ANNUAL REPORT 2017
Year Ended March 31, 2017

Securities Identification Code : 6482

Message from the President
Let me extend my wishes to you for your health and prosperity.
We respectfully appreciate for your continued support to our business.
We would like to present you an overall view of our company's 44th year of operations, the fiscal year from April 1st,

Impossible mark the starting point of a challenge.

2016 to March 31st, 2017.
July 2017
Mayumi Kotani
President andRepresentative Director

Susumu Kotani, Yushin’s FounderBusiness Results
In the fiscal year ended March 31,
2017, there was an uncertainty
about economic and trading
policies of the new US government
as well as politics in Europe.
However, the economy of the US
remained steady against abackground of improvements ofthe employment environment andexpansion of the individual
consumption. In Europe, theeconomy was on recovery trend
since “Brexit” impact was
temporary. In Asia, there were
slowdown in Chinese economy andstagnation of the economic growthin emerging countries, but there
was pickup in the second half ofthe year. On the whole, world
economy made a mild recovery.
In these circumstances, Yushin
Group has strived to expand
operation in a new business area,
to develop new products and toobtain new world-class customers.
However, consolidated net sales
decreased by 8.5% year on year to
19,346 million yen because sales innew business area fell below
expectation and there was strong
yen. As regards profit, in addition
to decrease in net sales, there were
cost occurred relating to the new1

Medium and Long-Term Management Strategies
ERP system launched lastNovember and the relocation of
the HQ implemented lastDecember. As a result, operating
income decreased by 31.5% year
on year to 2,112 million yen andordinary income decreased by
29.6% year on year to 2,058 million
yen, and net income attributable
to shareholders of the parent
company decreased by 27.7% year
on year to 1,380 million yen.

Outlook for Fiscal Year 2018
( Year ending March 31, 2018)

The world economy is expected
to show a recovery trend as awhole. However, there remains
uncertainty such as effect fromthe economic and trading policyof new US government, thepolitical trend in Europe andescalation of international
tensions.
Under these circumstances,
Yushin Group will extend thequality and scale of our businessby strengthening our sales capabilities worldwide and developing
and distributing products to meetcustomers’ demands. Particularly

a new model of take-out robots
with new functions has beenlaunched in July, 2017 (please see
Topics on page 13). We also
expand sales of custom-ordered
equipment in a medical and a
new business area. For the purpose of enhancing these all
efforts, Yushin Group aims to
improve productivities and topromote operational efficiencies
utilizing the new HQ, as well as
to continue cost reducing activities.
Yushin forcasts its businessperformance for the fiscal year
ending March 31, 2018, based on
the current information available,
as follows.

(Millions of yen)

Consolidated
Net sales

21,000(Y/Y 8.5%)

Operating income

2,700(Y/Y 27.8%)

Ordinary income

2,700(Y/Y 31.2%)

Net income
attributable toowners of theparent company

1,900(Y/Y 37.7%)

Yushin has set the medium-term
management targets of net sales of
30,000 million yen and ordinary
income of 5,000 million yen.
Company strategy
Yushin strengthens and conducts
business even more aggressively in
the global market, and works on
developing superior cost-effective
products with its quality andperformance to meet our customer
needs. And Yushin will also attract
new customer for the take-out robots
while promoting receiving orders forcustom-ordered equipment in a new
business area. In addition, Yushin will
improve productivities and promote
operational efficiencies utilizing a
new headquarters and factory which
was opened in December 2016.

countries where labor costs arehighly rising and develop world-classhuman resources who can sustain for
expanding our presence around theworld.
Product strategy
Yushin will continuously offer thedefinitely-differentiated product byappealing the performancesuperiority such as high-speed
motion, vibration suppression andpower-saving. In order to establish
multiple core businesses, Yushin must
develop and bring new products tothe market in the business area
where Yushin can manifest
technological and/or sales synergies.

Market strategy
Yushin has developed a sales andservice network for take-out robots in
the U.S, Asia, and Europe. Yushin willcontinuously expand and strengthen
the network in areas where businessis expected to grow to develop a
global business that can adequately
respond to worldwide customer
purchases. Especially, Yushin aims todevelop new customers in emerging

2

Outline of Yushin Precision Equipment Co., Ltd.
Our name “Yushin”, means to be both conscientious and trustworthy in Japanese. As these terms
suggest, our goal is to be a company that earns and deserves the trust of customers. This is why we work

Consolidated Financial Highlights
YUSHIN PRECISION EQUIPMENT CO., LTD. and Subsidiaries
Years ended March 31

constantly to develop products and systems based on what we call “Heartful Technology”, that reaches
heart to heart.
Since 1973, we have been striving to make the molding process more efficient, focusing on thedevelopment and manufacturing of take-out robots for plastic injection molding products. To us, thewords “impossible” or “it can’t be done” mark the starting point of a challenge.
To be successful, we must continue to introduce innovative products, for instance, ultra-high speed
robots and factory automation systems for bringing new capabilities into the customers.
As an innovator in the plastic molding process, Yushin intends to continue developing equipment thatwill improve quality, and simplify the molding new types of products. Taking advance with automation
for plastic molding plants, Yushin has been expanding its service network throughout the world.
Yushin also conducts its business so as to live up to the trust and expectations of its customers,
shareholders, suppliers, employees, local communities and all other stakeholders.

Thousands of
U.S. Dollars

Millions of Yen
2017

2016

2015

2014

2013

2017

￥ 19,346
2,112
2,009

￥ 21,148
3,086
2,858

￥ 17,799
2,304
2,566

￥ 17,909
2,792
3,163

￥ 14,721
1,498
1,779

$ 172,735
18,862
17,943

1,380
619

1,908
510

1,683
472

1,893
448

1,114
591

12,323
5,531

At Year end:
Total assets ・・・・・・・・・・・・・・・・・・・・・・・・・
Equity ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・

30,76125,451

29,40924,71529,463
23,97026,252
21,87523,744
19,865

274,658
227,247

Per share of common stock:
Net income ・・・・・・・・・・・・・・・・・・・・・・・・・・
Cash dividends ・・・・・・・・・・・・・・・・・・・・・
Equity ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・￥ 78.9336.00
1,444.38￥ 109.14
36.00
1,401.54￥ 96.2630.00
1,357.36￥ 108.24
30.00
1,243.88￥ 63.74
30.00
1,131.63

For the year:
Net sales ・・・・・・・・・・・・・・・・・・・・・・・・・・・・
Operating income ・・・・・・・・・・・・・・・・・・
Income before income taxes ・・・・・
Net income attributable to ownersof the parent company ・・・・・・・・
R&D Expenses ・・・・・・・・・・・・・・・・・・・・・

Yen

Equity ratio:
Return on assets ・・・・・・・・・・・・・・・・・・・
Return on equity ・・・・・・・・・・・・・・・・・・・・

%

6.5 %
7.9

4.6 %
5.6

6.0 %
7.4

7.6 %
9.1

U.S. Dollars$ 0.70
0.32

4.8 %
5.8

Notes: The computation of net income per share is based on the weighted average number of shares of common stock outstanding during each year, retroactively adjusted for stock splits,
including those stock splits made after year-end.
Cash dividends per share are dividends applicable to the respective years including dividends to be paid after the end of the year.
The computation of equity per share is based on the number of shares of common stock outstanding each end of year, retroactively adjusted for stock splits, including those stock splits
made after year-end.
Translations of Japanese Yen amounts into U.S. dollar amounts are made at the rate of ¥112 to $1.

(millions of yen)

Net Sales
2013(millions of yen)

Net Income
2013

14,721

2014

17,9092014

2015

17,799

2015

1,114
1,893
1,683

2016

21,148

2016

1,908

2017

19,346

2017

1,380

0

5,000

10,00015,000Total Assets

20,00025,00030,000

0

500

1,000

1,500

2,000

2,500

3,000

(millions of yen)

Equity(millions of yen)

23,7442013

19,865

2013
2014

2014

26,252

21,875

2015

29,463

2015

23,9702016

29,4092016

24,7152017

25,451

30,761

2017
0

5,000

10,00015,00020,00025,00030,0000

5,000

10,00015,00020,00025,00030,000Estimates, Forecasts, and Plans

Serving society through developing plastics industry.
3

The performance estimates, forecasts of the business environment, and business plans contained in this publication are based on the information available at the time of compilation.
Statements herein regarding these performance estimates, forecasts of the business enviorment,and business plans may contain inaccurate elements. In addition, there is a possibility of unknown
risks, uncertainties, and contingencies emerging that may invalidate these performance estimates, forecasts of the business environment, and business plans. As a result, the reader is requested tounderstand that actual results / performance, the business environment and business plans in the future may differ materially from the content of this publication.

4

Review of Operations
Take-out Robots
Net sales of take-out robots
decreased by 512 million yen (3.7%)
from the previous FY to 13,410 million
yen due to slow sales in the first half ofthe year even there was a recovery
trend in the second half.
Net Sales
6,767

2014

10,141
8,974
9,304

2016

9,564

2017

13,092
13,923

8,689
3,000
6,000
Overseas sales【Japan】
Net sales increased by 0.2% from the previous FY to 15,545 million yen and operating income decreased by 15.0% from theprevious FY to 1,279 million yen.

12,7362015

0

Performance of geographic segments(millions of yen)2013

13,4109,000

12,000【North America】
Net sales decreased by 8.3% from the previous FY to 3,285 million yen and operating income decreased by 21.4% to 348
million yen.

15,000【Asia】Net sales decreased by 8.3% from the previous FY to 4,776 million yen and operating income decreased by 41.3% to 469
million yen.

Custom-ordered Equipment
Net sales of custom-ordered
equipment decreased by 1,165 million
yen (29.1%) from the previous FY to2,832 million yen.
Net Sales
2013

1,581

1,063

Overseas sales simply indicate Yushin’s world sales to countries and areas other than Japan. Overseas sales decreased by
21.1% year on year to 11,391 million yen from the previous fiscal year. And the ratio of overseas sales to the total net sales
was 58.9%.

2,144

1,914

2,626
1,794

2016

2,947

2017 1,095
0Overseas sales(millions of yen)

2014
2015

【Europe】
Net sales decreased by 78.9% from the previous FY to 396 million yen and operating income decreased by 97.0% from theprevious FY to 6 million yen.

3,997
2,832

2,000
Overseas sales

4,000

Sales composition by region

6,000

Parts and maintenance service
Net sales of parts and maintenanceservice decreased by 124 million yen(3.9%) from the previous FY to 3,103
million yen.
Net Sales
1,284

2,436

2014

1,324

2,547

1,668

2016

1,929

2017

1,606
0

5

(millions of yen)

2013
2015

2,000
Overseas sales

21,148(millions of yen)

2,911
3,227

Sales composition by products
Parts andmaintenance service
16.0%
Custom-ordered
Equipment
14.6%

14,721
181
2,215
824
4,019

FY20172,392

Take-out
RobotsTake-out
Robots
69.3%

5,088

19,346FY2013

17,909484

17,799

2,917

395
2,628

1,352

959

4,721

4,982

2,738
5,694

3,069

5,762

610
3,665
2,163
4,781
3,220

6,707

19,349
445

Other

3,573

North America

693

Europe4,200

Other Asia

2,477

China / Taiwan

7,955

Japan

3,103
4,000

6,000

FY2014FY2015FY2016FY2017(millions of yen)

6

Board of Directors, Auditors and Officers

Corporate Governance System(As of June 30, 2017)

Basic Views

Outside Corporate Auditor Outside Corporate Auditor

Hiroho Kamakura

Yasuhiro Orita

Outside Director

Outside Director

Full-time Corporate Auditor

Outside Corporate Auditor

The Company aims at achieving sustainable growth and maximizing the enterprise value for mediumand long-term under the management philosophy with obtaining credibility from all stakeholders
surrounding Yushin including shareholders. We strive to strengthen corporate governance with the basic
policy of following five items.

Executive Officer

Yasuo Nishiguchi Hiroshi Matsuhisa Yoshihisa Nakanishi Michitoshi Morimoto Masahito Fukui

1. The Company respects the rights of shareholders and ensures equality, as well as strives to improve theenvironment for executing rights appropriately and protect rights.
2. The Company strives to sincerely cooperate with stakeholders excluding our shareholders with good
sense.
3. The Company strives to ensure the transparency by appropriately making disclosure according to laws
and regulations and voluntarily providing information excluding the disclosure.
4. The Board of Directors strives to execute its roles and duties appropriately for transparent/fair andflexible decision-making.
5. The Company strives to positively communicate with shareholders after sharing the direction of its
stable growth for long-term.

Chart of Corporate Governance System
General Meeting of Shareholders
Appointment / Dismissal
Director

Tomohiro Inano

Executive Managing Director President and Representative Director Executive Managing Director

Yasushi Kitagawa

Satoshi Kimura

Mayumi Kotani

Appointment / Dismissal

Appointment / Dismissal

Managing Director

Yasuharu Ohdachi

Board of Directors (Directors/ Outside Directors)

Organization Chart(As of June 30, 2017)

Board of Directors

Accounting Auditor

General meeting ofshareholders

Corporate Auditors

President

Executive
Managing Director

Internal
Audit Office

7

Corporate
Planning

Product Planningand Marketing Dep.

Sales & Customer
service H.Q

Research &Development H.Q

Sales Dep.

Customer
Service Dep.

Quality
Assurance Dep.

Production H.Q

Representative
Director

Management
Meeting

GeneralAffairs Dep.

Management
Administration Dep.

Cooperation
Internal Audit Office

ReportSupervision /Instruction

Audit

Committee ofInternal Control
Purchase H.Q

Supervision /Instruction

Management
Supervision

Training /Supervision

Audit / Supervision
Sales HQ
R&D HQ
Production HQ
Purchase HQ
Administrative Dept.
Quality Assurance Dept.
Corporate Planning
Product Planning and Marketing Dept.

Audit

Board of Corporate Auditors(Corporate Auditor/ Outside Corporate Auditors)

Appointment / Dismissal

Subsidiaries

Cooperation

8

Global Network (As of June 30, 2017)

USA

Headquarters & Factory

Korea

Malaysia

TaiwanThailandUK

China (Shenzhen)

China (Shanghai)VietnamChina (Guangzhou)

Headquarters & Factory
555 Kuzetonoshiro-cho, Minami-ku, Kyoto, Japan 612-8205
TEL: +(81)75-933-9555

Subsidiaries (Sales office)

UK <Birmingham>
Korea <Seoul>■■ Netherlands <Ede>
Korea <Daegu>
China■ Italy <Torino> China <Shanghai><Tianjin>
Canada <Toronto>■■ Turkey <Istanbul>■■
USA <Rhode Island>■
USA <Ohio> ■China <Guangzhou>■■ Japan <Kyoto>■■
USA<NorthCarolina>
USA <California> ■China <Shenzhen> ■USA <Texas> ■■ Taiwan <Taipei>■
India <Gurgaon> ■■■Taiwan <Taichung>■■India <Chennai> ■Mexico <Guanajuato>■ Philippines <Manila>■■
Vietnam <Hanoi>■ Malaysia <Johor Bahru>
Thailand < Bangkok >Malaysia <Kuala Lumpur>

Vietnam <Ho Chi Minh>

Chubu General Sales Office
Nagoya-Nishi Sales Office■ China

YUSHIN PRECISION EQUIPMENT TRADING (SHANGHAI) CO., LTD.
Unit J1, 17/Floor, No.1800 Zhongshan West Road, Shanghai, 200235 China
TEL: +(86)21-6440-1586~7
YUSHIN PRECISION EQUIPMENT TRADING (SHENZHEN) CO., LTD.
13F Tower 1, Yang Guang Hua Yi Building NO.3003,
Nan Hai Ave, Nan Shan District, Shenzhen, 518052, China
TEL: +(86)755-8358-0139

Indonesia<Jakarta>■ Taiwan

Australia<Melbourne>

Technical Center

YUSHIN KOREA CO., LTD. <Seoul>
Tawon Techno-town F-101, 98 Okuchundong-Ro, Siheung-Shi,
Gyeonggi-Do, 15097, Korea
TEL: +(82)31-433-9655~6■■

Headquarters & Factory■ Korea■

New Zealand<Auckland>

Toyama Sales Office
Nagano Sales Office■ Indonesia

Iwate Satellite Office

Fukuoka Sales Office

Tohoku Sales Office
Higashi-Nihon General Sales Office

Ohita Satellite Office

YUSHIN PRECISION EQUIPMENT (VIETNAM) CO., LTD. <Hanoi>
Room No. 101, 1st Floor, HITC Building, 239 Xuan Thuy Street,
Dich Vong Ward, Cau Giay Dist, Hanoi, Vietnam
TEL: +(84)43-767-3844■ Malaysia

YUSHIN PRECISION EQUIPMENT SDN. BHD. <Kuala Lumpur>
Unit No. C-03A-5, Setiawalk, Persiaran Wawasan,
Pusat Bandar Puchong 47610 Puchong, Selangor Darul Ehsan, Malaysia
TEL：+(60)3-5880-5445■ Thailand

YUSHIN PRECISION EQUIPMENT (THAILAND) CO., LTD. <Bangkok>
179/346 Supalai Place, Soi, Sukhumvit 39 (Prompong),
Sukhumvit Rd., Klongton Nua, Wattana, Bangkok 10110 Thailand
TEL: +(66)2-662-2580■ India

YUSHIN PRECISION EQUIPMENT (INDIA) PVT. LTD. <Chennai>
Plot No.7, 4th Floor, Dr. Kannan Tower, Lakshmi Nagar, Extension, Arcot
Road, Porur, Chennai 600116 Tamil Nadu, India
TEL: +(91)44-4231-8005■ UK

YUSHIN AUTOMATION LIMITED <Birmingham>
Unit 15-16 Aston Fields Industrial Estate, Aston Road,
Bromsgrove, Worcestershire B60 3EX, United Kingdom
TEL: +(44)1527-558-218■ USA

YUSHIN AMERICA, INC. <Rhode Island>
35 Kenney Drive, Cranston, RI 02920 U.S.A.
TEL: +(1)401-463-1800

Tsukuba Sales Office
Shizuoka Sales Office
Nishi-Kanto Sales Office

Chubu General Sales Office9

Higashi-Nihon General Sales Office

PT. YUSHIN PRECISION EQUIPMENT INDONESIA <Jakarta>
Ruko Kalimas Jl. Chairil Anwar No. A. 15 Rt 006 Rw 017,
Margahayu, Bekasi Timur, Kota Bekasi, Jawabarat 17112 Indonesia
TEL：+(62)21-8835-8185■ Vietnam

Nishi-Nihon General Sales Office
Hiroshima Sales Office

YUSHIN PRECISION EQUIPMENT (TAIWAN) CO., LTD. <Taipei>
10F., No.45, Sec.1, Minquan E. Rd., Zhongshan District, Taipei City 10452, Taiwan (R.O.C.)
TEL: +(886)2-2585-0507

Technical Center

487 Kuzetsukiyama-cho, Minami-ku, Kyoto, Japan 601-8203
TEL: +(81)75-933-9555

Subsidiary (Factory)■ China

GUANGZHOU YUSHIN PRECISION EQUIPMENT CO., LTD.
No.2 Chuangli Road, XiangShan street, Zengcheng
Economic & Technological Development District,
Guangzhou City, Guangdong Province, China
TEL: +(86)20-8269-0091

Representative offices■ Philippines Representative Office <Manila>

2nd Foor RAHA Sulayman Building (Annex) 108, Benavidez
Street, Legaspi Village, Makati City, 1229 Philippines
TEL: +(63)2-893-7546

Agents■ New Zealand

TASMAN MACHINERY LTD. <Auckland>
14-16 Auburn St, Grafton, Auckland 1023 (New Zealand)
TEL: +(64)9-379-5716■ Australia

TASMAN MACHINERY PTY. LTD. <Melbourne>
Unit 2, 84-90 Lakewood Blvd, Braeside, Victoria 3195 (Australia)
TEL: +(61)3-8587-8200■ Turkey

MAR PLASTİK METAL KALIP SAN. VE TİC. LTD. ŞTİ. <Istanbul>İstanbul Anadolu Yakası Organize Sanayi Bölgesi (İAYOSB)
9. Sk. No: 6, 34953 Tuzla-İstanbul / TÜRKİYE
TEL: +(90)216-593-20-01■ Itary

MACAM S.r.l. <Torino>
Via Asti, 88/A 10098 Rivoli (TO), Italia
TEL: +(39)11-959-50-57■ The Netherlands

POLYMAC-ROBOTICS B.V. <Ede>
Morsestraat 20 Ede 6716 AH EDE, The Netherlands
TEL: +(31)318-648615■ Canada

EN-PLAS, INC. <Toronto>
1395 Morningside Avenue Scarborough, (Toronto) Ontario
M1B 3J1, Canada
TEL: +(1)416-286-3030

10

Topics
New Company Headquarters and Factory

Yushin opened a new company headquarters and factory in December 2016. The new facility is in the
20,597sqm land along the Route 171 in Kyoto and consists of the 7-story office wing and the 4-story factory wing.

New Company Logotype

A new company logotype was launched in
December 2016 to emphasize our intention tofurther grow and develop globally.
The former logotype of Yushin that was familiar
to our customers and business partners for over
30 years was created by outlining our founderSusumu Kotani’s handwriting, representing hisquest for “Innovation Next” (furthering
technology innovation) and “Heartful Technology”(pursuing cooperation between human andmachines). The new company logo design reflects
our intention to maintain his vision and ouraspiration to reach new heights.
The new Yushin logotype symbolizes our
pursuit of speed, quality and strength, as well as
relationships and bonds with people inside andoutside the company. In particular, the initial “Y”
in the logotype has a line that stretches upward
to the right, representing Yushin’s innovativeness.
Where this soaring line reaches lies theever-developing future to which Yushin will makecontributions through its Heartful Technology.

<Aims of the construction of new headquarters and factory>
1. Integrating the production area
To enhance productivity, the production area in our headquarters and factory site has been integrated toperform all processes seamlessly, from acceptance of parts, materials and equipment to assembly, inspection andshipping of products.
2. Responding to more orders for large machines
To meet more orders, the area for assembly and inspection of large take-out robots has been expanded, with
an open ceiling space that extends through three floors to secure sufficient height.
3. Streamlining and sophisticating operations through better communication
The floor layout has been designed to foster internal communication. For example, sales, development, design
and administration functions are grouped on the fourth floor of the headquarters building.
4. Creating an environment where employees can work together with a feeling of greater enrichment.

1112

Topics
FRA - New Series of High-end Take-out Robots
In July 2017, Yushin launched
new FRA Series of high-end
take-out robots equipped with
newly developed vibration
dampening technology.
Yushin has long contributed tothe development of the plastic
molding industry by offering
newly featured take-out robots in
a continuous pursuit of 'speed'
and 'simple operation'. The newseries of robots is carefully andmeticulously redesigned every
detail of our existing robots.

<Features of FRA>
1. New vibration dampening technology
Reducing vibrations is critical to insert molding and other methods of high-precision molding, as well as for
shortening molding cycle time - a key factor for determining plastic molding productivity. Equipped with
Yushin's proprietary 'Active Vibration Control', these robots deliver high dampening performance under various
molding conditions.
2. New controller
The 'E-touch V' furthers the 'simple operation' concept that Yushin began with the industry's first standard
configuration 'touch panel controller'. It employs 2 vertically arrayed displays - main and sub - that effectively
shorten setup time by simultaneously presenting a lot of information in an easy-to-understand format.
3. IoT
Intu Line is Yushin's proprietary IoT service that visualizes information essential towards enhancing productivity
and molding quality, preventing robot trouble. Anyone can start using the service the same day the robot is
installed. Moreover, the benefits far outweigh the costs of introduction and usage.

Financial Review

YUSHIN PRECISION EQUIPMENT CO., LTD. and Subsidiaries

1.Net Sales

4.Cash Flow

Net sales decreased by 8.5% year on year to
19,346 million yen from the previous fiscal year
because sales in new business area fell below
expectation and there was strong yen, althoughsales in Japan and of subsidiaries in Vietnam,
Malaysia and Indonesia increased.

The balance of cash and cash equivalents on
March 31, 2017 increased by 392 million yen fromthe end of the previous fiscal year to 5,690 million
yen. Main reasons are as follows.

2.Operating Income【Cash flow from operating activities】
Income before income taxes was 2,009 million
yen. After deducting 958 million yen in Income
taxes paid, cash flow from operating activities forthe fiscal year ended March 31, 2017 was a net
inflow of 1,626 million yen (it was a net inflow of
2,218 million yen in the previous fiscal year).

In addition to decrease in net sales, there were
cost occurred relating to the new ERP system
launched in November, 2016 and the relocation of
the HQ implemented in December, 2016. As aresult, operating income decreased by 31.5% year
【Cash flow from investment activities】
on year to 2,112 million yen from the previous fiscal
Due to 356 million yen in Purchase of property,
year.
plant and equipment, cash flow from investment
activities for the fiscal year ended March 31, 2017
was a net outflow of 471 million yen (it was a net
3.Financial Condition
outflow of 5,105 million yen in the previous fiscal
year).
Total assets increased by 1,352 million yen fromthe end of the previous fiscal year to 30,761 million
yen. This was mainly due to increase of 453 million 【Cash flow from financing activities】
Due to Cash dividends paid of 629 million yen,
yen in Notes and accounts receivable – trade, 413
cash flow from financing activities was a net
million yen in Consumption taxes receivable andoutflow of 678 million yen (it was a net outflow of
393 million yen in Cash and deposits.
677 million yen in the previous fiscal year).
Total liabilities increased by 616 million yen fromthe end of the previous fiscal year to 5,310 million
yen. This was mainly due to increase of 653 million
yen in electronically recorded obligations operating.
Net assets increased by 736 million yen from theend of the previous fiscal year to 25,451 million
yen due to increase of Retained earnings by 771
million yen.

4. Compliant with international safety standards
Alongside the 'high speed' and 'anyone-can-operate' concepts underlying the FRA Series, Yushin outpaces theindustry with its 'safe usage' proposals. These robots offer the world's highest level of industrial safety, byincorporating redundant safety circuitry, speed monitoring and other safety features required underinternational standards.

13

14

Consolidated Balance SheetYUSHIN PRECISION EQUIPMENT CO., LTD. and Subsidiaries
March 31, 2017

ASSETS

Millions of Yen

2016

2017

CURRENT ASSETS:
Cash and cash equivalents (Note 9)

Thousands of
U.S. Dollars(Note 1)・・・・・・・・・・・・・・・・・・・・・・・

Short-term investments (Notes 9)

・・・・・・・・・・・・・・・・・・・・

￥

5,690
43

￥

2017

5,297

$

43

LIABILITIES AND EQUITY

Millions of Yen

391

Receivables (Note 9) :

2016

2017

CURRENT LIABILITIES:

50,809Thousands of
U.S. Dollars(Note 1)

2017

Payables (Note 9) :Trade notes ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・
Trade accounts

￥

83

￥

47

$

748

・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・

2,908

2,121

25,968Trade notes ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・

1,184

1,300

10,571

Construction and other ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・

750

776

6,705

Trade accounts ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・

5,295

4,725

47,283

Advances from customers ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・

604

278

5,401

Allowance for doubtful receivables ・・・・・・・・・・・・・・・・・・・・・・・・・

(21)

(30)

(190)

Income taxes payable (Note 9)・・・・・・・・・・・・・・・・・・・・・・・・・・・・・

100

548

893

Inventories (Note 4)・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・

3,833

3,673

34,230Accrued expenses

・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・

451

405

4,028

Deferred tax assets (Note 7) ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・

431

625

3,856

Warranty reserve ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・

122

148

1,097

Other current assets ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・

890

320

7,947

Other current liabilities (Note 7)・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・

77

65

694

Total current assets ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・

17,34815,956

154,899

Total current liabilities ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・

5,100

4,392

45,537

LONG-TERM LIABILITIES:PROPERTY, PLANT AND EQUIPMENT:

66

66

596

5,784

5,779

Liability for retirement benefits to directors (Note 5)・・・・・・・・・

Land ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・

51,644

53

44

480

8,816

4,442

Liability for retirement benefits (Note 5)・・・・・・・・・・・・・・・・・・・・・・

Buildings and structures ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・

78,719

29

123

265

559

442

Deferred tax liabilities (Note 7) ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・

Machinery and equipment・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・

4,998

59

67

530

1,465

1,345

Other ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・

Furniture and fixtures ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・

13,085

209

301

1,873

5

4,587

Total long-term liabilities・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・

Construction in progress ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・

51

Total ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・

16,631

16,597

148,499

Accumulated depreciation ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・(4,376)(4,160)(39,072)

Net property, plant and equipment ・・・・・・・・・・・・・・・・・・・・

12,255

12,436

109,426

・・・・・・・・・・・・・・・・・・・・・

1,985

1,985

17,729

Capital surplus ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・

2,023

2,023

18,070Retained earnings ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・

21,27320,502

189,940

・・・・・

(353)

(352)

(3,160)・・・・・・・・・・

58

33

522

・・・・・・・・・・・・・・・・

203

266

1,815

EQUITY (Notes 6 and 12):
Common stock, authorized, 40,000,000 shares; issued,
17,819,033 shares in 2017 and 2016

Treasury stock - at cost:

INVESTMENTS AND OTHER ASSETS:
Investment securities (Notes 3 and 9) ・・・・・・・・・・・・・・・・・・・・・・・

220

185

1,971

331,715 shares in 2017 and 331,208 shares in 2016

Insurance funds ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・

119

142

1,069

Accumulated other comprehensive income:

Asset for retirement benefits (Note 5)・・・・・・・・・・・・・・・・・・・・・・・・

292

266

2,615

Unrealized gain on available-for-sale securities

Deferred tax assets (Note 7) ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・

20

9

182

Other assets ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・

503

411

4,492

Defined retirement benefit plan ・・・・・・・・・・・・・・・・・・・・・・・・・・・

67

50

604

Total investments and other assets ・・・・・・・・・・・・・・・・・・・・

1,157

1,015

10,332

Total ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・

25,25824,509225,521

Noncontrolling interests ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・

193

205

1,726

Total equity ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・

25,451

24,715

227,247

・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・￥ 30,761￥ 29,409

TOTAL ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・￥ 30,761￥ 29,409$

Foreign currency translation adjustments

274,658
TOTAL$

274,658

See notes to consolidated financial statements.

15

16

Consolidated Statement of Income

Consolidated Statement of Changes in Equity

YUSHIN PRECISION EQUIPMENT CO., LTD. and Subsidiaries
Year Ended March 31, 2017YUSHIN PRECISION EQUIPMENT CO., LTD. and Subsidiaries
Year Ended March 31, 2017

Thousands of U.S. Dollars(Note 1)Millions of Yen

2016

2017
NET SALES ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・
COST OF SALES ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・
Gross profit ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・￥ 19,346
11,6807,666

SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES (Note 8) ・・・・・・・・・・・・・・・・・・・・
Operating income ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・

INCOME TAXES (Note 7):
Current ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・
Deferred ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・
Total income taxes ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・
NET INCOME
・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・
NET INCOME ATTRIBUTABLE TONONCONTROLLING INTERESTS
・・・・・・・・・・・・・・・・・・・・・・・・・

21,14812,705
8,442$

172,735
104,285
68,44949,586
18,862

See notes to consolidated financial statements.

17

Unrealized
ForeignDefinedGain onCurrency Retirement
Retained Treasury
Available-forTranslation
Benefit
Earnings
Stock
Sale Securities Adjustments
Plan

17,488 ￥ 1,985 ￥ 2,023 ￥ 19,205 ￥ (352) ￥Cash dividends, ￥35 per share ・・・・・・・・

955
(72)
883
1,975

4,494
845
5,339
12,603BALANCE, APRIL 1, 2016 ・・・・・・・・・・(as restated)

31

66

280

Purchase of treasury stock ・・・・・・・・・・・・

1,380

￥

1,908

￥

78.93
36.00

$

12,323

17,487

1,985

2,023

20,502

Cumulative effect ofaccounting change ・・・・・・・・・・・・
17,487

1,985

1,411

(612)

(0)

(0)

(352)

(73)

(392)

(58)

(523)

(26)

(550)

33

266

50

24,509205

24,7152,023

20

20,522

(352)

33

266

50

1,380

Cash dividends, ￥36 per share ・・・・・・・・

24,530

24

(63)

205

24,736
1,380

(629)

(629)

(1)

(1)

(1)

17,488 ￥ 1,985 ￥ 2,023 ￥ 21,273 ￥ (353) ￥

20

1,380

(629)
(0)

17

(21)

(12)

(33)

67 ￥ 25,258 ￥ 193 ￥ 25,451

58 ￥ 203 ￥U.S. Dollars (Note 1)￥

109.14
36.00$

Thousands of U.S. Dollars (Note 1)

0.70
0.32

Accumulated Other
Comprehensive Income
CommonStockCapitalSurplusThousands of U.S. Dollars(Note 1)

2016
￥

1,975

2017
$

(73)
(420)
(58)
(552)

24
(59)
17
(17)

12,603
219
(535)
155
(159)

￥

1,393

￥

1,422

$

12,444

￥

1,359
34

￥

1,384
37

$

12,133310

Retained
Earnings

Treasury
Stock

Unrealized
ForeignDefinedGain onCurrency Retirement
Available-for- Translation
BenefitSale Securities Adjustments
Plan

BALANCE, MARCH 31, 2016 ・・・・・・・ $ 17,729 $ 18,070 $ 183,055 $ (3,149) $・(April 1, 2016, as previously reported)
Cumulative effect ofaccounting change ・・・・・・・・・・・・

￥

(612)

20

Net income ・・・・・・・・・・・・・・・・・・・・・・・・・

BALANCE, MARCH 31, 2017

1,908

(0)

Net change in the year ・・・・・・・・・・・・・・・・
BALANCE, MARCH 31, 2016 ・・・・・・・(April 1, 2016, as previously reported)

1,908

(612)
(0)

Noncontrolling Total
Interests
EquityTotal

108 ￥ 23,737 ￥ 232 ￥ 23,970

107 ￥ 658 ￥1,908

Net change in the year ・・・・・・・・・・・・・・・￥

OTHER COMPREHENSIVE INCOME (LOSS) (Note 10) :Unrealized gain (loss) on available-for-sale securities ・・・・・・・
Foreign currency translation adjustments ・・・・・・・・・・・・・・・・・・・
Defined retirement benefit plan ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・
Total other comprehensive income (loss) ・・・・・・・・・・・・・・・・・・

TOTAL COMPREHENSIVE INCOME
ATTRIBUTABLE TO :Owners of the parent ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・
Noncontrolling interests ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・

CapitalSurplus・・・・・・・・・・・・・・・・・・・・・・・

503
94
598
1,411

2017

・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・

Net income

96(1,154)5
133(919)
17,943

Millions of Yen

COMPREHENSIVE INCOME

BALANCE, APRIL 1, 2015 ・・・・・・・・・・

17
(224)
1
(21)
(227)
2,858

YUSHIN PRECISION EQUIPMENT CO., LTD. and Subsidiaries
Year Ended March 31, 2017・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・

Outstanding
Number of Common
Shares ofStock
Common Stock

Purchase of treasury stock ・・・・・・・・・・・・・

Consolidated Statement of Comprehensive Income

NET INCOME

Accumulated Other
Comprehensive Income

10
(129)
0
14
(103)
2,009

Yen
PER SHARE OF COMMON STOCK (Notes 2.p and 11):Net income ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・
Cash dividends applicable to the year ・・・・・・・・・・・・・・・・・・・・・・・

Millions of Yen

2017

5,356
3,086

5,553
2,112

OTHER INCOME (EXPENSES):Interest and dividend income ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・
Foreign exchange loss ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・
Gain from the sale of investment securities ・・・・・・・・・・・・・・・・・・
Other-net・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・
Other income (expenses) - net ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・
INCOME BEFORE INCOME TAXES
・・・・・・・・・・・・・・・・・・・・・・

NET INCOME ATTRIBUTABLE TO OWNERS OF
THE PARENT COMPANY ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・￥

Thousands

BALANCE, APRIL 1, 2016 ・・・・・・・・・・(as restated)

302 $ 2,380 $448 $ 218,837 $

181
17,72918,070183,237

Noncontrolling
Interests

Total

1,837 $ 220,675

181(3,149)

302

2,380

448

219,019

Total
Equity181
1,837

220,857

Net income ・・・・・・・・・・・・・・・・・・・・・・・・・

12,323

12,323

12,323

Cash dividends, $0.32 per share ・・・・・・・(5,621)(5,621)(5,621)

Purchase of treasury stock・・・・・・・・・・・(11)

BALANCE, MARCH 31, 2017 ・・・・・・・

(11)
219

Net change in the year ・・・・・・・・・・・・・・・・$ 17,729 $ 18,070 $189,940 $ (3,160) $(565)

522 $ 1,815 $

155

(189)

(11)
(111)

(301)

604 $ 225,521 $ 1,726 $227,247

See notes to consolidated financial statements.

18

Consolidated Statement of Cash Flows

Notes to Consolidated Financial Statements
YUSHIN PRECISION EQUIPMENT CO., LTD. and Subsidiaries
Year Ended March 31, 2017YUSHIN PRECISION EQUIPMENT CO., LTD. and Subsidiaries
Year Ended March 31, 2017

Thousands of
U.S. Dollars(Note 1)Millions of Yen

2016

2017
OPERATING ACTIVITIES:
Income before income taxes ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・
Adjustments for:
Income taxes - paid ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・
Depreciation and amortization・・・・・・・・・・・・・・・・・・・・・・・・・・・・・
Changes in assets and liabilities:
Increase in trade receivables ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・(Increase) decrease in inventories ・・・・・・・・・・・・・・・・・・・・・・・・
Increase in trade payables ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・(Decrease) increase in provision for doubtful receivables
・・
Other - net ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・
Total adjustments ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・
Net cash provided by operating activities・・・・・・・・・・・・・
INVESTING ACTIVITIES:
Increase in short-term investments ・・・・・・・・・・・・・・・・・・・・・・・・・・
Purchases of property, plant and equipment ・・・・・・・・・・・・・・・・
Proceeds from sales of property, plant and equipment ・・・・・
Purchases of investment securities ・・・・・・・・・・・・・・・・・・・・・・・・・・
Proceeds from sales of investment securities ・・・・・・・・・・・・・・・
Other - net ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・
Net cash used in investing activities ・・・・・・・・・・・・・・・・・・・

2,858$ 17,943

(958)
479

(669)
394

(8,556)
4,282

(482)
(213)
890
(8)
(89)
(383)

(384)
466
27
6
(482)
(640)

(4,310)(1,907)
7,947
(79)
(795)
(3,419)

1,626

2,218

14,523￥ 2,009￥(2)(4,861)
0
(0)
1
(244)
(5,106)

(3)
(356)
4
(0)
0
(117)
(471)

(27)
(3,178)41(1)
6(1,047)(4,206)

FINANCING ACTIVITIES:Dividends paid ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・
Dividends paid to noncontrolling interests・・・・・・・・・・・・・・・・・・・
Purchase of treasury stock ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・
Other - net ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・
Net cash used in financing activities ・・・・・・・・・・・・・・・・・・・

(629)
(50)
(1)
3
(678)

(677)

(5,624)
(450)
(11)
29
(6,057)

EFFECT OF EXCHANGE RATE CHANGES ON
CASH AND CASH EQUIVALENTS ・・・・・・・・・・・・・・・・・・・・・・・

(84)

(226)

(751)

NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・

392(3,791)

3,508

CASH AND CASH EQUIVALENTS,
BEGINNING OF YEAR ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・

5,297

9,089

47,300CASH AND CASH EQUIVALENTS,
END OF YEAR ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・￥ 5,690

5,297$ 50,809

See notes to consolidated financial statements.

19

2017

(612)
(64)
(1)

￥

1.BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS
The accompanying consolidated financial statements have been
prepared in accordance with the provisions set forth in the Japanese
Financial Instruments and Exchange Act and its related accounting
regulations and in conformity with accounting principles generally
accepted in Japan ("Japanese GAAP"), which are different in certain
respects as to the application and disclosure requirements ofInternational Financial Reporting Standards.
In preparing these consolidated financial statements, certain
reclassifications and rearrangements have been made to theconsolidated financial statements issued domestically in order topresent them in a form which is more familiar to readers outside
Japan. In addition, certain reclassifications have been made in the2016 consolidated financial statements to conform to theclassifications used in 2017.
The fiscal year end dates of all consolidated subsidiaries are different
from that of the consolidated balance sheet date of March 31. They

are dated December 31, and the financial statements of thesesubsidiaries as of the provisional closing date of March 31 are used
for consolidation purposes.
The consolidated financial statements are stated in Japanese yen,
the currency of the country in which Yushin Precision Equipment
Co., Ltd. (the "Company") is incorporated and operates. The
translations of Japanese yen amounts into U.S. dollar amounts areincluded solely for the convenience of readers outside Japan andhave been made at the rate of ¥112 to $1, the approximate rate ofexchange at March 31, 2017. Such translations should not be
construed as representations that the Japanese yen amounts could
be converted into U.S. dollars at that or any other rate.
Amounts less than one million yen and one thousand U.S. dollars
are rounded down, except for per-share data. Therefore, total or
subtotal amounts may not correspond with the aggregation ofsuch account balances.

2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESa. Consolidation - The consolidated financial statements as of March
31, 2017, include the accounts of the Company and all of its
subsidiaries (together, the "Group").
Under the control concept, those companies in which the Company isable to directly exercise control over operations are fully
consolidated.
All significant intercompany balances and transactions have been
eliminated in consolidation. All material unrealized profit included in
assets resulting from transactions within the Group is also eliminated.
b. Unification of Accounting Policies Applied to Foreign
Subsidiaries for the Consolidated Financial Statements - Under
Accounting Standards Board of Japan ("ASBJ") Practical Issues Task
Force ("PITF") No. 18, "Practical Solution on Unification of Accounting
Policies Applied to Foreign Subsidiaries for the Consolidated Financial
Statements," the accounting policies and procedures applied to aparent company and its subsidiaries for similar transactions andevents under similar circumstances should in principle be unified forthe preparation of the consolidated financial statements. However,financial statements prepared by foreign subsidiaries in accordancewith either International Financial Reporting Standards or generally
accepted accounting principles in the United States of America(Financial Accounting Standards Board Accounting Standards
Codification - "FASB ASC") tentatively may be used for the
consolidation process, except for the following items that should be
adjusted in the consolidation process so that net income is accounted
for in accordance with Japanese GAAP, unless they are not material:(a) amortization of goodwill; (b) scheduled amortization of actuarial
gain or loss of pensions that has been recorded in equity throughother comprehensive income; (c) expensing capitalized development
costs of R&D; and (d) cancellation of the fair value model ofaccounting for property, plant and equipment and investment
properties and incorporation of the cost model of accounting.
c. Business Combinations - Business combinations are accounted forusing the purchase method. Acquisition-related costs, such asadvisory fees or professional fees, are accounted for as expenses in
the periods in which the costs are incurred. If the initial accounting
for a business combination is incomplete by the end of the reporting
period in which the business combination occurs, an acquirer shallreport in its financial statements provisional amounts for the items forwhich the accounting is incomplete. During the measurement period,
which shall not exceed one year from the acquisition, the acquirer

shall retrospectively adjust the provisional amounts recognized at
the acquisition date to reflect new information obtained about facts
and circumstances that existed as of the acquisition date and thatwould have affected the measurement of the amounts recognized
as of that date. Such adjustments shall be recognized as if theaccounting for the business combination had been completed at
the acquisition date. A parent's ownership interest in a subsidiarymight change if the parent purchases or sells ownership interests in
its subsidiary. The carrying amount of noncontrolling interest is
adjusted to reflect the change in the parent's ownership interest in
its subsidiary while the parent retains its controlling interest in its
subsidiary. Any difference between the fair value of theconsideration received or paid and the amount by which thenoncontrolling interest is adjusted is accounted for as capitalsurplus as long as the parent retains control over its subsidiary.
d. Cash Equivalents - Cash equivalents are short-term investmentsthat are readily convertible into cash and exposed to insignificant
risk of changes in value. Cash equivalents include time deposits
which mature or become due within three months of the date ofacquisition.
e. Inventories - Inventories are principally stated at the lower of cost,
determined by the specific identification method for finishedproducts and work in process, and by the average method for raw
materials and supplies, or net selling value.
f. Securities - Securities are investment securities in the consolidatedbalance sheet. All investment securities are classified asavailable-for-sale securities, which are not classified as either
trading securities or held-to-maturity debt securities, and arereported at fair value, with unrealized gains and losses, net of
applicable taxes, reported in a separate component of equity. The
cost of securities sold is determined based on the moving-averagemethod. For other-than-temporary declines in fair value,
investment securities are reduced to net realizable value by acharge to income.
g. Property, Plant and Equipment - Property, plant and equipment
are stated at cost. Depreciation of property, plant and equipmentof the Group is principally computed by the declining-balancemethod at rates based on the estimated useful lives of the assets.
The range of useful lives is principally from 13 to 40 years forbuildings and structures and from 5 to 12 years for machinery andequipment.
20

h. Long-Lived Assets - The Group reviews its long-lived assets for
impairment whenever events or changes in circumstance indicate
the carrying amount of an asset or asset group may not berecoverable. An impairment loss would be recognized if thecarrying amount of an asset or asset group exceeds the sum of theundiscounted future cash flows expected to result from thecontinued use and eventual disposition of the asset or asset group.
The impairment loss would be measured as the amount by which
the carrying amount of the asset exceeds its recoverable amount,which is the higher of the discounted cash flows from the continued
use and eventual disposition of the asset or the net selling price at
disposition.
i. Warranty Reserve - In order to provide for future warranty
expenses for the Group's products, a warranty reserve is estimatedand recorded principally on the basis of the Company's historicalexperience.
j. Retirement Benefits - The Company has a funded defined benefit
pension plan and a funded defined contribution pension plan
covering substantially all of its employees. Certain subsidiaries havean unfunded defined benefit pension plan or an unfunded defined
contribution pension plan.
The Company accounts for the liability for retirement benefits basedon the projected benefit obligations and plan assets at the balance
sheet date. The projected benefit obligations are attributed toperiods on a benefit formula basis. Actuarial gains and losses andpast service costs that are yet to be recognized in profit or loss arerecognized within equity (accumulated other comprehensive
income), after adjusting for tax effects and are recognized in profit
or loss over 10 to 16 years, no longer than the expected averageremaining service period of the employees. The discount rate isdetermined using a single weighted-average discount rate reflecting
the estimated timing and amount of benefit payment.
Retirement benefits to directors are provided at the estimatedamount which would be required if all directors retired at thebalance sheet date. The Company terminated its retirement benefit
plan for directors on June 29, 2006, and no additional provisions
have been recorded since then. As of March 31, 2017, the balanceof the liability for retirement benefits to directors was ¥66 million($596 thousand), provided in proportion to the term that present
directors had been in place before June 29, 2006.
k. Research and Development Costs - Research and development
costs are charged to income as incurred.
l. Bonuses to Directors - Bonuses to directors are accrued at the
year-end to which such bonuses are attributable.
m. Income Taxes - The provision for income taxes is computed basedon the pretax income included in the consolidated statement ofincome. The asset and liability approach is used to recognize
deferred tax assets and liabilities for the expected future tax
consequences of temporary differences between the carrying
amounts and the tax bases of assets and liabilities. Deferred taxes
are measured by applying currently enacted income tax rates to thetemporary differences.
The Company applied ASBJ Guidance No. 26, "Guidance on
Recoverability of Deferred Tax Assets," effective April 1, 2016. As aresult, deferred tax assets (investments and other assets) andretained earnings as of April 1, 2016 increased by ¥20 million ($181
thousand).
n. Foreign Currency Transactions - All short-term and long-termmonetary receivables and payables denominated in foreign
currencies are translated into Japanese yen at the exchange rates atthe balance sheet date. The foreign exchange gains and losses fromtranslation are recognized in the consolidated statement of income
to the extent that they are not hedged by forward exchange
21

contracts.
o. Foreign Currency Financial Statements - The balance sheet
accounts of the consolidated foreign subsidiaries are translated into
Japanese yen at the current exchange rate as of the balance sheet
date except for equity, which is translated at the historical rate.
Differences arising from such translation are shown as "Foreign
currency translation adjustments" under accumulated othercomprehensive income in a separate component of equity.
Revenue and expense accounts of consolidated foreign subsidiaries
are translated into Japanese yen at the average exchange rate.
p. Per-Share Information - Basic net income per share is computedby dividing net income available to common shareholders by theweighted-average number of common shares outstanding for theperiod.
Diluted net income per share is not disclosed as there are no
outstanding potentially dilutive securities.
Cash dividends per share presented in the accompanying
consolidated statement of income are dividends applicable to therespective fiscal years, including dividends to be paid after the endof the year.
q. Accounting Changes and Error Corrections - Under ASBJ
Statement No. 24, "Accounting Standard for Accounting Changes
and Error Corrections," and ASBJ Guidance No. 24, "Guidance on
Accounting Standard for Accounting Changes and Error
Corrections," accounting treatments are required as follows: (1)Changes in Accounting Policies - When a new accounting policy isapplied following revision of an accounting standard, the new policy
is applied retrospectively unless the revised accounting standard
includes specific transitional provisions, in which case the entity shallcomply with the specific transitional provisions. (2) Changes in
Presentation - When the presentation of financial statements ischanged, prior-period financial statements are reclassified inaccordance with the new presentation. (3) Changes in Accounting
Estimates - A change in an accounting estimate is accounted for in
the period of the change if the change affects that period only, andis accounted for prospectively if the change affects both the periodof the change and future periods. (4) Corrections of Prior-Period
Errors - When an error in prior-period financial statements is
discovered, those statements are restated.

3.SECURITIES(1) Investment Securities
The costs and aggregate fair values of investment securities as of March 31, 2017 and 2016, were as follows:

Millions of Yen

2016

2017

Unrealized Unrealized Fair Value
Securities classified as:
Cost
Gains
LossesAvailable-for-sale:
￥ 84
￥
0
￥ 220
Equity securities ・・・・・・・・・・・・・・・・ ￥ 136

Cost
￥ 136

Unrealized Unrealized Fair Value
Gains
Losses
48

￥

￥

0

￥ 185

Thousands of U.S. Dollars

2017

Unrealized Unrealized Fair Value
Securities classified as:
Cost
Gains
LossesAvailable-for-sale:
$ 752
$
0
$ 1,971
Equity securities ・・・・・・・・・・・・・・・・ $ 1,219(2) The proceeds, realized gains and realized losses of the available-for-sale securities which were sold during the years ended
March 31, 2017 and 2016, were as follows:
March 31, 2017
Available - for - sale :Equity securities ・・・・・・・・・・・・・・・・・・・・・・・

Millions of Yen

Proceeds￥

Realized Gains

0￥March 31, 2016
Available - for - sale :Equity securities ・・・・・・・・・・・・・・・・・・・・・・・
March 31, 2017
Available - for - sale :Equity securities ・・・・・・・・・・・・・・・・・・・・・・・

Realized Loss

0

Millions of Yen

Proceeds

Realized Gains

1

￥

￥

Realized Loss

1

Thousands of U.S. Dollars

Proceeds$

Realized Gains

6$

Realized Loss

5

4.INVENTORIESInventories at March 31, 2017 and 2016, consisted of thefollowing:Thousands of
U.S. Dollars

Millions of Yen

2016

2017

2017

Finished products ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・
Work in process ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・
Raw materials and supplies ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・

￥

769
884
2,179

￥

762
625
2,286

$

6,873
7,900
19,456

Total

￥

3,833

￥

3,673

$

34,230・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・

5.RETIREMENT AND PENSION PLANS
The Company has severance payment plans for employees.
Under most circumstances, employees terminating their employment are entitled to retirement benefits determined based on therate of pay at the time of termination, years of service and certain other factors. Such retirement benefits are made in the form of
a lump-sum severance payment or annuity payments from a trustee.
The Company has a funded defined benefit pension plan and a funded defined contribution pension plan for employees which
cover approximately 50% each of their benefits. Certain subsidiaries have an unfunded retirement benefit plan or a defined
contribution pension plan. The Company recorded a liability for retirement benefit to directors in the amount of ¥66 million ($596
thousand) and ¥66 million as of March 31, 2017 and 2016, respectively.

22

(1) The changes in defined benefit obligation for the years ended March 31, 2017 and 2016, were as follows:
Millions of Yen

2016

2017
Balance at beginning of year (as previously reported) ・・・
Current service cost ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・
Interest cost ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・
Actuarial (gains) losses ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・
Benefits paid ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・
Others ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・￥

Balance at end of year ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・￥

Thousands of
U.S. Dollars

552
55
1
(3)
(8)
0

￥

597

￥

2017
483
54
4
27
(11)
(7)

$

552

$

(2) The changes in plan assets for the years ended March 31, 2017 and 2016, were as follows:

5,338

Thousands of
U.S. Dollars

Millions of Yen

2016

2017

4,929
499
13
(34)
(76)
6

2017

Balance at beginning of year ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・
Expected return on plan assets ・・・・・・・・・・・・・・・・・・・・・・・・・
Actuarial (gains) losses ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・
Contributions from the employer ・・・・・・・・・・・・・・・・・・・・・・・
Benefits paid ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・

￥

(774)
(7)
(21)
(40)
7

￥

(791)
(7)
53
(40)
11

$

(6,919)
(69)
(190)
(361)
66

Balance at end of year ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・

￥

(836)

￥

(774)

$

(7,473)(3) Reconciliations between the liability recorded in the consolidated balance sheet and the balances of defined benefit
obligation and plan assets as of years ended March 31, 2017 and 2016, were as follows:
Thousands of
U.S. Dollars

Millions of Yen

2016

2017
Funded defined benefit obligation ・・・・・・・・・・・・・・・・・・・・・・・
Plan assets ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・

￥

544
(836)
(292)
53

￥

￥

(239)

￥

Unfunded defined benefit obligation ・・・・・・・・・・・・・・・・・・・・
Net asset arising from defined benefit obligation ・・・・・・・・

2017

508
(774)
(266)
44

$

(222)

$

2016

2017

Liability for retirement benefits ・・・・・・・・・・・・・・・・・・・・・・・・・・・
Asset for retirement benefits ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・

￥

53
(292)

￥

44
(266)

$

480
(2,615)

Net asset arising from defined benefit obligation ・・・・・・・・

￥

(239)

￥

(222)

$

(2,134)(4) The components of net periodic benefit costs for the years ended March 31, 2017 and 2016, were as follows:
Millions of Yen

Thousands of
U.S. Dollars

2016

2017

23

(2,134)

Thousands of
U.S. Dollars

Millions of Yen

2017

4,857
(7,473)(2,615)480

2017

Service cost ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・
Interest cost ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・
Expected return on plan assets ・・・・・・・・・・・・・・・・・・・・・・・・・・
Recognized actuarial gains ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・

￥

55
1
(7)
(0)

￥

54
4
(7)
(6)

$

499
13
(69)
(0)

Net periodic benefit costs ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・

￥

49

￥

44

$

442

(5) Amounts recognized in other comprehensive income (before income tax effect) in respect of defined retirement beneit plans
for the years ended March 31, 2017 and 2016, were as follows:
Thousands ofMillions of Yen
U.S. Dollars

2016

2017
Actuarial gains (losses) ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・

25

￥

2017
(88)

￥

$

224

(6) Amounts recognized in accumulated other comprehensive income (before income tax effect) in respect of defined retirement
benefit plans as of March 31, 2017 and 2016 were as follows:
Thousands ofMillions of Yen
U.S. Dollars

2016

2017
Unrecognized actuarial gains・・・・・・・・・・・・・・・・・・・・・・・・・・・・・

97

￥

2017
72

￥

$

869

(7) Plan assets
a. Components of plan assets
Plan assets as of March 31, 2017 and 2016, consisted of the following:

2017

2016

Domestic debt investments ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・
Domestic equity investments ・・・・・・・・・・・・・・・・・・・・・・・・・・・・
Foreign debt investments ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・
Foreign equity investments ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・
General accounts ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・
Others ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・

0.1 %
17.2
7.8
25.8
3.2
45.9

17.8 %
33.6
10.3
29.4
3.7
5.2

Total

100.0 %

100.0 %

・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・

b. Method of determining the expected rate of return on plan assets
The expected rate of return on plan assets is determined considering the long-term rates of return
which are expected currently and in the future from the various components of the plan assets.
(8) Assumptions used for the years ended March 31, 2017 and 2016, were set forth as follows:

Discount rate ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・
Expected rate of return on plan assets ・・・・・・・・・・・・・・・・・・・

2017

2016

0.4 %
1.0

0.3 %
1.0

6.EQUITY
Japanese companies are subject to the Companies Act of Japan (the"Companies Act"). The significant provisions in the Companies Act that
affect financial and accounting matters are summarized below:(a) Dividends
Under the Companies Act, companies can pay dividends at any time
during the fiscal year in addition to the year-end dividend upon
resolution at the shareholders meeting. Additionally, for companies
that meet certain criteria including (1) having a Board of Directors, (2)having independent auditors, (3) having an Audit & Supervisory
Board, and (4) the term of service of the directors being prescribed as
one year rather than the normal two-year term by its articles ofincorporation, the Board of Directors may declare dividends (except
for dividends-in-kind) at any time during the fiscal year if thecompany has prescribed so in its articles of incorporation. The
Company meets all the above criteria and, accordingly, the Board of
Directors may declare dividends (except for dividends-in-kind) at any
time during the fiscal year.
The Companies Act permits companies to distributedividends-in-kind (non-cash assets) to shareholders subject to acertain limitation and additional requirements.
Semiannual interim dividends may also be paid once a year upon
resolution by the Board of Directors if the articles of incorporation of
the company so stipulate. The Companies Act provides certain
limitations on the amounts available for dividends or the purchase oftreasury stock. The limitation is defined as the amount available for
distribution to the shareholders, but the amount of net assets after
dividends must be maintained at no less than ¥3 million.

(b) Increases/decreases and transfer of common stock, reserve andsurplus
The Companies Act requires that an amount equal to 10% of
dividends must be appropriated as a legal reserve (a component ofretained earnings) or as additional paid-in capital (a component of
capital surplus) depending on the equity account charged upon thepayment of such dividends until the aggregate amount of legal
reserve and additional paid-in capital equals 25% of the common
stock. Under the Companies Act, the total amount of additional
paid-in capital and legal reserve may be reversed without limitation.
The Companies Act also provides that common stock,legal reserve,
additional paid-in capital, other capital surplus and retained earnings
can be transferred among the accounts within equity under certain
conditions upon resolution of the shareholders.
(c) Treasury stock and treasury stock acquisition rights
The Companies Act also provides for companies to purchase treasury
stock and dispose of such treasury stock by resolution of the Board of
Directors. The amount of treasury stock purchased cannot exceed
the amount available for distribution to the shareholders which isdetermined by a specific formula. Under the Companies Act, stockacquisition rights are presented as a separate component of equity.
The Companies Act also provides that companies can purchase bothtreasury stock acquisition rights and treasury stock. Such treasury
stock acquisition rights are presented as a separate component ofequity or deducted directly from stock acquisition rights.
24

8.RESEARCH AND DEVELOPMENT COSTS

7.INCOME TAXESThe Company is subject to Japanese national and local income taxes which, in the aggregate, resulted in normal effective
statutory tax rates of approximately 30.8% and 33.0% for the years ended March 31, 2017 and 2016, respectively.
The tax effects of significant temporary differences which resulted in deferred tax assets and liabilities at March 31, 2017 and 2016,
were as follows:
Thousands ofMillions of Yen
U.S. Dollars

2016

2017
Deferred tax assets:
Inventories ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・
Building depreciation ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・
Software ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・
Enterprise tax payable ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・
Advances received ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・
Accrued bonuses
・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・
Warranty reserve ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・
Retirement benefits to directors ・・・・・・・・・・・・・・・・・・・・・・・・・
Other ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・
Less valuation allowance ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・
Total ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・
Deferred tax liabilities:
Undistributed earnings of foreign subsidiaries・・・・・・・・・・
Asset for retirement benefits ・・・・・・・・・・・・・・・・・・・・・・・・・・・
Unrealized gain on available-for-sale securities・・・・・・・・・
Defined retirement benefit plan ・・・・・・・・・・・・・・・・・・・・・・・・
Other ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・
Total ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・
Net deferred tax assets

￥

￥
￥

￥
￥

249
94
133
1
40
77
27
20
78
0
723

￥

157
59
24
29
37
308
414

￥

￥

￥
￥

405
81
61
29
39
72
33
20
84
(20)
807

$

173
59
13
22
31
299
507

$

Deferred tax assets (liabilities) are included in the consolidated balance sheets as follows:

￥

431
20
(7)
(29)
414

$
$

2016

2017
￥

$

￥

￥

2,227
839
1,190
15
364
687
247
181
701
0
6,456
1,408
532
214
265
332
2,752
3,704

(1) Group policy for Financial Instruments
The Group does not use financial instruments for speculative purposes based on its capital financing plan. Cash surpluses, if any, areinvested in low-risk financial assets, including short-term time deposits. Funds on hand are used to fund its ongoing operations.
Derivatives are not used for speculative purposes, but to manage exposure to financial risks.
(2) Nature and Extent of Risks Arising from Financial Instruments
Receivables, such as trade notes and trade accounts, are exposed to customer credit risk. Receivables in foreign currencies are
exposed to the market risk of fluctuation in foreign currency exchange rates. Investment securities are exposed to the risk of market
price fluctuations. Payment terms of payables, such as trade notes and trade accounts, are primarily less than four months.
(3) Risk Management for Financial Instruments
Credit risk management
Credit risk is the risk of economic loss arising from a counterparty's failure to repay or service debt according to the contractual terms.
The Group manages its credit risk from receivables on the basis of internal guidelines, which include monitoring of payment terms andbalances of major customers by each business administration department to identify the default risk of customers at an early stage.
Investment securities are managed by monitoring market values and financial position of issuers on a regular basis.

(4) Fair Value of Financial Instruments

625
9
(3)
(123)
507

Millions of Yen
Carrying
Amount

2017
$

$

3,856
182
(68)
(265)
3,704

A reconciliation between the normal effective statutory tax rate and the actual effective tax rate reflected in the accompanying
consolidated statement of income for the years ended March 31, 2017 and 2016, were as follows:

2016
Normal effective statutory tax rate・・・・・・・・・・・・・・・・・・・・・・・・・・
Expenses not deductible for income tax purposes ・・・・・・・・・
Per capita inhabitant tax ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・
Difference in income tax rates applicable to incomein certain foreign countries ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・
Undistributed earnings of foreign subsidiaries・・・・・・・・・・・・・・
Tax credit for research and development expenses ・・・・・・・
Adjustments to deferred tax assets due to tax rate changes ・・・
Other - net ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・
Actual effective tax rate ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・

9.FINANCIAL INSTRUMENTS AND RELATED DISCLOSURES

Thousands of
U.S. Dollars

Millions of Yen
Current assets - Deferred tax assets ・・・・・・・・・・・・・・・・・・・・・・・・・
Investments and other assets - Deferred tax assets ・・・・・・・・・・・・
Current liabilities - Other current liabilities ・・・・・・・・・・・・・・・・・・・
Long-term liabilities - Deferred tax liabilities ・・・・・・・・・・・・・・・・・
Net deferred tax assets ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・

2017

Research and development costs charged to income were ¥619 million ($5,531 thousand) and ¥510 million for the years ended March
31, 2017 and 2016, respectively.

33.0 %
0.4
0.6

March 31, 2017
Cash and cash equivalents ・・・・・・・・・
Short-term investments ・・・・・・・・・・・・・
Receivables ・・・・・・・・・・・・・・・・・・・・・・・・・
Investment securities ・・・・・・・・・・・・・・・

￥

5,690
43
6,479
220

Fair Value￥

Total ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・￥ 12,435

Payables ・・・・・・・・・・・・・・・・・・・・・・・・・・・・
Income taxes payable ・・・・・・・・・・・・・・

￥

3,743
100

￥

Total ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・

￥

3,843

￥

5,690
43
6,479
220

￥ 12,435

Thousands of U.S. Dollars
Unrealized
Gain/Loss

Carrying
Amount$50,809391
57,854
1,971

Fair Value$

Unrealized
Gain / Loss

50,809391
57,854
1,971$ 111,027$ 111,027

3,743
100

$

33,422893$

33,422
893

3,843

$

34,315$34,315

(2.7)
(0.5)
(1.9)
1.2
0.8
30.9 %For the year ended March 31, 2017, a reconciliation is not disclosed since the difference of the normal effective statutory tax rate
and actual effective tax rate is less than 5.0% of the normal effective statutory tax rate.

25

26

Millions of Yen

Carrying
AmountMarch 31, 2016
Cash and cash equivalents ・・・・・・・・・
Short-term investments ・・・・・・・・・・・・・
Receivables ・・・・・・・・・・・・・・・・・・・・・・・・・
Investment securities ・・・・・・・・・・・・・・・￥

Fair Value

5,297
43
6,026
185

￥

10. COMPREHENSIVE INCOME (LOSS)

Unrealized
Gain/Loss

The components of other comprehensive income (loss) for the years ended March 31, 2017 and 2016, were as follows:

5,297
43
6,026
185

Total ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・￥

11,552￥

11,552

Payables ・・・・・・・・・・・・・・・・・・・・・・・・・・・・
Income taxes payable ・・・・・・・・・・・・・・

￥

2,945
548

￥

2,945
548

Total ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・

￥

3,494

￥

Unrealized gain (loss) on available-for-sale securities:
Amount arising during the year
・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・
Reclassification adjustments to profit or loss ・・・・・・・・・・・・・・・・・・
Amount before income tax effect ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・
Income tax effect ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・
Total ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・

The carrying values of cash and cash equivalents, short-term investments, receivables and payables and income taxes payable
approximate fair value because of their short maturities.
Investment Securities
The fair values of investment securities are measured at the quoted market price of the stock exchange for the equity instruments.
Fair value information for the investment securities by classification is included in Note 3.

(5) Maturity Analysis for Financial Assets with Contractual Maturities
Millions of Yen

March 31, 2017
Cash and cash equivalents ・・・・・・・・・
Short-term investments ・・・・・・・・・・・・・
Receivables ・・・・・・・・・・・・・・・・・・・・・・・・・
Total

・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・

￥

5,690
43
6,479

￥

12,214Due after 1 Yearthrough 5 Years

Due after 5 Years
through 10 Years

Due after
10 YearsForeign currency translation adjustments:
Adjustments arising during the year・・・・・・・・・・・・・・・・・・・・・・・・・・・・
Amount before income tax effect ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・
Total ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・
Adjustments related to retirement beneﬁts:
Adjustments arising during the year・・・・・・・・・・・・・・・・・・・・・・・・・・・・
Reclassification adjustments to profit or loss ・・・・・・・・・・・・・・・・・・
Amount before income tax effect ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・
Income tax effect ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・
Total ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・
Total other comprehensive income (loss)

March 31, 2016
Cash and cash equivalents ・・・・・・・・・
Short-term investments ・・・・・・・・・・・・・
Receivables ・・・・・・・・・・・・・・・・・・・・・・・・・
Total

・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・￥￥

Due after 1 Yearthrough 5 Years

Due after 5 Years
through 10 Years

Due after
10 Years

Total

・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・$

11,36750,809391
57,854$ 109,055

Year Ended March 31, 2017:
Basic EPS
Net income available to commonshareholders・・・・・・・・・・・・・・・・・・・・・・・・・・
Year Ended March 31, 2016:
Basic EPS
Net income available to commonshareholders・・・・・・・・・・・・・・・・・・・・・・・・・・

Thousands of U.S. Dollars

March 31, 2017
Cash and cash equivalents ・・・・・・・・・
Short-term investments ・・・・・・・・・・・・・
Receivables ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・￥ (107)
(1)
(109)
35
￥ (73)

$

(59)
(59)
(59)

￥ (420)(420)￥ (420)

$

(81)
(6)
(88)
29
(58)

$

￥

25
(0)
25
(7)
17

$

225
(0)
224
(68)
155

￥

(17)

￥ (552)

$

(159)

￥

￥
￥

￥

Due after 1 Yearthrough 5 Years

Due after 5 Years
through 10 Years

Due after
10 YearsMillions of Yen

Thousands ofSharesNet Income

WeightedAverage Shares￥ 1,380

17,487

￥

78.93

1,908

17,487￥109.14

￥

$

321
(5)
316
(96)
219

$

(535)
(535)
(535)

U.S.
Dollars

Yen
EPS$ 0.70

Diluted net income per share is not disclosed because there are no outstanding potentially dilutive securities.

12. SUBSEQUENT EVENTSAppropriation of Retained Earnings
The following appropriation of retained earnings at March 31, 2017, was approved at the Company's Board of Directors' meeting
held on May 10, 2017:
Thousands ofMillions of Yen
U.S. Dollars
Year-end cash dividends, ¥ 21 ($ 0.18 ) per share

27

36
(0)
35
(10)
24

￥

Details of the basic net income per share (EPS) for the years ended March 31, 2017 and 2016, were as follows:

5,297
43
6,026

Due in 1 Yearor Less

2017

11. NET INCOME PER SHARE

Millions of Yen
Due in 1 Yearor Less

2016

2017

3,494

Cash and Cash Equivalents, Short-Term Investments, Receivables and Payables and Income Taxes Payable

Due in 1 Yearor Less

Thousands of
U.S. Dollars

Millions of Yen

・・・・・・・・・・・・・・・・・・・・・・・・￥ 367$ 3,27828

Millions of Yen

13.SEGMENT INFORMATION

2016

Under ASBJ Statement No. 17, "Accounting Standard for Segment Information Disclosures" and ASBJ Guidance No. 20, "Guidanceon Accounting Standard for Segment Information Disclosures," an entity is required to report financial and descriptive information
about its reportable segments. Reportable segments are operating segments or aggregations of operating segments that meet
specified criteria. Operating segments are components of an entity about which separate financial information is available andsuch information is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and inassessing performance. Generally, segment information is required to be reported on the same basis as is used internally forevaluating operating segment performance and deciding how to allocate resources to operating segments.
1.

Description of reportable segments
Segments used for financial reporting are the Company's constituent units for which separate financial information isavailable and for which the Board of Directors performs periodic studies for the purposes of determining the allocation of
resources and evaluating performance.
The Company carries out the development, production, sales and after-sales maintenance of take-out robots forinjection-molded products and peripheral equipment, including labor-saving systems. In the domestic market, these
operations are handled by the Company; overseas markets - U.S.A., Asia (South Korea, Taiwan, China, Indonesia, Vietnam,
Malaysia, Thailand and India) and Europe (UK) - are serviced by local subsidiaries, including Yushin America Inc. (U.S.A.),
Yushin Korea Co., Ltd. (Asia) and Yushin Automation Limited (Europe). The local subsidiaries are independently managed
units, with separately drafted strategies and activities.
Accordingly, the Company's operations, based on its production, sales, and after-sales maintenance setups, aregeographically grouped into four reportable segments: Japan, Asia, Europe and the U.S.A.

2.

3.

Methods of measurement for the amounts of sales, profit (loss), assets and other items for each reportable segment
The accounting procedure for the reportable segments is described in Note 2, "Summary of significant accounting policies."
Segment profit by reportable segment is calculated based on operating income.
Intersegment sales and transfers are based on a realized market price basis.
Information about sales, profit, assets and other items is as follows.

Reportable Segment
Sales:
Sales to external customers ・・・・・・・・・・・・・・
Intersegment sales or transfers ・・・・・・・・・・・
Total ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・
Segment profit ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・
Segment assets ・・・・・・・・・・・・・・・・・・・・・・・・・・・・
Other:
Depreciation ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・
Increase in property, plant andequipment and intangible assets ・・・・・・・

Japan

Asia

EuropeU.S.A.

Total

Reconciliations Consolidated

10,818 ￥4,701￥ 15,520 ￥

4,885 ￥
323
5,208 ￥

1,880 ￥
4
1,884 ￥

3,564 ￥ 21,148
19
5,048 ￥
3,583 ￥ 26,197 ￥￥(5,048)(5,048) ￥1,505 ￥
21,275

799 ￥
3,851

229 ￥
851

443 ￥
2,183

2,978 ￥
28,161107 ￥ 3,086
1,247
29,409

196

25

11

34

268

4,892

49

12

156

5,110

￥

￥

21,14821,148

125

394
5,110

Thousands of U.S. Dollars

2017
Reportable Segment
Sales:
Sales to external customers ・・・・・・・・・・・
Intersegment sales or transfers ・・・・・・・・
Total ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・
Segment profit ・・・・・・・・・・・・・・・・・・・・・・・・・・・・
Segment assets ・・・・・・・・・・・・・・・・・・・・・・・・・・・
Other:
Depreciation ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・
Increase in property, plant andequipment and intangible assets ・・・・・

Japan

Asia

EuropeU.S.A.

Total

Reconciliations Consolidated

99,677 $39,118$ 138,795 $

40,286 $2,361
42,648 $3,531 $
12
3,543 $

29,240 $ 172,735$ 172,735
96
41,589 $ (41,589)
29,337 $ 214,325 $ (41,589) $ 172,735

11,420 $193,340

4,194 $
33,562

61 $
8,422

3,111 $ 18,787 $75 $ 18,862
18,954
254,279
20,378274,658

3,610

177

114

331

4,233

4,101

147

405

225

4,880

$

$

48

4,282
4,880

Millions of Yen

2017
Reportable Segment

Reconciliations Consolidated
Japan
Asia
EuropeU.S.A.
Total
Sales:
・・・・・・・・・・ ￥ 11,163 ￥ 4,512 ￥395 ￥ 3,274 ￥ 19,346
Sales to external customers￥ 19,346
4,381
264
1
10
4,658 ￥ (4,658)
Intersegment sales or transfers ・・・・・・・・
396 ￥ 3,285 ￥ 24,004 ￥ (4,658) ￥ 19,346
Total ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ ￥ 15,545 ￥ 4,776 ￥Segment profit ・・・・・・・・・・・・・・・・・・・・・・・・・・・・ ￥ 1,279 ￥
21,654
Segment assets ・・・・・・・・・・・・・・・・・・・・・・・・・・・
Other:
404
Depreciation ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・
Increase in property, plant andequipment and intangible assets ・・・・・
459

469 ￥
3,758

6 ￥
943

348 ￥ 2,104 ￥2,122
28,479

19

12

37

474

16

45

25

546

8 ￥ 2,112
2,282
30,761
5479

Note 1: Reconciliations for the year ended March 31, 2017, are as follows:(1) The ¥8 million ($75 thousand) reconciliation to segment profit includes eliminations for intersegment transactions of ¥26 million($234 thousand) and inventory reconciliation of ¥(17) million ($(158) thousand).
(2) The ¥2,282 million ($20,378 thousand) reconciliation to segment assets includes eliminations for intersegment transactions of¥(2,504) million ($(22,358) thousand), operating funds of surplus assets held by the Company (cash and deposits and others) of¥4,786 million ($42,737 thousand) and others.
(3) The ¥5 million ($48 thousand) reconciliation to depreciation includes eliminations for equipment related to administrative
divisions that do not belong to the reportable segments.
Note 2: Segment profit is reconciled to be consistent with operating income shown in the consolidated statements of income.

4. Information about products and services

546

Millions of Yen

2017
Take-Out
RobotsSales to external customers

29

・・・・・・・・・・・・￥

13,410

Custom-Ordered
Equipment￥

2,832

Parts and
Maintenance
Services

￥

3,103

Total
￥

19,34630

Independent Auditor’s Report

Millions of Yen

2016

Take-Out
RobotsSales to external customers

13,923￥・・・・・・・・・・・・

Custom-Ordered
Equipment
3,997￥

Parts and
Maintenance
Services
3,227

￥

Total
21,148￥

Thousands of U.S. Dollars

2017
Take-Out
RobotsSales to external customers$

・・・・・・・・・・・・

Custom-Ordered
Equipment

Parts and
Maintenance
Services$$

119,737

25,29027,707

Total$

172,735

5. Information about geographical areas(1) Sales
Millions of Yen
Japan
￥

7,955

2017

China
Taiwan￥2,477

Other Asia￥

Europe

4,200

￥

693

North America
￥

3,573

Other
￥

445

Total
￥ 19,346

Millions of Yen
Japan
￥

6,707

2016

China
Taiwan￥3,220

Other Asia￥

Europe

4,781

￥

2,163

North America
￥

3,665

Other
￥

610

Total
21,148￥

Thousands of U.S. Dollars
China
TaiwanJapan$

71,027

2017$

22,122Other Asia$

37,502Europe$6,191

North America$

31,910

Other
$

3,980

Total
$

172,735

Note: Sales are classified by country or region based on the location of customers.
(2) Property, plant and equipment
Information is omitted because property, plant, and equipment in Japan accounted for over 90% of property, plant, andequipment on the consolidated balance sheet.

6. Information about major customers
Information is omitted because there were no customers that accounted for 10% or more of total net sales recorded in the
consolidated statements of income included in net sales to external customers.

31

32Company Profile(As of March 31, 2017)

Company Name : YUSHIN PRECISION EQUIPMENT CO., LTD.
Establishment: October 1973

Capital: 1,985 million yen

Head Office: 555 Kuzetonoshiro-cho, Minami-ku, Kyoto, Japan 601-8205
Phone : +(81)75-933-9555 Fax : +(81)75-934-4033

Number of Employees : 663 (Including consolidated subsidiaries) and 388 (Yushin Precision Equipment Co., Ltd. only)
Number of Shareholders : 3,483
Listed Stock Exchange : First Section, Tokyo
Securities Identification Code : 6482

Major Shareholders(As of March 31, 2017)

Number of Shares held
(thousand)Yushin Industry Co., Ltd. ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・
The Nomura Trust and Banking Co., Ltd. (Trust Account 3071019)
The Kyoto Chuo Shinkin Bank, Ltd.

34.3

774

4.4

・・・・・・・・・・・・・・・・

774

4.4

・・・・・・・・・・・・・・・・・・・・・・・

The Master Trust Bank of Japan, Ltd. (Retail Trust Account 620021158)

5,996

Percentage ofShares held (%)

・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・

544

3.1

Mayumi Kotani ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・

531

3.0

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

455

2.6

Japan Trustee Service Bank, Ltd. (Trust Accounts 9) ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・

455

2.6

The Bank of Tokyo-Mitsubishi UFJ, Ltd.

424

2.4

・・・・・

418

2.4

・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・

383

2.2

・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・

BNP Paribas Sec Services Luxembourg, Jasdec, Aberdeen Global Client Assets
RBC IST 15 PCT Non Lending Account - Client AccountNote: “Percentage of Shares held (%)” is calculated after deducting the number of treasury stock (331,715 shares).

Distribution of ownership among shareholders
Others: 1.1%
Treasury stock:
1.9%
Individuals:
11.6%

Foreign corporations and others:
20.7%

Financial institutions: 0.8%
Other
Foreign corporations
corporations:and others: 4.0%
34.8%

Total
17,819,033
sharesTotal
3,483
persons
Financial
institutions:
31.1%

33

Individuals:
94.0%

34

555 Kuzetonoshiro-cho, Minami-ku, Kyoto
601-8205 JAPAN
Phone:+81-75-933-9555 Fax:+81-75-934-4033

http://www.yushin.com

2017.07