Net income / Net income to sales 1,785 1, ,746. Millions of yen. $ 553,283 Operating profit... 67,092 67,310

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2 Financial Highlights Net sales (Millions of yen) Operating profit / Operating profit margin (Millions of yen / %) Net income / Net income to sales (Millions of yen / %) Shareholders equity / ROE (Millions of yen / %) Total assets / ROA (Millions of yen / %) , , , ,087 65,093 2,141 3, , ,140 2, ,013 1, , ,077 30,867 31, ,751 33, ,641 84,493 78, ,599 80, Fiscal Years Millions of yen Thousands of U.S. dollars (Note) Fiscal Years Net sales... 60,476 67,092 67,310 64,087 65,093 $ 553,283 Operating profit... 2,141 3,323 2,947 1,140 2,947 25,053 Per share (yen): Net income Shareholders equity Total assets... 77,641 84,493 78,215 80,599 80,860 $ 687,293 Note: U.S. dollar amounts appearing in this annual report are converted from yen, for convenience only, at the rate of = $1.00, the rate of exchange prevailing as of March 31,. ANNUAL Contents Financial Highlights Review of Operations...02 New Products History Product Chronology...06 Financial Section Company Information...11 Kyosan Electric Mfg. Co., Ltd. Page 01

3 Review of Operations Signal Systems Business A challenging operating environment had repercussions for the sales of our Signal Systems business. Despite sings of an upturn in capital investment for railway control and safety equipment, accompanying a recovery in passenger numbers and higher demand for highly functional and diversified products, major projects leveled off in the fiscal year under review. Reflecting these operating conditions, Kyosan experienced slight year-on-year declines in orders received and net sales in this segment. In public transportation-related systems, orders received generally involved small projects, with certain exceptions such as orders for half-height platform screen doors for the Marunouchi Tokyo Metro Subway Line and signal equipment for the Fukutoshin Tokyo Metro Subway Line. As a result, total orders declined from the previous fiscal year, although net sales moved higher. In private transportation-related systems, demand for signal equipment for the Tokyu Oimachi Line, new automatic train stop (ATS) systems from the Keihin Electric Express Railway Co., Ltd. and Keisei Electric Railway Co., Ltd., and traffic control systems for the Nagoya area from Kintetsu Corporation contributed to an increase in total orders received, while net sales declined. Sales by Segment (Consolidated Basis) Signal Systems Business 50,980 (78.3%) In JR-related systems, both orders received and net sales increased from the previous fiscal year. This was a result of demand for ATS systems from JR companies and signal systems for Hakata Railyard from West Japan Railway Company, as well as the delivery of uninterruptible power supply systems for the Jyoetsu Shinkansen to East Japan Railway Company. In exports, both orders and sales declined year on year. A number of new projects, including new transportation systems for the international airport in Dubai and computerized interlocking devices for Chinese railway lines, could not fill the gap left by the completion of delivery of railway signaling equipment to the Taiwan High Speed Rail Project. Sales 65,093 (100%) prefectural governments and intensified competition among companies in the private sector. In response, Kyosan adopted a number of structural reforms in its business and bolstered production, while seeking to step up orders for growing terminal control units, based on the digital transmission system. Despite these initiatives, both orders received and net sales fell from the levels of the previous year. Accounting for the foregoing factors, overall Signal Systems business orders decreased 2.0%, to 57,391 million, while net sales slipped 4.3%, to 50,980 million. Electric Appliances Business Results for semiconductor equipment were supported by capital investment in line with higher demand for liquid crystal display (LCD) panels and capital outlays by mobile 14,113 (21.7%) Electric Appliances Business (Millions of yen) phone companies. As a result, both orders and sales increased from the previous fiscal year. In industrial power units, we not only achieved steady growth in sales of LCD production equipment power supplies, we also recorded a rise in sales of DC and RF power supplies for semiconductor manufacturing equipment, on the strength of growing demand for flash memories. Power supplies for photovoltaic power generation manufacturing equipment are very promising and during the term orders for these products also contributed to a significant increase in both orders and sales from the previous fiscal year. Notwithstanding the impact of continued restraint on capital spending by gas and electric companies, orders and sales of power supplies for communication equipment increased year on year thanks to the positive effect of front-loaded capital investment by mobile phone companies. In display systems and control systems, both orders and sales rose from the levels of the previous fiscal year. Conditions for Road Traffic Monitoring and Control Systems remained harsh because of falling prices attributable to budget revisions by the national and As a result, overall orders in the Electric Appliances business rose 16.9% year on year, to 14,561 million. Sales were up 30.3%, to 14,113 million. Kyosan Electric Mfg. Co., Ltd. Page 02

4 New Products Railway Signal Division Signal System for Taiwan High Speed Rail Project Signal system with Japan's Shinkansen technology at its core. Taiwan High Speed Rail commenced operation between Banciao and Kaohsiung on January 5,, and began full service from Taipei to Kaohsiung from March 2,. Kyosan delivered the entire signaling system, beginning with the ATC system, to Taiwan High Speed Rail. This signaling system has specifications based on the signaling system used in the Tokaido and Kyushu Shinkansen, with the necessary additional functions installed for the specific route. It has slashed the time required to travel between Taipei and Kaohsiung to 90 minutes on the fastest train, traveling at a maximum speed of 300km/h. Taiwan High Speed Rail Computerized Interlocking Devices A convergence of component technologies, delivering a wide array of systems to cater to a broad range of requirements. Kyosan s computerized interlocking devices are presently operating at over 800 stations within Japan. We also have an impressive track record of overseas delivery to countries such as China and India. Our devices have earned high marks from users, testament to their safety and reliability. CI system Platform Safety Facilities Movable platform doors and gap fillers Many stations are now being equipped with movable platform doors and gap fillers to prevent falls from the platform or contact with the cars. Kyosan has delivered these facilities to Tokyu Meguro Line, Tsukuba Express Line and Marunouchi Tokyo Metro Subway Line. As the leading manufacturer of these facilities, we will continue to supply products designed to keep the platforms safe. Railway platform safety systems Millimeter Wave Level Crossing Obstruction Detection Device Monitors the entire crossing, detects pedestrians and automobiles. Conventional crossing obstruction detection devices were designed to detect automobiles stuck within the crossing, as they have the potential to interfere with train operation. Recently, there have been calls for the detection of pedestrians and persons using wheelchairs, to enable them to safely traverse the crossing. Kyosan has developed and introduced a product using millimeter wave sensors to detect obstructions. It scans the entire crossing, picking up the reflection from objects and vastly improving obstruction detection capability. EHF crossing obstruction detection devices Kyosan Electric Mfg. Co., Ltd. Page 03

5 Traffic Control Systems Division UD Transmission-Compatible UC-Type Signal Control Subsystems Line consolidation system leads to significant operating maintenance cost reductions by consolidating communication lines Kyosan has provided its latest UD transmission system-compatible UC-type signal control subsystem. By setting up a circuit-intensive terminal with router functions on the roadside, the new transmission system allows for access to a number of various terminal-type equipment through one communication line. UD-type system Signal control mechanism Signal control mechanism Optical beacon UC-type traffic signal control equipment Aggregated lines Aggregating equipment for terminal lines Signal control mechanism (Central system) Traffic information signboard Slim LED Traffic Signal Units for Cars and Pedestrians Significantly thinner, lighter LED light signals contribute to enhanced roadway environments The popularity of LED-type traffic signals is quickly growing. These signals are characterized by their contributions to energy-savings due to low-power consumption. With long-life operation, they also lead to reduced operating and maintenance costs. With high-intensity luminosity that can be seen in direct sunlight, they have gained the favor of both drivers and pedestrians alike. Also, according to Kyosan data, its LED traffic signals for cars are 1/3 thinner and lighter than standard units, with pedestrians signals being 1/2 the thickness and weight of standard units. Slim LED-type traffic signals Slim LED-type pedestrian signals Power Converter Division RF Generator Ecological, energy-saving, powerful high-frequency power supply system The demand for RF generators as an indispensable power supply system in the manufacturing process for LCDs (for flat-screen TVs and monitors), semiconductors and optical discs such as DVDs and CDs is growing. RF generators are leading-edge products that demonstrate Kyosan s technological strength. In line with increasingly larger flat-screen TVs and silicone wafer sizes in recent years, requests for larger-capacity RF generators have increased along with demand for thinner, lighter weight, higher-efficiency RF generators. As a leading manufacturer of RF generators, Kyosan has expanded its product lineup to meet these needs. New lineup Compact 4MHz 0.5kW 4MHz 25kW Compact 13.56MHz 30kW 27.12MHz 20kW 4MHz 0.5kW 13.56MHz 30kW Kyosan Electric Mfg. Co., Ltd. Page 04

6 History 1917 Company established as Tokyo Denki Kogyo Co., Ltd. in Kanda-Awajicho, Tokyo. Commenced manufacturing and sale of electro-medical apparatus and other electrical machinery and devices Tokyo Office established Company name changed to Kyosan Electric Mfg. Co., Ltd Constructed and transferred Head Office and Factory to the present location. Merged limited partnership Kyosan Shokai and Nippon Electric Application Co., Ltd Nagoya District Office (currently Nagoya Branch) established Kyosan Seiki Co., Ltd. established Stock listed on the Tokyo Stock Exchange Kyushu Satellite Office (currently Kyushu Branch) established Nihon International Seiryuki Co., Ltd. (currently Nihon Inter Electronics Corporation) established Stock listed on the First Section of the Osaka Securities Exchange. Kyosan Metal Industry Co., Ltd. established Tokyo Office transferred to the present location. Kyosan Koji Co., Ltd. (currently Kyosan Engineering and Construction Co., Ltd.) established Kyosan Kogyo Co., Ltd. established Sendai Sales Branch (currently Sendai Branch) established Nagoya Electric Engineering Co., Ltd. (currently Meielec Co., Ltd.) established jointly with Nagoya Railroad Co., Ltd Hiroshima Sales Branch (currently Hiroshima Branch) established. Kyosan Chemical Industry Co., Ltd. established Sapporo Sales Branch (currently Sapporo Branch) established. Taiwan Kyosan Co., Ltd. established in Taiwan Shikoku Sales Branch (currently Shikoku Branch) established. Kyosan Engineering Service Co., Ltd. established Osaka Branch transferred to the present location Kyosan System Co., Ltd. established Partial ownership of Osaka Rectifier Co., Ltd. acquired, making the company a Kyosan affiliate Swiss franc convertible bonds issued Swiss franc convertible bonds issued with preemptive rights Sueyoshi business center established Capitalization increased to 6.27 billion (amortization of bonds with preemptive rights completed) 2005 Zama Factory established Kyosan Electric Mfg. Co., Ltd. Page 05

7 Product Chronology 1917 Company established way 3-position track relay for alternating current 1921 Electric railway signal device Impedance bond 1923 Electromechanical interlocking device 1925 Level crossing alarm device Electric point machine 1926 Electrical interlocking device 1930 Automatic blocking device for single tracks 1931 Cuprous oxide rectifier Traffic signal Small automobile (type: Kyosan) 1932 Trim arm type ATS device 1933 Relay interlocking equipment 1936 CTC system 1938 Systematic traffic signal controller 1943 Car retarder 1950 Selenium rectifier 1951 Time code type CTC system 1954 Type B cab warning device 1956 AF track circuit device 1958 Silicon rectifier Type A and C cab warning devices Multistage systematic traffic signal controller 1962 Type S ATS device 1963 ATC system for the Tokaido Shinkansen Line 1964 Automatic-response systematic traffic signal controller 1965 Programmed traffic control (PTC) system 1967 Various types of ATS devices 1968 Transfer machine 1969 Total traffic control (TTC) system 1970 Ultrasound vehicle detector 1972 Parking meters Power supply for satellite communication earth stations 1973 ATC system for the Sanyo Shinkansen line 1974 Computerized TTC system Traffic control system Power supply for electronic exchanges (DEX) 1976 Destination announcement device 1977 Cab signal type ATC system Large-capacity CVCF power supply Skypower Noninsulated track circuit device 1978 ATC systems for the Tohoku and Joetsu Shinkansen Lines Centrally monitored multistage systematic controller 1980 Doppler type vehicle detector VVVF power supply Clear-up fuse 1981 Signal security device for new transportation systems for medium-volume transport (ATO and others) Roadside type variable signboards 1982 Computer-based centrally controlled train control device for Amtrak (U.S. railroad company) 1983 Type A centrally controlled traffic signal High-frequency, large-capacity converters 1984 Electronic interlocking device 1985 Lapping machine 1986 Semi-free pattern type information panel controller Solid-state, high-voltage power supply LED signboard 1987 Central control system for parking meters 1988 Resistive type magnetic levitation High Speed Surface Transport (HSST) control device Train timetable creation support device Solid-state RF generator 1989 Export of a traffic control system to Shenzhen, China Power supply for mobile communications 1991 Digital ATC system 1993 Airport passenger information system Multifunctional digital RF generator Programmed route control (PRC) system 1994 Multifunctional digital DC converter 1995 ISO 9001 certification granted for Power Converter Division 1996 ISO 9001 certification granted for Railway Signal Division and Traffic Systems Division (currently Traffic Control Systems Division) 1996 Electronic interlocking device for export 1998 Integrated electronic interlocking device for route segment Traffic control ITS equipment for the Nagano Olympics 2000 Half-height platform screen door 2002 ISO certification 2003 Combined type electric switch machine 2004 Gap-filler 2005 Signal system for magnetic levitation HSST is put into revenue operation Railway Signaling Equipment for Taiwan High Speed Rail World first or first in Japan Kyosan Electric Mfg. Co., Ltd. Page 06

8 Financial Section Consolidated Balance Sheets Kyosan Electric Mfg. Co., Ltd. and Consolidated Subsidiaries As of March 31,, 2006 and 2005 Millions of yen Thousands of U.S. dollars ASSETS FY2005 FY2006 FY FY Current assets: Cash on hand and in bank... Notes and accounts receivable... Allowance for doubtful accounts... Inventories... Other current assets... Total current assets... 6,533 22,788 (18) 22,804 1,038 53,145 7,259 24,812 (34) 19,280 1,184 52,501 5,051 28,265 (26) 18,499 1,180 52,969 $ 42, ,243 (221) 157,241 10, ,228 Fixed assets Property, plant and equipment: Land... Buildings and structures... Others... Property, plant and equipment - net... 3,939 2,230 1,964 8,133 3,928 2,536 2,149 8,613 3,841 2,459 2,089 8,389 32,647 20,905 17,753 71,305 Intangible assets ,503 Investments and long-term receivables: Long term loans receivables... Investment securities... Allowance for doubtful accounts... Other investments and long-term receivables... Total investments and long-term receivables... Total fixed assets ,156 (72) 3,409 16,544 25,070 16,795 (71) 2,219 18,943 28,098 16,012 (69) 2,911 18,854 27, ,102 (587) 24, , ,065 Total assets... 78,215 80,599 80,860 $ 687,293 Millions of yen Thousands of U.S. dollars LIABILITIES, MINORITY INTERESTS AND SHAREHOLDERS EQUITY FY2005 FY2006 FY FY LIABILITIES Current liabilities: Short-term bank loans... Notes and accounts payable... Accrued income taxes... Other current liabilities... Total current liabilities... 11,670 13, ,088 30,751 13,378 15, ,110 34,818 8,900 15,185 1,293 6,055 31,433 $ 75, ,071 10,990 51, ,178 Long-term liabilities: Long-term debt... Employees retirement allowances... Allowance for retirement benefits for directors and statutory auditors... Other long-term liabilities... Total long-term liabilities... 6,563 8, ,701 3,064 8, ,795 7,383 7, ,505 62,754 64,764 1,715 2, ,786 Total liabilities... 46,452 46,613 46,938 $ 398,964 Net assets: Shareholders equity... Common stock... Capital surplus... Retained eamings... Treasury stock... Valuation and translation adjustments... Net unrealized gains on securities... Foreign currency translation adjustments... Minority interests... Total net assets... 28,467 6,270 4,667 17,552 (22) 3,066 3,146 (80) ,763 28,490 6,270 4,667 17,599 (46) 5,261 5,327 (66) ,986 29,715 6,270 4,625 18,870 (50) 4,110 4,179 (69) 97 33, ,574 53,296 39, ,393 (431) 34,934 35,523 (589) ,329 Total liabilities and net assets... 78,215 80,599 80,860 $ 687,293 Kyosan Electric Mfg. Co., Ltd. Page 07

9 Consolidated Statements of Income Kyosan Electric Mfg. Co., Ltd. and Consolidated Subsidiaries For the years ended March 31,, 2006 and 2005 Millions of yen Thousands of U.S. dollars FY2005 FY2006 FY FY Net sales... Cost of sales... Gross profit... 67,310 55,383 11,927 64,087 54,058 10,029 65,093 53,351 11, , ,475 99,808 Selling, general and administrative expenses... 8,980 8,889 8,795 74,755 Operating profit... 2,947 1,140 2,947 25,053 Non-operating profit: Dividend income... Other non-operating profit... Total non-operating profit... Non-operating expenses: Interest expenses... Other non-operating expenses... Total non-operating expenses ,125 4,123 2, ,910 Ordinary profit... Extraordinary gains... Extraordinary losses... Income before income taxes... Income taxes... Deferred income taxes... Minority interest in income (loss)... Net income... 3, ,769 1, (506) (9) 739 1, (528) , ,054 1, (138) 1,746 26, ,966 11,276 1,024 (1,175) 14,841 ANNUAL Consolidated Statements of Cash Flows Kyosan Electric Mfg. Co., Ltd. and Consolidated Subsidiaries For the years ended March 31,, 2006 and 2005 Millions of yen Thousands of U.S. dollars FY2005 FY2006 FY FY Cash flows from operating activities... (117) 4, ,518 Cash flows from investing activities... (375) (1,467) (496) (4,217) Cash flows from financing activities... (810) (2,235) (601) (5,108) Effect of exchange rate changes on cash and cash equivalents (0) (2) Increase (decrease) in cash and cash equivalents... (1,303) 368 (801) (6,809) Cash and cash equivalents at the beginning of the period... 5,939 4,636 5,004 42,538 Cash and cash equivalents at the end of the period... 4,636 5,004 4,203 35,729 Kyosan Electric Mfg. Co., Ltd. Page 08

10 Notes to Consolidated Financial Statements Kyosan Electric Mfg. Co., Ltd. and Consolidated Subsidiaries As of March 31, Significant items relating to the preparation of the consolidated financial statements (1) Scope of consolidation Number of consolidated subsidiaries: 8 Principal consolidated subsidiary: Kyosan Engineering and Construction Co., Ltd. Shingo Kogyo Co., Ltd., a non-consolidated subsidiary, is not included in the scope of consolidation, as its total assets, net sales, net income and retained earnings are minor and have no significant impact on the consolidated financial statements. (2) Application of the equity method Of one non-consolidated subsidiary and two affiliated companies, the investment in Nihon Inter Electronics Corporation, an affiliate, is accounted for by the equity method. The investment in Shingo Kogyo Co., Ltd., a non-consolidated subsidiary, and Osaka Rectifier Co., Ltd., an affiliated company, are not accounted for by the equity method, as operating results of these companies have only a minor impact on net income, retained earnings and other accounts and have no significant impact on the consolidated financial statements. Kyosan accounts for investments in these companies using the cost accounting method. (3) Significant accounting policies ➀ Accounting standards and evaluation of important assets (a) Marketable securities Securities held to maturity Amortized cost method (Straight-line method) Other securities Securities with actual value: market value method based on the market value on the settlement date (Net unrealized gains and losses on other securities are reported directly to shareholders equity. The cost of these securities is calculated based on the moving-average cost method.) Securities without actual value: cost basis using the moving average method (b) Inventory Finished goods and work-in-process: cost basis using the identified cost method Semi-finished goods and raw materials: cost basis using the gross average method ➁ Depreciation of important depreciable assets (a) Property, plant and equipment: declining balance method for Kyosan and domestic consolidated subsidiaries and the Straightline method for other subsidiaries. However, buildings (excluding associated structures and facilities) acquired after April 1, 1998 by Kyosan and domestic consolidated subsidiaries are based on the Straight-line method. The service life of the main buildings is as follows: Buildings and structures: 3 to 50 years Others: 2 to 20 years (b) Intangible assets: Straight-line method Software for internal use is depreciated using the Straight-line method over the expected life of five-years. ➂ Accounting policies for reserves (a) Allowance for doubtful accounts To provide for losses on the write-off of debt such as accounts receivable, the Company calculates estimated uncollectible amounts for ordinary debt based on the past ratio of bad loans, and for doubtful receivables and other specific debt by examining the potential for recovery on a case-by-case basis. (b) Allowance of directors bonus To provide for the payment of bonuses to directors and executive officers, the Company records the estimated amount of payment for the current fiscal period. (c) Allowance for employees retirement benefits Reserves for employee retirement benefits are calculated based on projected benefit obligations and estimated annuity assets at the end of the current fiscal year. Prior service costs are amortized using the Straight-line method over a specific time period (five years) within the average remaining service life of the employee at the time of retirement. Actuarial differences are amortized in the fiscal year after they are calculated using the Straight-line method over a specific time period (five years) within the Kyosan Electric Mfg. Co., Ltd. Page 09

11 average remaining service life of employees in the fiscal year during which they retire. (d) Allowance for directors retirement benefits To provide for retirement bonuses to directors and executive officers, the Company records the amount required at the end of the fiscal period to make payments in accordance with internal regulations. (e) Allowance of loss on contract To provide for losses on order contracts, the Company records the estimated amount of losses for order contracts for which a future loss is anticipated and for which amount of the future loss can be reasonably estimated at the end of the current fiscal period. ➃ Accounting method for lease transactions With the exception of cases in which ownership of the leased property is transferred to the lessee, finance lease transactions are accounted for in the same manner as ordinary lease transactions. ➄ Hedge accounting Because they fulfill the criteria for special exceptions, interest rate swaps are accounted for using exceptional accounting procedures. ➅ Other significant items relating to the preparation of the consolidated financial statements Tax accounting methods: The tax exclusion method is applied to local and other consumption taxes. (4) Evaluation of the assets and liabilities of consolidated subsidiaries Assets and liabilities of consolidated subsidiaries are evaluated at fair value. (Accounting Standards Board of Japan (ASBJ) Statement No. 4 on November 29, 2005) applies from this fiscal period. Operating profit, ordinary profit, and income before income taxes and minority interests declined 89 million yen, respectively, in comparison with the figures before the application of the Standards. Accounting Standards for Presentation of Net Assets in the Balance Sheet The Accounting Standard for Presentation of Net Assets in the Balance Sheet (ASBJ Statement No. 5 on December 9, 2005) and the Guidance on Accounting Standard for Presentation of Net Assets in the Balance Sheet (ASBJ Guidance No. 8 on December 9, 2005) apply from this fiscal period. There is no impact of the application on profits and losses. The amount corresponding to Shareholders equity in the past presentation is 33,825 million yen. (7) Additional information Allowance for directors retirement benefits Although the company that prepared the consolidated financial statements had recorded the amount required at the end of the fiscal period to make payments in accordance with internal regulations, the Board of Directors resolved at a meeting held on March 18, 2006 to abolish the allowance system for directors retirement benefits as of the close of the ordinary general meeting of shareholders held on June 29, In accordance with the approval of a proposal for the termination payment of retirement benefits at the ordinary general meeting of shareholders, the company reversed the entire allowance for directors retirement benefits and recorded the amount due of 310 million yen in Others current liabilities and Other long-term liabilities. (5) Amortization of goodwill Goodwill is amortized evenly over five years. (6) Changes in significant items relating to the preparation of the consolidated financial statements Accounting standards for directors bonus The Accounting Standard for Directors Bonus Kyosan Electric Mfg. Co., Ltd. Page 10

12 Company Information Company name: Kyosan Electric Mfg. Co., Ltd. Established: September 1917 Capitalization: 6.27 billion Number of employees: 1,012 Address: Heian-cho, Tsurumi-ku, Yokohama Tel: Directors and Statutory Auditors: President: Tsutomu Nishikawa Director: Morimasa Sumi Director: Sadatsuna Watanabe Director: Hiroshi Takahashi Director: Kazuo Hinata Director: Shigenobu Nishida Director: Hirokazu Watanabe Director: Tsutomu Tokodai Director: Fumihide Esaka Statutory Auditor: Yasumasa Inaba (standing) Statutory Auditor: Michihiro Hiraoka Statutory Auditor: Hidehiro Yokoyama Statutory Auditor: Masatoshi Oshima Executive Officers and Officers: CEO: Tsutomu Nishikawa Senior Executive Officer: Morimasa Sumi Senior Executive Officer: Sadatsuna Watanabe Executive Officer: Hiroshi Takahashi Executive Officer: Kazuo Hinata Officer: Shigenobu Nishida Officer: Hirokazu Watanabe Officer: Tsutomu Tokodai Officer: Shohei Sato Officer: Kazuaki Miyazaki Officer: Kanichiro Kaminishi Officer: Tsutomu Kanno Officer: Shinichi Sugita Officer: Hiroshi Sonoda Officer: Toru Onodera (As of June 28, ) Kyosan Electric Mfg. Co., Ltd. Page 11

13 Organization: Development Center Planning Center Dept. Management Dept. Board of Directors Cost Management Dept. Quality Reinforcement Promotion Dept. Project Management Dept. President Management Council Executive Officers, Statutory Auditors Internal Auditing Office General Planning Dept. Railway Signal Division Installation Management Dept. 1st Sales Dept. 2nd Sales Dept. Overseas Dept. Development Dept. 1st Signal System Engineering Dept. 2nd Signal System Engineering Dept. Information Technology Designing Dept. Manufacturing Planning Dept. Manufacturing Dept. Quality Control Dept. Corporate Planning Office Investor and Public Relations Office Traffic Control Systems Division Management Dept. Traffic Control Systems Sales Dept. Traffic Control Systems Designing Dept. Traffic Control Systems Quality Control Dept. Machinery Dept. Compliance Dept. Business Development Center OA System Center General Affairs Dept. Finance & Accounting Dept. Technical Quality Management Center Business Headquarters Power Converter Division Osaka Branch Office Management Dept. Sales Dept. Designing Dept. Manufacturing Control Dept. Manufacturing Dept. Quality Control Dept. General Affairs Dept. 1st Sales Dept. 2nd Sales Dept. 3rd Sales Dept. 4th Sales Dept. Board of Auditors Statutory Auditors Sapporo Branch Sendai Branch Nagoya Branch Hiroshima Branch Kyushu Branch Shikoku Branch Industrial Engineering Dept. Purchasing Dept. Products Custody Dept. Kyosan Electric Mfg. Co., Ltd. Page 12

14 Major Products: Railway Signal Systems Railway Signal Systems, which underpins our Signal Systems business, traces its history back to 1921, when we developed the nation s first electric signaling system. Since then, we have achieved successive results as a pioneer in railway control and safety. Our systems operate on the side of safety, preventing accidents in the case of a breakdown, as we pursue the failsafe principle that is the pre-eminent concept in railway signaling. Moreover, Kyosan implements research and development directed toward constant improvement and usability. Traffic operation control systems (CTC, PRC, PTC, TTC) Electronic interlocking devices Relay interlocking equipment Train control systems (ATS, ATC, ATO) Train detection systems (Commercial, AF Track Circuit, NIT) Overrun stoppers Departure control equipment Safety information transmission equipment (transponder) Railway signal monitoring equipment (ATC, electronic interlocking, wayside equipment) Diagram creation support systems Level crossing protection equipment (electronic crossing signal control, constant alarming time length device, motor operated crossing gate, crossing obstruction detection devices) Embedded LED guidance display device for passenger safety (Thread line) Falling objects sensor equipment Half-height platform screen doors Platform gap fillers Inplant railway transportation control systems (wagon number detection, automatic train detection) Test equipment (ATC, ATO, ATS) Signaling equipment (electric point machine, car stopper, track circuit, relays, signals, impedance bonds) New transportation system Magnetic levitation linear motorcar system Destination information display system Automatic announcement equipment Road Traffic Control Systems Our involvement with road traffic monitoring and control systems began in 1931, when we installed Japan s first traffic signal systems in Kyobashi and Ginza. Our goal is for society s transportation to be accident and congestion-free, reliable and comfortable. We offer a wide selection of traffic control systems and barrier-free-related products from our flagship comprehensive control system to traffic signal terminal units and every kind of roadside sign. Traffic control systems (advanced traffic control, traffic information transmission, public vehicle priority subsystem) Traffic signal control equipment LED traffic signal units Vehicle detecting devices Optical beacons LED signboards Road information sensors Vehicle approach signboards SS radio transmission equipment Variable signboards Parking meters LED mobile signboard cars Small LED mobile signboards Crossing buttons for vulnerable pedestrians Pedestrian audio assistant buttons Pedestrian support equipment ITS related equipment Power Converters Having cultivated and mastered semiconductor-applied technology, we have developed power generation equipment that supplies the power needed to support safe, high-speed signaling for rail and road signaling systems, meeting the demand for increasingly higher speeds of network communication in the digital age. By developing RF and other cutting-edge systems for all kinds of power units, we have contributed greatly to the electric appliance industry. High-capacity high-frequency (RF) galvano-power supply equipment RF power supplies Power supplies for high-frequency induction heating apparatus Uninterruptible power supplies Power supplies for communications equipment Frequency transformation equipment Compound frequency equipment Power supplies for electric precipitators Electrical drainage equipment Clear-up fuses Other Equipment Other Equipment comprises products not belonging to the segments above.offered through this segment are a wide range of other products such as bus control systems and building entry and exit control systems. Information display systems Bus control systems Seat booking systems Various control systems Various sensors for automatic doors (Mat switches etc) Targeting equipment Amusement facility control systems Entry/exit control systems Other electric appliances Kyosan Electric Mfg. Co., Ltd. Page 13

15 Offices and Factories: Head Office and Factory Heian-cho, Tsurumi-ku, Yokohama TEL FAX Tokyo Office Marunouchi, Chiyoda-ku, Tokyo (New Nisseki Building) FAX General Affairs Department TEL Finance & Accounting Department TEL Railway Signal Division: 1st Sales Department TEL TEL TEL nd Sales Department TEL Overseas Department TEL / 8136 Traffic Control Systems Division: Traffic Control Systems Sales Department TEL Machinery Sales Department TEL Power Converter Division: Sales Department TEL Sueyoshi Office Traffic Control System Division Kami-sueyoshi, Tsurumi-ku, Yokohama TEL FAX Osaka Branch Office Naniwa-cho, Kita-ku, Osaka (Nihon Seimei Tenroku Building) FAX General Affairs Department TEL st Sales Department (Railway signals) TEL (Industrial equipment) TEL nd Sales Department (Traffic signals) TEL rd Sales Department (Power supply equipment) TEL th Sales Department (JR) TEL Sapporo Branch Kita Ichijo Nishi, Chuo-ku, Sapporo (Kogin Building) TEL FAX Sendai Branch Chuo, Aoba-ku, Sendai (Sumitomo Seimei Sendai Building) TEL FAX Nagoya Branch Meieki, Nakamura-ku, Nagoya (JR Central Towers) TEL FAX Hiroshima Branch 1-16 Kami Osuka-cho, Higashi-ku, Hiroshima (Kotsu Kaikan Building) TEL FAX Kyushu Branch Hakata Ekimae, Hakata-ku, Fukuoka (Sumitomo Seimei Hakata Ekimae Building) TEL FAX Shikoku Branch 8-1 Hyogo-machi, Takamatasu (Nihon Seimei Takamatsu Hyogo-machi Building) Subsidiaries and Affiliates: Kyosan Seiki Co., Ltd. Manufacture and sale of traffic signals, railway signals, etc., specific and general labor dispatch service Kami-sueyoshi, Tsurumi-ku, Yokohama TEL Nihon Inter Electronics Corporation Manufacture and sales of silicon rectifier elements, silicon controlling rectifier elements, silicon diodes, etc Soya, Hadano, Kanagawa TEL Kyosan Metal Industry Co., Ltd. Manufacture, inspection, repair and sale of various machinery and equipment and their parts, design and installation work of various machinery and equipment, specific and general labor dispatch service Komatsubara, Zama, Kanagawa TEL Kyosan Engineering and Construction Co., Ltd. Design and installation of railway signal security facilities Minami-rokugo, Ota-ku, Tokyo TEL Kyosan Kogyo Co., Ltd. Sales of office equipment and supplies; damage insurance agency 2-29 Heian-cho, Tsurumi-ku, Yokohama TEL Kyosan Chemical Industry Co., Ltd. Manufacture and sales of printed wiring boards and various plating coatings Asahi-cho, Tsurumi-ku, Yokohama TEL Taiwan Kyosan Co., Ltd. Manufacture and export of signal relays No. 3-1, Chien Kuo Rd., Taichung Export Processing Zone, Taichung, Taiwan, Republic of China TEL / 1192 Kyosan Engineering Service Co., Ltd. Design, installation inspection, maintenance, manufacture and sales of signal security facilities and electric equipment,specified and general temporary staffing services Heian-cho, Tsurumi-ku, Yokohama TEL Kyosan System Co., Ltd. Development of computerized systems, and computer systems design and programming under consignment Design, manufacture and sales of computer peripherals and terminal units Kami-sueyoshi, Tsurumi-ku, Yokohama TEL Osaka Rectifier Co., Ltd. Design, manufacture and sales of semiconductor power supplies Torikaikami, Settsu, Osaka TEL Zama Factory Komatsubara, Zama City, Kanagawa TEL FAX Abbreviations AF: Audio Frequency ATC: Automatic Train Control ATO: Automatic Train Operation ATP: Automatic Train Protection ATS: Automatic Train Stop CI: Computerized Interlocking CTC: Centralized Traffic Control CVCF: Constant Voltage Constant Frequency DEX: Dendenkosya Electronics exchanger HSST: High Speed Surface Transport NIT: PRC: PTC: RF: TD: Non Insulated Track Circuit Programmed Route Control Programmed Traffic Control Radio Frequency Train Detection TTC: Total Traffic Control VVVF: Variable Voltage Variable Frequency Kyosan Electric Mfg. Co., Ltd. Page 14

16 100% recycled paper Head Office: 29-1, Heian-cho, 2-chome, Tsurumi-ku, Yokohama , Japan TEL: Fax : URL: Printed in Japan