Summary Report on Financial Results for the Second Quarter of the Year Ending March 2016
（Japan GAAP）
October 30th, 2015
Listing: TSE-JASDAQ
Company name:
Fukuda Denshi Co., Ltd.
Code No.:
6960 (http://www.fukuda.co.jp)
Representative:
Daijiro Shirai, President & COO
Inquiries:
Haruhiko Honbu, Senior Manager of Accounting & Finance DepartmentTel:+81-3-5684-1558
Scheduled date for filing the quarterly report:
November 9th, 2015
Scheduled date for commencement of dividend payment:
December 7th, 2015
Supplementary material development:
None
Financial results meeting:None(Amounts less than one million yen are rounded down)(The number with parenthesis shows negative figure)1. Consolidated financial results for the second quarter of the year ending March 2016 (April 1st, 2015 throughSeptember 30th, 2015)(1) Consolidated operating results (cumulative)(% represents increases or decreases from the previous year)
Ordinary
Profit attributable to
Net sales
Operating income
incomeowners of parent
millionmillionmillionmillion
%
%
%
%
yen
yen
yen
yen
Second quarter of the
53,050
10.8
4,563
0.6
4,896
(0.9)
3,491
19.5
year ending March 2016
Second quarter of the47,874
1.3
4,535 (12.5)
4,940
(6.5)
2,922
(12.7)
year ended March 2015
(Note) Comprehensive income
Second quarter of the year ending March 2016:3,288 million yen / (8.5) %Second quarter of the year ended March 2015: 3,593 million yen / 9.0 %Earnings
per share
Yen

Diluted earnings
per shareYen

251.13―210.23―

Second quarter of theyear ending March 2016
Second quarter of theyear ended March 2015
(2) Consolidated financial situation

million yen

million yen

Shareholders'equity ratio％

Second quarter of theyear ending March 2016

122,642

90,87674.1

6,536.74

Year ended March 2015

124,582

88,99171.4

6,401.07

Total assets(Reference) Shareholders' equity:
Second quarter of the year ending March 2016:
Year ended March 2015:

Net assets

90,876 million yen
88,991 million yen-1-

Net Assets per
Share
Yen

2. Dividends
End of thefirst quarteryenYearly Dividends per share
End of the
End of the
End of the term
second quarter
third quarter
yen
yen
yen

Annualyen
Year ended
―
50.00
―
100.00150.00March 2015
Year ending―
60.00
March 2016
Year ending
March 2016―
90.00
150.00(forecast)(Note) Revisions to recent dividend forecast: None
The detail of second quarter dividend of Year ended March 2015; ordinary dividend 40.00 yen, extra dividend
5.00 yen, commemorative dividend 5.00 yen
The detail of year-end dividend of Year ended March 2015; ordinary dividend 40.00 yen, extra dividend 60.00
yen
The detail of second quarter dividend of Year ending March 2016; ordinary dividend 40.00 yen, extra dividend
20.00 yen.
The detail of year-end dividend of Year ending March 2016 (Forecast); ordinary dividend 40.00 yen, extra
dividend 50.00 yen
3. Forecast of consolidated financial results for the year ending March 2016 (April 1st, 2015 through March
31st, 2016)（% represents increase or decrease from the previous year）

Net sales

Full-year

millionyen%

109,000

0.7

Operatingincomemillion%yen

Ordinary
incomemillion%yen

12,00012,00016.5

5.5

Profit attributable toowners of parent
million
%
yen
7,380

3.7

Earnings
per shareyen
506.29(Note) Revisions to recent business forecast: None
Since the Group's operating results tend to take a peak at the fourth quarter and it is difficult to give a forecast
every six months based on rational calculation, the consolidated forecast at the second quarter is not disclosed.
*Notes(1) Changes in significant subsidiaries during the period (changes in specified subsidiaries involving changes
in the scope of consolidation): None
(2) Application of special accounting methods for the preparation of the consolidated quarterly financial
statements: None
(3) Changes in accounting policies, accounting projections and restatement(i) Changes in accounting policies associated with revision of accounting standards: Yes(ii) Changes other than (i) above: None(iii) Changes in accounting projections: None(iv) Restatement: None
(Note)For details, please refer to “(3) Change in accounting policies, accounting projections, and restatement”
under the section “2. Summary information” on page 6.

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(4) Number of outstanding shares (common stock)(i) Number of outstanding shares at the end of the period (including treasury stock)
Second quarter of the year ending March 2016: 19,588,000 sharesYear ended March 2015: 19,588,000 shares(ii) Number of shares of treasury stock at the end of the period:
Second quarter of the year ending March 2016: 5,685,566 sharesYear ended March 2015: 5,685,418 shares(iii) Average number of shares during the period (accumulated consolidated quarter)
Second quarter of the year ending March 2016: 13,902,492 shares
Second quarter of the year ended March 2015: 13,902,674 shares* Statement concerning the Status of Quarterly Financial Review Procedures
These Consolidated Financial Statements for the Second Quarter of the Fiscal Year Ending March 31st, 2016
are not subject to quarterly financial review under the Financial Instruments and Exchange Act. At the timeof disclosing these Consolidated Financial Statements, financial review procedures specified in the Financial
Instruments and Exchange Act have not been completed with respect to the quarterly consolidated financial
statements.
* Explanation about the appropriate use of the forecasts of financial results, and other noteworthy matters
1. The forecasted financial results described above are based on information available at the time ofannouncement. Actual results may differ from the results projected and presented hereby for a variety ofreasons.
2. With respect to the preconditions for the forecast of financial results, please refer to “(3) Explanation about
consolidated earnings forecast” under the “1. Qualitative information about consolidated earnings results
for the quarter under review" section on page 5.
3. On October 1st, 2015, Fukuda Denshi Co., Ltd. (hereinafter referred to as “Fukuda Denshi” ) haveconducted a share exchange (hereinafter referred to as the “Share Exchange”) with Fukuda Denshi as thewholly-owning parent company and Atomic Sangyo Co., Ltd. (hereinafter referred to as “Atomic Sangyo”)
as a wholly-owned subsidiary by using Fukuda Denshi’s treasury stock, as a result the “Treasury stock”
have decreased 3,704,798 shares. Also on October 30th, 2015, Atomic Sangyo disposed the common sharesof Fukuda Denshi by distribution in kind to Fukuda Denshi, as a result the “Treasury stock” have increased
2,244,096 shares. As a consequence of this, we have calculated the “Earnings per share” by using thenumber of shares after taking into account said Share Exchange, shown on “3. Forecast of consolidated
financial results for the year ending March 2016” section on page 2.

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Contents of the Attached Materials
1. Qualitative information about consolidated earnings results for the quarter under review -----------

5(1) Explanation about consolidated operating results -------------------------------------------------------

5(2) Explanation about consolidated financial situation -----------------------------------------------------

5(3) Explanation about consolidated earnings forecast -------------------------------------------------------

5

2. Summary information ------------------------------------------------------------------------------------------

6(1) Change in significant subsidiaries during the period ---------------------------------------------------

6(2) Application of special accounting methods for the preparation of the consolidated quarterly
financial statements -------------------------------------------------------------------------------------------

6(3) Change in accounting policies, accounting projections, and restatement ----------------------------

6

3. Material events related to going concern assumptions ----------------------------------------------------

6

4. Consolidated quarterly financial statements ----------------------------------------------------------------

7(1) Consolidated quarterly balance sheets --------------------------------------------------------------------

7(2) Consolidated quarterly income statements and consolidated quarterly comprehensive income
statements

9Consolidated quarterly income statements
Second quarter of the consolidated term ----------------------------------------------------------------

9

Consolidated quarterly comprehensive income statements
Second quarter of the consolidated term ---------------------------------------------------------------(3) Notes to consolidated quarterly financial statement

10-----------------------------------------------------

10(Notes regarding the premise for going concern) ----------------------------------------------------------

10(Notes when there is a significant fluctuation in the amount of shareholders’ equity)----------------

10----------------------------------------------------------------------------------

11

5. Important subsequent events-4-

1. Qualitative information about consolidated earnings results for the quarter under review(1) Explanation about consolidated operating results
In the second quarter cumulative period, improvements were seen in corporate earnings and indicatorsreflecting the employment conditions, the Japanese economy remained a moderate recovery.
In the medical equipment industry, the remuneration for medical treatment in FY2014 seeks to establish aframework to provide healthcare services that meet the needs of Japan’s aging society by focusing onchallenges such as the differentiation and strengthening of medical institutions’ functions, encouraging
teamwork throughout Japan’s medical network, and expanding home treatment. Medical institutions face
ever greater demands for efficient, high-quality healthcare.
As a result, the Group posted a consolidated net sales of 53,050 million yen (up 10.8% on a year-to-yearbasis), operating income of 4,563 million yen (up 0.6% on a year-to-year basis), ordinary income of 4,896
million yen (down 0.9% on a year-to-year basis), and profit attributable to owners of parent of 3,491 million
yen (up 19.5% on a year-to-year basis) in the second quarter.
A. Physiological diagnostic equipment segment
The sales of electrocardiographs, vascular screening systems and blood cell counters increased.
Consolidated “Net sales” were 15,371 million yen (up 26.1% on a year-to-year basis).
B. Patient monitoring equipment segment
Sales of patient monitoring equipment decreased.
Consolidated “Net sales” were 3,726 million yen (down 3.2% on a year-to-year basis).
C. Medical treatment equipment segment
While the business of renting medical equipment for home treatment and sales of pacemakers
increased.
Consolidated “Net sales” were 22,029 million yen (up 5.9% on a year-to-year basis).
D. Consumables and other products segment
In this segment, we mainly handle recording paper, disposable electrodes, and consumables used for
devices handled in the above segments, as well as maintenance and repair services.
Consolidated “Net sales” for this segment were 11,922 million yen (up 8.0% on a year-to-year basis).
(2) Explanation about consolidated financial situation
Total assets were 122,642 million yen at the end of the second quarter under review, down 1,939 million
yen from the end of the previous fiscal year.
The main factors are the decrease of 6,034 million yen in “Notes and accounts receivable-trade” despite
the increase of 1,393 million yen in “Securities”.
Liabilities amounted to 31,765 million yen, down 3,824 million yen from the end of the previous fiscal
year.
The main factor is the decrease of 3,924 million yen in “Notes and accounts payable-trade”.
Net assets were 90,876 million yen, up 1,885 million yen from the end of the previous fiscal year.
The main factors are the increase of 2,089 million yen in “Retained earnings” despite the decrease of 90
million yen in “Valuation difference on available-for-sale securities”.
(3) Explanation about consolidated earnings forecast
Due to the steady sales achievement until the second quarter, there is no change at this moment in theforecast of the financial results for the full fiscal year which we announced on May 15th, 2015.
The forecasted financial results described in this material are based on information available at the timeof announcement. Actual results may differ from the results projected and presented hereby for a variety ofreasons.

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2. Summary information(1) Change in significant subsidiaries during the period
Not applicable.
(2) Application of special accounting methods for the preparation of the consolidated quarterly financial
statements
Not applicable.
(3) Change in accounting policies, accounting projections, and restatement(Application of Accounting Standard for Business Combinations, etc.)
Fukuda Denshi has applied the Accounting Standard for Business Combinations (ASBJ Statement No.21
issued on September 13th, 2013, hereinafter, the “Business Combinations Accounting Standard”), the
Accounting Standard for Consolidated Financial Statements (ASBJ Statement No.22 issued on September
13th, 2013, hereinafter, the “Consolidated Accounting Standard”) and the Accounting Standard forBusiness Divestitures (ASBJ Statement No.7 issued on September 13th, 2013, hereinafter, the “Business
Divestitures Accounting Standard”), etc. from the first quarter of the current consolidated fiscal year, will
post the difference due to changes in the Company’s equity in a subsidiary when the Company continues
to control the subsidiary as capital surplus and change to the method of posting the acquisition-related
expenses as expenses in the consolidated fiscal year in which they were incurred. Furthermore, forbusiness combinations implemented from the beginning of the first quarter of the current consolidated
fiscal year onwards the Company has changed to the method of reflecting the revision of the allocatedamount of the acquisition cost due to the finalization of the provisional accounting treatment in thequarterly consolidated financial statements for the consolidated fiscal quarter in which the businesscombination date occurs. In addition, the Company has changed the presentation of quarterly net income,etc. and has changed the term “minority interests” to “non-controlling interests.” The Company has
adjusted the quarterly consolidated financial statements and consolidated financial statements for the firstquarter of the previous consolidated cumulative fiscal year and the previous consolidated fiscal year inorder to reflect these changes in the presentation.
Regarding the application of the Business Combinations Accounting Standard, etc., the Company iscomplying with the transitional measures prescribed under the Business Combinations AccountingStandard, Clause 58-2 (4), the Consolidated Accounting Standard, Clause 44-5 (4) and the Business
Divestitures Accounting Standard, Clause 57-4 (4), and will apply the new accounting standards from the
beginning of the first quarter of the current consolidated fiscal year into the future.
The impact on profit and loss is minor.
3. Material events related to going concern assumptions
Not applicable.

-6-4. Consolidated quarterly financial statements(1) Consolidated quarterly balance sheets
Previous fiscal year
(as of March 31st, 2015)
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable-trade
Securities
Merchandise and finished goods
Work in process
Raw materials and supplies
Other
Allowance for doubtful accounts
Total current assets
Noncurrent assets
Property, plant and equipment
Intangible assets
Investments and other assets
Investment securities
Other
Allowance for doubtful accounts
Total investments and other assets
Total noncurrent assets
Total assets
Liabilities
Current liabilities
Notes and accounts payable-trade
Short-term loans payable
Income taxes payable
Provision for bonuses
Provision for product warranties
Other provision
Other
Total current liabilities
Noncurrent liabilities
Other provision
Net defined benefit liability
Other
Total noncurrent liabilities
Total liabilities-7-(Million yen)
End of the second quarter
under review(as of September 30th, 2015)

25,72632,698
192
8,616
112
2,128
3,781
(24)
73,23225,875
26,664
1,586
9,885
94
2,532
4,415
(21)
71,03224,0962,551

24,756
2,402

11,362
13,350(12)24,701
51,349124,582

10,321
14,138(8)24,451
51,610122,642

22,620
1,850
1,832
2,034
370
173
4,610
33,493

18,696
1,900
1,836
2,103
426
84
4,567
29,615

192
548
1,356
2,097
35,590

185
578
1,385
2,150
31,765

Previous fiscal year
(as of March 31st, 2015)
Net assets
Shareholders' equity
Capital stock
Capital surplus
Retained earnings
Treasury stock
Total shareholders' equity
Accumulated other comprehensive
incomeValuation difference on
available-for-sale securities
Foreign currency translation
adjustment
Remeasurements of defined benefit
plans
Total accumulated othercomprehensive income
Total net assets
Total liabilities and net assets-8-(Million yen)
End of the second quarter
under review(as of September 30th, 2015)

4,621
10,05586,369(14,731)
86,315

4,621
10,05588,458(14,732)
88,403

2,164

2,073

(152)

(187)

664

587

2,676

2,473

88,991
124,582

90,876
122,642(2) Consolidated quarterly income statements and consolidated quarterly comprehensive income statements
Consolidated quarterly income statements(Second quarter of the consolidated term)

Net sales
Cost of sales
Gross profit
Selling, general and administrative
expenses
Operating income
Non-operating income
Interest income
Dividend income
Foreign exchange gains
Other
Total non-operating income
Non-operating expenses
Interest expenses
Loss on investments in partnership
Other
Total non-operating expenses
Ordinary income
Extraordinary income
Gain on sales of non-current assets
Gain on sales of investment securities
Surrender value of insurance
Total extraordinary income
Extraordinary losses
Impairment loss
Total extraordinary losses
Income before income taxes and minority
interests
Income taxes-current
Income taxes-deferred
Total income taxes
ProfitProfit attributable to owners of parent

Second quarter of theprevious consolidated term(from April 1st, 2014
to September 30th, 2014)
47,87425,03022,843(Million yen)
Second quarter of theconsolidated term(from April 1st, 2015
to September 30th, 2015)
53,05029,377
23,67318,308

19,109

4,535

4,563

36
97
133
155
423

30
87
96
139
353

12
2
4
19
4,940

14
1
4
21
4,896

4
0
102
107

2
－
326
329

3
3

13
13

5,044

5,212

1,576
545
2,121
2,922
2,922

2,088
(368)
1,720
3,491
3,491

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Consolidated quarterly comprehensive income statements(Second quarter of the consolidated term)

ProfitOther comprehensive income
Valuation difference on
available-for-sale securities
Foreign currency translation
adjustment
Remeasurements of defined benefit
plans, net of tax
Total other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable toowners of parent

Second quarter of theprevious consolidated term(from April 1st, 2014
to September 30th, 2014)
2,922(Million yen)
Second quarter of theconsolidated term(from April 1st, 2015
to September 30th, 2015)
3,491

674

(90)

(1)

(35)

(1)

(76)

671
3,593

(202)
3,288

3,593

3,288

(3) Notes to consolidated quarterly financial statement(Notes regarding the premise for going concern)
Not applicable.
(Notes when there is a significant fluctuation in the amount of shareholders’ equity)
Not applicable.
5 Important subsequent events
On October 1st, 2015, Fukuda Denshi conducted a share exchange with Fukuda Denshi as thewholly-owning parent company and Atomic Sangyo as a wholly-owned subsidiary.
(1) Purpose of the Share Exchange
Since going public in May 1982, Fukuda Denshi has developed operations to achieve stable and sustainablegrowth and worked on active information disclosure so that our shareholders and investors can always makeappropriate investment decisions. Under these circumstances, as part of the measures to further enhancetransparency in corporate management and for the purpose of stabilizing and improving the efficiency ofcorporate management and improving customer services, Fukuda Denshi resolved to conclude a Share
Exchange Agreement with our largest shareholder, Atomic Sangyo on May 15th, 2015.
Principal business of Atomic Sangyo, Fukuda Denshi’s largest shareholder, is manufacturing recording
paper for medical electronic devices and the real estate leasing business. Fukuda Denshi purchases recording
paper and other products from Atomic Sangyo which are essential to our business.
In addition, Kotaro Fukuda, a member of the founding family and the Chairman & CEO of Fukuda Denshi,
and his relatives have a stake in Atomic Sangyo, and transactions between Fukuda Denshi and Atomic
Sangyo are considered as related party transactions. In transactions with Atomic Sangyo of recording paperand other products, decisions on the prices are based on negotiations and consideration of market prices andensuring the transparency by continuously disclosing them (disclosure of related party transactions) insecurities reports.
However, since Atomic Sangyo is an unlisted company, it is difficult for our shareholders and investors tounderstand the reality of corporate management, and we cannot deny that the relationship between Fukuda
Denshi and Atomic Sangyo seems unclear. In order for Fukuda Denshi to gain more trust from ourshareholders and investors and to achieve stable and sustainable growth, we are aware that it is necessary toterminate related party transactions of recording paper and other products and implement measures to further
enhance the transparency of corporate management.
At the same time, recording paper and other products manufactured by Atomic Sangyo are essential to ourbusiness and thus cannot easily be replaced with other companies’ products. Therefore, we came to the- 10 -

conclusion that rather than terminate the transactions or switching to products of other companies, we canstabilize the supply chain as a Group from manufacturing to sales, and improve management efficiency
including further cost reduction and enhance customer service by making Atomic Sangyo wholly-owned
subsidiary by the Share Exchange, and terminating these related party transactions.
Fukuda Denshi and Atomic Sangyo started discussions around February 2015, performed due diligence andengaged in frequent exchanges of views. As a result, Fukuda Denshi and Atomic Sangyo agreed on May 15th,
2015, to conclude the Share Exchange Agreement in order to enhance the transparency of corporate
management by terminate these related party transactions, and stabilize and improve the efficiency ofcorporate management, as well as improve customer services.
Based on the Share Exchange, the type of holding of our shares by Kotaro Fukuda and his relatives willchange from a combination of direct holding and indirect holding through Atomic Sangyo to direct holding
only. Accordingly, we believe that transparency of our shareholder composition will increase, and that theunderstanding of our shareholders and investors for our governance will be improved further.
Atomic Sangyo is engaged in real estate leasing in addition to manufacturing of recording paper for
medical electronic devices and owns some assets which have limited relevance to our business. We
separated these assets from Atomic Sangyo before the Share Exchange became effective by transferring
them to a third party by a company split and other measures.
Specifically, Atomic Sangyo implemented an absorption-type company split (hereinafter referred to as the“Absorption-Type Company Split”) which transferred the majority of rights and obligations concerning thereal estate leasing business to a successor company, and to transfer assets which have limited relevance toour business (hereinafter referred to as the “Asset Transfer”) to a third party, effective as of September 1st,2015. Cash has been used as consideration for the Absorption-Type Company Split and the Asset Transfer.
No capital ties arose between Fukuda Denshi and the successor company/the third party after the Share
Exchange. As the Share Exchange is effective subject to effectuation of the Absorption-Type Company Splitand the Asset Transfer, the Group did not succeed the real estate leasing business to a third party.
Atomic Sangyo, which became a wholly-owned subsidiary by the Share Exchange, owns common sharesof Fukuda Denshi, which became the wholly-owning parent company, but Atomic Sangyo disposed theseshares by distribution in kind to Fukuda Denshi as of October 30th, 2015.
(2) Schedule of the Share Exchange
Recording date for the general meeting of shareholders (Fukuda Denshi)
Date of resolution by the Board of Directors meeting (Fukuda Denshi)
Date of decision by Board of Directors (Atomic Sangyo)
Date on which the Share Exchange Agreement is executed(Fukuda Denshi, Atomic Sangyo)
Date of resolution by the general meeting of shareholders(Fukuda Denshi, Atomic Sangyo)
Scheduled date of the Share Exchange (effective date)

March 31st, 2015
May 15th, 2015
May 15th, 2015
June 26th, 2015
October 1st, 2015(3) Method of the Share Exchange
Fukuda Denshi conducted a share exchange with Fukuda Denshi as the wholly-owning parent company
and Atomic Sangyo as a wholly-owned subsidiary. The Share Exchange is effective as of October 1st, 2015
subject to approval of the Share Exchange Agreement by a resolution of the respective general meetings ofshareholders of Fukuda Denshi and Atomic Sangyo both held on June 26th, 2015.
(4) Details of Allotment by the Share Exchange
Fukuda Denshi
Atomic Sangyo(Wholly-owning parent company) (Wholly-owned subsidiary)
Details of allotment by the Share Exchange
1419
Note 1: Ratio of allotment of shares by the Share Exchange
Fukuda Denshi allotted its 419 common shares to one share of Atomic Sangyo.
Financial figures based on the Absorption-Type Company Split and the Asset Transfer are used for
calculation by a comparable company method and by the discounted cash flow method (DCF
method) in the calculation sheet for the share exchange ratio used as reference to determine the ratioof allotment.

- 11 -

Note 2: Number of Fukuda Denshi’s shares to be issued by the Share Exchange
Number of Fukuda Denshi’s common shares issued by the Share Exchange: 3,704,798 shares
In issuing its common shares by the Share Exchange, Fukuda Denshi used treasury stock of
3,704,798 shares it owns and has no plan to issue new shares. Fukuda Denshi allotted its commonshares in the number calculated based on the abovementioned ratio of allotment to all theshareholders of Atomic Sangyo immediately before the acquisition by Fukuda Denshi of all
outstanding shares of Atomic Sangyo (hereinafter referred to as the “Base Period”), in exchange forcommon shares of Atomic Sangyo owned by these shareholders.
In addition, Atomic Sangyo cancelled all treasury stock (including shares of Atomic Sangyo owned
by its shareholders which Atomic Sangyo acquired based on their appraisal remedy in accordancewith provisions of Article 785, Paragraph 1 of the Companies Act) it owns as of immediately before
the Base Period upon decision of the Board of Directors to be made before effectuation of the Share
Exchange.
Note 3: Fukuda Denshi’s common shares owned by Atomic Sangyo
Atomic Sangyo, which became a wholly-owned subsidiary by the Share Exchange, owned commonshares of Fukuda Denshi, which became the wholly-owning parent company by the Share Exchange.
Atomic Sangyo disposed these shares on October 30th, 2015, in accordance with provisions of theCompanies Act by distribution in kind to Fukuda Denshi and other means after effectuation of the
Share Exchange.
(5) Treatment of share options and bonds with share options going with the Share Exchange
Atomic Sangyo does not issue share options and bonds with share options.
(6) Basis for allotment for the Share Exchange
As mentioned in “(1) Purpose of the Share Exchange” above, Fukuda Denshi and Atomic Sangyo started
discussions and exchanges of views concerning the Share Exchange around February 2015.
In these discussions and exchanges of views, Fukuda Denshi appointed MID Structures, Co., Ltd.
(hereinafter referred to as “MID Structures”), a third-party valuation institution independent from Fukuda
Denshi and Atomic Sangyo, as well as Yanagida & Partners as legal adviser and has conducted a full-scale
review in order to ensure fairness and reasonableness of the share exchange ratio to be used for the Share
Exchange (hereinafter referred to as the “Share Exchange Ratio”).
Fukuda Denshi has repeated careful discussions and reviews, taking into account the financial conditions
and trends in earnings of both companies, based on the share exchange ratio calculation sheet submitted by
MID Structures and advice from our legal adviser.
As a result, we have come to the conclusion that the share exchange ratio mentioned in “(4) Details of
Allotment by the Share Exchange” above is reasonable. It was decided at the meetings of the Board of
Directors of both companies held on May 15th, 2015, to conduct the Share Exchange, and both companies
signed the Share Exchange Agreement.
(7) Overview of accounting
For the Share Exchange we plan to make Fukuda Denshi the acquiring enterprise and Atomic Sangyo theacquired enterprise in the accounting, in accordance with the Accounting Standard for Business
Combinations (ASBJ Statement No.21, September 13th, 2013) and the Guidance on Accounting Standard
for Business Combinations and Accounting Standard for Business Divestitures (ASBJ Guidance No.10 ,September 13th, 2013). As a consequence of this accounting treatment, we expect that goodwill will be
generated at Fukuda Denshi, but the amount and years of depreciation, etc. in the case that goodwill isgenerated are not yet determined at this time.

* This English translation is for reference purposes only. The original Japanese version will prevail as theofficial authoritative version.

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