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, 2013

Dear Shareholders,

Notice of Convocation for
the 40th Ordinary General Meeting of Shareholders
Notice is hereby given that the 40th 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
Tuesday, June 25, 2013 at the latest.
Details
Wednesday, June 26, 2013 at 10 a.m.
4F Conference Room, No. 2 Factory
Head Office of Yushin Precision Equipment Co., Ltd.
11-260 Kogahonmachi, Fushimi-ku, Kyoto

1.
2.

Date and Time:
Place:

3.

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

Business Report and Consolidated Financial Statements for the
40th Fiscal Year (from April 1, 2012 to March 31, 2013) 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
40th Fiscal Year (from April 1, 2012 to March 31, 2013)

Agenda for resolution:
Proposal 1: Election of Five (5) Directors
Proposal 2: Election of Two (2) Corporate Auditors

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, 2012 to March 31, 2013)
1.

Current Business Conditions of the Yushin Group(1) Progress and achievements
In this fiscal year, although economy in North America and Asia started to show strength in thelatter half of the period, the world economy was faltering through the period due to the debt andfinancial instability in Europe and the deceleration of growth in Chinese economy. In Japan,
although the economy turned upward toward the end of the period since the Japanese yen
depreciated against other currencies and the stock prices rose, the real economy through the year
was under severe conditions due to the deteriorating Japan-China relation and the electricity supply
instability. As for industries related to the Yushin Group, demand was strong in the automotive
industry but demand in the IT and Electronics device industry was weak.
Against this background, the Yushin Group increased sales of take-out robots, with customers
recognizing the speed, weight and energy efficiency advantages of the YC Series. These robots
were designed using Yushin’s structural optimization technology, which has won a technology
award from the Japan Society of Mechanical Engineers. Thus, consolidated net sales increased by
3.4% year on year to 14,721 million yen, although the sales in China and the sales of customordered equipments were below the expectation. Meanwhile, operating income increased by 17.7%
year on year to 1,498 million yen, ordinary income turned up by 38.0% to 1,746 million yen, andnet income increased by 43.2% to 1,114 million yen.
Consolidated net sales by product category(Thousands of yen)
Years ended
March 31,

2012

2013

Product

Amount%Amount%Take-out robots

9,048,483

63.5

10,141,284

68.9

Custom-ordered
equipments

3,085,576

21.7

2,144,021

14.6

Parts andmaintenanceservice

2,105,948

14.8

2,436,336

16.5

Total

14,240,008

100.0

14,721,643

100.0

(2)

Capital investment
The total amount of capital investment for the Yushin Group effectuated over the course of theperiod under review was 1,225 million yen mainly for the construction of the Technical center ofHead Quarters valued at 1,047 million yen, the purchase of measuring instrument valued at 29
million yen and the capital investment related to R&D valued at 13 million yen.

(3)

Financing activities
No material items to report.

–2–(4) Assets and operating results 2010 - 2013
Years ended March 31,

2010

2011

2012

2013

Net sales(thousands of yen)

12,369,935

12,567,648

14,240,008

14,721,643

Ordinary income(thousands of yen)872,400

1,055,101

1,265,740

1,746,573

Net income(thousands of yen)

487,509729,833

778,283

1,114,801

Net income per share
(yen)

27.87

41.73

44.50

63.74

Total assets(thousands of yen)

20,593,798

21,583,634

22,641,673

23,744,465

Net assets(thousands of yen)

18,115,226

18,495,803

18,787,344

19,865,622

Net assets per share(yen)

1,034.11

1,055.42

1,072.24

1,131.63

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, although the economic recovery
is expected, only a small increase in the capital investment is anticipated within Japan since
manufacturing shifted to overseas due to the prolonged appreciation of the yen. However, overseas
capital investment is expected to be strong particularly in North America and South East Asia.
Under these circumstances, Yushin will improve the product lineup by enhancing productdevelopment utilizing design optimization and quickly bringing the products and service
responding to customers’ needs. Yushin will also attract new customer for the take-out robots
while promoting receiving orders for custom-ordered equipments from the area such as medical
and semiconductor-related. Furthermore, Yushin will increase earnings by increasing overseas
sales and promote cost-cutting including overseas procurement.
To accomplish this, Yushin developed high-speed take-out robots “HSA” and “TSXA” in 2010,
utilizing optimum design technology which earned “Japan Society of Mechanical Engineering
Technology Award” in 2010. This technology has been applied hereafter to general purpose takeout robot. It is the technology which can largely contribute to power-saving by reducing weightand power consumption. For this reason, take-out robot “YC” won “the Japan Machinery
Federation’s Energy Efficient Machine Award” in 2013. Yushin will offer this definitelydifferentiated product by appealing the performance superiority such as high-speed, light weightand power-saving.
As for market strategy, Yushin has developed a sales and service network for take-out robots inJapan, the U.S, Asia and Europe. Yushin continues to expand and strengthen the network in areas
where business is expected to grow, including South East Asia, Mexico and Turkey, to develop a
global business that can adequately respond to worldwide customer purchases.
Furthermore, Yushin will develop and bring new products on the market in the semiconductorrelated and medical-related area as new domains that have both technological and sales-relatedsynergies. The production capacity of new facility, “Technical Center” opened in April 2013 will
be maximally utilized to increase sales in semiconductor-related and medical-related area.

–3–

(6)

Status of Major subsidiaries
Name

Yushin Korea Co., Ltd.
Yushin Precision Equipment(Taiwan) Co., Ltd.

Location
Siheung-Si,
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

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

PT. Yushin Precision Equipment Indonesia was established in November 2012 as a subsidiary of the
Yushin Group and included in the scope of consolidation from the fiscal year under review. Yushin
Precision Equipment (Singapore) Pte. Ltd. was liquidated in November 2012, therefore, excluded
from the scope of consolidation.
(7) Major operations (as of March 31, 2013)
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.

–4–

(8) Main sales offices and factories (as of March 31, 2013)
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

Tochigi Sales Office

Sano-city, Tochigi

Nishi-Kanto Sales Office

Atsugi-city, Kanagawa

Nagano Sales Office

Shiojiri-city, Nagano

Shizuoka Sales Office

Suruga-ku, Shizuoka-city

Nagoya-Nishi Sales Office

Kuwana-city, Mie

Toyama Sales OfficeToyama-city, Toyama

Hiroshima Sales Office

Nishi-ku, Hiroshima-city

Fukuoka Sales Office

Hakata-ku, Fukuoka-city

Indonesia Representative Office

Jakarta, Indonesia

Vietnam Representative OfficeHanoi, Vietnam

Ho Chi Minh Representative Office

Ho Chi Minh, Vietnam

Philippines Representative Office

Makati-city, Philippines

Note: Tochigi Sales Office was integrated into Kita-Kanto General Sales Office on April 1, 2013.

(9) Employees (as of March 31, 2013)
Number of employees

Increase from the end of previous FY

588 (56)

17

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, 2013)
No items to report.
(11) Other important matters pertaining to the status of the GroupNo material items to report.

–5–

2.

Matters Pertaining to the Shares of the Company (as of March 31, 2013)(1) Number of shares authorized:
40,000,000(2) Total number of issued shares:
17,819,033(3) Number of shareholders:
4,782(4) Major shareholders:
Investment in the Company
Name

Number of shares held
(thousand)

Percentage of shares
held
(%)

Yushin Industry Co., Ltd.

4,376

25.0

Mayumi Kotani

2,217

12.7

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

774

4.4

774

4.4

The Kyoto Chuo Shinkin Bank, Ltd.

544

3.1

RBC IST LONDON-CLIENTS ACCOUNT

529

3.0

Japan Trustee Service Bank, Ltd. (Trust
Accounts)

508

2.9

The Bank of Tokyo-Mitsubishi UFJ, Ltd.

424

2.4

The Bank of Kyoto, Ltd.

352

2.0

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

345

2.0

Note: Percentage of shares held is calculated after deducting the number of treasury stock (329,376 shares).

–6–

3.

Matters Pertaining to Officers of the Company(1) Directors and Corporate Auditors (as of March 31, 2013)
Position

Responsibilities and representation of otherorganization

Name

President andRepresentative Director

Mayumi Kotani

Executive Managing
Director

Satoshi KimuraManaging Director

Yasuharu Odachi

Head of Research & Development H.Q.

Director

Yasushi Kitagawa

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

Director

Yuji Tsujimoto

Head of Administrative H.Q. and Head ofGeneral 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 all of 5 Meetings of theBoard 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 4 of 5 Meetings ofthe 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 9 Meetings of Board of Directors and all of 4
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
Hiroho Kamakura was newly appointed as a corporate Auditor at the 39th Ordinary General Meeting of Shareholders heldon June 27, 2012 and assumed the post.
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

153,130

Corporate Auditors

4

27,0009

180,130

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: 19,720 thousand yen (Directors: 19,720 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, 2013 (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 7,500 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

27,20031,100Note: In the audit contract between the Company and the Independent Auditor, audit fees pursuant to the Company Law and thosepursuant 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 theevent of a request by the same.
The Board of Corporate Auditors will dismiss the Independent Auditor should it determine thatsame corresponds to the provisions in each item of Paragraph 1, Article 340 of the Company Law,
with the agreement of all the members of the Board of Corporate Auditors. In such a case, anauditor appointed by the Board of Corporate Auditors will report the fact of and the reason for thedismissal of the Independent Auditor to the first General Meeting of Shareholders called after thedismissal.
(5) Overview of limited liability contract
The Company has entered into a contract with Deloitte Touche Tohmatsu LLC, the Independent
Auditor, based on Paragraph 1, Article 427 of the Company Law limiting the liability of same as
specified in Paragraph 1, Article 423 of the Law. The upper limit provided in the limited liability
contract is the minimum limited amount stipulated by laws and regulations.

–9–

5.

Matters Pertaining to the Development of Internal Control Systems to Ensure a Properness 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 andmanaged 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– 10 –

the Company or the Group.

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 bymaintaining a stable operational base, improving its ROE and effectuating dividends based on theperformance results of each respective fiscal year.
For this fiscal year, a full-year dividend is 30 yen per share, comprising an interim dividend of 10
yen per share, a year-end dividend of 10 yen per share and a 40th year commemorate dividend (at the
year-end) of 10 yen per share.

– 11 –

Consolidated Balance Sheets(As of March 31, 2013)(Thousands of yen)Account

AmountAccount

ASSETS
Current assets

AmountLIABILITIES
17,022,868

Current liabilities

3,700,105

Cash and deposits

7,345,829

Notes and accounts payable - trade

1,719,798

Notes and accounts receivable trade

4,601,853

Accounts payable - other487,228

Short-term investment securities

300,000

Accrued expenses

104,900

Merchandise and finished goods

1,077,587

Income taxes payable

280,914Work in process

1,142,033

Advances received

264,646

Raw materials and supplies

1,808,738

Provision for bonuses

192,000

Prepaid expenses

73,772

Provision for directors’ bonuses

19,720

Deferred tax assets

392,745

Provision for product warranties

127,013Other296,382

Accounts payable - facilities

419,833

Allowance for doubtful accounts(16,073)

Deferred tax liabilities

4,363

Other

79,686

Noncurrent assets

6,721,597

Property, plant and equipment

6,136,420

Long-term liabilities

178,737

Provision for directors’ retirement
benefits

66,78084,398

Other

111,957

Machinery and equipment

42,531

Total liabilities

3,878,843

Vehicles

25,970Tools, furniture and fixtures

140,561

Shareholders’ equity

20,051,469

3,953,407

Capital stock

1,985,666

Leased assets

15,721

Capital surplus

2,023,903

Construction in progress

3,366

Retained earnings

16,390,498

Treasury stock(348,598)

Buildings

1,870,463

Structures

Land

Intangible assets

NET ASSETS

100,007

Software

22,766

Total accumulated othercomprehensive income
Valuation difference on availablefor-sale securities
Foreign currency translation
adjustments

Others65,414

Minority interests

Telephone subscription right
Right of trademark

11,430395

Investments and other assets

485,169

Investment securities

246,287

Deferred tax assets

6,144

Other

(259,667)
58,239(317,906)
73,819233,423

Allowance for doubtful accounts

Total assets(686)

23,744,465– 12 –

Total net assets

19,865,622

Total liabilities and net assets

23,744,465

Consolidated Statements of Income(From April 1, 2012 to March 31, 2013)(Thousands of yen)Account

AmountNet sales

14,721,643

Cost of sales

8,950,836

Gross profit

5,770,806

Selling, general and administrative expenses

4,272,083

Operating income

1,498,722

Non-operating income

252,449

Interest and dividends income

23,429Purchase discounts

10,777

Foreign exchange gains

195,020

Other

23,223Non-operating expenses

4,598

Sales discounts

799

Other

3,799

Ordinary income

1,746,573

Extraordinary income

35,566

Gain on sales of noncurrent assets

821

Gain on sales of investment securities

34,745Extraordinary loss

2,460

Loss on retirement of noncurrent assets

2,460

Income before income taxes and minority interests

1,779,679

Income taxes - current

571,920

Income taxes - deferred

21,574

Income before minority interests

1,186,185

Minority interests in income

71,384

Net income

1,114,801– 13 –

Consolidated Statements of Changes in Net Assets(From April 1, 2012 to March 31, 2013)(Thousands of yen)
Shareholders’ equity

Balance as of April 1, 2012

Capital stock

Capital surplus

1,985,666

2,023,903

Retainedearnings
15,625,496

Treasury stock

Total
shareholders’equity(347,903)

19,287,162

Changes in the current period
Dividends of surplus(349,799)(349,799)

Net income

1,114,801

1,114,801

Acquisition of treasury stock

(694)

(694)

Changes in items other thanshareholders’ equity, net
Total changes in the current
periodBalance as of March 31, 2013--

765,001(694)

764,307

1,985,666

2,023,903

16,390,498(348,598)

20,051,469

Minority
interests

Total net assets

Total accumulated other comprehensive income

Balance as of April 1, 2012

Valuationdifference on
available-forsale securities

Foreigncurrencytranslation
adjustments

Total
accumulated
othercomprehensive
income47,576(581,173)(533,596)

33,77818,787,344

Changes in the current period
Dividends of surplus(349,799)

Net income

1,114,801

Acquisition of treasury stock
Changes in items other thanshareholders’ equity, net(694)
10,662

263,266

273,92940,041

313,970

Total changes in the current
period10,662

263,266

273,92940,041

1,078,277

Balance as of March 31, 2013

58,239(317,906)(259,667)

73,81919,865,622– 14 –

1.

Basis of Preparing Consolidated Financial Statements(1) Scope of consolidation
All 11 subsidiaries of the Company, provided below, fall within the scope of consolidation. PT.
Yushin Precision Equipment Indonesia was established in November 2012 as a subsidiary of the
Yushin Group and included in the scope of consolidation from the fiscal year under review. Yushin
Precision Equipment (Singapore) Pte. Ltd., which was a consolidated subsidiary at the end of
previous fiscal year, was liquidated in November 2012, therefore, excluded from the scope of
consolidation. The statement of income up to its liquidation is consolidated.

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(2) Application of the equity method
There is no non-consolidated subsidiary or affiliate company.
(3) Fiscal year of subsidiaries
The account closing date for all consolidated subsidiaries is December 31.
Financial statements as of said date are used in preparation of the Consolidated Financial
Statements. However, adjustments considered necessary for consolidation are effectuated withrespect to material transactions occurring during the period between the day after the accountclosing date of the subsidiaries and the consolidated account closing date.

– 15 –

(4) Accounting policies
a. Valuation of important assetsi) Securities
Available-for-sale securities classified as other securities- Securities with available fair market values are reported at fair value on the consolidated
account closing date
(Unrealized gains or losses, net of applicable taxes, reported in a separate component of equity.
The cost of securities sold is principally determined by the moving average method)ii) 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, 2013is provided in proportion to the term that present directors had been in their respective positions
before June 2006.

– 16 –

d. Employees’ retirement benefits
To provide for employees’ retirement benefits, based on the projected benefit obligations at yearend and the pension asset balance, the amount of pension assets surplus to projected benefit
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.
e. Other significant matter for the preparation of Consolidated Financial Statements
Consumption tax and local consumption tax are accounted for using the tax excluded method.
(5) Changes in presentation(Consolidated Balance Sheet)“Accounts payable - facilities”, which was included in “Accounts payable - other” until theprevious fiscal year, is presented separately from the fiscal year under review, because its
materiality increased. “Accounts payable - facilities” in the previous fiscal year was 19,089
thousand yen.

– 17 –

2.

Notes to Consolidated Balance Sheet(1) Accumulated depreciation of property, plant and equipment:
3,332,174 thousand yen(2) Notes payable on the closing date handled for settlement on exchange dates. The closing day of thisfiscal year was a day when financial institutions are closed, and therefore the following note payable on
the closing date is included in the balance at the end of the period.
Notes receivable - trade127,983 thousand yen
Notes payable - trade11,963 thousand yen

3.

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

416-

329,376

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

Number of shares atthe end of previous FY

Common stock

328,960

Note: The increase in the number of shares of treasury stock (416 shares) is due to the purchase of shares of less than one unit.

(3) Dividends of surplus
a. Payment of dividends
Resolution
The Board of Directors’Meeting on May 9, 2012
The Board of Directors’Meeting on November 6,
2012Class of shares

Total dividend(Thousands ofyen)

Dividend per
share
(Yen)

Common stock

174,900

10

March 31,2012

June 13,
2012

Common stock

174,89810

September 30,
2012

December 3,
2012

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
The Board of
Directors’ Meetingon May 9, 2013

Class ofsharesCommonstock

Total dividend(Thousands ofyen)
349,793

Dividend
funds
Retainedearnings– 18 –

Dividend per
share
(Yen)
20

Record date

Effective date

March 31,2013

June 12,2013

4.

Notes to Financial Instruments(1) Conditions of financial instruments
a. Management policy
The Yushin Group has a policy of limiting investments of unused funds to short-term time deposits,
certificates of deposits and similar instruments and never using these funds for speculation. Internal
resources are used to meet all working capital requirements. Derivative instruments may be used 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 exposed tothe credit risk of customers, while foreign currency denominated operating receivables at foreign
operations are exposed also to the foreign exchange risk.
Short-term investment securities and Investment securities, which are certificate of deposit andavailable-for-sale securities, are exposed to risk associated with market price volatility.
Operating debt consisting of Notes and accounts payable - trade are largely due four months or less.
Accounts payable - other, Income taxes payable and Accounts payable - facilities 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 for the
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, 2013 are shown as follows.

(1)
(2)
(3)

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

Carrying value(thousands of yen)

Fair value(thousands of yen)

7,345,829
4,601,853

7,345,829
4,601,853-

Other securities

546,287546,287-

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

12,493,969

12,493,969-

1,719,798
487,228
280,914419,833

1,719,798
487,228
280,914419,833-

Liabilities total

2,907,775

2,907,775-

Cash and time deposits
Notes and accounts receivable - trade
Short-term investment securities andInvestment securities

Differences(thousands of yen)

(Note) Matters concerning determination of fair value of financial instruments and marketable securities.
(Assets)(1) Cash and time deposits, (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) Short-term investment securities and Investment securities
Fair value of the above financial instruments such as stocks are determined by prices at stock
exchanges. Fair value of certificates of deposits is deemed to be equal to their carrying value
because they are settled within a short period of time.
(Liabilities)(1) Notes and accounts payable - trade, (2) Accounts payable - other, (3) Income taxes payable(4) Accounts payable - facilities
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)

Cash and time deposits
Trade notes and accounts receivable
Short-term investment securities andInvestment securities
Of which available-for-salesecurities with maturity
Total

5.

Due after ten
years (thousandsof yen)7,345,829
4,601,853---

300,000---

12,247,682-

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

1,131.63 yen
63.74 yen

Note: Amounts less than one thousand yen are truncated.

– 20 –

Balance Sheets(As of March 31, 2013)(Thousands of yen)Account

AmountAccount

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

AmountLIABILITIES
15,340,255

Current liabilities

6,103,188

Notes payable - trade924,303

Accounts payable - trade

4,367,120

Lease obligations

3,565,651
72,486
1,965,231
2,849

Short-term investment securities

300,000

Accounts payable - other426,694

Merchandise and finished goods

788,952

Accrued expenses

72,507Work in process

1,076,456

Income taxes payable

188,974

Raw materials and supplies

1,247,618

Advances received

92,599Prepaid expenses

43,704

Deposits received

13,327

Consumption taxes receivable

161,842

Provision for bonuses

192,000

Deferred taxes assets

195,949

Provision for directors’ bonuses

19,720Other

141,618

Provision for product warranties

67,500(10,500)

Notes payable - facilities

31,925

Accounts payable - facilities

419,833

Allowance for doubtful accounts
Noncurrent assets

7,359,231

Property, plant and equipment

5,760,878

Buildings

1,698,244

Structures

84,398

Machinery and equipment

31,099VehiclesTools, furniture and fixtures
Land
Lease assets
Construction in progress
Intangible assets
Telephone subscription right
Right of trademark
Software215

66,780620
3,646,744

NET ASSETS
Shareholders’ equity

18,994,503

Capital stock

1,985,666

3,366

Capital surplus

2,023,903

Legal capital surplus

24,76011,430Retained earnings

2,023,903
15,333,531

395

Legal retained earnings

286,314

12,934

Other retained earnings

15,047,216

Reserve for dividend equalization

1,000,000

246,287

General reserve

8,700,000

789,460

Retained earnings brought forward

5,347,216

170

Treasury stock

267,132

Valuation and translation adjustments
Valuation difference on available-forsale securities

29,184(348,598)
58,23958,239686

Deferred tax assets

51,840Other

189,517

Total assets

13,692

15,721

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

Allowance for doubtful accounts

Total liabilities

81,092

3,831,429

1,573,592

Claims provable in bankruptcy,
claims provable in rehabilitationand other

Lease obligations
Provision for directors’ retirement
benefits
Long-term guarantee deposited

96,402

Investments and other assets

Guarantee deposits

Noncurrent liabilities(686)
23,744,465– 21 –

Total net assets

19,052,742

Total liabilities and net assets

22,699,486

Statements of Income(From April 1, 2012 to March 31, 2013)(Thousands of yen)Account

AmountNet sales

12,393,875

Cost of sales

8,026,110

Gross profit

4,367,764

Selling, general and administrative expenses

3,440,084

Operating income

927,680

Non-operating income

362,521

Interest and dividend income

283,881

Purchases discounts

10,777

Foreign exchange gains

40,213

Other

27,649Non-operating expenses

1,390

Sales discounts

799

Other

591

Ordinary income

1,288,811

Extraordinary income

34,745Gain on sales of investment in securities

34,745Extraordinary loss

1,938

Loss on sales and retirement of noncurrent assets

1,645

Loss on liquidation of subsidiaries and affiliates

292

Income before income taxes

1,321,618

Income taxes - current

373,660

Income taxes - deferred

6,032

Net income

941,925– 22 –

Statements of Changes in Net Assets(From April 1, 2012 to March 31, 2013)(Thousands of yen)
Shareholders’ equity
Capital surplus

Retained earnings
Other retained earnings

Capital stock

Legal capitalsurplus

Total capitalsurplus

Legal retained
earnings

Reserve fordividend
equalization

Generalreserve

Retainedearnings
brought
forward

Total retained
earnings

2,023,903

2,023,903

286,3141,000,000

8,700,000

4,755,090

14,741,405

Dividends of surplus(349,799)(349,799)

Net income

941,925

941,925

Balance as of April 1, 2012

1,985,666

Changes in the current period

Acquisition of treasury stock
Changes in items other thanshareholders’ equity, net
Total changes in the current
periodBalance as of March 31, 2013

-

-

-

-

-

-

592,125

592,125

1,985,666

2,023,903

2,023,903

286,3141,000,000

8,700,000

5,347,216

15,333,531

Shareholders’ equity

Treasury stock

Balance as of April 1, 2012

(347,903)

Valuation and translation adjustments

Total shareholders’equityValuation difference
on available-for-salesecurities

Total valuation andtranslation
adjustments

18,403,072

47,57647,576

Total net assets

18,450,648

Changes in the current period
Dividends of surplus(349,799)(349,799)

Net income

941,925

941,925

(694)

(694)

Acquisition of treasury stock(694)

Changes in items other thanshareholders’ equity, net
Total changes in the current period
Balance as of March 31, 2013

10,662

10,662

10,662(694)

591,431

10,662

10,662602,093(348,598)

18,994,503

58,23958,23919,052,742– 23 –

1.

Summary of Significant Accounting Policies(1) Valuation of important assets
a. Stocks of subsidiaries and affiliates
Carried at cost determined by the moving average method
b. Available-for-sale securities classified as other securities- Securities with available fair market values are reported at fair value on the closing date
(Unrealized gains or losses, net of applicable taxes, reported in a separate component of equity.
The cost of securities sold is principally determined by the moving average method)c. Inventories- 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, 2013is 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)“Accounts payable - facilities”, which was included in “Accounts payable - other” until theprevious fiscal year, is presented separately from the fiscal year under review, because its
materiality increased. “Accounts payable - facilities” in the previous fiscal year was 19,089
thousand yen.
2.

3.

4.

Notes to Balance Sheet(1) Accumulated depreciation of property, plant and equipment:
2,867,301 thousand yen(2) Notes payable on the closing date handled for settlement on exchange dates. The closing day of thisfiscal year was a day when financial institutions are closed, and therefore the following note payable on
the closing date is included in the balance at the end of the period.
Notes receivable - trade127,983 thousand yen
Notes payable - trade11,963 thousand yen(3) Monetary credit and debts to affiliates
a. Short-term monetary credit:
1,817,875 thousand yen
b. Short-term monetary debts:
56,838 thousand yen
Notes to Statements of Income
Transactions with subsidiaries and affiliates
a. Net sales:b. Purchases:c. Selling, general and administrative expenses:
d. Non-operating transactions:3,660,060 thousand yen
14,441 thousand yen
263,207 thousand yen
278,305 thousand yen

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

Common stock

Number of shares atthe end of previous FY

Number of increased
shares of current FY

Number of decreased
shares of current FY

Number of shares atthe end of current FY

416-

329,376

328,960

Note: The increase in the number of shares of treasury stock (416 shares) is due to the purchase of shares of less than one unit.

– 25 –

5.

Notes on Tax-effect Accounting
Breakdown by cause of deferred tax assets and liabilities
Deferred tax assets
Inventories
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)
59,066
41,932
55,11373,152
18,71625,717
23,70628,829326,234(23,706)
302,527
18,88329,3486,505
54,738
247,789

Note: Net deferred tax assets are included in following balance sheet items.
(Thousands of yen)
Current assets
195,949
Fixed assets
51,840– 26 –

6.

Transactions with Related Parties
Subsidiaries, etc.

Type

Subsid
iary

Name

% of
votingrights held

Relationship
Concurrent
directors,
etc.
Concurrent
directors: 2

YushinAmerica,Inc.

100%
Directly
held by theCompany

YushinKorea Co.,
Ltd.

100%
Directly
held by theCompany

Concurrent
directors: 2

YushinPrecision
Equipment(Thailand)Co., Ltd.

49%
Directly
held by theCompany

Concurrent
directors: 1

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

1,151,860

Accounts
receivable- trade312,400

Sale ofproducts

792,704

Accounts
receivable- trade411,084

Sale ofproducts

568,802

Accounts
receivable- trade221,825

Manufactureof Company
products

Sale ofproducts

399,103

Accounts
receivable- trade507,084

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:

1,089.37 yen
53.86 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 17, 2013
To the Board of Directors of
Yushin Precision Equipment Co., Ltd.:
Deloitte Touche Tohmatsu LLC
Takeshi Nishimura, CPA [SEAL]
Limited, Designated and Engagement
Partner
Hiroyuki Kobayashi, 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, 2012to March 31, 2013 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 17, 2013
To the Board of Directors of
Yushin Precision Equipment Co., Ltd.:
Deloitte Touche Tohmatsu LLC
Takeshi Nishimura, CPA [SEAL]
Limited, Designated and Engagement
Partner
Hiroyuki Kobayashi, 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, 2012 to March 31, 2013 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 is 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, 2012 to March 31,
2013, 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.
a.

Audit Results
Results of Audit of Business Report and Other Relevant Documents(1) In our opinion, the business report and supporting schedules are in accordance with therelated laws and regulations and Articles of Incorporation, and fairly represent 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, 2013
Board of Corporate Auditors,
Yushin Precision Equipment Co., Ltd.
Full-time Corporate Auditor
Outside Corporate Auditor
Outside Corporate Auditor
Outside Corporate Auditor– 31 –

Shujiro Sawada [SEAL]
Yasuhiro Orita [SEAL]
Takao Yoshikawa [SEAL]
Hiroho Kamakura [SEAL]Reference Documents for the General Meeting of Shareholders
Proposal 1: Election of Five (5) Directors
The terms of office of all the currently serving five (5) Directors will expire at the conclusion of thisMeeting. Consequently, shareholders are asked to vote for these five 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
August 2009
June 2010

5

Yuji Tsujimoto(March 25, 1952)

April 2008
June 2008
June 2009
June 2010

Joined the Company
Director
Executive Vice President and Director
Executive Vice President and Director, Head of Sales
H.Q.
President and Representative Director
President and Head of Sales and Customer Service
H.Q.
President 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.
Executive Officer, Deputy Head of Manufacturing
Dept. and Head of Quality Assurance Dept.
Executive Officer, Head of Manufacturing Dept. andHead of Quality Assurance Dept.
Director and Head of Manufacturing Dept. and Headof 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

Note: Candidates for Directors have no special interests in the Company.

– 32 –

Number ofshares held

2,217,901
shares1,100 shares

2,100 shares

1,200 shares

1,000 shares

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

Name
(Date of birth)

Career summary, position, areas of responsibility, and representation ofother organizations
December 1977
March 1988
June 1991
July 1999

1

Shujiro Sawada(November 27, 1946)

April 2003
April 2006
January 2008
June 2009
September 1985

2

Takao Yoshikawa(July 31, 1941)

March 2005
June 2005

Joined the Company
Executive Director
Executive Director and Head of Production H.Q.
Managing Director and Head of Production H.Q.
Managing Director and Head of Sales and Customer
Service H.Q.
Managing Director and Head of Production H.Q.
Managing Director
Full-time Corporate Auditor
To the present
Professor of School of Engineering Science at Osaka
university
Professor emeritus at Osaka university
Corporate Auditor
To the present

Number ofshares held

19,250 shares- shares

Notes: 1. The candidates for Corporate Auditors have no special interests in the Company.
2. Takao Yoshikawa is a candidate for outside corporate auditor. Mr. Yoshikawa is currently an outside Corporate Auditorof the Company and will have served in this role for eight years at the close of this General Meeting of Shareholders.
We would like to request the nomination of Mr. Yoshikawa in expectation of his opinion on the audit of the Company
with his specialized knowledge from his academic background. The Company judges he has an ability to act as an
outside Corporate Auditor appropriately with the above reason although he has no direct experience in corporate
management.
3. The Company has designated Mr. Yoshikawa as an independent auditor as provided in the rules of the Tokyo Stock
Exchange and submitted notices to this effect to the exchange. The Company will continue to designate him as anindependent auditor upon his election as an outside Corporate Auditor.

– 33 –