May 10, 2010
To Whom It May Concern:
Company Name
Representative::

Share Code:Inquiries:

Telephone:

Company Name:

Representative:

Share Code:Inquiries:

Telephone:

Sumitomo Heavy Industries, Ltd.
Yoshinobu Nakamura
President and CEO
6302, First Section, Tokyo Stock
Exchange, Osaka Securities
Exchange
Hideo Oshima, General Manager
Corporate Communications Dept.
+81-3-6737-2333
Nihon Spindle Manufacturing Co.,
Ltd.
Junai Saito
President and CEO
6242, First Section, Tokyo Stock
Exchange, Osaka Securities
Exchange
Takashi Minamoto
Managing Director+81-6-6499-5551

Notice Regarding Execution of the Stock Swap Agreement to Convert Nihon Spindle Manufacturing Co., Ltd.
into a Wholly Owned Subsidiary of Sumitomo Heavy Industries, Ltd.
Sumitomo Heavy Industries, Ltd. (hereinafter referred to as “SHI”) and Nihon Spindle Manufacturing Co., Ltd.
(hereinafter referred to as “Nihon Spindle”) announced today that their respective board of directors, at a board
meeting also held today, passed a resolution to make Nihon Spindle a wholly-owned consolidated subsidiary of
SHI through a stock swap (hereafter referred to as “Stock Swap”). The details of the stock swap agreement werealso executed as per the detailed information provided below.
The Stock Swap must still be approved by Nihon Spindle shareholders at a regularly planned shareholders’meeting to be held on June 29, 2010. Upon approval, the anticipated effective date of the Stock Swap isscheduled to be October 1, 2010. Please note that SHI, as per the provisions set out in Article 796, Item 3 of theCompanies Act, does not require shareholder approval as they will be proceeding based on a simplified stock
swap arrangement.
In addition, prior to the proposed effective date of the provisions, shares of Nihon Spindle will be de-listed from
Tokyo Stock Exchange Inc. ( hereinafter referred to as “the Tokyo Stock Exchange”) and Osaka Securities
Exchange. Co., Ltd. ( hereinafter referred to as “Osaka Securities Exchange”) with a proposed de-listing date of
September 28, 2010, with the final day of trading to be set as September 27, 2010.
Rule 802 Legend
This exchange offer or business combination is made for the securities of a foreign company. The offer issubject to disclosure requirements of a foreign country that are different from those of the United States.
Financial statements included in the document, if any, have been prepared in accordance with foreign
accounting standards that may not be comparable to the financial statements of United States companies.
It may be difficult for you to enforce your rights and any claim you may have arising under the federal securities
laws, since the issuer is located in a foreign country, and some or all of its officers and directors may beresidents of a foreign country. You may not be able to sue a foreign company or its officers or directors in aforeign court for violations of the U.S. securities laws. It may be difficult to compel a foreign company and its
affiliates to subject themselves to a U.S. court’s judgment.
You should be aware that the issuer may purchase securities otherwise than under the exchange offer, such as inopen market or privately negotiated purchases.

1

Details of the Stock Swap
1.

Purpose of Conversion into a Wholly Owned Subsidiary through a Stock Swap Arrangement
Nihon Spindle is currently a consolidated subsidiary of SHI (SHI controls 40.09% of the total voting sharesof Nihon Spindle; 40.50% if indirect holdings are also included) and its shares are listed on the first sectionof both the Tokyo Stock Exchange and Osaka Securities Exchange. The main business activities of Nihon
Spindle are the manufacturing and sale of dust collectors, cooling towers, spinning machines, foodprocessing equipment, clean rooms, and industrial fasteners.
From the time Nihon Spindle became a consolidated subsidiary of SHI in October 2007, effectively making
SHI the parent company, both companies have worked to create business synergies.
However, since that time the business environment has significantly changed and market competition has
become more intense as a result of the global economic downturn that began in the second half of 2008. In
order to counter such changes, Nihon Spindle is being asked to further expand its global presence andstrengthen its product capabilities by its shareholders. With this in mind, Nihon Spindle developed a plan toactively utilize the technical development capabilities and global business network of SHI in order to set iton a growth trajectory.
Through the conversion of Nihon Spindle into a wholly owned subsidiary, SHI intends to maximize
business synergies between the two companies quickly. This will help Nihon Spindle strengthen its
operating foundation, achieve long-term growth, and will ultimately improve the corporate value of entire
SHI Group.

2.

Summary of the Stock Swap Arrangementa. Timetable for the Stock Swap
Date of Record of the Scheduled
Shareholders’ Meeting
Board of Directors Meeting to Discuss
Stock Swap Resolution
Execution of Stock Swap agreement
Scheduled Shareholders’ Meeting toApprove Stock Swap
Final Trading Day
Share De-Listing Day
Stock Swap Day (Effective Date)(Nihon Spindle)

March 31, 2010 (Wed)(Both Companies)

May 10, 2010 (Mon)(Both Companies)(Nihon Spindle)

May 10, 2010 (Mon)
June 29, 2010 (Tue) – Tentative(Nihon Spindle)(Nihon Spindle)

September 27, 2010 (Mon) – Tentative
September 28, 2010 (Tue) – Tentative
October 1, 2010 (Fri) – Tentative

Note 1: SHI will be performing this stock swap through the use of a simplified stock swap arrangement. Per
the provisions in Article 796, Item 3 of the Companies Act, SHI does not require approval from its
shareholders for this transaction.
Note 2: Please note that the schedule for the Stock Swap stated above may be modified upon mutual
consent by SHI and Nihon Spindle.
b. Stock Swap Methodology
The stock swap will lead to SHI becoming the sole parent company of Nihon Spindle, and Nihon Spindle
becoming a wholly owned subsidiary of SHI. Further, SHI will be performing this stock swap through theuse of a simplified stock swap arrangement. Per the provisions in Article 796, Item 3 of the Companies Act,
SHI does not require approval from its shareholders for this transaction. Nihon Spindle shareholders havethe opportunity to review the proposal at the scheduled shareholders’ meeting to be held on June 29, 2010.
Assuming that the transaction is approved, the effective date of the stock swap is scheduled to be October 1,
2010.

2

c.

Details of the Allocation of Shares Associated with the Stock Swap
SHI
Nihon Spindle
Company Name
(Sole Parent Company)(Wholly Owned Subsidiary)
Share Allocation Associated1
0.38
with the Stock Swap
Common Stock: 11,311,011 Shares (Anticipated)
Number of Shares to be(SHI plans to appropriate 2,510,000 treasury stock to the number of
Allocated for the Stock Swap
shares to be allocated for the Stock Swap)

Note 1: Share allocation ratios
For every one share of Nihon Spindle common stock, 0.38 shares of SHI common stock will be allocated.
However, no shares of SHI common stock will be allocated for 19,494,180 shares of Nihon Spindle
common stocks that are currently held by SHI. Please note that SHI and Nihon Spindle may modify theallocation ratios stated above upon mutual consent if a significant change occurs in the original basis of thecalculations of such ratios.
Note 2: Handling of Odd-Lot SharesThose shareholders that are in possession of an odd lot of SHI stock after the effective date of the Stock
Swap will still have the right to receive dividends with a date of record after such effective date in theamount according to their shareholdings. However, odd-lot stock cannot be traded on the stock exchange.
For this reason, those shareholders that are in possession of an odd lot of SHI stock are granted access tothe following programs in regards to SHI stock.
i)

Buyback Program for Odd-Lot StockAs per Article 192, Item 1 of the Companies Act, shareholders that are in possession of odd-lot stock
can request that SHI purchase such stock.
ii) Top-Up Program for Odd-Lot StockAs per Article 194, Item 1 of the Companies Act and the articles of incorporation of SHI, shareholders
that are in possession of odd-lot stock can request that SHI sell single shares to make their odd-lot
stock a whole stock.
Note 3: Handling of Fractional Shares
As a result of the Stock Swap, certain Nihon Spindle shareholders will be in possession of fractional sharesof SHI stock. Those shareholders will receive an amount equivalent to the fractional portion of the share asprovided in Article 234 of the Companies Act.
d. Handling of Stock Options and Convertible Bonds of the Stock Swap Wholly-Owned Subsidiary
Nihon Spindle has not issued any stock options or convertible bonds.
3.

Basis for Calculating the Share Allocations Associated with the Stock Swap
a. Background and Basis for Calculation
In order to ensure the fairness and appropriateness of the stock swap ratio associated with the Stock Swap,
SHI employed the services of Daiwa Securities Capital Markets Co., Ltd. (hereinafter referred to as “Daiwa
Securities CM”) and Nihon Spindle employed the services of Nomura Securities Co., Ltd. (hereinafterreferred to as “Nomura Securities”) to act as independent third parties for the calculation.
Daiwa Securities CM calculated the stock swap ratio using two methods; the market price analysis, and the
DCF analysis. The market price analysis for calculating the stock swap ratio was adopted because stock
price information for SHI and Nihon Spindle is available (with May 7, 2010 being set as the date of record
for the calculation, the closing stock price on the record date, the average stock price for the period between
April 28, 2010, which represents the date following the day that SHI announced revisions to its earningsand dividend forecast, and the date of record, the average stock price for the one-month period prior to thedate of record, and the average stock price for the three-months period prior to the date of record was
utilized). In addition to this method, the DCF analysis, which reflects future business activity conditions of
SHI and Nihon Spindle in the analysis, was adopted to calculate another stock swap ratio.
The following table represents the output of the two calculation methods utilized to generate the ratio forthe number of SHI common stock that would be equivalent to a single Nihon Spindle common stock.

3

Valuation Method
Market Price Analysis
DCF Analysis

Valuation Ranges for Stock Swap Ratio
0.269～0.288
0.311～0.432

Daiwa Securities CM utilized information provided by both SHI and Nihon Spindle, as well as publicly
available information to calculate the stock swap ratio. The information that Daiwa Securities CM used wasassumed to be complete and accurate and they themselves did not verify the completeness and accuracy ofsuch information. In regards to the assets and liabilities of SHI and Nihon Spindle (including contingent
liabilities), Daiwa Securities CM did not evaluate, appraise or assess this information, nor did it hire a thirdparty to evaluate or appraise such information. This includes carrying out any analysis or valuation of eachindividual asset or liability of the respective companies. Further, Daiwa Securities CM worked under theassumption that the business plans and financial forecasts of SHI and Nihon Spindle were calculated by the
management team of both companies in a reasonable manner, after due process using the best available
information and judgment at the time such forecasts were made.
Please note that the results of the valuation generated by Daiwa Securities CM do not represent an opinion
regarding the fairness or appropriateness of stock swap ratio associated with the Stock Swap.
Nomura Securities calculated the stock swap ratio for SHI using three methods; the market price analysis,
the comparable companies analysis, and the DCF analysis. The market price analysis for calculating thestock swap ratio was adopted as market price information for SHI is available (after considering stock
market trading conditions, the closing stock price on May 7, 2010, the average stock price for the period
between April 28, 2010, which represents the date following the day that SHI announced revisions to its
earnings and dividend forecast, and May 7, 2010, the five-day average stock price for the period between
April 27, 2010 and May 7, 2010, the average stock price for the period between April 19, 2010, which
represents the date following the day that Nihon Spindle announced revisions to its earnings forecast, theone-month average stock price for the period between April 8, 2010 and May 7, 2010, the three-monthaverage stock price for the period between February 8, 2010 and May 7, 2010, and the six-month averagestock price for the period between November 9, 2009 and May 7, 2010 was utilized). Next, the comparable
companies analysis was adopted to calculate the stock swap ratio because the selection of companies
similar to SHI was possible. Finally, the DCF analysis was adopted to calculate the stock swap ratio byreflecting future business activity conditions of SHI into the analysis.
Similarly for Nihon Spindle, Nomura Securities calculated the stock swap ratio using three methods; themarket price analysis, the comparable companies analysis, and the DCF analysis. The market price analysis
was adopted as market price information for Nihon Spindle is available (after considering stock market
trading conditions, the closing stock price on May 7, 2010, the average stock price for the period between
April 28, 2010, which represents the date following the day that SHI announced revisions to its earningsand dividend forecast, and May 7, 2010, the five-day average stock price for the period between April 27,
2010 and May 7, 2010, the average stock price for the period between April 19, 2010, which represents thedate following the day that Nihon Spindle announced revisions to its earnings forecast, the one-monthaverage stock price for the period between April 8, 2010 and May 7, 2010, the three-month average stock
price for the period between February 8, 2010 and May 7, 2010, and the six-month average stock price forthe period between November 9, 2009 and May 7, 2010 was utilized). Next, comparable companies
analysis was adopted because the selection of companies similar to Nihon Spindle was possible. Finally, theDCF analysis was adopted to calculate the stock swap ratio by reflecting future business activity conditionof Nihon Spindle into the analysis.
Valuation Method
Market Price Analysis
Comparable Companies Analysis
DCF Analysis

Valuation Ranges for Stock Swap Ratio
0.270 ~ 0.287
0.276 ~ 0.430
0.355 ~ 0.416

Nomura Securities also utilized information provided by both SHI and Nihon Spindle, as well as publicly
available information to calculate the stock swap ratio. The information that Nomura Securities used wasassumed to be complete and accurate and they themselves did not verify the completeness and accuracy ofsuch information. In regards to the assets and liabilities of SHI and Nihon Spindle (including contingent
liabilities), Nomura Securities did not evaluate, appraise or assess this information, nor did it hire a thirdparty to evaluate or appraise such information. This includes carrying out any analysis or valuation of eachindividual asset or liability of the respective companies. Further, Nomura Securities worked under theassumption that the financial forecasts of SHI and Nihon Spindle were calculated by the management team4

of both companies in a reasonable manner using the best available information and judgment at the timesuch forecasts were made.
SHI and Nihon Spindle carefully reviewed the analysis results of each independent third-party valuationcompany and also reviewed the financial conditions, business performance trends, and stock pricemovements of each other. After prudent deliberation and discussion, the board of directors of SHI and
Nihon Spindle concluded that the stock-swap ratio specified in Section 2., Part c., above is appropriate andthat the Stock Swap would be beneficial for both sets of shareholders. Further, both boards of directors, attheir respective board meetings held on May 10, 2010, agreed and passed a resolution on the stock swap
ratio associated with the Stock Swap. On the same day, both board of directors executed the Stock Swap
agreement.
Please note that SHI and Nihon Spindle may modify the allocation ratios stated above upon mutual consent
if a significant change occurs in the original basis of the calculations of such ratios.
b. Relationship Between Valuation Companies, SHI and Nihon Spindle
The valuation companies, Daiwa Securities CM and Nomura Securities are each, respectively, independent
from both SHI and Nihon Spindle, and are not the related parties. As such, no specific conflict of interest
exists as it relates to the Stock Swap.
c. Anticipated Date of De-Listing and Reasons for such MoveAs a result of the Stock Swap, Nihon Spindle will become a wholly owned subsidiary of SHI on October 1,
2010, which coincides with the effective date of Stock Swap. In anticipation of this move, Nihon Spindle, is
expecting to de-list its shares from the Tokyo Stock Exchange and Osaka Securities Exchange on
September 28, 2010 (final trading day of the stock will be September 27, 2010), after completing thedesignated paperwork per the de-listing guidelines of both exchanges.
Upon de-listing, Nihon Spindle’s stock will no longer be traded on both the Tokyo Stock Exchange andOsaka Securities Exchange.
As discussed previously under the heading of “Purpose of Conversion into a Wholly Owned Subsidiarythrough a Stock Swap Arrangement”, the main purpose of the Stock Swap is to increase the corporate valueof both SHI and Nihon Spindle and not the de-listing of Nihon Spindle stock. However, as a consequenceof the Stock Swap, Nihon Spindle stock will be de-listed from its trading locations.
The shares of SHI common stock that are delivered as consideration of the Stock Swap are listed on theTokyo Stock Exchange and Osaka Securities Exchange, as such, any shareholder who receives 1,000 shares(the minimum trading unit) or more of SHI common stock in exchange for 2,632 shares or more of Nihon
Spindle common stock will be able to trade their stock on both exchanges. We believe that this will ensureliquidity of the stock held by such shareholders. Please note, however, that a certain number of existing
Nihon Spindle shareholders will be allocated an odd lot of SHI common stock.
Those shareholders that hold less than 2,632 shares of Nihon Spindle common stock, will receive shares of
SHI common stock that will not satisfy the minimum trading unit of the stock (1,000 shares) as a result of
the Stock Swap. Such odd-lot stock will not be able to be traded on the securities exchange. However, as
referenced in Note 2 of Section 2, Part c), owners of odd-lot stock will be able to utilize the SHI Buy-Back
Program for Odd-Lot Stock and the Top-Up Program for Odd Lot Stock.
Further, Please refer to Section 2, Part c, Note 3 above for further information regarding the handling of
fractional shares.
Until the anticipated final trading day of September 27, 2010, existing Nihon Spindle shareholders will beable to trade Nihon Spindle stock as per usual procedure on the Tokyo Stock Exchange and Osaka
Securities Exchange, and will continue to be able to execute any shareholder rights granted to thempursuant to the applicable provisions contained in the Companies Act and other related laws and regulations.
d. Measures Taken to Ensure Fairness
SHI currently treats the entity as a consolidated subsidiary from an accounting standpoint. With this inmind, SHI employed the services of an independent third-party valuation company, Daiwa Securities CM,
to ensure that the stock-swap ratio associated with the Stock Swap was fair and appropriate. SHI utilized5the ratio determined by Daiwa Securities CM as a reference point to deliberate and negotiate the final
agreed upon stock swap ratio with Nihon Spindle as stated above. Further, the resolution to execute theStock Swap agreement was passed on this basis at its board of directors meeting held today.
On the other hand, Nihon Spindle employed the services of a separate, independent third-party valuationcompany, Nomura Securities, to ensure that the stock-swap ratio associated with the Stock Swap was fair
and appropriate. Nihon Spindle utilized the ratio determined by Nomura Securities as a reference point todeliberate and negotiate the final agreed upon stock swap ratio with SHI as stated above. Further, theresolution to execute the Stock Swap was passed on this basis at its board of directors meeting held today.
Please note that neither SHI nor Nihon Spindle have requested a Fairness Opinion Letter (i.e., a document
opining whether the stock swap ratio is fair and appropriate from a financial perspective) from theirrespective independent third-party valuation companies.
e. Measures Taken to Avoid Potential Conflicts of Interest
The board of Nihon Spindle does not include any directors from SHI or any member of the board that is
also an employee at SHI. In addition, to avoid any potential conflicts of interests, the one external auditor
that also holds the role of auditor at SHI did not participate in the Nihon Spindle board meeting held today
regarding the Stock Swap. In addition, Nihon Spindle received legal advice from its legal advisor, Kumagai& Tanaka, in regards to decisions and other matters relating to the Stock Swap.
Further, as the board of SHI does not include any directors from Nihon Spindle or any member of the boardthat is also an employee at Nihon Spindle, no specific measures to avoid potential conflicts of interests
needed to be taken.
f. Items Relating to Transactions with a Majority Shareholder(s)The Stock Swap falls under the category of a transaction with a majority shareholder. Currently, no
conditions are known whereby SHI, which is the parent company of Nihon Spindle, interferes with thebusiness activities of its consolidated subsidiary. Further, a certain degree of independence has been granted
by SHI to Nihon Spindle to carry out such activities.
With respect to the Stock Swap, any transactions made with the parent company or any other groupcompany by Nihon Spindle conforms to the “Guidelines Regarding the Protection of Minority Shareholders
in Transactions with Majority Shareholders” included in Nihon Spindle’s Corporate Governance Report.
More specifically, as per the guidelines, such transactions are treated the same as a transaction with anunrelated entity, and therefore standard internal protocols are followed. Further, the terms and conditions ofsuch transactions, including pricing, is prepared in the same manner as a transaction with an unrelated
entity.
4.

Corporate Profiles of the Two Companies that are Parties to the Stock Swap (as of March 31, 2010)
Stock Swap Sole Parent Company
Stock Swap Wholly Owned
Subsidiary
1. Name
Sumitomo Heavy Industries, Ltd.
Nihon Spindle Manufacturing Co.,Ltd.
2. Address
1-1 Osaki 2-Chome, Shinagawa2-30 Shioe 4-Chome, Amagasakiku, Tokyo, Japan
City, Hyogo Prefecture, Japan
3. Name and Title of
Yoshinobu Nakamura, President
Junai Saito
President and CEO
Representativeand CEO
4. Description of Main
Manufacturing and sales of various Manufacturing and sales ofBusiness Activities
industrial machinery ranging fromenvironmental equipment (various
general industrial machinery to
dust collectors, dioxin treatment
precision control devices
systems, etc.), air-conditioning
equipment (clean-rooms, precision
air-conditioning systems, cooling
towers, ice-thermal systems, etc.),
industrial equipment (various
rotational plastic forming machines
including spinning machines, foodprocessing equipment, industrial
fasteners, etc.), and construction
materials (various partitions forschools, doors for senior living

65.

Capital6.
7.

Date of Incorporation
Number of Shares Issued

8.
9.

Fiscal Year End
Number of Employees

10. Major Customers

JPY30,872 million (as of March
31, 2010)
November 1, 1934
605,726,394 shares (as of March
31, 2010)
March 31
15,463 (Consolidated)(As of March 31, 2010)
Sumitomo Corporation, Itochu
Corporation, etc.

facilities and medical facilities,etc.)
JPY3,275 million (as of March 31,
2010)
April 16, 1949
49,260,000 shares (as of March 31,
2010)
March 31722 (Consolidated)(As of March 31, 2010)
Sumitomo Corporation, Asahi
Industries, Co., Ltd, JFE SteelCorporation, etc.

11. Major Banking Partners

Sumitomo Mitsui Banking
Corporation, The Sumitomo Trust& Banking Co., Ltd., etc.

The Sumitomo Trust & Banking
Co., Ltd., Sumitomo Mitsui
Banking Corporation, etc.

12. Majority Shareholders
and AssociatedShareholdings

Japan Trustee Services
Bank, Ltd.

14.23%

Sumitomo Heavy
Industries, Ltd.

39.57%The Master Trust Bankof Japan, Ltd.

7.77%

The Sumitomo Trust &Banking Co., Ltd.

3.75%

State Street Bank andTrust Company(Mizuho Corporate
Bank and others acting
as standing proxy)

5.86%

Mitsui Sumitomo
Insurance Co., Ltd.

2.50%

Japan Trustee Services
Bank, Ltd. (Trust
Account)

2.06%

Sumitomo Life
Insurance Company

3.73%
Sumitomo Mitsui
Banking Corporation

1.15%

3.44%
Trust & Custody
Services Bank, Ltd.
(As of March 31, 2010)(As of March 31, 2010)
13. Related Interestsi) Capital Ties
As of March 31, 2010, including indirect
holdings, SHI holds 19,692,180 shares of Nihon
Spindle common stock, which represents 39.98%
of the issued shares.
ii) Personnel Ties
One auditor of SHI also holds the post of external
auditor at Nihon Spindle.
iii) Business Ties
There are relationships such as sale of products
from Nihon Spindle to SHI.
iv) Related Parties
SHI treats Nihon Spindle as a consolidated
subsidiary and as such, Nihon Spindle is a related
party.
14. Financial Performance and Condition for the Previous Three Fiscal Years
SHI (Consolidated)Nihon Spindle (Consolidated)
PeriodPeriodPeriodPeriodPeriodPeriodFiscal Year
Ended
Ended
Ended
Ended
Ended
Ended
March
March
March
March
March
March
2008
2009
2010
2008
2009
2010
Consolidated Net Assets
246,371
238,697
254,153
12,303
12,706
12,733
Consolidated Total Assets
678,634
657,436
610,087
22,67021,804
19,977
Consolidated Net Assets per
392.80378.78404.73242.07251.27251.61
Share (in Yen)
Consolidated Net Sales
660,769
642,918
516,165
24,204
26,392
20,113

7

Consolidated Operating
IncomeConsolidated Ordinary
IncomeConsolidated Net Income for
the Period
Consolidated Net Income per
Share (in Yen)
Dividend per Share (in Yen)

5.

77,79056,94028,254

1,760

1,446

591

75,46950,27526,333

1,818

1,499

653

42,974

13,64913,280

1,302

811

129

71.19

22.62

22.01

29.66

16.53

2.65

10.0

6.0
4.0
5.0
3.0
0.0
(Units: Millions of Yen unless specifically stated above)

Corporate Condition Upon Completion of the Stock Swap
1.
2.
3.
4.

Name
Address
Name and Title of Representative
Description of Business Activities

5.
6.
7.
8.

CapitalFiscal Year End
Net Assets
Total Assets

Stock Swap Sole Parent Company
Sumitomo Heavy Industries, Ltd.
1-1 Osaki 2-Chome, Shinagawa-ku, Tokyo, Japan
Yoshinobu Nakamura, President and CEO
Manufacturing and sales of a variety of industrial machinery
ranging from general industrial machinery to precisioncontrol devices
JPY30,872 million
March 31This figure is yet to be finalized at this time
This figure is yet to be finalized at this time6.

Summary of Accounting Treatment
The Stock Swap falls within the category of a transaction with minority shareholders under theclassification of transactions under common control. At this time, the goodwill value as a result of thistransaction is yet to be determined.

7.

Outlook Regarding Impact on Future Business Performance
As Nihon Spindle is already a consolidated subsidiary of SHI, the impact on the consolidated and nonconsolidated financial results of SHI as a result of the Stock Swap is projected to be minimal.

8. Setting the Date of Record
In order to determine those shareholders that retain the right to request share buy-back with respect to
the Stock Swap, the date of July 1, 2010 has been set as the date of record. Those shareholders listedon the final register of shareholders on such date retain the right to execute the aforementioned right torequest share buy-back.
END(Reference)
SHI’s Consolidated Financial Projections for the Current Fiscal Year (as announced on May 10, 2010) andActual Financial Results from the Previous Fiscal Year.
(Units: Millions of Yen)
Consolidated Net
Consolidated Net
Consolidated
Consolidated
Income for the
Sales
Operating Income
Ordinary Income
PeriodFinancial
Projections for the
540,000
36,00032,00016,500Current Fiscal YearEnding March 2011
Actual Results for
516,165
28,254
26,333
13,280the Year End March
2010
Note: The above figures do not include any impact as a result of the Stock Swap. A review is currently being
carried out to determine the impact of the Stock Swap on SHI’s consolidated financial results. SHI will provide
this information to shareholders as soon as the details become available.

8