Quarterly Consolidated Financial Statements
Included in the Quarterly Report

Meiko Electronics Co., Ltd.
and its consolidated subsidiaries
For the second quarter and six months ended September 30, 2018
(ENGLISH TRANSLATION)NOTE:This document is an excerpt translation of the Quarterly Report (“Shihanki Houkokusho”) of Meiko
Electronics Co., Ltd. (the “Company”), for the second quarter and six months ended September 30,
2018, 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 November 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 Financial
Statements” (Cabinet Office Ordinance No. 64 of 2007).

2 Review reports
The quarterly consolidated financial statements of the Company for the second quarter (July 1, 2018 –September 30, 2018), and those for the six months ended September 30, 2018, 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 of
U.S. dollars

Millions of yen
March 31, 2018

AssetsCurrent assets
Cash and deposits
Notes and accounts receivable-trade
Merchandise and finished goods
Work in process
Raw materials and supplies
Other
Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures, net
Machinery, 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

¥
*2

*1

¥

-2-

15,422
24,911
4,460
4,719
5,117
1,993
(252)
56,37018,43021,494
1,488
2,764
5,557
49,733210
4,003
53,946110,316

September 30, 2018

¥
*2

*1

¥

12,551
28,621
6,425
4,785
5,588
2,328
(179)
60,11918,55922,710
1,488
6,866
5,453
55,076250
5,016
60,342
120,461

September 30, 2018

$
*2

*1

$

110,505
251,987
56,56542,12549,197
20,504(1,573)529,310

163,399
199,948
13,10460,451
48,006484,9082,201
44,166531,275
1,060,585

Thousands of
U.S. dollars

Millions of yen
March 31, 2018

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 liabilities
Long-term loans payable
Provision for directors’ retirement benefits
Net defined benefit liability
Other
Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity
Capital stock
Capital surplus
Retained earnings
Treasury shares
Total shareholders’ equity
Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Total net assets
Total liabilities and net assets

*2

¥

*4
*4

*2

*4

¥

-3-

September 30, 201816,152
13,263
10,478
67
640
60
8,265
48,925*2

23,303
217
2,658
2,171
28,34977,274

*4

¥

*4
*4

September 30, 2018

19,3936,430
12,825
621
677
－
9,059
49,005*2

33,636
217
2,720
1,769
38,342
87,347

*4

$

*4
*4

170,746
56,608112,912
5,470
5,965
－
79,754431,455
296,140
1,913
23,94815,576
337,577
769,032

12,88911,7455,400(396)
29,63812,8896,464
10,470(397)
29,426

113,475
56,916
92,185(3,492)
259,084

22
299
3,512
(429)
3,404
33,042
110,316

12
304
3,769
(397)
3,688
33,114120,461

103
2,679
33,183(3,496)32,469291,553
1,060,585¥$

(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income
Consolidated Statements of Income
For the Six Months Ended September 30, 2018
Meiko Electronics Co., Ltd. and its consolidated subsidiaries
Thousands of
U.S. dollars

Millions of yen
Six months ended
September 30, 2017

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

¥

*1

¥

-4-

53,212
43,958
9,254
5,390
3,864

Six months ended
September 30, 2018¥*1

61,75850,34011,4185,744
5,674

Six months ended
September 30, 2018$

*1

543,742443,211
100,531
50,573
49,958

15
21
－
226
262

29
5
1,127
481
1,642

256
47
9,922
4,228
14,453

682
238
386
1,306
2,820

426
－
544
970
6,346

3,746
－
4,794
8,540
55,871

0
0

2
2

14
14

113
49
162
2,658
545
2,113
(28)
2,141

130
－
130
6,218
886
5,332
－
5,332

1,139
－
1,139
54,746
7,803
46,943－
46,943¥$

Consolidated Statements of Comprehensive Income
For the Six Months Ended September 30, 2018
Meiko Electronics Co., Ltd. and its consolidated subsidiaries
Thousands of
U.S. dollars

Millions of yen
Six months ended
September 30, 2017

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 income
Comprehensive income attributable toComprehensive income attributable to owners of parent
Comprehensive income attributable to non-controlling interests

¥

2,113

Six months ended
September 30, 2018

¥

(29)
(77)
1,573
32
1,499
3,612
¥

-5-

3,646
(34)

5,332

Six months ended
September 30, 2018

$

(10)
6
256
32
284
5,616
¥

5,616
－

46,943
(89)
48
2,261
280
2,500
49,443$49,443－

(3) Consolidated Statements of Cash Flows
For the Six Months Ended September 30, 2018
Meiko Electronics Co., Ltd. and its consolidated subsidiaries

Thousands of
U.S. dollars

Millions of yen
Six months ended
September 30, 2017

Cash flows from operating activities
Profit before income taxes
Depreciation
Impairment loss
Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in provision for bonuses
Increase (decrease) in provision for directors’ bonuses
Increase (decrease) in provision for directors’ retirement benefits
Increase (decrease) in net defined benefit liability
Interest and dividend income
Interest expenses
Foreign exchange losses (gains)
Loss (gain) on sales and retirement ofproperty, plant and equipment
Decrease (increase) in notes and accounts receivable-trade
Decrease (increase) in inventories
Increase (decrease) in notes and accounts payable-trade
Decrease (increase) in other assets
Increase (decrease) in other liabilities
Other, net
SubtotalInterest and dividend income received
Interest expenses paid
Proceeds from insurance income
Income taxes (paid) refund
Net cash provided by (used in) operating activities
Cash flows from investing activities
Purchase of property, plant and equipment
Proceeds from sales of property, plant and equipment
Purchase of intangible assets
Purchase of investment securities
Payments for sales of shares of subsidiaries resulting inchange in scope of consolidation
Purchase of insurance funds
Proceeds from maturity of insurance funds
Other, net
Net cash provided by (used in) investing activities

¥

¥

-6-

2,658
2,813
49
150
45
(40)
(22)
69
(36)
682
(78)

Six months ended
September 30, 2018

¥

6,218
3,075
－
(75)
33
(60)
－
93
(34)
426
(404)

Six months ended
September 30, 2018$

54,746
27,072
－
(659)
292
(528)
－
822
(303)
3,746
(3,558)

113

128

1,125

(2,093)(1,571)
3,280
203
1,437
94
7,753
36
(705)
111
(436)
6,759

(3,384)(2,172)
3,169
28
283
(72)
7,252
34
(441)
289
(234)
6,900

(29,798)(19,120)
27,899
250
2,489
(623)
63,852302(3,888)2,547(2,061)60,752(3,882)
3
(28)
(22)

(7,723)
40
(63)
(79)

(67,999)
353
(558)
(698)

(279)

－

－

(2)
98
(224)
(4,336)(1)－(1,327)(9,153)(11)－(11,675)(80,588)¥$

Thousands ofMillions of yen
Six months ended
September 30, 2017

U.S. dollars

Six months ended
September 30, 2018

Six months ended
September 30, 2018

Cash flows from financing activities
Net increase (decrease) in short-term loans payable¥(3,077)¥(6,951)$(61,198)

Proceeds from long-term loans payable

7,276

17,251

151,875

Repayments of long-term loans payable(7,359)(4,851)(42,707)

(682)

(680)

(5,991)(0)(5,282)(46,500)

(437)

(261)

(2,297)(1)－－(4,280)(774)(6,818)

248

154

1,354

(1,609)(2,873)(25,300)

Repayments of lease obligations
Purchase of treasury shares
Cash dividends paid
Dividends paid to non-controlling interests
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

17,196*1-7-¥15,587

15,190*1¥

12,317

133,741*1$

108,441

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 ¥113.58 to $1,
the approximate rate of exchange at September 30, 2018. 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.
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, 2019, andmultiplying profit before income taxes for the period under review by this estimated effective tax rate.
Additional Information(Application of Partial Amendments to Accounting Standard for Tax Effect Accounting, etc.)
Effective from the beginning of the first quarter ended June 30, 2018, the Company has adopted the “Partial
Amendments to Accounting Standard for Tax Effect Accounting” (ASBJ Statement No. 28, February 16,2018), etc. Accordingly, deferred tax assets are presented under investments and other assets, and deferred
tax liabilities are presented under non-current liabilities.

-8-

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

Millions of yen
March 31, 2018

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

215

September 30, 2018¥

215

September 30, 2018

$

1,891

*2 Accounting treatment for notes maturing on September 30, 2018
Notes maturing on the final day of a quarterly reporting period are accounted for as if they had been settled on the
final day of the period.
As the final day of the second 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, September 30, 2018.
Thousands of
U.S. dollars

Millions of yen
March 31, 2018

Notes receivable-trade･････････････････････････
Notes payable-trade･･･････････････････････････
Notes payable-facilities････････････････････････

¥
¥
¥

51
63
1

September 30, 2018

¥
¥
¥

56
54
－

September 30, 2018

$
$
$

494
479
－

3 Discounted notes receivable-trade are summarized below:
Thousands of
U.S. dollars

Millions of yen
March 31, 2018

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

49

September 30, 2018¥34

September 30, 2018$299

*4 Financial covenants
Consolidated fiscal year ended March 31, 2018
Of short-term loans payable and long-term loans payable (including loans payable scheduled for repayment
within one year), ¥30,556 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.
Six months ended September 30, 2018
Of short-term loans payable and long-term loans payable (including loans payable scheduled for repayment
within one year), ¥43,521 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.

-9-

Consolidated Statements of Income*1 Main items and corresponding amounts recorded as selling, general and administrative expenses are shown
below:
Thousands of
U.S. dollars

Millions of yen
Six months ended
September 30, 2017¥

Salaries and allowances･･･････････････････････
Provision for bonuses･････････････････････････
Provision of allowance for doubtful accounts････
Retirement benefit expenses･･･････････････････
Research and development expenses････････････

943
137
150
38
319

Six months ended
September 30, 2018

¥

997
157
(75)
49
428

Six months ended
September 30, 2018

$

8,778
1,386
(657)
429
3,765

Consolidated Statements of Cash Flows*1 The relationship between cash and cash equivalents as of September 30, 2018, and the amounts shown on theConsolidated Balance Sheets are shown below:
Thousands of
U.S. dollars

Millions of yen
Six months ended
September 30, 2017

Cash and deposits･････････････････････････････
Time deposits with tenors exceeding 3 months･･･
Cash and cash equivalents･････････････････････- 10 -¥¥

15,815(228)
15,587Six months ended
September 30, 2018¥¥12,551(234)
12,317Six months ended
September 30, 2018$$110,505(2,064)
108,441

Total Shareholders’ Equity
Six months ended September 30, 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

2 Of the dividends whose record date falls during the six months ended September 30, 2017, those dividends whose
effective date fell after the last day of the second quarter
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- 11 -Six months ended September 30, 2018
1 Cash dividends paid
Resolution
Board meeting on May 28, 2018
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, 2018
June 12, 2018
Retained earnings

2 Of the dividends whose record date falls during the six months ended September 30, 2018, those dividends whose
effective date will fall after the last day of the second quarter
Resolution
Board meeting on November 9, 2018
Type of shares ･････････････････････････・･･･・・
Total dividends (Millions of yen) ･････････････・
Dividend per share (Yen)･････････････････････・
Record date･･････････････････････････････････
Effective date････････････････････････････････
Dividend resource･･････････････････････・・･･･・

Common shares
393
15.00
September 30, 2018
November 30, 2018
Retained earnings

3 Significant changes in shareholders’ equity
By resolution of the Board meetings held on February 16, 2018 and May 28, 2018, the Company acquired andcancelled Class A preference shares as of April 2, 2018 and June 26, 2018. As a result, capital surplus for thesix months ended September 30, 2018 decreased by ¥5,281 million, to ¥6,464 million as of September 30,
2018.

- 12 -

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:
Six months ended
September 30, 2017
75.02

Item

Six months ended
September 30, 2018
203.71(1) Profit per share (Yen)Basis for calculation
2,141
5,332
Profit attributable to owners of parent (Millions of yen)Amounts not attributable to common shareholders
177－(Millions of yen)
Of which the amount of Class A preferred dividends
[177]
[－]
(Millions of yen)
Profit attributable to owners of parent pertaining to
5,332
1,963
common shares (Millions of yen)
Average number of common shares outstanding for the period
26,174,009
26,174,033(Shares)
53.45－(2) Diluted profit per share (Yen)Basis for calculation
Adjustments of profit attributable to owners of parent
177－(Millions of yen)
Of which the amount of Class A preferred dividends
[177]
[－]
(Millions of yen)
13,873,450－
Increase in the number of common shares (Shares)
Of which Class A preference shares (Shares)[13,873,450][－]
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
Note: Diluted profit per share for the six months ended September 30, 2018 is not disclosed, as there were no
diluted shares.
Significant Subsequent Events
Not applicable

2 Other(1) Dividends of surplus
With regard to interim dividends for the fiscal year ending March 31, 2019, the Board of Directors passed a
resolution at its meeting on November 9, 2018 to pay interim dividends to shareholders who are recorded in theshareholder registry as of September 30, 2018 as follows:
1) Total dividends
393 million yen
2) Dividend per share

15.00 yen

3) Effective date of claim for payment and payment commencement dateNovember 30, 2018

(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’s subsidiary.
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.

- 13 -