Note: This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy
between this translated document and the Japanese original, the original shall prevail.
The Company assumes no responsibility for this translation or for direct, indirect or any other forms of damages arising from thetranslation.

Securities Code: 6482
June 2, 2017
Dear Shareholders,

Notice of Convocation for
the 44 Ordinary General Meeting of Shareholdersth

We would like to express our deepest condolences.
Notice is hereby given that the 44th Ordinary General Meeting of Shareholders of Yushin Precision
Equipment Co., Ltd. will be held as set out below:
If you do not expect to attend the meeting in person, you may exercise your voting rights in writing or
via electromagnetic means (the Internet and others). Please refer to the enclosed Reference Documents for
the General Meeting of Shareholders and exercise your voting rights by 5 p.m. on Wednesday, June 21,2017 at the latest.
Details
Thursday, June 22, 2017 at 10 a.m.
Conference Room on the 6th Floor,
Head Office of Yushin Precision Equipment Co., Ltd.
555 Kuzetonoshiro-cho, Minami-ku, Kyoto(*The venue for the meeting is changed from the previous year.)1.
2.

Date and Time:
Place:

3.

Objectives of the Meeting:a)Matters to be reported:b)

Business Report and Consolidated Financial Statements for the
44th Fiscal Year (from April 1, 2016 to March 31, 2017) as well as
the audit reports from the Accounting Auditor and the Board of
Corporate Auditors on the Consolidated Financial Statements
Report on the Non-Consolidated Financial Statements for the 44th
Fiscal Year (from April 1, 2016 to March 31, 2017)

Agenda for resolution:
Proposal 1: Election of Seven (7) Directors
Proposal 2: Election of Two (2) Corporate Auditors

Sincerely Yours,
Mayumi Kotani
President and Representative Director
YUSHIN PRECISION EQUIPMENT CO., LTD.
555 Kuzetonoshiro-cho, Minami-ku,
Kyoto, Japan
Notes:* You are kindly requested to present the enclosed “Form for Exercising Voting Rights” to the receptionist upon your arrival at
the Meeting.
* If any changes have been made to the matters appearing in the Reference Documents for the General Meeting of Shareholders,Business Report, Non-Consolidated Financial Statements or Consolidated Financial Statements, such changes will be posted on
our website: (http://www.yushin.com)–1–

<Information on Exercise of Voting Rights via the Internet>
Shareholders exercising voting rights via the Internet are asked to kindly note the following matters.
Exercising the voting rights by post or via the Internet is unnecessary if you attend the meeting in person.
1. About the voting rights exercise site(1) Shareholders can exercise their voting rights only by accessing on the voting rights exercise site
designated by the Company (http://www.evote.jp/) via PC, smartphone or mobile phone (i-mode, EZweb
or Yahoo! Mobile)*. (However, please note that you cannot exercise your voting rights via the Internet on
the designated website between the hours of 2:00 a.m. and 5:00 a.m.)*"i-mode", "EZweb" and "Yahoo!" are trademarks or registered trademarks of NTT DOCOMO INC.,
KDDI Corporation and Yahoo Inc. in the U.S., respectively.
(2) Please note that you may not be able to exercise your voting rights via PC or smartphone depending on
the Internet settings configured on your PC or smartphone, such as firewalls, etc. that are in place toregulate your Internet connections, anti-virus software that has been installed on your PC or smartphone,
the use of a proxy server or not designating TLS.
(3) When exercising voting rights via mobile phone, you must use one of the following services: i-mode,
EZweb or Yahoo! Mobile. For security reasons, you cannot vote using mobile handsets that cannot send
TLS encrypted information or that cannot send information of the mobile phone used.
(4) A voting deadline is 5:00 p.m. on June 21, 2017. Shareholders are cordially requested to exercise theirvoting rights as early as possible. Please call Help Desk as mentioned below with any inquiries.
2. Method of exercising of voting rights via the Internet(1) On the voting rights exercise site designated by the Company (http://www.evote.jp/), please enter the“login ID” and “temporary password” indicated on the enclosed Voting Rights Exercise Form and enter
your approval or disapproval of each of the proposals in accordance with instructions on the screen.
(2) Please note that, in order to prevent unauthorized access to the designated website by individuals otherthan shareholders (persons impersonating shareholders) and to prevent the alteration of votes, we requestthat you change your "temporary password" to a permanent password on the designated website for the
exercise of voting rights, when you exercise your voting rights via the Internet.
(3) New “login ID” and “temporary password” will be advised for each notice of convocation for
Ordinary General Meeting of Shareholders.
3. Treatment when you exercise your voting rights more than one time(1) If you exercise your voting rights both by post and via the Internet, the voting via the Internet shall bedeemed valid.
(2) If you exercise your voting rights more than once via Internet, the last exercise of voting rights shall bedeemed valid. If you exercise your voting rights redundantly via PC, smartphone and mobile phone, thelast exercise of voting rights shall be deemed valid.
4. Costs associated with accessing the website for the exercise of voting rights
All costs associated with accessing the website for the exercise of voting rights (cost of Internet
connections etc.) are to be borne by the shareholder. Also, when voting via mobile phone etc. all packet
communication fees and other costs incurred in the use of a smartphone or a mobile phone are also to beborne by the shareholder.
Inquiries about the system
Mitsubishi UFJ Trust and Banking Corporation
Transfer Agent Department (Help Desk)
Phone: 0120-173-027 (9:00 a.m. to 9:00 p.m. (Japan Time); toll free only within Japan)<For Institutional Investors>
Institutional investors may use “The Platform for Electronic Exercise of Votes for Institutional Investors”
of ICJ Ltd.as another way of exercising voting rights.

–2–

(Submitted Documents)

Business Report(from April 1, 2016 to March 31, 2017)
1. Current Business Conditions(1) Progress and achievements
In the fiscal year ended March 31, 2017, there was an uncertainty about economic and trade policies
by the new US government as well as politics in Europe. However, the economy of the US remained
steady against a background of improvements of the employment environment and expansion of theindividual consumption. In Europe, the economy was on recovery trend since “Brexit” impact was
temporary. In Asia, there were slowdown in Chinese economy and stagnation of the economic growthin emerging countries, but there was pickup in the second half of the year. On the whole, world
economy made a mild recovery.
In these circumstances, Yushin Group has strived to expand operation in a new business area, todevelop new products and to obtain new world-class customers. However, consolidated net sales
decreased by 8.5% year on year to 19,346 million yen because sales in new business area fell below
expectation and there was strong yen. As regards profit, in addition to decrease in net sales, there were
cost occurred relating to the new ERP system launched last November and the relocation of the HQ
implemented last December. As a result, operating income decreased by 31.5% year on year to 2,112
million yen and ordinary income decreased by 29.6% year on year to 2,058 million yen, and net
income attributable to shareholders of the parent company decreased by 27.7% year on year to 1,380
million yen.
Consolidated net sales by product category(Thousands of yen)
Years ended March 31,
Product

2016
Amount2017%

AmountChange%%Take-out robots

13,923,022

65.8

13,410,587

69.3

(3.7)

Custom-ordered
equipment

3,997,845

18.9

2,832,537

14.7(29.1)

Parts and maintenanceservice

3,227,723

15.3

3,103,275

16.0

(3.9)

Total

21,148,591

100.0

19,346,399

100.0

(8.5)

(2) Capital investment
The total amount of capital investment for Yushin Group effectuated over the course of the period
under review was 546 million yen mainly for the capital investment related to extension of TechnicalCenter valued at 159 million yen and construction of a new ERP system for headquarters valued at
149 million yen.
(3) Financing activities
No material items to report.

–3–

(4) Assets and operating results 2014 - 2017
Years ended March 31,

2014

2015

2016

2017

Net sales(thousands of yen)

17,909,292

17,799,020

21,148,591

19,346,399

Ordinary income(thousands of yen)

3,095,258

2,542,871

2,921,754

2,058,192

Net income
attributable toshareholders of theparent company(thousands of yen)

1,893,027

1,683,479

1,908,626

1,380,273

Net income per share(yen)

108.2496.26

109.1478.93

Total assets(thousands of yen)

26,252,009

29,463,773

29,409,602

30,761,736

Net assets(thousands of yen)

21,875,926

23,970,142

24,715,668

25,451,718

Net assets per share(yen)

1,243.88

1,357.36

1,401.54

1,444.38

Notes: The net income per share is calculated based on the average number of issued shares during the fiscal year and the net
assets per share are calculated based on the number of issued shares at the end of the fiscal year.

(5) Issues to be addressed
As for the business environment surrounding Yushin Group, the world economy is expected to show arecovery trend as a whole. However, there remains uncertainty such as effect from the economic and trading
policy of new US government, the political trend in Europe and escalation of international tensions.
As for issues to be addressed, Yushin Group must differentiate and strengthen the products
including price competitiveness and strengthen our sales capabilities worldwide as well as develop
world-class human resources who can sustain expansion of our presence around the world.
In the new business area, Yushin Group must develop and bring new products to the market in thebusiness area where Yushin Group can manifest technological and/or sales synergies in order toestablish multiple core businesses.
Under these circumstances, Yushin Group aims to develop itself further as a number-one company
across the board in the “take-out robot” industry with Yushin Group philosophy “Through theongoing creation of innovative technology, we make a far-reaching contribution to society on a global
scale”
As for strategy, Yushin Group will extend the quality and scale of our business by strengthening oursales capabilities worldwide and developing and distributing products to meet customers’ demands.
Particularly a new model of take-out robots with new functions is scheduled to be launched this year. We
also expand sales of custom-ordered equipment in a medical and a new business area. For the purpose ofenhancing these all efforts, Yushin Group aims to improve productivities and to promote operational
efficiencies utilizing the new HQ, as well as to continue cost reducing activities.

–4–(6) Status of major subsidiaries
Name
Yushin Korea Co., Ltd.
Yushin Precision Equipment(Taiwan) Co., Ltd.

Location
Siheung-Shi,
Gyeonggi-Do,
South Korea
Taipei City,
Taiwan(R.O.C.)

Percentage ofshareholding

Major operations

KRW350 million

100%

Sales and maintenance &repair of our products

NT$5 million

100%

Sales and maintenance &repair of our products

Capital stock

Yushin Precision Equipment
Trading (Shanghai) Co., Ltd.

Shanghai,
China

US$200,000

100%

Sales and maintenance &repair of our products

Yushin Precision Equipment
Trading (Shenzhen) Co., Ltd.

Shenzhen,
Guangdong,
China

US$400,000

100%

Sales and maintenance &repair of our products

PT. Yushin Precision Equipment
Indonesia

Bekasi,Indonesia

IDR2,841 million

99%

Sales and maintenance &repair of our products

Yushin Precision Equipment(Vietnam) Co., Ltd.

Hanoi,
Vietnam

US$300,000

100%

Sales and maintenance &repair of our products

Yushin Precision Equipment
Sdn. Bhd.

Selangor,
Malaysia

MYR1 million

100%

Sales and maintenance &repair of our products

Yushin Precision Equipment(Thailand) Co., Ltd.

Bangkok,Thailand

THB8 million

49%

Sales and maintenance &repair of our products

Yushin Precision Equipment(India) Pvt. Ltd.

Chennai, India

INR7.4 million

95%

Sales and maintenance &repair of our products

Yushin Automation Ltd.

Worcestershire,
U.K.

GBP150,000

95.6%

Sales and maintenance &repair of our products

Yushin America, Inc.

Rhode Island,
U.S.A.

US$8,000

100%

Sales and maintenance &repair of our products.
Manufacturing, sales andmaintenance & repair ofcustom-ordered equipment

Guangzhou Yushin Precision
Equipment Co., Ltd.

Guangzhou,
Guangdong,
China

RMB13.7 million

100%

Manufacturing of our
products(7) Major operations (as of March 31, 2017)
Yushin Group is mainly engaged in the development, manufacture and sale of take-out robots forplastic injection molding products and stock systems as well as factory automation systems formolding plants.

–5–(8) Main sales offices and factories (as of March 31, 2017)
Name

Location

Head Office

Minami-ku, Kyoto-city

Fushimi Factory

Fushimi-ku, Kyoto-city

Technical Center

Minami-ku, Kyoto-city

Higashi-Nihon General Sales OfficeKita-ku, Saitama-city

Chubu General Sales Office

Toyokawa-city, Aichi

Nishi-Nihon General Sales Office

Minami-ku, Kyoto-city

Tohoku Sales Office

Fukushima-city, Fukushima

Tsukuba Sales Office

Tsukuba-city, Ibaraki

Nishi-Kanto Sales Office

Atsugi-city, Kanagawa

Nagano Sales Office

Shiojiri-city, Nagano

Shizuoka Sales Office

Suruga-ku, Shizuoka-city

Nagoya-Nishi Sales Office

Kuwana-city, Mie

Toyama Sales OfficeToyama-city, Toyama

Hiroshima Sales Office

Nishi-ku, Hiroshima-city

Fukuoka Sales Office

Hakata-ku, Fukuoka-city

Philippines Representative Office

Makati City, Philippines

Note: The Head Office was moved to Minami-ku, Kyoto-city on December 12, 2016.

(9) Employees (as of March 31, 2017)
Number of employees

Increase from the end of previous FY

663(59)27

Note: The number of employees represents full-timers only (including seconded employees to the Company). Part-timers andother irregular employees are represented separately as their average annual number indicated in parentheses ( ).

(10) Major creditors (as of March 31, 2017)
No items to report.
(11) Other important matters pertaining to the status
The Head Office was moved to Minami-ku, Kyoto-city on December 12, 2016.

–6–

2.

Matters Pertaining to the Shares of the Company (as of March 31, 2017)(1) Number of shares authorized:
40,000,000(2) Total number of issued shares:
17,819,033(3) Number of shareholders:
3,483(4) Major shareholders:
Investment in the Company
Name

Number of shares held
(thousand)Yushin Industry Co., Ltd.

Percentage ofshares held (%)

5,996

34.3

The Nomura Trust and Banking Co., Ltd. (Trust Account3071019)774

4.4

The Master Trust Bank of Japan, Ltd. (Retail Trust
Account 620021158)

774

4.4

The Kyoto Chuo Shinkin Bank, Ltd.

544

3.1

Mayumi Kotani

531

3.0

The Master Trust Bank of Japan, Ltd. (Trust Account)

455

2.6

Japan Trustee Service Bank, Ltd. (Trust Account 9)

455

2.6

The Bank of Tokyo-Mitsubishi UFJ, Ltd.

424

2.4

BNP Paribas Sec Services Luxembourg, Jasdec, Aberdeen
Global Client Assets

418

2.4

RBC IST 15 PCT Non Lending Account - Client Account

383

2.2

Note: Percentage of shares held is calculated after deducting the number of treasury stock (331,715 shares).

–7–

3.

Matters Pertaining to Officers of the Company(1) Directors and Corporate Auditors (as of March 31, 2017)
Position

Responsibilities and representation ofother organization

Name

President and Representative
Director

Mayumi Kotani

Executive Managing Director

Satoshi KimuraManaging Director

Yasuharu Odachi

Head of Research & Development H.Q.

Managing Director

Yasushi Kitagawa

Head of Manufacturing H.Q. and Head of Quality Assurance
Dept.

Director

Yasuo Nishiguchi

Chairman & CEO at Socionext Inc.
Outside Director at Zensho Holdings Co., Ltd.
Outside Director at YAMADA Consulting Group Co., Ltd.

Director

Hiroshi Matsuhisa

Professor emeritus at Kyoto University
Outside Corporate Auditor at Technology Seed Incubation Co.,Ltd.

Full-time Corporate Auditor

Shujiro Sawada

Corporate Auditor

Yasuhiro Orita

LawyerCorporate Auditor

Takao Yoshikawa

Professor emeritus at Osaka University

Hiroho Kamakura

Certified Public Accountant
Outside Corporate Auditor at Trusco Nakayama Corporation
Outside Corporate Auditor at FUJIO FOOD SYSTEM CO.,LTD.

Corporate Auditor

Notes:
1. Directors, Yasuo Nishiguchi and Hiroshi Matsuhisa are Outside Directors stipulated in Item 15, Article 2 of the Companies
Act.
2. The following describes the activities of the Outside Directors during the period under review.
(1)Director, Yasuo Nishiguchi
In the period under review, Yasuo Nishiguchi attended 10 of 13 Meetings of Board of Directors. Based on his wide
knowledge and experience across the running a company which he had cultivated through holding prominent corporate
positions such as President and Representative Director, and Chairman of the Board and Representative Director at Kyocera
Corporation, he asked questions to clarify ambiguities that arose with respect to matters reported or resolved, and provided
opinions.
Yasuo Nishiguchi is the Chairman and CEO at Socionext Inc. He is also the Outside Director at Zensho Holdings Co., Ltd
and YAMADA Consulting Group Co., LTD. There is no special relationship between the Company and Socionext Inc.,
Zensho Holdings or YAMADA Consulting Group Co., LTD.
(2)Director, Hiroshi Matsuhisa
In the period under review, Hiroshi Matsuhisa attended 12 of 13 Meetings of Board of Directors. Based on the specialized
knowledge by the person with academic standing in engineering of Kyoto University, he asked questions to clarify
ambiguities that arose with respect to matters reported or resolved, and provided opinions.
Hiroshi Matsuhisa is a professor emeritus at Kyoto University. He is also the Outside Corporate Auditor at Technology
Seed Incubation Co., Ltd. There is no special relationship between the Company and Kyoto University or Technology Seed
Incubation Co., Ltd.
(3)In addition to the frequency of convening meetings of the Board of Directors described above, there were 4 times of written
resolutions adopted, deeming that there have been resolutions of the Board of Directors Meetings pursuant to Article 370 of
the Companies Act and Article 24 of the Articles of Association.
3. Corporate Auditors, Yasuhiro Orita, Takao Yoshikawa and Hiroho Kamakura are Outside Corporate Auditors stipulated in
Item 16, Article 2 of the Companies Act.
4. The following describes the activities of the Outside Corporate Auditors during the period under review.
(1)Corporate Auditor, Yasuhiro Orita
In the period under review, Yasuhiro Orita attended 11 of 13 Meetings of Board of Directors and 4 of 5 Meetings of theBoard of Corporate Auditors. Based on the specialized legal knowledge, he asked questions to clarify ambiguities that arosewith respect to matters reported or resolved, and provided opinions. Additionally, he perused the reports of the internal
auditing results, exchanged opinions concerning auditing, and participated in joint discussions on important matters. In
addition to receiving the Accounting Auditor’s detailed report on regular basis, he also regularly exchanged opinions with
top management.
–8–

(2)Corporate Auditor, Takao Yoshikawa
In the period under review, Takao Yoshikawa attended all of 13 Meetings of Board of Directors and all of 5 Meetings ofthe Board of Corporate Auditors. Based on the specialized knowledge by the person with academic standing in engineeringof Osaka University, he asked questions to clarify ambiguities that arose with respect to matters reported or resolved, andprovided opinions. Additionally, he perused the reports of the internal auditing results, exchanged opinions concerning
auditing, and participated in joint discussions on important matters. In addition to receiving the Accounting Auditor’s
detailed report on regular basis, he also regularly exchanged opinions with top management.
Takao Yoshikawa is a professor emeritus at Osaka University. There is no special relationship between the Company andOsaka University.
(3)Corporate Auditor, Hiroho Kamakura
In the period under review, Hiroho Kamakura attended 11 of 13 Meetings of Board of Directors and all of 5 Meetings ofthe Board of Corporate Auditors. He is a Certified Public Accountant and has specialist knowledge in finance and accounting.
Based on the specialized knowledge as a CPA, he asked questions to clarify ambiguities that arose with respect to mattersreported or resolved, and provided opinions. Additionally, he perused the reports of the internal auditing results, exchanged
opinions concerning auditing, and participated in joint discussions on important matters. In addition to receiving the
Accounting Auditor’s detailed report on regular basis, he also regularly exchanged opinions with top management.
Hiroho Kamakura is also the Outside Corporate Auditor at Trusco Nakayama Corporation and at FUJIO FOOD SYSTEM
CO., LTD. There is no special relationship between the Company and Trusco Nakayama Corporation and FUJIO FOOD
SYSTEM CO., LTD.
(4)In addition to the frequency of convening meetings of the Board of Directors described above, there were 4 times of written
resolutions adopted, deeming that there have been resolutions of the Board of Directors Meetings pursuant to Article 370 of
the Companies Act and Article 24 of the Articles of Association.
Change of Directors and Corporate Auditors during the period under review
Not applicable.
The Company has designated Director, Yasuo Nishiguchi, Director, Hiroshi Matsuhisa, Corporate Auditor, Yasuhiro Orita,
Corporate Auditor, Takao Yoshikawa and Corporate Auditor, Hiroho Kamakura as Independent Officers as prescribed by the
Tokyo Stock Exchange and submitted notices to this effect to the exchange.

5.
6.

(2) Total remuneration and other payments made to Directors and Corporate Auditors
Classification

Number of Directors/
Corporate Auditors

Total amount(Thousands of yen)
158,940

Directors

6

Corporate Auditors

4

21,30010

180,240

Total

Notes:
1. The 43rd Ordinary General Meeting of Shareholders held on June 20, 2016 resolved total remuneration for all Directors within
500,000 thousand yen per year（including remuneration for Outside Directors within 100,000 thousand yen）and total
remuneration for all Corporate Auditors within 100,000 thousand yen per year.
There are currently no Directors who have concurrent employment positions.
2. Total remuneration amounts provided above include the following amount in addition to fixed monthly compensation amounts.
- Provision for directors’ bonuses: 22,710 thousand yen
3. With respect to the liability for retirement benefits to Directors and Corporate Auditors, the plan for retirement benefits for
Directors and Corporate Auditors was terminated at the 33rd Ordinary General Meeting of Shareholders held on June 29, 2006,
and no additional provision has been recorded since then. Therefore, the balance as of March 31, 2017 (66,780 thousand yen)is provided in proportion to the term that present Directors and Corporate Auditors had been in their respective positions before
June 2006.
4. The total amount of remuneration for the two (2) Outside Directors is 10,800 thousand yen.
5. The total amount of remuneration for the three (3) Outside Corporate Auditors is 9,300 thousand yen.

4.

Matters Pertaining to Accounting Auditor(1) Name of Accounting Auditor: Deloitte Touche Tohmatsu LLC(2) Amount of compensation and other payments for the Accounting Auditor
The amount of compensation and other payments payable to the Accounting
Auditor for the reporting year
Total amount of monetary and other property benefits payable by the Company
and its subsidiaries

33,200 thousand yen
35,337 thousand yen

Note 1: In the audit contract between the Company and the Accounting Auditor, audit fees pursuant to the Companies Act andthose pursuant to the Financial Instruments and Exchange Act are not clearly separated and this separation is practically
impossible. Therefore, the amount of compensation and other payments to the Accounting Auditor is represented as thetotal payment.
2: Upon receipt of the necessary materials and reports from the Directors, in-house related departments and Accounting
Auditor, the Board of Corporate Auditors acknowledged the details of the audit and status of the course of accounting
duties by the Accounting Auditor, the grounds for calculation of the estimated remuneration for auditing, and reviews of
the audit calculation. As a result, the Board of Corporate Auditors believes that the audit remuneration presented by the
Accounting Auditor was appropriate and gave consent under Paragraph 1, Article 399 of the Companies Act.

(3) Non-audit services
Advice and guidance on international operations.
–9–(4) Policy for making decisions regarding the dismissal or non-reappointment of Accounting
Auditor
The Board of Corporate Auditors will determine the content of the proposals relating to thedismissal or non-reappointment of the Accounting Auditor, to be submitted to the General Meetingof Shareholders, should the execution of the Accounting Auditor’s duties be impeded, is deemednecessary by the Board of Corporate Auditors,
The Board of Corporate Auditors will dismiss the Accounting Auditor should it determine thatsame corresponds to the provisions in each item of Paragraph 1, Article 340 of the Companies Act,with the agreement of all the members of the Board of Corporate Auditors. In such a case, aCorporate Auditor appointed by the Board of Corporate Auditors will report the fact of and thereason for the dismissal of the Accounting Auditor to the first General Meeting of Shareholders
called after the dismissal.
(5) Overview of limited liability contract
The Company has entered into a contract with Deloitte Touche Tohmatsu LLC, the Accounting
Auditor, based on Paragraph 1, Article 427 of the Companies Act limiting the liability of same as
specified in Paragraph 1, Article 423 of the Act. The upper limit provided in the limited liability
contract is the minimum limited amount stipulated by laws and regulations.

5.

Matters Pertaining to the Development of Systems to Ensure a Properness of Operations
The Company has established the basic policy of Internal Control System for the development of asystem to ensure that the execution of duties by Directors conforms to laws and regulations, and the
Articles of Association as well as other systems that ensure the properness of operations of theCompany, as follows.
(1) System to ensure that business execution of Directors and employees complies with laws andregulations and the Articles of Association.
The Company raises the awareness for and holds training on legal compliance to increaseawareness of compliance as well as establishes “Whistle-Blowing Regulations” providing theprocedure for reporting violations.
(2) System for keeping and managing the information on business execution of the Company’s Directors.
Information is kept and managed according to laws and regulations, and internal regulations(including “Document Regulations,” “Internal Information Management Regulations” and“Information System Management Regulations”).
(3) Regulations on and other systems for risk management of losses of the Company and our subsidiaries.
Risk of currently estimated losses is managed by setting a committee and making discussion
according to degree of its significance. Events delivering losses to the Company would be reported
to Directors and Corporate Auditors by the Executive in charge and discussed and managed by all
executives.
(4) System to ensure effective business execution by Directors of the Company and our subsidiaries.
Effective business execution by Directors is ensured by followings.
[1] The Board of Directors determines significant matters and oversees business execution by
Directors.
[2] Information is shared among Directors, Executives, and Corporate Auditors at executive
meetings.
[3] Notice of significant matters on management, understanding of status and business instructions
are conducted at management meetings and YSM management conference.
[4] At the subsidiaries conference, the information is shared on the Company and our subsidiaries
and significant matters are discussed and determined.
(5) The systems to ensure appropriate works of the corporate group consisting of the Company and its
subsidiaries, and to make reports to the Company on matters concerning business execution by
Directors of subsidiaries.
Internal Audit Office develops the Internal Control System. “Subsidiaries Management
Regulations” obligate subsidiaries to make periodic reports relating to business results, fiscal– 10 –

conditions and other significant information of subsidiaries.
Significant matters are discussed to solve issues at the Board of Directors.
(6) System to ensure effective Corporate Auditors’ audit.
Corporate Auditors attend the Board of Directors meetings and required significant meetings
including management conference as well as read major approval documents and other significant
documents concerning business execution and receives explanation from Directors and employeesof the Company and Directors of subsidiaries as necessary.
(7) System on employees assisting works of the Company’s Corporate Auditors when Corporate
Auditors require allocation of the assisting employees.
Employees assisting the work of the Company’s Corporate Auditors can be allocated as staff asnecessary. Corporate Auditor has the authority to give instructions and orders to his or her Corporate
Auditor staff.
(8) System to ensure that those reporting to the Board of Corporate Auditors and Corporate Auditors,
etc. are not unfavorably treated for the reason of the report.
The Company ensures that executives and employees reporting to Board of Corporate Auditors
and Corporate Auditors are not treated unfavorably because of the report and thoroughly inform thewhole company of this.
In the “Whistle-Blowing Regulations,” it is prescribed to prohibit dismissal and give otherunfavorable treatment for the reason of the report.
(9) Matters on the policy for dealing with expenses or debts resulting from business execution of theCompany’s Corporate Auditors.
The Company, when Corporate Auditors require the Company to make advance payment inrespect of business execution according to Article 388 of the Companies Act, immediately deals
with the relevant expenses and debts unless it is considered unnecessary to make advance payments.
(10) Systems on Eliminating Anti-Social Forces
The Company assumes a resolute attitude to anti-social forces threatening order and security ofcivil society as well as closely exchanges information and cooperates with the relevant specialized
agencies including police against anti-social forces and thoroughly informs employees of the above
policy.
6.

Overview of the Business Operations of Systems to Ensure a Properness of Operations
Major operational status of the Internal Control System executed by the Yushin Group in the current
consolidated fiscal year is as follows.
(1) Status of addressing compliance
The Company is endeavoring to spread awareness of compliance across the Yushin Groupthrough education and workshops. In addition, the Company has enacted “Whistle-Blowing
Regulations,” in which reporting procedures for any infringement are prescribed. And, compliancerequirements are thoroughly disseminated throughout the Yushin Group with regard to laws andregulations and internal regulations (including “Office Regulations,” “Internal Information
Management Regulations” and “Information System Management Regulations”).
(2) Status of addressing the risk management of losses
For the risk management overall, the Committee of Internal Control offers consultations for
implementation of companywide measures. If any events causing damage to the Company arise, theDirector in charge immediately makes a report to the Board of Directors and the Board of Corporate
Auditors, and all Directors offer consultations to take actions.
(3) Status of addressing to conducting proper and efficient execution of assigned duties
Assigned duties of the Directors are executed efficiently as described below.
[1] Significant matters are determined by the Board of Directors, and the Directors supervise thestatus of business execution.
[2] Significant matters are discussed among Directors, Executives and Corporate Auditors at theexecutive meetings thereby sharing such significant information.
– 11 –

[3] Significant matters relating to the corporate management are communicated at management
meetings. The operating status of the Company is monitored and necessary guidance isprovided.
(4) Status of addressing the proper operations of the business group consisting of the Company and its
subsidiaries
Establishing the Internal Control System is being promoted by the Committee of Internal Control.
The Company’s subsidiaries hold meetings three times a year so as to share information relating to
the Company and its subsidiaries. The Company also strives to strengthen subsidiary management
through monitoring status of business operations and confirming establishment of rules andregulations of subsidiaries.
(5) Ensuring of effectiveness of Corporate Auditors’ audit
Corporate Auditors conduct audits pursuant to the audit policies and the audit schedule asprescribed by the Board of Corporate Auditors by attending the Board of Directors and executives,
management and other meetings. Corporate Auditors conduct interviews on the status of executionof duties by the Directors and the Internal Audit Office and then inspect significant decisions as
noted in the documentation, such as the approval documents, contracts and agreements. Corporate
Auditors also investigate the statuses of business operations, corporate properties and fraudulent acts
relating to the performance of Directors’ duties, infringement of rights and violations of laws andregulations, and the Articles of Association. Meanwhile, Corporate Auditors coordinates with thelegal counsel such as the lawyers and the Certified Public Accountant, who are Outside Corporate
Auditors, and keeps internal coordination with the Internal Control Department. Other than that,
Corporate Auditors develops the standards and guidelines for the course of action by Corporate
Auditors conducting audits of the Company’s Internal Control System, including the “Audit PracticeStandards relating to the Internal Control System,” and Corporate Auditors conduct its audits
pursuant to such practice standards.
7.

Policy Concerning Decisions on the Dividends of Surplus
The Yushin Group manages its businesses considering the return of profits to shareholders as oneof its important managerial issues.
To that effect, it is the basic policy of the Yushin Group to proactively return profits to shareholders
by maintaining a stable operational base, improving its ROE and effectuating dividends based on theperformance results of each respective fiscal year. Specifically, the Yushin Group has a target at therealization of 30% and more of dividend payout ratio to consolidated net income attributable toshareholders of the parent company.
For this fiscal year, a full-year dividend is 36 yen per share, consisting of an interim dividend of
15 yen per share and a year-end dividend of 21 yen per share.

– 12 –

Consolidated Balance Sheets(as of March 31, 2017)(Thousands of yen)Account

AmountAccount

ASSETS
Current assets

AmountLIABILITIES
17,348,701

Current liabilities

5,100,213

Cash and deposits

5,734,493

Notes and accounts payable - trade

1,686,219

Notes and accounts receivable trade

6,479,748

Electronically recorded obligations- operating

1,306,059

Merchandise and finished goods

769,815

Accounts payable - other

750,992

Work in process

884,830

Accrued expenses

175,619

Raw materials and supplies

2,179,141

Income taxes payable

100,112

Consumption taxes receivable

515,608

Advances received

604,929

Prepaid expenses

255,560

Provision for bonuses

252,861

Deferred tax assets

431,885

Provision for directors’ bonuses

22,710Other

118,915

Provision for product warranties

122,870

Allowance for doubtful accounts(21,298)

Deferred tax liabilities

7,721

Other

70,116

Non-current assets
Property, plant and equipment
Buildings

13,413,034
12,255,813
5,786,448

Non-current liabilities

209,805

Structures

254,764

Provision for directors’ retirement
benefits

Machinery equipment andVehicles

193,037

Net defined benefit liability

53,853Tools, furniture and fixtures

222,842

Deferred benefit liabilities

29,739Other59,431

Land

5,784,160

Leased assets

8,811

Total liabilities

Construction in progress

5,749

NET ASSETS

66,7805,310,018

Shareholders’ equity

24,928,866

473,285

Capital stock

1,985,666

Telephone subscription right

11,430Capital surplus

2,023,903

Software392,364Retained earnings

21,273,290

Others69,490Treasury stock(353,994)

Intangible assets

Investments and other assets

683,936

Investment securities

220,783

Net defined benefit asset

292,959

Deferred tax assets

20,444

Other

149,999

Allowance for doubtful accounts
Total assets

Total accumulated othercomprehensive income
Valuation difference on availablefor-sale securities
Foreign currency translation
adjustment
Remeasurements of defined benefit
plans

329,536

Non-controlling interests

193,315(251)
30,761,736– 13 –

58,545203,291
67,699Total net assets

25,451,718

Total liabilities and net assets

30,761,736

Consolidated Statements of Income(from April 1, 2016 to March 31, 2017)(Thousands of yen)Account

AmountNet sales

19,346,399

Cost of sales

11,680,029

Gross profit

7,666,369

Selling, general and administrative expenses

5,553,726

Operating income

2,112,643

Non-operating income

81,905Interest and dividends income

10,756

Purchase discounts

12,556

Subsidy income

22,942

Other

35,651Non-operating expenses

136,356

Sales discounts

1,209

Foreign exchange losses

129,316

Other

5,830

Ordinary income

2,058,192

Extraordinary income

2,329

Gain on sales of non-current assets

1,755

Gain on sales of investment securities

574

Extraordinary loss

50,881

Loss on sales and retirement of non-current assets

50,881

Income before income taxes

2,009,640

Income taxes - current

503,362

Income taxes - deferred

94,643

Net income

1,411,635

Net income attributable to non-controlling interests

31,361

Net income attributable to shareholders of the parent company– 14 –

1,380,273

Consolidated Statements of Changes in Net Assets(from April 1, 2016 to March 31, 2017)(Thousands of yen)
Shareholders’ equity

Balance as of April 1, 2016

Capital stock

Capital surplus

1,985,666

2,023,903

Retainedearnings
20,502,208

Cumulative effects ofchanges in accounting
policies
Restated balance

Treasury stock

Total
shareholders’equity(352,731)

24,159,047

20,367
1,985,666

2,023,903

20,367

20,522,575(352,731)

24,179,414

Changes in the current period
Dividends of surplus(629,558)(629,558)

Net income attributable toshareholders of the parent
company

1,380,273

1,380,273

Acquisition of treasury stock(1,262)(1,262)

Changes in items other thanshareholders’ equity, net
Total changes in the current
periodBalance as of March 31, 2017--

750,715(1,262)

749,452

1,985,666

2,023,903

21,273,290(353,994)

24,928,866

Total accumulated other comprehensive income

Balance as of April 1, 2016

Valuationdifference on
availablefor-salesecurities

Foreigncurrencytranslation
adjustments

Remeasurements ofdefinedbenefit plans

33,920266,643

50,245

Total
Nonaccumulated controllinginterests
othercomprehensive
income350,808

205,812

Cumulative effects ofchanges in accounting
policies
Restated balance

Total net
assets

24,715,668
20,36733,920266,643

50,245350,808

205,81224,736,035

Changes in the current period
Dividends of surplus(629,558)

Net income attributable toshareholders of the parent
company

1,380,273

Acquisition of treasury stock
Changes in items other thanshareholders’ equity, net(1,262)
24,625(63,351)

17,454(21,271)(12,497)(33,769)

Total changes in the current
period24,625(63,351)

17,454(21,271)(12,497)715,682

Balance as of March 31, 2017

58,545203,291

67,699329,536

193,315

25,451,718– 15 –

1.

Basis of Preparing Consolidated Financial Statements(1) Scope of consolidation
All 12 subsidiaries of the Company, provided below, fall within the scope of consolidation.
List of Subsidiaries
Yushin America, Inc.
Yushin Korea Co., Ltd.
Yushin Precision Equipment Sdn. Bhd.
Yushin Precision Equipment (Taiwan) Co., Ltd.
Yushin Precision Equipment (Thailand) Co., Ltd.
Yushin Automation, Ltd.
Yushin Precision Equipment Trading (Shenzhen) Co., Ltd.
Yushin Precision Equipment Trading (Shanghai) Co., Ltd.
Yushin Precision Equipment (India) Pvt. Ltd.
Guangzhou Yushin Precision Equipment Co., Ltd.
PT. Yushin Precision Equipment Indonesia
Yushin Precision Equipment (Vietnam) Co., Ltd.

(2) Application of the equity method
There is no non-consolidated subsidiary or affiliate company.
(3) Accounting policies
a. Valuation of important assetsi) Securities
Available-for-sale securities classified as other securities- Securities with available fair market values are reported at fair value on the consolidated
account closing date
(Unrealized gains or losses, net of applicable taxes, reported in a separate component of equity.
The cost of securities sold is principally determined by the moving average method)ii) Inventories- Merchandise and finished goods, Work-in-process
Principally carried at cost determined by the identified cost method (the carrying value on thebalance sheet is written down to reflect the effect of lower profit margins)- Raw materials
Principally carried at cost determined by the periodic average method (the carrying value on
the balance sheet is written down to reflect the effect of lower profit margins)- Supplies
Carried by the last purchase price methodb. Depreciationi) Property, plant and equipment (excluding leased assets): Principally computed by the decliningbalance method
The range of useful lives for major assets is as follows:
Buildings:
13 - 40 years
Structures:
7 - 20 years
Machinery and equipment:
5 - 12 years
Tools, furniture and fixtures:
2 - 8 years
ii)

Intangible assets (excluding leased assets)- Software used internally: Straight-line method based on the expected useful lives- Other intangible assets: Straight-line methodiii) Leased assets: For leased assets under non-ownership transfer finance lease transactions, the– 16 –

Company applies a straight-line method with the lease period as useful life and the residual valueas 0.
c. Estimation on important allowance and reservesi) Allowance for doubtful accounts:
To provide for possible bad debt losses, the amount deemed unrecoverable is accounted using theloan loss ratio based on past experience for general claims and by examining the possibility ofrecovery on an individual basis for specific claims with default possibility.
ii) Provision for bonuses:
In order to allocate the payment of employees’ bonuses, the Company provides the amount subject
to the fiscal year under review among the total estimated amount to be paid as employees’ bonuses.
iii) Provision for directors’ bonuses:
The Company provides the projected payment amount to be allocated for the payment of bonuses
to Directors and Corporate Auditors.
iv) Provision for product warranties:
To provide for expenses incurred for free repairs related to product sales, an amount is accounted
based on historical experience.
v) Provision for directors’ retirement benefits:
The Company provides the estimated amount of retirement benefits to Directors and Corporate
Auditors which would be required if all Directors and Corporate Auditors retired at the balance
sheet date according to internal regulations. This plan was terminated on June 29, 2006 and no
additional provision has been recorded since then. Therefore, the balance as of March 31, 2016 isprovided in proportion to the term that present Directors had been in their respective positions
before June 2006.
d. Other significant matter for the preparation of Consolidated Financial Statementsi) Accounting for Assets and Liabilities for Employees’ retirement benefits
To provide for employees’ retirement benefits, based on the projected benefit obligations at yearend and the pension asset balance, the amount of pension assets surplus to projected benefit
obligations is recorded.
The net actuarial loss or gain is subject to amortization from the next fiscal year of the recognition
thereof onward in an amount pro-rated by the straight-line method based on the average remaining
employee service period (10 to 16 years) at the time of the recognition of net actuarial loss or gainin each fiscal year.
Unrecognized actuarial differences is recorded in “Remeasurements of defined benefit plans”
under “Total accumulated other comprehensive income” in Net assets after adjusting for tax
effects.
ii)

2.

Accounting for Consumption tax and local consumption tax
Consumption tax and local consumption tax are accounted for using the tax excluded method.

Changing in accounting policies(Application of guidance on “Recoverability of Deferred Tax Assets”)
The company has applied “Guidance on Recoverability of Deferred Tax Assets” (AccountingStandards Board of Japan [ASBJ] Guidance No.26, March 28, 2016; hereafter “Guidance on
Recoverability”) from the beginning of the current fiscal year and revised a part of the accounting
procedure for recoverability of deferred tax assets.
The Company has applied “Guidance on Recoverability” in accordance with the provisions ontransitional implementation indicated in Article 49(4) of “Guidance on Recoverability.” The differences
between the amount of Deferred tax assets and Deferred tax liabilities in applying Article 49(3)① through③ of “Guidance on Recoverability” at the beginning of the current fiscal year, and the amount of Deferred
tax assets and Deferred tax liabilities at the end of the previous fiscal year have been added to Retained
earnings at the beginning of the current fiscal year.
As the result, at the beginning of the current fiscal year, Deferred tax assets (“Investments and otherassets”) increased by 20,367 thousand yen and Retained earnings increased by 20,367 thousand yen.
3.

Changes in presentation(Consolidated Balance Sheet)“Consumption taxes receivable”, which was included in “Other” in Current assets until the– 17 –

previous fiscal year, is presented separately from the fiscal year under review, because its materiality
increased. “Consumption taxes receivable” in the previous fiscal year was 102,232 thousand yen.
(Consolidated Statements of Income)“Subsidy income”, which was included in “Other” in Non-operating income until the previous
fiscal year, is presented separately from the fiscal year under review, because its materiality
increased. “Subsidy income” in the previous fiscal year was 12,208 thousand yen.
4.

5.

Notes to Consolidated Balance Sheet
Accumulated depreciation of property, plant and equipment:

4,376,087 thousand yen

Notes to Consolidated Statement of Changes in Net Assets(1) Total number of issued sharesClass of shares

Number of shares atthe beginning ofcurrent FY

Number of increased
shares of current FY

Number of decreased
shares of current FY

Number of shares atthe end of current FY

Common stock

17,819,033--

17,819,033(2) Number of treasury stock
Class of shares

Number of shares atthe beginning ofcurrent FY

Number of increased
shares of current FY

Number of decreased
shares of current FY

Number of shares atthe end of current FY

Common stock

331,208507-

331,715

Note: The increase in the number of shares of treasury stock (507 shares) is due to the purchase of shares of less than one unit.

(3) Dividends of surplus
a. Payment of dividends
Resolution

Class of shares

Total dividend(Thousandsof yen)Dividend
per share(Yen)

Record date

The Board of Directors’Meeting on May 10, 2016

Common stock

367,244

21

March 31, 2016

June 3, 2016

The Board of Directors’Meeting on November 4,
2016

Common stock

262,31415

September 30,
2016

December 1,
2016

Effective dateb. Dividends whose record date falls within this consolidated fiscal year but comes into effect in
the next consolidated fiscal year
Resolution

Class ofsharesTotal dividend(Thousandsof yen)Dividend
funds

Dividend
per share(Yen)

The Board of
Directors’ Meetingon May 10, 2017

Commonstock

367,233

Retainedearnings

21

6.

Record date

Effective date

March 31,2017

June 5, 2017

Notes to Financial Instruments(1) Conditions of financial instruments
a. Management policy
Yushin Group has a policy of limiting investments of unused funds to short-term deposits,
certificates of deposits and similar instruments and never using these funds for speculation. Internal
resources are used to meet all working capital requirements. Derivative instruments may be used tohedge exposure to foreign exchange rate risk but will never be used for speculation.
b. Details of financial instruments and their risks
Operating receivables consisting of Notes and accounts receivable - trade are generally exposedto the credit risk of customers, while foreign currency denominated operating receivables at foreign
operations are exposed also to the foreign exchange risk.
Investment securities are available-for-sale securities and are exposed to risk associated withmarket price volatility.
Operating debt consisting of Notes and accounts payable - trade and Electronically recorded– 18 –

obligations - operating are largely due four months or less. Accounts payable - other and Income
taxes payable are due one year or less.
c. Risk management system for financial instruments
Payment dates and balances of outstanding are supervised for each customer based on rules forthe management of trade receivables and credit. In addition, there is a system for monitoring thefinancial soundness of customers.
For Investment securities, there are measures to periodically monitor the fair values of thesesecurities and the financial soundness of issuers of these securities.
(2) Fair value of financial instruments
The carrying value on the consolidated balance sheets, fair value, and their differences as of March
31, 2017 are shown as follows.
Carrying value(thousands of yen)
(1)
(2)
(3)
(4)

(1)
(2)
(3)
(4)

Cash and deposits
Notes and accounts receivable – trade
Consumption taxes receivable
Investment securities
Other securities

Fair value(thousands of yen)

Differences(thousands of yen)

5,734,493
6,479,748
515,608

5,734,493
6,479,748
515,608-

220,783

220,783-

Assets total

12,950,633

12,950,633-

Notes and accounts payable - trade
Electronically recorded obligations - operating
Accounts payable - other
Income taxes payable

1,686,219
1,306,059
750,992
100,112

1,686,219
1,306,059
750,992
100,112-

Liabilities total

3,843,383

3,843,383-(Note) Matters concerning determination of fair value of financial instruments and marketable securities.

(Assets)(1) Cash and deposits, (2) Notes and accounts receivable – trade, and (3) Consumption taxes
receivable.
Fair value of the above financial instruments is deemed to be equal to their carrying value
because they are settled within a short period of time.
(4)Investment securities
Fair value of the above financial instruments such as stocks is determined by prices at stock
exchanges.
(Liabilities)(1) Notes and accounts payable - trade, (2) Electronically recorded obligations - operating, (3)Accounts payable - other and (4) Income taxes payable
Fair value of the above financial instruments is deemed to be equal to their carrying value
because they are settled within a short period of time.
(3) The amount of money claims scheduled to be redeemed subsequent to the consolidated balance
sheet date
Due within
one year

Due after one year
through five years

Due after five
years throughten years

Due after
ten years(thousands of yen)(thousands of yen)(thousands of yen)(thousands of yen)

Cash and deposits
Notes and accounts receivable – trade
Consumption taxes receivable

5,734,493
6,479,748
515,608

-

-

-

Total

12,729,850

-

-

-

6. Per Share Information(1) Net assets per share:(2) Net income per share:

1,444.38 yen
78.93 yen

Note: Amounts less than one thousand yen are truncated– 19 –

Balance Sheets(as of March 31, 2017)
Account

AmountAccount

ASSETS
Current assets(Thousands of yen)AmountLIABILITIES
13,803,212

Cash and deposits

4,113,442

Notes receivable - trade

1,018,392

Accounts receivable - trade

5,062,322

Current liabilities
Notes payable - trade
Electronically recorded obligations operating
Accounts payable - trade

4,073,787
83,816
1,306,059
1,458,758

Merchandise and finished goods

375,874

Accounts payable - other589,841

Work in process

796,987

Accrued expenses

108,170

Raw materials and supplies

1,415,625

Income taxes payable

25,798Prepaid expenses

81,658Advances received

127,941

Consumption taxes receivable

515,608

Deposits received

19,470

Deferred tax assets

166,988

Provision for bonuses

250,000

Other

257,110

Provision for directors’ bonuses

22,710(800)

Provision for product warranties

77,000Allowance for doubtful accounts
Non-current assets

13,527,950

Property, plant and equipment

11,312,285

Buildings

5,286,602

Structures

254,764

Machinery and equipment

108,663

VehiclesTools, furniture and fixtures
Land

Other

4,221

Non-current liabilities
Provision for directors’ retirement
benefits
Other

78

Total liabilities

156,661

72,541
66,7805,761
4,146,329

NET ASSETS

5,490,953

Shareholders’ equity

23,126,287

Leased assets

8,811

Capital stock

1,985,666

Construction in progress

5,749

Capital surplus

2,023,903

Intangible assets

394,162

Telephone subscription right

11,430Software382,732

Legal capital surplus
Retained earnings

2,023,903
19,470,711

Legal retained earnings

286,314

Other retained earnings

19,184,396

Investments and other assets

1,821,502

Reserve for dividend equalization

1,000,000

Investment securities
Stocks of subsidiaries andaffiliates
Investments in capital ofsubsidiaries and affiliates
Deferred tax assets

220,783

General reserve

8,700,000

808,896

Retained earnings brought forward

9,484,396

Other327,794

Allowance for doubtful accounts

Total assets

297,873

Treasury stock

166,405

Valuation and translation adjustments
Valuation difference on available-forsale securities(353,994)
58,54558,545(251)

27,331,162– 20 –

Total net assets

23,184,832

Total liabilities and net assets

27,331,162

Statements of Income(from April 1, 2016 to March 31, 2017)(Thousands of yen)Account

AmountNet sales

15,545,096

Cost of sales

10,119,689

Gross profit

5,425,406

Selling, general and administrative expenses

4,146,265

Operating income

1,279,141

Non-operating income

475,478

Interest income

2,764

Dividends income

406,823

Purchase discounts

12,556

Subsidy income

22,942Other

30,392Non-operating expenses

32,759

Sales discounts

1,209

Foreign exchange losses

25,721

Other

5,828

Ordinary income

1,721,859

Extraordinary income

574

Gain on sales of investment securities

574

Extraordinary loss

50,756

Loss on sales and retirement of non-current assets

50,756

Income before income taxes

1,671,677

Income taxes - current

292,168

Income taxes - deferred

110,405

Net income

1,269,103– 21 –

Statements of Changes in Net Assets(from April 1, 2016 to March 31, 2017)(Thousands of yen)
Shareholders’ equity
Capital surplus

Retained earnings
Other retained earnings

Capital stock Legal capitalsurplus

Total capitalsurplusLegalretainedearnings

2,023,903

286,314

Reserve fordividend
equalization

Generalreserve

Retainedearnings
brought
forward

Total retained
earnings

1,000,000

8,700,000

8,824,484

18,810,799

20,367

20,367

8,844,851

18,831,166

Changes in thecurrent period
Dividends ofsurplus(629,558)(629,558)

Net income

1,269,103

1,269,103

Balance as ofApril 1, 2016

Cumulative
effects ofchanges inaccounting
policies
Restated balance

Acquisition oftreasury stock
Changes in items
other thanshareholders’equity, net
Total changes in thecurrent period
Balance as ofMarch 31, 2017

1,985,666

1,985,666

2,023,903

2,023,903

2,023,903

286,3141,000,000

8,700,000

-

-

-

-

-

-

639,544639,544

1,985,666

2,023,903

2,023,903

286,3141,000,000

8,700,000

9,484,396

19,470,711

Shareholders’ equity
Treasury stock
Balance as of April 1, 2016

(352,731)

Cumulative effects ofchanges in accounting
policies
Restated balance

Valuation and translation adjustments

Totalshareholders’equity22,467,637

Valuationdifference on
available-for-salesecurities

Total valuation andtranslation
adjustments

33,92033,92020,367(352,731)

22,488,004

Total net assets

22,501,557
20,36733,92033,92022,521,924

Changes in the current period
Dividends of surplus(629,558)(629,558)

Net income

1,269,103

1,269,103(1,262)(1,262)Acquisition of treasury stock(1,262)

Changes in items other thanshareholders’ equity, net
Total changes in the current
period(1,262)

Balance as of March 31, 2017

(353,994)

24,625

24,625

24,625638,282

24,625

24,625662,907

23,126,287

58,54558,54523,184,832– 22 –

1. Summary of Significant Accounting Policies(1) Valuation of important assets
a. Stocks of subsidiaries and affiliates
Carried at cost determined by the moving average method
b. Available-for-sale securities classified as other securities- Securities with available fair market values are reported at fair value on the closing date
(Unrealized gains or losses, net of applicable taxes, reported in a separate component of equity.
The cost of securities sold is principally determined by the moving average method)c. Inventories- Merchandise and finished products, Work in process:
Carried at cost determined by the identified cost method (the carrying value on the balance
sheet is written down to reflect the effect of lower profit margins).
- Raw materials:
Carried at cost determined by the periodic average method (the carrying value on the balance
sheet is written down to reflect the effect of lower profit margins)- Supplies:
Carried by the last purchase price method(2) Depreciationa. Property, plant and equipment (excluding leased assets): Declining balance method
The range of useful lives for major assets is as follows:
Buildings:
13 - 38 years
Structures:
7 - 20 years
Machinery and equipment:
12 years
Tools, furniture and fixtures:
2 - 8 yearsb.

c.

Intangible assets (excluding leased assets)- Software used internally: Straight-line method based on the expected useful lives- Other intangible assets: Straight-line method
Leased assets: For leased assets under non-ownership transfer finance lease transactions, theCompany applies a straight-line method with the lease period as useful life and the residual valueas 0.

(3) Estimation on allowance and reserves
a. Allowance for doubtful accounts:
To provide for possible bad debt losses, the amount deemed unrecoverable is accounted using theloan loss ratio based on past experience for general claims and by examining the possibility ofrecovery on an individual basis for specific claims with default possibility.
b. Provision for bonuses:
In order to allocate the payment of employees’ bonuses, the Company provides the amount subject
to the fiscal year under review among the total estimated amount to be paid as employees’ bonuses.
c. Provision for directors’ bonuses:
The Company provides the projected payment amount to be allocated for the payment of bonuses
to Directors and Corporate Auditors.
d. Provision for product Warranties:
To provide for expenses incurred for free repairs related to product sales, an amount is accounted
based on historical experience.
e. Provision for directors’ retirement benefits:
The Company provides the estimated amount of retirement benefits to Directors and Corporate
Auditors which would be required if all Directors and Corporate Auditors retired at the balance
sheet date according to internal regulations. This plan was terminated on June 29, 2006 and no
additional provision has been recorded since then. Therefore, the balance as of March 31, 2016 isprovided in proportion to the term that present Directors had been in their respective positions
before June 2006.

– 23 –

(4) Employees’ retirement benefits
To provide for employees’ retirement benefits, based on the projected benefit obligations at yearend and the pension asset balance, the amount of pension assets surplus to projected benefit
obligations is recorded in the “Other” field under “Investments and other assets.” The net actuarial
loss or gain is subject to amortization from the next fiscal year of the recognition thereof onward inan amount pro-rated by the straight-line method based on the average remaining employee service
period (10 to 16 years) at the time of the recognition of net actuarial loss or gain in each fiscal year.
(5) Other basic significant matter for the preparation of Financial Statements
Consumption tax and local consumption tax are accounted for using the tax excluded method.
(6)

Changes in accounting policies.
(Application of guidance on “Recoverability of Deferred Tax Assets”)
The company has applied “Guidance on Recoverability of Deferred Tax Assets” (AccountingStandards Board of Japan [ASBJ] Guidance No.26, March 28, 2016; hereafter “Guidance on
Recoverability”) from the beginning of the current fiscal year and revised a part of the accounting
procedure for recoverability of deferred tax assets.
The Company has applied “Guidance on Recoverability” in accordance with the provisions ontransitional implementation indicated in Article 49(4) of “Guidance on Recoverability.” Thedifferences between the amount of Deferred tax assets and Deferred tax liabilities in applying
Article 49(3)① through ③ of “Guidance on Recoverability” at the beginning of the current fiscal
year, and the amount of Deferred tax assets and Deferred tax liabilities at the end of the previous
fiscal year have been added to Retained earnings brought forward at the beginning of the current
fiscal year.
As the result, at the beginning of the current fiscal year, Deferred tax assets (“Investments andother assets”) increased by 20,367 thousand yen and Retained earnings brought forward increased
by 20,367 thousand yen.

(7) Changes in presentation(Balance Sheet)“Guarantee deposits” which was separately presented until previous fiscal year, is reported in“Other” in Investments and other assets from this fiscal year under review, because its materiality
decreased. “Guarantee deposits” at the end of this fiscal year is 10,786 thousand yen.
“Lease obligations” and “Long-term guarantee deposited” in Non-current liabilities which wereseparately presented until previous fiscal year, are reported in “Other” in Non-current liabilities fromthis fiscal year under review, because their materiality decreased. “Lease obligations” and “Longterm guarantee deposited” in Non-current liabilities at the end of this fiscal year are 5,081 thousand
yen and 680 thousand yen respectively.
(Statements of Income)“Subsidy income”, which was included in “Other” in Non-operating income until the previous
fiscal year, is presented separately from the fiscal year under review, because its materiality
increased. “Subsidy income” in the previous fiscal year was 12,208 thousand yen.

2. Notes to Balance Sheet(1) Accumulated depreciation of property, plant and equipment:(2) Monetary credit and debts to affiliates
a. Short-term monetary credit:b. Short-term monetary debts:

3. Notes to Statements of Income
Transactions with subsidiaries and affiliates
a. Net sales:b. Purchases:c. Selling, general and administrative expenses:
d. Non-operating transactions:– 24 –

3,578,523 thousand yen
1,772,677 thousand yen
42,991 thousand yen

4,385,911 thousand yen
10,789 thousand yen
261,106 thousand yen
402,139 thousand yen

4. Notes to Statement of Changes in Net Assets
Number of treasury stock
Class of shares

Number of shares atthe beginning ofcurrent FY

Number of increased
shares of current FY

Number of decreased
shares of current FY

Number of shares atthe end of current FY

Common stock

331,208507-

331,715

Note: The increase in the number of shares of treasury stock (507 shares) is due to the purchase of shares of less than one unit.

5. Notes on Tax-effect Accounting(1) Breakdown by cause of deferred tax assets and liabilities
Deferred tax assets
Inventories
Depreciation of Buildings
SoftwareProvision for bonuses
Provision for product warranties
Provision for directors’ retirement benefit
Other
Total deferred tax assets
Deferred tax liabilities
Prepaid pension costs
Valuation difference on available-for-sale securities
Total deferred tax liabilities
Net deferred tax assets(Thousands of yen)
46,276
94,066
133,332
77,00023,716
20,36722,283417,043
59,642
24,006
83,649333,394

Note: Net deferred tax assets are included in following balance sheet items.
(Thousands of yen)
Current assets
166,988
Fixed assets
166,405– 25 –

6. Transactions with Related Parties
Subsidiaries, etc.
Type

Subsidiary

Name

% of
votingrights held

YushinAmerica,Inc.

100%
Directly
held by theCompany

YushinKorea Co.,
Ltd.

100%
Directly
held by theCompany

Guangzhou
YushinPrecision
Equipment
Co., Ltd.

100%
Directly
held by theCompany

Relationship
Concurrent
Business
Directors,
relationshipetc.
Sale ofCompany
products andConcurrent
manufacture
Directors: 2
and sale oflabor saving
machines
Sale ofCompany
products andConcurrent
manufacture
Directors: 1
and sale oflabor saving
machines

Concurrent
Directors: 3

Manufactureof Company
products

Type oftransactions

Transaction
amount(thousands ofyen)

Account

Year-endbalance(thousands ofyen)Sale ofproducts

1,487,509

Accounts
receivable- trade342,683

Sale ofproducts

1,242,657

Accounts
receivable- trade473,680

Sale ofproducts

492,205

Accounts
receivable- trade452,055

Transaction terms or method of determining transaction terms(Note) For sale of products, prices are determined by negotiations considering local market prices.

7. Per Share Information(1) Net assets per share:(2) Net income per share:

1,325.81 yen
72.57 yen

Note: Amounts less than one thousand yen are truncated.

– 26 –

[Certified copy of the Accounting Auditors’ Report concerning consolidated statutory report](TRANSLATION)
INDEPENDENT AUDITOR'S REPORTMay 12, 2017
To the Board of Directors of
Yushin Precision Equipment Co., Ltd.:
Deloitte Touche Tohmatsu LLC
Designated Unlimited Liability Partner,
Engagement Partner,
Certified Public Accountant:
Yoshiki Yamada [SEAL]
Designated Unlimited Liability Partner,
Engagement Partner,
Certified Public Accountant:
Mitsuhiro Takasaki [SEAL]
Pursuant to the fourth paragraph of Article 444 of the Companies Act, we have audited the consolidated
financial statements, namely, the consolidated balance sheet as of March 31, 2017 of Yushin Precision
Equipment Co., Ltd. (the "Company") and its consolidated subsidiaries, and the related consolidated
statements of income and changes in net assets for the fiscal year from April 1, 2016 to March 31, 2017,and a summary of significant accounting policies and other explanatory information.
Management's Responsibility for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of these consolidated financial
statements in accordance with accounting principles generally accepted in Japan, and for such internal
control as management determines is necessary to enable the preparation of consolidated financial
statements that are free from material misstatement, whether due to fraud or error.
Auditor's Responsibility
Our responsibility is to express an opinion on these consolidated financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in Japan. Thosestandards require that we plan and perform the audit to obtain reasonable assurance about whether the
consolidated financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in
the consolidated financial statements. The procedures selected depend on the auditor's judgment, including
the assessment of the risks of material misstatement of the consolidated financial statements, whether due
to fraud or error. In making those risk assessments, the auditor considers internal control relevant to theentity's preparation and fair presentation of the consolidated financial statements in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on
the effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness ofaccounting policies used and the reasonableness of accounting estimates made by management, as well as
evaluating the overall presentation of the consolidated financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis forour audit opinion.
Audit Opinion
In our opinion, the consolidated financial statements referred to above present fairly, in allmaterial respects, the financial position of Yushin Precision Equipment Co., Ltd. and its
consolidated subsidiaries as of March 31, 2017, and the results of their operations for the year thenended in accordance with accounting principles generally accepted in Japan.
Interest
Our firm and the engagement partners do not have any interest in the Company for which disclosure isrequired under the provisions of the Certified Public Accountants Act.
The above represents a translation, for convenience only, of the original report issued in the Japanese
language.
– 27 –

[Certified copy of the Accounting Auditors’ Report concerning non-consolidated statutory report](TRANSLATION)
INDEPENDENT AUDITOR'S REPORTMay 12, 2017
To the Board of Directors of
Yushin Precision Equipment Co., Ltd.:
Deloitte Touche Tohmatsu LLC
Designated Unlimited Liability Partner,
Engagement Partner,
Certified Public Accountant:
Yoshiki Yamada [SEAL]
Designated Unlimited Liability Partner,
Engagement Partner,
Certified Public Accountant:
Mitsuhiro Takasaki [SEAL]
Pursuant to the first item, second paragraph of Article 436 of the Companies Act, we have audited thefinancial statements, namely, the balance sheet as of March 31, 2017 of Yushin Precision Equipment Co.,
Ltd. (the "Company"), and the related statements of income and changes in net assets for the 44th fiscal
year from April 1, 2016 to March 31, 2017, and a summary of significant accounting policies and otherexplanatory information, and the accompanying supplemental schedules.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements and theaccompanying supplemental schedules in accordance with accounting principles generally accepted inJapan, and for such internal control as management determines is necessary to enable the preparation offinancial statements and the accompanying supplemental schedules that are free from material
misstatement, whether due to fraud or error.
Auditor's Responsibility
Our responsibility is to express an opinion on these financial statements and the accompanying
supplemental schedules based on our audit. We conducted our audit in accordance with auditing standards
generally accepted in Japan. Those standards require that we plan and perform the audit to obtainreasonable assurance about whether the financial statements and the accompanying supplemental
schedules are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in
the financial statements and the accompanying supplemental schedules. The procedures selected dependon the auditor's judgment, including the assessment of the risks of material misstatement of the financial
statements and the accompanying supplemental schedules, whether due to fraud or error. In making thoserisk assessments, the auditor considers internal control relevant to the entity's preparation and fairpresentation of the financial statements and the accompanying supplemental schedules in order to design
audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the entity's internal control. An audit also includes evaluating theappropriateness of accounting policies used and the reasonableness of accounting estimates made bymanagement, as well as evaluating the overall presentation of the financial statements and theaccompanying supplemental schedules.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis forour audit opinion.
Audit Opinion
In our opinion, the financial statements and the accompanying supplemental schedules r eferred toabove present fairly, in all material respects, the financial position of Yushin Precision Equipment
Co., Ltd. as of March 31, 2017, and the results of its operations for the year then ended inaccordance with accounting principles generally accepted in Japan.
Interest
Our firm and the engagement partners do not have any interest in the Company for which disclosure isrequired under the provisions of the Certified Public Accountants Act.
The above represents a translation, for convenience only, of the original report issued in the Japanese
language and "the accompanying supplemental schedules" referred to in this report are not included in theattached financial documents.
– 28 –

[Certified copy of the Audit Report of the Board of Corporate Auditors](TRANSLATION)

Audit Report
Regarding the performance of duties by the Directors for the fiscal year from April 1, 2016 to March 31,
2017, the Board of Corporate Auditors hereby submits its audit report, which has been prepared throughdiscussions based on the audit report prepared by each Corporate Auditor.
1.

Auditing Methods adopted by the Corporate Auditors and Board of Corporate Auditors and Details of
Such Methods(1) The Board of Corporate Auditors established auditing policies, allocation of duties, and other relevant
matters, and received reports from each Corporate Auditor regarding his or her audits and results
thereof, as well as received reports from the Directors, other relevant personnel, and the Accounting
Auditors regarding performance of their duties, and requested explanations as necessary.
(2) Each Corporate Auditor complied with the auditing standards of Corporate Auditors established by
the Board of Corporate Auditors, followed the auditing policies, allocation of duties, and otherrelevant matters, communicated with the Directors, the Internal Audit Office, other employees, andany other relevant personnel, and made efforts to optimize the environment for information collection
and audit, and conducted audits as follows.
[1] Participated in the Board of Directors’ Meetings and other important meetings, received reports
from the Directors, employees, and other relevant personnel regarding performance of theirduties, requested explanations as necessary, examined important authorized documents andassociated information, and studied the operations and financial positions at the head office andprincipal offices. In addition, with respect to subsidiaries, we communicated and exchanged
information with Directors, Corporate Auditors, and other relevant personnel of the subsidiaries,
and received business reports from subsidiaries as necessary.
[2] We received periodic reports and requested explanations as necessary from the Directors, otherrelevant personnel and expressed our opinion about conditions of construction and applicationon the content of the resolution of the Board of Directors and system actually placed as “Internal
Control System” in accordance to this resolution, which is stipulated in Paragraphs 1 and 3,
Article 100 of the Enforcement Regulation of the Companies Act as a system required to ensure
the compliance of laws and regulations, and the Articles of Association in the execution ofbusinesses by the Directors and necessity to ensure a properness of operation in the businessgroup consisting of the Company and its subsidiaries written in the business report.
[3] We monitored and verified whether the Accounting Auditors maintained their independence andimplemented appropriate audits, and we received reports from the Accounting Auditors
regarding the performance of their duties and requested explanations as necessary. In addition,
we received notice from the Accounting Auditors that “the system for ensuring that duties are
performed properly” (matters set forth in each Item of Article 131 of the Company Accounting
Rules) is appropriately established in accordance with “Quality Control Standard on Audit”(Business Accounting Council, October 28, 2005) and requested explanations as necessary.
Based on the above methods, we examined the business report and its supporting schedules, the nonconsolidated financial statements (Balance Sheets, Statements of Income, and Statements of Changes in
Net Assets) and its supporting schedules, and the consolidated financial statements (Balance Sheets,Statements of Income, and Statements of Changes in Net Assets) related to the relevant business year.

– 29 –

2.

Audit Results(1) Results of Audit of Business Report and Other Relevant Documents[1] In our opinion, the business report and supporting schedules are in accordance with the related
laws and regulations and Articles of Association, and fairly represent the Company’s condition.
[2) With regard to the performance of duties by the Directors, we have found no evidence ofwrongful action or material violation of related laws and regulations, nor of any violation withrespect to the Articles of Association.
[3] In our opinion, resolutions of the Board of Directors for the Internal Control System arefair. And also the contents of the business report about the Internal Control System, and the
Director’s activities and implementation have no issues to be pointed out.
(2) Results of Audit of Financial Statements and Supporting Schedules
In our opinion, the methods and results employed and rendered by the Accounting Auditors, Deloitte
Touche Tohmatsu LLC, are fair and reasonable.
(3) Results of Audit of Consolidated Financial Statements
In our opinion, the methods and results employed and rendered by the Accounting Auditors, Deloitte
Touche Tohmatsu LLC, are fair and reasonable.

May 18, 2017

Board of Corporate Auditors,
Yushin Precision Equipment Co., Ltd.
Full-time Corporate Auditor
Outside Corporate Auditor
Outside Corporate Auditor
Outside Corporate Auditor

Shujiro Sawada [SEAL]
Yasuhiro Orita [SEAL]
Takao Yoshikawa [SEAL]
Hiroho Kamakura [SEAL]

End of submitted documents– 30 –

Reference Documents for the General Meeting of Shareholders
Proposal 1: Election of Seven (7) Directors
The terms of office of all the currently serving six (6) Directors will expire at the conclusion of thisMeeting. To enhance the management, we propose to increase the number of Director by one (1) and
Shareholders are asked to vote for these seven (7) candidates for Directors.
The candidates for the position of Directors are as follows:
No.

Name
(Date of birth)

Career summary, position, areas of responsibility, and representation ofother organizations
October 1973
October 1982
February 1989
March 1993

Mayumi Kotani(January 12, 1947)

December 2002
April 2006

1
March 2011

2

Joined the Company
Director
Executive Vice President and Director
Executive Vice President and Director, Head of Sales
H.Q.
President and Representative Director
President and Head of Sales and Customer Service
H.Q.
President and Representative Director
To the present

Number ofshares held

531,101 shares

Reasons for appointment:
Mayumi Kotani has been engaged in management since the establishment of the Company and exercising strong
leadership as a President and Representative Director for many years. She has extensive experience in business
management. Because of the expectation that the functions of decision-making and oversight by the Board of
Directors should be strengthened, she is a candidate for a Director of the Company.
April 2005
Joined the Company as Executive Officer andGeneral Manager of Purchase Dept.
October 2005
Executive Officer and Head of Purchase Dept.
April 2006
Senior Executive Officer and Head of Purchase H.Q.
Satoshi Kimura
3,000 shares
June
2006
Managing Director and Head of Purchase H.Q.
(April 1, 1954)
June 2008
Executive Managing Director and Head of Purchase
H.Q.
March 2010
Executive Managing Director
To the present
Reasons for appointment:
Satoshi Kimura has been involved in management and operations of purchasing and administration, thus having
broad experience in the business. Because of the expectation of continuously strengthening the function of decisionmaking and supervision of the Board of Directors, he is a candidate for a Director of the Company.
December 2004
February 2005
March 2005
October 2005
Yasuharu Odachi(July 31, 1958)

April 2006
April 2008

3
June 2008
June 2011

Joined the Company
General Manager of Production Technology Dept.
General Manager of Research & Development Dept.
Head of Research & Development Dept. and Quality
Assurance Dept.
Executive Officer and Head of Research &Development H.Q. and Quality Assurance Dept.
Executive Officer and Head of Research &Development H.Q.
Director and Head of Research & Development H.Q.
Managing Director and Head of Research &Development H.Q.
To the present

2,200 shares

Reasons for appointment:
Yasuharu Odachi has been involved in management and operation of research and development, thus having broad
experience in the business. Because of the expectation of continuously strengthening the function of decision-making
and supervision of the Board of Directors, he is a candidate for a Director of the Company.

– 31 –

No.

Name(Date of birth)

Yasushi Kitagawa(August 12, 1958)
4

Career summary, position, areas of responsibility, and representation ofother organizations
September 2007
November 2007
April 2008

Joined the Company
Deputy Head of Manufacturing Dept.
Deputy Head of Manufacturing Dept. and Head of
Quality Assurance Dept.

April 2009

Executive Officer, Deputy Head of Manufacturing
H.Q. and Head of Quality Assurance Dept.

August 2009

Executive Officer, Head of Manufacturing H.Q. andHead of Quality Assurance Dept.
Director and Head of Manufacturing H.Q. and Headof Quality Assurance Dept.
Managing Director and Head of Manufacturing H.Q.
and Head of Quality Assurance Dept.

June 2010
June 2013

5

6

Number ofshares held

2,000 shares

To the present
Reasons for appointment:
Yasushi Kitagawa has been engaged in management and operation of production, thus having broad experience inthe business. Because of the expectation of continuously strengthening the function of decision-making andsupervision of the Board of Directors, he is a candidate for a Director of the Company.
June 1989
Joined the Company
August 2003
General Manager of Yushin Precision Equipment
Trading (Shenzhen) Co., Ltd.
April 2008
General Manager of Chinese Area and*General Manager of Yushin Precision Equipment
Tomohiro Inano
Trading (Shenzhen) Co., Ltd.
100 Shares
July 2009
Assistant to General Manager of Sales H.Q.
(December 13,
1962)
February 2010
Deputy General Manager of Sales H.Q.
March 2011
General Manager of Sales H.Q.
March 2014
Executive Officer and General Manager of Sales
H.Q.
To the present
Reasons for appointment:
Tomohiro Inano has been involved in management and operation of sales, thus having broad experience in thebusiness. Because of the expectation of strengthening the decision-making and supervising functions of the Boardof Directors, he is a candidate for a Director of the Company.
March 1975
Joined Kyoto Ceramic Co., Ltd.(currently Kyocera
Corporation)
June 1987
Director
June 1992
Senior Managing Director and Representative
Director
June 1997
Executive Vice president and Representative Director
June 1999
President and Representative Director
June 2003
President and Representative Director and President
and Executive Officer
June 2005
Chairman of the Board and Representative Director,
and Chief Executive Officer
Yasuo Nishiguchi
2,700 Shares
April 2006
Advisor and Director(October 9, 1943)
June 2009Retired from the office of Director
June 2013
Outside Director of Zensho Holdings Co., Ltd.
To the present
June 2014
Outside Director of the Company
To the present
March 2015
Chairman and CEO of Socionext Inc.
To the present
June 2016
Outside Director of YAMADA Consulting Group
Co., Ltd.
To the present
Reasons for nomination as an Outside Director:
Yasuo Nishiguchi has held such positions as the President and Representative Director, and the Chairman and
Representative Director at Kyocera Corporation. Based on his knowledge and experience in general management
cultivated through prominent corporate positions, we asked him to give the Company advice and supervision ofoperations as an Independent Director. Thus, because we can expect to strengthen the function of the Company’s
Board of Directors, he is a candidate for an Outside Director of the Company.

– 32 –

No.

Name(Date of birth)

Hiroshi Matsuhisa(August 5, 1947)
7

Note: 12
34Career summary, position, areas of responsibility, and representation ofother organizations
June 1976
Research Assistant of school of precision engineeringin Faculty of Engineering at Kyoto University
October 1987
Assistant professor
April 1994
Professor( transferred to graduate school of department of
Mechanical Engineering and Science by areorganization in 1995 )Number ofshares held

2,000 Shares

April 2012
June 2014

Professor emeritus at Kyoto University
Outside Director of the Company
To the present
June 2016
Outside Corporate Auditor of Technology Seed
Incubation Co., Ltd.
Reasons for nomination as an Outside Director:
Based on the specialized knowledge by the person with academic standing in engineering of Kyoto University, theCompany will ask for advice and oversight from an independent position. Because this will strengthen the functionof the Company’s Board of Directors, Hiroshi Matsuhisa is a candidate for an Outside Director. Although the person
has no experience in direct corporate management, our belief is that he will be able to properly fulfill assigned duties
as an Outside Director of the Company for the reasons cited above.
*The candidates for the new Director
The candidates for Directors have no special interests in the Company.
Yasuo Nishiguchi and Hiroshi Matsuhisa are candidates of Outside Directors.
Yasuo Nishiguchi and Hiroshi Matsuhisa are the present Outside Directors of the Company and their term of office as
Director of the Company is respectively three (3) years at the closing of this General Meeting of Shareholders. The
Company has registered Yasuo Nishiguchi and Hiroshi Matsuhisa as Independent Officers provided in the rules of theTokyo Stock Exchange and submitted notices to this effect to the Exchange. Yasuo Nishiguchi and Hiroshi Matsuhisa
will be continuously registered as Independent Officers if they are reappointed.

– 33 –

Proposal 2: Election of Two (2) Corporate Auditors
The terms of a Corporate Auditor, Shujiro Sawada and Takao Yoshikawa will expire at theconclusion of this meeting.
Accordingly, we propose to elect two (2) new Corporate Auditors.
The Board of Corporate Auditors has consented to this proposition.
The candidates for the position of a Corporate Auditors are as follows:
No.

1

Name
(Date of birth)

Career summary, position, areas of responsibility, andNumber of
representation of other organizations
shares held
March 2008
Joined the Company*
April 2008
General Manager of Personnel Affairs Section
Yoshihisa Nakanishi
1,000 Shares
June 2008
General Manager of Accounting Department
July 2015(June 5, 1959)
General Manager of Internal Audit Office
To the present
Reasons for appointment:
Yoshihisa Nakanishi has been primarily engaged in management and operation of internal audit and accounting
and has extensive experience and achievement. Because of the expectation of strengthening the Company’s audit
competence utilizing his experience and achievement, he is a candidate for a Corporate Auditor of the Company.

April 1981
February 1982*
Michitoshi Morimoto(August 9, 1957)

February 1987
October 1990

Joined FUJITEC Co., Ltd.
Joined Osaka Research Institute of Industrial
Science and Technology
Joined Matsushita Electric Industrial Co., Ltd.
（Panasonic Corporation）
Joined Nomura Research Institute, Ltd.

- Shares

January 2016

2

Note: 1
2
3
4

Joined Human Holdings Co., Ltd.
Executive officer (CIO)
November 2016Retired from the Human Holdings Co., Ltd.
The reason for the nomination as an Outside Corporate Auditor
The specialized knowledge of corporate information technology/system strategy is expected to be put to effective
use for the Company. Our belief is that this must help strengthen the Company’s audit competence. Thus,
Michitoshi Morimoto is a candidate for an Outside Corporate Auditor. Michitoshi Morimoto has no experiencefor business administration directly, but the Company judges that he has the ability to execute business properly
as an Outside Corporate Auditor of the Company as mentioned above.
*The candidates for the new Corporate Auditors
Yoshihisa Nakanishi has no special interests in the Company. The consulting contract concerning ERP system wasentered into between Michitoshi Morimoto and the Company in the past, but the volume of transactions was
insignificant (less than 0.1% of the consolidated net sales).
Michitoshi Morimoto is a candidate of Outside Corporate Auditor.
Michitoshi Morimoto meets the criteria of Independent Officer provided in the rules of the Tokyo Stock Exchange andthe Company plans to register him if he is appointed.

End of Reference Documents– 34 –