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

Security Code: 6482
June 12, 2012

Dear Shareholders,

Notice of Convocation for the39th Ordinary General Meeting of Shareholders
Notice is hereby given that the 39th Ordinary General Meeting of Shareholders of Yushin Precision
Equipment Co., Ltd. will be held as set out below:
If you do not expect to attend the meeting in person, you may exercise your voting rights in writing.
Please refer to the enclosed Reference Documents for the General Meeting of Shareholders, use the Formfor Exercising Voting Rights to indicate your vote on agenda proposals and return it by 5 p.m. on
Tuesday, June 26, 2012 at the latest.
Details
Wednesday, June 27, 2012 at 10 a.m.
4F Conference Room, No. 2 Factory
Head Office of Yushin Precision Equipment Co., Ltd.
11-260 Kogahonmachi, Fushimi-ku, Kyoto

1.
2.

Date and Time:
Place:

3.

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

Business Report and Consolidated Financial Statements for the39th Fiscal Year (April 1, 2011 to March 31, 2012) as well as theaudit reports from the Accounting Auditor and the Board of
Corporate Auditors on the Consolidated Financial Statements
Report on the Non-Consolidated Financial Statements for the39th Fiscal Year (April 1, 2011 to March 31, 2012)

Agenda for resolution:
Proposal 1: Election of Five (5) Directors
Proposal 2: Election of One (1) Corporate Auditor

Sincerely Yours,
Mayumi Kotani
President and Representative Director
Yushin Precision Equipment Co., Ltd.
11-260 Kogahonmachi, Fushimi-ku,
Kyoto, Japan
Notes:* You are kindly requested to present the enclosed “Form for Exercising Voting Rights” to the receptionist upon your arrival at
the Meeting.
* If any changes have been made to the matters appearing in the Reference Documents for the General Meeting of Shareholders,Business Report, Non-Consolidated Financial Statements or Consolidated Financial Statements, such changes will be posted
on our website: (http://www.yushin.com)–1–

(Submitted Documents)

Business Report(For the fiscal year from April 1, 2011 to March 31, 2012)
1.

Current Business Conditions of the Yushin Group(1) Progress and achievements
In this fiscal year as for the world economy, although the U.S. economy was on the recovery trend,
the prospects were vague due to the anxiety about debt in Europe which caused the economic growthof the emerging countries plateau. The domestic economy was on the recovery trend led by the
restoration demand from the earthquake and yen’s appreciation, which weighed on the earnings ofexport industry, is on easing trend. As for industries related to Yushin, demand from Asia and North
America were strong. By industry, automotive, home appliance, medical and daily products werestrong.
Under these circumstances, Yushin Group linked demand from Southeast Asia to order, and increased
sales to the industries such as Automotive, electronic component, and optical and precision equipment.
As a result, consolidated net sales increased by 13.3% from the previous FY to ¥14,240 million. By
introducing new products, operating income increased by 15.9% from the previous FY to ¥1,272
million, ordinary income increased by 20.0% from the previous FY to ¥1,265 million and net income
was by 6.6% from the previous FY to ¥778 million despite the effects of yen’s appreciation.
Consolidated net sales per product(Thousands of yen)
Years ended
March 31,

2011

2012

Product

Amount%Amount%Take-out robots

8,912,734

70.9

9,048,483

63.5

Custom-ordered
equipment

1,670,074

13.3

3,085,576

21.7

Parts andmaintenanceservice

1,984,839

15.8

2,105,948

14.8

Total

12,567,648

100.0

14,240,008

100.0

(2)

Capital investment
The total amount of capital investment for the Group effectuated over the course of the period
under review was ¥2,009 million mainly for the acquisition of the land for the factory of Head
Quarters valued at ¥1,724 million, the mold building for the new robot valued at ¥ 73 million, theacquisition of the land for the factory of Yushin Korea Co., Ltd. valued at ¥ 72 million, and thecapital investment related to R&D valued at ¥ 45 million.

(3)

Financing activities
No material items to report.

–2–(4) Assets and operating results 2009-2012
Years ended March 31,

2009

2010

2011

2012

Net sales(thousands of yen)

19,272,301

12,369,935

12,567,648

14,240,008

Ordinary income(thousands of yen)

2,805,258

872,400

1,055,101

1,265,740

Net income(thousands of yen)

1,468,190

487,509729,833

778,283

82.71

27.87

41.73

44.50

Total assets(thousands of yen)

21,977,500

20,593,798

21,583,634

22,641,673

Net assets(thousands of yen)

17,864,104

18,115,226

18,495,803

18,787,344

Net assets per share(yen)

1,019.99

1,034.11

1,055.42

1,072.24

Net income per share(yen)

Notes: The net income per share is calculated based on the average number of issued shares during the fiscal year and the net
assets per share are calculated based on the number of issued shares at the end of the fiscal year.

(5) Issues to be addressed
As for the business environment surrounding the Yushin Group, there is a recovery trend from theGreat East Japan Earthquake and the floods in Thailand which caused great damages. In Japan demandis expected particularly for automotive industry, and the capital investment on power-saving
equipment is anticipated to grow due to the anxiety about power supply. Globally, it is anticipated that
North America, Korea and Southeast Asia will stay strong.
Under these circumstances, Yushin Group must reinforce its products including pricecompetitiveness to further promote the differentiation and to strengthen its power of global marketing.
Furthermore, aiming to establish multiple core business, Yushin must develop and launch new
products that can manifest technological and sales synergies.
To this end, design optimization technology, which earned “Japan Society of MechanicalEngineering Technology Award”, will be applied to general purpose robot. Yushin will transmit
information of the definitely-differentiated products by appealing the performance superiority such as
high-speed, light weight and power-saving. Yushin will also develop business in the semiconductorrelated and medical-related area as new domains that have technological synergies.

–3–(6) Status of Major subsidiaries
Name

Location

Capital stock

Percentage
ofshareholding

Major operations

Yushin America, Inc.

Rhode Island,
U.S.A.

US$8,000

100%

Sales and maintenance & repairof our products. Manufacturing& sales and maintenance &repair of our post-processequipment

Yushin Korea Co., Ltd.

Siheung-Si,
Gyeonggi-Do,
South Korea

KRW350 million

100%

Sales and maintenance & repairof our products

Yushin Precision Equipment(Singapore) Pte. Ltd.

Singapore

S$370,000

100%

Sales and maintenance & repairof our products

Yushin Precision Equipment
Sdn. Bhd.

Selangor,
Malaysia

MYR500,000

100%

Sales and maintenance & repairof our products

Yushin Precision Equipment(Taiwan) Co., Ltd.

Taipei City,
Taiwan(R.O.C.)

NT$5 million

100%

Sales and maintenance & repairof our products

Yushin Precision Equipment(Thailand) Co., Ltd.

Bangkok,Thailand

THB6 million

49%

Sales and maintenance & repairof our products

Yushin Automation Ltd.

West
Midlands, U.K.

GBP150,000

95.6%

Sales and maintenance & repairof our products

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

Shenzhen,
Guangdong,
China

US$400,000

100%

Sales and maintenance & repairof our products

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

Shanghai,
China

US$200,000

100%

Sales and maintenance & repairof our products

Yushin Precision Equipment(India) Pvt. Ltd.

Chennai, India

INR7.4 million

95%

Sales and maintenance & repairof our products

Guang Zhou Yushin Precision
Equipment Co., Ltd.

Guangzhou,
Guangdong,
China

RMB13.7million

100%

Manufacturing of our products

Yushin Precision Equipment (Slovakia) s.r.o. was liquidated in October 2011, therefore, excluded
from the scope of consolidation.
(7) Major operations (as of March 31, 2012)
The Yushin Group is mainly engaged in the development, manufacture and sale of take-out
robots for plastic injection Molding products and stock systems as well as factory automation
systems for molding plants.

–4–

(8) Main sales offices and factories (as of March 31, 2012)
Name

Location

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

Fushimi-ku, Kyoto-city

Tokyo General Sales OfficeChuo-ku, Tokyo

Kita-Kanto General Sales OfficeKita-ku, Saitama-city

Chubu General Sales Office

Toyokawa-city, Aichi

Nishi-Nihon General Sales Office

Fushimi-ku, Kyoto-city

Tohoku Sales Office

Fukushima-city, Fukushima

Tsukuba Sales Office

Tsukuba-city, Ibaraki

Tochigi Sales Office

Sano-city, Tochigi

Nishi-Kanto Sales Office

Atsugi-city, Kanagawa

Nagano Sales Office

Shiojiri-city, Nagano

Shizuoka Sales Office

Suruga-ku, Shizuoka-city

Nagoya-Nishi Sales Office

Kuwana-city, Mie

Toyama Sales OfficeToyama-city, Toyama

Hiroshima Sales Office

Nishi-ku, Hiroshima-city

Fukuoka Sales Office

Hakata-ku, Fukuoka-city

Indonesia Representative Office

Jakarta, Indonesia

Vietnam Representative OfficeHanoi, Vietnam

Ho Chi Minh Representative Office

Ho Chi Minh Vietnam

Philippines Representative Office

Makati-city, Philippines(9) Employees (as of March 31, 2012)
Number of employees

Increase from the end of previous FY

571 (55)

25

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

(10) Major creditors (as of March 31, 2012)
No items to report.
(11) Other important matters pertaining to the status of the GroupNo material items to report.

–5–

2.

Matters pertaining to the shares of the Company (as of March 31, 2012)(1) Number of shares authorized:
40,000,000(2) Total number of issued shares:
17,819,033(3) Number of shareholders:
5,021(4) Major shareholders:
Investment in the company
Name

Number of shares held
(thousand)

Percentage of shares
held
(%)

Yushin Industry Co., Ltd.

4,376

25.0

Mayumi Kotani

2,239

12.8

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

774

4.4

774

4.4

605

3.5

The Kyoto Chuo Shinkin Bank, Ltd.

544

3.1

The Bank of Tokyo-Mitsubishi UFJ, Ltd.

424

2.4

RBC DEXIA INVESTOR SERVICES
TRUST LONDON (Client Accounts)
The Chase Manhattan Bank NA, London SL,
Omnibus Accounts

423

2.4

361

2.1

The Bank of Kyoto, Ltd.

352

2.0

Note: Percentage of shares held is calculated after deducting the number of treasury stock (328,960 shares).

–6–

3.

Matters pertaining to officers of the Company(1) Directors and Corporate Auditors (as of March 31, 2012
Position

Responsibilities and representation of otherorganization

Name

President andRepresentative Director

Mayumi Kotani

Executive Managing
Director

Satoshi KimuraManaging Director

Yasuharu Odachi

Head of Research & Development H.Q.

Director

Yuji Tsujimoto

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

Director

Yasushi Kitagawa

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

Standing Corporate
AuditorShujiro Sawada

Corporate Auditor

Yasuhiro Orita

LawyerCorporate Auditor

Takao Yoshikawa

Professor emeritus at Osaka University

Notes:
1. Corporate Auditors Yasuhiro Orita and Takao Yoshikawa are outside Corporate Auditors stipulated in Item 2, Article 16 of
the Company Law.
2. The following describes the activities of the two outside Corporate Auditors during the period under review.
Corporate Auditor, Yasuhiro Orita
In the period under review, Yasuhiro Orita attended 11 of 12 Meetings of Board of Directors’ and 4 of 5 Meetings of theBoard of Auditors. At the Board of Directors’ Meetings, from his background as a legal specialist and practitioner he asked
pertinent questions to clarify ambiguities that arose with respect to matters reported or matters resolved, and provided
opinions. Additionally, at the Meetings of the Board of Auditors, he perused the reports of the internal auditing results,
exchanged opinions concerning auditing, and participated in joint discussions on important matters. In addition to receiving
the Accounting Auditor’s detailed report on regular basis, he also regularly exchanged opinions with top management.
Corporate Auditor, Takao Yoshikawa
In the period under review, Takao Yoshikawa attended 10 of 12 Meetings of Board of Directors’ and 4 of 5 Meetings of theBoard of Auditors. At the Board of Directors’ Meetings, from his background as an academic he asked pertinent questions
to clarify ambiguities that arose with respect to matters reported or matters resolved, and provided opinions. Additionally,at the Meeting of the Board of Auditors, he perused the reports of the internal auditing results, exchanged opinions
concerning auditing, and participated in joint discussions on important matters. In addition to receiving the Accounting
Auditor’s detailed report on regular basis, he also regularly exchanged opinions with top management.
3. Change of Directors and Corporate Auditors during the period under review
No items to report.
4. The Company has designated corporate auditor Takao Yoshikawa as an independent corporate officer asprescribed by the Tokyo Stock Exchange and submitted notices to this effect to the exchange.

–7–(2) Total remuneration and other payments made to Directors and Corporate Auditors(Thousands of yen)Classification

Number of Directors/
Corporate Auditors

Total amount

Directors

5

148,800

Corporate Auditors

3

30,3008

179,100

Total

Notes:
1. The 35rd Ordinary General Meeting of Shareholders held on June 27, 2008 resolved to set the upper limit of the total
remuneration for all Directors at ¥300,000 thousand per year and the upper limit of the total remuneration for all Auditorsat ¥50,000 thousand per year.
There are currently no Directors who have concurrent employment positions.
2. Total remuneration amounts provided above include the following amount in addition to fixed monthly compensation
amounts.
- Provision for bonuses to Directors and Corporate Auditors: ¥16,950 thousand (Directors: ¥16,950 thousand)
3. With respect to the liability for retirement benefits to Directors and Corporate Auditors, the plan for retirement benefits for
Directors and Corporate Auditors was terminated at the 33rd Ordinary General Meeting of Shareholders held on June 29,
2006, and no additional provision has been recorded since then. Therefore, the balance as of March 31, 2010 (¥66,780
thousand) 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 2 outside Corporate Auditors is ¥4,800 thousand.

–8–

4.

Matters pertaining to Independent Auditors(1) Name of Independent Auditors:
Deloitte Touche Tohmatsu LLC(2) Amount of compensation and other payments for the Independent Auditors(Thousands of yen)
Item

Total payment

The amount of compensation and other payments payable tothe Independent Auditors for the reporting year
Total amount of monetary and other property benefits payable
by the Company and its subsidiaries

26,20033,062

Note: In the audit contract between the Company and the Independent Auditor, audit fees pursuant to the Company Law andthose pursuant to the Financial Instruments and Exchange Law are not clearly separated and this separation is practically
impossible. Therefore, the amount of compensation and other payments to the Independent Auditor is represented as thetotal payment.

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

–9–

5.

Matters pertaining to the development of internal control systems to ensure a properness ofoperations
The following is an overview of the development of an internal control system to ensure that theexecution of duties by Directors conforms to laws and regulations and the Articles of Incorporation
as well as other systems that ensure the properness of operations of the Company.
a.

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

b.

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

c.

Regulations and other systems for the management of the risk of loss
For compliance, environmental protection, responses to disasters, information security, export
management and other items, the department responsible for risk management for each item prepares rules
and manuals and conducts training programs. The Board of Directors and Executive Meeting receive
information about these activities in a timely manner. There is a framework under the supervision of the
President and Representative Director for taking quick and appropriate actions to avoid problems or reduce
the likelihood that they will occur.

d.

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

e.

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

f.

Matters concerning a system for employees in cases where Corporate Auditors issue
requests for the assignment of said employees to assist them with their duties as well as
concerning the independence of said employees from Directors
There are currently no employees who assist Corporate Auditors. However, the Corporate Auditors can
ask employees of the Internal Auditing Department to perform auditing tasks as required. In addition,
employees who receive the required order from a Corporate Auditor to perform auditing tasks will nolonger be subject to instructions or orders from Directors and managers of the Internal Auditing
Department.

g.

System for reporting to Corporate Auditors by Directors and employees and other systems
concerning reports to Corporate Auditors
Corporate Auditors attend important meetings and receive reports as needed to monitor the status ofbusiness operations. Directors and employees must promptly submit to the Corporate Auditors reports
concerning legally required matters as well as reports about other items that can have a significant effect on– 10 –

the Company or the Group.

h.

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

6.

Policy concerning decisions on the dividends of surplus
The Yushin Group manages its businesses considering the return of profits to shareholders as one of
its important managerial issues.
To that effect, it is the basic policy of the Company to proactively return profits to shareholders bymaintaining a stable operational base, improve its ROE and effectuate dividends based on theperformance results of each respective fiscal year.
For this fiscal year, a full-year dividend is ¥20 per share, comprising an interim dividend of ¥10 per
share and a year-end dividend of ¥10 per share.
.

– 11 –

Consolidated Balance Sheets(As of March 31, 2012)(Thousands of yen)Account

AmountAccount

ASSETS
Current assets

AmountLIABILITIES
16,964,191

Current liabilities

3,728,298

Cash and cash equivalents

7,747,068

Trade notes and accounts payable

2,314,053

Trade notes and accounts
receivable

4,670,510

Accounts payable – other468,424

Securities

300,000

Expenses payable

97,287

Finished goods

898,193

Income tax payable

300,968

Work-in-process

856,105

Advances by customers

209,459

Accrued employees’ bonuses

180,000

Raw material and Supplies

1,861,430

Prepaid expenses

56,813

Accrued bonuses to directors andcorporate auditors

16,950

Deferred tax assets

365,173

Warranty reserve

104,897

Other

227,019

Deferred tax liabilities

3,465

Allowance for doubtful accounts(18,123)

Other

32,791

Fixed assets

5,677,481

Property, plant and equipment

977,399

Structures

17,496

Machinery and equipment

21,011

Vehicles

16,653126,030

Liability for retirement benefits todirectors and corporate auditors

66,780Other59,250Total Liabilities

3,854,328

5,105,195

Buildings

Furniture and fixtures

Long-term liabilities

NET ASSETS

131,065

Shareholders’ equity

19,287,162

3,935,369

Common stock

1,985,666

Leased assets

2,988

Capital surplus

2,023,903

Construction in progress

3,211

Retained earnings

15,625,496

81,147

Treasury stock – at cost

(347,903)

Land

Intangible assets

Software

8,426

Cumulative total of consolidated othercomprehensive income
Unrealized gain on available-forsale securities
Foreign currency translation
adjustments

Others60,594

Minority interests

Telephone subscription right
Right of trademark

11,430695

Investments and other assets

491,139

Investment securities

241,443

Deferred tax assets

16,865

Other271,419

Allowance for doubtful accounts(38,589)

Total Assets

22,641,673– 12 –(533,596)
47,576(581,173)
33,778

Total Net Assets

18,787,344

Total Liabilities and Net Assets

22,641,673

Consolidated Statements of Income(From April 1, 2011 to March 31, 2012)(Thousands of yen)Account

AmountNet sales

14,240,008

Cost of sales

8,810,071

Gross profit

5,429,937

Selling, general and administrative expenses

4,157,042

Operating income

1,272,895

Non-operating income
Interest and dividend income

31,556

Purchase discounts

10,077

Other

27,223

68,856

Non-operating expenses
Sales discounts

453

Foreign exchange loss

71,910

Other

3,647

Ordinary income

76,011
1,265,740

Extraordinary income
Gain on sales of tangible fixed assets

1,662

Gain on sales of investment in securities

627

2,290

Extraordinary expenses
Loss on sales & disposal of tangible fixed assets

2,350

Loss on revaluation of investment in securities

588

Income before income taxes and minority interests

2,938
1,265,092

Income taxes
Current

504,481Deferred(20,135)

Income before minority interest

780,746

Minority interests

2,462

Net income

778,283– 13 –

Consolidated Statements of Changes in Net Assets(From April 1, 2011 to March 31, 2012)(Thousands of yen)
Shareholders’ equity

Balance as of April 1, 2011

Common stock

Capital surplus

1,985,666

2,023,903

Retainedearnings
15,249,493

Treasury stock– at cost

Total
shareholders’equity(347,208)

18,911,854

Changes in the current period
Dividends of surplus(402,280)(402,280)

Net income

778,283

778,283

Acquisition of treasury stock

(694)

(694)

Changes in items other thanshareholders’ equity, net
Total changes in the current
periodBalance as of March 31, 2012--

376,002(694)

375,308

1,985,666

2,023,903

15,625,496(347,903)

19,287,162

Cumulative balance of consolidated othercomprehensive income

Balance as of April 1, 2011

Net unrealized
gain (loss) on
available-forsale securities

Foreigncurrencytranslation
adjustments

Cumulative
total ofconsolidated
othercomprehensive
income51,056(503,005)(451,949)

Minority
interests

35,898

Total net assets

18,495,803

Changes in the current period
Dividends of surplus(402,280)

Net income

778,283

Acquisition of treasury stock
Changes in items other thanshareholders’ equity, net(694)(3,479)(78,168)(81,647)(2,119)(83,767)

Total changes in the current
period(3,479)(78,168)(81,647)(2,119)291,540

Balance as of March 31, 2012

47,576(581,173)(533,596)

33,77818,787,344– 14 –

1.

Basis of preparing Consolidated Financial Statements(1) Scope of consolidation
All 11 subsidiaries of the company, provided below, fall within the scope of consolidation.
Yushin Precision Equipment (Slovakia) s.r.o., which was a consolidated subsidiary at the end of
previous fiscal year, was liquidated in October 2011, therefore, excluded from the scope of
consolidation. The statement of income up to its liquidation is consolidated.

List of Subsidiaries
Yushin America, Inc.
Yushin Korea Co., Ltd.
Yushin Precision Equipment (Singapore) Pte. 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.
(2) Application of the equity method
There is no non-consolidated subsidiary or affiliate company.

(3) Fiscal year of subsidiaries
The account closing date for all consolidated subsidiaries is December 31.
Financial statements as of said date are used in preparation of the Consolidated Financial
Statements. However, adjustments considered necessary for consolidation are effectuated withrespect to material transactions occurring during the period between the day after the accountclosing date of the subsidiaries and the consolidated account closing date.

– 15 –

(4) Accounting policies
a. Valuation of important assetsi) Securities
Available-for-sale securities classified as other securities- Securities with available fair market values are reported at fair value on the consolidated
account closing date
(Unrealized gains or losses, net of applicable taxes, reported in a separate component of equity.
The cost of securities sold is principally determined by the moving average method)ii) Derivatives: Fair value methodiii) Inventories- Merchandise and finished goods, work-in-process
Principally 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
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
Machinery and equipment:
5-12 years
ii)

Intangible assets (excluding leased assets)- Software used internally: Straight-line method based on the expected useful lives- Other intangible assets:
Straight-line methodiii) 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. Out of leased assets under non-ownership transfer finance lease transactions, leasetransactions which were started before March 31, 2008 are accounted for as operating lease.

c. Estimation on important allowance and reservesi) Allowance for doubtful accounts:
To provide for possible bad debt losses, the amount deemed unrecoverable is accounted using
the loan loss ratio based on past experience for general claims and by examining the possibilityof recovery on an individual basis for specific claims with default possibility.
ii) Accrued employees’ bonuses:
In order to allocate the payment of employees’ bonuses, the Company provides the amountsubject to the fiscal year under review among the total estimated amount to be paid as
employees’ bonuses.
iii) Accrued bonuses to directors and corporate auditors:
The Company provides the projected payment amount to be allocated for the payment ofbonuses to directors and corporate auditors.
iv) Warranty reserve:
To provide for expenses incurred for free repairs related to product sales, an amount isaccounted based on historical experience.
v) Liability for retirement benefits to directors and corporate auditors:
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, 2012– 16 –

is provided in proportion to the term that present directors had been in their respective
positions before June 2006.
d. Employees’ retirement benefits
To provide for employees’ retirement benefits, based on the projected benefit obligations at yearend and the pension asset balance, the amount of pension assets surplus to projected benefit
obligations is recorded in the “Other” field under “Investments and other assets”. The net
actuarial loss or gain is subject to amortization from the next fiscal year of the recognition thereof
onward 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 orgain in each fiscal year.
e. Other significant matter for the preparation of Consolidated Financial Statements
Consumption tax and local consumption tax are accounted for using the tax excluded method.
(5) Additional Information(Application of Accounting Standard for Accounting Changes and Error Corrections)With regard to any accounting changes or corrections to previous errors that are made after the
beginning of the current fiscal year under review, the “Accounting Standard for Accounting Changes
and Error Corrections” (Accounting Standard – ASBJ Statement No. 24 dated December 4, 2009) andthe “Guidance on the Accounting Standard for Accounting Changes and Error Corrections”(Implementation Guidance – ASBJ Statement No. 24 dated December 4, 2009) have been applied.

– 17 –

2.

Notes to Consolidated Balance Sheet(1) Accumulated depreciation of property, plant and equipment:¥3,117,298thousand(2) Notes payable on the closing date handled for settlement on exchange dates. The closing day of thisfiscal year was a day when financial institutions are closed, and therefore the following note payable on
the closing date is included in the balance at the end of the period.
Trade notes receivable¥94,219 thousand
Trade notes payable¥78,587 thousand

3.

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

Number of shares atthe end of previous FY

Common stock

Number of increased
shares of current FY

Number of decreased
shares of current FY

Number of shares atthe end of current FY--

17,819,033

Number of increased
shares of current FY

Number of decreased
shares of current FY

Number of shares atthe end of current FY

463-

328,960

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

Number of shares atthe end of previous FY

Common stock

328,497

Note: The increase in the number of shares of treasury stock (463 shares) is due to the purchase of shares of less than one unit.

(3) Dividends of surplus
a. Payment of dividends
Resolution
The Board of Directors’Meeting on May 11, 2011
The Board of Directors’Meeting on November 7,
2011Class of shares

Total dividend(Thousands ofyen)

Dividend per
share
(Yen)

Common stock

227,376

13

March 31,2011

June 14,2011

Common stock

174,90310September 30,
2011

December 5,
2011

Record date

Effective dateb. Dividends whose record date falls within this consolidated fiscal year but comes into effectin the next consolidated fiscal year
Resolution
The Board of
Directors’ Meetingon May 9, 2012

Class ofsharesCommonstock

Total dividend(Thousands ofyen)
174,900

Dividend
funds
Retainedearnings– 18 –

Dividend per
share
(Yen)
10

Record date

Effective date

March 31,2012

June 13,2012

4.

Notes to Financial Instruments(1) Conditions of financial instruments
a. Management policy
The Yushin Group has a policy of limiting investments of unused funds to short-term time
deposits, certificates of deposits and similar instruments and never using these funds for speculation.
Internal resources are used to meet all working capital requirements. Derivative instruments may be
used to hedge 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 trade notes and accounts receivable are generally exposed tothe credit risk of customers, while foreign currency denominated operating receivables at foreign
operations are exposed also to the foreign exchange risk.
Investment securities, which are available-for-sale securities, are exposed to risk associated withmarket price volatility.
Operating debt consisting of trade notes and accounts payable are largely due four months or less.
c. Risk management system for financial instruments
Payment dates and balances of outstanding are supervised for each customer based on rules forthe management of trade receivables and credit. In addition, there is a system for monitoring thefinancial soundness of customers.
For investment securities, there are measures to periodically monitor the fair values of thesesecurities and the financial soundness of issuers of these securities.
(2) Fair value of financial instruments
The carrying value on the consolidated balance sheets, fair value, and their differences as of March
31, 2012 are shown as follows.

(1)
(2)
(3)

(1)
(2)
(3)

Carrying value(¥thousands)

Fair value(¥thousands)

7,747,068
4,670,510

7,747,068
4,670,510-

Other securities

541,443

541,443-

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

12,959,022
2,314,053
468,424
300,968
3,083,446

12,959,022
2,314,053
468,424
300,968
3,083,446-

Cash and time deposits
Trade notes and accounts receivable
Securities and investment securities
Available for-sale securities

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

– 19 –

(3) The amount of money claims and mature marketable securities scheduled to be redeemed
subsequent to the consolidated balance sheet date, and the scheduled repayment of interest-bearing
debt
Due within
one year(¥thousands)

Due after one
year throughfive years(¥thousands)

Due after five
years throughten years(¥thousands)

Due after ten
years(¥thousands)

Cash and time deposits
Trade notes and accounts receivable
Securities
Of which available-for-salesecurities with maturity

7,747,068
4,670,510---

300,000

-

-

-

Total

12,717,579

-

-

-

.
5.

Per share information- Net assets per share:- Net income per share:¥1,072.24¥44.50Note: Amounts less than one thousand yen are truncated.

– 20 –

Balance Sheets(As of March 31, 2012)(Thousands of yen)Account

AmountAccount

ASSETS
Current assets
Cash and cash equivalents
Trade notes
Trade accounts receivable

AmountLIABILITIES
15,605,091

Current liabilities

3,447,813

6,637,411

Trade notes

428,584

851,215

Trade accounts payable

4,932,879

Lease obligations

1,863,458
801

Securities

300,000

Accounts payable – other467,409

Finished products

526,833

Accrued expenses

67,655809,915

Income tax payable

282,400

Advances by customers

37,567Work in progress
Raw materials and supplies

1,217,801

Prepaid expenses

26,019Deposits received

11,202

Consumption tax receivable

98,815

180,000

Deferred tax assets

191,109

Other

24,590Accrued employees’ bonuses
Accrued bonuses to directors andcorporate auditors
Warranty reserve

Allowance for doubtful accounts(11,500)

Fixed assets

6,363,061

Property, plant and equipment

4,780,964

Buildings

820,852

Structures

17,496

Machinery and equipment

10,879VehiclesFurniture and fixtures
Land

Notes payable-equipment
Long-term liabilities
Lease obligations
Liability for retirement benefits todirectors and corporate auditors
Guarantee deposit

16,95091,200583
69,691
2,371
66,780540

281
93,824

Total Liabilities

3,517,504

3,831,429

Leased assets
Construction in progress
Intangible assets
Telephone subscription right
Trademark right
Software

2,988

NET ASSETS

3,211

Shareholders’ equity

18,403,072

19,803

Common stock

1,985,666

11,430Capital surplus

2,023,903

695

Legal capital surplus

7,677

Retained earnings

2,023,903
14,741,405

Investments and other assets

1,562,293

Legal retained earnings

286,314

Investment securities
Stocks of subsidiaries andaffiliates
Investments

241,443

14,455,090

Investments in affiliates

267,132

Other retained earnings
Reserve for dividend
equalization
General reserve
Retained earnings brought
forwardTreasury stockLong-term loans receivable

767,878
170

32

Guarantee deposits

28,764

Reorganization claims

38,589Deferred tax assets

67,291

Other

189,580

Allowance for investments loss

(38,589)

Total Assets

21,968,153

Valuation and translation adjustments
Net unrealized gain (loss) on
available-for-sale securities

Total Net Assets– 21 –

Total Liabilities and Net Assets

1,000,000
8,700,000
4,755,090(347,903)
47,57647,576

18,450,648
21,968,153

Statements of Income(From April 1, 2011 to March 31, 2012)(Thousands of yen)Account

AmountNet sales

13,104,791

Cost of sales

8,668,905

Gross profit

4,435,886

Selling, general and administrative expenses

3,480,897

Operating income

954,988

Non-operating income
Interest and dividend income

126,351

Purchases discounts

10,077

Other

20,045

156,473

Non-operating expenses
Sales discounts

453

Foreign exchange losses

3,443

Other

8

Ordinary income

3,905
1,107,557

Extraordinary income
Gain on sales of investment in securities

627

627

Extraordinary expenses
Loss on disposal and sales of tangible fixed assets
Loss on valuation of investments in securities

2,318
588
8,079

Loss on valuation of affiliates’ shares

Income before income taxes

10,986
1,097,198

Income taxes
Current

399,791

Deferred(2,517)

Net income

699,924– 22 –

Statements of Changes in Net Assets(From April 1, 2011 to March 31, 2012)(Thousands of yen)
Shareholders’ equity
Capital surplus

Retained earnings
Other retained earnings

Commonstock

Total
retainedearnings

Legal capitalsurplus

Total capitalsurplus

Legal retained
earnings

Dividend
equalization
fund

Other reserve
fund

Retainedearnings
brought
forward2,023,903

2,023,903

286,3141,000,000

8,700,000

4,457,446

14,443,761

Dividends of surplus(402,280)(402,280)

Net income

699,924

699,924

Balance as of April 1, 2011

1,985,666

Changes in the current period

Acquisition of treasury stock
Changes in items other thanshareholders’ equity, net
Total changes in the current
periodBalance as of March 31, 20012

-

-

-

-

-

-

297,643

297,643

1,985,666

2,023,903

2,023,903

286,3141,000,000

8,700,000

4,755,090

14,741,405

Shareholders’ equity

Treasury stock

Balance as of April 1, 2011

(347,208)

Valuation and translation adjustments

Total shareholders’equityNet unrealized gain
(loss) on availablefor-sale securities

Total valuation andtranslation
adjustments

18,106,122

51,05651,056

Total net assets

18,157,178

Changes in the current period
Dividends of surplus(402,280)(402,280)

Net income

699,924

699,924

(694)

(694)

Acquisition of treasury stock(694)

Changes in items other thanshareholders’ equity, net
Total changes in the current period
Balance as of March 31, 20012(3,479)(3,479)(3,479)(694)

296,949(3,479)(3,479)293,469(347,903)

18,403,072

47,57647,576

18,450,648– 23 –

1.

Summary of significant accounting policies(1) Valuation of important assets
a. Stocks of subsidiaries and affiliates
Carried at cost determined by the moving average method
b. Available-for-sale securities classified as other securities- Securities with available fair market values are reported at fair value on the closing date
(Unrealized gains or losses, net of applicable taxes, reported in a separate component of equity.
The cost of securities sold is principally determined by the moving average method)c. Inventories- Finished products and 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
Machinery and equipment:
12 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
value as 0. Out of leased assets under non-ownership transfer finance lease transactions, leasetransactions which were started before March 31, 2008 are accounted for as operating lease.

(3) Estimation on allowance and reserves
a. Allowance for doubtful accounts:
To provide for possible bad debt losses, the amount deemed unrecoverable is accounted using
the loan loss ratio based on past experience for general claims and by examining the possibilityof recovery on an individual basis for specific claims with default possibility.
b. Accrued employees’ bonuses:
In order to allocate the payment of employees’ bonuses, the Company provides the amountsubject to the fiscal year under review among the total estimated amount to be paid as
employees’ bonuses.
c. Accrued bonuses to directors and corporate auditors:
The Company provides the projected payment amount to be allocated for the payment ofbonuses to directors and corporate auditors.
d. Warranty reserve:
To provide for expenses incurred for free repairs related to product sales, an amount isaccounted based on historical experience.
e. Liability for retirement benefits to directors and corporate auditors:
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, 2012is provided in proportion to the term that present directors had been in their respective
positions before June 2006.

– 24 –

(4) Employees’ retirement benefits
To provide for employees’ retirement benefits, based on the projected benefit obligations at yearend and the pension asset balance, the amount of pension assets surplus to projected benefit
obligations is recorded in the “Other” field under “Investments and other assets”. The net
actuarial loss or gain is subject to amortization from the next fiscal year of the recognition thereof
onward 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 orgain in each fiscal year.
(5) Other basic significant matter for the preparation of Financial Statements
Consumption tax and local consumption tax are accounted for using the tax excluded method.
(6) Additional Information(Application of Accounting Standard for Accounting Changes and Error Corrections)With regard to any accounting changes or corrections to previous errors that are made after the
beginning of the current fiscal year under review, the “Accounting Standard for Accounting Changes
and Error Corrections” (Accounting Standard – ASBJ Statement No. 24 dated December 4, 2009) andthe “Guidance on the Accounting Standard for Accounting Changes and Error Corrections”(Implementation Guidance – ASBJ Statement No. 24 dated December 4, 2009) have been applied.
2.

Notes to Balance Sheet(1)Accumulated depreciation of property, plant and equipment:¥2,722,231 thousand(2) Notes payable on the closing date handled for settlement on exchange dates. The closing day of thisfiscal year was a day when financial institutions are closed, and therefore the following note payable on
the closing date is included in the balance at the end of the period.
Trade notes receivable¥94,219 thousand
Trade notes payable¥78,587 thousand(3) Monetary credit and debts to affiliates
a. Short-term monetary credit:¥1,985,653 thousandb. Short-term monetary debts:¥53,942 thousand

3.

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:¥3,399,576 thousand¥11,847 thousand¥214,239 thousand¥107,726 thousand

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

Common stock

Number of shares atthe end of previous FY

Number of increased
shares of current FY

Number of decreased
shares of current FY

Number of shares atthe end of current FY

463-

328,960

328,497

Note: The increase in the number of shares of treasury stock (463 shares) is due to the purchase of shares of less than one unit.

– 25 –

5.

Notes on tax-effect accounting(1) Breakdown by cause of deferred tax assets and liabilities
Deferred tax assets
Inventories
Depreciation of Buildings
SoftwareAccrued employees’ bonuses
Accrued enterprise taxes
Warranty reserve
Liability for retirement benefits to directors and corporate auditors
Other
Subtotal deferred tax assets
Valuation reserve
Total deferred tax assets
Deferred tax liabilities
Prepaid pension costs
Marketable securities valuation difference - otherTotal deferred tax liabilities
Net deferred tax assets(Thousands of yen)
52,09337,22364,057
68,58023,09334,747
23,70623,936
327,438(23,706)
303,731
23,174
22,15545,329258,401

Note: Net deferred tax assets are included in following balance sheet items.
(Thousands of yen)
Current assets
191,109
Fixed assets
67,291(2) Change in deferred tax assets and income taxes-deferred due to the change in corporate tax
rates.
Following the promulgation on December 2, 2011 of the “Act for Partial Revision of the Income
Tax Act etc. for the Purpose of Creating Taxation System Responding to Changes in Economic
and Social Structures” (Act No.114 of 2011) and the “Act on Special Measures for Securing
Financial Resources Necessary to Implement Measures for Reconstruction following the Great
East Japan Earthquake” (Act No.117 of 2011), corporate income tax rates will be reduced andspecial corporate tax for funding the recovery from the disaster will be imposed for the fiscal year
beginning on or after April 1, 2012.
With this change of tax rates, the amount of deferred tax assets (the amount minus deferred tax
liabilities) decreased by ¥13,735 thousand and the amount of income taxes-deferred increased by¥16,072 thousand.

– 26 –

6.

Notes on fixed assets leased by the Company(1)In addition to the fixed assets accounted in the Balance Sheet, some business machines are used
under finance lease agreements where the transfer of ownership of the leased property to the lessee
is not effectuated.
a. Acquisition cost equivalent on the closing date, accumulated depreciation equivalent and yearend balance equivalent(Thousands of yen)
Acquisition costequivalent

Accumulated
depreciation equivalentYear-end balance
equivalent

Furniture and Fixtures

3,813

3,609

203

Total

3,813

3,609

203

b. Future leasing expense equivalents on the closing dateYear-end balance equivalents of future leasing expense
Within 1 year
Total

(Thousands of yen)203203(2) Operating leases
Year-end balance equivalents of future leasing expense
Within 1 year
Total

(Thousands of yen)
1,528
1,528

– 27 –

7.

Transactions with related parties
Subsidiaries, etc.

Type

Subsid
iary

Name

%
of
votingrights held

Relationship
Concurrent
directors,
etc.
Concurrent
directors: 2

YushinAmerica,Inc.

100%
Directly
held by theCompany

YushinKorea Co.,
Ltd.

100%
Directly
held by theCompany

Concurrent
directors: 2

YushinPrecision
Equipment(Thailand)Co., Ltd.

49%
Directly
held by theCompany

Concurrent
directors: 1

Guang Zhou
YushinPrecision
Equipment
Co., Ltd.

100%
Directly
held by theCompany

Concurrent
directors: 3

BusinessrelationshipTypeoftransactions

Transaction
amountAccount

Year-endbalance(¥thousands)(¥thousands)

Saleof
Company
products andmanufactureand sale oflabor saving
machines
Saleof
Company
products andmanufactureand sale oflabor saving
machines
Saleof
Company
products andmaintenanceserviceSaleofproducts

1,039,341

Accounts
receivable-trade366,207

Saleof
products

513,005

Accounts
receivable-trade299,831

Saleof
products

734,829

Accounts
receivable-trade461,074

Manufactureof Company
products

Saleofproducts

589,452

Accounts
receivable-trade587,525

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:¥1,054.92¥40.02

Note: Amounts less than one thousand yen are truncated.

– 28 –

(TRANSLATION PURPOSE ONLY)[Certified copy of the Independent Auditors’ Report concerning consolidated statutory report]

Independent Auditors’ Report
May 18, 2012
To the Board of Directors of
Yushin Precision Equipment Co., Ltd.:
Deloitte Touche Tohmatsu LLC
Takeshi Nishimura, CPA [SEAL]
Limited, Designated andEngagement Partner
Hiroyuki Kobayashi, CPA [SEAL]
Limited, Designated andEngagement Partner
We have audited the consolidated statutory report, namely, the Consolidated Balance Sheets, theConsolidated Statements of Income, the Consolidated Statements of Changes in Net Assets and its
supporting schedule and notes, of Yushin Precision Equipment Co., Ltd. (the “Company”) for the fiscal
year from April 1, 2011 to March 31, 2012 in accordance with Paragraph 4, Article 444 of the Company
Law.
Management’s responsibility for the consolidated statutory reportManagement is responsible for the preparation and fair presentation of these Consolidated financial
statements in accordance with auditing standards generally accepted in Japan. This includes thedevelopment and implementation of internal control deemed necessary by management for the
preparation and fair presentation of Consolidated financial statements that is free from material
misstatement, whether due to fraud or error.
Independent auditor’s responsibility
Our responsibility is to express an opinion on the Consolidated financial statements based on our audits
as independent auditors. We conducted our audits in accordance with auditing standards generally
accepted in Japan. Those auditing standards require that we plan and perform the audit to obtainreasonable assurance about whether the Consolidated financial statements is free from material
misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in
the Consolidated financial statements. The audit procedures selected and applied depend on our
judgment, including the assessment of the risks of material misstatement of the Consolidated financial
statements, whether due to fraud or error. The purpose of an audit is not to express an opinion on theeffectiveness of the entity’s internal control. However, in making those risk assessment, we consider
internal control relevant to the entity’s preparation and fair presentation of the Consolidated financial
statements in order to design audit procedures that are appropriate in the circumstances. An audit also
includes evaluating the appropriateness of accounting policies used, the method of their application, andthe 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 opinion.
Audit opinion
In our opinion, the consolidated statutory report referred to above presents fairly, in all material respects,
the consolidated financial position and the results of operations of Yushin Precision Equipment Co., Ltd.
and its consolidated subsidiaries for the period for which the consolidated statutory report is prepared, inconformity with accounting principles generally accepted in Japan.
Interests in the Company
Our firm and engagement partners have no interest in Yushin Precision Equipment Co., Ltd., whichshould be disclosed pursuant to the provisions of the Certified Public Accountants Law of Japan.

– 29 –

(TRANSLATION PURPOSE ONLY)[Certified copy of the Independent Auditors’ Report concerning non-consolidated statutory report]

Independent Auditors’ Report
May 18, 2012
To the Board of Directors of
Yushin Precision Equipment Co., Ltd.:
Deloitte Touche Tohmatsu LLC
Takeshi Nishimura, CPA [SEAL]
Limited, Designated andEngagement Partner
Hiroyuki Kobayashi, CPA [SEAL]
Limited, Designated andEngagement Partner

We have audited the statutory report, namely, the Balance Sheets, the Statements of Income, theStatements of Changes in Net Assets and its supporting schedule of Yushin Precision Equipment Co.,
Ltd. (the “Company”) for the fiscal year from April 1, 2011 to March 31, 2012 in accordance with Item 1,
Paragraph 2, Article 436 of the Company Law.
Management’s responsibility for the statutory reportManagement is responsible for the preparation and fair presentation of these financial statements and its
supporting schedule in accordance with auditing standards generally accepted in Japan. This includes thedevelopment and implementation of internal control deemed necessary by management for the
preparation and fair presentation of financial statements and its supporting schedule that is free frommaterial misstatement, whether due to fraud or error.
Independent auditor’s responsibility
Our responsibility is to express an opinion on the financial statements and its supporting schedule basedon our audits as independent auditors. We conducted our audits in accordance with auditing standards
generally accepted in Japan. Those auditing standards require that we plan and perform the audit toobtain reasonable assurance about whether the financial statements and its supporting schedule is freefrom material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in
the financial statements and its supporting schedule. The audit procedures selected and applied depend
on our judgment, including the assessment of the risks of material misstatement of the financial
statements and its supporting schedule, whether due to fraud or error. The purpose of an audit is not to
express an opinion on the effectiveness of the entity’s internal control. However, in making those risk
assessment, we consider internal control relevant to the entity’s preparation and fair presentation of thefinancial statements and its supporting schedule in order to design audit procedures that are appropriate
in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used,
the method of their application, and the reasonableness of accounting estimates made by management, as
well as evaluating the overall presentation of the financial statements and its supporting schedule.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis forour opinion.
Audit opinion
In our opinion, the financial statements and its supporting schedule referred to above presents fairly, inall material respects, the financial position and the results of operations of Yushin Precision Equipment
Co., Ltd. for the period for which the financial statements and its supporting schedule is prepared, inconformity with accounting principles generally accepted in Japan.
Interests in the Company
Our firm and engagement partners have no interest in Yushin Precision Equipment Co., Ltd., whichshould be disclosed pursuant to the provisions of the Certified Public Accountants Law of Japan.

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(TRANSLATION PURPOSE ONLY)<Certified copy of the audit report concerning non-consolidated statutory report>

Audit Report
Regarding the performance of duties by the Directors for the fiscal year from April 1, 2011 to March 31,
2012, the Board of Corporate Auditors hereby submits its audit report, which has been prepared throughdiscussions based on the audit report prepared by each Corporate Auditor.
1.

Auditing Methods adopted by the Corporate Auditors and Board of Corporate Auditors and Details
of Such Methods
The Board of Corporate Auditors established auditing policies, allocation of duties, and otherrelevant matters, and received reports from each Corporate Auditor regarding his or her audits andresults thereof, as well as received reports from the Directors, other relevant personnel, andindependent auditors regarding performance of their duties, and requested explanations as necessary.
Each Corporate Auditor complied with the auditing standards of Corporate Auditors established by
the Board of Corporate Auditors, followed the auditing policies, allocation of duties, and otherrelevant matters, communicated with the Directors, the internal audit department, other employees,
and any other relevant personnel, and made efforts to optimize the environment for informationcollection and audit, and participated in the Board of Directors’ Meetings and other important
meetings, received reports from the Directors, employees, and other relevant personnel regarding
performance of their duties, requested explanations as necessary, examined important authorized
documents and associated information, and studied the operations and financial positions at the head
office and principal offices.
In addition, we received periodic reports and requested explanations as necessary from the Directors,
other relevant personnel and expressed our opinion about conditions of construction and applicationon the content of the resolution of the Board of directors and system actually placed as“internal control system” in accordance to this resolution, which is stipulated in Paragraphs
1 and 3of Article 100 of the Enforcement Regulation of Corporate Act as a system required
to ensure the compliance of laws and the Articles of Associations in the execution ofbusinesses by directors written in the business report.
With respect to subsidiaries, we communicated and exchanged information with Directors,
Corporate Auditors, and other relevant personnel of the subsidiaries, and received business reports
from subsidiaries as necessary. Based on the above methods, we examined the business report andsupporting schedules related to the relevant business year.
Furthermore, we monitored and verified whether the independent auditors maintained their
independence and implemented appropriate audits, and we received reports from the independent
auditors regarding the performance of their duties and requested explanations as necessary. In
addition, we received notice from the independent auditors that “the system for ensuring that duties
are performed properly” (matters set forth in each Item of Article 131 of the Company Accounting
Rules) is appropriately established in accordance with “Quality Control Standard on Audit”(Business Accounting Council, October 28, 2005) and requested explanations as necessary.
Based on the above methods, we examined the non-consolidated financial statements (Balance
Sheets, Statements of Income, and Statements of Changes in Net Assets) and supporting schedules,
and the consolidated financial statements (Balance Sheets, Statements of Income, and Statements of
Changes in Net Assets).

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2.
a.

Audit Results
Results of Audit of Business Report and Other Relevant Documents(1) In our opinion, the business report and supporting schedules are in accordance with therelated laws and regulations and Articles of Incorporation, and fairly represent theCompany’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
with respect to the Articles of Incorporation.
(3) In our opinion, resolutions of the Board of Directors for the internal controls system arefair. And also the contents of the business report about the internal controls system and the
director’s activities and implementation of internal control system have no issues to be
pointed out.

b.

Results of Audit of Financial Statements and Supporting Schedules
In our opinion, the methods and results employed and rendered by the independent auditors,
Deloitte Touche Tohmatsu LLC, are fair and reasonable.

c.

Results of Audit of Consolidated Financial Statements
In our opinion, the methods and results employed and rendered by the independent auditors,
Deloitte Touche Tohmatsu LLC, are fair and reasonable.

May 21, 2012
Board of Corporate Auditors,
Yushin Precision Equipment Co., Ltd.
Standing Corporate Auditor
Outside Corporate Auditor
Outside Corporate Auditor– 32 –

Shujiro Sawada [SEAL]
Yasuhiro Orita [SEAL]
Takao Yoshikawa [SEAL]Reference Documents for the General Meeting of Shareholders
Proposal 1 : Election of Five (5) Directors
The terms of office of all the currently serving five (5) Directors will expire at the conclusion of thisMeeting. Consequently, for the purpose of strengthening the Company’s management foundation,
shareholders are asked to vote for these five candidates for director.
The candidates for the position of Directors are as follows: five
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
March 2011
April 2005

2

Satoshi Kimura(April 1, 1954)

October 2005
April 2006
June 2006
June 2008
March 2010
December 2004
February 2005
March 2005
October 2005

3

Yasuharu Odachi(July 31, 1958)

April 2006
April 2008
June 2008
June 2011
April 2008

4

Yuji Tsujimoto(March 25, 1952)

June 2008
June 2009
June 2010

Joined the Company
Director
Executive Vice President and Director
Executive Vice President and Director, Head of Sales
H.Q.
President and Representative Director
President and Head of Sales and Customer Service
H.Q.
President and Representative Director
To the present
Joined the Company as Executive Officer andGeneral Manager of Purchase Dept.
Executive Officer and Head of Purchase Dept.
Senior Executive Officer and Head of Purchase H.Q.
Managing Director and Head of Purchase H.Q.
Executive Managing Director and Head of Purchase
H.Q.
Executive Managing Director
To the present
Joined the Company
General Manager of Production Technology Dept.
General Manager of Research & Development Dept.
Head of Research & Development Dept. and Quality
Assurance Dept.
Executive Officer and Head of Research &Development H.Q. and Quality Assurance Dept.
Executive Officer and Head of Research &Development H.Q.
Director and Head of Research & Development H.Q.
Managing Director and Head of Research &Development H.Q.
To the present
Joined the Company
Standing Corporate Auditor
Director and Head of General Affairs Dept.
Director and Head of Administrative H.Q. andGeneral Affairs Dept.
To the present

Number ofshares held

2,239,901
shares1,100 shares

2,100 shares

1,000 shares

September 2007
November 2007
April 2008

Joined the Company
Deputy Head of Manufacturing Dept.
Deputy Head of Manufacturing Dept. and Head of
Quality Assurance Dept.
Executive Officer, Deputy Head of Manufacturing
April
2009
5
Yasushi Kitagawa
Dept. and Head of Quality Assurance Dept.
(August 12, 1958)
Executive Officer, Head of Manufacturing Dept. andAugust 2009
Head of Quality Assurance Dept.
Director and Head of Manufacturing Dept. and Head
June 2010of Quality Assurance Dept.
To the present
Note: Candidates for Directors have no special interests in the Company.

– 33 –

1,200 shares

Proposal 2 : Election of One (1) Corporate Auditor
To enhance the auditing system, we would like to increase one (1) Corporate Auditor in addition to
currently serving three (3) Corporate Auditors.
Accordingly, we propose to elect one (1) Corporate Auditor.
The Board of Corporate Auditors has consented to this proposition.
The candidate for the position of Corporate Auditor is as follows:
No.

Name
(Date of birth)1

Hiroho Kamakura(January 27, 1947)

Career summary, position, areas of responsibility, and representation ofother organizations
November 1971

Joined Tohmatsu Aoki & Co. (currently “Deloitte
Touche Tohmatsu LLC”)

May 1973

Registered as CPA

Number ofshares held

- sharesTo the present
Notes: 1. Mr. Kamakura was involved in the accounting audit of the Company as a CPA of Deloitte Touche Tohmatsu LLC from
April 1992 to March 2001 and from April 2003 to March 2005. Currently, he retired from the operation and has no
special interests in the Company.
2. Mr. Kamakura is the candidate of outside Corporate Auditor. The reason for the nomination is that he has wide
knowledge and depthful insight in business administration which he gained from long experience as a CPA and also has
specialist knowledge in accounting. We would like to request the nomination of Mr. Kamakura in expectation of his
neutral and fair opinion on the management of the Company with his knowledge and view and his objective stance asan outside Corporate Auditor.
3. Mr. Kamakura will retire from Deloitte Touche Tohmatsu LLC on June 30, 2012 and plans to become an outside
Corporate Auditor on July 1, 2012.
4. Mr. Kamakura plans to become an outside corporate auditor of Trusco Nakayama Corporation on July 1, 2012 by theapproval of the ordinary general meeting of shareholders of Trusco Nakayama Corporation held on June 8, 2012.

– 34 –