Quarterly Consolidated Financial Statements
Included in the Quarterly Report

Meiko Electronics Co., Ltd.
and its consolidated subsidiaries
For the third quarter and nine months ended December 31, 2017
(ENGLISH TRANSLATION)NOTE:This document is an excerpt translation of the Quarterly Report (“Shihanki Houkokusho”) of MeikoElectronics Co., Ltd. (the “Company”), for the third quarter and nine months ended December 31,
2017, filed with the Director of the Kanto Local Finance Bureau of the Ministry of Finance of Japanpursuant to the Financial Instruments and Exchange Act of Japan on February 13, 2018.
Please note that the quarterly consolidated financial statements in this document are a translation of
the reviewed quarterly consolidated financial statements presented in Japanese. The translation of thequarterly consolidated financial statements and notes has NOT been audited by KPMG AZSA LLC,
who reviewed the original Japanese figures.
The Company provides this translation for your reference and convenience only without any warranty
as to its accuracy. In case of any discrepancy between the translation and the Japanese original, thelatter shall prevail. The final decision and responsibility for investments rests solely with the reader ofthis document.

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

2 Review reports
The quarterly consolidated financial statements of the Company for the third quarter (October 1, 2017 –December 31, 2017), and those for the nine months ended December 31, 2017, were reviewed by
KPMG AZSA LLC, pursuant to Article 193-2, Paragraph 1 of the Financial Instruments and Exchange
Act of Japan.

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

Thousands ofU.S. dollars

Millions of yen
March 31, 2017

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

¥

*1

¥

-2-

17,422
22,035
4,550
3,390
4,587
2,434
(17)
54,401

19,05018,540
1,488
1,117
5,560
45,755220
3,202
49,177
103,578

December 31, 2017

¥
*2

*1

¥

13,59826,636
5,025
4,574
5,519
3,126(304)
58,174

19,115
21,2071,488
2,826
6,04450,680
189
3,355
54,224112,398

December 31, 2017

$
*2

*1

$

120,337
235,71344,47040,48048,83927,662(2,689)514,812

169,161
187,677
13,17125,01253,483
448,504
1,668
29,688479,860
994,672

Thousands of
U.S. dollars

Millions of yen
March 31, 2017

Liabilities
Current liabilities
Notes and accounts payable-trade
Short-term loans payable
Current portion of long-term loans payable
Income taxes payable
Provision for bonuses
Provision for directorsʼ bonuses
Other
Total current liabilities
Non-current liabilitiesLong-term loans payable
Provision for directors’ retirement benefits
Net defined benefit liability
Other
Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity
Capital stock
Capital surplus
Retained earnings
Treasury shares
Total shareholders’ equity
Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets

¥*4
*4

*4

¥

-3-

December 31, 201713,195
12,292
12,323
210
547
40
6,398
45,005*2

23,893
239
2,699
3,202
30,03375,038

*4

¥

*4
*4

*2

December 31, 2017

17,359
8,675
9,902
504
322
－
8,971
45,733*2

27,959
217
2,609
2,657
33,442
79,175

*4

$

*4
*4

*2

153,62176,77387,627
4,458
2,852
－
79,384
404,715
247,421
1,923
23,08723,512295,943
700,658

12,88911,745
1,932(396)
26,17012,88911,745
4,772(396)
29,010114,057
103,946
42,234(3,508)
256,72985
59
2,438(470)
2,112
258
28,540103,57830
24,603(422)
4,213－
33,223112,398267
19
40,730(3,731)37,285－
294,014994,672¥$

(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income
Consolidated Statements of Income
For the Nine Months Ended December 31, 2017
Meiko Electronics Co., Ltd. and its consolidated subsidiaries
Thousands ofU.S. dollars

Millions of yen

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

Nine months ended
December 31, 2016

Nine months ended
December 31, 2017

Nine months ended
December 31, 2017

¥

¥$

¥

-4-

70,902
58,954
11,948
7,787
4,161

81,192
67,143
14,0498,274
5,775

718,513594,189
124,324
73,221
51,103

20
22
60
185
287

27
26
140
283
476

240
229
1,243
2,497
4,209

993
76
1,523
2,592
1,856

970
251
429
1,650
4,601

8,582
2,222
3,794
14,59840,714

－
－－

0
182
182

2
1,607
1,609

92
3－
25
120
1,736
943
793
8785

177
5626－259
4,524
805
3,719
(27)
3,746

1,570
494
228
－
2,292
40,031
7,122
32,909(238)
33,147¥$

Consolidated Statements of Comprehensive Income
For the Nine Months Ended December 31, 2017
Meiko Electronics Co., Ltd. and its consolidated subsidiaries
Thousands ofU.S. dollars

Millions of yen

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

Nine months ended
December 31, 2016

Nine months ended
December 31, 2017

Nine months ended
December 31, 2017

¥¥

$793
(7)
378
(1,564)37(1,156)(363)¥-5-(369)
6

3,719
(55)
(56)
2,158
48
2,095
5,814

¥

5,846
(32)

32,909(488)(499)
19,108424
18,54551,454$51,741(287)

Notes to the Consolidated Financial Statements
Matters concerning Going Concern Assumption
Not applicable
Basis of Presenting Consolidated Financial Statements
The accompanying consolidated financial statements of Meiko Electronics Co., Ltd. (the “Company”) havebeen prepared in accordance with the provisions set forth in the Financial Instruments and Exchange Act ofJapan and its related accounting regulations, and in conformity with accounting principles generally acceptedin Japan (“Japanese GAAP”), which are different in certain respects as to application and disclosure
requirements of International Financial Reporting Standards.
The consolidated financial statements are stated in Japanese yen, the currency of the country in which theCompany is incorporated and operates. The translation of Japanese yen amounts into U.S. dollar amounts is
included solely for the convenience of readers outside Japan and have been made at the rate of ¥113.00 to $1,
the approximate rate of exchange at December 31, 2017. 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.
Change in Scope of Consolidation and Application of the Equity Method(Important change in the scope of consolidation)
Due to the partial sales of shares of M.D. Systems Co., Ltd., which was a consolidated subsidiary of theCompany, during the second quarter ended September 30, 2017, M.D. Systems Co., Ltd. and its subsidiary
MDS Circuit Technology, Inc. were excluded from the scope of consolidation as of September 30, 2017.
Specific Accounting Treatments Adopted in Preparing the Quarterly Consolidated Financial Statements(Computation of Tax Expense)
Tax expenses are calculated by reasonably estimating the effective tax rate after the adoption of tax-effectaccounting that is applicable to profit before income taxes for the fiscal year ending March 31, 2018, andmultiplying profit before income taxes for the period under review by this estimated effective tax rate.

-6-

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

Millions of yen
March 31, 2017

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

215

December 31, 2017¥

215

December 31, 2017

$1,901*2 Accounting treatment for notes maturing on December 31, 2017
Notes maturing on the final day of a quarterly reporting period are accounted for as if they had been settled on thefinal day of the period.
As the final day of the third quarter was a bank holiday, the following notes that matured on that day were
accounted for as though they had been settled on the maturity date, December 31, 2017.
Thousands ofU.S. dollars

Millions of yen
March 31, 2017

Notes receivable-trade･････････････････････････
Notes payable-trade･･･････････････････････････
Notes payable-facilities････････････････････････¥¥¥－－－December 31, 2017¥¥¥6173
1

December 31, 2017

$
$
$

542
648
93 Discounted notes receivable-trade are summarized below:
Thousands ofU.S. dollars

Millions of yen
March 31, 2017

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

43

December 31, 2017¥20

December 31, 2017$

178

*4 Financial covenants
Consolidated fiscal year ended March 31, 2017
Of short-term loans payable and long-term loans payable (including loans payable scheduled for repayment
within one year), ¥31,135 million have financial covenants attached under which the breaching of any of thefollowing will require the accelerated repayment of the obligation in the corresponding funding agreement(when there is more than one covenant, the one with stricter conditions is stated).
(1) Two consecutive ordinary losses shall not be recorded in the consolidated statements of income for eachfiscal year.
(2) The total amount of net assets recorded in the consolidated balance sheet as of the close of each fiscal year
shall be at least the higher of: (i) ¥21,962 million; or (ii) 80% of the total amount of net assets recorded in
the consolidated balance sheet as of the close of the immediately preceding fiscal year.
(3) The total amount of interest-bearing debt recorded in the consolidated balance sheet as of the close ofeach fiscal year shall be no more than the amount of net sales recorded in the consolidated statement ofincome for the same fiscal year, divided by 12 and multiplied by 8.
Nine months ended December 31, 2017
Of short-term loans payable and long-term loans payable (including loans payable scheduled for repayment
within one year), ¥33,434 million have financial covenants attached under which the breaching of any of thefollowing will require the accelerated repayment of the obligation in the corresponding funding agreement(when there is more than one covenant, the one with stricter conditions is stated).
(1) Two consecutive ordinary losses shall not be recorded in the consolidated statements of income for eachfiscal year.
(2) The total amount of net assets recorded in the consolidated balance sheet as of the close of each fiscal year
shall be at least the higher of: (i) ¥21,962 million; or (ii) 80% of the total amount of net assets recorded in
the consolidated balance sheet as of the close of the immediately preceding fiscal year.
(3) The total amount of interest-bearing debt recorded in the consolidated balance sheet as of the close ofeach fiscal year shall be no more than the amount of net sales recorded in the consolidated statement ofincome for the same fiscal year, divided by 12 and multiplied by 8.

-7-

Consolidated Statements of Cash Flows
No consolidated statements of cash flow were prepared for the nine months ended December 31, 2017.
Depreciation (including amortization related to intangible assets) for the nine months ended December 31, 2017 isshown below:
Thousands ofU.S. dollars

Millions of yen
Nine months ended
December 31, 2016

¥Depreciation･････････････････････････････････

4,060

Nine months ended
December 31, 2017

¥4,299Nine months ended
December 31, 2017$

38,044

Total Shareholders’ Equity
Nine months ended December 31, 2016
1 Cash dividends paid
Resolution
Board meeting on November 10, 2016
Type of shares ･････････････････････････・･･･・・
Total dividends (Millions of yen) ･････････････・
Dividend per share (Yen)･････････････････････・
Record date･･････････････････････････････････
Effective date････････････････････････････････
Dividend resource･･････････････････････・・･･･・

Class A preference shares
175
3,500,000.00
September 30, 2016
December 30, 2016
Retained earnings

2 Of the dividends whose record date falls during the nine months ended December 31, 2016, those dividends
whose effective date fell after the last day of the third quarterNot applicable3 Significant changes in shareholders’ equity
By resolution of the annual shareholders’ meeting held on June 28, 2016, the Company reduced its capitalreserve by ¥8,000 million as of June 30, 2016 in accordance with the provisions of Article 448, Paragraph 1 of
the Companies Act, and transferred it to other capital surplus. In addition, the Company transferred ¥8,000
million of other capital surplus to retained earnings brought forward, in accordance with the provisions ofArticle 452 of the Companies Act to compensate for loss.
As a result, capital surplus was ¥11,745 million and retained earnings were ¥950 million as of December 31,
2016.

-8-Nine months ended December 31, 2017
1 Cash dividends paid
Resolution
Board meeting on May 29, 2017
Type of shares ･････････････････････････・･･･・・
Total dividends (Millions of yen) ･････････････・
Dividend per share (Yen)･････････････････････・
Record date･･････････････････････････････････
Effective date････････････････････････････････
Dividend resource･･････････････････････・・･･･・

Common shares
262
10.00
March 31, 2017
June 13, 2017
Retained earnings

Resolution
Board meeting on May 29, 2017
Type of shares ･････････････････････････・･･･・・
Total dividends (Millions of yen) ･････････････・
Dividend per share (Yen)･････････････････････・
Record date･･････････････････････････････････
Effective date････････････････････････････････
Dividend resource･･････････････････････・・･･･・

Class A preference shares
175
3,500,000.00
March 31, 2017
June 13, 2017
Retained earnings

Resolution
Board meeting on November 10, 2017
Type of shares ･････････････････････････・･･･・・
Total dividends (Millions of yen) ･････････････・
Dividend per share (Yen)･････････････････････・
Record date･･････････････････････････････････
Effective date････････････････････････････････
Dividend resource･･････････････････････・・･･･・

Common shares
262
10.00
September 30, 2017
November 30, 2017
Retained earnings

Resolution
Board meeting on November 10, 2017
Type of shares ･････････････････････････・･･･・・
Total dividends (Millions of yen) ･････････････・
Dividend per share (Yen)･････････････････････・
Record date･･････････････････････････････････
Effective date････････････････････････････････
Dividend resource･･････････････････････・・･･･・

Class A preference shares
177
3,535,000.00
September 30, 2017
November 30, 2017
Retained earnings

2 Of the dividends whose record date falls during the nine months ended December 31, 2017, those dividends
whose effective date will fall after the last day of the third quarter
Not applicable-9-Segment Information
As the Group’s businesses are primarily in PCB design, manufacturing, sales, and ancillary operations, thedescription of other businesses is omitted as they are of little significance.
Per Share Information
The basis for calculating profit per share and the basis for calculating diluted profit per share are shown below:
Item(1) Profit per share (Yen)Basis for calculation
Profit attributable to owners of parent (Millions of yen)Amounts not attributable to common shareholders(Millions of yen)
Of which the amount of Class A preferred dividends(Millions of yen)
Profit attributable to owners of parent pertaining tocommon shares (Millions of yen)
Average number of common shares outstanding for the period(Shares)(2) Diluted profit per share (Yen)Basis for calculation
Adjustments of profit attributable to owners of parent(Millions of yen)
Of which the amount of Class A preferred dividends(Millions of yen)
Increase in the number of common shares (Shares)
Of which Class A preference shares (Shares)
Descriptions of diluted shares that were not included in thecalculation of diluted profit per share due to their anti-dilutive
effect but that changed significantly from the end of theprevious fiscal year

Nine months ended
December 31, 2016
19.91

Nine months ended
December 31, 2017132.93

785

3,746

264

266

[264]

[266]

521

3,480

26,174,076

26,174,026

18.54

94.00

264

266

[264]

[266]

16,154,150[16,154,150]

13,673,650[13,673,650]－－

Significant Subsequent Events
Not applicable
2 Other(1) Dividends of surplus
With regard to interim dividends for the fiscal year ending March 31, 2018, the Board of Directors passed aresolution at its meeting on November 10, 2017 to pay interim dividends to shareholders who are recorded in theshareholder registry as of September 30, 2017 as follows:
1) Total dividends

Common sharesClass A preference shares

262 million yen
177 million yen

2) Dividend per share

Common sharesClass A preference shares

10.00 yen
3,535,000.00 yen

3) Effective date of claim for payment and payment commencement dateNovember 30, 2017(2) Litigation
Legal action was brought against Meiko Tech Co., Ltd., a consolidated subsidiary of the Company, by Hohsen
Corp. on September 27, 2017. According to the complaint, Hohsen Corp. is demanding compensation for losses
totaling ¥291 million from the Company’s subsidiary, etc. on the grounds that it suffered such losses due tofictitious trades that were carried out at Hohsen Corp. under the direction of a former executive of the Company’ssubsidiary.
The Company recognizes that there are no obligations or grounds to respond to the demand claimed by theplaintiff, and intends to make such claims in the litigation.

- 10 -