Profile
Ever since its founding in 1897, Meidensha Corporation
has been working on the relentless pursuit of new technology
and product developments and witnessed steady growth.
Our product offerings cover a wide area, such as generators,
substation equipment, electronic equipment and informationequipment. Our mission is not only to provide these products
but also to recommend the best solutions on the basis of whata customer values best. In order to realize these best solutions,
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.

Contents
Financial Highlights

3

Message from Management

4

Topics6

Operating Performance Highlights

9Overseas Operations

11

R & D Highlights

12

Financial Section

14

Overseas Affiliates

40

Corporate Data

43

Board of Directors

43

FINANCIAL HIGHLIGHTS
Years ended March 31

Millions of yen

Thousands of U.S. dollars

2009

2008

2007

2009

¥198,798¥203,515¥194,194$2,028,551

Net income (loss)(1,083)

2,405

2,314

(11,051)

Net income (loss) per share (yen, U.S. dollars)(4.77)

10.59

10.18

(0.05)

908

1,363

1,137

9,265

214,165

236,415

223,386

2,185,357

7,133

6,825

6,775

—

Net sales

Cash dividends paid
Total assets
Number of employees

The consolidated figures in this Annual Report are expressed in yen and solely for the convenience of thereader, translated into United States dollars at the rate of ¥98 = U.S.$1, the approximate exchange rate prevailingon the Tokyo Foreign Exchange Market as of March 31, 2009. See Note 1 to Consolidated Financial Statements.

Net Sales (¥ millions)

Net Income (Loss)(¥ millions)

250,000

4,000

Total Assets (¥ millions)
250,000

3,252
200,000

203,515
198,798
194,194
183,747

200,000

2,314 2,405

236,415
223,386
214,165
201,2742,000
150,000

150,000

100,000

100,000
0

50,00050,000(1,083)00–2,000
06

07

08

09

06

07

08

09

06

07

08

09

Annual Report 20093

Message from Management
We, at Meidensha Corporation (“Meiden”) and its consolidated
subsidiary companies (collectively the “Meiden Group” or “theCompany”), share the same corporate philosophy. The mission
is: “Illuminating a more affluent tomorrow.” The value is:“For customer peace of mind and satisfaction.” Meiden Grouppositively seeks to produce innovations in technology andnew values to realize a more vibrant society and better living
conditions in the future. For customer satisfaction and assurance,
we produce eco-friendly designs and approaches. We strongly
promote courteous customer-support service. With top quality
products and services, we hope to help our customers in solving
their various problems and in realizing their dreams.
Meiden Group products form a broad spectrum, from powersystems, substation equipment, and electronic products to
information and communication products. We not only performthe manufacturing and sales of these products, but also engage
in the solutions business in Japan. This process includes finding
customer-driven optimum solutions and offering engineering,system operations, and system maintenance and management torealize these solutions. Out of our business operations, we would
like to positively seek to offer solutions to the various challenges of
our times, such as the Global Climate Control problem. Throughour contributions to building a more affluent future society,we would like to live up to our social responsibilities and seek
sustainable growth as a company.
From the beginning of fiscal 2008, the Japanese economy
continued to lose steam, but starting in September, the subprime loan problem triggered a worldwide financial crisis
and a sudden economic slowdown that could be viewed as a
global recession. Overall enterprise performance significantly
deteriorated and the landscape of capital investment reflected
the slowdown, while personal consumption became sluggish.
This clearly marked that the economic setback had became a
reality, and the economy became quite challenging. The heavy
electrical industry market in Japan saw decreases in public
investment and a further decline of capital investment in private
sector demand due to spending cuts, so that demand and pricedeterioration continued. Demand also reduced significantly
in overseas markets, due to the above factors, so the businessclimate continues to be challenging.

4

Annual Report 2009

Under these economic conditions, the Company madevigorous across-the-board efforts to boost sales, but in spite ofthis, sales for fiscal 2008 totaled ¥198,797 million (consolidated
basis), a 2.3% decrease from the previous fiscal year.
With respect to earnings, we made efforts in raisingproductivity, but due to the price hike of raw materials, net income(loss) before income taxes came to ¥1,377 million (consolidated)
and a net income (loss) for the year came to ¥1,083.5 million(consolidated). Year-end dividends were 4 yen per share.
As for future economic conditions, it is difficult to predict
when the Japanese and foreign market recession will hit bottom,
and the economic outlook is still foggy. Demand in the heavy
electrical industry in Japan has been sluggish, due to decreases
in public spending and private sector spending cuts following
the recession, so that price deterioration is still there. For thatreason, the economic environment for the Meiden Group remains
quite challenging.
Under these conditions, the Company drew up POWER 5, a
new medium-term management plan for solid growth. POWER
5 is a five-year plan, running from fiscal 2009 to fiscal 2013, withthe slogan, “The challenge of the Meiden Group: Contributing tosociety through the “power” of manufacturing excellence.” Thedetails of specific programs are as follows:(1) Realize high growth and new business development
In preparing for the low-carbon society of the future, wewill shift our heavy electrical engineering resources technology
into new areas. To be specific, we will develop new businesses
by entering into component businesses, such as drive units
for pure electric vehicles, power conversion products, electric
double layer capacitors, products for wind turbine applications,and other component products; we have to make these thegrowth drivers.
(2) Develop business further in the private sector andoverseas markets
Accelerating new product development for the private sector
and overseas markets, overseas production, consolidation of
our business and affi liated companies, and human resources
development programs will give us a competitive advantage; wewould also like to develop new markets.

(3) Improve profitability through selection andconcentration
With “component products” and “private sector demand andoverseas markets” as our core business fields, we will put ourmanagement resources into these selected areas.
(4) Enhance the power of manufacturing excellence
We believe that “the power of manufacturing excellence”
refers to the overall strength of manufacturing, covering R & D,
sales and marketing and services. We would like to increase
these collective powers by working together to improve ourstrengths.

(CSR) by contributing to climate control and energy-savings with
our products and services.
By implementing POWER 5, we aim to provide peace ofmind and the best product experience to our customers throughour products and services for social infrastructure building
and the general industry and at the same time, we will try to
generate high earnings. We also aim to be a company where
each individual employee can work with pride for a higher levelof job satisfaction.
We ask every shareholder, as well as our customers andbusiness partners, to give us your continuous support andadvice.

(5) Constantly promote CSR management
We will try to reduce the gas emissions that are a result of ourcorporate activities and fulfi ll our corporate social responsibility

Keiji Kataoka, Chairman

Junzo Inamura, President

Annual Report 20095

The Start of Our Medium-Term
Management Plan “POWER 5”
The Company drew up its medium-term management plan, titled “POWER 5”, a five-year plan starting in fiscal 2009,
and we started implementation of this program from April 1, 2009, at the All Meiden Group level.

The five basic principles of POWER 5:

Phase 1 (Fiscal 2009- Fiscal 2010)

1 Establish high growth and new businesses

We anticipate a challenging business environment due to thesluggish market, but in order to achieve new growth, we willfurther restructure or downsize our non-performing businesses
and establish the quality and systems that will allow us toconcentrate management resources in the businesses that wewill focus on.

2 Further develop the private sector and overseas markets businesses
3 Improve profitability through “selection and focus”
4 Enhance the “Power of Manufacturing Excellence”
5 Constantly promote CSR management

The Duration and Policy:

Phase 2 (FY2011-FY2013)

The five years are divided into periods in which we will
lay the groundwork in building a future growth platform(Phase 1) and a period of growth and expansion based onthat platform (Phase 2), and we will try to develop ourbusinesses and reinforce our competences.

Drawing on the growth platform that we built during Phase 1,
we will concentrate R&D spending on the focused businesses,
promote the consolidation of production hubs, and increasefacility investment. All of these efforts will contribute to producing
higher earnings.

Specific implementations:(1) Focused business development for high growth and a new business field
We will select and expand component products that can contribute to a low-carbon society

Electric double-layer
capacitor business

Motor drive unit businessfor pure electric vehicle

Power conversion
product business

Component businessfor wind turbines

Vacuum capacitor
business

Traction substation
business

Water processing business(Develop a water treatment systembusiness (including overseas
markets and Japanese industrial
sector market)

Dynamometer andlogistics systembusiness(2) New business development for our
existing heavy electrical businessWe will adopt strategies that allow us tomaintain our current level of earnings in our
existing heavy electrical business. We will employ
our rich engineering resources, experiences andtrack records and servicing powers in newmarkets in this market segments.

By combining the five (5) power sources of POWER: Productivity, Organizational power and Worldwide presence,
Environmental problem solving, and Resources (human resources), we aim to produce a company with “the passion for
manufacturing excellence.”

6

Annual Report 2009

New Business Development for Wind
Power Business Field▼ Meiden Customer Center that monitors the wind turbine
operations 24 hours a day and seven days a week (24/7)▲ Generator for a wind turbine by
Japan Steel Works, Ltd.

Our Company has been involved in the wind power business field since 2002. We sold wind power systems and related
facilities to wind farm operators in Japan. We also provide maintenance services after the commercial operation of eachwind power project. Our wholly owned subsidiary, M Winds Co., Ltd., has two wind farm projects in Japan selling a total
28,500 kW of power to the power utilities.
Now we are supplying 2 MW generators for a wind turbine that Japan Steel Works, Ltd. (“JSW”) manufactures andsells. We also provide maintenance services for JSW’s wind power systems.
Drawing on our long-standing generator manufacturing technology and our rich experience in maintenance services,
our nationwide maintenance networks, and our latest systems offering 24/7 remote-monitoring service, we would like todevelop a new business in this challenging renewable energy market.

Annual Report 20097

Entered into discussions with Ono Sokki for a future
automotive testing business alliance▼ Meiden: Engine bench(liquid-cooled dynamometer)▲ Ono Sokki, operation and measurement,
control panels

In order to build a mutually strong and broad cooperative relationship in the area of automotive testing, our Company
and Ono Sokki Co., Ltd. (“Ono Sokki”, President & CEO, Mr. Masamichi Ono) decided to enter into business discussions
on such a business alliance.
The main objective of this alliance is to combine Ono Sokki’s measurement, control, and analysis technology with
Meiden’s mechanical and control technology to create a technological synergy.
We would like to utilize tangible and intangible management resources, such as mutual technology and production
facilities, to introduce high value to products for the peace of mind and best product experiences of the customers through“the passion of manufacturing excellence.”
Our aim is to create new innovations and added value for a competitive advantage in markets in Japan and abroad, sothat we can provide world top-class technologies and products.

8

Annual Report 2009

Social Infrastructure Systems Business Sector
The Japanese economic slowdown from the latter half of fiscal 2008 caused a sharp decrease in private sector demand, but orderlevels for the Environmental Engineering Segment, which includes our water processing systems, etc., equaled the levels of the preceding
year. Revenue from the previous fiscal year orders contributed greatly and the final sales results showed an increase over those of theprevious fiscal year.

Power, Railways & Private Sector Business Segment
Due to a recession in the Japanese Market, the businessclimate experienced a continuous challenging situation
as demand for facility investments, such as private sector
manufacturing plants, decreased.
For new business development under
this business climate, we are working on
Traction power substation
business development in the renewable
Protection relay andenergy fields. We are manufacturing thecontrol panel for“Shinkansen line”
generator for a wind turbine by Japan
substations
Steel Works, Ltd., and are also working
on the business development of a microGenerator for a wind turbine
Electric double-layer capacitor-based
grid system linking solar power.
by Japan Steel Works, Ltd.

Power-conditioning systems

dynamic voltage compensator

Environment Engineering Segment
We had strong replacement order demands for the major
electrical systems for drinking water treatment plants andsewage treatment plants. We newly developed a sewage water
treatment system for the private sector and a new monitoring
control system for water processing facilities. We are working
on business development for these systems. We aim to develop
the water processing business in overseas markets in the future
and are working together with the government and academic
institutions in Japan. We joined the Global Water Recycle System
Association (GWRA) in Japan to learn necessary information
for building a platform for future business development of thewater processing business in the overseas market.

WATERCUBE
Membrane filtration systemfor drinking water production

Monitoring and control systems

International Business Segment
The worldwide recession and the strong yen put us into avery challenging business situation. We are working harder todevelop the T & D business for power utilities in our overseas
markets and the traction substation business for railway
projects. We are also working to develop an overseas businessfor products for the renewable energy business and for the
CATENARY EYE, an on-board trolley line inspection unit.

DC circuit breaker
for railroads

On-board trolleyline inspection unit,
CATENARY EYEIndustrial Systems Business Sector
Reflecting the drastic slowdown of the Japanese economy during the second half of fi scal 2008, the business climate became morechallenging due to spending cuts in private sector capital investment.

Information and Communications Business
Segment
Demand in our major market sector, the semiconductor
manufacturing equipment market, remained sluggish. We areworking hard by improving high-value product offerings: aslim size controller, a new series of desktop industrial PCs, andproducts for improving web security.

Pulsed power generator

Vacuum capacitors

Industrial controllerµPIBOC-I

Annual Report 20099Motor Drive Application Business Segment
We are working on the business development of motor
drive unit sales utilizing the electric double layer capacitor
for energy-savings by using regenerative power. We are facing
a very challenging market due to spending cuts in capital
investment. We are working on business development bycapitalizing on the rising demand for the motor drive units
for pure electric vehicles. We are preparing for the mass
production of these products.

Motor controller
for forklifts

Motor drive unit for pure electric vehicle

Dynamometer System Business Segment
After December 2008, major automakers in Japanannounced an increasing number of postponements or
freezes of automotive testing facility projects, and this put
us in a very challenging business situation. We are working
to improve our product development for a testing systemfor eco-friendly cars such as pure electric vehicles or hybridcars. These cars have major growth potential. We also enteredinto a discussion with Ono Sokki Co., Ltd., in Japan over analliance in the automotive testing field. In such a way, we arelaying the groundwork for future business growth.

Hyper Dynamometer

Low-speed
PM Dynamometer

Engineering System Business Sector
Maintenance Service and Facility Management
Service Segment
In addition to our existing services of maintenance andinspection of electrical facilities in Japan, we are actively
seeking new service fields, which include maintenanceservices for wind power systems, energy-saving consulting
services, facility life extension services and retrofit orrenovation services for aged facilities based on our facility
apparatus health diagnosis service.

Maintenance Service for Semiconductor
Manufacturing Equipment Segment
Due to the drastic decline in the demand for semiconductor
products, some semiconductor manufacturers in Japan opted
for a temporary shutdown of production lines. This put
us in a very challenging situation. We are reinforcing ourservice offerings by providing contract maintenance andinspection services for semiconductor production lines forsemiconductor device manufacturers.

Real Estate Business Segment
We are conducting a real estate business service primarilyout of ThinkPark Tower, a business and commercial building
located in Osaki, Shinagawa City, Tokyo.

ThinkPark Tower

10

Annual Report 2009

4WD Chassis Dynamometer

During fiscal year 2008, the global economy faced asevere recession after the fi nancial crisis in September
2008, symbolized by the Lehman Brothers default and therescue of American Insurance Group (AIG). China, India
and the Middle East continued to maintain growth while
all of the advanced countries marked negative growth
for the first time since the World War II. The emerging
markets were hard hit by the financial crisis. The global
GDP contracted more than 6% during fiscal 2008.
The Middle East showed weak growth of around 2.5%.
It faced a decline in oil prices and some area of the Gulf
region experienced a credit crunch caused by the financial
crisis.
Southeast Asia, which is Meidensha Corporation’s
major market, posted about a 2% growth in fiscal 2008.
Singapore was hard hit by the fi nancial crisis and theworldwide recession and showed a negative GDP growthin fiscal 2008
The US power sector showed about a 5% drop in total
net power generation due to the decline of US industrial
production. There was a significant drop in coal-firegeneration, on the scale of around 14%. There was anincrease in hydroelectric power generation (around 18%)
and wind power generation (around 35%.)
The automotive industry in the US experienced its
worst sales decline since fiscal 1992. US auto sales for fiscal
year 2008 were around 9 million vehicles. US automakers
suffered from the impact of the US financial crisis.
Major products ordered in fiscal year 2008 were as
follows:
In the field of power generation, GE Aero Energy
Products in Texas placed orders as part of a long-term
purchasing contract for generators for GE LM6000 gas
turbine.
In the field of utility power substations, we also received
orders for mobile substations for the Middle East.
In the field of electric railroad substations, we received
orders for expansion and modification work of the existing
traction substations in the South Asia and the Middle East.

In the North American automotive market, we received
orders for 4WD chassis dynamometers, drive-train test
systems, and end-of-line test systems for automaker’s
technical centers and factories.
In the Asia-Pacific automotive market (outside Japan),we received orders for motor test systems for hybrid
electric vehicles, and chassis dynamometers for auto andmotorcycle makers’ technical centers in Asia.
The major products manufactured and shipped during
fiscal year 2008 were as follows:
In the field of substations, we supplied substationequipment for the Middle East.
In the field of electric railroad substations, we shippedand installed traction substation equipment for the Middle
East.
In the North American automotive market, weshipped and supplied 8 test systems for automobiles,
truck transmissions, engines, and vehicles for several
customers.
In the Asia-Pacific automotive market (outside Japan),
we also shipped and supplied 8 test systems for automobiles,
truck engines, and vehicles for several customers.
In another noteworthy event in our overseas operations,we opened a second factory at Meiden Hangzhou Drive
Systems Co., Ltd. (MHD) on October 23, 2008. Hangzhou
is the capital of Zhejiang Province in China and is located180 km southwest of Shanghai. MHD is our manufacturing
hub for motor production in China. MHD’s main productoffering is motors for elevators. With about 3,000 square
meters of factory building space, the newly completed
MHD factory has a production capacity of 6000 PM
motors per year.
On September 19, 2008, there was a special ceremonycommemorating the 10th Anniversary of Meiden Electric(Thailand) Ltd. (MET) in Bangkok, Thailand. MET
is located in Bangpa-in, near Bangkok, and produces
switchgears for the Asian market.

Annual Report 200911

R&D at the Meiden Group focuses on two fronts: the development of core technologies and the development ofelemental technologies. Both are based on a long-term view. The following are the highlights of the main R&D activities
in fiscal 2008:

Developments in Core Technologies
We are conducting R&D on the key materials for our products. We are developing eco-friendly new insulationmaterials and a catalyst that converts methane gas into its chemical components. We are also conducting R&D on productlife diagnostic technology to determine the remaining operational life of the equipment used in power generation andsubstation facilities. In order to ensure the quality of our products, we are engaged in quality review of the materials or
products using chemical analysis methods, fault analysis, diagnosis of facility deterioration, support for developmentof materials, optimization of design parameters for electrical and mechanical design, and two-dimensional and threedimensional multi-computation technology for analyzing the magnetic fields of rotating machinery. We are also conducting
fundamental research on the development of parallel and distributed computation processing technology, increase ofsoftware programming productivity, development of remote web-monitoring products to monitor power conversion
products, etc., development of an effective operational planning model for the energy system, and development of effective
control technology for energy systems, etc.

Developments in Elemental Technologies
We are also working on the performance increase of the electric double-layer capacitor (“EDLC”) to save energy, andthe development of EDLC-applied systems or products. The Company is reinforcing its product offerings for the quality
power markets using such EDLC-applied systems or products. We are also planning to obtain certification in the leading
safety standards for such systems or products for export markets. We are also improving the performance of our pureozone gas generator, whose gas is 100% pure ozone gas, free from heavy metals. We are also developing a semiconductor
manufacturing process application area that best utilizes our pure ozone feature.

12

Annual Report 2009

Contents
Consolidated Financial Review

14Five-year Summary

14

Operational Review

15

Consolidated Balance Sheets

16

Consolidated Statements of Operations

18

Consolidated Statements of Shareholders’ Equity/
Changes in Net Assets

19

Consolidated Statements of Cash Flows20

Notes to Consolidated Financial Statements

21

Independent Auditors’ Report

39

CONSOLIDATED FINANCIAL REVIEW
Outline of Business Performance

Financial Conditions

During this consolidated fiscal year, the economic
downturn that began in March, 2008 has continued on.
The severity of the downturn increased after September
2008, as the subprime mortgage crisis developed into aworldwide financial crisis, causing what could be called a
global depression. It has become clear that we are in the
midst of an economic recession and that the Company
faces a very difficult business environment. Corporate
performance has significantly worsened, there has been adecrease in demand for capital expenditures, and personal
consumption has also taken a downturn.
The heavy electrical industry market in Japan has
suffered a further decline in demand, and market prices
are in a downward trend due to several factors, the main
one being a curb in both public and private sector capital
investment. Meanwhile, in overseas markets, due to theeconomic factors described above, demand took a sharp
dive, which means that the operating environment willcontinue to be harsh for the Company.
Under these economic circumstances, results are as
follows for the Company and its consolidated subsidiaries.
Sales were ¥198,798 million (down 2.3% from the previous
fi scal year) and operating income was ¥4,085 million(down 46.1% from the previous fiscal year). Net income
declined by ¥3,488 million, resulting in a net loss of¥1,083 million.

The amount of total assets on March 31, 2009
declined by ¥22,250 million (down 9.4%) compared tothe amount of total assets on March 31, 2008, resulting
in total assets of ¥214,165 million. Due to a reduction inaccounts receivables caused by a decline in sales and orders
received, current assets declined by ¥17,859 million (down
13.6%) compared to the previous fiscal year, resulting in
total assets of ¥113,316 million at the end of the current
fiscal year. Fixed assets declined by ¥4,391 million (down
4.2%), due to the continual depreciation of property, plants,
and equipment, and to the falling stock prices of securities
held by the Company, which caused a reduction in thevalue of investment securities, resulting in fi xed assets of¥100,849 million at the end of the current fiscal year. The
amount of total liabilities at the end of the current fiscal year
was ¥161,463 million, a decline of ¥14,776 million (down
8.4%). The amount of current liabilities at the end of thecurrent fiscal year was ¥118,170 million, a decline of ¥10,586
million (down 8.2%); due to a decrease in payables. The
amount of long-term liabilities at the end of the current
fiscal year was ¥43,293 million, a decline of ¥4,190 million(down 8.8%), due to the retirement of long-term debt. The
amount of net assets at the end of the current fiscal year
was ¥52,702 million, a decline of ¥7,474 million (down
12.4%). This was due to the decrease in stock prices of
securities held by the Company and the net loss incurred
during the current fiscal year. As a result, the capital toasset ratio increased from 24.5% to 23.7% at the end of
the current fiscal year.

FIVE-YEAR SUMMARY
MEIDENSHA CORPORATION AND CONSOLIDATED SUBSIDIARIES (years ended March 31)
2009

2008

Millions of yen
2007¥198,798¥203,515¥194,194¥183,747¥185,442

Net income (loss)(1,083)

2,405

2,314

3,252

5,113

Net income (loss) per share (yen)Net sales

14

2006

2005

(4.77)

10.59

10.18

14.12

22.33

Cash dividends paid

908

1,363

1,137

909

682

Depreciation and amortization

7,797

6,334

4,369

3,872

3,906

Total assets

214,165

236,415

223,386

201,274

180,595

Net property, plant and equipment

65,90966,822

61,52346,50135,838

Shareholders’ equity per share (yen)223.35255.31

272.20265.64232.19Annual Report 2009

OPERATIONAL REVIEWSocial Infrastructure Systems(Millions of yen)

105,340

07

08

115,345

95,395This segment includes business related to the construction of social infrastructure. We
provide solution services of all kinds in relation to electric power quality, energy conservation,and related matters, and we engage in the manufacturing and marketing of all types ofelectrical equipment involved in power generation, transmission, transforming, distribution,and other related functions, for power companies, government and other public agencies andoffices, railroads, highways, private facilities, and other such establishments.
We are also involved in the field of water supply and sewerage treatment for local governments.
Our activities include manufacturing and marketing products for the control of treatment
equipment and processes of all kinds, and for the improvement of IT networks. We are further
developing environmental solution services that include contracting for the maintenancemanagement of water treatment plants, and so on.

58.0%

09

Industrial Systems(Millions of yen)

57,047

07

08

21.4%
42,50460,456This segment includes business operations related to product systems used in the manufacturingindustry, IT, and other general industry operations. In addition to providing private industry withpower substations, motor vehicle testing systems, and logistics support systems, we engage in the
manufacture and marketing of motors, inverters, and other products for use in textile machinery,elevators, and other such equipment.
We are active in the information and telecommuni-cations field, manufacturing and marketing
component products for industrial computer and networking systems. We also provide IT solutionsin an effort to promote the greater operational sophistication and efficiency of corporations andlocal governments through the use of IT.

09

Engineering Systems(Millions of yen)

22,911

23,23722,866This segment provides services relating to the remote management and monitoring of facilities
and the proposal of measures for extending the life of facilities, energy conservation, and othersuch services related primarily to the maintenance of products we supply. We also engage inthe maintenance of semiconductor manufacturing equipment and the reconditioning of used
manufacturing equipment.

07

08

09

11.5%

Real Estate(Millions of yen)

2,740This segment includes rentals of real estate holdings, including ThinkPark(Osaki, Shinagawa City, Tokyo).

798

0
07

1.4%

08

09

Others(Millions of yen)08

15,34307

17,093

15,432This segment includes marketing companies not tied to specific business fields, and companies
that contract accounting, payroll, and other administrative functions, as well as welfare services
for employees.

7.7%

09

Annual Report 200915

CONSOLIDATED BALANCE SHEETSMEIDENSHA CORPORATION AND CONSOLIDATED SUBSIDIARIES (as of March 31, 2009 and 2008)
Millions of yen

Thousands of U.S. dollars (Note1)

2009

2008

2009

¥3,201¥10,284$32,663

Trade notes

3,272

5,209

33,388Trade accounts

58,57164,060597,663

Loans receivable and advances

2,886

4,294

29,449Due from unconsolidated subsidiaries and affiliates

2,027

4,167

20,684

Allowance for doubtful accounts(1,095)(915)(11,173)

Inventories (Note 4)

37,25337,231

380,133

Deferred income taxes (Note 14)

3,602

2,829

36,755

Other current assets

3,599

4,015

36,724

Total current assets

113,316

131,174

1,156,286

Land (Note 7)

9,251

8,211

94,398

Buildings and structures (Notes 5 and 7)

72,602

71,566

740,837

Machinery and equipment (Notes 5 and 7)

55,74554,169568,827

Construction in progress

1,354

1,533

13,816(73,043)(68,657)(745,337)

65,90966,822

672,541

Investments securities (Notes 3 and 7)

13,94819,870142,327

Investments in unconsolidated subsidiaries and affiliates (Note 3)

8,924

9,600

91,061

387

423

3,949

Deferred income taxes (Note 14)

5,054

1,884

51,571Other assets

6,714

6,737

68,510Allowance for doubtful accounts

(87)

(95)

(888)

34,94038,419356,530¥214,165¥236,415$2,185,357

AssetsCurrent assets:
Cash and time deposits (Note 15)
Receivables:

Property, plant and equipment:

Less: Accumulated depreciation
Net property, plant and equipment
Investments and other assets:Long-term loans receivable

Total investments and other assets
Total assets

See accompanying notes.

16

Annual Report 2009

Millions of yen

Thousands of U.S. dollars (Note1)

2009

2008

2009

¥42,698¥14,349$435,694—

30,000

—

6,255

2,435

63,827

Trade notes

6,882

8,347

70,224

Trade accounts

20,372

25,839207,878

Due to unconsolidated subsidiaries and affiliates

3,804

7,052

38,816

11,247

13,392

114,765

520

1,166

5,306

Accrued bonuses for employees

4,890

4,915

49,898Provision for product warranties

551

28

5,622

Liabilities and net assets
Current liabilities:
Short-term borrowings (Note 6)
Commercial paper (Note 6)
Current portion of long-term debt (Notes 6 and 7)
Payables:Advances received from customers
Accrued income taxes

679

—

6,929

Other current liabilities

Provision for loss on orders

20,272

21,234

206,857

Total current liabilities

118,170

128,757

1,205,816

Long-term debt (Notes 6 and 7)

19,987

26,233203,949

Employees’ severance and retirement benefits (Note 8)

19,342

17,193

197,367

Reserve for retirement allowance for directors and corporate auditors

124

152

1,265

Provision for environmental measures

564

567

5,755

Deferred income taxes (Note 14)

85

30

867

Long-term liabilities:

Other Long-term liabilities

3,191

3,308

32,562

Total Long-term liabilities

43,29347,483441,765

Contingent liabilities (Note 10)
Net assets (Notes 2 and 9):
Common stock
Authorized– 576,000,000 shares
17,07017,070174,184

Capital surplus

Issued and outstanding – 227,637,704 shares

13,197

13,205

134,663

Retained earnings

19,18021,625

195,714

Less:Treasury stock, at cost

(116)

(77)

(1,184)

Unrealized gains on securities, net of taxes

2,401

6,241

24,500

Unrealized losses on hedging derivatives, net of taxes

(82)

(65)

(836)

Foreign currency translation adjustment

(945)

3

(9,643)

Minority interests

1,997

2,173

20,378

Total net assets

52,70260,175

537,776¥214,165¥236,415$2,185,357

Total liabilities and net assets

Annual Report 200917

CONSOLIDATED STATEMENTS OF OPERATIONSMEIDENSHA CORPORATION AND CONSOLIDATED SUBSIDIARIES (years ended March 31, 2009, 2008 and 2007)
Millions of yen

Thousands of U.S. dollars (Note1)

2009

2008

2007

2009

Net sales (Note 13)¥198,798¥203,515¥194,194$2,028,551

Cost of sales (Notes 12 and 13)

158,403

159,094

152,731

1,616,357

Selling, general and administrative expenses (Notes 12 and 13)

36,31036,83535,238370,510

4,085

7,586

6,225

41,684

545

548

471

5,561

(1,322)(1,027)(606)(13,490)

Equity in net income of affiliated companies

150

344

180

1,531

Gain on sales of marketable securities and investment securities

11

242

272

112

Loss on devaluation of securities

(288)

(168)

(127)

(2,939)Loss on disposal of inventories

(326)

(141)

(100)

(3,327)

Loss on disposal of fixed assets

(133)

(294)

(337)

(1,357)

Gain on sales of fixed assets

118

4

217

1,204

Provision of allowance for doubtful accounts

(487)

(16)

(294)

(4,969)Loss on product warranties

(502)

—

—

(5,122)

Provision for product warranties

(522)

(53)

—

(5,327)Development working expenses for the Osaki station west exit

—

—

(93)

—

Moving expenses of office

—

(657)

—

—

(662)

(382)

—

(6,755)(2,045)(1,690)(873)(20,867)(1,378)

4,296

4,935

(14,061)

Current

891

2,143

1,325

9,092

Past

—

—

3,655

—

(1,429)(381)(2,421)(14,582)

(538)

1,762

2,559

(5,490)

243

129

62

2,480

¥(1,083)¥2,405¥2,314$(11,051)

Operating income
Other income (expenses):
Interest and dividend income
Interest expense

Restructuring charges on a consolidated subsidiary
OthersIncome (loss) before income taxes and minority interests
Income taxes (Note 14):

DeferredIncome (loss) before minority interests
Minority interests
Net income (loss) (Note 17)

Yen

U.S. dollars (Note1)

2009

2008

2007

2009

¥(4.77)¥10.59¥10.18$(0.05)

4.00

6.00

5.00

0.04

Amounts per share of common stock (Notes 2 and 17):
Net income (loss)
Cash dividends applicable to the year
See accompanying notes.

18

Annual Report 2009

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’
EQUITY/CHANGES IN NET ASSETSMEIDENSHA CORPORATION AND CONSOLIDATED SUBSIDIARIES (years ended March 31, 2009, 2008 and 2007)
Millions of yen

Shareholders’ equity at March 31,
2006 as previously reported
Reclassification due to adoptionof new accounting standards forpresentation of net assets in thebalance sheet at April 1, 2006

Number ofshares issued

Commonstock

CapitalsurplusRetainedearnings

Treasurystock,
at costUnrealized
gains onsecurities,
net of taxes

222,637,704¥17,070¥13,204¥19,743¥(32)¥10,774

13,204

19,7432,314(1,137)(32)

10,774——¥(342)(342)

Minority
interests¥60,417

1,948

1,948

1,948

62,3652,314(1,137)

222,637,704

222,637,704

17,07013,204

20,681(57)

289
11,063

(37)
(37)

269
(73)

336
2,284

Net assets at April 1, 2007
Net income
Cash dividends
Decrease in retained earnings
due to addition of consolidated
subsidiaries
Acquisition of treasury stock
Disposal of treasury stock
Net changes during the year
Balance at March 31, 2008

222,637,704

17,07013,204

20,681
2,405(1,136)(57)

11,063

(37)

(73)

2,284

(46)

(46)

(193)

(193)
(26)
1

0

(325)

222,637,704

17,0701
113,205

222,637,704

17,07013,205Total—

Net assets at April 1, 2006
Net income
Cash dividends
Bonuses to directors and corporate
auditors
Decrease in retained earnings
due to addition of consolidated
subsidiaries
Acquisition of treasury stock
Disposal of treasury stock
Net changes during the year
Balance at March 31, 2007

Net assets at April 1, 2008
Effect of changes in accounting
policies applied to foreignsubsidiaries
Net income
Cash dividends
Decrease in retained earnings
due to addition of consolidated
subsidiaries
Acquisition of treasury stock
Disposal of treasury stock
Net changes during the year
Balance at March 31, 2009

17,070

Unrealized losses Foreign currency
on hedging
translation
derivatives,
adjustment
net of taxes

(26)
1
857
64,13564,135
2,405(1,136)(325)

944
21,625

(24)
4
(20)
(77)

(4,822)
6,241

(28)
(65)

76
3

(111)
2,173

(24)
5
(3,960)60,175

21,625

(77)

6,241

(65)

3

2,173

60,1751

1(1,083)(1,363)(1,083)(1,363)

(64)
25

(8)
222,637,704¥17,070¥13,197¥19,180¥(116)

Number ofshares issued

Commonstock

CapitalsurplusRetainedearnings

Treasurystock,
at cost222,637,704$174,184$134,745$220,663$(786)(3,840)¥2,401

(17)
¥(82)

(64)
17
(4,981)¥52,702(948)¥(945)(176)¥1,997

Unrealized losses Foreign currency
on hedging
translation
derivatives,
adjustment
net of taxes$(663)$31

Minority
interests

Total$22,173$614,031

Thousands of U.S. dollars (Note 1)

Net assets at April 1, 2008
Effect of changes in accounting
policies applied to foreignsubsidiaries
Net income
Cash dividends
Decrease in retained earnings
due to addition of consolidated
subsidiaries
Acquisition of treasury stock
Disposal of treasury stock
Net changes during the year
Balance at March 31, 200910

10

(11,051)(13,908)(11,051)(13,908)

(653)
255

(82)
222,637,704$174,184$134,663

Unrealized
gains onsecurities,
net of taxes$63,684$195,714$ (1,184)(39,184)$24,500(173)$ (836)(9,674)$ (9,643)(1,795)$20,378(653)
173(50,826)$ 537,776

Annual Report 200919

CONSOLIDATED STATEMENTS OF CASH FLOWSMEIDENSHA CORPORATION AND CONSOLIDATED SUBSIDIARIES (years ended March 31, 2009, 2008 and 2007)
Millions of yen
2009

2008

Thousands of U.S. dollars (Note1)
2007

2009

Operating activities:
Income (loss) before income taxes and minority interests¥(1,378)¥4,296¥4,935$(14,061)

Depreciation and amortization

7,797

6,335

4,369

79,561

Increase (decrease) in allowances

4,020

1,891

(200)

41,020Interest and dividend income

(545)

(548)

(471)

(5,561)Equity in net loss (income) of affiliated companies

(150)

(344)

(180)

(1,531)

Interest expense

13,490Adjustments to reconcile income before income taxes to net cash
provided by operating activities:

1,322

1,027

606

Gain on sales of marketable securities and investment securities

(11)

(242)

(272)

(112)

Gain on sales of fixed assets

(118)

(4)

(217)

(1,204)

Loss on disposal of fixed assets

133

294

337

1,357

Loss on devaluation of securities

288

168

124

2,939

Decrease (increase) in receivables

6,368

2,494

(8,466)64,980Decrease (increase) in inventories(995)(7,854)(5,846)(10,153)

Increase (decrease)in payables(8,491)(2,794)

6,412(86,643)

Other-net

1,239

5,823

3,283

12,642

9,479

10,542

4,414

96,724Sub-totalInterest and dividend received

543

532

473

5,541

Interest expense paid

(1,259)(1,206)(805)(12,847)

Income taxes paid

(1,509)(5,517)(453)(15,398)

7,254

4,351

3,629

74,020

(786)

(492)

(585)

(8,020)

20

260

526

204

(7,038)(12,647)(20,312)(71,816)

Proceeds from sales of property, plant and equipment

140

65

28

1,429

Proceeds from sale of investment in consolidated subsidiary in resulting
change in scope of consolidation

—

56

—

—

Net cash provided by operating activities
Investing activities:
Purchase of marketable securities and investment securities
Proceeds from sales of marketable securities and investment securities
Purchase of property, plant and equipment

Other-net
Net cash used in investing activities(1,117)(112)(1,214)(11,399)(8,781)(12,870)(21,557)(89,602)

Financing activities:
Increase (decrease) in short-term bank loans

28,663

4,791(5,870)292,480

Increase (decrease) in commercial paper(30,000)

10,00010,000(306,122)

Proceeds from long-term debt

50

830

16,170510

Repayment of long-term debt

(2,435)(1,516)(6,358)(24,847)

Cash dividends paid

(1,388)(1,125)(1,126)(14,163)

(73)

137

186

(746)

(5,183)

13,117

13,002(52,888)

Other-net
Net cash provided by (used in) financing activities
Effects of exchange rate changes on cash and cash equivalents

(336)

71

175

(3,428)Net increase (decrease) in cash and cash equivalents(7,046)

4,669(4,751)(71,898)

Cash and cash equivalents at beginning of year

10,1695,486

10,081

103,765

—

14

156

—

¥3,123¥10,169¥5,486$ 31,867

Increase in cash and cash equivalents due to addition of
consolidated subsidiaries
Cash and cash equivalents at end of year (Note 15)

See accompanying notes.

20

Annual Report 2009

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MEIDENSHA CORPORATION AND CONSOLIDATED SUBSIDIARIES

1. Basis of Presenting
ConsolidatedFinancial Statements
The accompanying consolidated financial statementsof Meidensha Corporation (the “Company”) andits consolidated subsidiaries have been prepared inaccordance with the provisions set forth in the Japanese
Financial Instruments and Exchange Law and its related
accounting regulations, and in conformity with accounting
principles generally accepted in Japan (“Japanese GAAP”),
which are different in certain respects as to applicationand disclosure requirements of International Financial
Reporting Standards.

in the consolidated financial statements, although suchstatements were not required to be fi led with the Local
Finance Bureau.
The translations of the Japanese yen amounts into
U.S. dollars are included solely for the convenience ofreaders outside Japan, using the prevailing exchange rate on
March 31, 2009, which was ¥98 to U.S. $1. The conveniencetranslations should not be construed as representations ofwhat the Japanese yen amounts have been, could have been,or could in the future when converted into U.S. dollars at
this or any other rate of exchange.

of consolidated overseas subsidiaries are based on their

2. Summary of Significant
Accounting Policies

accounting records maintained in conformity witha)

Prior to the year ended March 31, 2009, the accounts

Principles of Consolidation

generally accepted accounting principles prevailing in the

The accompanying consolidated financial statements

respective countries of domicile. As discussed in Note 2(v)include the accounts of the Company and its 38 consolidated(1), the accounts of consolidated overseas subsidiaries for

subsidiaries in 2009 (38 in 2008 and 36 in 2007). All

the year ended March 31, 2009, are prepared in accordance

significant inter-company accounts and transactions havewith either International Financial Reporting Standards

been eliminated in consolidation. The Company’s remaining

or U.S. generally accepted accounting principles, withsubsidiaries, whose total assets, sales, net income (loss)

adjustments for the specified six items as applicable.

and retained earnings are not significant in the aggregate

The accompanying consolidated financial statements
have been reformatted and translated into English (within relation to the comparable figures in the consolidated
financial statements, have not been consolidated.

some expanded descriptions) from the consolidated

In the elimination of investments in subsidiaries,

financial statements of the Company prepared in

the assets and liabilities of the subsidiaries, including

accordance with Japanese GAAP and filed with thethe portion attributable to minority shareholders, areappropriate Local Finance Bureau of the Ministry ofevaluated using the fair value when the Company acquired

Finance as required by the Japanese Financial Instruments

control of the respective subsidiaries.

and Exchange Law. Certain supplementary information
financial statements is not presented in the accompanying

Accounting Standard for Presentation of
Net Assets in the Balance Sheetconsolidated financial statements.

Effective from the year ended March 31, 2007, theincluded in the statutory Japanese language consolidatedb)

As discussed in Note 2 (c), the consolidated statement

Company and its consolidated subsidiaries adopted theof changes in net assets for the year ended March 31, 2007,

new accounting standard, “Accounting Standard forhas been prepared in accordance with the new accounting

Presentation of Net Assets in the Balance Sheet” (Statement

standard. The accompanying consolidated statement of

No. 5 issued by the Accounting Standards Board of

shareholders’ equity for the year ended March 31, 2006,

Japan on December 9, 2005), and the implementation

was voluntarily prepared for the purpose of inclusion

guidance for the accounting standard for presentation ofAnnual Report 200921

net assets in the balance sheet (the Financial Accountingof Japan on December 27, 2005), (collectively referred toStandard Implementation Guidance No. 8 issued by theas “the Additional New Accounting Standards”).

Accounting Standards Board of Japan on December 9,

The Compa ny prepa red t he accompa ny i ng

2005), (collectively referred to as “the New Accounting

consolidated statement of changes in net assets for the year

Standards”).

after March 31, 2007, in accordance with the Additional

The consolidated balance sheet after March 31,

New Accounting Standards.

2007, prepared in accordance with the New AccountingStandards, is comprised of three sections covering assets,d) Equity Method

liabilities and net assets sections. The consolidated

Investments in affi liated companies (all 20% tobalance sheet as of March 31, 2006, prepared pursuant

50% owned and certain others 15% to 20% owned) areto the previous presentation rules is comprised of four

accounted for by the equity method in the years ended

sections covering assets, liabilities, minority interests andMarch 31, 2009, 2008 and 2007.
The equity method was applied to 5 affi liates andshareholders’ equity.
Under the New Accounting Standards, the following

1 unconsolidated subsidiary during the fiscal year 2009.

items are presented differently at March 31, 2007 compared

The equity method was applied to 6 affi liates during theto March 31, 2006. The net assets section includes

fiscal year 2008 and 5 affi liates during the fiscal year 2007.

unrealized gains (losses) on hedging derivatives, net of

Investments in all unconsolidated subsidiaries and othertaxes. Under the previous presentation rules, unrealized

affiliated companies, that would not have material effect on

gains (losses) on hedging derivatives were included in thethe consolidated financial statements, are stated at cost.

assets or liabilities section without considering the related
income tax effects. Minority interest is included in the nete)Securities

assets section after March 31, 2007. Under the previous

Securities are classified based on the intent of holding

presentation rules, companies were required to present

as (a) securities held for trading purposes (hereafter,

minority interests between the non-current liabilities and“trading securities”), (b) debt securities intended to be held

shareholders’ equity sections.

to maturity (hereafter, “held-to-maturity debt securities”),

The adoption of the New Accounting Standards had(c) equity securities issued by non-consolidated subsidiaries

no impact on the consolidated statements of operations forand affi liated companies, or (d) all other securities thatthe year ended March 31, 2007. Also, if the New Accounting

are not classified in any of the above categories (hereafter,

Standards had not been adopted at March 31, 2007, the“available-for-sale securities”).

shareholders’ equity amounting to ¥61,888 million would
have been presented.

The Company and its consolidated subsidiaries
do not have trading securities and held-to-maturity
debt securities. Equity securities issued by subsidiariesc)22

Accounting Standard for Statement of
Changes in Net Assets

and affi liated companies which are not consolidated or

Effective from the year ended March 31, 2007, themoving-average cost. Available-for-sale securities with

Company and its consolidated subsidiaries adopted the

no available fair market values are stated at the moving-new accounting standard, “Accounting Standard for

average cost.

accounted for using the equity method are stated at theStatement of Changes in Net Assets” (Statement No. 6

If the market value of equity securities issued byissued by the Accounting Standards Board of Japan on

unconsolidated subsidiaries and affi liated companies andDecember 27, 2005), and the implementation guidance foravailable-for-sale securities declines significantly, suchthe accounting standard for statement of changes in net

securities are stated at fair market value and the difference

assets (the Financial Accounting Standard Implementation

between fair market value and the carrying amount is

Guidance No. 9 issued by the Accounting Standards Board

recognized as loss in the period of the decline unless theAnnual Report 2009declines are considered temporary. If the fair market value(b)

the discount or premium on the contract (that is,of equity securities issued by unconsolidated subsidiaries

the difference between the Japanese yen amount ofand affi liated companies not accounted for on the equity

the contract translated using the contracted forward

method is not readily available, such securities shouldrate and that translated using the spot rate at the

be written down to net asset value with a corresponding

inception date of the contract) is recognized overcharge in the statement of operations in the event net asset

the term of the contract.

value declines significantly unless the decline is considered2.

If a forward foreign exchange contract is executed tohedge a future transaction denominated in a foreign

as recoverable.
Available-for-sale securities with available faircurrency, the future transaction will be recorded

market values are stated at fair market value. Unrealizedusing the contracted forward rate, and no gains or

gains and unrealized losses on these securities are

losses on the forward foreign exchange contract arereported, net of applicable income taxes, as a separate

recognized.

component of net assets. Realized gains and losses on
Also, if interest rate swap contracts are used as hedge

sale of such securities are computed using the movingaverage cost.

and meet certain hedging criteria, the net amount to be
paid or received under the interest rate swap contract isf)Derivatives and Hedge Accounting

added to or deducted from the interest on the assets or

Derivative financial instruments are stated at fairliabilities for which the swap contract is executed.

value, and the Company and its consolidated subsidiaries

Commodity price swap transactions are used for therecognize changes in the fair value as gains or losses unlesspurpose of avoiding risks associated with fluctuations inderivative fi nancial instruments are used for hedging

the market prices of raw materials procured.

purposes.
If derivative financial instruments are used as hedgesg)Inventories

and meet certain hedging criteria, the Company and its

Prior to April 1, 2008, inventories of the Company

consolidated subsidiaries defer recognition of gains orand its consolidated subsidiaries are stated at costlosses resulting from changes in fair value of derivative

determined principally by the weighted-average method

financial instruments until the corresponding losses oras to materials and supplies, and the specific identification

gains on the hedged items are recognized.

method as to finished products and work-in-process. In the

However, in cases where forward foreign exchange

following paragraph, effective April 1, 2008, the Company

contracts are used as hedges and meet certain hedging

and its consolidated subsidiaries adopted a new accounting

criteria, forward foreign exchange contracts and hedged

standard for measurement of inventories, and the carrying

items are accounted for in the following manner:amounts stated on the balance sheet have been calculated
after a devaluation reflecting reduced profitability.

1.

If a forward foreign exchange contract is executedto hedge an existing foreign currency receivable orpayable,(a)<Changes in Accounting Policy>
On July 5, 2006, the Accounting Standards Board of

the difference, if any, between the Japanese yen

Japan issued ASBJ Statement No. 9, “Accounting Standard

amount of the hedged foreign currency receivablefor Measurement of Inventories”. As permitted underor payable translated using the spot rate at thethe superseded accounting standard, the Company andinception date of the contract and the book value

its consolidated subsidiaries previously stated inventoriesof the receivable or payable is recognized in theat cost. The new accounting standard requires thatstatement of operations in the period which includes

inventories held for sale in the ordinary course of businessthe inception date, andbe measured at the lower of cost or net realizable value.

Annual Report 200923

Replacement cost may be used in lieu of the net realizable

immediately following the year in which depreciation

value, if appropriate.

has been recognized up to the depreciation limit. Due toAs a result of the adoption of ASBJ Statement No.

the change, operating income and income before income

9, operating income decreased by ¥835 thousand ($8,183

taxes and minority interests decreased by ¥309 thousand

thousand), and loss before income taxes and minority

for the year ended March 31, 2008. The effects on segmentinterests increased by ¥835 thousand ($8,183 thousand)information are described in Note 13.
Effective from the year ended March 31, 2009, thefor the year ended March 31, 2009. The effects on segment
information are described in Note 13.

Company and certain consolidated subsidiaries changed
the useful lives based on the reassessment of the usefulh) Property, Plant and Equipment andDepreciation

lives in light of the change in the Corporation Tax Law
of Japan. As a result, operating income decreased by

The Company and its consolidated subsidiaries¥454 thousand ($4,633 thousand), and loss before income

compute depreciation of the remaining assets principallytaxes and minority interests increased by ¥454 thousandby the declining-balance method at rates based on($4,633 thousand) in the year ended March 31, 2009. The

the useful lives and residual values determined in

effects on segment information are described in Note 13.

accordance with the Corporation Tax Law of Japan.
However, the company computes depreciation by the

i)

Lease

straight-line method for buildings (exclusive of building

Property, plant and equipment capitalized underimprovements) acquired after March 31, 1998, andfinance lease arrangements are depreciated over the leasebuilding improvements, structures and machinery

term of the respective assets up to no residual values.

belonging to the Company’s Real Estate Division (Osaki,

However, as permitted, finance leases commencing prior

Shinagawa City, Tokyo).

to April 1, 2008, which do not transfer ownership of theleased property to the lessee, are accounted for as operating<Changes in Accounting Policy>
Following the amendments of the Corporation Tax

leases with disclosure of certain “as if capitalized”
information.

Law of Japan, the method of depreciation applied to thetangible fi xed assets acquired by the Company and certainj)

Allowance for Doubtful Accounts

consolidated subsidiaries after April, 2007, was changed.

The Company and its consolidated subsidiaries

Due to this change, for the year ended March 31, 2008, theprovide the allowance for doubtful accounts in an

operating income and income before income taxes andamount sufficient to cover possible losses on collection

minority interests decreased by ¥212 thousand, comparedby estimating individually uncollectible amounts andwith what would have been reported if the depreciation

applying a percentage based on collection experience tomethod prior to the change had been applied. The effects

the remaining accounts.

on segment information are described in Note 13.

k)<Additional Information>
Effective April 1, 2007, due to the amendment of the
Corporation Tax Law of Japan, amounts of depreciation

Accrued Bonuses for Employees
The Company provides for the payment of employee

bonuses, based on the estimated projected amounts for
employee bonus payments.

limit (5% of acquisition costs) of tangible fi xed assets
acquired by the Company and certain consolidated

24l)Provision for Product Warranties

subsidiaries before April 1, 2007, are recognized as

The Company and its consolidated subsidiaries makedepreciation equally over five years commencing fromprovision for product warranty by estimating individually

the later of the year ended March 31, 2008, or the year

the expected charge-free expenses.

Annual Report 2009m) Provision for Loss on Orders
The Company makes provision for losses on orders

The net transition obligation (¥38,222 million) has beenrecognized in expenses in equal amounts over 15 years.

by estimating the expected losses incurred after thebalance sheet date.

q)

Income Tax
The Company and its consolidated subsidiariesn) Provision for environmental measures

recognize tax effects of temporary differences between the

The “Law Concerning Special Measures against PCB

carrying amounts of assets and liabilities for tax and financial(polychlorinated biphenyl) Waste” requires companies toreporting. The provision for income taxes is computed

responsibly dispose of PCB waste. The Company reserved

based on the pretax income included in the consolidated

an amount for estimated expenses to treat PCB waste instatements of operations. The asset and liability approach

the year ended March 31, 2009 and 2008.

is used to recognize expected future tax consequences of
temporary differences between the carrying amounts ofo)Reserve for Retirement Allowance for
Directors and Corporate Auditors

assets and liabilities for financial reporting purposes andthe amounts used for income tax purposes.
The Company and some subsidiaries adopted

Certain consolidated subsidiaries recorded 100%of obligation based on their rules and regulations underconsolidated tax return system.

the assumption that all directors and corporate auditors
retired at the balance sheet date.

p)r)Interest Cost on Borrowing Included in
Acquisition Cost of Fixed Assets

Employees’ Severance and Retirement
Benefits

before the operation of the fixed asset as part of the cost of

The Company and its consolidated subsidiaries

construction in progress on the Osaki Station West Exit Area

provide two types of severance and retirement benefit

Project. The capitalized interest cost recorded as a part ofplans, unfunded lump-sum payment plans and funded

construction in progress for the year ended March 31, 2008

non-contributory pension plans, under which all eligible

and 2007 were ¥214 million and ¥242 million, respectively.

The company capitalizes interest cost on borrowing

employees are entitled to benefits based on the level ofwages and salaries at the time of retirement or termination,s)length of service and certain other factors.
The liabilities and expenses for severance andretirement benefits are determined based on the amounts

Amounts per Share of Common Stock
The computation of net income (loss) per shareis based on the weighted average number of shares ofcommon stock outstanding during the year.

actuarially calculated using certain assumptions.

For the years ended March 31, 2009, 2008 and

The Company and its consolidated subsidiaries

2007, diluted net income per share was not shown since

provided allowance for employees’ severance andthe Company had no securities with dilutive effect.

retirement benefits based on the estimated amounts ofCash dividends per share presented in the consolidated

projected benefit obligation and the fair value of the planstatements of operation represent actual amounts

assets at each balance sheet date.

applicable to the respective years.

Prior service costs are recognized in expenses inequal amounts over the average of the estimated remainingt)Statements of Cash Flows

service lives of the employees (10 years), and actuarial gains

In preparing the consolidated statements of cash

and losses are recognized in income or expenses using theflows, cash on hand, readily-available deposits and short-straight-line method over the average of the estimatedterm highly liquid investments with maturities that doremaining service lives (from 12 to 15 years) commencing

not exceed three months at the time of purchase, arewith the following period.

considered to be cash and cash equivalents.

Annual Report 200925u) Translation of Foreign Currency
Accounts and Financial Statements
Receivables and payables denominated in foreign③

Capitalized expenditures for research and development
activities④

Fair value measurement of investment properties,

currencies are translated into Japanese yen at the yearend

and revaluation of property, plant and equipment

rates.

and intangible assets
Financial statements of consolidated overseas⑤

policies

subsidiaries are translated into Japanese yen at the yearend rate, except that net asset accounts are translated

Retrospective treatment of a change in accounting⑥

Accounting for net income attributable to minority
interests

at historical rates and statements of operations items
resulting from transactions with the Company at the rates

There were no material effects as a result of theused by the Company.
Foreign currency translation adjustments resulting
from translation of foreign currency financial statements

adoption of PITF No. 18 on the consolidated fi nancial
statements for the year ended March 31, 2009.

were presented separately in the foreign currencytranslation adjustment and minority interests in the
consolidated balance sheets.

2)

New accounting standards for lease transactions as
lesseePrior to April 1, 2008, the Company and itsv)

Change in accounting policies

consolidated subsidiaries accounted for finance leases that1)

Unification of Accounting Policies Applied to

do not transfer ownership of the leased property to theForeign Subsidiaries for Consolidated Financial

lessee as operating leases with disclosure of certain “as if

Statements

capitalized” information in the notes to the consolidated

On March 17, 2006, the Accounting Standards

financial statements.

Board of Japan issued Practical Issues Task Force No. 18

On March 31, 2007, the Accounting Standards Board“Practical Solution on Unification of Accounting Policies

of Japan issued Statement No. 13, “Accounting Standard

Applied to Foreign Subsidiaries for Consolidated Financial

for Lease Transactions” and Guidance No. 16, “GuidanceStatements” (“PITF No. 18”). PITF No. 18 requires thaton Accounting Standard for Lease Transactions”. The

accounting policies and procedures applied by a parent

new accounting standards require that all finance lease

company and its subsidiaries to similar transactions andtransactions be treated as capital leases.

events under similar circumstances should, in principle,

Effective April 1, 2008, the Company and its

be unified for the preparation of the consolidated financial

consolidated subsidiaries adopted the new accounting

statements. PITF No. 18, however, as a tentative measure,standards for fi nance leases commencing after Marchallows a parent company to prepare consolidated financial

31, 2008, and capitalized assets used under such leases,

statements using foreign subsidiaries’ financial statements

except for certain immaterial or short-term finance leases,

prepared in accordance with either International Financial

which are accounted for as operating leases. As permitted,

Reporting Standards or U.S. generally accepted accounting

finance leases that commenced prior to April 1, 2008, andprinciples. In this case, adjustments for the following six

that have been accounted for as operating leases, continue

items are required in the consolidation process so that their

to be accounted for as operating leases with disclosure of

impact on net income are accounted for in accordance withcertain “as if capitalized” information.

Japanese GAAP unless the impact is not material.

There were no material effects as a result of the
adoption of No. 13 and 16 on the consolidated financial①②

Goodwill not subject to amortization
Actuarial gains and losses of defined-benefit
retirement plans recognized outside profit or loss

26

Annual Report 2009

statements for the year ended March 31, 2009.

3. Securities
A. The following tables summarize acquisition costs and book values of securities with fair value as of March 31, 2009 and 2008.

Acquisition cost

Millions of yen
Book value

Difference¥7,019¥11,469¥4,450¥7,019¥11,469¥4,450¥2,263¥1,736¥(527)

55

49

(6)

Total

¥2,318¥1,785¥(533)

2008

Acquisition cost

Millions of yen
Book value

Difference¥8,149¥18,532¥10,383¥8,149¥18,532¥10,383

¥673

¥569

¥(104)

55

52

(3)

¥728

¥621

¥(107)

2009
Securities with book value (fair value) exceeding acquisition cost:
Equity securities
Total
Securities with book value (fair value) not exceeding acquisition cost:
Equity securities
OthersSecurities with book value (fair value) exceeding acquisition cost:
Equity securities
Total
Securities with book value (fair value) not exceeding acquisition cost:
Equity securities
OthersTotal

2009

Thousands of U.S. dollars
Acquisition cost
Book value
Difference

Securities with book value(fair value) exceeding acquisition cost:
Equity securities
Total$71,622$117,031$45,409$71,622$117,031$45,409$23,092$17,714$(5,378)

561

500

(61)

$23,653$18,214$5,439Securities with book value(fair value) not exceeding acquisition cost:
Equity securities
OthersTotal

B. The following table summarizes book values of securities with no fair value as of March 31, 2009 and 2008.
(a) Available-for-sale securities;
Book value
Millions of yen
2009
2008
Non-listed equity securities

¥694

¥717

Thousands of U.S. dollars
2009$7,082

Annual Report 200927

(b) Equity securities issued by subsidiaries and affi liated companies;
Book value
Millions of yen
2009
2008

Thousands of U.S. dollars
2009

Investments in unconsolidated subsidiaries

¥174

¥314

$1,775Investments in affiliated companies

8,750

9,286

89,286

Total¥8,924¥9,600$91,061

C. Total sales amounts of available-for-sale securities sold, gains and losses, in the years ended March 31, 2009, 2008 and2007 are as follows:

2009

Millions of yen
2008

2007

Thousands of U.S. dollars
2009

Sales amount

¥21

¥260

¥311

$214

Gains

11

242

272

112

Losses————

4. Inventories
Inventories as of March 31, 2009 and 2008 were as follows:
Millions of yen
2009

2008

Thousands of U.S. dollars
2009

Finished products¥4,849¥3,657$49,480

Work-in-process

30,501

31,927311,235

Materials and supplies

1,903

1,647

19,418¥37,253¥37,231$380,133

Total

5. Subsidies Received from the Japanese Government
The Company received a portion of the acquisition costs of certain tangible fixed assets from the Japanese Government.
The aggregated amount of the subsidies deducted from the acquisition costs of the tangible fi xed assets as of March 31,
2009, and 2008, were ¥1,331 million ($13,582 thousand).

6. Short-Term Borrowings, Long-Term Debt and Commercial Paper
Short-term borrowings are bank loans and represented by notes. The weighted average interest rate was 1.4% as ofMarch 31, 2009 and 1.5% as of March 31, 2008, respectively.
Long-term debt and commercial paper as of March 31, 2009 and 2008 consisted of the following.
Millions of yen
1.1% to 2.8% loans from banks and insurance companies
Less: Current portion
Total
Commercial paper, bearing interest rates of 0.8%

28Annual Report 2009

2009

2008

Thousands of U.S. dollars
2009¥26,242¥28,668$267,776

6,255

2,435

63,827¥19,987¥26,233$203,949—¥30,000—

The annual maturities of long-term debts as of March 31,2009 were as follows:Year ended March 31

Millions of yen

Thousands of U.S. dollars

2010¥6,255$63,827

2011

4,450

45,408

2012

2,958

30,184

2013

2,593

26,459

2014

1,822

18,5922015 and thereafter

8,164

83,306

Commitment Line Agreement
The Company renewed an agreement with a syndicate of 15 Japanese banks to set up a commitment line by multiple
finance institutions for Meidensha Corporation in Japan.
The unexecuted balance of lending commitments at the company as of March 31,2009 and 2008 were as follows:

Millions of yen
2009

2008

Thousands of U.S. dollars
2009

Total lending commitments¥30,000¥35,000$306,123

Less amounts currently executed

15,60012,600159,184

Unexecuted balance¥14,400¥22,400$146,939

2009

2008

Thousands of U.S. dollars
2009

Land

¥1,479¥1,479$15,092

Buildings and structures

20,836

21,691

212,612

Machinery and equipment

—

323

—

Investment securities

12

20

123

¥22,327¥23,513$227,827

7. Pledged Assets
The following assets were pledged as collateral as of March 31, 2009 and 2008.
Millions of yen

Total

Obligation with collateral pledged as of March 31,2009 and 2008 were as follows:
Millions of yen
Long-term debt (Including current portion of long-term debt)

2009

2008

Thousands of U.S. dollars
2009¥12,600¥14,000$128,571

In addition to the above, investment securities of ¥2 million ($20 thousand) as of March 31, 2009 and 2008 were
pledged as collateral for borrowing from financial institutions by an affiliate.
An affi liate engaged in the wind farm business has a project finance loan that is secured by pledged business assets
amounting to ¥1,980 million ($20,204 thousand) and ¥2,150 million as of March 31, 2009 and 2008, respectively.

Annual Report 200929

Total business assets of this affi liate are amounting to ¥3,003 million ($30,643 thousand) and ¥3,237 million as ofMarch 31, 2009 and 2008, respectively.

8. Employees’ Severance and Retirement 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 determined basedon 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, 2009 and 2008 consist of the following.
Millions of yen
2009

2008

Thousands of U.S. dollars
2009¥54,984¥53,475$561,061

Unrecognized prior service costs

1,400

1,737

14,286

Unrecognized actuarial differences(9,589)(6,105)(97,847)

Less fair value of pension assets(17,273)(20,037)(176,255)

Less unrecognized net transition obligation(10,180)(11,877)(103,878)

Liability for severance and retirement benefits¥19,342¥17,193$197,367

Projected benefit obligation

Included in the consolidated statements of income for the years ended March 31, 2009, 2008 and 2007 are severance
and retirement benefit expenses comprising the following.

2009

2008

2007

Thousands of U.S.
dollars2009

Service costs - benefits earned during the year

¥2,287¥2,243¥2,080$23,337

Interest cost on projected benefit obligation

1,392

1,344

1,226

14,204

Expected return on plan assets

(575)

(656)

(495)

(5,867)

Amortization of prior service costs

(337)

(337)

(405)

(3,439)Amortization of net transition obligation

1,697

1,698

1,698

17,316

Amortization of actuarial defferences

593

268

290

6,051

¥5,057¥4,560¥4,394$51,602

Millions of yen

Severance and retirement benefit expenses

The discount rate and the rate of expected return on plan assets used by the Company and its consolidated subsidiaries
are 2.7% and 3.0% for 2009, 2008 and 2007, 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. (i) Severance and retirement benefit expenses of consolidated
subsidiaries using the simplified method are included in the “Service Costs” above, excluding the amortization of net
transition obligation. (ii) Major expenses of the universally-established welfare program service are included in the “Service
Costs” above.

30

Annual Report 2009

9. Net Assets
The Japanese Corporate Law (“the Law”) became effective on May 1, 2006, replacing the Japanese Commercial Code(“the Code”). The Law is generally applicable to events and transactions occurring after April 30, 2006 and for fiscal years
ending after that date.
Under Japanese laws and regulations, the entire amount paid for new shares is required to be designated as common
stock. However, a company may, by a resolution of the Board of Directors, designate an amount not exceeding one-half ofthe price of the new shares as additional paid-in capital, which is included in capital surplus.
Under the Law, in cases where a dividend distribution of surplus is made, the smaller of an amount equal to 10% of
the dividend or the excess, if any, of 25% of common stock over the total of additional paid-in-capital and legal earnings
reserve must be set aside as additional paid-in-capital or legal earnings reserve. Legal earnings reserve is included in retained
earnings in the accompanying consolidated balance sheets.
Under the Code, companies were required to set aside an amount equal to at least 10% of the aggregate amount ofcash dividends and other cash appropriations as legal earnings reserve until the total of legal earnings reserve and additional
paid-in capital equaled 25% of common stock.
Under the Code, legal earnings reserve and additional paid-in capital could be used to eliminate or reduce a deficit
by a resolution of the shareholders’ meeting or could be capitalized by a resolution of the Board of Directors. Under theLaw, both of these appropriations generally require a resolution of the shareholders’ meeting.
Additional paid-in capital and legal earnings reserve may not be distributed as dividends. Under the Code, however,on condition that the total amount of legal earnings reserve and additional paid-in capital remained equal to or exceeded
25% of common stock, they were available for distribution by resolution of the shareholder’s meeting. Under the Law, alladditional paid-in-capital and all legal earnings reserve may be transferred to other capital surplus and retained earnings,
respectively, which are potentially available for dividends.
The maximum amount that the Company can distribute as dividends is calculated based on the non-consolidated
financial statements of the Company in accordance with Japanese laws and regulations.
At the annual shareholders’ meeting held on June 26, 2009, the shareholders approved cash dividends amounting to
908 million ($9,265 thousand). Such appropriations have not been accrued in the consolidated financial statements as ofMarch 31, 2009. Such appropriations are recognized in the period in which they are approved by the shareholders.

10. Contingent Liabilities
Contingent liabilities as of March 31, 2009 and 2008, were as follows:
Millions of yen
2009

2008

Thousands of U.S.dollars
2009

Repurchase of note discounted and endorsed

¥56

¥88

$571

Guarantees of loans from banks to employees andunconsolidated subsidiaries and affiliates

245

392

2,500

11. Lease Information(1) Finance leases, which do not transfer ownership of properties to lessees, are not capitalized and are accounted
for in the same manner as operating leases. Certain related information are summarized as follows:

Annual Report 2009

31

(i)

Assumed amounts (inclusive of interest) of acquisition cost, accumulated depreciation and net book value
as of March 31, 2009 and 2008, are summarized as follows:
Millions of yen
2009

2008

Thousands of U.S.dollars
2009¥1,310¥1,489$13,367

124

207

1,266

Accumulated depreciation

(769)

(851)

(7,847)

Net book value

¥665

¥845

$ 6,786

Assumed acquisition cost
Machinery and equipment
Others(ii) Future minimum lease payments, inclusive of interest, as of March 31, 2009 and 2008 totaled ¥665 million($6,786 thousand) and ¥845 million, including ¥127 million ($1,296 thousand) and ¥180 million due within
one year, respectively.
(iii) Lease payments, which are equal to assumed depreciation charges for the years ended March 31, 2009, 2008
and 2007 were ¥179 million ($1,827 thousand), ¥229 million and, ¥192 million, respectively.
(iv) Assumed depreciation charges are computed using the straight-line method over lease terms assuming noresidual value.
(2) Future lease receivable under non-cancelable operating leases as lessor as of March 31, 2009 and 2008 totaled¥14 million ($143 thousand) and ¥51 million due within one year, respectively.
As discussed in Note 2 v), effective for the year ended March 31, 2009, the Company and its consolidated subsidiaries
adopted the new accounting standard for leases to recognize leased property and lease obligations on the balance sheet.
Finance leases commencing prior to April 1, 2008, which do not transfer ownership of the leased property to the lessee,
are accounted for as operating leases.

12. Research and Development Expenses
Research and development expenses are charged to income as incurred. The amounts charged to income for theyears ended March 31, 2009, 2008 and 2007 were ¥6,939 million ($70,806 thousand), ¥6,530 million, and ¥6,041 million,
respectively.

13. Segment Information
Industry segments:
The Company and its consolidated subsidiaries operate principally in five industrial sectors: Social Infrastructure
Systems, Industrial Systems, Engineering, Real Estate and Other sectors.
Effective for the year ended March 31, 2008, the Company has changed its classification of businesses. The Real Estatebusiness which was included in the other sectors for the year ended March 31, 2007, is disclosed as a separate segment
because Real Estate business become material.
The information on business segments for the years ended March 31, 2009, 2008 and 2007 is summarized asfollows:

32

Annual Report 2009

Millions of yen

Year ended March 31, 2009

SocialIndustrial
Infrastructure
Systems
Systems

Real
EstateEngineering

OthersTotal

Eliminations
Consolidated
or Corporate

Net sales:
Outside customers¥115,345¥42,504¥22,866¥2,740¥15,343¥198,798—¥198,798

6,819

5,537

665

263

11,243¥24,527(24,527)—

122,164

48,041

23,531

3,003

26,586

223,325(24,527)

198,798

Operating expenses

119,101

48,47622,1652,102

26,284

218,128(23,415)

194,713

Operating income (loss)¥3,063¥(435)¥1,366¥901¥302¥5,197¥(1,112)¥4,085

Identifiable assets¥76,999¥46,687¥13,415¥23,824¥10,338¥171,263¥42,902¥214,165

Depreciation and amortization

2,760

1,348

305

927

216

5,556

2,241

7,797

Capital expenditures

1,770

3,159

156

442

411

5,938

2,280

8,218

Inter-segment
Total

Millions of yen

Year ended March 31, 2008

SocialIndustrial
Infrastructure
Systems
Systems

Real
EstateEngineering

OthersTotal

Eliminations
Consolidated
or Corporate

Net sales:
Outside customers¥105,340¥57,047¥23,237¥798¥17,093¥203,515—¥203,515

5,910

6,665

510

241

12,001

25,327(25,327)—

111,250

63,712

23,747

1,039

29,094

228,842(25,327)

203,515

Operating expenses

107,554

61,43822,094902

28,331

220,319(24,390)

195,929

Operating income (loss)¥3,696¥2,274¥1,653¥137¥763¥8,523¥(937)¥7,586

Identifiable assets¥77,987¥56,738¥14,654¥24,202¥5,917¥179,498¥56,917¥236,415

Depreciation and amortization

2,256

1,017

334

549

206

4,362

1,972

6,334

Capital expenditures

1,908

2,219

117

4,796

450

9,490

4,662

14,152

Inter-segment
Total

Millions of yen

Year ended March 31, 2007

SocialIndustrial
Infrastructure
Systems
Systems

Engineering

RealEstateOthersTotal

Eliminations
Consolidated
or Corporate

Net sales:
Outside customers¥95,395¥60,456¥22,911—¥15,432¥194,194—¥194,194

5,126

6,497

394

259

9,113

21,389(21,389)—

100,52166,95323,305259

24,545215,583(21,389)

194,194

Operating expenses

97,41465,54321,51050

23,994

208,511(20,542)

187,969

Operating income (loss)¥3,107¥1,410¥1,795¥209¥551¥7,072¥(847)¥6,225

Identifiable assets¥75,996¥51,107¥18,288¥598¥31,928¥177,917¥45,469¥223,386

Depreciation and amortization

1,683

754

317

—

142

2,896

1,473

4,369

Capital expenditures

2,795

812

294

13,511

158

17,5703,944

21,514

Inter-segment
Total

Annual Report 200933

Thousands of U.S. dollars
SocialIndustrial
Infrastructure
Systems
Systems

Engineering

RealEstateOthers$1,176,990$433,714$233,327$27,959$156,561 $2,028,551

69,58256,500

6,786

2,684

114,724

250,276(250,276)—

1,246,572

490,214240,11330,643

271,285 2,278,827(250,276)

2,028,551

Operating expenses

1,215,317

494,653

226,174

21,449268,2032,225,796(238,929)

1,986,867

Operating income (loss)$31,255$(4,439)$13,939$9,194$3,082$53,031$(11,347)$41,684

Identifiable assets$785,704$476,398$136,888$243,102$105,490$1,747,582

Depreciation and amortization

28,163

13,755

3,112

9,459

2,205

56,694

22,86779,561

Capital expenditures

18,061

32,235

1,592

4,510

4,194

60,592

23,26583,857

Year ended March 31, 2009

Total

Eliminations
Consolidated
or Corporate

Net sales:
Outside customers
Inter-segment
Total— $2,028,551$437,775 $2,185,357

The above Industry segment information for the year ended March 31, 2007 was restated based on the newclassification.
Changes in Accounting Policy
As noted in “NOTES TO CONSOLIDATED FINANCIAL STATEMENTS” 2 g), the Company and its consolidated
subsidiaries have applied Accounting Standard for Measurement of Inventories, effective from the year ended March 31,
2009. As a result, operating expenses in this consolidated accounting period increased by ¥654 million ($6,673 thousand)in Social Infrastructure Systems business, ¥130 million ($1,327 thousand) in Industrial Systems business, ¥50 million ($510
thousand) in Engineering business, and ¥1 million ($10 thousand) in Other businesses. Operating profits also decreased
by same amount.
As noted in “NOTES TO CONSOLIDATED FINANCIAL STATEMENTS” 2 h), with the revision of the Corporation
Tax Law in FY2007 from the beginning of the current consolidated accounting period, the depreciation method for property,
plants, and equipment acquired on or after April 1, 2007 has been changed to one based on the revised Corporation Tax
Law. As a result, operating expenses in this consolidated accounting period increased by ¥82 million in Social Infrastructure
Systems business, ¥43 million in Industrial Systems business, ¥7 million in Engineering business, ¥13 million in Real Estatebusiness, and ¥4 million in Other businesses. ‘Eliminations or corporate’ increased by ¥64 million and operating profits
also decreased by same amount.
Additional Information
As noted in “NOTES TO CONSOLIDATED FINANCIAL STATEMENTS” 2 h), with the revision of the Corporation
Tax Law in FY2008 from the beginning of the current consolidated accounting period, the depreciation method for property,
plants, and equipment acquired on or after April 1, 2008 has been changed to one based on the revised Corporation Tax Law.
As a result, operating expenses for the current consolidated accounting year increased by ¥266 million ($2,714 thousand)for Social Infrastructure Systems business, ¥138 million ($1,408 thousand) for Industrial Systems business, ¥17 million($173 thousand) for Engineering business, and ¥1 million ($10 thousand) for Other businesses. ‘Eliminations or corporate’increased by ¥33 million ($337 thousand) and operating profits also decreased by same amount.
As noted in “NOTES TO CONSOLIDATED FINANCIAL STATEMENTS” 2 h), with the revision of the Corporation
Tax Law in FY2007, due to the application of depreciation methods based on the Corporation Tax Law prior to its revision,

34

Annual Report 2009

property, plant and equipment acquired on or before March 31, 2007, was treated as follows: Beginning with the next
consolidated accounting year after the consolidated accounting year in which the value reaches 5% of the acquisition
price, the difference between 5% of the acquisition price and the memorandum price was amortized in equal amounts
over a five-year period and included in the posting of depreciation expenses. As a result, operating expenses for the current
consolidated accounting year increased by ¥159 million for Social Infrastructure Systems business, ¥80 million for Industrial
Systems business, ¥15 million for Engineering business, and ¥4 million for Other businesses. ‘Eliminations or corporate’increased by ¥52 million and operating profits also decreased by same amount.
Geographic information :Geographic information is not disclosed due to its insignificance.
Overseas sales information:
Overseas sales information for the year ended March 31, 2009, and 2008 and 2007 are as follows:Year ended March 31, 2009

Asia

Millions of yen
Other Areas

Overseas sales¥27,393¥4,260¥31,653

Consolidated sales——¥198,798

Percentage of total sales

13.8

2.1

15.9

Total

Year ended March 31, 2008

Asia

Millions of yen
Other Areas

Overseas sales¥31,325¥2,773¥34,098

Consolidated sales——¥203,515

Percentage of total sales

15.4

1.4

16.8

Total

Year ended March 31, 2007

Asia

Millions of yen
Other Areas

Total

Overseas sales¥21,146¥3,628¥24,774

Consolidated sales——¥194,194

Percentage of total sales

10.9

1.9

12.8

Asia

Thousands of U.S. dollars
Other Areas

Total$279,520$43,470$322,990

Consolidated sales——$2,028,551

Percentage of total sales

13.8

2.1

15.9

Year ended March 31, 2009
Overseas sales

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 39.69% for the years ended March 31, 2009, 2008 and 2007,
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, 2008 and 2007.

Annual Report 2009

35

2009

2008

2007

39.69%

39.69%

39.69%

Permanent difference (social expenses,etc.)

3.25

5.99

Per capital inhabitant tax

2.60

2.39

Net changes in valuation allowance

1.37

1.52

(3.18)(1.44)Tax deduction(4.29)(7.41)

Additional taxes

—

7.58

Other-net

1.57

3.54

41.01%

51.86%

Statutory tax rate

Equity in loss (income) of affiliated companies

Effective tax rate

Intentionally omitted

39.05%

Notes for 2009 on the above table were omitted due to the immaterial differences between the statutory tax rates
and the Company’s effective tax rates.
Significant components of deferred tax assets and liabilities of the Company and its consolidated subsidiaries as ofMarch 31, 2009 and 2008 are as follows:

Millions of yen
2009

2008

Thousands of U.S.dollars
2009

Deferred tax assets:
Net operating loss carry forwards

¥663

¥172

$ 6,765

Allowance for retirement benefits

7,118

6,330

72,633

Bonuses

1,921

1,922

19,602Others

3,364

2,676

34,327

13,066

11,100133,327

Less:Valuation allowance(1,453)(1,091)(14,827)

Total deferred tax assets

11,613

10,009118,500

Reserve for special depreciation

260

101

2,653

Unrealized holding gains on securities

1,558

4,081

15,898Deferred gain from division of corporation

1,131

1,131

11,541

94

12

959

Gross deferred tax liabilities

3,043

5,325

31,051

Net deferred tax assets¥8,570¥4,684$ 87,449

Gross deferred tax assets

Deferred tax liabilities:

Others

15. Cash and Cash Equivalents
A. 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, 2009 and 2008 are as follows:

36

Annual Report 2009

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

2009

2008

Thousands of U.S. dollars
2009¥3,201¥10,284$32,663

(78)

(115)

(796)

¥3,123¥10,169$31,867

B. In the year ended March 31 2008, the Company sold a part of shares of MEIDEN HOIST SYSTEMCOMPANY, LTD. and excluded MEIDEN HOIST SYSTEM COMPANY, LTD. from the scope of consolidation.
The assets and liabilities amounts of MEIDEN HOIST SYSTEM COMPANY, LTD. related to the sales prices of sharesand proceeds from the sale of the investment were as follows:
MEIDEN HOIST SYSTEM COMPANY, LTD. (as of March 31, 2008)
Millions of yen
Current assets¥2,001

Non-current assets

51

Current liabilities(1,416)

Non-current liabilities(28)

Minority interests(511)

Gain on sale of investments in affiliate

152

Sales price of shares

249

Cash and cash equivalents owned by the subsidiary(193)

Proceeds from sale of investment in consolidated subsidiary resulting in change in scope of
consolidation

56

16. Related Party Transactions
Information on related party transactions for the years ended March 31, 2009, 2008 and 2007, and the related amounts
as of those dates is summarized as follows:Year ended March 31, 2009
Japan AE Power Systems Corporation

Year ended March 31, 2008

Millions of yen
Purchase of finished products¥11,272
Millions of yen
Purchase of finished products

Accounts payable¥3,233

Accounts payable

Japan AE Power Systems Corporation¥10,042¥3,069Japan Motor & Generator Co., Ltd.

7,620

2,702

Year ended March 31, 2007

Millions of yen
Purchase of finished products

Accounts payable

Japan AE Power Systems Corporation¥7,044¥2,525

Japan Motor & Generator Co., Ltd.

6,372

2,320

Annual Report 200937

Year ended March 31, 2009

Thousands of U.S. dollars
Purchase of finished products
Accounts payable

Japan AE Power Systems Corporation$115,020$32,990

Additional Information :ASBJ Statement No.11, “Accounting Standard for Related Party Disclosures” and ASBJ Guidance No.13, “Guidanceon Accounting Standard for Related Party Disclosures” issued by the Accounting Standards Board of Japan on October
17, 2006, require certain additional related party disclosures effective for years beginning on or after April 1, 2008. Even
pursuant to the new accounting standard, applicable related parties within the new definition of additional related party
disclosures, remain unchanged from the previous year as per above.

17. Net Income (Loss) per Share
The basis of per share amount calculation for the year ended March 31, 2009, 2008 and 2007 were as follows:

2009

2008

2007

Thousands of U.S.
dollars2009¥(1,083)¥2,405¥2,314$(11,051)

—

—

—

—

(1,083)

2,405

2,314

(11,051)

Millions of yen

Basic earnings per share:
Net income (loss)
Earnings not attributable to commonshareholders
Net income (loss) allocated to common
stocksDiluted net income per share is not presented, since the Company has never issued any dilutive securities.

Weighted-average number of common stocks

2009

Thousands of shares
2008

2007

227,110

227,195

227,258

18. Subsequent Event
The following appropriation of retained earnings at March 31, 2009 was approved at the annual meeting of theCompany’s shareholders held on June 26, 2009.

Cash dividends, ¥4.0 ($0.041) per share

38

Annual Report 2009

Millions of yen

Thousands of U.S. dollars¥908$9,265

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, 2009 and 2008, and the related consolidated statements of operations,changes in net assets and cash flows for each of the three years in the period ended March 31, 2009, expressedin 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. Those standards
require that we plan and perform the audit to obtain reasonable assurance about whether the financial 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 andsignificant estimates made by management, as well as evaluating the overall 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 financial position of MEIDENSHA CORPORATION and subsidiaries as of March 31, 2009 and 2008, andthe results of their operations and their cash flows for each of the three years in the period ended March 31, 2009,
in conformity with accounting principles generally accepted in Japan.
The U.S. dollar amounts in the accompanying consolidated financial statements with respect to the year
ended March 31, 2009, 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 describedin Note 1 to the consolidated financial statements.

Tokyo, Japan
June 26, 2009

Annual Report 200939

OVERSEAS AFFILIATES(AS OF JULY, 2009)

CHINA• DONGGUAN MEIDEN

ELECTRICAL ENGINEERING
CO., LTD.
Yan Wu Industrial District,
Wan Jiang Country, Dongguan,
Guangdong P.C. 523049, P.R.China
Phone: 86-769-2228-5210
Facsimile: 86-769-2228-5250• MEIDEN HANGZHOUDRIVE SYSTEMS CO., LTD.
No.168, Hongxing Road, Qiaonan
District, Xiaoshan Economic &Technological Development Zone,
Hangzhou, Zhejiang, P.C. 311231
P.R.Chaina
Phone: 86-571-8369-6808
Facsimile: 86-571-8369-6818• MEIDEN ZHENGZHOUELECTRIC CO., LTD.

No.87 Hehuan Street,
Zhengzhou Hi-Tech Industries
Development Zone,
Zhengzhou, Henan Province,
P.C. 450001, P.R.China
Phone: 86-371-67848800
Facsimile: 86-371-67848797

40

Annual Report 2009

• MEIDEN SHANGHAI CO., LTD.
15F, Hengji Plaza, No.99
Huaihai-Donglu, Huangpu-Qu,
Shanghai, P.C. 200021, P.R.China
Phone: 86-21-6386-0358
Facsimile: 86-21-6386-0058

HONG KONG• 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: 852-2503-2468
Facsimile: 852-2887-8046

INDIA• MEIDEN INDIA PVT. LTD.

910, International Trade Tower,
Nehru Place, New Delhi-110019,
India
Phone: 91-11-4653-9381
Facsimile: 91-11-4653-9385

INDONESIA• P.T. MEIDEN ENGINEERINGINDONESIA

20th Floor, Summitmas I,
Jl. Jenderal Sudirman Kaveling 61-62,
P.O.BOX 6920/KBY/Summitmas I
Jakarta Selatan 12190, Indonesia
Phone: 62-21-520-0612
Facsimile: 62-21-520-0240

KOREA• MEIDEN KOREA CO., LTD.

Royal Building No.410,
5 Dangju-Dong, Chongro-ku,
Seoul, Korea
Phone: 82-2-736-0232
Facsimile: 82-2-736-0234

MALAYSIA• MEIDEN ELECTRIC

ENGINEERING SDN. BHD.
G. 03, Ground Floor,
Wisma Academy, 4A, Jalan 19/1,
46300 Petaling Jaya,
Selangor Darul Ehsan, Malaysia
Phone: 60-3-7955-4646
Facsimile: 60-3-7954-6466

• MEIDEN ASIA PTE. LTD.

MALAYSIA BRANCH OFFICE
G. 03, Ground Floor,
Wisma Academy, 4A, Jalan 19/1,
46300 Petaling Jaya,
Selangor Darul Ehsan, Malaysia
Phone: 60-3-7955-4646
Facsimile: 60-3-7954-6466

SINGAPORE• MEIDEN ASIA PTE. LTD.

5, Jalan Pesawat, Jurong Industrial
Estate, Singapore 619363
Phone: 65-6268-8222
Facsimile: 65-6264-4292• MEIDEN SINGAPORE PTE. LTD.

5, Jalan Pesawat, Jurong Industrial
Estate, Singapore 619363
Phone: 65-6268-8222
Facsimile: 65-6264-4292

THAILAND• THAI MEIDENSHA CO., LTD.

15th Floor, Rasa Tower II,
555 Phaholyothin Road, Chatuchak,Chatuchak, Bangkok 10900,
ThailandPhone: 66-2792-4200
Facsimile: 66-2792-4299• MEIDEN ELECTRIC(THAILAND) LTD.

898 Moo 2, Bangpa-in Industrial
Estate, Udomsorayuth Road.,
Klongjig, Bangpa-in, Ayudhaya
13160, Thailand
Phone: 66-35-258258
Facsimile: 66-35-221388

UNITED ARAB EMIRATES• MEIDENSHA CORPORATION
Room 905, AI Reem Tower
AI Maktoum Street, Deira,
P.O.Box 117841, Dubai,
United Arab Emirates
Phone: 971-4-229-9653
Facsimile: 971-4-229-9654

THE UNITED KINGDOM• MEIDEN EUROPE LTD.

NYK Complex Bradbourne Drive,
Tilbrook, Milton Keynes MK7 8BN,
England, U.K.
Phone: 44-1908-276000
Facsimile: 44-1908-276010

THE UNITED STATES• MEIDEN AMERICA, INC.

15800 Centennial Drive, NorthvilleTownship, MI 48168, U.S.A.
Phone: 1-734-656-1400
Facsimile: 1-734-459-1863• MEIDEN TECHNICAL CENTERNORTH AMERICA LLC

15800 Centennial Drive, NorthvilleTownship, MI 48168, U.S.A.
Phone: 1-734-656-1400
Facsimile: 1-734-459-1863

Annual Report 200941

CONSOLIDATED SUBSIDIARY COMPANIESMEIDEN SHOJI Co., Ltd.

Meiden Kankyo Service 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

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 ELECTRIC (THAILAND) LTD.
Capital TB70 million

Manufacture and sales of switchgears❖ P.T.MEIDEN ENGINEERINGINDONESIA
Capital US$320 thousand

Engineering and constructing service

Kofu Meidensha Electric Mfg.
Co., Ltd.
Capital ¥400 million

Manufacture and sales of electric motors
825 Nakadate, Chuo-shi,
Yamanashi 409-3801 Japan
Phone: 55-274-7910 Fax: 55-274-7996

HOKUTO DENKO CORPORATION
Capital ¥25 million

Manufacture and sales of electric sensors
22-13, Himonya 4-chome, Meguro-ku,
Tokyo 152-0003 Japan
Phone: 3-3716-3686 Fax: 3-3793-8787

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

Capital ¥20 million

Manufacture and sales of switchgear and relays
726-1, Osuwa, Numazu-shi,
Shizuoka 410-0873 Japan
Phone: 55-924-4630 Fax: 55-922-4013

Meiden Kiden Kogyo Co., Ltd.
Capital ¥20 million

MEIDEN CHEMICAL CO., LTD.
Capital ¥95 million

Insulating varnish and molded instrumenttransformer
515, Kaminakamizo, Higashimakado-aza,
Numazu-shi, Shizuoka 410-0865 Japan
Phone: 55-923-0238 Fax: 55-923-0886

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

MEIDEN MEDIAFRONT CORPORATION
Capital ¥40 million

Printing and copy service❖ MEIDEN PACIFIC (CHINA) LTD.
Sales of electric products and components,
and constructing service❖ MEIDEN AMERICA, INC.
Capital US$16.5 million

Sales of dynamometer products andengineering and consulting services❖ MEIDEN HANGZHOU DRIVESYSTEMS CO., LTD.
Capital US$11.6 million

Manufacture and sales of electrical morors❖ DONGGUAN MEIDEN ELECTRICAL
ENGINEERING CO., LTD.
Capital HK$8.4 million

Manufacture and sales of switchgears andslaes of electric products and components

Sales of products and materials, and agent
service of insurance

Maruki Building, 13-7, Nishigotanda
1-chome, Shinagawa-ku,
Tokyo 141-0031 Japan
Phone: 3-3490-4767 Fax: 3-3779-3083❖ MEIDEN ZHENGZHOU ELECTRIC
CO., LTD.

Meiko Building, 5-5, Osaki 5-chome,
Shingawa-ku, Tokyo 141-8616 Japan
Phone: 3-3490-3737 Fax: 3-3490-3906

Meiden Sheet Metal Products
Corporation❖ MEIDEN SHANGHAI CO., LTD.

MEIDEN KOHSAN CO., LTD.
Capital ¥100 million

Capital ¥90 million

MEIDEN SOFTWARE CORPORATION
Capital ¥50 million

Engineering and programming of software
515, Kaminakamizo, Higashimakado-aza,
Numazu-shi, Shizuoka 410-0865 Japan
Phone: 55-923-4966 Fax: 55-923-1191

Manufacture and sales of sheet metal
515, Kaminakamizo, Higashimakado-aza,
Numazu-shi, Shizuoka 410-0865 Japan
Phone: 55-929-5555 Fax: 55-929-5566

MEIDEN FOUNDRY INDUSTRIAL
Co., Ltd.
Capital ¥50 million

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

MEIDEN SYSTEM ENGINEERING
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

Annual Report 2009

Capital CNY40 million

Manufacture and sales of surge arresters
Capital ¥320 million

Sales of electric products and components❖ MEIDEN TECHNICAL CENTERNORTH AMERICA LLC.
Capital US$16.2 million

Testing service of engine and drive train

MSA Co., Ltd.
Capital ¥400 million

42

Capital £750 thousand

Sales of electric products and components
Capital HK$10 million

MEIDEN SYSCON Co., Ltd.
Meiden Plant Engineering &Construction Co., Ltd.

❖ MEIDEN EUROPE LTD.

Manufacture and sales of surge arresters
515, Kaminakamizo, Higashimakado-aza,
Numazu-shi, Shizuoka 410-0865 Japan
Phone: 55-929-4300
Fax: 55-929-4399❖ MEIDEN SINGAPORE PTE. LTD.
Capital S$25.4 million

Manufacture and sales of transformers,
switchgears and circuit-breakers and related
engineering and constructing service❖ THAI MEIDENSHA CO., LTD.
Capital TB20 million

Engineering and constructing service❖ MEIDEN ASIA PTE. LTD.
Capital S$6.7 million

Business management for Southeast Asia
operations❖ MEIDEN POWER SOLUTIONS(SINGAPORE) PTE. LTD.
Capital S$1 million
Manufacture and sales of dynamic voltage
compensators

Plus 7 domestic subsidiaries and
2 foreign subsidiaries.
❖ Please see page 40-41 to find contact information foroverseas affiliates.

CORPORATE DATACORPORATE NAMEMEIDENSHA CORPORATION (Kabushiki Kaisha Meidensha)

HEAD OFFICE
ThinkPark Tower, 2-1-1, Osaki, Shinagawa-ku, Tokyo 141-6029 Japan

FOUNDED
1897

COMMON STOCK
Authorized
576,000,000 shares
Issued227,637,704 shares¥17,070 million ($161,038 thousand)

SHAREHOLDERS
21,363

TRANSFER AGENTThe Sumitomo Trust & Banking Co., Ltd.

BOARD OF DIRECTORS(AS OF JUNE 26, 2009)

CHAIRMANPRESIDENT

Keiji Kataoka

Junzo Inamura

EXECUTIVE VICE PRESIDENTEXECUTIVE VICE PRESIDENT

Masaaki Kato

Kosuke Sato

DIRECTOR AND
SENIOR MANAGINGEXECUTIVE OFFICERDIRECTORSSENIOR CORPORATE
AUDITORSCORPORATE AUDITORS

Hiroshi Sugiyama
Ken Torikai
Noriyasu Nagai

Tetsuro Kawakami
Yasuo Matoi

Kazuo Hosoya
Sumio Kimura

Hideo Fujii
Sanpei Nozaki

Annual Report 200943