Policy of returning profit to shareholders

MEITEC considers returning profit to shareholders as a combination of cash dividend payments and acquisition, holding, and retirement of treasury stock.

Basic Policy Regarding Profit Distribution

The company’s objective is to maximize the shareholders return in mid to long term through realizing the sustainable growth of the company. The basic policy of the Company is to distribute profit in accordance with operating results. In view of maximizing shareholder’s return in mid to long term, unless major investment demands are expected, total return ratio to be within 100% for the total shareholders return by dividend and acquisition of treasury shares. Payout ratio for the dividend to be equal or more than 50%,and interim dividend and year end dividend are to be paid. Minimum level of payout ratio is to be consolidated Dividend on Equity ratio (DOE) 5%.

The amount of working capital required to continue our business has been set at the equivalent of three (3) months of consolidated net sales in our group cash management plan. Therefore acquisition of treasury shares will be executed with consideration of our total return ratio if the consolidated cash position at the end of previous fiscal year exceeds the three (3) month net sales and there are no major investment demands expected.

Treasury shares will be continued to be held by the company up to two million (2,000,000) shares.
Treasury shares in excess of two million (2,000,000) shares will be retired by the end of the fiscal year.

Total Return Ratio = Total shareholders return for the year / Consolidated net profit
Total Shareholders Return for Year = Total dividend paid (interim and year end) + Amount used to acquire the treasury shares during the fiscal year
Payout Ratio = Total dividend paid (interim and year end) / Consolidated net profit
Dividend on Equity Ratio (DOE) = Dividend / consolidated shareholder’s equity
Three Month Net Sales = Working capital : Consolidated two month net sales + Fund for strengthening the
financial base (a fund to sustain the business operation in the event of a crisis equivalent to that of fiscal year ended March 2010) : consolidated one month net sales
Working capital is determined according to such factors as account receivables.
To realize the flexible financial position, for the implementation of future growth strategies and response to the risk associated in achieving the goals of the management plan, treasury shares will be held by the company.