Japan Overseas Infrastructure Investment Corporation
for Transport & Urban Development

Financial Statements

For the 2nd fiscal year
From April 1, 2015 to March 31, 2016

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, 2016
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
Akihisa Asakawa
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 2nd fiscal year from April 1, 2015
to March 31, 2016, 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 generally
accepted 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 financial
statements and the related supporting schedules, whether due to fraud or error. In making those riskassessments, 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, 2016, 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 pursuantto 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.

Balance Sheet(As of March 31, 2016)（Thousands of yen）
AssetsLiabilities and net assets( Assets )Current assets:( Liabilities )14,740,311

Current liabilities:

135,547

Cash and deposits

10,662,793

Accounts payable-Other

60,899Operational investment securities

4,039,607

Income taxes payable

46,742

Prepaid expenses

12,194

Lease obligations

4,698

Other

25,716

Other

23,207

Non-current assets:
Property and equipment:

4,885,271

Non-current liabilities:

12,371

113,731

Lease obligations

12,371

Total liabilities

Buildings

71,600Tools, furniture and fixtures

53,058 ( Net assets )Leased assets

36,176

Accumulated depreciation
Intangible assets:
SoftwareInvestments and other assets:
Investment in subsidiaries and associates△ 47,104
2,183

2,183
4,769,357
4,682,245

Lease deposits

77,262

Other

9,849

Deferred assets:

59,202

Deferred organization expenses

27,426

Share issuance cost

31,775

Total assets
Amounts of less than 1 thousand yen are rounded off.

19,684,785

Shareholders' equity:

147,919

19,536,865

Capital stock

10,472,500

Capital surplus:

10,472,500

Legal capital surplus
Retained earnings:
Other retained earnings:
Retained earnings brought forward

10,472,500△ 1,408,134△ 1,408,134△ 1,408,134

Total net assets

19,536,865

Total liabilities and net assets

19,684,785

Statement of Operations(From April 1, 2015 to March 31, 2016)（Thousands of yen）
Operating expenses

1,118,841

Operating loss

1,118,841

Non-operating income
Interest income

7,404

Other

3,189

10,594Non-operating expenses
Interest expenses

330

Amortization of deferred organization
expenses

7,836

Amortization of share issuance cost

3,740

Other286

12,194

Ordinary loss

1,120,441

Loss before income taxes

1,120,441

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

1,210
1,121,651

Statement of Changes in Equity(From April 1, 2015 to March 31, 2016)（Thousands of yen）
Shareholders' equity

Capital surplus

Retained earnings
Total net assets
Other retainedearnings

Capital stock

Total shareholders'equity

Legal capital surplus
Retained earnings
brought forward
5,398,750

5,398,750△ 286,482

10,511,017

10,511,017

5,073,750

5,073,750-

10,147,500

10,147,500--

Total changes of items during period

5,073,750

5,073,750△ 1,121,651△ 1,121,651
9,025,848△ 1,121,651

Balance at March 31, 2016

10,472,500

10,472,500△ 1,408,134

19,536,865

19,536,865

Balance at April 1, 2015
Changes of items during period
Issuance of common stock
Net lossAmounts of less than 1 thousand yen are rounded off.

△ 1,121,651

9,025,848

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), which are depreciated 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 provisions
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.

(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. 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$10,770,851

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

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

418,900 shares

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

327,616 thousand yen

Accrued enterprise taxes

14,051 thousand yen

Provision for bonuses

3,138 thousand yen

Accrued social insurances
Lease deposits (Asset retirement obligations)
Subtotal
Valuation Allowance
Total

440 thousand yen
2,375 thousand yen347,621 thousand yen△ 347,621 thousand yen－thousand yen

(Note1) Revision of deferred income tax assets by reduction of taxation rate
Following the enactment on March 29, 2016 of the “Act for Partial Amendment of the Income Tax Act,etc.” and the “Act on Partial Revision, etc. of the Local Tax Act, etc.”, the corporate income tax rate
will be changed from the fiscal year beginning April 1, 2016. As a result of these amendments, theeffective statutory tax rate used to measure deferred tax assets for the fiscal year has been reduced
from 33.06% for the previous fiscal year to 30.86 % for temporary differences that are expected to berecovered or paid during the period of April 1, 2016 through March 31, 2018, and from 32.36% for theprevious fiscal year to 30.62% for temporary differences that are expected to be recovered or paid
during the period on and after April 1, 2018, respectively.

6. 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.
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.

(2) Fair value of financial instruments
Book value, fair value and the difference between them as of March 31, 2016 are as follows. Financial
instruments of which the fair value is extremely difficult to measure are not included below.
(Thousand of yen)Book value

Fair value

10,662,793

Cash and deposits

Difference

10,662,793－① 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

4,039,607

Unlisted stocks (*1)
Investment in subsidiaries and associates

4,682,245

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

10,662,793

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

Name

Percentage

Relationshipof votingNature ofTransaction

Accounting

Year-endtransactions

amountsclassification

balance－－rights ,etc.
Principal

Minister ofOwned

Investments

Investments

shareholder

Finance

directly

in capitalin capital

71.61%(Note 1)9,600,000

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

(2) Subsidiaries and associates（Thousands of yen）
Attribution

Name

Percentage

Relationshipof voting

Nature ofTransaction

Accounting

Year-endtransactions

amountsclassification

balance

Investment in

4,682,245

rights ,etc.
SubsidiaryJAPAN

Directly

Acquisition

Payment for

HIGH-SPEED

holdingof new sharesinvestments

subsidiaries andRAILWAY，INC

100.00%in capital

associates

4,682,245(Note 2)

(Note 2) US$40,048 thousand was paid for investments in capital of the subsidiary.

8. Notes to per share information
Net assets per share¥46,638.49

Net loss per share¥4,113.24

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