May 26, 2017
To Whom It May Concern:
Company
Representative::

CodeContact::Phone:

Sumitomo Heavy Industries, Ltd.
Shunsuke Betsukawa
President and Chief Executive Officer
6302
Tsuneyoshi Sato
General Manager, Corporate
Communications Department+81-3-6737-2333

Notice Regarding a Change to the Trading Unit and Reverse Stock Split of the Shares of
Sumitomo Heavy Industries, Ltd. along with a Partial Amendment to the Articles ofIncorporation and Revision to the Dividend Forecast
At a Board of Directors meeting held today, the board members of Sumitomo Heavy Industries, Ltd.
(hereinafter referred to as “SHI” or the “Company”) passed a resolution to make a partial amendment tothe articles of incorporation associated with a change in the trading unit of SHI shares in accordance withSection 1, Article 195 of the Companies Act. In addition, the board members of SHI also agreed to proposea resolution at the 121st Ordinary General Shareholders Meeting (hereinafter referred to as the“Shareholders Meeting”) to be held on June 29, 2017 to carry out a reverse stock split of the Company’s
shares. As a result of the proposed reverse stock split, the dividend forecast which was previously
announced on May 9, 2017 has been revised with further details provided below.
Please note that the changes below are subject to the reverse stock split resolution being approved at theShareholders Meeting. At the present moment, the effective date of the reverse stock split is anticipatedto be on October 1, 2017.
DETAILS
1.

Changes to the Trading Unit
(1) Reason for the Change
The stock exchanges in Japan announced the “Action Plan for Consolidating Trading Units” andhave set a target date of October 2018 for all common shares listed on the stock exchanges totransition to a single trading unit of 100 shares. As the Company’s shares are listed on the Tokyo
Stock Exchange, SHI has agreed to take action to reduce the trading unit from the existing 1,000shares to 100 shares in line with the guidance provided by the stock exchanges.
(2) Details of the Change
The trading unit of the Company’s shares will be changed from 1,000 shares to 100 shares.
(3) Conditions of the Change
The partial amendment to the articles of incorporation will be carried out through a board
resolution as per the rules outlined in the Companies Act. However, such amendments aresubject to the resolution for the reverse stock split (as outlined in 2. below) being approved at
the Shareholders Meeting. If such approval is granted, the effective date of the change is
expected to be on October 1, 2017.

2.

Reverse Stock Split(1) Purpose of the Reverse Stock Split
1

The Company has decided to carry out the reverse stock split for a few reasons. First, as
mentioned in 1. above, there will be a change in the trading unit of the Company’s shares from
1,000 shares to 100 shares. Also, the stock exchange has specified an optimal investment unit(above JPY50,000 but below JPY500,000) that SHI is aiming to achieve. Finally, the Company’s aim
is for shareholders to hold SHI shares in a stable manner and considerations were taken in regard
to medium-to-long term share price fluctuations.
As per the reverse stock split ratio, the total number of authorized shares will be reduced fromthe current 1,800,000,000 shares to 360,000,000 shares.
(2) Details of the Reverse Stock Splita.
Type of shares that are the subjectof the reverse stock split

Common stockb.

Reverse stock split ratio

On October 1, 2017, a 5-to-1 reverse stock split
will be offered to all shareholders that are listedon the register of shareholders as of September
30th, 2017 (in actual fact September 29th, 2017)c.

Total number of authorized shares
after the reverse stock split

360,000,000 shares (1,800,000,000 shares prior
to the reverse stock split). Please note that thetotal number of authorized shares will be changed
as per the stipulations of Item 2, Article 182 of theCompanies Act as of the effective date of thereverse stock split (October 1, 2017).

d.

Number of shares reduced as a result of the reverse stock split
Total number of shares outstanding before the reverse
614,527,405 sharesstock split (as of March 31, 2017)
Number of shares reduced as a result of the reverse
491,621,924 sharesstock split
Total number of shares outstanding after the reverse
122,905,481 sharesstock split
Note: The “number of shares reduced as a result of the reverse stock split” and the “total
number of shares outstanding after the reverse stock split” are theoretical values
calculated based on the total number of shares outstanding before the reverse stock split
and the reverse stock split ratio.

e.

Number of shareholders reduced as a result of the reverse stock split
The composition of the shareholders listed on the registry as of March 31, 2017 was asfollows:
Number of shares in the
Number of
Number of shares held (ratio)
shareholders possession
shareholders (ratio)
Less than 5 shares
438 (1.17%)
1,073 shares (0.00%)
More than 5 shares
36,933 (98.83%) 614,526,332 shares (100.00%)
Total
37,371 (100.00%) 614,527,405 shares (100.00%)
If the reverse stock split is approved, the 438 shareholders that hold less than 5 shares(a total of 1,073 shares as of March 31, 2017) will lose their position as shareholders ofthe Company. If shareholders hold less than the trading unit of SHI shares, as per Item 1,Article 194 of the Companies Act, they can request the Company to sell them shares that
total the trading unit of SHI shares after combining such shares with the shares that werebelow the trading unit. In addition, again as per Item 1, Article 192 of the Companies Act,
shareholders holding shares less than the trading unit of SHI shares can request the2Company to purchase such shares back. For either option, if the shareholder does nothave a securities broker or a brokerage account, they should contact the Company’s
shareholder registry administrator.
f.

Treatment of fractional shares below a single shareIf fractional shares are generated as a result of the reverse stock split, as stipulated in
Article 235 of the Companies Act, such fractional shares will be disposed of at one timeor will be bought back by the Company as treasury stock. The applicable proceeds fromthe sale will be distributed according to the fractional ownership ratio of the relevant
shareholders.

(3) Conditions of the Reverse Stock Split
The reverse stock split is conditional upon the resolution for such stock split being approved at
the Shareholders Meeting. If approved, the effective date of the reverse stock split will beOctober 1, 2017.
3.

4.

Partial Amendment to the Articles of Incorporation
The Company’s articles of incorporation will be amended on October 1, 2017 subject to approval of
the reverse stock split resolution (as outlined in 2. above) at the Shareholders Meeting. The details ofthe amendments are as follows:
Current Version of the Articles ofIncorporation(Total Number of Authorized Shares)
Article 6 – The total number of authorizedshares of the Company shall be 1,800,000,000.

Revision Version(Total Number of Authorized Shares)
Article 6 – The total number of authorizedshares of the Company shall be 360,000,000.

Article 8 – The trading unit of the Company’s
shares shall be 1,000.

Article 8 – The trading unit of the Company’s
shares shall be 100.

Revision to the Dividend Forecast
With regard to the dividend forecast for the consolidated fiscal year ending March 2018, the figuresthat were previously announced on May 9, 2017 have been increased fivefold in line with the reverse
stock split ratio. The new dividend forecast outlined in the table below are designed to increase theper share dividend in line with the reverse stock split. The total amount has not changed in value.

End of Q2

Annual Dividend AmountEnd of Fiscal Year

Total
Previous Forecast
JPY8.00
JPY8.00
JPY16.00(Released on May 9, 2017)
Current Revised Forecast※1 JPY8.00※2 JPY40.00※3 ―Actual Dividends
Dividend Amount for thePrevious Fiscal Year
JPY7.00
JPY9.00
JPY16.00(Period Ended March 2017)※1 The interim dividend amount forecast to be paid at the end of the second quarter of the current
consolidated fiscal year ending March 2018 contemplates shares prior to the reverse stock split.
※2 The year-end dividend amount forecast to be paid at the end of the current consolidated fiscal
year ending March 2018 contemplates shares post the reverse stock split.
※3 The total dividend amount forecast to be paid for the current consolidated fiscal year ending
can not to be calculated.
5.

Major Timeline3

May 26, 2017

June 29, 2017
September 26, 2017
September 27, 2017
October 1, 2017

Board of director meeting (approval of changes to the trading unit andassociated partial amendment to the articles of incorporation;agreement to submit a resolution at the 121st Ordinary General
Shareholders Meeting)
121st Ordinary General Shareholders Meeting
Final day of trading using the old trading unit of 1,000 sharesFirst day of trading using the new trading unit of 100 shares
Effective date of the change in the trading unit of the Company’s sharesand the associated partial amendment to the articles of incorporation(Reference)
As mentioned above, the effective date of the change in the trading unit of the Company’s shares andthe associated partial amendment to the articles of incorporation is scheduled to effective on October
1, 2017. However due to transfer procedures associated with the shares, shareholders will be able totrade using the new trading unit of 100 shares at the Tokyo Stock Exchange from September 27th,2017 subject to the changes coming into force.
END4