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, 2016
(ENGLISH TRANSLATION)NOTE:This document is an excerpt translation of the Quarterly Report (“Shihanki Houkokusho”) of Meiko
Electronics Co., Ltd. (the “Company”), for the third quarter and nine months ended December 31,
2016, 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, 2017.
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 third quarter (October 1, 2016 –December 31, 2016), and those for the nine months ended December 31, 2016, 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, 2016

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

¥

*1

¥

-2-

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

December 31, 2016

¥
*2

*1

¥

18,17825,315
5,026
3,562
4,902
2,085
(188)
58,88019,945
19,343
1,488
1,439
5,845
48,060233
3,242
51,535
110,415

December 31, 2016

$
*2

*1

$

156,047
217,317
43,14430,57942,083
17,893(1,613)
505,450

171,219
166,047
12,776
12,35050,178412,570
2,001
27,830442,401
947,851

Thousands of
U.S. dollars

Millions of yen
March 31, 2016

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

¥
*4
*4

*4

¥

-3-

December 31, 2016

11,605
12,613
11,746
147
495
5,384
41,990*2

32,254
239
2,287
4,071
38,85180,841

*4

¥

*4
*4

*2

December 31, 2016

14,595
10,40012,756
345
238
8,332
46,666*2

29,177
239
2,402
3,722
35,54082,206

*4

$

*4
*4

*2

125,291
89,280109,499
2,965
2,040
71,529400,604
250,471
2,052
20,621
31,943305,087
705,691

12,88919,745(7,660)(396)
24,57812,88911,745950(396)
25,188110,640
100,832
8,158(3,403)
216,227

32
(337)
4,476
(246)
3,925
261
28,764
109,605

25
41
2,916
(210)
2,772
249
28,209110,415217
352
25,022(1,799)23,792
2,141
242,160
947,851¥$

(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income
Consolidated Statements of Income
For the Nine Months Ended December 31, 2016
Meiko Electronics Co., Ltd. and its consolidated subsidiaries
Thousands of
U.S. dollars

Millions of yen

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

Nine months ended
December 31, 2015

Nine months ended
December 31, 2016

Nine months ended
December 31, 2016

¥

¥

$

*1

¥

-4-

71,882
62,232
9,650
7,545
2,105

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

608,650
506,084
102,566
66,84635,720

17
24
58
31
71
201

20
22
73
60
112
287

169
192
623
516
961
2,461

950
－
91
725
1,766
540

993
1,418
76
105
2,592
1,856

8,524
12,177654
896
22,251
15,930

11
13
8
32

－
－
－
－

－
－
－
－

140
8,061
587
8,788
(8,216)
1,655(9,871)－(9,871)

*1

¥

92
3
25
120
1,736
943
793
8
785

*1

$

792
25
213
1,030
14,900
8,097
6,803
65
6,738

Consolidated Statements of Comprehensive Income
For the Nine Months Ended December 31, 2016
Meiko Electronics Co., Ltd. and its consolidated subsidiaries
Thousands of
U.S. dollars

Millions of yen

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

Nine months ended
December 31, 2015

Nine months ended
December 31, 2016

Nine months ended
December 31, 2016

¥

¥

$

(9,871)(29)(187)(1,933)(41)(2,190)(12,061)¥-5-(12,061)
－

793
(7)
378
(1,564)37(1,156)
(363)

¥

(369)
6

6,803
(62)
3,245
(13,414)314(9,917)(3,114)$(3,164)50

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 ¥116.49 to $1,
the approximate rate of exchange at December 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.
Change in Accounting Policies(Application of Practical Solution on a Change in Depreciation Method due to Tax Reform 2016)
Following the revision to the Corporation Tax Act, the Company and its consolidated domestic subsidiaries
have adopted the “Practical Solution on a Change in Depreciation Method due to Tax Reform 2016” (PITF
No. 32, June 17, 2016) beginning with the first quarter ended June 30, 2016. As a result, the method ofdepreciation of facilities attached to buildings and structures acquired on and after April 1, 2016 has beenchanged from the declining-balance method to the straight-line method.
The effect of this change on the profit or loss for the nine months ended December 31, 2016 was not material.
Specific Accounting Treatments Adopted in Preparing the Quarterly Consolidated Financial Statements(Computation of Tax Expense)
Tax expenses are calculated by reasonably estimating the effective tax rate after the adoption of tax-effectaccounting that is applicable to profit before income taxes for the fiscal year ending March 31, 2017, andmultiplying profit before income taxes for the period under review by this estimated effective tax rate.
Additional Information(Application of Implementation Guidance on Recoverability of Deferred Tax Assets)
Effective from the first quarter ended June 30, 2016, the Company has adopted the “Implementation
Guidance on Recoverability of Deferred Tax Assets” (ASBJ Guidance No. 26, March 28, 2016).

-6-

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

Millions of yen
March 31, 2016

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

19

December 31, 2016¥18

December 31, 2016$156

*2 Accounting treatment for notes maturing on December 31, 2016
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 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, 2016.
Thousands of
U.S. dollars

Millions of yen
March 31, 2016

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

¥
¥
¥

－
－
－

December 31, 2016

¥
¥
¥

50
57
3

December 31, 2016

$
$
$

428
493
26

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

Millions of yen
March 31, 2016

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

55

December 31, 2016¥

52

December 31, 2016$

443

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

-7-

Nine months ended December 31, 2016
Of short-term loans payable and long-term loans payable (including loans payable scheduled for repayment
within one year), ¥35,300 million have financial covenants attached under which the breaching of any of thefollowing will require the accelerated repayment of the obligation in the corresponding funding agreement(when there is more than one covenant, the one with stricter conditions is stated).
(1) Two consecutive ordinary losses shall not be recorded in the consolidated statements of income for eachfiscal year.
(2) The total amount of net assets recorded in the consolidated balance sheet as of the close of each fiscal year
shall be at least the higher of: (i) ¥21,962 million; or (ii) 80% of the total amount of net assets recorded in
the consolidated balance sheet as of the close of the immediately preceding fiscal year. However, (ii) shallexclude the fiscal year ended March 31, 2016.
(3) The total amount of interest-bearing debt recorded in the consolidated balance sheet as of the close ofeach fiscal year shall be no more than the amount of net sales recorded in the consolidated statement ofincome for the same fiscal year, divided by 12 and multiplied by 8.
Consolidated Statements of Income*1 Impairment loss
Nine months ended December 31, 2015
The Group recorded impairment loss for the following asset group.
Use

Business assets

Type of assets
Buildings and structures
Machinery, equipment and vehicles
OthersBuildings and structures
Machinery, equipment and vehicles
Others
Total

Location

AmountIshinomaki,
Miyagi, Japan¥995 million

Hanoi, Vietnam¥7,066 million¥8,061 million

The Group carries out grouping mainly based on each plant for business assets. During the nine months ended
December 31, 2015, the Group reduced the book value of business assets to the recoverable amount due to a
decline in profitability, and recorded the reduced amount as an impairment loss of ¥8,061 million under
extraordinary losses. The breakdown is: ¥3,193 million for buildings and structures; ¥3,364 million formachinery, equipment and vehicles; ¥213 million for land; ¥847 million for construction in progress; and¥444 million for others.
The recoverable amount of this asset group uses the higher of net realizable value and use value. Net
realizable value is evaluated based on the amount obtained by making reasonable adjustments to the assessedvalue of non-current assets. Use value is obtained by discounting future cash flow by 14.0%.
Nine months ended December 31, 2016
Description is omitted as they are of little significance.

-8-Consolidated Statements of Cash Flows
No consolidated statements of cash flow were prepared for the nine months ended December 31, 2016.
Depreciation (including amortization related to intangible assets) for the nine months ended December 31, 2016 isshown below:
Thousands of
U.S. dollars

Millions of yen
Nine months ended
December 31, 2015¥

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

5,021

Nine months ended
December 31, 2016

¥

4,060

Nine months ended
December 31, 2016$

34,857

Total Shareholders’ Equity
Nine months ended December 31, 2015
1 Cash dividends paid
Not applicable
2 Of the dividends whose record date falls during the nine months ended December 31, 2015, those dividends
whose effective date fell after the last day of the third quarter
Not applicable3 Significant changes in shareholders’ equity
Effective from the first quarter ended June 30, 2015, Meiko Electronics Thang Long Co., Ltd., which was a
non-consolidated subsidiary in the previous consolidated fiscal year, has been included in the scope of
consolidation, due to a rise in its importance. As a result, retained earnings as of the beginning of the term
have decreased by ¥462 million.
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
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 will fall after the last day of the third quarter
Not applicable3 Significant changes in shareholders’ equity
By resolution of the annual shareholders’ meeting held on June 28, 2016, the Company reduced its capitalreserve by ¥8,000 million as of June 30, 2016 in accordance with the provisions of Article 448, Paragraph 1 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.

-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.
Derivative Transactions
As of March 31, 2016
Not applicable
As of December 31, 2016
A derivative transaction whose object is currencies was material in the operation of the corporate group’sbusiness, and a significant change compared to the end of the previous consolidated fiscal year (March 31, 2016)has been recognized.
Type of object ･･････････････････････････････････････････ Currencies
Type of transaction ･･････････････････････････････････････ Foreign exchange forwards
Short
Contract amount (Millions of yen) ････････････････････････ 13,417
Fair value (Millions of yen) ･･････････････････････････････ (1,645)
Loss or gain on valuation (Millions of yen) ････････････････ (1,645)
Notes:
1. Excludes derivative transactions to which hedge accounting is applied.
2. Calculation method of fair value: Calculated based on the quoted price obtained from the financial
institutions.
Per Share Information
The basis for calculating profit or loss per share and the basis for calculating diluted profit per share are shown
below:
Nine months ended
December 31, 2015(377.14)Item

Nine months ended
December 31, 2016
19.91

(1) Profit (loss) per share (Yen)Basis for calculation
Profit (loss) attributable to owners of parent (Millions of yen)
(9,871)785
Amounts not attributable to common shareholders
264－(Millions of yen)
Of which the amount of preferred dividends (Millions of yen)
[－]
[264]
Profit (loss) attributable to owners of parent pertaining to(9,871)
521
common shares (Millions of yen)
Average number of common shares outstanding for the period
26,174,076
26,174,076(Shares)－(2) Diluted profit per share (Yen)
18.54
Basis for calculation
Adjustments of profit attributable to owners of parent
264－(Millions of yen)
Of which the amount of preferred dividends (Millions of yen)
[－]
[264]
－
Increase in the number of common shares (Shares)
16,154,150
Of which preference shares (Shares)[－][16,154,150]
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 nine months ended December 31, 2015 is not disclosed as there
were no diluted shares.

- 10 -

Significant Subsequent Events
Not applicable
2

Other
With regard to interim dividends for the fiscal year ending March 31, 2017, the Board of Directors passed a
resolution at its meeting on November 10, 2016 to pay interim dividends to shareholders who are recorded in theshareholder registry as of September 30, 2016 as follows:
Class A preference shares
175 million yen(1) Total dividends
Class A preference shares
3,500,000.00 yen(2) Dividend per share(3) Effective date of claim for payment andClass A preference shares
December 30, 2016
payment commencement date

- 11 -