Annual Report 2012
For the Year Ended March 31, 2012

ProfileEver since its founding in 1897, Meidensha Corporation has been working on the relentless
pursuit of new technology and product developments, and witnessed steady growth. Our
product offerings cover a wide range, including generators, substation equipment, e­ lectronicequipment and information equipment. Our mission is not only to provide these products
but also to recommend the best solutions on the basis of what a customer values most ofall. In order to realize these best solutions, we engage in the supply of various products andprovide related services such as engineering, facility management (including operation andmaintenance), repair and product-life support.

Contents
Financial Highlights

01

Message from Management

02

Topics: Medium-Term Management Plan
POWER 5 Phase III Has Started

04

At a Glance

05

Review of Operations

06

Research & Development

10

Corporate Governance11

Corporate Social Responsibility

12

Consolidated Financial Review

13

Consolidated Balance Sheets

14

Consolidated Statements of Income

16

Consolidated Statements of Comprehensive Income (Loss)

17

Consolidated Statements of Shareholders’ Equity/Changes in Net Assets

18

Consolidated Statements of Cash Flows

19

Notes to Consolidated Financial Statements

20

Independent Auditor’s Report

41

Consolidated Subsidiary Companies

42

Corporate Data

43

Board of Directors

43

Forward-Looking Statements
This annual report contains forward-looking statements regarding the future results and performance of the Meiden
Group. Such statements are based on information available at the time of preparation of this report, and include various
potential risks and uncertainties. As a result, actual results could differ materially from those anticipated by these forward-looking statements.

Financial Highlights
Meidensha Corporation and Consolidated Subsidiaries
Years ended March 31

Thousands of
U.S. dollars(except per
share data)

Millions of yen (except per share data)

For the year:
Orders received
Net sales
Operating income
Net income (loss)
Capital expenditures
Depreciation and amortization
R&D expenses
Per share data (yen and U.S. dollars):
Net income (loss)
Cash dividends
At year-end:
Total assets
Total equity
Number of employees

2008

2009

2010

2011

2012

2012

¥213,148
203,515
7,586
2,405
14,152
6,334
6,530¥188,803
198,798
4,085(1,083)
8,218
7,797
6,939

¥161,464
173,067
3,322
971
5,514
7,611
6,836

¥168,826
167,729
5,778
1,196
4,530
7,166
7,413

¥186,986
181,107
6,279
1,679
6,823
7,008
8,425

$2,280,317
2,208,622
76,573
20,476
83,20785,463
102,744

10.59
6.00

(4.77)
4.00

4.28
4.00

5.27
4.00

7.40
4.00

0.09
0.05

236,415
60,175
6,825

214,165
52,702
7,133

206,608
54,132
7,144

206,871
52,722
6,994

211,733
53,4227,145

2,582,110
651,488—

Notes: 1. The translations of the Japanese yen amounts into U.S. dollars are included solely for the convenience of readers outside Japan, using the prevailing exchange rate on
March 31, 2012, which was ¥82 to U.S.$1.
2. Figures for employee numbers excludes those employees on temporary contracts.
3. The cash dividend for 2008 included a special dividend of ¥1.00 to commemorate the 110th anniversary of the Company as well as the completion of the new head officebuilding construction project.

The Company made efforts to reduce costs and cut back on fixed expenses, while implementing
the policies under the medium-term management plan POWER 5.
As a result of these efforts, despite net sales for the Group falling 8.0% year on year to ¥181,107
million, operating income jumped 8.7% to ¥6,279 million (consolidated), and net income climbed
40.4% to ¥1,679 million (consolidated).

Net Sales

Net Income (Loss)

Total Assets(Millions of yen)

(Millions of yen)

(Millions of yen)

250,000

250,000

3,000

236,4152,405
200,000 203,515 198,798

214,165
200,000

2,000

173,067 167,729

206,608 206,871

211,773

1,679

181,107150,000

1,000

100,000

0

50,000–1,0001,196

150,000

971

100,000

50,000(1,083)00–2,000

2008

2009

2010

2011

2012

2008

2009

2010

2011

2012

2008

2009

2010

2011

2012

Meiden Annual Report 201201

Message from Management
Meidensha Corporation (“Meiden”) and its consolidated subsidiary companies (collectively the “Meiden Group” or “theCompany”), share the same corporate philosophy. The mission is: “Illuminating a more affluent tomorrow.” The value
is: “For customer peace of mind and satisfaction.” The Meiden Group positively seeks to produce innovations intechnology and new values to realize a more vibrant society and better living conditions in the future. For customer
satisfaction and assurance, we produce eco-friendly designs and approaches. We strongly promote courteous customer
support service. With top quality products and services, we hope to help our customers in solving their various problems
and in realizing their dreams.

Meiden Group products form a broad spectrum, from power

economies. While there is an outlook of mild recovery spurred

systems, substation equipment, and electronic products toby the reconstruction demand after the Quake, we expect the

information and communication products. We not only performbusiness environment for the Meiden Group to remain chal-the manufacturing and sales of these products, but also engage

lenging considering such factors as the strong yen and electric-in the solutions business in Japan. This process includes finding

ity shortages which may accelerate more companies moving

customer-driven optimum solutions and offering engineering,

their production to overseas countries.

system operations, and system maintenance and management

Under these conditions, while the Group maintains its basic

to realize these solutions. Out of our business operations, wemanagement direction—“The challenge of the Meiden Group:

would like to positively seek to offer solutions to the various

Contributing to society through the “power” of manufacturing

challenges of our times, such as the global climate control

excellence” under the POWER 5 medium-term management

problem. Through our contributions to building a more affluent

plan (the “Plan”), we implemented the key policies of “realistic

future society, we would like to live up to our social responsibilities

realignment” and “more focus” of the Plan in line with the cur-and seek sustainable growth as a company.

rent management environment.

The Japanese economy in fiscal 2012 saw the prolonged

From March 2012, we entered Phase III period of POWER

impact of the Great East Japan Earthquake (the “Quake”) and

5, which is a 3-year management plan covering fiscal 2012–

the flooding in Thailand as well as the impact from the slow-

2014. The following five (5) points will be the key policies under

down of the world economy, especially in the euro area, andPhase III.

the yen’s persistent strength. It was a challenging year.
Under these economic conditions, the Group made(1)	Accelerate “Growth Businesses”

vigorous efforts to boost sales, which led to net sales on a

We will accelerate the growth of five businesses—motor drive

consolidated basis of ¥181,107 million, up 8.0% year on year.

units for pure electric vehicles, vacuum capacitors, smart grids,

With respect to earnings, the Company made efforts toenergy storage devices, and logistics system products (collec-

reduce costs and fixed expenses. At the same time, we imple-

tively “Growth Businesses”) and seek to make them true growthmented measures to reinforce our existing businesses withbusinesses that will drive the Group’s growth.

growth potential and develop new businesses in line with the
As a result, net income before income taxes came to ¥3,086(2)	Strengthen “Existing Core Businesses” and accelerate
new business developments

million (consolidated) and net income for the year came to

We will work to strengthen our competitiveness in three existing¥1,679 million (consolidated).

core businesses—water processing, traction power supply, andpolicies under POWER 5, our medium-term management plan.

02

The year-end dividend was ¥4 per share.

dynamometer-applied systems (“Existing Core Businesses”)—

The economic outlook remains uncertain due to concerns

and to develop our business in new business fields, focusing

over recession in the euro area and the slowdown of Asianon such development in overseas markets. In addition, we will

Meiden Annual Report 2012

accelerate our new servicing business development in theterms of price, performance, and other factors. Especially inengineering systems business sector. We would like tothe case of T&D products, we will promote the development ofstrengthen our servicing competitiveness. At the same time, we

eco-friendly models and overseas production.

would like to reinforce our servicing business at every stage ofthe product lifecycle.

(5)	Promote business realignment, alliances and
M&A transactions(3)	Strengthen Meiden Group overseas strategy

In Japan and abroad, we will promote cooperation with univer-

As a step toward the Growth Businesses and the Existing Core

sities and strategic alliances with companies. We will also seek

Businesses going global, we will actively promote the overseas

M&A opportunities.

operations of sales and marketing, production and productdevelopment for overseas markets. Further, we will seek M&A

In so doing, we will accelerate business development
and make effective use of our management resources.

and business alliance opportunities. In so doing, we will aim toachieve our fiscal 2013 target: 30% of consolidated net sales

By implementing POWER 5, we aim to provide peace of mind

from overseas sales.

and the best product experience to our customers through thestable supply of products and services that contribute to an(4)	Enhance product competitivenessaffluent society. We also aim to make a highly profitable com-

We appointed a new executive officer in charge of overseeingpany. Further, we would like to become a company that gives

our product strategy for three product lines: power transmission

each of our employees a high level of job satisfaction and a

and distribution (T&D) products, power generation products,

pride in being a member of the Company.

and power conversion products.
We would like to enhance product competitiveness in

We ask all shareholders, as well as our customers and business partners, to give us their continuous support and advice.

Keiji Kataoka, Chairman

Junzo Inamura, President

Meiden Annual Report 201203

Topics

Medium-Term Management Plan

POWER 5 Phase III Has Started
Operating in this climate, the Group is maintaining the basic
direction of our POWER 5 medium-term management plan, whichis encapsulated by the slogan: “The challenge of the Meiden Group:
Contributing to society through the “power” of manufacturing
excellence.” We have also revised and reinforced priority policies inline with current business conditions, and from April 2012 weembarked on Phase III of the POWER 5 plan, which consists ofinitiatives to be conducted over the three-year period from fiscal
2012 to fiscal 2014.

In April 2009, the Meiden Group formulated its medium-term
management plan POWER 5, a five-year plan covering the period
from March 2010 to March 2014. Under this plan, the Company has
steadily implemented measures to enhance its corporate value.
However, the operating environment of the Meiden Group has beenchanging dramatically mainly due to the change in energy policy by
the Japanese government after the Great East Japan Earthquake inMarch 2011, and the impact of the strong yen. In addition, we
dissolved a joint venture in the power transmission and distribution
field, one of our main businesses, and are now engaged intransforming our business structures to achieve new growth.

Establishment of the initial five-year plan period(from April 2009)

Re-establishment of the plan period(from April 2012)

Phase I (FY2009–FY2010)

Phase II (FY2011–FY2013)

Period of building a growth platform

Period of growth and expansion

Phase I (FY2009–FY2010)
Period of building a growth platform

POWER 5Phase II (FY2011)

Phase III (FY2012-FY2014)

Review strategies

Period of growth and expansion

We will implement the following five priority measures in Phase III.

1 Accelerate “Growth Businesses”
We will accelerate the growth of five businesses (collectively “Growth Businesses”) and seek to make them true growth businesses that will drive the Group’s growth.

Motors and inverters forelectric vehicles business

2

Vacuum capacitors
business

Smart grids business

Energy storage devices
business

Logistics business

Strengthen “Existing Core Businesses” and accelerate new business developments

We will work to strengthen our competitiveness in our existing core businesses (“Existing Core Businesses”) and to develop our business in new business fields,
focusing on development in overseas markets. In addition, we will accelerate our new business development in the engineering systems business sector that is
engaged in maintenance services for our products.

Water treatment business3

Dynamometers businessElectric railways businessEngineering business

Strengthen Meiden Group overseas strategy

We will aim to achieve our fiscal 2013 target of 30% of consolidated net sales from overseas sales, and our fiscal 2014 target of 34%.
4

Enhance product competitivenessFor the three product lines of power transmission and distribution (T&D) products, power generation products, and power conversion products, we would like toenhance product competitiveness in terms of price, performance, and other factors. Especially in the case of T&D products, we will promote the development of
eco-friendly models and overseas production.

Power transmission anddistribution products

5Power generation
products

Power transformation
products

Promote business realignment, alliances and M&A transactions

In Japan and abroad, we will promote cooperation with universities and strategic alliances with companies. We will also seek M&A opportunities. In so doing, we
will accelerate business development and make effective use of our management resources.

04

Meiden Annual Report 2012

At a GlanceSocial Infrastructure Systems
This sector includes business related to the construction of social infrastructure. We provide
solution services of all kinds in relation to electric power quality, energy conservation, andrelated matters, and we engage in the manufacture and marketing of all types of electricalequipment involved in power generation, transmission, transforming, distribution, and otherrelated functions for power companies, governments and other public agencies and offices,
railroads, highways, private facilities, and other such establishments.
We are also involved in the field of water supply and sewerage treatment for local
governments. Our activities include manufacturing and marketing products for the control oftreatment equipment and processes of all kinds, and for the improvement of IT networks. We
are further developing environmental solution services that include contracting for the
maintenance management of water treatment plants, recycling of industrial waste, etc.

Industrial Systems
This sector includes business operations related to product systems used in the manufacturingindustry, IT, and other general industry operations. In addition to providing private industry with
automotive testing systems and logistics support systems, we engage in the manufacture andmarketing of motors, inverters, and other products for use in textile machinery, elevators, andother such equipment.
We are active in the information and telecommunications field, manufacturing andmarketing component products for industrial computer and networking systems.

Net Sales

Composition of Sales(Millions of yen)(%)

112,529

52.8%

2010

This sector provides services relating to the remote management and monitoring of facilities
and the proposal of measures for extending the life of facilities, energy conservation, and othersuch services related primarily to the maintenance of products we supply. We also engage inthe maintenance of semiconductor manufacturing equipment and the reconditioning of used
manufacturing equipment.

(Millions of yen)This sector includes rentals of real estate holdings, including ThinkPark (Osaki, ­Shinagawa
City, Tokyo).

OtherThis sector includes marketing companies not tied to specific business fields, and companies
that contract accounting, payroll, and other administrative functions, as well as welfare
services for employees.

2012

Composition of Sales
39,121(%)

30,987
26,214

19.2%

2011

2012

Net Sales

Composition of Sales(Millions of yen)(%)

25,92521,997 22,205

12.7%

2010

Real Estate

2011

Net Sales

2010

Engineering Systems

105,369 107,525

2011

2012

Net Sales

Composition of Sales(Millions of yen)

(%)

3,286

3,290

3,286

2010

2011

2012

1.6%

Net Sales

Composition of Sales(Millions of yen)(%)

28,38826,679 27,983

13.7%

2010

2011

2012

Meiden Annual Report 201205

Review of Operations
Social Infrastructure Systems Business Sector

Net Sales

Operating Income

Orders had been stable from the second half of fiscal 2010 and there were demand from

(Millions of yen)

(Millions of yen)

post-earthquake reconstruction activities and demand for power systems due to concerns

112,529

105,369 107,525

5,115

about electricity shortages. Given these factors, the sector sales increased by 2.0% compared
3,543

to fiscal 2010, to ¥107,525 million.

1,979

2010

2011

Power, Railway & Private Sector Business Segment

2012

2010

2011

2012

“Catenary Eye”
(OCS inspection system)

The business environment became increasingly challenging as competition with other firms
intensified, largely in the public sector, which consists of the government and other public
offices, local governments, and others.
Given the above, we actively marketed and proposed products and services for energy
conservation and business continuity plans against disasters. At the same time, we engaged in
the business development of various energy systems using renewable energy resources like asolar power system. In the traction power supply system sector, we focused on sales of ourunique products such as the overhead catenary system (“OCS”) inspection system featuring ourimage recognition technology, as well as on the sales of our conventional traction substations.

Environmental Engineering Business Segment
The business environment became increasingly challenging due to such factors as public
spending cuts, fewer water processing plant construction projects, and more competition in
the market.

Mt. Komekura Mega Solar Project

PCS for solar power

Against the above backdrop, we worked hard for the earliest possible recovery of sewage
water treatment plants hit by the Great East Japan Earthquake (the “Quake”). We focused ourefforts in securing orders for both new and renovation work as regards electrical systems fordrinking water and sewage treatment plants. Another focus was to secure business process
outsourcing (“BPO”) contracts for water processing facility operation & maintenance management.
Additionally, as a new business sector, we did the preparatory work for the serial production of ceramic membranes for sewage and industrial waste water treatment plants. In
February 2012, we sealed a business alliance with Organo Corporation for the public sector

Ceramic membranewater processing facility business in Japan. We actively marketed and offered to potential
customers a comprehensive proposal for a water processing facility.

International Business Segment
The business climate for getting orders from overseas markets continued to be challenging
due to the ongoing strength of the yen.
Given such circumstances, we worked hard to increase sales of power distribution sub-Facility management at work in adrinking water treatment plantstations and traction substations as well as the sales of power systems. We actively workedon the sales development of a power conditioning subsystem (PCS) for solar power.
Additionally, we worked for the emergency restoration projects for the customer facilities
damaged by the flooding in Thailand. We actively participated in a feasibility study project
for a micro grid system for an island nation as a part of our study for the global release ofthis system.
Experimental power grid plant in Singapore
including micro grid research06

Meiden Annual Report 2012

Meiden Inked MOU with Toshiba on Small & Medium-sized Hydro Power Systems Business Collaboration
In October 2011, Meiden signed a memorandum of understanding (MOU) on a businessand technology collaboration with Toshiba
Corporation (Toshiba). The purpose is tomutually enhance the strength of the companies’ small and medium-sized hydro power
plant systems field businesses.
Under this collaboration, the two companies will work to build the cooperation where
Toshiba will supply the turbines and related
services to Meiden, and Meiden will provide thehydro turbine generators and related services
to Toshiba. In so doing, this collaboration willreinforce the mutual hydro power plant systembusinesses.
Through this cooperation, the companies
will aim to enhance each hydro power plantsystems business primarily in Japan, whereby
Toshiba will reinforce small capacity range
hydro power plant systems and Meiden willreinforce such business by procuring thehydro turbines from Toshiba. In the Japanese
small capacity range hydro power plant systems market, it has a big growth potential,
and the companies will work to provide highly
efficient hydro power plant systems andrelated services with a view to increasing theirrespective market shares.
The companies intend to expand theircooperation into the overseas small andmedium capacity range hydro power plantsystems market.

Hydroelectric
generator

Meiden Supplied PV Power Conditioners to a 21 MW Solar Park in Bulgaria
During fiscal 2011, Meiden supplied its photovoltaic (PV) power conditioners to a 21 MW
Solar PV Project built in Bulgaria.
This 21 MW Zlataritsa Project in northcentral Bulgaria was undertaken by SDN
Company Ltd. (“SDN”), a world-leading South
Korean solar system integrator, and started
commercial operation in February 2012. For
this PV Project, we shipped a total of 84 unitsof 250-kW PV power conditioners. SDN has
another PV Project in Bulgaria: the 5 MW
Ostar Kamak PV Project. It started commercial
operation in the summer of 2011. We havesupplied a total of 20 units of 250 kW PV
power conditioners.

SP100 Series Power
Conditioner PV
Inverters

The PV power conditioner for these projects is our SP100 series IEC-compliant
model. As a “transformer inside” model, thispower conditioner offers a world-top level
energy efficiency of 97%. This model also
received the Golden Sun Certificate issued by
the China General Certification Center (CGC).
The certificate certifies that the product satisfies the required quality and performancestandards of a Chinese national solar farmproject.
We would like to actively promote thedevelopment of renewable energy-related
products and innovations, as well as
marketing.

Zlataritsa PV Project in Bulgaria

Sojitz and Meiden Received an Order for a Traction Substation for MTR Hong Kong
—First Overseas Order for CAPAPOST, Regenerative Energy Storage System—
Meiden and Sojitz Corporation (Sojitz) in cooperation with GTECH Services (Hong Kong)
Limited, recently received an order for a traction substation system from MTR Corporation
Limited (MTR), a rail and metro network
operator in Hong Kong.
The order included switchgears, transformers, and the CAPAPOST system. Thisorder marks the first overseas order for
CAPAPOST. CAPAPOST is an energy storage
system using a proprietary electric doublelayer capacitor that will be installed in the
traction substation.

CAPAPOST absorbs the regenerative
power generated when a train decelerates
using a brake by converting the kinetic energy
to electric energy. Then, CAPAPOST feeds
the power to other trains that are running.
Thus we can realize the recovery of a resource.
This system reduces energy consumption byapproximately 10 percent and contributes tothe reduction of the train’s carbon footprint.
This order was for the South Island Line
(East) (SIL(E)) Project, a new seven-kilometer
metro line currently under construction by MTR.
When completed, it will connect Admiralty

Station in Hong Kong Island’s Central District
to South Horizons Station, which is underconstruction. Upon completion, SIL(E) will be
the first railway line connecting the southernpart of the island to the MTR network.
With the track record of an official adoptionof CAPAPOST by MTR,a leading railway operator in Asia, we aim todevelop the CAPAPOST
business in other overseas markets.
CAPAPOST

Meiden Annual Report 201207

Industrial Systems Business Sector

Net Sales

Some parts of the component business segment remained somewhat stagnant, but the

Operating Income (Loss)(Millions of yen)

(Millions of yen)

39,121dynamometer and logistics systems business was in a recovery phase, with an increase of

186

30,98726.2% year on year to ¥39,121 million.

26,214(1,496)(4,276)

2010

2011

2012

2010

2011

2012

Dynamometer and Logistic Systems Business Segment
In the automotive testing field, the order receiving climate improved due to several factors: theresumption of R&D spending after its postponement because of the Quake, the developmentof products for fuel-efficient vehicles, and the construction of R&D centers in foreign countries
to meet the overseas production of Japanese automakers. We focused on the businessdevelopment of testing systems for eco-friendly vehicles, such as pure electric vehicles andAutomatic guided
vehicle (AGV)hybrid cars. We actively worked to expand sales in overseas markets like China, India andSoutheast Asia where demand for auto-related R&D facilities is on the rise.
In the area of logistics systems, the demand for motor drive units for forklifts increased.
We worked to promote the sales both in Japan and overseas. The capital spending on auto-

Low-inertia
dynamometermatic guided vehicles (AGVs) showed there is a recovery trend mostly in the auto industry. We
also worked on the sales in other industries such as pharmaceuticals, chemicals and warehousing. In the overseas markets for AGVs, there were rising demand in China, Southeast Asiaand other emerging countries. We reinforced the knock-down productions and sales conducted
through our Meiden Group companies in those countries.

Component Business Segment
Demand for the modular units for semiconductor manufacturing systems showed somedecline after the second half of fiscal 2011. The motor demand for injection molding machines
showed an increase due to the factory recovery needs after the flooding in Thailand.
Additionally, we worked to increase the production of motor drive units for pure electric vehicles:
the i-MiEV and MINICAB MiEV produced by Mitsubishi Motors Corporation.
We started the local production of general purpose industrial inverters at a newplant constructed by our company, Meiden Hangzhou Drive Systems Co.,
Ltd., in China.

Motor drive unit for pure electric vehicle

Industrial computer

08

Meiden Annual Report 2012

Vacuum capacitors

Inverter

Engineering Systems Business Sector

Net Sales

Operating Income

In the maintenance service sector, price competition(Millions of yen)

(Millions of yen)remained intense, but we managed to generate a sales

25,925increase of 16.8% year on year to ¥25,925 million due to21,997 22,205

restoration and recovery demands after the Quake.

3,461
2,729

In addition to regular maintenance and inspection

1,897

services, we also actively worked on maintenance service
for power supply facilities, where the service demandhas increased after the Quake. We actively did themarketing and service proposals for the facility health

Failure status analysis and its possible
cause analysis

2010

2011

2012

2010

2011

2012

assessment service and the facility remaining-life
assessment service.

Facility diagnosis at the power“on” condition

Real Estate Business Sector
The Meiden Group is involved in real estate leasing, primarily

Net Sales

Operating Income(Millions of yen)

(Millions of yen)ThinkPark Tower, an office and commercial building in Tokyo’s
Shinagawa City. Sector sales totaled ¥3,286 million, almost thesame level as in fiscal 2010.
3,286

2010

Other Businesses Sector

3,290

2011

3,286

2012

1,192

1,160

1,184

2010

2011

2012

Net Sales

Operating Income (Loss)

Sales from businesses not included in the above-mentioned sectors and other reporting(Millions of yen)

(Millions of yen)segments. These businesses, which include sales of other products, welfare services for

28,388

employees, and the provision of chemical products, increased 4.9% over fiscal 2010 to

26,679 27,983¥27,983 million.
315

847

(170)

2010

2011

2012

2010

2011

2012

Meiden Annual Report 201209

Research & Development
With due consideration to medium- and long-term market and technological trends, the Meiden
Group promotes new product development and conducts R&D on basic core technologies using
a clear future road-map, and drawing on our long-standing engineering resources.

In the area of new product development, we developed “Aqua Smart
Cloud”, a cloud-computing technology-based monitoring and control
system which streamlines the operation and maintenance work of water
processing facilities (both drinking water and sewage treatment plantfacilities). We also developed an IEC Standard-compliant medium-voltage

Research & Development
ExpensesComposition of R&D Expenses(Millions of yen)

(Millions of yen)

8,425
6,836

7,413
2,446
99

inverter that was designed for release in overseas markets.
In the meantime, in the area of basic core technologies, we pro-131

moted the development of inverter products that make use of next-

2,127

generation power semiconductor devices (silicon carbide). In the areaof motor technologies for pure electric vehicles and others, we have

2010

2011

2012

been accelerating the development of motors that use less rare earth
metals to avoid the availability risk of such resources. Moreover, withn Social Infrastructure Systems
n Industrial Systemsn Engineering Systems
n Othersn Common Expenses

regard to basic core technologies with their clear future road-map, we
conducted a joint development program with Sumitomo ElectricIndustries, Ltd. (“SEI”) on high-capacity electric double layer capacitors using SEI’s aluminum Celmet, mostly for automotive applications.
Also, under the Yokohama Smart City Project, we have been working
on the demonstrative testing program to develop the effective controlof the use of energy resources using a storage battery system. As aresult of these activities, total R&D expenses in fiscal 2011 amounted
to ¥8,425 million.

Update on Joint Development of EDLC Using SEI’s Aluminum-Celmet
Meiden commercialized its bipolar electric
double-layer capacitor (EDLC) for high-voltage/high-current storage in 2006. The EDLC features a compact size by using bipolar structure and long life even with a high number ofcharge-discharge cycles. Making effective
use of these features, Meiden has being doing
the EDLC business primarily for power infrastructure systems such as the dynamic voltage compensator (DVC) for a stable power
supply and regenerative power storage for
traction power supply systems. For wider
applications of EDLC, the Company has
actively conducted its device-level development to achieve better performance anddevelopment for finding further applications.
Since 2011, the Company entered a joint
research program with Sumitomo ElectricIndustries, Ltd. (SEI) on the development of an
EDLC using SEI’s porous metal “AluminumCelmet.”*1 Recently, we achieved about a 3.4

10

Meiden Annual Report 2012

times higher volumetric energy density,
together with a wider operating temperature
range, and higher output density than theconventional EDLC that uses aluminum foil,
activated carbon, and organic electrolytes.
Meiden and SEI will continue the joint
development to achieve about a 5 times
higher volumetric energy density than theconventional level. The parties recognize thatthe main market for such EDLC will be in theautomotive field such as electrically assisted
acceleration for pure EV or hybrid EV, orregenerative power storage during vehicle
deceleration.
We plan to release the sample unit in
fiscal 2013 and to commercialize the productin fiscal 2015.
*1	Aluminum-Celmet is a trademark of Sumitomo
Electric Industries, Ltd.

Image of electric double-layer capacitor (EDLC)
using Aluminum-Celmet

3,622

Corporate Governance
The Meiden Group is committed to fair and transparent as well as prompt and efficient management.
We continue to evaluate and improve our framework of internal control and governance to ensure
appropriate operation of the Group’s business.

Corporate Governance System of the Meiden Group
Basic Approach
In order to realize the Group’s philosophy, we considered it essential
to establish a framework for sound internal control and governanceas a Group. To this end, we adopted a “Basic Policy” to evaluate andimprove the governance framework in order to ensure appropriate
operation of the Group’s business at a regular Board of Directors
meeting held in May 2006. We are committed to strengthening corporate governance.
Basic Policy
1. System to ensure the directors’ compliance with laws and Articles ofIncorporation in the performance of their duties.
2. System to manage and store information relating to the duties of thedirectors.
3. System regarding rules and other structures of risk management.
4. System to ensure directors’ efficient execution of their duties.
5. System to ensure employees’ compliance with laws and Articles ofIncorporation in the performance of their duties.
6. System to ensure appropriate business operations by the Company andits affiliates.
7. Matters relating to employees who assist corporate auditors with theirduties.
8. Matters relating to the independence from directors of the above
employees assisting corporate auditors.
9. System of reporting to the corporate auditors by directors and employees and system of reporting to the corporate auditors by others.
10. Other systems to ensure effective audit by the corporate auditor.

perform their duties expeditiously while under the supervision of therepresentative directors.
The Company has adopted a corporate auditor system. The
Board of Corporate Auditors consists of four members, two of whom
are outside corporate auditors. The Board of Corporate Auditors
communicates with directors, the internal auditing department, andother departments, while adhering to auditing policies, the division ofduties, and auditing rules for corporate auditors stipulated by the
Board of Corporate Auditors. The corporate auditors attend Board of
Directors Meetings and other important meetings, and audit theduties of directors by means of monitoring the operations and financial conditions of the Group.
We have an Internal Auditors Office to assist the Board of ­Corporate
Auditors which works under the direct control of the Board.
We have an Internal Auditing Unit which reports directly to thepresident. It operates as an internal auditing department, fulfilling therole of performing regular health checks of the Group. This Internal
Auditing Unit conducts internal audits of the efficacy and efficiency
of operations, the reliability of financial reporting, the status of compliance with laws, and the maintenance of assets covering the Company and all Group companies, including overseas companies.
It reports the results of internal audits to the top management,
and also offers advice to the employees under internal audit review on
the execution of their duties.
With respect to requirements regarding the guidance of internal
control system for financial reporting in accordance with the Financial
Instruments and Exchange Law in Japan, the Company adopted
basic policies that conform to the Implementation Guidance for

Implementation­Management Assessment and Audit of Internal Controls over ­Financial

In June 2003, the Company adopted an executive officer system. At

Reporting (ICFR) by Japan’s Financial Services Agency. The Internal

the same time, we sought to reinforce the function of the Board ofAuditing Unit independently audits the effectiveness of improvements

Directors. To this end, we separated the “decision-making and super-

to, and implementation of internal control systems at the Company asvisory functions” and the “business execution function” of the Board

well as at the overall Group level.

of Directors. The former functions were assigned to the Company’s
directors, and the latter to the representative directors and executive
officers who were delegated duties by the representative directors. As
a result, the Board of Directors is responsible for making decisions

Governance Structure: Meiden’s Execution of Duties, Management
Supervision, and Internal Control Systemfrom the standpoint of the entire Group, and for overseeing the overall

General Meeting of Shareholders

management of the Group.
Two of the eight members of the Board of Directors are outside
directors. This structure is designed to reinforce corporate ­governance

Board of Directors(includes two outside directors)

by enhancing the Board’s supervisory function concerning the­execution of duties.

They are responsible for executing their designated duties within thescope of the powers delegated by the representative directors, andAccounting Auditor

Representative
Directors

Executive officers appointed by the Board of Directors comply
with Group management policies decided by the Board of Directors.

Executive Officers

Board of Corporate Auditors(includes two outside auditors)

Internal
Auditing Unit

Business Units

Compliance Committee
Compliance Manager

Compliance Hotline

Meiden Annual Report 201211

Corporate Social Responsibility
Since April 2006, the Meiden Group has been actively promoting corporate social responsibility(CSR) through CSR management. The reasons for this approach is to reaffirm our awareness of
the importance of fulfilling our social responsibilities, which we have practiced for more than 110
years since our founding, and to further enhance corporate value.

Approach to CSR
Our approach to CSR programs is: “Each and every employee shallwork to realize the Group’s corporate philosophy so that the Meiden

Corporate Philosophy(1) Definition of CSR
Under the Meiden Group’s definition of CSR, “Each and every employee

Group is needed by society.” The launch of CSR programs in 2006

shall work to realize the Group’s corporate philosophy so that the Meiden

coincided with the updating of the Group’s corporate philosophy. The

Group is needed by society.”new philosophy reflects our thinking: “By providing high quality prod-(2) Code of Conduct

ucts and services, we will help to solve the problems of our customers

This code defines compliance in conducting our CSR programs andand produce the best product experiences for them. Further, throughour business operations, we will positively contribute in solving thechallenges faced by society, such as environmental issues, and we

activities.
(3) President’s CSR Policy Order
This policy sets forth the policy of our CSR programs and activities in themedium term. The Policy Order asks each Group employee to implement

will contribute to the realization of a more affluent society to fulfill our

CSR programs and activities in their daily work. We will draw up specificsocial responsibilities. In order to fulfill these objectives, we need toactions that reflect the given business climate and CSR challenges underkeep solving such challenges.” Sharing such core values among thethe then current stage of the POWER 5 management plan.

Group and implementing these ideas in our daily business is the(4) Meiden Cycle

essence of our CSR programs.
Group Corporate Philosophy
Corporate Mission
Illuminating a more affluent tomorrow
We will constantly strive to create new technologies and value, in order tohelp bring about a more affluent and comfortable society.

Meiden Cycle shows the guiding spirits shared by all members of theGroup in realizing the Group’s corporate philosophy.
Group Corporate
Philosophy

Corporate Slogan
This is a statement
which expresses our philosophy in a simple phrase.

Corporate Mission
Corporate raisond’etre andour mission(1) Definition of CSR

Providing Value(3) President’s
CSR Policy
Order

Offering customers peace of mind and satisfaction
We will work to protect the environment and provide caring businesssupport to give customers peace of mind and satisfaction. We will also
help customers solve their problems and realize their dreams through theProviding Value
Delivering uniquevalue and strengths

Risk Management

into the action program by the departments concerned and we posi-Contribution to Society

tively promote the CSR programs across the board in the Meiden
Group as a part of the Group’s CSR Committee activities.

CSR
OfficeThe CSR Office coordinates the plans and results of each theme

term management plan which we have been working on since fiscal
2009. As in Phase I, the promotion of CSR m­ anagement is set as a key
policy. We will promote CSR as a management strategy and aim to
deeply embed our CSR principles in the everyday actions of eachMove Ahead

Corporate Governancethe officer in charge of Environment & CSR. Each theme is translated

From March 2011, we entered Phase II of POWER 5, the medium-

Think
Big

CSR Promotion Structure

and activities based on 10 promotion themes under the supervision ofaction to increase the Group-wide awareness of CSR.

Keep in
Touch

Have
Fun

At the Meiden Group, we promote the development of CSR programs

and promotes the CSR programs using the PCDA cycle, while taking(4) Meiden Cycle

Build Loyalty

provision of top-quality products and services.

CSR Management Promotion Structure(2) Code of Conduct

Officer in Chargeof Environment& CSR

Compliance
Disclosure
Eco
Quality & Product Safety
Occupational Safety and Health
Safety and HygieneGroup employee.
Employment & Human Rights

12

Meiden Annual Report 2012

Consolidated Financial Review

Outline of Profits and Losses

Financial Conditions

The Japanese economy faced difficult conditions in fiscal

The amount of total assets on March 31, 2012 increased by

2011, the year ended March 31, 2012. In addition to the¥4,862 million (up 2.4%) compared to the amount of total

impact of the Great East Japan Earthquake in March 2011, theassets at the end of the previous fiscal year, resulting in total

economy was negatively impacted by the persistently strong

assets of ¥211,733 million.

yen and stagnant European and other overseas economies.

Accompanying a rise in inventories, current assets

Under these conditions, the Meiden Group madeincreased by ¥7,548 million (up 6.9%), resulting in total current

Company-wide efforts to reduce costs and fixed expenses

assets of ¥116,585 million at the end of the fiscal year underwhile at the same time worked at implementing the policies

review. Fixed assets declined by ¥2,686 million (down 2.7%)

called for by the medium-term management plan, POWER 5.

due to the continual depreciation of property, plant, andBased on the factors above, results are as follows for theequipment, resulting in fixed assets of ¥95,148 million at theCompany and its consolidated subsidiaries. Sales wereend of the current fiscal year.

¥181,107 million (up 8.0% from the previous fiscal year) and

The amount of total liabilities at the end of the current

operating income was ¥6,279 million (up 8.7% from thefiscal year was ¥158,311 million, an increase of ¥4,162 million

previous fiscal year). As a result, net income increased 40.4%(up 2.7%). The amount of current liabilities at the end of theyear on year to ¥1,679 million.

current fiscal year was ¥102,028 million, an increase of ¥7,261
million (up 7.7%), due mainly to increases in payables andcommercial paper.
The amount of long-term liabilities at the end of the current
fiscal year was ¥56,283 million, a decline of ¥3,099 million(down 5.2%), due mainly to a decrease in long-term debt.
Retained earnings increased due to the increase in net
income, and the amount of net assets at the end of the current
fiscal year was ¥53,422 million, an increase of ¥700 million(up 1.3%).
As a result, the capital to asset ratio decreased from
24.4% to 24.2% at the end of the current fiscal year.

Meiden Annual Report 201213

Consolidated Balance Sheets
MEIDENSHA CORPORATION AND CONSOLIDATED SUBSIDIARIES (as of March 31, 2012 and 2011)

Thousands of
U.S. dollars(Note 1)Millions of yen

AssetsCurrent assets:
Cash and time deposits (Note 18)

2012

2011

2012

¥ 12,748¥ 12,067$   155,463

Receivables:
Trade notes

2,533

4,325

30,890Trade accounts

62,19955,313

758,524

Loans receivable and advances

321

330

3,915

Due from unconsolidated subsidiaries and affiliates

895

772

10,915

(336)

(309)

(4,098)Inventories (Note 5)

Allowance for doubtful accounts

31,57130,314

385,012Deferred income taxes (Note 16)

3,501

3,616

42,695

Other current assets

3,153

2,609

38,452

Total current assets

116,585

109,037

1,421,768

Land (Notes 8 and 17)

9,356

9,365

114,098

Buildings and structures (Notes 6, 8 and 17)

75,551

74,631

921,354

Machinery and equipment (Note 6)

54,93056,801

669,878

Construction in progress

1,510

414

18,415(79,974)(78,174)(975,293)

61,37363,037

748,452

Investment securities (Notes 4 and 8)

13,173

13,775

160,646

Investments in unconsolidated subsidiaries and affiliates (Note 4)

8,138

9,233

99,244

29

378

354

Deferred income taxes (Note 16)

6,617

5,897

80,695

Other assets

5,911

5,580

72,085

Property, plant and equipment:

Less: Accumulated depreciation
Net property, plant and equipment

Investments and other assets:Long-term loans receivable

Allowance for doubtful accounts
Total investments and other assets
Total assets
See accompanying notes.

14

Meiden Annual Report 2012

(93)

(66)

(1,134)

33,77534,797

411,890¥211,733¥206,871$2,582,110

Thousands of
U.S. dollars(Note 1)Millions of yen

Liabilities and net assets
Current liabilities:
Short-term borrowings (Note 7)

2012

2011

2012

¥  1,736¥  2,969$   21,171

Commercial paper (Note 7)

23,50022,000286,585

Current portion of long-term debt (Notes 7 and 8)

5,957

5,664

72,646

Payables:Trade notes

6,412

5,553

78,195Trade accounts

22,751

18,724277,451

Due to unconsolidated subsidiaries and affiliates

3,863

3,713

47,110

Advances received from customers

8,331

8,519

101,598

Accrued income taxes

1,254

1,179

15,293

Accrued bonuses for employees

4,798

5,080

58,512
3,037

Provision for product warranties

249

865

Provision for loss on orders

659

625

8,037

Other current liabilities

22,51819,876274,609

Total current liabilities

102,028

94,767

1,244,244

Long-term debt (Notes 7 and 8)

27,85832,602339,732

Employees’ severance and retirement benefits (Note 9)24,171

22,446

294,768

116

110

1,415

1,070

1,120

13,049Provision for loss on guarantees

12

16

146

Deferred income taxes (Note 16)

44

20

537

Other long-term liabilities

3,012

3,068

36,731

Total long-term liabilities

56,28359,382686,378

Long-term liabilities:

Reserve for retirement allowance for directors and corporate auditors
Provision for environmental measures

Contingent liabilities (Note 12)
Net assets (Note 10):
Common stock
Authorized—576,000,000 shares

Issued and outstanding—227,637,704 shares

17,07017,070208,171

Capital surplus

13,197

13,197

160,939

Retained earnings

241,768

19,825

19,057

Less: Treasury stock, at cost

(152)

(151)

(1,854)

Unrealized gains on securities, net of taxes

2,665

2,515

32,500(90)(46)(1,097)

Foreign currency translation adjustment(1,309)(1,133)(15,963)

Minority interests

2,216

2,213

27,024

Total net assets

53,422

52,722

651,488¥211,733¥206,871$2,582,110

Unrealized losses on hedging derivatives, net of taxes

Total liabilities and net assets
See accompanying notes.

Meiden Annual Report 201215

Consolidated Statements of Income
MEIDENSHA CORPORATION AND CONSOLIDATED SUBSIDIARIES (years ended March 31, 2012, 2011 and 2010)

Thousands of
U.S. dollars(Note 1)Millions of yen
2012

2011

2010

2012

Net sales (Note 15)¥181,107¥167,729¥173,067$2,208,622

Cost of sales (Notes 14)

138,890

128,910

134,720

1,693,781

Selling, general and administrative expenses (Notes 14)

35,93833,04135,025438,268

6,279

5,778

3,322

76,573Operating income
Other income (expenses):
Interest and dividend income

394

415

418

4,805

Interest expense

(880)

(901)

(1,051)(10,732)

Equity in net income of affiliated companies

286

40

428

3,488

7

8

1

85

(440)

(1,121)(32)(5,366)(1,379)––(16,817)

Gain on sales of marketable securities and investment securities (Note 4)
Loss on devaluation of securities
Loss on valuation of stocks of subsidiaries and affiliates
Loss on disposal of inventories

–

(57)

(355)

–

Loss on disposal of fixed assets

(60)

(167)

(132)

(732)

Loss on adjustment for changes of accounting standard for asset
retirement obligations

–

(25)

–

–

Gain on sales of fixed assets

14

7

24

171

Provision of allowance for doubtful accounts

(43)

(0)

(11)

(524)

Loss on product warranties

–

(800)

(220)

–

Provision for environmental measures

–

(605)

–

–

Early extra retirement payments
OthersIncome (loss) before income taxes and minority interests

–

(270)

–

–

(1,092)

(200)

(761)

(13,317)

3,086

2,102

1,631

37,63418,927

Income taxes (Note 16):
Current

1,552

1,399

617

Prior year

–

239

–

–

Deferred

(360)

(940)

(58)

(4,391)

Total

1,192

698

559

14,536

Income (loss) before minority interests

1,894

1,404

1,072

23,098

215

208

101

2,622

¥  1,679¥  1,196¥    971$   20,476

Minority interests
Net income (loss) (Note 20)

U.S. dollars(Note 1)

Yen
2012

2011

2010

2012

¥   7.40¥   5.27¥   4.28$     0.09

4.00

4.00

4.00

0.05

Amounts per share of common stock (Note 21):
Net income (loss)
Cash dividends applicable to the year
See accompanying notes.

16

Meiden Annual Report 2012

Consolidated Statements of Comprehensive Income (Loss)
MEIDENSHA CORPORATION AND CONSOLIDATED SUBSIDIARIES (years ended March 31, 2012, 2011 and 2010)

Thousands of
U.S. dollars(Note 1)Millions of yen

Income (loss) before minority interests

2012

2011

2010

2012

¥1,894¥1,404¥1,072$23,098

131

(998)

1,164

1,597

Other comprehensive income (loss)
Unrealized gains (losses) on securities, net of taxes
Unrealized gains (losses) on hedging derivatives, net of taxes

(50)

5

54

(610)

Foreign currency translation adjustment

(242)

(363)

132

(2,951)

Share of other comprehensive income (loss) of associates accounted
for using equity method
Total other comprehensive income (loss) (Note 11)
Comprehensive income (loss)

11

32

(1)

134

(150)

(1,324)

1,349(1,830)¥1,744¥80¥2,421$21,268

1,609

(76)

2,206

19,622

135

156

215

1,646

Comprehensive income (loss) attributable to:Comprehensive income (loss) attributable to owners of the parent
Comprehensive income (loss) attributable to minority interests
See accompanying notes.

Meiden Annual Report 201217

Consolidated Statements of Shareholders’ Equity/Changes in Net Assets
MEIDENSHA CORPORATION AND CONSOLIDATED SUBSIDIARIES (years ended March 31, 2012, 2011 and 2010)

Millions of yen

Net assets at April 1, 2009

Unrealized
gains onTreasury stock, securities,
at costnet of taxes

Number ofshares issued

Commonstock

CapitalsurplusRetainedearnings

227,637,704¥17,070¥13,197¥19,180¥(116)

Unrealized
losses on
hedging
derivatives,
net of taxes¥ 2,401¥(82)

Foreigncurrencytranslation
adjustment¥   (945)

Minority
interests

Total¥1,997¥52,702

Net income

971

971

Cash dividends

(908)

(908)

Change of scope of equity
method1

Acquisition of treasury stock

1(30)

Disposal of treasury stock

0

(30)

1

Net changes during the year

1
1,129

31

74

161

1,395

Balance at March 31, 2010

227,637,704¥17,070¥13,197¥19,244¥(145)¥ 3,530¥(51)¥   (871)¥2,158¥54,132

Net assets at April 1, 2010

227,637,704¥17,070¥13,197¥19,244¥(145)¥ 3,530¥(51)¥   (871)¥2,158¥54,132

Net income

1,196

1,196

Cash dividends

(908)

(908)

New consolidated investment

(428)

(428)

Change of scope of equity
method(47)

Acquisition of treasury stock

(47)
(6)

Disposal of treasury stock

0

(6)

0

Net changes during the year0
(1,015)

5

(262)

55

(1,217)

Balance at March 31, 2011

227,637,704¥17,070¥13,197¥19,057¥(151)¥ 2,515¥(46)¥(1,133)¥2,213¥52,722

Net assets at April 1, 2011

227,637,704¥17,070¥13,197¥19,057¥(151)¥ 2,515¥(46)¥(1,133)¥2,213¥52,722

Net income

1,679

1,679

Cash dividends

(908)

(908)

New consolidated investment(3)

Acquisition of treasury stock

(3)
(2)

Disposal of treasury stock0

Net changes during the year
Balance at March 31, 2012

227,637,704¥17,070¥13,197(2)

1¥19,825¥(152)

1
150

(44)

(176)

3

(67)

¥ 2,665¥(90)¥(1,309)¥2,216¥53,422

Thousands of U.S. dollars (Note 1)

Net assets at April 1, 2011

Number ofshares issued

Commonstock

CapitalsurplusRetainedearnings

227,637,704$208,171$160,939$232,402

Unrealized
gains onTreasury stock, securities,
at costnet of taxes$(1,842)$    (561)

Foreigncurrencytranslation
adjustment$(13,817)

Minority
interests$26,988

Total$642,951

Net income

20,476

20,476

Cash dividends(11,073)(11,073)

New consolidated investment(37)

Acquisition of treasury stock

(37)
(24)

Disposal of treasury stock0

Balance at March 31, 2012
See accompanying notes.

Meiden Annual Report 2012

227,637,704$208,171$160,939(24)

12

Net changes during the year18

$30,671

Unrealized
losses on
hedging
derivatives,
net of taxes$241,768$(1,854)

12
1,829

(536)

(2,146)36(817)$32,500$(1,097)$(15,963)$27,024$651,488

Consolidated Statements of Cash Flows
MEIDENSHA CORPORATION AND CONSOLIDATED SUBSIDIARIES (years ended March 31, 2012, 2011 and 2010)

Thousands of
U.S. dollars(Note 1)Millions of yen
2011

2010

2012

¥ 3,086¥   2,102¥   1,631$ 37,634

7,008
976
(394)
(286)
880
(7)
(14)
60
440
(5,866)(1,398)
5,188
3,715
13,388378(848)(1,475)
11,443

7,166
2,835
(415)
(40)
901
(8)
(7)
167
1,121
(580)
(2,381)
4,747
327
15,935
426
(858)
(793)
14,710

7,611
730
(418)
(428)
1,051
(1)
(24)
132
32
623
9,396
(3,977)
1,392
17,750438(1,145)(769)
16,27485,463
11,902(4,805)(3,488)
10,732
(85)
(171)
732
5,366
(71,537)(17,049)
63,26845,306
163,268
4,610(10,341)(17,988)
139,549

(3)
(50)

(22)
(110)

(714)
(28)

(37)
(610)

69
–
(3,800)34(1,661)46(275)(5,640)28140(3,727)
121(1,342)
1,465(871)(4,318)1–(4,244)254(1,031)200
51(5,511)

841–(46,341)415(20,256)561(3,353)(68,780)(1,194)1,500
1,154(5,604)
(2)
(909)
(132)
139
(5,048)(116)
639
11,986(11,597)(8,000)16,808(5,793)
(6)
(906)
(41)
(64)
(9,599)(164)629
11,180(29,737)
30,0004,435(6,426)
(30)
(908)
(19)
(58)
(2,743)
37
8,057
3,123

(14,561)
18,293
14,073(68,341)(24)(11,085)(1,610)1,694(61,561)(1,415)
7,793
146,171

49

177

–

597

(0)
¥12,674–¥ 11,986–¥ 11,180(0)$154,561

2012

Operating activities:
Income (loss) before income taxes and minority interests
Adjustments to reconcile income before income taxes to net cash
provided by operating activities:
Depreciation and amortization
Increase (decrease) in allowancesInterest and dividend income
Equity in net loss (income) of affiliated companies
Interest expense
Gain on sales of marketable securities and investment securities
Gain on sales of fixed assets
Loss on disposal of fixed assets
Loss on devaluation of securities
Decrease (increase) in receivables
Decrease (increase) in inventories
Increase (decrease) in payables
Other-net
Sub-totalInterest and dividend received
Interest expense paid
Income taxes paid
Net cash provided by operating activities
Investing activities:
Purchase of marketable securities and investment securities
Purchase of investments in subsidiaries
Proceeds from sales of marketable securities and investment
securities
Proceeds from sales of stocks of subsidiaries and affiliates
Purchase of property, plant and equipment
Proceeds from sales of property, plant and equipment
Purchase of software
Proceeds from subsidy
Other-net
Net cash used in investing activities
Financing activities:
Increase (decrease) in short-term bank loans
Increase (decrease) in commercial paper
Proceeds from long-term debt
Repayment of long-term debt
Purchase of treasury stock
Cash dividends paid
Cash dividends paid to minority shareholders
Other-net
Net cash provided by (used in) financing activities
Effects of exchange rate changes on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
Increase in cash and cash equivalents due to addition of consolidated subsidiaries
Decrease in cash and cash equivalents due to exclusion of consolidated subsidiaries
Cash and cash equivalents at end of year (Note 18)
See accompanying notes.

Meiden Annual Report 201219

Notes to Consolidated Financial Statements
MEIDENSHA CORPORATION AND CONSOLIDATED SUBSIDIARIES

1. Basis of Presenting Consolidated Financial Statements
The accompanying consolidated financial statements of Meidensha Corporation (“the Company”) and its consolidated subsidiaries have been prepared in accordance with the provisions set forth in the Japanese Financial
Instruments and Exchange Law and its related accounting regulations, and in conformity with accounting principles
generally accepted in Japan (“Japanese GAAP”), which are different in certain respects as to application anddisclosure requirements of International Financial Reporting Standards.
Effective from the year ended March 31, 2009, the Practical Issues Task Force No. 18 “Practical Solution on
Unification of Accounting Policies Applied to Foreign Subsidiaries for Consolidated Financial Statements” (“PITF
No. 18”), issued by the Accounting Standards Board of Japan on March 17, 2006, has been applied to theCompanies. PITF No. 18 requires that accounting policies and procedures applied by a parent company and its
subsidiaries to similar transactions and events under similar circumstances should, in principle, be unified for the
preparation of the consolidated financial statements. The accounts of consolidated overseas subsidiaries areprepared in accordance with either International Financial Reporting Standards or U.S. generally accepted accounting
principles, with adjustments for the following specified six items as applicable.
1Goodwill not subject to amortization
2Actuarial gains and losses of defined-benefit retirement plans recognized outside profit or loss
3Capitalized expenditures for research and development activities
4Fair value measurement of investment properties, and revaluation of property, plant and equipment andintangible assets
5Retrospective treatment of a change in accounting policies
6Accounting for net income attributable to minority interests
The accompanying consolidated financial statements have been reformatted and translated into English (withsome expanded descriptions) from the consolidated financial statements of the company and its consolidated
subsidiaries (“the Companies”) prepared in accordance with Japanese GAAP and filed with the appropriate Local
Finance Bureau of the Ministry of Finance as required by the Japanese Financial Instruments and Exchange Law.
Certain supplementary information included in the statutory Japanese language consolidated financial statements
is not presented in the accompanying consolidated financial statements.
The translations of the Japanese yen amounts into U.S. dollars are included solely for the convenience of readers
outside Japan, using the prevailing exchange rate on March 31, 2012, which was ¥82 to U.S. $1. The conveniencetranslations should not be construed as representations of what the Japanese yen amounts have been, could havebeen, or could in the future when converted into U.S. dollars at this or any other rate of exchange.

2. Summary of Significant Accounting Policiesa) Principles of Consolidation
The accompanying consolidated financial statements include the accounts of the Company and its 40 consolidated
subsidiaries in 2012, 39 consolidated subsidiaries in 2011 and 38 consolidated subsidiaries in 2010.
MEIDEN MALAYSIA SDN. BHD. has been added to the scope of consolidation from the fiscal year ended March
31, 2012 due to their increased importance.
DONGGUAN MEIDEN PACIFIC ELECTRICAL ENGINEERING CO., LTD. and Meiden T&D Corporation havebeen added to the scope of consolidation from the fiscal year ended March 31, 2012 due to established.
ENERGY GIKEN CO., LTD. was removed from the scope of consolidation from the fiscal year ended March 31,
2012 due to its liquidation.
Meiden Media Front Corporation was removed from the scope of consolidation from the fiscal year ended March
31, 2012 due to the merger with MEIDEN KOHSAN CO., LTD.
All significant inter-company accounts and transactions have been eliminated in consolidation. 9 unconsolidated
subsidiaries, whose total assets, sales, net income (loss), and retained earnings are not significant in the aggregate
in relation to the comparable figures in the consolidated financial statements, have not been consolidated in 2012.
In the elimination of investments in subsidiaries, the assets and liabilities of the subsidiaries, including the portion
attributable to minority shareholders, are evaluated using the fair value when the Companies acquired control of
the respective subsidiaries.

20

Meiden Annual Report 2012

The fiscal year-end for consolidated overseas subsidiaries is December 31, 2011. In preparing the consolidated
financial statements, the financial statements as of December 31 of these subsidiaries are used. However, adjustments
are made as necessary upon consolidation to reflect any significant transactions from January 1 to March 31.
b) Equity Method
Investments in affiliated companies (all 20% to 50% owned and certain others 15% to 20% owned) are accounted
for by the equity method in the years ended March 31, 2012, 2011 and 2010.
The equity method was applied to 3 affiliates during the fiscal year 2012 and 2011, and 4 affiliates and 1 unconsolidated subsidiary during the fiscal year 2010. Investments in 9 unconsolidated subsidiaries and 3 other affiliatedcompanies, that would not have material effect on the consolidated financial statements, are stated at cost in 2012.
AE POWER METAL ENGINEERING SDN. BHD, the one of the affiliates, whose financial statements fall on
December 31 and these statements are used to prepare the consolidated financial statements.
<Changes in Accounting Policy>
Effective from the fiscal year ended March 31, 2011, the Companies have applied the “Accounting Standard for
Equity Method of Accounting for Investments” (Accounting Standards Board of Japan (“ASBJ”) Statement No. 16
of March 10, 2008) and the “Practical Solution on Unification of Accounting Policies Applied to Associates
Accounted for Using the Equity Method” (Practical Issues Task Force (“PITF”) No. 24 of March 10, 2008).
The impact of this change is immaterial in the fiscal year ended March 31, 2011.
c) Securities
Securities are classified based on the intent of holding as (a) securities held for trading purposes (hereafter, “trading
securities”), (b) debt securities intended to be held to maturity (hereafter, “held-to-maturity debt securities”), (c) equity
securities issued by unconsolidated subsidiaries and affiliated companies, or (d) all other securities that are notclassified in any of the above categories (hereafter, “available-for-sale securities”).
The Companies do not have trading securities and held-to-maturity debt securities. Equity securities issued bysubsidiaries and affiliated companies which are not consolidated or accounted for using the equity method arestated at the moving-average cost. Available-for-sale securities with no available fair market values are stated at
the moving-average cost.
If the market value of equity securities issued by unconsolidated subsidiaries and affiliated companies andavailable-for-sale securities declines significantly, such securities are stated at fair market value and the difference
between fair market value and the carrying amount is recognized as loss in the period of the decline unless thedeclines are considered temporary. If the fair market value of equity securities issued by unconsolidated subsidiaries
and affiliated companies not accounted for on the equity method is not readily available, such securities should be
written down to net asset value with a corresponding charge in the statements of income in the event net asset
value declines significantly unless the decline is considered as recoverable.
Available-for-sale securities with available fair market values are stated at fair market value. Unrealized gains andunrealized losses on these securities are reported, net of applicable income taxes, as a separate component of net
assets. Realized gains and losses on sale of such securities are computed using the moving-average cost.
d) Derivatives and Hedge Accounting
Derivative financial instruments are stated at fair value, and the Companies recognize changes in the fair value as
gains or losses unless derivative financial instruments are used for hedging purposes.
If derivative financial instruments are used as hedges and meet certain hedging criteria, the Companies defer
recognition of gains or losses resulting from changes in fair value of derivative financial instruments until thecorresponding losses or gains on the hedged items are recognized.
However, in cases where forward foreign exchange contracts are used as hedges and meet certain hedging
criteria, forward foreign exchange contracts and hedged items are accounted for in the following manner:
1. If a forward foreign exchange contract is executed to hedge an existing foreign currency receivable or payable,(a) the difference, if any, between the Japanese yen amount of the hedged foreign currency receivable or payabletranslated using the spot rate at the inception date of the contract and the book value of the receivable or payable
is recognized in the statements of income in the period which includes the inception date, and(b) the discount or premium on the contract (that is, the difference between the Japanese yen amount of the contract
translated using the contracted forward rate and that translated using the spot rate at the inception date of thecontract) is recognized over the term of the contract.
Meiden Annual Report 201221

2. If a forward foreign exchange contract is executed to hedge a future transaction denominated in a foreign currency, the future transaction will be recorded using the contracted forward rate, and no gains or losses on theforward foreign exchange contract are recognized.
Also, if interest rate swap contracts are used as hedge and meet certain hedging criteria, the net amount to be
paid or received under the interest rate swap contract is added to or deducted from the interest on the assets or
liabilities for which the swap contract is executed.
e) Inventories
Inventories of the Companies are stated at cost determined principally by the weighted-average method as to materials
and supplies, and the specific identification method as to finished products and work-in-process. The carrying
amounts stated on the balance sheet have been calculated after a devaluation reflecting reduced profitability.
f) Property, Plant and Equipment and Depreciation
The Companies compute depreciation of the remaining assets principally by the declining-balance method at rates
based on the useful lives and residual values determined in accordance with the Corporation Tax Law of Japan.
However, the Companies compute depreciation by the straight-line method for buildings (exclusive of building
improvements) acquired after March 31, 1998, and building improvements, structures and machinery belonging to
the Company’s Real Estate Division (Osaki, Shinagawa City, Tokyo).
g) Lease
Property, plant and equipment capitalized under finance lease arrangements are depreciated over the lease termof the respective assets up to no residual values. However, as permitted, finance leases commencing prior to April
1, 2008, which do not transfer ownership of the leased property to the lessee, are accounted for as operatingleases with disclosure of certain “as if capitalized” information.
h) Allowance for Doubtful Accounts
The Companies provide the allowance for doubtful accounts in an amount sufficient to cover possible losses oncollection by estimating individually uncollectible amounts and applying a percentage based on collection experienceto the remaining accounts.
i) Accrued Bonuses for Employees
The Companies provide for the payment of employee bonuses, based on the estimated projected amounts for
employee bonus payments.
j) Provision for Product Warranties
The Companies make provision for product warranty by estimating individually the expected charge-free expenses.
k) Provision for Loss on Orders
The Companies make provision for losses on orders by estimating the expected losses incurred after the balance
sheet date.
l) Provision for Environmental Measures
An amount is posted for the expected future amount required to provide for expenditures related to environmental
measures such as the processing of hazardous substances as required by laws and regulations.
m) Provision for Loss on Guarantees
The Company provides for losses on guarantee obligations for its non-consolidated companies, based on theestimated amount of loss, taking into account the financial condition of each non-consolidated company andother factors.
n) Reserve for Retirement Allowance for Directors and Corporate Auditors
Certain consolidated subsidiaries recorded 100% of obligation based on their rules and regulations under theassumption that all directors and corporate auditors retired at the balance sheet date.

22

Meiden Annual Report 2012o) Employees’ Severance and Retirement Benefits
The Companies provide two types of severance and retirement benefit plans, unfunded lump-sum payment plans
and funded non-contributory pension plans, under which all eligible employees are entitled to benefits based on thelevel of wages and salaries at the time of retirement or termination, length of service and certain other factors.
The liabilities and expenses for severance and retirement benefits are determined based on the amounts actuariallycalculated using certain assumptions.
The Companies provided allowance for employees’ severance and retirement benefits based on the estimatedamounts of projected benefit obligation and the fair value of the plan assets at each balance sheet date.
Prior service costs are recognized in expenses in equal amounts over the average of the estimated remaining
service lives of the employees (10 years), and actuarial gains and losses are recognized in income or expenses
using the straight-line method over the average of the estimated remaining service lives (from 12 to 15 years)
commencing with the following period.
The net transition obligation (¥38,222 million) has been recognized in expenses in equal amounts over 15 years.
p) Revenue Recognition of Construction Contracts
The Companies apply the percentage-of-completion method when the outcome of individual contracts can be
estimated reliably. The percentage/stage of completion at the end of the reporting period is measured by the
proportion of the cost incurred to the estimated total cost.
q) Income Tax
The Companies recognize tax effects of temporary differences between the carrying amounts of assets and liabilities
for tax and financial reporting. The provision for income taxes is computed based on the pretax income includedin the consolidated statements of income. The asset and liability approach is used to recognize expected future
tax consequences of temporary differences between the carrying amounts of assets and liabilities for financial
reporting purposes and the amounts used for income tax purposes.
The Company and some subsidiaries adopted consolidated tax return system.
r) Amounts per Share of Common Stock
The computation of net income (loss) per share is based on the weighted average number of shares of common
stock outstanding during the year.
For the years ended March 31, 2012, 2011 and 2010, diluted net income per share was not shown since theCompany had no securities with dilutive effect. Cash dividends per share presented in the consolidated statements
of income represent actual amounts applicable to the respective years.
s) Amortization of Goodwill and Amortization Period
Goodwill is amortized using the straight-line method over a period of effectiveness.
t) Statements of Cash Flows
In preparing the consolidated statements of cash flows, cash on hand, readily-available deposits, and short-term
highly liquid investments with maturities that do not exceed three months at the time of purchase and with insignificant
risks of change in value are considered to be cash and cash equivalents.
u) Translation of Foreign Currency Accounts and Financial Statements
Receivables and payables denominated in foreign currencies are translated into Japanese yen at the year-end rates.
Financial statements of consolidated overseas subsidiaries are translated into Japanese yen at the year-end
rate, except that net asset accounts are translated at historical rates and statements of income items resulting fromtransactions with the Companies at the rates used by the Companies.
Foreign currency translation adjustments resulting from translations of foreign currency financial statements were
presented separately in the foreign currency translation adjustment and minority interests in the consolidatedbalance sheets.
v) Reclassifications
Certain prior year amounts have been reclassified and restated to conform to the current year presentation.
These reclassifications and restatements had no effect on previously reported results of operations orretained earnings.

Meiden Annual Report 201223w) Change in Accounting Policies1)	Changes in Accounting Policies with Revision of Accounting Standards(Adoption of accounting standard for asset retirement obligations)
From the fiscal year ended March 31, 2011, the Companies have adopted the “Accounting Standard for Asset
Retirement Obligations” (ASBJ Statement No. 18 of March 31, 2008) and “Guidance on Accounting Standard for
Asset Retirement Obligations” (ASBJ Guidance No. 21 of March 31, 2008). These changes had a negligible impact
on operating income and segment performance in the fiscal year ended March 31, 2011. As a result of adopting
these standards, “Income before income taxes and minority interests” decreased by ¥25 million for the fiscal year
ended March 31, 2011.
2)	Change in Presentation Method(Consolidated Statements of Income)
The Companies have adopted the “Cabinet Office Ordinance Regarding Partial Amendment of the Regulation for
Terminology, Forms and Preparation of Financial Statements” (Cabinet Office Ordinance No. 5 of March 24, 2009)
based on the “Accounting Standard for Consolidated Financial Statements” (ASBJ Statement No. 22 of December
26, 2008). As a result, “Income (loss) before minority interests” is included in the financial statements from the fiscal
year ended March 31, 2011.
<Additional Information>(1) Effective from March 31, 2011, the Companies adopted “Accounting Standard for Presentation of Comprehensive
Income” (ASBJ Statement No. 25 on June 30, 2010) and “Revised Accounting Standard for Consolidated Financial
Statements” (ASBJ Statement No. 22, revised on June 30, 2010). As a result of the adoption of these standards,
the Companies have presented the consolidated statements of comprehensive income (loss) in the consolidated
financial statements.
(2) The Company and its consolidated domestic subsidiaries adopted “Accounting Standard for Accounting
Changes and Error Corrections” (Accounting Standards Board of Japan (“ASBJ”) Statement No. 24 issued on
December 4, 2009) and “Guidance on Accounting Standard for Accounting Changes and Error Corrections” (ASBJ
Guidance No. 24, issued on December 4, 2009) for accounting changes and corrections of prior period errors
which are made from the fiscal year beginning on April 1, 2011.

3. Financial Instruments
Information on financial instruments for the year ended March 31, 2012 required pursuant to the revised accounting
standards is as follows:
1. Items relating to condition of financial instruments(1) Policy initiatives for financial instruments
It is Meiden Group policy to limit fund management to short-term deposits, and use bank loans and the issue ofshort-term bonds for financing. Derivatives are used only to hedge the market fluctuation risks described below
and are not used for speculative transactions.
(2) Types of financial instruments and risks
Operating claims such as trade notes and trade accounts receivable are exposed to the credit risk of the customer.
Operating claims denominated in foreign currencies that arise from our business operations overseas are also
exposed to currency rate fluctuation risk. However, in principle, this exposure is hedged through forward exchange
contracts, except for cases in which the claims are less than the balance of operating debt denominated in thesame foreign currency.
Stocks that are investment securities, which mainly consist of stocks of corporations the Companies havebusiness or capital alliances with, are exposed to market value fluctuation risk.
The majority of operating debt such as trade notes and trade accounts payable has payment dates within one
year. In addition there are some foreign currency-denominated notes and accounts payable related to raw materials
purchases that are exposed to currency rate fluctuation risk. However, in principle, this exposure is hedged throughforward exchange contracts, except for cases in which the debts are less than the balance of operating claims
denominated in the same foreign currency.

24

Meiden Annual Report 2012

Short-term borrowings and commercial paper are mainly used for financing operations transactions, while
long-term debt is used for financing capital investment and operating capital. Borrowings with a floating rate areexposed to interest rate fluctuation risk. However derivatives transactions are used as instruments to hedge thefluctuation risk for interest paid and to ensure that a fixed interest rate is paid.
Derivatives transactions consist of forward exchange contracts to hedge currency fluctuation risk associatedwith foreign currency-denominated operating claims and debts, interest rate swaps to hedge interest rate payment
fluctuation risk associated with borrowings and commodity swaps to hedge price fluctuation risk associated withraw materials purchases.
Refer to the note 2 d) (Derivatives and Hedge Accounting) for information relating to hedge accounting concerning
hedge instruments, hedged items, hedge policies, and the method used for evaluating the effectiveness of hedges.
(3) Risk management structure for financial instruments(i) Credit risk (risk relating to counterparty not performing contracts, etc.) management
For each counterparty, operating claims balances are managed based on credit management regulations andstructures are in place to allow regular assessment of the creditworthiness of major counterparties.
To reduce the credit risk of contracted financial institutions when using derivatives transactions, transactions are
only conducted with financial institutions with a high credit ranking.
(ii) Market risk (currency and interest rate fluctuation risk) management
Forward exchange contracts are used to hedge future currency rate fluctuation risk associated with foreign
currency-denominated operating claims and debts. In addition, interest rate swap transactions are used to control
interest rate payment risk associated with borrowings and commodity swap transactions are used to control pricefluctuation risk associated with raw materials purchases.
The fair value of investment securities and financial position of the issuer are assessed regularly.
The purposes, types of transactions, and deciding authorities for derivative transactions are stipulated inderivatives transactions management regulations and approval regulations, and conduct and management ofthese transactions is in accordance with even more specific operation rules.
(iii) Management of liquidity risk (risk that payment cannot be conducted on payment date) associated with financing
Although operating debt and borrowings are exposed to liquidity risk, this risk is managed through methods suchas preparing and renewing cash flow planning as required.
(iv) Supplementary explanation concerning fair value of financial instruments
The fair value of financial instruments includes amounts based on market value and amounts that have beenreasonably estimated when no market value is available. Because the calculation of these amounts incorporate
elements subject to fluctuation, if different preconditions are used the resulting amounts could vary. Please notethat for the contract amounts related to derivatives transactions included in the note “Derivatives Transaction
Related,” the amounts themselves do not indicate the market risk associated with derivatives transactions.
2. Items related to the calculation of fair value of financial instruments and securities and derivatives transactions
Assets(1) Cash and time deposits, (2) Trade notes and trade accounts receivable
These assets are settled in the short-term and fair value is nearly equivalent with book value, so the book value
is used.
(3) Investment securities
The fair value of stocks is the price at the exchange and the fair value of debt securities is the price at the exchangeor price presented by correspondent financial institutions, etc. Refer to the Note 4 (Securities) for information by
the purpose of ownership for securities.
(4) Long-term loans receivable
The fair value of long-term loans is calculated by discounting by the interest rate assumed for a new loan of thesame type.
Liabilities(1) Trade notes and trade accounts payable, (2) Short-term borrowings, (3) Commercial paper, (4) Accrued
income taxes
These liabilities are settled in the short-term and fair value is nearly equivalent with book value, so the book value
is used.

Meiden Annual Report 201225

(5) Long-term debt
The fair value of long-term debt is calculated by discounting by the interest rate assumed for receiving a new loanof the same type. For the fair value of long-term debt with floating rate interest subject to special treatment withinterest rate swaps, the total of principal and interest that is treated together with the hedged long-term debt is
discounted by the interest reasonably expected to be applied for a similar type of debt.
Derivatives transactions
Because the special treatment of interest rate swaps is treated together with the hedged long-term borrowings,
the fair value is stated within the fair value of the relevant long-term borrowings. Because the allocation treatmentof forward exchange contracts is treated together with the hedged foreign currency-denominated account receivable, the fair value is stated within the fair value of the relevant foreign currency-denominated account receivable.
Please refer to the Note 2 d) (Derivatives and Hedge Accounting) for information on derivatives transactions.
3. Fair value of financial instruments
Book value and fair values of the financial instruments on the consolidated balance sheet at March 31, 2012 andMarch 31, 2011 are as follows:
Millions of yen
2012

Amount posted

Fair value

Difference

Cash and time deposits¥12,748¥12,748¥–

Trade notes and trade accounts receivable *1

65,39065,390–Investment securities

12,567

12,567

–

30

32

2

Total assets¥90,735¥90,737¥  2

Trade notes and trade accounts payable *1¥33,027¥33,027¥––Long-term loans receivable

Short-term borrowings

1,736

1,736

Commercial paper

23,50023,500–Accrued income taxes

1,254

1,254

–

Long-term debt

33,81534,080265

Total liabilities¥93,332¥93,597¥265

Derivatives transactions¥(117)¥(117)¥–Millions of yen
2011

Fair value

Difference

Cash and time deposits¥12,067¥12,067¥–

Trade notes and trade accounts receivable *1

60,18460,184–

Investment securities

13,096

13,096–Long-term loans receivable

26

Amount posted

379

382

3

Total assets¥85,726¥85,729¥ 3

Trade notes and trade accounts payable *1¥27,989¥27,989¥–

Short-term borrowings

2,969

2,969

–
–

Commercial paper

22,00022,000Accrued income taxes

1,179

1,179

–

Long-term debt

38,26738,36497

Total liabilities¥92,404¥92,501¥97

Derivatives transactions¥(54)¥(54)¥–

Meiden Annual Report 2012

Thousands of U.S. dollars
2012

Amount posted

Fair value

Cash and time deposits$  155,463$  155,463$–Trade notes and trade accounts receivable *1

797,439

797,439–

Investment securities

153,256

153,256–

Long-term loans receivable

Difference

366

391

25

Total assets$1,106,524$1,106,549$   25Trade notes and trade accounts payable *1$  402,768$  402,768$–

Short-term borrowings

21,171

21,171–

Commercial paper

286,585

286,585–

Accrued income taxes

15,293

15,293–Long-term debt

412,378415,610

3,232

Total liabilities$1,138,195$1,141,427$3,232Derivatives transactions$(1,427)$(1,427)$–*1 Those for unconsolidated subsidiaries and affiliates are included.

4. Derivatives and hedge accounting(1) Derivatives transactions not subject to hedge accounting
Not applicable for the current fiscal year(2) Derivatives transactions subject to hedge accounting(i) Currency related
Millions of yen

2012

Hedge accounting method

Types of derivatives transactions

Major hedged items

Basic accounting method

US dollar-denominatedforward exchange contracts

Accounts receivable(planned transactions)

Allocation treatment offorward exchange contracts

US dollar-denominatedforward exchange contracts

Accounts payable

Allocation treatment offorward exchange contracts

US dollar-denominatedforward exchange contracts

Accounts receivable

Amount ofcontracts

Amount ofcontracts
over one year

Fair value

¥ 62

¥–

¥ 63

17

–

18

243

–

246

2011

Millions of yen
Amount ofcontracts

Amount ofcontracts
over one year

Fair value

Hedge accounting method

Types of derivatives transactions

Major hedged items

Basic accounting method

US dollar-denominatedforward exchange contracts

Accounts receivable(planned transactions)

¥340

¥–

¥311

Basic accounting method

US dollar-denominatedforward exchange contracts

Accounts payable(planned transactions)

11

–

11

Basic accounting method

EUR-denominatedforward exchange contracts

Accounts payable(planned transactions)

68

–

70

Basic accounting method

SG dollar-denominatedforward exchange contracts

Accounts payable(planned transactions)

2

–

2

Allocation treatment offorward exchange contracts

US dollar-denominatedforward exchange contracts

Accounts receivable
11

–

10

Allocation treatment offorward exchange contracts

SG dollar-denominatedforward exchange contracts

Accounts payable
13

–

14

Meiden Annual Report 201227

Thousands of U.S. dollars

2012

Hedge accounting method

Types of derivatives transactions

Major hedged items

Basic accounting method

US dollar-denominatedforward exchange contracts

Accounts receivable(planned transactions)

Allocation treatment offorward exchange contracts

US dollar-denominatedforward exchange contracts

Accounts payable

Allocation treatment offorward exchange contracts

US dollar-denominatedforward exchange contracts

Accounts receivable

Amount ofcontracts

Amount ofcontracts
over one year

Fair value$  756$–$  768

207

–

220

2,963

–

3,000

(Note) Fair value calculation
Calculation is based on the amount presented by the counterparty financial institution.

(ii) Interest rate related
Millions of yen

2012

Hedge accounting method

Types of derivatives transactions

Basic accounting method

Interest rate swap transactions Long-term debt

Major hedged items

Special treatment for interest
rate swaps

Interest rate swap transactions Long-term debt

Amount ofcontracts

Amount ofcontracts
over one year

Fair value¥ 1,987¥1,817¥(100)

10,936

9,010

(152)

2011

Millions of yen

Hedge accounting method

Types of derivatives transactions

Basic accounting method

Interest rate swap transactions Long-term debt

Major hedged items

Special treatment for interest
rate swaps

Interest rate swap transactions Long-term debt

Amount ofcontracts

Amount ofcontracts
over one year

Fair value¥ 2,166¥ 1,987¥ (85)

12,803

10,877(469)

Thousands of U.S. dollars

2012

Hedge accounting method

Types of derivatives transactions

Basic accounting method

Interest rate swap transactions Long-term debt

Major hedged items

Special treatment for interest
rate swaps

Interest rate swap transactions Long-term debt

Amount ofcontracts

Amount ofcontracts
over one year

Fair value$ 24,232$ 22,159$(1,220)

133,366

109,878(1,854)(Note) Fair value calculation
Calculation is based on the amount presented by the counterparty financial institution.

(iii) Commodity related
Millions of yen

2012

Hedge accounting method

Types of derivatives transactions

Basic accounting method

Commodity swap transactions Raw material

Major hedged items

Hedge accounting method

Types of derivatives transactions

Basic accounting method

Commodity swap transactions Raw material

Major hedged items(Note) Fair value calculation
Calculation is based on the amount presented by the counterparty financial institution.

Meiden Annual Report 2012

Amount ofcontracts
over one year

Fair value

¥185

¥–

¥(16)

Thousands of U.S. dollars

2012

28

Amount ofcontracts

Amount ofcontracts

Amount ofcontracts
over one year

Fair value$2,256$–$(195)

4. Securities
A. The following tables summarize acquisition costs and book values of securities with fair value as of March 31,
2012 and 2011.
Millions of yen
Acquisition cost2012

Book value

Difference

Securities with book value (fair value) exceedingacquisition cost:
Equity securities¥5,247¥ 9,802¥4,555Sub-total

5,247

9,802

4,555

Equity securities

3,195

2,765

(430)

Sub-total

3,195

2,765

(430)

¥8,442¥12,567¥4,125

Securities with book value (fair value) not exceedingacquisition cost:

Total(Note) The company recognized shrinkage loss of ¥435 million ($5,305 thousand) on its available for sale securities for the year ended
March 31, 2012.
Millions of yen
2011

Acquisition cost

Book value

Difference

Securities with book value (fair value) exceedingacquisition cost:
Equity securities¥6,030¥10,998¥4,968Sub-total

6,030

10,998

4,968

2,867

2,098

(769)

Securities with book value (fair value) not exceedingacquisition cost:
Equity securities
Sub-total
Total

2,867

2,098

(769)

¥8,897¥13,096¥4,199(Note) The company recognized shrinkage loss of ¥1,102 million on its available for sale securities for the year ended March 31, 2011.
Thousands of U.S. dollars
Acquisition cost2012

Book value

Difference

Securities with book value (fair value) exceedingacquisition cost:
Equity securities$ 63,988$119,537$55,549

Sub-total

63,988

119,537

55,549Equity securities

38,96333,719(5,244)Sub-total

38,96333,719(5,244)$102,951$153,256$50,305

Securities with book value (fair value) not exceedingacquisition cost:

Total

B. The following table summarizes book values of securities with no fair value as of March 31, 2012 and 2011.
(a) Available-for-sale securities;
Book value
Thousands of
U.S. dollars

Millions of yen
2012

Non-listed equity securities

¥606

2011

¥679

2012

$7,390

Meiden Annual Report 201229

(b) Equity securities issued by subsidiaries and affiliated companies;
Book value
Thousands of
U.S. dollars

Millions of yen
2012

2011

2012

Investments in unconsolidated subsidiaries¥  117¥   88$ 1,427

Investments in affiliated companies

8,021

9,145

97,817

Total¥8,138¥9,233$99,244

C. Total sales amounts of available-for-sale securities sold, gains and losses, in the years ended March 31, 2012,2011 and 2010 are as follows:
Thousands of
U.S. dollars

Millions of yen
2011

2012

Sales amount

2010

2012

¥69

¥28

¥1

$841

Gains

7

8

1

85

Losses

(1)

–

–

(12)

5. Inventories
Inventories as of March 31, 2012 and 2011 were as follows:
Thousands of
U.S. dollars

Millions of yen
2012

2011

2012

Finished products¥ 4,336¥ 3,395$ 52,878

Work-in-process

25,19025,364

307,195

Materials and supplies

2,045

1,555

24,939¥31,571¥30,314$385,012

Total

6. Subsidies Received from the Japanese Government
The Companies received a portion of the acquisition costs of certain tangible fixed assets from the Japanese
Government. The aggregated amount of the subsidies deducted from the acquisition costs of the tangible fixed
assets as of March 31, 2012 and 2011, were ¥2,863 million ($34,915 thousand) and ¥2,815 million.

7. Short-Term Borrowings, Long-Term Debt and Commercial Paper
Short-term borrowings are bank loans and represented by notes. The weighted average interest rate was 2.6% asof March 31, 2012 and 1.5% as of March 31, 2011, respectively.
Long-term debt and commercial paper as of March 31, 2012 and 2011 consisted of the following:Thousands of
U.S. dollars

Millions of yen

1.2% to 2.9% loans from banks and insurance companies
Less: Current portion

30

2012

2011

2012

¥33,815¥38,266$412,378

5,957

5,664

72,646

Total¥27,858¥32,602$339,732

Commercial paper, bearing interest rates of 0.1%

¥23,500¥22,000$286,585

Meiden Annual Report 2012

The annual maturities of long-term debts as of March 31, 2012 were as follows:
Millions of yen

Thousands of
U.S. dollars

2013¥5,957$ 72,646

2014

8,692

106,000

2015

5,900

71,951

2016

4,807

58,622

2017

3,874

47,2442018 and thereafter

4,585

55,915

Year ended March 31

Commitment Line Agreement
The Company renewed an agreement with a syndicate of 15 Japanese banks to set up a commitment line bymultiple financial institutions for the Company.
The unexecuted balances of lending commitments for the company as of March 31, 2012 and 2011 wereas follows:
Thousands of
U.S. dollars

Millions of yen

Total lending commitments

2012

2011

2012

¥25,000¥25,000$304,878–––¥25,000¥25,000$304,878

Less amounts currently executed
Unexecuted balance

8. Pledged Assets
The following assets were pledged as collateral as of March 31, 2012 and 2011.
Thousands of
U.S. dollars

Millions of yen
2012

2011

2012

Land

¥ 1,479¥ 1,479$ 18,037

Buildings and structures

18,101

18,974

220,744

21

21

256

¥19,601¥20,474$239,037

Investment securities
Total

Obligations with collateral pledged as of March 31, 2012 and 2011 were as follows:
Millions of yen

Long-term debt (Including current portion of long-term debt)

Thousands of
U.S. dollars

2012

2011

2012

¥8,400¥9,800$102,439

In addition to the above, investment securities of ¥2 million ($24 thousand) as of March 31, 2012 and 2011 were
pledged as collateral for borrowing from financial institutions by an affiliate.
An affiliate engaged in the wind farm business has a project finance loan that is secured by pledged businessassets amounting to ¥3,023 million ($36,866 thousand) and ¥4,921 million as of March 31, 2012 and 2011,
respectively.
Total business assets of this affiliate are amounting to ¥5,750 million ($70,122 thousand) and ¥7,703 million asof March 31, 2012 and 2011, respectively.

Meiden Annual Report 201231

9. Employees’ Severance and Retirement Benefits
The Companies adopted the accounting standard for employees’ severance and retirement benefits, under which
the liabilities and expenses for severance and retirement benefits are determined based on the amounts obtainedby actuarial calculations.
The liabilities for severance and retirement benefits included in the liability section of the consolidated balance
sheets as of March 31, 2012 and 2011 consist of the following:Thousands of
U.S. dollars

Millions of yen

Projected benefit obligation

2012

2011

2012

¥63,575¥53,432$775,305

Unrecognized prior service costs

393

725

4,792

Unrecognized actuarial differences(16,781)(6,782)(204,646)

Less fair value of pension assets(17,926)(18,144)(218,610)

Less unrecognized net transition obligation(5,090)(6,785)(62,073)

Liability for severance and retirement benefits¥24,171¥22,446$294,768

Included in the consolidated statements of income for the years ended March 31, 2012, 2011 and 2010 areseverance and retirement benefit expenses comprising the following:Thousands of
U.S. dollars

Millions of yen
2012

2011

2010

2012

Service costs—benefits earned during the year

¥2,269¥2,412¥2,326$27,671

Interest cost on projected benefit obligation

1,387

1,418

1,431

16,914

Expected return on plan assets

(514)

(543)

(327)

(6,268)

Amortization of prior service costs

(332)

(338)

(337)

(4,049)Amortization of net transition obligation

1,695

1,698

1,697

20,671

Amortization of actuarial differences
Severance and retirement benefit expenses

773

728

859

9,427

¥5,278¥5,375¥5,649$64,366

The discount rate and the rate of expected return on plan assets used by the Companies are 1.8% and 3.0%
for 2012, 2.7% and 3.0% for 2011 and 2.7% and 2.0% for 2010, respectively.
The estimated amount of all retirement benefits to be paid at the future retirement date is allocated equally toeach service year using the estimated number of total service years. (i) Severance and retirement benefit expensesof consolidated subsidiaries using the simplified method are included in the “Service Costs” above, excluding theamortization of net transition obligation. (ii) Major expenses of the universally established welfare program service
are included in the “Service Costs” above.

10. Net Assets
Under Japanese laws and regulations, the entire amount paid for new shares is required to be designated as common
stock. However, a company may, by a resolution of the Board of Directors, designate an amount not exceeding
one-half of the prices of the new shares as additional paid-in capital, which is included in capital surplus.
Under the Law, in cases where a dividend distribution of surplus is made, the smaller of an amount equal to
10% of the dividend or the excess, if any, of 25% of common stock over the total of additional paid-in-capital andlegal earnings reserve must be set aside as additional paid-in capital or legal earnings reserve. Legal earnings
reserve is included in retained earnings in the accompanying consolidated balance sheets.
Under the Code, companies were required to set aside an amount equal to at least 10% of the aggregate amountof cash dividends and other cash appropriations as legal earnings reserve until the total of legal earnings reserve
and additional paid-in capital equaled 25% of common stock.
Under the Code, legal earnings reserve and additional paid-in capital could be used to eliminate or reduce a
deficit by a resolution of the shareholders’ meeting or could be capitalized by a resolution of the Board of Directors.
Under the Law, both of these appropriations generally require a resolution of the shareholders’ meeting.

32

Meiden Annual Report 2012

Additional paid-in capital and legal earnings reserve may not be distributed as dividends. Under the Code,however, on condition that the total amount of legal earnings reserve and additional paid-in capital remained equal
to or exceeded 25% of common stock, they were available for distribution by resolution of the shareholders’ meeting.
Under the Law, all additional paid-in capital and all legal earnings reserve may be transferred to other capital surplus
and retained earnings, respectively, which are potentially available for dividends.
The maximum amount that the Company can distribute as dividends is calculated based on the unconsolidated
financial statements of the Company in accordance with Japanese laws and regulations.
At the annual shareholders’ meeting held on June 26, 2012, the shareholders approved cash dividends amounting to ¥908 million ($11,073 thousand). Such appropriations have not been accrued in the consolidated financial
statements as of March 31, 2012. Such appropriations are recognized in the period in which they are approved by
the shareholders.

11. Reclassification Adjustments and Tax Effects for Comprehensive Income
Amounts reclassified to net income (loss) in the current period that were recognized in other comprehensive
income in the current or previous periods and tax effects for each component of other comprehensive income
are as follows:
Millions of yen

Thousands of
U.S. dollars

2012

2012

Unrealized gains (losses) on securities:
Increase (decrease) during the year¥(508)$(6,195)
5,232

Reclassification adjustments

429

Sub-total, before tax

(79)

(963)

Tax (expense) or benefit

210

2,560

Sub-total, net of tax

131

1,597

Increase (decrease) during the year

(36)

(439)

Reclassification adjustments

(27)

(329)

Sub-total, before tax

(63)

(768)

Unrealized gains (losses) on hedging derivatives:

Tax (expense) or benefit

13

158

Sub-total, net of tax

(50)

(610)

(242)

(2,951)

Increase (decrease) during the year

11

134

Total other comprehensive income¥(150)$(1,830)

Foreign currency translation adjustment:
Increase (decrease) during the year
Share of other comprehensive income of associates accounted forusing equity method:

12. Contingent Liabilities
Contingent liabilities as of March 31, 2012 and 2011, were as follows:
Thousands of
U.S. dollars

Millions of yen
2012

2011

2012

Repurchase of note discounted and endorsed

¥ 79

¥ 67

$  963

Guarantees of loans from banks to employees andunconsolidated subsidiaries and affiliates

114

151

1,390

Meiden Annual Report 201233

13. Lease Information
Prior to April 1, 2008, finance leases, which do not transfer ownership of properties to lessees, are not capitalized andare accounted for in the same manner as operating leases. Certain related information are summarized as follows:(1) Assumed amounts (inclusive of interest) of acquisition cost, accumulated depreciation and net book value asof March 31, 2012 and 2011, are summarized as follows:
Thousands of
U.S. dollars

Millions of yen
2012

2011

2012

¥818

¥981

$9,975

10

15

122

Accumulated depreciation

(468)

(560)

(5,707)

Net book value

¥360

¥436

$4,390

Assumed acquisition cost
Machinery and equipment
Others(2) Future minimum lease payments, inclusive of interest, as of March 31, 2012 and 2011 totaled ¥360 million($4,390 thousand) and ¥436 million, including ¥58 million ($707 thousand) and ¥76 million due within one year,
respectively.
(3) Lease payments, which are equal to assumed depreciation charges for the years ended March 31, 2012, 2011
and 2010, were ¥76 million ($927 thousand), ¥101 million and ¥127 million, respectively.
(4) Assumed depreciation charges are computed using the straight-line method over lease terms assuming noresidual value.

14. Research and Development Expenses
Research and development expenses are charged to income as incurred. The amounts charged to income for theyears ended March 31, 2012, 2011 and 2010 were ¥8,425 million ($102,744 thousand), ¥7,413 million and ¥6,836
million, respectively.

15. Segment Information
General information about reportable segments
Each reportable segment of the Companies is a business unit within the Companies, for which discrete financial
information is available. Reportable segments are reviewed periodically at the Board of Directors Meeting in orderto determine distribution of management resources and evaluate business results by each reportable segment.
The Companies position segments identified by products and services, propose comprehensive strategies withrespect to products and services, and operate its business activities.
The Companies position segments identified by products and services, including “Social Infrastructure Systems,”“Industrial Systems,” “Engineering,” and “Real Estate.”
Description of business of each reportable segment is as follows:
Reportable segments

Description of businessSocial Infrastructure Systems This segment includes business related to the construction of social infrastructure.

34

Industrial Systems

This segment includes business operations related to product systems used in
the manufacturing industry, IT, and other general industry operations.

Engineering

This segment provides service relating to the remote management andmonitoring of facilities and so on.

Real EstateThis segment includes rentals of real estate holdings.

Meiden Annual Report 2012

Basis of measurement about reported segment profit or loss, segment assets, segment liabilities and othermaterial items
Accounting methods for each reportable segment are the same as statements on “Basis of Presenting Consolidated
Financial Statements.”
The operating income (loss) for each reportable segment is in conformity to the operating income of consolidated
statements of income.
Inter-segment sales and transfers are based on market prices.
Information about reported segment profit or loss, segment assets, segment liabilities and other material items.
Segment information for the year ended March 31, 2012, is as follows:
Millions of yen
Social Infrastructure Systems

Industrial
Systems

Engineering

Real Estate

Sub-total

Others

Total

Adjustments

Consolidated¥102,169¥33,474¥25,592¥ 3,022¥164,257¥16,850¥181,107¥–¥181,107

5,356

5,647

333

264

11,600

11,13322,733(22,733)–¥107,525¥39,121¥25,925¥ 3,286¥175,857¥27,983¥203,840¥(22,733)¥181,107

Operating income (loss)¥  1,979¥   186¥ 3,461¥ 1,184¥  6,810¥   847¥  7,657¥ (1,378)¥  6,279

Identifiable assets¥ 77,440¥42,429¥14,022¥21,178¥155,069¥11,943¥167,012¥44,721¥211,733

Depreciation andamortization

2,293

1,492

194

885

4,864

424

5,288

1,720

7,008

Capital expenditures

2,057

1,948

139

–

4,144

238

4,382

2,441

6,823

Year ended March 31, 2012

Social Infrastructure Systems

Industrial
Systems

Engineering

Real Estate

Sub-total

Others

Total

Adjustments

Consolidated$1,245,964$408,219$312,097$ 36,854$2,003,134$205,488$2,208,622$–$2,208,622

65,317

68,866

4,062

3,219

141,464

135,768

277,232(277,232)–$1,311,281$477,085$316,159$ 40,073$2,144,598$341,256$2,485,854$(277,232) $2,208,622

Operating income (loss) $   24,134$  2,268$ 42,208$ 14,439$   83,049$ 10,329$   93,378$ (16,805) $   76,573

Identifiable assets$  944,390$517,427$171,000$258,268$1,891,085$145,647$2,036,732$545,378$2,582,110

Depreciation andamortization

27,96318,1952,366

10,79359,317

5,171

64,48820,97585,463

Capital expenditures

25,08623,756

1,695–

50,5372,902

53,43929,76883,207

Year ended March 31, 2012

Net sales:
Outside customers
Inter-segment
Total

Other items

Thousands of U.S. dollars

Net sales:
Outside customers
Inter-segment
Total

Other items(Notes)1. “Others” segment comprises business operations that are not included in the reporting segments. These operations include other product sales, employee welfare
and benefit services, and the provision of chemical and other products.
2. Segment operating income (loss) is reconciled with operating income reported on the consolidated financial statements.
3. “Adjustments” for segment operating income (loss) of ¥(1,378) million ($(16,805) thousand) includes eliminations of inter-segment sales transfers of ¥1,048 million($12,780 thousand), adjustments for Inventories of ¥(23) million ($(280) thousand), and corporate operating expenses of ¥(2,403) million ($(29,305) thousand) thatare not allocated to the reportable segments. The corporate operating expenses mainly include R&D expenses incurred at the fundamental research laboratory andother facilities that are not affiliated with the reportable segments.
4. “Adjustments” for segment assets of ¥44,721 million ($545,378 thousand) includes eliminations of inter-segment receivables and other assets of ¥(22,105) million($(269,573) thousand), and corporate assets of ¥66,826 million ($814,951 thousand) that are not allocated to the reportable segments. Corporate assets mainly
include cash and time deposits, investment securities, and the assets related to the fundamental research laboratory and other facilities that are not affiliated withthe reportable segments.
5. “Adjustments” for capital expenditures of ¥2,441 million ($29,768 thousand) mainly include investments for corporate information systems that are not affiliated withthe reportable segments.

Meiden Annual Report 201235

Segment information for the year ended March 31, 2011 and 2010, which is restated in conformity with therequirements of the Standard, is as follows:
Millions of yen
Social Infrastructure Systems

Industrial
Systems

Engineering

Real Estate

Sub-total

Others

Total

Adjustments

Consolidated¥100,686¥26,356¥21,770¥ 3,026¥151,838¥15,891¥167,729¥–¥167,729

4,683

4,631

435

264

10,013

10,78820,801(20,801)–¥105,369¥30,987¥22,205¥ 3,290¥161,851¥26,679¥188,530¥(20,801)¥167,729

Operating income (loss)¥  3,543¥(1,496)¥ 2,729¥ 1,160¥  5,936¥   315¥  6,251¥   (473)¥  5,778

Identifiable assets¥ 76,064¥36,045¥12,983¥21,818¥146,910¥ 7,721¥154,631¥52,240¥206,871

Depreciation andamortization

2,157

1,462

217

885

4,721

441

5,162

2,004

7,166

Capital expenditures

1,527

1,291

105

55

2,978

182

3,160

1,370

4,530

Year ended March 31, 2011

Net sales:
Outside customers
Inter-segment
Total

Other items(Notes)1. “Others” segment comprises business operations that are not included in the reporting segments. These operations include other product sales, employee welfare
and benefit services, and the provision of chemical and other products.
2. Segment operating income (loss) is reconciled with operating income reported on the consolidated financial statements.
3. “Adjustments” for segment operating income (loss) of ¥(473) million includes eliminations of inter-segment sales transfers of ¥1,082 million, adjustments for Inventoriesof ¥(44) million, and corporate operating expenses of ¥(1,511) million that are not allocated to the reportable segments. The corporate operating expenses mainly
include R&D expenses incurred at the fundamental research laboratory and other facilities that are not affiliated with the reportable segments.
4. “Adjustments” for segment assets of ¥52,240 million includes eliminations of inter-segment receivables and other assets of ¥(14,051) million, and corporate assetsof ¥66,291 million that are not allocated to the reportable segments. Corporate assets mainly include cash and time deposits, investment securities, and the assets
related to the fundamental research laboratory and other facilities that are not affiliated with the reportable segments.
5. “Adjustments” for capital expenditures of ¥1,370 million mainly include investments for corporate information systems that are not affiliated with the reportable segments.
Millions of yen
Year ended March 31, 2010

Social Infrastructure Systems

Industrial
Systems

Engineering

Real Estate

Sub-total

Others

Total

Adjustments

Consolidated¥108,599¥22,297¥21,576¥ 3,022¥155,494¥17,573¥173,067¥–¥173,067

3,930

3,917

421

264

8,532

10,815

19,347(19,347)–

Net sales:
Outside customers
Inter-segment¥112,529¥26,214¥21,997¥ 3,286¥164,026¥28,388¥192,414¥(19,347)¥173,067

Operating income (loss)¥  5,115¥(4,276)¥ 1,897¥ 1,192¥  3,928¥(171)¥  3,757¥   (435)¥  3,322

Identifiable assets¥ 75,729¥31,909¥12,665¥22,775¥143,078¥ 8,477¥151,555¥55,053¥206,608

Depreciation andamortization

2,236

1,521

258

901

4,916

456

5,372

2,239

7,611

Capital expenditures

1,570

2,265

67

228

4,130

442

4,572

942

5,514

Total

Other items(Notes)1. “Others” segment comprises business operations that are not included in the reporting segments. These operations include other product sales, employee welfare
and benefit services, and the provision of chemical and other products.
2. Segment operating income (loss) is reconciled with operating income reported on the consolidated financial statements.

<Changes in Accounting Policy>
As noted in “NOTES TO CONSOLIDATED FINANCIAL STATEMENTS” 2 w), the companies have applied the“Accounting Standard for Asset Retirement Obligations” (ASBJ Statement No. 18, issued on March 31, 2008). Thischange had a negligible impact on segment operating income (loss) for the year ended March 31, 2011.
<Additional Information>
Effective April 1, 2010, the Companies adopted “Accounting Standard for Disclosures about Segments of anEnterprise and Related Information” (ASBJ Statement No. 17 on March 27, 2009) and “Guidance on AccountingStandard for Disclosures about Segments of an Enterprise and Related Information” (ASBJ Guidance No. 20, issued
on March 21, 2008).

36

Meiden Annual Report 2012

Related information
Related information about geographic areas:
Information about geographic areas for the year ended March 31, 2012, 2011 and 2010 are as follows:
Millions of yen
Year ended March 31, 2012

Net salesJapan¥155,850

Asia

Other Areas¥21,696¥3,561

Total¥181,107

Millions of yen
Year ended March 31, 2011

Net salesJapan¥140,411

Asia

Other Areas¥23,939¥3,379

Total¥167,729

Millions of yen
Year ended March 31, 2010

Net salesJapan¥141,490

Asia

Other Areas¥27,186¥4,391

Total¥173,067

Thousands of U.S. dollars
Year ended March 31, 2012

Net sales

Japan

Asia

$1,900,610$264,585

Other Areas$43,427

Total$2,208,622

16. Income Taxes
The Companies are subject to a number of taxes based on income, which in aggregate, resulted in normal statutory
tax rates of approximately 39.69% for the year ended March 31, 2012, 2011 and 2010, respectively.
The following table summarizes the significant differences between the statutory tax rate and the Companies’
effective tax rate for financial statement purposes for the years ended March 31, 2012, 2011 and 2010.

Statutory tax rate

2012

2011

2010

39.69%

39.69%

39.69%

Permanent difference (social expenses, etc.)

2.48

3.63

2.04

Per capital inhabitant tax

3.91

5.13

6.69

Net changes in valuation allowance

2.03

4.61

11.28

Equity in loss (income) of affiliated companies(3.68)(0.76)(10.41)

Tax deduction(12.81)(13.06)–

Statutory tax rates variance of overseas subsidiaries(4.00)(9.99)(18.72)

–

3.61

–

Effects of changes in the statutory tax rate

Effects due to reclaiming taxes

36.57

–

–

Tax effects of investments for subsidiaries andaffiliates due to liquidation(26.41)––Other—net

0.83

0.36

3.71

Effective tax rate

38.61%

33.22%

34.28%

Meiden Annual Report 201237

Significant components of deferred tax assets and liabilities of the Companies as of March 31, 2012 and 2011
are as follows:
Thousands of
U.S. dollars

Millions of yen
2012

2011

2012

$ 13,317

Deferred tax assets:
Net operating loss carry forwards¥ 1,092¥   962

Allowance for retirement benefits

8,107

8,315

98,866

Bonuses

1,788

1,952

21,805

OthersGross deferred tax assets

4,006

3,346

48,853

14,993

14,575

182,841

Less: Valuation allowance(1,739)(1,666)(21,207)

Total deferred tax assets

13,254

12,909161,634

Deferred tax liabilities:
521

484

6,354

Unrealized gains on securities, net of taxes

Reserve for special depreciation

1,454

1,669

17,732

Deferred gain from division of corporation

1,073

1,131

13,085

OthersGross deferred tax liabilities
Net deferred tax assets

132

132

1,610

3,180

3,416

38,781¥10,074¥ 9,493$122,853(Note)
Adjustment of deferred tax assets and liabilities for enacted changes in tax laws and rates
On December 2, 2011, amendments to the Japanese tax regulations were enacted into law. As a result of these amendments, the statutory
income tax rate for the Company will be reduced to 37.64% for years beginning on or after April 1, 2012 and 35.27% for years beginning on
or after April 1, 2015. Based on the amendments, the statutory income tax rates utilized for the measurement of deferred tax assets and liabilities
expected to be settled or realized from April 1, 2012 to March 31, 2015 and on or after April 1, 2015 are 37.64% and 35.27%, respectively,
as of March 31, 2012. Due to these changes in statutory income tax rates, net deferred tax assets decreased by ¥947 million as of March
31, 2012 and deferred income tax expense recognized for the year ended March 31, 2012 increased by ¥1,128 million.

17. Investment and Rental Property
The Company owns some rental office buildings and rental commercial facilities for the purpose of earning rent
income in Tokyo and other regions. Pursuant to the new requirements, information about fair value of investment
and rental property is disclosed as follows:
Millions of yen

Rental real estate2012 beginning-ofyear balance

Increase (decrease)during 20122012 end-ofyear balance

2012 fair value¥19,397¥(817)¥18,580¥46,856(Notes)1. Figures stated above are the amount after accumulated depreciation is deducted from the cost of acquisition.
2. The decrease in investment and rental property during the year ended March 31, 2012, is mainly attributable to depreciation ¥817 million($9,964 thousand).
3. The fair value at March 31, 2012 shows the appraisal value from an independent real estate appraiser.
Millions of yen

Rental real estate2011 beginning-ofyear balance

Increase (decrease)during 2011

2011 end-ofyear balance2011 fair value¥20,197¥(800)¥19,397¥46,945(Notes)1. Figures stated above are the amount after accumulated depreciation is deducted from the cost of acquisition.
2. The decrease in investment and rental property during the year ended March 31, 2011, is mainly attributable to depreciation ¥800 million.
3. The fair value at March 31, 2011 shows the appraisal value from an independent real estate appraiser.
Thousands of U.S. dollars

Rental real estate

38

Meiden Annual Report 20122012 beginning-ofyear balance

Increase (decrease)during 20122012 end-ofyear balance

2012 fair value$236,549$(9,964)$226,585$571,415

The profits and losses associated with rental real estate and real estate that contains portions that are used asrental real estate for the fiscal years ended March 31, 2012, 2011 and 2010 are described below.
Millions of yen
Year ended March 31, 2012

Rental real estate

Operating income

Operating cost

Operating profit¥3,286¥2,102¥1,184

Millions of yen
Year ended March 31, 2011

Rental real estate

Operating income

Operating cost

Operating profit¥3,290¥2,130¥1,160Millions of yen
Year ended March 31, 2010

Rental real estate

Operating income

Operating cost

Operating profit¥3,286¥2,094¥1,192Thousands of U.S. dollars
Year ended March 31, 2012

Rental real estate

Operating income

Operating cost

Operating profit$40,073$25,634$14,439

18. Cash and Cash Equivalents
Reconciliations of cash and time deposits shown in the consolidated balance sheets and cash and cash equivalents
shown in the consolidated statements of cash flows as of March 31, 2012 and 2011 are as follows:
Thousands of
U.S. dollars

Millions of yen

Cash and time deposits
Time deposits with maturities exceeding three months
Cash and cash equivalents

2012

2011

2012

¥12,748¥12,067$155,463

(74)

(81)

(902)

¥12,674¥11,986$154,561

19. Related Party Transactions
Information on related party transactions for the years ended March 31, 2012, 2011 and 2010, and the related
amounts as of those dates are summarized as follows:
Millions of yen

Year ended March 31, 2012

Japan AE Power Systems Corporation

Purchaseof finishedproducts

Accounts
payable¥6,307¥2,344

Millions of yen

Year ended March 31, 2011

Japan AE Power Systems Corporation

Purchaseof finishedproducts

Accounts
payable¥9,840¥2,890Millions of yen

Year ended March 31, 2010

Japan AE Power Systems Corporation

Purchaseof finishedproducts¥9,635

Accounts
payable¥2,762Thousands of U.S. dollars

Year ended March 31, 2012

Japan AE Power Systems Corporation

Purchaseof finishedproducts$76,915

Accounts
payable$28,585(Note)
The amount of purchase of finished products and accounts payable is based on market price.

Meiden Annual Report 201239

20. Net Income (Loss) per Share
The basis of per share amount calculation for the years ended March 31, 2012, 2011 and 2010 were as follows:
Thousands of
U.S. dollars

Millions of yen
2011

2012

2010

2012

Basic earnings per share:
Net income (loss)¥1,679¥1,196

¥971

–

–

–

–

1,679

1,196

971

20,476

Earnings not attributable to common shareholders
Net income (loss) allocated to common stocks$20,476

Diluted net income per share is not presented, since the Company has never issued any dilutive securities.
Thousands of shares

Weighted-average number of common stocks

2012

2011

2010

226,946

226,956

226,983

21. Subsequent Events
The following appropriation of retained earnings at March 31, 2012 was approved at the annual meeting of theCompany’s shareholders held on June 26, 2012.
Year ended March 31

Cash dividends, ¥4.0 ($0.05) per share

Millions of yen

Thousands of
U.S. dollars¥908$11,073

At a meeting of the Board of Directors held on December 26, 2011, Meidensha Corporation approved thedissolution of the joint venture business of Japan AE Power Systems Corporation (hereinafter, “AE Power”), a joint
venture formed by Hitachi, Ltd., Fuji Electric Co., Ltd. and Meidensha Corporation. On the same day, the four
companies, comprising the three co-parent companies and AE Power, reached a final agreement on dissolving thejoint venture.
Based on the final agreement, Meiden T&D Corporation (hereinafter, “Meiden T&D”), a wholly owned subsidiaryof Meidensha Corporation, has reached an absorption-type corporate split agreement with AE Power with Meiden
T&D as the succeeding company, and took over part of the business run by AE Power on April 1, 2012.
1. Outline of business combination
1Name of counterparty company and business field
Name of counterparty company
Japan AE Power Systems Corporation
Business field
Power transmission and distribution business
2Main reason for business combination
To strengthen competitiveness in the power transmission and distribution business and capture synergies withexisting business operations, etc.
3Date of business combination
April 1, 2012
4Legal format of business combination
Absorption-type corporate split
5Name of succeeding company
Meiden T&D Corporation
2. Matters concerning calculation of acquisition cost
1Acquisition cost of acquired business and breakdown
Meiden T&D Corporation shares: ¥6,321 million
2Type and number of shares issued
Common stock: 91,970 shares

40

Meiden Annual Report 2012

Independent Auditor’s Report

Meiden Annual Report 201241

Consolidated Subsidiary Companies

JAPAN• MEIDEN KOHSAN CO., LTD.
	Sales of products and materials, and agent
service of insurance
Capital ¥100 million• Meiden Plant Systems Corporation
	Construction services
Capital ¥400 million• Kofu Meidensha Electric Mfg. Co., Ltd.
	Manufacture and sales of electric motors
Capital ¥400 million• MSA Co., Ltd.
	Manufacture and sales of surge arresters
Capital ¥400 million• MEIDEN SHOJI Co., Ltd.
	Sales of electric products and components
Capital ¥300 million• Meiden Kankyo Service Co., Ltd.
	Maintenance and control service of water
treatment equipment
Capital ¥100 million• Meiden Kiden Kogyo Co., Ltd.
	Machining and repairing service
Capital ¥20 million• MEIDEN SYSTEMENGINEERING Co., Ltd.
	System engineering of plants
Capital ¥50 million• MEIDEN T&D CORPORATION	Engineering, manufacture and sales ofelectric products
Capital ¥90 million

SINGAPORE• MEIDEN SINGAPORE PTE. LTD.
	Manufacture and sales of transformers,
switchgears and circuit-breakers and related
engineering and construction services
Capital S$25.4 million• MEIDEN ASIA PTE. LTD.
	Business management for Southeast Asia
operations
Capital S$5.0 million

MALAYSIA• MEIDEN MALAYSIA SDN. BHD.
	Engineering, construction services
and trading
Capital RM800.0 thousand

CHINA• MEIDEN FOUNDRY
INDUSTRIAL Co., Ltd.
	Casting
Capital ¥50 million• DONGGUAN MEIDEN ELECTRICAL
ENGINEERING CO., LTD.
	Manufacture and sales of switchgears andsales of electric products and components
Capital HK$8.4 million• MEIDEN CHEMICAL CO., LTD.
	Insulating varnish and molded
instrument transformer
Capital ¥95 million• MEIDEN ZHENGZHOUELECTRIC CO., LTD.
	Manufacture and sales of surge arresters
Capital RMB40.0 million• HOKUTO DENKO CORPORATION	Manufacture and sales of electric sensors
Capital ¥25 million• MEIDEN HANGZHOUDRIVE SYSTEMS CO., LTD.
	Manufacture and sales of electrical motors
Capital US$19.0 million

THAILAND• THAI MEIDENSHA CO., LTD.
	Engineering and construction services
Capital TB20.0 million• MEIDEN ELECTRIC (THAILAND) LTD.
	Manufacture and sales of switchgears
Capital TB70.0 million

INDONESIA• MEIDEN SOFTWARE CORPORATION	Engineering and programming of software
Capital ¥50 million• Meiden System Technology Co., Ltd.
	Engineering and programming software
Capital ¥30 million• MEIDEN SYSCON Co., Ltd.
	Manufacture and sales ofswitchgear and relays
Capital ¥20 million• Meiden Sheet Metal
Products Corporation
	Manufacture and sales of sheet metal
Capital ¥90 million• MEIDEN SHANGHAI CO., LTD.
	Sales of electric products and components
Capital ¥320 million• DONGGUAN MEIDEN PACIFIC
ELECTRICAL ENGINEERING COMPANY
LIMITED	Manufacture and sales of switchgears andsales of electric products and components
Capital RMB9.0 million• P.T. MEIDEN ENGINEERING INDONESIA	Engineering and construction services
Capital US$320.0 million

THE UNITED STATES• MEIDEN AMERICA, INC.
	Sales of dynamometer products and­engineering and consulting services
Capital US$16.5 million• MEIDEN TECHNICAL CENTER NORTHAMERICA LLC
	Testing service of engine and drive train
Capital US$16.2 million

HONG KONG• MEIDEN PACIFIC (CHINA) LTD.
	Sales of electric products and components,
and construction services
Capital HK$10.0 million

THE UNITED KINGDOM• MEIDEN EUROPE LTD.
	Sales of electric products and components
Capital €750.0 thousand

Plus 9 domestic subsidiaries

42

Meiden Annual Report 2012

Corporate Data

CORPORATE NAMECOMMON STOCKMEIDENSHA CORPORATION(Kabushiki Kaisha Meidensha)

Authorized 576,000,000 shares
Issued 227,637,704 shares¥17,070 million ($205,663 thousand)HEAD OFFICE
ThinkPark Tower, 2-1-1, Osaki,
Shinagawa-ku, Tokyo 141-6029 JapanSHAREHOLDERS

FOUNDED

TRANSFER AGENT

1897

The Sumitomo Trust & Banking Co., Ltd.

24,475

Board of Directors(As of June 26, 2012)

CHAIRMANPRESIDENT

Keiji Kataoka

Junzo Inamura
DIRECTORS AND SENIORMANAGING EXECUTIVE OFFICERS

Akira Wachi
Gentaro Kawashima
Takeshi Miida
DIRECTORS

Tetsuro Kawakami
Botaro Hirosaki
EXECUTIVE VICE PRESIDENTEXECUTIVE VICE PRESIDENT

Yuji Hamasaki

Kozo Masaki

SENIOR CORPORATE AUDITORS

Kaoru Sutou
Kazuyuki Tanaka
CORPORATE AUDITORS

Masakiyo Inoue
Yoshiaki Shin

Meiden Annual Report 201243

Meidensha Corporation Annual Report 2012

This report was printed using vegetable oil ink and a waterless printing process.

Printed in Japan