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.

Securities Code: 6482
June 11, 2014

Dear Shareholders,

Notice of Convocation for
the 41 Ordinary General Meeting of ShareholdersstNotice is hereby given that the 41st 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
Wednesday, June 25, 2014 at the latest.
Details
Thursday, June 26, 2014 at 10 a.m.
4th Floor 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
41st Fiscal Year (from April 1, 2013 to March 31, 2014) as wellas the audit reports from the Accounting Auditor and the Boardof Corporate Auditors on the Consolidated Financial Statements
Report on the Non-Consolidated Financial Statements for the 41st
Fiscal Year (from April 1, 2013 to March 31, 2014)

Agenda for resolution:
Election of Seven (7) Directors
Proposal: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(From April 1, 2013 to March 31, 2014)
1. Current Business Conditions of the Yushin Group(1) Progress and achievements
In this fiscal year, the economy of United States was gradually recovering and the European
economy which had been struggling seemed to come out of the recession. On the other side, theeconomic growth in China and some of emerging Asian countries were slowing down. Therefor theworld economy had been uncertain situation. The economic situation in Japan has been upward
momentum due to correction of the yen appreciation and rising stock prices with implementationsome economic policies by the government and the last-minute demand just before raisingconsumption taxes.
Regarding the industries relating to the Yushin Group, demands on the industry of automotive
and IT devices for smartphones and etc. have kept strong and also demands for consumer goods
industry increased. And there were some improvements of the investment for the equipment inJapan following strong overseas markets.
In these circumstances, the Yushin Group increased unit sales of main products, take-out robots“SC and YC series” which were developed based on the concepts of a high-speed motion, vibration
suppression and an energy saving, and which have been recognized its performance in many
countries of the world. Especially, sales in the United States, China and South Korea weremaintained a good condition. Orders from new customers, who focus attention on energy-saving
performances and labor cost savings, significantly increased. And the Yushin Group has received
results of cost reduction activities, local purchases and making up production systems.
As the result, consolidated net sales increased by 21.7% year on year to 17,909 million yen. Also
operating income increased by 86.3% year on year to 2,792 million yen, ordinary income increased
by 77.2% year on year to 3,095 million yen, and net income increased by 69.8% year on year to1,893 million yen.
Consolidated net sales by product category(Thousands of yen)
Years ended March 31,
Product

2013
Amount2014%

AmountChange%%Take-out robots

10,141,284

68.9

12,736,206

71.1

25.6

Custom-ordered
equipments

2,144,021

14.6

2,626,046

14.7

22.5

Parts and maintenanceservices

2,436,336

16.5

2,547,039

14.2

4.5

Total

14,721,643

100.0

17,909,292

100.0

21.7

(2) Capital investment
The total amount of capital investment for the Yushin Group effectuated over the course of theperiod under review was 1,924 million yen mainly for the acquisition of the land for a new Head
Quarters valued at 1,659 million yen, the building a fence around the new land valued at 55 million
yen and the capital investment related to R&D valued at 38 million yen.
(3) Financing activities
No material items to report.

–2–(4) Assets and operating results 2011 - 2014
Years ended March 31,

2011

2012

2013

2014

Net sales(thousands of yen)

12,567,648

14,240,008

14,721,643

17,909,292

Ordinary income(thousands of yen)

1,055,101

1,265,740

1,746,573

3,095,258

Net income(thousands of yen)

729,833

778,283

1,114,801

1,893,027

Net income per share
(yen)

41.73

44.50

63.74

108.24

Total assets(thousands of yen)

21,583,634

22,641,673

23,744,465

26,252,009

Net assets(thousands of yen)

18,495,803

18,787,344

19,865,622

21,875,926

Net assets per share(yen)

1,055.42

1,072.24

1,131.63

1,243.88

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 the first half of the fiscal year
domestic economy in Japan is expected that it will be still in a tough situation on swinging in theeconomy due to raise in consumption tax rate. However, the economy has a prospect to enter into a
trend in upward from the effect of the monetary and fiscal policies implemented by the government
toward the second half. Although the economic recovery is expected, only a small increase in thecapital investment is anticipated within Japan since manufacturing shifted to overseas due to theprolonged appreciation of the yen. In the overseas, capital investments are expected to becontinuously strong particularly in North America and Asia.
Under these circumstances, Yushin aims to develop itself further as a number-one company
across the board in the “take-out robot” industry with Yushin philosophy “To contribute widely tosociety through the creation of innovative technology that enables customers to rationalize theirproduction activities in plastic molding industry”.
As for company strategy, Yushin strengthens and conducts business even more aggressively in
the global market, and work on developing superior cost-effective products with its quality andperformance to meet our customer needs. Furthermore, Yushin will also attract new customer forthe take-out robots while promoting receiving orders for custom-ordered equipment.
As for market strategy, Yushin has developed a sales and service network for take-out robots in
the U.S, Asia, and Europe. Yushin will continuously expand and strengthen the network in areas
where business is expected to grow, including South East Asia and South America, to develop a
global business that can adequately respond to worldwide customer purchases. Especially, Yushin
aims to develop new customers in emerging countries where labor costs are highly rising anddevelop world-class human resources who can sustain for expanding our presence around the world.
And Yushin maximally utilize the production capacity of Technical center opened in 2013 torespond to the sales increase in semiconductor-related and medical-related area.
As for product strategy, Yushin developed a new take-out robot utilizing optimum design
technology in 2010. This technology has been applied hereafter to general purpose take-out robot. It
is the technology which can largely contribute to power-saving by reducing weight and power
consumption. Yushin will continuously offer this definitely-differentiated product by appealing theperformance superiority such as high-speed motion, vibration suppression and power-saving. In
order to establish multiple core businesses, Yushin must develop and bring new products that canmanifest technological and/or sales synergies to the market.

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

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

Capital stock

Percentage
ofshareholding

Major operations

KRW350 million

100%

Sales and maintenance & repairof our products

NT$5 million

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
Trading (Shenzhen) Co., Ltd.

Shenzhen,
Guangdong,
China

US$400,000

100%

Sales and maintenance & repairof our products

Yushin Precision Equipment(Vietnam) Co., Ltd.

Hanoi,
Vietnam

US$300,000

100%

Sales and maintenance & repairof our products

PT. Yushin Precision Equipment
Indonesia

Jakarta,Indonesia

IDR2,841million

99%

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(Thailand) Co., Ltd.

Bangkok,Thailand

THB6 million

49%

Sales and maintenance & repairof our products

Yushin Precision Equipment(India) Pvt. Ltd.

Chennai, India

INR7.4 million

95%

Sales and maintenance & repairof our products

Yushin Automation Ltd.

Worcestershire,
U.K.

GBP150,000

95.6%

Sales and maintenance & repairof our products

Yushin America, Inc.

Rhode Island,
U.S.A.

US$8,000

100%

Sales and maintenance & repairof our products. Manufacturing& sales and maintenance &repair of custom-ordered
equipments

Guangzhou Yushin Precision
Equipment Co., Ltd.

Guangzhou,
Guangdong,
China

RMB13.7million

100%

Manufacturing of our products

Yushin Precision Equipment (Vietnam) Co., Ltd. was established in February 2014 as a subsidiary of the Yushin
Group and included in the scope of consolidation from the fiscal year under review.

(7) Major operations (as of March 31, 2014)
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, 2014)
Name

Location

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

Fushimi-ku, Kyoto-city

Technical Center

Minami-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

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

Ho Chi Minh Representative Office

Ho Chi Minh, Vietnam

Philippines Representative Office

Makati-city, Philippines(9) Employees (as of March 31, 2014)
Number of employees

Increase from the end of previous FY

589 (54)1

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, 2014)
No items to report.
(11) Other important matters pertaining to the status of the Yushin GroupNo material items to report.

–5–

2.

Matters Pertaining to the Shares of the Company (as of March 31, 2014)(1) Number of shares authorized:
40,000,000(2) Total number of issued shares:
17,819,033(3) Number of shareholders:
4,051(4) Major shareholders:
Investment in the Company
Name

Number of shares held
(thousand)

Percentage ofshares held (%)

Yushin Industry Co., Ltd.

4,376

25.0

Mayumi Kotani

2,187

12.5

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

774

4.4

774

4.4

656

3.8

563

3.2

The Kyoto Chuo Shinkin Bank, Ltd.

544

3.1

The Bank of Tokyo-Mitsubishi UFJ, Ltd.

424

2.4

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

376

2.2

The Bank of Kyoto, Ltd.

352

2.0

Note: Percentage of shares held is calculated after deducting the number of treasury stock (330,197 shares).

–6–

3.

Matters Pertaining to Officers of the Company(1) Directors and Corporate Auditors (as of March 31, 2014)
Position

Responsibilities and representation ofother organization

Name

President andRepresentative Director

Mayumi Kotani

Executive Managing
Director

Satoshi KimuraManaging Director

Yasuharu Odachi

Head of Research & Development H.Q.

Managing Director

Yasushi Kitagawa

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

Director

Yuji Tsujimoto

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

Full-time Corporate
AuditorShujiro Sawada

Corporate Auditor

Yasuhiro Orita

LawyerCorporate Auditor

Takao Yoshikawa

Professor emeritus at Osaka University

Corporate Auditor

Hiroho Kamakura

Certified Public Accountant
Corporate Auditor at Trusco Nakayama Corporation
Corporate Auditor at Fujio Food System Co., Ltd.

Notes:
1. Corporate Auditors Yasuhiro Orita, Takao Yoshikawa and Hiroho Kamakura are outside Corporate Auditors stipulated in
Item 2, Article 16 of the Company Law.
2. The following describes the activities of the three outside Corporate Auditors during the period under review.
Corporate Auditor, Yasuhiro Orita
In the period under review, Yasuhiro Orita attended 11 of 12 Meetings of Board of Directors and 4 of 5 Meetings ofthe Board of Auditors. At the Board of Directors’ Meetings, from his background as a legal specialist and practitioner heasked pertinent questions to clarify ambiguities that arose with respect to matters reported or matters resolved, andprovided 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 toreceiving 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 Meetings of Board of Directors and all of 5 Meetingsof the Board 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.
Corporate Auditor, Hiroho Kamakura
In the period after assuming the post, Hiroho Kamakura attended all of 12 Meetings of Board of Directors and all of 5
Meetings of the Board of Auditors. He is a Certified Public Accountant and has specialist knowledge in finance andaccounting. At the Board of Directors’ Meetings, from his background as a CPA 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. He is also the Corporate
Auditor at Trusco Nakayama Corporation and at Fujio Food System Co., Ltd. There is no special relationship between the
Company and Trusco Nakayama Corporation and Fujio Food System Co., Ltd.
3. Change of Directors and Corporate Auditors during the period under review
No items to report.
4. The Company has designated corporate auditor Takao Yoshikawa as an independent corporate officer as prescribed by the
Tokyo Stock Exchange and submitted notices to this effect to the exchange.

–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

172,470

Corporate Auditors

4

21,9009

194,370

Total

Notes:
1. The 35th 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 yen per year and the upper limit of the total remuneration for all Auditors
at 50,000 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 to Directors and Corporate Auditors: 34,500 thousand yen
3. With respect to the liability for retirement benefits to Directors and Corporate Auditors, the plan for retirement benefits for
Directors and Corporate Auditors was terminated at the 33rd Ordinary General Meeting of Shareholders held on June 29,
2006, and no additional provision has been recorded since then. Therefore, the balance as of March 31, 2014 (66,780
thousand yen) is provided in proportion to the term that present Directors and Corporate Auditors had been in their respective
positions before June 2006.
4. The total amount of remuneration for the 3 outside Corporate Auditors is 8,400 thousand yen.

–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

29,20033,650Note: 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, theIndependent Auditor, based on Paragraph 1, Article 427 of the Company Law limiting the liabilityof same as specified in Paragraph 1, Article 423 of the Law. The upper limit provided in thelimited 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 of
Operations
The following is an overview of the development of an internal control system to ensure that theexecution 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 the Company.
a.

System to ensure that the execution of duties of Directors and employees conforms to laws
and regulations and the Articles of Incorporation
The Company has established a code of conduct so that all employees comply with laws and regulations
and accepted social guidelines for behavior by attending the morning meeting at each department. In
addition, there is a system for handling matters involving compliance at meetings of the Board of Directors,
Board of Corporate Auditors and Executive Meeting. Measures to improve internal controls primarily
involve audits of business operations by the Internal Auditing Department.

b.

System for the preservation and management of information regarding the execution ofduties by Directors
Documents and other information concerning the execution of duties by Directors are properly stored
and managed in accordance with the importance of each item as prescribed in Documents Management
Regulations. Directors and Corporate Auditors can view these documents and other information as required.

c.

Regulations and other systems for the management of the risk of loss
For compliance, environmental protection, responses to disasters, information security, export
management and other items, the department responsible for risk management for each item prepares rules
and manuals and conducts training programs. The system for confirming safe conditions of all the membersof the Company is introduced to take control safety information quickly during an emergency. The Board of
Directors and Executive Meeting receive information about these activities in a timely manner. There is aframework under the supervision of the President and Representative Director for taking quick andappropriate actions to avoid problems or reduce the likelihood that they will occur.

d.

System to ensure efficiency in the execution of duties by Directors
The Board of Directors meets once each month in principle and aims to conduct highly transparent
management. Duties include reaching decisions about important matters and managing and supervising theexecution of business operations by directors. To improve the efficiency of the Company’s management, theBoard of Directors thoroughly examines important matters associated with all aspects of management. For
the execution of business operations, annual budgets are established based on the business climate andtargets for the entire company are established. Each department is responsible for determining and executing
specific measures needed to achieve those targets.

e.

System to ensure a properness of operations in the business group comprised of theCompany and its subsidiaries
The Yushin Group uses close cooperation among group companies and measures to strengthen
management systems for the purpose of ensuring proper corporate governance, compliance and financial
reports for the entire group. The oversight and management of the entire group is performed in accordancewith Subsidiary Management Regulations.

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 theindependence of said employees from Directors
There are currently no employees who assist Corporate Auditors. However, the Corporate Auditors can
ask employees of the Internal Auditing Department to perform auditing tasks as required. In addition,
employees who receive the required order from a Corporate Auditor to perform auditing tasks will no longer
be subject to instructions or orders from Directors and managers of the Internal Auditing Department.

g.

System for reporting to Corporate Auditors by Directors and employees and other systems
concerning reports to Corporate Auditors
Corporate Auditors attend important meetings and receive reports as needed to monitor the status ofbusiness operations. Directors and employees must promptly submit to the Corporate Auditors reports
concerning legally required matters as well as reports about other items that can have a significant effect on
the Company or the Group.

– 10 –

h.

Other systems to ensure effective audits by Corporate Auditors
The Board of Corporate Auditors holds separate meetings on a regular basis to exchange information
with the President and Representative Director and with the Independent Auditor. The Board of Corporate
Auditors also works closely with the Internal Auditing Department.

6.

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
by maintaining a stable operational base, improving its ROE and effectuating dividends based on theperformance results of each respective fiscal year. Specifically, the Company has a target at therealization of 30% and more of dividend payout ratio to non-consolidated net income.
For this fiscal year, a full-year dividend is 30 yen per share, comprising an interim dividend of
10 yen per share and a year-end dividend of 20 yen per share.

– 11 –

Consolidated Balance Sheets(As of March 31, 2014)(Thousands of yen)Account

AmountAccount

ASSETS
Current assets

AmountLIABILITIES
17,810,640

Current liabilities

4,107,905

Cash and deposits

7,728,245

Notes and accounts payable - trade

1,696,371

Notes and accounts receivable trade5,263,663

Accounts payable - other633,809

Merchandise and finished goods

837,873

Accrued expenses

114,447

Work in process

1,076,358

Income taxes payable

767,962

Raw materials and supplies

2,076,333

Advances received

388,832

Prepaid expenses

95,940

Provision for bonuses

214,000

Deferred tax assets

519,500

Provision for directors’ bonuses

34,500Other

238,089

Provision for product warranties

138,670

Allowance for doubtful accounts(25,363)

Deferred tax liabilities

Non-current assets
Property, plant and equipment

Other

8,441,368
7,758,635

4,466
114,843

Long-term liabilities

268,178

Provision for directors’ retirement
benefits

66,780123,459

Net defined benefit liability

33,938

Machinery and equipment

58,967

Other

167,459

Vehicles

52,878

Total liabilities

4,376,083

Tools, furniture and fixtures

131,375

Buildings

1,722,996

StructuresLand

NET ASSETS

5,640,928

Shareholders’ equity

21,418,143

Leased assets

22,254

Capital stock

1,985,666

Construction in progress

5,775

Capital surplus

2,023,903

146,080

Retained earnings

17,758,839

Treasury stock(350,265)

Intangible assets
Telephone subscription right

11,430536,652

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

Investment securities

230,176

Minority interests

Net defined benefit asset

107,464

Right of trademark

95

Software54,699Others

79,854

Investments and other assets

Deferred tax assets

10,500Other

189,514

Allowance for doubtful accounts
Total assets(1,003) Total net assets
26,252,009– 12 –

Total liabilities and net assets

335,801
53,416242,279
40,105
121,980

21,875,926
26,252,009

Consolidated Statements of Income(From April 1, 2013 to March 31, 2014)(Thousands of yen)Account

AmountNet sales

17,909,292

Cost of sales

10,269,015

Gross profit

7,640,276

Selling, general and administrative expenses

4,848,218

Operating income

2,792,058

Non-operating income

305,341

Interest and dividends income

20,419Purchase discounts

12,233Foreign exchange gains

249,737

Other

22,950Non-operating expenses

2,141

Sales discounts

1,003

Other

1,138

Ordinary income

3,095,258

Extraordinary income

91,982Gain on sales of non-current assets

2,934

Gain on sales of investment securities

9,047

Subsidy income

80,000Extraordinary loss

23,522

Loss on sales and retirement of non-current assets

23,522

Income before income taxes and minority interests

3,163,717

Income taxes - current

1,274,629

Income taxes - deferred(66,217)

Income before minority interests

1,955,306

Minority interests in income

62,278Net income

1,893,027– 13 –

Consolidated Statements of Changes in Net Assets(From April 1, 2013 to March 31, 2014)(Thousands of yen)
Shareholders’ equity

Balance as of April 1, 2013

Capital stock

Capital surplus

1,985,666

2,023,903

Retainedearnings
16,390,498

Treasury stock

Total
shareholders’equity(348,598)

20,051,469

Changes in the current period
Dividends of surplus(524,686)(524,686)

Net income

1,893,027

1,893,027

Acquisition of treasury stock(1,667)(1,667)

Changes in items other thanshareholders’ equity, net
Total changes in the current
periodBalance as of March 31, 2014--

1,368,341(1,667)

1,366,673

1,985,666

2,023,903

17,758,839(350,265)

21,418,143

Total accumulated other comprehensive income

Balance as of April 1, 2013

Valuationdifference on
availablefor-salesecurities

Foreigncurrencytranslation
adjustments

Remeasurements ofdefinedbenefit plans

Total
accumulated
othercomprehensive
incomeMinority
interests

Total net
assets58,239(317,906)-(259,667)

73,81919,865,622

Changes in the current period
Dividends of surplus(524,686)

Net income

1,893,027

Acquisition of treasury stock
Changes in items other thanshareholders’ equity, net(1,667)(4,822)560,186

40,105595,469

48,160643,630

Total changes in the current
period(4,822)560,186

40,105595,469

48,1602,010,304

Balance as of March 31, 2014

53,416242,279

40,105335,801

121,980

21,875,926– 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.
Yushin Precision Equipment (Vietnam) Co., Ltd. was established in February 2014 as a subsidiaryof the Yushin Group and included in the scope of consolidation from the fiscal year under review.

List of Subsidiaries
Yushin America, Inc.
Yushin Korea Co., Ltd.
Yushin Precision Equipment Sdn. Bhd.
Yushin Precision Equipment (Taiwan) Co., Ltd.
Yushin Precision Equipment (Thailand) Co., Ltd.
Yushin Automation, Ltd.
Yushin Precision Equipment Trading (Shenzhen) Co., Ltd.
Yushin Precision Equipment Trading (Shanghai) Co., Ltd.
Yushin Precision Equipment (India) Pvt. Ltd.
Guangzhou Yushin Precision Equipment Co., Ltd.
PT. Yushin Precision Equipment Indonesia
Yushin Precision Equipment (Vietnam) Co., Ltd.
(2) Application of the equity method
There is no non-consolidated subsidiary or affiliate company.
(3) 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 ofequity. The cost of securities sold is principally determined by the moving average method)ii) Inventories- Merchandise and finished goods, Work-in-process
Principally carried at cost determined by the identified cost method (the carrying value on thebalance sheet is written down to reflect the effect of lower profit margins)- Raw materials
Principally carried at cost determined by the periodic average method (the carrying value on
the balance sheet is written down to reflect the effect of lower profit margins)- Supplies
Carried by the last purchase price methodb. Depreciationi) Property, plant and equipment (excluding lease assets): Principally computed by the decliningbalance method
The range of useful lives for major assets is as follows:
Buildings:
13 - 40 years
Machinery and equipment:
5 - 12 years
ii)

Intangible assets (excluding leased assets)- Software used internally: Straight-line method based on the expected useful lives- Other intangible assets: Straight-line methodiii) Lease assets: For lease assets under non-ownership transfer finance lease transactions, theCompany applies a straight-line method with the lease period as useful life and the residual
value as 0.
c. Estimation on important allowance and reservesi) Allowance for doubtful accounts:
To provide for possible bad debt losses, the amount deemed unrecoverable is accounted using
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) Provision for 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) Provision for directors’ bonuses:
The Company provides the projected payment amount to be allocated for the payment ofbonuses to directors and corporate auditors.
iv) Provision for product warranties:
To provide for expenses incurred for free repairs related to product sales, an amount isaccounted based on historical experience.
v) Provision for directors’ retirement benefits:
The Company provides the estimated amount of retirement benefits to directors and corporate
auditors which would be required if all directors and corporate auditors retired at the balance
sheet date according to internal regulations. This plan was terminated on June 29, 2006 and no
additional provision has been recorded since then. Therefore, the balance as of March 31, 2014is provided in proportion to the term that present directors had been in their respective positions
before June 2006.

– 16 –

d. Other significant matter for the preparation of Consolidated Financial Statementsi) Employees’ retirement benefits
To provide for employees’ retirement benefits, based on the projected benefit obligations at
year-end 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 averageremaining employee service period (10 to 16 years) at the time of the recognition of net actuarial
loss or gain in each fiscal year.
ii)

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

2.

Changing in accounting policies(Adoption of Accounting Standard for Retirement Benefits)
Effective from this fiscal year ended March 31, 2014, the Company adopted the Accounting Standard
for Retirement Benefits (Accounting Standards Board of Japan Statement No. 26 issued on May 17,
2012; hereafter “ASBJ Statement”), and its Guidance on the Accounting Standard for Retirement
Benefits (Accounting Standards Board of Japan Guidance No. 25 issued on May 17, 2012; hereafter“ASBJ Guidance”) (But, except article 35 of ASBJ Statement and article 67 of ASBJ Guidance). Under
the new Accounting standard, pension assets are deducted from retirement benefit obligations and the
net amount is recognized as “Net defined benefit asset” and “Net defined benefit liability”, andunrecognized actuarial gains or losses are recorded as “Net defined benefit asset” and “Net defined
benefit liability”.
Regarding to the adoption of the Accounting Standard for Retirement Benefits, in accordance withtransitional accounting as stipulated in Article 37 of “ASBJ Statement”, the effect of the changes inaccounting policies arising from initial application is recognized as “Remeasurements of defined benefit
plans” in “Total accumulated other comprehensive income” as of March 31, 2014.
As the result, “Total accumulated other comprehensive income” on the Consolidated Balance Sheets
increased by 40,105 thousand yen.

3.

Changes in presentation(Consolidated Balance Sheet)“Accounts payable - facilities”, which was separately presented until previous fiscal year, isreported in “Accounts payable - other” from this fiscal year under review, because its materiality
decreased. “Accounts payable - facilities” in this fiscal year is 64,296 thousand yen.

– 17 –

4.

5.

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

3,691,370 thousand yen

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

821-

330,197

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

Number of shares atthe end of previous FY

Common stock

329,376

Note: The increase in the number of shares of treasury stock (821 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 9, 2013

Common stock

349,793

20

March 31,2013

June 12,2013

The Board of Directors’Meeting on November 6,
2013

Common stock

174,89810

September 30,
2013

December 2,
2013

Record date

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

Class ofsharesTotal dividend(Thousands ofyen)

Dividend
funds

Dividend per
share
(Yen)

The Board of
Directors’ Meetingon May 9, 2014

Commonstock

349,776

Retainedearnings

20– 18 –

Record date

Effective date

March 31,2014

June 12,2014

6.

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 tohedge exposure to foreign exchange rate risk but will never be used for speculation.
b. Details of financial instruments and their risks
Operating receivables consisting of Notes and accounts receivable - trade are generally exposedto the credit risk of customers, while foreign currency denominated operating receivables at foreign
operations are exposed also to the foreign exchange risk.
Investment securities are available-for-sale securities and are exposed to risk associated withmarket price volatility.
Operating debt consisting of Notes and accounts payable - trade is largely due four months orless. Accounts payable – other and Income taxes payable are due one year or less.
c. Risk management system for financial instruments
Payment dates and balances of outstanding are supervised for each customer based on rules forthe management of trade receivables and credit. In addition, there is a system for monitoring thefinancial soundness of customers.
For Investment securities, there are measures to periodically monitor the fair values of thesesecurities and the financial soundness of issuers of these securities.
(2) Fair value of financial instruments
The carrying value on the consolidated balance sheets, fair value, and their differences as of March
31, 2014 are shown as follows.

(1)
(2)
(3)

Carrying value(thousands of yen)

Fair value(thousands of yen)

7,728,245
5,263,663

7,728,245
5,263,663-

230,176

230,176-

Assets total

13,222,084

13,222,084-

Trade notes and accounts payable
Accounts payable - other
Income taxes payable

1,696,371
633,809
767,962

1,696,371
633,809
767,962-

Cash and time deposits
Notes and accounts receivable - trade
Investment securities
Other securities

(1)
(2)
(3)

Differences(thousands of yen)

Liabilities total
3,098,143
3,098,143(Note) Matters concerning determination of fair value of financial instruments and marketable securities.

-(Assets)(1) Cash and time deposits and (2) Notes and accounts receivable - trade.
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) Investment securities
Fair value of the above financial instruments such as stocks is determined by prices at stock
exchanges.
(Liabilities)(1) Notes and accounts payable - trade, (2) Accounts payable - other and (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.

– 19 –

(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 after one
year throughfive years

Due after five
years throughten years(thousands of yen)(thousands of yen)

Due within
one year(thousands of yen)7.

Due after
ten years(thousands of yen)

Cash and time deposits
Trade notes and accounts receivable

7,728,245
5,263,663

-

-

-

Total

12,991,908

-

-

-

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

1,243.88 yen
108.24 yen

Note: Amounts less than one thousand yen are truncated.

– 20 –

Balance Sheets(As of March 31, 2014)(Thousands of yen)Account

AmountAccount

ASSETS
Current assets
Cash and deposits
Notes receivable - trade
Accounts receivable - trade

AmountLIABILITIES
14,746,227

Current liabilities

5,833,753

Notes payable - trade970,843

Accounts payable - trade

4,642,795

Lease obligations

3,469,635
22,394
1,831,340
5,019

Merchandise and finished goods

496,928

Accounts payable - other567,516Work in process

989,612

Accrued expenses

68,516

1,289,649

Income taxes payable

601,878

36,479Advances received

23,786

Consumption taxes receivable

87,793

Deposits received

12,973

Deferred taxes assets

255,484

Provision for bonuses

214,000

Other

152,885

Provision for directors’ bonuses

34,500Allowance for doubtful accounts(10,000)

Provision for product warranties

87,000Raw materials and supplies
Prepaid expenses

Noncurrent assets

8,947,618

Property, plant and equipment

7,276,002

Buildings

1,508,027

Structures

123,459

Machinery and equipment

33,581

Vehicles

1,211

Tools, furniture and fixtures
Land

Notes payable - facilities
Noncurrent liabilities
Lease obligations
Provision for directors’ retirement
benefits
Long-term guarantee deposited
Total liabilities

90,738708
85,86718,507
66,780580
3,555,502

NET ASSETS

5,490,953

Shareholders’ equity

Lease assets

22,254

Capital stock

1,985,666

Construction in progress

5,775

Capital surplus

2,023,903

Intangible assets
Telephone subscription right
Right of trademark
SoftwareInvestments and other assets
Investment securities
Stocks of subsidiaries andaffiliates
Investments in capital ofsubsidiaries and affiliates
Guarantee deposits
Claims provable in bankruptcy,
claims provable in rehabilitationand other

Legal capital surplus

54,566
11,430Retained earnings

2,023,903
16,425,622

95

Legal retained earnings

286,31443,040

Other retained earnings

16,139,307

Reserve for dividend equalization

1,000,000

230,176

General reserve

8,700,000

789,460

Retained earnings brought forward

6,439,307

1,617,049

297,873

Treasury stock

27,614

Valuation and translation adjustments
Valuation difference on available-forsale securities

1,003

Deferred tax assets

79,816

Other

192,108

Allowance for doubtful accounts(1,003)

Total assets

20,084,926

23,693,846– 21 –(350,265)
53,41653,416

Total net assets

20,138,343

Total liabilities and net assets

23,693,846

Statements of Income(From April 1, 2013 to March 31, 2014)(Thousands of yen)Account

AmountNet sales

14,351,240

Cost of sales

9,060,468

Gross profit

5,290,772

Selling, general and administrative expenses

3,679,283

Operating income

1,611,488

Non-operating income

649,317

Interest and dividend income

598,965

Purchases discounts

12,233Foreign exchange gains

23,302

Other

14,815Non-operating expenses

2,016

Sales discounts

1,003

Other

1,013

Ordinary income

2,258,789

Extraordinary income

89,057

Gain on sales of non-current assets

10Gain on sales of investment in securities

9,047

Subsidy income

80,000Extraordinary loss

23,475

Loss on sales and retirement of non-current assets

23,475

Income before income taxes

2,324,371

Income taxes - current

792,102

Income taxes - deferred(84,507)

Net income

1,616,777– 22 –

Statements of Changes in Net Assets(From April 1, 2013 to March 31, 2014)(Thousands of yen)
Shareholders’ equity
Capital surplus

Retained earnings
Other retained earnings

Capital stock

Generalreserve

Retainedearnings
brought
forward

Total retained
earnings

8,700,000

5,347,216

15,333,531

Dividends of surplus(524,686)(524,686)

Net income

1,616,777

1,616,777

Balance as of April 1, 2013

1,985,666

Legal capitalsurplus

Total capitalsurplus

Legal retained
earnings

Reserve fordividend
equalization

2,023,903

2,023,903

286,3141,000,000

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, 2014

-

-

-

-

-

-

1,092,090

1,092,090

1,985,666

2,023,903

2,023,903

286,3141,000,000

8,700,000

6,439,307

16,425,622

Shareholders’ equity

Treasury stock

Balance as of April 1, 2013

(348,598)

Valuation and translation adjustments

Total shareholders’equity18,994,503

Valuation difference
on available-for-salesecurities
58,239Total valuation andtranslation
adjustments
58,239Total net assets

19,052,742

Changes in the current period
Dividends of surplus(524,686)(524,686)

Net income

1,616,777

1,616,777(1,667)(1,667)

Acquisition of treasury stock(1,667)

Changes in items other thanshareholders’ equity, net
Total changes in the current period
Balance as of March 31, 2014

(4,822)(4,822)(4,822)(1,667)

1,090,423(4,822)(4,822)

1,085,601(350,265)

20,084,926

53,41653,416

20,138,343– 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 ofequity. The cost of securities sold is principally determined by the moving average method)c. Inventories- Merchandise and finished products, Work in process:
Carried at cost determined by the identified cost method (the carrying value on the balance
sheet is written down to reflect the effect of lower profit margins).
- Raw materials:
Carried at cost determined by the periodic average method (the carrying value on the balance
sheet is written down to reflect the effect of lower profit margins)- Supplies:
Carried by the last purchase price method(2) Depreciationa. Property, plant and equipment (excluding lease assets): 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 (excluding lease assets)- Software used internally: Straight-line method based on the expected useful lives- Other intangible assets: Straight-line method
Lease assets: For lease assets under non-ownership transfer finance lease transactions, theCompany applies a straight-line method with the lease period as useful life and the residual
value as 0.

(3) Estimation on allowance and reserves
a. Allowance for doubtful accounts:
To provide for possible bad debt losses, the amount deemed unrecoverable is accounted using
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. Provision for 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. Provision for directors’ bonuses:
The Company provides the projected payment amount to be allocated for the payment ofbonuses to directors and corporate auditors.
d. Provision for product Warranties:
To provide for expenses incurred for free repairs related to product sales, an amount isaccounted based on historical experience.
e. Provision for directors’ retirement benefits:
The Company provides the estimated amount of retirement benefits to directors and corporate
auditors which would be required if all directors and corporate auditors retired at the balance
sheet date according to internal regulations. This plan was terminated on June 29, 2006 and no
additional provision has been recorded since then. Therefore, the balance as of March 31, 2014is provided 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 inan amount pro-rated by the straight-line method based on the average remaining employee service
period (10 to 16 years) at the time of the recognition of net actuarial loss or gain in each fiscal year.
(5) Other basic significant matter for the preparation of Financial Statements
Consumption tax and local consumption tax are accounted for using the tax excluded method.
(6) Changes in presentation(Balance Sheet)“Investments in capital”, which was separately presented until previous fiscal year, is reported
in “Other” of “Investment and other assets” from this fiscal year under review, because its
materiality decreased. “Investments in capital” in this fiscal year is 170 thousand yen.
“Accounts payable - facilities”, which was separately presented until previous fiscal year, isreported in “Accounts payable - other” from this fiscal year under review, because its materiality
decreased. “Accounts payable - facilities” in this fiscal year is 64,296 thousand yen.

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

1,783,773 thousand yen
48,706 thousand yen

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

4,218,570 thousand yen
10,578 thousand yen
304,195 thousand yen
589,084 thousand yen

3,084,865 thousand yen

4. 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

821-

329,376

Number of shares atthe end of current FY

330,197

Note: The increase in the number of shares of treasury stock (821 shares) is due to the purchase of shares of less than one unit.

– 25 –

5.

Notes on Tax-effect Accounting(1) Breakdown by cause of deferred tax assets and liabilities
Deferred tax assets
Inventories
Depreciation of Buildings
SoftwareProvision for bonuses
Accrued enterprise taxes
Provision for product warranties
Provision for directors’ retirement benefit
Other
Subtotal deferred tax assets
Valuation reserve
Total deferred tax assets
Deferred tax liabilities
Prepaid pension costs
Valuation difference on available-for-sale securities
Other
Total deferred tax liabilities
Net deferred tax assets(Thousands of yen)
72,84961,01958,38475,97043,61430,88523,70636,974403,404(23,706)
379,697
16,076
26,811
1,507
44,396335,301

Note: Net deferred tax assets are included in following balance sheet items.
(Thousands of yen)
Current assets
255,484
Fixed assets
79,816(2) Change in deferred tax assets and income taxes-deferred due to the change in corporate tax rates.
Following the promulgation on March 31, 2014 of the “Act for Partial Revision of the
Income Tax Act etc.”(Act No. 10 of 2014), special corporate tax for funding the recovery fromthe disaster will be exempted for the fiscal year beginning on or after April 1, 2014.
With this change of tax rates, the amount of “Deferred tax assets” (the amount minus“Deferred tax liabilities”) decreased by 22,111 thousand yen and the amount of “Income taxesdeferred” increased by 22,111 thousand yen.

– 26 –

6. Transactions with Related Parties
Subsidiaries, etc.
Type

Subsidiary

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

YushinAutomation
Ltd.

95.6%
Directly
held by theCompany

Concurrent
directors: 2

Guangzhou
YushinPrecision
Equipment
Co., Ltd.

100%
Directly
held by theCompany

Concurrent
directors: 3

BusinessrelationshipType oftransactions

Transaction
amountAccount(thousands ofyen)Year-endbalance(thousands ofyen)Sale ofCompany
products andmanufactureand sale oflabor saving
machines
Sale ofCompany
products andmanufactureand sale oflabor saving
machines
Sale ofCompany
products andmaintenanceservice

Sale ofproducts

1,346,036

Accounts
receivable- trade362,588

Sale ofproducts

1,254,022

Accounts
receivable- trade389,807

Sale ofproducts

352,450

Accounts
receivable- trade247,185

Manufactureof Company
products

Sale ofproducts

425,421

Accounts
receivable- trade399,249

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

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

1,151.50 yen
92.44 yen

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 16, 2014
To the Board of Directors of
Yushin Precision Equipment Co., Ltd.:
Deloitte Touche Tohmatsu LLC
Takeshi Nishimura, CPA [SEAL]
Limited, Designated and Engagement
Partner
Hirokazu Miura, CPA [SEAL]
Limited, Designated and Engagement
Partner
We have audited the consolidated statutory report, namely, the Consolidated Balance Sheets, theConsolidated Statements of Income, the Consolidated Statements of Changes in Net Assets and its
supporting schedule and notes, of Yushin Precision Equipment Co., Ltd. (the “Company”) for the fiscal
year from April 1, 2013to March 31, 2014 in accordance with Paragraph 4, Article 444 of the Company
Law.
Management’s responsibility for the consolidated statutory reportManagement is responsible for the preparation and fair presentation of these Consolidated financial
statements in accordance with auditing standards generally accepted in Japan. This includes thedevelopment and implementation of internal control deemed necessary by management for the preparationand fair presentation of Consolidated financial statements that is free from material misstatement, whether
due to fraud or error.
Independent auditor’s responsibility
Our responsibility is to express an opinion on the Consolidated financial statements based on our audits
as independent auditors. We conducted our audits in accordance with auditing standards generally
accepted in Japan. Those auditing standards require that we plan and perform the audit to obtainreasonable assurance about whether the Consolidated financial statements is free from material
misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in
the Consolidated financial statements. The audit procedures selected and applied depend on our judgment,
including the assessment of the risks of material misstatement of the Consolidated financial statements,
whether due to fraud or error. The purpose of an audit is not to express an opinion on the effectiveness ofthe entity’s internal control. However, in making those risk assessment, we consider internal control
relevant to the entity’s preparation and fair presentation of the Consolidated financial statements in orderto design audit procedures that are appropriate in the circumstances. An audit also includes evaluating theappropriateness of accounting policies used, the method of their application, and the reasonableness ofaccounting estimates made by management, as well as evaluating the overall presentation of theConsolidated financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis forour opinion.
Audit 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.
Interests in the Company
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 16, 2014
To the Board of Directors of
Yushin Precision Equipment Co., Ltd.:
Deloitte Touche Tohmatsu LLC
Takeshi Nishimura, CPA [SEAL]
Limited, Designated and Engagement
Partner
Hirokazu Miura, CPA [SEAL]
Limited, Designated and Engagement
Partner

We have audited the statutory report, namely, the Balance Sheets, the Statements of Income, theStatements of Changes in Net Assets and its supporting schedule of Yushin Precision Equipment Co., Ltd.
(the “Company”) for the fiscal year from April 1, 2013 to March 31, 2014 in accordance with Item 1,
Paragraph 2, Article 436 of the Company Law.
Management’s responsibility for the statutory reportManagement is responsible for the preparation and fair presentation of these financial statements and its
supporting schedule in accordance with auditing standards generally accepted in Japan. This includes thedevelopment and implementation of internal control deemed necessary by management for the preparationand fair presentation of financial statements and its supporting schedule that is free from material
misstatement, whether due to fraud or error.
Independent auditor’s responsibility
Our responsibility is to express an opinion on the financial statements and its supporting schedule basedon our audits as independent auditors. We conducted our audits in accordance with auditing standards
generally accepted in Japan. Those auditing standards require that we plan and perform the audit to obtainreasonable assurance about whether the financial statements and its supporting schedule are free frommaterial misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in
the financial statements and its supporting schedule. The audit procedures selected and applied depend on
our judgment, including the assessment of the risks of material misstatement of the financial statements
and its supporting schedule, whether due to fraud or error. The purpose of an audit is not to express an
opinion on the effectiveness of the entity’s internal control. However, in making those risk assessment, weconsider internal control relevant to the entity’s preparation and fair presentation of the financial
statements and its supporting schedule in order to design audit procedures that are appropriate in thecircumstances. An audit also includes evaluating the appropriateness of accounting policies used, themethod of their application, and the reasonableness of accounting estimates made by management, as well
as evaluating the overall presentation of the financial statements and its supporting schedule.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis forour opinion.
Audit opinion
In our opinion, the financial statements and its supporting schedule referred to above presents fairly, inall material respects, the financial position and the results of operations of Yushin Precision Equipment
Co., Ltd. for the period for which the financial statements and its supporting schedule is prepared, inconformity with accounting principles generally accepted in Japan.
Interests in the Company
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, 2013 to March 31,
2014, 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 toensure the compliance of laws and the Articles of Associations in the execution of businesses
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 fromsubsidiaries 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. Audit Results
a. 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 the Company’s
condition.
(2) With regard to the performance of duties by the Directors, we have found no evidence ofwrongful action or material violation of related laws and regulations, nor of any violation withrespect to the Articles of Incorporation.
(3) In our opinion, resolutions of the Board of Directors for the internal 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 20, 2014
Board of Corporate Auditors,
Yushin Precision Equipment Co., Ltd.
Full-time Corporate Auditor
Outside Corporate Auditor

Shujiro Sawada [SEAL]
Yasuhiro Orita [SEAL]

Outside Corporate Auditor
Outside Corporate Auditor

Takao Yoshikawa [SEAL]
Hiroho Kamakura [SEAL]

End of submitted documents– 31 –

Reference Documents for the General Meeting of Shareholders
Proposal: Election of Seven (7) 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 strengthen of management organization, to add two (2)candidates for director, shareholders are asked to vote for these seven (7) candidates for director.
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

1

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
June 2011

September 2007
November 2007
April 2008

4

Yasushi Kitagawa(August 12, 1958)

April 2009

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

August 2009

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

June 2010
June 20135

Yuji Tsujimoto(March 25, 1952)

Joined the Company
Director
Executive Vice President and Director
Executive Vice President and Director, Head of Sales
H.Q.
President and Representative Director
President and Head of Sales and Customer Service
H.Q.
President and Representative Director
To the present
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.
Managing Director and Head of Purchase H.Q.
Executive 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.
Managing Director and Head of Research &Development H.Q.
To the present
Joined the Company
Deputy Head of Manufacturing Dept.
Deputy Head of Manufacturing Dept. and Head of
Quality Assurance Dept.

April 2008
June 2008
June 2009
June 2010

Managing Director and Head of Manufacturing Dept.
and Head of Quality Assurance Dept.
To the present
Joined the Company
Full-time Corporate Auditor
Director and Head of General Affairs Dept.
Director and Head of Administrative H.Q. andGeneral Affairs Dept.
To the present– 32 –

Number ofshares held

2,187,901
shares1,100 shares

2,100 shares

1,200 shares

1,000 shares

March 1975

6*
Yasuo Nishiguchi(October 9, 1943)

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
April 2006
Advisor and Director
June 2009Retired from the office of Director
June 2012
Outside Director of NAGASE & CO., LTD.
To the present
June 2013
Outside Director of Zensho Holdings Co., Ltd.
To the present
Representation of other organization
Representative director of HANDY Corporation
Representative director of SOLE Corporation

June 1976
October 1987
April 1994
7*
Hiroshi Matsuhisa(August 5, 1947)
April 2012
March 2013

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 2013)- Shares- Shares

Professor emeritus at Kyoto University
Senior Council of the Japan Society of MechanicalEngineers, Kansai Branch
To the present

Note 1: Asterisks (*) above denote new candidates.
2: The Company currently has a consulting agreement of a research and development with Mr. Hiroshi Matsuhisa. The
agreement has been started since April 2013 and the company should pay 100 thousand yen per month to him incompensation for the services. However, the agreement will be canceled once Mr. Hiroshi Matsuhisa becomes a
member of the Board. The amount of the transaction is quite small comparing to the Company’s business scale and isless than 0.1% to the consolidated net sales of the company. Mr. Hiroshi Matsuhisa has no special interests in the
Company.
3: Mr. Yasuo Nishiguchi and Mr. Hiroshi Matsuhisa are candidates of the outside director.
4: The reason for the nomination of outside directors(1) We would like to request the nomination of Mr. Yasuo Nishiguchi in expectation of his pertinent advice on ourbusiness because he has wide knowledge and experience across the running a company which he had cultivatedthrough holding ministerial posts such as President and Representative Director at Kyocera Corporation. As
Kyocera Corporation is one of our customers and the transaction with Kyocera Corporation is less than 0.1% to theconsolidated net sales of the Company, there are no importance to cause special interests between the Company andKyocera Corporation.
(2) We would like to request the nomination of Hiroshi Matsuhisa in expectation of his pertinent advice from hisacademic prospective on our business. As on the reason above, we have evaluated that Mr. Hiroshi Matsuhisa canadequately fulfill his position although he has not had experiences on a corporate management.

End of reference documents– 33 –