report of meitec group 8 *amounts for each companies are non-consolidated basis fiscal 2001 fiscal...

Results of Results of MeitecMeitec GroupGroupFor the fiscal year ended

March 31, 2007

Report of Report of MeitecMeitec GroupGroup<Consolidated><Consolidated>

2

<FY2007 : Market Conditions><FY2007 : Market Conditions>

1. Conditions in the manufacturing sector, Meitec Group’s main customer segment

・Investment in development and capital investment are both strong, irrespectiveof business sector.・But some companies and businesses are trimming budgets.

2. Conditions in Meitec’s principal market (temporary engineering staff business)

・The climate for orders continues to be strong.・Client companies are hiring more permanent staff, but that is not affecting orders for staffing .

The Meitec Group’s most important business issue is increasing engineers, and in that respect, the strategic shift to mid-career recruitment is beginning to firm up (see latter).

3

（Million of Yen)

Net Sales OperatingIncome

OrdinaryIncome Net Income

FY2007 42,009 5,929 5,889 -2,702

FY2006 40,723 5,935 5,996 3,250

Change(%) 3.2% -0.1% -1.8% -

FY2007 82,229 11,581 11,487 295

FY2006 83,223 12,485 12,562 5,302

Change(%) -1.2% -7.2% -8.6% -94.4%

Results ofInterimPeriod

Results ofFiscalYear

<Consolidated Results For the FY2007><Consolidated Results For the FY2007>

* Note: Main reason for decline is the sale of the U.S. firm Novations Group Inc.

4

<Extraordinary Losses in the FY2007><Extraordinary Losses in the FY2007>

Impairment loss due to decrease of DBM-J’s goodwill: - 4,292 million yen

Loss on sales of foreign operations: -673 million yen

Resulting from impairment tests conducted by the auditors at eacResulting from impairment tests conducted by the auditors at eachhaccounts closing.accounts closing.

Sale of the U.S. firm Sale of the U.S. firm NovationsNovations Group Inc.Group Inc.

<Consolidated><Consolidated>

Global BusinessMGS, Meitec(shanghai), Mi High Tech(Zhejiang), Meitec (Dalian), Meitec

(Guangzhou), Meitec (Xian)

Temporary Engineers Staffing

Business

Full Line up of Temporary

Staffing Business

Career SupportBusiness

Engineering Solutions Business3DTec, IMS, Apollo Giken, CAE

Meitec MF, MC, MEXDBM-J, MN

Meitec (Xian), Meitec Next：Established in FY2007

<<MeitecMeitec GroupGroup’’s Business Domain Expansion Strategy in Global Vision21>s Business Domain Expansion Strategy in Global Vision21>Strategy for expanding the group’s business domains through utilization of Meitec’s brand name, engineer resources and marketing channels.

5

710.7742.9 755 765.5

121.9 127.3 126 120.6

0

100

200

300

400

500

600

700

800

900

FY2004 FY2005 FY2006 FY2007

5.78.1

15

30.1

0.3

46.1

67.9

35.2

0.2 0.5 0.2 1.4

-4-1 -1.8

-4.1

0.1

-4.1

1.8 2.2 3.8

-0.3

-10

0

10

20

30

40

50

60

70

80

FY2004 FY2005 FY2006 FY2007 FY2004 FY2005 FY2006 FY2007 FY2004 FY2005 FY2006 FY2007

Temporary Engineers Staffing Business

Engineering Solutions Business

Global Business Career SupportBusiness

(100 million yen)

Net sales

Operating income

<Growth in the four <Growth in the four MeitecMeitec GroupGroup’’s business domains>s business domains>

6

7

<<MeitecMeitec Group Results For the FY2007>Group Results For the FY2007>(million yen)

Net Sales ChangeOperatingIncome

ChangeOrdinaryIncome

ChangeNet

IncomeChange

Meitec(MT) 61,795 0.6% 10,621 -4.6% 15,500 34.1% -83 -Meitec Fielders(MF) 10,748 3.5% 1,308 -4.5% 1,310 -4.6% 768 -5.9%

Meitec Cast(MC) 3,919 3.7% 174 -19.6% 175 -18.9% 98 -23.7%

Meitec Experts(MEX) 87 - -39 - -39 - -39 -

３D Tec(3DT) 614 22.6% 52 20.9% 52 20.9% 28 20.3%

IMS 409 2.1% 4 -78.0% 4 -78.2% 2 -81.6%

Apollo Giken 1,478 122.1% 21 - 20 - 16 -

Meitec CAE(CAE) 508 - 70 - 70 - 40 -Meitec Global

Solutions(MGS) 337 73.6% -85 - -85 - -85 -

Meitec Shanghai 27 7.2% -21 - -22 - -22 -

Meitec Dalian 14 213.6% -41 - -42 - -42 -

Meitec Guangzhou 2 - -30 - -32 - -32 -

Meitec Zhejiang 3 - -8 - -8 - -8 -DBM-Japan Group(DBM) 3,518 -48.2% -214 - -242 - -1,025 -

Meitec Next(NEXT) 8 - -198 - -198 - -199 -

Consolidated 82,229 -1.2% 11,581 -7.2% 11,487 -8.6% 295 -94.4%

Fullyear

8

<Growth in Group Net sales FY2007><Growth in Group Net sales FY2007>

*Amounts for each companies are non-consolidated basis

Fiscal 2001 Fiscal 2007 Change Change(%)

Meitec 555.4 617.9 62.5 11.3%

Other Group Companies 85.7 216.7 131.0 152.9%

Consolidated Net Sales 640.7 822.2 181.5 28.3%Composition Ratios of

Other Group Companies ※13.4% 26.4% - -

MeitecMeitec86.686.6％％

MF+JC+MF+JC+

3DTec3DTec

13.4%13.4%

Fiscal Year 2001

MeitecMeitec73.673.6％％ MF+MC+MEX+3DT+IMS+MF+MC+MEX+3DT+IMS+

ApolloGikenG+CAE+MGSApolloGikenG+CAE+MGS+M(Shanghai)+M(Dalian)++M(Shanghai)+M(Dalian)+Meitec(Guangzhou)+MeiteMeitec(Guangzhou)+Meitec(Zhejiang+)DBMc(Zhejiang+)DBM G+NEXTG+NEXT

26.4%26.4%

Fiscal Year 2007*Meitec’s group strategy was launched from fiscal year 2001 (Hundred Million of Yen)

9

Shortfall in recruitment of new graduates supplemented by midShortfall in recruitment of new graduates supplemented by mid--career hirescareer hires

Strategies to strengthen midStrategies to strengthen mid--career recruitment contributed to personnel increasecareer recruitment contributed to personnel increase

Meitec 272 282

MF 182 167

total 454 449

Meitec 61 148

MF 20 106

total 81 254

30 86

- 2

- 23

6 12

mid-career

Bridge engineers

826

FY2007

O&O

Meitec Next

Meitec Experts

FY2006

Total 571

newgraduates

+255+255from the from the

previous yearprevious year

+173+173from the from the

previous yearprevious year

＜＜Personnel Increases in FY2007Personnel Increases in FY2007＞＞

10

<Group Workforce Expansion Strategy><Group Workforce Expansion Strategy>-- Flow of people across the entire Group Flow of people across the entire Group --

Meitec

MeitecFielders

MeitecCast

MGS

MEX

External labor market

MeitecNext

DBMClient

companies

Overseas labor market

(China)

Senior labor

market

MeitecMeitec GroupGroup

Recruitment (new graduates)Recruitment (new graduates)Recruitment (midRecruitment (mid--career)career)RegistrationRegistrationPlacement (recruitment)Placement (recruitment)Temporary transferTemporary transferRotation in GroupRotation in Group

11

<Global Strategy : Phase 2><Global Strategy : Phase 2>-- Into China and Beyond China Into China and Beyond China --

Bridge engineers

FY ended March 2006: 30 engineersFY ended March 2007: 86 engineersTotal : 116 engineers

Hangzhou

Dalian

Xian

Guangzhou

12

<Consolidated Operating Results For the FY2007><Consolidated Operating Results For the FY2007>

591 608577

641 649

832

115

54

791

712

822

657

122122101101

8299

11391

124125121122

10311484

9792 91114

4767

37 35 40 49 5353

2

15.4%

17.1%16.7% 16.6%

14.3%

17.6%

15.6%

13.9%15.0%

14.1%9.4%

6.3% 5.8%7.0%

7.7% 8.2%8.2%

5.9% 6.4%

0.4%

0

100

200

300

400

500

600

700

800

900

1998 1999 2000 2001 2002 2003 2004 2005 2006 20070%

5%

10%

15%

20%

25%

30%

Net Sales Operating Income Ordinary IncomeNet Income Operating Income Margins Net Income Margins

(100 million Yen)

13

<Return on Equity (ROE) From the FY1994 to the FY2007><Return on Equity (ROE) From the FY1994 to the FY2007>

12.6%

14.3%

15.6%

14.6%

11.7%

10.4%

8.2%

4.5% 4.7%

6.1%

8.6%7.3%

4.6%

10.0%

0.7%

13.2%

11.1%

10.2%

15.2%

12.1%11.2%

8.7%

2.3%

8.0%9.1%

6.8%

5.4%4.9%

10.2%

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Non-consolidated

Consolidated

-0.2%

15％

(Planned)(Planned)

Report of Report of MeitecMeitec<Non<Non--Consolidated>Consolidated>

15

<Non<Non--Consolidated Operating Results For FY2007>Consolidated Operating Results For FY2007>

339

395

489518 508

611 614 617

112 106

155

553556555

595

10498

37

9458

77 93 80107 111

115117

106

3554

88 9478

94 82109

-%

6868373235

2215

48 5048 60

18.3%17.2%

18.5%18.7%

15.1%

18.9%19.1%

14.6%

11.0%

16.7%

14.9%

18.1%

8.6%

7.3%

6.1%7.2%

5.6%

4.4%

8.7% 9.1%10.2%

11.1% 11.1%

0

100

200

300

400

500

600

700

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 20070%

5%

10%

15%

20%

25%

Net Sales Operating Income Ordinary Income

Net Income Operating Income Margins Net Income Margins

(100 million Yen)

16

<Breakdown of Non<Breakdown of Non--consolidated Net Sales>consolidated Net Sales>

* Net sales of new business in previous year were 0.62 billion yen.

* Net sales from new businesses are primarily from the cooperative marketing results with 3D Tec, IMS, Meitec Global Solutions and Meitec CAE and customer transactions were posted to Meitec's account.

MeitecMeitec’’ss nonnon--consolidated net sales consolidated net sales ＝＝ 61.7961.79 billion yenbillion yen＝＝Core Business Core Business （（Temporary engineers staffing businessTemporary engineers staffing business））

+ + New Business New Business （（Gateway BusinessGateway Business））＝＝ 60.83 billion yen + 60.83 billion yen + 0.96 billion yen0.96 billion yen

17

<Core Business<Core Business（（Temporary engineers staffing businessTemporary engineers staffing business））Results FY2007>Results FY2007>-- MeitecMeitec & MF Results Data & MF Results Data ––

* Meitec + Meitec Fielders (Net sales 72.5 billion Yen, 88.2％ of Consolidated Net Sales)

Meitec + MF Meitec Meitec Fielders

97.6% 97.7% 97.1%

97.9% 98.1% 97.3%

- 9.21h/day 9.33h/day

- 9.23h/day 9.33h/day

- 1.8%　up 3.0%　up

- 1.5%　up 2.3%　up

7,110 5,776 1,334

7,060 5,755 1,305

UtilizationRatio

OperatingHours

Average RateRevision

Number of Engineers

※ Lower figure is the previous year’s result

18

0

20

40

60

80

100

120

140

160

Automobile/Tran

sporta

ion

Aircraf

t/Aerospa

ce

Industrial M

achinery

Precisio

n Equip

ment

IT Related

Hardware

and D

evices

Electric

and Electro

nics

Semico

nductor and

Integr

ated C

ircuits

Design

Semico

nductor E

quipment

and Devic

es

Information

Processing

/Software Plan

t

Construc

tion

Other

2003/3 2004/3 2005/3 2006/3 2007/3

<Comparison of Sales Trend by the Industrial Segments><Comparison of Sales Trend by the Industrial Segments>

（100 million yen）

* Sales by industrial segments for appendix 12

19

<Top 10 Clients by Sales and Shares of Net Sales> <Top 10 Clients by Sales and Shares of Net Sales> (Non(Non--consolidated)consolidated)

1 1 12 2 23 3 34 4 45 5 56 Toyota Motor 6 67 Nikon Corp. 7 78 Jatoco T.T. 8 89 Omron Corp. 9 9

10 10 10

19,462 35.0% 21,059 34.3% 20,875 33.8%

26,357 47.4% 28,099 45.7% 27,315 44.2%

29,281 52.6% 33,326 54.3% 34,480 55.8%

55,638 100.0% 61,425 100.0% 61,795 100.0%

Companies Name

Seiko EpsonSeiko Epson

Matsushita ElectricSony Corp.Canon Inc.Toyota Motor

Toyota Motor

Top 10 Total

Top 20 Total

Others

Kawasaki Heavy

Companies Name

Top 10 Total

Top 20 Total

Top 10 Total

Top 20 Total

Others

Total Total Total

Others

Omron Corp.Nikon Corp.

Omron Corp.Mitsubishi HeavyNikon Corp.

Companies Name

Matsushita ElectricSony Corp.Canon Inc.

Denso Corporation

Kawasaki Heavy

Sony Corp.Seiko EpsonMatsushita ElectricMitsubishi HeavyCanon Inc.

Denso CorporationKawasaki Heavy

Mitsubishi Heavy

(million yen)＜ Five years ago ＞＜ Current ＞

20

<Current status and future of the engineering staffing market><Current status and future of the engineering staffing market>

Fake contractor issue apparent since last yearFake contractor issue apparent since last year

Elimination of problem contractors

Future movesFuture moves

Select appropriate companies and cull

Japan Engineering Outsourcing Association established in FebruarJapan Engineering Outsourcing Association established in February 2007y 2007

Five listed companies representing the industry are the proponents, and the focus of activities is building a healthy industry.

21

<Status of Global Vision21><Status of Global Vision21>

1. Expansion of staff business with temporary engineering staff business at the core

* Increase personnel for MEITEC + Meitec Fielders (MF) + Meitec Cast (MC)+ MGS + MEX

2. Expansion of gateway business with temporary engineering staff business at the core

* Foray into solutions business, in addition to staff business

22

<Status of Global Vision 21><Status of Global Vision 21>-- Trend in Number of Staffs<Trend in Number of Staffs<MeitecMeitec + MF + MC + MGS + CAE> + MF + MC + MGS + CAE> --

5,952 6,040 6,012 6,037 5,989

1,132 1,140 1,149 1,310 1,416 1,472 1,452

652 616 734837 926 941 960

6,0735,907

1163049

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

2001/4/1 2002/4/1 2003/4/1 2004/4/1 2005/4/1 2006/4/1 2007/4/1

（staffs）

Meitec MF MC MGS CAE

※ Meitec cast’s number is that of registered employees on job.

7,829 7,835 8,187 8,3547,691

8,480 8,566

Group currently shifting to personnel increase modelGroup currently shifting to personnel increase model

23

MarketOverseas resources(MGS, Partners in China）Overseas resourcesOverseas resources(MGS, Partners in China(MGS, Partners in China））

Group human resources(MF, MＣ, MEX）

Group human resourcesGroup human resources(MF, M(MF, MＣＣ, MEX, MEX））

Group service contentsGroup service contentsGroup service contents

External resources（Affiliated with over 200 firms）

External resourcesExternal resources（（Affiliated with over 200 firmsAffiliated with over 200 firms））

Meitecengineers

MeitecMeitecengineersengineers

Client AClient A

Client BClient B

Client CClient C

Client DClient D

MeitecGroupMeitecMeitecGroupGroupGateway

<Status of Global Vision 21><Status of Global Vision 21>-- Gateway for the Resources and ServicesGateway for the Resources and Services--

24

<Results of Gateway Strategy (Group collaboration)><Results of Gateway Strategy (Group collaboration)>-- Number of orders Number of orders --

→ Meitec MF MC MEX 3DTec IMS AP MGS CAE DBM Total Previousfiscal year

Meitec 415 606 52 898 608 33 254 255 26 3,147 3,118

MF 86 68 11 10 2 177 263

MC 12 2 14 117

MEX 2 2

3DTec 1 1 3 14 19 5

IMS 4 1 5

AP 1 1

MGS 3 1 1 1 6 33

CAE

DBM 18 5 48 1 72 60

Total 22 433 744 52 971 622 33 280 255 31 3,443

Previousfiscal year 162 763 903 805 582 295 86 3,596

＜Establishment of Cross-selling structure＞＜Number of Orders＞ Apr, 2006 to Mar, 2007

25

470

279

167

0 2

486

192

0 8 2

702756

231

501

192

0

100

200

300

400

500

600

700

800

3DTec IMS MGS CAE DBM

Num

ber o

f Con

tract

s

FY2005 FY2006 FY2007

FY2005：918FY2006：1,388FY2007：1,682

<Results of Gateway Strategy (Group collaboration)><Results of Gateway Strategy (Group collaboration)>--Number of contractsNumber of contracts--

26

<Forecasts; Fiscal Year Ending March 31, 2008><Forecasts; Fiscal Year Ending March 31, 2008>（Millions of Yen)

Net Sales OperatingIncome

OrdinaryIncome Net Income

Interim FY2008 40,500 5,000 5,000 2,500Interim FY2007 42,009 5,929 5,889 -2,702

Change(%) -3.6% -15.7% -15.1% -

FY2008 84,000 11,000 11,000 5,000FY2007 82,229 11,581 11,487 295

Change(%) 2.2% -5.0% -4.2% 1593.4%

Interim FY2008 31,000 4,700 5,000 2,700Interim FY2007 30,799 5,353 9,745 -3,379

Change(%) 0.7% -12.2% -48.7% -

FY2008 63,000 10,200 10,500 4,800FY2007 61,795 10,621 15,500 -83

Change(%) 1.9% -4.0% -32.3% -

Con

solid

ated

Non

-con

solid

ated

* * Extraordinary losses (consolidated and nonExtraordinary losses (consolidated and non--consolidated) recorded for FY2008 included, consolidated) recorded for FY2008 included, respectively, respectively, ¥¥1.0 billion to shift 1.0 billion to shift MeitecMeitec’’ss retirement bonus system from a definedretirement bonus system from a defined--benefit to benefit to defineddefined--contribution type, and contribution type, and ¥¥0.5 billion for retirement of 0.5 billion for retirement of MeitecMeitec CorporationCorporation’’s existing IT s existing IT system in preparation for a system renewal (planned for April 20system in preparation for a system renewal (planned for April 2008)08)

**

27

0

10

20

30

40

50

60

70

80

90

FY2007 FY2008

Cost of Sales SG & A Operating Income

¥82.2 billion ¥84.0 billion

<Factors Affecting Forecasts for FY2008 (1)><Factors Affecting Forecasts for FY2008 (1)>

Variation on SG&A expensesVariation on SG&A expenses : + : + ¥¥10.5 billion10.5 billion

Cost of Sales¥57.7 billion

70.2%

SG&A¥12.95 billion

15.7%

¥11.5 billion14.1%

¥11.0 billion13.1%SG&A

¥14.00 billion16.7%

Cost of Sales¥59.0 billion

70.2%

Strategic investment to expand business

Cost of sales ratios will be unchangedCost of sales ratios will be unchanged

(billion yen)

(Planned)

28

<Factors Affecting Forecasts for FY2008 (2)><Factors Affecting Forecasts for FY2008 (2)>

<Increase in SG&A expenses: <Increase in SG&A expenses: ¥¥1,050 million>1,050 million>Increase in strategic investments for business expansion: +Increase in strategic investments for business expansion: +¥¥1,300 million1,300 million

Decrease in existing costs: Decrease in existing costs: --¥¥250 million250 million

<Breakdown of Strategic Investments><Breakdown of Strategic Investments>

1.1. Strengthening of Existing BusinessStrengthening of Existing BusinessStrengthening recruitment for the staff business: Strengthening recruitment for the staff business: ¥¥700 million700 million* * MeitecMeitec: : ¥¥500 million; 500 million; MeitecMeitec Fielders: Fielders: ¥¥200 million200 million

2. New Business Development2. New Business Development-- Increase in number of bridge engineers: Increase in number of bridge engineers: ¥¥120 million120 million-- Establishment of Establishment of MeitecMeitec Next Next

(Job placement business): (Job placement business): ¥¥350 million350 million

3. Increase in Group Office Locations3. Increase in Group Office LocationsEstablishment of new domestic offices: Establishment of new domestic offices: ¥¥130 million130 million

Total Total ¥¥1,300 million1,300 million

29

<Precondition for the Forecasts of the FY2008><Precondition for the Forecasts of the FY2008>-- Meitec+MF+MGSMeitec+MF+MGS --

Meitec MF MGS

First Half 96.7% 94.6% 68.7%

Second Half 97.9% 97.0% 72.3%Fiscal Year 97.3% 95.8% 70.9%

100％ by endof August

100％ by endof August

－

9.18h/day 9.26h/day 9.18h/day

1.8％ up 3.0% up 3.0% up

350 200 130 (*)

Meitec MF Total

220 180 400

Reference

New graduates Recruitmentas of April 2008(planned)

Mid-career Recruitmentduring fiscal year

Utilization Ratio

Assignment ofNew Graduate

Operating Hours per day(Average for the year)

Rate Revision (Compared to theprevious year)

* Per annum increase in number of bridge engineers

30

<Forecasts; Fiscal Year Ending March 31, 2008><Forecasts; Fiscal Year Ending March 31, 2008>（Millions of Yen)

Net SalesOperatingIncome

OrdinaryIncome

Net Income

Meitec 31,000 4,700 5,000 2,700Meitec Fielders 5,500 500 500 250

Meitec Cast 2,000 100 100 50Meitec Experts 70 -20 -20 -20

3D Tec 360 30 30 15IMS 220 -10 -10 -10

Apollo Giken Group 780 -5 -5 -5 Meitec CAE 280 30 30 20

Meitec Global Solutions 400 -20 -20 -20 Meitec Shanghai 30 0 0 0

Meitec Dalian 25 0 0 0Meitec Guangzhou 15 -10 -10 -10

Meitec Zhejiang 20 0 0 0Meitec Xian 10 -10 -10 -10 DBM-Japan 700 -50 -50 -70 Meitec Next 75 -170 -170 -170 Consolidated 40,500 5,000 5,000 2,500

Meitec 63,000 10,200 10,500 4,800Meitec Fielders 11,300 1,100 1,100 600

Meitec Cast 4,200 200 200 100Meitec Experts 200 -25 -25 -25

3D Tec 740 60 60 35IMS 500 0 0 0

Apollo Giken Group 1,650 25 25 15Meitec CAE 630 65 65 40

Meitec Global Solutions 1,030 30 30 30Meitec Shanghai 80 15 15 15

Meitec Dalian 60 0 0 0Meitec Guangzhou 50 -10 -10 -10

Meitec Zhejiang 40 0 0 0Meitec Xian 20 -10 -10 -10 DBM-Japan 1,650 0 0 -20 Meitec Next 340 -220 -220 -220 Consolidated 84,000 11,000 11,000 5,000

Inte

rim

Period

Fis

cal

Year

*Amounts for each company are non-consolidated basis

31

<Resetting Global Vision 21 goals><Resetting Global Vision 21 goals>

New numeric targets will be announced next year.

Based on establishment of an organic growth model

Basic vision for growth.

32

<Targets of number of engineers for new business (within three t<Targets of number of engineers for new business (within three to four years)>o four years)>

Bridge engineer business (MGS)

Seniors staffing business (MEX)

Job placement (NEXT)

The number of placement in Meitec Group out of above

-- bring in at least 300bring in at least 300engineers per yearengineers per year

-- build up a cadre of 200 build up a cadre of 200 seniors seniors

-- at least 1,200 engineers at least 1,200 engineers per yearper year

-- 300 engineers per year300 engineers per year

33

Planned amounts in the retirement of treasury stock

<Measures to Improve the Capital Efficiency & Returns to shareho<Measures to Improve the Capital Efficiency & Returns to shareholders >lders >

Funds for retirement of treasury stock = Funds for retirement of treasury stock = (cash position at end of fiscal year) (cash position at end of fiscal year)

-- （（the groupthe group’’s Net sales for 2 months Net sales for 2 month））==17.1 billion yen billion yen –– 14.0 billion yen 14.0 billion yen ==3.1 billion yenbillion yen

※ It is our policy to carry out treasury stock acquisitions during each fiscal half-year in which no large-scale investments are made, to the value of 50% of the planned annual amount. Consequently, during the interim period ending September 30, 2007, we plan to carry out treasury stock acquisitions totaling ¥1.55 billion. Furthermore, if there are no large-scale investments pending as of October 2007, we will carry out additional treasury stock acquisitions totaling ¥1.55 billion during the six-month period ending March 31, 2008.

= ¥ 3.1 billion

34

<Additional matters relating to returns to shareholders><Additional matters relating to returns to shareholders>

The company’s returns to shareholders are achieved by the following two means, based on a consolidated cash management.

1. Distribution of at least 50% of consolidated net income for the period

2. Retire of shares by the cash that amounts twice or more of the consolidated monthly sales

At the annual shareholder’s meeting due to be held in June 2007, it is intended to propose that the non-consolidated retained earnings (In order to secure financial resources for payment of dividends ) and capital surplus (In order to secure financial resources for retirement of stock ) be drawn down, because as of May 2007, the amount of dividend following the above policies will excess non-consolidated capital funds available for dividend for there is a legal requirement for shareholder returns to be on non-consolidated bases.

<Summary for <Summary for MeitecMeitec Group>Group>Meitec Global Solutions

FY 2007 Net Sales \10,748Million FY 2007 Net Sales \337MillionCapitalization \268Million Capitalization \200MillionEmployeeｓ 1,528 Employeeｓ 124Establishment December, 1979 Establishment April, 2003Business Description Temporary engineering staff business Business Description International outsourcing services

Meitec (Shanghai)FY 2007 Net Sales \3,919Million FY 2007 Net Sales \27MillionCapitalization \100Million Capitalization $1,200,000Employeeｓ 60 Employeeｓ 9Establishment February, 2000 Establishment September, 2003Business Description Registed-style temporary staffing business and employment agency Business Description Corporate management consultation

Meitec (Dalian)FY 2007 Net Sales \87Million FY 2007 Net Sales \14MillionCapitalization \100Million Capitalization RMB 8,000,000Employeeｓ 4 Employeeｓ 12Establishment April, 2006 Establishment November, 2004Business Description Temporary senior engineering staff business Business Description Training business in China

Meitec (Guangzhou)FY 2007 Net Sales \614Million FY 2007 Net Sales \2MillionCapitalization \201Million Capitalization RMB 8,000,000Employeeｓ 24 Employeeｓ 12Establishment December, 2000 Establishment December, 2005Business Description R&D support utilizing 3-D CAD design services Business Description Training business in ChinaIMS Meitec (Zhejiang)FY 2007 Net Sales \409Million FY 2007 Net Sales \3MillionCapitalization \10Million Capitalization RMB 9,000,000Employeeｓ 24 Employeeｓ 14Establishment September, 1983 Establishment July, 2004Business Description Designning and manufacturing printed circuits board Business Description Training business in ChinaApollo Giken Meitec (Xian)FY 2007 Net Sales \1,474Million FY 2007 Net Sales -Capitalization \311Million Capitalization $1,200,000Employeeｓ 77 Employeeｓ 13Establishment August, 1978 Establishment September, 2006Business Description Designning and manufacturing printed circuits board Business Description Training business in China

Drake Beam MorinFY 2007 Net Sales \53Million FY 2007 Net Sales \1,981MillionCapitalization $525,000 Capitalization \450MillionEmployeeｓ 37 Employeeｓ 183Establishment August, 1997 Establishment October, 1982Business Description Designning and manufacturing printed circuits board Business Description Outplacement ServiceMeitec CAE Meitec NextFY 2007 Net Sales \508Million FY 2007 Net Sales \8MillionCapitalization \100Million Capitalization \480MillionEmployeeｓ 48 Employeeｓ 22Establishment April, 2006 Establishment July, 2006Business Description Contract work and temporary staffing related to structural analysis Business Description Job placement for engineers

Shanghai Apomac (consolidated subsidiary of Apollo Giken)

Meitec Experts

3D Tec

Meitec Fielders

Meitec Cast

（（AppendixAppendix--11））

<Utilization Ratio (Non<Utilization Ratio (Non--Consolidated)>Consolidated)>

* Meitec Fielders Utilization Date is on appendix


98.1%

98.6%98.4%

95.8%97.7%

93.6%

96.1%

93.2%

90.7%

86.7%

94.7%

95.9%

97.0%

92.5%

99.4%

99.1%

98.9%

94.7%

97.3%

93.9%

92.4%

88.7%

95.9%

95.6%

91.2%

93.7%

98.6%

98.9%

95.2%

98.5%

98.8%

98.7%

95.4%

98.8%

99.1%

99.0%

75%

80%

85%

90%

95%

100%

04 07 10 01 04 07 10 01 04 07 10 01 04 07 10 01 04 07 10 01 04 07 10 01 04 07 10 01 04 07 10 01 04 07 10 01

Quarter Period Average

Operating Ratio ,excluding new empioyees

Companywide Operating Ratio

Restructuring periods

by customers

Restructuring periods

by customers

FY1999 FY2001 FY2002 FY2003FY2000

Crisis in the Japanese Financial System IT Recession

FY2004 FY2005 FY2006 FY2007

95%

98.4%

92.3%

98.8% 99.1%

92.6%

98.6% 99.0%99.1%

91.9%

98.9%99.2%99.3%

92.9%

98.7%98.4%

98.5%

85%

90%

95%

100%

04 07 10 01 04 07 10 01 04 07 10 01 04 07 10 01

<Utilization Ratio (<Utilization Ratio (MeitecMeitec Fielders)>Fielders)>

FY2004 FY2005 FY2006


FY2007

<Operating Hours (Non<Operating Hours (Non--Consolidated)>Consolidated)>


8.4

8.6

8.8

9.0

9.2

9.4

9.6

1998/04 1999/04 2000/04 2001/04 2002/04 2003/04 2004/04 2005/04 2006/04

Average of operating hours(h/day)

9.3

Average ：9.23Ｈ

Average ：9.05Ｈ

Average ：9.06Ｈ

Average ：9.10Ｈ

Average ：9.32Ｈ

Average ：9.18Ｈ

Average ：9.35Ｈ

FY1999 FY2001 FY2002 FY2003FY2000 FY2004 FY2005

Average ：9.23Ｈ

FY2006

Average ：9.21Ｈ

FY2007

<Trend in New Orders by Month (Non<Trend in New Orders by Month (Non--Consolidated)>Consolidated)>


0

50

100

150

200

250

300

350

400

450

99/4 7 10 00/1 4 7 10 01/1 4 7 10 02/1 4 7 10 03/1 4 7 10 04/1 4 7 10 05/1 4 7 10 06/1 4 7 10 07/1

(Num

ber

of n

ew

ord

ers

)

New orders (Meitec)

250

4,607 4,682 4,719 4,700 4,752 4,8044,863

4,729

3,5283,4583,4373,384

2,500

3,000

3,500

4,000

4,500

5,000

5,500

6,000

FY2000 FY2001 FY2002 FY2003 FY2004 FY2005 FY2006 FY2007

（Yen）

Average Rate(Meitec) Average Rate(MF)

<Trend in Average Rate (<Trend in Average Rate (MeitecMeitec, MF)>, MF)>

3,200＜ The average of temporary engineers staffing industry ＞


<New Contract by the Industrial Segments><New Contract by the Industrial Segments>-- General + New Graduates General + New Graduates --

New Contracts by Segments General + New Graduates（Apr1, 2006 to March 31, 2007）

13

38

111

10

71

88

21

229

26

154

144

28

21

18

36

25

15

18

13

19

3

6

7

6

8

10

2

4

3

10

22

50

2

11

4

92

12

7

2

5

14

3

8295

132

202

66

3

10

35

107

30

21

109

70

0 50 100 150 200 250 300 350 400

Other

Other Materials

Construction

Plant

Information Processing/Software Development and Management

Semiconductor Equipment and Devices

Semiconductors and Integrated Circuits Design

Electric and Electronic

IT-Related Hardware and Devices

Precision Equipment

Industrial Machinery

Aircraft/Rocketry

Automobile/Transportation

Machinery Electric and Electronic Control Systems Information Systems chemistry Other

（Segments）

(Number of contract)

331


New Contracts by Segments New Graduates（Apr1, 2006 to March 31, 2007）

2

10

15

5

11

3

48

54

20

2

3

12

4

3

6

2

6

3

9

4

1

2

8

6

3

2

18

5

4

7

16

6

0

0

10

80

51

17

58

0 10 20 30 40 50 60 70 80 90 100

Other

Other Materials

Construction

Plant

Information Processing/Software Development

and Management

Semiconductor Equipment and Devices

Semiconductors and Integrated Circuits Design

Electric and Electronic

IT-Related Hardware and Devices

Precision Equipment

Industrial Machinery

Aircraft/Rocketry

Automobile/Transportation

Machinery Electric and Electronic Control Systems Information Systems chemistry

（Segment）

（Number of contract）

<New Contract by the Industrial Segments><New Contract by the Industrial Segments>-- New Graduates New Graduates --


<Consolidated SG&A Expenses and Cost of Sales,<Consolidated SG&A Expenses and Cost of Sales,and Their Ratio to the Sales>and Their Ratio to the Sales>

（100 Million yen）

8188

9290 86

88 8483 93

123140 129

41

71

108 101 82

113 101 91122

122122 115

577566544

496483464440

409

416391327

292

70.5%67.3% 66.2%

68.5%70.9%

68.7%71.5%

73.5%69.7% 68.8% 68.1% 70.2%

19.6% 18.1% 15.6% 14.9% 14.9% 13.7% 12.9% 12.6% 13.1%15.5% 16.9% 15.7%

90.1%85.4%

81.7% 83.4%85.8%

82.4% 84.4% 86.1%82.7% 84.3% 85.0% 85.9%

0

100

200

300

400

500

600

700

800

900


0%

20%

40%

60%

80%

100%

Cost of Sales SG&A Expenses Operating Income

Cost of Sales to Net Sales SG&A Expenses to Net Sales Cost of Sales+SG&A Expense


485485

591591 608608 577577

414414

641641 649649 657657

712712 791791 832832 822822

<Non<Non--Consolidated SG&A Expenses and Cost of Sales,Consolidated SG&A Expenses and Cost of Sales,and Their Ratio to the Sales>and Their Ratio to the Sales>

（100 Million yen）

229 252309

344 355 376 392 403 409 420 423 431

7385

86

76 7675

71 70 78 78 79 80

37

58

9498 77

104 93 80107

112 111 106

67.6%63.8% 63.2%

66.4%69.9%

67.7%70.5%

72.9%68.7% 68.7% 69.0% 69.8%

21.5% 21.5%17.6%

14.7% 15.0% 13.6% 12.8% 12.7% 13.1% 12.8% 12.9% 13.0%

89.1%85.3%

80.8% 81.1%84.8%

81.3%83.2%

85.5%81.8% 81.5% 81.9% 82.8%

0

100

200

300

400

500

600

700


0%

20%

40%

60%

80%

100%

Cost of Sales SG&A Expenses

Operating Income Cost of Sales to Net Sales

SG&A Expenses to Net Sales Cost of Sales+SG&A Expenses to Net Sales


395395

489489

518518

508508

339339

555555 556556 553553 595595 611611 614614 617617

<Capital Investments and Depreciations (Non<Capital Investments and Depreciations (Non--Consolidated)>Consolidated)>-- From the FY2001 to the FY2007 From the FY2001 to the FY2007 --

5.0

9.7

3.4

4.8 4.96.1

3.0

9.3

9.911.3

10.710.3

9.9

12.7

0

5

10

15

20

FY2001 FY2002 FY2003 FY2004 FY2005 FY2006 FY2007

Capital InvestmentDepreciation

(100 Million Yen)

5

11


<Sales by the Industrial Segments (Non<Sales by the Industrial Segments (Non--Consolidated)>Consolidated)>

Fiscal

2 003

Fiscal

2 004

Fiscal

2005

Fiscal

2006

Ne t

Sale s

Total Ne t

Sales(% )Change

Au tomobile /Transportat ion 12 ,090 13 ,3 91 13 ,3 24 13 ,4 32 13 ,083 21 .2 % -348 -2 .6%↓

Airc raft/Ae rospace 3 ,656 3 ,2 96 3 ,4 70 3 ,0 90 3 ,086 5 .0 % - 4 -0 .1%↓

Industr ial Mach in e ry 5 ,213 5 ,8 10 6 ,5 01 5 ,9 82 6 ,814 11 .0 % 831 +13 .9%↑

Prec ision Equ ipmen t 2 ,215 2 ,4 34 2 ,3 85 2 ,9 63 3 ,194 5 .2 % 231 +7 .8%↑

IT Re lated Hardware and Devices 5 ,529 5 ,6 85 6 ,1 24 6 ,6 09 6 ,845 11 .1 % 236 +3 .6%↑

Elec tr ic and Elec tron ics 7 ,359 8 ,1 27 9 ,2 69 10 ,3 33 9 ,993 16 .2 % -339 -3 .3%↓

Semi conduct o r s a nd I n t eg r a t ed Ci r cu i t s Des i g n 8 ,819 10 ,0 66 10 ,1 46 9 ,6 80 9 ,274 15 .0 % -406 -4 .2%↓

Semiconduc to r Equ ipmen t and Devic es 3 ,346 3 ,2 88 2 ,9 44 2 ,8 71 2 ,983 4 .8 % 112 +3 .9%↑

In fo rmat ion Processin g/So ftware 3 ,859 3 ,9 22 3 ,5 88 3 ,1 05 3 ,227 5 .2 % 121 +3 .9%↑

Plan t 1 ,041 1 ,1 11 984 999 937 1 .5 % -62 -6 .2%↓

Construc t ion 384 322 301 260 261 0 .4 % 1 +0 .4%↑

Othe rs 1 ,862 2 ,0 61 2 ,0 70 2 ,0 95 2 ,092 3 .4 % - 2 -0 .1% ↓

Total 5 5 ,379 59 ,5 18 61 ,1 09 61 ,4 25 61 ,795 100 .0 % 369 - -

Segment

Ne t Sale s

Fiscal 2007

Change (% )

(Millions of yen)

※ Yellow ink ；up compared to previous year


<Results of Acquisition and Retirement of Treasury Stock><Results of Acquisition and Retirement of Treasury Stock>

2,117

932

1,760

775

1,5621,400

824

0

500

1,000

1,500

2,000

2,500

FY2002 FY2003 FY2004 FY2005 FY2006 FY2007 FY2008

Num

ber o

f Ret

irem

ent o

f Tre

asur

y S

tock

*Number of retirement of treasury stock for fiscal year 2008 was calculated average of closing price for the past three months (from February to April in 2007).*A total of 3,799,950 new shares were issued in October 2004 for a share exchange with Drake Beam Morin-Japan, Inc.

3.1 billion yen（Estimation）

（Thousands of share）(From FY2002 to FY2007)Cumulative total numbers of retirement of treasury stock

Cumulative total amounts ofretirement of treasury stock

= 8,545 thousand shares= 8,545 thousand shares

= 31,9= 31,97676 million yenmillion yen


<Shareholders by Business Segments (Non<Shareholders by Business Segments (Non--Consolidated)>Consolidated)>

Shareholders ％ Shares Held ％

Banks 10 0.12% 1,476,401 4.17%

Trust Banks 27 0.32% 8,293,200 23.40%

Life and against loss insurancecompanies

26 0.31% 4,932,283 13.92%

Securities financing and otherfinancial companies

12 0.14% 78,660 0.22%

Securities companies 29 0.34% 186,574 0.53%

Business concerns and othercompanies

148 1.75% 412,751 1.16%

Overseas companiesand investors

213 2.53% 15,822,022 44.64%

Individuals and others 7,969 94.49% 4,240,364 11.96%

Total 8,434 100.0% 35,442,255 100.0%

Shareholder Segment(As of the Fiscal year ended March 31, 2007)


report of meitec group 8 *amounts for each companies are non-consolidated basis fiscal 2001 fiscal...

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