Japan Overseas Infrastructure Investment Corporationfor Transport & Urban Development

Financial Statements

For the 3rd fiscal year
From April 1, 2016 to March 31, 2017

Tel: +81-3-3295-1040
Fax: +81-3-3295-1993
www.bdo-toyo.or.jp

BDO Toyo & Co.
Kandamitoshirocho7,
Chiyoda-ku,Tokyo
101-0053 Japan

Independent Auditors’ Report(Translation)
May 24, 2017
To the Board of Directors ofJapan Overseas Infrastructure Investment Corporation for Transport & Urban Development
BDO Toyo & Co.
Shinichi Nakashio
Designated Partner
Engagement Partner
Certified Public Accountant
Hiroaki Izawa
Designated Partner
Engagement Partner
Certified Public Accountant
We have audited the accompanying financial statements of Japan Overseas Infrastructure Investment
Corporation for Transport & Urban Development (the “Company”) for the 3rd fiscal year from April 1, 2016
to March 31, 2017, which comprise the balance sheet, the statement of operations and changes in equity,
the notes to financial statements and the supporting schedules, in accordance with item1, paragraph 2 ofArticle 436 of the Companies Act.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements and therelated supporting schedules in accordance with accounting principles generally accepted in Japan. The
responsibility includes designing, implementing and maintaining internal control relevant to thepreparation and fair presentation of the financial statements and the related supporting schedules that are
free from material misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on these financial statements and the related supporting
schedules based on our audit. We conducted our audit in accordance with the auditing standards generallyaccepted in Japan. Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the financial statements and the related supporting schedules are free frommaterial misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in thefinancial statements and the related supporting schedules. The procedures selected depend on theauditor’s judgment, including the assessment of the risks of material misstatement of the financialstatements and the related supporting schedules, whether due to fraud or error. In making those risk
assessments, the auditor considers internal control relevant to the entity’s preparation and fairpresentation of the financial statements and the related supporting schedules in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on
the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness ofaccounting policies used and the reasonableness of accounting estimates made by management, as well as
evaluating the overall presentation of the financial statements and the related supporting schedules.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis forour audit opinion.
Audit opinion
In our opinion, the financial statements and the related supporting schedules referred to above present
fairly, in all material respects, the financial position of the Company as of March 31, 2017, and the resultsof its operations for the year then ended in accordance with accounting principles generally accepted inJapan.
Conflict of Interest
Our firm or the engagement partners have no interest in the Company which should be disclosed pursuant
to the provisions of the Certified Public Accountants Act.
The above represents a translation, for convenience only, of the original report issued in the Japaneselanguage.
BDO Toyo & Co., a Japanese Audit Corporation,is a member of BDO International Limited,a UK company limited by guarantee,and forms part of the international
BDO network of independent member firms.
BDO is the brand name for the BDO network and for each of the BDO member firms.

Statement of Operations(From April 1, 2016 to March 31, 2017)（Thousands of yen）
Operating expenses

1,299,710

Operating loss

1,299,710

Non-operating income
Interest income
Other1361,816

1,953

Non-operating expenses
Interest expenses

176

Amortization of deferred organization
expenses

7,836

Amortization of share issuance cost

12,227

Other

6,314

26,555

Ordinary loss

1,324,313

Loss before income taxes

1,324,313

Income taxes
Net lossAmounts of less than 1 thousand yen are rounded off.

3,800
1,328,113

Notes to Financial Statements
Amounts of less than 1 thousand yen are rounded off.

1. Significant Accounting Policies(1) Basis and method of valuation of securities① Operational investment securities
Securities without market quotations:
Stated at cost determined by the moving-average method② Investment in subsidiaries
Stated at cost determined by the moving-average method(2) Depreciation method of non-current assets① Property and equipment (excluding leased assets)
Depreciation is provided by the declining-balance method, except for the buildings (excludingbuilding facilities), building facilities and structures acquired on or after April 1, 2016, which aredepreciated using the straight-line method.
The useful lives adopted for major assets are as follows:
Buildings: 10 -15 years
Tools, furniture and fixtures: 3-10 years② Leased assets
Leased assets under finance lease arrangements which do not transfer the ownership of the leased
property to the lessee are depreciated to a residual value of zero by the straight-line method using
lease period as the useful life.
③ Intangible assets
Intangible assets are amortized using the straight-line method. Computer software for internal use
is amortized by the straight-line method over the estimated useful lives (5 years).

(3) Amortization method of deferred assets① Deferred organization expenses
Deferred organization expenses are amortized by the straight-line method over 5 years.

② Share issuance cost
Share issuance cost is amortized by the straight-line method over 3 years.

(4) Accounting for provisions① Provision for bonuses
For payment of employees’ bonuses, provision is provided for the portion of the total anticipatedbonuses that is attributable to the fiscal year.
② Provision for retirement benefits
To prepare for employees' retirement benefits to employees, the Company records an amountcalculated based upon the estimated retirement and severance benefit obligations at the end of thefiscal year.
The estimated retirement and severance benefit obligations is calculated based on the simplified
method.
③ Allowance for investment loss
Estimated amount of possible losses from investment in subsidiaries and associates held at thebalance sheet date are accrued based on the status of the investees, etc.

(5) Other significant matters which constitute the basis for preparation of the financial statements
Accounting for consumption taxes
Consumption taxes are excluded in transaction amounts.

2. Changes in Accounting Policies
In association with the revision of the Corporation Tax Act, the Company have applied the “PracticalSolution on a change in depreciation method due to Tax Reform 2016” (The Accounting Standards
Board of Japan (ASBJ) Practical Issues Task Force (PITF) No. 32 dated June 17, 2016) from this fiscal
year, and changed the depreciation method for building facilities and structures that were acquired on orafter April 1, 2016 from the declining-balance method to the straight-line method.
The effect of this change on the financial statements for the financial year ended March 31, 2017 isimmaterial.

3. Additional Information
The Company has applied the “Implementation Guidance on Recoverability of Deferred Tax Assets”(ASBJ Guidance No. 26 dated March 28, 2016) from this fiscal year.

4. Notes to balance sheet
Loan guarantee liabilities
The Company guarantees loans of the investee from financial institutions.

The investee: Concessionária do VLT Carioca S.A.
Amount of guarantee: R$12,603,464

The investee: Concessionaria Move Sao Paulo S.A.
Amount of guarantee: R$11,084,312

The investee: Supervia Concessionaria de Transporte Ferroviario S.A.
Amount of guarantee: R$23,709,396

5. Notes to statement of operations
There are no items to be disclosed.

6. Notes to statement of changes in equity
Class and number of shares at the end of the fiscal year:
Common stock

498,900 shares

7. Notes to taxes effect accounting
Main sources of deferred tax assets:
Deferred tax assets:
Loss carryforwards

718,157 thousand yen

Accrued enterprise taxes

19,806 thousand yen

Provision for bonuses

3,403 thousand yen

Valuation difference on available-for-sale securities

5,619 thousand yen

Allowance for investment loss

4,333 thousand yen

Lease deposits (Asset retirement obligations)

4,877 thousand yen

Other1,687 thousand yen

Subtotal

757,886 thousand yen

Valuation Allowance
Total△ 757,886 thousand yen－thousand yen8. Notes to financial instruments(1) States of financial instruments① Management policy on financial instruments
The Company conducts investment activities based on the standards stipulated in the Act on Japan
Overseas Infrastructure Investment Corporation for Transport & Urban Development. To conduct
investment activities, the Company raises the necessary funds by equity capital and issuance ofGovernment-Guaranteed Bonds.
Regarding fund management, the Company invests only in short-term deposits and investment
securities (certificates of deposit) to secure liquidity and safety of funds.
② Features and risks of financial instruments
Financial instruments held by the Company are short-term deposits. There is no risk of fluctuations
in market prices.
Operational investment securities and investment in subsidiaries and associates held by theCompany are stocks invested by the Company and are exposed to credit risk of the investees andliquidity risk due to unlisted stocks.
Operational investment securities and investment in subsidiaries and associates which aredenominated in foreign currencies are exposed to the risk of exchange fluctuations.
③ Risk management of financial instrumentsⅰ) Management of liquidity risk to financing
The Company controls liquidity risks by monitoring deposits and payments and preparing thestatement of cash positions regularly.
ⅱ) Management of credit risk of the investees
The Company timely and regularly monitors the business conditions of the investees andmakes efforts to promptly obtain information of deterioration of their financial conditions anddeviation from their business plan, etc.
ⅲ) Management of exchange fluctuation risk to operational investment securities and investment
in subsidiaries and associates which are denominated in foreign currencies.
The Company controls exchange fluctuation risks regarding operational investment securities
and investment in subsidiaries and associates which are denominated in foreign currencies by
periodically monitoring exchange rate fluctuations.

(2) Fair value of financial instruments
Book value, fair value and the difference between them as of March 31, 2017 are as follows.
Financial instruments of which the fair value is extremely difficult to measure are not included
below.
(Thousand of yen)Book value
Cash and deposits

11,117,838

Fair value

Difference

11,117,838－① Fair value measurement of financial instruments
Cash and deposits:
The book value approximates fair value due to the short term settlements.
② Financial instruments of which the fair value is extremely difficult to measure are as follows:(Thousand of yen)Book value
Operational investment securities

6,159,310

Unlisted stocks (*1)
Investment in subsidiaries and associates

4,750,890

Unlisted stocks (*1)(*1) Unlisted stocks are not included in the above disclosure of “book value, fair value and thedifference between them”, because they have no quoted market price and their fair value isextremely difficult to measure.
③ Future redemption of financial assets with maturities are as follows:(Thousand of yen)

Within one year
Cash and deposits

11,117,838

9. Notes to related party transactions(1) The Company directors and principal shareholders, etc.
（Thousands of yen）
Attribution

NamePercentage

Relationshipof voting

Nature ofTransaction

Accounting

Year-endtransactions

amountsclassification

balance－－rights ,etc.
Principal

Minister ofOwned

Investments

Investments

shareholder

Finance

directly

in capitalin capital

76.16%

4,000,000(Note 1)

(Note 1) Minister of Finance acquired shares issued by the Company in the amount of ¥50 thousand
per share.

10. Notes to per share information
Net assets per share¥44,478.65

Net loss per share¥3,168.81

11. Notes to significant subsequent events
There are no items to be disclosed.