Annual Business Report
April 1, 2020 through March 31, 2021

NIPPON SHARYO, LTD. and Consolidated Subsidiaries

Financial Highlights
Comparison of Sales by Segment(Unit: millions of yen)
192th period(2020-2021)

Business Segment

191th period(2019-2020)

Increase/(Decrease)

Railway rolling stock

50,48650.8%

42,371

44.8%

8,115

19.2%

Transportation equipment
and Steel structure

18,502

18.6

21,07822.3(2,576)(12.2)

Construction equipment

21,646

21.7

24,93926.3(3,293)(13.2)Engineering

8,738

8.8

6,100

6.4

2,638

43.3

Other

76

0.1

147

0.2

(71)

(47.6)

Total

99,448100.0

94,635

100.0

4,813

5.1

Change in Operating Performance and Asset Status(Unit: millions of yen except Net income per share)
191th period
190th period(2019-2020)(2018-2019)

192th period(2020-2021)

Titles of accountNet sales

99,44894,63591,179

Income before income taxes

9,274

7,530

8,547

Net income (loss) attributableto owners of the parent

7,929

7,895

9,199

Net income per share (loss)¥549.31¥547.00¥637.29

Total assets

136,596

127,813134,194

Total equity

45,28834,50432,446

Note: Effective October 1, 2018, the Company has implemented a 1-for-10 reverse stock split of common stock. Per share ofcommon stock is retroactively adjusted. Per share information is disclosed as if the reverse stock split had been effected at
the beginning of the fiscal year ended March 31, 2018.

Comparison of Sales by Segment(Millions of Yen)
120,000

Other

100,000

Engineering

80,000Construction
equipment

60,000Transportationequipment and Steelstructure
Railway rolling stock

40,00020,0000
192th period

191th period

190th period

Contents

Message from the President

2

Review by Segment

5

Investment in Plant and Equipment

7

Financing Activities

7

Consolidated Financial Statements and Independent Auditor's Report

8

Corporate Information

54

Directory

54

Series N700S Shinkansen

1Message from the President
Review of Business Operations
During the first half of the fiscal year under review, economic activity in Japan wasconstrained by the spread of coronavirus infectious disease (COVID-19). Subsequently, theresumption of economic activity led to signs of a recovery, but careful attention must be
paid to the risk that a resurgence of infection causes domestic and overseas economies toundershoot, and the outlook remains unclear.
As a result of this business environment, the Group’s sales for the fiscal year underreview came to ¥99,448 million, an increase of 5.1% from the previous year, helped byincreases in the railway rolling stock business and the engineering business.
With regard to profit, despite decreases in the transportation equipment and steel
structure business and the construction equipment business, the railway rolling stockbusiness recorded an increase, resulting in overall operating income rising by 6.0% year on
year to ¥9,048 million, the income before income taxes increasing 23.2% year on year to¥9,274 million, and net income attributable to owners of the parent inching up 0.4% year on
year to ¥7,929 million.

The Outlook
When formulating the “Nippon Sharyo Innovative Change 2030” medium-term businessplan, the Group drew up a long-term vision that expressed the ideal form to become by2030 as “a business partner that solves customers’ problems by providing safety andreliability in the workplace.”
This is based on the expectation of significant changes in the external environment, suchas the declining birthrate, aging population, and rising awareness of carbon neutrality thatwill accelerate in the future. It is also grounded in the Group’s recognition that the transition
to an earnings structure that is not influenced by fluctuations in product demand is essential.
As well as further honing its strengths, such as quality, customization, and cooperation
with JR Central, in order to acquire the resources necessary for achieving the long-term vision,
the Group will promote the “Nippon Sharyo Innovative Change 2030” medium-term businessplan, which clarifies the areas of focus for a three-year period, and organizes them into threepillars.

2

(1) Thorough strengthening of profitability (the ability to generate profit)・Establishing processes to regularize, standardize, and make production sites more efficient,(sales, design, materials, manufacturing, quality assurance)
・Unearthing and completely eliminating the “three Ms”: muri, muda, and mura (overburden,
waste, unevenness)
・Achieving more sophisticated project management(2) Reforming the foundations of the business for growth・Selecting and concentrating on specific areas of business・Committing human resources to areas that are in genuine need of strengthening
・Investing in facilities for growth and enhanced productivity(3) Achieving a transformation of the business model・Embodying services that contribute to energy savings and improved efficiency at customer
production sites
・Strengthening after sales support
・Technical collaboration with other companies, etc.

We expect a difficult order environment for the railway rolling stock business going
forward, due to contractions in upgrade demand caused by the prolongation of the impact of
COVID-19, etc. In response to this environment, we will leverage our strength in handling awide variety of rolling stock, such as Shinkansen trains, limited express trains, commuter
trains, and operational vehicles. In addition, we will work to reduce costs by differentiating
ourselves through technology development that utilizes our condition-monitoring technology
and by reforming production processes, and continue to strengthen our competitiveness.
With respect to the transportation equipment and steel structure business, due to theeconomic uncertainty in Japan and overseas caused by the prolongation of COVID-19, which
has resulted in the suppression of capital investment and other issues, the order environment
is very challenging. In this environment, we are working on launching new products aimed
at meeting market needs, and on R&D aimed at introducing new technology, primarily in thearea of our mainstay high-pressure gas tank trucks and heavy duty carriers. In addition, we
will take steps to reduce costs through such actions as standardizing design, whilestrengthening our competitiveness and acquiring new customers. For steel structures weforecast a certain level of orders for the construction of new steel bridges, but we expect theorder environment to remain difficult. On the other hand, due to the deterioration of existing3

bridges, repair and maintenance work is becoming increasingly important. In response to thisenvironment, we will continue to strengthen our ability to provide technical proposals for
new bridges, as well as secure order volume. At the same time, in the repair and maintenancebusiness we will leverage the know-how we have accumulated in the course of bridge repair
work conducted during major repair work on the Tokaido Shinkansen to grow our orders forrepair and maintenance of highway bridges.
In the construction equipment business, due to the risk of an undershoot caused by the
prolongation of the impact of COVID-19 in both domestic and overseas markets, the outlook
for demand is becoming increasingly uncertain. In this environment, we will leverage ourdevelopment and manufacturing know-how in construction equipment, including pile-driving
rigs. In Japan and overseas markets, primarily those in Asia, we will respond flexibly to theneeds of different regions, while striving to strengthen our competitiveness through the
adoption of automation and energy-saving technology.
In the engineering business, mechanical equipment for railway company, country
elevator, and paper-making facility are essential components of social infrastructure, and we
expect a certain level of demand to continue going forwards. In addition to enhanced safety
and reduced power consumption, customers are requiring labor-saving features and improved
maintainability for such equipment to address labor shortages caused by the aging of the
population. In response we will provide detailed proposals to meet market needs, enabling us
to secure profits.

Kazuhiro Igarashi
President and Chief Executive Officer

4Review by Segment
Railway Rolling Stock Business
Our sales to the JR Companies, Series N700S
Shinkansen trains to Central Japan Railway and WestJapan Railway Company, rail transporting vehicle for
East Japan Railway Company resulted in net sales of¥39,226 million.
Sales to public and private railways included trains

Series N700S Shinkansen

provided to the Tokyo Metro Co., Ltd. and Nagoya
Railroad Co., Ltd., resulting in net sales of ¥10,584
million. As a result of these increases in rolling stock for
JR Companies and others, the railway rolling stockbusiness recorded net sales of ¥50,486 million, up 19.2%
year on year.

Rail transporting vehicle

Transportation Equipment and Steel Structure BusinessIn transportation equipment business, year-on-yearincreases in sales of Automated Guided Vehicle and bulk
tank trucks for consumer use resulted in a 5.6% rise in
net sales, to ¥9,479 million.
In steel structures business, sales were recorded inrelation to such projects as the Fukuoka Urban
Expressway

Route

6

Kashiihama

Viaduct,

theLPG bulk tank truck

Yokohama Loop Line Sakae interchange/junction H-ramp No.1
bridge, the Hokuriku Shinkansen Yoriyasu bridge, and major repair works for the Tokaido
Shinkansen. However, due to declines in sales related tohighway bridges for government and municipal offices, net
sales fell 25.4% year on year to ¥9,021 million.
As a result of the above, net sales for the transportationequipment and steel structure business came to ¥18,502
million, a decline of 12.2% year on year.
Yokohama Loop Line H-ramp No.1 bridge

5

Construction Equipment BusinessIn Construction equipment business, performance was generally
remained strong due to demand for urban redevelopment projects inJapan. However, due to large pile driving rigs recording a year-onyear decline and other factors, net sales for the construction
equipment business fell by 13.2% year on year, to ¥21,646 million.
Pile driving rig

Engineering Business
The main components of sales in this business included mechanical equipment for
Railway Company as well as manufacturing equipment for household paper manufacturers
and agricultural plant facilities for Japan Agricultural Cooperatives all over Japan. As aresult, net sales in the engineering business totaled ¥8,738 million, up 43.3% from theprevious year.
The order backlog at the end of the fiscal year
under review was ¥145,079 million. The componentsof this were ¥112,236 million in the railway rollingstock business, ¥17,781 million in the transportationequipment and steel structure business (¥7,758 million
in transportation equipment, and ¥10,023 million insteel structures), ¥11,423 million in the construction
Mechanical equipment for Railway Company

equipment business, and ¥3,637 million in theengineering business.

6

Investment in Plant and Equipment
Plant and equipment investment during the fiscal year under review totaled ¥3,031
million. Investment was mainly targeted at renewal of equipment necessary for productionof transportation equipment and the steel structure business. Investment was also made forrenewal of equipment to maintain/improve the production capacity at each plant.
On April 20, 2017, we transferred the plant property of Toyokawa Plant, Kinuura Plant,
and Narumi Plant to our parent company (Central Japan Railway Company). Since therelevant transaction is a transaction with our parent company, and we concluded a lease
contract with our parent company and continuously use the transferred plant property as
plants as before even after transfer, we recorded the “land” and “buildings and structures”of this plant property as tangible fixed assets instead of executing sales and purchaseaccounting. The relevant transaction is not a finance lease transaction, so we recorded thetransfer price of the plant property as a long-term debt (including current portion of longterm debt to be cleared within one year).
Therefore, plant and equipment investment concerning the transferred plant property was
also recorded as “buildings and structures,” “machinery and equipment,” and “other,” andsome of the equipment investment amount as long-term debt (including current portion of
long-term debt to be cleared within one year).

Financing Activities
As for the fiscal year under review, no significant borrowing occurred.

7

NIPPON SHARYO, LTD. ANDCONSOLIDATED SUBSIDIARIESCONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED MARCH 31, 2021
AND
INDEPENDENT AUDITOR’S REPORT

8

INDEPENDENT AUDITOR'S REPORTTo the Board of Directors of NIPPON SHARYO, LTD.:
OpinionWe have audited the consolidated financial statements of NIPPON SHARYO LTD. and its consolidated subsidiaries (the"Group"), which comprise the consolidated balance sheet as of March 31, 2021, and the consolidated statement of income,consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated statement ofcash flows for the year then ended, and notes to the consolidated financial statements, including a summary of significant
accounting policies, all expressed in Japanese yen.
In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated
financial position of the Group as of March 31, 2021, and its consolidated financial performance and its consolidated cash flows
for the year then ended in accordance with accounting principles generally accepted in Japan.
Convenience Translation
Our audit also comprehended the translation of Japanese yen amounts into U.S. dollar amounts and, in our opinion, suchtranslation has been made in 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.
Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in Japan. Our responsibilities under thosestandards are further described in the Auditor's Responsibilities for the Audit of the Consolidated Financial Statements sectionof our report. We are independent of the Group in accordance with the provisions of the Code of Professional Ethics in Japan,
and we have fulfilled our other ethical responsibilities as auditors. We believe that the audit evidence we have obtained issufficient and appropriate to provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated
financial statements of the current period. These matters were addressed in the context of our audit of the consolidated financial
statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Key Audit Matter Description

How the Key Audit Matter Was Addressed in the Audit[Revenue recognition - Percentage of completion method]
As stated in Note 3 to the consolidated financial statements, the Groupapplied the percentage of completion method if the outcome of aconstruction project for the portion completed by the end of the fiscal year
can be estimated reliably. The percentage of completion method is applied
principally in the steel structure business that manufactures, builds, andsells mainly road bridges, railway bridges, floodgates and so forth. The
revenue recognized under the percentage of completion method
amounted to ¥7,333 million for the year ended March 31, 2021.

Our audit procedures to test the construction revenue
recognized by the percentage of completion method included
the following, among others:
Evaluated the design and operating effectiveness of internal
controls over the process of identifying construction projects
subject to the percentage of completion method, the process of
preparing and approving the working budget of estimated total
construction costs and the process of calculating construction
revenue in applying the percentage of completion method.
Examined whether the amount of the estimated total cost of9In applying the percentage of completion method, the amount ofconstruction revenue for each construction project is its total construction
revenue multiplied by the percentage of incurred cost of construction to
its total cost of construction based on the working budget.
The working budget of the total construction costs includes estimates ofmaterial costs, labor costs and subcontractor costs for construction
projects. The significant assumptions of estimates of labor andsubcontractor costs include locations and timing of construction projects,
degrees of difficulty of construction based on the construction method andcost improvement effects of skill levels based on past construction
performance.
In addition, since the working budget of the total cost of construction
requires updating each time when the designs of construction projects arechanged, it is necessary to reflect such changes to the revenue recognition
under the percentage of completion method, based on timely
determination of the degrees and ranges of the effects of the designchanges on the working budget.
We have identified the percentage of completion method as a key audit
matter since the estimate of total cost of construction used in thepercentage of completion method is affected by the significant
assumptions made by the Group’s management.
[Valuation of work in process and provision for loss on orders received inrailway rolling stock business]
As stated in Note 6 to the consolidated financial statements, the Group
recognized work in process of ¥28,133 million as of March 31, 2021. Mostof the work in process was the railway rolling stock business related
assets. In addition, as stated in Note 3 to the consolidated financial
statements, the cost of sales included the write-down of work in process
and other inventories of ¥1,177 million for the year ended March 31, 2021
according to the lower of cost or net selling value method.
The Group compares the order amount and the estimated total cost foreach order when calculating write-down and provision for loss on orders
received related to work in process in railway rolling stock business. The
estimated total cost is based on the working budget prepared for eachorder and includes estimated material costs, labor costs, subcontracting
costs and other expenses at each related department in the business unit.
The significant assumptions of the estimates of these costs include theapplicability of know-how based on the past design and manufacturing ofsimilar railway rolling stock, load forecast based on actual results and cost
improvement due to progress in mass production of the similar railway
rolling stock and improvement of cost proficiency.
We have identified valuation of work in process and provision for loss
on orders received in railway rolling stock business as a key audit matter
since the estimated total cost per order is affected by the significant
assumptions made by the Group’s management.







construction projects subject to the percentage of completion
method were consistent with the working budget approved by thegeneral manager of the steel structure business division.
Compared the labor cost ratio and subcontractor cost ratio for
construction works based on characteristics of construction projects
by contractor, bridge types, timing, location, term and method of
constructions with those for past years and examined if the monthly
costs by cost category were consistent with the cost structure andthe work progress.
Tested whether the estimated total cost of construction had changed
for the construction projects with design change agreements
selected from those accounted for by the percentage of completion
method.
Made site inspection for selected construction projects
subject to the percentage of completion method andtested the consistency of cost of construction incurredwith the stage of the completion of the contract bycomparing the progress toward completion to the wholecontract period or total construction process.

Our audit procedures to evaluate reasonableness of valuationof work in process and provision for loss on orders received
included the following, among others:
Evaluated the design and operating effectiveness of internal
controls over the process of identifying orders for which orderlosses had occurred in the railway rolling stock business, theprocess of preparing and approving working budgets of the total
estimated costs and the process of evaluating work in process andprovision for loss on orders received.

Examined the consistency of the schedule for calculating theestimated loss on orders received and the list of construction
contracts outstanding as of March 31, 2021 for testing thecompleteness of identifying the estimated loss on orders received.
Compared the Group’ judgement of the estimated loss onorders received with the profit/loss experience of thesimilar railway rolling stock in the prior periods and themost recent estimated cost of construction projects andevaluated the reasonableness of the estimated loss onorders received.

Responsibilities of Management and Audit & Supervisory Board Members and the Audit & Supervisory Board for
the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance withaccounting principles generally accepted in Japan, and for such internal control as management determines is necessary toenable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or
error.

10

In preparing the consolidated financial statements, management is responsible for assessing the Group's ability to continue as agoing concern, disclosing, as applicable, matters related to going concern in accordance with accounting principles generally
accepted in Japan and using the going concern basis of accounting unless management either intends to liquidate the Group or
to cease operations, or has no realistic alternative but to do so.
Audit & Supervisory Board members and the Audit & Supervisory Board are responsible for overseeing the Directors'
execution of duties relating to the design and operating effectiveness of the controls over the Group's financial reporting process.
Auditor's Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free frommaterial misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonableassurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with auditing standards
generally accepted in Japan will always detect a material misstatement when it exists. Misstatements can arise from fraud or
error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence theeconomic decisions of users taken on the basis of these consolidated financial statements.
As part of an audit in accordance with auditing standards generally accepted in Japan, we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:•
Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or
error, design and perform audit procedures responsive to those risks. The procedures selected depend on the auditor's judgment.
In addition, we obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting
a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery,
intentional omissions, misrepresentations, or the override of internal control.
•
Obtain, when performing risk assessment procedures, an understanding of internal control relevant to the audit in orderto design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on theeffectiveness of the Group's internal control.
•
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related
disclosures made by management.
•
Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit
evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on theGroup's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention
in our auditor's report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, tomodify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However,
future events or conditions may cause the Group to cease to continue as a going concern.
•
Evaluate whether the overall presentation and disclosures of the consolidated financial statements are in accordance withaccounting principles generally accepted in Japan, as well as the overall presentation, structure and content of the consolidated
financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying
transactions and events in a manner that achieves fair presentation.

11

•Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within
the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision andperformance of the group audit. We remain solely responsible for our audit opinion.
We communicate with Audit & Supervisory Board members and the Audit & Supervisory Board regarding, among othermatters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal
control that we identify during our audit.
We also provide Audit & Supervisory Board members and the Audit & Supervisory Board with a statement that we havecomplied with relevant ethical requirements regarding independence, and communicate with them all relationships and othermatters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with Audit & Supervisory Board members and the Audit & Supervisory Board, we determine
those matters that were of most significance in the audit of the consolidated financial statements of the current period and are
therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicatedin our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest
benefits of such communication.
Interest Required to Be Disclosed by the Certified Public Accountants Act of Japan
Our firm and its designated engagement partners do not have any interest in the Group which is required to be disclosed pursuant
to the provisions of the Certified Public Accountants Act of Japan.

印
Hiroki Kitagata
Designated Engagement Partner
Certified Public Accountant

印
Shumpei Kano
Designated Engagement Partner
Certified Public Accountant

June 29, 2021

12

NIPPON SHARYO, LTD. and Consolidated Subsidiaries
Consolidated Balance Sheet
March 31, 2021

ASSETS

Millions of Yen
2021
2020

Thousands of
U.S. Dollars(Note 1)2021

20,767$CURRENT ASSETS:
Cash and cash equivalents (Notes 16 and 19)¥¥

13,256

188,789

Notes and accounts receivable (Notes 5, 16 and 19)

27,61029,314251,001

Inventories (Notes 2.i and 6)
Other current assets (Note 11)

32,11233,369291,926

1,272

692

11,567

Total current assets

81,761

76,631

743,283

Land (Note 11)

14,38014,383130,724

Buildings and structures (Note 11)26,15925,898237,813

Machinery and equipment

35,55034,925323,179

Construction in progress

148

109

1,351

76,23775,315

693,067(47,635)(47,092)(433,052)

28,602

28,223260,015

Investment securities (Notes 7, 11 and 16)
Investments in an unconsolidated subsidiary and associatedcompanies (Note 16)

19,091

17,405173,549

885

842

8,048

Asset for employees’ retirement benefits (Note 10)

4,917

3,365

44,700

138

124

1,255

1,202

1,223

10,93026,233

22,959238,482

127,813$ 1,241,780

PROPERTY, PLANT AND EQUIPMENT:

Total
Accumulated depreciation
Net property, plant, and equipment

INVESTMENTS AND OTHER ASSETS:

Deferred tax assets (Note 15)
Other assets (Note 11)
Total investments and other assets
TOTAL

¥

136,596¥(Continued)

13

NIPPON SHARYO, LTD. and Consolidated Subsidiaries
Consolidated Balance Sheet
March 31, 2021

LIABILITIES AND EQUITYCURRENT LIABILITIES:Current portion of long-term debt (Notes 9, 16 and 19)¥
Current portion of lease obligations (Notes 13 and 16)
Notes and accounts payable (Notes 8 and 16)
Accrued expenses (Note 19)
Advances received
Income taxes payable (Note 15)
Allowance for work in process on construction contracts
Provision for losses on orders received (Note 2.n)Other current liabilities
Total current liabilities
LONG-TERM LIABILITIES:Long-term debt (Notes 9, 11 16 and 19)
Liability for employees’ retirement benefits (Note 10)
Lease obligations (Notes 13 and 16)
Allowance for PCB disposal expenses (Note 2.p)
Provision for compensation for health damage fromasbestos
Deferred tax liabilities (Note 15)
Other long-term liabilities
Total long-term liabilities
COMMITMENTS AND
CONTINGENT LIABILITIES (Notes 12 and 17)
EQUITY (Note 14):
Common stock,authorized, 32,800,000 shares;
issued, 14,675,012 shares in 2021 and 2020
Retained earnings
Treasury stock, at cost, 241,705 shares in 2020
and 242,109 shares in 2021
Accumulated other comprehensive income:Unrealized gain on available-for-sale securities
Foreign currency translation adjustments
Defined retirement benefit plans
Total accumulated other comprehensive income
Non-controlling interests
Total equity
TOTAL¥
See notes to consolidated financial statements.

14

Thousands of
U.S. Dollars(Note 1)
2021

Millions of Yen
2021
2020
3,360
906
21,442
4,694
1,109
1,347
32
399
33,289¥450744
22,883
5,469
613
26
120
313
1,100
31,718$30,5498,238
194,926
42,673
10,08012,243288
3,628
302,625

51,946
259
1,092
106

56,364
454
1,436
141

472,234
2,356
9,925
964

92

62

836

4,329
195
58,0192,923
211
61,59139,355
1,773
527,443

11,811
25,40911,811
17,480107,370
230,992

(520)

(519)

(4,727)

8,646(2,228)
2,031
8,449
139
45,288
136,596

6,860(2,242)
984
5,602
130
34,504
127,81378,603(20,258)
18,471
76,816
1,261
411,712$ 1,241,780(Concluded)¥

NIPPON SHARYO, LTD. and Consolidated Subsidiaries
Consolidated Statement of Income
Year Ended March 31, 2021
Thousands of
U.S. Dollars(Note 1)
2021

Millions of Yen
2021
2020
NET SALES (Note 19)¥

COST OF SALES (Notes 2.i, 2.m and 2.u)
Gross profit
SELLING, GENERAL, AND ADMINISTRATIVE
EXPENSES (Note 2.u)Operating income

99,448¥94,635$904,076

83,39579,033758,133

16,053

15,602

145,943

7,005

7,064

63,689

9,048

8,538

82,254

286
(354)
47
115

352
(372)
53
68

2,600
(3,218)
425
1,044

(29)

(1,123)(266)

OTHER INCOME (EXPENSES)Interest and dividend income (Note 19)
Interest expense (Note 19)
Equity in earnings of associated companies
Gain on sales of investment securities, net (Note 7)
Loss on impairment of property, plant and equipment(Note 18)
Loss on sales and disposals of property, plant andequipment, net
Other – net
Other income (expenses) – net
INCOME BEFORE INCOME TAXES

(123)

(57)

(1,116)

284
226
9,274

71
(1,008)
7,530

2,585
2,054
84,308

INCOME TAXES (Note 15):
Current
Deferred
Total income taxes

1,188
144
1,332

238
(618)
(380)

10,802
1,308
12,110

7,942

7,910

72,198

13

15

122

NET INCOME
NET INCOME ATTRIBUTABLE TONONCONTROLLING INTERESTSNET INCOME ATTRIBUTABLE TO OWNERS OF
THE PARENT

¥

7,929

¥

7,895

Yen
PER SHARE OF COMMON STOCK (Note 2.v):
Basic net income
Cash dividends applicable to the year
See notes to consolidated financial statements.

15¥549.31
10.00$

72,076

U.S. Dollars¥

547.00
-

$

4.99
0.09

NIPPON SHARYO, LTD. and Consolidated Subsidiaries
Consolidated Statement of Comprehensive Income
Year Ended March 31, 2021
Thousands of
U.S. Dollars(Note 1)
2021

Millions of Yen
2021
2020
NET INCOME¥

OTHER COMPREHENSIVE INCOME (Note 20):
Unrealized gain (loss) on available-for-sale securities
Foreign currency translation adjustments
Defined retirement benefit plans
Share of other comprehensive income in associatedcompanies
Total other comprehensive income (loss)
COMPREHENSIVE INCOME

7,942

$

72,198(2,060)(19)(3,769)16,208
128
9,524

3

1

28

2,848
10,790TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE
TO:
Owners of the parent¥
Non-controlling interests

10,776
14

16

7,910

1,783
14
1,048

¥

See notes to consolidated financial statements.

¥

¥

¥

(5,847)
2,063

2,048
15

$

$

25,88898,086

97,964122

NIPPON SHARYO, LTD. and Consolidated Subsidiaries
Consolidated Statement of Changes in Equity
Year Ended March 31, 2021
Millions of Yen
Accumulated other comprehensive income

BALANCE, APRIL 1, 2019¥¥

Commonstock

14,433,876¥ 11,811

-

-

-

7,895

-

-

-

-

-

-

7,895

(569)

-

-

-

(2)

-

-

-

-

-

(2)

-

-

-

-

-

(2,059)(18)(3,770)(5,847)

12(5,835)

14,433,307

11,811-

17,480

(519)

6,860

(2,242)

984

5,602

130

34,504

-

-

-

7,929

-

-

-

-

-

-

7,929

(404)

-

-

-

(1)

-

-

-

-

-

(1)

-

-

-

-

-

1,786

14

1,047

2,847

9

2,856

14,432,903¥ 11,811-¥ 25,409

Net changes in the year
Net income attributable toowners of the parent
Increase in treasury stock, net
Net changes in the year
BALANCE, MARCH 31, 2021

Definedretirement
benefit plans

Total
accumulated
othercomprehensive
incomeNumber ofshares ofcommon stock
outstanding
Net income attributable toowners of the parent
Increase in treasury stock, net
BALANCE, MARCH 31, 2020

Foreigncurrencytranslation
adjustments

Capitalsurplus¥Retainedearnings
-

¥

¥

9,585

Treasury
stock
¥

¥

(517)

(520)

Unrealized gain
on available-forsale securities
¥

¥

8,919

8,646

¥

(2,224)(2,228)

¥

4,754

2,031

¥

¥

11,4498,449

Noncontrollinginterests
¥

¥

118

139

Total
equity¥¥32,44645,288

Thousands of U.S. Dollars (Note 1)
Accumulated other comprehensive income

BALANCE, MARCH 31, 2020
Net income attributable toowners of the parent
Increase in treasury stock, net
Net changes in the year
BALANCE, MARCH 31, 2021

Definedretirement
benefit plans
$
8,947

Total
accumulated
othercomprehensive
income$ 50,927-

Retainedearnings$ 158,916

Treasurystock$ (4,717)

Unrealized gain
on available-forsale securities$
62,366

Foreigncurrencytranslation
adjustments$ (20,386)--

72,076

-

-

-

-

-

-

72,076

-

-

-

(10)
-

16,237

128

9,524

25,88979(10)25,968-$ 230,992$ (4,727)

1,261$ 411,712

Commonstock$ 107,370$ 107,370

Capitalsurplus$$See notes to consolidated financial statements.

17$

78,603$(20,258)$

18,471$

76,816

Noncontrollinginterests$ 1,182$

Total
equity$ 313,678

NIPPON SHARYO, LTD. and Consolidated Subsidiaries
Consolidated Statement of Cash Flows
Year Ended March 31, 2021
Thousands of
U.S. Dollars(Note 1)Millions of Yen
2021
2020
OPERATING ACTIVITIES:
Income before income taxes¥
Adjustments for:
Income taxes-paid
Depreciation
Loss on impairment of property, plant and equipment
Loss (gain) on sales and disposals of property, plant andequipment
Gain on sales of investment securities
Changes in assets and liabilities:
Decrease in trade notes and accounts receivable
Decrease (increase) in inventories
Decrease in trade notes and accounts payable
Decrease in allowance for work in process on construction
contracts
Decrease in provision for losses on orders received
Increase (decrease) in provision for compensation for healthdamage from asbestos
Increase (decrease) in advances received(Decrease) increase in liability for employees’ retirement
benefits
Other-net
Net cash provided by operating activities
INVESTING ACTIVITIES:
Purchases of property, plant and equipment
Proceeds from sales of property, plant and equipment
Purchases of investment securities
Proceeds from sales of investment securities
Other-net
Net cash used in investing activities

9,274

¥

7,530

2021
$

84,308

203
2,657
29

(802)
2,362
1,123

1,846
24,156
266

1
(115)

(139)
(68)

9
(1,044)740
1,256(2,308)697(1,896)
(119)

6,727
11,425(20,986)

(89)
(313)

(56)
(1,524)(806)(2,848)

30
496

(25)
(3,668)

273
4,508

(194)
(130)
11,537161(2,267)
1,309(1,768)(1,183)
104,883(3,120)
14
(4)
1,003
(188)
(2,295)(4,615)
2,665
(4)
145
(93)
(1,902)(28,362)
124
(32)
9,114
(1,706)(20,862)(Continued)

18

Millions of Yen
2021
2020

Thousands of
U.S. Dollars(Note 1)
2021

FINANCING ACTIVITIES:
Proceeds from long-term debt
Repayments of long-term debt
Dividends paid
Other-net
Net cash (used in) provided by financing activities

177(1,685)(130)(1,638)2,739(1,440)
(0)
(151)
1,148

1,608
(15,315)(1,184)(14,891)

FOREIGN CURRENCY TRANSLATION ADJUSTMENTS
ON CASH AND CASH EQUIVALENTS
NET INCREASE IN CASH AND CASH EQUIVALENTS
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR

(93)
7,511
13,256(20)
535
12,721(846)
68,283
120,506

CASH AND CASH EQUIVALENTS, END OF YEAR¥

20,767¥

13,256$

188,789(Concluded)
See notes to consolidated financial statements.

19

NIPPON SHARYO, LTD. and Consolidated Subsidiaries
Notes to Consolidated Financial Statements
Year Ended March 31, 2021

1. BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS
The accompanying consolidated financial statements have been prepared in accordance with theprovisions set forth in the Japanese Financial Instruments and Exchange Act and its related
accounting regulations and in accordance with accounting principles generally accepted in Japan(“Japanese GAAP”), which are different in certain respects as to the application and disclosure
requirements of International Financial Reporting Standards (IFRS).
In preparing these consolidated financial statements, certain reclassifications and rearrangements
have been made to the consolidated financial statements issued domestically in order to present
them in a form which is more familiar to readers outside Japan. In addition, certain
reclassifications have been made in the 2020 consolidated financial statements to conform to theclassifications used in 2021.
The consolidated financial statements are stated in Japanese yen, the currency of the country inwhich NIPPON SHARYO, LTD. (the “Company”) is incorporated and operates. The translationsof Japanese yen amounts into U.S. dollar amounts are included solely for the convenience ofreaders outside Japan and have been made at the rate of ¥110 to $1, the approximate rate ofexchange at March 31, 2021. Such translations should not be construed as representations that theJapanese yen amounts could be converted into U.S. dollars at that or any other rate.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESa. Consolidation
The consolidated financial statements as of March 31, 2021, include the accounts of the Company
and its significant subsidiaries (together, the “Group”). Under the control and influence 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 the Group has the ability to
exercise significant influence are accounted for by the equity method.
Investments in associated companies are accounted for by the equity method. Investments in theremaining unconsolidated subsidiary and associated company are stated at cost. If the equity
method of accounting had been applied to the investments in these companies, the effect on theaccompanying consolidated financial statements would not be material.
All significant intercompany balances and transactions have been eliminated on consolidation.
All material unrealized profit included in assets resulting from transactions within the Group was
also eliminated.

20

The number of the consolidated subsidiaries, unconsolidated subsidiaries, and associatedcompanies for the years ended March 31, 2021 and 2020, was as follows:
2021
2020
Consolidated subsidiaries
6
6
Unconsolidated subsidiaries stated at cost
1
1
Associated companies accounted for by the equity method22
Associated companies stated at cost
1
1
An absorption-type merger became effective on January 1, 2021 regarding three U.S.
subsidiaries: NIPPON SHARYO MANUFACTURING, LLC as the surviving company,
NIPPON SHARYO U.S.A., INC. and NIPPON SHARYO ENGINEERING & MARKETING,
LLC both as the absorbed companies.
The fiscal year-end of NIPPON SHARYO U.S.A., INC. and its subsidiaries, NIPPON SHARYOMANUFACTURING, LLC, and NIPPON SHARYO ENGINEERING & MARKETING, LLC
is December 31 and their financial statements with the closest closing date prior to that of theCompany are used for consolidation purposes. Necessary adjustments for significant transactions
from January 1 to March 31 are made for consolidation purposes.
For the equity method associated companies that have a different fiscal year from that of theCompany, the associated companies’ financial statements with the closest closing date prior tothat 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 (“PITF”) No.
18, “Practical Solution on Unification of Accounting Policies Applied to Foreign Subsidiaries for
the Consolidated Financial Statements,” the accounting policies and procedures applied to aparent 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 foreign subsidiaries in accordance witheither 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 that should
be adjusted in the consolidation process so that net income is accounted for in accordance withJapanese 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 othercomprehensive income; (c) expensing capitalized development costs of research and development(R&D); and (d) cancellation of the fair value model of accounting for property, plant andequipment and investment properties and incorporation of the cost model accounting.
c. Unification of accounting policies applied to associated companies for the equity method
ASBJ Statement No. 16, “Accounting Standard for Equity Method of Accounting forInvestments,” requires adjustments to be made to conform the associate’s accounting policies for
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.
d. Business combinations
Business combinations are accounted for using the purchase method. Acquisition-related costs,
such as advisory fees or professional fees, are accounted for as expenses in the periods in which
the costs are incurred. If the initial accounting for a business combination is incomplete by theend of the reporting period in which the business combination occurs, an acquirer shall report in21

its financial statements provisional amounts for the items for which the accounting is incomplete.
During the measurement period, which shall not exceed one year from the acquisition, theacquirer shall retrospectively adjust the provisional amounts recognized at the acquisition date toreflect new information obtained about facts and circumstances that existed 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 for the business combination had been
completed at the acquisition date. A parent’s ownership interest in a subsidiary might change 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 the consideration received or paid and the amount by which the noncontrolling interest is adjusted is accounted for as capital surplus for as long as the parent retains
control over its subsidiary.
e. Cash equivalents
Cash equivalents are short-term investments that are readily convertible into cash and exposed toinsignificant risk of changes in value.
Cash equivalents include time deposits and Cash Management System (“CMS”) funds due fromCentral Japan Railway Company (“CJR”) group, all of which mature or become due within threemonths from the date of acquisition. CJR is the parent 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, with unrealized gains and losses, net of
applicable taxes, reported in a separate component of equity.
Nonmarketable available-for-sale securities are stated at cost determined by the moving-averagemethod. For other-than-temporary 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 foreignexchange and interest rates. Forward foreign currency contracts are utilized by the Group to
reduce foreign currency exchange risks. The Group does not enter into derivatives for trading or
speculative purposes.
Derivative financial instruments and foreign currency transactions are classified and accounted
for as follows: 1) all derivatives are recognized as either assets or liabilities and measured at fairvalue and gains and losses on derivative transactions are recognized in the consolidated statementof operations and 2) for derivatives used for hedging purposes, if such derivatives qualify forhedge accounting because of high correlation and effectiveness between the hedging instruments
and the hedged items, gains and losses on derivatives are deferred until maturity of the hedgedtransactions.
The forward foreign currency contracts are utilized to hedge foreign currency exposures in salesof merchandise and finished goods to overseas customers and procurement of raw materials fromoverseas suppliers. Trade receivables and payables denominated in foreign currencies aretranslated at the contracted rates if the forward contracts qualify for hedge accounting.
h. Allowance for doubtful accounts
An allowance for doubtful accounts is provided for at the aggregate amount of estimated credit

22

loss based on an individual analysis of certain doubtful or troubled receivables and a generalreserve for other receivables is calculated based on the historical loss experience.
i. Inventories
Inventories are stated at the lower of cost, determined principally by the specific identification
method for merchandise, finished goods and work in process and by the moving-average method
for semi-finished goods, raw materials, and supplies, or net selling value, which is defined as theselling price, less additional estimated manufacturing costs and estimated direct selling expenses.
The replacement cost may be used in place of the net selling value, if appropriate. Reversal ofwrite-downs of inventories in the amounts of ¥2,803 million ($25,485 thousand) and ¥1,837
million for the years ended March 31, 2021 and 2020, respectively, were included in cost of sales.
j. Property, plant and equipment
Property, plant and equipment, including significant renewals and additions, are stated at cost andare depreciated principally by the straight-line method for buildings and building improvements
and structures acquired on or after April 1, 2016, and by the declining-balance method for otherproperty at rates based on the estimated useful lives of the assets.
Depreciation of leased assets relating to financial lease transactions without transfer of ownershipis computed by the straight-line method over the leased period.
The range of useful lives is principally from 10 to 60 years for buildings and structures and fromsix to 17 years for machinery and equipment.
The Company has transferred its factory assets of Toyokawa Plant, Kinuura Plant, and Narumi
Plant to CJR on April 20, 2017. The transfer was not treated as a buying and selling transaction
since the relevant factory assets were transferred to CJR, but 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 equipmentof the Company. As the relevant transactions do not fall under a finance lease transaction, thetotal transfer price was recorded as long-term debt (including the current portion). In addition,
capital expenditure related to the transferred factory assets was recorded under “buildings andstructures” and “machinery and equipment,” and a part of the capital expenditure was recorded
as long-term debt (including the current portion), for the years ended March 31, 2021 and 2020.
As a result, the relevant factory assets as of March 31, 2021, were recorded under property, plantand equipment with carrying amounts of ¥11,975 million ($108,867 thousand) as land, of ¥5,767
million ($52,431 thousand) as buildings and structures and ¥153 million ($1,387 thousand) as
machinery and equipment, while long-term debt (including the current portion) was recorded witha carrying amount of ¥22,609 million ($205,537 thousand) as of March 31, 2021. As of March
31, 2020, the relevant factory assets were recorded under property, plant and equipment withcarrying amounts of ¥11,975 million as land, of ¥5,997 million as buildings and structures and¥200 million as machinery and equipment, while long-term debt (including the current portion)
was recorded with a carrying amount of ¥22,893 million.
k. Long-lived assets
The Group reviews its long-lived assets for impairment whenever events or changes incircumstance indicate that the carrying amount of an asset or asset group may not be recoverable.
An impairment loss is recognized if the carrying amount of an asset or asset group exceeds thesum of the undiscounted future cash flows expected to result from the continued use and eventual
disposition of the asset or asset group. The impairment loss would be measured as the amount bywhich 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 the asset or the net
selling value at disposition.

23

l. Intangible assets
Intangible assets that are included in other assets are amortized by the straight-line method.
Software costs are amortized over five years.
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 on construction projects for which eventual losses are deemed inevitable and forwhich the amount of loss can be reasonably estimated. Reversal of provisions for work in process
on construction contracts with an amount of ¥89 million ($806 thousand) and ¥56 million for theyears ended March 31, 2021 and 2020, respectively, were included in cost of sales.
n. Provision for losses on orders received
A provision for losses on orders received, except for construction contracts, is recorded based onan estimate of the total anticipated loss on contracts for which eventual losses are deemed
inevitable and for which the amount of loss can be reasonably estimated.
o. Retirement and pension plans
The Company has a lump-sum retirement benefit plan, a defined contribution pension plan and adefined benefit pension plan. The Company’s domestic consolidated subsidiaries have similar
retirement benefit plans.
Liabilities for employees’ retirement benefits are calculated based on the projected benefit
obligations and plan assets at the consolidated balance sheet date. The projected benefit
obligations are attributed to periods on a benefit formula basis. Prior service costs are amortizedon 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 iswithin the average remaining service period in the following the fiscal year.
p. Allowance for Polychlorinated Biphenyl (PCB) disposal expenses
An allowance for PCB disposal expenses has been provided based on the published estimateddisposal fee schedule issued by the Japan Environmental Storage & Safety Corporation.
q. Provision for compensation for health damage from asbestos
A provision for compensation for health damage from asbestos has been recorded based on theestimated compensation amount for former employees who suffered health damage from asbestos.
r. Income taxes
The provision for income taxes is computed based on the pretax income included in the
consolidated statement of operations. The asset and liability approach is used to recognize
deferred tax assets and liabilities for the expected future tax consequences of temporary
differences between the carrying amounts and the tax bases of assets and liabilities. Deferredtaxes are measured by applying currently enacted tax rates to the temporary differences.
s. Foreign currency transactions
All short-term and long-term monetary receivables and payables denominated in foreign
currencies are translated into Japanese yen at the exchange rates at the consolidated balance sheet
date. The foreign exchange gains and losses from translation are recognized in the consolidated
statement of 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 foreign subsidiaries 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 foreign24subsidiaries are translated into yen at the average exchange rate. Differences arising from suchtranslation are shown as foreign currency translation adjustments under accumulated othercomprehensive income in a separate component of equity.
u. R&D expenses
Expenses related to R&D activities are charged to income as incurred. R&D expenses amounted
to ¥1,773 million ($16,115 thousand) and ¥1,480 million for the years ended March 31, 2021 and2020, respectively, and are included in general and administrative expenses and manufacturingcosts in the accompanying consolidated statement of operations.
v. Per share information
Basic net income per share is computed by dividing net income attributable to commonshareholders by the weighted-average number of shares of common stock outstanding during
the respective year. Weighted-average number of shares of common stock for the years ended
March 31, 2021 and 2020, were 14,433 thousand shares. Diluted net income per share for theyears ended March 31, 2021 and 2020, 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 tobe paid after the end of the year.
w. Construction contracts
Construction revenue and construction costs are recognized by the percentage-of-completion
method if the outcome of a construction contract can be estimated reliably. When total
construction revenue, total construction costs and the stage of completion of the contract at theconsolidated balance sheet date can be reliably measured, the outcome of a construction contract
is deemed to be estimated reliably. If the outcome of a construction contract cannot be reliably
estimated, the completed-contract method is applied. When it is probable that the total
construction costs will exceed total construction revenue, the estimated loss on the contract isrecognized.
x. Accounting changes and error corrections
Under ASBJ Statement No. 24, “Accounting Standard for Accounting Changes and Error
Corrections” and ASBJ Guidance No. 24, “Guidance on Accounting Standard for Accounting
Changes and Error Corrections,” accounting treatments 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 shall comply with thespecific transitional provisions. (2) Changes in Presentation—When the presentation of financial
statements is changed, prior-period financial statements are reclassified in accordance with thenew presentation. (3) Changes in Accounting Estimates—A change in an accounting estimate isaccounted 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.
y. Change in accounting policies
Foreign subsidiaries adopting generally accepted accounting principles in the United States ofAmerica (“US-GAAP”) have applied ASC 842 “Leases” from the fiscal year ended March 31,
2021. The effects of the application of this standard on the consolidated financial statements are
immaterial.
z. New accounting pronouncements
Accounting Standard for Revenue Recognition, etc.
- Accounting Standard for Revenue Recognition (ASBJ Statement No. 29, revised on March25

31, 2020)- Implementation Guidance on Accounting Standard for Revenue Recognition (ASBJ Guidance
No. 30, revised on March 26, 2021)- Implementation Guidance on Disclosures about Fair Value of Financial Instruments (ASBJ
Guidance No. 19, revised on March 31, 2020)(a) Overview
The International Accounting Standards Board (“IASB”) and the Financial Accounting Standards
Board (“FASB”) have jointly developed a comprehensive accounting standard for revenue
recognition and issued it as converged guidance on recognizing revenue in contracts withcustomers in May 2014 as IFRS 15 (IASB) and Topic 606 (FASB), respectively. To respond toboth IFRS 15 and Topic 606 effective from the fiscal years beginning on or after January 1, 2018and December 15, 2017, respectively, ASBJ has developed a comprehensive accounting standard
for revenue recognition and issued it with the respective implementation guidance.
In developing the accounting standard for revenue recognition, ASBJ basically integrated thecore principle of IFRS 15 from a comparability point of view of the financial statements, which
is one of the benefits of ensuring consistency with IFRS 15. ASBJ, on the other side, consideredadditional alternative treatments where current practices under Japanese GAAP are to be reflected
as far as such treatments would not significantly impair international comparability.
(b) Effective date
The above standard and guidances are scheduled to be applied from the beginning of the fiscal
year ending March 31, 2022.
(c) Effects of application of the standards
The application of the above standard and guidances is subject to the transitional treatment
provided for in the proviso to paragraph 84 of the Accounting Standard for Revenue Recognition.
The cumulative effect of the retrospective application, assuming the new accounting policy had
been applied to periods prior to the start of the fiscal year ending March 31, 2022, was added toor subtracted from the opening balance of retained earnings of the fiscal year ending March 31,
2022, and thus the new accounting policy will be applied from such opening balance. The effectsof the application of the above standard and guidances on the opening balance of retained
earnings of the fiscal year ending March 31, 2022 are immaterial.
Accounting Standard for Fair Value Measurement, etc.
- Accounting Standard for Fair Value Measurement (ASBJ Statement No. 30, issued on July 4,
2019)- Accounting Standard for Measurement of Inventories (ASBJ Statement No. 9, issued on July4, 2019)- Accounting Standard for Financial Instruments (ASBJ Statement No. 10, issued on July 4,
2019)- Implementation Guidance on Accounting Standard for Fair Value Management (ASBJ
Guidance No. 31, issued on July 4, 2019)- Implementation Guidance on Disclosures about Fair Value of Financial Instruments (ASBJ
Guidance No. 19, revised on March 31, 2020)(a) Overview
Both the IASB and the FASB each established a nearly identical and detailed guidance for fairvalue measurement (IFRS 13 “Fair Value Measurement” in IFRS and ASC Topic 820 “Fair Value
Measurement” in US-GAAP.) Given this fact, ASBJ issued the “Accounting Standard for Fair
Value Measurement” to establish consistency between Japanese standards and international
standards regarding the guidance and disclosure mainly for fair value of financial instruments.

26

ASBJ’s basic policy in developing the accounting standard for fair value measurement was toadopt the entirety of IFRS 13 with the unified measurement methodology for better comparabilityof the financial statements of domestic and foreign enterprises. ASBJ, on the other side, specified
other alternative treatments in individual items considering the current practices under Japanese
GAAP as far as such treatments would not significantly impair international comparability.
(b) Effective date
The above standards and guidances are scheduled to be applied from the beginning of the fiscal
year ending March 31, 2022.
(c) Effects of application of the standards, etc.
The effects of the application of the above standards and guidances on the consolidated financial
statements are currently being assessed.
3. SIGNIFICANT ACCOUNTING ESTIMATES
In preparing the consolidated financial statements of the Group, management makes judgments,
estimates and assumptions that affect the application of the accounting policies and the reported
amounts of assets, liabilities, income, and expenses. The Group’s significant estimates andunderlying assumptions are reviewed on an ongoing basis. Those revisions could result in amaterial adjustment to carrying amounts of assets and liabilities in the future periods due touncertainty of estimates and assumptions. The Group’s significant estimates and assumptions
used are as follows:(1) Revenue recognition (percentage-of-completion method)(a) Amount recognized in the fiscal year ended March 31, 2021
Millions of
Yen
2021
¥
7,333

Net sales

Thousands of
U.S. Dollars
2021$
66,664(b) Information on the nature of significant account estimates useful for the users of theconsolidated financial statements(i)

Calculation method
In applying the percentage of completion method, the amount of construction
revenue for each construction project is its total construction revenue multiplied by
the percentage of incurred cost of construction to its total cost of construction basedon the working budget.

(ii) Key assumptions
The working budget of the total construction costs includes estimates of material
costs, labor costs and subcontractor costs for construction projects. The significant
assumptions of estimates of labor and subcontractor costs include locations andtiming of construction projects, degrees of difficulty of construction based on theconstruction method and cost improvement effects of skill levels based on past
construction performance.
(iii) Impact on the next fiscal year’s consolidated financial statements
In case of engineering design change of a contract construction, the working budget
is reviewed by assessing the impact level and extent of the design change in a timely
manner. The revenue amount may vary, if the percentage of completion is to be27

changed significantly based on such a revision of the working budget.
(2) Valuation of inventories and provision for losses on orders received(a) Amount recognized in the fiscal year ended March 31, 2021
Millions of
Yen
2021
¥
1,177

Loss on valuation of inventories

Thousands of
U.S. Dollars
2021$
10,699(b) Information on the nature of significant account estimates useful for the users of theconsolidated financial statements(i)

Calculation method
In calculating write-down and provision for loss on orders received related to workin process in railway rolling stock business, the order amount are compared to theestimated total cost for each order.

(ii) Key assumptions
The estimated total cost is based on the working budget prepared for each order andincludes estimated material costs, labor costs, subcontracting costs and otherexpenses at each related department in the business unit. The significant
assumptions of the estimates of these costs include the applicability of know-how
based on the past design and manufacturing of similar railway rolling stock, load
forecast based on actual results and cost improvement due to progress in mass
production of the similar railway rolling stock and improvement of cost proficiency.
(iii) Impact on the next fiscal year’s consolidated financial statements
In case of engineering design change, the working budget is reviewed by assessing
the impact level and extent of the design change in a timely manner. The amount ofloss on valuation of work in process and provision for losses on orders received
may vary, if the working budget is to be changed significantly.
(3) Recoverability of deferred tax assets(a) Amount recognized in the fiscal year ended March 31, 2021
Millions of
Yen
2021
¥
2,163

Deferred tax assets

Thousands of
U.S. Dollars
2021$
19,663(b) Information on the nature of significant account estimates useful for the users of theconsolidated financial statements(i)

Calculation method
In judgment for recoverability of deferred tax assets, the Group recognizes deferred
tax assets within the expected range of amount for the future period where taxable
income is reasonably estimated, depending on the fiscal year where temporary
differences are expected to be eliminated by scheduling of temporary differences
and tax loss carried forward.

28

(ii) Key assumptions
For calculating the expected amount of taxable income, projected business results
are used which are based on the business strategies of each division considering its
market volume, customer need, capital investments, etc.
(iii) Impact on the next fiscal year’s consolidated financial statements
Changes in taxation system and tax rates could affect the calculation results, whilechanges in market environment and a shortfall of management objectives could
affect the future business results, thus all changes could affect valuation of deferred
tax assets.

4. CHANGE IN PRESENTATION
The “Accounting Standard for Disclosure of Accounting Estimates” (ASBJ Statement No. 31,
issued on March 31, 2020) has been applied from the fiscal year ended March 31, 2021, and thenote regarding significant accounting estimates was disclosed on the consolidated financial
statements. However, no respective disclosure for the fiscal year ended March 31, 2020, wasmade according to the transitional treatment provided for in the proviso to paragraph 11 of theabove accounting standard.
5. NOTES AND ACCOUNTS RECEIVABLE
Notes and accounts receivable as of March 31, 2021 and 2020, consisted of the following:Thousands ofMillions of Yen
U.S. Dollars
2021
2020
2021
Trade notes receivable
¥
4,419
¥
4,230
$
40,172- Unconsolidated subsidiary and associatedcompanies
98
136
895
Trade accounts receivable
18,637
16,750169,423- CJR, unconsolidated subsidiary andassociated companies
4,272
7,065
38,838
Other
200
1,147
1,818
Less allowance for doubtful accounts
(16)
(14)
(145)
¥
27,610¥29,314$251,001
Total
Note: Allowance for doubtful accounts was not recognized for accounts receivable-other, which
was included in Other above.

29

6. INVENTORIESInventories as of March 31, 2021 and 2020, consisted of the following:

Merchandise
Finished goods
Semi-finished goods
Work in process
Raw materials

¥

¥

Total

Millions of Yen
2021
2020
224
¥
424
1,046
968
1,228
1,213
28,13329,244
1,481
1,520
32,112¥33,369Thousands of
U.S. Dollars
2021
$
2,034
9,514
11,167
255,752
13,459$291,926

Work in process and the allowance for work in process on construction contracts are presented in
the gross amount in the consolidated balance sheet. At March 31, 2021 and 2020, an allowancefor work in process on construction contracts of ¥16 million ($150 thousand) and ¥nil,
respectively, was provided and included in work in process and semi-finished goods above.

30

7. INVESTMENT SECURITIESInvestment securities as of March 31, 2021 and 2020, consisted of the following:

Equity securities
Total

¥
¥

Millions of Yen
2021
2020
19,091¥
17,40519,091¥
17,405

Thousands of
U.S. Dollars
2021$
173,549$
173,549

The costs and aggregate fair values of investment securities as of March 31, 2021 and 2020, wereas follows:

Cost
Securities classified asavailable-for-sale:
Equity securities
Total

¥
¥

5,115
5,115

Cost
Securities classified asavailable-for-sale:
Equity securities
Total

Securities classified asavailable-for-sale:
Equity securities
Total

¥
¥

$
$

5,993
5,993

Millions of Yen
2021
Gross unrealized
Gross unrealized
gains
lossesFair andcarrying value

¥
¥

¥
¥

12,407
12,407

¥
¥

(19)
(19)

17,503
17,503

Millions of Yen
2020
Gross unrealized
Gross unrealized
gains
lossesFair andcarrying value

¥
¥

¥
¥

10,064
10,064

¥
¥

(246)
(246)

15,811
15,811

Cost

Thousands of U.S. Dollars
2021
Gross unrealized
Gross unrealized
gains
lossesFair andcarrying value

46,50346,503

$
$

$
$

31

112,788
112,788

$
$

(176)
(176)

159,115
159,115

The information of available-for-sale securities which were sold for the years ended March 31,
2021 and 2020, was as follows:

Proceeds
Available-for-sale:
Equity securities
Total

¥
¥

1,003
1,003

Proceeds
Available-for-sale:
Equity securities
Total

¥
¥

145
145

Proceeds
Available-for-sale:
Equity securities
Total

Millions of Yen
2021
Realized
gains
¥
¥

148
148

Realized
losses¥¥Millions of Yen
2020
Realized
gains
¥
¥

68
68

33
33

Realized
losses¥¥-Thousands of U.S. Dollars
2021
Realized
gains

Realized
losses

$

9,114

$

1,348

$

304

$

9,114

$

1,348

$

304

No impairment losses were recognized on available-for-sale equity securities for the years ended
March 31, 2021 and 2020.
8. NOTES AND ACCOUNTS PAYABLE
Notes and accounts payable as of March 31, 2021 and 2020, consisted of the following:Thousands ofMillions of Yen
U.S. Dollars
2021
2020
2021
Trade notes payable
¥
479
¥
384
$
4,357
Electronically recorded obligations-operating
10,11010,77491,909-Unconsolidated subsidiary and associated1012
91
companies
Trade accounts payable
7,145
8,886
64,956-Unconsolidated subsidiary and associated
32
32
287
companies
Other
3,666
2,795
33,326¥
21,442¥
22,883$
194,926
Total

32

9. LONG-TERM DEBT
Long-term debt as of March 31, 2021 and 2020, consisted of the following:Thousands of
U.S. Dollars
2021

Millions of Yen
2021
2020
Loans from CJR due through 2027 (Note) withaverage interest rate of 0.61%¥
Less current portion
Total¥

55,306(3,360)51,946¥56,814(450)
56,364$$

502,783(30,549)472,234

The aggregate annual maturities of long-term debt as of March 31, 2021, were as follows:
Thousands ofYears ending March 31
Millions of Yen
U.S. Dollars
2022
¥
2,900
$
26,3642023
2,900
26,3642024
2,900
26,3642025
2,900
26,3642026
2,900
26,3642027 and thereafter
18,197
165,427
Total¥
32,697$297,247
Note: Long-term debt recorded for the transfer price of the factory assets transferred to CJR andfor a part of capital expenditure related to the transferred factory assets in the total
amount of ¥22,609 million ($205,537 thousand) was not reflected.

33

10. RETIREMENT AND PENSION PLANS
Employees who terminate their service with the Company and its domestic consolidated
subsidiaries are entitled to retirement benefits generally determined by reference to the basic rateof 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 defined 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, 2021 and 2020, wereas follows:
Thousands ofMillions of Yen
U.S. Dollars
2021
2020
2021
Balance at beginning of year¥
13,731¥
13,638$ 124,831
Current service cost
746
750
6,784
Interest cost
122
120
1,104
Actuarial gains
(474)
(14)
(4,313)
Benefits paid
(457)
(698)
(4,153)
Prior service cost
(65)
Balance at end of year¥
13,668¥13,731$ 124,253
Note: The domestic consolidated subsidiaries of the Company apply the simplified method in
calculating the defined benefit obligation.
(b) The changes in plan assets for the years ended March 31, 2021 and 2020, were as follows:

Millions of Yen
2021
2020
¥
16,642¥
21,256
255
258
1,223
(4,908)
423
380
(217)
(344)
¥
18,326¥
16,642

Balance at beginning of year
Expected return on plan assets
Actuarial gains
Contribution from the employer
Benefits paid
Balance at end of year

34

Thousands of
U.S. Dollars
2021$ 151,295
2,315
11,1183,848(1,979)$ 166,597

(c) Reconciliation between the liability (asset) recorded in the consolidated balance sheet and thebalances of defined benefit obligation and plan assets as of March 31, 2021 and 2020, was asfollows:

Funded defined benefit obligation
Plan assets
Total
Unfunded defined benefit obligation
Net asset arising from defined benefit
obligation
Asset for employees’ retirement benefits
Liability for employees’ retirement benefits
Net asset arising from defined benefit
obligation

Millions of Yen
2021
2020
¥
13,409¥13,498(18,326)(16,642)(4,917)(3,144)259
233

Thousands of
U.S. Dollars
2021$ 121,897(166,597)(44,700)
2,356¥(4,658)¥(2,911)$(42,344)¥(4,917)259¥(3,365)454$(44,700)
2,356¥(4,658)¥(2,911)$(42,344)(d) The components of net periodic benefit costs for the years ended March 31, 2021 and 2020,
were as follows:
Thousands ofMillions of Yen
U.S. Dollars
2021
2020
2021
Service cost (Note)
¥
746
¥
750
$
6,784
Interest cost
122
120
1,104
Expected return on plan assets
(255)
(258)
(2,315)
Recognized actuarial gains
(176)
(563)
(1,599)Amortization of prior service cost
(12)
(9)
(109)
Net periodic benefit costs
¥
425
¥
40
$
3,865
Note: Retirement benefit costs of the consolidated subsidiaries applying the simplified method
are included in service cost.
(e) Amounts recognized in other comprehensive income (before income tax effect) in respect ofdefined retirement benefit plans for the years ended March 31, 2021 and 2020

Millions of Yen
2021
2020
¥
(12)
¥
55
1,522
(5,457)¥
1,510¥(5,402)

Prior service cost
Actuarial losses (gains)
Total

35

Thousands of
U.S. Dollars
2021
$
(109)
13,832$
13,723(f) Amounts recognized in accumulated other comprehensive income (before income tax effect)
in respect of defined retirement benefit plans as of March 31, 2021 and 2020

Millions of Yen
2021
2020
¥
(114)
¥
(126)
(2,814)(1,292)¥(2,928)¥(1,418)Unrecognized prior service cost
Unrecognized actuarial gains
Total

Thousands of
U.S. Dollars
2021$(1,040)(25,576)$(26,616)(g) Plan assets(i) Components of plan assets
Plan assets consisted of the following:
2021
17%
72%
5%
6%
100%

Debt investments
Equity investments
Cash and deposits
Other
Total

2020
17%
72%
4%
7%
100%

Note: The employees’ retirement benefit trusts for the contributory pension plans accounted
for 15% and 16% of total plan assets for the years ended March 31, 2021 and 2020,
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 long-term rates of return which are expected currently and in the futurefrom the various components of the plan assets.
(h) Assumptions used for the years ended March 31, 2021 and 2020, were set forth as follows:
2021
0.9%
2.0%

Discount rate
Expected rate of return on plan assets

2020
0.9%
2.0%

(2) Defined contribution plans
The required contribution of the Company and its consolidated subsidiaries amounted to ¥143
million ($1,302 thousand) and ¥143 million for the years ended March 31, 2021 and 2020,
respectively.

36

11. ASSETS PLEDGED AS COLLATERAL(1) Assets pledged as collateral for long-term debt borrowed from CJR in November 2017 forthe payment of settlement money related to a large railway rolling stock project in the U.S.A.
were as follows. The balance of the long-term debt, including current portion, as of March
31, 2021 and 2020 was ¥32,697 million ($297,245 thousand) and ¥33,921 million,
respectively.
Thousands ofMillions of Yen
U.S. Dollars
2021
2020
2021
Buildings and structures
¥
259
¥
259
$
2,356
Land
15
15
136
Investment securities
17,225
14,881
156,592
Total¥ 17,499¥ 15,155$ 159,084(2) Other assets pledged as collateral as of March 31, 2021 and 2020, were as follows:
Thousands ofMillions of Yen
U.S. Dollars
2021
2020
2021
Other current assets (Note 1)¥¥
1
Other assets under Investments and Other
10
10
Assets (Note 2)
Total
¥
10
¥
11
Notes 1: Deposit required by insurance contracts
2: Guarantee deposit required by the Real Estate Brokerage Act

$

91

$

91

12. 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 theCompany’s construction equipment products, the Company guarantees payment of the amountdefined by the contract to the leasing companies. Such guarantees as of March 31, 2021 and 2020,
amounted to ¥58 million ($530 thousand) and ¥129 million, respectively.

3713. 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 purchasetransactions.
The aggregate annual maturities of lease obligations as of March 31, 2021, were as follows:

Years ending March 31
2022
2023
2024
2025
2026
2027 and thereafter
Total

Millions of Yen
¥
906
452
290
268
80
2
¥
1,998

Thousands of
U.S. Dollars
$
8,238
4,108
2,639
2,437
727
14
$
18,163

A consolidated subsidiary subleases machinery.
Investments in leases and lease obligations, which include an interest portion, resulting fromsublease transactions as of March 31, 2021 and 2020, were as follows:
Thousands of
U.S. Dollars
2021

Millions of Yen
2021
2020
Investments in leases:
Due within one year
Due after one year
Total

¥
¥

163
160
323

¥
¥

116
112
228

$
$

Thousands of
U.S. Dollars
2021

Millions of Yen
2021
2020
Lease obligations:Due within one year
Due after one year
Total

¥
¥

38

187
180
367

¥
¥

132
129
261

1,484
1,456
2,940

$
$

1,694
1,638
3,332

14. 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 of service ofthe directors being prescribed as one year rather than the normal two-year term by its articles ofincorporation, 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) toshareholders 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 of incorporation of the company so stipulate. The Companies Act
provides certain limitations on the amounts available for dividends or the purchase of treasury
stock. The limitation is defined as the amount available for distribution to the shareholders, but
the amount of net assets after dividends must be maintained at no less than ¥3 million.
(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 asa legal reserve (a component of retained earnings) or as additional paid-in capital (a componentof 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 capitaland 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 under certain 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 suchtreasury stock by resolution of the Board of Directors. The amount of treasury stock purchased
cannot exceed the amount available for distribution to the shareholders which is determined by aspecific formula. Under the Companies Act, stock acquisition rights are presented as a separate
component of equity. The Companies Act also provides that companies can purchase bothtreasury stock acquisition rights and treasury stock. Such treasury stock acquisition rights arepresented as a separate component of equity or deducted directly from stock acquisition rights.

39

15. 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
30.6% and 30.3% for the years ended March 31, 2021 and 2020, respectively.
The tax effects of significant temporary differences and tax loss carryforwards that resulted indeferred tax assets and liabilities as of March 31, 2021 and 2020, were as follows:
Thousands of
U.S. Dollars
2021

Millions of Yen
2021
2020
Deferred tax assets:
Tax loss carryforwards (Note 2)
Liability for employees’ retirement benefits
Loss on write-downs of inventories
Land and building of plants
Loss on impairment of fixed assets
Accrued bonuses to employees
Provision for losses on orders received
Other
Sub-total
Less valuation allowance for tax loss
carryforwards (Note 2)Less valuation allowance pertaining to total
amount of deductible temporary differences
Valuation allowance, total (Note 1)
Total

¥

¥

5,239
2,509
360
1,514
418
559
1,756
12,355

¥

6,479
2,496
1,218
1,517
417
536
96
1,545
14,304$47,62722,805
3,276
13,7653,805
5,080
15,963112,321(4,595)(5,929)(41,776)(5,597)(10,192)
2,163(6,094)(12,023)¥
2,281 $

(50,882)(92,658)
19,663

Deferred tax liabilities:
Unrealized gain on available-for-sale securities ¥(3,788)¥ (3,002) $(34,435)
Other(2,566)(2,078)(23,328)
Total(6,354)(5,080)(57,763)
Net deferred tax liabilities¥(4,191)¥ (2,799) $(38,100)
Notes 1: Valuation allowance decreased by ¥1,831 million ($16,644 thousand) during the year
ended March 31, 2021. This is mainly due to the decrease of the Company’s tax loss
carryforwards.
2: Expected maturity of the deferred tax assets after the balance sheet date for tax loss
carryforwards as of March 31, 2021, was as follows:40

The expiration of tax loss carryforwards, the related valuation allowances and the resulting net
deferred tax assets as of March 31, 2021, were as follows:
Millions of Yen
Over 1 year Over 2 years Over 3 years Over 4 years
but within but within
but within
but within Over 5 years
2 years
3 years
4 years
5 years

Within1 year2021
Tax loss carryforwards (*)
Valuation allowance
Deferred tax assets

-

-

-

-

- ¥
-

Total

5,239 ¥ 5,239(4,595)(4,595)644(**) 644

Millions of Yen
Over 1 year Over 2 years Over 3 years Over 4 years
but within but within
but within
but within Over 5 years
2 years
3 years
4 years
5 years

Within1 year

2020
Tax loss carryforwards (*)
Valuation allowance
Deferred tax assets

-

-

-

-

- ¥
-

Total

6,479 ¥ 6,479(5,929)(5,929)550(**) 550

Thousands of U.S. Dollars
Over 1 year Over 2 years Over 3 years Over 4 years
but within but within
but within
but within Over 5 years
2 years
3 years
4 years
5 years

Within1 year2021
Tax loss carryforwards (*)
Valuation allowance
Deferred tax assets

-

-

-

-

- $ 47,627 $ 47,627(41,776)(41,776)5,851(**) 5,851(*) The amount of tax loss carryforwards was calculated by using the statutory tax rate.
(**) The amount of deferred tax assets related to tax loss carryforwards is determined to be
recovered based on the expected future taxable income.
A reconciliation between the normal effective statutory tax rates and the actual effective tax
rates reflected in the accompanying consolidated statement of operations for the year ended
March 31, 2021, with the corresponding figures for 2020, is as follows:

Normal effective statutory tax rate
Increase (decrease) due to:
Expenses not deductible for income tax purposes
Tax-exempt income
Changes in valuation allowance
Per capita inhabitant tax
Transfer price adjustments on consolidation
Higher (lower) income tax rates applicable to income incertain foreign countries
Transfer price adjustment
Effect of changes in tax rate
Income tax credit

Other
Actual effective income tax rate

41

2021
30.6 %

2020
30.3

0.1
(0.3)
(16.4)
0.4
-

14.4
(0.4)
(4.5)
0.4
10.3

0.1

2.4

(1.4)
1.3
14.4

(58.3)
0.2
0.2
(5.0)

%

Total

%

%

16. 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 tofinancial 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, the position, 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 and for apart of capital expenditure related to the transferred factory assets is not exposed to market risks
from changes in variable interest rates since the Company repays a constant lease fee including
the interest portion based on the lease agreement. Long-term debt borrowed from CJR in
November 2017 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 with fluctuations in foreign currency exchange rates related toreceivables and payables denominated in foreign currencies and forecasted transactions
denominated in foreign currencies. Please see Note 17 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 the contractual terms. The Group manages its credit risk from receivables bymonitoring financial position, payment terms and balances of customers to identify default riskof 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 fromfluctuations in foreign currency exchange rates. Such foreign exchange risk is hedged principally
by forward foreign currency contracts. In addition, when foreign currency trade receivables andpayables are expected from forecasted transactions, forward foreign currency contracts may be
used.

42

Investment securities are managed by monitoring the market values and the financial position ofissuers on a regular basis.
Liquidity risk management
The Group establishes or updates its cash management plan according to the monthly cash
management plan from each subsidiary 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, other rational valuation techniques are used instead. Please see Note 17 for thedetails of the fair value of derivatives.
(a) Fair value of financial instruments
Millions of Yen
2021

Cash and cash equivalents
Notes and accounts receivable
Investment securities
Total

Carrying
amount¥ 20,767
27,61017,503¥ 65,880

Notes and accounts payable
Income taxes payable
Long-term debt, including current portion
Lease obligations, including current portion
Total¥ 21,442
1,347
32,697
1,998¥ 57,484

Fair value¥ 20,767
27,61017,503¥ 65,880
21,442
1,347
33,2681,934¥ 57,991

Unrealized
gain (loss)
-

¥

¥
¥

(571)
64
(507)

Millions of Yen
2020

Cash and cash equivalents
Notes and accounts receivable
Investment securities
Total

Carrying
amount¥ 13,256
29,314
15,811¥ 58,381

Notes and accounts payable
Income taxes payable
Long-term debt, including current portion
Lease obligations, including current portion
Total¥ 22,883
26
33,921
2,180¥ 59,010

43

Fair value¥ 13,256
29,314
15,811¥ 58,381
22,88326
34,5132,169¥ 59,591

Unrealized
gain (loss)
-

¥

¥
¥

(592)
11
(581)

Cash and cash equivalents
Notes and accounts receivable
Investment securities
Total

Thousands of U.S. Dollars
2021
Carrying
Unrealized
Fair value
amountgain (loss)$ 188,789$ 188,789
251,001
251,001
159,115
159,115$ 598,905$ 598,905-

Notes and accounts payable
Income taxes payable
Long-term debt, including current portion
Lease obligations, including current portion
Total$ 194,926
12,243
297,246
18,163$ 522,578$ 194,926
12,243
302,437
17,577$ 527,183$$(5,191)586(4,605)

AssetsCash 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 their short maturities.
Investment securities
The fair values of investment securities are measured at the quoted market prices of the stock
exchange. The information on the fair value of investment securities by classification is includedin Note 7.
Liabilities
Notes and accounts payable, and income taxes payable
The carrying values of notes and accounts payable, and income taxes payable approximate fairvalue 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 aremeasured at the present value of the 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 17.
(b) Carrying amounts of financial instruments whose fair value cannot be reliably determined

Unlisted securities¥
Investments in an unconsolidated subsidiary andassociated companies
Long-term debt recorded for the transfer price of thefactory assets transferred to CJR and for a part ofcapital expenditure related to the transferredfactory assets (including the current portion)

44

Millions of Yen
2021
2020
1,588
¥
1,595

Thousands of
U.S. Dollars
2021$
14,434

885

842

8,048

22,60922,893

205,537

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

Cash and cash equivalents
Notes and accounts receivable
Total

Cash and cash equivalents
Notes and accounts receivable
Total

Due in one
year or lessMillions of Yen
2021
Due after
Due after
one yearfive years
throughthroughfive years
10 years¥ 20,767
27,388¥ 48,155¥¥

Due in one
year or lessThousands of U.S. Dollars
2021
Due after
Due after
one yearfive years
throughthroughfive years
10 years$ 188,789
248,986$ 437,775

$
$

222
222

2,015
2,015

¥
¥

$
$

Due after
10 years--

Due after
10 years-

Please see Note 9 for annual maturities of long-term debt and Note 13 for obligations underfinance leases.

17. DERIVATIVE TRANSACTIONSThe Group enters into forward foreign currency contracts to hedge foreign exchange risk
associated with certain assets and liabilities denominated in foreign currencies.
All derivative transactions are entered into to hedge interest and foreign currency exposuresincorporated 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 the authorization and credit limit amount.
There was no derivative transaction to which hedge accounting was applied for the years ended
March 31, 2021 and 2020.

45-

18. LOSS ON IMPAIRMENT OF PROPERTY, PLANT AND EQUIPMENTThe Group recognized impairment losses on the following asset groups.
For the year ended March 31, 2021:

Asset group
Idle assets
Assets forgenerator business

Location
Shinanomachi,
NaganoAccount

Millions of Yen
2021

Land

¥

Nagoya, Aichi

Machinery, etc.
Total

3

Thousands of
U.S. Dollars
2021
$

26
¥

29

28
238

$

266

For the year ended March 31, 2020:

Asset group
Idle assets

Location
Illinois,
U.S.A.

Account
Land andbuildings, etc.
Total

Millions of Yen
2020
¥

1,123

¥

1,123

The Group reviewed its long-lived assets for impairment as of March 31, 2021 and 2020.
The Group recognized an impairment loss for idle assets by writing down the property to its net
selling value (based on estimated sales amount of contract for the years ended March 31, 2021,
and 2020).
The Company resolved at the Board of Directors held on November 26, 2020 to withdraw fromthe generator business. The Company recognized an impairment loss for assets related to thegenerator business by writing down the assets to their net selling value (memorandum value asno sale is expected). The impairment loss of ¥26 million ($238 thousand) consisted of ¥26 million($236 thousand) on machinery and equipment and ¥0 million ($2 thousand) on other.
The Company resolved at the Board of Directors held on November 22, 2019 to sell all the assetsof the manufacturing plant of an U.S. subsidiary, NIPPON SHARYO U.S.A., INC. in Rochelle,
Illinois, U.S.A. The Company recognized an impairment loss by writing down the assets to theirrecoverable amount since the carrying amount of the asset exceeds its recoverable amount basedon the net selling value. The impairment loss of ¥1,123 million consisted of ¥921 million onbuildings and structures, ¥200 million on land and ¥2 million on other.

46

19. RELATED-PARTY DISCLOSURES(1) Parent and major shareholders
CJR directly owned 51.2% of the total shares of the Company as of March 31, 2021 and 2020.
The Company distributes transportation vehicles to CJR.
Transactions of the Company with CJR for the years ended March 31, 2021 and 2020, were as
follows:
For the year ended March 31, 2021

Sales
Borrowing of funds
Repayment of debt
Interest expense

Millions of
Yen
2021
¥
31,606
177
1,685
346

Thousands of
U.S. Dollars
2021$
287,325
1,608
15,314
3,144

Borrowing of funds, repayment of debt, and interest expense of ¥177 million ($1,608
thousand), ¥461 million ($4,190 thousand), and ¥142 million ($1,293 thousand), respectively,
were recorded for the transfer of the factory assets transferred to CJR and for a part of capital
expenditure related to the transferred factory assets.
For the year ended March 31, 2020

Sales
Borrowing of funds
Repayment of debt
Interest expense

Millions of
Yen
2020
¥
18,290
2,740
1,441
345

Borrowing of funds, repayment of debt and interest expense of ¥2,740 million, ¥362 millionand ¥134 million, respectively, were recorded for the transfer of the factory assets transferred to
CJR and for a part of capital expenditure related to the transferred factory assets.
The balances due to or from CJR as of March 31, 2021 and 2020, were as follows:
As of March 31, 2021

Accounts receivable
Current portion of long-term debt
Long-term debt
Accrued expenses

Millions of
Yen
2021
¥
4,199
3,360
51,946
41

Thousands of
U.S. Dollars
2021$
38,17530,549472,234
370

Current portion of long-term debt, long-term debt, and accrued expenses of ¥460 million($4,169 thousand), ¥22,149 million ($201,352 thousand), and ¥41 million ($370 thousand),
respectively, were the balances related to long-term debt for the transfer price of the factory
assets transferred to CJR and for a part of capital expenditure related to the transferred factory
assets.

47

As of March 31, 2020

Accounts receivable
Current portion of long-term debt
Long-term debt
Accrued expenses

Millions of
Yen
2020
¥
7,018
450
56,36342

Current portion of long-term debt, long-term debt and accrued expenses of ¥450 million,¥22,443 million and ¥42 million, respectively, were the balances related to long-term debt for
the transfer price of the factory assets transferred to CJR and for a part of capital expenditure
related to the transferred factory assets.
(2) Fellow subsidiaries and subsidiaries of other affiliates
Transactions of the Company with the fellow subsidiaries for the years ended March 31, 2021
and 2020, were as follows:
For the year ended March 31, 2021
Millions ofYen
2021
JR Central Financial Management Co., Ltd.
Interest income¥

12

Thousands of
U.S. Dollars
2021
$

111

For the year ended March 31, 2020
Millions ofYen
2020
JR Central Financial Management Co., Ltd.
Interest income¥

7

The balances due to or from the fellow subsidiaries as of March 31, 2021 and 2020, were as
follows:
As of March 31, 2021
Millions ofYen
2021
JR Central Financial Management Co., Ltd.
Cash and cash equivalents¥

16,079As of March 31, 2020
Millions ofYen
2020
JR Central Financial Management Co., Ltd.
Cash and cash equivalents
¥

48

6,872

Thousands of
U.S. Dollars
2021$

146,17420. OTHER COMPREHENSIVE INCOME (LOSS)
The components of other comprehensive income (loss) for the years ended March 31, 2021 and2020, were as follows:
Thousands of
U.S. Dollars

Millions of Yen
2021

2020

2021

Unrealized gain (loss) on available-for-salesecurities:
Gains (losses) arising during the year¥

Reclassification adjustments to profit or loss

2,662

¥

(2,831)$

24,200

(93)

(68)

(845)

Amount before income tax effect

2,569(2,899)23,355

Income tax effect

(786)

839

(7,147)

Total

¥

1,783

¥

(2,060)$16,208

¥

14

¥

(19)

$

128

¥

14

¥

(19)

$

128

¥

1,697

¥

(4,830)$15,431

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

(187)

(572)

(1,708)Amount before income tax effect

1,510(5,402)

13,723

Income tax effect

(462)

1,633

(4,199)

Total
Share of other comprehensive income inassociated companies
Gains arising during the year

¥

1,048

¥

(3,769)

$

9,524

¥

3

¥

1

$

28

Income tax effect

-

Total
Total other comprehensive income (loss)

-

-

¥

3

¥

1

$

28

¥

2,848

¥

(5,847)$25,888

21. SUBSEQUENT EVENT
Appropriation of Retained Earnings
The following appropriation of retained earnings at March 31, 2021, was approved at the Company's shareholders'meeting held on June 29, 2021:

Millions of
Yen
¥
144

49

Thousands of
U.S. Dollars$
1,31222. 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 aggregations of 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, and there are four reportable segments: “Railway Rolling Stock,” “Transportation Equipment and Steel Structure,” “Construction
Equipment,” and “Engineering.”“Railway Rolling Stock” consists of manufacture and sales of rolling stock, such as EMUs and railway motor cars.
“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
upon arm’s-length transactions.
(3) Information of sales, profit (loss), assets and other items was as follows:
Millions of Yen
2021
Reportable segment
Transportation
Equipment andConstruction
Steel Structure
Equipment

Railway Rolling
Stock
Net sales
Sales to external customers
Intersegment sales or transfers
Total
Segment profit
Segment assets
Other:
Depreciation
Increase in property, plant andequipment and intangible assets

¥

¥
¥
¥

50,486110
50,596
5,007
45,316

¥

944

¥

1,332

¥

¥
¥
¥

18,502
66
18,568712
20,117¥676
806

Engineering
¥

¥
¥
¥

21,646102
21,7483,981
22,397

¥

720

Other
¥

¥
¥
¥

8,738
15
8,753
332
5,901

¥

75

666

62

50

Total
¥

¥
¥
¥

76
231
307
92
648

¥

2
2

Reconciliations¥¥¥

99,448524
99,972
10,124
94,379

¥

2,417
2,868

Consolidated

¥
¥
¥
¥

(524)
(524)
(1,076)42,217¥¥¥99,44899,4489,048
136,596

¥

240

¥

2,657

335

¥

3,203

Millions of Yen
2020
Reportable segment
Transportation
Equipment andConstruction
Steel Structure
Equipment

Railway Rolling
Stock
Net sales
Sales to external customers
Intersegment sales or transfers
Total
Segment profit
Segment assets
Other:
Depreciation
Increase in property, plant andequipment and intangible assets

¥

¥
¥
¥

42,371
133
42,504
3,014
46,827

¥

901

¥

¥

¥
¥
¥

21,078100
21,178895
23,415

¥

489

1,334

Engineering
¥

¥
¥
¥

24,9396
24,945
4,952
23,139

¥

803

3,239

Other
¥

¥
¥
¥

6,100
6,100
349
4,669

¥

35

793

Total
¥

¥
¥
¥

147
149
296
152
687

¥

2

228

Reconciliations¥¥¥

94,635388
95,023
9,362
98,737

¥

2,230

2

Consolidated

¥
¥
¥
¥

(388)
(388)
(824)
29,076¥¥¥

94,635
94,635
8,538
127,813

¥

132

¥

2,362

5,596

¥

202

5,798

Thousands of U.S. Dollars
2021
Reportable segment
Transportation
Equipment andConstruction
Steel Structure
Equipment

Railway Rolling
Stock
Net sales
Sales to external customers
Intersegment sales or transfers
Total
Segment profit
Segment assets
Other:
Depreciation
Increase in property, plant andequipment and intangible assets

$

$
$
$

458,969996
459,965
45,516
411,961

$

8,583

$

12,111$$$$

168,190604
168,794
6,469
182,885

$

6,147
7,324

Engineering
$

$
$
$

196,777924
197,701
36,190203,611

$

6,543

Other
$

$
$
$

79,438136
79,574
3,019
53,649

$

682

6,051

563

Total
$

$
$
$

702
2,096
2,798
838
5,894

$

16
20

Reconciliations

Consolidated$$$

904,076
4,756
908,832
92,032858,001$$$$(4,756)(4,756)(9,778)383,779$$$

904,076
904,076
82,254
1,241,780$

21,971

$

2,185

$

24,156

26,0693,048$

29,117

Notes: 1. “Other” represents businesses that are not included in any reportable segment, which includes manufacture and sales of laser processing system.
2. “Reconciliations” in segment profit include corporate expenses of ¥(1,085) million ($(9,865) thousand) and ¥(839) million for the years ended March 31, 2021 and 2020, respectively, and elimination of intersegment
transactions of ¥16 million ($142 thousand) and ¥15 million for the years ended March 31, 2021 and 2020, respectively. 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 ¥40,283 million ($366,210 thousand) and ¥29,807 million, elimination of intersegment balances of ¥(134) million ($(1,215) thousand) and ¥(110) million,
and adjustments in inventories of ¥(67) million ($(611) thousand) and ¥(61) million as of March 31, 2021 and 2020, respectively. Total corporate assets principally consist of investment securities and general management
properties as of March 31, 2021 and 2020.
4. Segment profit is reconciled to operating income in the consolidated statement of operations.

51

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, 2021 and 2020 was asfollows.
Millions of Yen
2021

Net salesJapan¥96,082

U.S.A.
¥68

Asia¥3,272

Other
¥26

Total
¥99,448

Other
¥19

Total
¥94,635

Millions of Yen
2020

Net salesJapan¥86,510

U.S.A.
¥405

Asia¥7,701Thousands of U.S. Dollars
2021
Japan
U.S.A.
Asia
Other
Total
Net sales$873,472$623$29,748$233$904,076
Note: Sales are based on the location of the customers and grouped by country or area.
Millions of Yen
2021
Japan
Property, plantand equipment

U.S.A.

¥28,521

Asia

¥63

Other

¥18

Total
¥0

¥28,602

Millions of Yen
2020
Japan
Property, plantand equipment

U.S.A.

¥28,214

Asia
¥8

Other
¥1

Total
¥0

¥28,223

Thousands of U.S. Dollars
2021
Japan
Property, plantand equipment$259,282

U.S.A.
$571

52

Asia
$162

Other

Total
$0

$260,015

(3) Information about major customers
Net sales
Millions of Yen
2021
2020

Name of major
customer

CJR¥

31,606¥

18,290Thousands of
U.S. Dollars
2021$

Relatedsegment

287,325

Railway Rolling
Stock, Transportation
Equipment and Steel
Structure,Engineering(4) Information about loss on impairment of property, plant and equipment by reportable segment
Millions of Yen
2021
Reportable segment
Transportation
Equipment and Construction
Steel Structure
Equipment

Railway
Rolling
Stock
Impairment
loss
¥

-

-

¥

26

Engineering
-

Other
- ¥

Total
26

Reconciliations¥

3 ¥Consoli-dated29

Millions of Yen
2020
Reportable segment
Transportation
Equipment and Construction
Steel Structure
Equipment

Railway
Rolling
Stock
Impairment
loss
¥

1,123

-

-

Other

-

-

$

239

＊＊＊＊＊＊

53

-

Total

- ¥ 1,123

Thousands of U.S. Dollars
2021
Reportable segment
Transportation
Equipment and Construction EngineerSteel Structure
Equipment
ing
Other

Railway
Rolling
Stock
Impairment
loss
$

-

Engineering

Total- $ 239

Reconciliations¥- ¥Reconciliations$

28 $Consoli-dated1,123

Consoli-dated266

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

Company History
Sep. 1896 Established in Nagoya City.

Common Stock:Authorized

32,800,000 shares

Jun. 1938 Founded Narumi Plant.

Common Stock:Issued

14,675,012 shares

May. 1949 Re-listed on Tokyo Stock Exchange.

Number of Shareholders

11,181 persons

Jan. 1959 Began Construction Machinery Business.

(March 31, 2021)

Oct. 1961 Started Bridge Manufacturing.
Jul. 1964 Founded Toyokawa Plant.
Jun. 1975 Founded Kinuura Plant.
Sep. 1996 100th Anniversary.
Aug. 2008 Equity and business tie-up entered into with
Central Japan Railway Company.
Aug. 2019 Manufactured 4000th Shinkansen.

Line of Business
Overview of the Main Segments
NIPPON SHARYO manufactures and sells the following products:
Lines of businessBusiness segment
Railway rolling stock

EMUs, DMUs, Passenger Cars, Linear Motor Cars, Track Maintenance Machines and Rolling Stock Components

Transportation equipment
and Steel structure

Freight Cars, Tank Trucks, Tank Trailers, Storage Tanks, Heavy-duty Industrial Vehicles, Containers, AutomatedGuided Vehicles, Roadway Bridges and Railway Bridges

Construction equipment

Pile Driving Rigs, Crawler Cranes, Hydraulic Hammers, Casing Rotators, Other Products Related to Foundation
Work, Portable Diesel Generator Sets, Emergency Generators and Various Products Related to Electric
MachinesEngineering

Agricultural Plants, Railway Rolling Stock Inspection/Maintenance System and Pulp and Paper Facilities

Directory
OFFICEHEAD OFFICE (NAGOYA)TOKYO OFFICEOSAKA BRANCHNIPPON SHARYO MANUFACTURING, LLC

1-1 Sanbonmatsu-cho,

12th Fl. Marunouchi Central Bldg.

14th FL,North Gate Building.

1051 Perimeter Drive, Suite 270

Atsuta-ku, Nagoya 456-8691 JAPAN

1-9-1 Marunouchi,

3-1-3 Umeda,

Phone: +81-52-882-3316

Chiyoda-ku, Tokyo 100-0005 JAPAN Kita-ku, Osaka 530-0001 JAPAN

Schaumburg, IL 60173 U.S.A.
Phone: +1-847-228-2700

Fax: +81-52-882-3781

PLANT
TOYOKAWA PLANT

NARUMI PLANT(Railway rolling stock)(Construction equipment)

KINUURA PLANT(Transportation equipment and Steel structure)

2-20 Honohara,

80 Ryucho, Narumi-cho,

20 11-gouchi,

Toyokawa, Aichi 442-8502 JAPAN

Midori-ku, Nagoya 458-8502 JAPAN Handa, Aichi 475-0831 JAPAN

Phone: +81-533-85-4900

Phone: +81-52-623-3529

Fax: +81-533-85-4123

Fax: +81-52-623-4349

54