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 fromthe translation.

Security Code: 6482
June 13, 2011

Dear Shareholders,

Notice of Convocation for the
38th Ordinary General Meeting of Shareholders
We would like to express our deepest condolences and sympathies to all those who have suffered and are
suffering as a result of 2011 Tohoku earthquake and tsunami.
Notice is hereby given that the 38th Ordinary General Meeting of Shareholders of Yushin Precision
Equipment Co., Ltd. will be held as set out below:
If you do not expect to attend the meeting in person, you may exercise your voting rights in writing.
Please refer to the enclosed Reference Documents for the General Meeting of Shareholders, use the Formfor Exercising Voting Rights to indicate your vote on agenda proposals and return it by 5 p.m. on
Monday, June 27, 2011 at the latest.
Details
Tuesday, June 28, 2011 at 10 a.m.
4F Conference Room, No. 2 Factory
Head Office of Yushin Precision Equipment Co., Ltd.
11-260 Kogahonmachi, Fushimi-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
38th Fiscal Year (April 1, 2010 to March 31, 2011) as well as theaudit 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
38th Fiscal Year (April 1, 2010 to March 31, 2011)

Agenda for resolution:
Proposal 1: Election of Five (5) Directors
Proposal 2: Election of One (1) Corporate Auditor

Sincerely Yours,
Mayumi Kotani
President and Representative Director
Yushin Precision Equipment Co., Ltd.
11-260 Kogahonmachi, Fushimi-ku,
Kyoto, Japan
Notes:* You are kindly requested to present the enclosed “Form for Exercising Voting Rights” to the receptionist upon your arrival at
the Meeting.
* If any changes have been made to the matters appearing in the Reference Documents for the General Meeting of Shareholders,Business Report, Non-Consolidated Financial Statements or Consolidated Financial Statements, such changes will be posted
on our website: (http://www.yushin.com)–1–

(Submitted Documents)

Business Report(For the fiscal year from April 1, 2010 to March 31, 2011)
1.

Current Business Conditions of the Yushin Group(1) Progress and achievements
In this fiscal year as for the world economy, economic expansions in Asian countries, especially in
China continued by strong domestic demand, while employment situation was hard to increase,considering the recovery of companies’ results, and there were unstable factors of the financial crisis in
the emerging countries in Europe and the rise of oil price by the political unrest in the Middle East. As
for domestic economy, environment of employment and income was still hard, and the prospects ofdomestic economy was very vague by deflation and yen’s appreciation since last summer. And what
was ever worse that 2011 Tohoku earthquake and tsunami brought an unprecedented disaster and madethe future economy more opaque.
As for industries related to Yushin Group, in Asia sales for digital appliance field was in goodcondition and in the United States the demand in the car industry showed a recovery trend and also thedemand in the medical products and the sundry products field remained strong despite the effects of
sharp yen’s appreciation.
Under these circumstances, Yushin Group maintained good results in take-out robot sales by theremained strong demand in Asia and by the special automation needs in the background of elevatedlabor cost in Asian countries, while sales of the custom- ordered equipments have decreased from thecorres-ponding period of previous year due to the decrease in backlog of orders in the end of lastFiscal Year.
As a result, consolidated net sales increased by 1.6% from the previous FY to ¥12,567 million.
Operating income increased by 45.8% from the previous FY to ¥1,097 million by the effect of costdown activity despite the effects of yen’s appreciation. Ordinary income increased by 20.9% from theprevious FY to ¥1,055 million and net income was by 49.7% from the previous FY to ¥729 million.
Consolidated net sales per product(Thousands of yen)
Years ended
March 31,

2010

2011

Product

Amount%Amount%Take-out robots

6,029,684

48.7

8,912,734

70.9

Custom-ordered
equipment

4,757,980

38.5

1,670,074

13.3

Parts andmaintenanceservice

1,582,270

12.8

1,984,839

15.8

Total

12,369,935

100.0

12,567,648

100.0

Notes: From FY2010, the category will be integrated into three items. - Peripheral equipment will be split into Take-out
robots, Custom-ordered equipment and Parts and Maintenance service. - Stock system will be integrated into Customordered equipment.

(2)

Capital investment
The total amount of capital investment for the Group effectuated over the course of the period
under review was ¥239 million mainly for the deposit for the acquisition of the land for thefactory of Head Quarters valued at ¥95 million, the building of the factory for Guang Zhou
Yushin Precision Equipment Co., Ltd. valued at ¥ 40 million, and the capital investment related
to R&D valued at ¥ 31 million.

(3)

Financing activities
No material items to report.

–2–(4) Assets and operating results 2009-2011
Years ended March 31,

2008

2009

2010

2011

Net sales(thousands of yen)

21,108,632

19,272,301

12,369,935

12,567,648

Ordinary income(thousands of yen)

3,578,444

2,805,258

872,400

1,055,101

Net income(thousands of yen)

2,023,693

1,468,190

487,509729,833

Net income per share(yen)

125.04

82.71

27.87

41.73

Total assets(thousands of yen)

24,867,651

21,977,500

20,593,798

21,583,634

Net assets(thousands of yen)

17,997,691

17,864,104

18,115,226

18,495,803

Net assets per share(yen)

1,109.13

1,019.99

1,034.11

1,055.42

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

(5) Issues to be addressed
As for the business environment surrounding the Yushin Group, in Japan though the revival demand
for the disaster is expected to be risen, demand for the equipment investment should be weak by unrestfor the electricity service, while economic environment in the United States and Asia should keep
good condition.
Under these circumstances, Yushin Group will develop competitive machines for the market in agreat demand and progress the activity for receiving order of general-purpose machines and also takeout robots for the new business categories and custom-ordered equipments.

–3–(6) Status of Major subsidiaries
Name

Location

Capital stock

Percentage
ofshareholding

Major operations

Yushin America, Inc.

Rhode Island,
U.S.A.

US$8,000

100%

Sales and maintenance & repairof our products. Manufacturing& sales and maintenance &repair of our post-processequipment

Yushin Korea Co., Ltd.

Ansan-City,
Kyunggi-Do,
South Korea

KRW350 million

100%

Sales and maintenance & repairof our products

Yushin Precision Equipment(Singapore) Pte. Ltd.

Singapore

S$370,000

100%

Sales and maintenance & repairof our products

Yushin Precision Equipment
Sdn. Bhd.

Selangor,
Malaysia

MYR500,000

100%

Sales and maintenance & repairof our products

Yushin Precision Equipment(Taiwan) Co., Ltd.

Taipei City,
Taiwan(R.O.C.)

NT$5 million

100%

Sales and maintenance & repairof our products

Yushin Precision Equipment(Thailand) Co., Ltd.

Bangkok,Thailand

THB6 million

49%

Sales and maintenance & repairof our products

Yushin Automation Ltd.

West
Midlands, U.K.

GBP150,000

95.6%

Sales and maintenance & repairof our products

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

Shenzhen,
Guangdong,
China

US$400,000

100%

Sales and maintenance & repairof our products

Yushin Precision Equipment(Slovakia) s.r.o.

Bratislava,
Slovakia

EUR141,000

100%

Sales and maintenance & repairof our products

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

Shanghai,
China

US$200,000

100%

Sales and maintenance & repairof our products

Yushin Precision Equipment(India) Pvt. Ltd.

Chennai, India

INR7.4 million

95%

Sales and maintenance & repairof our products

Guang Zhou Yushin Precision
Equipment Co., Ltd.

Guangzhou,
China

RMB13.7million

100%

Manufacturing of our products(7) Major operations (as of March 31, 2011)
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.

–4–

(8) Main sales offices and factories (as of March 31, 2011)
Name

Location

Kyoto Head Office & FactoryNo. 1, No. 2, No. 3, No. 5, No. 6
Factory at the Head site

Fushimi-ku, Kyoto-city

Tokyo General Sales OfficeChuo-ku, Tokyo

Kita-Kanto General Sales OfficeKita-ku, Saitama-city

Chubu General Sales Office

Toyokawa-city, Aichi

Nishi-Nihon General Sales Office

Fushimi-ku, Kyoto-city

Tohoku Sales Office

Fukushima-city, Fukushima

Tsukuba Sales Office

Tsukuba-city, Ibaraki

Tochigi Sales Office

Sano-city, Tochigi

Nishi-Kanto Sales Office

Atsugi-city, Kanagawa

Nagano Sales Office

Shiojiri-city, Nagano

Shizuoka Sales Office

Suruga-ku, Shizuoka-city

Nagoya-Nishi Sales Office

Kuwana-city, Mie

Toyama Sales OfficeToyama-city, Toyama

Hiroshima Sales Office

Nishi-ku, Hiroshima-city

Fukuoka Sales Office

Hakata-ku, Fukuoka-city

Indonesia Representative Office

Jakarta, Indonesia

Vietnam Representative OfficeHanoi, Vietnam

Ho Chi Minh Representative Office

Ho Chi Minh Vietnam

Philippines Representative Office

Makati-city, Philippines

Tianjin Representative Office

Tianjin, China(9) Employees (as of March 31, 2011)
Number of employees

Increase from the end of previous FY

546 (50)24

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

(10) Major creditors (as of March 31, 2011)
No items to report.
(11) Other important matters pertaining to the status of the GroupNo material items to report.

–5–

2.

Matters pertaining to the shares of the Company (as of March 31, 2011)(1) Number of shares authorized:
40,000,000(2) Total number of issued shares:
17,819,033(3) Number of shareholders:
5,388(4) Major shareholders:
Investment in the company
Name

Number of shares held
(thousand)

Percentage of shares
held
(%)

Yushin Industry Co., Ltd.

4,376

25.0

Mayumi Kotani

2,259

12.9

The Nomura Trust and Banking Co., Ltd.
(Trust Account 3071019)
The Master Trust Bank of Japan, Ltd. (Retail
Trust Account 620021158)
Japan Trustee Service Bank, Ltd. (Trust
Accounts)

774

4.4

774

4.4

576

3.3

The Kyoto Chuo Shinkin Bank, Ltd.

544

3.1

The Bank of Tokyo-Mitsubishi UFJ, Ltd.

424

2.4

RBC DEXIA INVESTOR SERVICES
TRUST LONDON (Client Accounts)
The Master Trust Bank of Japan, Ltd. (Trust
Accounts)
The Nomura Trust and Banking Co.,
Ltd.(Trust Accounts)

410

2.3

401

2.3

381

2.2

Note: Percentage of shares held is calculated after deducting the number of treasury stock (328,497 shares).

–6–

3.

Matters pertaining to officers of the Company(1) Directors and Corporate Auditors (as of March 31, 2011
Position

Responsibilities and representation of otherorganization

Name

President andRepresentative Director

Mayumi Kotani

Executive Managing
Director

Satoshi Kimura

Director

Yasuharu Odachi

Head of Research & Development H.Q.

Director

Yuji Tsujimoto

Head of Administrative H.Q. and Head ofGeneral Affairs Dept.

Director

Yasushi Kitagawa

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

Standing Corporate
AuditorShujiro Sawada

Corporate Auditor

Yasuhiro Orita

LawyerCorporate Auditor

Takao Yoshikawa

Professor emeritus at Osaka University

Notes:
1. Corporate Auditors Yasuhiro Orita and Takao Yoshikawa are outside Corporate Auditors stipulated in Item 2, Article 16 of
the Company Law.
2. The following describes the activities of the two outside Corporate Auditors during the period under review.
Corporate Auditor, Yasuhiro Orita
In the period under review, Yasuhiro Orita attended all 12 Meetings of Board of Directors’ and all 5 Meetings of the Board
of Auditors. At the Board of Directors’ Meetings, from his background as a legal specialist and practitioner he asked
pertinent questions to clarify ambiguities that arose with respect to matters reported or matters resolved, and provided
opinions. Additionally, at the Meetings of the Board of Auditors, he perused the reports of the internal auditing results,
exchanged opinions concerning auditing, and participated in joint discussions on important matters. In addition to receiving
the Accounting Auditor’s detailed report on regular basis, he also regularly exchanged opinions with top management.
Corporate Auditor, Takao Yoshikawa
In the period under review, Takao Yoshikawa attended 11 of 12 Board of Directors’ Meetings and all 5 Meetings of theBoard of Auditors. At the Board of Directors’ Meetings, from his background as an academic he asked pertinent questions
to clarify ambiguities that arose with respect to matters reported or matters resolved, and provided opinions. Additionally,at the Meeting of the Board of Auditors, he perused the reports of the internal auditing results, exchanged opinions
concerning auditing, and participated in joint discussions on important matters. In addition to receiving the Accounting
Auditor’s detailed report on regular basis, he also regularly exchanged opinions with top management.
3. Change of Directors and Corporate Auditors during the period under review
4.

At the 37th Ordinary General Meeting of Shareholders held on June 25, 2010, Yasushi Kitagawa was newly
elected as a director.
The Company has designated corporate auditor Takao Yoshikawa as an independent corporate officer asprescribed by the Tokyo Stock Exchange and Osaka Securities Exchange and submitted notices to this effect toboth exchanges.

–7–(2) Total remuneration and other payments made to Directors and Corporate Auditors(Thousands of yen)Classification

Number of Directors/
Corporate Auditors

Total amount

Directors

5

111,289

Corporate Auditors

3

34,8008

146,089

Total

Notes:
1. The 35rd Ordinary General Meeting of Shareholders held on June 27, 2008 resolved to set the upper limit of the total
remuneration for all Directors at ¥300,000 thousand per year (this amount does not include remuneration for services as an
employee received by Directors with concurrent employment positions) and the upper limit of the total remuneration for all
Auditors at ¥50,000 thousand per year.
There are currently no Directors who have concurrent employment positions.
2. Total remuneration amounts provided above include the following amount in addition to fixed monthly compensation
amounts.
- Provision for bonuses to Directors and Corporate Auditors: ¥13,680 thousand (Directors: ¥13,680 thousand)
3. With respect to the liability for retirement benefits to Directors and Corporate Auditors, the plan for retirement benefits for
Directors and Corporate Auditors was terminated at the 33rd Ordinary General Meeting of Shareholders held on June 29,
2006, and no additional provision has been recorded since then. Therefore, the balance as of March 31, 2010 (¥66,780
thousand) is provided in proportion to the term that present Directors and Corporate Auditors had been in their respective
positions before June 2006.
4. The total amount of remuneration for the 2 outside Corporate Auditors is ¥4,800 thousand.

–8–

4.

Matters pertaining to Independent Auditors(1) Name of Independent Auditors:
Deloitte Touche Tohmatsu LLC(2) Amount of compensation and other payments for the Independent Auditors(Thousands of yen)
Item

Total payment

The amount of compensation and other payments payable tothe Independent Auditors for the reporting year
Total amount of monetary and other property benefits payable
by the Company and its subsidiaries

26,20028,000Note: In the audit contract between the Company and the Independent Auditor, audit fees pursuant to the Company Law andthose pursuant to the Financial Instruments and Exchange Law are not clearly separated and this separation is practically
impossible. Therefore, the amount of compensation and other payments to the Independent Auditor is represented as thetotal payment.

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

–9–

5.

Matters pertaining to the development of internal control systems to ensure a properness ofoperations
The following is an overview of decisions pertaining to the development of an internal control
system 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.
The Company shall develop internal control systems to ensure the appropriateness of operations of
the Company in accordance with the Company Law and the Enforcement Ordinance of theCompany Law, as follows:a.

System to ensure that the execution of duties of Directors and employees conforms to laws
and regulations and the Articles of Incorporation
A compliance policy shall be established and diffused to all Directors and employees to ensurethat the execution of duties on the part of Directors and employees conforms to laws andregulations and the Articles of Incorporation and that the Company fulfills its social
responsibilities.
The Company shall create an internal whistleblower system and do its utmost to rapidly discover
any actual or possible violation to laws and regulations or the Articles of Incorporation
effectuating internal audits to manage compliance conditions.

b.

System for the preservation and management of information regarding the execution ofduties by Directors
The Company shall formulate document management regulations pertaining to the creation,
preservation and disposal of documents regarding important decisions and reports by Directors.
These documents shall be constantly available for inspection of all Directors and Corporate
Auditors.

c.

Regulations and other systems for the management of the risk of loss
Each respective department shall establish regulations and guidelines for each respective
Department, conduct training programs and create and distribute manuals with respect to types
and degrees of risks of loss. The Administrative Department shall monitor cross-departmental
risks and handle them on a company-wide basis.

d.

System to ensure efficiency in the execution of duties by Directors
Along with developing an organization for the appropriate assignment, allocation of duties andestablishment of authority of Directors and employees, the Company shall define each Director’s
responsibility and authority and communalize information by periodically reporting to the Boardof Directors concerning the progress of objectives and budgets approved by that body and realize
the efficient execution of duties.

e.

System to ensure a properness of operations in the business group comprised of theCompany and its subsidiaries
The Company shall assign a department in charge of subsidiary management, establish subsidiarymanagement regulations and exert control over subsidiaries where necessary depending on theircircumstances.

f.

Matters concerning a system for employees in cases where Corporate Auditors issue
requests for the assignment of said employees to assist them with their duties as well as
concerning the independence of said employees from Directors
The Company shall assign employees where necessary to assist Corporate Auditors. The priorapproval of the Board of Corporate Auditors is required concerning the transfer, evaluation andreprimand of employees.

g.

System for reporting to Corporate Auditors by Directors and employees and other systems– 10 –

concerning reports to Corporate Auditors
Directors and employees shall report to Corporate Auditors any matter that results, or would
result, in a material loss for the Company, any unlawful or fraudulent act on the part of a Director
or employee or any matter for which an obligation to report has been stipulated by the Board of
Corporate Auditors.
Directors shall report on the risk management system of their respective departments in charge ona regular or irregular basis upon consultation with the Board of Corporate Auditors.
h.

6.

Other systems to ensure effective audits by Corporate Auditors
The Company shall deepen the understanding of Directors and employees with respect to audits
by Corporate Auditors and develop an environment under which said audits by Corporate
Auditors may be conducted. Corporate Auditors shall hold periodical meetings withRepresentative Directors to exchange opinions and work towards the coordination of tasks with
the Internal Auditing Department and the execution of appropriate communication and effective
audit tasks.
Policy concerning decisions on the dividends of surplus
The Yushin Group manages its businesses considering the return of profits to shareholders as one of
its important managerial issues.
To that effect, it is the basic policy of the Company to proactively return profits to shareholders bymaintaining a stable operational base, improve its ROE and effectuate dividends based on theperformance results of each respective fiscal year.
For this fiscal year, a full-year dividend is ¥18 per share, comprising an interim dividend of ¥5 per shareand a year-end dividend of ¥13 per share.
.

– 11 –

Consolidated Balance Sheets(As of March 31, 2011)(Thousands of yen)Account

AmountAccount

ASSETS
Current assets

AmountLIABILITIES
17,649,250

Current liabilities

2,965,436

Cash and cash equivalents

9,653,652

Trade notes and accounts payable

1,918,405

Trade notes and accounts
receivable

4,288,949

Accounts payable – other

371,087

Securities

300,000

Expenses payable

89,597

Finished goods

630,010

Income tax payable

154,462

Work-in-process

630,728

Advances by customers

100,679

Accrued employees’ bonuses

179,000

Raw material and Supplies

1,483,591

Prepaid expenses

47,236

Accrued bonuses to directors andcorporate auditors

13,680

Deferred tax assets

339,504

Warranty reserve

104,517

Other

293,338

Deferred tax liabilities

1,587

Allowance for doubtful accounts(17,760)

Other

32,417

Fixed assets

3,934,383

Long-term liabilities

122,393

3,328,129

Liability for retirement benefits todirectors and corporate auditors

66,780

Buildings

1,028,870

Other

55,613Structures

17,745

Machinery and equipment

24.275

Total Liabilities

3,087,830

Vehicles

15,818Property, plant and equipment

Furniture and fixtures
Land
Construction in progress

Intangible assets

NET ASSETS

99,350Shareholders’ equity

18,911,854

2,044,977

Common stock

1,985,666

97,091

Capital surplus

2,023,903

Retained earnings

15,249,493

Treasury stock – at cost

(347,208)

91,450Software

17,183Cumulative total of consolidated othercomprehensive income
Unrealized gain on available-forsale securities
Foreign currency translation
adjustments

Others61,840Minority interests

Telephone subscription right
Right of trademark

11,430995

Investments and other assets

514,803

Investment securities

250,994

Deferred tax assets

19,525

Other282,446

Allowance for doubtful accounts(38,162)

Total Assets

21,583,634– 12 –(451,949)
51,056(503,005)
35,898

Total Net Assets

18,495,803

Total Liabilities and Net Assets

21,583,634

Consolidated Statements of Income(From April 1, 2010 to March 31, 2011)(Thousands of yen)Account

AmountNet sales

12,567,648

Cost of sales

7,709,299

Gross profit

4,858,348

Selling, general and administrative expenses

3,760,493

Operating income

1,097,855

Non-operating income
Interest and dividend income

45,761

Purchase discounts

8,203

Other

26,65680,621Non-operating expenses
Sales discounts

589

Foreign exchange loss

119,408

Other

3,377

Ordinary income

123,375
1,055,101

Extraordinary income
Gain on sales of tangible fixed assets

24

Gain on sales of investment in securities

782

806

418

418

Extraordinary expenses
Loss on sales & disposal of tangible fixed assets
Income before income taxes and minority interests

1,055,488

Income taxes
Current

341,630

Deferred(28,515)

Income before minority interest

742,373

Minority interests

12,539Net income

729,833– 13 –

Consolidated Statements of Changes in Net Assets(From April 1, 2010 to March 31, 2011)(Thousands of yen)
Shareholders’ equity

Balance as of March 31, 2010

Common stock

Capital surplus

1,985,666

2,023,903

Retainedearnings
14,694,569

Treasury stock– at cost

Total
shareholders’equity(346,098)

18,358,040

Changes in the current period
Dividends of surplus(174,909)(174,909)

Net income

729,833

729,833

Acquisition of treasury stock(1,110)(1,110)Changes in items other thanshareholders’ equity, net
Total changes in the current
periodBalance as of March 31, 2011--

554,924(1,110)553,813

1,985,666

2,023,903

15,249,493(347,208)

18,911,854

Cumulative balance of consolidated othercomprehensive income

Balance as of March 31, 2010

Net unrealized
gain (loss) on
available-forsale securities

Foreigncurrencytranslation
adjustments

Cumulative
total ofconsolidated
othercomprehensive
income68,374(338,489)(270,114)

Minority
interests

27,300Total net assets

18,115,226

Changes in the current period
Dividends of surplus(174,909)

Net income

729,833

Acquisition of treasury stock(1,110)Changes in items other thanshareholders’ equity, net(17,318)(164,516)(181,834)

8,598(173,236)

Total changes in the current
period(17,318)(164,516)(181,834)

8,598

380,577

Balance as of March 31, 2011

51,056(503,005)(451,949)

35,89818,495,803– 14 –

1.

Basis of preparing Consolidated Financial Statements(1) Scope of consolidation
All 12 subsidiaries of the company, provided below, fall within the scope of consolidation.

List of Subsidiaries
Yushin America, Inc.
Yushin Korea Co., Ltd.
Yushin Precision Equipment (Singapore) Pte. Ltd.
Yushin Precision Equipment Sdn. Bhd.
Yushin Precision Equipment (Taiwan) Co., Ltd.
Yushin Precision Equipment (Thailand) Co., Ltd.
Yushin Automation, Ltd.
Yushin Precision Equipment Trading (Shenzhen) Co., Ltd.
Yushin Precision Equipment (Slovakia) s.r.o.
Yushin Precision Equipment Trading (Shanghai) Co., Ltd.
Yushin Precision Equipment (India) Pvt.Ltd.
Guangzhou Yushin Precision Equipment Co., Ltd.
(2) Application of the equity method
There is no non-consolidated subsidiary or affiliate company.

(3) Fiscal year of subsidiaries
The account closing date for all consolidated subsidiaries is December 31.
Financial statements as of said date are used in preparation of the Consolidated Financial
Statements. However, adjustments considered necessary for consolidation are effectuated withrespect to material transactions occurring during the period between the day after the accountclosing date of the subsidiaries and the consolidated account closing date.

– 15 –

(4) Accounting policies
a. Valuation of important assetsi) Securities
Available-for-sale securities classified as other securities- Securities with available fair market values are reported at fair value on the consolidated
account closing date
(Unrealized gains or losses, net of applicable taxes, reported in a separate component of equity.
The cost of securities sold is principally determined by the moving average method)ii) Derivatives: Fair value methodiii) Inventories- Merchandise and finished goods, work-in-process
Principally carried at cost determined by the identified cost method (the carrying value on
the balance sheet is written down to reflect the effect of lower profit margins)- Raw materials
Principally carried at cost determined by the periodic average method (the carrying value on
the balance sheet is written down to reflect the effect of lower profit margins)- Supplies
Carried by the last purchase price methodb. Depreciationi) Property, plant and equipment: Principally computed by the declining balance method
The range of useful lives for major assets is as follows:
Buildings:
13-38 years
Machinery and equipment:
5-12 years
ii)

Intangible assets- Software used internally: Straight-line method based on the expected useful lives- Other intangible assets:
Straight-line methodc. Estimation on important allowance and reservesi) Allowance for doubtful accounts:
To provide for possible bad debt losses, the amount deemed unrecoverable is accounted using
the loan loss ratio based on past experience for general claims and by examining the possibilityof recovery on an individual basis for specific claims with default possibility.
ii) Accrued employees’ bonuses:
In order to allocate the payment of employees’ bonuses, the Company provides the amountsubject to the fiscal year under review among the total estimated amount to be paid as
employees’ bonuses.
iii) Accrued bonuses to directors and corporate auditors:
The Company provides the projected payment amount to be allocated for the payment ofbonuses to directors and corporate auditors.
iv) Warranty reserve:
To provide for expenses incurred for free repairs related to product sales, an amount isaccounted based on historical experience.
v) Liability for retirement benefits to directors and corporate auditors:
The Company provides the estimated amount of retirement benefits to directors and corporate
auditors which would be required if all directors and corporate auditors retired at the balance
sheet date according to internal regulations for allocation of retirement benefit payments todirectors and corporate auditors. This plan was terminated on June 29, 2006 and no additional
provision has been recorded since then. Therefore, the balance as of March 31, 2011 isprovided in proportion to the term that present directors had been in their respective positions
before June 2006.
d. Employees’ retirement benefits
To provide for employees’ retirement benefits, based on the projected benefit obligations at yearend and the pension asset balance, the amount of pension assets surplus to projected benefit– 16 –

obligations is recorded in the “Other” field under “Investments and other assets”. The net
actuarial loss or gain is subject to amortization from the next fiscal year of the recognition thereof
onward in an amount pro rated by the straight-line method based on the average remaining
employee service period (10 to 16 years) at the time of the recognition of net actuarial loss orgain in each fiscal year.
e. Lease
Except for finance leases that deem to transfer ownership of the leased property to the lessee, allfinance leases are accounted for as operating leases.
f. Other significant matter for the preparation of Consolidated Financial Statements
Consumption tax and local consumption tax are accounted for using the tax excluded method.
(5) Change in accounting principle
Accounting Standard for Asset Retirement Obligations
Effective from the fiscal year ending March 31, 2011, the Company applied ASBJ Statement No.
18,“Accounting Standard for Asset Retirement Obligations” and ASBJ Guidance No. 21,“Guidance on Accounting Standard for Asset Retirement Obligations,” both issued on March 31,
2008.
The effect of this change on the accompanying consolidated financial statements was none.
(6) Change of expression method(Consolidated statement of income and Consolidated statement of comprehensive income):From this fiscal year, based on the “Accounting Standard for Consolidated Financial Statements(ASBJ Statement No. 22, issued on December 26, 2008), the Ordinance of the Ministry of Justiceto the Partial Revision on the Ordinance for Enforcement of the Company Act and the Ordinanceof the Accounting of Companies (Ordinance of the Ministry of Justice No.7 issued on 27 March,2009) has been adopted. Accordingly, “Income (loss)before minority interests” is included in the
consolidated financial statements for March 31, 2011.
‘Loss on lease cancellation’ to be reported in non-operating expense until the previous fiscal year
should be changed to be included by others in non-operating expense from this fiscal year.
Amount of ‘loss on lease cancellation’ in others of non-operating expense in this fiscal year is¥211thousand.

– 17 –

2.

3.

Notes to Consolidated Balance Sheet
Accumulated depreciation of property, plant and equipment:¥2,971,517thousand

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

Number of shares atthe end of previous FY

Common stock

Number of increased
shares of current FY

Number of decreased
shares of current FY

Number of shares atthe end of current FY--

17,819,033

Number of increased
shares of current FY

Number of decreased
shares of current FY

Number of shares atthe end of current FY

725-

328,497

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

Number of shares atthe end of previous FY

Common stock

327,772

Note: The increase in the number of shares of treasury stock (725 shares) is due to the purchase of shares of less than one unit.

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

Class of shares

Total dividend(Thousands ofyen)

Dividend per
share
(Yen)

The Board of Directors’Meeting on May 11, 2010
The Board of Directors’Meeting on November 9,
2010

Common stock

87,456

5

March 31,2010

June 11,2010

Common stock

87,4535

September 30,
2010

December 6,
2010

Record date

Effective dateb. Dividends whose record date falls within this consolidated fiscal year but comes into effectin the next consolidated fiscal year
Resolution
The Board of
Directors’ Meetingon May 11, 2011

Class ofsharesCommonstock

Total dividend(Thousands ofyen)
227,376

Dividend
funds
Retainedearnings– 18 –

Dividend per
share
(Yen)
13

Record date

Effective date

March 31,2011

June 14,2011

4.

Notes to Financial Instruments(1) Conditions of financial instruments
a. Management policy
The Yushin Group has a policy of limiting investments of unused funds to short-term time
deposits, certificates of deposits and similar instruments and never using these funds for speculation.
Internal resources are used to meet all working capital requirements. Derivative instruments may be
used to hedge exposure to foreign exchange rate risk but will never be used for speculation.
b. Details of financial instruments and their risks
Operating receivables consisting of trade notes and accounts receivable are generally exposed tothe credit risk of customers, while foreign currency denominated operating receivables at foreign
operations are exposed also to the foreign exchange risk.
Investment securities, which are available-for-sale securities, are exposed to risk associated withmarket price volatility.
Operating debt consisting of trade notes and accounts payable are largely due four months or less.
c. Risk management system for financial instruments
Payment dates and balances of outstanding are supervised for each customer based on rules forthe management of trade receivables and credit. In addition, there is a system for monitoring thefinancial soundness of customers.
For investment securities, there are measures to periodically monitor the fair values of thesesecurities and the financial soundness of issuers of these securities.
(2) Fair value of financial instruments
The carrying value on the consolidated balance sheets, fair value, and their differences as of March
31, 2011 are shown as follows.

(1)
(2)
(3)

(1)
(2)
(3)

Carrying value(¥thousands)

Fair value(¥thousands)

9,653,652
4,288,949

9,653,652
4,288,949-

Other securities

550,994

550,994-

Assets total
Trade notes and accounts payable
Accounts payable-other
Income taxes payable
Liabilities total

14,493,596
1,918,405
371,087
154,4622,443,956

14,493,596
1,918,405
371,087
154,4622,443,956-

Cash and time deposits
Trade notes and accounts receivable
Securities and investment securities
Available for-sale securities

Differences(¥thousands)(Note) Matters concerning determination of fair value of financial instruments and marketable securities(Assets)(1) Cash and time deposits, (2) Trade notes and accounts receivable,
Fair value of the above financial instruments is deemed to be equal to their carrying value
because they are settled within a short period of time.
(3) Securities and investment securities
Fair value of the above financial instruments such as stocks are determined by prices at stock
exchanges. Fair value of certificates of deposits is deemed to be equal to their carrying value
because they are settled within a short period of time.

– 19 –

Please see below for items regarding securities and investment securities categorized by holding
purpose.
Acquisition cost(¥thousands)

Carrying value(¥thousands)

114,319-

203,759-

89,440-114,319

203,759

89,44051,582300,000

47,235300,000(4,346)-

351,582

347,235(4,346)465,901

550,994

85,093

Securities whose fair value
exceeds their carrying value
Stock
Other
Subtotal
Securities whose fair value
do not exceed their carrying value
Stock
Other
Subtotal
Total

Differences(¥thousands)(Liabilities)(1) Trade notes and accounts payable, (2) Accounts payable-other, (3) Income taxes payable
Fair value of the above financial instruments is deemed to be equal to their carrying value
because they are settled within a short period of time.
(3) The amount of money claims and mature marketable securities scheduled to be redeemed
subsequent to the consolidated balance sheet date, and the scheduled repayment of interestbearing debt
Due within
one year(¥thousands)

Due after one
year throughfive years(¥thousands)

Due after five
years throughten years(¥thousands)

Due after ten
years(¥thousands)

Cash and time deposits
Trade notes and accounts receivable
Securities
Of which available-for-salesecurities with maturity

9,653,652
4,288,949---

300,000

-

-

-

Total

14,242,602

-

-

-

.
5.

Per share information- Net assets per share:- Net income per share:¥1,055.42¥41.73

Note: Amounts less than one thousand yen are truncated.

– 20 –

Balance Sheets(As of March 31, 2011)(Thousands of yen)Account

AmountAccount

ASSETS
Current assets
Cash and cash equivalents
Trade notes
Trade accounts receivable

AmountLIABILITIES
16,569,145

Current liabilities

3,059,279

8,566,723

Trade notes

275,485

983,415

Trade accounts payable

1,907,572

4,140,107

Accounts payable – other347,630

Securities

300,000

Accrued expenses

66,575

Finished products

401,674

Income tax payable

134,700

600,216

Advances by customers

37,642

Deposits received

12,446
179,000

Work in progress
Raw materials and supplies

1,130,821

Prepaid expenses

27,106

Consumption tax receivable

221,264

Deferred tax assets

178,595

Accrued employees’ bonuses
Accrued bonuses to directors andcorporate auditors
Warranty reserve

Other

30,219Other

Allowance for doubtful accounts

4,714,672

Property, plant and equipment

3,091,592

Buildings

894,886

Structures

17,745

Machinery and equipment

14,025

Furniture and fixtures
Land

84,50046(11,000)

Fixed assets

Vehicles

13,680Long-term liabilities
Liability for retirement benefits todirectors and corporate auditors
Guarantee deposit

67,36066,780580

421
55,855

Total Liabilities

3,126,639

2,011,566

Construction in progress
Intangible assets
Telephone subscription right
Trademark right
Software

97,091

NET ASSETS

28,692

Shareholders’ equity

18,106,122

11,430Common stock

1,985,666

995

Capital surplus

2,023,903

16,266

Legal capital surplus

Investments and other assets

1,594,388

Investment securities
Stocks of subsidiaries andaffiliates

250,994

Legal retained earnings

286,314775,957

Other retained earnings

14,157,446

Reserve for dividend
equalization
General reserve
Retained earnings brought
forwardTreasury stock

1,000,000

Valuation and translation adjustments
Net unrealized gain (loss) on
available-for-sale securities

51,056

Investments
Investments in affiliates
Long-term loans receivable

Retained earnings

2,023,903

170
267,132
305

Guarantee deposits

29,814

Reorganization claims

38,162

Deferred tax assets

71,075

Other

198,938

Allowance for investments loss

(38,162)
Total Net Assets

Total Assets

21,283,818– 21 –

Total Liabilities and Net Assets

14,443,761

8,700,000
4,457,446(347,208)

51,05618,157,178
21,283,818

Statements of Income(From April 1, 2010 to March 31, 2011)(Thousands of yen)Account

AmountNet sales

11,703,060

Cost of sales

7,751,145

Gross profit

3,951,914

Selling, general and administrative expenses

3,181,619

Operating income

770,295

Non-operating income
Interest and dividend income

138,552

Purchases discounts

8,203

Other

24,118170,874

Non-operating expenses
Sales discounts

589

Foreign exchange losses

50,697

Other

212

Ordinary income

51,499889,671

Extraordinary income
Gain on sales of investment in securities

782

782

398

398

Extraordinary expenses
Loss on disposal and sales of tangible fixed assets

Income before income taxes and minority interests

890,054

Income taxes
Current

250,459

Deferred30,310Net income

609,284– 22 –

Statements of Changes in Net Assets(From April 1, 2010 to March 31, 2011)(Thousands of yen)
Shareholders’ equity
Capital surplus

Retained earnings
Other retained earnings

Commonstock

Total
retainedearnings

Legal capitalsurplus

Total capitalsurplus

Legal retained
earnings

Dividend
equalization
fund

Other reserve
fund

Retainedearnings
brought
forward2,023,903

2,023,903

286,3141,000,000

8,700,000

4,023,071

14,009,386

Dividends of surplus(174,909)(174,909)

Net income

609,284

609,284

Balance as of March 31, 2010

1,985,666

Changes in the current period

Acquisition of treasury stock
Changes in items other thanshareholders’ equity, net
Total changes in the current
periodBalance as of March 31, 20011

-

-

-

-

-

-

434,375

434,375

1,985,666

2,023,903

2,023,903

286,3141,000,000

8,700,000

4,457,446

14,443,761

Shareholders’ equity

Treasury stock

Balance as of March 31, 2010

( 346,098)

Valuation and translation adjustments

Total shareholders’equityNet unrealized gain
(loss) on availablefor-sale securities

Total valuation andtranslation
adjustments

17,672,858

68,374

68,374

Total net assets

17,741,233

Changes in the current period
Dividends of surplus(174,909)(174,909)

Net income

609,284

609,284(1,110)(1,110)Acquisition of treasury stock(1,110)Changes in items other thanshareholders’ equity, net
Total changes in the current period
Balance as of March 31, 20011(17,318)(17,318)(17,318)(1,110)433,264(17,318)(17,318)

415,945(347,208)

18,106,122

51,05651,05618,157,178– 23 –

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

c.

Intangible assets- Software used internally: Straight-line method based on the expected useful lives- Other intangible assets:
Straight-line method
Long-term prepaid expenses: Straight-line method(3) Estimation on allowance and reserves
a. Allowance for doubtful accounts:
To provide for possible bad debt losses, the amount deemed unrecoverable is accounted using
the loan loss ratio based on past experience for general claims and by examining the possibilityof recovery on an individual basis for specific claims with default possibility.
b. Accrued employees’ bonuses:
In order to allocate the payment of employees’ bonuses, the Company provides the amountsubject to the fiscal year under review among the total estimated amount to be paid as
employees’ bonuses..
c. Accrued bonuses to directors and corporate auditors:
The Company provides the projected payment amount to be allocated for the payment ofbonuses to directors and corporate auditors.
d. Warranty reserve:
To provide for expenses incurred for free repairs related to product sales, an amount isaccounted based on historical experience.
e. Liability for retirement benefits to directors and corporate auditors:
The Company provides the estimated amount of retirement benefits to directors and corporate
auditors which would be required if all directors and corporate auditors retired at the balance
sheet date according to internal regulations for allocation of retirement benefit payments todirectors and corporate auditors. This plan was terminated on June 29, 2006 and no additional
provision has been recorded since then. Therefore, the balance as of March 31, 2011 isprovided in proportion to the term that present directors had been in their respective positions
before June 2006.

– 24 –

(4) Employees’ retirement benefits
To provide for employees’ retirement benefits, based on the projected benefit obligations at yearend and the pension asset balance, the amount of pension assets surplus to projected benefit
obligations is recorded in the “Other” field under “Investments and other assets”. The net
actuarial loss or gain is subject to amortization from the next fiscal year of the recognition thereof
onward in an amount pro rated by the straight-line method based on the average remaining
employee service period (10 to 16 years) at the time of the recognition of net actuarial loss orgain in each fiscal year.
(5) Lease
Except for finance leases that deem to transfer ownership of the leased property to the lessee, allfinance leases are accounted for as operating leases.
(6) Other basic significant matter for the preparation of Financial Statements
Consumption tax and local consumption tax are accounted for using the tax excluded method.
(7) Change in accounting principle
Accounting Standard for Asset Retirement Obligations
Effective from the fiscal year ending March 31, 2011, the Company applied ASBJ Statement No. 18,“Accounting Standard for Asset Retirement Obligations” and ASBJ Guidance No. 21, “Guidance on
Accounting Standard for Asset Retirement Obligations,” both issued on March 31, 2008.
The effect of this change on the accompanying consolidated financial statements was none.
(8) Change of expression method‘Loss on termination of lease’ to be reported in non-operating expense until the previous fiscal
year should be changed to be included by others in non-operating expense from this fiscal year.
Amount of which in others of non-operating expense in this fiscal year is ¥211 thousand.
2.

3.

4.

Notes to Balance Sheet(1) Accumulated depreciation of property, plant and equipment:(2) Monetary credit and debts to affiliates
a. Short-term monetary credit:b. Short-term monetary debts:¥2,559,645 thousand¥1,658,456 thousand¥16,551 thousand

Notes to Statements of Income
Transactions with subsidiaries and affiliates
a. Net sales:b. Purchases:c. Selling, general and administrative expenses:
d. Non-operating transactions:¥3,070,914 thousand¥1,948 thousand¥246,240 thousand¥105,084 thousand

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

Common stock

Number of shares atthe end of previous FY

Number of increased
shares of current FY

Number of decreased
shares of current FY

Number of shares atthe end of current FY

725-

328,497

327,772

Note: The increase in the number of shares of treasury stock (725 shares) is due to the purchase of shares of less than one unit.

– 25 –

5.

Notes on tax-effect accounting
Breakdown by cause of deferred tax assets and liabilities
Deferred tax assets
Inventories
Buildings
SoftwareAccrued employees’ bonuses
Accrued enterprise taxes
Warranty reserve
Liability for retirement benefits to directors and corporate auditors
Other
Subtotal deferred tax assets
Valuation reserve
Total deferred tax assets
Deferred tax liabilities
Prepaid pension costs
Marketable securities valuation difference - otherTotal deferred tax liabilities
Net deferred tax assets(Thousands of yen)
46,84638,50983,89371,60013,56733,80026,712
29,578344,505(32,672)
311,833
34,12028,041
62,162
249,670

Note: Net deferred tax assets are included in following balance sheet items.
(Thousands of yen)
Current assets
178,595
Fixed assets
71,075
6.

Notes on fixed assets leased by the Company(1)In addition to the fixed assets accounted in the Balance Sheet, some business machines are used
under finance lease agreements where the transfer of ownership of the leased property to the lessee
is not effectuated.
a. Acquisition cost equivalent on the closing date, accumulated depreciation equivalent and yearend balance equivalent(Thousands of yen)
Acquisition costequivalent

Accumulated
depreciation equivalentYear-end balance
equivalent

Furniture and Fixtures

9,562

8,010

1,552

Total

9,562

8,010

1,552

b.Future leasing expense equivalents on the closing dateYear-end balance equivalents of future leasing expense
Within 1 year
Over 1 year
Total

(Thousands of yen)
1,348
203
1,552

(2) Operating leases
Year-end balance equivalents of future leasing expense
Within 1 year
Over 1 year
Total

(Thousands of yen)
10,224
1,528
11,753– 26 –

7.

Transactions with related parties
Subsidiaries, etc.

Type

Subsid
iary

Name

%
of
votingrights held

Relationship
Concurrent
directors,
etc.
Concurrent
directors: 2

YushinAmerica,Inc.

100%
Directly
held by theCompany

YushinKorea Co.,
Ltd.

100%
Directly
held by theCompany

Concurrent
directors: 2

YushinPrecision
Equipment(Thailand)Co., Ltd.

49%
Directly
held by theCompany

Concurrent
directors: 1

Guang Zhou
YushinPrecision
Equipment
Co., Ltd.

100%
Directly
held by theCompany

Concurrent
directors: 3

Businessrelationship
SaleofCompany
products andmanufactureand sale oflabor saving
machines
Saleof
Company
products andmanufactureand sale oflabor saving
machines
Saleof
Company
products andmaintenanceservice

Manufactureof Company
products

Typeoftransactions

Transaction
amountAccount

Year-endbalance(¥thousands)(¥thousands)

Saleof
products

1,130,150

Accounts
receivable-trade431,416

Saleof
products

529,531

Accounts
receivable-trade289,474

Saleof
products

435,300

Accounts
receivable-trade230,883

Subscriptionofshareallotment

2,665

-

Sale
of
products

470,286

Accounts
receivable-trade-448,321Transaction terms or method of determining transaction terms(Note) For sale of products, prices are determined by negotiations considering local market prices.
8. Per share information-(1)Net assets per share:-(2)Net income per share:¥1,038.11¥34.83

Note: Amounts less than one thousand yen are truncated.

– 27 –

(TRANSLATION PURPOSE ONLY)[Certified copy of the Independent Auditors’ Report concerning consolidated statutory report]

Independent Auditors’ Report
May 20, 2011
To the Board of Directors of
Yushin Precision Equipment Co., Ltd.:
Deloitte Touche Tohmatsu LLC
Yoshiki Yamada, CPA [SEAL]
Limited, Designated andEngagement Partner
Hiroyuki Kobayashi, CPA [SEAL]
Limited, Designated andEngagement Partner

We have audited the consolidated statutory report, namely, the Consolidated Balance Sheets, theConsolidated Statements of Income and the Consolidated Statements of Changes in Net Assets, ofYushin Precision Equipment Co., Ltd. (the “Company”) for the fiscal year from April 1, 2010 to March
31, 2011 in accordance with Paragraph 4, Article 444 of the Company Law. The preparation of theconsolidated statutory report is the responsibility of the Company’s management. Our responsibility is toexpress an opinion on the consolidated statutory report based on our audit as independent auditors.
We conducted our audit in accordance with auditing standards generally accepted in Japan. Those
auditing standards require us to obtain reasonable assurance about whether the consolidated statutory
report is free of material misstatement. An audit is performed on a test basis and includes assessing theaccounting principles used, the method of their application and estimates made by management, as well
as evaluating the overall presentation of the consolidated statutory report. We believe that our audit
provides a reasonable basis for our opinion.
In our opinion, the consolidated statutory report referred to above presents fairly, in all material respects,
the consolidated financial position and the results of operations of Yushin Precision Equipment Co., Ltd.
and its consolidated subsidiaries for the period for which the consolidated statutory report is prepared, inconformity with accounting principles generally accepted in Japan.
Our firm and engagement partners have no interest in Yushin Precision Equipment Co., Ltd., whichshould be disclosed pursuant to the provisions of the Certified Public Accountants Law of Japan.

– 28 –

(TRANSLATION PURPOSE ONLY)[Certified copy of the Independent Auditors’ Report concerning non-consolidated statutory report]

Independent Auditors’ Report
May 20, 2011
To the Board of Directors of
Yushin Precision Equipment Co., Ltd.:
Deloitte Touche Tohmatsu LLC
Yoshiki Yamada, CPA [SEAL]
Limited, Designated andEngagement Partner
Hiroyuki Kobayashi, CPA [SEAL]
Limited, Designated andEngagement Partner

We have audited the statutory report, namely, the Balance Sheets, the Statements of Income, theStatements of Changes in Net Assets and its supporting schedules of Yushin Precision Equipment Co.,
Ltd. for the business year from April 1, 2010 to March 31, 2011 in accordance with Item 1, Paragraph 2,
Article 436 of the Company Law. The preparation of the statutory report and its supporting schedules are
the responsibility of the Company’s management. Our responsibility is to express an opinion on thestatutory report and its supporting schedules based on our audit as independent auditors.
We conducted our audit in accordance with auditing standards generally accepted in Japan. Those
auditing standards require us to obtain reasonable assurance about whether the statutory report and its
supporting schedules are free of material misstatement. An audit is performed on a test basis and includes
assessing the accounting principles used, the method of their application and estimates made bymanagement, as well as evaluating the overall presentation of the statutory report and its supporting
schedules. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the statutory report and its supporting schedules referred to above present fairly, in allmaterial respects, the financial position and the results of operations of Yushin Precision Equipment Co.,
Ltd. for the period for which the statutory report and its supporting schedules are prepared, in conformity
with accounting principles generally accepted in Japan.
Our firm and engagement partners have no interest in Yushin Precision Equipment Co., Ltd. whichshould be disclosed pursuant to the provisions of the Certified Public Accountants Law of Japan.

– 29 –

(TRANSLATION PURPOSE ONLY)<Certified copy of the audit report concerning non-consolidated statutory report>

Audit Report
Regarding the performance of duties by the Directors for the fiscal year from April 1, 2010 to March 31,
2011, 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
The Board of Corporate Auditors established auditing policies, allocation of duties, and otherrelevant matters, and received reports from each Corporate Auditor regarding his or her audits andresults thereof, as well as received reports from the Directors, other relevant personnel, andindependent auditors regarding performance of their duties, and requested explanations as necessary.
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 department, other employees,
and any other relevant personnel, and made efforts to optimize the environment for informationcollection and audit, and participated in the Board of Directors’ Meetings and other important
meetings, received reports from the Directors, employees, and other relevant personnel regarding
performance of their duties, requested explanations as necessary, examined important authorized
documents and associated information, and studied the operations and financial positions at the head
office and principal offices.
In addition, we received periodic reports and requested explanations as necessary from the Directors,
other relevant 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 3of Article 100 of the Enforcement Regulation of Corporate Act as a system required
to ensure the compliance of laws and the Articles of Associations in the execution ofbusinesses by directors written in the business report.
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. Based on the above methods, we examined the business report andsupporting schedules related to the relevant business year.
Furthermore, we monitored and verified whether the independent auditors maintained their
independence and implemented appropriate audits, and we received reports from the independent
auditors regarding the performance of their duties and requested explanations as necessary. In
addition, we received notice from the independent 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 non-consolidated financial statements (Balance
Sheets, Statements of Income, and Statements of Changes in Net Assets) and supporting schedules,
and the consolidated financial statements (Balance Sheets, Statements of Income, and Statements of
Changes in Net Assets).

– 30 –

2.
a.

Audit Results
Results of Audit of Business Report and Other Relevant Documents(1) In our opinion, the business report and supporting schedules are in accordance with therelated laws and regulations and Articles of Incorporation, and fairly represent theCompany’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
with respect to the Articles of Incorporation.
(3) In our opinion, resolutions of the Board of Directors for the internal controls system arefair. And also the contents of the business report about the internal controls system and the
director’s activities and implementation of internal control system have no issues to be
pointed out.

b.

Results of Audit of Financial Statements and Supporting Schedules
In our opinion, the methods and results employed and rendered by the independent auditors,
Deloitte Touche Tohmatsu LLC, are fair and reasonable.

c.

Results of Audit of Consolidated Financial Statements
In our opinion, the methods and results employed and rendered by the independent auditors,
Deloitte Touche Tohmatsu LLC, are fair and reasonable.

May 23, 2011
Board of Corporate Auditors,
Yushin Precision Equipment Co., Ltd.
Standing Corporate Auditor
Outside Corporate Auditor
Outside Corporate Auditor– 31 –

Shujiro Sawada [SEAL]
Yasuhiro Orita [SEAL]
Takao Yoshikawa [SEAL]Reference Documents for the General Meeting of Shareholders
Proposal 1 : Election of Five (5) Directors
The terms of office of all the currently serving five (5) Directors will expire at the conclusion of thisMeeting. Consequently, for the purpose of strengthening the Company’s management foundation,
shareholders are asked to vote for these five candidates for director.
The candidates for the position of Directors are as follows: five
No.

Name
(Date of birth)

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

Mayumi Kotani(January 12, 1947)

December 2002
April 2006
March 2011
April 2005

2

Satoshi Kimura(April 1, 1954)

October 2005
April 2006
June 2006
June 2008
March 2010
December 2004
February 2005
March 2005
October 2005

3

Yasuharu Odachi(July 31, 1958)

April 2006
April 2008
June 2008
April 2008

4

Yuji Tsujimoto(March 25, 1952)

June 2008
June 2009
June 2010

Joined the Company
Director
Executive Vice President and Director
Executive Vice President and Director, Head of Sales
H.Q.
President and Representative Director
President and Head of Sales and Customer Service
H.Q.
President
To the present
Joined the Company as Executive Officer andGeneral Manager of Purchase Dept.
Executive Officer and Head of Purchase Dept.
Senior Executive Officer and Head of Purchase H.Q.
Executive Director and Head of Purchase H.Q.
Managing Director and Head of Purchase H.Q.
Executive Managing Director
To the present
Joined the Company
General Manager of Production Technology Dept.
General Manager of Research & Development Dept.
Head of Research & Development Dept. and Quality
Assurance Dept.
Executive Officer and Head of Research &Development H.Q. and Quality Assurance Dept.
Executive Officer and Head of Research &Development H.Q.
Director and Head of Research & Development H.Q.
To the present
Joined the Company
Standing Corporate Auditor
Director and Head of General Affairs Dept.
Director and Head of Administrative H.Q. andGeneral Affairs Dept.
To the present

Joined the Company
Deputy Head of Manufacturing Dept.
Deputy Head of Manufacturing Dept. and Head of
Quality Assurance Dept.
Executive Officer, Deputy Head of Manufacturing
April
2009
5
Yasushi Kitagawa
Dept. and Head of Quality Assurance Dept.
(August 12, 1958)
Executive Officer, Head of Manufacturing Dept. andAugust 2009
Head of Quality Assurance Dept.
Director and Head of Manufacturing Dept. and Head
June 2010of Quality Assurance Dept.
To the present
Note: Candidates for Directors have no special interests in the Company.

Number ofshares held

2,259,901
shares1,100 shares

2,100 shares

1,000 shares

September 2007
November 2007
April 2008

– 32 –

1,200 shares

Proposal 2 : Election of One(1) Corporate Auditor
Corporate Auditor Yasuhiro Orita’s term of office will end at the closing of this General Meeting of
Shareholders. Accordingly, we propose to elect one(1) Corporate Auditor.
The Board of Corporate Auditors has consented to this proposition.
The candidate for the position of Corporate Auditor is as follows:
No.

Name
(Date of birth)

Career summary, position, areas of responsibility, and representation ofother organizations
April 1975

1

Yasuhiro Orita(September 30,1944)

May 1985
June 1994

Registered at Attorney at Law
Established Orita Law Office (current Keyaki Law
Office)To the present
Corporate Auditor
To the present

Number ofshares held

5,420ares

Notes: 1. The candidate for Corporate Auditor has no special interests in the Company.
2. Mr. Orita is the candidate of outside Corporate Auditor. He is the present outside Corporate Auditor of the Company,and his term of office as Corporate Auditor of the Company is 17 years at the closing of this General Meeting of
Shareholders. We would like to request the nomination of Mr. Orita to the candidate of outside Corporate Auditor in
expectation of his special view as the lawyer to be reflected to the audit of the Company.
3.Mr. Orita has no experience for business administration directly, but we judge he has the ability to execute businessproperly as outside Corporate Auditor of the Company as mentioned above Note2.

– 33 –