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, 2021
Dear Shareholders,

Notice of Convocation for
the 48 Ordinary General Meeting of Shareholdersth

We would like to express our deepest condolences.
Notice is hereby given that the 48th Ordinary General Meeting of Shareholders of YUSHINPRECISION 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 Monday, June 21, 2021
(JST) at the latest.
Please confirm the “Information on Exercise of Voting Rights via the Internet and others” on page 2
and 3 when voting via electromagnetic means.
Details
Tuesday, June 22, 2021 at 10 a.m.
Conference Room on the 6th Floor,
Head Office of YUSHIN PRECISION EQUIPMENT CO., LTD.
555 Kuzetonoshiro-cho, Minami-ku, Kyoto

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
48th Fiscal Year (from April 1, 2020 to March 31, 2021) 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 48th
Fiscal Year (from April 1, 2020 to March 31, 2021)

Agenda for resolution:
Proposal 1: Partial Amendments to the Articles of Incorporation
Proposal 2: Election of Eight (8) Directors
Proposal 3: Election of One (1) Corporate Auditor
Proposal 4: Election of One (1) Substitute Corporate Auditor
Proposal 5: Election of Accounting Auditor
Proposal 6: Revision of Remuneration for Directors

Sincerely Yours,
Mayumi Kotani
Representative Director and President
YUSHIN PRECISION EQUIPMENT CO., LTD.
555 Kuzetonoshiro-cho, Minami-ku,
Kyoto, Japan–1–

Notes: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
the Company’s website: (https://www.ype.co.jp)
Of the documents required to be appended to this Notice of Convocation as attachments, “Consolidated Statements of Changes
in Net Assets”, “Basis of Preparing Consolidated Financial Statements and other Notes”, “Statements of Changes in Net Assets”
and “Significant Accounting Policies and other notes”, have been posted on the Company’s website (https://www.ype.co.jp) in
accordance with laws and regulations and Articles of Incorporation, and are therefore not included in the attached documents.
Besides, “Consolidated Statements of Changes in Net Assets”, “Basis of Preparing Consolidated Financial Statements andother Notes”, “Statements of Changes in Net Assets” and “Significant Accounting Policies and other notes” were audited by the
Accounting Auditor and the Corporate Auditor as part of the Consolidated Financial Statements and the Non-consolidated
Financial Statements in preparing the Audit Report.

<Information on Exercise of Voting Rights via the Internet and others>

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 (https://www.evote.tr.mufg.jp/) via PC, smartphone or mobile phone.
(However, please note that you cannot exercise your voting rights via the Internet on the designatedwebsite between the hours of 2:00 a.m. and 5:00 a.m.)(2) Please note that you may not be able to exercise your voting rights via PC or smartphone dependingon the Internet settings configured on your PC or smartphone, such as firewalls, etc. that are in place
to regulate 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, 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 Monday, June 21, 2021. Shareholders are cordially requested toexercise their voting rights as early as possible. Please call Help Desk as mentioned below with any
inquiries.
2. Methods of exercising of voting rights via the Internet(1) PC, mobile phone method-On the voting rights exercise site designated by the Company (https://www.evote.tr.mufg.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.
-Please note that, in order to prevent unauthorized access to the designated website by individuals
other than shareholders (persons impersonating shareholders) and to prevent the alteration of votes,
we request that you change your "temporary password" to a permanent password on the designatedwebsite for the exercise of voting rights, when you exercise your voting rights via the Internet.
-New “login ID” and “temporary password” will be advised for each notice of convocation for
Ordinary General Meeting of Shareholders.
(2) Smartphone method-Please scan the QR code located on the Voting Rights Exercise Form. You can simply login to thewebsite for exercising voting rights without entering your voting code and password.
-Note that your voting rights can be exercised only once by using the QR code method for security
reason. Please enter “login ID” and “temporary password” when you use QR code for second andsubsequent times.
-Depending on the model of your smartphone, you may not be able to log in with the QR code. If you
cannot do login with the QR code, please exercise your voting rights by 2. (1) PC, mobile phonemethod.
*“QR code” is a registered trademark of DENSO WAVE INCORPORATED.
–2–

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 shallbe deemed valid.
(2) If you exercise your voting rights more than once via Internet, the last exercise of voting rights shallbe deemed valid. If you exercise your voting rights redundantly via PC, smartphone and mobile
phone, the last 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
be borne 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.

–3–

Reference Documents for the General Meeting of Shareholders

Proposal 1: Partial Amendments to the Articles of Incorporation
1. Reasons for the proposal(1) The number of Directors as stipulated in Article 18 of the current Articles of Incorporation shall bechanged from ten (10) to fifteen (15) or less in order to further strengthen the management baseand further expand and enhance corporate governance.
(2) Other necessary amendments will be made to Article 29, Paragraph 3 of the current Articles ofIncorporation.
2. Details of the proposed amendment
The details of the proposed amendment are as follows:(Amendments are underlined)
Current Articles of Incorporation
Proposed Amendment( Number of directors )( Number of directors )Article 18. There shall be within 10 directors of
Article 18. There shall be within 15 directors of
the Company.
the Company.
( Term of auditors )Article 29. (Omission of the provisions)
2. (Omission of the provisions)3. The effective period of theresolution for the election ofsubstitute Auditors elected inaccordance with Article 329,
Paragraph 2 of the Companies Act
shall be until the close of theOrdinary General Meeting of
Shareholders relating to the last
fiscal year ending within four (4)years after their election.
4. (Omission of the provisions)( Term of auditors )Article 29. (Unchanged)
2. (Unchanged)
3. The effective period of the resolution
for the election of substitute Auditors
elected in accordance with Article
329, Paragraph 3 of the Companies
Act shall be until the commencementof the Ordinary General Meeting of
Shareholders relating to the last fiscal
year ending within four (4) years
after their election.
4. (Unchanged)–4–

Proposal 2: Election of Eight (8) Directors
The terms of all Directors (10 members) will expire at the conclusion of this General Meeting of
Shareholders.
The Company therefore requests the election of Director by two (2) and Shareholders are asked to votefor these eight (8) candidates for Directors.
The candidates for the position of Directors are as follows.

No.

Current position in thecompany

Name

Areas of responsibility,
and representation ofother organizations

1

Takayo Kotani

Reappointment

Directorand Executive Vice President

General Manager of
R&D Division2

Yasushi Kitagawa

Reappointment

Executive Managing Director

General Manager of
Manufacturing Division

3

Tomohiro Inano

Reappointment

Director

General Manager ofSales Division

4

Masahito Fukui

Reappointment

Director

General Manager ofCorporate Management
Department

5

Kota Oda

Reappointment

Director

General Manager ofGeneral Affairs
Department

6

Yasuo Nishiguchi

Director

Chairman of YAMADA
Consulting Group Co.,Ltd.

Director

Professor emeritus at
Kyoto University

Director

Director of LUCKLAND
CO.,LTD (Audits
Committee)
Outside Director of
Mandom Corporation

Reappointment
External Independent

Reappointment
7

Hiroshi Matsuhisa
External Independent

Reappointment
8

Reiko Nakayama
External Independent

–5–

No.

Career summary, position, areas of responsibility,
and representation of other organizations

Name(Date of birth)

Reappointment
April 2008
October 2008
April 2009
April 2019
June 2019
June 2020
October 2020

Takayo Kotani
1Joined the Company
Manager of R&D Section
General Manager of R&D Department
Executive Officer and General Manager of R&D Department
Executive Officer and General Manager of R&D Division
Managing Director and General Manager of R&D Division
Director, Executive Vice President
and General Manager of R&D Division (to present)(Name on family register:
Takayo Oda)
(August 26, 1977)

Number of shares held: 1,872,532 shares
Reasons for appointment:
Takayo Kotani has been involved in R&D, promotion of development strategies and management, and has a wealth ofexperience and achievements. Her achievements have been recognized socially, such as receiving the Japan Society of
Mechanical Engineers Prize for the development of robot technology. Since October 2020, she has served as
Executive Vice President, providing leadership in formulating management strategies for sustainable growth andstrengthening the organizational structure of the Company. The Company renominates her for Director because can be
expected to strengthen the decision-making and supervisory functions of the Board of Directors.
Reappointment
September 2007
November 2007
April 2008
April 2009

August 2009
June 2010
2

Yasushi Kitagawa

June 2013(August 12, 1958)
June 2017

July 2020

Joined the Company
Deputy General Manager of Manufacturing Division
Deputy General Manager of Manufacturing Division
and Quality Assurance Department
Executive Officer,
Deputy General Manager of Manufacturing Division
and Quality Assurance Department
Executive Officer, General Manager of Manufacturing Division
and Quality Assurance Department
Director and General Manager of Manufacturing Division
and Quality Assurance Department
Managing Director and General Manager of Manufacturing Division
and Quality Assurance Department
Executive Managing Director
and General Manager of Manufacturing Division
and Quality Assurance Department
Executive Managing Director
and General Manager of Manufacturing Division (to present)

Reasons for appointment: 4,800 shares
Reasons for appointment:
Yasushi Kitagawa has been engaged in management and operation of production, thus having a wealth of experiencein the business. The Company renominates him for Director because can be expected to strengthen the decisionmaking and supervisory functions of the Board of Directors.

–6–

No.

Career summary, position, areas of responsibility,
and representation of other organizations

Name(Date of birth)

Reappointment
June 1989
August 2003
April 2008

3

Tomohiro Inano(December 13, 1962)

July 2009
February 2010
March 2011
March 2014
June 2017

Joined the Company
General Manager of YUSHIN PRECISION EQUIPMENTTRADING (SHENZHEN) CO., LTD.
General Manager of Chinese Area and YUSHIN PRECISIONEQUIPMENT TRADING (SHENZHEN) CO., LTD.
Assistant to General Manager of Sales Division
Deputy General Manager of Sales Division
General Manager of Sales Division
Executive Officer and General Manager of Sales Division
Director and General Manager of Sales Division (to present)

Reasons for appointment: 3,400 shares
Reasons for appointment:
Tomohiro Inano has been involved in management and operation of sales, thus having a wealth of experience in thebusiness. The Company renominates him for Director because can be expected to strengthen the decision-making andsupervisory functions of the Board of Directors.
Reappointment
October 2013
July 2015
April 2017

April 2020

4

Masahito Fukui

June 2020(June 30, 1960)

Joined the Company as General Manager of Internal Audit Office
General Manager of Accounting Department
Executive Officer
and General Manager of Corporate Management Department
and General Manager of Accounting Department
Executive Officer
and General Manager of Corporate Management Department
Director andGeneral Manager of Corporate Management Department (to present)

Number of shares held: 2,200 shares
Reasons for appointment:
Masahito Fukui has been involved in management and operation of group accounting and finance, IT systemmanagement, and auditing, etc., thus having a wealth of experience in the business. The Company renominates him for
Director because can be expected to strengthen the decision-making and supervisory functions of the Board of
Directors.
Reappointment
October 2015
April 2019
June 2020

5

Joined the Company
as General Manager of General Affairs Department
Executive Officer
and General Manager of General Affairs Department
Directorand General Manager of General Affairs Department (to present)

Kota Oda(June 10, 1978)
Number of shares held: 6,000 shares
Reasons for appointment:
Kota Oda has been involved in management and operation of general affairs, human resources, work style reformpromotion, governance strengthening and compliance strengthening, etc., thus having a wealth of experience in thebusiness. The Company renominates him for Director because can be expected to strengthen the decision-making andsupervisory functions of the Board of Directors.

–7–

No.

Career summary, position, areas of responsibility,
and representation of other organizations

Name(Date of birth)

Reappointment
March 1975
June 1987
June 1992
June 1997
June 1999
June 2003
June 2005

Yasuo Nishiguchi
6(October 9, 1943)

April 2006
June 2009
June 2014
March 2015
June 2016
March 2018
April 2020

External

Independent

Joined Kyoto Ceramic Co., Ltd.(currently Kyocera Corporation)
Director
Senior Managing Director and Representative Director
Executive Vice president and Representative Director
President and Representative Director
President and Representative Director and President
and Executive Officer
Chairman of the Board and Representative Director,
and Chief Executive Officer
Advisor and Director
Retired from the office of Director
External Director of the Company (to present)
Chairman and CEO of Socionext Inc.
Outside Director of YAMADA Consulting Group Co., Ltd.
Retired from Chairman and CEO of Socionext Inc.
Chairman of YAMADA Consulting Group Co., Ltd. (to present)

Number of shares held: 39,600 shares
Reasons for selection as a candidate for External Director and expected role:
The Company has renominated Yasuo Nishiguchi as a candidate for External Director to continue to utilize hisknowledge and experience in all aspects of management, which he has cultivated through his key positions as President
and Representative Director and the Chairman of Kyocera Corporation, in the management of the Company. He is
expected to strengthen the functions of the Board of Directors of the Company by providing management advice andsupervision from an independent standpoint, utilizing his specialized knowledge as a person with management
experience.
Reappointment
June 1976
October 1987
April 1994

Hiroshi Matsuhisa
7

April 2012
June 2014
June 2016(August 5, 1947)
June 2018

External Independent

Research Assistant of school of precision engineering in Faculty ofEngineering at Kyoto University
Assistant professor
Professor( transferred to graduate school of department of MechanicalEngineering and Science by a reorganization in 1995 )Professor emeritus at Kyoto University (to present)
External Director of the Company (to present)
Outside Corporate Auditor ofTechnology Seed Incubation Co., Ltd.
Retired from Outside Corporate Auditor ofTechnology Seed Incubation Co., Ltd.

Number of shares held: 10,000 shares
Reasons for selection as a candidate for External Director and expected role:
The Company has renominated Hiroshi Matsuhisa as a candidate for External Director to continue to utilize his expertiseas an academic expert in engineering in the management of the Company. He is expected to strengthen the functions of
the Board of Directors of the Company by providing advice and supervision of management from an independent
standpoint. Although he has no experience for business administration directly, the Company judges that he has the ability
to perform duty properly as an External Director of the Company as mentioned above.

–8–

No.

Career summary, position, areas of responsibility,
and representation of other organizations

Name(Date of birth)

Reappointment
April 1983

8

Reiko Nakayama(April 2, 1959)

January 1997
March 2000
October 2004
October 2008
February 2009
March 2013
March 2015
March 2016

June 2018
June 2019
Number of shares held: 10,062 shares

External Independent

Joined Japan Associated Finance Co., Ltd. (currently JAFCO Co.,
Ltd)
Joined Marusan Securities Co., Ltd.
General Manager of Investment information
General Manager of Underwriting
Part-time Director of LivTech, Inc.
Director and Head of Administrative H.Q. of LivTech, Inc.
Retired from the office of Director of LivTech, Inc.
Outside Director of LUCKLAND CO.,LTD
Director of LUCKLAND CO.,LTD (Audits Committee)(to present)
External Director of the Company (to present)
Outside Director of Mandom Corporation (to present)

Reasons for selection as a candidate for External Director and expected role:
The Company has renominated Reiko Nakayama as a candidate for External Director to continue to apply her abundantinsight based on her experience as a general manager of an underwriting department of a securities company, an officer
in charge of administration of an operating company, and an External Director to the management of the Company. She
is expected to strengthen the functions of the Company's Board of Directors by providing management advice andsupervision from an independent standpoint.
Note:
1. The candidates for Directors have no special interests in the Company.
2. Yasuo Nishiguchi, Hiroshi Matsuhisa and Reiko Nakayama are candidates of External Directors.
3. Yasuo Nishiguchi, Hiroshi Matsuhisa and Reiko Nakayama are the present External Directors of the Company. Yasuo
Nishiguchi and Hiroshi Matsuhisa term of office as Director of the Company is respectively seven (7) years at the closingof this General Meeting of Shareholders, Reiko Nakayama term of office as Director of the Company is three (3) year at
the closing of this General Meeting of Shareholders
4. The Company has registered Hiroshi Matsuhisa and Reiko Nakayama as Independent Officers provided in the rules of
the Tokyo Stock Exchange and submitted notice to this effect to the Exchange. If Hiroshi Matsuhisa and Reiko Nakayama
are reappointed, the Company plans to continue to make them Independent Officers. In addition, Yasuo Nishiguchi
satisfies the requirements for Independent Officers as stipulated by the Tokyo Stock Exchange, and the Company plans
to appoint him as an Independent Officer in the event that he is reappointed.
5. The Company's Articles of Incorporation stipulate that the Company may enter into agreements with Directors (excluding
those who are Executive Directors, etc.) to limit their liability for damages due to negligence of their duties. IF Yasuo
Nishiguchi, Hiroshi Matsuhisa and Reiko Nakayama are reappointed, the Company will conclude a contract for limitationof liability with them to limit their liability to the amount stipulated in laws and regulations.
6. If Takayo Kotani, Yasushi Kitagawa, Tomohiro Inano, Masahito Fukui, Kota Oda, Yasuo Nishiguchi, Hiroshi Matsuhisa
and Reiko Nakayama are reappointed, the Company plans to enter into an indemnity agreement with each of them to theeffect that the Company will indemnify them for the expenses set forth in Article 430-2, Paragraph 1, Item 1 of theCompanies Act and the loss set forth in Item 2 of the same Paragraph to the extent provided by law.
7. The Company has concluded Directors and Officers Liability Insurance (hereinafter referred to as "D&O Insurance") as
stipulated in Article 430-3, Paragraph 1 of the Companies Act with the insurance company. The insurance company will
cover any damages, etc. (However, damages that fall under the reasons for exemption specified in the insurance contract
are excluded.) that the Corporate Auditors, etc. are liable for damages due to their work. The Company bears the entire
premium for D&O insurance. If Takayo Kotani, Yasushi Kitagawa, Tomohiro Inano, Masahito Fukui, Kota Oda, Yasuo
Nishiguchi, Hiroshi Matsuhisa,and Reiko Nakayama are reappointed, they will continue to be insured by D&O insurance.
The contract period for D&O insurance is one year, and it will be renewed after a resolution by the Board of Directors
before the expiration of the period.

–9–

Proposal 3: Election of One (1) Corporate Auditor
The terms of Corporate Auditors, Yoshihisa Nakanishi and Michitoshi Morimoto will expire at theconclusion of this General Meeting of Shareholders.
The Company therefore requests the election of one (1) new Corporate Auditor.
The Board of Corporate Auditors has consented to this proposition.
The candidate for the position of Corporate Auditor is as follows:
Career summary, position, areas of responsibility,
and representation of other organizations

Name(Date of birth)

No.

New
April 1990
April 1990
October 1995
June 2003
June 2009

External Independent

Registered as attorney
Joined Honda Mutsushi Law Office.
Joined Naniwabashi Law Office(currently “Naniwabashi Law Office LPC”)
Outside Corporate Auditor of TOYO SHUTTER CO., LTD.
(to present)
Senior Partner of Naniwabashi Law Office LPC (to present)

Naohiro Tsuda
1(August 14, 1956)

Number of shares held: - shares
The reason for the nomination as an External Corporate Auditor:
The Company nominates Naohiro Tsuda as a candidate for External Corporate Auditor because it is expected that theauditing function will be strengthened by utilizing his specialized knowledge as an attorney and his abundant knowledgeof corporate legal affairs in the Company’s auditing. Although he has no experience for business administration directly,
the Company judges that he has the ability to perform duty properly as an External Corporate Auditor of the Company
as mentioned above.
Note: 12
3
4
5
6

Naohiro Tsuda is candidate of new Corporate Auditor.
Naohiro Tsuda has no special interests in the Company.
Naohiro Tsuda satisfies the requirements for Independent Officers as stipulated by the Tokyo Stock Exchange, and theCompany plans to appoint him as an Independent Officer in the event that he is appointed.
The Company's Articles of Incorporation stipulate that the Company may enter into agreements with Corporate Auditors
to limit their liability for damages due to negligence of their duties. If Tetsuya Nonaka is appointed, the Company willconclude a contract for limitation of liability with him to limit his liability to the amount stipulated in laws and regulations.
If Naohiro Tsuda is appointed, the Company plans to enter into an indemnity agreement with him to the effect that theCompany will indemnify him for the expenses set forth in Article 430-2, Paragraph 1, Item 1 of the Companies Act andthe loss set forth in Item 2 of the same Paragraph to the extent provided by law.
The Company has concluded Directors and Officers Liability Insurance (hereinafter referred to as "D&O Insurance") as
stipulated in Article 430-3, Paragraph 1 of the Companies Act with the insurance company. The insurance company will
cover any damages, etc. (However, damages that fall under the reasons for exemption specified in the insurance contract
are excluded.) that the Corporate Auditors, etc. are liable for damages due to their work. The Company bears the entire
premium for D&O insurance. If Naohiro Tsuda is appointed as a Corporate Auditor, he will be insured by D & O
Insurance.
The contract period for D&O insurance is one year, and it will be renewed after a resolution by the Board of Directors
before the expiration of the period.

– 10 –

Proposal 4: Election of One (1) Substitute Corporate Auditor
In case the number of Corporate Auditors required by law is insufficient, the Company requests theelection of one (1) Substitute Corporate Auditor.
The Board of Corporate Auditors has consented to this proposition.
The candidate for the position of substitute Corporate Auditor is as follows:
Career summary, position, areas of responsibility,
and representation of other organizations

Name(Date of birth)

No.

New
October 2004
October 2004

External Independent

Registered as attorney
Joined Naniwabashi Law Office(currently “Naniwabashi Law Office LPC”) (to present)

Tetsuya Nonaka(September 25, 1976)

1

Number of shares held: - shares
The reason for the nomination as a substitute External Corporate Auditor:
The Company nominates Tetsuya Nonaka as a candidate for Substitute External Corporate Auditor because it is expectedthat the auditing function will be strengthened by utilizing his specialized knowledge as an attorney and his abundant
knowledge of corporate legal affairs in the Company’s auditing. Although he has no experience for businessadministration directly, the Company judges that he has the ability to perform duty properly as an External Corporate
Auditor of the Company as mentioned above.
Note: 12
3
4
5
6

Tetsuya Nonaka is candidate of substitute Corporate Auditor.
Tetsuya Nonaka has no special interests in the Company.
Tetsuya Nonaka satisfies the requirements for Independent Officers as stipulated by the Tokyo Stock Exchange, and theCompany plans to appoint him as an Independent Officer in the event that he is appointed.
The Company's Articles of Incorporation stipulate that the Company may enter into agreements with Corporate Auditors
to limit their liability for damages due to negligence of their duties. If Tetsuya Nonaka is appointed, the Company willconclude a contract for limitation of liability with him to limit his liability to the amount stipulated in laws and regulations.
If Tetsuya Nonaka is appointed, the Company plans to enter into an indemnity agreement with him to the effect that theCompany will indemnify him for the expenses set forth in Article 430-2, Paragraph 1, Item 1 of the Companies Act andthe loss set forth in Item 2 of the same Paragraph to the extent provided by law.
The Company has concluded Directors and Officers Liability Insurance (hereinafter referred to as "D&O Insurance") as
stipulated in Article 430-3, Paragraph 1 of the Companies Act with the insurance company. The insurance company will
cover any damages, etc. (However, damages that fall under the reasons for exemption specified in the insurance contract
are excluded.) that the Corporate Auditors, etc. are liable for damages due to their work. The Company bears the entire
premium for D&O insurance. If Tetsuya Nonaka is appointed as a Corporate Auditor, he will be insured by D & O
Insurance.
The contract period for D&O insurance is one year, and it will be renewed after a resolution by the Board of Directors
before the expiration of the period.

– 11 –

Proposal 5: Election of Accounting Auditor
The terms of Accounting Auditor “Deloitte Touche Tohmatsu LLC” will expire at the conclusion of this
General Meeting of Shareholders. The Company therefore requests the election of new Accounting
Auditor.
The Board of Corporate Auditors has consented to this proposition.
The reason why the Board of Corporate Auditors has selected “Grant Thornton Taiyo LLC” as a
candidate for Accounting Auditor is that it can be expected to audit from a new perspective by changing
the Accounting Auditor. In addition, they have many audit records of companies engaged in themachinery manufacturing industry, which is the main business of the Group, and we can expect audits
based on an understanding of the Group's business activities. Also, they have the expertise,independence, quality control system, etc. required for Accounting Auditors. As a result ofcomprehensive consideration of these factors, the Board of Corporate Auditors has determined that it isappropriate to appoint as an Accounting Auditor of the Company.
The candidate for the position of Accounting Auditor is as follows:(as of March 31, 2021)
Name
OfficeProfileGrant Thornton Taiyo LLC
Main Office
1-2-7 Motoakasaka, Minato-ku, Tokyo
Capital
580 million yen
Managing partner /Members
84 person
Partner
Specified partner
4 person
CPA
308 person
Passed CPA exam, etc.
227 person
Other professions
199 person
Office worker
85 person
Total
907 person(excluding part-time)
Number of Audited
984 companies
Companies

Note: The Company's Articles of Incorporation stipulate that the Company may enter into agreements with Accounting Auditor
to limit their liability for damages due to negligence of their duties. If “Grant Thornton Taiyo LLC” is appointed, theCompany will conclude a contract for limitation of liability with them to limit their liability to the amount stipulated in laws
and regulations.

– 12 –

Proposal 6: Revision of Remuneration for Directors
The amount of remuneration for the Directors of the Company has been resolved at the 43rd Ordinary
General Meeting of Shareholders held on June 20, 2016 to be within 500,000 thousand yen (of which
100,000 thousand yen or less for External Directors) per year.
In order to prepare for the payment of remuneration according to future business performance andfinancial conditions, and to establish a remuneration level suitable for securing excellent humanresources, the Company will change the remuneration of Directors within 700,000 thousand yen (ofwhich 100,000 thousand yen or less for External Directors) per year.
This revision of the remuneration amount will be revised in consideration of the above circumstances.
The Nomination and Remuneration Committee of the Company also submitted an opinion that it isappropriate in line with the decision policy (Overview is described on page 21 of the business report)
regarding the content of individual remuneration, etc. of Directors resolved by the Board of Directors of
the Company. In addition, even if this proposal is approved, there are no plans to change the policy.
Based on the above, the Company has determined that the content of this proposal is appropriate.
In addition, as in the past, the amount of remuneration for Directors does not include salaries for
employees who also serve as employees. Currently, there are 10 Directors (including 3 External
Directors). If Proposal No. 2 "Election of Eight (8) Directors" is approved as originally proposed, thenumber of Directors will be 8 (including 3 External Directors).

– 13 –

(Submitted Documents)

Business Report(from April 1, 2020 to March 31, 2021)
1.

Current Business Conditions(1) Progress and achievements
Regarding the global economy during this fiscal year under review, as a result of the global spread of
COVID-19 infection, business activities continue to be greatly restricted and the global economy is in asevere situation of negative growth. Although business sentiment has been improving due to the increase invaccination rates, the global situation remains uncertain as there is still no prospect of global convergence.
Under these circumstances, YUSHIN Group has continued to develop new customers on a global scale,
while paying careful attention to the spread of COVID-19, with the safety of our customers, business
partners and employees as our top priority. As a result, from the third quarter of the consolidated fiscal
year, both domestic and overseas orders began to pick up, and the recovery trend in capital investment wasparticularly noticeable in China and some other Asian countries. As for the business results for the
consolidated fiscal year, sales in North America were strong, mainly in the medical field, and sales in
China and South Korea also increased compared to the same period of the previous year, mainly in the
medical field, while sales of take-out robots in Japan decreased compared to the same period of theprevious year due to a decline in capital investment. Sales of Custom-ordered equipment in Europe
decreased from the same period of the previous fiscal year, despite a certain level of sales, due to a small
number of large projects. As a result, consolidated net sales decreased by 7.7% year on year to 18,473
million yen. In terms of profits, operating profit increased by 9.2% from the previous fiscal year to 2,522
million yen, due to the improvement in gross profit margin and cost reduction efforts, despite the decreasein sales. Ordinary profit increased by 18.3% to 2,608 million yen due to foreign exchange gains, and profit
attributable to owners of parent increased by 19.2% to 1,827 million yen.
In addition, in June 2020, we started sales of the space-saving palletizing robot "PA" series, which ismainly used in packaging and distribution sites. We will aim to expand sales to markets other than theplastic injection molding industry. In March 2021, we also started sales of the "LA" series take-out robots
for large molding machines.

– 14 –

Consolidated net sales by product category(Thousands of yen)
Years ended March 31,

2020

Product

Amount2021%

AmountY/Y%%

Take-out robots

12,770,127

63.8

11,904,506

64.4

(6.8)

Custom-ordered
equipment

4,056,072

20.3

3,422,063

18.5(15.6)

Parts and maintenanceservice

3,185,499

15.9

3,147,394

17.0

(1.2)

Total

20,011,700

100.0

18,473,964

100.0

(7.7)

(2) Capital investment
The total amount of capital investment for the YUSHIN Group effectuated over the course of the period
under review was 125 million yen mainly for the mold price in H.Q. at 14 million yen.
(3) Financing activities
No material items to report.
(4) Assets and operating results 2018 - 2021
Years ended March 31,

2018

2019

2020

2021

Net sales(thousands of yen)

20,878,651

21,833,399

20,011,700

18,473,964

Ordinary profit(thousands of yen)

2,432,690

2,791,364

2,205,033

2,608,925

Profit attributable toowners of parent(thousands of yen)

1,626,768

1,903,435

1,532,851

1,827,868

Earnings per share
(yen)

46.51
(Note 2)

54.54

45.01

53.70

Total assets(thousands of yen)

32,572,888

33,197,260

31,933,368

34,688,675

Net assets(thousands of yen)

26,472,034

27,117,484

27,471,961

29,199,402

Book value per share(yen)

750.37(Note 2)783.03800.04850.95

Notes:
1
Earnings per share is calculated based on the average number of issued shares during the fiscal year and Book value pershare are calculated based on the number of issued shares at the end of the fiscal year.
2
The Company carried out a stock split on April 1, 2018, at a ratio of two shares per one common share. Accordingly,
Earnings per share and Book value per share has been calculated presuming that this stock split was carried out at thestart of the consolidated fiscal year ended on March 31, 2018.

– 15 –

(5) Issues to be addressed
As for the business environment surrounding the YUSHIN Group, the prolongation of U.S.-China trade
friction and the global spread of COVID-19, the outlook is likely to remain uncertain.
Under these circumstances, the YUSHIN Group will continue to swiftly grasp changes in the businessenvironment and aim to develop itself further as a leading company across the board in the Take-out robot
industry with the YUSHIN Group philosophy “Through the ongoing creation of innovative technology, we
make a far-reaching contribution to society on a global scale”.
As for issues to be addressed, in the Take-out robot, we will expand sales of Take-out robots which isdifferentiated by strengthening product power and strengthen our sales capabilities worldwide. In the new
business area, the YUSHIN Group must develop and bring new products to the market in the business area
where the YUSHIN Group can manifest technological and/or sales synergies in order to establish multiple
core businesses. In addition to these efforts, we will strengthen organizational development and humanresource development, and strive for sustainable growth.
Specific effort for the 49th (FY2022), we will strive to increase our market share by expanding salesof take-out robot developed in the 48th fiscal year that are suitable for each region of the global market,
and we will further accelerate robot development to further strengthen our product capabilities. We will
also further accelerate the development of robots to further strengthen our product capabilities.
For Custom-ordered equipment, we will continue to expand sales and develop new businesses in
response to the growing need for automation in Japan and overseas due to the shortage of manpower andhygiene considerations. We will continue to strive to expand sales and develop new businesses. In
particular, we will focus on sales of the "PA" series of palletizing robots, which were launched in the 48th
fiscal year and are expected to expand the user base.
To strengthen our organizational strength, we will improve productivity by strengthening cooperation
among departments, enhancing IT systems, and improving the quality, efficiency, and speed of ouroperations.
Furthermore, we will work to improve the corporate brand value by instilling the corporate identity(CI), which was compiled to clarify the attitude necessary to open up a new era, while inheriting thestrengths and advantages of the YUSHIN group.
Regarding crisis management, we will continue to take thoroughly prevent COVID-19, strengthen ourinternal system including disaster prevention, and strive to maintain the provision of products and services
to our customers.

– 16 –

(6) Status of major subsidiaries
Name

YUSHIN KOREA CO., LTD.

YUSHIN PRECISIONEQUIPMENT TRADING(SHANGHAI) CO., LTD.
YUSHIN PRECISIONEQUIPMENT TRADING(SHENZHEN) CO., LTD.
YUSHIN PRECISIONEQUIPMENT (TAIWAN) CO.,LTD.

Location

Siheung-Shi,
South Korea

Shanghai,
China
Shenzhen,
Guangdong,
China
Taipei City,
Taiwan(R.O.C.)

Capital stock

Percentage ofshareholding

KRW350 million

100%

US$200,000

100%

US$400,000

100%

NT$5 million

100%

PT. YUSHIN PRECISIONEQUIPMENT INDONESIA

Bekasi,Indonesia

IDR2,841 million

99%

YUSHIN PRECISIONEQUIPMENT (VIETNAM)
CO., LTD.

Hanoi,
Vietnam

US$300,000

100%

YUSHIN PRECISIONEQUIPMENT SDN. BHD.

Selangor,
Malaysia

MYR1 million

100%

YUSHIN PRECISIONEQUIPMENT (THAILAND)
CO., LTD.

Bangkok,Thailand

THB8 million

49%

YUSHIN PRECISIONEQUIPMENT (INDIA) PVT.
LTD.

Chennai,
India

INR17.4million

97.9%

YUSHIN EUROPE GMBH

Bayern,Germany

EUR25,000

100%

YUSHIN AUTOMATIONLTD.

Worcestershire,
U.K.

GBP150,000

95.6%

YUSHIN AMERICA, INC.

Rhode Island,
U.S.A.

US$8,000

100%

GUANGZHOU YUSHINPRECISION EQUIPMENT
CO., LTD.

Guangzhou,
Guangdong,
China

RMB13.742
million100%– 17 –

Major operations
Sales and maintenance &repair of the Company
products.
Manufacturing, sales andmaintenance & repair ofCustom-ordered equipment
Sales and maintenance &repair of the Company
products
Sales and maintenance &repair of the Company
products
Sales and maintenance &repair of the Company
products
Sales and maintenance &repair of the Company
products
Sales and maintenance &repair of the Company
products
Sales and maintenance &repair of the Company
products
Sales and maintenance &repair of the Company
products.
Manufacturing, sales andmaintenance & repair ofCustom-ordered equipment
Sales and maintenance &repair of the Company
products
Sales and maintenance &repair of the Company
products
Sales and maintenance &repair of the Company
products
Sales and maintenance &repair of the Company
products.
Manufacturing, sales andmaintenance & repair ofCustom-ordered equipment
Manufacturing of theCompany products(7) Major operations (as of March 31, 2021)
The YUSHIN Group is mainly engaged in the development, manufacture and sale of Take-out robots
for plastic injection molding products and stock systems as well as factory automation systems for molding
plants.
(8) Main sales offices and factories (as of March 31, 2021)
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

Nishi-Kanto Sales Office

Atsugi-city, Kanagawa

Nagano Sales Office

Shiojiri-city, Nagano

Tohoku Sales Office

Fukushima-city, Fukushima

Tsukuba Sales Office

Tsukuba-city, Ibaraki

Chubu General Sales Office

Toyokawa-city, Aichi

Shizuoka Sales Office

Suruga-ku, Shizuoka-city

Nagoya-Nishi Sales Office

Kuwana-city, Mie

Nishi-Nihon General Sales Office

Minami-ku, Kyoto-city

Toyama Sales OfficeToyama-city, Toyama

Hiroshima Sales Office

Asaminami-ku, Hiroshima-city

Fukuoka Sales Office

Hakata-ku, Fukuoka-city

Philippines Representative Office

Makati City, Philippines(9) Employees (as of March 31, 2021)
Number of employees

Increase from the end of previous FY

681 (54)(8)

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, 2021)
No items to report.
(11) Other important matters pertaining to the status
No items to report.

– 18 –

2.

Matters Pertaining to the Shares of the Company (as of March 31, 2021)
(1)
(2)
(3)
(4)

Number of shares authorized:
Total number of issued shares:
Number of shareholders:Major shareholders:

80,000,000
35,638,066
4,320
Number of shares held
(thousand)

Name

Percentage ofshares held (%)

Yushin Industry Co., Ltd.

11,992

35.2

Takayo Oda

1,872

5.5

Miki Murata

1,847

5.4

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

1,660

4.9

Custody Bank of Japan, Ltd. (Trust Account)

1,514

4.4

The Kyoto Chuo Shinkin Bank, Ltd.

1,088

3.2

Mayumi Kotani

1,040

3.1

RBC IST 15 PCT NON LENDING ACCOUNT-CLIENT
ACCOUNT862

2.5

MUFG Bank, Ltd.

849

2.5

STATE STREET BANK AND TRUST COMPANY
505001

830

2.4

Note:
1. The company holds 1,602,518 shares of treasury shares but is excluded from this number.
2. Shareholding ratio is calculated by deducting treasury shares.

– 19 –

3.

Matters Pertaining to Officers of the Company(1) Directors and Corporate Auditors (as of March 31, 2021)
Position

Responsibilities and representation ofother organization

Name

Representative Director
and President

Mayumi Kotani

Director and Executive
Vice President

Takayo Kotani

General Manager of R&D Division

Executive Managing Director

Satoshi Kimura

General Manager of Purchase Division

Executive Managing Director

Yasushi Kitagawa

General Manager of Manufacturing Division

Director

Tomohiro Inano

General Manager of Sales Division

Director

Masahito Fukui

General Manager of Corporate Management Department

Director

Kota Oda

General Manager of General Affairs Department

Director

Yasuo Nishiguchi

Chairman of YAMADA Consulting Group Co., Ltd.

Director

Hiroshi Matsuhisa

Professor emeritus of Kyoto University

Director

Reiko Nakayama

Director of LUCKLAND CO.,LTD (Audits Committee)
Outside Director of Mandom Corporation

Full-time Corporate Auditor

Yoshihisa Nakanishi

Full-time Corporate Auditor

Katsumi Noda

Corporate Auditor

Hiroho Kamakura

Corporate Auditor

Michitoshi Morimoto

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

Notes:
1.
Directors, Yasuo Nishiguchi, Hiroshi Matsuhisa and Reiko Nakayama are External Directors stipulated in Item 15, Article 2of the Companies Act.
2.
Corporate Auditors, Hiroho Kamakura and Michitoshi Morimoto are External Corporate Auditors stipulated in Item 16,
Article 2 of the Companies Act.
3.
Corporate Auditor, Hiroho Kamakura is a Certified Public Accountant and has specialist knowledge in finance and accounting.
4.
The Company has designated Director, Hiroshi Matsuhisa, Director, Reiko Nakayama, Corporate Auditor, Hiroho Kamakura
and Corporate Auditor, Michitoshi Morimoto as Independent Officers as prescribed by the Tokyo Stock Exchange andsubmitted notices to this effect to the exchange.
5.
Change of Directors and Corporate Auditor during the period under review
Name

Takayo Kotani

Yasushi Kitagawa

Masahito Fukui
Kota Oda
Yasuo Nishiguchi
Katsumi Noda

Before change

After change

Executive officer
General Manager of R&D Division

Managing Director
General Manager of R&D Division
Director and Executive Vice
President and General Manager of
R&D Division

Managing Director
General Manager of R&D Division
Executive Managing Director
General Manager of Manufacturing
Division and Quality Assurance
Department
Executive officer
General Manager of Corporate
Management Department
Executive officer
General Manager of General Affairs
Department
Outside Director of YAMADA
Consulting Group Co., Ltd.
System Engineering Department– 20 –

Executive Managing Director
General Manager of Manufacturing
Division
Director
General Manager of Corporate
Management Department
Director
General Manager of General Affairs
Department
Chairman of YAMADA Consulting
Group Co., Ltd.
Full-time Corporate Auditor

Date of change
June 24, 2020
October 1, 2020

July 1, 2020

June 24, 2020
June 24, 2020
April 1, 2020
June 24, 2020

6.

The Company has concluded Directors and Officers Liability Insurance (hereinafter referred to as "D&O Insurance") as
stipulated in Article 430-3, Paragraph 1 of the Companies Act with the insurance company. The scope of insured persons
under the D&O insurance is Directors, Corporate Auditors, Executive Officers and Employees. The insurance company will
cover the damages, etc. (However, damages that fall under the disclaimer stipulated in the insurance contract are excluded)
when the insured is liable for damages due to business. The Company bears the entire premium for D&O insurance.

(2) Policy for Determining the Content of Remuneration and the Other for Directors
1. Current Policy
At a meeting of the Board of Directors held on February 5, 2021, the Company passed a resolution on
the policy for deciding the details of remuneration, etc. for each individual director. The Board of
Directors has consulted the Nomination and Compensation Committee regarding the details of theresolution and received its report.
The Board of Directors has confirmed that the method of determining the content of remuneration, etc.
and the content of remuneration, etc. determined are consistent with the relevant decision policy and thatthe report from the Nomination and Compensation Committee has been respected, and has determined thatthe content of remuneration, etc. for individual Directors for the relevant fiscal year is in line with therelevant decision policy.
(a) Policy on determining the amount of remuneration, etc. for each individual director and the method of
calculation thereofRemuneration for Directors of the Company consists of fixed remuneration and performance-linked
remuneration, the level of which is determined in consideration of business performance and other factors.
Remuneration, etc., for External Directors consists of fixed remuneration, and it is our policy not to pay
performance-linked remuneration from the viewpoint of independence for business execution.
(b) Details of the performance indicators pertaining to the performance-linked remuneration, etc. and themethod of calculating the amount or number of such performance-linked remuneration, etc.
The performance-linked remuneration is indexed to ordinary income, which is a financial figure thatindicates the earnings status of the Company.
(c) Policy on determining the ratio of remuneration, etc. to the amount of remuneration, etc. for eachindividual director
The Company's current remuneration system for Directors consists of fixed remuneration (basic
remuneration) and performance-linked remuneration, with performance-linked remuneration based on
short-term performance. The remuneration composition ratio for Directors is set based on the level ofcompanies with similar business scale and related performance and business categories as the Company.
(d) Policy on determining the timing and conditions of remuneration, etc. to be paid to Directors
The basic remuneration for Directors of the Company is fixed monthly remuneration, which isdetermined by comprehensively taking into account the duties they are in charge of, the performance ofeach fiscal year, and the degree of their contribution. Bonuses for directors are paid once a year inaccordance with performance indicators and the degree of achievement of targets for a single fiscal year.
(e) Matters concerning the delegation of decision on the details of individual remuneration, etc. of
Directors
The Nomination and Compensation Committee, which is an advisory body to the Board of Directors,
deliberates on the remuneration system for Directors and other matters, reports to the Board of Directors
or expresses its opinions, and the President and Representative Director, who is entrusted by the Board of
Directors, decides the amount of remuneration, etc. for Directors based on the above calculation policy.
The contents delegated to the representative directors is the amount of basic remuneration for eachdirector and the evaluation and allocation of bonuses based on business performance. The Nomination andCompensation Committee is chaired by External Director Yasuo Nishiguchi, and its other members are
Representative Director and President Mayumi Kotani, Director and Executive Vice President Takayo
Kotani, External Director Hiroshi Matsuhisa, External Director Reiko Nakayama, External Corporate
Auditor Hiroho Kamakura, and External Corporate Auditor Michitoshi Morimoto.
No other non-monetary remuneration for Directors is treated.
2. Future Considerations- As for the future policy of the remuneration system for directors and corporate auditors, the Company
will consider the details of the system based on objective and transparent procedures, and the setting of alevel of remuneration that will attract, motivate and retain excellent human resources, while obtaining– 21 –

reports and opinions from the Nomination and Compensation Committee.
- In addition, while formulating and executing the medium-term management plan, the Company willconcretize the system structure of medium- to long-term performance-linked remuneration (how cash
remuneration and stock remuneration should be, the ratio of basic remuneration to performance-linked
remuneration, etc.) in accordance with the degree of achievement of the plan and the increase incorporate value.
(3) Total remuneration and other payments made to Directors and Corporate Auditors

Classification

Total remunerationand other payments(Thousands of yen)

Total amount by type of remuneration and otherpayments (Thousands of yen)Fixed
remuneration

Performancelinked
remuneration,etc.

Non-monetary
remuneration,etc.

Number oftargetDirectors/
Corporate
Auditors

Directors(Excluding External Directors)

197,888

155,088

42,800-7

External Directors

16,80016,800--3

Subtotal

214,688

171,888

42,800-10

Corporate Auditors(Excluding External Corporate
Auditors)

21,00021,000--2

External Corporate Auditors

9,600

9,600

-

-

2

Subtotal

30,60030,600

-

-

4

Total

245,288

202,488

42,800-14

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 External Directors within 100,000 thousand yen）and total
remuneration for all Corporate Auditors within 100,000 thousand yen per year.
At the end of the General Meeting of Shareholders, the number of Directors is 6 (including 2 External Directors) and thenumber of Corporate Auditors is 4.
There are currently no Directors who have concurrent employment positions.
2. The index related to executive bonuses, such as performance-linked remuneration, is ordinary profit, and we have selected thisindex because it is a financial figure that indicates the profit status of the company. The calculation method of performancelinked remuneration, etc. is determined by multiplying the index by a certain coefficient for each position after
comprehensively considering the duties in charge, performance of each period, contribution level, etc. (The target of the index
related to performance-linked remuneration for the current fiscal year is 2,200,000 thousand yen, and the actual result is
1,972,280 thousand yen.)
3. With respect to the provision for retirement benefits for 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. As of the end of March 2021, one of the incumbent directors had
reserved 66,780 thousand yen according to the period during which she was appointed as a Director before June 2006. She isscheduled to retire at the 48th Ordinary General Meeting of Shareholders held on June 22, 2021, and is expected to be paid infull during the 49th term.
4. The procedure for determining the amount of remuneration for officers is as follows: The Nomination and Compensation
Committee first deliberates on the remuneration system for directors, and then reports or gives opinions to the Board of
Directors. Then, Representative Director and President - Mayumi Kotani, who has been entrusted by the Board of Directors,
makes the decision within the upper limit resolved at the General Meeting of Shareholders, taking into consideration theirduties, achievements and contributions for each term. The reason for delegating to the Representative Director is that wehave determined that it is suitable for evaluating the duties of each Director, taking into consideration the businessperformance of the Company as a whole. In addition, the Nomination and Compensation Committee deliberates on important
policies in advance to determine the delegated content.

– 22 –

(4) External Directors and External Corporate Auditors
a. Important position at other organizations and the relationship between the company and other organizations.
- Yasuo Nishiguchi is the Chairman of YAMADA Consulting Group Co., Ltd. There is no special relationship between
the Company and YAMADA Consulting Group Co., Ltd.
- Hiroshi Matsuhisa is a professor emeritus of Kyoto University. There is no special relationship between the Company
and Kyoto University.
- Reiko Nakayama is the Director of LUCKLAND CO., LTD (Audits Committee) and the Outside Director of Mandom
Corporation. There is no special relationship between the Company and LUCKLAND CO., LTD. and Mandom
Corporation.
- Hiroho Kamakura is the Outside Corporate Auditor of Trusco Nakayama Corporation, FUJIO FOOD SYSTEM CO.,LTD. and SymEnergy Inc. There is no special relationship between the Company and Trusco Nakayama Corporation,
FUJIO FOOD SYSTEM CO., LTD., and SymEnergy Inc.
b. The following describes the activities during the period under review.
Attendance, Remarks and Outline of Duties Performed
Status and Name
Regarding the Roles Expected of External Directors

Director, Yasuo Nishiguchi

Director, Hiroshi Matsuhisa

Director, Reiko Nakayama

In the period under review, Yasuo Nishiguchi attended all of 13 Meetings ofBoard of Directors. Based on his wide knowledge and experience across therunning a company which he had cultivated through holding prominent
corporate positions such as President and Representative Director, andChairman of the Board and Representative Director at Kyocera Corporation, hesupervises and advises management from a professional standpoint. He plays
an appropriate role in ensuring the adequacy of decision making. Also, as amember of the Nomination and Compensation Committee, he attended all of 4
Committee Meetings held in the current fiscal year and lead the supervisory
function in the process of selecting executive candidates and determining
executive compensation, etc from an objective standpoint.
In the period under review, Hiroshi Matsuhisa attended 12 of 13 Meetings ofBoard of Directors. Based on the specialized knowledge by the person withacademic standing in engineering, he supervises and advises management froma professional and independent standpoint. He plays an appropriate role inensuring the adequacy of decision making. Also, as a member of theNomination and Compensation Committee, he attended all of 4 Committee
Meetings held in the current fiscal year and take on the supervisory function in
the process of selecting executive candidates and determining executive
compensation, etc from an objective standpoint.
In the period under review, Reiko Nakayama attended all of 13 Meetings ofBoard of Directors. Based on her experience of securities company
underwriter, and management executive officer and outside officers ofoperating companies, she supervises and advises management from a
professional and independent standpoint. She plays an appropriate role inensuring the adequacy of decision making. Also, as a member of theNomination and Compensation Committee, he attended all of 4 Committee
Meetings held in the current fiscal year and take on the supervisory function in
the process of selecting executive candidates and determining executive
compensation, etc from an objective standpoint.

Status and Name

Attendance and Remark

Corporate Auditor, Hiroho Kamakura

In the period under review, Hiroho Kamakura attended all of 13 Meetings ofBoard of Directors and all of 7 Meetings of the Board of Corporate Auditors.
Based on the specialized knowledge as a Certified Public Accountant, he asked
questions to clarify ambiguities that arose with respect to matters reported or
resolved, and provided opinions. Additionally, he perused the reports of theinternal auditing results, exchanged opinions concerning auditing, andparticipated 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. Also, as a member of theNomination and Compensation Committee, he attended all of 4 Committee
Meetings held in the current fiscal year and expressed his opinions on legality.

Corporate Auditor, Michitoshi Morimoto

In the period under review, Michitoshi Morimoto attended all of 13 Meetingsof Board of Directors and all of 7 Meetings of the Board of Corporate Auditors.
Based on the specialized knowledge of corporate information
technology/system strategy, 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 importantmatters. In addition to receiving the Accounting Auditor’s detailed report on
regular basis, he also regularly exchanged opinions with top management.
Also, as a member of the Nomination and Compensation Committee, heattended all of 4 Committee Meetings held in the current fiscal year andexpressed his opinions on legality.

Note:
In addition to the frequency of convening meetings of the Board of Directors described above, there were 5 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 Incorporation.
– 23 –

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 theCompany and its subsidiaries

35,200 thousand yen
37,000 thousand yen

Notes1: In the audit contract between the Company and the Accounting Auditor, audit fees pursuant to the Companies Act
and those pursuant to the Financial Instruments and Exchange Act are not clearly separated and this separation ispractically impossible. Therefore, the amount of compensation and other payments to the Accounting Auditor isrepresented as the total payment.
2: Upon receipt of the necessary materials and reports from the Directors, in-house related departments andAccounting Auditor, the Board of Corporate Auditors acknowledged the details of the audit and status of thecourse 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 theaudit 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.
(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) Outline of the Contents of the Contract for Limitation of Liability
Based on the provisions of Article 427, Paragraph 1 of the Companies Act, Deloitte Touche
Tohmatsu LLC, which is an Accounting Auditor, has entered into a contract for limitation of liability
for damages under Article 423, Paragraph 1 of the Companies Act. The maximum amount ofliability for damages based on the contract is the minimum amount stipulated by law.

– 24 –

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 Incorporation as well as other systems that ensure the properness of operations of theCompany, as follows. (Board of Directors Resolution on June 12, 2015) The main points of the basic
policy are as follows.
(1) System to ensure that business execution of Directors and employees complies with laws andregulations and the Articles of Incorporation.
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(“Document Regulations,” “Contract management rules,” “Internal Information Management
Regulations,” “Basic policy on information security” and “Information System Management
Regulations,” etc.).
(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 conferences.
[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 businessexecution by Directors of subsidiaries.
The Internal Control System is developed as we as “Subsidiaries Management Regulations”
obligate subsidiaries to make periodic reports relating to business results, fiscal conditions and othersignificant 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.
– 25 –

(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
the Company’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.
In order to improve the effectiveness and efficiency of operations, to ensure reliability of financial
reports, and to expansively develop the operations of the internal control system aimed at securingassets and compliance to laws and regulations pertaining to business activities according to the Basic
Policy for Internal Control System, The Internal Control Regulations and the Committee of Internal
Control Operations Regulations have been enacted.
The scope of responsibility of the Board of Directors and Corporate Auditors as well as the system
for implementation and details of activities for executives and employees, and the procedures forevaluation and reporting were clarified in the internal control Regulations. Furthermore, basic policyon the maintenance and operation of Internal Control is formulated. The structure of the committee
aimed at facilitating internal control as well as how to promote its mission and activities wereclarified in the Committee of Internal Control Operations Regulations, and the activities arepromoted.

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 thecurrent 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. “YUSHIN Organizational Knowledge Book “(Y-Book) is used
as an organization’s knowledge collection to improve business quality, maintaining disciplines, andinstill awareness of compliance. In addition, the Company has enacted the Whistle-Blowing
Regulations that prescribes the procedures to report on violations and has set up an external contact
point for internal reporting.
Moreover, efforts have been made to provide information concerning recent trends in relevantlaws and regulations, as well as to develop and make thoroughly available internal regulations(Office Regulations, Contract management rules, Internal Information Management Regulations,
Basic policy on information security, Information System Management Regulations, etc.) In thisfiscal year, we established the "Basic Policy on Information Security" in order to properly manageand operate all information assets. The purpose is to protect information assets based on laws andregulations, implement appropriate management, and improve the information security system(Appointment of information security manager), etc. In addition, we have established "Contract
Management Regulations" for the purpose of properly fulfilling contracts. By establishing basic
matters related to contract business, we will prevent the occurrence of business disputes with third
parties. The management of contracts of the YUSHIN Group has been changed to system-based
management from this fiscal year in order to improve the efficiency and quality of operations related
to contract management. We also provide training on compliance, such as rules regarding the– 26 –

handling of contracts.
In addition, based on appropriate rules, we are strengthening efforts that lead to operational
efficiency and productivity improvement, such as expanding the digitization of operations andpromoting the digitization of documents.
(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 event causing damage to the Company arises, theDirector in charge immediately reports to the Board of Directors and the Board of Corporate
Auditors, and all executives will offer consultations to take action, while efforts to avoid risks arealso being enhanced by having the Corporate Auditors conduct inspections and hearings on any
event that is seen to have the risk of causing damage.

(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] Board of Directors determines significant matters and supervise the status of businessexecution of the Directors.
[2] The Nomination and Remuneration Committee has been established as an advisory bodyaiming to increase the objectivity, appropriateness and transparency of the composition of theBoard of Directors and the nomination and remuneration of Directors, etc. to link the mediumto long-term growth of the Company group and increase its corporate value. The selection ofcandidates of Directors and Corporate Auditors and the compensation system for directors are
discussed by the Nomination and Remuneration Committee, and a report or opinion is given
to the Board of Directors[3] In order to further improve the functions of the Board of Directors, we are conducting aninternal questionnaire on the analysis and evaluation of the effectiveness of the Board of
Directors as a whole, and analyzing and evaluating the results to make improvements.
[4] Significant matters are discussed among Directors, Executive Officers and Corporate Auditors
at the executive meetings thereby sharing such significant information.
[5] 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
In order to promote the development of the internal control system, the Internal Control
Regulations and Committee of Internal Control Operations Regulations have enacted at the Boardof Directors’ meeting held on February 7, 2018. Specifically, the scope of responsibilities of theBoard of Directors and Corporate Auditors concerning internal control, as well as the system for
implementation (supervision, actual system for implementation, etc.) and details of activities(policy, process to promote the development of operations, etc.) for executives and employees andthe procedures for evaluation and reporting (scope of target, procedure, correction measures incase of deficiencies, etc.) were clarified by the Internal Control Regulations, while the structure of
the committee aimed at facilitating internal control, as well as how to promote its mission andactivities (supervision, system for implementation, scope of target activities, education, etc.) wereclarified in the Committee of Internal Control Operations Regulations. Based on Internal Control
Regulations, along with the basic policy on the development and operation of Internal Control, we
have enacted a basic plan for conducting evaluations and are promoting activities. Furthermore,
the Company’s subsidiaries hold meetings three times a year so as to share information relating to
the Company and its subsidiaries and monitoring status of business operations.

(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 executive
meeting, management meeting and other meetings. Corporate Auditors conduct interviews on thestatus of execution of duties by the Directors and the Internal Audit Office and then inspectsignificant decisions as noted in the documentation, such as the approval documents, contracts andagreements. Corporate Auditors also investigate the statuses of business operations, corporate
properties and fraudulent acts relating to the performance of Directors’ duties, infringement of rights– 27 –

and violations of laws and regulations, and the Articles of Incorporation.
At conducting audit, Corporate Auditors utilize the expertise as the Certified Public Accountant
and the expert in corporate IT / System strategy, who are External Corporate Auditors, and keeps
internal coordination with the Internal Audit Office. Other than that, Corporate Auditors develops
the standards and guidelines for the course of action by Corporate Auditors conducting audits of theCompany’s Internal Control System, including the “Audit Practice Standards 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 Profit attributable to owners of
the parent.
For this fiscal year, a full-year dividend is 18 yen per share, consisting of an interim dividend of 5
yen per share and a year-end dividend of 13 yen per share.

– 28 –

Consolidated Balance Sheets(as of March 31, 2021)(Thousands of yen)Account

AmountAccount

ASSETS
Current assets
Cash and deposits

AmountLIABILITIES
22,509,500

Current liabilities

5,321,953

11,690,730

Notes and accounts payable - trade

1,933,977

Notes and accounts receivable trade

5,563,680

Electronically recorded obligations- operating

839,221

Merchandise and finished goods

1,007,401

Accounts payable - other542,158

Accrued expenses

258,548

Work in process

987,869

Raw materials and supplies

2,987,777

Income taxes payable

400,497

Consumption taxes receivable

71,912

Advances received

789,464

Prepaid expenses

122,918

Provision for bonuses

282,429

Other

114,035

Provision for bonuses for directors

42,800Allowance for doubtful accounts(36,825)

Provision for product warranties

162,715

Other

70,139Non-current assets

12,179,174

Property, plant and equipment

10,531,559

Buildings

4,041,649

Structures

Non-current liabilities

167,319

Retirement benefit liability

87,948

124,524Deferred tax liabilities

35,955

Machinery equipment andVehicles

116,036

Other

43,415Tools, furniture and fixtures

94,997

Total liabilities

Land

5,489,273

6,129,718

Leased assets

2,630

NET ASSETS

Construction in progress

22,001

Shareholders’ equity

28,503,594

Intangible assets

254,601

Share capital

1,985,666

Telephone subscription right

11,430Capital surplus

2,024,597

Software173,405

Retained earnings

25,848,552

Others69,765

Treasury shares(1,355,222)

Investments and other assets

1,393,012

Investment securities

285,724

Retirement benefit asset

296,727

Deferred tax assets

621,419

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

Other

209,365

Non-controlling interests

Allowance for doubtful accounts(20,224)

Total net assets

Total assets

34,688,675– 29 –

Total liabilities and net assets

458,927
103,840
290,333
64,753236,879
29,199,402
34,688,675

Consolidated Statements of Income(from April 1, 2020 to March 31, 2021)(Thousands of yen)Account

AmountNet sales

18,473,964

Cost of sales

10,598,790

Gross profit

7,875,173

Selling, general and administrative expenses

5,353,032

Operating profit

2,522,141

Non-operating income
Interest and dividends income

11,882

Purchase discounts

6,846

Foreign exchange gains

34,653

Subsidy income

15,552Other

19,38488,319Non-operating expenses
Sales discounts

606

Other

928

Ordinary profit

1,535
2,608,925

Extraordinary income
Gain on sales of non-current assets

1,964

1,964

74

74

Extraordinary loss
Loss on sales and retirement of non-current assets
Profit before income taxes

2,610,815

Income taxes - current

744,942

Income taxes - deferred

8,029

Profit752,971
1,857,844

Profit attributable to non-controlling interests

29,975

Profit attributable to owners of parent

1,827,868– 30 –

Balance Sheets(as of March 31, 2021)(Thousands of yen)Account

AmountAccount

ASSETS
Current assets

LIABILITIES
17,654,094

Cash and deposits

8,794,229

Notes receivable - trade

1,090,504

Accounts receivable - trade

4,375,299

Merchandise and finished goods
Work in process

AmountCurrent liabilities
Notes payable - trade
Electronically recorded obligations operating
Accounts payable - trade345,889

45,003
839,221
1,591,154

Accounts payable - other468,819

Accrued expenses

128,020

Raw materials and supplies

792,614

Income taxes payable

299,045

Prepaid expenses

75,929Advances received

73,486

Consumption taxes receivable

71,912

Provision for bonuses

275,000

Other

148,931

Provision for bonuses for directors

42,800

Provision for product warranties

62,000Other

18,977

Allowance for doubtful accounts

1,959,083

3,843,529(300)

Non-current assets

12,288,751

Property, plant and equipment

9,718,895

Non-current liabilities

Buildings

3,627,585

Other

Structures

124,524

Total liabilities

Machinery and equipment

44,920

VehiclesTools, furniture and fixturesLand

25,994,276

53,411

Share capital

1,985,666

5,843,521

Capital surplus

2,023,903

2,630
22,001

Software

NET ASSETS
Shareholders’ equity

Construction in progress
Telephone subscription right

1,199
3,844,728

299

Leased assets
Intangible assets

1,199

Legal capital surplus
Retained earnings

2,023,903
23,339,928

181,043

Legal retained earnings

286,314

11,430

Other retained earnings

23,053,614

169,613

Investments and other assets

2,388,812

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

285,724Deferred tax assets

562,957

Other

368,662

Total assets

29,942,846

873,594
297,873

Reserve for dividend equalization

1,000,000

General reserve

8,700,000

Retained earnings brought forward

13,353,614

Treasury shares
Valuation and translation adjustments
Valuation difference on available-forsale securities(1,355,222)
103,840
103,840

Total net assets

26,098,117

Total liabilities and net assets

29,942,846– 31 –

Statements of Income(from April 1, 2020 to March 31, 2021)(Thousands of yen)Account

AmountNet sales

13,337,772

Cost of sales

8,327,720

Gross profit

5,010,051

Selling, general and administrative expenses

3,723,889

Operating profit

1,286,162

Non-operating income
Interest income

3,170

Dividend income

639,230

Purchase discounts

6,846

Foreign exchange gains

11,609Subsidy income

15,552

Other

10,769687,177

Non-operating expenses
Sales discounts

606

Other

452

Ordinary profit

1,058
1,972,280

Extraordinary losses
Loss on sales and retirement of non-current assets

46

Loss on valuation of shares of subsidiaries

72,115

Profit before income taxes

72,162
1,900,118

Income taxes - current

453,216

Income taxes - deferred(23,863)

Profit429,353
1,470,764– 32 –

[Certified copy of the Accounting Auditors’ Report concerning consolidated statutory report](TRANSLATION)
INDEPENDENT AUDITOR'S REPORTMay 12, 2021
To the Board of Directors of
YUSHIN PRECISION EQUIPMENT CO., LTD.:
Deloitte Touche Tohmatsu LLC
Kyoto office
Designated Unlimited Liability Partner,
Engagement Partner,
Certified Public Accountant:
Mitsuhiro Takasaki [SEAL]
Designated Unlimited Liability Partner,
Engagement Partner,
Certified Public Accountant:
Hideki Yasuda [SEAL]
OpinionPursuant to the fourth paragraph of Article 444 of the Companies Act, we have audited theconsolidated financial statements of YUSHIN PRECISION EQUIPMENT CO., LTD. and its
consolidated subsidiaries (the "Group"), namely, the consolidated balance sheet as of March 31,
2021, and the consolidated statement of income and consolidated statement of changes in equity
for the fiscal year from April 1, 2020 to March 31, 2021, and the related notes.
In our opinion, the accompanying consolidated financial statements present fairly, in allmaterial respects, the consolidated financial position of the Group as of March 31, 202 1, and its
consolidated financial performance for the year then ended in accordance with accounting
principles generally accepted in Japan.
Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in Japan. Our
responsibilities under those standards are further described in the Auditor's Responsibilities for the Auditof the Consolidated Financial Statements section of our report. We are independent of the Group inaccordance with the provisions of the Code of Professional Ethics in Japan, and we have fulfilled ourother ethical responsibilities as auditors. We believe that the audit evidence we have obtained is sufficientand appropriate to provide a basis for our opinion.
Responsibilities of Management and Audit & Supervisory Board Members and the Audit &Supervisory Board 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.
In preparing the consolidated financial statements, management is responsible for assessing the Group's
ability to continue as a going concern, disclosing, as applicable, matters related to going concern inaccordance with accounting principles generally accepted in Japan.
Audit & Supervisory Board members and the Audit & Supervisory Board are responsible foroverseeing the Directors' execution of duties relating to the design and operating effectiveness of thecontrols over the Group's financial reporting process.
Auditor's Responsibility for Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements
as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor'sreport that includes our opinion. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic decisionsof users taken on the basis of these consolidated financial statements.
As part of an audit in accordance with auditing standards generally accepted in Japan, we exercise
professional judgment and maintain professional skepticism throughout the audit. We also:•
Identify and assess the risks of material misstatement of the consolidated financial statements,
whether due to fraud or error, design and perform audit procedures responsive to those risks. The– 33 –

procedures selected depend on the auditor's judgement. In addition, we obtain audit evidence that is
sufficient and appropriate to provide a basis for our opinion.
•
Obtain, when performing risk assessment procedures, an understanding of internal control relevantto the audit in order to design audit procedures that are appropriate in the circumstances, but not forthe purpose of expressing an opinion on the effectiveness of the Group's internal control.
•
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.
•
Conclude on the appropriateness of management's use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to events orconditions that may cast significant doubt on the Group's ability to continue as a going concern. If weconclude that a material uncertainty exists, we are required to draw attention in our auditor's report to
the related disclosures in the consolidated financial statements or, if such disclosures are inadequate,
to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor's report. However, future events or conditions may cause the Group to cease to continue as agoing concern.
•
Evaluate whether the overall presentation and disclosures of the consolidated financial statements
are in accordance with accounting principles generally accepted in Japan, as well as the overall
presentation, structure and content of the consolidated financial statements, including the disclosures,and whether the consolidated financial statements represent the underlying transactions and events ina manner that achieves fair presentation.
•
Obtain sufficient appropriate audit evidence regarding the financial information of the entities orbusiness activities within the Group to express an opinion on the consolidated financial statements.
We are responsible for the direction, supervision and performance of the group audit. We remainsolely responsible for our audit opinion.
We communicate with Audit & Supervisory Board members and the Audit & Supervisory Board
regarding, among other matters, the planned scope and timing of the audit and significant audit findings,
including any significant deficiencies in internal control that we identify during our audit.
We also provide Audit & Supervisory Board members and the Audit & Supervisory Board with astatement that we have complied with relevant ethical requirements regarding independence, andcommunicate with them all relationships and other matters that may reasonably be thought to bear on our
independence, and where applicable, related safeguards.
Interest Required to Be Disclosed by the Certified Public Accountants Act of Japan
Our firm and its designated engagement partners do not have any interest in the Group which is
required to be disclosed pursuant to the provisions of the Certified Public Accountants Act of Japan.

Notes to the Readers of Independent Auditor's Report
This is an English translation of the independent auditor's report as required by the Companies Act ofJapan for the conveniences of the reader.

– 34 –

[Certified copy of the Accounting Auditors’ Report concerning non-consolidated statutory report](TRANSLATION)
INDEPENDENT AUDITOR'S REPORTMay 12, 2021
To the Board of Directors of
YUSHIN PRECISION EQUIPMENT CO., LTD.:
Deloitte Touche Tohmatsu LLC
Kyoto office
Designated Unlimited Liability Partner,
Engagement Partner,
Certified Public Accountant:
Mitsuhiro Takasaki [SEAL]
Designated Unlimited Liability Partner,
Engagement Partner,
Certified Public Accountant:
Hideki Yasuda [SEAL]
OpinionPursuant to the first item, second paragraph of Article 436 of the Companies Act, we haveaudited the nonconsolidated financial statements of YUSHIN PRECISION EQUIPMENT CO.,LTD. (the "Company"), namely, the nonconsolidated balance sheet as of March 31, 202 1, and thenonconsolidated statement of income and nonconsolidated statement of changes in equity for the
48th fiscal year from April 1, 2020 to March 31, 2021, and the related notes and the accompanying
supplemental schedules.
In our opinion, the accompanying nonconsolidated financial statements present fairly, in allmaterial respects, the financial position of the Company as of March 31, 2021, and its financial
performance for the year then ended in accordance with accounting principles generally acceptedin Japan.
Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in Japan. Our
responsibilities under those standards are further described in the Auditor's Responsibilities for the Auditof the Nonconsolidated Financial Statements section of our report. We are independent of the Company inaccordance with the provisions of the Code of Professional Ethics in Japan, and we have fulfilled ourother ethical responsibilities as auditors. We believe that the audit evidence we have obtained is sufficientand appropriate to provide a basis for our opinion.
Responsibilities of Management and Audit & Supervisory Board Members and the Audit &Supervisory Board for the Nonconsolidated Financial Statements
Management is responsible for the preparation and fair presentation of the nonconsolidated 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 nonconsolidated financial
statements that are free from material misstatement, whether due to fraud or error.
In preparing the nonconsolidated financial statements, management is responsible for assessing theCompany's ability to continue as a going concern, disclosing, as applicable, matters related to going
concern in accordance with accounting principles generally accepted in Japan.
Audit & Supervisory Board members and the Audit & Supervisory Board are responsible foroverseeing the Directors' execution of duties relating to the design and operating effectiveness of thecontrols over the Company's financial reporting process.
Auditor's Responsibilities for the Audit of the Nonconsolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the nonconsolidated financial
statements as a whole are free from material misstatement, whether due to fraud or error, and to issue anauditor's report that includes our opinion. Misstatements can arise from fraud or error and are consideredmaterial if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of these nonconsolidated financial statements.
As part of an audit in accordance with auditing standards generally accepted in Japan, we exercise
professional judgment and maintain professional skepticism throughout the audit. We also:•
Identify and assess the risks of material misstatement of the nonconsolidated financial statements,
whether due to fraud or error, design and perform audit procedures responsive to those risks. The
procedures selected depend on the auditor's judgement. In addition, we obtain audit evidence that is
sufficient and appropriate to provide a basis for our opinion.
•
Obtain, when performing risk assessment procedures, an understanding of internal control relevantto the audit in order to design audit procedures that are appropriate in the circumstances, but not forthe purpose of expressing an opinion on the effectiveness of the Company's internal control.
– 35 –

•

Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.
•
Conclude on the appropriateness of management's use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to events orconditions that may cast significant doubt on the Company's ability to continue as a going concern. If
we conclude that a material uncertainty exists, we are required to draw attention in our auditor'sreport to the related disclosures in the nonconsolidated financial statements or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to
the date of our auditor's report. However, future events or conditions may cause the Company tocease to continue as a going concern.
•
Evaluate whether the overall presentation and disclosures of the nonconsolidated financial
statements are in accordance with accounting principles generally accepted in Japan, as well as theoverall presentation, structure and content of the nonconsolidated financial statements, including thedisclosures, and whether the nonconsolidated financial statements represent the underlying
transactions and events in a manner that achieves fair presentation.
We communicate with Audit & Supervisory Board members and the Audit & Supervisory Board
regarding, among other matters, the planned scope and timing of the audit and significant audit findings,
including any significant deficiencies in internal control that we identify during our audit.
We also provide Audit & Supervisory Board members and the Audit & Supervisory Board with astatement that we have complied with relevant ethical requirements regarding independence, andcommunicate with them all relationships and other matters that may reasonably be thought to bear on our
independence, and where applicable, related safeguards.
Interest Required to Be Disclosed by the Certified Public Accountants Act of Japan
Our firm and its designated engagement partners do not have any interest in the Company which is
required to be disclosed pursuant to the provisions of the Certified Public Accountants Act of Japan.

Notes to the Readers of Independent Auditor's Report
This is an English translation of the independent auditor's report as required by the Companies Act ofJapan for the conveniences of the reader.

– 36 –

[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, 2020 to March 31,
2021, 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 Incorporation 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.

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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 Incorporation, 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 Incorporation.
[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 13, 2021

Board of Corporate Auditors,
YUSHIN PRECISION EQUIPMENT CO., LTD.
Full-time Corporate Auditor
Full-time Corporate Auditor

Yoshihisa Nakanishi [SEAL]
Katsumi Noda [SEAL]

External Corporate Auditor
External Corporate Auditor

Hiroho Kamakura [SEAL]
Michitoshi Morimoto [SEAL]

End of submitted documents– 38 –