Note: This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy
between this translated document and the Japanese original, the original shall prevail.
The Company assumes no responsibility for this translation or for direct, indirect or any other forms of damages arising from thetranslation.

Securities Code: 6482
June 3, 2019
Dear Shareholders,

Notice of Convocation for
the 46 Ordinary General Meeting of Shareholdersth

We would like to express our deepest condolences.
Notice is hereby given that the 46th 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 or
via electromagnetic means (the Internet and others). Please refer to the enclosed Reference Documents for
the General Meeting of Shareholders and exercise your voting rights by 5 p.m. on Thursday, June 20, 2019at the latest.
Please confirm the “Information on Exercise of Voting Rights via the Internet” on page 2 and 3
when voting via electromagnetic means.
Details
Friday, June 21, 2019 at 10 a.m.
Conference Room on the 6th Floor,
Head Office of Yushin Precision Equipment Co., Ltd.
555 Kuzetonoshiro-cho, Minami-ku, Kyoto

1.
2.

Date and Time:
Place:

3.

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

Business Report and Consolidated Financial Statements for the
46th Fiscal Year (from April 1, 2018 to March 31, 2019) as well as
the audit reports from the Accounting Auditor and the Board of
Corporate Auditors on the Consolidated Financial Statements
Report on the Non-Consolidated Financial Statements for the 46th
Fiscal Year (from April 1, 2018 to March 31, 2019)

Agenda for resolution:
Election of Seven (7) Directors
Proposal :Sincerely Yours,
Mayumi Kotani
President and Representative Director
YUSHIN PRECISION EQUIPMENT CO., LTD.
555 Kuzetonoshiro-cho, Minami-ku,
Kyoto, Japan
Notes:* You are kindly requested to present the enclosed “Form for Exercising Voting Rights” to the receptionist upon your arrival at
the Meeting.
* If any changes have been made to the matters appearing in the Reference Documents for the General Meeting of Shareholders,Business Report, Non-Consolidated Financial Statements or Consolidated Financial Statements, such changes will be posted on
our website: (https://www.ype.co.jp)–1–

<Information on Exercise of Voting Rights via the Internet>

Shareholders exercising voting rights via the Internet are asked to kindly note the following matters.
Exercising the voting rights by post or via the Internet is unnecessary if you attend the meeting in person.
1. About the voting rights exercise site(1) Shareholders can exercise their voting rights only by accessing on the voting rights exercise site
designated by the Company (https://www.evote.tr.mufg.jp/) via PC, smartphone or mobile phone.
(However, please note that you cannot exercise your voting rights via the Internet on the designatedwebsite between the hours of 2:00 a.m. and 5:00 a.m.)(2) Please note that you may not be able to exercise your voting rights via PC or smartphone depending on
the Internet settings configured on your PC or smartphone, such as firewalls, etc. that are in place toregulate your Internet connections, anti-virus software that has been installed on your PC or smartphone,
the use of a proxy server or not designating TLS.
(3) When exercising voting rights via mobile phone, for security reasons, you cannot vote using mobile
handsets that cannot send TLS encrypted information or that cannot send information of the mobile phoneused.
(4) A voting deadline is 5:00 p.m. on June 20, 2019. Shareholders are cordially requested to exercise theirvoting rights as early as possible. Please call Help Desk as mentioned below with any inquiries.
2. Methods of exercising of voting rights via the Internet(1) PC, mobile phone method
・ On the voting rights exercise site designated by the Company (https://www.evote.tr.mufg.jp/), please
enter the “login ID” and “temporary password” indicated on the enclosed Voting Rights Exercise Formand enter your approval or disapproval of each of the proposals in accordance with instructions on thescreen.
・ Please note that, in order to prevent unauthorized access to the designated website by individuals
other than shareholders (persons impersonating shareholders) and to prevent the alteration of votes, werequest that you change your "temporary password" to a permanent password on the designated website
for the exercise of voting rights, when you exercise your voting rights via the Internet.
・ New “login ID” and “temporary password” will be advised for each notice of convocation for
Ordinary General Meeting of Shareholders.
(2) Smartphone method
・ Please scan the QR code® located on the Voting Rights Exercise Form. You can simply login to thewebsite for exercising voting rights without entering your voting code and password.
・ Note that your voting rights can be exercised only once by using the QR code® method for security
reason. Please enter “login ID” and “temporary password” when you use QR code® for second andsubsequent times.
・ Depending on the model of your smartphone, you may not be able to log in with the QR code®. If
you cannot do login with the QR code®, please exercise your voting rights by 2. (1) PC, mobile phonemethod.
*“QR Code” is a registered trademark of DENSO WAVE INCORPORATED.
3. Treatment when you exercise your voting rights more than one time(1) If you exercise your voting rights both by post and via the Internet, the voting via the Internet shall bedeemed valid.
(2) If you exercise your voting rights more than once via Internet, the last exercise of voting rights shall be–2–deemed valid. If you exercise your voting rights redundantly via PC, smartphone and mobile phone, thelast exercise of voting rights shall be deemed valid.
4. Costs associated with accessing the website for the exercise of voting rights
All costs associated with accessing the website for the exercise of voting rights (cost of Internet
connections etc.) are to be borne by the shareholder. Also, when voting via mobile phone etc. all packet
communication fees and other costs incurred in the use of a smartphone or a mobile phone are also to beborne by the shareholder.
Inquiries about the system
Mitsubishi UFJ Trust and Banking Corporation
Transfer Agent Department (Help Desk)
Phone: 0120-173-027 (9:00 a.m. to 9:00 p.m. (Japan Time); toll free only within Japan)<For Institutional Investors>
Institutional investors may use “The Platform for Electronic Exercise of Votes for Institutional Investors”
of ICJ Ltd.as another way of exercising voting rights.

–3–

(Submitted Documents)

Business Report(from April 1, 2018 to March 31, 2019)
1. Current Business Conditions(1) Progress and achievements
Regarding the global economy during this fiscal year under review, the moderate economic
expansion continued despite concerns on trade friction between United States and China is rising. In
the United States, employ environment continues to improve and personal consumption remained
steady. In Europe as well, the economy remained generally firm due to improvement of employment
and income conditions. In Asian region, although the economy as a whole remained steady, theslowdown in China became evident.
Under these circumstances, Yushin Group has continued to develop new customer base on global
scale. Regarding the outcome for this fiscal year under review, sales of Take-out robots were goodin Japan, North America, etc. despite slowdown in China, and resulted at the same level as previous
fiscal year. Net sales increased by 4.6% year on year to 21,833 million yen as a result of strong
sales of custom-ordered equipment both in Japan and overseas. Operating income increased by
17.0% year on year to 2,760 million yen, owing to reductions in depreciation expenses andnormalization of development costs that was concentrated to new product development etc.
although there was purchase price increase due to difficulties in procuring parts in the first half.
Ordinary income increased by 14.7% year on year to 2,791 million yen, and net income attributable
to shareholders of the parent increased by 17.0% year on year to 1,903 million yen.
In this fiscal year, our high-end Take-out robot "FRA" was highly valued for its active vibration
control function, and was awarded “The Japan Society of Mechanical Engineers Medal for New
Technology”. In addition, FRA was awarded "red dot design award" which is internationallyauthoritative award and "Machine Design Award" sponsored by Nikkan Industrial Newspaper for
its valued product design. Furthermore, it was also awarded "the JMF’s Energy-Efficient Machinery
award" for its energy saving performance being highly evaluated.
Consolidated net sales by product category(Thousands of yen)
Years ended March 31,
Product

2018
Amount2019%

AmountChange%%Take-out robots

15,449,729

74.0

15,512,592

71.0

0.4

Custom-ordered
equipment

2,204,986

10.6

2,880,736

13.2

30.6

Parts and maintenanceservice

3,223,934

15.4

3,440,070

15.8

6.7

Total

20,878,651

100.0

21,833,399

100.0

4.6

(2) Capital investment
The total amount of capital investment for Yushin Group effectuated over the course of the period
under review was 256 million yen mainly for the development of the head office north parking lot at
80 million yen.
(3) Financing activities
No material items to report.

–4–(4) Assets and operating results 2016 - 2019Years ended March 31,

2016

2017

2018

2019

Net sales(thousands of yen)

21,148,591

19,346,399

20,878,651

21,833,399

Ordinary income(thousands of yen)

2,921,754

2,058,192

2,432,690

2,791,364

Net income
attributable toshareholders of theparent(thousands of yen)

1,908,626

1,380,273

1,626,768

1,903,435

Net income per share(yen)

109.14

78.93

46.51
(Note 2)

54.54

Total assets(thousands of yen)

29,409,602

30,761,736

32,572,888

33,197,260

Net assets(thousands of yen)

24,715,668

25,451,718

26,472,034

27,117,484

Net assets per share(yen)

1,401.54

1,444.38

750.37(Note 2)783.03

Notes:
1
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.
2
The Company carried out a stock split on April 1, 2018, at a ratio of two shares per one common share. Accordingly, Net
income per share and Net assets per share has been calculated presuming that this stock split was carried out at the startof the consolidated fiscal year ended on March 31, 2018.

(5) Issues to be addressed
As for the business environment surrounding Yushin Group, there are many uncertain factors including
problems of trade policies in the US and China, and the outlook for the economy will continue to be
uncertain.
Under these circumstances, Yushin Group aims to develop itself further as a number-one company
across the board in the take-out robot industry with Yushin Group philosophy “Through the ongoingcreation of innovative technology, we make a far-reaching contribution to society on a global scale”

As for issues to be addressed, In the take-out robot, we will expand sales of Take-out
robots which is differentiated by strengthening product power and strengthen our sales
capabilities worldwide. In the new business area, Yushin Group must develop and bringnew products to the market in the business area where Yushin Group can manifest
technological and/or sales synergies in order to establish multiple core businesses. In
addition to these efforts, we will strengthen organizational development and humanresource development, and strive for sustainable growth.
Specific effort for the 47th (FY2020), Yushin Group will strive to expand sales ofdifferentiated Take-out robots and improve brand value. In addition, by establishing a
European subsidiary, we will expand sales channels and expand our service in Europe. In
Custom-ordered equipment business, we will continue to expand sales and develop new
businesses to meet the growing automation needs in and outside Japan. Furthermore, wewill strengthen collaboration among divisions to improve productivity, work styles, andaccelerate cost reduction activities.

–5–(6) Status of major subsidiaries
Name

LocationYushin Korea Co., Ltd.

Siheung-Shi,
South Korea

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

Shanghai,
China

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

Shenzhen,
Guangdong,
China
Taipei City,
Taiwan(R.O.C.)

Capital stock

Percentage ofshareholding

Major operations

KRW350 million

100%

Sales and maintenance &repair of Company products.
Manufacturing, sales andmaintenance & repair ofcustom-ordered equipment

US$200,000

100%

Sales and maintenance &repair of Company products

US$400,000

100%

Sales and maintenance &repair of Company products

NT$5 million

100%

Sales and maintenance &repair of Company products

PT. Yushin Precision Equipment
Indonesia

Bekasi,Indonesia

IDR2,841 million

99%

Sales and maintenance &repair of Company products

Yushin Precision Equipment(Vietnam) Co., Ltd.

Hanoi,
Vietnam

US$300,000

100%

Sales and maintenance &repair of Company products

Yushin Precision Equipment
Sdn. Bhd.

Selangor,
Malaysia

MYR1 million

100%

Sales and maintenance &repair of Company products

Yushin Precision Equipment(Thailand) Co., Ltd.

Bangkok,Thailand

THB8 million

49%

Sales and maintenance &repair of Company products.
Manufacturing, sales andmaintenance & repair ofcustom-ordered equipment

Yushin Precision Equipment(India) Pvt. Ltd.

Chennai,
India

INR7.4 million

95%

Sales and maintenance &repair of Company products

Yushin Automation Ltd.

Worcestershire,
U.K.

GBP150,000

95.6%

Sales and maintenance &repair of Company products

Yushin America, Inc.

Rhode Island,
U.S.A.

US$8,000

100%

Sales and maintenance &repair of Company products.
Manufacturing, sales andmaintenance & repair ofcustom-ordered equipment

Guangzhou Yushin Precision
Equipment Co., Ltd.

Guangzhou,
Guangdong,
China

RMB13.7 million

100%

Manufacturing of Company
products(7) Major operations (as of March 31, 2019)
Yushin Group is mainly engaged in the development, manufacture and sale of take-out robots forplastic injection molding products and stock systems as well as factory automation systems formolding plants.

–6–

(8) Main sales offices and factories (as of March 31, 2019)
Name

Location

Head Office

Minami-ku, Kyoto-city

Fushimi Factory

Fushimi-ku, Kyoto-city

Technical Center

Minami-ku, Kyoto-city

Higashi-Nihon General Sales OfficeKita-ku, Saitama-city

Nishi-Kanto Sales Office

Atsugi-city, Kanagawa

Nagano Sales Office

Shiojiri-city, Nagano

Tohoku Sales Office

Fukushima-city, Fukushima

Tsukuba Sales Office

Tsukuba-city, Ibaraki

Chubu General Sales Office

Toyokawa-city, Aichi

Shizuoka Sales Office

Suruga-ku, Shizuoka-city

Nagoya-Nishi Sales Office

Kuwana-city, Mie

Nishi-Nihon General Sales Office

Minami-ku, Kyoto-city

Toyama Sales OfficeToyama-city, Toyama

Hiroshima Sales Office

Nishi-ku, Hiroshima-city

Fukuoka Sales Office

Hakata-ku, Fukuoka-city

Philippines Representative Office

Makati City, Philippines(9) Employees (as of March 31, 2019)
Number of employees

Increase from the end of previous FY

683 (62)

No change

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

(10) Major creditors (as of March 31, 2019)No items to report.
(11) Other important matters pertaining to the status
No items to report.

–7–

2.

Matters Pertaining to the Shares of the Company (as of March 31, 2019)(1) Number of shares authorized:
80,000,000(2) Total number of issued shares:
35,638,066(3) Number of shareholders:
4,307(4) Major shareholders:Number of shares held
(thousand)

Name

Percentage ofshares held (%)

Yushin Industry Co., Ltd.

11,99235.0

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

2,499

7.3

The Nomura Trust and Banking Co., Ltd. (Trust Account3071019)

1,549

4.5

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

1,549

4.5

The Kyoto Chuo Shinkin Bank, Ltd.

1,088

3.2

Mayumi Kotani

1,054

3.1

Japan Trustee Service Bank, Ltd. (Trust Account)

933

2.7

The Bank of Mitsubishi UFJ, Ltd.

849

2.5

The Bank of Kyoto, Ltd.

704

2.1

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

684

2.0

Note:
1. The company holds 1,333,548 shares of treasury stock but is excluded from this number.
2. Shareholding ratio is calculated by deducting treasury stockholding.

–8–

3.

Matters Pertaining to Officers of the Company(1) Directors and Corporate Auditors (as of March 31, 2019)
Position

Responsibilities and representation ofother organization

Name

President and Representative
Director

Mayumi Kotani

Executive Managing Director

Satoshi Kimura

General Manager of Purchase H.Q.

Executive Managing Director

Yasushi Kitagawa

General Manager of Manufacturing H.Q. and Quality Assurance
Dept.

Managing Director

Yasuharu Odachi

General Manager of Research & Development H.Q.

Director

Tomohiro Inano

General Manager of Sales H.Q.

Director

Yasuo Nishiguchi

Outside Director at YAMADA Consulting Group Co., Ltd.

Director

Hiroshi Matsuhisa

Professor emeritus at Kyoto University

Director

Reiko Nakayama

Director of LUCKLAND CO.,LTD (Audits Committee)

Full-time Corporate Auditor

Yoshihisa Nakanishi

Corporate Auditor

Yasuhiro Orita

LawyerCorporate Auditor

Hiroho Kamakura

Certified Public Accountant
Outside Corporate Auditor at Trusco Nakayama Corporation
Outside Corporate Auditor at FUJIO FOOD SYSTEM CO.,LTD.

Corporate Auditor

Michitoshi Morimoto

Notes:
1. Directors, Yasuo Nishiguchi, Hiroshi Matsuhisa and Reiko Nakayama are Outside Directors stipulated in Item 15, Article 2 of
the Companies Act.
2. Corporate Auditors, Yasuhiro Orita, Hiroho Kamakura and Michitoshi Morimoto are Outside Corporate Auditors stipulated in
Item 16, Article 2 of the Companies Act.
3. Corporate Auditor, Hiroho Kamakura is a Certified Public Accountant and has specialist knowledge in finance and accounting.
4. The Company has designated Director, Hiroshi Matsuhisa, Director, Reiko Nakayama, Corporate Auditor, Yasuhiro Orita,
Corporate Auditor, Hiroho Kamakura and Corporate Auditor, Michitoshi Morimoto as Independent Officers as prescribed by
the Tokyo Stock Exchange and submitted notices to this effect to the exchange.
5. Change of Directors during the period under review
Name
Before change
After change
Date of change
Hiroshi Matsuhisa
Outside Corporate Auditor at
RetiredJune 22, 2018
Technology Seed Incubation Co., Ltd.
Reiko Nakayama-

Outside Director–9–June 22, 2018

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

Number of Directors/
Corporate Auditors

Total amount(Thousands of yen)
203,060

Directors

8

Corporate Auditors

4

24,00012

227,060

Total

Notes:
1. The 43rd Ordinary General Meeting of Shareholders held on June 20, 2016 resolved total remuneration for all Directors within
500,000 thousand yen per year（including remuneration for Outside Directors within 100,000 thousand yen）and total
remuneration for all Corporate Auditors within 100,000 thousand yen per year.
There are currently no Directors who have concurrent employment positions.
2. Total remuneration amounts provided above include the following amount in addition to fixed monthly compensation amounts.
- Provision for bonuses for directors: 37,520 thousand yen (37,520 thousand yen for five directors).
3. With respect to the provision for retirement benefits for Directors and Corporate Auditors, the plan for retirement benefits for
Directors and Corporate Auditors was terminated at the 33rd Ordinary General Meeting of Shareholders held on June 29, 2006,
and no additional provision has been recorded since then. Therefore, the balance as of March 31, 2019 (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 three (3) Outside Directors is 15,300 thousand yen.
5. The total amount of remuneration for the three (3) Outside Corporate Auditors is 12,000 thousand yen.

– 10 –

(3) Outside Directors and Corporate Auditors
a. Important position at other organizations and the relationship between the company and other organizations.
・Yasuo Nishiguchi is the Outside Director at YAMADA Consulting Group Co., Ltd. There is no special relationship between
the Company and YAMADA Consulting Group Co., Ltd.
・Hiroshi Matsuhisa is a professor emeritus at Kyoto University. There is no special relationship between the Company and
Kyoto University.
・Reiko Nakayama is the Director of LUCKLAND CO., LTD (Audits Committee). There is no special relationship between
the Company and LUCKLAND CO., LTD.
・Kamakura is the Outside 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.

b. The following describes the activities during the period under review.
Status and Name
Director, Yasuo Nishiguchi

Attendance and Remark
In the period under review, Yasuo Nishiguchi attended all of 13 Meetings ofBoard of Directors. Based on his wide knowledge and experience across therunning a company which he had cultivated through holding prominent corporate
positions such as President and Representative Director, and Chairman of theBoard and Representative Director at Kyocera Corporation, he asked questions
to clarify ambiguities that arose with respect to matters reported or resolved, andprovided opinions.

Director, Hiroshi Matsuhisa

In the period under review, Hiroshi Matsuhisa attended 12 of 13 Meetings ofBoard of Directors. Based on the specialized knowledge by the person withacademic standing in engineering of Kyoto University, he asked questions toclarify ambiguities that arose with respect to matters reported or resolved, andprovided opinions.
Since assuming the post of Director on June 22, 2018, Reiko Nakayama attended
all of 10 Meetings of Board of Directors. Based on her experience of securities
company underwriter, and management executive officer and outside officers ofoperating companies, she asked questions to clarify ambiguities that arose withrespect to matters reported or resolved, and provided opinions.

Director, Reiko Nakayama

Corporate Auditor, Yasuhiro Orita

In the period under review, Yasuhiro Orita attended 12 of 13 Meetings of Boardof Directors and all of 7 Meetings of the Board of Corporate Auditors. Based on
the specialized legal knowledge, he asked questions to clarify ambiguities that
arose with respect to matters reported or resolved, and provided opinions.
Additionally, he perused the reports of the internal auditing results, exchanged
opinions concerning auditing, and participated in joint discussions on importantmatters. In addition to receiving the Accounting Auditor’s detailed report on
regular basis, he also regularly exchanged opinions with top management.

Corporate Auditor, Hiroho Kamakura

In the period under review, Hiroho Kamakura attended all of 13 Meetings ofBoard of Directors and all of 7 Meetings of the Board of Corporate Auditors.
Based on the specialized knowledge as a Certified Public Accountant, he asked
questions to clarify ambiguities that arose with respect to matters reported or
resolved, and provided opinions. Additionally, he perused the reports of theinternal auditing results, exchanged opinions concerning auditing, andparticipated in joint discussions on important matters. In addition to receiving
the Accounting Auditor’s detailed report on regular basis, he also regularly
exchanged opinions with top management.

Corporate Auditor, Michitoshi Morimoto

In the period under review, Michitoshi Morimoto attended all of 13 Meetings ofBoard of Directors and all of 7 Meetings of the Board of Corporate Auditors.
Based on the specialized knowledge of corporate information technology/systemstrategy, he asked questions to clarify ambiguities that arose with respect tomatters reported or resolved, and provided opinions. Additionally, he perused
the reports of the internal auditing results, exchanged opinions concerning
auditing, and participated in joint discussions on important matters. In addition
to receiving the Accounting Auditor’s detailed report on regular basis, he also
regularly exchanged opinions with top management.

Note:
In addition to the frequency of convening meetings of the Board of Directors described above, there were 5 times of written
resolutions adopted, deeming that there have been resolutions of the Board of Directors Meetings pursuant to Article 370 of
the Companies Act and Article 24 of the Articles of Association.

– 11 –

4.

Matters Pertaining to Accounting Auditor(1) Name of Accounting Auditor: Deloitte Touche Tohmatsu LLC(2) Amount of compensation and other payments for the Accounting Auditor
The amount of compensation and other payments payable to the Accounting
Auditor for the reporting year
Total amount of monetary and other property benefits payable by the Company
and its subsidiaries

33,200 thousand yen
36,670 thousand yen

Notes1: In the audit contract between the Company and the Accounting Auditor, audit fees pursuant to the Companies Act andthose pursuant to the Financial Instruments and Exchange Act are not clearly separated and this separation is practically
impossible. Therefore, the amount of compensation and other payments to the Accounting Auditor is represented as thetotal payment.
2: Upon receipt of the necessary materials and reports from the Directors, in-house related departments and Accounting
Auditor, the Board of Corporate Auditors acknowledged the details of the audit and status of the course of accounting
duties by the Accounting Auditor, the grounds for calculation of the estimated remuneration for auditing, and reviews of
the audit calculation. As a result, the Board of Corporate Auditors believes that the audit remuneration presented by the
Accounting Auditor was appropriate and gave consent under Paragraph 1, Article 399 of the Companies Act.

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

5.

Matters Pertaining to the Development of Systems to Ensure a Properness of Operations
The Company has established the basic policy of Internal Control System for the development of asystem to ensure that the execution of duties by Directors conforms to laws and regulations, and the
Articles of Association as well as other systems that ensure the properness of operations of theCompany, as follows. (Board of Directors Resolution on June 12, 2015) The main points of the basic
policy are as follows.
(1) System to ensure that business execution of Directors and employees complies with laws andregulations and the Articles of Association.
The Company raises the awareness for and holds training on legal compliance to increaseawareness of compliance as well as establishes “Whistle-Blowing Regulations” providing theprocedure for reporting violations.
(2) System for keeping and managing the information on business execution of the Company’s
Directors.
Information is kept and managed according to laws and regulations, and internal regulations(including “Document Regulations,” “Internal Information Management Regulations” and“Information System Management Regulations”).
(3) Regulations on and other systems for risk management of losses of the Company and our
subsidiaries.
– 12 –

Risk of currently estimated losses is managed by setting a committee and making discussion
according to degree of its significance. Events delivering losses to the Company would be reported
to Directors and Corporate Auditors by the Executive in charge and discussed and managed by all
executives.
(4) System to ensure effective business execution by Directors of the Company and our
subsidiaries.
Effective business execution by Directors is ensured by followings.
[1] The Board of Directors determines significant matters and oversees business execution by
Directors.
[2] Information is shared among Directors, Executives, and Corporate Auditors at executive
meetings.
[3] Notice of significant matters on management, understanding of status and business instructions
are conducted at management meetings and YSM management conference.
[4] At the subsidiaries conference, the information is shared on the Company and our subsidiaries
and significant matters are discussed and determined.
(5) The systems to ensure appropriate works of the corporate group consisting of the Company
and its subsidiaries, and to make reports to the Company on matters concerning businessexecution by Directors of subsidiaries.
The Internal Control System is developed as we as “Subsidiaries Management Regulations”
obligate subsidiaries to make periodic reports relating to business results, fiscal conditions and othersignificant information of subsidiaries.
Significant matters are discussed to solve issues at the Board of Directors.
(6) System to ensure effective Corporate Auditors’ audit.
Corporate Auditors attend the Board of Directors meetings and required significant meetings
including management conference as well as read major approval documents and other significant
documents concerning business execution and receives explanation from Directors and employeesof the Company and Directors of subsidiaries as necessary.
(7) System on employees assisting works of the Company’s Corporate Auditors when Corporate
Auditors require allocation of the assisting employees.
Employees assisting the work of the Company’s Corporate Auditors can be allocated as staff asnecessary. Corporate Auditor has the authority to give instructions and orders to his or her Corporate
Auditor staff.
(8) System to ensure that those reporting to the Board of Corporate Auditors and Corporate
Auditors, etc. are not unfavorably treated for the reason of the report.
The Company ensures that executives and employees reporting to Board of Corporate Auditors
and Corporate Auditors are not treated unfavorably because of the report and thoroughly inform thewhole company of this.
In the “Whistle-Blowing Regulations,” it is prescribed to prohibit dismissal and give otherunfavorable treatment for the reason of the report.
(9) Matters on the policy for dealing with expenses or debts resulting from business execution of
the Company’s Corporate Auditors.
The Company, when Corporate Auditors require the Company to make advance payment inrespect of business execution according to Article 388 of the Companies Act, immediately deals
with the relevant expenses and debts unless it is considered unnecessary to make advance payments.
(10) Systems on Eliminating Anti-Social Forces
The Company assumes a resolute attitude to anti-social forces threatening order and security ofcivil society as well as closely exchanges information and cooperates with the relevant specialized
agencies including police against anti-social forces and thoroughly informs employees of the above
policy.
In order to improve the effectiveness and efficiency of operations, to ensure reliability offinancial reports, and to expansively develop the operations of the internal control system aimed atsecuring assets and compliance to laws and regulations pertaining to business activities according to– 13 –

the Basic Policy for Internal Control System, The Internal Control Regulations and the Committee
of Internal Control Operations Regulations have been enacted.
The scope of responsibility of the Board of Directors and Corporate Auditors as well as thesystem for implementation and details of activities for executives and employees, and the proceduresfor evaluation and reporting were clarified in the internal control Regulations. Furthermore, basic
policy on the maintenance and operation of Internal Control is formulated. The structure of thecommittee aimed at facilitating internal control as well as how to promote its mission and activities
were clarified in the Committee of Internal Control Operations Regulations, and the activities arepromoted.
6.

Overview of the Business Operations of Systems to Ensure a Properness of Operations
Major operational status of the Internal Control System executed by the Yushin Group in the current
consolidated fiscal year is as follows.
(1)

Status of addressing compliance
The Company is endeavoring to spread awareness of compliance across the Yushin Groupthrough education and workshops. “Yushin Organizational Knowledge Book “(Y-Book) is used as
an organization’s knowledge collection to improve business quality, maintaining disciplines, andinstill awareness of compliance. In addition, the Company has enacted the Whistle-Blowing
Regulations that prescribes the procedures to report on violations and has set up an external contact
point for internal reporting.
Moreover, efforts have been made to provide information concerning recent trends in relevantlaws and regulations, as well as to develop and make thoroughly available internal regulations(Office Regulations, Internal Information Management Regulations, Information System
Management Regulations, etc.) This fiscal year, we have enacted regulations for company seal
management and personal information protection, and provided education and training for
employees.

(2)

Status of addressing the risk management of losses
For the risk management overall, the Committee of Internal Control offers consultations for
implementation of companywide measures. If any event causing damage to the Company arises, theDirector in charge immediately reports to the Board of Directors and the Board of Corporate
Auditors, and all executives will offer consultations to take action, while efforts to avoid risks arealso being enhanced by having the Corporate Auditors conduct inspections and hearings on any
event that is seen to have the risk of causing damage.

(3)

Status of addressing to conducting proper and efficient execution of assigned duties
Assigned duties of the Directors are executed efficiently as described below.
[1] Significant matters are determined by the Board of Directors, and the Directors supervise thestatus of business execution.
[2] Significant matters are discussed among Directors, Executives and Corporate Auditors at theexecutive meetings thereby sharing such significant information.
[3] Significant matters relating to the corporate management are communicated at management
meetings. The operating status of the Company is monitored and necessary guidance isprovided.

(4)

Status of addressing the proper operations of the business group consisting of the Company
and its subsidiaries
In order to promote the development of the internal control system, the Internal Control
Regulations and Committee of Internal Control Operations Regulations have enacted at the Boardof Directors’ meeting held on February 7, 2018. Specifically, the scope of responsibilities of theBoard of Directors and Corporate Auditors concerning internal control, as well as the system for
implementation (supervision, actual system for implementation, etc.) and details of activities(policy, process to promote the development of operations, etc.) for executives and employees andthe procedures for evaluation and reporting (scope of target, procedure, correction measures incase of deficiencies, etc.) were clarified by the Internal Control Regulations, while the structure of
the committee aimed at facilitating internal control, as well as how to promote its mission and– 14 –

activities (supervision, system for implementation, scope of target activities, education, etc.) wereclarified in the Committee of Internal Control Operations Regulations. Based on Internal Control
Regulations, along with the basic policy on the development and operation of Internal Control, we
have enacted a basic plan for conducting evaluations and are promoting activities. Furthermore,
the Company’s subsidiaries hold meetings three times a year so as to share information relating to
the Company and its subsidiaries and monitoring status of business operations.
(5)

7.

Ensuring of effectiveness of Corporate Auditors’ audit
Corporate Auditors conduct audits pursuant to the audit policies and the audit schedule asprescribed by the Board of Corporate Auditors by attending the Board of Directors and executives,
management and other meetings. Corporate Auditors conduct interviews on the status of executionof duties by the Directors and the Internal Audit Office and then inspect significant decisions as
noted in the documentation, such as the approval documents, contracts and agreements. Corporate
Auditors also investigate the statuses of business operations, corporate properties and fraudulent acts
relating to the performance of Directors’ duties, infringement of rights and violations of laws andregulations, and the Articles of Association.
At conducting audit, Corporate Auditors coordinates with the legal counsel such as the Certified
Public Accountant and the lawyers, who are Outside Corporate Auditors, and keeps internal
coordination with the Internal Control Department. Other than that, Corporate Auditors develops thestandards and guidelines for the course of action by Corporate Auditors conducting audits of theCompany’s Internal Control System, including the “Audit Practice Standards relating to the Internal
Control System,” and Corporate Auditors conduct its audits pursuant to such practice standards.

Policy Concerning Decisions on the Dividends of Surplus
The Yushin Group manages its businesses considering the return of profits to shareholders as oneof its important managerial issues.
To that effect, it is the basic policy of the Yushin Group to proactively return profits to shareholders
by maintaining a stable operational base, improving its ROE and effectuating dividends based on theperformance results of each respective fiscal year. Specifically, the Yushin Group has a target at therealization of 30% and more of dividend payout ratio to consolidated net income attributable toshareholders of the parent.
For this fiscal year, a full-year dividend is 9 yen per share, consisting of an interim dividend of 8
yen per share and a year-end dividend of 17 yen per share.

– 15 –

Consolidated Balance Sheets(as of March 31, 2019)(Thousands of yen)Account

AmountAccount

ASSETS
Current assets

AmountLIABILITIES
19,964,853

Current liabilities

5,860,064

Cash and deposits

6,362,933

Notes and accounts payable - trade

1,331,229

Notes and accounts receivable trade

6,844,705

Electronically recorded obligations- operating

1,035,982

Merchandise and finished goods

717,394

Accounts payable - other492,256

Work in process

1,696,139

Accrued expenses

194,758

Raw materials and supplies

3,619,833

Income taxes payable

523,827

Consumption taxes receivable

34,295

Advances received

1,755,449

Prepaid expenses

131,046

Provision for bonuses

273,647

Other

576,833

Provision for bonuses for directors

37,520Allowance for doubtful accounts(18,327)

Provision for product warranties

147,609

Other

67,785

Non-current assets

13,232,406

Property, plant and equipment

11,408,464

Buildings

4,785,640

Non-current liabilities

219,710Structures

209,643

Provision for retirement benefits for
directors

Machinery equipment andVehicles147,766

Retirement benefit liability

65,723Tools, furniture and fixtures

118,651

Deferred benefit liabilities

37,324

Other

49,882Land

6,130,716

Leased assets

7,497

Construction in progress

8,549

Total liabilities

66,7806,079,775

NET ASSETS
Shareholders’ equity

26,549,936

Intangible assets

429,392

Capital stock

1,985,666

Telephone subscription right

11,430Capital surplus

2,023,903

Software351,090

Retained earnings

23,579,393

Others

66,872

Treasury stock(1,039,026)

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

Investments and other assets

1,394,549

Investment securities

218,062

Retirement benefit asset

294,037

Deferred tax assets

705,335

Other

196,910Non-controlling interests

Allowance for doubtful accounts(19,795)

Total net assets

Total assets

33,197,260– 16 –

Total liabilities and net assets

311,482
56,815
184,923
69,743

256,066
27,117,484
33,197,260

Consolidated Statements of Income(from April 1, 2018 to March 31, 2019)(Thousands of yen)Account

AmountNet sales

21,833,399

Cost of sales

13,092,179

Gross profit

8,741,219

Selling, general and administrative expenses

5,980,416

Operating income

2,760,802

Non-operating income

109,943

Interest and dividends income

10,478Purchase discounts

13,410Subsidy income

49,499Rent income

11,361

Other

25,193Non-operating expenses

79,381

Sales discounts

1,105

Foreign exchange losses

77,406

Other

869

Ordinary income

2,791,364

Extraordinary income

2,423

Gain on sales of non-current assets

2,423

Extraordinary loss

10,138Loss on sales and retirement of non-current assets

9,924

Other

214

Income before income taxes

2,783,649

Income taxes - current

930,324

Income taxes - deferred(110,525)

Net income

1,963,849

Net income attributable to non-controlling interests

60,414

Net income attributable to shareholders of the parent– 17 –

1,903,435

Consolidated Statements of Changes in Net Assets(from April 1, 2018 to March 31, 2019)(Thousands of yen)
Shareholders’ equity

Balance as of April 1, 2018

Capital stock

Capital surplus

1,985,666

2,023,903

Retainedearnings
22,270,517

Treasury stock

Total
shareholders’equity(354,848)

25,925,238

Changes in the current period
Dividends of surplus(594,559)(594,559)

Net income attributable toshareholders of the parent

1,903,435

1,903,435

Acquisition of treasury stock(684,178)(684,178)

Changes in items other thanshareholders’ equity, net
Total changes in the current
periodBalance as of March 31, 2019--

1,308,876(684,178)

624,697

1,985,666

2,023,903

23,579,393(1,039,026)

26,549,936

Total accumulated other comprehensive income

Balance as of April 1, 2018

Valuationdifference on
availablefor-salesecurities

Foreigncurrencytranslation
adjustments

Remeasurements ofdefinedbenefit plans

97,103

164,323

56,982

Total
Nonaccumulated controllinginterests
othercomprehensive
income318,409228,385

Total net
assets26,472,034

Changes in the current period
Dividends of surplus(594,559)

Net income attributable toshareholders of the parent

1,903,435

Acquisition of treasury stock(684,178)

Changes in items other thanshareholders’ equity, net(40,288)

20,60012,760(6,927)

27,68020,752

Total changes in the current
period(40,288)

20,60012,760(6,927)

27,680645,450

Balance as of March 31, 2019

56,815

184,923

69,743

311,482

256,066

27,117,484– 18 –

1.

Basis of Preparing Consolidated Financial Statements(1) Scope of consolidation
All 12 subsidiaries of the Company, provided below, fall within the scope of consolidation.
List of Subsidiaries
Yushin America, Inc.
Yushin Korea Co., Ltd.
Yushin Precision Equipment Sdn. Bhd.
Yushin Precision Equipment (Taiwan) Co., Ltd.
Yushin Precision Equipment (Thailand) Co., Ltd.
Yushin Automation, Ltd.
Yushin Precision Equipment Trading (Shenzhen) Co., Ltd.
Yushin Precision Equipment Trading (Shanghai) Co., Ltd.
Yushin Precision Equipment (India) Pvt. Ltd.
Guangzhou Yushin Precision Equipment Co., Ltd.
PT. Yushin Precision Equipment Indonesia
Yushin Precision Equipment (Vietnam) Co., Ltd.

(2) Application of the equity method
There is no non-consolidated subsidiary or affiliate company.
(3) 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 leased assets): Principally computed by the decliningbalance method
The range of useful lives for major assets is as follows:
Buildings:
13 - 40 years
Structures:
7 - 20 years
Machinery and equipment:
5 - 12 years
Tools, furniture and fixtures:
2 - 10 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) Leased assets: For leased 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.
– 19 –

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 theloan loss ratio based on past experience for general claims and by examining the possibility ofrecovery 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 amount subject
to the fiscal year under review among the total estimated amount to be paid as employees’ bonuses.
iii) Provision for bonuses for directors:
The Company provides the projected payment amount to be allocated for the payment of bonuses
to Directors and Corporate Auditors.
iv) Provision for product warranties:
To provide for expenses incurred for free repairs related to product sales, an amount is accounted
based on historical experience.
v) Provision for retirement benefits for directors:
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, 2016 isprovided in proportion to the term that present Directors had been in their respective positions
before June 2006.
d. Other significant matter for the preparation of Consolidated Financial Statementsi) Accounting for Retirement benefit assets and liabilities
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.
The net actuarial loss or gain is subject to amortization from the next fiscal year of the recognition
thereof onward in an amount pro-rated by the straight-line method based on the average remaining
employee service period (10 to 16 years) at the time of the recognition of net actuarial loss or gainin each fiscal year.
Unrecognized actuarial differences is recorded in “Remeasurements of defined benefit plans”
under “Total accumulated other comprehensive income” in Net assets after adjusting for tax
effects.
ii) Accounting for Consumption tax and local consumption tax
Consumption tax and local consumption tax are accounted for using the tax excluded method.
2. Notes of Change in Presentation(Application of “Partial amendments to “Accounting standards regarding to tax effect accounting””)
According to “Partial amendments to “Accounting standards regarding to tax effect accounting” (BusinessAccounting Standard No. 28, February 16, 2018), etc., which we applied from the beginning of this fiscal year,
deferred tax assets are classified as investments and other assets, and deferred tax liabilities are classified as
Fixed liabilities.
(Consolidated statements of income)“Rent income” ,which was included in “Others” in non-operating income until the previous fiscal year,
has been separately presented from this fiscal year due to the increase in monetary importance. “Rent
income” in the previous fiscal year is 1,084 thousand yen.
3. Notes to Consolidated Balance Sheet
Accumulated depreciation of property, plant and equipment:
4.

5,739,641 thousand yen

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

Number of shares atthe beginning ofcurrent FY

Number of increased
shares of current FY

Number of decreased
shares of current FY

Number of shares atthe end of current FY

Common stock

17,819,033

17,819,033-

35,638,066

Note: The increase in the number of shares of treasury stock (17,819,033 shares) is due to carry out a stock split on April 1,– 20 –

2018, at a ratio of two shares per one common share(2) Number of treasury stock
Class of shares

Number of shares atthe beginning ofcurrent FY

Number of increased
shares of current FY

Number of decreased
shares of current FY

Number of shares atthe end of current FY

Common stock

331,982

1,001,566-

1,333,548

Notes: Of the increase in the number of shares of treasury stock 331,982 shares is due to carried out a stock split on April 1,
2018, at a ratio of two shares per one common share, 669,400 shares is due to the purchase based on the board of directors
resolution held on February 7, 2019, and 184 shares is due to the purchase of shares of less than one unit.

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

Class of shares

Total dividend(Thousandsof yen)Dividend
per share(Yen)

Record date

The Board of Directors’Meeting on May 10, 2018

Common stock

314,766

18

March 31, 2018

Effective dateJune 5, 2018

The Board of Directors’
September 30,
December 3,
Common stock
279,792
8
Meeting on November 5,
2018
2018
2018
Note: The Company carried out a stock split on April 1, 2018, at a ratio of two shares per one common share. The stock split
has an effective date of April 1, 2018.With regard to dividends based on March 31, 2018, the dividend per share is based on thenumber of shares as before the stock split.

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

Class ofsharesTotal dividend(Thousandsof yen)Dividend
funds

Dividend
per share(Yen)

The Board of
Directors’ Meetingon May 10, 2019

Commonstock

308,740

Retainedearnings

95.

Record date

Effective date

March 31,2019

June 4, 2019

Notes to Financial Instruments(1) Conditions of financial instruments
a. Management policy
Yushin Group has a policy of limiting investments of unused funds to short-term deposits,
certificates of deposits and similar instruments and never using these funds for speculation. Internal
resources are used to meet all working capital requirements. Derivative instruments may be used tohedge exposure to foreign exchange rate risk but will never be used for speculation.
b. Details of financial instruments and their risks
Operating receivables consisting of Notes and accounts receivable - trade are generally exposedto the credit risk of customers, while foreign currency denominated operating receivables at foreign
operations are exposed also to the foreign exchange risk.
Investment securities are available-for-sale securities and are exposed to risk associated withmarket price volatility.
Operating debt consisting of Notes and accounts payable - trade and Electronically recorded
obligations - operating are largely due four months or less. Accounts payable - other and Income
taxes payable are due one year or less.
c. Risk management system for financial instruments
Payment dates and balances of outstanding are supervised for each customer based on rules forthe management of trade receivables and credit. In addition, there is a system for monitoring thefinancial soundness of customers.
For Investment securities, there are measures to periodically monitor the fair values of thesesecurities and the financial soundness of issuers of these securities.

– 21 –

(2) Fair value of financial instruments
The carrying value on the consolidated balance sheets, fair value, and their differences as of March
31, 2019 are shown as follows.
Carrying value(thousands of yen)
(1)
(2)
(3)
(4)

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

Cash and deposits
Notes and accounts receivable – trade
Consumption taxes receivable
Investment securities
Other securities

Fair value(thousands of yen)

6,362,933
6,844,705
34,295Differences(thousands of yen)

6,362,933
6,844,705
34,295-

218,062

218,062-

Assets total

13,459,996

13,459,996-

Notes and accounts payable - trade
Electronically recorded obligations - operating
Accounts payable - other
Income taxes payable

1,331,229
1,035,982
492,256
523,827

1,331,229
1,035,982
492,256
523,827-

Liabilities total

3,383,295

3,383,295-

Note: Matters concerning determination of fair value of financial instruments and marketable securities.

(Assets)(1) Cash and deposits, (2) Notes and accounts receivable – trade, and (3) Consumption taxes
receivable.
Fair value of the above financial instruments is deemed to be equal to their carrying value
because they are settled within a short period of time.
(4)Investment securities
Fair value of the above financial instruments such as stocks is determined by prices at stock
exchanges.
(Liabilities)(1) Notes and accounts payable - trade, (2) Electronically recorded obligations - operating, (3)Accounts payable - other and (4) Income taxes payable
Fair value of the above financial instruments is deemed to be equal to their carrying value
because they are settled within a short period of time.
(3) The amount of money claims scheduled to be redeemed subsequent to the consolidated balance
sheet date6.

Due within
one year

Due after one year
through five years

Due after five
years throughten years

Due after
ten years(thousands of yen)(thousands of yen)(thousands of yen)(thousands of yen)

Cash and deposits
Notes and accounts receivable – trade
Consumption taxes receivable

6,362,933
6,844,705
34,295

-

-

-

Total

13,241,934

-

-

-

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

783.03 yen
54.54 yen

Note: Amounts less than one thousand yen are truncated.

– 22 –

Balance Sheets(as of March 31, 2019)
Account

AmountAccount

ASSETS
Current assets(Thousands of yen)AmountLIABILITIES
15,497,309

Cash and deposits

4,164,213

Notes receivable - trade

1,636,788

Accounts receivable - trade

5,221,969

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

3,790,289
92,685
1,035,982
1,050,546

Merchandise and finished goods

312,441

Accounts payable - other440,590

Work in process

867,422

Accrued expenses

136,047

2,503,369

Income taxes payable

453,935

76,567

Advances received

165,194

Consumption taxes receivable

34,295

Provision for bonuses

268,000

Other

680,742

Provision for bonuses for directors

37,520

Provision for product warranties

82,000Other

27,787

Raw materials and supplies
Prepaid expenses

Allowance for doubtful accounts(500)

Non-current assets

13,138,667

Property, plant and equipment

10,543,413

Buildings

4,331,269

Structures

209,643

Machinery and equipment

68,664

Vehicles

2,316

Tools, furniture and fixtures
Land

Total liabilities

71,283
66,7804,503
3,861,572

NET ASSETS

71,560Shareholders’ equity

24,717,588

5,843,911

Capital stock

1,985,666

Capital surplus

2,023,903

Leased assets

7,497

Construction in progress

8,549

Intangible assets

Non-current liabilities
Provision for retirement benefits for
directors
Other

Legal capital surplus

357,257

Retained earnings

2,023,903
21,747,045

Telephone subscription right

11,430Legal retained earnings

286,314

Software345,827

Other retained earnings

21,460,730

Reserve for dividend equalization

1,000,000

Investments and other assets

2,237,995

General reserve

8,700,000

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

218,062

Retained earnings brought forward

11,760,730

808,896

Treasury stock(1,039,026)

Deferred tax assets

562,882

Other

350,297

Allowance for doubtful accounts

Total assets

297,873

Valuation and translation adjustments
Valuation difference on available-forsale securities

56,81556,815(15)

28,635,976– 23 –

Total net assets

24,774,404

Total liabilities and net assets

28,635,976

Statements of Income(from April 1, 2018 to March 31, 2019)(Thousands of yen)Account

AmountNet sales

17,474,221

Cost of sales

11,099,050

Gross profit

6,375,171

Selling, general and administrative expenses

4,329,833

Operating income

2,045,337

Non-operating income

527,285

Interest income

2,393

Dividends income

419,987

Purchase discounts

13,410Foreign exchange gains

3,340

Subsidy income

49,499Other

38,654Non-operating expenses

1,928

Sales discounts

1,105

Other

822

Ordinary income

2,570,695

Extraordinary loss

10,118Loss on sales and retirement of non-current assets

9,904

Other

214

Income before income taxes

2,560,577

Income taxes - current

720,207

Income taxes - deferred(48,861)

Net income

1,889,231– 24 –

Statements of Changes in Net Assets(from April 1, 2018 to March 31, 2019)(Thousands of yen)
Shareholders’ equity
Capital surplus

Retained earnings
Other retained earnings

Capital stock Legal capitalsurplus
Balance as ofApril 1, 2018
Changes in thecurrent period
Dividends ofsurplus1,985,666

2,023,903

Total capitalsurplusLegalretainedearnings

2,023,903

286,314

Reserve fordividend
equalization

Generalreserve

Retainedearnings
brought
forward

Total retained
earnings

1,000,000

8,700,000

10,466,058

20,452,373(594,559)(594,559)

1,889,231

1,889,231

Net income
Acquisition oftreasury stock
Changes in items
other thanshareholders’equity, net
Total changes in thecurrent period
Balance as ofMarch 31, 2019

-

-

-

-

-

-

1,294,671

1,294,671

1,985,666

2,023,903

2,023,903

286,3141,000,000

8,700,000

11,760,730

21,747,045

Shareholders’ equity
Treasury stock
Balance as of April 1, 2018(354,848)

Valuation and translation adjustments

Totalshareholders’equity24,107,095

Valuationdifference on
available-for-salesecurities

Total valuation andtranslation
adjustments

97,103

97,103

Total net assets

24,204,198

Changes in the current period
Dividends of surplus(594,559)(594,559)

Net income

1,889,231

1,889,231(684,178)(684,178)

Acquisition of treasury stock(684,178)

Changes in items other thanshareholders’ equity, net
Total changes in the current period
Balance as of March 31, 2019(40,288)(40,288)(40,288)(684,178)

610,493(40,288)(40,288)570,205(1,039,026)

24,717,588

56,81556,815

24,774,404– 25 –

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 leased assets): Declining balance method
The range of useful lives for major assets is as follows:
Buildings:
13 - 38 years
Structures:
7 - 20 years
Machinery and equipment:
12 years
Tools, furniture and fixtures:
2 -10 yearsb.

c.

Intangible assets (excluding leased assets)- Software used internally: Straight-line method based on the expected useful lives- Other intangible assets: Straight-line method
Leased assets: For leased assets under non-ownership transfer finance lease transactions, theCompany applies a straight-line method with the lease period as useful life and the residual valueas 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 theloan loss ratio based on past experience for general claims and by examining the possibility ofrecovery 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 amount subject
to the fiscal year under review among the total estimated amount to be paid as employees’ bonuses.
c. Provision for bonuses for directors:
The Company provides the projected payment amount to be allocated for the payment of bonuses
to Directors and Corporate Auditors.
d. Provision for product Warranties:
To provide for expenses incurred for free repairs related to product sales, an amount is accounted
based on historical experience.
e. Provision for retirement benefits for directors:
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, 2016 isprovided in proportion to the term that present Directors had been in their respective positions
before June 2006.

– 26 –

(4) 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 (Prepaid pension costs) is recorded in the “Other” field under “Investments and otherassets.” The net actuarial loss or gain is subject to amortization from the next fiscal year of therecognition thereof onward in an amount pro-rated by the straight-line method based on the averageremaining employee service period (10 to 16 years) at the time of the recognition of net actuarial
loss or gain in each fiscal year.
(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.
2. Notes of change in presentation(Application of “Partial amendments to “Accounting standards regarding to tax effect accounting””)
According to “Partial amendments to “Accounting standards regarding to tax effect accounting” (BusinessAccounting Standard No. 28, February 16, 2018), etc., which we applied from the beginning of this fiscal
year, deferred tax assets are classified as investments and other assets, and deferred tax liabilities areclassified as Fixed liabilities.
3. Notes to Balance Sheet(1) Accumulated depreciation of property, plant and equipment:(2) Monetary credit and debts to affiliates
a. Short-term monetary credit:b. Short-term monetary debts:
4. 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:
5. Notes to Statement of Changes in Net Assets
Number of treasury stock

4,843,717 thousand yen
1,774,533 thousand yen
166,038 thousand yen

4,892,377 thousand yen
24,674 thousand yen
290,191 thousand yen
423,681 thousand yen

Class of shares

Number of shares atthe beginning ofcurrent FY

Number of increased
shares of current FY

Number of decreased
shares of current FY

Number of shares atthe end of current FY

Common stock

331,982

1,001,566-

1,333,548

Notes: Of the increase in the number of shares of treasury stock 331,982 shares is due to carried out a stock split on April 1,
2018, at a ratio of two shares per one common share, 669,400 shares is due to the purchase based on the board of directors
resolution held on February 7, 2019, and 184 shares is due to the purchase of shares of less than one unit.

– 27 –

6. Notes on Tax-effect Accounting(1) Breakdown by cause of deferred tax assets and liabilities
Deferred tax assets
Inventories
Excess depreciation of property, plant and equipment
Excess intangible assets depreciation
Provision for bonuses
Provision for product warranties
Provision for retirement benefits for directors
Other
Total deferred tax assets
Deferred tax liabilities
Prepaid pension costs
Valuation difference on available-for-sale securities
Total deferred tax liabilities
Net deferred tax assets– 28 –(Thousands of yen)
46,570255,764
159,075
81,74025,01020,36758,361
646,890
59,07424,93384,007562,882

7. Transactions with Related Parties
Subsidiaries, etc.
Type

Name

% of
votingrights held

YushinAmerica,Inc.

100%
Directly
held by theCompany

YushinKorea Co.,
Ltd.

100%
Directly
held by theCompany

Guangzhou
YushinPrecision
Equipment
Co., Ltd.

100%
Directly
held by theCompany

Subsidiary

Relationship
Concurrent
Business
Directors,
relationshipetc.
Sales andmaintenance& repair ofCompany
products.
Concurrent Manufacturin
Directors: 3 g, sales andmaintenance& repair ofcustomordered
equipment
Sales andmaintenance& repair ofCompany
products.
Concurrent Manufacturin
Directors: 1 g, sales andmaintenance& repair ofcustomordered
equipment

Concurrent
Directors: 3

Manufactureof Company
products

Type oftransactions

Transaction
amount(thousands ofyen)Year-endbalance

Account(thousands ofyen)Sale ofproducts

1,609,759

Accounts
receivable- trade327,157

Sale ofproducts

922,933

Accounts
receivable- trade307,576

Sale ofproducts

434,371

Accounts
receivable- trade492,260

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

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

722.19 yen
54.13 yen

Note: Amounts less than one thousand yen are truncated.

– 29 –

[Certified copy of the Accounting Auditors’ Report concerning consolidated statutory report](TRANSLATION)
INDEPENDENT AUDITOR'S REPORTMay 15, 2019
To the Board of Directors of
Yushin Precision Equipment Co., Ltd.:
Deloitte Touche Tohmatsu LLC
Designated Unlimited Liability Partner,
Engagement Partner,
Certified Public Accountant:
Yoshiki Yamada [SEAL]
Designated Unlimited Liability Partner,
Engagement Partner,
Certified Public Accountant:
Mitsuhiro Takasaki [SEAL]
Designated Unlimited Liability Partner,
Engagement Partner,
Certified Public Accountant:
Hideki Yasuda [SEAL]
Pursuant to the fourth paragraph of Article 444 of the Companies Act, we have audited the consolidated
financial statements, namely, the consolidated balance sheet as of March 31, 2019 of Yushin Precision
Equipment Co., Ltd. (the "Company") and its consolidated subsidiaries, and the related consolidated
statements of income and changes in net assets for the fiscal year from April 1, 2018 to March 31, 2019,
and a summary of significant accounting policies and other explanatory information.
Management's Responsibility for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of these consolidated financial
statements in accordance with accounting principles generally accepted in Japan, and for such internal
control as management determines is necessary to enable the preparation of consolidated financial
statements that are free from material misstatement, whether due to fraud or error.
Auditor's Responsibility
Our responsibility is to express an opinion on these consolidated financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in Japan. Thosestandards require that we plan and perform the audit to obtain reasonable assurance about whether the
consolidated financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in
the consolidated financial statements. The procedures selected depend on the auditor's judgment, including
the assessment of the risks of material misstatement of the consolidated financial statements, whether due
to fraud or error. In making those risk assessments, the auditor considers internal control relevant to theentity's preparation and fair presentation of the consolidated financial statements in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on
the effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness ofaccounting policies used and the reasonableness of accounting estimates made by management, as well as
evaluating the overall presentation of the consolidated financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis forour audit opinion.
Audit Opinion
In our opinion, the consolidated financial statements referred to above present fairly, in allmaterial respects, the financial position of Yushin Precision Equipment Co., Ltd. and its
consolidated subsidiaries as of March 31, 2019, and the results of their operations for the year thenended in accordance with accounting principles generally accepted in Japan.
Interest
Our firm and the engagement partners do not have any interest in the Company for which disclosure isrequired under the provisions of the Certified Public Accountants Act.
The above represents a translation, for convenience only, of the original report issued in the Japanese
language.
– 30 –

[Certified copy of the Accounting Auditors’ Report concerning non-consolidated statutory report](TRANSLATION)
INDEPENDENT AUDITOR'S REPORTMay 15, 2019
To the Board of Directors of
Yushin Precision Equipment Co., Ltd.:
Deloitte Touche Tohmatsu LLC
Designated Unlimited Liability Partner,
Engagement Partner,
Certified Public Accountant:
Yoshiki Yamada [SEAL]
Designated Unlimited Liability Partner,
Engagement Partner,
Certified Public Accountant:
Mitsuhiro Takasaki [SEAL]
Designated Unlimited Liability Partner,
Engagement Partner,
Certified Public Accountant:
Hideki Yasuda [SEAL]
Pursuant to the first item, second paragraph of Article 436 of the Companies Act, we have audited thefinancial statements, namely, the balance sheet as of March 31, 2019 of Yushin Precision Equipment Co.,
Ltd. (the "Company"), and the related statements of income and changes in net assets for the 45th fiscal
year from April 1, 2018 to March 31, 2019, and a summary of significant accounting policies and otherexplanatory information, and the accompanying supplemental schedules.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements and theaccompanying supplemental schedules in accordance with accounting principles generally accepted inJapan, and for such internal control as management determines is necessary to enable the preparation offinancial statements and the accompanying supplemental schedules that are free from material
misstatement, whether due to fraud or error.
Auditor's Responsibility
Our responsibility is to express an opinion on these financial statements and the accompanying
supplemental schedules based on our audit. We conducted our audit in accordance with auditing standards
generally accepted in Japan. Those standards require that we plan and perform the audit to obtainreasonable assurance about whether the financial statements and the accompanying supplemental
schedules are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in
the financial statements and the accompanying supplemental schedules. The procedures selected dependon the auditor's judgment, including the assessment of the risks of material misstatement of the financial
statements and the accompanying supplemental schedules, whether due to fraud or error. In making thoserisk assessments, the auditor considers internal control relevant to the entity's preparation and fairpresentation of the financial statements and the accompanying supplemental schedules in order to design
audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the entity's internal control. An audit also includes evaluating theappropriateness of accounting policies used and the reasonableness of accounting estimates made bymanagement, as well as evaluating the overall presentation of the financial statements and theaccompanying supplemental schedules.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis forour audit opinion.
Audit Opinion
In our opinion, the financial statements and the accompanying supplemental schedules referred toabove present fairly, in all material respects, the financial position of Yushin Precision Equipment
Co., Ltd. as of March 31, 2019, and the results of its operations for the year then ended inaccordance with accounting principles generally accepted in Japan.
Interest
Our firm and the engagement partners do not have any interest in the Company for which disclosure isrequired under the provisions of the Certified Public Accountants Act.
The above represents a translation, for convenience only, of the original report issued in the Japanese
language and "the accompanying supplemental schedules" referred to in this report are not included in theattached financial documents.
– 31 –

[Certified copy of the Audit Report of the Board of Corporate Auditors](TRANSLATION)

Audit Report
Regarding the performance of duties by the Directors for the fiscal year from April 1, 2018 to March 31,
2019, the Board of Corporate Auditors hereby submits its audit report, which has been prepared throughdiscussions based on the audit report prepared by each Corporate Auditor.
1.

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

– 32 –

2.

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

May 16, 2019

Board of Corporate Auditors,
Yushin Precision Equipment Co., Ltd.
Full-time Corporate Auditor
Outside Corporate Auditor
Outside Corporate Auditor
Outside Corporate Auditor

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

End of submitted documents– 33 –

Reference Documents for the General Meeting of Shareholders
Proposal: Election of Seven (7) Directors
The terms of office of all the currently serving eight (8) Directors will expire at the conclusion of thisMeeting. We propose to decrease the number of Director by one (1) and Shareholders are asked to votefor these seven (7) candidates for Directors.
The candidates for the position of Directors are as follows:
No.

Name
(Date of birth)

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

Mayumi Kotani(January 12, 1947)

December 2002
April 2006

1
March 2011

2

Joined the Company
Director
Executive Vice President and Director
Executive Vice President and Director, General
Manager of Sales H.Q.
President and Representative Director
President and General Manager of Sales andCustomer Service H.Q.
President and Representative Director
To the present

Number ofshares held

1,054,102
sharesReasons for appointment:
Mayumi Kotani has been engaged in management since the establishment of the Company and exercising strong
leadership as a President and Representative Director for many years. She has extensive experience in business
management. Because of the expectation that the functions of decision-making and oversight by the Board of
Directors should be strengthened, she is a candidate for a Director of the Company.
April 2005
Joined the Company as Executive Officer andGeneral Manager of Purchase Dept.
October 2005
Executive Officer and General Manager of Purchase
Dept.
April 2006
Senior Executive Officer and General Manager ofSatoshi Kimura
Purchase H.Q.
6,000 shares(April 1, 1954)
June 2006
Managing Director and General Manager of Purchase
H.Q.
June 2008
Executive Managing Director and General Manager
of Purchase H.Q.
To the present
Reasons for appointment:
Satoshi Kimura has been involved in management and operations of purchasing and administration, thus having
broad experience in the business. Because of the expectation of continuously strengthening the function of decisionmaking and supervision of the Board of Directors, he is a candidate for a Director of the Company.
September 2007 Joined the Company
November 2007 Deputy General Manager of Manufacturing Dept.
Deputy General Manager of Manufacturing Dept. andApril 2008
Quality Assurance Dept.

Yasushi Kitagawa(August 12, 1958)

April 2009

Executive Officer, Deputy General Manager of
Manufacturing H.Q. and Quality Assurance Dept.

August 2009

Executive Officer, General Manager of
Manufacturing H.Q. and Quality Assurance Dept.
Director and General Manager of Manufacturing
H.Q. and Quality Assurance Dept.
Managing Director and General Manager of
Manufacturing H.Q. and Quality Assurance Dept.

June 20103
June 2013
June 2017

4,800 shares

Executive Managing Director and General Manager
of Manufacturing H.Q. and Quality Assurance Dept.

To the present
Reasons for appointment:
Yasushi Kitagawa has been engaged in management and operation of production, thus having broad experience inthe business. Because of the expectation of continuously strengthening the function of decision-making andsupervision of the Board of Directors, he is a candidate for a Director of the Company.

– 34 –

No.

4

5

Name
(Date of birth)

Career summary, position, areas of responsibility, and representation of
Number ofother organizations
shares held
June 1989
Joined the Company
August 2003
General Manager of Yushin Precision Equipment
Trading (Shenzhen) Co., Ltd.
April 2008
General Manager of Chinese Area and Yushin
Precision Equipment Trading (Shenzhen) Co., Ltd.
Tomohiro Inano
July 2009
Assistant to General Manager of Sales H.Q.
3,400 Shares(December 13,
February 2010
Deputy General Manager of Sales H.Q.
1962)
March 2011
General Manager of Sales H.Q.
March 2014
Executive Officer and General Manager of Sales
H.Q.
June 2017
Director and General Manager of Sales H.Q.
To the present
Reasons for appointment:
Tomohiro Inano has been involved in management and operation of sales, thus having broad experience in thebusiness. Because of the expectation of strengthening the decision-making and supervising functions of the Boardof Directors, he is a candidate for a Director of the Company.
March 1975
Joined Kyoto Ceramic Co., Ltd.(currently Kyocera
Corporation)
June 1987
Director
June 1992
Senior Managing Director and Representative
Director
June 1997
Executive Vice president and Representative Director
June 1999
President and Representative Director
June 2003
President and Representative Director and President
and Executive Officer
June 2005
Chairman of the Board and Representative Director,
19,100
Yasuo Nishiguchi
and Chief Executive Officer
Shares(October 9, 1943)
April 2006
Advisor and Director
June 2009Retired from the office of Director
June 2014
Outside Director of the Company
To the present
March 2015
Chairman and CEO of Socionext Inc.
June 2016
Outside Director of YAMADA Consulting Group
Co., Ltd.
To the present
March 2018
Retired from Chairman and CEO of Socionext Inc.
Reasons for nomination as an Outside Director:
Yasuo Nishiguchi has held such positions as the President and Representative Director, and the Chairman and
Representative Director at Kyocera Corporation. Based on his knowledge and experience in general management
cultivated through prominent corporate positions, we asked him to give the Company advice and supervision ofoperations as an Independent Director. Thus, because we can expect to strengthen the function of the Company’s
Board of Directors, he is a candidate for an Outside Director of the Company.

– 35 –

No.

Name(Date of birth)7

Number ofshares held

10,000SharesProfessor emeritus at Kyoto University
Outside Director of the Company
To the present
June 2016
Outside Corporate Auditor of Technology Seed
Incubation Co., Ltd.
Retired from Outside Corporate Auditor ofJune 2018
Technology Seed Incubation Co., Ltd.
Reasons for nomination as an Outside Director:
Based on the specialized knowledge by the person with academic standing in engineering of Kyoto University, we
asked him to give the Company advice and supervision of operations as an Independent Director. Thus, because we
can expect to strengthen the function of the Company’s Board of Directors, he is a candidate for an Outside Directorof the Company. Although the person has no experience in direct corporate management, our belief is that he will
be able to properly fulfill assigned duties as an Outside Director of the Company for the reasons cited above.
April 1983
Joined Japan Associated Finance Co., Ltd. (currently
JAFCO Co., Ltd)
January 1997
Joined Marusan Securities Co., Ltd.
March 2000
General Manager of Investment information
October 2004
General Manager of Underwriting
October 2008
Part-time Director of LivTech, Inc.
February 2009
Director and Head of Administrative H.Q. of
Reiko Nakayama
5,062 Shares
LivTech, Inc.
(April 2, 1959)
March 2013
Retired from the office of Director of LivTech, Inc.
March 2015
Outside Director of LUCKLAND CO.,LTD
March 2016
Director of LUCKLAND CO.,LTD (Audits
Committee)
To the present
Outside Director of the Company
June 2018
To the present
Reasons for nomination as an Outside Director:
Based on her experience of securities company underwriter, and management executive officer and outside officers
of operating companies, we asked her to give the Company advice and supervision of operations as an Independent
Director. Thus, because we can expect to strengthen the function of the Company’s Board of Directors, she is acandidate for an Outside Director of the Company.
Hiroshi Matsuhisa(August 5, 1947)

6

Career summary, position, areas of responsibility, and representation ofother organizations
June 1976
Research Assistant of school of precision engineeringin Faculty of Engineering at Kyoto University
October 1987
Assistant professor
April 1994
Professor( transferred to graduate school of department of
Mechanical Engineering and Science by areorganization in 1995 )April 2012
June 2014

Note:
1
2
3

4

The candidates for Directors have no special interests in the Company.
Yasuo Nishiguchi, Hiroshi Matsuhisa and Reiko Nakayama are candidates of Outside Directors.
Yasuo Nishiguchi, Hiroshi Matsuhisa and Reiko Nakayama are the present Outside Directors of the Company. Yasuo
Nishiguchi and Hiroshi Matsuhisa term of office as Director of the Company is respectively five (5) years at the closingof this General Meeting of Shareholders, Reiko Nakayama term of office as Director of the Company is one (1) year at
the closing of this General Meeting of Shareholders
The Company has registered Hiroshi Matsuhisa and Reiko Nakayama as Independent Officers provided in the rules of
the Tokyo Stock Exchange and submitted notices to this effect to the Exchange. Hiroshi Matsuhisa and Reiko Nakayama
will be continuously registered as Independent Officers if they are reappointed.

End of Reference Documents– 36 –