+

Annual Report 2016
For the year ended March 31, 2016

Meiko Electronics Co., Ltd.

The Meiko Group consists of Meiko Electronics Co., Ltd. (the “Company”), and its 16
subsidiaries (12 consolidated subsidiaries and 4 non-consolidated subsidiaries) (the“Group”). As the Group’s businesses are primarily in PCB design, manufacturing, sales, andancillary operations, the description of other businesses is omitted as they are of little
significance.

Forward-looking Statements:
This annual report contains forward-looking statements that are based on the information
currently available to management, and estimates involving uncertain factors thought likely
to have an effect on future results. As such, they include various risks and uncertainties.
Actual results may differ materially from these projections for a variety of reasons, includingchanges in business environments, market trends and exchange rate fluctuations relevantto the business of Meiko Electronics Co., Ltd.

1

Contents
Five-year Financial Summary.............................................................................................. 3
Financial Review: Management’s Discussion and Analysis ........................................... 5
Business Risks ..................................................................................................................... 9
Consolidated Financial Statements ................................................................................. 12
Principal Subsidiaries and Affiliates ................................................................................ 34
Principal Shareholders ...................................................................................................... 35
Corporate History ............................................................................................................... 36
Corporate Data (As of March 31, 2016) ............................................................................ 38
Meiko Share Performance in FY2016 Compared with Indices ...................................... 392

Five-year Financial Summary(For the years ended/as of March 31)
2012

2013

2014

2015

2016

(millions of yen, except per share amounts)
Consolidated financial indicators:
Net sales¥62,973¥60,709¥79,232¥90,895¥95,287

222

(387)

1,932

1,075

(492)

Profit (loss) attributable to ownersof parent

1,159(1,568)23(9,573)(11,250)

Comprehensive income

2,048

1,822

3,522

(5,954)(14,709)

Net assets

35,02836,72744,70838,62328,764

Total assets

91,105102,046

115,427

122,964

109,605

1,865.71

1,956.24

1,708.09

1,475.59

897.9761.73(83.52)

1.11(365.76)(429.83)

—

—

—

—

—

Equity ratio

38.4%

36.0%

38.7%

31.4%

26.0%

Return on equity (ROE)

3.4%

-4.4%

0.1%

-23.0%-33.5%

Price earnings ratio (PER) (times)

19.4

—

583.5

—

—

Cash flows from operating activities

9,252

3,594

2,426

2,238

9,932

Cash flows from investing activities(10,377)(5,075)(4,021)(6,986)(1,737)

Cash flows from financing activities

2,360

5,358

1,187

4,861

1,967

Cash and cash equivalents
at the end of the period

3,752

8,788

8,759

9,491

19,313

Number of employees

9,948

9,966

11,858

10,895

9,491

[397]

[528]

[700]

[609]

[633]

Ordinary income (loss)

Net assets per share (yen)Net income (loss) per share (yen)Net income per share (diluted)(yen)[Averagestaff]

numberoftemporary3

Net sales

Net income (loss), basic per share
Net income, diluted per share¥200.00(yen)(millions of yen)

¥100,000¥80,000¥100.00¥0.00(¥100.00)¥60,000(¥200.00)¥40,000(¥300.00)(¥400.00)¥20,000(¥500.00)
¥0

2012
2012

2013

2014

2015

2016

Net income (loss)

2016(millions of yen)(millions of yen)¥0(¥2,000)(¥4,000)(¥6,000)(¥8,000)(¥12,000)

2012

2013

2014

2015

2012

2016

2013

Cash flows from operating activities
Cash flows from financing activities

2014

2015

2016

Cash flows from investing activities

Return on equity (ROE)

Net assets¥50,000(percentage)(millions of yen)

2015

Net income, diluted per share (yen)¥20,000¥15,000¥10,000¥5,000¥0(¥5,000)(¥10,000)(¥15,000)(¥20,000)(¥10,000)¥40,000¥30,000

5.0%
-5.0%

¥20,000-15.0%¥10,000-25.0%

¥0

2012

2013

2014

2015

2014

2015

2016

600.0 times(times)¥120,000¥90,000

500.0 times
400.0 times
300.0 times¥60,000

200.0 times¥30,000

100.0 times
0.0 times
2012

2013

2014

2015

2016

Net assets per share¥3,000.00¥2,000.00¥1,000.00
¥0.00

2013

Price earnings ratio (PER)¥150,000¥0

2012-35.0%

2016

Total assets(millions of yen)

2014

Cash flows¥2,000

(yen)

2013

Net income (loss), basic per share (yen)

2012

2013

2014

2015

2016

4

2012

2013

2014

2015

2016

Financial Review: Management’s Discussion and Analysis
The forward-looking statements in this section are based on the Group’s assumptions
as of the end of the current consolidated fiscal year.
(1) Significant accounting policies and estimates
The consolidated financial statements of the Group have been prepared in conformity
with accounting principles generally accepted in Japan (“Japanese GAAP”). Prior to thepresentation of these consolidated financial statements, the Company used its most
relevant accounting principles in accordance with the Ordinance on Terminology, Forms,
and Preparation Methods of Consolidated Financial Statements (Ordinance of the
Ministry of Finance No. 28 of 1976). The statements of estimates have been preparedin view of past results and reasonable assumptions, however, they involve uncertainties
and actual results may differ from the estimates presented.
(2) Analysis of the Group’s financial position
Current assets
Current assets as of March 31, 2016 were ¥55,330 million, up ¥3,782 million from theend of the previous fiscal year. This change mainly comprised an increase of ¥9,822
million in cash and deposits, a decrease of ¥984 million in trade notes and accounts
receivable, a decrease of ¥2,068 million in inventories, and a decrease of ¥2,268 inother receivables.
Non-current assets
Non-current assets as of March 31, 2016 were ¥54,275 million, down ¥17,141 million
from the end of the previous fiscal year. Major factors for this decrease were a ¥14,180
million decrease in property, plant and equipment, a ¥1,941 million decrease ininvestment securities and a ¥985 million decrease in deferred tax assets.
Current liabilities
Current liabilities as of March 31, 2016 were ¥41,990 million, down ¥5,129 million fromthe end of the previous fiscal year. This change mainly consisted of a ¥1,008 million
decrease in trade notes and accounts payable, a ¥646 million decrease in short-termborrowings, and a ¥2,354 million decrease in the current portion of long-termborrowings.
Non-current liabilities
Non-current liabilities as of March 31, 2016 were ¥38,851 million, up ¥1,629 million fromthe end of the previous fiscal year. The major factor in this increase was ¥1,597 million
in lease obligations.
Net assets
Net assets as of March 31, 2016 were ¥28,764 million, down ¥9,859 million from theend of the previous fiscal year. Major factors for this decrease were a ¥4,935 million
increase in capital surplus due to the issue of class A preference shares through athird-party allotment, an ¥11,712 million decrease in retained earnings and a ¥2,978
million decrease in foreign currency translation adjustments.

5(3) Analysis of business results
1) Net sales
The Group’s business performance during the fiscal year under review was boosted byrobust sales of PCBs (printed circuit boards) for automotive products on the back ofglobally strong demand for automobiles, and by favorable sales of PCBs for
smartphones to Chinese manufacturers, mainly through orders from existing customers.
As a result, net sales were ¥95,287 million, up ¥4,392 million, or 4.8%, from theprevious fiscal year.
2) Cost of sales and selling, general and administrative expenses
Cost of sales decreased ¥962 million, or 1.2%, from the previous fiscal year to ¥82,101
million, reflecting a rise in productivity due to an improvement in product yield, as wellas efforts in structural reforms such as a reduction in fixed costs. As a result, grossprofit increased ¥5,354 million, or 68.4%, from the previous fiscal year to ¥13,186
million. The gross margin increased 5.2 percentage points, from the previous fiscal year
to 13.8%.
Selling, general and administrative expenses decreased ¥837 million, or 7.8%, fromthe previous fiscal year to ¥9,861 million, primarily due to a decrease in personal
expenses and packing and freight expenses.
3) Operating income
Operating income increased ¥6,191 million to ¥3,325 million from an operating loss of¥2,866 million in the previous fiscal year, owing to an increase in net sales and the fruitsof structural reforms for the improvement of the revenue structure. Operating margin
was 3.5% compared with −3.2% for the previous fiscal year.
4) Non-operating income and non-operating expenses
Non-operating income decreased ¥5,047 million from the previous fiscal year to ¥301
million, primarily due to foreign exchange gains in the previous fiscal year turning into
foreign exchange losses.
Non-operating expenses increased ¥2,711 million from the previous fiscal year to¥4,118 million, mainly due to the recording of foreign exchange losses.
5) Ordinary loss
Ordinary loss was ¥492 million, compared with an ordinary income of ¥1,075 million in
the previous fiscal year, due primarily to the increase in non-operating expenses,
despite the recording of an operating income.
6) Extraordinary income (loss)
Extraordinary income decreased ¥228 million from the previous fiscal year to ¥33
million. This primarily reflected the recording of gain on sales of non-current assets of¥12 million and compensation income of ¥13 million from Tokyo Electric Power
Company (currently Tokyo Electric Power Company Holdings, Incorporated), for the
fiscal year under review.
Extraordinary loss decreased ¥622 million from the previous fiscal year to ¥9,074
million. This mainly reflected the recording of a net loss on sales and disposal ofproperty, plant and equipment of ¥388 million, and an impairment loss of ¥7,978 million
for the fiscal year under review.
7) Loss attributable to owners of parent
The total amount of income taxes–current and income taxes–deferred increased ¥505
million from the previous fiscal year to ¥1,718 million.
As a result of the above, the loss attributable to owners of parent was ¥11,250 million,
compared with a loss attributable to owners of parent of ¥9,573 million for the previous
fiscal year.
6(4) Analysis of source of funds and liquidity
1) Cash flows
Cash and cash equivalents (hereafter, “net cash”) as of March 31, 2016 increased¥9,822 million from the previous fiscal year, to ¥19,313 million.
Of the above amount, net cash that increased due to the inclusion of Meiko
Electronics Thang Long Co., Ltd., previously a non-consolidated subsidiary, into thescope of consolidation was ¥364 million.
Cash flows of each category and their causes during the consolidated fiscal year
ended March 31, 2016 were as follows.
Net cash provided by operating activities for the fiscal year under review was ¥9,932
million, up ¥7,694 million from the previous fiscal year.
Increases were mainly from depreciation and amortization of ¥6,471 million, an
impairment loss of ¥7,978 million, foreign exchange losses of ¥2,141 million, andproceeds from insurance income of ¥1,764 million. The major decreases comprised aloss before income taxes and minority interests of ¥9,533 million.
Net cash used in investing activities was ¥1,737 million, down ¥5,249 million from theprevious fiscal year. The major outflow was ¥2,395 million for the purchase of property,
plant and equipment. The major inflow comprised proceeds from liquidation ofsubsidiaries and associates of ¥524 million.
Net cash provided by financing activities was ¥1,967 million, down ¥2,894 million
from the previous fiscal year. The major inflows comprised proceeds from long-termborrowings of ¥12,627 million and proceeds from issuance of common stock of ¥4,812
million. The major outflows comprised payments for long-term borrowings of ¥14,328
million, repayments of lease obligations of ¥695 million and payments for installment
liabilities of ¥559 million.
Trends in cash flow indicators of the Group are as follows:Year ended
March 31, 2014

Year ended
March 31, 2015

Year ended
March 31, 2016

Equity ratio (%)

38.7

31.4

26.0

Market value equity ratio (%)

14.7

7.9

8.2

Cash flows versus Interest-bearing debt ratio

21.2

27.5

6.1

Interest coverage ratio (times)

2.5

2.1

7.8

Equity ratio = Equity capital / Total assets
Market value equity ratio = Stock market capitalization / Total assets
Cash flow versus interest-bearing debt ratio = Interest-bearing debt / Operating cash flow
Interest coverage ratio = Operating cash flow / Interest payment
Notes:
1. Each indicator is calculated based on consolidated financial values.
2. The stock market capitalization is calculated as follows: term-end closing stock price x term-end
number of shares issued (after deducting shares of treasury stock). Common stocks are subject tothe calculation.
3. The operating cash flow represents the cash flow provided by (used in) operating activities as
indicated in the consolidated statements of cash flows. Of the liabilities posted on the consolidatedbalance sheets, the interest-bearing debt covers all the liabilities for which interest was paid. Theinterest payment represents the payment of interest indicated in the consolidated statements ofcash flows.

72) Financial policy
The Group procures funds for its operations from internal reserves or borrowings. The
Group has a policy of procuring funds for investment and loans and funds to acquire
manufacturing equipment inside and outside Japan via long-term borrowings. With
regard to procuring such funds and the conditions of procurement, the Group strives toselect the most favorable timing and conditions.

8Business Risks
Below are some of the major risks from among those described in the securities report(provided/filed in Japanese only) which may significantly affect any decisions made byinvestors.
Forward-looking statements are based on the Group’s best judgment during theconsolidated fiscal year under review.
(1) The Group’s major customers’ business performance
The Group’s major customers are manufacturers of automobile electronic control
equipment, communications equipment and devices, digital household appliances, andpersonal computers, among others. The Group’s major business is the manufacture andsale of PCBs, which are parts that constitute a core function of finished products. Should anatural disaster or global economic turmoil occur and thus adversely impact the marketsof the industries in which the Group’s major customers operate, or lead to sluggish salesof their finished products, such factors could impact the volume of orders received by theGroup and affect the Group’s business performance.
(2) Risks related to the timing of capital investments
The Group conducts appropriate capital investment to enhance productivity and maintainproduct competitiveness. Although overseas and domestic capital investments arecarefully determined considering brand manufacturers’ business performance and market
trends, should manufacturers change strategies or the Group’s capital investments
become excessive upon a downturn in the economy, or the operation of new facilities bedelayed, factors such as the burden of depreciation costs could adversely affect theGroup’s business results and financial position.
(3) Possibility of product defects
PCBs are mounted with electronic components and then embedded in finished products
by brand manufacturers. The Group manufactures PCBs in compliance with globally
accepted quality control standards. In addition, brand manufacturers conduct inspections
upon receipt of the finished product checking for product defects. However, should alarge-scale recall or a product liability claim occur, such an incident would incur significant
costs and harm the value of our corporate brand, which could adversely affect the Group’s
performance.
(4) Technological development and price competition
Although the Group expects long-term expansion of demand for PCBs due to theworldwide spread of digital household appliances and the further advancement ofelectronic automobile components, to address intensifying global competition stemmingfrom downward pressure on prices from Southeast Asia, Japanese manufacturers need todifferentiate their products by adding more value. To this end, the Group is developing
technologies such as element technologies to make wires thinner and hole diameters
smaller, as well as cost-reduction technologies. However, should such technologies
diverge from market needs and not be accepted, the Group may get embroiled in a pricewar, which could affect its business performance.

9(5) Impact of disasters
The Group’s major manufacturing bases are the Fukushima Factory, the Yamagata
Factory (Yamagata Meiko Electronics Co., Ltd.) and the Ishinomaki Branch Factory(Yamagata Meiko Electronics Co., Ltd.), which are all located in the Tohoku region. The
Group endeavors to prevent damage from natural disasters by securing the safety of its
employees and protecting facilities against earthquakes and tsunami. However, the Great
East Japan Earthquake and subsequent tsunami, which were beyond our capability to
predict, seriously affected the Group’s business performance. Should a disaster of thatscale occur in the future, it could adversely affect the Company’s business performanceagain, despite the fact that we reviewed our risk management system following thedisaster.
In addition, although the Group conducts regular inspections and maintenance works
on its production equipment in manufacturing bases inside and outside Japan and strives
to minimize the occurrence of fire, equipment failures, accidents, etc. which may result inthe suspension of line operations, there is no guarantee that these will be prevented or
reduced completely.
Should production and shipping be suspended for a long period of time due to thesefactors, the Group’s business performance and financial position could be adversely
affected.
(6) Potential risks inherent in plant operations in China and Vietnam
To expand productivity and reduce production costs, the Group has established local
corporations in Hong Kong, Guangzhou and Wuhan in China, and in Vietnam, conducting
manufacturing and sales activities.
The following difficulties might occur in these countries:
1: Hygiene-related issues such as infectious diseases
2: Change or introduction of environmental regulations, legal restrictions and the tax
system3: Failure of infrastructure such as electricity, water and transportation
4: Political uncertainty and public security-related issues
5: Anti-Japanese demonstrations and/or labor disputes
Should unexpected events such as changes in the political or legal environment,
economic situation or environmental regulations occur, the Group’s business performanceand financial position could be adversely affected as a result of the issues which mightarise in the management of production facilities and equipment and in the execution ofother operations, or a large amount of liabilities or obligations associated with thecompliance of environmental conservation and other regulations.
(7) Foreign currency exchange rate fluctuation risk
To operate plants in China and Vietnam, we need to hold U.S. dollars and other foreign
currency-denominated assets. Therefore, the Group is exposed to yen-to-yuan andyen-to-U.S. dollar exchange rate fluctuations. These fluctuations could result in losses.
(8) Raw materials market fluctuation risk
The Group purchases the raw materials necessary for manufacturing from externalmaterials manufacturers and trading companies. The surge in prices of crude oil, copper,
gold, etc., could influence the prices of the raw materials the Group purchases andadversely affect the Group’s business performance and financial position.

10(9) Financial risks
The Group has made aggressive capital investments of amounts higher than the funds it
has acquired from operating activities to prepare for the anticipated medium- andlong-term increase in demand for digital household appliances and automobiles, as well
as responses to new products in line with technological innovation.
As a result, the ratio of borrowings to total assets as of March 31, 2016, was 51.7%.
Should we make further aggressive capital investments to fulfill our business strategies,
an increase in borrowings and/or interest rates could affect the Group’s businessperformance and financial position.
(10) Intellectual property rights
The Group recognizes intellectual properties as its significant management resources andseeks to acquire intellectual property rights by applying for patents, etc. for proprietary
technologies, etc. developed by the Group with the aim of protecting intellectual
properties. However, not all applications may be approved and it is also possible thatobtained rights may be rendered void due to objections by third parties.
Although the Company’s external relations and affairs department manages obtained
intellectual properties and pays attention to violation of rights by external parties,
anticipated profits could be lost in the event of illegal use, etc.
Meanwhile, should a lawsuit be filed against the Group with regard to a violation of
intellectual property rights of third parties, the Group’s business performance and financial
position could be adversely affected as a result of the compensation or damages paid tocustomers due to the suspension of production and payment of license fees, etc., related
to patent use in order to resume production.
(11) Risks associated with production activities
The Group may continue to build new plants or establish new production lines in order toexpand its production capacity in the future in accordance with demand of major
customers around the world. However, should such construction works be delayed or new
production lines not launched smoothly, it could result in a delay in delivery of products tocustomers or a decline in plant productivity, and the subsequent drop in sales might
adversely affect the Group’s business performance.

11

Consolidated Financial Statements
Consolidated Balance Sheets
Meiko Electronics Co., Ltd. and Consolidated Subsidiaries
As of March 31, 2016 and 2015
Thousands ofMillions of yen

ASSETS2016

U.S. dollars (Note 1)

2015

Current Assets:
Cash and cash equivalents (Note 12) .............................................................................................................................
\
19,313\
9,491
Receivables －Trade notes and accounts receivable (Note 12) ........................….....................................................................................
21,75922,743
Other receivables ............................................................................................................................…...…
1,399
3,667
Less: Allowance for doubtful accounts ........................................................................................................................
(24)
(17)
Inventories －Merchandise and finished goods .............................…............................................................................…
3,855
5,680
Work in process ................................…..................................................................................................…
3,263
3,170
Raw materials and supplies ...........................…......................................................................................…
4,497
4,833
Deferred tax assets (Note 11) ....................................................................................…........................ 44
463
Other ...................................................................................................................................................................…
1,224
1,518
Total current assets .......................................................................................................................55,330
51,5482016$

193,205
12,423(214)
34,22928,97439,929390
10,871
491,295

Property, Plant and Equipment, at Cost:
Land ................................................................................................................................................................
1,488
1,702
Buildings and structures ........................................................................…..................................................
36,67742,779Machinery and vehicles................................................…..........................................................................
69,54282,927
Leased assets................................................…..............................................................
5,363
601
Construction in progress ..........................................................................................................................
1,735
3,241
Other ................................................................................................................................................................….......….
3,835
4,020
118,640
135,270
Less: Accumulated depreciation ........................................................................................................….…
(67,906)(70,356)
Net property, plant and equipment ......................................................................................................…
50,73464,914
Intangible Assets

213

171,488

13,215
325,675
617,489
47,622
15,40334,0501,053,454(602,967)
450,487

294

1,888

Investments and Other Assets:
Investment securities (Notes 3 and 12) ....................................................................................................................
872
2,813
Long-term loans receivable .................................................................................................................... 51
101
Deferred tax assets (Note 11) .............................................................................................................. 1,027
2,012
Other ...............................................................................................................................................................…......…
1,397
1,662
Less: Allowance for doubtful accounts ..........................................................................................................
(19)
(19)
Less: Allowance for investment loss ..........................................................................................................… (361)
Total investments and other assets ..........................................................................................................
3,328
6,208
Total ...........................................................................................................................................
\
109,605\
122,964

7,742
456
9,120
12,412(168)
29,562
973,232

See notes to consolidated financial statements.

12$

Thousands of

LIABILITIES AND
NET ASSETS

Millions of yen

2016

U.S. dollars (Note 1)

2015

Current Liabilities:
Trade notes and accounts payable (Note 12) ..................................................................................................................
\
11,605\
12,613
Short-term borrowings (Notes 4 and 12) ............................................................................................................…
12,613
13,259Current portion of long-term borrowings (Notes 4 and 12) ........................................................................................................
11,746
14,100
Income taxes payable (Note 11) .....................................................................................................................
147
720
Accrued bonuses .................................................................................................................................. 495
460
Other (Notes 4 and 12) ................................................................................................................................................................
5,384
5,967
Total current liabilities ..................................................................................................................41,990
47,119Long-term Liabilities:
Long-term borrowings (Notes 4 and 12) .......................................................................................................................
32,25432,475
Lease obligations (Notes 4 and 12) .................................................................................
2,140
543
Long-term other payable (Notes 4 and 12) ...............................................................................................................
1,391
1,525
Provision for directors' retirement benefits ................................................................................................…
239
239
Net defined benefit liability (Note 5) .............................................................................................
2,287
2,146
Other ......................................................................................................................................................................
540
294
Total long-term liabilities ..................................................................................................................................................
38,851
37,222

2016$

103,049
111,996
104,295
1,309
4,392
47,809372,850

286,398
19,00012,3472,122
20,3084,800
344,975

Commitments and Contingent Liabilities (Note 8) :Net Assets (Note 6):
Shareholders' Equity:
Common stock:
Authorized:
70,000,000 shares in 2016 and 63,200,000 shares in 2015
Issued:26,803,320 shares in 2016 and 2015
Preferred stock:
Authorized:
50 shares in 2016 and no share in 2015
Issued:50 shares in 2016 and no share in 2015 ..............................................................................…........

12,88912,889114,442
Capital surplus ........................................................................................................................................................
19,745
14,810175,332
Retained earnings (accumulated deficit) ..................................................................................................................................................................…
(7,660)
4,052(68,013)
Less: Treasury stock, at cost; Common stock,629,244 shares in 2016 and 2015 ......................................................................................................................
(396)
(396)
(3,519)Total shareholders' equity...............................................................................................................................................…
24,57831,355
218,242
Accumulated Other Comprehensive Income:Unrealized gains (losses) on available-for-sale securities .......................................................................................................................
32
131
289
Deferred gains (losses) on hedges ...........................................................................................................................…
(337)
(162)
(2,993)Foreign currency translation adjustments ..................................................................................
4,476
7,454
39,741Remeasurements of defined benefit plans (Note 5) ......................................................................
(246)
(155)
(2,186)
Total accumulated other comprehensive income...............................................................................................................................................…
3,925
7,268
34,851
Non-controlling interests……………………………………………..………………...…………
261
2,314
Total net assets ..................................................................................................................................................
28,764
38,623
255,407
Total ........................................................................................................................................................
\
109,605\
122,964$
973,232

See notes to consolidated financial statements.

13

Consolidated Statements of Operations
Meiko Electronics Co., Ltd. and Consolidated Subsidiaries
For the Years ended March 31, 2016, 2015 and 2014
Thousands ofMillions of yen

2016

U.S. dollars (Note 1)

2015

2014

2016

Net Sales ...........................................................................................................................................................
\
95,287\90,895\
79,232$846,095
Cost of Sales (Note 9) ..................................................................................................................................................
82,101
83,06369,023729,012Gross profit ......................................................................................................................................................
13,186
7,832
10,209117,083
Selling, General and Administrative Expenses (Note 9) ........................................................................................................................................................................
9,861
10,6989,286
87,557
Operating income (loss) ....................................................................................................................................…
3,325(2,866)923
29,526
Other Income (Expenses):
Interest expense, net ...............................................................................................................................................
(1,262)(1,027)
Dividend income ...............................................................................................................................................
24
21
Foreign exchange gain (loss).............................................................................…....................…
(1,818)
5,051
Net gain (loss) on sales and disposal of property, plant and equipment (Note 10)............................................…
(376)
(480)
Subsidy income ..............................................................................................................................................................…
71
39
Compensation income (Note 14) ..............................................................................................................................................................…
13
258
Gain on liquidation of subsidiaries ....................................................................................
8
Insurance income.............................................................................................................................
40
39
Commission for syndicate loan ..............................................................................................................................................................…
(570)
(135)
Impairment loss (Note 7) ............................................................................................................
(7,978)(8,821)
Provision of allowance for investment loss ...................................................................................
(332)
Other, net ......................................................................................................................................................................................
(1,010)(107)
Total ...............................................................................................................................................
(12,858)(5,494)

(932)
18
2,049
181
93
287
11
(121)
(62)
(200)
1,324

(11,206)
217(16,144)(3,336)
630
112
73
353
(5,058)(70,841)(8,972)(114,172)

Income (Loss) before Income Taxes ..........................................................................................

2,247(84,646)

Income Taxes (Note 11):
Current ...............................................................................................................................................…453
1,166
1,056
Deferred .................................................................................................................................................
1,265
47
1,168
Total income taxes ............................................................................................................................
1,718
1,213
2,224
Net income (Loss)...........................................................................................................................…
(11,251)(9,573)23
Net Income (Loss) attributable to non-controlling interests............................................................................................
(1)
Net Income (Loss) attributable to owners of the Company ..........................................................................................................................................
\(11,250) \(9,573) \23

4,019
11,234
15,253(99,899)(2)(99,897)(9,533)(8,360)$Yen

Per Share of Common Stock:
Net income (loss) ..........................................................................................................................................
\(429.83) \Cash dividends applicable to the year ......................................................................................................................
-

See notes to consolidated financial statements.

14(365.76)-

U.S. dollars (Note 1)

\

1.11
10.00

$

(3.82)-

Consolidated Statements of Comprehensive Income (Loss)
Meiko Electronics Co., Ltd. and Consolidated Subsidiaries
For the Years ended March 31, 2016, 2015 and 2014
Thousands ofMillions of yen

2016

U.S. dollars (Note 1)

2015

Net Income (Loss) ...........................................................................................................................................................
\(11,251) \(9,573)

2014
\

23

Other Comprehensive Income (Note 15):
Unrealized gains (losses) on available-for-sale securities................................................................................................................................…
(98)
33
Deferred gains (losses) on hedges ......................................................................................................................................................
(175)
(80)
Foreign currency translation adjustments ......................................................................................................................................................
(3,094)
3,688
Remeasurements of defined benefit plans .......................................................................
(91)
(22)
Total other comprehensive income ......................................................................................................................................................
(3,458)3,619
Comprehensive Income (Loss) ......................................................................................................................................................
\(14,709) \(5,954) \

213
124
3,162
3,499
3,522

Comprehensive Income (Loss) Attributable to:
Owners of the Company ................................................................................................................................…
\(14,709) \(5,954)Non-controlling interests ......................................................................................................................................................
(0)
-

3,522
-

See notes to consolidated financial statements.

15

\

2016
$

(99,899)$(875)(1,555)(27,472)(809)(30,711)(130,610)$(130,607)(3)

Consolidated Statements of Changes in Net Assets
112.62 Meiko Electronics Co., Ltd. and Consolidated Subsidiaries
For the Years ended March 31, 2016, 2015 and 2014

Millions of yen
Shareholders' Equity
Common Stock

Number of
SharesBalance at March 31, 2013.......................................................................19,403,320\
Net income attributable to owners of the Company...........................................................
Issuance of new shares............................................................................... 7,400,000
Cash dividends paid.....................................................................................
Net increase (decrease)...............................................................................
Balance at March 31, 2014.......................................................................26,803,320\
Net loss attributable to owners of the Company............................................................ Cash dividends paid.....................................................................................
Net increase (decrease)...............................................................................
Balance at March 31, 2015.......................................................................26,803,320\
Net loss attributable to owners of the Company............................................................ Issuance of new shares...............................................................................
Transfer to capital surplus from preferred stock........................................................... Change of scope of consolidation...........................................................
-

Accumulated Other Comprehensive Income

Preferred Stock

Amount10,546
2,343
12,88912,889-Number of
SharesAmount
-

\

-

\

\

\

\

\

\

\

Retained
Earnings
13,82723(94)
13,756(9,573)(131)
4,052(11,250)(462)

Treasury
Stock at cost;
Common
Stock
(396)
\
(396)
\
(396)
\
-

Total
Shareholders'Equity36,444
\
23
4,686
(94)
41,059\(9,573)(131)
31,355\(11,250)
5,000
(462)

(115)
213
98
33
131
-

Deferred
Gains(Losses) on
Hedges
(206)
\
124
(82)
\
(80)
(162)
\
-

Unrealized Gains(Losses) on
Available-for-sale
Securities

\

\

\

Foreign Currency
Translation
Adjustments

\

\

\

604
3,162
3,766
3,688
7,454
-

\

(133)
(133)
(22)
(155)
-

\

\

-

-

-

-

-

-

-

-

-

-

-

116

-

Sales of shares of consolidated subsidiaries........................................................
Net increase (decrease)...............................................................................
Balance at March 31, 2016.......................................................................26,803,320

-

-

-

(65)
19,745(7,660)

(396)

(65)
24,578

(99)
32

(175)
(337)

(3,094)
4,476

(91)
(246)

\

12,889

50

\

\

\

\

\

\

\

\

Total
Accumulated
Other
Comprehensive
IncomeRemeasurementsof Defined Benefit
Plans

2,500
(2,500)-Change of scope of consolidation - foreign currency translation
adjustments..................................................................................................

50\

CapitalSurplus12,4672,343
14,81014,810
2,500
2,500
-

\

\

\

\

\

283 \
3,366
3,649 \
3,619
7,268 \-

Non-controlling
Interests
- \
- \
- \
-

Total Net
Assets36,727
23
4,686
(94)
3,366
44,708(9,573)(131)
3,619
38,623(11,250)
5,000
(462)

116

-

116

(3,459)3,925 \

262
(1)
261 \

197
(3,460)28,764Non-controlling
Interests- $-Total Net
Assets342,943(99,897)
44,398(4,100)2,316(2)2,314 $

1,746
(30,713)
255,407

Thousands of U.S. dollars (Note 1)
Shareholders' Equity

Balance at March 31, 2015.......................................................................
Net loss attributable to owners of the Company............................................................
Issuance of new shares...............................................................................
Transfer to capital surplus from preferred stock...........................................................
Cash dividends paid.....................................................................................
Change of scope of consolidation...........................................................

$

CommonStock
114,442-

Change of scope of consolidation - foreign currency translation
adjustments..................................................................................................

Sales of shares of consolidated subsidiaries...........................................................
Net increase (decrease)...............................................................................
Balance at March 31, 2016.......................................................................

$

114,442

Preferred
Stock
$

-

$

22,199(22,199)-

CapitalSurplus131,504
22,19922,199-

Accumulated Other Comprehensive Income$

Retained
Earnings
35,984(99,897)(4,100)Treasury
Stock at cost;
CommonStock$(3,519)-

Total
Shareholders'Equity$278,411(99,897)
44,398(4,100)

Unrealized Gains(Losses) on
Available-for-sale
Securities

$

1,164
-

Deferred
Gains(Losses) on
Hedges$(1,438)-Foreign Currency
Translation
Adjustments$

66,183-$(1,377)
-

-

-

-

-

-

-

-

-

1,030

-

-

-

(570)
175,332(68,013)(3,519)(570)
218,242(875)
289(1,555)(2,993)(27,472)
39,741(809)(2,186)

$

$

$

$

See notes to consolidated financial statements.

16

$

$

$

$

Total
Accumulated
Other
Comprehensive
IncomeRemeasurementsof Defined Benefit
Plans

$

$

64,532 $
1,030$(30,711)34,851 $1,030

Consolidated Statements of Cash Flows
Meiko Electronics Co., Ltd. and Consolidated Subsidiaries
For the Years ended March 31, 2016, 2015 and 2014
Thousands ofMillions of yen

2016
Operating Activities:
Income (loss) before income taxes ......................................................................................................................................................
\(9,533)

U.S. dollars (Note 1)

2015

2014
\

2016

\

(8,360)Depreciation and amortization ...................................................................................................................................................... 6,471
Impairment loss...........................................................................................................................................................
7,978
Increase (decrease) in allowance for doubtful accounts ...................................................................................................................................
7
Increase (decrease) in allowance for investment loss ........................................................................................…..
(361)
Decrease in provision for employees' retirement benefits ..........................................................................................
Increase in net defined benefit liability .......................................................................................................................
124
Increase (decrease) in accrued bonuses .......................................................................................................................…
35
Decrease in provision for directors' retirement benefits................................................................................................
Interest income and dividend income ......................................................................................................................
(51)
Interest expenses ..................................................................................................................................................
1,287
Commission for syndicate loan ...............................................................................................................................................
570
Foreign exchange (loss) gain .......................................................................................................................................
2,141
Net loss (gain) on sales and disposal of property, plant and equipment.......................................................................
376
Compensation income ...........................................................................................................................................
(13)
Gain on liquidation of subsidiaries ...................................................................................................................................................… (8)Decrease (increase) in trade notes and accounts receivable ..........................................................................................................................
129
Decrease (increase) in inventories ...........................................................................................................................................
1,153
Increase (decrease) in trade notes and accounts payable ...................................................................................................................................
(31)
Decrease (increase) in other assets .......................................................................................................................…
894
Increase (decrease) in other liabilities .......................................................................................................................…
(192)
Subtotal
10,976
Interest and dividend received .................................................................................................................................
51
Interest paid ............................................................................................................................................................
(1,275)
Proceeds from compensation income ............................................................................................................................................… 13
Proceeds from subsidy income ..............................................................................................................................
Proceeds from insurance income ............................................................................................................................
1,764
Payments for business structure improvement ........................................................................................................
(600)
Income taxes paid ..................................................................................................................................................
(997)
Net cash provided by operating activities ..................................................................................................................................
9,932

7,186
8,821
0
332
182
(41)
(22)
(55)
1,061
135
(4,167)480(258)(3,173)
(515)
1,281
(36)
1,165
4,016
55
(1,073)258(1,018)
2,238

6,182
62
(19)
(1,517)
1,735
60
(38)
952
121
(2,054)(181)(287)(5,871)
(616)
2,000
(281)
601
3,096
39
(971)
287
500
1,206
(1,731)
2,426

57,462
70,84158(3,206)
1,103
309
(450)
11,4395,058
19,012
3,336
(112)
(73)
1,147
10,238(272)
7,940(1,721)
97,463450(11,318)112
15,661(5,327)(8,850)88,191

Investing Activities:
Payments for purchases of property, plant and equipment ..........................................................................................................................
(2,395)
Proceeds from sales of property, plant and equipment ................................................................................................................................
75
Payments for purchases of intangible assets ..........................................................................................................................
(46)
Proceeds from liquidation of subsidiaries and affiliates ..........................................................................................................................524
Payments for purchases of investment securities ..........................................................................................................................
(10)
Payments for insurance policies .............................................................................….................................................
(5)
Proceeds from maturity of insurance funds .............................................................................….................................................
Other, net ...................................................................................................................................................................
120
Net cash used in investing activities ..................................................................................................................................................(1,737)(6,146)
48
(68)
(969)
(8)
92
65
(6,986)(4,724)
662
(101)
(325)
(13)
357
123
(4,021)(21,268)
668
(409)
4,654
(84)
(44)
1,062
(15,421)

Financing Activities:
Increase (decrease) in short-term borrowings ..........................................................................................................................
(87)
Proceeds from long-term borrowings ........................................................................................................................................... 12,627
Payments for long-term borrowings ........................................................................................................................................... (14,328)
Proceeds from issuance of common stock.................................................................................................................
4,812
Repayments of lease obligations................................................................................................................................
(695)
Payments for installment liabilities .............................................................................................................................
(559)
Cash dividends paid ..................................................................................................................................................
(0)

3,609
14,805(12,860)
(85)
(477)
(131)

(6,265)18,303(15,021)
4,686
(16)
(406)
(94)

(769)
112,124(127,220)
42,726(6,178)(4,966)
(1)

0
4,861

0
1,187

1,748
17,464

2,247$(84,646)

Adjustments to reconcile income (loss) before income taxes
to net cash provided by operating activities:

Proceeds from changes in ownership interests in subsidiaries that do not result in change in scope of consolidation.............................................................................................................
197

Other.......................................................................................................................................................................
Net cash provided by financing activities ..................................................................................................................................................
1,967

See notes to consolidated financial statements.

17

Thousands ofMillions of yen

U.S. dollars (Note 1)

2016

2015

2014

2016

(704)

619

379

(6,248)Net Increase (Decrease) in Cash and Cash Equivalents ..........................................................................................................................
9,458

732

(29)

83,986

Cash and Cash Equivalents at Beginning of Year .............................................................................................................................................
9,491
8,759
Increase in Cash and Cash Equivalents
resulting from Change of Scope of Consolidation (Note 16).............................................................................................................................................
364
Cash and Cash Equivalents at End of Year ............................................................................................................ \19,313
\
9,491

8,788

84,272

Effect of Exchange Rate Changes
on Cash and Cash Equivalents .....................................................................................................................................

See notes to consolidated financial statements.

18

\

8,759

$

3,230
171,488

Notes to Consolidated Financial Statements
Meiko Electronics Co., Ltd. and Consolidated Subsidiaries
For the Years ended March 31, 2016, 2015 and 2014
1. Basis of Presenting Consolidated Financial Statements
The accompanying consolidated financial statements of Meiko Electronics
Co., Ltd. (the “Company”) have been prepared in accordance withthe provisions set forth in the Financial Instruments and Exchange Law of Japanand its related accounting regulations, and in conformity with accounting
principles generally accepted in Japan (“Japanese GAAP”), which are different
in certain respects as to application and disclosure requirements ofInternational Financial Reporting Standards.
In preparing the accompanying consolidated financial statements,
certain reclassifications and rearrangements have been made to present
them in a form which is more familiar to readers outside Japan.
In addition, the notes to the consolidated financial statements include
information which is not required under Japanese GAAP, but ispresented herein as additional information.
The consolidated financial statements are denominated in Japanese yen,
the currency of the country in which the Company is incorporated
and operates. The translation of Japanese yen amounts into U.S. dollar
amounts is included solely for the convenience of readers outside Japanand have been made at the rate of \112.62 to $1, the approximate rate ofexchange at March 31, 2016. Such translation should not be construed
as representation that the Japanese yen amounts could be converted
into U.S. dollars at that or any other rate.

(f) Depreciation and Amortization (excluding leased assets)
Depreciation of property, plant and equipment for the Company and its
domestic subsidiaries is computed mainly by the declining-balance method.
Certain buildings and property, plant and equipments for overseas
subsidiaries are computed by the straight-line method.
The ranges of useful lives are summarized as follows:
Buildings and structures
2 - 47 years
Machinery and vehicles
2 - 10 years
Software for company use is carried at cost less accumulated amortization,
which is calculated by the straight-line method over their estimated useful
lives (five years).

2. Significant Accounting Policies
The following is a summary of the significant accounting policies
adopted by the Company and its consolidated subsidiaries
in the preparation of the consolidated financial statements.

(g) Leased assets
Leased property under finance lease arrangements which transfer ownershipof the leased property to the lessee is depreciated in the same method as
the one applied to property, plant and equipment owned by the Company.
Leased property under finance lease arrangements which do not transfer
ownership of the leased property to the lessee is capitalized to recognize
leased assets and lease obligations in the balance sheets and depreciatedover the lease term of the respective assets with zero residual value.

(a) Consolidation
The consolidated financial statements include the accounts of
the Company and its significant 12 subsidiaries (together, the “Group”).
Meiko Electronics Thang Long Co., Ltd has been included in the scope of
consolidation due to the increase of materiality for the year ended March 31,
2016.
Meiko Techno Co., Ltd was newly established and added to the scope of
consolidation for the year ended March 31, 2016.
All significant inter-company accounts and transactions have been eliminated.
In the elimination of investments in subsidiaries, the assets and liabilities ofthe subsidiaries, including the portion attributable to minority shareholders,
are recorded based on the fair value at the time the Company acquired
control of the respective subsidiaries. Investments in certain unconsolidated
subsidiaries are accounted for by cost method due to immateriality
in view of consolidation.
(b) Equity Method
Investments in unconsolidated subsidiaries and affiliates are accounted forby the equity method. However, certain investments in unconsolidated
subsidiaries and affiliates are not accounted for by the equity method and arestated at cost because the effect of their net income or losses and retained
earnings on the accompanying consolidated financial statements is immaterial.
(c) Cash Equivalents
Cash equivalents are short-term investments that are readily convertible
into cash and that are exposed to insignificant risk of changes in value.
Cash equivalents include time deposits, certificate of deposits, andcommercial paper, all of which mature or become due within threemonths of the date of acquisition.
(d) Translation of Foreign Currency Accounts
Current and non-current receivables and payables in foreign currencies
are translated at current rates prevailing at the balance sheet date andthe resulting exchange gains or losses are recognized in the consolidated
statements of operations.
Financial statements of consolidated overseas subsidiaries are translated
into Japanese yen at the exchange rate at the balance sheet date, exceptthat shareholders' equity accounts are translated at historical rates andstatement of income items resulting from transactions with the Company
at the rates used by the Company.
Foreign currency translation adjustments resulting from translation offoreign currency financial statements prepared by consolidated overseas
subsidiaries are presented in net assets in the consolidated balance sheets.
(e) Inventories
Inventories are stated at cost, determined by the first-in-first-out method.
However, they are written down due to decreased profitability where appropriate.

(Change in accounting estimates)
The useful lives of machinery of the Company andconsolidated domestic subsidiaries were fundamentally
reviewed upon renewal of machineries for the purpose of moresuited depreciation which reflect the actual situation of use.
Accordingly, useful lives were changed from 6 to 10 years from theyear ended March 31, 2016. As a result of this change,
operating income increased by \117 million ($1,037 thousand)and loss before income taxes decreased by the same amounts
for the year ended March 31, 2016.

(h) Allowance for Doubtful Accounts
The Company and its consolidated subsidiaries provide for doubtful
accounts principally at an amount computed based on the historical bad debt
ratio during a certain reference period plus an estimated uncollectible amountbased on the analysis of certain individual accounts including claims inbankruptcy.
(i) Accrued Bonuses
Accrued bonuses to employees are provided for the estimated amounts,
which the Company and its consolidated subsidiaries are obligated to
pay to employees after the fiscal year-end based on services rendered during
the current fiscal year.
(j) Impairment Losses on Fixed Assets
The Group reviews its long-lived assets for impairment whenever eventsor changes in circumstance indicate the carrying amount of an asset or
asset group may not be recoverable. An impairment loss would berecognized if the carrying amount of an asset or asset group exceeds
the sum of the undiscounted future cash flows expected to result fromthe continued use and eventual disposition of the asset or asset group.
The impairment loss would be measured as the amount by which
the carrying amount of the asset exceeds its recoverable amount,which is higher of asset's or cash-generating unit's fair valueless costs to sell and its value in use.
(k) Investment Securities
The Company has classified all the equity securities as available-forsale securities based on management’s intention. Available-for-salesecurities other than non-marketable are reported at fair value withunrealized gains or losses, net of applicable taxes, reported in a separate
component of net assets.
Non-marketable available-for-sale securities are stated at cost determinedby the moving-average method.
(l) Income Taxes
The provision for income taxes is computed based on the pretax
income included in the consolidated statements of operations. The asset
and liability approach is used to recognize deferred tax assets andliabilities for the expected future tax consequences of temporary
differences between the carrying amounts and the tax bases ofassets and liabilities. Deferred tax assets are measured by applying
currently enacted tax laws to the temporary differences.

19

(m) Derivative Financial Instruments
The Group uses foreign currency forward contracts, interest rate swaps
and copper price swaps as a means of hedging exposure to foreign currencies,
interest risks and market fluctuation. The Group does not enter into
derivatives for trading or speculative purposes.
Derivative financial instruments are classified and accounted for as
follows: a) all derivatives are recognized as either assets or liabilities andmeasured at fair value, and gains or losses on transactions arising fromderivative except for hedge purposes are recognized in the consolidated
statements of operations and b) for derivatives used for hedging purposes,
if derivatives qualify for hedge accounting because of high correlation andeffectiveness between the hedging instruments and the hedged items,
gains or losses on derivatives are deferred until maturity of the hedgedtransactions.
However, if the foreign currency forward contracts qualify for hedge
accounting, hedged items such as foreign currency receivables andpayables are translated at the contracted rates.
Also, if interest rate swap contracts are used as hedge and meet certain
criteria, the net amount to be paid or received under the swap
contract is added to or deducted from the interest on the assets or
liabilities for which the swap contract was executed.
(n) Retirement Benefits for Employees
The benefit formula method is used as a method of attributing
expected benefits to the periods through the end of the fiscal year
in calculating projected benefit obligation.
Actuarial gain or loss is amortized using the declining balance method
over 10 years, which is less than the average remaining years of serviceof the employees, and the amortization will be started in the following year
in which the gain or loss is recognized.
Past service cost is amortized using the straight-line method over 10
years, which is less than the average remaining years of service of theemployees.
Certain consolidated subsidiaries apply the simplified method in which
the retirement benefit amount required for voluntary termination at year-end
is deemed a projected benefit obligation for the calculation of liability
associated with retirement and retirement benefit expenses.
(Change in accounting estimates)(Change in amortization period of actuarial gain or loss)
Previously, the actuarial gain or loss on net defined benefit liability
was amortized over 13 years. However, the average remaining
years of service of the employees fell below 13 years, and, therefore,
it is amortized over 10 years from the year ended March 31, 2015.
The effect of this change on profit or loss before income taxes andminority interests for the year ended March 31, 2015, was immaterial.
(o) Provision for Directors' Retirement Benefits
The Company and its domestic consolidated subsidiaries account for the provision
for directors' retirement benefits at balance sheet date in accordance with internal
regulations.
(p) Appropriations of Retained Earnings
Appropriations of retained earnings are reflected in the accompanying
consolidated financial statements for the following year uponshareholders' approval.
(q) Per Share Information
Dividends per share shown in the consolidated statements of operations havebeen presented on an accrual basis and include, in each fiscal period,
dividends approved after each balance sheet date, but applicable to the fiscal
period then ended.
Net income (loss) per share is computed by dividing net income (loss) attributable
to common shareholders of the Company by the weighted-average
number of common shares outstanding for the period.
The diluted net income per share is omitted as the Company was in net loss
for the years ended March 31, 2016 and 2015 and had no potential
dilutive shares for the year ended March 31, 2014.

(s) Application of “Revised Accounting Standards regarding Business Combinations”
The Company and its domestic subsidiaries adopted “Revised AccountingStandard for Business Combinations” (ASBJ Statement No.21, September 13,
2013 (hereinafter, “Statement No.21”)), “Revised Accounting Standard forConsolidated Financial Statements” (ASBJ Statement No.22, September 13,
2013 (hereinafter, “Statement No.22”)) and “Revised Accounting Standard forBusiness Divestitures” (ASBJ Statement No.7, September 13, 2013
(hereinafter, “Statement No.7”)) (together, the “Business Combination
Accounting Standards”) from the current fiscal year. As a result, the Company
changed its accounting policies to recognize in capital surplus the differences
arising from changes in the Company’s ownership interest of subsidiaries
over which the Company continues to maintain control and to record acquisition
related costs as expenses in the fiscal year in which the costs are incurred.
In addition, the Company changed its accounting policy for the reallocation of
acquisition costs due to the completion following provisional accounting to reflect
such reallocation in the consolidated financial statements for the fiscal year
in which the business combination took place.
The Company also changed the presentation of net income and of the term
“non-controlling interests” is used instead of “minority interests”. Certain
amounts in the prior year comparative information were reclassified
to conform to such changes in the current year presentation.
With regard to the application of the Business Combination Accounting Standards,
the Company followed the provisional treatments in article 58-2 (3) ofStatement No.21, article 44-5 (3) of Statement No.22 and article 57-4 (3) ofStatement No.7 and recognized in capital surplus or retained earnings
the cumulative effect as of the beginning of the current fiscal year that
resulted from the retrospective application of the new accounting policies forall of the previous fiscal years.
As a result of these changes, capital surplus as of March 31, 2016 decreased by\64 million ($568 thousand).
In the consolidated statement of cash flows, cash flows from acquisition or
disposal of shares of subsidiaries with no changes in the scope of
consolidation are included in “Cash flows from financing activities”.
The effects on earnings per share are immaterial.
(t) Accounting Standard Issued but Not Yet Applied“Revised Implementation Guidance on Recoverability of Deferred Tax Assets”(ASBJ Guidance No. 26, March 28, 2016 (hereinafter, “Guidance No.26”)(1) Overview
Following the framework in Auditing Committee Report No. 66“Audit Treatment regarding the Judgment of Recoverability ofDeferred Tax Assets”, which prescribes estimation of deferred
tax assets according to the classification of the entity by one offive types, the following treatments were changed as necessary:
1. Treatment for an entity that does not meet any of the criteria
in types 1 to 5;
2. Criteria for types 2 and 3;
3. Treatment for deductible temporary differences which an entity
classified as type 2 is unable to schedule;
4. Treatment for the period which an entity classified as type 3 isable to reasonably estimate with respect to future taxable income
before consideration of taxable or deductible temporary differencesthat exist at the end of the current fiscal year; and5. Treatment when an entity classified as type 4 also meets thecriteria for types 2 or 3.
(2) Effective date
Effective from the beginning of the fiscal year ending March 31, 2017.
(3)Effects of application of the Guidance
The impact is under assessment at the time of preparation
for the year ended March 31, 2016.
(u) Reclassifications
Certain prior year amounts have been reclassified to conform to the presentations
for the year ended March 31, 2016.

(r) Unification of Accounting Policies Applied to Foreign Subsidiaries
for Consolidated Financial Statements
The Accounting Standards Board of Japan has issued ASBJ Practical Issues Task Force
No. 18 “Practical Solution on Unification of Accounting Policies Applied to Foreign
Subsidiaries for Consolidated Financial Statements” (“PITF No. 18”). PITF No. 18
requires that accounting policies and procedures applied by a parent company and its
subsidiaries to similar transactions and events under similar circumstances should,
in principle, be unified for the preparation of the consolidated financial statements.
PITF No. 18, however, as a tentative measure, allows a parent company to prepare
consolidated financial statements using foreign subsidiaries’ financial statements
prepared in accordance with either International Financial Reporting Standards
or U.S. generally accepted accounting principles. In this case, adjustments
for the following four items are required in the consolidation process so that
their impacts on net income are accounted for in accordance with Japanese GAAP
unless the impact is not material.
(1) Goodwill not subjected to amortization(2) Actuarial gains and losses of defined benefit plans recognized outside profit or loss
(3) Capitalized expenditures for research and development activities(4) Fair value measurement of investment properties, and revaluation ofproperty, plant and equipment, and intangible assets20

3. Investment Securities
All the equity securities, classified as available-for-sale securities, are included in non-current investment securities.
The carrying amounts and aggregate fair values of the available-for-sale securities as of March 31, 2016 and 2015 are as follows:
2016
Millions of yen

Thousands of U.S. dollars

Fair

Acquisition

Unrealized

Fair

Acquisition

Unrealized

Value

Cost

Gains (Losses)

Value

Cost

Gains (Losses)

Securities whose carrying value
exceeds their acquisition cost:
Equity securities ...............................................................................................................
\
230 \
126 \
104 $
2,046 $
1,121 $
925
Securities whose carrying value doesn't
exceed their acquisition cost:
Equity securities .................................................................................................................................................................................................................
500
557
(57)
4,443
4,951
(508)
Total ...............................................................................................................
\
730 \
683 \
47 $
6,489 $
6,072 $
417
2015
Millions of yen
Fair

Acquisition

Unrealized

Value

Cost

Gains (Losses)

Securities whose carrying value
exceeds their acquisition cost:
Equity securities ...............................................................................................................
\
877 \
684 \
193
Securities whose carrying value doesn't
exceed their acquisition cost:
Equity securities .................................................................................................................................................................................................................
Total ...............................................................................................................
\
877 \
684 \
193
Information on available-for-sale securities whose fair value is not readily determinable as of March 31, 2016 and 2015 are described in Note 12.
The Company recognized impairment losses of \361 million ($3,206 thousand), \24 million and \27 million on available-for-sale securities during the years ended March 31, 2016, 2015 and 2014.

4. Short-term Borrowings and Long-term Debt
Short-term borrowings and long-term debt as of March 31, 2016 and 2015 consist of the following:Thousands ofMillions of yen
2016
2015

U.S. dollars

2016

Short-term borrowings with average interest rate of 2.08% for 2016 and 2.39% for 2015..........................................................................................................................................................................
\
12,613 \13,259 $111,996
Current portion of long-term borrowings with average interest rate of 1.71% for 2016 and 1.54% for 2015........................................................................................................................................................
11,746
14,100104,295
Current portion of lease obligations ...........................................................................................................................................................
577
94
5,126
Current portion of other liabilities with average interest rate of 1.79% for 2016 and 1.69% for 2015...........................................................................................................................................................
528
481
4,692
Total short-term ................................................................................................................................................................................................
25,46427,934226,109
Long-term borrowings with average interest rate of 1.98% for 2016 and 1.50% for 2015, less current portion ....................................................................................................................................................
32,25432,475286,398
Lease obligations, less current portion .................................................................................................................................................................................................................
2,140
543
19,000Long-term other payable, less current portion .................................................................................................................................................................................................................
960
1,313
8,520
Total long-term ...................................................................................................................................................................................................................................…
35,35434,331
313,918
Total ..............................................................................................................................................................................................................................................
\
60,818 \62,265 $540,027* Average interest rate of borrowings represents the weighted average rate for the outstanding balances at March 31, 2016 and 2015.
Average interest rate of lease obligations are not disclosed since the amount equivalent to interest expense included in total lease payments is allocated over the lease term using the straight-line method.
Average interest rate of other liabilities represents the weighted average rate for the average of the outstanding balances at April 1, 2015 and March 31, 2016.
The aggregate annual maturities of long-term debt as of March 31, 2016 are as follows:
Millions
Year ending March 31
of yen2017...........................................................................................................................................................................................................................................................
\
12,274 $2018...........................................................................................................................................................................................................................................................
12,4752019 ..........................................................................................................................................................................................................................................................
8,972
2020...........................................................................................................................................................................................................................................................
6,438
2021 and thereafter ...........................................................................................................................................................................................................................................
5,329
Total .........................................................................................................................................................................................................................................................
\
45,488 $Thousands of
U.S. dollars

108,987
110,773
79,66557,16447,316
403,905

The aggregate annual maturities of lease obligations as of March 31, 2016 are as follows:
Millions
Year ending March 31
of yen2017...........................................................................................................................................................................................................................................................
\
577 $2018...........................................................................................................................................................................................................................................................590
2019 ..........................................................................................................................................................................................................................................................605
2020...........................................................................................................................................................................................................................................................377
2021 and thereafter ...........................................................................................................................................................................................................................................
568
Total .........................................................................................................................................................................................................................................................
\
2,717 $

21

Thousands of
U.S. dollars

5,126
5,237
5,371
3,348
5,044
24,126

Financial covenants
For the year ended March 31, 2016
Short-term borrowings and long-term borrowings including the current portion amounting to \36,060 million ($320,192 thousand) include certain financial covenants which forfeit the benefit of termwith regard to the debts on certain loan agreement in the event the Company is in breach of either of the following covenants (stricter covenants are described if there are several covenants).
(1) For each fiscal year, ordinary losses shall not be recorded on the consolidated statement of operations under Japanese GAAP for two consecutive years.
(2) Total net assets on the consolidated balance sheet at each fiscal year-end shall be maintained at least higher of either (i) \21,962 million ($195,010 thousand), or (ii) 80% of the total net assets
recorded on the consolidated balance sheet as of the end of the previous fiscal year (except for the year ended March 31, 2016).
(3) The total amount of interest bearing debts on the consolidated balance sheet at each fiscal year-end shall be lower than the amount equivalent to the net sales on the consolidated statement of operations
for that fiscal year divided by 12 and multiplied by 8.
For the year ended March 31, 2015
Short-term borrowings and long-term borrowings including the current portion amounting to \34,635 million ($307,535 thousand) include certain financial covenants which forfeit the benefit of termwith regard to the debts on certain loan agreement in the event the Company is in breach of either of the following covenants (stricter covenants are described if there are several covenants).
(1) For each fiscal year, ordinary losses shall not be recorded on the consolidated statement of operations under Japanese GAAP for two consecutive years.
(2) Total net assets on the consolidated balance sheet at each fiscal year-end shall be maintained at least higher of either (i) 75% of the total net assets on the consolidated balance sheet
as of March 31, 2014, or (ii) 75% of the total net assets on the consolidated balance sheet as of the end of the previous fiscal year.
(3) The total amount of interest bearing debts on the consolidated balance sheet at each fiscal year-end shall be lower than the amount equivalent to the net sales on the consolidated statement of operations
for that fiscal year divided by 12 and multiplied by 8.

5. Retirement Benefits
The Company and its certain consolidated subsidiaries provide a lump-sum retirement plan as defined benefit pension plan for employees' retirement benefits.
Certain consolidated subsidiaries apply the simplified method in computing net defined benefit liability and benefit costs for their lump-sum retirement plans.
Although the Company and certain domestic consolidated subsidiaries also contribute to a multi-employer pension plan, related benefit
obligation, plan assets and benefit costs are excluded from the following calculation because it is difficult to assess the plan assets reasonably.
Defined benefit pension plans, except plan applying the simplified method(1) Movement in projected benefit obligations
Thousands ofMillions of yen
U.S. dollars
2016
2015
2016
Balance at beginning of year .............................................................................................................................................................................................…
\
1,674 \
1,520 $
14,863Service cost ...........................................................................................................................................................................................…
144
142
1,276
Interest cost .............................................................................................................................................................................................…
11
15
104
Actuarial loss.............................................................................................................................................................................................…
61
59
541
Benefits paid .............................................................................................................................................................................................…
(99)
(62)
(875)
Other (decrease due to employment transfer).............................................................................................................................................................................................…
(16)
(146)
Balance at end of year.............................................................................................................................................................................................…
\
1,775 \
1,674 $
15,763(2) Reconciliation from projected benefit obligations to net defined benefit liability
Thousands ofMillions of yen
U.S. dollars
2016
2015
2016
Unfunded projected benefit obligations ...........................................................................................................................................................................................…
\
1,775 \
1,674 $
15,763
Total liability at end of year ...........................................................................................................................................................................................…
\
1,775 \
1,674 $
15,763Net defined benefit liability ...........................................................................................................................................................................................…
\
1,775 \
1,674 $
Total liability at end of year ...........................................................................................................................................................................................…
\
1,775 \
1,674 $

15,763
15,763(3) Retirement benefit costs
Thousands ofMillions of yen
2016
2015
Service cost ...........................................................................................................................................................................................…
\
144 \
142 $
Interest cost ...........................................................................................................................................................................................…11
15
Amortization of actuarial loss .............................................................................................................................................................… 36
29
Amortization of past service cost .............................................................................................................................................................................................…
8
8
Total benefit costs .............................................................................................................................................................................................…
\
199 \
194 $

U.S. dollars

2016
1,276
104
315
72
1,767

(4) Remeasurements of defined benefit plans
Thousands ofMillions of yen
2016
2015
Past service cost ...........................................................................................................................................................................................…
\
(8) \
(8) $
Actuarial loss ................................................................................................................................................................…
25
30
Total ......................................................................................................................................................................................................….
\
17 \
22 $

U.S. dollars

2016
(72)
226
154

(5) Accumulated remeasurements of defined benefit plans
Thousands ofMillions of yen
2016
2015
Unrecognized past service cost ...........................................................................................................................................................................................…
\
49 \
57 $
Unrecognized actuarial loss ................................................................................................................................................................… 197
172
Total ......................................................................................................................................................................................................….
\
246 \
229 $

U.S. dollars

2016
433
1,753
2,186

(6) Actuarial assumptions
2016
2015
Discount rate .................................................................................................................................................................................................................................................
0.3%
0.7%

22

Defined benefit pension plan applying the simplified method(1) Movement in net defined benefit liability
Thousands ofMillions of yen
2016
2015
Balance at beginning of year .............................................................................................................................................................................................…
\
472 \
422 $
Benefit costs .........................................................................................................................................................................................................
83
60
Benefits paid .............................................................................................................................................................................................…
(57)
(14)
Increase due to employment transfer..........................................................................................................................................................................................…
16
Others .............................................................................................................................................................................................… (2)4Balance at end of year .............................................................................................................................................................................................…
\
512 \
472 $

U.S. dollars

2016
4,188
735
(504)
146
(20)
4,545

(2) Reconciliation from projected benefit obligations to net defined benefit liability
Thousands ofMillions of yen
U.S. dollars
2016
2015
2016
Unfunded projected benefit obligations ...........................................................................................................................................................................................…
\
512 \
472 $
4,545
Total liability at end of year ...........................................................................................................................................................................................…
\
512 \
472 $
4,545
Net defined benefit liability ...........................................................................................................................................................................................…
\
512 \
472 $
Total liability at end of year ...........................................................................................................................................................................................…
\
512 \
472 $

4,545
4,545

(3) Retirement benefit costThousands ofMillions of yen
U.S. dollars
2016
2015
2016
Retirement benefit costs calculated using the simplified method ...........................................................................................................................................................................................…
\
83 \
60 $
735
Total costs at end of year ...........................................................................................................................................................................................…
\
83 \
60 $
735

Multi-employer pension plan
The amount required to contribute to the multi-employer pension plan which is accounted for in the same way as defined contribution plans is\90 million ($798 thousand) and \122 Million for the years ended March 31, 2016 and 2015, respectively.

Millions of yen(1) Funded status
2015
2014
Fair value of plan assets .............................................................................................................................................................................................................................
\
67,202 \59,789Total amount of pension benefit obligation recorded by pension fund and minimum actuarial reserve.......................................................................................
65,97061,919Funded status ............................................................................................................................................................................................................…
\
1,232 \
(2,130)
The above funded status is presented based on the most recent available information (as of March 31, 2015 and 2014 for fiscal 2016 and 2015, respectively).

(2) Contribution share ratio of the Company
2015
2014
Contribution share ratio .................................................................................................................................................................................................................................................
6.80%
6.63%
Note: The above ratio does not match the Group's actual share ratio.

(3) Supplementary information
As of March 31, 2015, the difference described in (1) above was calculated by the sum of the balance of the unamortized past service cost of \ 1,940 million,
accumulated deficit of the fund of \ (702) million and the past service cost is amortized equally over a remaining period of 6 years and 1 month.
As of March 31, 2014, the difference described in (1) above was calculated by the sum of the balance of the unamortized past service cost of \ (838) million,
accumulated deficit of the fund of \ (1,292) million and the past service cost is amortized equally over a remaining period of 6 years and 4 months
The Social Welfare Pension Fund of Nippon Electronic Circuits (the “Fund”) that the Company and certain consolidated domestic subsidiaries have joined resolved
an ordinary dissolution of the fund at a meeting of board members of the Fund on February 25, 2015.

23

6. Net assets
Under the Japanese Corporation Law (“the Law”) and regulations, the entire amount paid for new shares is required to be designated as capital stock.
However, a company may, by a resolution of the Board of Directors, designate an amount not exceeding one-half of the price of the new sharesas additional paid-in capital, which is included in capital surplus.
In cases where dividend distribution of surplus is made, the smaller of an amount equal to 10% of the dividend or the excess, if any, of 25% ofcapital 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.
Additional paid-in capital and legal earnings reserve may not be distributed as dividends. However, all additional paid-in capital and all legal earnings
reserve may be transferred to other capital surplus and retained earnings, respectively, which are potentially available for dividends.
The maximum amount that the Company can distribute as dividends is calculated based on the non-consolidated financial statements of
the Company in accordance with the Law.

7. Impairment loss
Impairment losses recognized for the years ended March 31, 2016 and 2015 are as follows:
Thousands of

Use
Business assets

Type of assets
Buildings and structures and Machinery andvehicles, etc.

Millions of yen
2016

Location\

Ishinomaki, Miyagi

U.S. dollars

2016

998 $

Buildings and structures and Machinery andHanoi, Vietnam
6,980
vehicles, etc.
Total ................................................................................................................................................................................................
7,978 $\

Business assets

8,864
61,977
70,841The Group carries out grouping mainly based on each plant for business assets.
For the year ended March 31, 2016, the Group recognized impairment losses of \7,978 million ($70,841 thousand) due to decline in profitability,
which resulted in decreasing the book values of such assets to recoverable amounts.
Impairment losses comprise of \3,161 million ($28,065 thousand) for Buildings and structures, \3,327 million ($29,545 thousand) for Machineryand vehicles, \837 million ($7,434 thousand) for Construction in progress, \213 million ($1,895 thousand) for Land and \440 million ($3,902 thousand) for others.
The recoverable value of this assets group was measured based on the higher of net selling price or the value in use.
The net selling price is computed based on the fixed asset tax valuation with reasonable adjustments.
The value in use is computed based on the future cash flow discounted at 14.0%.

Use
Business assets

Type of assets
Buildings and structures and Machinery andvehicles, etc.

Millions of yen
2015

Location\

Wuhan, Hubei, China

4,244

Buildings and structures and Machinery andHanoi, Vietnam
4,508
vehicles, etc.
Idle assets
Machinery and vehicles
Yamato, Kanagawa, Japan
69
Total ................................................................................................................................................................................................
8,821\
Business assets

The Group carries out grouping mainly based on each plant for business assets and based on each asset for idle assets.
For the year ended March 31, 2015, the Group recognized impairment losses of \8,821 million due to decline in profitability,
which resulted in decreasing the book values of such assets to recoverable amounts for business assets and to the net selling price for idle assets.
Impairment losses comprise of \3,448 million for Buildings and structures, \4,551 million for Machineryand vehicles, \460 million for Construction in progress and \362 million for others.
Impairment losses recognized for the year ended March 31, 2014 are omitted due to their immateriality.
8. Contingent Liabilities
Contingent liabilities of the Company as of March 31, 2016 and 2015 are as follows:
Thousands ofMillions of yen
2016
2015

U.S. dollars

2016
Guarantee of installment liabilities denominated in U.S. dollar
Meiko Electronics Thang Long Co., Ltd.........................................................................................................................................................................
\- \2,328 $
Trade notes discounted........................................................................................................................................................................
55
72
486

9. Research and Development Costs
Research and development costs included in selling, general and administrative expenses and manufacturing costs are \828 million ($7,348 thousand),\908 million and \1,013 million for the years ended March 31, 2016, 2015 and 2014, respectively.

2410. Net Gain (Loss) on Sales and Disposal of Property, Plant and Equipment
Significant components of net gain (loss) on sales and disposal of property, plant and equipment for the years ended March 31, 2016, 2015 and 2014 are as follows:
Thousands ofMillions of yen
U.S. dollars
Gain:
2016
2015
2014
2016
Buildings and structures ........................................................................................................................................................................
\
- \
- \
30 $
Machinery and vehicles ........................................................................................................................................................................
40
438Land ...................................................................................................................
379
Construction in progress ........................................................................................................................................................................
3
Others ........................................................................................................................................................................
80070
Total gain ................................................................................................................................................................................................
12
3
413
108
Loss:
Buildings and structures ........................................................................................................................................................................
(4)
(12)
(15)
(36)
Machinery and vehicles ........................................................................................................................................................................
(365)
(266)
(114)
(3,242)Land ...................................................................................................................
(0)
(0)
(1)
(2)
Construction in progress ........................................................................................................................................................................
(84)
(91)
Intangible assets ........................................................................................................................................................................
(114)
(6)
Others ........................................................................................................................................................................
(19)
(7)
(5)
(164)
Total loss ................................................................................................................................................................................................
(388)
(483)
(232)
(3,444)
Net gain (loss) ....................................................................................................................................................................................................................................
\(376) \
(480) \
181 $
(3,336)

11. Income Taxes
Income taxes applicable to the Company consist of corporate tax, inhabitant tax and enterprise tax, which in the aggregate resulted in the normal statutory
tax rates of approximately 32.2%, 35.6% and 38.0% for the years ended March 31, 2016, 2015 and 2014, respectively.
The tax effects of significant temporary differences which resulted in deferred tax assets and liabilities as of March 31, 2016 and 2015 are as follows:
Thousands ofMillions of yen
2016
2015

U.S. dollars

2016
Deferred Tax Assets:
Elimination of unrealized profits .........................................................................................................................…
\
25 \
37 $
222
Accrued bonuses ..................................................................................................................................................... 161
156
1,427
Net defined benefit liability ...................................................................................................................................... 635
695
5,637
Provision for directors' retirement benefits ........................................................................................................................................................................
73
77
649
Accrued enterprise tax ........................................................................................................................................................................
16
74
144
Allowance for doubtful accounts.....................................................................................................................................................................…
13
353
119
Tax loss carryforwards ........................................................................................................................................................................
3,269
2,404
29,027
Valuation loss of inventories.....................................................................................................................................................................…
57
75
501
Difference on depreciation period.....................................................................................................................................................................…
598
500
5,311
Impairment loss.....................................................................................................................................................................…
1,977
1,666
17,554
Loss on valuation of investment securities.....................................................................................................................................................................…
60
16
537
Allowance for investment loss .....................................................................................................................................................................…
60
Loss on revaluation of golf club memberships ........................................................................................................................................................................
20
21
177
Deferred losses on hedges.....................................................................................................................................................................…
82
69
730
Other ...................................................................................................................................................................................................
56
232
500
Less: valuation allowance ........................................................................................................................................................................
(5,961)(3,710)(52,933)
Total ......................................................................................................................................................................................
\
1,081 \
2,725 $
9,602

Thousands ofMillions of yen
2016
2015

U.S. dollars

2016
Deferred Tax Liabilities:
Reserve for advanced depreciation of property, plant and equipment.....................................................................................................................................................................…
\- \(100) $
Retained earnings of foreign subsidiaries.............................................................................................................. (182)(158)(1,618)Deferred gains on transfer......................................................................................................................................... (72)(638)
Other.........................................................................................................................................................................…
(14)
(62)
(128)
Total .........................................................................................................................................................................................
\(268) \
(320) $
(2,384)
Deferred Tax Assets, Net: ........................................................................................................................................................................
\
813 \
2,405 $

7,218

A reconciliation between the normal effective statutory tax rates and the actual effective tax rates reflected in the accompanying consolidated statements
of income for years ended March 31, 2016 and 2015 are omitted due to pre-tax loss.
A reconciliation between the normal effective statutory tax rates and the actual effective tax rates reflected in the accompanying consolidated statements
of income for year ended March 31, 2014 is as follows:

2014
Statutory tax rate ............................................................................................................................................................................................................................
38.0%
Expenses not deductible for tax purpose ........................................................................................................................................................................
0.4%
Per capita inhabitant tax ............................................................................................................................................................................................
0.8%
Foreign tax credit ......................................................................................................................................................................................
(7.1)%
Special tax credit for income tax ............................................................................................................................................................(6.7)%
Tax rate difference in foreign subsidiaries ...................................................................................................................................................................................................................
14.1%
Retained earnings of foreign subsidiaries ................................................................................................................................................17.2%
Decrease of tax loss carryforwards .......................................................................................................................................................30.0%
Reduction of deferred tax assets due to income tax rates change ...............................................................................................................................................................................................
0.8%
Valuation allowance ............................................................................................................................................................................................................
9.9%
Other, net ................................................................................................................................................................................................................................
1.6%
Actual effective tax rate ....................................................................................................................................................................................................
99.0%

25

Amendments to the amount of deferred tax assets and liabilities for enacted changes in tax laws and rates
The Partial Revision of the Income Tax Act (Act. No.. 15, 2016) and the Partial Revision of the Local Income Tax Act (Act. No. 13, 2016) were enacted by the National Diet on March 29, 2016
and the statutory tax rate applied to calculate deferred tax assets and deferred tax liabilities was changed from 32.2% to 30.8% for temporary differences expected to be realized in the period
between April 1, 2016 and March 31, 2018, and to 30.6% for temporary differences expected to be realized on or after April 1, 2018.
The impact of this change was immaterial.

12. Financial Instruments(a) Qualitative information on financial instruments(1) Policies for using financial instruments
The Group finances necessary funds mainly through bank loans and bond issues according to the capital investment plan for the production and sales of PCB.
Temporary and excessive funds are operated by highly stable financial instruments and the Group finances short-term operating capital by bank loans.
Derivative transactions are only utilized to hedge the risks mentioned in (2) below.
(2) Details of financial instruments used and exposures to risk and how they arise
Operating receivables such as trade notes and accounts receivable are exposed to credit risk. Some operating receivables, which are denominated in foreign currencies
due to global operations, are exposed to foreign currency fluctuation risk. The Group might utilize foreign exchange forward contracts if necessary except for thosewithin the range of the operating payables dominated in the same foreign currency. Investments securities mainly consist of securities of companies in whicha business relationship has been established and they are exposed to market fluctuation risk.
Operating payables such as trade notes and accounts payable are due within one year.
Some of the operating payables relating to imports of raw materials are dominated in foreign currencies and are exposed to foreign currency fluctuation risk.
The Group might utilize foreign exchange forward contracts if necessary except for those within the range of the operating receivables dominated in the same foreign currency.
Loans and lease obligations for finance lease transactions are mainly used for the purpose of financing capital investments.
Some of them are variable interest loans and are exposed to interest fluctuation risk.
The Group utilizes interest rate swaps to hedge the risk. Regarding derivative transactions, the Group utilizes foreign exchange forward contracts to hedge foreign
currency fluctuation risk of operating receivables and payables dominated in foreign currencies and interest rate swaps to hedge interest fluctuation risk.
The Group utilizes commodity forward contracts to hedge copper price fluctuation risk.
(3) Policies and processes for managing the risk(i) Credit risk management (risk of default by the counterparties)
The sales management department in the Company follows sales management rules, monitors the customers’ credit conditions periodically and manages the due dateand balance per customer. The Company keeps track of the adverse financial conditions of its customers in the early stage to mitigate the uncollectible risk.
The Company enters into derivative transactions only with the credit worthy financial institutions to mitigate the credit risk.
(ii) Market risk management (risk of foreign currency fluctuations and interests)
Regarding the trade receivables and trade payables dominated in foreign currencies, the Company utilizes foreign exchange forward contracts if necessary to hedge
the foreign currency fluctuation risk, which is controlled by each currency and on a monthly basis. For investment securities, the Company regularly reviews the fair value
and issuers' financial condition and readjust Company's portfolio on an ongoing basis considering the business relationship with counterparties. Derivative transactions
are based on the internal rules and executed after getting the approval from the approver and managed by Finance Dept. Contents of the derivative transactions
are reported to Board of Directors' meeting periodically.
(iii) Liquidity risk management (risk of default at the due dates)
The Company prepares and updates the cash management plan based on the reports from each department to manage liquidity risk on a timely basis.
(4) Supplemental information on fair values
As well as the values based on market prices, fair values of financial instruments include values which are reasonably calculated in case market prices do not exist.
As the calculation of those values adopts certain assumptions, those values may vary in case different assumptions are applied.
Also, for the contract amount regarding derivative transactions described in Note 13, the contract amount itself does not indicate market risk related to derivativetransactions.
(b) Fair values of financial instruments
Book values of the financial instruments included in the consolidated balance sheets and their fair values at March 31, 2016 and 2015 are as follows:
2016
Millions of yen
Book

Fair

Value

Value

Thousands of U.S. dollars
Difference

AssetsCash and cash equivalents ...........................................................................................................
\
19,313 \19,313 \- $Time deposits ..................................................................…
219
219
Trade notes and accounts receivable ...................................................................................................
21,75921,759Investment securities:
Available-for-sale securities....................................................................................................................
730
730
Liabilities
Trade notes and accounts payable .................................................
\
11,605 \11,605 \- $Short-term borrowings......................................................................................................
12,613
12,613Long-term borrowings............................................................................
44,00044,287287
Lease obligations ........................................................................…
2,717
2,751
34
Long-term other payable ........................................................................…
1,488
1,500
12
Derivative financial instruments ........................................................................…
\(337) \
(337) \
- $

Book

Fair

Value

Value

171,488 $
1,948
193,205

171,488 $
1,948
193,205

-

6,489

6,489

-

103,049 $
111,996
390,69324,126
13,212(2,993) $103,049 $
111,996393,242
24,426
13,324(2,993) $2015
Millions of yen
Book

Fair

Value

Value

Difference

AssetsCash and cash equivalents ...........................................................................................................
\
9,491 \
9,491 \
Time deposits ..................................................................…
219
219
Trade notes and accounts receivable ...................................................................................................
22,74322,743
Investment securities:
Available-for-sale securities....................................................................................................................
877
877
Liabilities
Trade notes and accounts payable .................................................
\
12,613 \12,613 \Short-term borrowings......................................................................................................
13,25913,259Long-term borrowings............................................................................
46,575
46,690115
Long-term other payable ........................................................................…
1,794
1,801
7
Derivative financial instruments ........................................................................…
\(231) \
(231) \-

26

Difference

2,549
300
112
-

The financial instruments whose fair value is extremely difficult to determine are not included above.
Derivative financial instruments are stated in net of assets and liabilities. The figures in parenthesis indicate net liabilities.

(1) Valuation method of the fair value of financial instruments and information of investment securities and derivative transactions(i). Cash and cash equivalents, (ii). Time deposits, (iii). Trade notes and accounts receivable
The carrying value is deemed as the fair value since it is scheduled to be settled in a short period of time.
(iv). Investment securities
Fair value of equity securities is based on the quoted price on stock exchange. Please refer to Note 5 regarding the information of the fair value for the investment
in securities by classification.
(v). Trade notes and accounts payable, (vi) Short-term borrowings
The carrying value is deemed as the fair value since it is scheduled to be settled in a short period of time.
(vii). Long-term borrowings, (viii). Lease obligations, (ix).Long-term other payable
The fair values are measured as the net present value of estimated future cash flows by discounting the principal and interest value using the loan interest rate applied
to the new loans or the lease contracts. If the variable interest rate loans meet certain criteria for the short cut method (If interest rate swap contracts are used as a hedge
and meet certain hedging criteria, the interest rate swaps are not remeasured at market price and the amount to be received under the interest rate swap contract is added to or
deducted from the interest on the liabilities for which the swap contract was executed), the sum of principal and the interest processed as interest rate swaps are discounted byusing the reasonably estimated loan interest rate applied to the same kind of loans.
(x). Derivative transactions
Please refer to Note 13.
(2) Unlisted securities of \142 million yen ($1,253 thousand) as of March 31, 2016 and \1,936 million yen as of March 31, 2015 are not included in the above tablebecause the securities do not have fair market values and it is extremely difficult to estimate fair values.
(c) The redemption schedule for financial instruments and securities with maturity as of March 31, 2016 and 2015 is as follows:
2016
Millions of yen
Due in one
year

Due after one
year throughDue after five
year throughor less

five years

ten years

Due after ten
years

Cash and cash equivalents ...........................................................................................................
\
19,313 \- \- \Time deposits ..................................................................…
219
Trade notes and accounts receivable ...................................................................................................
21,759Investment securities:
Available-for-sale securities with maturities....................................................................................................................
Total ...............................................................................................................
\
41,291 \
- \
- \
2016
Thousands of U.S. dollars
Due in one

Due after one

Due after fiveDue after ten

year

year throughyear throughyears

or less

five years

ten years

Cash and cash equivalents ...........................................................................................................
$
171,488 $- $- $Time deposits ..................................................................…
1,948
Trade notes and accounts receivable ...................................................................................................
193,205
Investment securities:
Available-for-sale securities with maturities....................................................................................................................
Total ...............................................................................................................
$
366,641 $
- $
- $
2015
Millions of yen
Due in one
year

Due after one
year throughDue after five
year throughor less

five years

ten years

Due after ten
years

Cash and cash equivalents ...........................................................................................................
\
9,491 \-\-\
Time deposits ..................................................................…
219
Trade notes and accounts receivable ...................................................................................................
22,743
Investment securities:
Available-for-sale securities with maturities....................................................................................................................
Total ...............................................................................................................
\
32,453 \
-\
-\

27

-

13. Derivatives
Derivative transactions for which hedge accounting has been applied for the years ended March 31, 2016 and 2015 are as follows:
2016

Contract
amountHedged item

Millions of yen
Contract
amountdue after
one year

Fair value

Thousands of U.S. dollars
Contract
amountContract
due after
amountone year
Fair value

Interest rate related:
Benchmark Method
Interest rate swap
contracts
Payable fixed/
Receive floating

Long-term
borrowings \22,586 \15,792 \(282) $

200,550 $

140,225 $(2,506)

Special Method
Interest rate swap
contracts
Payable fixed/
Receive floating

Long-term
borrowings \1,950 \

1,440 \

(28) $

17,315 $12,786 $(248)

Commodity related :Benchmark Method
Copper price swap
contractsRawmaterials

331 \

- \

(55) $

2,935 $

- $

(487)

\

Contract
amountHedged item

2015
Millions of yen
Contract
amountdue after
one year

Fair value

Interest rate related:
Benchmark Method
Interest rate swap
contracts
Payable fixed/
Receive floating

Long-term
borrowings\

20,945 \13,955 \(225)

Special Method
Interest rate swap
contracts
Payable fixed/
Receive floating

Long-term
borrowings\

2,460 \

1,950 \

(27)

Commodity related :Benchmark Method
Copper price swap
contractsRawmaterials

\

63 \

- \

(6)

Fair value is principally based on quoted price obtained from financial institutions signing the contract.
There are no derivative transactions for which hedge accounting has not been applied for the years ended March 31, 2016 and 2015.

14. Compensation Income
Compensation income consists of compensation payments from Tokyo Electric Power Company for lost earnings due to accidents at Fukushima Daiichi Nuclear Power
Station ("NPS") and Fukushima Daini NPS of Tokyo Electric Power Company.

28

15. Comprehensive Income
Reclassifications and income tax effects attributable to other comprehensive income for the years ended March 31, 2016, 2015 and 2014 are as follows:
Thousands of2016

Millions of yen
2015

U.S. dollars

2014

Unrealized gains (losses) on available-for-sale securities:
Gains (losses) arising during the year ........................................................................................................................................................................
\(146) \
26 \331 $Reclassifications and adjustments ........................................................................................................................................................................
16
Before income tax effects .....................................................................................................................................................................…
(146)
42
331
Income tax effects .....................................................................................................................................................................…
48
(9)
(118)
Total ......................................................................................................................................................................................
\(98) \
33 \213 $Deferred gains (losses) on hedges:
Gains (losses) arising during the year ........................................................................................................................................................................
\(406) \
(304) \
(2) $Reclassifications and adjustments ........................................................................................................................................................................
300
196
179
Before income tax effects .....................................................................................................................................................................…
(106)
(108)
177
Income tax effects .....................................................................................................................................................................…
(69)
28
(53)
Total ......................................................................................................................................................................................
\(175) \
(80) \
124 $Foreign currency translation adjustments:
Adjustments arising during the year ........................................................................................................................................................................
\(3,094) \3,688 \
3,162 $
Total ......................................................................................................................................................................................
\(3,094) \3,688 \
3,162 $
Remeasurements of defined benefit plans:
Adjustments arising during the year ........................................................................................................................................................................
\(61) \(59) \- $Reclassifications and adjustments ........................................................................................................................................................................
44
37
Before income tax effects .....................................................................................................................................................................…
(17)
(22)
Income tax effects .....................................................................................................................................................................…
(74)
0
Total ......................................................................................................................................................................................
\(91) \(22) \- $Total other comprehensive income ......................................................................................................................................................................................
\(3,458) \3,619 \
3,499 $

2016
(1,300)(1,300)425(875)(3,602)
2,660
(942)
(613)
(1,555)(27,472)(27,472)
(540)
386
(154)
(655)
(809)
(30,711)

16. Supplementary Cash Flow Information
Details of assets and liabilities at the beginning of the consolidation relating to Meiko Electronics Thang Long Co., Ltd., a newly consolidated
subsidiary due to increased its materiality, are as follows:

Thousands ofMillions of yen
2016

U.S. dollars

2016

Current assets........................................................................................................................................................................
\
589 $
5,232
Non-current assets ........................................................................................................................................................................
2,342
20,797
Total assets .....................................................................................................................................................................…
\
2,931 $
26,029Current liabilities ........................................................................................................................................................................
\
634 $
5,631
Non-current liabilities ........................................................................................................................................................................
1,718
15,251
Total liabilities.....................................................................................................................................................................…
\
2,352 $
20,882Significant non-cash transactions
Thousands ofMillions of yen
2016
2015

U.S. dollars

2016

Assets and liabilities relating to finance lease transactions.........................................................................................................................................................................
\
2,965 \
657 $
26,32529

17. Segment Information
Information about reported segment sales, segment profit, segment assets and other items under the new accounting standards is not disclosed as the Group's
reportable segment is mainly printed circuit boards (“PCB”), and the related business and other business is immaterial.
(Supplementary information)(1) Information about products and services
Information about products and services is not disclosed since sales amount of single unit of product or service to external customers accounted for more than
90% of consolidated net sales.
(2) Information about geographical areas(a) Net sales

2016
Millions of yen
Japan

Net sales .............................................................................................................................
\
26,570

Asia\

North America\

52,994

Europe\12,016

3,707

Other

\

Total

-

\

95,287-$

846,095

-

\

-

\

2016
Thousands of U.S. dollars
Japan

Net sales .............................................................................................................................
$
235,922

Asia$

North America

470,560$

Europe106,696$

32,917

Other

$

Total

2015
Millions of yen
Japan

Net sales .............................................................................................................................
\
25,274

Asia\

North America\

50,024

Europe\10,916

4,681

Other

\

Total

90,8952014
Millions of yen
Japan

Net sales .............................................................................................................................
\
24,919Asia\

North America\

42,452

7,848

Europe\4,013

Net sales by destination were recognized based on the location of customers and classified by country or regions.
(b) Property, plant and equipment

2016
Millions of yen
Japan

Asia

Other

Property, plant and equipment .............................................................................................................................
\
5,448
\
45,282

\

Total

4

\

50,73429$

450,487

1\

2016
Thousands of U.S. dollars
Japan

Asia

Other

Property, plant and equipment .............................................................................................................................
$
48,379$ 402,079

$

Total

2015
Millions of yen
Japan

Asia

Property, plant and equipment .............................................................................................................................
\
5,867
\
59,046

Other

\

Total

(3) Information about major customers
Information about major customers is not presented since no single customer accounts for 10% or more of consolidated net sales.
(4) Information about impairment loss
Information about impairment loss by reportable segment for the year ended March 31, 2016 is not disclosed as the Group's reportable segment ismainly printed circuit boards (“PCB”) and the related business, and other business is immaterial.
Information about impairment loss by reportable segment for the year ended March 31, 2015 is not disclosed as the Group's reportable segment issolely printed circuit boards (“PCB”) and the related business.
There were no applicable matters for the year ended March 31, 2014.

30

64,914

Other

\

Total

79,232

18. Related party transactions
For the year ended March 31, 2016
Transactions with related parties(1) Unconsolidated subsidiary
There were no applicable matters for the year ended March 31, 2016 since Meiko Electronics Thang Long Co., Ltd. was included in the scope of consolidationfrom the year ended March 31, 2016.
(2) Directors and major individual shareholders

Name
Seiichi Naya

Location-

Capital
-Occupation
Director and senior
managing executive officerof the Company

Percentage forpossession of Voting
RightsDirectly owned (%)
1.7

Relationship-

Details oftransaction ※2
Sales ofsubsidiaries'
sharesTransaction
Balance atamount ※1
March 31, 2016
\197 million($1,748 thousand)Note: ※1 Seiichi Naya is an actual younger brother of Yuichiro Naya, representative director and executive officer of the Company※2 The terms and conditions of the transactions for sales of subsidiaries' shares are determined based on negotiation with reference to the stock price calculated by a third party appraiser.
For the year ended March 31, 2015
Transactions with related parties(1) Unconsolidated subsidiary

Name
Meiko Electronics ThangLong Co., Ltd.

Location
Hanoi, Vietnam

Capital$9,000thousands

Percentage forpossession of Voting
Rights
Details of businessElectronics-related businessDirectly own (%)
100.0

Relationship
Manufacturing of
the Company's
product, guarantee of
liabilities andconcurrent director

Details oftransaction ※2
Guarantee of
liabilities

Transaction
amount ※1\2,328 million(2) Directors and major individual shareholders
There were no applicable matters for the year ended March 31, 2015.
19. Significant Subsequent Events
At the Board of Directors' meeting held on May 16, 2016, a submission of a proposal of reduction of legal capital surplus and appropriation of surplus to the 41th annual generalshareholders' meeting to be held on June 28, 2016, was resolved. The proposal was approved at the annual general shareholder's meeting held on June 28, 2016.
(1) Purpose of reduction of legal capital surplus and appropriation of surplus
The purpose is to enable the Company to realize the capital policy to promote financial health and maintain flexible and efficient management in the future
through compensation of accumulated deficit as of March 31, 2016.
(2) Details of the reduction of legal capital surplus
Pursuant to the provisions of Article 448, Paragraph 1 of the Companies Act, a portion of legal capital surplus will be reduced and the same amount will be transferred toother capital surplus.
(a) Amount of legal capital surplus to be reduced\ 8,000 million ($71,035 thousand) out of \12,042 million ($106,923 thousand)(b) Amount of other capital surplus to be increased\ 8,000 million ($71,035 thousand)(3) Details of the appropriation of surplus
Pursuant to the provisions of Article 452 of the Companies Act, a portion of other capital surplus will be transferred to retained earnings (accumulated deficit).
(a) Amount of other capital surplus to be reduced\ 8,000 million ($71,035 thousand)(b) Amount of retained earnings (accumulated deficit) to be increased\ 8,000 million ($71,035 thousand)(4) Schedules
Date of resolution at the Board of Directors' meeting
Date of public notice for making objections by creditors
The last day for making objections by creditors
Date of annual general shareholders' meeting
Planned effective date

May 16, 2016
May 20, 2016
June 20, 2016
June 28, 2016
June 30, 201631

Balance at
March 31, 2015
-

32

33

Principal Subsidiaries and Affiliates

Principal
Business

Paid-in Capital

Investment
Ratio (%)

Name or Trade Name

Address

Meiko Tech Co., Ltd.

Ayase City,
Kanagawa Prefecture

20

PCBs forelectronics

100.0

Yamagata Meiko
Electronics Co., Ltd.

Kahoku-cho,Nishimurayama-gun,
Yamagata Prefecture

75

PCBs forelectronics

100.0

M.D. Systems Co.,
Ltd.

Atsugi City,
Kanagawa Prefecture

15

PCBs forelectronics

19.0

Meiko Techno Co.,Ltd.

Yamato City,
Kanagawa Prefecture

50

PCBs forelectronics

100.0

Meiko Elec. HongKong. Co., Ltd.

Hong Kong

US$127,569
thousand

PCBs forelectronics

100.0

Meiko Electronics(Guangzhou
Nansha) Co., Ltd.

Guangzhou,
Guangdong Province,
P.R.C.

US$120,800
thousand

PCBs forelectronics

100.0

Meiko Electronics(Wuhan) Co., Ltd.

Wuhan,
Hubei Province,
P.R.C.

US$148,800
thousand

PCBs forelectronics

100.0

MDS Circuit
Technology, Inc.

Manila, thePhilippines

PHP12,000
thousand

PCBs forelectronics

Meiko Electronics
America, Inc.

CA, U.S.A.

US$1,500
thousand

PCBs forelectronics

100.0

Guangzhou MeikoPCB Co., Ltd.

Guangzhou,
Guangdong Province,
P.R.C.

US$10,000
thousand

PCBs forelectronics

100.0

Meiko Electronics
Vietnam Co., Ltd.

Hanoi, Vietnam

US$90,000
thousand

PCBs forelectronics

Meiko Electronics
Thang Long Co., Ltd.

Hanoi, Vietnam

US$15,000
thousand

PCBs forelectronics(Millions of yen)34

[81.0](66.3)(47.6)
100.0(100.0)(100.0)100.0(100.0)100.0

Principal Shareholders(Thousands of shares)

Percentage ofTotal Number of
Shares Issued (%)

4,701

17.54

667

2.49

631

2.36

Meiko Kosan Co., Ltd.

608

2.27

Yuho, Ltd.

521

1.94

BNY GCM CLIENT ACCOUNT JPRD AC ISG(FE–AC)515

1.92

Haruyuki Naya

488

1.82

DEUTSCHE BANK AG LONDON-PB
NON-TREATY CLIENTS 613

454

1.69

452

1.69

443

1.66

9,483

35.38

Number of
Shares Held

Name of Shareholder

Yuichiro NayaGOLDMAN SACHS INTERNATIONAL(Standing Agent: Goldman Sachs Japan Co.,Ltd.)
PLEASANT VALLEY(Standing Agent: The Bank of Tokyo-Mitsubishi
UFJ, Ltd.)(Standing Agent: The Bank of Tokyo-Mitsubishi
UFJ, Ltd.)(Standing Agent: Deutsche Securities Inc.)BARCLAYS BANK PLC A/C CLIENT
SEGREGATGED A/C PB CAYMAN CLIENTS(Standing Agent: Barclays Capital Japan Limited)
Seiichi Naya
Total

35

Corporate History

November 1975

Established Meiko Denshi Kogyo Co., Ltd. to manufacture and sell PCBs.
Started selling double-sided PCBs.

April 1978

Established the System Development Department (currently Meiko TechnoCo., Ltd./ Meiko Tech Co., Ltd.) to develop electronics application products.

October 1978

Developed in-house use PCB Testers for the PCB final inspection process.

September 1980

Constructed a new headquarters and factory, establishing an integrated
production system for the entire process from design to finished product.

December 1980

Introduced a multi-layer press machine and started manufacturingmulti-layer PCBs.

December 1981

Developed the world’s first multi-video processor.

March 1982

Established Multitech Co., Ltd. (currently Meiko Tech Co., Ltd.) to
manufacture single-sided PCBs (currently a consolidated subsidiary of theCompany).

September 1982

Established Yamagata Meiko Electronics Co., Ltd. (currently a consolidated
subsidiary of the Company) to manufacture PCBs.

August 1984

Completed construction to expand the headquarters/factory in Ayase,
Kanagawa Prefecture, and started operations.

July 1988

Established M.D. Systems Co., Ltd. to design PCBs (currently a consolidated
subsidiary of the Company).

June 1990

Constructed the Fukushima Factory.

April 1991

Changed company name to Meiko Electronics Co., Ltd.

November 1997

Constructed a new manufacturing building on the premises of the Yamagata
Factory (Yamagata Meiko Electronics Co., Ltd.) to manufacture PCBs using
the new PCB Build-Up technology.

August 1998

Established Meiko Elec. Hong Kong. Co., Ltd. in Hong Kong, China(currently a consolidated subsidiary of the Company), mainly to expand
transactions with overseas manufacturers and purchase materials locally.

December 1998

Established Meiko Electronics (Panyu Nansha) Co., Ltd. in Guangzhou,
Guangdong, China [currently Meiko Electronics (Guangzhou Nansha) Co.,
Ltd., a consolidated subsidiary of the Company], to manufacture PCBs.

June 1999

Changed the name of the PCB manufacturing department of headquarters to
Kanagawa Factory.

December 2000

Stock listed on the Japan Securities Dealers Association.

January 2001

Started operations at the Guangzhou Plant [Meiko Electronics (Guangzhou
Nansha) Co., Ltd.].

June 2001

Established MDS Circuit Technology, Inc. (currently a non-consolidated
subsidiary of the Company) in Manila, the Philippines, to design PCBs.

36

December 2004

Stock listed on JASDAQ Securities Exchange, Inc.

July 2005

Established Meiko Electronics (Wuhan) Co., Ltd. in Wuhan, Hubei, China(currently a consolidated subsidiary of the Company) to manufacture PCBs.

November 2005

Constructed a new factory building at Miyagi Factory (currently the Ishinomaki
Branch Factory).

April 2006

Established Meiko Electronics America, Inc. in the United States (currently aconsolidated subsidiary of the Company) to sell PCBs.

July 2006

Started operations at the WUHAN Plant [Meiko Electronics (Wuhan) Co.,Ltd.].

January 2007

Established Meiko Electronics Vietnam Co., Ltd. (currently a consolidated
subsidiary of the Company) in Hanoi, Vietnam, to manufacture PCBs.

November 2007

Constructed a new headquarters building on the premises of the Kanagawa
Factory.

March 2008

Purchased the Circuit Business from Victor Company of Japan, Limited.

April 2009

Started operation of the EMS Plant in Vietnam.

May 2009

Established the Meiko R&D Center.

July 2009

Started operation of second plant in WUHAN.

April 2010

Upon the merger of JASDAQ Securities Exchange, Inc. and Osaka Securities
Exchange Co., Ltd., the Company’s stock is listed on the Osaka Securities
Exchange, JASDAQ market.

October 2010

Subsequent to the integration of the Hercules, JASDAQ and NEO markets of
the Osaka Securities Exchange, Meiko Electronics Co., Ltd. had its stock
listed on the JASDAQ Standard market of the exchange.

July 2011

Transferred the imaging equipment and industrial equipment businesses
to Multitech Co., Ltd., and changed the trade name to Meiko Tech Co., Ltd.

November 2011

Started operation of the PCB Plant in Vietnam.

May 2013

Started operation of the Ishinomaki Factory (currently Ishinomaki Branch
Factory).

July 2013

Subsequent to the integration of cash equity markets of the Osaka Securities
Exchange Co., Ltd. and Tokyo Stock Exchange Group, Inc., Meiko Electronics
Co., Ltd. had its stock listed on the JASDAQ standard market of the Tokyo
Stock Exchange.

August 2014

Established Meiko Electronics Thang Long Co., Ltd. (currently a consolidated
subsidiary of the Company) in Hanoi, Vietnam, to manufacture and sell PCBs.

June 2015

Established Meiko Solar Park Fukushima, a solar power generation plant on
the premises of the Fukushima Factory.

August 2015

Established Meiko Techno Co., Ltd. (currently a consolidated subsidiary of theCompany) in Yamato, Kanagawa Prefecture, to mount PCBs and manufactureand sell imaging equipment and industrial equipment.

37

Corporate Data (As of March 31, 2016)

Corporate Name:
Meiko Electronics Co., Ltd.
Date of Establishment:
November 25, 1975
Paid-in Capital:¥12,888 million
Fiscal Year:
April 1 to March 31
Number of Shares Authorized:
70,000,000
Number of Shares Issued:
26,803,370
Number of Shareholders:
5,664
Securities Code:
6787
Stock Exchange Listing:Tokyo Stock Exchange, JASDAQ standard market
Number of Employees:
9,491 (Consolidated)
Number of Subsidiaries:
16
Transfer Agent:
Sumitomo Mitsui Trust Bank, Limited
Accounting Auditor:
KPMG AZSA LLC
Headquarters:
5-14-15, Ogami, Ayase, Kanagawa Prefecture, Japan 252-1104
Investor Relations Contact:- Tel:+81-(0)467-76-6001- E-mail: Meiko_Eng@meiko-elec.com- URL: http://www.meiko-elec.com/

38

Meiko Share Performance in FY2016 Compared with Indices140.0
Meiko Electronics (JASDAQ: 6787)

130.0

JASDAQ INDEX

120.0
110.0
100.0
90.0
80.0
70.0
60.0
50.0
40.0

Fiscal year ended March 31, 2016
Index
In %

39

40