AnnualReport 2015

For the Year EndedMarch 31, 2015

010_0288501372706.indd 2 2015/07/22 16:21:56

<SHASHI> is …

Contents

a word we coined which means “Resolution of Vision as a company.”Shinkawa celebrated its 50th anniversary in August, 2009. At this turning point, we decided to establish <SHASHI> composed of a Corporate Mission and an Action Philosophy which are aimed at producing a forward technological leap in the coming 50 years.

ChallengeWe value the spirit to keep challenging assumed limits.It is important to have the courage not to fear failure and the passion never to give up while having a sense of purpose.We believe that to continue challenging our limits will transform our dreams, ideals and hopes into reality.

ChangeWe value openness to changing times and surrounding realities, and in turn change ourselves in corresponding ways.It is important to think and act subjectively while adopting a broad view and flexible thinking, determining the cause of change and future direction.We believe that we can open up new opportunities through our continuous openness to change.

CollaborationWe value the spirit of collaboration to work together in concert.We have a diversity of backgrounds such as nationalities, experiences, sense of values, etc. That’s what makes it important to share common goals and to be interconnected at work.We believe that thinking and working together will elicit a joy of accomplishment and feeling of trust, eventually resulting in accomplishment of a major goal which could never have been achieved by one person.

Shinkawa will cultivate robot technology and continue to suggest cutting-edge technology to realize a society where people can dream and hope while exercising creativity, and also realize an environment where people can challenge their limits.

“Shinkawa leads in robot technology to contribute to society which allows the human being to be more creative.”Corporate Mission

We move forward by fulfilling our commitments below without being bound by superficial events and customary practices, pursuing “what the essence is” with sincerity.

We think it is important to have the attitude of constantly pursuing the essence at the base of every action.Action Philosophy

SHASHI / Contents 1Financial Highlights 2Top Interview 3Research and Development Activities 6Product Introduction 7Commitment to CSR 10Corporate Governance 11Directors, Operating Officers and Corporate Auditors 13Financial Summary 15

Review of Management 17Main Risks and Uncertainties 19Our Tasks Ahead 20Financial Date 21Group Companies and Locations 25Profile of the Corporate Group and Organization 26History of SHINKAWA 27Corporate Information / Investor Information 28

Annual Report 2015

1

010_0288501372706.indd 1 2015/07/22 16:21:57

Financial Highlights (for the Years ended March 31)

Operating Results Millions of YenThousands of U.S. Dollars

FY2010 FY2011 FY2012 FY2013 FY2014 FY2014Net Sales ¥20,773 ¥13,396 ¥11,350 ¥7,481 ¥11,352 $94,470 Overseas Sales 15,543 9,594 8,733 5,965 9,833 81,824 Operating Income (Loss) (792) (2,388) (2,558) (4,113) (2,669) (22,211)Net Income (Loss) (¥1,222) (¥4,647) (¥2,120) (¥4,312) (¥1,894) ($15,757)

Financial Position Millions of YenThousands of U.S. Dollars

FY2010 FY2011 FY2012 FY2013 FY2014 FY2014Total Assets ¥37,618 ¥32,664 ¥31,004 ¥26,059 ¥26,500 $220,522 Total Net Assets ¥35,136 ¥30,366 ¥28,967 ¥24,402 ¥23,336 $194,189

Per Share Data (¥•$)FY2010 FY2011 FY2012 FY2013 FY2014 FY2014

Net Income (Loss) (¥67.24) (¥255.67) (¥116.65) (¥237.27) (¥104.19) ($0.87)Total Net Assets 1,932.74 1,670.68 1,593.73 1,342.61 1,284.01 10.68 Cash Dividends ¥5.00 ¥5.00 ¥5.00 ¥0.00 ¥0.00 $0.00

Key RatiosFY2010 FY2011 FY2012 FY2013 FY2014 FY2014

Operating Margin (%) (3.8) (17.8) (22.5) (55.0) (23.5) —ROA (Return on Assets) (%) (3.2) (13.2) (6.7) (15.1) (7.2) —ROE (Return on Equity) (%) (3.4) (14.2) (7.1) (16.2) (7.9) —Equity Ratio (%) 93.4 93.0 93.4 93.6 88.1 —Turnover of Total Assets (Times) 0.54 0.38 0.36 0.26 0.43 —Note : The translation of Japanese yen amounts into U.S. dollars is included solely for the convenience of the readers, using the

prevailing exchange rate at March 31, 2015, which was ¥120.17 to U.S. $1.00.

Net Sales and Operating Income (Loss)

ROA and ROE

Total Assets, Total Net Assets and Equity Ratio

Capital Expenditure and Depreciation

-5,0002010 2011

Net Sales

(Millions of Yen)

Operating Income (Loss)2012 2013 2014 (FY)

0

5,000

10,000

15,000

20,000

25,000

2010 2011

(%)

2012 2013 2014 (FY)ROEROA

-18.0

-16.0

-14.0

-12.0

-10.0

-8.0

-6.0

-4.0

-2.0

0.0

2.0

02010 2011

Total Assets (Scale on Left)

(Millions of Yen) (%)

Total Net Assets (Scale on Left)2012 2013 2014 (FY)

50,000

10,000

20,000

30,000

40,000

Equity Ratio (Scale on Right)

70

75

80

85

90

95

100

2010 2011Capital Expenditure

(Millions of Yen)

Depreciation2012 2013 2014 (FY)

0

100

200

300

400

500

600

700

800

900

1,000

2

010_0288501372706.indd 2 2015/07/22 16:21:58

Top Interview

Q1 Please provide us with your thoughts on the business environment, in which the Group operates, and details of SHINKAWA’s performance in the fiscal year that ended March 31, 2015.

including the deceleration of emerging economies due to falling resource prices and the increasingly apparent sluggishness of the Chinese real estate market.In the semiconductor industry, aggressive capital investments in South Korea and China were seen as favorable mobile-related markets continued partly due to the launch of new products by smartphone manufacturers. The market expansion continued as the mass production of multilayer memory products by through-silicon via (TSV) for communications infrastructure and servers has arrived, increasing capital investments from major memory makers. Accordingly, the back-end

In fiscal 2014 (the term ended March 31, 2 0 1 5 ) , i n t e r m s o f c o n s o l i d a t e d performance, the Group recorded an

increase of net sales by 51.7% on a year over-year basis to 11,352 million yen, an operating loss of 2,669 million yen, an ordinary loss of 1,784 million yen and a net loss of 1,894 million yen.The global economy showed that the developed countries maintained a gradual recovery trend as a whole, reflecting the improved housing and labor markets in the United States and the depreciation of the euro against a backdrop of quantitative easing launched by the European Central Bank (ECB). Meanwhile, causes for concern persisted,

A1

A full product lineup of our most advanced modelsToward a great resurgence for the SHINKAWA Group, we are striving to expand sales of our products and reform the earnings structure.

Takashi Nagano, President and CEO, Representative Director

Annual Report 2015

3

010_0288501372706.indd 3 2015/07/22 16:21:58

With regard to the existing products of the Group, as a result of our efforts to expand sales to major OSAT (outsourced

semiconductor assembly and test services) providers, sales to OSAT providers in China progressed, with the ratio of sales to Chinese OSAT providers expanding from 22.1% in fiscal 2013 to 44.3%. In addition, as a result of our efforts to promote market penetration of the STC-800, which was launched into the market in 2014, our market recognit ion rose and product evaluation progressed steadily, even though the model has yet to contribute to sales. We are expecting the model to contribute to sales in fiscal 2015. We also strove to improve operational efficiency by reorganizing our sales, engineering, and production systems. At our Thai factory, our target monthly production volume of 100 units has been achieved, showing steady progress in the operational transfer toward optimal location production. Having achieved this, we consider we are nearing the completion of rebuilding the organization of SHINKAWA Group.

A2

Q2 Please explain the current status of rebuilding the entire organization of SHINKAWA Group.

equipment market enjoyed greater order receipts than usual.In such a business climate, the SHINKAWA Group endeavored to promote market penetration with products launched in the previous fiscal year and expand sales to major OSAT (outsourced semiconductor assembly and test services) providers. In terms of technological development, we introduced a network-based production support system aimed at fully automating customers’ production processes. Improvement of operational efficiency was also promoted through the sales, engineering and production systems that were restructured in the previous fiscal year.As a result of these efforts, sales of the UTC-5000 Series wire bonders proceeded favorably with an increase in the order receipts from memory makers for mobile devices and servers. Coupled with the continued depreciation of the yen, net sales achieved a year-on-year increase. In terms of profitability, however, the situation remained severe, as various measures to reform the earnings structure have not yet been completed.

4

010_0288501372706.indd 4 2015/07/22 16:22:00

With regard to engineering, we aim to enhance our technological capabilities and product strengths.Looking at the trend of packaging technologies, the popularity of wireless processes, such as flip chip and wafer-level packaging, is expected to grow significantly, which will likely expand the flip-chip bonder market. To prepare for the anticipated start of mass production of TCB (Thermal Compression Bonding) process flip-chip devices, in which our customers’ considerable investment will occur, we will focus on the development of highly cost-competitive next-generation platforms that address various processes and establish a business tie-up with Yamaha Motor Co., Ltd., to enhance our product lineup.In the wire and die bonder businesses, we will continue to provide existing and new customers with our highly reliable technologies. We will also expand sales to emerging OSAT providers by upgrading the operator supporting functions of the bonding equipment itself and providing system solutions aimed at effective management of the status of equipment operation and production.

Takashi NaganoPresident and CEO, Representative Director

Q4 What is your message to shareholders?

To our shareholders, I hereby express my sincere appreciation for all your support for SHINKAWA and deeply apologize for

any inconveniences and concerns that our prolonged deficits have caused you. Positioning fiscal 2015 as the year for a great resurgence for the SHINKAWA Group, we are committed to achieving the revival of the Group and will make concerted efforts to expand the return of profits to shareholders including enhancement of our corporate value.I would like to ask our shareholders for your continued understanding and support.

A4

In the semiconductor industry in the fiscal year ending March 31, 2016, growing demand for smartphones and

cloud computing is expected to boost expansion of the memory market.The back-end equipment market is expected to enjoy continued capital investments for mass production by memory makers and OSAT providers in China for the time being, giving us a continuing favorable tailwind for our business operation. Capitalizing on this opportunity, we are committed to executing the reform of the earnings structure and focusing on expanding sales of our most advanced models, aiming to achieve profitability.To make fiscal 2015 our year of great resurgence, we will work on the following issues.We will continue to promote reorganization of our sales, engineering, and production systems and aim to familiarize the Group with the new structures quickly.With regard to sales activities, the Group respects the autonomy of its overseas sales offices to allow them to customize their activities to suit the local needs and maximize customer satisfaction.The engineering force is strengthening ties with the production and quality assurance divisions to promote cost-cutting efforts starting at the product design and development stages, thereby improving profitability.With regard to production, the Group seeks to ensure optimal production in the most suitable location at reduced costs. To achieve that, the manufacturing of some products has been outsourced, and the Group’s production division is being decentralized into its subsidiaries to allow production activities to remain flexible and careful ly ta i lored to customer needs . By encouraging the Thai factory, the domestic factory, and the outsourced producers to establish a c o m p l e m e n t a r y r e l a t i o n s h i p , w e s e e k enhancement of production efficiency on a Group-wide basis.

A3

Q3 P l e a s e e x p l a i n a b o u t perspectives and management strategies on the fiscal year that ended March 31, 2016.

Annual Report 2015

5

010_0288501372706.indd 5 2015/07/22 16:22:00

*NRS (Non Reaction Servo system)

XY table vibration is suppressed• By absorbing the vibration of XY acceleration and deceleration

• Enhanced bondability due to device stability

Research and Development Activities

Efficiently utilizing the ample know-how the Group has accumulated during its long history as a manufacturer specialized in bonding equipment, and attentively accepting and reflecting the user needs, we are developing the equipment technology adaptable to a wide range of packaging solutions.

The total of research and development costs in fiscal 2014 was 2,198 million yen. Below are the results and the contents of the main research and development projects on each type of bonder product.

2. Die Bonder

We developed the SPA-1000, the successor model of the SPA-400 for ICs, and launched the model into the market in May 2015. The SPA-1000, by adopting Shinkawa’s distinctive three-dimensional non reaction servo system technology (3D-*NRS), enables the twin-head design. This contributes to high accuracy and high productivity as well as floor space savings in production sites. With the trend toward the downsizing of packages, we will continue to develop functionality, aiming for higher precision, higher productivity, and lower costs.

3. Flip Chip Bonder

We are continuing the development of stable mass production technologies collaborating with customers toward 2.5D packaging of cutting-edge logic devices adopting the TCB process and 3D packaging of TSV (through-silicon via) memory.In addition, for the radically changing cutting-edge packaging processes, we are promoting the development of next-generation platforms that enable various processes.

Research and Development Expenses

2010 2011

(Millions of Yen)

2012 2013 2014 (FY)0

500

1,000

1,500

2,000

2,500

3,000

Conventional System Sinkawa NRS

MotorMotor

Indexer Indexer

1. Wire Bonder

To expand the application of copper wire for cutting-edge devices, which are becoming increasingly miniaturized while improving their qual i ty and operat ional rate and saving manpower, we developed an upgraded version of the UTC-5000NeoCu. At the same time we introduced a network-based production support system as a functional improvement to the UTC-5000 series, promoting technological development from customers’ perspective. In addition, including the development of next-generation platforms within our vision, we are developing component technologies.

6

010_0288501372706.indd 6 2015/07/22 16:22:00

With the arrival of Big Data and the IoT age, the steady expansion of demand for flash memory is expected, supported by investments in infrastructure such as server storage and consumer products such as mobile equipment.To achieve high-precision and high-productivity die bonding by the use of increasingly high-functional NAND flash memory, the Company has completed the development of the latest high-accuracy twin-head die bonder “SPA-1000” and started accepting new orders in May 2015.Demand for high precision and high productivity bonding is increasing with the trend toward downsizing of packages. The SPA-1000 adopts Shinkawa’s distinctive three-dimensional non reaction servo system technology (3D-NRS), which enables the twin-head design. This contributes to high accuracy and high productivity as well as floor space savings in production sites. Furthermore, a total of eight high resolution cameras, including the die backside camera of each bonding head, enables precise inspection to improve product quality.

SPA-1000

Product IntroductionWire Bonder

To expand our share in the wire bonder market

Die BonderLaunched high-accuracy twin-head die bonder SPA-1000

Our wire bonder product lineup includes the UTC-5000 series for ICs/LSIs, the UTC-5000NeoCu for copper wire-compatible ICs/LSIs, and the UTC-5100 for transistors and LEDs.The UTC-5000 series has renewed bonding head and XY and Z motors, and a highly rigid transducer. It achieves high-quality mounting of heavy wires and high-speed bonding of 45ms/2mm, which is 10% faster than traditional models, thereby contributing to the improvement of users’ productivity.

The UTC-5000NeoCu incorporates self-diagnostic functions to optimize its servo parameters (a calibration of the XY servos and the Z load sensor), resulting in improved portability.In addition, by setting parameters for the inert gas flow rate (copper bonding requires inert gas to prevent copper oxidation), the time for conversion of product-types was shortened, which lessens the operators’ work.

The UTC-5000 series will expand the Group’s share not only in the semiconductor market but also in the markets of image sensors, RF modules and other electronics components, transistors and LEDs where demand is growing along with the dissemination of smartphones.

UTC-5000NeoCu

Annual Report 2015

7

010_0288501372706.indd 7 2015/07/22 16:22:02

S-Link (Engineer Supporting System)

S-Brain (Production Management System)

S-APC (Equipment Management System)Data obtained from the equipment are monitored to detect malfunctions quickly and optimize the frequency of maintenance, contributing to the prevention of defective products and the reduction of maintenance loads.

The S-Link sets the bonding conditions offline.By linking them with design data, the time for setting equipment conditions is shortened, alleviating the burden on workers and engineers and shortening work time, thereby leading to cost reduction.

The S-Brain monitors the production status of each piece of equipment in an integrated manner.It supports production management with real-time monitoring of the operational status of each piece of equipment, including visible alarms. The integrated management of equipment recipes helps improve the yield rate and alleviate the burden on the operators.

We are currently promoting the development of these systems, aiming to commercialize them within fiscal 2015.

Promoting Provision of System SolutionsAlthough aggressive capital investments are continuing in China and other emerging countries, wage standards there are rising each year, which is increasing demand for automation and a reduction of manpower in the semiconductor industry.To address such demand, the Group is striving to strengthen its operator supporting functions, including the auto-recovery functions of wire bonders. Also under development is Shinkawa Computer Integrated Manufacturing (S-CIM), which enables monitoring of the operational and production status of equipment, promoting the proposal of system solutions.

S-CIM consists of three systems—S-Brain, S-APC, and S-Link—that contribute to the improvement of productivity by connecting to equipment via networks.

8

010_0288501372706.indd 8 2015/07/22 16:22:02

Flip Chip BonderTo expand our flip chip bonder business

As semiconductor packaging becomes smaller and thinner, the space available for interconnect becomes smaller. This has led to the expanded adoption of the flip chip bonding method, which enables high speed operation and reduction in energy consumption. The Group developed the LFB series for the TCB (Thermal Compression Bonding) process and has been working to expand the flip chip bonder business for years.The adoption of the TCB process is progressing for CPUs/GPUs/FPGAs compatible with servers, graphics, and wearable equipment and devices.Highly expected as the key to further enhancement of performance and reduction of energy consumption is the TSV (Through Silicon Via) stacking technology (which allows memory chips to be stacked on top of one another).As for the LFB series, the Company will continue the development of stable mass production technologies collaborating with customers toward 2.5D packaging of cutting-edge logic devices adopting the TCB process and 3D packaging of TSV (Through Silicon Via) memory.

As semiconductor miniaturization progresses, fan-out wafer-level packaging (FO WLP) is drawing attention as a new technology that is expected to be applied for mobile device application processors. The Company is also promoting the development of successor models that can address a broad range of uses including the FO WLP.

Responding to the expansion of the smartphone market in emerging countries, the adoption of the reflow soldering process, a major flip chip bonding method that heats and melts solder using a reflow furnace, is expanding.For the purpose of enhancing the product lineup, the Company established a business tie-up with Yamaha Motor Co., Ltd. (“Yamaha Motor”), thereby starting to sell models for the reflow soldering process as a SHINKAWA brand. These models are developed and produced by Yamaha Motor, which utilizes Surface Mounter Technology.By providing a full product lineup, we will reinforce our system to address diverse customer requests and expand our flip chip bonder business to become a new pillar business of the Company.

LFB-1102Super

LFB-2301

Annual Report 2015

9

010_0288501372706.indd 9 2015/07/22 16:22:05

Commitment to CSREnvironmental PolicySHINKAWA LTD. is committed to engage in protection of the global environment through activities based on the following environmental mission and action guideline.

Environmental Mission

Business organization is created by the stage called earth and the players called human beings, so threats to earth and human beings means the menace to the existence of business organization.Therefore, we will undertake the task of protecting nature, which includes conservation of biodiversity

and environment surrounding the human beings, based on our action guideline in all areas of our b u s i n e s s o p e r a t i o n s s u c h a s r e s e a r c h , development, designing, manufacturing, sales and after-sales service of semiconductor manufacturing equipment.

Action Guideline1. We will establish the “SHINKAWA Environmental Management System” and work on prevention of

pollution and continuous improvement of the system.2. We will observe the regulations and other requirements related to environment.3. We will intensively promote the following: 1) Saving of natural resources and energy as well as recycling. 2) Active engagement in technical development and research of eco-friendly products.

Occupational Safety and Health PolicySHINKAWA LTD. will be engaged in activities aimed for occupational safety and health based on the following occupational safety and health missions and action guideline.

Occupational Safety and Health Mission

U n d e r t h e m a n a g e m e n t p h i l o s o p h y o f “SHINKAWA LTD. will lead the robotic technology to guide the society to where people can maximize their creative ability”, we will take occupational safety and health as the priority in all areas of our b u s i n e s s o p e r a t i o n i n c l u d i n g r e s e a r c h ,

development, designing, manufacturing, sales and after-sales service of semiconductor manufacturing equipment, etc. And we will work on building a safe and comfortable working environment as well as sustaining and promoting physical and mental health based on our action guideline.

Action Guideline1. We will establish “SHINKAWA Occupational Safety and Health Management System” and work on

prevention of injury and sickness, as well as continuous improvement of the system.2. We will observe the regulations and other requirements related to occupational safety and health.3. We will strive to eliminate the risk of injuries and sickness resulting from industrial accidents such

as caught in machinery, and natural disasters such as earthquake.4. We will make efforts in sustaining and promoting physical and mental health in order for all

employees to maximize their ability respectively.

10

010_0288501372706.indd 10 2015/07/22 16:22:05

Corporate Governance

Corporate Governance SystemThe Company has a Board of Corporate Auditors.

Internal Control SystemThe Company has put in place an internal control system as set out below pursuant to the Companies Act as well as the Ordinance for Enforcement of the Companies Act.

Board of DirectorsSHINKAWA’s Board of Directors is composed of six members, one of whom is appointed from outside the Company. The Company has also incorporated a corporate officer system, making a clear distinction between the management/supervision function of the management on the one hand and the function of ensuring that business is conducted according to the management policy on the other.In addition to regularly scheduled Board meetings held once every month, extraordinary meetings are held as and when required. The Board meets to deliberate on and determine matters of importance and to overview and supervise the status of operating execution.During the 2014 fiscal year, the Board of Directors met on a total of 21 occasions. In addition to the Board of Directors, a Management Meeting is held on a regular basis twice each month. This meeting is attended by the President, general managers of head office divisions and department general managers.

Board of Corporate AuditorsThe Board of Corporate Auditors is composed of three members, all of whom are appointed from outside the Company. During the 2014 fiscal year, the Board of Corporate Auditors met a total of 14 times. In addition to formulating audit policies and plans, the Board deliberates on matters concerning important auditing operations. Corporate Auditors attend meetings of the Board of Directors, exchange opinions with the

Representative Director, review important documents including requests for approval and resolutions by the Board of Directors. Drawing on evaluations of the business and financial condition of the Company, Corporate Auditors also conduct audits of the execution of duties by directors particularly in the context of statutory and regulatory compliance and validity. Turning to subsidiary companies, Corporate Auditors communicate with directors and corporate auditors and demand reports from subsidiaries when needed. In the event an issue of concern is uncovered, information is shared with the Internal Control Department with steps taken to ensure a resolution and improvement.Corporate Auditors receive and deliberate on the results of accounting audits working closely with Accounting Auditors to monitor the independence and adequacy of each audit. Furthermore, Accounting Auditors and the Internal Audit Department maintain close-knit ties, mutually exchanging information and opinions as and when required. Through these means, every effort is made to enhance the efficiency and efficacy of audits.

Accounting AuditorsThe Company concluded an audit agreement with ARK & Co, based on the Corporate Law Audit and Financial Instruments and Exchange Act. ARK & Co, accordingly conducts an independent accounting audit of the Company. There is no special vested interest between the Company and the Accounting Auditors or its executive officers.

1. The system for securing job execution compliance by directors and employees with laws and regulations as well as the article of association

We shall establish the “Code of Conduct for the SHINKAWA Group” so that all the board members and employees of the entire Group shall perform their jobs in compliance with laws, regulations and the norms of society.In order to attain a thorough understanding, the president shall also control the Companywide promotion of compliance having instituted the basic rules of

compliance. Moreover, the education of employees shall be conducted mainly through the Personnel & Administration Department.The Audit Department under the direct control of the president shall audit the degree of compliance with respect to the Personnel & Administration Department. We shall create an internal reporting system with the aim of deterring questionable behavior and conduct in terms of laws, regulations and the norms of society, prepare contact points for internal reporting both inside and outside the Company to allow all the board members and employees to report information directly,

Basic PhilosophyFor the purpose of raising efficiency and transparency of the management as well as of ensuring soundness and compliance of its business activities, the Group makes a continual effort to maintain and strengthen an internal control system that is treated as one of the most important tasks of the management. By creating an appropriate structure of governance, we believe we can control various uncertain factors surrounding the Group and ensure the continuity of active conduct of business and maximization of the corporate value.

Annual Report 2015

11

010_0288501372706.indd 11 2015/07/22 16:22:05

and ensure that reporters will not receive detrimental treatment because of such reporting.By establishing and promoting these systems, we shall engage in organizational correspondence toward eliminating relationships with antisocial forces and organizations. In the face of unacceptable demands from antisocial forces and organizations, we shall strive to cut-off relations and prevent damage by cooperating with the police and other law enforcement authorities mainly through the Personnel & Administration Department as the controlling division.

2. Systems concerning the maintenance and control of information related to job execution by directors

We shall record and keep information related to decision making and job execution by directors in documents or electronic media (Hereafter, “documents, etc.”) pursuant to the rules relating to document control.These documents, etc. shall be made available for inspection by directors and corporate auditors at any time pursuant to the rules relating to document control.

3. Regulations and other systems concerning the management of risk of loss

In accordance with the risk management rules, risk derived from the responsible jobs of each department and each company of the SHINKAWA Group shall be managed by the department in charge. Monitoring of the s tatus o f c ross -organizat iona l r i sks and Companywide responses shall be managed by the Corporate Planning Department.

4. The system of ensuring that directors execute their duties in an efficient manner

SHINKAWA has adopted an executive officer system to ensure that decision-making is undertaken in a swift and agile manner and to clarify responsibilities with respect to the execution of duties.In the context of operating execution function in accordance with decisions of the Board of Directors, the rules relating to management authority clearly define the responsibilities and authority of each officer. In this manner, the Company has taken steps to build a system that is conducive to the appropriate and efficient execution of duties.In addition, specific objectives and targets are set for each division and department. The Board of Directors regularly reviews that status of progress and results. This helps raise the probability of achieving established objectives and goals and securing efficient Group-wide operations.

5. System to secure the appropriateness of the Company’s operations as well as of the Company Group including its subsidiaries

(1) The department in charge of internal control for the entire Group Companies shall be the Corporate Planning Department, which provides necessary guidance and support to each Group Company to enhance the effectiveness of internal control and the efficiency of business execution at each Group Company.

(2) The Company’s department in charge of compliance and risk management shall conduct activities covering the entire Group.

(3) An internal reporting system shall be applied to each Group company.

(4) The rules for decision making on business execution at the Company’s subsidiaries shall be put in place, and the Company shall have its subsidiaries report the status of their business execution and financial position regularly.

6. In the event corporate auditors request that employees be assigned to assist in their duties; matters related to the relevant employees, matters related to the independence of such employees from directors, and matters related to ensuring the effectiveness of the instructions given to such employees.

In the event employees are required to assist in the duties of corporate auditors, we shall assign employees who have the ability and knowledge to examine the operations of the Company. The employees shall not be subject to instruction and/or order of directors and others insofar as their capacity to assist in the duties of corporate auditors is concerned. Personnel transfers and other employee conditions shall be subject to prior approval by the board of corporate auditors.

7. Systems for directors and employees of the Company and its subsidiaries to report to corporate auditors, systems for other reporting to corporate auditors, and systems to ensure that reporters will not receive detrimental treatment because of such reporting

All the board members and employees o f the SHINKAWA Group shall report without delay on important matters which have a significant impact on the Company and the Company Group, the degree to which internal audits have been implemented in addition to matters designated by law. Methods of reporting (reporter, recipient of report, timing of report, etc.) will be determined by directors and the board of corporate auditors.The SHINKAWA Group shall not treat reporters in a detrimental way because of their providing related information to the corporate auditors.

8. Other sys tems to secure the e f fect ive implementation of audits by corporate auditors

We shall provide active support for the preparation of an appropriate environment that allows audits by corporate auditors, and arrange regular meetings for the exchange of opinions between the board of corporate auditors and representative directors.The Company shall cover the necessary expenses for audit duties such as using external advisors who support the corporate auditors’ audit duties in case it is deemed necessary by the corporate auditors.

12

010_0288501372706.indd 12 2015/07/22 16:22:05

Directors, Operating Officers and Corporate AuditorsDirectors and Operating Officers

Corporate Auditors

Chief Technical Officer, DirectorNorimasa NagataJoined in January 2013Director in Charge of Engineering Div. and Global Operation Div.

DirectorIchiro AnjoOutside Director

Operating OfficerTetsuya SakumaJoined in March 1982General Manager, Global Operation Div.

Operating Officer, DirectorNoboru FujinoJoined in April 1980General Manager, Engineering Div.

Audit & Supervisory Board MemberKoji Sekiguchi

Audit & Supervisory Board MemberMasaki Yoshino

Audit & Supervisory Board MemberMariko Mitsuya

President and CEO,Representative DirectorTakashi NaganoJoined in March 1981

Chief Financial Officer, DirectorTakuya MoriJoined in March 1983Director in Charge of Corporate Planning Dept.and Personnel & Administration Dept.and Accounting Dept.

Operating OfficerHirotoshi TashimaJoined in March 1984General Manager, Sales Div.General Manager, Global Sales Management Dept.

ChairmanOperating Officer, DirectorHiroshi NishimuraJoined in January 1979Shinkawa (Thailand) Co., Ltd. President and Shinkawa Manufacturing Asia Co., Ltd. President

Annual Report 2015

13

010_0288501372706.indd 13 2015/07/22 16:22:12

Financial Section

Financial SummaryReview of ManagementMain Risks and UncertaintiesOur Tasks AheadFinancial DataGroup Companies and LocationsProfile of the Corporate Group and OrganizationHistory of SHINKAWACorporate Information / Investor Information

010_0288501372706.indd 14 2015/07/22 16:22:12

Consolidated 11-Year SummaryYears ended March 31

Financial Summary

Operating Results (Millions of Yen) Operating Results (Millions of Yen)FY2004 FY2005 FY2006 FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014

Net Sales ¥22,108 ¥27,082 ¥32,457 ¥27,796 ¥10,403 Net Sales ¥9,980 ¥20,773 ¥13,396 ¥11,350 ¥7,481 ¥11,352 Gross Profit 7,476 9,303 11,288 9,245 2,367 Gross Profit 1,757 4,742 3,057 2,716 2,135 2,837 Operating Income (Loss) 2,106 3,529 4,267 2,514 (4,256) Operating Income (Loss) (2,867) (792) (2,388) (2,558) (4,113) (2,669)Net Income (Loss) ¥1,339 ¥2,317 ¥2,808 ¥1,376 (¥4,720) Net Income (Loss) (¥2,959) (¥1,222) (¥4,647) (¥2,120) (¥4,312) (¥1,894)

Other Data Other DataFY2004 FY2005 FY2006 FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014

Experiment and Research Expenses (Millions of Yen) ¥1,146 ¥1,298 ¥1,739 ¥1,756 ¥2,276 Experiment and Research Expenses (Millions of Yen) ¥1,420 ¥1,500 ¥1,921 ¥2,033 ¥2,589 ¥2,198 Capital Expenditure (Millions of Yen) 388 935 810 1,047 578 Capital Expenditure (Millions of Yen) 846 410 341 733 649 522 Depreciation (Millions of Yen) ¥699 ¥740 ¥938 ¥1,035 ¥999 Depreciation (Millions of Yen) ¥777 ¥744 ¥716 ¥663 ¥894 ¥801 Number of Employees 477 518 571 604 647 Number of Employees 643 672 658 647 702 672

Per Share Data (Yen) Per Share Data (Yen)FY2004 FY2005 FY2006 FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014

Net Income (Loss) ¥66.36 ¥115.89 ¥145.58 ¥71.36 (¥255.45) Net Income (Loss) (¥162.80) (¥67.24) (¥255.67) (¥116.65) (¥237.27) (¥104.19)Total Net Assets 2,221.62 2,393.75 2,481.45 2,429.87 2,147.43 Total Net Assets 2,006.19 1,932.74 1,670.68 1,593.73 1,342.61 1,284.01 Cash Dividends ¥20.00 ¥40.00 ¥50.00 ¥40.00 ¥10.00 Cash Dividends ¥5.00 ¥5.00 ¥5.00 ¥5.00 ¥0.00 ¥0.00

Ratios (%) Ratios (%)FY2004 FY2005 FY2006 FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014

Return on Assets (ROA) 2.9 4.8 5.4 2.7 (10.5) Return on Assets (ROA) (7.5) (3.2) (13.2) (6.7) (15.1) (7.2)Return on Equity (ROE) 3.1 5.2 6.0 2.9 (11.0) Return on Equity (ROE) (7.8) (3.4) (14.2) (7.1) (16.2) (7.9)Equity Ratio 95.5 90.6 89.4 93.8 96.7 Equity Ratio 94.4 93.4 93.0 93.4 93.6 88.1

Financial Position (Millions of Yen) Financial Position (Millions of Yen)FY2004 FY2005 FY2006 FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014

Total Assets ¥44,898 ¥51,020 ¥53,539 ¥49,945 ¥40,354 Total Assets ¥38,643 ¥37,618 ¥32,664 ¥31,004 ¥26,059 ¥26,500 Total Net Assets ¥42,899 ¥46,247 ¥47,865 ¥46,868 ¥39,046 Total Net Assets ¥36,480 ¥35,136 ¥30,366 ¥28,967 ¥24,402 ¥23,336

Cash Flows (Millions of Yen) Cash Flows (Millions of Yen)FY2004 FY2005 FY2006 FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014

Net Cash Provided by (used in) Operating Activities ¥3,142 ¥2,894 ¥3,842 (¥1,188) ¥2,267 Net Cash Provided by (used in) Operating Activities (¥439) (¥5,293) (¥1,482) ¥2,225 (¥2,774) (¥1,913)Net Cash Provided by (used in) Investing Activities (282) (1,034) (938) (285) (969) Net Cash Provided by (used in) Investing Activities 230 3,355 (1,017) (1,794) 1,799 (460)Free Cash Flows 2,860 1,860 2,904 (1,473) 1,298 Free Cash Flows (209) (1,938) (2,499) 431 (975) (2,373)Net Cash Provided by (used in) Financing Activities (896) (437) (775) (965) (2,170) Net Cash Provided by (used in) Financing Activities (95) (95) (93) (91) (91) (1)Cash and Cash Equivalents at End of Period ¥13,558 ¥15,116 ¥17,333 ¥14,807 ¥13,832 Cash and Cash Equivalents at End of Period ¥13,554 ¥11,477 ¥8,821 ¥9,253 ¥8,492 ¥6,349

Note : From Annual Report 2009, the amount of cash and cash equivalents are shown after deduction of time deposits of which maturity exceed three months.

The amounts from FY2004 to FY2007 shown in Net Cash Provided by (Used in) Investing Activities, and Cash and Cash Equivalents at End of Period are changed in accordance with the change of the calculation.

Free Cash Flows = Net Cash Provided by (used in) Operating Activities + Net Cash Provided by (used in) Investing Activities

Annual Report 2015

15

010_0288501372706.indd 15 2015/07/22 16:22:12

Operating Results (Millions of Yen) Operating Results (Millions of Yen)FY2004 FY2005 FY2006 FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014

Net Sales ¥22,108 ¥27,082 ¥32,457 ¥27,796 ¥10,403 Net Sales ¥9,980 ¥20,773 ¥13,396 ¥11,350 ¥7,481 ¥11,352 Gross Profit 7,476 9,303 11,288 9,245 2,367 Gross Profit 1,757 4,742 3,057 2,716 2,135 2,837 Operating Income (Loss) 2,106 3,529 4,267 2,514 (4,256) Operating Income (Loss) (2,867) (792) (2,388) (2,558) (4,113) (2,669)Net Income (Loss) ¥1,339 ¥2,317 ¥2,808 ¥1,376 (¥4,720) Net Income (Loss) (¥2,959) (¥1,222) (¥4,647) (¥2,120) (¥4,312) (¥1,894)

Other Data Other DataFY2004 FY2005 FY2006 FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014

Experiment and Research Expenses (Millions of Yen) ¥1,146 ¥1,298 ¥1,739 ¥1,756 ¥2,276 Experiment and Research Expenses (Millions of Yen) ¥1,420 ¥1,500 ¥1,921 ¥2,033 ¥2,589 ¥2,198 Capital Expenditure (Millions of Yen) 388 935 810 1,047 578 Capital Expenditure (Millions of Yen) 846 410 341 733 649 522 Depreciation (Millions of Yen) ¥699 ¥740 ¥938 ¥1,035 ¥999 Depreciation (Millions of Yen) ¥777 ¥744 ¥716 ¥663 ¥894 ¥801 Number of Employees 477 518 571 604 647 Number of Employees 643 672 658 647 702 672

Per Share Data (Yen) Per Share Data (Yen)FY2004 FY2005 FY2006 FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014

Net Income (Loss) ¥66.36 ¥115.89 ¥145.58 ¥71.36 (¥255.45) Net Income (Loss) (¥162.80) (¥67.24) (¥255.67) (¥116.65) (¥237.27) (¥104.19)Total Net Assets 2,221.62 2,393.75 2,481.45 2,429.87 2,147.43 Total Net Assets 2,006.19 1,932.74 1,670.68 1,593.73 1,342.61 1,284.01 Cash Dividends ¥20.00 ¥40.00 ¥50.00 ¥40.00 ¥10.00 Cash Dividends ¥5.00 ¥5.00 ¥5.00 ¥5.00 ¥0.00 ¥0.00

Ratios (%) Ratios (%)FY2004 FY2005 FY2006 FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014

Return on Assets (ROA) 2.9 4.8 5.4 2.7 (10.5) Return on Assets (ROA) (7.5) (3.2) (13.2) (6.7) (15.1) (7.2)Return on Equity (ROE) 3.1 5.2 6.0 2.9 (11.0) Return on Equity (ROE) (7.8) (3.4) (14.2) (7.1) (16.2) (7.9)Equity Ratio 95.5 90.6 89.4 93.8 96.7 Equity Ratio 94.4 93.4 93.0 93.4 93.6 88.1

Financial Position (Millions of Yen) Financial Position (Millions of Yen)FY2004 FY2005 FY2006 FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014

Total Assets ¥44,898 ¥51,020 ¥53,539 ¥49,945 ¥40,354 Total Assets ¥38,643 ¥37,618 ¥32,664 ¥31,004 ¥26,059 ¥26,500 Total Net Assets ¥42,899 ¥46,247 ¥47,865 ¥46,868 ¥39,046 Total Net Assets ¥36,480 ¥35,136 ¥30,366 ¥28,967 ¥24,402 ¥23,336

Cash Flows (Millions of Yen) Cash Flows (Millions of Yen)FY2004 FY2005 FY2006 FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014

Net Cash Provided by (used in) Operating Activities ¥3,142 ¥2,894 ¥3,842 (¥1,188) ¥2,267 Net Cash Provided by (used in) Operating Activities (¥439) (¥5,293) (¥1,482) ¥2,225 (¥2,774) (¥1,913)Net Cash Provided by (used in) Investing Activities (282) (1,034) (938) (285) (969) Net Cash Provided by (used in) Investing Activities 230 3,355 (1,017) (1,794) 1,799 (460)Free Cash Flows 2,860 1,860 2,904 (1,473) 1,298 Free Cash Flows (209) (1,938) (2,499) 431 (975) (2,373)Net Cash Provided by (used in) Financing Activities (896) (437) (775) (965) (2,170) Net Cash Provided by (used in) Financing Activities (95) (95) (93) (91) (91) (1)Cash and Cash Equivalents at End of Period ¥13,558 ¥15,116 ¥17,333 ¥14,807 ¥13,832 Cash and Cash Equivalents at End of Period ¥13,554 ¥11,477 ¥8,821 ¥9,253 ¥8,492 ¥6,349

16

010_0288501372706.indd 16 2015/07/22 16:22:12

Results of Operations for the Fiscal Year ended March 31, 2015

Operating Results for the Fiscal Year Ended March 31, 2015

Review of Management

The global economy in the fiscal year ended March 31, 2015 showed that the developed countries maintained a gradual recovery trend as a whole, reflecting the improved housing and labor markets in the United States and the depreciation of the euro against a backdrop of quantitative easing launched by the European Central Bank (ECB). Meanwhile, causes for concern persisted, including the deceleration of emerging economies due to falling resource prices and the increasingly apparent sluggishness of the Chinese real estate market.In the semiconductor industry, aggressive capital investments in South Korea and China were seen as favorable mobile-related markets continued partly due to the launch of new products by smartphone manufacturers. The market expansion continued as the mass production of multilayer memory products by through-silicon via (TSV) for communications infrastructure and servers has arrived, increasing capital investments from major memory makers. Accordingly, the back-end equipment market enjoyed greater order receipts than usual.In such a business climate, the SHINKAWA Group endeavored to promote market penetration with products launched in the previous fiscal year and expand sales to major OSAT (outsourced semiconductor assembly and test services) providers. In terms of technological development,

we introduced a network-based production support system aimed at fully automating customers’ production processes. Improvement of operational efficiency was also promoted through the sales, engineering and production systems that were restructured in the previous fiscal year.As a result of these efforts, sales of the UTC-5000 Series wire bonders proceeded favorably with an increase in the order receipts from memory makers for mobile devices and servers. Coupled with the continued depreciation of the yen, net sales achieved a year-on-year increase. In terms of profitability, however, the situation remained severe, as various measures to reform the earnings structure have not yet been completed. As for the consolidated performance of the Group for the fiscal year ended March 31, 2015, net sales increased 51.7% from the corresponding period of the previous fiscal year to 11,352 million yen. An operating loss of 2,669 million yen was recorded compared with an operating loss of 4,113 million yen for the previous fiscal year and an ordinary loss of 1,784 million yen was posted compared with an ordinary loss of 3,909 million yen a year earlier. As a result, a net loss of 1,894 million yen was recorded for the fiscal year under review compared with a net loss of 4,312 million yen a year earlier.

1. Net SalesNet sales in fiscal 2014 were 11,352 million yen, a 51.7% increase compared with the last fiscal year.Domestic sales amounted to 1,520 million yen, a 0.2% increase compared with last fiscal year, and foreign sales were 9,833 million yen, a 64.8% increase. As demand has expanded for smartphones to be sold within China, we received increased orders from major Chinese OSAT providers and major South Korean memory makers that have factories in China.

2. Cost of SalesCost of sales was 8,515 million yen and the ratio of sales cost to net sales was 75.0%, a rise of 3.5 percentage points from the previous consolidated fiscal year.

3. Selling, General and Administrative ExpensesSelling, general and administrative expenses were 5,506 million yen, an 11.9% decrease compared with the last fiscal year mainly because of a decrease in experiment and research expenses.

4. Operating Profit/LossThe Company posted an operating loss of 2,669 million yen compared with an operating loss of 4,113 million yen recorded in the last fiscal year.

5. Non-operating IncomeThe Company posted a non-operating income of 890 million yen compared with a non-operating income of 209 million yen recorded in the last fiscal year.Foreign exchange gains of 790 million yen due to yen depreciation and dividend income of 47 million yen were recorded.

6. Non-operating ExpensesNon-operating expenses were 6 million yen, almost the same amount as those for the previous consolidated fiscal year.

7. Extraordinary IncomeExtraordinary income was 15 million yen compared with 1,467 million yen for the previous consolidated fiscal year due to such factors as the voluntary retirement scheme in place for the previous consolidated fiscal year; we received the government’s subsidy for labor movement facilitation.During the previous consolidated fiscal year, a gain on sales of investment securities of 1,464 million yen was recorded.

8. Extraordinary LossExtraordinary losses were 140 million yen compared with 1,859 million yen for the previous consolidated fiscal year due to such factors as impairment of noncurrent assets due to the decision to transfer the assets held.During the previous consolidated fiscal year, impairment loss of 1,503 million yen and premium allowance of retirement of 269 million yen were recorded.

9. Net Income/LossAs a result of the factors above, the Company posted a current term net loss of 1,894 million yen compared with 4,312 million yen recorded as a current term net loss in the last fiscal year. Current term net loss per share was 104.19 yen.

Annual Report 2015

17

010_0288501372706.indd 17 2015/07/22 16:22:12

Perspectives on the next fiscal yearFor the global economy in the fiscal year ending March 31, 2016, the continuation of a mild economic recovery is expected, led by the U.S. market where improvement of the income environment is expected to continue against a backdrop of low crude oil prices. However, uncertainty about the future remains due to such factors as a possible interest-rate increase by the Federal Reserve Bank’s financial measure, fears of a Greek default and falling oil prices causing economic deterioration in oil-producing countries.In the semiconductor industry, growing demand for smartphones and cloud computing is expected to boost expans ion o f the memory market . Car -mounted semiconductors are also expected to steadily grow. The launch of wearable devices is expected to create new demand for semiconductors. The back-end equipment market is expected to enjoy continued capital investments for mass production by memory makers and OSAT providers of China for the time being. However, the market’s sustainability is uncertain due to geopolitical risk and other factors which place downward pressure on the global economy.

As part of its measures to “Improve Company Structure,” the Group is in the process of restructuring its production system so that it centers on three locations—the Thai factory, the domestic factory and outsourced producers. We will strive to make this structure fully established as early as possible, while promoting sales expansion and improving the profitability of existing products.

Current Liabilities and Current Ratio

2014 (FY)2013201220112010Current Liabilities (Scale on Left) Current Ratio (Scale on Right)

0

500

1,000

1,500

2,000

2,500

3,000(Millions of Yen) (%)

0

500

1,000

1,500

2,000

2,500

Cash & Cash Equivalents and Equity Ratio

2014 (FY)2013201220112010Cash and Cash Equivalents (Scale on Left) Equity Ratio (Scale on Right)

80

85

90

95

100(Millions of Yen)

0

3,000

6,000

9,000

12,000

15,000(%)

Quarterly Orders Received and Net Sales

Quarterly Orders Received

(Millions of Yen)

Net Sales

0

7,000

2,000

3,000

1,000

4,000

5,000

6,000

4Q3Q2QFY2014.1Q4Q3Q2QFY2013.1Q4Q3Q2QFY2012.1Q

Cash Flows

Cash Flows from Operating Activities Cash Flows from Investing Activities Cash Flows from Financing Activities2014 (FY)2013201220112010

(Millions of Yen)

-6,000

-4,000

-2,000

0

2,000

4,000

18

010_0288501372706.indd 18 2015/07/22 16:22:13

Main Risks and Uncertainties

1. Changes in the semiconductor marketThe Group manufactures and sells semiconductor m a n u f a c t u r i n g e q u i p m e n t . T h e d e m a n d f o r semiconductor manufacturing equipment is influenced by fluctuations in the semiconductor market, the trend of semiconductor manufacturers’ capital investments and other factors.Our Group strives to maintain solid fiscal standing and is currently conducting a range of measures to radically reorganize the cost structure and fortify the product lineup with a view to boost its competitive power, but since ours is a single segment enterprise, these market fluctuations may have a disadvantageous impact on the Group’s financial standing and business performance.

2. Exchange rate fluctuationsIn the 2014 fiscal year, the proportion of foreign sales among net sales of the Group was 86.6%. As the Group also intends to expand the number of its overseas bases centering on the Asian countries, we expect a further increase in the foreign currency transactions in the future.Presently, the non-yen foreign currency transactions are denominated in U.S. dollars, and fluctuations in the yen/dollar exchange rate may affect the financial standing and business performance of the Group.

3. Uncertainties related to product developmentOur Group makes a continuous effort to develop original technology in response to the latest technological innovations and needs of the market, but the results of product development are accompanied by a number of uncertainties stemming from various factors including the changes in the product life cycle, and segmentation of clients’ needs.In such cases as when the Group cannot develop new technologies and new products in a timely manner, or when it cannot develop new technologies precisely matching the direction of the current market competition, it may affect the financial standing and business performance of the Group.

4. Worsening of conditions for raw material procurement

The products of the Group are made by assembling in the company varied units processed/manufactured by external suppliers, and since production of such units requires the manufacturer to have the proprietary technology of our Group, in procurement we depend on a small number of specific suppliers.During the phases when there is a substantial increase of production by the Group, there are cases when the capacity of production on the suppliers side temporarily cannot keep up with the increase, resulting in the state of procurement becoming unstable.The Group may also be influenced by financial health and other changes happening to its suppliers. These

factors may affect the financial standing and business performance of the Group.

5. Major quality claimsOne of the permanent tasks of the Group is to maintain and enhance the stability and reliability of our products, taking all possible care to ensure a thorough quality control. Nevertheless, there may be cases when due to unforeseen defects or flaws the Group is sued under product liability and has to fulfill its duty for compensation.When the cost of such duty cannot be covered by insurance, it may affect the financial standing and business performance of the Group.

6. Lawsuits related to intellectual property rights, etc.

The Group strives to protect and control various kinds of intellectual property rights including such measures as acquiring the patent rights for the proprietary technology developed by the Group.At the same time, in product development, we make an effort not to infringe on intellectual property rights and other rights owned by third parties.However, when a third party fraudulently uses the technology the Group owns intellectual property rights for, or when a legal action is taken against the Group by a third party for infringement of its intellectual property rights, it may affect the financial standing and business performance of the Group.

7 . Uncertaint ies re lated to mergers and acquisitions and business collaborations

Since establishment, the Group has consistently grown through its own resources without mergers and acquisitions. However, as economic fluctuations and competition intensify against the backdrop of the advancing economic globalization, as a means of business expansion, we may resort to such steps as mergers, acquisitions, or business collaboration with companies that are expected to have a synergistic effect when their technology is combined with the technology of the Group.In such a case, the Group shall check with due diligence the financial standing and other details of the company concerned beforehand and identify the risks, but if after acquisition the company is unexpectedly found to have debts, or when there is no synergistic effect due to changes of business environment or other factors, such cases may affect the financial standing and business performance of the Group.

8. Changes of regulationsThe Group is influenced not only by laws and regulations of Japan, but also by various regulations and approval procedures peculiar to the countries of the clients who purchase and use the products of the Group.

Below are the main risks and uncertainties SHINKAWA is exposed to in the business environment surrounding the Group that can substantially influence judgment of the investors.Please note that all forward-looking statements listed in this section are based on the current assumptions of the Group as of the end of June, 2015.

Annual Report 2015

19

010_0288501372706.indd 19 2015/07/22 16:22:13

Our Tasks Ahead

Although the Group strives to strictly observe these legal restrict ions by maintaining a system of compliance, in cases where the Group has to bear substantial costs as a result of revisions or enforcements of new laws, ordinances, or regulations in the future, such cases may affect the financial standing and business performance of the Group.

9. Leakage of important informationThe SHINKAWA Group handles important information related to its business partners and personal information of officers and employees of the Group while conducting business activities. To protect such information, we are str iv ing to manage such information thoroughly by improving the compliance system, including related rules, establishing an information security system, and conducting activities to educate officers and employees.However, despite all such measures we take, should any leakage of customer information or personal information occur due to an unexpected situation, liability for damage compensation might occur and/or the Group might lose the trust of society, which could affect the Group’s financial position and operating results.

10. Occurrence of natural disasters, wars, terrorist attacks, accidents, etc.

In cases when earthquakes, floods, or other natural disasters, wars, terrorist attacks, epidemics of infectious diseases, radioactive contamination, or computer virus attacks happen in areas in and outside the country, in which bases of our Group are located, the Group may be forced to suspend its business activity. Also, when the Group has to bear the restoration expenses for products, components, or plant and equipment that were damaged during natural or man-caused disasters, it may affect the financial standing and business performance of the Group.

11. Notes on Important Events Related to Going Concern Assumption

The Group has reported an operating loss, ordinary loss and net loss in recent fiscal years, mostly due to prolonged periods of product development and evaluation and a relatively high ratio of fixed cost to net sales. Under such circumstances, the Company experienced important events relating to the going concern assumption.

To address the increasingly small, high-precision and low-cost packaging business in the semiconductor assembly markets that continue to expand mainly in the emerging nations in Asia, the Group has engaged in several initiatives. These include promoting the sales of cost-competitive and high-value-added products, acquiring new customers including major OSAT providers, and transferring production to the Thai factory, which is a years-long effort to reform the earnings structure. These measures have proceeded steadily, producing some positive results. Due to the prolonged periods of product development and evaluation, however, the various measures to reform the earnings structure are incomplete, with unsatisfactory business results having continued.Faced with such an environment, the Group is working on the following tasks.

1. Improvement of operational efficiencyTo respond to changes in global market trends in a timely and speedy manner, the Group has promoted the restructuring of its sales, engineering and production systems since October 2013 as part of the efforts to “Improve Company Structure” and will continue these efforts so that the new systems are fully established as early as possible.With regard to sales activities, the Group respects the autonomy of its overseas sales offices to allow them to customize their activities to suit the local needs and maximize customer satisfaction.The engineering force is strengthening ties with the production and quality assurance divisions to promote cost-cutting efforts starting at the product design and development stages, thereby improving profitability.With regard to production, the Group seeks to ensure optimal production in the most suitable location at reduced costs. To achieve that, the manufacturing of some products has been outsourced, and the Group’s production division is being decentralized into its subsidiaries to allow production activities to remain flexible and carefully tailored to customer needs. By encouraging the Thai factory, the domestic factory, and the outsourced producers to establish a complementary relationship, we seek enhancement of production efficiency on a Group-wide basis.

2. Enhancement of technological capabilities and product strengths to capture business opportunitiesLooking at the trend of packaging technologies, the popularity of wireless processes, such as flip chip and wafer-level packaging, is expected to grow significantly, which will likely expand the flip-chip bonder market. To prepare for the anticipated start of mass production of the TCB (Thermal Compression Bonding) process flip-chip devices, in which our customers’ considerable investment will occur, we will promote alliances with external partners and sharpen our competitive edge in 3D packaging and other leading-edge technologies. At the same time, we will address various processes to seek distinction from competitors, while making focused efforts to develop cost-competitive next-generation platforms.In the wire and die bonder businesses, we will continue to provide existing and new customers with our highly reliable technologies. We will also expand sales to emerging OSAT providers by upgrading the operator supporting functions of the bonding equipment itself and providing system solutions aimed at effective management of the status of equipment operation and production.

20

010_0288501372706.indd 20 2015/07/22 16:22:13

Financial DateConsolidated Balance Sheets

Millions of YenThousands of U.S.

DollarsAs of

March 31, 2014As of

March 31, 2015As of

March 31, 2015Assets

Current assetsCash and deposits 9,212 7,016 58,382 Notes and accounts receivable-trade 2,110 4,798 39,923 Merchandise and finished goods 2,953 2,679 22,291 Work in process 1,624 708 5,889 Raw materials and supplies 409 593 4,937 Deferred tax assets 16 28 235 Other 323 629 5,238 Allowance for doubtful accounts (1) (1) (12)Total current assets 16,645 16,449 136,884

Noncurrent assetsProperty, plant and equipment

Buildings and structures 12,856 13,040 108,512 Accumulated depreciation (10,639) (10,901) (90,717)Buildings and structures, net 2,217 2,138 17,795

Machinery, equipment and vehicles 2,790 2,459 20,465 Accumulated depreciation (2,221) (1,996) (16,608)Machinery, equipment and vehicles, net 568 464 3,858

Land 3,540 3,502 29,144 Construction in progress 13 — —Other 1,792 1,617 13,455

Accumulated depreciation (1,695) (1,526) (12,699)Other, net 97 91 756

Total property, plant and equipment 6,435 6,195 51,552 Intangible assets

Other 81 75 624 Total intangible assets 81 75 624

Investments and other assetsInvestment securities 2,526 3,324 27,661 Long-term loans receivable 34 28 233 Deferred tax assets 13 37 304 Other 326 392 3,264 Total investments and other assets 2,898 3,781 31,462

Total noncurrent assets 9,414 10,051 83,638 Total assets 26,059 26,500 220,522

LiabilitiesCurrent liabilities

Accounts payable-trade 277 1,308 10,885 Income taxes payable 22 40 331 Deferred tax liabilities — 6 50 Provision for product warranties 52 133 1,107 Other 234 329 2,735 Total current liabilities 585 1,816 15,109

Noncurrent liabilitiesNet defined benefit liability 727 795 6,617 Deferred tax liabilities 323 538 4,478 Other 22 15 129 Total noncurrent liabilities 1,072 1,349 11,224

Total liabilities 1,657 3,164 26,333 Net assets

Shareholders' equityCapital stock 8,360 8,360 69,568 Capital surplus 8,907 8,907 74,119 Retained earnings 9,287 7,332 61,016 Treasury stock (3,149) (3,150) (26,210)Total shareholders' equity 23,405 21,450 178,494

Accumulated other comprehensive incomeValuation difference on available-for-sale securities 871 1,454 12,098 Foreign currency translation adjustment 127 371 3,089 Remeasurements of defined benefit plans (1) 61 508 Total accumulated other comprehensive income 997 1,886 15,695

Total net assets 24,402 23,336 194,189 Total liabilities and net assets 26,059 26,500 220,522

March 31, 2014 and 2015

Note : The translation of Japanese yen amounts into U.S. dollars is included solely for the convenience of the readers, using the prevailing exchange rate at March 31, 2015, which was ¥120.17 to U.S. $1.00.

Annual Report 2015

21

010_0288501372706.indd 21 2015/07/22 16:22:13

Consolidated Statements of IncomeMillions of Yen

Thousands of U.S. Dollars

Fiscal year ended March 31, 2014

Fiscal year ended March 31, 2015

Fiscal year ended March 31, 2015

Net sales 7,481 11,352 94,470 Cost of sales 5,346 8,515 70,862 Gross profit 2,135 2,837 23,608 Selling, general and administrative expenses 6,248 5,506 45,819 Operating loss (4,113) (2,669) (22,211)Non-operating income

Interest income 19 12 99 Dividend income 70 47 395 Rent income 19 25 208 Subsidy income 46 — —Foreign exchange gains 42 790 6,573 Other 14 16 135 Total non-operating income 209 890 7,409

Non-operating expensesCost of lease revenue 5 5 41 Other 1 1 6 Total non-operating expenses 6 6 47

Ordinary loss (3,909) (1,784) (14,848)Extraordinary income

Gain on sales of noncurrent assets — 2 14 Gain on sales of investment securities 1,464 — —Gain on sales of golf memberships 3 — —Tokyo labor bureau grant — 13 109 Total extraordinary income 1,467 15 123

Extraordinary lossesLoss on sales of non-current assets 66 — —Impairment loss 1,503 106 883 Loss on retirement of non-current assets 21 33 278 Premium allowance of retirement 269 — —Total extraordinary losses 1,859 140 1,161

Loss before income taxes and minority interests (4,302) (1,909) (15,886)Income taxes-current 9 29 240 Refund of income taxes (16) (17) (140)Income taxes-deferred 18 (28) (229)Total income taxes 11 (16) (129)Loss before minority interests (4,312) (1,894) (15,757)Net loss (4,312) (1,894) (15,757)

Fiscal Years ended March 31, 2014 and 2015

Consolidated Statements of Comprehensive IncomeMillions of Yen

Thousands of U.S. Dollars

Fiscal year ended March 31, 2014

Fiscal year ended March 31, 2015

Fiscal year ended March 31, 2015

Loss before minority interests (4,312) (1,894) (15,757)Other comprehensive income

Valuation difference on available-for-sale securities (436) 583 4,854 Foreign currency translation adjustment 352 244 2,033 Remeasurements of defined benefit plans, net of tax — 62 515Total other comprehensive income (83) 889 7,401

Comprehensive income (4,396) (1,004) (8,356)Comprehensive income attributable to

Comprehensive income attributable to owners of the parent (4,396) (1,004) (8,356)Comprehensive income attributable to minority interests — — —

Fiscal Years ended March 31, 2014 and 2015

Note : The translation of Japanese yen amounts into U.S. dollars is included solely for the convenience of the readers, using the prevailing exchange rate at March 31, 2015, which was ¥120.17 to U.S. $1.00.

22

010_0288501372706.indd 22 2015/07/22 16:22:13

Consolidated Statements of Cash FlowsMillions of Yen

Thousands of U.S. Dollars

Fiscal year ended March 31, 2014

Fiscal year ended March 31, 2015

Fiscal year ended March 31, 2015

Net cash provided by (used in) operating activitiesLoss before income taxes and minority interests (4,302) (1,909) (15,886)Depreciation 894 801 6,662 Impairment loss 1,503 106 883 Increase (decrease) in allowance for doubtful accounts 0 0 2 Increase (decrease) in provision for retirement benefits (522) — —Increase (decrease) in net defined benefit liability 726 58 487 Increase (decrease) in other provision (68) 81 674 Interest and dividend income (89) (59) (494)Foreign exchange losses (gains) 30 (355) (2,958)Loss on retirement of non-current assets 21 33 278 Tokyo labor bureau grant — (13) (109)Loss (gain) on sales of property, plant and equipment 66 (2) (14)Loss (gain) on sales of investment securities (1,464) — —Decrease (increase) in notes and accounts receivable - trade 27 (2,540) (21,135)Decrease (increase) in inventories 559 1,287 10,712 Increase (decrease) in notes and accounts payable - trade (232) 741 6,169 Loss (gain) on sales of golf club memberships (3) — —Premium allowance of retirement 358 — —Other, net 32 (232) (1,929)Subtotal (2,464) (2,002) (16,659)Interest and dividend income received 91 64 531 Income taxes (paid) refund (43) 25 212 Premium allowance of retirement paid (358) — —Net cash provided by (used in) operating activities (2,774) (1,913) (15,917)

Net cash provided by (used in) investing activitiesPayments into time deposits (981) (741) (6,167)Proceeds from withdrawal of time deposits 968 869 7,230 Purchase of property, plant and equipment (642) (464) (3,865)Proceeds from sales of property, plant and equipment 232 3 28 Purchase of intangible assets (34) (49) (406)Payments for retirement of non-current assets — (4) (37)Proceeds from sales of investment securities 2,263 — —Payments of loans receivable (15) (7) (57)Collection of loans receivable 17 15 128 Other payments (67) (98) (816)Other proceeds 57 16 131 Net cash provided by (used in) investing activities 1,799 (460) (3,830)

Net cash provided by (used in) financing activitiesPurchase of treasury shares (0) (0) (3)Cash dividends paid (91) (1) (6)Net cash provided by (used in) financing activities (91) (1) (9)

Effect of exchange rate change on cash and cash equivalents 72 231 1,922 Net increase (decrease) in cash and cash equivalents (995) (2,143) (17,834)Cash and cash equivalents at beginning of period 9,253 8,492 70,665 Increase in cash and cash equivalents from newly consolidated subsidiary 234 — —Cash and cash equivalents at end of period 8,492 6,349 52,831

Fiscal Years ended March 31, 2014 and 2015

Annual Report 2015

23

010_0288501372706.indd 23 2015/07/22 16:22:13

Consolidated Statement of Changes in Net AssetsFiscal Years ended March 31, 2014 and 2015

Millions of yen

Shareholders’ equityAccumulated other

comprehensive incomeTotal net

assetsCapital stock

Capital surplus

Retained earnings

Treasury stock

Total shareholders’

equity

Valuation difference

on available-for-sale

securities

Foreign currency

translation adjustment

Remeasurements of defined benefit

plans

Total accumulated

other comprehensive

income

Balance at March 31, 2013 ¥8,360 ¥8,907 ¥13,768 (¥3,149) ¥27,886 ¥1,306 (¥226) — ¥1,081 ¥28,967 Cumulative effects of changes in accounting policies — —Restated balance 8,360 8,907 13,768 (3,149) 27,886 1,306 (226) — 1,081 28,967 Changes of items during period

Dividends of surplus (91) (91) (91)Net income (loss) (4,312) (4,312) (4,312)Change of scope of consolidation (77) (77) (77)Purchase of treasury shares (0) (0) (0)Net changes of items other than shareholders’ equity (436) 352 (1) (84) (84)

Total changes of items during period — — (4,480) (0) (4,481) (436) 352 (1) (84) (4,565)

Fiscal Years ended March 31, 2015 Thousands of U.S. Dollars

Shareholders’ equityAccumulated other

comprehensive incomeTotal net

assetsCapital stock

Capital surplus

Retained earnings

Treasury stock

Total shareholders’

equity

Valuation difference

on available-for-sale

securities

Foreign currency

translation adjustment

Remeasurements of defined benefit

plans

Total accumulated

other comprehensive

income

Balance at the beginning of current period $69,568 $74,119 $77,285 ($26,206) $194,766 $7,244 $1,056 ($6) $8,294 $203,060 Cumulative effects of changes in accounting policies (511) (511) (511)Restated balance 69,568 74,119 76,773 (26,206) 194,254 7,244 1,056 (6) 8,294 202,548 Changes of items during period

Dividends of surplus — —Net income (loss) (15,757) (15,757) (15,757)Change of scope of consolidation — —Purchase of treasury shares (3) (3) (3)Net changes of items other than shareholders’ equity 4,854 2,033 515 7,401 7,401

Total changes of items during period — — (15,757) (3) (15,760) 4,854 2,033 515 7,401 (8,359)Balance at the end of current period $69,568 $74,119 $61,016 ($26,210) $178,494 $12,098 $3,089 $508 $15,695 $194,189

Balance at the beginning of current period ¥8,360 ¥8,907 ¥9,287 (¥3,149) ¥23,405 ¥871 ¥127 (¥1) ¥997 ¥24,402 Cumulative effects of changes in accounting policies (61) (61) (61)Restated balance 8,360 8,907 9,226 (3,149) 23,344 871 127 (1) 997 24,340 Changes of items during period

Dividends of surplus — —Net income (loss) (1,894) (1,894) (1,894)Change of scope of consolidation — —Purchase of treasury shares (0) (0) (0)Net changes of items other than shareholders’ equity 583 244 62 889 889

Total changes of items during period — — (1,894) (0) (1,894) 583 244 62 889 (1,005)Balance at the end of current period ¥8,360 ¥8,907 ¥7,332 (¥3,150) ¥21,450 ¥1,454 ¥371 ¥61 ¥1,886 ¥23,336

24

010_0288501372706.indd 24 2015/07/22 16:22:13

Group Companies and Locations [Head Office] ■ SHINKAWA LTD. 2-51-1 Inadaira, Musashimurayama-shi, Tokyo 208-8585, Japan Phone: +81-42-560-1231 Fax : +81-42-560-8485

[Manufacturing/Engineering] ■ Shinkawa Technologies Ltd. 2-51-1 Inadaira, Musashimurayama-shi, Tokyo 208-0023, Japan Phone: +81-42-560-0988 Fax: +81-42-560-0844 ■ Shinkawa Manufacturing Asia Co., Ltd. 83/44 Moo19 Nava Nakorn Industrial Zone, Phaholyothin Rd, Klong Nueng, Klong Luang, Pathumthani 12120 Thailand Phone : +66-2529-6285 Fax : +66-2529-6289

[Software Engineering] ■ Shinkawa Vietnam Co., Ltd. 4F, QTSC Building 9, Quang Trung Software City, Tan Chanh

Hiep Ward, District 12, Ho Chi Minh City, Vietnam Phone : +84-8-3715-4080 Fax : +84-8-3715-4079

[Sales/Service] ● Shinkawa Technologies Ltd. Kyushu Service Center 8F, AIM Bldg., 3-8-1 Asano Kokurakita-ku Kitakyushu-shi, Fukuoka 802-0001, Japan Phone : +81-93-533-1226 Fax : +81-93-533-1227 ■ Shinkawa Korea Co., Ltd. #501 Sunil Technopia 440, Sangdaewon-dong, Jungwon-ku,

Sungnam-shi, Kyungki-do 462726, Korea Phone : +82-31-777-3434 Fax : +82-31-777-3421 ■ Shinkawa Taiwan Co., Ltd. 6F, No. 318, Sec.1, Neihu Rd., Taipei 114, Taiwan, R.O.C. Phone : +886-2-2797-8281 Fax : +886-2-2797-8287 ● Shinkawa Taiwan Co., Ltd. Kaohsiung Office 14F., No.335, Wunfu Rd., Zuoying Dist., Kaohsiung City 813,

Taiwan (R.O.C.) Phone : +886-7-341-8150 Fax : +886-7-341-8151

■ Shinkawa (Shanghai) Co., Ltd. Rm. 2101A/B, Sunplus Bldg., No.1077, Zuchongzhi Rd., Zhangjiang High-Tech Park, Pudong New Area, Shanghai 201203, China Phone : +86-21-6391-7373 Fax : +86-21-6391-7576 ● Shinkawa (Shanghai) Co., Ltd. Leshan Office 27, West People Rd., Leshan, Sichuan, 614000, China Phone : +86-833-215-0238 Fax : +86-833-215-0338 ● Shinkawa (Shanghai) Co., Ltd. Suzhou Office Singa Plaza Tower 1A0201B, 8 Zhong Xin Da Dao West, Suzhou Industrial Park, Suzhou, Jiangsu, 215021, China Phone: +86-512-6763-9551 Fax: +86-512-6763-9550 ■ Shinkawa Philippines, Inc. Unit 304 The Sycamore Bldg., Alabang-Zapote Rd., Alabang Muntinlupa City, Metro Manila 1770, Philippines Phone : +63-2-850-4519 Fax : +63-2-807-1023 ● Shinkawa Philippines, Inc. Baguio Office C/O Ms. Erna Muyano Apartment, Unit 2, Youngland, Camp 7, Baguio City 2600, Philippines Phone/Fax : +63-74-444-9594 ■ Shinkawa Singapore Pte. Ltd. 31 Kaki Bukit Rd., 3 #02-03A Techlink, Singapore 417818 Phone : +65-6227-0072 Fax : +65-6227-1072 ■ Shinkawa (Malaysia) Sdn. Bhd. Suite B613, 6F, East Wing Wisma Consplant 2, NO.7, Jalan

SS 16/1 47500, Subang Jaya, Selangor Darul Ehsan, Malaysia Phone : +60-3-5637-5620 Fax : +60-3-5632-4926 ■ Shinkawa (Thailand) Co., Ltd. 83/44 Moo19 Nava Nakorn Industrial Zone, Phaholyothin Rd, Klong Nueng, Klong Luang, Pathumthani 12120 Thailand Phone : +66-2529-6284 Fax : +66-2529-6289 ■ Shinkawa U.S.A., Inc. 1177 South Porter Court Gilbert, AZ 85296, U.S.A. Phone : +1-480-831-7988 E-mail : shinkawausa@shinkawausa.com

Thai Factory

Japanese Factory

Customers

SHINKAWA LTD.

Suppliers

ShinkawaU.S.A., Inc.

Shinkawa Korea Co., Ltd.Shinkawa Taiwan Co., Ltd.Shinkawa (Shanghai) Co., Ltd.

Shinkawa SingaporePte. Ltd.

Shinkawa ManufacturingAsia Co., Ltd.

Shinkawa (Malaysia)Sdn. Bhd.

Shinkawa (Thailand)Co., Ltd.

ShinkawaPhilippines, Inc.

Shinkawa Technologies Ltd. Shinkawa Vietnam Co., Ltd.

Used Equipment

Products

After-sales Service

After-sales Service

After-sales Service After-sales Service

ProductsProductsProducts

Products

Products

Semi Finished Products Semi Finished Products

After-sales Service

After-sales ServiceService Consignment Service Consignment

Service Consignment

Service Consignment

Service Consignment

Assembly & AdjustmentsAssembly & Adjustments

Software

Sales Support

Sales Support

Semi Finished Products

The SHINKAWA Group

Annual Report 2015

25

010_0288501372706.indd 25 2015/07/22 16:22:16

Profile of the Corporate Group and OrganizationProfile of the Corporate Group

Organization

Customers

SHINKAWA LTD.

Suppliers

ShinkawaU.S.A., Inc.

Shinkawa Korea Co., Ltd.Shinkawa Taiwan Co., Ltd.Shinkawa (Shanghai) Co., Ltd.

Shinkawa SingaporePte. Ltd.

Shinkawa ManufacturingAsia Co., Ltd.

Shinkawa (Malaysia)Sdn. Bhd.

Shinkawa (Thailand)Co., Ltd.

ShinkawaPhilippines, Inc.

Shinkawa Technologies Ltd. Shinkawa Vietnam Co., Ltd.

Used Equipment

Products

After-sales Service

After-sales Service

After-sales Service After-sales Service

ProductsProductsProducts

Products

Products

Semi Finished Products Semi Finished Products

After-sales Service

After-sales ServiceService Consignment Service Consignment

Service Consignment

Service Consignment

Service Consignment

Assembly & AdjustmentsAssembly & Adjustments

Software

Sales Support

Sales Support

Semi Finished Products

The SHINKAWA Group

Board of Auditors Sales Div.

President and CEO

Board of Directors

Shareholders’ Meeting

Global Production

Global Engineering Service

Management Dept.

Management Dept.

Global Quality Management Dept.

Engineering Div.

Global Operation Div.

High Speed Die Bonder Gr.

High Precision Die Bonder Gr.

Flip Chip Bonder Gr.

Wire Bonder Development Gr.

Wire Bonder Technology Gr.

Wire Bonder Design Gr.

Research and Development Dept.

Technical Marketing Dept.

Engineering Planning Dept.

Global Sales Management Dept.

Audit Dept.

Corporate Planning Dept.

Personnel & Administration Dept.

Accounting Dept.

26

010_0288501372706.indd 26 2015/07/22 16:22:16

History of SHINKAWASHINKAWA LTD. was founded in 1959 — the year that the world witnessed the birth of the first integrated circuit (IC) in the U.S. —and has kept pace with the evolution of semiconductors ever since. SHINKAWA started out with secondary transistor processing, expanded the scope of its business during the 10 years that followed the Company’s founding to conduct the development, manufacture and marketing of such custom-made products as j igs and fixtures for

semiconductor assembly and semiconductor testers and handlers. After the oil shocks of the early 1970s, the Company concentrated its managementresources on the development of automated equipment used in the assembly process of semiconductor manufacturing.All of these endeavors underpin what we are today — a specialized manufacturer of semiconductor assembly equipment.

August 1959 Shinkawa Seisakusho Co., Ltd. was founded to engage in secondary processing of transistor parts (Paid-up capital ¥1 million, Head office located in Mitaka-shi, Tokyo)

February 1960 Commenced production of jigs and fixtures for semiconductor assemblyJanuary 1964 Built a new plant in Musashimurayama-shi, TokyoJanuary 1967 Moved head office to Musashimurayama-shi, Tokyo

Introduced semi-automatic bonder for transistorsApril 1970 Introduced automatic wire bonder for ICsAugust 1972 Introduced integrated type microcomputer for the first time in the industrySeptember 1976 Began exporting of wire bonders to the U.S.June 1977 Introduced the world’s first, fully automatic wire bonder and tape bonderJanuary 1978 Introduced type fully automatic wire bonder with digital bond head systemJanuary 1980 Introduced type fully automatic die bonder with digital bond head systemFebruary 1980 Changed the company name to SHINKAWA LTD.April 1984 Introduced inner lead tape bonderDecember 1985 Introduced in line systemSeptember 1988 Listed on the Second Section of the Tokyo Stock Exchange

Established Shinkawa Singapore Pte. Ltd. in SingaporeSeptember 1989 Established Shinkawa U.S.A., Inc. in the U.S.June 1994 Introduced wire bonder with inspection capabilityNovember 1994 Established Shinkawa (Malaysia) Sdn. Bhd. in MalaysiaAugust 1996 Established Shinkawa Taiwan Co., Ltd. in TaiwanDecember 1996 Established Shinkawa Korea Co., Ltd. in KoreaApril 1999 Acquired ISO9001 certificationJanuary 2000 Established Shinkawa (Thailand) Co., Ltd. in ThailandApril 2000 Established SKT Ltd. (currently Shinkawa Technologies Ltd.)September 2000 Upgraded to the First Section of the Tokyo Stock ExchangeApril 2001 Established Kyushu Service Center in FukuokaMay 2001 Introduced 300mm wafer handling die bonderNovember 2001 Established Shinkawa (Shanghai) Co., Ltd. in the People’s Republic of ChinaDecember 2001 Introduced wire bonder with NRS/RPS capabilityFebruary 2006 Established Shinkawa Philippines, Inc. in the Republic of the PhilippinesJuly 2008 Introduced wire bonder with BIM capabilityAugust 2009 Established Shinkawa Vietnam Co., Ltd. in VietnamMarch 2010 Introduced flip chip bonder for TCB processNovember 2011 Acquired ISO14001 & OHSAS18001 certificationFebruary 2012 Established Shinkawa Manufacturing Asia Co., Ltd. in Thailand

Annual Report 2015

27

010_0288501372706.indd 27 2015/07/22 16:22:16

■ Company Name SHINKAWA LTD.■Head Office 2-51-1 Inadaira, Musashimurayama-shi, Tokyo 208-8585, Japan■ Telephone Number +81-42-560-1231■ Established August 6, 1959■ Paid-up Capital 8,360 million yen (As of March 31, 2015)■ Fiscal Year From April 1 to March 31■Number of Employees Group Total 672 (As of March 31, 2015)■ Business Research, Development, Designing, Manufacturing, Sales and

After-Sales Service of Semiconductor Manufacturing Equipment■Group Companies 11■ Product Lineup Wire Bonders, Die Bonders, Flip Chip Bonders, etc.■ Auditing Firm ARK & Co,■URL http://www.shinkawa.com

Stock Listing : Tokyo Stock Exchange, First Section

Securities Code : 6274

Number of Shares Authorized : 80,000,000 shares

Number of Shares Outstanding : 20,047,500 shares

Number of Shareholders : 7,921

General Meeting of Shareholders : June

Transfer Agent and Registrar : Mitsubishi UFJ Trust and Banking Corporation

Corporate Information / Investor InformationCorporate Information

Investor Information

Stock Price

Distribution of Shareholders(As of March 31, 2015)

Principal Shareholders (As of March 31, 2015)

Stock Price (Scale on Left)Trading Volume (Scale on Right)

(Yen) (Thousand Shares)

0

500

1,000

1,500

Apr.15Oct.14Apr.14Oct.13Apr.13Oct.12Apr.12Oct.11Apr.110

2,000

4,000

6,000

8,000

Financial Institutions22.95%

Other Japanese Corporations12.45%

Foreign Corporations and Others19.82%

Individual Investors and Others35.41%

Treasury Stock9.34%

Name of ShareholderNumber of Shares Held

(Thousand)Percentage of Shares Held

(%)The Master Trust Bank of Japan, Ltd. (Trust Account) 930 4.63 Trust & Custody Services Bank, Ltd. (The Tokyo Tomin Bank, Limited. Retirement Benefit Trust Account re-entrusted by Mizuho Trust & Banking Co., Ltd.)

900 4.49

The Bank of New York Mellon 140030 755 3.76 SHINKAWA Business Partners Share-Holding Association 542 2.70 I & E Corporation 499 2.49 The Bank of New York 133522 486 2.42 Tomin Lease Co., Ltd. 405 2.02 Royal Bank of Canada Trust Company (Cayman) Limited 400 1.99 State Street Bank and Trust Company 347 1.73 UBS AG London A/C IPB Segregated Client Account 314 1.57

28

010_0288501372706.indd 28 2015/07/22 16:22:16

Annual Report 2015For the Year Ended March 31, 2015

010_0288501372706.indd 1 2015/07/22 16:21:55