ANNUAL REPORT2000

For the year ended
March 31, 2000

MEIDENSHA CORPORATIONProfile
As a heavy electric machinery manufacturer, Meidensha Corporation has steadily
developed excellent engineering resources, advancing toward total system engineeringin a variety of technical fields. The Company’s noteworthy policy is to consistently
focus on a key technical concept, to be referred to as POWERTRONICS, a fusion ofheavy electric technology with electronics technology. This concept is further joinedwith MECHATRONICS and ELECTRONICS, thus creating the three essential pillars of its
overall operations.
Supported by the Four Business Groups—Energy, Environment, Info andCommunications, and Industrial Systems—the Company also strives for “speedy”
decision-making and being “agile” in its organization by uniting sales, engineering,and manufacturing.
We constantly bear in mind that we must contribute to society as a reliable solution
provider to ensure that our technologies and products will be useful and effective inthe creation of a well-to-do society and a comfortable environment.

Contents
Financial Highlights ........................................................................................................ 3
Message from Management ............................................................................................ 4
Review of Operations ..................................................................................................... 6
R&D Review ................................................................................................................. 12
Financial Section .......................................................................................................... 13
Overseas Offices and Affiliates ...................................................................................... 32
Consolidated Subsidiary Companies ............................................................................. 34
Corporate Data ............................................................................................................. 35
Board of Directors ....................................................................................................... 35
2000 Annual Report2Financial Highlights
Years ended March 31
Thousands of
U.S. dollars

Millions of yen
2000

1999

1998

2000

Net Sales .............................................................

¥204,376¥218,354¥222,772$1,928,075

Net Loss .............................................................

(5,761)(16,912)(4,767)(54,349)

Net Loss Per Share (yen, U.S. dollars) .................

(28.52)(83.71)(23.60)(0.27)Cash Dividends Paid ..........................................

—

—

1,818

—

Total Assets .........................................................

221,388

235,911

253,671

2,088,575

Number of Employees ........................................

8,542

9,493

9,293

—

The consolidated figures in this Annual Report are expressed in yen and solely for the convenience of the reader, translated
into United States dollars at the rate of ¥106= U.S.$1, the approximate exchange rate prevailing on the Tokyo Foreign Exchange
Market as of March 31, 2000. See No.1 of Notes to Consolidated Financial Statements.
Net Sales (¥ millions)
250,000

Net Income (Loss) (¥ millions)

Total Assets (¥ millions)
300,000

235,104
222,772 218,354
204,376

250,000

245,003 253,671
235,911200,000

221,388
200,000

150,000
150,000
100,000
100,000

50,0005,000

50,000

1,348
0

97

98

99

00

0

0

-5,000(4,767)

97

98

99

00

(5,761)-10,000-15,000(16,912)-20,000

97

98

99

00

2000 Annual Report3Message from ManagementJapan’s economy is currently supported by public investment and exports. It is generally believed that an increase in private investment in plant and equipment will provide a concrete

sign of recovery. Private investment trends, however, seem to be concentrated in IT companies,
and there is still no significant recovery overall. Reflecting the worsening unemployment rate,
personal consumption continues to be stagnant. Consequently, a return to the recovery phase willtake more time. The business environment has been subject to severe conditions.
Despite these adverse economic circumstances, Meidensha Corporation has seen positive
activity in sales. The final overall sales turnover in fiscal 1999 of 204,376 million yen (consolidated basis), however, remains 6.4 % lower than the previous period.
In terms of earnings, corporate efforts were focused on the curtailment of expenses, the reduction of costs, and the improvement of productivity, which did in fact result in an ordinary profitof 712 million yen (consolidated basis) and a term-end loss of 5,761 million yen (consolidated
basis).
With regard to dividends for shareholders, Management regrets that the Company was unable
to achieve dividends.
On April 1, 2000, Meidensha Corporation introduced a Medium-Term Management Plan
[New Construction 21] (“NC21”). NC21, a medium-term plan which will be in effect for the
coming three years from Fiscal 2000 to Fiscal 2002, is designed to clear away the loss carriedforward with a target of the recovery of dividends for shareholders in Fiscal 2002. The Company
has powerfully promoted the renovation of the corporate structure since October 1997 in order toconstruct a strong corporate organization that can assure steady profit. Stimulated by the introduction of NC21, Management intends to advance the renovation more forcefully to expand its
profits by making a great leap into the 21st century. This business strategy will be developed
effectively, and not be limited to Meidensha Corporation but expanded to include all affiliatedfirms in the Meiden Group. The Company will contribute to society by offering a variety of attractive products that meet their requirements of the times.
We ask every shareholder, as well as our customers and business partners, to continue toshare your kind support, guidance, suggestions and advice.

2000 Annual Report4

Keiji Kojima, Chairman

Shigeo Seko, President

2000 Annual Report5E

nergy-related technologies are the most well-experienced
part of the business that supports the profits of Meidensha
Corporation.
The storage of electrical energy is a very important technology
in the effective utilization of energy. Based on this concept,
Meidensha Corporation has developed the zinc-bromine battery
cells. At present, the company is promoting the development oflarge-capacity electric double-layer capacitors under the headingof new techniques. Last year, the company finished the trial production of equipment composed of 2- 66kV 30MVA SF6 gas-insulatedseries 8-parallel of the 100V 5F units, transformer
Review of Operations
intended for application in electric vehicles. This equipment is currently loaded on an electricvehicle (EV), and experiments are continuing. This typeof large-capacity electric double-layer capacitor can perform rapid storage and discharge of electric power. Unlike conventional batteries, the newly developed capacitor is also applicable to electric railways.
In the field of substations, we have delivered largescale transformers and mobile transformers.
In particular, the Company recently delivered 66kV
30MVA SF6 gas-insulated transformers, which are expected to increase their future market share. In export transactions, the company
delivered its record-breaking product, a 19/231kV 353MVA step-up transformer tobe installed in a thermal electric power station.
The Company started the shipment of the 66kV class cubicle type GIS (gas-insulated switchgear), and the development of GIS to power company specificaSecondtions has also been completed.
generation
In the field of protective relay equipment, we have delivdigital protective
ered a large quantity of second-generation digital protecrelay equipment
tive relays and other equipment. These relays include second-generation transformer protective relay equipment, second-generation low-level
type optical PCM current differential carrier protective relay equipment, cost-reduced
type of 66kV loop system protective relay equipment, and transformer protective relay
equipment for intermediary banks.
With regard to generators, we have manufactured and delivered two water turbine
generators that use tetrafluoroethylene resin for their bearings.
In terms of recent trends, orders are steadily increasing for deliveries of urea
Micro turbine
systemdenitration units for application in the disposal of exhaust gases
from diesel engine generators.
In the field of information equipment, we have developed powersupervisory control system which integrates Web computing technology. We believe that achievement in this area shows the direction in which supervisory control systems will advance in the future.
Micro Gas Turbine Business Development Office was established on March 1, 2000. This organization will actively market
the micro turbines that the industry expects will prove most useful
Large-scale transformers and mobile transformationin the age of distributed generation.

EnergySector2000 Annual Report6Toward the goal of achieving better water environments, Meidensha
Corporation is working on the development of water quality control
technologies.
Last year, we examined the decomposition of bromic acid ions using
photocatalysts, the behavior of the combination of ozone and photocatalysts
to transform harmful substances in water into non-organic substances, aswell as other factors. Based on this research, we have achieved a prospect
for practical use. Verification tests have also been carried out in an actual
wastewater treatment plant to confirm the effectiveness of the activated sludge Corrosive gas removal facility
fuzzy control system.
In the field of operation and control, we
Review of Operations
have developed distributing reservoir operating technologies that are sustained by the shorttime demand prediction system based on thechaos theorem.
Medium-capacity water treatment supervisory control equipment,
OPS6000, was developed, and sales were recently initiated. This equipment comprises
an open network system and its delivery records are increasing favorably under thetitle of the EIC Integration System for sewage treatment and city water systems.
Electric instrumentation facilities have been delivered to small-scale wastewater
treatment plants. This equipment utilizes the anaerobic and aerobic filter treatment method.
In addition, we also have delivered environment-friendly corrosive gas removal facilities.
For city water and sewage water systems, we have delivered high-voltage direct inverters — the first such achievement in Japan. Finally, optical fiber network systems and related facilities, which
are operated by the use of existing sewage
treatment conduit systems, have also beendelivered.
Since October of last year, we have been
engaged in the sales of dry distillation typewaste disposal systems that suppress thegeneration of dioxin. The dioxin analysis
enterprise was also inaugurated.

Environment
SectorDry-distillation type waste disposal system

EIC integration system

Minigraphic control table of
the anaerobic and aerobic
filter treatment method

2000 Annual Report7

IIndustrial controller, µPIBOC-III

Review of Operations

nformation and communications technologies are indispensable
in a vast number of industrial fields. First and foremost,Meidensha Corporation developed technologies of common factors, and these technologies have formed the basis of the Company’s
development of applied systems that have proved useful in various
fields.
The primary technology of common factors is Web computing
technology, which is considered applicable to the previously described power supervisory control systems and the facility information control systems.
The second such technology is the Company’s object-oriented
technology. These unique technologies are able to connect and disconnect component objects with a high degree of freedom. Using
these technologies, a substantial flexibility can be expected in thecase of specification changes.

Info andCommunications
SectorThird is technology that utilizes video images. This remote image supervisorysystem uses H.324 protocol that enables the transmission of motion pictures andacoustic data through general public switched telephone lines.
With regard to related products, we have standardized our product lineups, suchas the plant facility control system, ASPAC 2000.
The reinforcement of our product series has also brought about a variety of achievements, such as industrial
computers, µPORT, and industrial controllers, µPIBOC.
Moreover, we have developed industrial
switching hubs in order to facilitate network
configuration in adverse environments.
Development and sales have begun forimage distribution systems that distribute remote images and voices on a real-time basis via portable telephones and similar deIndustrial switching hub, MEISWAY SW1000
vices.

ASPAC-GIS screen

ASPAC-FMS screen

2000 Annual Report8Meidensha Corporation
has accomplished muchin the fields of motor
power applications, logistics, anddynamometers.
In the motor power application field, we have delivered various products, such as the cokes
AGV for raw material ofmaterial handing system, continu- Meter display screen of
MEIDACS-DY5000P
medicines
ous casting facilities, semiconductor type high-frequency electric
Review of Operations
resistance welding equipment,
and wire material heating equipment, despite mostly stagnant capital
investment among manufacturers throughout Japan.
Energy conservation, a very effective means of protecting the environment, is likely to be pursued more aggressively in the future. As acountermeasure against wasting energy, Meidensha Corporation is promoting its reinforcement of products for its highly efficient permanent magnet exciter type synchronous motors (PM motors).
In fact, a large number of PM motors have been manufactured.
PM motors for the 183kW injection molding machines, for example,
have been developed and delivered. These machines are the largest in
their class in the world.
In the field of logistics, we have developed laser radar induction
technologies for application in the new induction system for AGVs
(Automated Guided Vehicles), considered to be one of the major products of the future. This technology eliminates the use of specific guidance lines, thus allowing for marked simplification of installation work and assuring considerable flexibility in course modification.
The Company has also achieved much in sales transactions for AGVs and a variety of palletizers.
Moreover, we have developed, and already begun delivery of, AC motors for motor-operated forklift trucks.
In the dynamometer-related field, the high-function operation telemetry systems for dynamometers, MEIDACSDY5000 Series, have been developed and delivered.
In order to respond to automotive manufacturers’ policies on reducing the time period for the developmentof new cars, we have developed the dynamic load simulator.
In conjunction with the intensified exhaust gas regulations, we have delivered large numbers of exhaust-gasrelated test systems for which demand has been increasing.

Industrial
Systems
SectorWire material heating equipment

Bottle case palletizer

2000 Annual Report9In fiscal 1999, the real GDP growth rate in all Southeast Asian
countries, major markets for Meidensha Corporation, indicatedpositive growth phases, reflecting the expansion of exports andthe effects of fiscal stimulus packages in each country. This is the first
upturn since the financial crisis hit. The problem of excess capacity,
however, remains due to heavy capital investment before the crisis.
The total capital investment growth rate in these regions still indicate a negative growth trend.

Review of Operations

Overseas
Operations

11kV metal-clad switchgear,
HICLAD-10J

Against this backdrop, Meidensha export results showorder entries totalling 8,499 million yen and sales turnover of 13,463 million yen (unconsolidated basis), a 45.4% decrease and a 20.4% decrease, respectively, as
compared with the previous year. The business climate was very severe, as this illustrates.
Major products ordered in fiscal 1999 are outlined below.
In the field of power distribution and substations, we received an order for ten units of 10MVA transformers
and 12 units of 75MVA transformers from PowerGrid, Ltd. in Singapore. We also received an order for 800
panels of 11kV HICLAD-10J switchgear, from CLP Power Hong Kong Limited in Hong Kong. In the field of dynamometer-applied systems for automobiles, we received an order for seven dynamometers for drive train systemdevelopment in NVH (Noise, Vibration and Harshness) testing from General Motors Corporation in the U.S. We
received this order in cooperation with MTS Systems Corporation (MTS) in the U.S.

Virtual engine system

2000 Annual Report10Major products manufactured and shipped in fiscal
1999 were as follows:
In the field of power generation, we delivered four unitsof 19MVA low-speed diesel
power plants to Colombo
Power (Pte) Ltd., an IPP (Independent Power Provider) in
Sri Lanka.
In the field of power distribution and substations, we alsodelivered 1,000 panels of 22kV
C-GIS to PowerGrid, Ltd. in
Singapore.
In the field of dynamom19MVA low-speed diesel-engine generator facility
eters for automobiles, we delivered the first virtual engine
system to the Advanced Engineering Center of Ford Motor Company in the U.S. in cooperation with MTS. Without
using actual car engines, this system allows for various performance tests that are necessary in the developmentof vehicle drive train systems.
The following is the M&A information of our overseas affiliated companies.
With regard to our quartz crystal oscillator manufacturing business at Meiden Quartz (S) Pte. Ltd. in
Singapore and Meiden Quartz (M) Sdn. Bhd. in Malaysia, complete shares were transferred to Herbert C.
Jauch, Inc. of Germany in March 2000. Meanwhile, we obtained complete control of Jardine Meiden Engineering Co., Ltd. in March 2000 through a share transfer with the joint venture partner, Jardine Engineering
Corporation, Ltd. The new company became our fully owned subsidiary and was renamed Meiden Hong Kong
Co., Ltd.

22kV cubicle typegas-insulated
switchgear (C-GIS)

Control panel for dynamometer

PM dynamometer

Drive train system

2000 Annual Report11R&D Review
Development of large-capacity electric
double layer capacitors
Meidensha Corporation is developing high voltage typelarge-capacity electric double layer capacitors intended forthe structuring of environment-friendly power systems and theachievement of energy conservation. The Company recently
finished the trial production of a module of the 100V/5F unit
on which 2-series and 8-parallel elements are connected inits casing. The module specifications are shown in Table 1,
and the external view is given in Fig. 1.
In cooperation with Mazda Motor Corporation, this module has been loaded on an electric vehicle in order to perform roller dynamometer testing. Testing has been carriedout for full throttle acceleration and city road driving mode.
Test results indicate improved efficiency through peak cut performance of battery output and energy recovery. The assistantfunction of the vehicle-loaded batteries has also been verified.
In the future, this module will be improved to increase its
capacity and energy density. Related applications and development activities in power storage and electric railway technologies will also be promoted.

Development of activated sludge fuzzycontrol systems
As illustrated, an activated sludge fuzzy control system has
been incorporated in a sewage water treatment plant that uses
the standard activated sludge method.
The three input items of continuous telemetry values are:quantity of influent water, concentration of suspended solids in the influent water, and concentration of soluble organic substance. These three output items represent operation values for the aeration rate, return sludge volume, andexcess sludge volume. The UV meter (ultraviolet absorbancemeter), which was improved for these operations, uses themeasurement of the quality of influent water in continuous
telemetry operation. Continuous operation, which takes one
week with fuzzy control, runs three cycles. These results indicate a sufficient quality of the water and validate our operations. Furthermore, by monitoring aeration rate data for

Fig. 1 External View of
the Capacitor Modules
Table 1 Module Specifications
Max. operating voltage

DC200V

Capacitance

20F

Resistance

0.15Ω

Mass

53 kg

External dimensions

W500×H300×D480 mm

an additional one month, the system achieved aeration ratesavings by adjusting membership functions.

Configuration of the Activated Sludge
Fuzzy Control System
PC for fuzzy control(µPORT-M2)

Operation values
Excess sludge volume

Influent water quantity,
influent water quality

Return sludge
volumeAeration rate

Flow meter UV meter

Final
sedimentation
tank

Aeration tank

Treatedwater

BlowerReturn sludge pump

Excess sludge pump

2000 Annual Report12Financial Section
Consolidated Financial Review .................................... 14
Five-Year Summary...................................................... 14
Operational Review ..................................................... 15
Consolidated Balance Sheets ....................................... 16
Consolidated Statements of Operations ........................ 18
Consolidated Statements of Shareholders’ Equity......... 19
Consolidated Statements of Cash Flows ........................ 20
Notes to Consolidated Financial Statements ................. 21
Report of Independent Public Accountants.................. 31
2000 Annual Report13Consolidated Financial Review
Outline of Profits and Losses

Financial Conditions

The Japanese economy in the first half of the fiscal year for thisconsolidated balance sheet was propped up over the short term by
public investment. In the second half of the fiscal year, however,public investment decreased substantially. Reflecting the deterioration of corporate profitability and the unemployment rate, consumer
spending and private sector capital investment remained stagnant.
Without signs of concrete recovery, the economy remained relatively weak this fiscal year. As a result, consolidated term-end net
income rose, though consolidated net sales declined.
Net sales totalled 204,376 million yen, a 6.4% decrease overthe previous term. Business sector-based net sales stood at 39.7%
for the Energy sector, 27.2% for the Environment sector, 5.7% for
the Info and Communications sector, 10.7% for the Industrial Systems sector, and 16.7% for Others.
The cost of sales was 164,221 million yen, a 6.3% decrease.
Sales, general and administrative expenses totalled 38,394 million
yen, a 14.6% decrease. Operating income, therefore, stood at 1,761
million yen. Other income and expenses showed an increase of 6,170
million yen.
The final result was a net loss of 5,761 million yen for this term.

Total assets at the end of March 2000 were 221,388 million
yen, a decrease of 14,523 million yen. As a result of decreased
marketable securities and inventories, of this figure current assets
stood at 162,024 million yen, a decrease of 14,509 million yen.
Property, plant and equipment was 39,616 million yen, a decreaseof 7,441 million yen. Total current liabilities totalled 146,497 million yen, a decrease of 17,415 million yen, and shareholders’ equity stood at 41,617 million yen, an increase of 4,807 million yen.
As a result, shareholder capital ratio increased 3.2 points from
15.6% to 18.8%.

Five-Year Summary
MEIDENSHA CORPORATION AND CONSOLIDATED SUBSIDIARIES
Years ended March 31

2000

1999

Net sales¥204,376¥218,354

Net income (loss)(5,761)

Net income (loss) per share (Yen)
Cash dividends paid
Depreciation and amortization
Total assets

Millions of yen
1998

1997

1996

¥222,772¥235,104¥217,089(16,912)(4,767)

1,348

785

(28.52)(83.71)(23.60)

6.68

3.89

—

—

1,818

1,616

808

6,285

6,588

6,666

6,538

6,482

221,388

235,911

253,671

245,003229,572

Net property, plant and equipment

39,61647,05747,39147,93247,769

Shareholders’ equity per share (Yen)

206.00182.21

266.30300.11301.052000 Annual Report14

Operational Review
39.7%

Energy sector
Net sales ¥81,184 million ($765,887 thousand)This sector manufactures and markets generators, transformers, switching devices, lightning arresters, power conversion
equipment, and products to control these devices, for use inelectric power facilities ranging from power company generating stations to transmission, transforming, and distribution
facilities, in establishments ranging from national and local
government facilities to railroads, highways, buildings, construction sites, and so on.

99

85,13100

81,18427.2%

Environment sector
Net sales ¥55,577 million ($524,311 thousand)This sector provides “environment-friendly products and technologies” for the development of IT networks involved in thecontrol of treatment equipment and processes for city waterand sewage water systems operated by local governments, aswell as for energy conservation, recycling, waste treatment, andso on.

99

51,41400

55,577

Info and Communications sector
Net sales ¥11,635 million ($109,764 thousand)

99

This sector manufactures and markets computer systems andall types of electronic equipment and crystal-related products primarily for the information and telecommunications
market.

00

17,896

11,635

Industrial Systems sector
Net sales ¥21,925 million ($206,840 thousand)This sector manufactures and markets products related to
manufacturing processes in every type of manufacturing industry, and, with a focus on electric motor power application
products, extends to dynamometer instrumentation, industrial
robots, automated conveyer vehicles, and other such areas.

99

27,541

99

00

00

27,541

21,92521,925

16.7%

Others
Net sales ¥34,055 million ($321,273 thousand)

99

00

36,372

34,0552000 Annual Report15

Consolidated Balance Sheets
MEIDENSHA CORPORATION AND CONSOLIDATED SUBSIDIARIESMarch 31, 2000 and 1999

1999

Thousands of
U.S. dollars (Note 1)
2000¥25,666
21,807¥19,480
26,941$242,132
205,726

10,587
69,670
205
1,634
(499)
28,511
1,723
2,720
162,024

14,471
78,405
1,043
1,386
(581)
32,952273
2,163
176,533

99,877657,264
1,934
15,415(4,708)
268,972
16,25525,661
1,528,528

6,440
41,51275,427713(84,476)
39,616

6,996
43,39582,958554(86,846)
47,05760,755
391,623
711,575
6,726(796,943)
373,736

Investment securities (Note 8) ..............................................................
Investments in unconsolidated subsidiaries and affiliates (Note 5) ......
Long-term loans ....................................................................................
Deferred income taxes (Note 15) .........................................................
Other assets (Note 8) ............................................................................
Allowance for doubtful accounts ...........................................................

773
972
223
9,792
7,453
(17)
19,196

1,206
1,259
330
207
9,067
(19)
12,050

7,292
9,170
2,104
92,37770,311(160)
181,094

Foreign currency translation adjustment ...........................................

552

271

5,208

Total assets ..............................................................................................

¥221,388¥235,911$2,088,566

Millions of yen
2000
AssetsCurrent assets:
Cash and time deposits .........................................................................
Marketable securities (Note 3) .............................................................
Receivables:
Trade notes ......................................................................................
Trade accounts .................................................................................
Loans and advances .........................................................................
Due from unconsolidated subsidiaries and affiliates ........................
Allowance for doubtful accounts ......................................................
Inventories (Note 4) .............................................................................
Deferred income taxes (Note 15) .........................................................
Other current assets ..............................................................................
Total current assets .....................................................................
Property, plant and equipment (Note 8):
Land ......................................................................................................
Buildings and structures .......................................................................
Machinery and equipment ....................................................................
Construction in progress .......................................................................
Less: Accumulated depreciation ............................................................

Investment and other assets:

See accompanying notes.

2000 Annual Report

16

1999

Thousands of
U.S. dollars (Note 1)
2000¥42,993
17,0008,078¥46,562
23,0006,130$405,594
160,377
76,20814,36932,166638
5,169
10,828700
14,556
146,497

17,59134,757388
6,388
11,284845
16,967
163,912

135,557
303,453
6,019
48,764102,151
6,604
137,321
1,382,048

Long-term debt (Note 7) ............................................................................
Reserve for retirement allowance (Note 9) ................................................
Other long-term debt .................................................................................

18,052
1,682
5,114

19,802
1,911
5,336

170,302
15,86848,245

Minority interests ...................................................................................

8,426

8,140

79,490Millions of yen
2000
Liabilities and Shareholders’ Equity
Current liabilities:
Short-term borrowings (Note 6) ...........................................................
Commercial paper ................................................................................
Current portion of long-term debt (Note 7) ..........................................
Payables:Trade notes ......................................................................................
Trade accounts .................................................................................
Due from unconsolidated subsidiaries and affiliates ........................
Employees’ savings deposits ..................................................................
Advances received from customers .......................................................
Accrued income taxes ...........................................................................
Other current liabilities .........................................................................
Total current liabilities .....................................................................
Long-term liabilities

Contingent liabilities (Note 11)
Shareholders’ equity (Note 10):
Common stock, par value ¥50 per share:
Authorized — 576,000,000 shares.......................................................
Issued and outstanding — 202,025,158 shares
Additional paid-in capital ......................................................................
Retained earnings .................................................................................
Less: Treasury stock ..............................................................................
Total shareholders’ equity ................................................................

17,07017,070161,038

12,751
11,796(0)41,617

12,7516,990(1)36,810120,292
111,283(0)392,613

Total liabilities and shareholders’ equity ..........................................

¥221,388¥235,911$2,088,566

See accompanying notes.

2000 Annual Report17Consolidated Statements of Operations
MEIDENSHA CORPORATION AND CONSOLIDATED SUBSIDIARIES
Years ended March 31, 2000, 1999 and 1998

2000

Millions of yen
1999

1998

Thousands of
U.S. dollars (Note 1)
2000

Net Sales....................................................................

¥204,376¥218,354¥222,772$1,928,075

Cost of sales .............................................................
Selling, general and administrative expenses ....

164,221
38,394

175,308
44,979

175,905
48,5781,549,255
362,207

Operating income (loss) .............................

1,761(1,933)(1,711)

16,613

Interest, dividends income .....................................
Interest expense .....................................................
Gains on securities sold .........................................
Write-down of securities ........................................
Special retirement benefits to employees ...............
Provision for employees’ pension liability ..............
Loss on disposal of fixed assets ..............................
Gain on sales of property, fixed assets ....................
Loss arising from liquidation of subsidiaries
and affiliates ......................................................
Miscellaneous, net .................................................

669(1,183)915(618)(1,650)
(8)
(684)
1,185

786
(1,623)91(1,520)(2,118)(5,661)(1,107)24

776(1,582)
3,814(3,992)
—
—
—
—

6,311
(11,160)
8,632(5,830)(15,566)(75)(6,453)
11,179(4,457)(615)—(1,488)—43(42,047)(5,802)

Loss before income taxes ............................

(4,685)(14,549)(2,652)(44,198)

Income taxes (Note 2) ................................................
Minority interests ........................................................
Equity in earning of affiliates .......................................

1,124
(48)
—

1,629
734
—

1,698
463
46

10,604(453)—

Net loss ...........................................................

(¥5,761)(¥16,912)(¥4,767)($54,349)

2000

Yen
1999

1998

U.S. dollars (Note 1)
2000(¥28.52)—(¥83.71)—(¥23.60)
4.00($0.27)—

Other income (expenses):

Amounts per share of common stock:
Net loss ..................................................................
Cash dividends applicable to the year ....................
See accompanying notes.

2000 Annual Report18Consolidated Statements of Shareholders’EquityMEIDENSHA CORPORATION AND CONSOLIDATED SUBSIDIARIES
Years ended March 31, 2000, 1999 and 1998

Balance at April 1, 1997....................................................
Net loss ........................................................................
Cash dividends paid .....................................................
Bonuses to directors and statutory auditors .................
Balance at March 31, 1998 ............................................
Net loss ........................................................................
Bonuses to directors and statutory auditors .................
Increase in retained earnings due to addition of
consolidated subsidiaries........................................
Balance at March 31, 1999 ...............................................
Net loss ........................................................................
Bonuses to directors and statutory auditors .................
Cumulative effect of adopting deferredincome tax accounting (Note 2) ...............................
Increase in retained earnings due to addition of
consolidated subsidiaries ..........................................
Decrease in retained earnings due to reduction of
consolidated subsidiaries ..........................................
Decrease in retained earnings due toownership change of affiliates ...................................
Balance at March 31, 2000 ..........................................

Balance at March 31, 1999 ...............................................
Net loss ........................................................................
Bonuses to directors and statutory auditors .................
Cumulative effect of adopting deferredincome tax accounting (Note 2) ...............................
Increase in retained earnings due to addition of
consolidated subsidiaries ..........................................
Decrease in retained earnings due to reduction of
consolidated subsidiaries ..........................................
Decrease in retained earnings due toownership change of affiliates ...................................
Balance at March 31, 2000 ..........................................

¥17,070———
17,070——Millions of yen
Additional
paid-in capital¥12,751———
12,751——Retainedearnings¥30,809(4,767)(1,818)(244)
23,980(16,912)(92)—
202,025,158———
17,070———12,751
—
—

14
6,990
(5,761)
(69)

—

—

—

10,631

—

—

—

238

—

—

—

(29)

—
202,025,158—¥17,070—¥12,751(204)¥11,796

Number ofshares issued
202,025,158———
202,025,158——

Common stock

Number ofshares issued
202,025,158——

Thousands of U.S. dollars (Note 1)
Common stock
Additional
Retainedpaid-in capitalearnings$161,038$120,292$65,943——(54,349)
—
—
(651)

—

—

—

100,293

—

—

—

2,245

—

—

—

(274)

—
202,025,158—$161,038—$120,292(1,924)$111,283

See accompanying notes.

2000 Annual Report19Consolidated Statements of Cash Flows
MEIDENSHA CORPORATION AND CONSOLIDATED SUBSIDIARIES
Year ended March 31, 2000

Operating activities:
Loss before income taxes .....................................................................................
Adjustments to reconcile loss before income taxes to net cash provided byoperating activities:
Depreciation and amortization .......................................................................
Decrease in allowances ...................................................................................
Interest, dividends income ..............................................................................
Interest expense ..............................................................................................
Decrease in receivables ..................................................................................
Decrease in inventories...................................................................................
Decrease in payables ......................................................................................
Other-net .........................................................................................................
Sub total ....................................................................................................
Interest income received ......................................................................................
Interest expense paid ...........................................................................................
Special retirement benefits to employees paid .....................................................
Income taxes paid ................................................................................................
Net cash provided by operating activities ...................................................

Millions of yen
2000

Thousands of
U.S. dollars (Note 1)
2000(¥4,685)($44,198)

6,285(1,386)(669)
1,183
12,542
3,957(4,545)
6,058
18,74059,292(13,075)(6,311)
11,160118,32137,330(42,877)
57,150176,792675(1,231)(4,053)(1,628)12,503

6,368(11,613)(38,236)(15,358)
117,953(5,301)
10,697(4,799)1,817(50,009)
100,915(45,274)
17,142

1,561
(438)
3,537

14,726(4,132)33,368(3,556)(6,000)
7,405(3,203)(4,000)(1,337)(10,691)(82)
5,267
21,549457¥27,273(33,547)(56,604)
69,858(30,217)(37,736)(12,612)(100,858)(774)
49,689203,292
4,311$257,292

Investing activities:
Acquisition of marketable securities and investment securities ...........................
Proceeds from sales of marketable securities and investment securities .............
Additions to property, plant and equipment .........................................................
Proceeds from sales of property, plant and equipment ........................................
Decrease in investments in and advances to unconsolidated subsidiaries
and affiliates ......................................................................................................
Other-net ..............................................................................................................
Net cash provided by investing activities ....................................................
Financing activities:
Decrease in short-term bank loans ......................................................................
Decrease in commercial paper ............................................................................
Proceeds from long-term debt .............................................................................
Payment of long-term debt ...................................................................................
Repayment of bonds ............................................................................................
Other-net ..............................................................................................................
Net cash used in financing activities ................................................................
Effects of exchange rate changes on cash ..................................................
Increase in cash and cash equivalents .......................................................
Cash and cash equivalents at beginning of year .........................................
Increase due to change in consolidated subsidiaries .................................
Cash and cash equivalents at end of year ...................................................
See accompanying notes.

2000 Annual Report20Notes to Consolidated Financial Statements
MEIDENSHA CORPORATION AND CONSOLIDATED SUBSIDIARIESMarch 31, 2000 and 1999

1. Basis of Consolidated Financial Statements

2. Summary of Significant Accounting Policies

MEIDENSHA CORPORATION (“the Company”)and its consolidated domestic subsidiaries maintain their accounts and records inaccordance with the provisions set forth in the Japanese Commercial Code and the Securities and Exchange Law and in conformity
with accounting principles and practices generally accepted in Japan, which are different from the accounting and disclosure requirements of International Accounting Standards. The accounts of overseas consolidated subsidiaries are based on the accounting recordsof these entities, in conformity with generally accepted accounting
principles and practices prevailing in the respective countries of domicile.
The accompanying consolidated financial statements are a translation of the audited consolidated financial statements of the Company which were prepared in accordance with accounting principles
and practices generally accepted in Japan from the accounts andrecords maintained by the Company and its consolidated subsidiaries and were filed with the Minister of Finance (“MOF”) as requiredby the Securities and Exchange Law.
In preparing the accompanying consolidated financial statements,
certain reclassifications have been made in the consolidated financial statements issued domestically in order to present them in aform which is more familiar to readers outside Japan.
The translation of the Japanese yen amounts into U.S. dollars
are included solely for the convenience of the reader, using the prevailing exchange rate at March 31, 2000, which was ¥106 to U.S.$1.
The convenience translations should not be construed as representations that the Japanese yen amounts have been, could have been,or could in the future be, converted into U.S. dollars at this or any
other rate of exchange.
Certain prior years’ amounts have been reclassified to conformto 2000 presentation. These changes had no impact on previously
reported results of operations or shareholders’ equity.

a) Principles of Consolidation
Effective for the year ended March 31, 2000, all companies are
required to consolidate all significant investees which are controlled
through substantial ownership of majority voting rights or existenceof certain conditions. Previously only majority-owned companies
were consolidated. The prior years’ consolidated financial statements
have not been restated.
The accompanying consolidated financial statements include theaccounts of the Company and its 22 (21 for 1999) consolidated
subsidiaries. All significant intercompany accounts and transactions
have been eliminated on consolidation. The Company’s remaining
subsidiaries, whose net and gross assets and net sales are not significant in the aggregate in relation to the comparable figures in the
consolidated financial statements, have not been consolidated.
In the elimination of investments in subsidiaries, the assets andliabilities of the subsidiaries, including the portion attributable tominority shareholders, are evaluated using the fair value at the Company acquired control of the respective subsidiaries.

b) Equity Method
Investments in unconsolidated subsidiaries and affiliated companies (all 20% to 50% owned and certain others 15% to 20%
owned) are accounted for by the equity method in the year ended
March 31, 2000. Prior to April 1, 1999, only investments in companies of which the Company owns 20% to 50% of the voting rights
and has the ability to significantly influence financial, operational or
business policies were accounted for using the equity method. Effective April 1, 1999, in accordance with the revised Accounting Principles for Consolidated Financial Statements, investments in companies of which the Company has at least 15% and less than 20% of thevoting rights are also accounted for using the equity method in thecases where the Company has the ability to exercise significant influence over operating and financial policies of the investees. The effect of the adoption of this new accounting is immaterial. In the caseof the Company, investments in an unconsolidated subsidiary and anaffiliated company are accounted for by the equity method in 2000.
Investments in all other unconsolidated subsidiaries and affiliatedcompanies, that would not have material effect on the consolidated
financial statements, are stated at cost.

2000 Annual Report21c) Marketable Securities and Investments in
Securities
Marketable securities and investments in securities listed in Japanese stock markets are mainly stated at the lower of cost or market.
Investments in securities unlisted in stock markets are stated at cost.
The cost is determined by the moving-average method. Investment
income is recognized when dividends or interest are received.

d) Inventories
Inventories are stated at cost, which is mainly determined by theaverage method as to raw materials and plant supplies and the specific identification method as to finished products, semi-finishedproducts and work in process.

e) Property Plant, Equipment andDepreciation
Depreciation is computed using the declining-balance method
over estimated useful lives except for buildings acquired after March
31, 1998, which are depreciated based on the straight-line method.
There was no material effect due to the change.

f) Reserve for Retirement Allowance
Under the terms of the Company and certain consolidated subsidiaries’ retirement plan, nearly all employees are entitled to a noncontributory funded pension plan. Annual contributions, which consist of current period costs and amortization of prior service costs
over years, are determined on an actuarial method and charged toincome when paid. The Company and consolidated subsidiaries provide severance benefits for the directors and statutory auditors basedon established guidelines.

g) Income Taxes
The Company provided income taxes at the amounts currently
payable for the years ended March 31, 1999 and 1998. Effective

April 1, 1999, the Company adopted the new accounting standard,
which recognizes tax effects of temporary differences between the
carrying amounts of assets and liabilities for tax and financial reporting. Under the new accounting standard, the provision for income taxes is computed based on the pretax income included in the
consolidated statement of income. The asset and liability approachis used to recognize expected future tax consequences of temporary
differences between the carrying amounts of assets and liabilities forfinancial reporting purposes and the amounts used for income tax
purposes.
The cumulative effect of adopting the new accounting standard
at April, 1999 is ¥10,631 million ($100,292 thousand), which is
directly added to the retained earnings brought forward from March
31, 1999. The effect for the year ended March 31, 2000 was a decrease in net income of ¥2,606 million ($24,585 thousand). Prior
years’ financial statements have not been restated.

h) Amounts Per Share of Common Stock
The computation of net income (loss) per share is based on theweighted average number of shares of common stock outstanding
during the year.
Cash dividends per share presented in the consolidated statements of operations and retained earnings represent the cash dividends declared applicable to each respective year, including dividends paid after the end of the year.

i) Statement of Cash Flows
In preparing the consolidated statements of cash flow, cash on
hand, readily-available deposits and short-term highly liquid investments with maturities that do not exceed three months at the time ofpurchase, are considered to be cash and cash equivalents. The Company prepared the 2000 consolidated statement of cash flow as required by and in accordance with the “Standards for Preparation ofConsolidated Cash Flow Statements, etc.”, effective from the year
ended March 31, 2000.

2000 Annual Report223. Market Value Information of Securities
Market value information of certain securities at March 31, 2000 were as follows.
Millions of yen
March 31, 2000
Current assets:
Shares ................................................................................................................
Bonds .................................................................................................................
Other ..................................................................................................................
Non-current assets:
Shares ................................................................................................................
Bonds .................................................................................................................
Other ..................................................................................................................
Total .......................................................................................................................

Book valueMarket value

Unrealized
gains (losses)¥16,054
1,225
102
17,381¥21,550
1,276
92
22,918¥5,496
51
(10)
5,537

139
—
0
139

133
—
—
133

(6)
—
(0)
(6)

¥17,520¥23,051¥5,531Thousands of U.S. dollars (Note 1)
March 31, 2000
Current assets:
Shares ................................................................................................................
Bonds .................................................................................................................
Other ..................................................................................................................
Non-current assets:
Shares ................................................................................................................
Bonds .................................................................................................................
Total .......................................................................................................................

Book valueMarket value

Unrealized
gains (losses)$151,453
11,557962
163,972$203,302
12,038868
216,208$51,849481(94)
52,236

1,311
—
1,311

1,254
—
1,254

(57)
—
(57)

$165,283$217,462$52,179

2000 Annual Report23

4. Inventories
Inventories as of March 31, 2000 and 1999 were as follows.

Finished products ............................................................................................
Semi-finished products ....................................................................................
Work-in-process ..............................................................................................
Materials and supplies .....................................................................................
Total ................................................................................................................

Millions of yen
2000
1999
¥1,902¥2,314
2,868
3,489
22,24825,195
1,493
1,954¥28,511¥32,952

Thousands of
U.S. dollars (Note 1)
2000$17,943
27,057
209,887
14,085$268,972

5. Investment Securities in Unconsolidated Subsidiaries and Affiliates
Investments in unconsolidated subsidiaries and affiliates in which the Company had direct equity ownership as of March 31, 2000 and1999 were as follows.
Millions of yen
2000

1999

Thousands of
U.S. dollars (Note 1)
2000

Equity in net assets:
Subsidiaries ................................................................................................
Affiliates ......................................................................................................

¥767
205

¥467
2,179

$7,236
1,934

Total ................................................................................................................

¥972¥2,646$9,170Book value:
Subsidiaries ................................................................................................
Affiliates ......................................................................................................

¥403
1,509

¥728
531

$3,802
14,236

Total ................................................................................................................

¥1,912¥1,259$18,038

6. Short-Term Borrowings
Short-term borrowings are represented by notes. The weighted average interest rate was 1.2% as of March 31, 2000.
Short-term borrowings as of March 31, 2000 and 1999 were as follows.
Millions of yen
2000
Bank loans .......................................................................................................

¥42,993

1999

Thousands of
U.S. dollars (Note 1)
2000¥46,562$405,594

2000 Annual Report24

7. Long-Term Debt
Long-term debt as of March 31, 2000 and 1999 consisted of the following.

4.8% to 6.5% mortgage bonds .........................................................................
1.45% to 7.5% loans from banks and insurance companies ............................
2.2% to 4.6% loans from agricultural cooperative organizations .....................
Less: Current portion .......................................................................................

Millions of yen
2000
1999
¥ —
¥4,00024,29019,8181,841
2,114(8,079)(6,130)Total ................................................................................................................

¥18,052

Thousands of
U.S. dollars (Note 1)2000$ —229,151
17,368(76,217)¥19,802$170,302

Millions of yen
2000

Thousands of
U.S. dollars (Note 1)
2000¥8,0793,755
10,077
3,788
382
50

$76,21735,424
95,06635,736
3,604
472

The annual maturities of long-term debts are as follows.

Year ended March 31
2001 .........................................................................................................................................
2002 .........................................................................................................................................
2003 .........................................................................................................................................
2004 .........................................................................................................................................
2005 .........................................................................................................................................
2006 and thereafter ..................................................................................................................

2000 Annual Report25

8. Pledged Assets
The following assets were pledged as collateral at March 31, 2000.

Buildings and structures less related accumulated depreciation ...................................
Machinery and equipment less related accumulated depreciation ................................
Land ..............................................................................................................................
Investment securities .....................................................................................................
Others ...........................................................................................................................
Total .............................................................................................................................

Millions of yen
2000¥1,568
133
1,478
3,002
120
¥6,301Thousands of
U.S. dollars (Note 1)
2000$14,792
1,255
13,94328,321
1,132$59,443

Millions of yen
2000¥3,344
4,564¥7,908

Thousands of
U.S. dollars (Note 1)
2000$31,547
43,057$74,604

Obligations with collateral pledged were as follows.

Short-term borrowings ..................................................................................................
Long-term debt..............................................................................................................
Total .............................................................................................................................

9. Reserve for Retirement Allowance
Unamortized prior service cost under the non-contributory funded pension plan amounted to ¥5,847 million ($55,160 thousand) on
March 31, 2000.

10. Shareholder’s Equity
Under the Commercial Code of Japan (the “Code”), at least 50% of the issue price of new shares, with a minimum of the par value thereof,
is required to be designated as stated capital. The portion which is to be designated as stated capital is determined by resolution of the Boardof Directors. Proceeds in excess of the amounts designated as stated capital are to be credited to additional paid-in capital.
Under the Code, amounts equal to at least 10% of cash dividends and other cash appropriations of retained earnings must be set aside asa legal reserve until such reserve equals 25% of stated capital. The legal reserve may be used to reduce deficits by resolution of the shareholders or may be transferred to stated capital by resolution of the Board of Directors.

2000 Annual Report2611. Contingent Liabilities
Contingent liabilities at March 31, 2000, were as follows.

Repurchase of note discounted and endorsed .................................................................
Guarantees of loans from banks to unconsolidated subsidiaries and affiliates ..........................
Employees .................................................................................................................................

Millions of yen¥1,494319
1,985

Thousands of
U.S. dollars$14,094
3,010
18,726

Total .........................................................................................................................................

¥3,798$35,830

12. Non-Capitalized Finance Leases:(1) Financial leases, which do not transfer ownership of properties to lessees, are not capitalized and are accounted for in the same manneras operating leases. The relevant calculations follow:(i) Assumed amounts (inclusive of interest) of acquisition cost, accumulated depreciation and net book value as of March 31, 2000
and 1999, are summarized as follows:

1999

Thousands of
U.S. dollars
2000

¥207
2,034
(1,181)¥694
3,147(1,888)$6,547
29,689(17,811)¥1,060¥1,953$18,425

Millions of yen
2000
Assumed acquisition cost:
Machinery and equipment ..............................................................
Other ..............................................................................................
Accumulated depreciation ...................................................................

(ii) Future minimum lease payments, inclusive of interest, at March 31, 2000 totalled ¥1,059 million ($9,991 thousand), including¥430 million ($4,057 thousand) due within one year.
(iii) Lease payments, which are equal to assumed depreciation charges for the years ended March 31, 2000 and 1999, were ¥608
million ($5,736 thousand) and ¥679 million ($6,406 thousand), respectively.
(iv) Assumed depreciation charges are computed using the straight-line method over lease terms assuming no residual value.
(2) Future operating lease payments under non-cancelable operating leases as of March 31, 2000 totalled ¥1,997 million ($18,840 thousand),including ¥268 million ($2,528 thousand) due within one year.

13. Research and Development Expenses
Research and development expenses are charged to income as incurred. The amount charged to income for the year ended March 31,
2000 stood at ¥8,372 million ($78,981 thousand).

2000 Annual Report2714. Segment Information
Industry segments:
The Company and its consolidated subsidiaries operate principally in five industrial sectors: the Energy, Environment, Info and Communications, Industrial Systems, and the Others sectors. In the year ended March 31, 2000, the Company and its consolidated subsidiaries modified its
classification of products (rotary machine, transmission and distribution equipment, control equipment, construction and wiring and others)
among the sectors. The change was brought about by the Company’s restructuring.
Information by industry segment for the year ended March 31, 2000 and 1999 were as follows.

Millions of yen
Year ended
March 31, 2001

Industrial
Systems

Other

Eliminations or
corporate
Consolidated

EnergyEnvironment

Total

Outsidecustomers¥ 70,597¥ 51,852¥ 14,636¥ 25,176¥ 34,722¥ 196,983¥ ––¥ 196,983

Inter-segment

5,380

1,549

2,843

2,502

36,345

48,619(48,619)––

Tot a l75,97753,401

17,47927,67871,067

245,602(48,619)

196,983

Operating expenses

76,04344,161

19,87529,261

69,969239,309(46,235)

193,074

Operating income(loss)(¥ 66)¥ 9,240(¥ 2,396)(¥ 1,583)¥ 1,098¥ 6,293(¥ 2,384)¥ 3,909

Identifiable assets¥ 54,207¥ 23,070¥ 21,335¥ 22,222¥ 43,189¥ 164,023¥ 48,082¥ 212,105

Depreciation andamortization

1,376

190

839

743

645

3,793

1,309

5,102

Capital expenditures

1,248

144

624

766

980

3,762

1,219

4,981

Net sales:

2000 Annual Report28Millions of yen
Year ended
March 31, 2000

EnergysectorEnvironment
sectorInfo andCommunicaIndustrial
tions sector Systems sector

OthersEliminations
or corporate Consolidated

Total

Net sales:
Outsidecustomers¥ 85,131¥ 51,414¥ 17,896¥ 27,541¥ 36,372¥ 218,354¥ ––¥ 218,354

Inter-segment

5,400

1,423

1,161

3,699

36,06747,750(47,750)

––

Total

90,531

52,837

19,057

31,24072,439266,104(47,750)

218,354

Operatingexpenses

91,91745,976

21,45634,24270,074

263,665(43,379)

220,286

Operating income(¥ 1,386)¥ 6,861(¥ 2,400)(¥ 3,001)¥ 2,365¥ 2,439(¥ 4,372)(¥ 1,933)

Identifiable assets¥ 66,718¥ 24,049¥ 26,130¥ 25,534¥ 39,767¥ 182,198¥ 53,714¥ 235,912

1,628

199

1,524

890

531

4,772

1,817

6,589

1,223

257

1,505

699

1,065

4,749

1,164

5,913

Depreciation andamortization
Capitalexpenditures

Thousands of U.S. dollars (Note 1)
Year ended
March 31, 2001
Net sales:
Outsidecustomers$569,331$418,161$118,032$203,032$280,017$1,588,573$––$1,588,573

Inter-segment

43,387

12,492

22,927

20,177

293,105

392,088(392,088)

––

Total

612,718

430,653

140,959

223,209573,122

1,980,661(392,088)

1,588,573

Operating expenses

613,250

356,137

160,282

235,975

564,267

1,929,911(372,862)

1,557,049

Operating income(loss)($532)$74,516($19,323)($12,766)$8,855$50,750($19,226)$31,524

Identifiable assets$437,153$186,048$172,056$179,210$348,299$1,322,766$387,758$1,710,524

Depreciation andamortization

11,097

1,532

6,766

5,992

5,202

30,58910,55641,145

Capital expenditures

10,065

1,161

5,032

6,177

7,904

30,3399,830

40,1692000 Annual Report29

Geographic information:

1999

Thousands of
U.S. dollars
2000¥11,350
4,537¥15,632
5,249$107,075
42,802¥15,887¥20,881$149,877

Millions of yen
2000
Sales:
Asia .............................................................................................................
Others .........................................................................................................
Total ................................................................................................................

15. Income Taxes
Japanese income taxes, which consist of corporate, enterprise and inhabitants taxes, would normally result in an aggregate statutory tax rateof approximately 42%, 48% and 51% for the years ended March 31, 2000, 1999 and 1998, respectively. Significant components of deferred tax
assets and liabilities of the Company and its consolidated subsidiaries as of March 31, 2000 are as follows.
Millions of yen

Thousands of
U.S. dollars

Deferred tax assets:
Net operating loss carry forwards ......................................................................
Allowance for retirement benefits ......................................................................
Unrecognized intercompany profit .....................................................................
Bonuses .............................................................................................................
Other ..................................................................................................................
Gross deferred tax assets ................................................................................

¥5,858
2,375
3,450
257
1,132
13,072$55,264
22,40632,547
2,425
10,679123,321

Less: Valuation allowance ...................................................................................

——

Deferred tax liabilities:
Deferred gain on sales of property for tax purpose ............................................
Other ..................................................................................................................
Gross deferred tax liabilities .........................................................................
Net deferred tax assets ..................................................................................

1,492
65
1,557
11,515

14,075613
14,689108,632

2000 Annual Report30

Report of Independent Public Accountants
To the Shareholders and the Board of Director of Meidensha Corporation:
We have audited the accompanying consolidated balance sheets of MEIDENSHA CORPORATION (a Japanese corporation) and subsidiaries as of March 31, 2000 and 1999, and the related consolidated statements of operations, and shareholders’equity for each of the three years in the period ended March 31, 2000, and the related consolidated statement of cash flows forthe year ended March 31, 2000, expressed in Japanese yen. Our audits were made in accordance with generally accepted
auditing standards in Japan and, accordingly, included such tests of the accounting records and such other auditing procedures
as we considered necessary in the circumstances.
In our opinion, the consolidated financial statements referred to above present fairly the consolidated financial position of
MEIDENSHA CORPORATION and subsidiaries as of March 31, 2000 and 1999, and the consolidated results of theiroperations for each of the three years in the period ended March 31, 2000, and the consolidated results of their cash flows forthe year ended March 31, 2000 in conformity with accounting principles generally accepted in Japan applied on consistentbasis, except for the change, with which we concur, in the method of segmentation by industry segment, made in the year ended
March 31, 2000, as described in Note 14.
As explained in Note 2 in the year ended March 31, 2000, the Company prospectively adopted new Japanese accounting
standards for consolidation and equity method accounting and income taxes in the year ended March 31, 2000.
Also, in our opinion, the U.S. dollar amounts in the accompanying consolidated financial statements have been translated
from Japanese yen on the basis set forth in Note 1.
Tokyo, Japan
June 29, 2000

Statement on Accounting Principles and Auditing Standards:
This statement is to remind users that accounting principles and auditing standards and their application in practice mayvary among nations and therefore could affect, possibly materially, the reported financial position and results of operations.
The accompanying financial statements are prepared based on accounting principles generally accepted in Japan, and theauditing standards and their application in practice are those generally accepted in Japan. Accordingly, the accompanying
financial statements and the auditors’ report presented above are for users familiar with Japanese accounting principles, auditing standards and their application in practice.

2000 Annual Report31Overseas Offices and Affiliates(As of July, 2000)

Hong Kong

Indonesia

Malaysia※● MEIDENSHA CORPORATION※● P.T. MEIDEN ENGINEERINGINDONESIA※● MEIDEN ELECTRIC
ENGINEERING SDN. BHD.

6/F Kerry Godown,
4-6 Kwai Tai Road,
Kwai Chung, N.T., Hong Kong
Phone: 2503-2468
Facsimile: 2887-8046● MEIDEN PACIFIC (CHINA)LTD.
6/F Kerry Godown,
4-6 Kwai Tai Road,
Kwai Chung, N.T., Hong Kong
Phone: 2503-2468
Facsimile: 2887-8046

19th Floor, Summitmas I,
Jl. Jenderal Sudirman Kaveling 61-62
P.O.BOX 6920/KBY/Summitmas I
Jakarta Selatan 12069, Indonesia
Phone: 21-520-0612/1584
Facsimile: 21-520-0240
Telex: 60780 MEIDEN IA

Korea※● MEIDENSHA CORPORATIONRoyal Building. No.410,
5 Dangju-Dong,
Chongro-ku, Seoul, Korea
Phone: 2-736-0232~3
Facsimile: 2-736-0234

G. 03, Ground Floor, Wisma Academy,
4A, Japan 19/1
46300 Petaling Jaya,
Selangor Darul Ehsan, Malaysia
Phone: 3-76206088
Facsimile: 3-76206089● MEIDEN METALENGINEERING SDN. BHD.
Lot 6, Peringkat 3,
Kawasan Perindustrian Alor Gajah,
78000 Melaka, Malaysia
Phone: 6-5568790~2
Facsimile: 6-5568795

2000 Annual Report32For inquiries, please contact the office/company marked ※.
● Overseas office / ● Affiliate

Singapore

ThailandThe United Kingdom※● MEIDEN SINGAPORE PTE.
LTD.

※● THAI MEIDENSHA CO., LTD.

※● MEIDEN EUROPE LTD.

5, Jalan Pesawat,
Jurong Industrial Estate,
Singapore 619363
Phone: 268-8222
Facsimile: 264-4292
Telex: MEITRA RS 34494

Taiwan※● MEIDENSHA CORPORATION
Room 1103, 11th Floor,
No.142 Chung Hsiao East Road,
Sec.4, Taipei, Taiwan, R.O.C.
Phone: 2-2775-3337~8
Facsimile: 2-2775-3339

11th Floor, TST Tower Building,
21 Viphavadi-Rangsit Road,
Soi Chuei Phung, Jatujak,
Bangkok 10900, Thailand
Phone: 2-273-8954~61
Facsimile: 2-273-8966
Cable Address: THAI MEIDENBANGKOK● MEIDEN ELECTRIC(THAILAND) LTD.
896 Moo 2,
Bangpa-in lndustrial Estate,
Udomsorayuth Rd., Klongjig,
Bangpa-in, Ayudhaya 13160,
ThailandPhone: 35-258258~262
Facsimile: 35-221388

New Wave Complex,
Bradbourne Drive, Tilbrook,
Milton Keynes MK7 8BN,
England, U.K.
Phone: 1908-276000
Facsimile: 1908-276010

The United States※● MEIDENSHA CORPORATIONThe American Center Building,Suite 1110
27777 Franklin Road,
Southfield Michigan 48034, U.S.A.
Phone: 248-353-2540
Facsimile: 248-353-3150

2000 Annual Report33Consolidated Subsidiary Companies
MEIDEN ENGINEERING CO., LTD.

MEIDEN SOFTWARE CORPORATIONMEIDEN PRINTING CORPORATION

Capital ¥2,360 million
Engineering service and other service affairs
7-9, Osaki 3-chome, Shinagawa-ku,
Tokyo 141-8607 Japan
Phone: 3-3490-7201 Fax: 3-3490-5550

Capital ¥70 million
Engineering and programming of software
809, Oka-Isshikitorimachi, Numazu-shi,
Shizuoka 410-0012 Japan
Phone: 559-23-4966 Fax: 559-23-1191

Capital ¥20 million
Printing and copy service
Maruki Building, 13-7, Nishigotanda 1-chome,
Shinagawa-ku, Tokyo 141-0031 Japan
Phone: 3-3490-4767 Fax: 3-3490-4910

SHINKO SEISAKUSHO CO., LTD.

MEIDEN FOUNDRY INDUSTRIAL Co., Ltd.

Nagoya Meiden Kohsan Co., Ltd.

Capital ¥800 million
Manufacture, sales, and maintenanceservicing of communication equipment,
peripherals and terminals
Kokuryu Shibakoen Building,
6-15, Shibakoen 2-chome,
Minato-ku, Tokyo 105-0011 Japan
Phone: 3-3436-1211 Fax: 3-3436-1881

MEIDEN SHOJI Co., Ltd.
Capital ¥300 million
Sales of electric products and components
Mitomi New Building, 20-18,
Ebisu 1-chome, Shibuya-ku,
Tokyo 150-0013 Japan
Phone: 3-5449-3700 Fax: 3-5449-3701

KOFU MEIDENSHA CORPORATION
Capital ¥200 million
Manufacture and sales of electric motors, mainly
15-11 Joto 3-chome, Kofu-shi,
Yamanashi 400-0861 Japan
Phone: 55-233-5161 Fax: 55-233-5171

Meiden Plant Engineering &Construction Co., Ltd.
Capital ¥150 million
Constructing service
Meiko Building, 5-5, Osaki 5-chome,
Shinagawa-ku, Tokyo 141-8616 Japan
Phone: 3-5487-6426 Fax: 3-5487-6487

MEIDEN CHEMICAL CO., LTD.
Capital ¥95 million
Insulating varnish and molded instrumenttransformer
1-17, Osaki 2-chome, Shinagawa-ku,
Tokyo 141-0032 Japan
Phone: 3-3492-5251 Fax: 3-3492-5280

Meiden Kohsan Co., Ltd.
Capital ¥80 million
Sales of products and materials and agent
service of insurance
Meiko Building, 5-5, Osaki 5-chome,
Shingawa-ku, Tokyo 141-8616 Japan
Phone: 3-3490-3737 Fax: 3-3490-3906

Capital ¥50 million
Casting
4, Nyogetsu, Heisaka-cho, Nishio-shi,
Aichi 444-0305 Japan
Phone: 563-59-6181 Fax: 563-59-4132

Capital ¥10 million
Sales of products and materials and buildings
maintenance service496-1, Ittan-gosewari, Nishi-biwajima-cho,Nishikasugai-gun, Aichi 452-0007 Japan
Phone: 52-503-7016 Fax: 52-504-2785

MEIDEN SYSTEM ENGINEERING Co., Ltd.
Capital ¥50 million
System engineering of plant
Meiko Building, 5-5, Osaki 5-chome,
Shingawa-ku, Tokyo 141-8616 Japan
Phone: 3-5487-6500 Fax: 3-5487-6516

Meiden Information Systems, Ltd.
Capital ¥50 million
Engineering and programming of software
1-17, Osaki 2-chome, Shinagawa-ku,
Tokyo 141-8565 Japan
Phone: 3-5487-2333 Fax: 3-5487-2104

Numazu Meiden Kohsan Co., Ltd.
Meiden Sheet Metal Products Corporation

Capital ¥30 million
Sales of products and materials and buildings
maintenance service
515, Kaminakamizo, Higashi-makado-aza,
Numazu-shi, Shizuoka 410-0865 Japan
Phone: 559-21-1140 Fax: 559-24-1474

Capital ¥90 million
Manufacture and sales of sheet metal
515, Kaminakamizo, Higashimakado-aza,
Numazu-shi, Shizuoka 410-0865 Japan
Phone: 559-29-5555 Fax: 559-29-5566

Meiden Kankyo Service Co., Ltd.

MEIDEN SINGAPORE PTE. LTD

Capital ¥30 million
Maintenance and control service of water
treatment equipment
Meiko Building, 5-5, Osaki 5-chome,
Shinagawa-ku, Tokyo 141-8616 Japan
Phone: 3-3490-0630 Fax: 3-3490-0623

Capital S$10 million
Manufacture of transformer and constructing
service5, Jalan Pesawat Jurong Industrial Estate,
Singapore 619363
Phone: 268-8222 Fax: 264-4292

HOKUTO DENKO CORPORATION

THAI MEIDENSHA CO., LTD.

Capital ¥25 million
Manufacture and sales of electric sensors
22-13, Himonya 4-chome, Meguro-ku,
Tokyo 152-0003 Japan
Phone: 3-3716-3235 Fax: 3-3793-8787

Capital TB10 million
Constructing service
11th floor, TST Tower Building,
21 Viphavadi-Rangsit Road, Soi Cuei Phung
Jatujak, Bangkok 10900, Thailand
Phone: 2-273-8954 Fax: 2-273-8966

MEIDEN SYSCON Co., Ltd.
Capital ¥20 million
Manufacture and sales of switchgear and relays
726-1, Osuwa, Numazu-shi,
Shizuoka 410-0873 Japan
Phone: 559-24-4630 Fax: 559-22-4013

Meiden Kiden Kogyo Co., Ltd.

MEIDEN ELECTRIC (THAILAND) LTD.
Capital TB70 million
Constructing service
896 Moo 2, Bangpa-in Industrial Estate,
Udomsorayuth Rd., Klongjig, Bangpa-in,
Ayudhaya 13160, Thailand
Phone: 35-258258 Fax: 35-221388

Capital ¥20 million
Machining and repairing service
1-17, Osaki 2-chome, Shinagawa-ku,
Tokyo 141-8565 Japan
Phone: 3-3491-2611 Fax: 3-3490-4226

2000 Annual Report

34Corporate
Data

Board of Directors(As of June 29, 2000)

Corporate Name

ChairmanPresident

MEIDENSHA CORPORATION(Kabushiki Kaisha Meidensha)

Keiji Kojima

Shigeo Seko

Executive
Vice President

Executive
Vice President

Keiji Kataoka

Mineo Itakura

SeniorManaging
Director

SeniorManaging
Director

Koji Yano

Toru Nakamura

Head OfficeRiverside Building, 36-2, Nihonbashi
Hakozakicho, Chuo-ku,
Tokyo 103-8515 JapanFounded
1897

Common StockPar Value
Authorized
Issued¥50 ($0.47)
576,000,000 shares
202,025,158 shares¥17,070 million($161,038 thousand)Shareholders
17,697

SeniorManaging
Director
Toyoaki Ishii

Transfer Agent
The Chuo Trust and Banking Co., Ltd.

Managing Directors

Harumichi Yamashita
Kensuke Ikuji
Hiroyasu Yagi
Masaoki Hino

Takao Shibue
Nobuo Takahashi
Masaaki Oishi

Directors

Masao Kamei
Jiro Iwashita
Kennosuke Goto

Kenzo Nakamura
Toru Niwa
Tatsujiro Matsumoto

Senior Corporate Auditors

Takamasa Hasebe
Junji Hashimura

Masaaki Obana

Corporate Auditors

Haruhisa Kawabe

Yojiro Yamashita

2000 Annual Report35