FINANCIAL INDICATORS
Operating Income (yen in million)

Net Sales (yen in million)
2010
2009

27,19325,6262006

23,255

2009

2008

2,380

2007

2,448

2006

2,510

ANNUAL REVIEW 2010
For the Year Ended March 31, 2010

Total Assets, Net Assets (yen in million) , and ROE(%)

Net Income (yen in million)
452

2010

516

2009

23,473

2008
2007

987

2010

19,884

2010

319

2009

28,685

18,6972.7

26,587

17,158

1.7

2008

1,884

2008

22,706

2007

1,834

2007

22,269

1,608

2006

2006

20,454

Total assets

Net assets

8.1

8.7

8.8 32,839

33,47332,059ROE

CORPORATE DATA (as of March 31, 2010)34-16, 2-chome, Chidori, Ota-ku, Tokyo 146-8510, Japan
Phone: (03) 3750-3100 Fax: (03) 3750-9915 URL: http://www.yushiro.co.jp¥4,249 million
336
July 24, 1944
Tokyo, Nagoya and Osaka
Hokkaido, Tohoku, Kitakanto, Hamamatsu, Hokuriku, Fukuyama, Hiroshima and Kyushu

Head Office
Capital
Employees
Established
Branch Offices
Sales Offices

Directors and Auditors (as of June 22, 2010)

Directors

Yoshihiro Sakaguchi
Eiichi Ogo
Yasuo Chiba
Tsuneo Onda
Akitaka Nozue

Directors

Yoshiaki Nagai
Masahisa Hirobe
Tatsuharu Hyakusoku
Ryuichiro Matsuno
Yuji Kishi
Haruo Okamoto

President
Managing Directors

Standing Auditors
Auditor (CPA)

Stock Information (as of March 31, 2010)
Number of shares issued
Trading unit
Total number of shareholders
Stock listing
Securities code
Transfer agent for common stock
Independent certified public accountants
Main underwriter

The way of mutua l progr ess

15,200,065
100
5,601
First section, Tokyo Stock Exchange
5013
Mitsubishi UFJ Trust and Banking Corporation
Ernst & Young ShinNihon LLC
Nomura Securities Co., Ltd.

(millionsof yen )Market value of shares

50,00040,00030,00020,00010,0000

2004/3 2005/3 2006/3 2007/3 2008/3 2009/3 2010/3

Stock pricesTerm2009.42009.52009.62009.72009.82009.92009.10 2009.11 2009.12

2010.1

2010.2

2010.3

High

969

937

1,230

1,400

1,624

1,470

1,447

1,413

1,249

1,285

1,269

1,200

Low

780

830

896

1,236

1,380

1,250

1,226

1,120

1,121

1,140

1,034

1,052

1,518

1,624

6,295

4,622

3,763

5,049

2,503

2,738

2,795

2,728

2,664

2,230

(Yen/share)(Yen/share)

Trading volume(Hundred of shares)

PRESIDENT’S MESSAGE

Yushiro Chemical Industry Co., Ltd. has contributed to the progress andmaterial development of Japan by supplying quality oil-fat-wax (yu-shi-ro)
products. We have succeeded in developing and offering to virtually allindustrial markets such auxiliary products as metalworking oils and fluids,
polishing agents for building maintenance. To respond to the needs of theindustry, every technology we have acquired will be fed back to our R&D
process for the creation of newer technologies and products based on our
corporate ideal of “the way of mutual progress.”

Yoshiaki Nagai
PRESIDENT

Business summary
During this consolidated fiscal year, the global economy gradually began torecover from the economic downturn that followed in the wake of thefinancial crisis that erupted in the autumn of 2008. However, this recovery
was due largely to the market stimulus measures taken by many countries
including Japan, and demand trends remain uncertain even after themeasures have been taken. Consequently, conditions remain challenging.
Nonetheless, domestic demands in China and other emerging countries in
Asia are recovering rapidly, with these economies now back on a growth
track.
Under these circumstances, net sales recovered at overseas subsidiaries due torecovery in the automobile industry, which is a major consumer of our
products. In Japan too, in addition to the recovering automobile industry,
growth in cutting oils and fluids for photovoltaic cells from the second halfof the year contributed greatly to net sales.
As a result, consolidated net sales were down 15.3% year over year, to¥19,884 million.
In terms of profit, prices of materials began to rise from the second half ofthe year, leading to extremely difficult conditions. In order to secure income,we sought to further reduce fixed costs and implemented price revisions andcost cutting, resulting in a 91.1% year over year increase in consolidated
operating income, to ¥987 million. Ordinary income rose 69.1% year overyear, to ¥1,491 million due to increase in equity method derived income.
Net income rose year over year by 41.4%, to ¥452 million.

Business segment

Previous Fiscal Year
Current Fiscal Year
Increase/
April 1, 2008, through April 1, 2009, throughDecrease
March 31, 2009
March 31, 2010
Million yen%

Million yen%%

Metalworking oils andfluids business

20,00985.2

16,92985.1

84.6

Building maintenancechemicals business

1,684

7.2

1,524

7.7

90.5

Industrial waste
processing-related
business

1,779

7.6

1,429

7.2

80.4

Total

23,473100.0

19,884

100.0

84.7

M e d i u m - a n d L o n g - Te r m P l a n
This fiscal year was initially scheduled as the final year of the 15th MediumTerm Plan. In light of the harsh economic climate that followed the Lehman
Shock in the latter half of 2008, however, we decided to suspend the 15th
Medium-Term Plan and adopted a plan solely for the fiscal year ended
March 2010.
Although the next fiscal year was to be the first year of the 16th MediumTerm Plan, given the need to respond to the ongoing changes in the businessenvironment and the current paradigm shift, we have decided once again to
adopt a plan solely for the next fiscal year. We have therefore positioned thefiscal year ending March 2011 as the “first year of a new Yushiro Global,”during which we will prepare for the 16th Medium-Term Plan.
In terms of concrete strategies, we will aggressively strengthen our overseas
bases in order to open up emerging markets. In particular, we will respond to
the growing markets of China, ASEAN and India. Furthermore, in order tosecure new sources of income we plan to invest aggressively in the rapidly
growing photovoltaic cell market. We have set a goal of consolidated net salesof ¥30,000 million for the final year of the 16th Medium-Term Plan.

1

Future Issues and Challenges

Basic policy for profit distribution

Based on the basic policies of extending our technological prowess in all ofour business segments, and transforming into a global company bypromoting a consolidated management structure, the Company iscommitted to achieving a long-term sustainable growth in profits.

The Company prioritizes shareholder returns and seeks to maintain a properbalance between returns through the dividends payments and investments
for continued growth.

To realize this aim, it is vital to actively tackle the following issues:
1. Reinforce corporate governance as a corporate group.
2. Reinforce participation in management of group companies.
3. Create cost structures that can respond to changes in prices of materials.
4. Respond to the overseas expansion of the automobile industry, which is
the major user of our products, and of related industries.
5. Reinforce ability to develop technologies to meet the global needs of thephotovoltaic cell industry.

Yen in millions

Net sales

U.S. dollars in thousands

2010

Fiscal Years ended March 31,¥ 19,884

¥

2009

2010

23,473$213,720

Operating income

987

516

10,613

Net income

452

319

4,861

Total assets

28,685

26,587308,309

Net assets

18,697

17,158200,957

Per Share Amounts
Net income per share
Cash dividends per share
Net assets per share

Yen

¥

35.31

U.S. dollars

¥

22.57

$

0.37

12.00

20

0.12

1,381.56

1,272.04

14.84

Notes : 1. U.S. dollar amounts, converted at the rate of ¥93.04 to US$1.00, are for convenience only.
2. Net income per share is based on the average number of shares outstanding at the end of each fiscal year.
3. Japanese yen amounts of less than one million have been excluded.

2

REVIEW OF OPERATIONSThe Yushiro Group consists of Yushiro Chemical Industry Co., Ltd., twodomestic subsidiaries, six overseas subsidiaries and four affiliates, and its
major businesses are the production and sales of metalworking oils andfluids, chemicals for building maintenance and industrial waste processing.
We have also expanded our business to include the purchase and sale ofproducts related to each business, logistics and other services.

M E TA LW O R K I N G O I L S A N D F L U I D S
BUSINESSBUILDING MAINTENANCE CHEMICALSBUSINESSThe metalworking oils and fluids business reported weak sales primarily toautomobile makers in the first half because of the considerable drop in
production within the automobile industry, triggered by financial instability
in the United States, following the previous year. In the second half theeconomy bottomed out, and overall conditions shifted toward a gentle
recovery. In this environment, sales of cutting oils and fluids for photovoltaic
cells, one of the products which we are focusing on selling have increased
since late second half of the year, thanks to R&D and activities to increase
sales of the oils and fluids for a new processing method.
As a result, net sales decreased 15.4% year over year, to ¥16,929 million.
With respect to profit, prices for raw materials including crude oil, naphtha,
and natural fats increased substantially. However, as a result of efforts to
reduce fixed costs, coupled with price revisions and cost cutting, operating
income rose 94.1% year over year, to ¥965 million.
Sales
2010
2009

85.1%

(Yen in millions)

16,9292006

Products• Cutting and Grinding Oils and Fluids• Aluminum Diecasting Lubricants• Cutting Oils and Fluids for Advanced-Material• Cleaners• Rust Preventives• Rolling Oils and Fluids• Drawing Oils and Fluids• Forming Oils and Fluids• Quenching Agents• Fire Resistant Hydraulic Lubricants• Other Oils and Fluids

20,0092008
2007

Metalworking oils and fluids• Fluids used for processing steel and other metals into specific shapes.
• Important areas of fluid performance include lubricity, cooling ability, etc.
• Mainly used in the automotive, precision processing and semiconductor
processing industries.

23,503
21,684
19,579Customers• Automobile companies• Precision machine processing companies• Steel companies• Electric equipment companies• Other machine processing companies

71

1. Automobile manufacturer: 17.7%
2. Automobile related: 38.3%
3. Precision machinery: 11.6%
4. Photo Voltaic/semiconductor: 10.1%
5. Ball bearing manufacturer: 4.7%
6. Steel industry: 4.2%
7. Other: 13.4%

6
5

Automobile
56.0%

4

3

2

Shares of sales by customers for the fiscal year
ended March 2010.

The Company’s advantages in the field of Cutting andGrinding Oils and Fluids• Our overwhelming share in the automobile industry; more than60%
The Company features its production development capacities andquick response to changes in the automobile industry including
rationalization, changes in materials and measures to addressenvironmental issues.
• Our wide human network interacts with users in different
industries at “The Society of Cutting Fluids & Cutting
Technology”
About the Society
The society was launched in 1954 as an on-site research group made up of metal
processing technology researchers, and has served as an office bridging academy
and industry for 50 years.
Engineers with abundant on-site experience, beginning with those from ourautomotive manufacturing customers, as well as those from machine
manufactures, tooling manufactures, etc., gather to exchange information andwork together to develop higher technologies and further nurture their expertise.
This group has served as a “training room” for these experts throughout thehistory of the industry. It is therefore no exaggeration to say that this group is anational asset supporting product development, or monozukuri.

The building maintenance industry is a major user of our products, andmarket conditions of this business segment continue to be extremely difficult
because of the ongoing economic downturn in Japan. As a result, the use of
the maintenance equipment has continuously declined.
Facing this situation, we made an effort to increase sales mainly in rollingstock related segments including rolling stocks and station buildings, but
customers were very committed to cost reductions in light of the impact of
the economic slump, and we were unable to achieve growth in sales volume.
As a result, net sales were down 9.5% year over year, to ¥1,524 million, while
this segment reported an operating income of ¥75 million. (An operating
loss of ¥7 million was reported in the previous year.)
Sales
2010
2009

7.7%

2008
2007
2006

Note: Metalworking oils and fluids business: Metalworking oils and fluids are manufactured and sold by Yushiro Chemical Industry Co., Ltd.
In overseas markets, metalworking oils and fluids are manufactured and sold by the Company’s subsidiaries: Yushiro Manufacturing America Inc. (“YUMA”), in the United States; Yushiro
do Brasil Ind. Quimica Ltda., in Brazil; Qidong Yushiro Chemical Industry Co., Ltd., Shanghai Yushiro Chemical Industry Co., Ltd., and Guangzhou Yushiro Oil Industry Co., Ltd., in
China; Yushiro-Jet Chemicals Sdn. Bhd., in Malaysia; Yushiro (Thailand) Co., Ltd., in Thailand; and Yushiro India Company Private Limited, in India; and our affiliates: Buhmwoo
Chemical Industry Co., Ltd., and Buhmwoo Co., Ltd., in South Korea and San-I Chemical Co., Ltd., in Taiwan.
3(Yen in millions)

1,524
1,684
1,891
2,086
2,239

Note: Building maintenance chemicals business: Yushiro Chemical Industry Co., Ltd.,
manufactures and sells chemicals for building maintenance.

4

REVIEW OF OPERATIONS

Subsidiaries and Associated Companies
Overseas Subsidiaries
Yushiro Manufacturing America Inc. (YUMA)
783 West Mausoleum Road, P.O. Box 217
Shelbyville, Indiana 46176 U.S.A.
Phone: (1) 317-398-9862 Fax: (1) 317-392-4818
URL: http://www.yushirousa.com

I N D U S T R I A L WA S T E P R O C E S S I N G B U S I N E S S
In the industrial waste processing business, lower waste from manufacturing industry, which is a majoruser of our products, as well as the operation of new combustion furnaces by our competitors led tosteepened price competition, and major declines in processing prices and decrease of orders had asignificant impact on results.

Yushiro do Brasil Indústria Química Ltda.
Av. Henry Néstle, 3100 Caçapava, CEP 12281-970
São Paulo, Brazil
Phone: (55) 12-3654-8100 Fax: (55) 12-3654-8101
URL: http://www.yushiro.com.br

As a result, net sales were down 19.6% year over year, to ¥1,429 million, while operating loss amounted to¥54 million. (An operating income of ¥25 million was reported in the previous year.)
Note: The Company sold all shares of NS. Yushiro Co., Ltd., a then-subsidiary of the Company, on May 12, 2010; therefore,
NS. Yushiro Co., Ltd. does not fall within the definition of subsidiary.
Sales
2010

7.2%

(Yen in millions)

1,779

2008

1,799

2007

1,855

2006

San-I Chemical Co., Ltd.
7th Fl. No.48 Ming Chuang W. Rd., Taipei, Taiwan R.O.C.
Phone: (886) 2-2522-1313 Fax: (886) 2-2522-1363

Qidong Yushiro Chemical Industry Co., Ltd.
New Qidong Port North
Qidong City, Jiangsu, Province, China
Phone: (86) 513-836-99942 Fax: (86) 513-836-99943

1,429

2009

Overseas Associated Companies
Buhmwoo Chemical Ind. Co., Ltd. & Buhmwoo Co., Ltd.
70-3, Yangjae-Dong, Seocho-Ku, Seoul, Korea
Phone: (82) 2-571-6321 Fax: (82) 2-571-6329
URL: http://www.buhmwoo.com

Note: The industrial waste processing business isconducted by a subsidiary, NS.Yushiro Co., Ltd.

Shanghai Yushiro Chemical Industry Co., Ltd.
881 Fulian Road, Baoshan, Shanghai,
P.R. China 201905
Phone: (86) 21-3604-1188 Fax: (86) 21-3604-0916

Yushiro Manufacturing America Inc. (YUMA)

Yushiro do Brasil Indústria Química Ltda.

Yushiro-Jet Chemicals Sdn. Bhd.

Yushiro (Thailand) Co., Ltd.

Yushiro-Jet Chemicals Sdn. Bhd.
14, Jalan Utama 2/28, Pusat Perindustrian Maju Jaya,
47100 Puchong, Malaysia
Phone: (60) 3-8061-9737 Fax: (60) 3-8062-2731

1,436

Yushiro (Thailand) Co., Ltd.
AMATA Nakorn Industrial Estate 700/533 Moo7,
Don Hua Roh, Muang, Chonburi 20000, Thailand
Phone: (66) 38-454-873 Fax: (66) 38-454-879

Shanghai Yushiro Chemical Industry Co., Ltd.

R E V I E W O F O P E R AT I O N S B Y R E G I O N
1. JapanNet sales in Japan fell 18.9% year over year to ¥14,592 million, accounting
for 73.4% of consolidated net sales.
An operating income of ¥216 million was reported. (An operating loss of¥37 million was reported in the previous year.)
2. United States
Although sales to the automobile industry fell significantly as a result of thefinancial crisis, the so-called “Cash for Clunkers” vehicle exchange programprovided a tailwind leading to rapid growth in the second half of the year. As
a result, net sales were down 18.0% year over year, to ¥1,187 million.
Operating income was down 2.7% year over year, to ¥55 million thanks toefforts to cut costs and expenses.

5

3. China
Supported by robust domestic demand, sales to the automobile and steel
industry were strong from the second half of the year. However, the global
recession impacted export industries, leading to lower sales to the exportrelated machine parts processing industry.
As a result, net sales were down 4.4% year over year, to ¥1,895 million.
Operating income rose 27.8% year over year, to ¥296 million thanks toefforts to cut costs and expenses.
4. Brazil
Although exports to the United States and South American countries fell in
the wake of the financial crisis, domestic private consumption recovered on
the back of expanding domestic demand. Nevertheless, the increase inimports from China led to the decrease in production by the motorcyclerelated users, which resulted in a decline in sales.
As a result, sales were up 22.3% year over year, to ¥1,171 million.
Operating income increased 49.3% year on year, to ¥207 million thanks to
upward price revisions and lower cost of imported materials resulting fromappreciation of the Brazilian real.
5. Malaysia
Indonesia is a major export destination, and sales of motorcycles were weakin the first half in light of the global economic recession. There were,
however, signs of a recovery in the second half, and hard disk base machining
performed favorably.
As a result, net sales increased 3.6% year over year, to ¥608 million.

Operating income increased substantially, by ¥89 million year over year, to¥95 million due to price revisions.
6. Thailand
Sales to the Japanese automobile industry, which is the primary client,continued to feel the effects of production declines from the second half ofthe previous fiscal year, and in the first half, sales were significantly lower
than in the prior fiscal year on a local currency basis. Despite a gradual pickup in production from the second half of the year, results for the entire year
were slightly lower than in the prior fiscal year.
As a result, net sales declined 19.9% year over year, to ¥411 million, andoperating income fell 28.5% year over year, to ¥80 million.

6

Consolidated Balance Sheets(Unaudited)
As of March 31, 2009 and 2008

U.S. dollars
in thousands(Note 8)Millions of yen

AssetsCurrent assets:
Cash and time deposits
Notes and accounts receivable–tradeMarketable securities
Inventories
Consumption tax receivable
Income tax receivable
Deferred tax assets
Other current assets
Allowance for doubtful accounts
Total current assets
Fixed assets:
Buildings and structures
Machinery, equipment and vehicle
Tools, furnitures and fixtures
Land
Lease assets
Construction in progress(Total property, plant and equipment)(Total intangible fixed assets)
Investment in securities
Investments in subsidiaries and affiliates
Long-term loans receivable
Savings premium
Deferred tax assets
Other assets
Allowance for doubtful accounts(Total investments and other assets)
Total fixed assets
Total assets

7

2010

¥ 5,522
5,089
390
1,788
–
11
226
342
(53)
13,317

3,369
1,408
224
4,488
45
65
9,601
169
2,170
2,445
18
536
36
436
(48)
5,596
15,367¥ 28,685

2009¥ 4,118
4,229
190
1,785
0
201
166
274
(62)
10,905

3,569
1,777
315
4,475
21
59
10,218
149
1,725
2,128
23
514
520
447
(46)
5,313
15,681¥ 26,587

2010$ 59,351
54,705
4,197
19,221
–
126
2,432
3,676
(574)
143,136

36,215
15,1402,411
48,247484
701
103,200
1,817
23,333
26,285
198
5,761
396
4,696
(516)
60,155
165,173$ 308,309

U.S. dollars
in thousands(Note 8)Millions of yen

Liabilities and net assets
Current liabilities:
Notes and accounts payable–trade
Short–term borrowings
Current portion of bonds payable
Accounts payable-otherAccrued corporate taxes
Accrued bonuses
Other current liabilities

2010

2009

2010

¥ 2,918
1,339
40
552
397
473
653

¥ 1,917
1,372
80
483
86
431
635

$ 31,369
14,399
429
5,933
4,268
5,087
7,021

6,374

5,006

68,509Long-term liabilities:
Corporate bonds
Long-term debt
Accrued retirement benefits for employees
Accrued retirement allowances for directors
Deferred tax liabilities
Other long-term liabilities

–
2,005
1,050
212
49
296

40
2,745
1,043
216
48
329

–
21,556
11,286
2,278
536
3,184

Total long-term liabilities
Total liabilities

3,613
9,988

4,422
9,428

38,842
107,351

Net assets:
Common stock
Capital surplus
Retained earnings
Treasury stock(Total shareholders’ equity)
Net unrealized gains on securities
Currency translation adjustments(Total valuation, translation adjustments and others)(Total minority interests)

4,249
3,994
14,974(2,579)20,639280(3,218)(2,938)
995

4,249
3,994
14,650(2,579)20,315(298)(3,718)(4,017)860

45,67242,935160,950(27,724)
221,832
3,012(34,592)(31,580)
9,244

18,697¥ 28,685

17,158¥ 26,587

200,957$ 308,309

Total current liabilities

Total net assets
Total liabilities and net assets

8Consolidated Statements of Income

Important points forming the basis of
consolidated financial statements(Unaudited)
For the Years Ended March 31, 2009 and 2009

U.S. dollars
in thousands(Note 8)Millions of yen

2010

2009

2010

¥ 19,884¥ 23,473$ 213,720

Cost of sales

13,733

17,391

147,609

Gross profit

6,150

6,081

66,111

5,163

5,565

55,497

Operating income

987

516

10,613

Interest and dividend income

154

165

1,655

Equity in earnings of associated companies

295

104

1,124

Other income

171

179

1,846

Interest expenses

71

53

769

Other expenses

45

31

489

Ordinary income

1,491

882

16,027

Gain from sale of fixed assets

41

3

445

Other extraordinary income

133

110

1,434

5

24

64

Other extraordinary losses

491

194

5,279

Income before income taxes

1,168

777

12,563

453

268

4,870

Net sales

Selling, general and administrative expenses

Loss on disposal of fixed assets

Corporate, local income enterprise taxes
Deferred taxes

65

87

707

Minority interests

(197)

(101)

(2,124)

Net income

¥

452

¥

319

$

4,861

Consolidated Statements of Cash Flows(Unaudited)
For the Years Ended March 31, 2009 and 2008

U.S. dollars
in thousands(Note 8)Millions of yen

2010

Cash flows from operating activities:

¥

2,426

¥

2010

1,075

$ 26,077

Cash flows from investing activities:

(59)

(236)

(641)

Cash flows from financing activities:(1,085)(1,183)(11,668)

322

(630)

3,471

Net increase (decrease) in cash and cash equivalents

1,604

(974)

17,239Cash and cash equivalents at beginning of year

4,288

5,262

46,0934,288$ 63,333

Effect of exchange rate changes on cash and cash equivalents

Cash and cash equivalents at end of year

9

2009

¥

5,892

¥

1. Scope of Consolidation
The scope of consolidation includes all 10 consolidated subsidiaries: NS.
Yushiro Co., Ltd., Yushiro Unso Co., Ltd., Yushiro Manufacturing America
Co., Ltd., Yushiro do Brasil Industria Quimica Ltda., Yushiro (Thailand)Co., Ltd., Qidong Yushiro Chemical Industry Co., Ltd., Shanghai Yushiro
Chemical Industry Co., Ltd., Yushiro-Jet Chemicals Sdn., Guangzhou
Yushiro Oil Industry Co., Ltd., and Yushiro India Company Private Limited.
2. Application of the Equity Method
Of the four affiliates, Buhmwoo Chemical Industry Co., Ltd., Buhmwoo
Co., Ltd. and San-I Chemical Co., Ltd., are included in the scope of
application for the equity method.
Yushiro Buhmwoo (India) was excluded from application under the equity
method because its impact on net income/loss and retained earnings was
negligible and it was deemed insignificant to overall performance.
3. Fiscal Years of the Consolidated Subsidiaries
The fiscal year-end of all eight overseas subsidiaries is December 31. In
preparing the consolidated financial statements, results as of that date areused, provided that necessary adjustments are made regarding materialtransactions conducted between December 31 and the consolidation closingdate.
4. Significant Accounting Policies(1) Valuation standard and methods for securities
In other securities, quoted securities are stated at market value at the
fiscal year-end. Unrealized gains are included in net assets, and the costof securities sold is computed using the moving-average method.
Unquoted securities are accounted for on a cost basis using the movingaverage method.
(2) Valuation standard and methods for inventories
The aggregate average cost method is adopted (i.e., the book value
reduction method based on declines in profitability).
(3) Depreciation method used for major depreciable assets
1. Tangible fixed assets (excluding leased assets)
The Company and its consolidated subsidiaries in Japan use thedeclining-balance method (however, the straight-line method isadopted for the Company’s technical research center). However, thestraight-line method is used for buildings acquired on or after April
1, 1998 (with the exception of annexed facilities). Overseas
consolidated subsidiaries generally use the straight-line method. The
main terms of useful service life are 3 to 50 years for buildings andstructures and 2 to 20 years for other tangible fixed assets.
Inexpensive tangible fixed assets costing ¥100,000 to ¥200,000 are
equally amortized over 3 years on a straight-line basis.
2. Intangible fixed assets (excluding leased assets)
The amortization of intangible fixed assets is computed by thestraight-line method. Computer software for internal use isamortized by the straight-line method over the estimated useful life
(5 years).
3. Leased assets
Assets leased under finance lease transactions without a transfer ofownership
The straight-line method in which the lease term is determined by
the number of years of the useful life, with a zero residual value, isused.
Finance lease transactions without a transfer of ownership, with alease that begins prior to the applicable initial year, continue to behandled according to the methods relating to conventional leasetransactions.
(4) Reserves
Allowance for doubtful accounts
The allowance for doubtful accounts is provided for possible bad
debt at the amount estimated based on the past bad debt experience

for normal receivables, plus uncollectible amounts determined byreference to the collectibility of individual doubtful receivables.
Accrued bonuses
The Accrued bonuses is provided at an estimated amount based on
the internal payment prediction standard.
Reserve for directors’ bonuses
At our subsidiaries Qidong Yushiro Chemical Industry Co., Ltd.
and Shanghai Yushiro Chemical Industry Co., Ltd., the reserve forbonuses to directors is provided at the amount estimated to be
accrued for the consolidated balance sheet date to prepare for suchpayments.
Accrued retirement benefits for employees
The accrued retirement benefits for employees are provided forpossible payment of employees’ post-retirement benefits at theamount to be accrued at the balance sheet date, and are calculated
based on the retirement benefit obligation and fair value of pension
plan assets at the end of this fiscal year. The actuarial gain or loss isamortized by the straight-line method over a period of 10 years,
which is shorter than the average remaining service years for
employees at the time of recognition, from the following year ofrecognition.
Accrued retirement allowances for directors
In order prepare the reserve for retirement allowances for directors,
the Company and its subsidiaries NS Yushiro Co., Ltd. and Yushiro
Unso Co., Ltd., based on the internal regulations, utilize an
accounting method calculated according to the estimated amount tobe accrued by the consolidated balance sheet date.
Repair reserves
The affiliate NS Yushiro Co., Ltd. recorded an amount corresponding
to expenses for this consolidated fiscal year from the anticipatedreserve expenditures used for periodic repairs, in order to conduct
the required inspections of machinery and equipment.
Litigation Loss Reserves
In order to prepare for potential losses on litigation, we have estimatedvalue of potential future losses and recorded the amount deemednecessary as litigation loss reserves.
(5) Other significant matters for the preparation of consolidated financial
statements
1. Standards for conversion of foreign currency denominated assets andliabilities to Japanese yen
Debts and credits denominated in foreign currencies are converted toyen at the actual market exchange rate on the closing date. The effectof exchange rate changes is recorded as a gain or loss.
2. Accounting treatment of consumption tax, etc.
Consumption tax, etc. is recorded on tax exclusive basis.
5. Matters related to the valuation of assets and liabilities of
the Company’s consolidated subsidiaries
The assets and liabilities of consolidated subsidiaries are valued at their fairvalue.
6. Amortization of goodwill and negative goodwill
The amount of goodwill and negative goodwill is equally amortized over 5
years on a straight-line basis.
7. Consolidated Statement on Cash Flow
Consolidated Statement on Cash Flow (cash and cash equivalents) includes
cash on hand, cash available for withdrawal, and cash invested in short-term,
low risk accounts redeemable within three months of the date of deposit.
8. The U.S. dollar amounts in the financial statements for the fiscal
year ended March 31, 2010, represent translation of Japanese yenat the rate of ¥93.04=US$1.00.

10

FINANCIAL INDICATORS
Operating Income (yen in million)

Net Sales (yen in million)
2010
2009

27,19325,6262006

23,255

2009

2008

2,380

2007

2,448

2006

2,510

ANNUAL REVIEW 2010
For the Year Ended March 31, 2010

Total Assets, Net Assets (yen in million) , and ROE(%)

Net Income (yen in million)
452

2010

516

2009

23,473

2008
2007

987

2010

19,884

2010

319

2009

28,685

18,6972.7

26,587

17,158

1.7

2008

1,884

2008

22,706

2007

1,834

2007

22,269

1,608

2006

2006

20,454

Total assets

Net assets

8.1

8.7

8.8 32,839

33,47332,059ROE

CORPORATE DATA (as of March 31, 2010)34-16, 2-chome, Chidori, Ota-ku, Tokyo 146-8510, Japan
Phone: (03) 3750-3100 Fax: (03) 3750-9915 URL: http://www.yushiro.co.jp¥4,249 million
336
July 24, 1944
Tokyo, Nagoya and Osaka
Hokkaido, Tohoku, Kitakanto, Hamamatsu, Hokuriku, Fukuyama, Hiroshima and Kyushu

Head Office
Capital
Employees
Established
Branch Offices
Sales Offices

Directors and Auditors (as of June 22, 2010)

Directors

Yoshihiro Sakaguchi
Eiichi Ogo
Yasuo Chiba
Tsuneo Onda
Akitaka Nozue

Directors

Yoshiaki Nagai
Masahisa Hirobe
Tatsuharu Hyakusoku
Ryuichiro Matsuno
Yuji Kishi
Haruo Okamoto

President
Managing Directors

Standing Auditors
Auditor (CPA)

Stock Information (as of March 31, 2010)
Number of shares issued
Trading unit
Total number of shareholders
Stock listing
Securities code
Transfer agent for common stock
Independent certified public accountants
Main underwriter

The way of mutua l progr ess

15,200,065
100
5,601
First section, Tokyo Stock Exchange
5013
Mitsubishi UFJ Trust and Banking Corporation
Ernst & Young ShinNihon LLC
Nomura Securities Co., Ltd.

(millionsof yen )Market value of shares

50,00040,00030,00020,00010,0000

2004/3 2005/3 2006/3 2007/3 2008/3 2009/3 2010/3

Stock pricesTerm2009.42009.52009.62009.72009.82009.92009.10 2009.11 2009.12

2010.1

2010.2

2010.3

High

969

937

1,230

1,400

1,624

1,470

1,447

1,413

1,249

1,285

1,269

1,200

Low

780

830

896

1,236

1,380

1,250

1,226

1,120

1,121

1,140

1,034

1,052

1,518

1,624

6,295

4,622

3,763

5,049

2,503

2,738

2,795

2,728

2,664

2,230

(Yen/share)(Yen/share)

Trading volume(Hundred of shares)