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

Financial Highlights ........................................................... 3
Message from Management .............................................. 4
Review of Operations ........................................................ 6
R&D Review .................................................................... 12
Financial Section .............................................................. 13
Overseas Offices and Affiliates ....................................... 37
Consolidated Subsidiary Companies ............................... 38
Corporate Data ................................................................ 39
Board of Directors ........................................................... 39
2004 ANNUAL REPORT

2

FINANCIAL HIGHLIGHTS
Years ended March 31
Thousands of
U.S. dollars

Millions of yen
2004

2003

2002

2004

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

¥181,560¥184,853¥200,075$1,712,830

Net Income (Loss) ....................................................

2,335

924

( 3,906)

22,028Net Income (Loss) Per Share (yen, U.S. dollars) .......

10.14

4.58

(19.34)

0.10

Cash Dividends Paid .................................................

—

—

—

—

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

194,163

197,140

205,221

1,831,726

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

7,278

7,465

7,622

—

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 theTokyo Foreign Exchange Market as of March 31, 2004. See Note 1 to Consolidated Financial Statements.

Net Sales (¥ millions)

Net Income (Loss) (¥ millions)

250,000

200,000

Total Assets (¥ millions)
250,000

212,105

196,983 200,075

205,221200,000

184,853 181,560

150,000

197,140 194,163

150,000
10,000100,000

100,000

5,000

50,00050,000

2,335
924
0

01

02

03

04

0

0

01

02

03

04

(2,645)(3,906)-5,000-10,000

01

02

03

04

2004 ANNUAL REPORT

3

MESSAGEFROMMANAGEMENTMESSAGEFROMMANAGEMENT

During fiscal 2003, the Japanese economy showed that exports andcapital investment increased substantially as a result of economic recovery in the United States and rapid growth of Chinese economy, but
personal consumption was still sluggish because of continuing deflation and record low temperature summer. Further reduction of public
investment continued. Given these factors, a full-fledged economic recovery cannot be seen in fiscal 2003.
Under these economic conditions, Meidensha Corporation madevigorous across-the-board efforts to boost sales. However, sales for fiscal 2003 were 181,560 million yen (consolidated basis), or 1.8 % lower
than those in the previous fiscal year.
We made company-wide efforts to cut expenses, reduce costs, andraise productivity. As a result of these efforts, income before income tax
and minority interests was 4,216 million yen (consolidated basis) andnet income was 2,334 million yen (consolidated basis).
A year-end dividend of 3 yen per share was declared, the first time a
dividend has been declared in six fiscal years after an interim dividend
was declared in fiscal 1997.
Under these circumstances, the Company continues to implement
the medium-term management plan, “Challenge and Create Plan”
adopted in July 2003. The basic principle of this plan is to divide the
10 years (fiscal 2003 - fiscal 2013) into three stages: (1) “Revamping
Business Model Phase”, (2) “Accelerating Growth Phase” and (3) “High
Growth Phase”. This fiscal year belongs to 1st stage, “Revamping Business Model Phase” under which we mapped out the specific policies tobe implemented during the three years (fiscal 2003 - fiscal 2005) toaddress the challenges. The Challenge and Create Plan sets as goals:“Maximizing Corporate Value and Revamping the Business Models” andadopts the following three fundamental policies to achieve those goals.
(1) Realize early the elimination of carry-over losses, resume dividends and maximize the corporate value through reinforcement of thefinancial strength.
(2) Reinforce new product and technology development and carryout the product portfolio review and re-alignment of the existing products.
(3) Create “a vibrant MEIDEN Group” by across-the-board groupwide efforts.
In order to put the medium-term management plan on the solid
ground, we promote the positive integration of the resources of former
Meiden Engineering Co., Ltd. merged in April 2003 with a view to
producing the synergy effects as soon as possible.
In addition, in April 2004 the Energy Business Group and the Environmental Solutions Business Group were merged into one group:“Social Infrastructure Systems Business Group” as a part of our organizational streamlining efforts. By this reorganization, we aim to increase
the market competitiveness and orders by strengthening engineering
competences in these business sectors.
We established a joint venture surge arrester company, MSA Co.,
2004 ANNUAL REPORT

4

Ltd., with ABB Ltd. of Switzerland in April, 2004. This establishmentof new company underlines our continuous efforts in promoting thealliance and introduction of new technology with other companies asin the case of a transmission and distribution business joint venture,
Japan AE Power Systems Corporation, with Hitachi Ltd. (NYSE: HIT)and Fuji Electric Co., Ltd. (TSE: 6504) in 2000. We aim to strengthen
our development of new products and technologies through such joint
undertaking.
To strengthen our overseas business operations, we established
Meiden America, Inc. in the United States in July 2003 and Shanghai
Meiden Semiconductor Co., Ltd. in August 2003. We also established
Meiden Asia Pte., Ltd. in April 2004 as a holding company of our
subsidiary companies in the Southeast Asian countries. Going forward,
we will strengthen our business strategies around these world markets
by utilizing these new and existing our overseas group companies.
In addition, we concluded a basic contract with World Trade Center Building, Inc. (“WTC”), a Tokyo-based company, in January 2004
to construct an office and commercial building by 2007 as a joint business with WTC. This new building will make use of the vacant lot of
our former plant premise in Shinagawa-ku, Tokyo. The details of thisproject will be worked out with WTC later. Our Company will workon this project to effectively utilize the land by which it will greatly
contribute to the financial health of our Company.
The medium-term management plan calls for improvements in capital efficiency and our financial strength through further reductions inliabilities. It also seeks new business creation and improvement of business strength by reviewing and re-aligning of the existing business models. According to this plan, we will keep focusing on our core businessby devoting our management resources to improve the profitability.
We ask every shareholder as well as our customers and business partners to give us your continued guidance and support.

Shigeo Seko, Chairman

Keiji Kataoka, President

Review of Operations

n order to reduce the volume ofcarbon dioxide emission, we arepromoting the use of renewableenergy and the development of energy
saving technologies. We also provide
products and systems using thesetechnologies that help solve our customers’ problems.
We have delivered wind power systems to Akita Citizens Wind Power
Station and to Windterra Wind Power
Station in Aino-cho, Nagasaki Prefecture. We have also started a wind farmbusiness under which we sell electricity from our wind power systems in
Choshi-city to electric utility.

I

PCS for NAS BatteriesWith respect to electric power solutions, we have increased orders forthe power conditioner systems (PCS)
using the sodium-sulfur (NAS) battery.
Concerning new products, we developed electric double layer capacitors (EDLC) called “M-CAP”. EDLC
is a type of electric power storage
product. Since it is free from heavy
metals unlike the batteries, it does not
require waste disposal. In addition,compared to batteries, EDLC has
faster charging and discharging characteristics compared with the batteries. By taking advantage of this feature, we have developed and marketed
products that can supply power toprevent the power interruption bydischarging the stored electric energy
in the capacitor in the event of a shortperiod power outage. Our EDLC isavailable in two types to prevent
power interruptions for two or 60 seconds with capacities from 50 kVA to
2,000 kVA.
We have received an increased orders for rehabilitation work for traction substation and substations at hydroelectric power stations.

Regarding a noteworthy topic, webegan a joint venture company forsurge arrester business with ABB Ltd. of
Switzerland by establishing MSA Co.,
Ltd. in April 2004.

Wind Power System in Choshi-city,
Chiba Prefecture

Transformer for Traction Substation

Electric Double Layer
Capacitor, M-CAP

2004 ANNUAL REPORT

6

Review of Operations

eidensha Corporation is
promoting the solutions
business that offers effective use of energy and efficient management of waterworks and seweragetreatment facilities. With respect tothe effective use of energy, we received
orders for electric energy storage systems that use 2000 kW sodium-sulfur (NAS) batteries. These devices
contributed to reductions in power
consumption and environment impact.
In the environmental protection
areas, we received an order for a system that dries and carbonizes thesludge generated by sewage treatment
plant.
In the supervisory control technology field, we have developed a supervisor y control system called“MEISVY-VS” that can monitor andcontrol multiple sewage processes andwater supply facilities together using
Web technologies.
We have also developed a simulator for analyzing the water treatment
processes in sewage treatment plants.
The simulator is able to produce asimulation of high-precision waterM

Chaos Theory-based Demand Predictive Controller & OPS6000

treatment processes taking place in thewater treatment plant. By using thissimulator, it is possible to optimize thecontrol, operation and maintenancefor sewage treatment facilities.
With respect to the waterworks
field, we developed an efficient operation system for the process facilities
and equipment for water intake, water supply and water distribution. This
operation is optimized based on thenecessary water volume forecast of the

MEISVY-VS2000 Web Control Screen

coming hourly demand of the givenday (such as the coming 1, 2, 3 hours,
up to about coming 10 hours) by applying the chaos theory.
We have also commercialized a deodorization product, “Pureleaf ”, thatuses a photocatalytic system.

Deodorization
Product, Pureleaf

2004 ANNUAL REPORT

7

Review of Operations

Embedded Controller, µPIBOC-C2

Switching Hub, MEISWAY SW2000

eidensha Corporation isdeveloping highly reliable
information and communications equipment and promoting
IT technology-based solutions business.
New information equipment includes µPIBOC-I model 800 industrial controller, µPIBOC-C2, andDeviceNet I/O slave module communications board for the semiconductor manufacturing market.
In the communications field, weMdeveloped and commercialized an industrial switching hub (SW2000),
multi-function router (SEIL/Turboand SEIL/neu2FE plus), and an integrated global positioning system(GPS) platform (iiGPS) for high level
location positioning detection.
In the IT-related field, we developed a solution using a new geographic information system (GIS)
platform (J-STIMS) that combines
spatio-temporal information management software with base maps.

Wholesale-Flowermarket Information System

Concerning wholesale market information systems, we developed the
Web-based networking solutions andhandy terminals to be used for wholesale-flowermarket information system
and wholesale fresh fruit market information system.
In the software field, we developed
for the commercialization of XML(Extensible Markup Language)
middleware products that fulfill theneeds for information sharing andincreased operational efficiency.

Spatio-Temporal Information Management
System, J-STIMSInformation Detail Window

Auction Room
View of a WholesaleFlowermarket Office

Attached File Window

2004 ANNUAL REPORT

8

Review of Operations

Computer System, MEIDACS-DY6000P

M

eidensha Corporation is developing the electromotive
power application and logistics solutions businesses. In the electromotive power application field, due
to the demand increase for machinery such as spinning machine for synthetic fiber and injection molding machine, we increased the shipment ofrelated products such as permanent
magnet-type synchronous motors(PM motors), inverters, and the vari-able speed systems combining PM
motors and inverters. Our variable
speed systems are also being used inelevator and dynamometer systems.
Shipments of AC motors and inverters for forklifts increased as there is amarked migration to the electric forklifts.
In the logistics field, we commercialized and supplied an automated guided
vehicle which uses laser guiding method.
With regard to dynamometers, wedeveloped and delivered a virtual reality system (VRS) that simulates theperformance characteristics of the car
mainbody and engine. This simulation capability greatly shorts the development period as it allows engineers to gain vehicle characteristics before conducting the real-life testing.

Electric Machine for Synthetic Fiber

Battery Controller
for Elevator

PM Motor
100 Series

THYFREC-VT630MS

AGV for Medical Supplies

2004 ANNUAL REPORT

9

Review of Operations

among the various departments in thee are shifting our focus ofmarketing from the stand medical clinic. A key feature of the sysalone product sales (such as tem is the use of dual monitor clinicalmedical accounting systems and elec- station showing extensive information
tronic charts system) to integrated sys- through windows in real time.
tem product sales. We
have also developed an
integrated system to support medical clinics going digital. This systemprovides solutions to integrate three functions(the medical accounting,electronic charts system,
simplified order entry
system) into one package. This system allows
databases to be shared
Dual Monitor Small and Medium-sizedW

Hospital System

W

Rotating Machine Insulation DiagnosisCare are offering equipment life
diagnosis services tothefacilities and by giving
the proper facility maintenance, it allows the facility owner to extend theequipment life. In addition, we areproviding another solutions businessby offering energy saving diagnosis
services to realize the energy consumption volume reduction. We arealso accepting orders under which we
provide outsourcing service for the operation and maintenance of nonMEIDEN products
and facilities.
At the same time,
we are developing a remote maintenance system that performs facility maintenancethrough the communi-

cation network such as Internet, etc.
With regard to engineering service
for the semiconductor manufacturingsystems, we established Shanghai
Meiden Semiconductor Co., Ltd.
(SMS) in China and have started
SMS-based remanufacturing, maintenance and repair services for preowned semiconductor manufacturingsystems.

Shanghai Meiden Semiconductor Co., Ltd.

2004 ANNUAL REPORT

10

Review of Operations

Manila Line No.2n the first half of fiscal 2003, theglobal economy faced the negative
impact of war in Iraq and the lungdisease, SARS. However, in the second
half of fiscal 2003, a moderate recovery of
the global economy took place due to theaccelerated economic growth in the
United States and China. The Asian Market, which is Meidensha Corporation’s
major market, showed steady economic
recovery, despite the foregoing negative effects, spurred on by exports and private
consumption.
The US power sector still faces
weaker market demand for new power
plants as there is uncertainty overwholesale power prices and the overbuilding of plants during the past five(5) years of a power generation“bubble” period.
The automotive market in the US,
which has a major influence on salesof dynamometer systems, saw weaksales in the first half of fiscal 2003 as
the economy and employment outlook
were still relatively weak. During thesecond half of the same year, however,sales was strong reflecting the improved
economic conditions. In order spursales, the major automobile manufacturers offered various incentive pro-I

grams, including cash rebates, cut-rate
financing and a lease program, which
contributed to the fiscal 2002 level of
16 million car sales.
The major orders received in fiscal
2003 were as follows:
In the field of electric railway substations, we received orders for traction substations from Civil Aviation Authority
Singapore in Singapore and Metro RailTransit Corporation in The Philippines.
In the power generation field, GE
Aero Energy Products in Texas placedorders for four generators for GE
LM6000 gas turbines, and Hitachi
placed orders for three generators for
H-25 gas turbines.
In the North American market, themajor Japanese automobile manufacturers placed orders for dynamometersystems for engine testing, and we also
received an order for a transmission
tester from a Japanese automaker for
use in its technical center.
The major products manufactured
and shipped during fiscal 2003 wereas follows:
In the field of electric railway substations, we supplied and installed traction substations for Metro Manila 2
Line Project in The Philippines. President Arroyo of The Philippines formally inaugurated the depot in May
2003. We also shipped traction substations for the Taiwan High Speed
Train Project (“Taiwan Shinkansen

Project”) of Taiwan High Speed Rail
Corporation.
In the dynamometer field for North
America, we supplied and installed engine dynamometer systems for the major Japanese auto transplants and an ultra- low-inertia dynamic transmission
test system for a Japanese auto transplant. An engine-driven transmission
test system for a Japanese automaker’s
technical center was also supplied andinstalled.
In the Asian market for automobile
dynamometers, we supplied many dynamometer systems to the major automobile manufacturers in Korea, Taiwan
and Thailand.
Noteworthy events in our overseas
operations were the establishment of
two companies in the U.S. and China.
One is Meiden America, Inc., established in July 2003 in Detroit for themarketing, repair and maintenance ofdynamometer systems, etc. in North
America. The other is Shanghai Meiden
Semiconductor Co. Ltd. established inAugust 2003 in Shanghai for theremanufacturing of pre-owned semiconductor manufacturing systems andrelated repair and maintenance services
in China. We also acquired the dynamic voltage compensator manufacturing company, SP Systems Pte. Ltd.,Singapore from Singapore Power Pte.
Ltd., Singapore in February 2004.

PCDY2
Permanent magnet typedynamometer for automatictransmission testing

2004 ANNUAL REPORT

11

Development of Electric Double Layer Capacitor (EDLC) Type of Dynamic Voltage
CompensatorAmong the features of EDLC is the ability to withstand repeated charging and discharging and todeliver a high output and their easy maintenance. As an application utilizing these features, we havedeveloped an uninterruptible power supply system witha compensation time of 2 seconds and 50 kVA capacity
as a joint project with Chubu Electric Power Co. Table 1
lists the specifications of the compensation unit, and Fig.1
shows the exterior of the beta model for field testing.

In addition to cutting maintenance costs by employing capacitors (Fig.2), the compensation unit reduces
operating costs by enabling a high level of efficiency to
be achieved during commercial operation by using a normally “on” commercial power supply system. Once wehave completed the field testing, we will enhance theproduct offerings and embark on commercialization.

Table 1 Specifications of Capacitor-type of Dynamic
Voltage Compensator
Item

Equipment specification

Capacity, compensation 50 kVA, 2 seconds
timeFig. 1
Exterior of Beta Model for
Field TestingFig. 2Exterior of
Capacitor Unit

Input/output

AC voltage 3-phase 210V
(can be set in the 200-220V range)

Circuit system

Normally “on” power supply system

Switching time whenpower fails

Switching without instantaneous shutdown(switching time: less than 0.002 sec)

Efficiency

More than 97% (during commercial operation)

Storage system

Electric double-layer capacitors

Dimensions, mass

W1,800 x H2,000 x D800 mm, 1,600 kg

Ambient environment

Installation location: Indoors

Temperature range:

0 to +40℃

Development of High-Purity Continuous Ozone GeneratorA

s a joint research with General Research Institute for Industries and Technologies(Sansoken), we are currently working on thedevelopment of a high-purity continuous ozone generator, which can be applied to the semiconductor mass
production processes. Fig. 3 shows the exterior of our
prototype generator (size: W1,340 × H1,892 × D940mm). By switching between four liquefaction vessels
in sequence, it is possible to generate high-purity ozone
continuously at a flow rate of 60 sccm. The ozone generator incorporates fail-safe safety functions and sequencer-based automatic operating functions. These

functions commercialized infiscal 2002 and establishedby the compact unit for research. Drawing on the pastexperiences, we will further
reduce the dimensions andimprove the performanceand moving ahead withplans to design it into mass
production process equipment.

Fig. 3Exterior of Pure
Ozone Generator

2004 ANNUAL REPORT

12

Consolidated Financial Review ........................................... 14
Five-Year Summary ............................................................ 14
Operational Review ............................................................ 15
Consolidated Balance Sheets .............................................. 16
Consolidated Statements of Income ................................... 18
Consolidated Statements of Shareholders’ Equity ............... 19
Consolidated Statements of Cash Flows ............................. 20
Notes to Consolidated Financial Statements ....................... 21
Independent Auditors’ Report ............................................ 36
2004 ANNUAL REPORT

13

CONSOLIDATEDFINANCIAL REVIEW
Outline of Profits and Losses
During fiscal 2003, the Japanese economy showedmarked increases in exports and capital investment as aresult of economic recovery in the United States and a
rapid growth in the Chinese economy. However, due tocontinuing deflation, record low summer temperatures,and job insecurity, personal consumption remained sluggish. In addition, public investment continued to decline. Given these factors, a full-fledged economic recovery was not realized in fiscal 2003.
Net sales totaled 181,560 million yen, a 1.8% decrease over the previous term. Business sector-based net
sales stood at 26.3% for the Energy Sector, 26.3% for
the Environment Sector, 11.7% for the Info and Communications Sector, 18.1% for the Industrial Systems
Sector, and 17.6% for Others.
The cost of sales totaled 141,187 million yen, a 2.7%
decrease over the previous term. Selling, general and administrative expenses totalled 35,068 million yen, a 3.5%

decrease. Operating income, therefore, stood at 5,305
million yen.
The final result was a net income of 2,335 million
yen for this term.
Financial Conditions
Total assets at the end of March 2004 amounted to194,163 million yen, a decrease of 2,977 million yen.
As a result of decreased trade accounts and deferred income taxes, current assets stood at 114,864 million yen,a decrease of 7,297 million yen. Property, plant andequipment amounted to 43,215 million yen, an increaseof 2,809 million yen. Total current liabilities amounted
to 111,476 million yen, a decrease of 17,084 million
yen, and shareholders’ equity stood at 47,769 million
yen, an increase of 10,942 million yen. As a result, theshareholder capital ratio increased 5.9 points from
18.7% to 24.6%.

FIVE -YEAR SUMMARY
MEIDENSHA CORPORATION AND CONSOLIDATED SUBSIDIARIES
Years ended March 31

2004

2003

¥181,560¥184,853

Net income (loss)

2,335

Net income (loss) per share (Yen)Millions of yen
2002

2001

2000

¥200,075¥196,983¥204,376

924(3,906)(2,645)(5,761)

4.58—(19.34)(13.09)(28.52)

Cash dividends paid

10.14
—

—

—

—

Depreciation and amortization

4,262

4,921

4,861

5,102

6,285

Total assets

194,163

197,140

205,221212,105

221,388

Net property, plant and equipment

43,21540,40640,89939,496

39,616

Shareholders’ equity per share (Yen)

209.91

182.36

176.74

192.50206.00Net sales

2004 ANNUAL REPORT

14

OPERATIONAL REVIEW
Energy Sector(Millions of yen)

Net sales ¥47,732 million ($450,302 thousand)

26.3%
02

The Company manufactures and markets generators, transformers, switching devices, lightning arresters, power conversion equipment, and products to control these devices, for use in electric power facilities
ranging from power company generating stations totransmission, transforming, and distribution facilities,
in establishments ranging from national and local government facilities to railroads, highways, buildings,
construction sites, and so on.

71,58703

04

56,76047,73226.3%
0247,39703

47,80904

47,707

Environment Sector
Net sales ¥47,707 million ($450,066 thousand)

The Company provides “environment-friendly
products and technologies” for the development of IT
networks involved in the control of treatment equipment and processes for city water and sewage water
systems operated by local governments, as well as forenergy conservation, recycling, waste treatment, andso on.

11.7%
02

13,59503

14,550

Info and Communications Sector
Net sales ¥21,279 million ($200,745 thousand)

The Company manufactures and markets computer
systems and all types of electronic equipment and crystal-related products primarily for the information andtelecommunications market.
Industrial Systems Sector

04

21,27918.1%
0232,63403

32,54704

32,797

Net sales ¥32,797 million ($309,405 thousand)

The Company manufactures and markets products
related to manufacturing processes in every type of
manufacturing industry, and, with a focus on electricmotor power application products, extends to dynamometer instrumentation, industrial robots, automatedguided vehicles, and other such areas.
Others17.6%
0234,862

03

33,18704

32,045Net sales ¥32,045 million ($302,312 thousand)2004 ANNUAL REPORT

15

CONSOLIDATEDBALANCE SHEETSMEIDENSHA CORPORATION AND CONSOLIDATED SUBSIDIARIESMarch 31, 2004 and 2003

2003

Thousands of
U.S. dollars (Note 1)
2004¥9,255409¥10,427
1,011$87,311
3,859

6,047
60,197
812
1,527
(203)
27,116
4,143
5,561
114,864

5,758
63,109
671
1,046
(229)
27,257
6,590
6,521
122,161

57,047567,896
7,660
14,406(1,915)
255,81139,08552,463
1,083,623

11,77243,49764,623
2,572(79,249)
43,2158,390
42,93865,6481,720(78,290)
40,406

111,057
410,349
609,650
24,264(747,632)
407,688

16,163
11,267
169
4,058
4,765
(338)
36,084

12,852
10,867
164
6,256
4,850
(416)
34,573

152,481106,292
1,594
38,283
44,953(3,188)340,415

ｴ194,163

ｴ197,140$ 1,831,726

Millions of yen
2004
AssetsCurrent assets:
Cash and time deposits (Note 15) ......................................................
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 14) ........................................................
Other current assets ............................................................................
Total current assets ...................................................................
Property, plant and equipment (Note 7):
Land ...................................................................................................
Buildings and structures .....................................................................
Machinery and equipment ..................................................................
Construction in progress .....................................................................
Less: Accumulated depreciation ..........................................................

Investment and other assets:
Investment securities (Notes 3 and 7) .................................................
Investments in unconsolidated subsidiaries and affiliates (Note 3) ..........
Long-term loans..................................................................................
Deferred income taxes (Note 14) ........................................................
Other assets (Note 7) ..........................................................................
Allowance for doubtful accounts ........................................................

See accompanying notes.

2004 ANNUAL REPORT

16

2003

Thousands of
U.S. dollars (Note 1)
2004¥34,184
5,264¥45,494
5,566$322,491
49,660

11,23624,923
5,462
9,646
238
4,482
16,041
111,476

13,87929,4597,244
11,553356
4,251
10,758
128,560

106,000
235,123
51,52891,0002,245
42,283
151,330
1,051,660

Long-term debt (Notes 6 and 7) .........................................................
Employees’ severance and retirement benefits (Note 8) ..........................
Reserve for retirement allowance for directors
and corporate auditors ...................................................................
Deferred income tax on revaluation reserve for land ...........................
Other long-term liabilities ..................................................................

14,432
17,377

10,387
10,931

136,151
163,934

581
469
58

641
469
240

5,481
4,425
547

Minority interests ....................................................................................
Contingent liabilities (Note 10)
Shareholders’ equity (Note 9):
Common stock ...................................................................................
Authorized— 576,000,000 shares
Issued and outstanding— 246,252,704 shares in 2004
— 202,025,158 shares in 2003
Capital surplus ....................................................................................
Retained earnings ...............................................................................
Revaluation reserve for land, net of tax ...............................................
Net unrealized holding gains on securities ..........................................
Foreign currency translation adjustment.............................................
Less: Treasury stock .............................................................................
Total shareholders’ equity ..............................................................

2,001

9,085

18,877

17,07017,070161,038

14,362
13,148
433
4,299
(394)
(1,149)47,76912,751
5,756
433
1,145
(316)
(12)
36,827

135,490
124,038
4,085
40,557(3,717)(10,840)
450,651

ｴ194,163

ｴ197,140$ 1,831,726

Millions of yen
2004
Liabilities and shareholders’ equity
Current liabilities:
Short-term borrowings (Notes 5 and 7) ..............................................
Current portion of long-term debt (Notes 6 and 7)............................
Payables:Trade notes ....................................................................................
Trade accounts ...............................................................................
Due to unconsolidated subsidiaries and affiliates...........................
Advances received from customers ......................................................
Accrued income taxes .........................................................................
Accrued bonuses .................................................................................
Other current liabilities ......................................................................
Total current liabilities ...................................................................

2004 ANNUAL REPORT

17

CONSOLIDATED STATEMENTS OF
INCOMEMEIDENSHA CORPORATION AND CONSOLIDATED SUBSIDIARIES
Years ended March 31, 2004, 2003 and 2002

2004

Millions of yen
2003

2002

Thousands of
U.S. dollars (Note 1)
2004

Net sales (Note 13) .........................................

¥181,560¥184,853¥200,075$1,712,830

Cost of sales (Notes 12 and 13) .....................
Selling, general and administrative
expenses (Notes 12 and 13) ....................

141,187

145,113160,016

1,331,953

35,06836,32236,525

330,830

Operating income .................................

5,305

3,418

3,534

50,047

545
(907)

420
(1,020)588(1,106)

5,142(8,557)

971
(1)
(191)
23
—
—

4
(2,633)
(134)
8
7,263
(3,197)39(5,243)
(40)
3
—
—

9,160
(9)
(1,802)
217
—
—

225
(1,754)—(3,126)—(1,323)

2,123(16,547)

4,216

1,003

(3,548)39,774

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

347
1,183
1,530
351

858
(901)
(43)
122

1,101
(932)
169
189

3,274
11,16014,434
3,312

Net income (loss) .................................

¥2,335¥924¥(3,906)$22,028

2004

Yen
2003

2002

U.S. dollars (Note 1)
2004¥10.14
3.00

¥4.58
—

¥(19.34)
—

$0.10
0.03

Other income (expenses):
Interest and dividend income ...............................
Interest expense.....................................................
Gains on sales of marketable securities andinvestment securities .........................................
Write-down of securities .......................................
Loss on disposal of fixed assets ..............................
Gain on sales of property, plant and equipment .........
Gain from division of corporation (Note 16) .......
Loss from division of corporation (Note 17) ........
Gains on the release from the substitutional
portion (Notes 2 and 8) ......................................
Others ...................................................................
Income (loss) before income taxes
and minority interests ......................
Income taxes (Note 14):
Current .................................................................
Deferred ................................................................

Amounts per share of common stock (Note 2):
Net income (loss) ..................................................
Cash dividends applicable to the year ...................
See accompanying notes.

2004 ANNUAL REPORT18

CONSOLIDATED STATEMENTS OF
SHAREHOLDERS’ EQUITY
MEIDENSHA CORPORATION AND CONSOLIDATED SUBSIDIARIES
Years ended March 31, 2004, 2003 and 2002

Balance at March 31, 2001 ...........................................
Net loss ....................................................................
Bonuses to directors and corporate auditors ............
Increase in retained earnings due toreduction of affiliated company ............................
Decrease in retained earnings due toaddition of consolidated subsidiaries ....................
Adjustments from translation of foreign
currency financial statements ................................
Adoption of new accounting standard forfinancial instruments ............................................
Increase in treasury stock .........................................
Decrease in retained earnings due toreduction of consolidated subsidiaries ..................
Balance at March 31, 2002 ...........................................
Net income ..............................................................
Bonuses to directors and corporate auditors ............
Increase in retained earnings due toaddition of affiliated companies ............................
Increase in retained earnings due toaddition of consolidated subsidiaries ....................
Adjustments from translation of foreign
currency financial statements ................................
Increase in treasury stock .........................................
Increase in revaluation reserve for land, net of tax ......
Decrease in net unrealized holding gains on
securities ...............................................................
Balance at March 31, 2003 ...........................................
Increase (decrease) due to merger ...........................
Net income ..............................................................
Bonuses to directors and corporate auditors ............
Decrease in retained earnings due to reductionof affiliated company ............................................
Adjustments from translation of foreign
currency financial statements ................................
Increase in treasury stock .........................................
Increase in net unrealized holding gains on
securities ...............................................................
Balance at March 31, 2004 ...........................................

Balance at March 31, 2003 ...........................................
Increase (decrease) due to merger ...........................
Net income ..............................................................
Bonuses to directors and corporate auditors ............
Decrease in retained earnings due to reduction .......
of affiliated company ............................................
Adjustments from translation of foreign
currency financial statements ................................
Increase in treasury stock .........................................
Increase in net unrealized holding gains on
securities ...............................................................
Balance at March 31, 2004 ...........................................

Millions of yen
Retained RevaluationNet
earnings reserve forunrealized
land, net holding gainsof taxon securities¥8,968¥423¥—(3,906)
—
—
(75)
—
—

Number ofsharesissuedCommonstock

Capitalsurplus

Foreign
Treasurycurrency
stocktranslation
adjustment¥(323)
¥(0)
—
—
—
—

202,025,158——¥17,070——¥12,751
—
—

—

—

—

61

—

—

—

—

—

—

—

(376)

—

—

—

—

—

—

—

—

—

—

(39)

—

—
—

—
—

—
—

—
—

—
—

1,159
—

—
—

—
(3)

—
202,025,158———
17,070———12,751
—
—

(7)
4,665
924
(46)

—
423
—
—

—
1,159
—
—

—
(362)
—
—

—
(3)
—
—

—

—

—

16

—

—

—

—

—

—

—

197

—

—

—

—

—
—
—

—
—
—

—
—
—

—
—
—

—
—
10

—
—
—

46
—
—

—
(9)
—

—
202,025,158
44,227,546———
17,070————12,751
1,611
—
—

—
5,756
5,061
2,335
(1)

—
433
—
—
—

(14)
1,145
(117)
—
—

—

—

—

(3)

—

—

—

—

—
—

—
—

—
—

—
—

—
—

—
—

(78)
—

—
(23)

—
246,252,704—¥17,070—¥14,362—¥13,148

—
¥433

3,271
¥4,299——¥(394) ¥(1,149)

Number ofsharesissuedCommonstock

202,025,158
44,227,546——$161,038———

Thousands of U.S. dollars (Note 1)
CapitalRetained RevaluationNet
surplusearnings reserve forunrealized
land, net holding gainsof taxon securities$120,292$54,302$4,085$10,802
15,19847,745—(1,104)—22,028
—
—
—
(9)
—
—

Foreign
Treasurycurrency
stocktranslation
adjustment$(2,981) $(113)— (10,510)
—
—
—
—

—

—

—

(28)

—

—

—

—

—
—

—
—

—
—

—
—

—
—

—
—

(736)
—

—
(217)

—
246,252,704—$161,038—$135,490—$124,038—$4,08530,859$40,557

—
—
(316)
(12)
— (1,114)
—
—
—
—

—
—
$(3,717) $(10,840)

2004 ANNUAL REPORT

19

CONSOLIDATED STATEMENTS OF CASH FLOWSMEIDENSHA CORPORATION AND CONSOLIDATED SUBSIDIARIES
Years ended March 31, 2004, 2003 and 2002

2004

Millions of yen
2003

2002

Thousands of
U.S. dollars (Note 1)
2004

Operating activities:
Income (loss) before income taxes and minority interests
Adjustments to reconcile income (loss) before income
taxes and minority interests to net cash provided byoperating activities:
Depreciation and amortization
Increase in allowancesInterest and dividends income
Interest expense
Gains on sales of investment securities
Gain from division of corporation
Loss from division of corporation
Write-down of securities
Merger expense
Decrease in receivables
Decrease (increase) in inventories
Increase (decrease) in payables
Other-net
Sub-total¥4,216¥1,003¥(3,548)$39,774

4,262
2,078
(545)
907
(971)
–
–
1
25
1,318
(185)
(3,996)
2,160
9,270

4,921
894
(420)
1,020
–
(7,263)
3,197
2,633
118
10,474(1,744)2,494(2,593)
14,734

4,861
1,665
(588)
1,106
(33)
–
–
5,243
–
1,548
4,132
(5,772)(2,163)
6,451

40,20819,604(5,142)
8,557(9,160)––9236
12,434(1,745)(37,698)
20,37687,453

Interest income and dividend received
Interest expense paid
Income taxes paid
Accident insurance income
Expenditures from casualty
Merger expense paid
Net cash provided by operating activities

566
(907)
(544)
–
–
(25)
8,360

422
(1,042)
(480)
–
–
(101)
13,533559(1,094)(1,344)
7
(153)
–
4,426

5,340
(8,557)(5,132)––(236)
78,868

(650)

(779)

(6,881)(6,132)

3,580(4,375)34983(8,801)421

5,577(4,300)877

33,774(41,274)–(646)(1,998)(306)
10(8,859)–141(5,042)–(6,094)(18,849)(10,135)
9,579(6,984)(453)(7,993)(33)(1,664)
10,919–¥9,255(2,137)
2,744(9,179)(1,273)(9,845)(22)(5,193)
15,581531¥10,919

2,439
4,672
(8,512)303(1,098)34(1,680)17,150111¥15,581(95,613)90,368(65,887)(4,274)(75,406)(311)(15,698)
103,009–$87,311

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 equipment93
Proceeds from sales of securities issued by subsidiaries
which caused the change of consolidation scope
Other-net
Net cash used in investing activities
Financing activities:
Increase (decrease) in short-term bank loans
Proceeds from long-term debt
Repayment of long-term debt
Other-net
Net cash used in financing activities
Effects of exchange rate changes on cash
Net decrease 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 (Note 15)
See accompanying notes.

2004 ANNUAL REPORT

20

Notes to Consolidated
Financial Statements
MEIDENSHA CORPORATION AND CONSOLIDATED SUBSIDIARIESMarch 31, 2004, 2003 and 2002

1. Basis of Presenting
Consolidated Financial
Statements

verted into U.S. dollars at this or any other rate of exchange.

The accompanying consolidated financial statements
have been prepared in accordance with the provisions
set forth in the Japanese Securities and Exchange Law
and its related accounting regulations, and in conformity with accounting principles generally accepted inJapan, which are different in certain respects as to application and disclosure requirements of International Financial Reporting Standards.
The accounts of overseas subsidiaries are based on
their accounting records maintained in conformity withgenerally accepted accounting principles prevailing in
the respective countries of domicile. The accompanying consolidated financial statements have been restructured and translated into English (with some expanded
descriptions and the inclusion of consolidated statementsof shareholders’ equity) from the consolidated financial
statements of the Company prepared in accordance withJapanese GAAP and filed with the appropriate Local
Finance Bureau of the Ministry of Finance as requiredby the Securities and Exchange Law. Some supplementary information included in the statutory Japanese language consolidated financial statements, but not required
for fair presentation, is not presented in the accompanying consolidated financial statements.
The translation of the Japanese yen amounts into
U.S. dollars are included solely for the convenience ofthe reader outside Japan, using the prevailing exchange
rate at March 31, 2004, which was ¥106 to U.S. $1.
The convenience translations should not be construed
as representations that the Japanese yen amounts havebeen, could have been, or could in the future be, con-

2. Summary of Significant
Accounting Policiesa) Principles of Consolidation
The accompanying consolidated financial statements
include the accounts of the Company and its 28 consolidated subsidiaries in 2004 (28 in 2003 and 24 in2002). All significant intercompany accounts and transactions have been eliminated on consolidation. The
Company’s remaining subsidiaries, whose net and grossassets and net sales are not significant in the aggregate inrelation to the comparable figures in the consolidated
financial statements, have not been consolidated.
In the elimination of investments in subsidiaries, theassets and liabilities of the subsidiaries, including the
portion attributable to minority shareholders, are evaluated using the fair value when the Company acquired
control of the respective subsidiaries.

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 year ended
March 31, 2004, 2003 and 2002.
Investments in five affiliated companies are accounted for by the equity method in 2004, investments
in six affiliated companies are accounted for by the equity method in 2003, and investments in an affiliatedcompany are accounted for by the equity method in
2002. Investments in all unconsolidated subsidiaries
and other affiliated companies, that would not have2004 ANNUAL REPORT

21

material effect on the consolidated financial statements,
are stated at cost.

c) Securities
The Company and its consolidated subsidiaries examine the intent of holding each security and classify
those securities 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 subsidiaries
and affiliated companies, and (d) all other securities thatare not classified in any of the above categories (hereafter,“available-for-sale securities”).
The Company and its subsidiaries do not have trading securities and held-to-maturity debt securities. Equity securities issued by subsidiaries and affiliated companies which are not consolidated or accounted for using the equity method are stated at the moving-averagecost. Available-for-sale securities 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 isrecognized as loss in the period of the decline. If the fairmarket value of equity securities issued by unconsolidated subsidiaries and affiliated companies not accounted
for on the equity method is not readily available, suchsecurities should be written down to net asset value witha corresponding charge in the statement of income inthe event net asset value declines significantly. In thesecases, such fair market value or the net asset value willbe the carrying amount of the securities at the beginning of the next year.
Effective April 1, 2001, the Company and its con-solidated subsidiaries applied a new accounting requirement for available-for-sale securities with available fairmarket values under the accounting standard for financial instruments which was adopted in the previous year.
Available-for-sale securities with available fair market values are stated at fair market value. Unrealized gains
and unrealized losses on these securities are reported,
net of applicable income taxes, as a separate componentof shareholders’ equity. Realized gains and losses on saleof such securities are computed using the moving-average cost.
As a result of applying the new accounting requirement, as at March 31, 2002, net unrealized holding
gains on securities increased by ¥1,159 million, deferredincome taxes decreased by ¥708 million, and minority
interests in the balance sheets decreased by ¥118 million.

d) Derivatives and Hedge Accounting
Derivative financial instruments are stated at fairvalue, and the Company and its consolidated subsidiaries 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 Company and its
consolidated subsidiaries defer recognition of gains orlosses resulting from changes in fair value of derivative
financial instruments until the related 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 areaccounted for in the following manner:
1. If a forward foreign exchange contract is executed to hedge
an existing foreign currency receivable or payable,

2004 ANNUAL REPORT

22

(a) the difference, if any, between the Japanese yenamount of the hedged foreign currency receivable orpayable translated using the spot rate at the inception
date of the contract and the book value of the receivable or payable is recognized in the statement of income in the period which includes the inception date,and(b) the discount or premium on the contract (that is, thedifference between the Japanese yen amount of thecontract translated using the contracted forward rate
and that translated using the spot rate at the inception date of the contract) is recognized over the termof the contract
2. If a forward foreign exchange contract is executed tohedge a future transaction denominated in a foreign
currency, the future transaction will be recorded using the contracted forward rate, and no gains or losseson the forward 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 are stated at cost, which is mainly determined by the average method as to raw materials andsupplies and the specific identification method as to finished products, semi-finished products and work in process.

f ) Property, Plant and Equipment and Depreciation
Depreciation is mainly 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 over estimated useful lives.

g) Impairment of Fixed Assets
In the year ended March 31, 2004, the Company
and its consolidated subsidiaries did not adopt early
the new accounting standard for impairment of fixed
assets (“Opinion Concerning Establishment of Accounting Standard for Impairment of Fixed Assets” issues by the Business Accounting Deliberation Council
on August 9, 2002) and the implementation guidance
for accounting standard for impairment of fixed assets(the Financial Accounting Standard Implementation
Guidance No. 6 issued by the Accounting Standards
Board of Japan on October 31, 2003).

h) Allowance for Doubtful Accounts
The Company and its consolidated subsidiaries provide the allowance for doubtful accounts in an amountsufficient to cover possible losses on collection by estimating individually uncollectible amounts and applying a percentage based on collection experience to theremaining accounts.

i) Employees’ Severance and Retirement Benefits
The Company and its consolidated subsidiaries provide two types of severance and retirement benefit plans,
unfunded lump-sum payment plans and funded contributory pension plans, under which all eligible employees are entitled to benefits based on the level ofwages 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 ac-

2004 ANNUAL REPORT

23

tuarially calculated using certain assumptions.
The Company and its consolidated subsidiaries provided allowance for employees’ severance and retirement
benefits based on the estimated amounts of projected
benefit obligation and the fair value of the plan assets atthe balance sheet date.
Prior service costs are recognized in expenses in equalamounts over the average of the estimated remaining
service lives of the employees, and actuarial gains andlosses are recognized in income or expenses using thestraight-line method over the average of the estimatedremaining service lives commencing with the following
period.
Employees of Japanese companies are compulsorily
included in the Welfare Pension Insurance Scheme operated by the government. Employers are legally required
to deduct employees’ welfare pension insurance contributions from their payroll and to pay them to the government together with employers’ own contributions.
For companies that have established their own Employees’ Pension Fund which meets certain legal requirements, it is possible to transfer a part of their welfare
pension insurance contributions (referred to as the “substitutional portion” of the government’s Welfare Pension
Insurance Scheme) to their own Employees’ Pension
Fund under the government’s permission and supervision.
Based on the newly enacted Defined Benefit Corporate Pension Law, the Company and some domestic consolidated subsidiaries decided to restructure their Employees’ Pension Fund and were permitted by the Minister of Health, Labor and Welfare on October 29, 2003
to be released from their future obligation for payments
for the substitutional portion of the Welfare Pension
Insurance Scheme. Pension assets for the substitutional
portion maintained by the Employees’ Pension Fund are

to be transferred back to the government’s scheme.
The Company and some domestic consolidated subsidiaries applied the transitional provisions as prescribedin paragraph 47-2 of the JICPA Accounting Committee
Report No. 13, “Practical Guideline for Accounting ofRetirement Benefits (Interim Report)”, and the effect oftransferring the substitutional portion was recognizedon the date permission was received from the Ministryof Health, Labor and Welfare. As the result, in the year
ended March 31, 2004, the Company and some consolidated domestic subsidiaries recorded gains on the release from the substitutional portion of the government’s
Welfare Pension Insurance Scheme amounting to ¥225
million ($2,123 thousand), which was calculated basedon the amount of the substitutional portion of the projected benefit obligations as of the permission date, therelated pension assets determined pursuant to the government formula, and the related unrecognized items.

j) Income Tax
The Company and its consolidated subsidiaries recognize tax effects of temporary differences between the
carrying amounts of assets and liabilities for tax and financial reporting. The provision for income taxes iscomputed based on the pretax income included in the
consolidated statement 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.
Effective from the year ended March 31, 2003, theCompany and some subsidiaries adopted consolidated
tax return system. The Company and some subsidiaries
account and represent in accordance with “Temporary
Treatment of Accounting for Tax Effects to Be Applied

2004 ANNUAL REPORT24

Under Consolidated Tax Return System (No.1),” issued
by the Accounting Standards Board of Japan on October 9, 2002, and “Temporary Treatments of Accounting
for Tax Effects to Be Applied Under Consolidated tax
Return System (No.2),” issued by the Accounting Standards Board of Japan on February 6, 2003.

k) Treasury Stock and Statutory Reserves
Effective April 1, 2002, the Company adopted the
new accounting standard for treasury stock and reversalof statutory reserves (Accounting Standards Board Statement No. 1, “Accounting Standard for Treasury Stockand Reversal of Statutory Reserves,” issued by the Accounting Standards Board of Japan on February 21,2002).
The effect on net income of the adoption of the new
accounting standard was not material.
l) Amounts Per Share of Common Stock
The computation of net income (loss) per share isbased on the weighted average number of shares of common stock outstanding during the year.
For the years ended March 31, 2004, 2003 and 2002,
diluted net income per share was not shown since the Company had no securities with dilutive effect.
Cash dividends per share presented in the consoli-

dated statements of income represent actual amounts
applicable to the years.
Effective April 1, 2002, the Company and its consolidated subsidiaries adopted the new accounting standard for net income per share and related guidance (Accounting Standards Board Statement No. 2, “Accounting Standards for Earnings Per Share” and Financial Standards Implementation Guidance No. 4, “Implementation Guidance for Accounting Standard for Earnings Per
Share,” issued by the Accounting Standards Board ofJapan on September 25, 2002).
The effect on net income per share of the adoptionof the new accounting standard was immaterial.

m)Statements of Cash Flows
In preparing the consolidated statements of cash
flows, cash on hand, readily-available deposits and shortterm highly liquid investments with maturities that do
not exceed three months at the time of purchase, areconsidered to be cash and cash equivalents.

n) Reclassifications
Certain prior years’ amounts have been reclassified
to conform to 2004 presentation. These changes had no
impact on previously reported results of operations orshareholders’ equity.

2004 ANNUAL REPORT

25

3. Securities
A. The following table summarizes acquisition costs and book values of securities with fair value as of March 31,
2004 and 2003.
(a) Available-for-sale securities;
Millions of yen
Acquisition Book Difference
2004
cost
value
Securities with book value (fair value) exceeding acquisition cost:
Equity securities¥7,357 ¥14,574¥7,217
Bonds
517
531
14
Total
¥7,874 ¥15,105¥7,231
Securities with book value (fair value) not exceeding acquisition
cost:
Equity securities
¥635
¥543
¥(92)
Bonds
110
100
(10)
Total
¥745
¥643
¥(102)

Thousands of U.S. dollars
Acquisition Book Difference
2004
cost
value
Securities with book value (fair value) exceeding acquisition cost:
Equity securities$69,406 $137,491 $68,085
Bonds
4,877
5,009
132
Total
$74,283 $142,500 $68,217
Securities with book value (fair value) not exceeding acquisition
cost:
Equity securities$5,991$5,123$(868)
Bonds
1,037
943
(94)
Total
$7,028$6,066$(962)

Millions of yen
Acquisition Book Difference
2003
cost
value
Securities with book value (fair value) exceeding acquisition cost:
Equity securities¥4,123¥6,812¥2,689
Bonds
352
365
13
Total
¥4,475¥7,177¥2,702
Securities with book value (fair value) not exceeding acquisition
cost:
Equity securities¥4,500¥3,617¥(883)
Bonds
2,229
2,065
(164)
Others
102
95
(7)
Total
¥6,831¥5,777 ¥(1,054)

B. The following table summarizes book values of securities without fair value as of March 31,
2004 and 2003.
(a) Available-for-sale securities;

Money management fundNon-listed foreign securities
Non-listed equity securities
Others

2004
¥—
108
715
1

Millions of yen
2003
¥152
52
684
21

Total

¥824

¥909

2004
¥635
10,632¥11,267

Millions of yen
2003¥81
10,786¥10,867(b) Equity securities issued by subsidiaries and affiliated companies;

Non-listed securities for subsidiaries
Non-listed securities for affiliated companies
Total

Book value
Thousands of U.S. dollars
2004
$—
1,019
6,745
10
$7,774
Book value
Thousands of U.S. dollars
2004$5,990100,302$106,292

2004 ANNUAL REPORT26

C. Maturities of available-for-sale securities with maturities as of March 31, 2004 and 2003.
Year ended
March 31, 2004
Bonds

Year ended
March 31, 2003
Bonds

Year ended
March 31, 2004
Bonds

Within 1 year
¥409

Millions of yen
Over 1 year but
Over 5 years but
within 5 years
within 10 years
¥218
¥22

Over 10 years¥91

Within 1 year
¥744

Millions of yen
Over 1 year but
Over 5 years but
within 5 years
within 10 years¥1,093¥20

Over 10 years¥573

Within 1 year
$3,859Thousands of U.S. dollars
Over 1 year but
Over 5 years but
within 5 years
within 10 years$2,057$208

Over 10 years$857

D. Total sales amounts of available-for-sale securities sold, gains and losses, in the years ended March 31, 2004,
2003 and 2002 are follows:

Sales amount
Gains
Losses2004¥3,752971
31

Millions of yen
2003
¥362
4
63

2002
¥2,882
39
68

Thousands of U.S. dollars
2004$35,396
9,160
292

4. Inventories
Inventories as of March 31, 2004 and 2003 were as follows.

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

Millions of yen
2004
2003
¥1,954¥2,7003,370
4,087
19,941
18,7601,851
1,710

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

¥27,116¥27,257

Thousands of
U.S. dollars
2004$18,434
31,792
188,123
17,462$255,811

2004 ANNUAL REPORT

27

5. Short-Term Borrowings
Short-term borrowings are bank loans and represented by notes. The weighted average interest rate was 1.2% as ofMarch 31, 2004 and 1.1% as of March 31, 2003.

6. Long-Term Debt
Long-term debt as of March 31, 2004 and 2003 consisted of the following.

1.12% to 3.0% loans from banks and insurance companies ...........................
Less: Current portion ......................................................................................

Millions of yen
2004
2003
¥19,696¥15,953(5,264)(5,566)

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

¥14,432

Thousands of
U.S. dollars
2004$185,811(49,660)¥10,387$136,151

Millions of yen

Thousands of
U.S. dollars¥5,264
6,802
5,918
955
522
235

$49,660
64,17055,830
9,009
4,925
2,217

Millions of yen
2004
2003
¥542
¥672
63
74
2,627
3,021
3,403
3,010
39
39
¥6,674¥6,816

Thousands of
U.S. dollars
2004$5,113594
24,78332,104368$62,962

The annual maturities of long-term debts as of March 31, 2004 were as follows.
Year ended March 31
2005........................................................................................................................................
2006........................................................................................................................................
2007........................................................................................................................................
2008........................................................................................................................................
2009........................................................................................................................................
2010 and thereafter .................................................................................................................

7. Pledged Assets
The following assets were pledged as collateral at March 31, 2004 and 2003.

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

Obligations with collateral pledged at March 31, 2004 and 2003 were as follows.

Short-term borrowings
Long-term debt
Total

Millions of yen
2004
2003
¥2,325¥2,7372,500
3,700¥4,825¥6,437

Thousands of
U.S. dollars
2004$21,934
23,585$45,519

2004 ANNUAL REPORT

28

8. Employees’ Severance and Pension Benefits
The Company and its consolidated subsidiaries adopted the accounting standard for employees’ severance andretirement benefits, under which the liabilities and expenses for severance and retirement benefits are determinedbased on the amounts obtained by actuarial calculations.
The liabilities for severance and retirement benefits included in the liability section of the consolidated balance
sheets as of March 31, 2004 and 2003 consist of the following:

Projected benefit obligation .....................................................................................
Unrecognized prior service costs ..............................................................................
Unrecognized actuarial differences ..........................................................................
Prepaid pension cost ................................................................................................
Less fair value of pension assets ...............................................................................
Less unrecognized net transition obligation ............................................................
Liability for severance and retirement benefits ........................................................

Millions of yen
2004
2003
¥52,100¥82,835
2,443—(4,488)(18,848)—64(13,225)(25,921)(19,453)(27,199)¥17,377¥10,931

Thousands of
U.S. dollars
2004$491,509
23,047(42,339)—(124,764)(183,519)$163,934① The Company and some domestic consolidated subsidiaries applied the transitional provisions as prescribed inparagraph 47-2 of the JICPA Accounting Committee Report No.13, “Practical Guideline for Accounting of Retirement Benefits (Interim Report)”, and the effect of transferring the substitutional portion was recognized on the datepermission was received from the Ministry of Health, Labor and Welfare.
The amount of pension plan assets expected to be transferred back to the government approximated to ¥18,608
million ($175,547 thousand) as at March 31, 2004.
② The prior service costs have occurred due to the change in the MEIDENSHA employee’s pension fund agreement in theyear ended March 31, 2004.
Included in the consolidated statements of income for the years ended March 31, 2004, 2003 and 2002 are severance and retirement benefit expenses comprising the following:

Service costs – benefits earned during the year ........................................................
Interest cost on projected benefit obligation ...........................................................
Expected return on plan assets .................................................................................
Amortization of prior service costs ..........................................................................
Amortization of net transition obligation ................................................................
Amortization of actuarial differences .......................................................................
Employee’s contribution ..........................................................................................
Severance and retirement benefit expenses ..............................................................

Millions of yen
2004
2003
¥3,202¥3,645
1,665
2,528
(236)
(853)
(41)
(4)
1,930
2,459
857
489
(244)
(564)
¥7,133¥7,7002002¥3,606
2,652(1,217)
(5)
2,547
433
(583)
¥7,433Thousands of
U.S. dollars
2004$30,20715,708(2,226)(387)
18,2078,085(2,302)$67,292

Amortization of net transition obligation amounted to ¥496 million and amortization of actual differences amounted
to ¥2,277 million due to division of corporation for the year ended March 31, 2003 are not included in the abovetable. These amounts are included in loss from division of corporation.
The discount rate and the rate of expected return on plan assets used by the Company and its consolidated subsidiaries are mainly 2.7% and 2.0% for 2004, 2.7% to 3.5% and 3.5% to 4.5% for 2003, and 3.5% and 3.5% to 4.5%
for 2002, respectively.
The estimated amount of all retirement benefits to be paid at the future retirement date is allocated equally to eachservice year using the estimated number of total service years. Prior service costs are recognized as an expense in equalamounts over 10 years for 2004 and over 14 years for 2003 and 2002, and actuarial gains/losses are recognized in thestatement of income using the straight-line method over 13 to 15 years for 2004, and over 10 to 15 years for 2003 and2002, respectively.
2004 ANNUAL REPORT

29

9. Shareholders’ Equity
Under the Commercial Code of Japan, the entire amount of the issue price of shares is required to be accounted for
as capital, although a company may, by resolution of its Board of Directors, account for an amount not exceeding onehalf of the issue price of the new shares as additional paid-in capital, which is included in capital surplus.
Under the Commercial Code, certain amounts of retained earnings equal to at least 10% of cash dividends andother cash appropriations shall be appropriated and set aside as a legal earnings reserve until the total amount of legal
earnings reserve and additional paid-in capital equals 25% of common stock. The total amount of legal earnings
reserve and additional paid-in capital of the Company has been reached to 25% of common stock, and therefore theCompany is not required to provide legal earnings reserve any more. The legal earnings reserve and additional paid-in
capital may be used to eliminate or reduce a deficit by resolution of the shareholders’ meeting or may be capitalized byresolution of the Board of Directors. On condition that the total amount of legal earnings reserve and additional paidin capital remains being equal to or exceeding 25% of common stock, they are available for distribution by the resolution of shareholders’ meeting. Legal earnings reserve is included in retained earnings in the accompanying financial
statements.
The maximum amount that the Company can distribute as dividends is calculated based on the nonconsolidated financial statements of the Company in accordance with the Commercial Code.

10. Contingent Liabilities
Contingent liabilities at March 31, 2004, were as follows.
Repurchase of note discounted and endorsed .........................................................................
Guarantees of loans from banks to employees and unconsolidated subsidiaries
and affiliates ..........................................................................................................................

Millions of yen¥1,691Thousands of
U.S. dollars$15,953

697

6,575

11. Lease Information:(1) Financial leases, which do not transfer ownership of properties to lessees, are not capitalized and are accounted forin the same manner as operating leases. Certain related information are summarized as follows:(i) Assumed amounts (inclusive of interest) of acquisition cost, accumulated depreciation and net book value
as of March 31, 2004 and 2003, are summarized as follows.
Millions of yen
2004
2003
Assumed acquisition cost
Machinery and equipment ............................................................
Others ...........................................................................................
Accumulated depreciation ..................................................................

Thousands of
U.S. dollars
2004

¥300
1,702
(894)

¥162
1,611
(897)

$2,83016,057(8,434)¥1,108¥876$10,453

2004 ANNUAL REPORT

30

(ii) Future minimum lease payments, inclusive of interest, at March 31, 2004 totaled ¥1,108 million ($10,453
thousand), including ¥371 million ($3,500 thousand) due within one year.
(iii) Lease payments, which are equal to assumed depreciation charges for the years ended March 31, 2004,
2003 and 2002, were ¥511 million ($4,821 thousand), ¥365 million and ¥438 million, respectively.
(iv) Assumed depreciation charges are computed using the straight-line method over lease terms assuming noresidual value.
(2) Future operating lease payments under non-cancelable operating leases as of March 31, 2004 totaled ¥923 million($8,708 thousand), including ¥268 million ($2,528 thousand) due within one year.

12. Research and Development Expenses
Research and development expenses are charged to income as incurred. The amount charged to income for theyears ended March 31, 2004, 2003 and 2002 stood at ¥6,794 million ($64,094 thousand), ¥7,012 million, and¥8,765 million, respectively.

13. Segment Information
Industry segments:

The Company and its consolidated subsidiaries operate principally in five industrial sectors: Energy, Environment,
Info and Communications, Industrial Systems, and Other sectors.
Information by industry segments for the years ended March 31, 2004, 2003 and 2002 are as follows:Year ended
March 31, 2004
Net sales:
Outsidecustomers
Inter-segment
Total
Operating expenses
Operating income(loss)
Identifiable assets
Depreciation andamortization
Capital expenditures

Millions of Yen
Industrial
Systems
Others

Total

EnergyEnvironment

Info andCommunications

Eliminations or
Corporate
Consolidated¥ 47,732¥ 47,707¥ 21,279¥ 32,797¥ 32,045¥ 181,560¥ ––¥ 181,560

3,197
50,92951,724

1,683
49,39042,5552,474
23,75323,0084,223
37,02037,773

26,51358,55857,29638,090219,650
212,356(38,090)(38,090)(36,101)––
181,560
176,255¥ (795)¥ 6,835¥ 74 5¥ (753)¥ 1,262¥ 7,294¥ (1,989)¥ 5,305¥ 38,280¥ 22,447¥ 20,543¥ 29,325¥ 23,776¥ 134,371¥ 59,792¥ 194,163

1,037

210

705

630

537

3,119

1,143

4,262

1,284

223

603

459

437

3,006

1,711

4,717

2004 ANNUAL REPORT

31

Year ended
March 31, 2003
Net sales:
Outsidecustomers
Inter-segment
Total
Operating expenses
Operating income(loss)
Identifiable assets
Depreciation andamortization
Capital expenditures

Year ended
March 31, 2002
Net sales:
Outsidecustomers
Inter-segment
Total
Operating expenses
Operating income(loss)
Identifiable assets
Depreciation andamortization
Capital expenditures

Year ended
March 31, 2004
Net sales:
Outsidecustomers
Inter-segment
Total
Operating expenses
Operating income(loss)
Identifiable assets
Depreciation andamortization
Capital expenditures

Millions of Yen
Industrial
Systems
Others

Total

EnergyEnvironment

Info andCommunications¥ 56,760¥ 47,809¥ 14,550¥ 32,547¥ 33,187¥ 184,853¥ ––¥ 184,853

3,948
60,70860,9832,477
50,28642,654

3,284
17,83420,203

4,115
36,66237,85030,014
63,201
61,436

43,838228,691
223,126(43,838)(43,838)(41,691)––
184,853
181,435¥ (275)¥ 7,632¥ (2,369)¥ (1,188)¥ 1,765¥ 5,565¥ (2,147)¥ 3,418¥ 44,053¥ 25,318¥ 20,430¥ 26,179¥ 38,653¥ 154,633¥ 42,507¥ 197,140

1,555

269

805

625

631

3,885

1,036

4,921

1,278

270

974

2,665

665

5,852

1,522

7,374

Millions of yen
Industrial
Systems
OthersTotal

Eliminations or
Corporate
Consolidated

EnergyEnvironment

Info andCommunications¥ 71,587¥ 47,397¥ 13,595¥ 32,634¥ 34,862¥ 200,075¥ ––¥ 200,075

4,712
76,29974,8992,320
49,717
41,613

2,908
16,503
19,776

3,976
36,61038,68735,47470,33668,43349,390249,465
243,408(49,390)(49,390)(46,867)––
200,075
196,541¥ 1,400¥ 8,104¥ (3,273)¥ (2,077)¥ 1,903¥ 6,057¥ (2,523)¥ 3,534¥ 54,342¥ 23,772¥ 18,363¥ 28,472¥ 34,649¥ 159,598¥ 45,623¥ 205,221

1,221

204

711

694

824

3,654

1,207

4,861

1,251

402

672

2,196

494

5,015

1,302

6,317

Thousands of U.S. dollars
Industrial
Systems
OthersEliminations or
Corporate
Consolidated

EnergyEnvironment

Info andCommunications$ 450,302$450,066$200,745$309,405$302,312$1,712,830$–$1,712,830

30,160480,462
487,962

15,877465,943
401,462

23,340224,085
217,057

39,840349,245356,349

250,123
552,435
540,528

359,340
2,072,170
2,003,358(359,340)(359,340)(340,575)–
1,712,830
1,662,783$(7,500)$64,481$7,028$(7,104)$11,907$68,812$(18,765)$50,047$361,132$211,764$193,802$276,651$224,302$1,267,651$564,075$1,831,726

9,783

1,981

6,651

5,943

5,067

29,425

10,78340,208

12,113

2,104

5,689

4,330

4,122

28,35816,14244,500Total

Eliminations or
Corporate
Consolidated

Geographic information and overseas sales are not disclosed due to its insignificance.

2004 ANNUAL REPORT

32

14. Income Taxes
The Company and its consolidated subsidiaries are subject to a number of taxes based on income, which in aggregate, resulted in normal statutory tax rates of approximately 42.69%, 42.69% and 40.87% for the years ended March
31, 2004, 2003 and 2002, respectively.
The following table summarizes the significant differences between the statutory tax rate and the Company’s effective tax rate for financial statement purposes for the years ended March 31, 2004, 2003 and 2002.
Statutory tax rate
Permanent difference (Social expenses, etc.)
Per capita inhabitant tax
Net decrease in valuation allowance
Decrease (increase) in deferred tax assets due to thechange of statutory tax rate
Increase in division of corporation
Decrease in net operating loss carry forwards of subsidiaries due toadoption of consolidated tax return system
Other-net
Effective tax rate

2004
42.69%
6.06
2.61(31.20)2003
42.69%
11.35
14.08(233.83)

2002
–%
–
–
–

6.65
–

(8.83)
116.15

–
–

9.32
0.16
36.29%

56.90(2.79)–4.28%–––%

Difference between the statutory tax rate and the Company’s effective tax rate for the year ended March 31, 2002
is not shown due to loss before income taxes.
Significant components of deferred tax assets and liabilities of the Company and its consolidated subsidiaries as ofMarch 31, 2004 and 2003 are as follows.
Millions of yen
2004
2003
Deferred tax assets:
Net operating loss carry forwards .......................................................................
Allowance for retirement benefits .......................................................................
Unrecognized intercompany profit .....................................................................
Bonuses ..............................................................................................................
Other ..................................................................................................................
Gross deferred tax assets ..................................................................................
Less: Valuation allowance ...................................................................................
Deferred tax liabilities:
Deferred gain on sales of property for tax purpose .............................................
Unrealized holding gains on securities ...............................................................
Deferred gain from division of corporation .......................................................
Other ..................................................................................................................
Gross deferred tax liabilities ............................................................................
Net deferred tax assets .....................................................................................

Thousands of
U.S. dollars

2004¥3,343
6,313
172
1,779
2,164
13,771(1,604)
12,167¥8,520
3,569
3,609
1,504
1,819
19,021(2,956)
16,065$31,538
59,557
1,622
16,783
20,415
129,915(15,132)
114,783

–
2,830
1,131
5
3,966
¥8,201

1,322
690
1,127
80
3,219
¥12,846–
26,698
10,67047
37,415$77,368

As of March 31, 2003, the statutory tax rate in Japan was estimated to be changed to 39.54% effective April 1,
2004 because of amendment to the Japanese local tax law. The effects on the consolidated financial statements for2003 resulted in a decrease of ¥150 million in long-term deferred tax assets (net of long-term deferred tax liabilities),
an increase of ¥162 million in income taxes-deferred, an increase of ¥11 million in net unrealized holding gains on
securities, a decrease of ¥15 million in deferred income tax liabilities on revaluation reserve for land, an increase of ¥5
million in minority interests, and an increase of ¥9 million in revaluation reserve for land.

2004 ANNUAL REPORT

33

The statutory tax rate in Japan effective April 1, 2004 finally was decided as 39.69% which has been used for the
calculation of deferred tax assets and liabilities for the year ended March 31, 2004. The effect on the consolidated
financial statements of this change was not material.
By adoption of consolidated tax return system, during the consolidated accounting fiscal years which start during
the period from April 1, 2002 through March 31, 2004, it became necessary to add 2% of the surtax rate on theconventional the corporate tax. Reflecting this change, in calculating the deferred tax asset and deferred tax liability theaddition of surtax rate 2% was taken into account.
Due to this change, effective tax rate for the corporate tax in the fiscal 2003 to be used in the calculation of thedeferred tax asset and the deferred tax liability is mainly changed from 27.37% to 29.20%. The amount of deferred
tax asset at the end of the fiscal 2002 (amount deducting the deferred tax liability) showed the increase of ¥232 million
and the decrease of ¥232 million in the adjustment amount relating to corporate tax, etc. in the fiscal 2002.

15. 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, 2004 and 2003 are as follows:
Millions of yen
Cash and time deposits
Short-term securities
Other current assets (repurchase agreement)
Bonds with maturities of exceeding three months
Cash and cash equivalents

2004¥9,255–––¥9,255

2003¥10,427
1,011
320
(839)
¥10,919

Thousands of
U.S. dollars
2004$87,311–––$87,311

16. Gain from Division of Corporation
Gain from division of corporation for the year ended March 31, 2003 was due to transferring the substation
business of the Company to Japan AE Power Systems Corporation.

17. Loss from Division of Corporation
Loss from division of corporation for the year ended March 31, 2003 consisted of the following:
Millions of yen
Recognized actuarial differences
Recognized net transition obligation
Loss on disposal of inventories
Other¥2,277496
255
169¥3,197

2004 ANNUAL REPORT34

18. Related Party Transactions
Significant transactions with related parties for the years ended March 31, 2004 and 2003 are as follows:Year ended March 31, 2004

Millions of yen
Purchase of finished products

Accounts payable¥6,936
5,541¥3,336
2,026

Japan AE Power Systems Corporation
Japan Motor & Generator Co., Ltd.
Year ended March 31, 2004

Thousands of U.S.dollars
Purchase of finished products

Accounts payable$65,434
52,274$31,472
19,113

Japan AE Power Systems Corporation
Japan Motor & Generator Co., Ltd.
Year ended March 31, 2003
Japan AE Power Systems Corporation
Japan Motor & Generator Co., Ltd.

Millions of yen
Purchase offinished products

Accounts
payableSupply ofMaterial

Accounts
receivable

Division of
corporation¥5,5594,662¥4,5482,313¥1,855
4,585

¥823
1,702

¥7,263—19. Subsequent Event
On May 31, 2004, the board of directors of the Company approved that the Company would subscribe to a basic
agreement concerning the sale of the Company’s shares of Shinko Seisakusho Co., Ltd., a consolidated subsidiary, to
Ace Denken Co., Ltd. And the Company subscribed to the agreement.
The following appropriations of retained earnings at March 31, 2004 were approved at the annual general meetingof shareholders of the Company held on June 25, 2004.
Year-end cash dividends (¥3.00 or $0.03 per share) ................................................................
Bonuses to directors and corporate auditors ...........................................................................

Millions of yen¥738
28

Thousands of
U.S. dollars$6,962264

20. Other Matters
In connection with collusion in sewer projects, 13 local governments including Machida City filed suit against nine
provider companies including the Company seeking damages totaling 2,062 million yen (including attorney’s fees but
not including interest of 5% per year). Settlements were reached with the exception of the suits involving Machida
City, and the lawsuits have been dismissed.
Of the cases that were settled, those in the Osaka High Court and the Saitama District Court were settled by theCompany for payments of 24 million yen and 29 million yen, respectively, in settlement payments and attorney’s fees.
We are working towards settling the pending Machida City cases.

2004 ANNUAL REPORT

35

INDEPENDENT AUDITORS’ REPORTTo the Board of Directors of MEIDENSHA CORPORATION:
We have audited the accompanying consolidated balance sheets of MEIDENSHA CORPORATION andconsolidated subsidiaries as of March 31, 2004 and 2003, and the related consolidated statements of income, shareholders’ equity and cash flows for each of the three years in the period ended March 31, 2004,
expressed in Japanese yen. These consolidated financial statements are the responsibility of the Company’s
management. Our responsibility is to independently express an opinion on these consolidated financial
statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in Japan. Thosestandards require that we plan and perform the audit to obtain reasonable assurance about whether thefinancial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing
the accounting principles used and significant estimates made by management, as well as evaluating theoverall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present fairly, in all material
respects, the consolidated financial position of MEIDENSHA CORPORATION and subsidiaries as ofMarch 31, 2004 and 2003, and the consolidated results of their operations and their cash flows for each of
the three years in the period ended March 31, 2004, in conformity with accounting principles generally
accepted in Japan.
Without qualifying our opinion, we draw attention to the following.
(1) As discussed in Note 2(c) to the consolidated financial statements, effective April 1, 2001,
MEIDENSHA CORPORATION and domestic subsidiaries adopted the new Japanese accounting
requirement for available-for-sale securities with available fair market values under the accounting
standard for financial instruments, which was adopted in the previous year.
(2) As discussed in Note 19 to the consolidated financial statements, MEIDENSHA CORPORATION
subscribed a basic agreement concerning the sale of the Company’s shares of Shinko Seisakusho Co.,
Ltd. to Ace Denken Co., Ltd. on May 31, 2004.
The U.S. dollar amounts in the accompanying consolidated financial statements with respect to the year
ended March 31, 2004 are presented solely for convenience. Our audit also included the translation of yen
amounts into U.S. dollar amounts and, in our opinion, such translation has been made on the basis described in Note 1 to the consolidated financial statements.
Tokyo, Japan
June 25, 2004

2004 ANNUAL REPORT36

OVERSEAS OFFICES AND AFFILIATES(As of July, 2004)● Overseas office● Affiliate

CHINA

KOREA

THAILAND● SHANGHAI MEIDENSEMICONDUCTOR CO., LTD.
53-1A, No.311, Fu Te Nan Lu,
Wai Gao Qiao Free Trade Zone,
Shanghai 200137, P.R.China
Phone: 21-50483681
Facsimile: 21-50483035● MEIDENSHACORPORATIONRoyal Building. No.410,
5 Dangju-Dong, Chongro-ku,
Seoul, Korea
Phone: 2-736-0232~3
Facsimile: 2-736-0234

HONG KONG

MALAYSIA● MEIDEN PACIFIC (CHINA)LTD.
Unit 01-02A, 16/F Tower 1,
Ever Gain Plaza,88 Container Port Road,
Kwai Chung, N.T., Hong Kong
Phone: 2503-2468
Facsimile: 2887-8046● MEIDEN ELECTRIC
ENGINEERING SDN. BHD.
G. 03, Ground Floor, Wisma Academy,
4A, Jalan 19/1, 46300 Petaling Jaya,
Selangor Darul Ehsan, Malaysia
Phone: 3-79554646
Facsimile: 3-79546466● THAI MEIDENSHA CO., LTD.
11th Floor, TST Tower Building,
21 Viphavadi-Rangsit Road,
Soi Chuei Phung, Ladyao, Jatujak,
Bangkok 10900, Thailand
Phone: 2-273-8954~61
Facsimile: 2-273-8966● MEIDEN ELECTRIC(THAILAND) LTD.
898 Moo 2, Bangpa-in lndustrial
Estate, Udomsorayuth Rd., Klongjig,
Bangpa-in, Ayudhaya 13160, Thailand
Phone: 35-258258~262
Facsimile: 35-221388

INDONESIA● P.T. MEIDEN ENGINEERING INDONESIA
19th Floor, Summitmas I,
Jl. Jenderal Sudirman Kaveling 61-62,
P.O.BOX 6920/KBY/Summitmas I
Jakarta Selatan 12190, Indonesia
Phone: 21-520-0612
Facsimile: 21-520-0240

SINGAPORE● MEIDEN ASIA PTE. LTD.
5, Jalan Pesawat, Jurong Industrial
Estate, Singapore 619363
Phone: 6268-8222
Facsimile: 6264-4292● MEIDEN SINGAPORE PTE.
LTD.
5, Jalan Pesawat, Jurong Industrial
Estate, Singapore 619363
Phone: 6268-8222
Facsimile: 6264-4292● SP SYSTEM PTE. LTD.
No.14 Penjuru Close
Singapore 608610
Phone: 6268-8222
Facsimile: 6264-4292

THE UNITED KINGDOM● MEIDEN EUROPE LTD.
New Wave Complex,
Bradbourne Drive, Tilbrook,
Milton Keynes MK 7 8BN, England,
U.K.
Phone: 1908-276000
Facsimile: 1908-276010

THE UNITED STATES● MEIDEN AMERICA, INC.
27000 Meadowbrook Road,
Meadowbrook Corporate Park,
Suite #209, Novi, Michigan 48377,
U.S.A.
Phone: 248-305-9903
Facsimile: 248-305-9904

2004 ANNUAL REPORT37

CONSOLIDATED SUBSIDIARY COMPANIESSHINKO SEISAKUSHO CO., LTD.
Capital ¥800 million
Manufacture, sales, and maintenance ofcommunication equipment, peripherals andterminals
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
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 ¥130 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 ¥100 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

MEIDEN SOFTWARE CORPORATION
Capital ¥90 million
Engineering and programming of software
809, Oka-Isshikitorimachi, Numazu-shi,
Shizuoka 410-0012 Japan
Phone: 559-23-4966 Fax: 559-23-1191

MEIDEN FOUNDRY INDUSTRIAL Co., Ltd.

MEIDEN HOIST SYSTEM COMPANY, LTD.

Capital ¥50 million

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

Capital ¥400 million
Manufacture and sales of hoists
1-17, Osaki 2-chome, Shinagawa-ku, Tokyo
141-0032 Japan
Phone: 3-3492-1201 Fax: 3-3492-1943

MEIDEN SYSTEM ENGINEERING Co., Ltd.

MSA Co., Ltd.

Capital ¥50 million
System engineering of plants
Meiko Building, 5-5, Osaki 5-chome,
Shingawa-ku, Tokyo 141-8616 Japan
Phone: 3-5487-6500 Fax: 3-5487-6516

Capital ¥400 million
Manufacture and sales of surge arresters
515, Kaminakamizo, Higashimakado-aza,
Numazu-shi, Shizuoka 410-0865 Japan
Phone: 559-29-4300 Fax: 559-29-4399

Meiden Kankyo Service Co., 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※ MEIDEN SINGAPORE PTE. LTD.

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

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.
Capital ¥20 million
Machining and repairing service
127, Nishishinmachi,
Oota-shi, Gunma 373-0847 Japan
Phone: 276-20-6371 Fax: 276-32-7999

MEIDEN MEDIAFRONTCORPORATION
Capital ¥40 million
Printing and copy service
Maruki Building, 13-7, Nishigotanda 1-chome,
Shinagawa-ku, Tokyo 141-0031 Japan
Phone: 3-3490-4767 Fax: 3-3779-3083

Capital S$10 million
Manufacture and sales of transformers,
switchgears and circuit-breakers andrelated engineering and constructing
service

Capital TB10 million
Engineering and constructing service※ MEIDEN ELECTRIC (THAILAND) LTD.
Capital TB70 million
Manufacture and sales of switchgears※ P.T.MEIDEN ENGINEERING INDONESIA
Capital US$320 thousand
Engineering and constructing service※ MEIDEN EUROPE LTD.
Capital £750 thousand
Sales of electric products and components※ MEIDEN PACIFIC (CHINA) LTD.
Capital HK$10 million
Sales of electric products and components, and constructing service

Plus five domestic subsidiaries.
※ Please see page 37 to find contact
information for overseas offices andaffiliates.

Meiden Sheet Metal Products Corporation
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

2004 ANNUAL REPORT38

CORPORATEDATABOARD OF DIRECTORS(As of June 25, 2004)

CORPORATE NAMEMEIDENSHACORPORATION(Kabushiki Kaisha Meidensha)

CHAIRMANPRESIDENT

Shigeo Seko

Keiji Kataoka

EXECUTIVEVICE
PRESIDENTEXECUTIVEVICE
PRESIDENT

Koji Yano

Kensuke Ikuji

EXECUTIVEVICE
PRESIDENTEXECUTIVEVICE
PRESIDENT

Masaaki Oishi

Masaoki Hino

HEAD OFFICE
Riverside Building, 36-2,
Nihonbashi Hakozakicho,
Chuo-ku, Tokyo 103-8515 Japan

FOUNDED
1897

COMMON STOCK
Authorized
Issued

576,000,000 shares
246,252,704 shares¥17,070 million($161,038 thousand)

SHAREHOLDERS
24,088TRANSFER AGENTThe Sumitomo Trust & Banking
Co., Ltd.

DIRECTOR AND
SENIOR MANAGINGEXECUTIVE OFFICER

Kennosuke Goto

DIRECTORS

Tetsuro Kawakami

Kenzo Nakamura

SENIOR CORPORATE AUDITORS

Tadashi Sanada

Shigeo Takeuchi

CORPORATE AUDITORS

Masayuki Tsubonoya

Nobuyuki Watanabe

2004 ANNUAL REPORT

39