39th

MEIKO REPORT(April 1, 2013 to March 31, 2014)
CONTENTSInterview with the President

P01

Meiko’s initiatives for FY2014

P03

Consolidated financial data

P04

Global network

P05

Corporate Data

P06

Introduce our new technology/
Introduction of Meiko Website

Back Cover

Securities code: 6787

Interview with the President

Capturing the market needs accurately, we willcontinue to offer the best printed circuit boards.
Please describe the business environmentand operating results for the fiscal year
ended March 31, 2014.

which demand is brisk, under the policy of selection and concentration ofBoth the domestic and overseas markets
recovered, and Meiko achieved profits although
its operating results fell below the target.

directors’ remuneration and the salaries of management-level employees,

Looking at the business environment during the fiscal year ended Marchholdings including elimination and consolidation of offices. As a result,31, 2014, the global economy was on a path leading out of a criticalproduction expanded in the first half of the fiscal year under review in thesituation, with the U.S. economy continuing to show a gradual reboundVietnam Plant and the 2nd Factory of the Wuhan Plant in China, which

and the European economy enjoying a moderate pickup in consumer
spending. In addition, the economies in Asia recovered, underpinned bybusiness. In line with losses posted in the previous fiscal year, the Groupdrastically reformed its management structure by means such as cutting
controlling the headcount properly towards productivity enhancement,
and streamlining the business operation system by reviewing asset

Operating results for FY2013(in 100 million yen)

Year-on-year change(in 100 million yen)

792.3

+185.2

I would like to express my sincere

positive factors such as an increase in imports and robust domesticg r a t i t u d e t o a l l s h a re h o l d e r s a n ddemand, etc. In Japan, the economy bottomed out and remained on ainvestors for their outstanding support

recovery path as indicated by rising stock prices, boosted consumer

Operating income

9.2

+15.2

spending and an improvement in employment driven by a series ofOrdinary income

19.3

+23.1

Net income

0.2

+15.9

for our business.
And I wish to take the opportunity of

economic and financial measures implemented under the initiative of thegovernment and Bank of Japan (BOJ).

giving our MEIKO REPORT for the 39th

The automobile industry, which represents one of the Meiko Group’s

fiscal term (ended March 31, 2014)

main business partners, saw its sales growth, supported by strong global

to explain the business conditions

demand for automobiles and an upturn in demand for Japaneseof FY2013 and our future businessautomobiles in China. In addition, demand for PCBs increased in thestrategy.

Yuichiro Naya

Under such circumstances, the Group concentrated its management
resources on expanding its production system and boosting orders
received with a focus on PCBs for automobiles and smartphones, for

01

MEIKO REPORT

Highlights for the financial results for FY2013
Positive
Factors(Year-on-year)

electronics industry as a result of manufacturers’ expanding theirproduction capacity of PCBs for smartphones marketed abroad.

President & CEO

Net sales

Negative
Factors(Year-on-year)• Steady growth in production of automotive PCBs
(the Guangzhou Plant and Wuhan Plant in China)• Strong orders received for PCBs for smartphonesof Asian and Chinese manufacturers (The Wuhan
Plant in China and Vietnam Plant)• Impact of the fire accident in the Vietnam Plant• Slowdown in orders received from some of thecustomers of PCBs for smartphones in Q4.
• Falls in product pricesmainly produce PCBs for smartphones, the Guangzhou Plant, whose main

For instance, we increased the capital aiming to improve the

Wuhan Plants in China and the Vietnam Plant, in order to surely capture

product is automotive PCBs, and the 1st Factory of the Wuhan Plant,

productivity of the two factories in China and the Vietnam Plant andbusiness opportunities and increase earnings. In addition, we will further

which newly commenced production of automotive PCBs. In addition, theenhance the R&D investments and financial position. The Group will

advance efforts for cost reduction and streamlining of management inGroup’s efforts for improving its management structure had positive

strategically use the funds to promote stable business expansion. On theorder to enhance the management structure.

effects on its operating performance and led to an increase in both sales

sales front, the Group will strive to expand business transactions globally

In Vietnam, we will establish a second manufacturing subsidiary in Julyand profits compared to the previous fiscal year. In the second half of theby acquiring leading overseas mobile device manufacturers as customers

2014 in order to expand production capacity in the northern part of the

fiscal year, meanwhile, the Group’s earnings fell below the initial forecast

and boosting business transactions with European automobile-related

country. Through this, we will accelerate the shift from production that isdue to factors such as the fire at the Vietnam Plant that occurred incustomers through collaboration with Germany’s Schweizer Electronic,

concentrated in China to diversified production locations in two or more

autumn, greater-than-expected falls in product prices and a sharp

our capital alliance partner.

sites to disperse risks. Moreover, we expect to enhance supply capacity

decrease in orders received from some of our customers. However, theAs a new initiative, we announced that we will launch the photovoltaic

Group successfully turned around its operations, going from the red in the

power generation business by utilizing the idle land in the Fukushima

previous fiscal year to posting profits in the fiscal year under review.

Factory. This business will not only help give a boost to rebuilding efforts

What is your management strategy forthe future?
We will aim to capture the needs ingrowing markets accurately and expand
production bases.
The Group’s management strategy is to aim to achieve stable growth by
expanding its business scale globally and strengthen its earnings powerin Hirono Town of Futaba County, Fukushima Prefecture, which is on its
way to reconstruction from the Great East Japan Earthquake, but also be
operated under the policy of promoting the dissemination of renewable

for neighboring emerging nations more than ever.

Please give a message tothe shareholders and investors
We will focus on maintaining stabledividends and increasing corporate value.

energy and contributing to the local community to fulfill our corporate

We at Meiko regard returning profits to shareholders as one of our topsocial responsibility. We plan to start selling electricity in May 2015.

management priorities, and take business results and other matters

What plans do you have for the next
fiscal year?

comprehensively into consideration for profit sharing as we work tomaintain stable dividends. In order to secure profits for shareholders in the
future, we are making it a basic policy to allocate internal reserves toinvestments to further strengthen and improve our business base, and to

In those markets, we expect that competition will increase further as

We will pursue business expansion and growthwith a focus on PCBs for automobiles andsmartphones, while continuing with efforts tostrengthen our management structure.

rivals, both domestic and international, will enter the market with strong

Looking at the management environment surrounding the Group forof 5 yen per share, the same as the interim dividend. Although thecost competitiveness, while enhancing their technological capabilities. In

launching new initiatives for the next fiscal year, we expect to see a solid

business environment surrounding the Company remains difficult, we areresponse, the Group will build robust production systems in Japan andexpansion in the automobile industry, as well as growth in the market forcommitted to doing our utmost in carrying out measures to reward theoverseas and provide customers with products of the best quality andsmartphone-related devices notably in China. In response to such a

support we receive from and meet the expectations of our stakeholders,with the best delivery schedule, while pursuing the development of newmarket environment, we will strive to acquire new customers aggressively

and to increase corporate value and achieve sustainable growth. We looktechnologies, to achieve stable growth of the business.

and expand the production scale and boost production power in theforward to your continued support and encouragement in the future.

by surely capturing markets such as the automotive market, which has
been growing continuously on a global basis, and the market for
smartphones and related devices, which is expanding notably in China.

use them to further expand our business.
Taking comprehensively into account the operating results for FY2013
and the future outlook, we have decided to distribute a year-end dividend

MEIKO REPORT

02

Meiko’s initiatives for FY2014
In FY2014, we expect to see an expansion of the smartphone market
centered on China and Asian countries, in addition to robust growthof the automobile industry that continues from FY2013. Here are ourinitiatives for FY2014 aimed at accurately capturing the market needs.
Market trends in FY2014
Automobile market

We will aim to increase both sales and profits by expanding
sales centered on PCBs for automobiles and smartphones
and promoting quality improvement and cost reduction.
Principal measures

The automobile market remains strong, with global car sales increasing
by 4% year on year to about 87 million units. Demand for PCBs
is forecast to grow with the progress of electrification of automobiles.

Sales

The smartphone market: A year-on-year increase of 29% to over
1,280 million units
The tablet market: A year-on-year increase of 20% to over 240
million units

Other markets
Industrial, healthcare and energy sectors are expected to grow.
Consolidated earnings forecast for FY2014
Full-year forecast Amount of change from FY2013(in 100 million yen) (in 100 million yen)

2 Expanding orders received for PCBs for high-

1stFactory

Boosting output of automotive PCBs

2nd
Factory

Narrowing down production models to PCBs
for mid-range and high-end smartphones

end smartphones

3 Promoting new customer acquisition in the
ASEAN region

1 Upgrading and strengthening of the production
system in Vietnam

production capacity and product quality in themarket for automotive PCBs

Technology
development

1 Promoting the development and launch of new

products that are one step ahead of customer needs

For high-end smartphones: High multilayer AnyLayer PCBs
For automobiles: HDI PCBs, High-frequency PCBs

+67.7

25.0

+15.8

The second manufacturing subsidiary in Vietnam

15.0

△4.3

7.0

+6.8

Establishment of
Meiko Electronics Thang Long Co., Ltd.

Forecast by application (in 100 million yen)

Forecast by product (in 100 million yen)
Hanoi Airport
Forecast for
FY2014

1. Expanding production of PCBs for high-end
smartphones
2. Expanding production of HDI PCBs forcustomers in the ASEAN region
3. Starting up production lines for automotive
PCBs under the joint venture with
Schweizer Electronic in Germany

The market of PCBs is expected to expand in Southeast Asia in
the future.
Accordingly, we will establish Meiko Electronics Thang Long
Co., Ltd. as the Group’s new sales base in July 2014.
Purposes of
establishing the
new company

1. Decentralization of production bases from
China.
2. Strengthening production of high-end HDI PCBs.

Meiko Thang Long
Thang Long Industrial Park

Automobiles

381

401

Double-sided PCB 73

73

Smartphones

149

198

Four-layer PCB 299

326

Digital consumer electronics 46

45

Six or more-layer PCB 125

134

1. Purchasing facilities of Panasonic and borrowing buildings— Utilizing developed infrastructure and high-performance
manufacturing equipment to produce high-value-added products.
Characteristics of
2. ‌Making the company a production base for high-end HDI
the new company
PCBs for automobiles and HDI module PCBs, for which
demand is expected to increase.

PCBs for other applications 162

165

HDI PCB214

255

3. Producing PCBs for high-end smartphones for the time being.

Non-PCB

51

Other PCBs

27

21

Non-PCB

54

51

Meiko Vietnam

Thach ThatQuoc Oai Industrial Zone

03

Vietnam Plant

Production 2 Aiming to become number one in terms of

860.0

Results for
FY2013Aiming to become the world’s top automotive
PCB plant— Producing stable and high reliability PCBs
Wuhan Plant

Net sales
Operating income
Ordinary income
Net income

Forecast for
FY2014

Guangzhou Plant

1 Strengthening the sales expansion system in themarket for automotive PCBs

The market for smartphones/tablets

Results for
FY2013

Priority measures of each plant

Key points for promoting business

54

MEIKO REPORT

Downtown of Hanoi City

Consolidated financial data
Consolidated balance sheet

Net sales

79,231

million yen(Forecast)

80,00060,00040,000(As of March 31, 2013)(As of March 31, 2014)35,10142,740Noncurrent assets

66,944

72,686

61,772

67,578

468

454

4,703

4,653

102,045

115,426

Intangible assets0
2011/3

2012/3

2013/3

2014/3

2015/3

Investments and other assets
Total assets

Operating income / Operating margin

Liabilities
Current liabilities

40,17736,910Noncurrent liabilities

25,14133,808

Total liabilities

65,31870,719million yen(million yen)

(%)

4,000

8

(Forecast) 6

3,000
2,000

4

1,000

2

0

0

-10

-2

2011/3

2012/3

2013/3

2014/3

2015/3

Net income / Net margin
million yen(million yen)

(%)

5

2,000

(Forecast)

0

0
-5

-2,000-4,000Year end of 2014

Current assets

Property, plant and equipment

20,00023Year end of 2013

Assets(million yen)

100,000

922(JPY in million)

2011/3

2012/3

2013/3

2014/3

2015/3

Net assets

36,44341,058

Capital10,545

12,888

Capital surplus

12,467

14,809

Shareholders’ equity

Consolidated statement of income
FY2013(JPY in million)

FY2014(April 1, 2012 to March 31, 2013) (April 1, 2013 to March 31, 2014)

Net sales

60,70979,231

Cost of sales

53,15569,023Gross profit

7,553

10,208Selling, general and administrative expenses

8,159

9,285

Operating income/losses (△)

△ 605

922

Non-operating income

2,628

2,342

Non-operating expenses

2,409

1,333

Ordinary income/losses (△)

△ 386

1,931

Extraordinary income

1,212

700

Extraordinary losses

1,272

384

Income (losses) before income taxes (△)

△ 446

2,247

1,121

2,224

Income (losses) before minority interests (△)△ 1,567

23

Net income/losses (△)△ 1,567

23

Income taxes

Consolidated statement of cash flows(JPY in million)

FY2013

FY2014Retained earnings

13,827

13,756

Treasury stocks

△ 396

△ 396

Net cash generated from operating activities

3,594

2,426

Cumulative other comprehensive income

282

3,648

Net cash expended in investment activities△ 5,075△ 4,020

Valuation difference on availablefor-sale securities

△ 115

97

Net cash generated from financing activities

5,357

1,186

Deferred gains or losses on hedges

△ 205

△ 81

The effect of changes in the exchange
rate on cash and cash equivalents

469

378

Foreign currency translation adjustment

603

3,765

Net increase (decrease) in cash andcash equivalents (△)

4,346

△ 29

Remeasurements of defined benefit plans

-

△ 133

Cash and cash equivalents at the
beginning of the period

3,751

8,788

690

-

8,788

8,759

(April 1, 2012 to March 31, 2013) (April 1, 2013 to March 31, 2014)

Total net assets

36,72644,707

Increase in cash and cash equivalents resulting
from merger with unconsolidated subsidiaries

Total liabilities and net assets

102,045

115,426

Cash and cash equivalents at the end of the period

MEIKO REPORT

04

Global network

Meiko’s production and sales systems
that meet global customer needs
Meiko Electronics Europe GmbH

Production base

R&D base

Sales Bases

Affiliated Companies

Shanghai Sales Office

Tianjin Sales OfficeWuhan Plant(Meiko Electronics (Wuhan) Co., Ltd.)

Meiko Electronics America, Inc.

Taiwan Branch

Guangzhou Plant
Meiko Electronics (Guangzhou Nansha) Co., Ltd.
Guangzhou Sales Headquarters
Overseas Sales Department

Yamagata Factory(Yamagata Meiko Electronics Co., Ltd.)
Ishinomaki Factory

Meiko Electronics Vietnam Co., Ltd.
Omiya Sales Office
Meiko Elec. Hong Kong. Co., Ltd.
MDS Circuit Technology, Inc.

Fukushima Factory

Meiko Tech Yokohama Branch Office
Nagoya Sales OfficeOsaka Sales Office
Meiko Tech Osaka Head Office

M.D. Systems Co., Ltd.

Headquarters
Kanagawa Factory
1st PCB Sales Dept.
2nd PCB Sales Dept.
3rd PCB Sales Dept.
International Sales Dept.
Research and Development Center

Yamato Office
Solder Stencil Dept.
EMS Dept.
Yamato Technology Center

05

MEIKO REPORTCorporate Data (As of March 31, 2014)
Corporate Profile

Stock Information

Name

Meiko Electronics Co., Ltd.

Number of Shares Authorized

Established

November 25, 1975

Number of Shares Issued

Headquarters

5-14-15, Ogami, Ayase, Kanagawa

Shareholders’ Information
63,200,000 Shares
26,174,076 Shares(excluding 629,244 Shares of treasury stock)

Capital12,888 million yen

Number of Shareholders

No. of Employees

11,858 (consolidated)(Japan: 802) (Overseas: 11,056)

Principal Shareholders

Outline of Business

Design and manufacturing and sales of
PCBs and auxiliary electronics business

6,638

Number of Shares held
(thousands of shares) % of shares held

Name of Shareholder

Yuichiro Naya

4,697

17.9

Executives(As of March 31, 2014)

The Master Trust Bank of Japan(Trust Account)

1,440

5.5

President & CEO

Yuichiro NayaJapan Trustee Services Bank, Ltd.
(trust account)

1,354

5.2

Director and Senior Managing Executive Officer Takahide Hirayama

Trust & Custody Services Bank, Ltd.
(Securities Investment Trust Account)

675

2.6

Director and Senior Managing Executive Officer Masakuni Shinozaki

PLEASANT VALLEY

631

2.4

Director and Managing Executive Officer Tetsuro Suzuki

Meiko Kosan Co., Ltd.

608

2.3

Director

Haruyuki NayaBNYML-NON TREATY ACCOUNT

561

2.1

Director

Kunihiko SatoYuho, Ltd.

521

2.0

Senior Corporate Auditor

Hitoshi Iyomoto

BNY GCM CLIENT ACCOUNTJPRD AC ISG（FE-AC）

507

1.9

Haruyuki Naya

488

1.9

Director and Senior Managing Executive Officer Seiichi Naya

Audit & Supervisory Board Member Hiroshi Tsukii
Audit & Supervisory Board Member Yasunobu Koshimura
Affiliated Companies
Yamagata Meiko Electronics Co., Ltd.
M.D. Systems Co., Ltd.
Meiko Tech Co., Ltd.
Meiko Electronics (Guangzhou Nansha) Co., Ltd.
Meiko Electronics (Wuhan) Co., Ltd.
Meiko Elec. Hong Kong. Co., Ltd.
Meiko Electronics Vietnam Co., Ltd.
MDS Circuit Technology, Inc.
Meiko Electronics America, Inc.
Meiko Electronics Europe GmbH

Manufacturing of PCBs
Design of PCBs
Sales of PCBs
Manufacturing and sales of PCBs
Manufacturing and sales of PCBs
Sales of PCBs
Manufacturing and sales of PCBs
Design of PCBs
Sales of PCBs
Sales of PCBs

*The Company owns 629,244 shares of treasury stock, which is excluded fromthe above list of principal shareholders.
The percentages for the total number of issued shares have been calculated
after excluding treasury stock.

Distribution of Ownership among Shareholders

Fiscal Year

April 1 to March 31 of the following year

Annual Shareholders’Meeting

June

Record dateEnd-of-year dividends: 3/31
I n t e r i m d i v i d e n d s: 9/30

Method of public notice Electronic public notice. In the event ofaccident or other unforeseen events thatprevent publication of the electronic public
notice, it will be published in The Nikkei.
Official page:
http://www.meiko-elec.com/ir/pa.shtml
Stock exchange

JASDAQ (Standard), Tokyo Stock Exchange

Administrator of shareholders 1-4-1, Marunouchi, Chiyoda-ku, Tokyo, Japan
register and special account Sumitomo Mitsui Trust Bank, Limited
management institution
Handling office ofAdministrator ofshareholders register

1-4-1, Marunouchi, Chiyoda-ku, Tokyo, Japan
Stock Transfer Agency Business Planning
Dept., Sumitomo Mitsui Trust Bank, Limited(Mailing Address)

2-8-4, Izumi, Suginami-ku, Tokyo, Japan
Stock Transfer Agency Business
Planning Dept., Sumitomo Mitsui Trust
Bank, Limited(Inquiries by telephone)

0120-782-031(URL)
http://www.smtb.jp /personal/agency/index.html

Individuals and others

49.6%[Inquiries about notices such as a change ofaddress concerning shareholdings]

Financial institutions

21.9%

Shareholders who have accounts with securities companies are

Foreign institutions and others 17.3%

advised to contact the securities company with regard to notices,

Other institutions

6.0%

such as a change of address.

Financial instruments business operators

2.8%

Shareholders who do not hold accounts with a securities company

Treasury stock

2.4%

are advised to contact the above telephone number for inquiries.
MEIKO REPORT

06

Introduction of Meiko Website

Introducing our
new technology 1

Heavy Copper PCB

The newly developed PCB was given the name “Heavy Copper PCB” because the conductor is thicker and more electric current can flow through it
than the conventional models.
When developing the new PCB, MEIKO Research and Development Center has made an effort to reduce environmental impact with its
unprecedented method by reviewing the entire production process of PCBs and raw materials, having “environmentally friendly” as the key concept.

Features of MEIKO’s Heavy Copper PCB
Top page

CSR Report

Introduction of our products(A Lot of MEIKO around You)For our latest IR news releases and otherinformation, including details on our products
and CSR activities, please visit the Company
website. You can visit the Company website
to find other useful information as well.
Meiko

Searchhttp://www.meiko-elec.com/

Headquarters
URL:

5-14-15, Ogami, Ayase, Kanagawa 252-1104, Japan
Tel: 0467 (76) 6001 (switchboard)
http: //w w w. me iko-e le c.c om/

1 Not waste copper

2 Making copper evenly and fast

The conductor of PCB are generally made by subtracting
the unnecessary copper areas, but our new technology
adopts the “additive method” — making and adding thenecessary parts, not dissolving the unnecessary parts. With
the new method, we can now decrease a copper waste tozero, which is used to be about 50% of the raw material,
reducing the effects on the environment successfully.

The conventional additive method not only takes time tomake thick copper but also often causes an uneven thickness
depending on the layout design of conductors, and thus is
not appropriate for heavy copper PCBs. By developing a
manufacturing device specially designed for heavy copper
PCBs, we have achieved a production time that is 10 times
shorter and a plating thickness accuracy of ± 15%.

3 Flat surface

4 Combine Fine circuits and heavy copper

Surface of heavy copper PCBs has micro asperities withthe size of several 100 µms depending on the thicknessof conductor, which may result in losing customers’
reliability in continuity and insulation that are crucial partof processing for customers. With the pattern-transfer
method applied to multiple-layer PCBs production byembedding conductors in the insulation resin, we canprovide flat-surface PCBs with less unevenness.

Conventional heavy copper PCBs cannot house thin signal
circuits in the layer where a high electric current flows
because the copper thickness in the layer is same. Due tothis, each PCB is necessary for high electric current andfor control respectively. MEIKO’s heavy copper PCB, on
the other hand, in which a single layer corresponds bothto thick and thin copper thickness, makes it possible todesign for high electric current and control on a single PCB.

Examples of use
MEIKO’s heavy copper PCB is used
in invertors and convertorsfor hybrid and electric automobiles.

Invertor

Module to convert
DC into AC and vice
versa

Module tochange voltage

Convertor

As for heavy copper PCB carrying a high electric current, method of dissipating the heat that is greatly generated throughelements, or circuit design specifications to current have not been well known surprisingly. MEIKO strives to materialize
customers’ request through conducting the research and development of heavy copper PCBs based on customers’ needs.

Notes on Forecasts
The information in this report contains future forecasts, such as the plans and business results of
the Company. These forecasts are based on information available at the time when these forecasts were made and certain preconditions that the Company believes to be reasonable. Please
note that actual business results may differ from the forecasts herein due to a variety of factors.