Quarterly Consolidated Financial Statements
Included in the Quarterly Report

Meiko Electronics Co., Ltd.
and its consolidated subsidiaries
For the first quarter and three months ended June 30, 2016
(ENGLISH TRANSLATION)NOTE:This document is an excerpt translation of the Quarterly Report (“Shihanki Houkokusho”) of MeikoElectronics Co., Ltd. (the “Company”), for the first quarter and three months ended June 30, 2016,
filed with the Director of the Kanto Local Finance Bureau of the Ministry of Finance of Japanpursuant to the Financial Instruments and Exchange Law of Japan on August 10, 2016.
Please note that the quarterly consolidated financial statements in this document are a translation of
the reviewed quarterly consolidated financial statements presented in Japanese. The translation of thequarterly consolidated financial statements and notes has NOT been audited by KPMG AZSA LLC,
who reviewed the original Japanese figures.
The Company provides this translation for your reference and convenience only without any warranty
as to its accuracy. In case of any discrepancy between the translation and the Japanese original, thelatter shall prevail. The final decision and responsibility for investments rests solely with the reader ofthis document.

Financial Information
1 Basis of preparation of the quarterly consolidated financial statements
The quarterly consolidated financial statements of the Company are prepared in accordance with the“Ordinance on the Terminology, Forms, and Preparation Methods of Quarterly Consolidated FinancialStatements” (Cabinet Office Ordinance No. 64 of 2007).

2 Review reports
The quarterly consolidated financial statements of the Company for the first quarter (April 1, 2016 –June 30, 2016), and those for the three months ended June 30, 2016, were reviewed by KPMG AZSA
LLC, pursuant to Article 193-2, Paragraph 1 of the Financial Instruments and Exchange Law of Japan.

-1-1 Consolidated Financial Statements(1) Consolidated Balance Sheets
Meiko Electronics Co., Ltd. and its consolidated subsidiaries

Thousands ofU.S. dollars

Millions of yen
March 31, 2016

AssetsCurrent assets
Cash and deposits
Notes and accounts receivable-trade
Merchandise and finished goods
Work in process
Raw materials and supplies
OtherAllowance for doubtful accounts
Total current assets
Non-current assetsProperty, plant and equipment
Buildings and structures, netMachinery, equipment and vehicles, netLand
Construction in progress
Other, net
Total property, plant and equipment
Intangible assets
Investments and other assets
Total non-current assets
Total assets

¥

*1

¥

-2-

June 30, 2016

19,532
21,759
3,855
3,263
4,497
2,448
(24)
55,33021,016
21,135
1,488
1,735
5,360
50,734
213
3,328
54,275
109,605¥*1¥

June 30, 2016

20,393
20,730
3,906
3,284
4,429
2,085
(17)
54,81018,85917,706
1,488
1,965
5,60645,624
200
2,950
48,774
103,584$*1$

198,071
201,341
37,93631,89843,014
20,255(167)
532,348

183,169
171,966
14,45519,08754,446443,123
1,943
28,651
473,717
1,006,065

Thousands ofU.S. dollars

Millions of yen
March 31, 2016

Liabilities
Current liabilities
Notes and accounts payable-trade
Short-term loans payable
Current portion of long-term loans payable
Income taxes payable
Provision for bonuses
Other
Total current liabilities
Non-current liabilities
Long-term loans payable
Provision for directors’ retirement benefits
Net defined benefit liability
Other
Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity
Capital stock
Capital surplus
Retained earnings
Treasury shares
Total shareholders’ equity
Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets¥*3*3*332,2542392,287
4,071
38,85180,841¥-3-11,605
12,613
11,746
147
495
5,384
41,990June 30, 2016

¥*3
*3

*3

12,053
11,683
12,021
149
248
6,068
42,222
29,636
239
2,326
4,217
36,41878,640June 30, 2016

$
*3
*3

*3

117,061
113,475
116,752
1,443
2,408
58,938410,077
287,838
2,321
22,58940,967353,715
763,792

12,88919,745(7,660)(396)
24,57812,88911,745(1,154)(396)
23,084125,179
114,082(11,212)(3,850)224,199

32
(337)
4,476
(246)
3,925
261
28,764
109,605(46)(302)
2,204(230)
1,626
234
24,944
103,584(450)(2,934)
21,406(2,234)
15,7882,286
242,273
1,006,065¥$

(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income
Consolidated Statements of Income
For the Three Months Ended June 30, 2016
Meiko Electronics Co., Ltd. and its consolidated subsidiaries
Thousands ofU.S. dollars

Millions of yen
Three months ended
June 30, 2015

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income (loss)
Non-operating incomeInterest income
Dividend income
Insurance income
Foreign exchange gains
Other
Total non-operating income
Non-operating expenses
Interest expenses
Foreign exchange losses
Other
Total non-operating expenses
Ordinary loss
Extraordinary income
Gain on sales of non-current assets
Total extraordinary income
Extraordinary losses
Loss on sales and retirement of non-current assets
Impairment loss
Other
Total extraordinary losses
Loss before income taxes
Income taxes
Loss
Loss attributable to non-controlling interests
Loss attributable to owners of parent¥

*1¥

-4-

Three months endedJune 30, 2016

22,451
20,413
2,038
2,684(646)¥Three months ended
June 30, 2016

22,31818,821
3,497
2,568
929

$

216,765
182,797
33,96824,944
9,024

5
3－
747
57
812

6
3
50
－
24
83

59
32
486
－
231
808

305
－
78
383
(217)

325
1,941
31
2,297
(1,285)

3,155
18,850302
22,307(12,475)

7
7

－
－－－

42
8,037
－
8,079
(8,289)1,078(9,367)－(9,367)

*1

¥

39
1
3
43(1,328)
170(1,498)(3)(1,495)

*1

$

382
730
419
(12,894)
1,651(14,545)(26)(14,519)

Consolidated Statements of Comprehensive Income
For the Three Months Ended June 30, 2016
Meiko Electronics Co., Ltd. and its consolidated subsidiaries
Thousands ofU.S. dollars

Millions of yen
Three months ended
June 30, 2015

Loss
Other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans, net of tax
Total other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners of parent
Comprehensive income attributable to non-controlling interests¥(9,367)

Three months ended
June 30, 2016

¥

26(6)
516
(63)
473
(8,894)¥-5-(8,894)－(1,498)

Three months ended
June 30, 2016

$(79)
35
(2,277)16(2,305)(3,803)¥(3,795)(8)(14,545)(766)
339(22,117)157(22,387)(36,932)$(36,853)(79)Notes to the Consolidated Financial Statements
Matters concerning Going Concern Assumption
Not applicable
Basis of Presenting Consolidated Financial Statements
The accompanying consolidated financial statements of Meiko Electronics Co., Ltd. (the “Company”) havebeen prepared in accordance with the provisions set forth in the Financial Instruments and Exchange Law ofJapan and its related accounting regulations, and in conformity with accounting principles generally acceptedin Japan (“Japanese GAAP”), which are different in certain respects as to application and disclosure
requirements of International Financial Reporting Standards.
The consolidated financial statements are stated in Japanese yen, the currency of the country in which theCompany is incorporated and operates. The translation of Japanese yen amounts into U.S. dollar amounts is
included solely for the convenience of readers outside Japan and have been made at the rate of ¥102.96 to $1,
the approximate rate of exchange at June 30, 2016. Such translation should not be construed as representationthat the Japanese yen amounts could be converted into U.S. dollars at that or any other rate.
Change in Accounting Policies(Application of Practical Solution on a Change in Depreciation Method due to Tax Reform 2016)
Following the revision to the Corporation Tax Act, the Company and its consolidated domestic subsidiaries
have adopted the “Practical Solution on a Change in Depreciation Method due to Tax Reform 2016” (PITFNo. 32, June 17, 2016) beginning with the first quarter ended June 30, 2016. As a result, the method ofdepreciation of facilities attached to buildings and structures acquired on and after April 1, 2016 has beenchanged from the declining-balance method to the straight-line method.
The effect of this change on the profit or loss for the three months ended June 30, 2016 was not material.
Specific Accounting Treatments Adopted in Preparing the Quarterly Consolidated Financial Statements(Computation of Tax Expense)
Tax expenses are calculated by reasonably estimating the effective tax rate after the adoption of tax-effectaccounting that is applicable to income before income taxes for the fiscal year ending March 31, 2017, andmultiplying income before income taxes for the period under review by this estimated effective tax rate.
Additional Information(Application of Implementation Guidance on Recoverability of Deferred Tax Assets)
Effective from the first quarter ended June 30, 2016, the Company has adopted the “Implementation
Guidance on Recoverability of Deferred Tax Assets” (ASBJ Guidance No. 26, March 28, 2016).

-6-Consolidated Balance Sheets*1 Amount of allowance for doubtful accounts directly deducted from the amount of assets
Thousands ofU.S. dollars

Millions of yen

Investments and other assets･･･････････････････

March 31, 2016

June 30, 2016

¥

¥

19

June 30, 2016

19

$184

2 Discounted notes receivable-trade are summarized below:
Thousands ofU.S. dollars

Millions of yen

Discounted notes receivable-trade･･････････････

March 31, 2016

June 30, 2016¥¥

55

June 30, 2016

83

$804

*3 Financial covenants
Consolidated fiscal year ended March 31, 2016
Of short-term loans payable and long-term loans payable (including loans payable scheduled for repayment
within one year), ¥36,060 million have financial covenants attached under which the breaching of any of thefollowing will require the accelerated repayment of the obligation in the corresponding funding agreement(when there is more than one covenant, the one with stricter conditions is stated).
(1) Two consecutive ordinary losses shall not be recorded in the consolidated statements of income for eachfiscal year.
(2) The total amount of net assets recorded in the consolidated balance sheet as of the close of each fiscal year
shall be at least the higher of: (i) ¥21,962 million; or (ii) 80% of the total amount of net assets recorded in
the consolidated balance sheet as of the close of the immediately preceding fiscal year. However, (ii) shallexclude the fiscal year ended March 31, 2016.
(3) The total amount of interest-bearing debt recorded in the consolidated balance sheet as of the close ofeach fiscal year shall be no more than the amount of net sales recorded in the consolidated statement ofincome for the same fiscal year, divided by 12 and multiplied by 8.
Three months ended June 30, 2016
Of short-term loans payable and long-term loans payable (including loans payable scheduled for repayment
within one year), ¥34,962 million have financial covenants attached under which the breaching of any of thefollowing will require the accelerated repayment of the obligation in the corresponding funding agreement(when there is more than one covenant, the one with stricter conditions is stated).
(1) Two consecutive ordinary losses shall not be recorded in the consolidated statements of income for eachfiscal year.
(2) The total amount of net assets recorded in the consolidated balance sheet as of the close of each fiscal year
shall be at least the higher of: (i) ¥21,962 million; or (ii) 80% of the total amount of net assets recorded in
the consolidated balance sheet as of the close of the immediately preceding fiscal year. However, (ii) shallexclude the fiscal year ended March 31, 2016.
(3) The total amount of interest-bearing debt recorded in the consolidated balance sheet as of the close ofeach fiscal year shall be no more than the amount of net sales recorded in the consolidated statement ofincome for the same fiscal year, divided by 12 and multiplied by 8.

-7-

Consolidated Statements of Income*1 Impairment loss
Three months ended June 30, 2015
The Group recorded impairment loss for the following asset group.
Use

Business assets

Type of assets
Buildings and structures
Machinery, equipment and vehicles
OthersLocation

Buildings and structures
Machinery, equipment and vehicles
OthersAmountIshinomaki,
Miyagi, Japan¥964 million

Hanoi, Vietnam¥7,073 millionTotal¥8,037 million

The Group carries out grouping mainly based on each plant for business assets. During the three months
ended June 30, 2015, the Group reduced the book value of business assets to the recoverable amount due to a
decline in profitability, and recorded the reduced amount as an impairment loss of ¥8,037 million under
extraordinary losses. The breakdown is: ¥3,194 million for buildings and structures; ¥3,358 million formachinery, equipment and vehicles; ¥213 million for land; ¥828 million for construction in progress; and ¥444 million for others.
The recoverable amount of this asset group uses the higher of net realizable value and use value. Net
realizable value is evaluated based on the amount obtained by making reasonable adjustments to the assessedvalue of non-current assets. Use value is obtained by discounting future cash flow by 14.0%.
Three months ended June 30, 2016
Description is omitted as they are of little significance.
Consolidated Statements of Cash Flows
No consolidated statements of cash flow were prepared for the three months ended June 30, 2016.
Depreciation (including amortization related to intangible assets) for the three months ended June 30, 2016 isshown below:
Thousands of
U.S. dollars

Millions of yen
Three months ended
June 30, 2015

Depreciation･････････････････････････････････

-8-

¥

1,763

Three months ended
June 30, 2016

¥1,370Three months ended
June 30, 2016

$13,306

Total Shareholders’ Equity
Three months ended June 30, 2015
1 Cash dividends paid
Not applicable
2 Of the dividends whose record date falls during the three months ended June 30, 2015, those dividends whoseeffective date fell after the last day of the first quarter
Not applicable3 Significant changes in shareholders’ equity
Effective from the first quarter ended June 30, 2015, Meiko Electronics Thang Long Co., Ltd., which was a
non-consolidated subsidiary in the previous consolidated fiscal year, has been included in the scope ofconsolidation, due to a rise in its importance. As a result, retained earnings as of the beginning of the term
have decreased by ¥462 million.
Three months ended June 30, 2016
1 Cash dividends paid
Not applicable
2 Of the dividends whose record date falls during the three months ended June 30, 2016, those dividends whoseeffective date will fall after the last day of the first quarter
Not applicable3 Significant changes in shareholders’ equity
By resolution of the annual shareholders’ meeting held on June 28, 2016, the Company reduced its capitalreserve by ¥8,000 million as of June 30, 2016 in accordance with the provisions of Article 448, Paragraph 1 ofthe Companies Act, and transferred it to other capital surplus. In addition, the Company transferred ¥8,000
million of other capital surplus to retained earnings brought forward, in accordance with the provisions ofArticle 452 of the Companies Act to compensate for loss.
As a result, capital surplus was ¥11,745 million and retained earnings was ¥(1,154) million as of June 30,
2016.

-9-

Segment Information
As the Group’s businesses are primarily in PCB design, manufacturing, sales, and ancillary operations, thedescription of other businesses is omitted as they are of little significance.
Per Share Information
The basis for calculating loss per share is shown below:
Three months ended
June 30, 2015(357.86)

Item

Three months ended
June 30, 2016
(60.45)

Loss per share (Yen)Basis for calculation
Loss attributable to owners of parent (Millions of yen)
(9,367)(1,495)
Amounts not attributable to common shareholders
87－(Millions of yen)
Of which the amount of preferred dividends (Millions of yen)[－]
[87]
Loss attributable to owners of parent pertaining to(9,367)(1,582)
common shares (Millions of yen)
Average number of common shares outstanding for the period
26,174,076
26,174,076(Shares)
Note: Diluted profit per share for the three months ended June 30, 2015 is not disclosed as there
were no diluted shares. Furthermore, diluted profit per share for the three months ended
June 30, 2016 is not disclosed although there were diluted shares, as the profit per share was negative.
Significant Subsequent Events
Not applicable2

Other
Not applicable- 10 -