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 4, 2020
Dear Shareholders,

Notice of Convocation for
the 47 Ordinary General Meeting of Shareholdersth

We would like to express our deepest condolences.
Notice is hereby given that the 47th 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 Tuesday, June 23, 2020
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
Wednesday, June 24, 2020 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
47th Fiscal Year (from April 1, 2019 to March 31, 2020) 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 47th
Fiscal Year (from April 1, 2019 to March 31, 2020)

Agenda for resolution:
Proposal 1: Election of Ten (10) Directors
Proposal 2: Election of Two (2) Corporate Auditors

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

<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 Tuesday, June 23, 2020. 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–(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.
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–

(Submitted Documents)

Business Report(from April 1, 2019 to March 31, 2020)
1. Current Business Conditions(1) Progress and achievements
Regarding the global economy during this fiscal year under review, due to uncertainties about the
future, including trade friction between the U.S. and China, the willingness of companies to makecapital investments has been declining globally. Furthermore, since the beginning of 2020, thespread of COVID-19 worldwide has slowed down the economic activities of each country. As aresult, concerns over the global economic slowdown have intensified, and the environment
surrounding us has become even more severe.
Under these circumstances, the YUSHIN Group has continued to develop new customer base on
global scale. However, orders received during this fiscal year have remained lower compared to theprevious fiscal year. Regarding the outcome for this fiscal year under review, sales of Customordered equipment increased significantly, especially in the medical field overseas. On the other
hand, sales of Take-out robots did not grow from the beginning of the period in Asia due to therestraint of capital investment, and the sales in Japan also slowed down from the second half. As aresult, the consolidated net sales decreased by 8.3% year on year to 20,011 million yen. Operating
profit decreased 16.3% year-on-year to 2,309 million yen, although expenses were suppressed due
to cost reductions by streamlining operations and reductions in depreciation expenses. Ordinary
profit decreased 21.0% year on year to 2,205 million yen due to foreign exchange losses, and Profit
attributable to owners of parent decreased 19.5% year on year to 1,532 million yen.
For the purpose of expanding sales channels and expanding the service system in the European
market, we established a wholly owned subsidiary YUSHIN EUROPE GMBH in Germany andstarted operations in June 2019. We are accelerating the construction of sales channels by exhibitingat the K exhibition, which is the world's largest trade fair for plastics and rubber held in Germany in
October 2019.

–4–

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

2019
Amount2020%

AmountChange%%Take-out robots

15,512,592

71.0

12,770,127

63.8(17.7)

Custom-ordered
equipment

2,880,736

13.2

4,056,072

20.3

40.8

Parts and maintenanceservice

3,440,070

15.8

3,185,499

15.9

(7.4)

Total

21,833,399

100.0

20,011,700

100.0

(8.3)

(2) Capital investment
The total amount of capital investment for the YUSHIN Group effectuated over the course of theperiod under review was 198 million yen mainly for the development of Technical center equipment
construction at 38 million yen.
(3) Financing activities
No material items to report.
(4) Assets and operating results 2017 - 2020
Years ended March 31,

2017

2018

2019

2020

Net sales(thousands of yen)

19,346,399

20,878,651

21,833,399

20,011,700

Ordinary profit(thousands of yen)

2,058,192

2,432,690

2,791,364

2,205,033

Profit attributable toowners of parent(thousands of yen)

1,380,273

1,626,768

1,903,435

1,532,851

Earnings per share
(yen)

78.93

46.51
(Note 2)

54.54

45.01

Total assets(thousands of yen)

30,761,736

32,572,888

33,197,260

31,933,368

Net assets(thousands of yen)

25,451,718

26,472,034

27,117,484

27,471,961

Book value per share(yen)

1,444.38

750.37(Note 2)783.03800.04

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.

–5–

(5) Issues to be addressed
As for the business environment surrounding the YUSHIN Group, The prolongation of U.S.-China
trade friction and the spread of COVID-19 worldwide have raised concerns about the impact on
domestic and overseas economic activities. In this way, the global economy has uncertainties, and theoutlook is likely to remain uncertain. Depending on the future spread of COVID-19, there is concernthat it may have a negative impact on corporate activities over a long period of time, such as disruptionof the supply chain and restrictions on various business activities. Under these circumstances, the
YUSHIN Group will continue to swiftly grasp changes in the business environment and aim todevelop 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 farreaching 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 is differentiated by strengthening product power and strengthen our sales capabilities
worldwide. In the new business area, the YUSHIN Group must develop and bring new products tothe 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 human resource development, and strive for sustainablegrowth.
Specific effort for the 48th (FY2021), we place the highest priority on the safety of customers,
business partners and employees, paying close attention to COVID-19. We will also develop andsell Take-out robots that are adapted to each region of global market, and promote the enhancementof services that utilizing IoT and AI.
For Custom-ordered equipment, we will continue working to expand sales and to cultivate new
businesses in order to respond to the increasing automation needs in Japan and overseas.
To strengthen our organizational strength, we will improve productivity by strengthening
collaboration between departments, improving the efficiency of work styles, and improving thequality, efficiency, and speed of operations.
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 the strengths and advantages of the YUSHIN group.
Regarding crisis management, we will thoroughly prevent COVID-19, strengthen our internal
system including disaster prevention, and strive to maintain the provision of products and services
to our customers.

–6–(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

INR7.4 million

95%

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%

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

Guangzhou,
RMB13.742
Manufacturing of the
Guangdong,
100%
Company products
million
China
Notes: YUSHIN EUROPE GMBH was established in June 2019 as a subsidiary of the Company and has been included in thescope of consolidation since the current consolidated fiscal year.
GUANGZHOU YUSHINPRECISION EQUIPMENT
CO., LTD.

–7–

(7) Major operations (as of March 31, 2020)
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 formolding plants.
(8) Main sales offices and factories (as of March 31, 2020)
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, 2020)
Number of employees

Increase from the end of previous FY

689 (61)6

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, 2020)
No items to report.
(11) Other important matters pertaining to the status
No items to report.

–8–

2.

Matters Pertaining to the Shares of the Company (as of March 31, 2020)(1) Number of shares authorized:
80,000,000(2) Total number of issued shares:
35,638,066(3) Number of shareholders:
4,348(4) Major shareholders:Number of shares held
(thousand)

Name

Percentage ofshares held (%)

Yushin Industry Co., Ltd.

11,992

35.2

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

2,703

7.9

Miki Murata

1,847

5.4

Takayo Oda

1,846

5.4

Japan Trustee Service Bank, Ltd. (Trust Account)

1,251

3.7

The Kyoto Chuo Shinkin Bank, Ltd.

1,088

3.2

Mayumi Kotani

1,040

3.1

The Bank of Mitsubishi UFJ, Ltd.

849

2.5

The Bank of Kyoto, Ltd.

704

2.1

SMBC Trust Bank Ltd. (Sumitomo Mitsui Banking
Corporation Ritirement benefit Trust Account)

684

2.0

Note:
1. The company holds 1,602,454 shares of treasury shares but is excluded from this number.
2. Shareholding ratio is calculated by deducting treasury shares.

–9–

3.

Matters Pertaining to Officers of the Company(1) Directors and Corporate Auditors (as of March 31, 2020)
Position

Responsibilities and representation ofother organization

Name

President and Representative
Director

Mayumi Kotani

Executive Managing Director

Satoshi Kimura

General Manager of Purchase Division

Executive Managing Director

Yasushi Kitagawa

General Manager of Manufacturing Division
and Quality Assurance Department

Director

Tomohiro Inano

General Manager of Sales Division

Director

Yasuo Nishiguchi

Outside Director 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

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 Outside Directors stipulated in Item 15, Article 2 of
the Companies Act.
2. Corporate Auditors, Hiroho Kamakura and Michitoshi Morimoto are Outside 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 Auditors during the period under review
Name
Before change
After change
Date of change
Yasuharu Odachi

Managing Director

Reiko Nakayama-

Yasuhiro Orita

Outside Corporate Auditor

RetiredOutside Director of
Mandom Corporation
Retired– 10 –

June 21, 2019
June 21, 2019
June 21, 2019

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

Number of Directors/
Corporate Auditors

Total amount(Thousands of yen)
177,490

Directors

8

Corporate Auditors

4

22,20012

199,690

Total

Notes:
1. The 43rd Ordinary General Meeting of Shareholders held on June 20, 2016 resolved total remuneration for all Directors within
500,000 thousand yen per year（including remuneration for Outside Directors within 100,000 thousand yen）and total
remuneration for all Corporate Auditors within 100,000 thousand yen per year.
There are currently no Directors who have concurrent employment positions.
2. Total remuneration amounts provided above include the following amount in addition to fixed monthly compensation amounts.
- Provision for bonuses for directors: 23,410 thousand yen (23,410 thousand yen for 4 directors).
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. Therefore, the balance as of year-end (66,780 thousand yen) is
provided in proportion to the term that present Directors had been in their respective positions before June 2006.
4. The total amount of remuneration for the three (3) Outside Directors is 16,800 thousand yen.
5. The total amount of remuneration for the three (3) Outside Corporate Auditors is 10,200 thousand yen.

– 11 –

(3) Outside Directors and Outside Corporate Auditors
a. Important position at other organizations and the relationship between the company and other organizations.
- Yasuo Nishiguchi was the Outside Director of YAMADA Consulting Group Co., Ltd. until March, 2020. Since April
2020, he has been Chairman of the Board of the Company. 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.
Status and Name
Attendance and Remark
In the period under review, Yasuo Nishiguchi attended all of 13 Meetings of
Director, Yasuo Nishiguchi
Board 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, he
asked questions to clarify ambiguities that arose with respect to mattersreported or resolved, and provided opinions.
In the period under review, Hiroshi Matsuhisa attended all of 13 Meetings of
Director, Hiroshi Matsuhisa
Board of Directors. Based on the specialized knowledge by the person withacademic standing in engineering of Kyoto University, he asked questions toclarify ambiguities that arose with respect to matters reported or resolved, andprovided opinions.
In the period under review, Reiko Nakayama attended all of 13 Meetings of
Director, Reiko Nakayama
Board of Directors. Based on her experience of securities company
underwriter, and management executive officer and outside officers ofoperating companies, she asked questions to clarify ambiguities that arose withrespect to matters reported or resolved, and provided opinions.
Corporate Auditor, Hiroho Kamakura

In the period under review, Hiroho Kamakura attended 12 of 13 Meetings ofBoard of Directors and all of 6 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.

Corporate Auditor, Michitoshi Morimoto

In the period under review, Michitoshi Morimoto attended all of 13 Meetingsof Board of Directors and all of 6 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.

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 Association.

– 12 –

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

33,800 thousand yen
41,600 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.

– 13 –

5.

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

– 14 –

(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.

– 15 –

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, Internal Information Management Regulations, Information System
Management Regulations, etc.) This fiscal year, to clarify the scope of decision and the department
responsible for drafting and execution, we are reviewing and maintaining the rules regarding theauthority of work. We also provide in-house education and training on subcontracting laws andinsider regulations.

(2)

Status of addressing the risk management of losses
For the risk management overall, the Committee of Internal Control offers consultations for
implementation of companywide measures. If any 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] Significant matters are determined by the Board of Directors, and the Directors supervise thestatus of business execution.
[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.

– 16 –

7.

(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
and violations of laws and regulations, and the Articles of Association.
At conducting audit, Corporate Auditors utilize the expertise as the Certified Public Accountant
and the expert in corporate IT / System strategy, who are Outside 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.

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 8
yen per share and a year-end dividend of 10 yen per share.

– 17 –

Consolidated Balance Sheets(as of March 31, 2020)(Thousands of yen)Account

AmountAccount

ASSETS
Current assets

AmountLIABILITIES
19,391,889

Current liabilities

4,250,803

Cash and deposits

8,646,219

Notes and accounts payable - trade895,133

Notes and accounts receivable trade

5,410,654

Electronically recorded obligations- operating

803,258

Merchandise and finished goods

772,690

Accounts payable - other418,287

Work in process

1,120,628

Accrued expenses

204,282

Raw materials and supplies

3,165,533

Income taxes payable

137,914

Consumption taxes receivable

19,143

Advances received

1,270,310

Prepaid expenses

140,126

Provision for bonuses

267,606

Other

136,139

Provision for bonuses for directors

23,410Allowance for doubtful accounts(19,247)

Provision for product warranties

178,399

Other

52,201

Non-current assets
Property, plant and equipment

12,541,479
10,905,978Non-current liabilities

210,603

Provision for retirement benefits for
directors

66,780

Buildings

4,392,530

Structures

161,764

Retirement benefit liability

62,919Machinery equipment andVehicles137,466

Deferred tax liabilities

34,438Tools, furniture and fixtures

92,074Other

46,466Land

6,107,772

Total liabilities

4,461,407

Leased assets

4,169

NET ASSETS

Construction in progress

10,199

Shareholders’ equity

27,185,619

Intangible assets

358,333

Share capital

1,985,666

Telephone subscription right

11,430Capital surplus

2,023,903

Software286,314Retained earnings

24,531,217

Others60,588Treasury shares(1,355,167)

Investments and other assets

1,277,168

Investment securities

159,973Retirement benefit asset

285,556

Deferred tax assets

658,373

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

Other

193,669

Non-controlling interests

Allowance for doubtful accounts(20,403)

Total net assets

Total assets

31,933,368– 18 –

Total liabilities and net assets

44,125
16,443(34,487)
62,169242,216
27,471,961
31,933,368

Consolidated Statements of Income(from April 1, 2019 to March 31, 2020)(Thousands of yen)Account

AmountNet sales

20,011,700

Cost of sales

11,991,662

Gross profit

8,020,037

Selling, general and administrative expenses

5,710,541

Operating profit

2,309,496

Non-operating income

46,484

Interest and dividends income

13,428Purchase discounts

10,126

Other

22,928Non-operating expenses

150,947

Sales discounts

1,170

Foreign exchange losses

147,975

Other

1,801

Ordinary profit

2,205,033

Extraordinary income

5,669

Gain on sales of non-current assets

5,669

Extraordinary loss

2,185

Loss on sales and retirement of non-current assets

1,185

Other

1,000

Profit before income taxes

2,208,516

Income taxes - current

565,497

Income taxes - deferred

63,770

Profit

1,579,248

Profit attributable to non-controlling interests

46,397

Profit attributable to owners of parent

1,532,851– 19 –

Balance Sheets(as of March 31, 2020)
Account

AmountAccount

ASSETS
Current assets(Thousands of yen)AmountLIABILITIES
15,145,403

Cash and deposits

6,001,179

Notes receivable - trade

1,478,745

Accounts receivable - trade4,123,529

Current liabilities

2,746,665

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

20,681
803,258
807,223

Merchandise and finished goods

206,339

Accounts payable - other352,484

Work in process

997,555

Accrued expenses

108,476

Raw materials and supplies

2,130,366

Income taxes payable

74,74685,679Advances received

210,066

Consumption taxes receivable

19,143

Provision for bonuses

263,000

Other

103,164

Provision for bonuses for directors

23,410

Provision for product warranties

64,000Other

19,318Prepaid expenses

Allowance for doubtful accounts(300)

Non-current assets

12,721,478

Property, plant and equipment

10,110,359

Buildings

3,978,531

Structures

161,764

Machinery and equipment

56,684

VehiclesTools, furniture and fixtures
Land
Leased assets
Construction in progress
Intangible assets

Non-current liabilities
Provision for retirement benefits for
directors
Other
Total liabilities

868

69,673
66,7802,893
2,816,338

NET ASSETS

54,620Shareholders’ equity

25,034,100

5,843,521

Share capital

1,985,666

Capital surplus

2,023,903

4,169
10,199Legal capital surplus

294,234

Retained earnings

2,023,903
22,379,698

Telephone subscription right

11,430Legal retained earnings

286,314

Software282,804

Other retained earnings

22,093,383

Investments and other assets

2,316,884

Reserve for dividend equalization

1,000,000

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

159,973

General reserve

8,700,000

931,110Retained earnings brought forward

12,393,383

297,873

Treasury shares(1,355,167)

Other

350,542

Allowance for doubtful accounts
Total assets

577,448

Valuation and translation adjustments
Valuation difference on available-forsale securities(64)
27,866,882– 20 –

16,443
16,443

Total net assets

25,050,544

Total liabilities and net assets

27,866,882

Statements of Income(from April 1, 2019 to March 31, 2020)(Thousands of yen)Account

AmountNet sales

14,751,243

Cost of sales

9,392,754

Gross profit

5,358,489

Selling, general and administrative expenses

4,082,249

Operating profit

1,276,239

Non-operating income

393,473

Interest income

2,882

Dividend income

361,682

Purchase discounts

10,126

Other

18,781Non-operating expenses

24,956

Sales discounts

1,170

Foreign exchange losses

22,017

Other

1,769

Ordinary profit

1,644,756

Extraordinary income

399

Gain on sales of non-current assets

399

Extraordinary losses

2,167

Loss on sales and retirement of non-current assets

1,167

Other

1,000

Profit before income taxes

1,642,988

Income taxes - current

426,157

Income taxes - deferred

3,151

Profit

1,213,679– 21 –

[Certified copy of the Accounting Auditors’ Report concerning consolidated statutory report](TRANSLATION)
INDEPENDENT AUDITOR'S REPORTMay 13, 2020
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,
2020, and the consolidated statement of income and consolidated statement of changes in equity
for the fiscal year from April 1, 2019 to March 31, 2020, 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, 2020, 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– 22 –

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.

– 23 –

[Certified copy of the Accounting Auditors’ Report concerning non-consolidated statutory report](TRANSLATION)
INDEPENDENT AUDITOR'S REPORTMay 13, 2020
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, 2020, and thenonconsolidated statement of income and nonconsolidated statement of changes i n equity for the
47th fiscal year from April 1, 2019 to March 31, 2020, 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, 2020, 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.
– 24 –

•

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.

– 25 –

[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, 2019 to March 31,
2020, the Board of Corporate Auditors hereby submits its audit report, which has been prepared throughdiscussions based on the audit report prepared by each Corporate Auditor.
1.

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

– 26 –

2.

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

May 14, 2020

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

Yoshihisa Nakanishi [SEAL]
Hiroho Kamakura [SEAL]
Michitoshi Morimoto [SEAL]

End of submitted documents– 27 –

Reference Documents for the General Meeting of Shareholders
Proposal 1: Election of Ten (10) Directors
The terms of office of all the currently serving seven (7) Directors will expire at the conclusion ofthis Meeting. We propose to increase the number of Director by three (3) in order to strengthen the
management system, and Shareholders are asked to vote for these ten (10) candidates for Directors.
The candidates for the position of Directors are as follows:
No.

Name
(Date of birth)

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

Mayumi Kotani(January 12, 1947)
1

December 2002
April 2006
March 2011

Joined the Company
Director
Executive Vice President and Director
Executive Vice President and Director,
General Manager of Sales Division
President and Representative Director
President and General Manager of Sales Division

Number ofshares held

1,040,202
sharesPresident and Representative Director
To the present

Reasons for appointment:
Mayumi Kotani has been engaged in management since the establishment of the Company and exercising strong
leadership as a President and Representative Director for many years. The Company renominates her for Director
because she has a wealth of experience in business management, and can be expected to strengthen the decisionmaking and supervisory functions of the Board of Directors.

Satoshi Kimura(April 1, 1954)

April 2005

Joined the Company as Executive Officer
and General Manager of Purchase Dept.

October 2005

Executive Officer
and General Manager of Purchase Dept.
Senior Executive Officer
and General Manager of Purchasing Division
Managing Director
and General Manager of Purchase Division
Executive Managing Director
and General Manager of Purchase Division
To the present

April 2006
June 2006

2
June 2008

6,000
sharesReasons for appointment:
Satoshi Kimura has been involved in management and operations of purchasing and administration, thus having a
wealth of experience in the business. The Company renominates him for Director because can be expected tostrengthen the decision-making and supervisory functions of the Board of Directors.
September 2007
November 2007
April 2008
April 2009

August 2009
Yasushi Kitagawa(August 12, 1958)
3

June 2010
June 2013
June 2017

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
To the present

4,800
sharesReasons 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.

– 28 –

No.

4

5

6

7

Name
(Date of birth)

Career summary, position, areas of responsibility, and representation of
Number ofother organizations
shares held
June 1989
Joined the Company
August 2003
General Manager of YUSHIN PRECISIONEQUIPMENT TRADING (SHENZHEN) CO., LTD.
April 2008
General Manager of Chinese Area and YUSHINPRECISION EQUIPMENT TRADING(SHENZHEN) CO., LTD.
Tomohiro Inano
3,400
July
2009
Assistant to General Manager of Sales Division(December 13,
sharesFebruary 2010
Deputy General Manager of Sales Division
1962)
March 2011
General Manager of Sales Division
March 2014
Executive Officer
and General Manager of Sales Division
June 2017
Director and General Manager of Sales Division
To the present
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
and supervisory functions of the Board of Directors.
April 2008
Joined the Company*
October 2008
Manager of R&D Section
Takayo Kotani
April 2009
General Manager of R&D Department(Name on family
1,846,932
April 2019
Executive Officer
register:sharesand General Manager of R&D Department
Takayo Oda)
June 2019
Executive Officer(August 26, 1977)
and General Manager of R&D Division
To the present
Reasons for appointment:
Takayo Kotani has been involved in management and operation of R&D and development strategy, thus having a
wealth of experience in the business. Also, she has been recognized socially for her achievements such asreceiving the Japan Society of Mechanical Engineers Medal for robot technology development. The Company
nominates her for Director because can be expected to strengthen the decision-making and supervisory functionsof the Board of Directors.
October 2013
Joined the Company
as General Manager of Internal Audit Office
July 2015
General Manager of Accounting Department*
2,200
April 2017
Executive Officer and General Manager of Corporate
Masahito Fukui
sharesManagement Department(June 30, 1960)
and General Manager of Accounting Department
April 2020
Executive Officer and General Manager of Corporate
Management Department
To the present
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 nominates him
for Director because can be expected to strengthen the decision-making and supervisory functions of the Board of
Directors.
October 2015
Joined the Company
as General Manager of General Affairs Department
September 2017 General Manager of General Affairs Department*
5,800
and Manager of Workstyle Support Team
Kota Oda
sharesApril
2019
Executive
Officer(June 10, 1978)
and General Manager of General Affairs Department
and Manager of Workstyle Support TeamTo the present
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 inthe business. The Company nominates him for Director because can be expected to strengthen the decisionmaking and supervisory functions of the Board of Directors.

– 29 –

No.

8

Name
(Date of birth)

Career summary, position, areas of responsibility, and representation of
Number ofother organizations
shares held
March 1975
Joined Kyoto Ceramic Co., Ltd.(currently Kyocera
Corporation)
June 1987
Director
June 1992
Senior Managing Director and Representative
Director
June 1997
Executive Vice president and Representative Director
June 1999
President and Representative Director
June 2003
President and Representative Director and President
and Executive Officer
June 2005
Chairman of the Board and Representative Director,
and Chief Executive Officer
21,400
Yasuo Nishiguchi
April 2006
Advisor and Director
shares(October 9, 1943)
June 2009Retired from the office of Director
June 2014
Outside Director of the Company
To the present
March 2015
Chairman and CEO of Socionext Inc.
June 2016
Outside Director of YAMADA Consulting Group
Co., Ltd.
March 2018
Retired from Chairman and CEO of Socionext Inc.
April 2020
Chairman and Director of YAMADA Consulting
Group Co., Ltd.
To the present
Reasons for nomination as an Outside Director:
Yasuo Nishiguchi has held such positions as the President and Representative Director, and the Chairman and
Representative Director of Kyocera Corporation. Based on his knowledge and experience in general management
cultivated through prominent corporate positions, we asked him to give the Company advice and supervision ofoperations from an independent position. Thus, the Company renominates him for Outside Director because can be
expected to strengthen the function of the Board of Directors.
June 1976
October 1987
April 1994

10,000sharesProfessor emeritus at Kyoto University
Outside Director of the Company
To the present
June 2016
Outside Corporate Auditor of Technology Seed
Incubation Co., Ltd.
Retired from Outside Corporate Auditor ofJune 2018
Technology Seed Incubation Co., Ltd.
Reasons for nomination as an Outside Director:
Based on the specialized knowledge by the person with academic standing in engineering of Kyoto University, we
asked him to give the Company advice and supervision of operations from an independent position. Thus, theCompany renominates him for Outside Director because can be expected to strengthen the function of the Board of
Directors. Although the person has no experience for business administration directly, the Company judges that hehas the ability to execute business properly as an Outside Director of the Company as mentioned above.
Hiroshi Matsuhisa(August 5, 1947)

9

Research Assistant of school of precision engineeringin Faculty of Engineering at Kyoto University
Assistant professor
Professor( transferred to graduate school of department of
Mechanical Engineering and Science by areorganization in 1995 )April 2012
June 2014– 30 –

No.

10

Name
(Date of birth)

Career summary, position, areas of responsibility, and representation of
Number ofother organizations
shares held
April 1983
Joined Japan Associated Finance Co., Ltd. (currently
JAFCO Co., Ltd)
January 1997
Joined Marusan Securities Co., Ltd.
March 2000
General Manager of Investment information
October 2004
General Manager of Underwriting
October 2008
Part-time Director of LivTech, Inc.
February 2009
Director and Head of Administrative H.Q. of
LivTech, Inc.
Reiko Nakayama
7,062
March 2013
Retired from the office of Director of LivTech, Inc.
(April 2, 1959)
sharesMarch 2015
Outside Director of LUCKLAND CO.,LTD
March 2016
Director of LUCKLAND CO.,LTD (Audits
Committee)
To the present
June 2018
Outside Director of the Company
To the present
June 2019
Outside Director of Mandom Corporation
To the present
Reasons for nomination as an Outside Director:
Based on her experience of securities company underwriter, and management executive officer and outside officers
of operating companies, we asked her to give the Company advice and supervision of operations from an
independent position. Thus, the Company renominates her for Outside Director because can be expected tostrengthen the function of the Board of Directors.

Note:
1
2
3
4

5

*The candidates for the new Directors.
The candidates for Directors have no special interests in the Company.
Yasuo Nishiguchi, Hiroshi Matsuhisa and Reiko Nakayama are candidates of Outside Directors.
Yasuo Nishiguchi, Hiroshi Matsuhisa and Reiko Nakayama are the present Outside Directors of the Company. Yasuo
Nishiguchi and Hiroshi Matsuhisa term of office as Director of the Company is respectively six (6) years at the closingof this General Meeting of Shareholders, Reiko Nakayama term of office as Director of the Company is two (2) year at
the closing of this General Meeting of Shareholders
The Company has registered Hiroshi Matsuhisa and Reiko Nakayama as Independent Officers provided in the rules of
the Tokyo Stock Exchange and submitted notices to this effect to the Exchange. Hiroshi Matsuhisa and Reiko Nakayama
will be continuously reregistered as Independent Officers if they are reappointed.

– 31 –

Proposal 2: Election of Two (2) Corporate Auditors
The terms of a Corporate Auditor, Hiroho Kamakura will expire at the conclusion of this meeting.
Accordingly, we propose to increase the number of Corporate Auditor by one (1) in order tostrengthen and enhance the audit system, and Shareholders are asked to vote for these two (2) candidates
for Corporate Auditors.
The Board of Corporate Auditors has consented to this proposition.
The candidates for the position of Corporate Auditors are as follows:
No.

1

Name
(Date of birth)

Career summary, position, areas of responsibility, andNumber of
representation of other organizations
shares held
April 1982
Joined the Company
March 1999
Manager of Manufacturing Section 3
December
2001
Manager of Sales Engineering Department*
April 2005
9,014
Manager of System Engineering Department
Katsumi Noda
October 2010
sharesGeneral Manager of System Engineering(October 19, 1959)
Department
October 2019
Mandatory Retired
Continue to work as fixed-term employee
Reasons for appointment:
Katsumi Noda has been involved in operation of production and sales, thus having a wealth of experience in thebusiness. The Company nominates him for Corporate Auditor because can be expected to strengthen the audit
function utilizing his experience and achievement.
November 1971
Joined Tohmatsu Aoki & Co. (currently“Deloitte Touche Tohmatsu LLC”)
May 1973
Registered as CPA
July 2012
Outside Corporate Auditor of Trusco
Nakayama Corporation
To the present
Hiroho Kamakura
5,700
July 2012
Outside Corporate Auditor of the Company(January 27, 1947)
sharesTo the present
March 2013

2

Note: 12
3
4
5
6

Outside Corporate Auditor of FUJIO FOOD
SYSTEM CO., LTD.
To the present
February 2018
Outside Corporate Auditor of SymEnergy Inc.
To the present
The reason for the nomination as an Outside Corporate Auditor
The Company renominates Hiroho Kamakura for Corporate Auditor because can be expected to strengthen theaudit function utilizing his specialized knowledge as a Certified Public Accountant in finance and accounting.
Although the person has no experience for business administration directly, the Company judges that he has theability to execute business properly as an Outside Corporate Auditor of the Company as mentioned above.
*The candidate for the new Corporate Auditor.
Katsumi Noda has no special interests in the Company.
Hiroho Kamakura was involved in accounting audits of the Company as a CPA of Deloitte Touche Tohmatsu LLC from
April 1992 to March 2001 and from April 2003 to March 2005. Currently, he retired from the operation and has no special
interests in the Company.
Hiroho Kamakura is a candidate of Outside Corporate Auditor.
Hiroho Kamakura is the present Outside Corporate Auditor of the Company, and his term of office as Corporate Auditorof the Company is eight (8) years at the closing of this General Meeting of Shareholders.
Hiroho Kamakura meets the criteria of Independent Officer provided in the rules of the Tokyo Stock Exchange and theCompany plans to reregister him if he is reappointed.

End of Reference Documents– 32 –