August 30, 2011
To Whom It May Concern:
Company Name:
Representative:
Stock Code:Inquiries:

Sumitomo Heavy Industries, Ltd.
Yoshinobu Nakamura, President
6302 (First Section of the TSE/OSE)
Hideo Ohshima
General Manager – Corporate
Communication Department
Tel: +81-3-6737-2333

Notice Regarding the Separation of the Compact Gear Motor Business through an
Incorporation-Type Company Split with a Subsidiary
This is to notify that at a Board of Directors’ Meeting held today, a resolution was passed to separate thesmall-sized gear motor manufacturing businesses of Sumitomo Heavy Industries, Inc. (hereinafterreferred to as “SHI” or “the Company”) and Sumiju Technos, Ltd. (hereinafter referred to as “Technos”),
a subsidiary of the Company. It was further decided that the responsibilities of the separated businesses
will be succeeded by a newly formed entity called Sumiju Small Gear Motor Co., Ltd. (hereinafterreferred to as “Sumiju Small Gear Motor”). Both decisions are anticipated to come into effect on
November 1, 2011. Details of the move are outlined below.
Please note that this incorporation-type company split is considered to be a Simplified Form of BusinessSeparation under Article 805 of the Companies Act. As such, certain details regarding the transaction havebeen omitted from the below content.
1.

Purpose of the Incorporation-Type Company Split
SHI has positioned the Power Transmission and Controls business as one of its core areas and has
been working to strengthen its functions over the years. As part of its efforts to achieve significant
growth in overseas markets, a decision was made to concentrate the manufacturing functions forsmall-sized gear motors to the Vietnam plant, ensuring cost competitiveness of its products in suchmarkets. In the domestic market, a decision was made to set up an independent company to manage
the manufacturing functions (primarily final assembly) of its small-sized gear motors to increase
efficiency and the speed in which business can be performed.
With this in mind, an incorporation-type company split will be carried out jointly with Technos, acontract manufacturer of power transmission equipment, to form Sumiju Small Gear Motor which
will commence operation on November 1, 2011. This move is anticipated to allow for speedy
decision-making and dynamic operational management, ensuring that customer needs in the domestic
market can be met from the standpoint of both detail and suitability.

2.

Summary of the Incorporation-Type Company Spliti) Schedule for the Incorporation-Type Company Split
Development of Incorporation-Type Company Split Plan
August 30, 2011
Approval of Incorporation-Type Company Split Plan
August 30, 2011
Effective Date of Incorporation-Type Company Split
November 1, 2011 (Projected)(Note – This incorporation-type company split is considered to be a simplified form of businessseparation under Article 805 of the Companies Act. As such, approval for the transaction at aGeneral Shareholders’ Meeting is not required.)ii) Method of the Incorporation-Type Company Split
This will be a joint incorporation-type company split whereby businesses from both theCompany and Technos will be separated to form Sumiju Small Gear Motor (the survivingcompany).
iii) Share Allotments Associated with the Incorporation-Type Company Split
Sumiju Small Gear Motor will issue 5,000 common shares as a result of the incorporation-typecompany split and allocate all the shares to the Company. No shares are to be allocated toTechnos.

iv) Handling of Equity Warrants and Bonds with Stock Acquisition Rights Associated with theIncorporation-Type Company Split
No equity warrants or bonds with stock acquisition rights are to be issued by the Company withrespect to this transaction.
v) Increase or Decrease in Capital Associated with the Incorporation-Type Company Split
No decreases in capital are anticipated as a result of the incorporation-type company split.
vi) Rights and Obligations to be Assumed by Sumiju Small Gear Motor
Sumiju Small Gear Motor will assume the assets, liabilities and contractual obligations that aredeemed necessary to perform the duties of the business areas that are separated as a result of theincorporation-type company split.
vii) Prospects for Fulfilling Debt Obligations
The Company has concluded that debt obligations to be borne by the succeeding company canbe met in its entirety.
3.

Profiles of Companies Involved in the Incorporation-Type Company Split
Sumiju Technos, Ltd.
Sumitomo Heavy(Splitting Company) –Industries, Ltd.
As of March 31, 2011
(Splitting Company) –As of March 31, 2011

(1) Name(2) Head Office(3) Name andPosition ofRepresentative(4) Description ofBusinessOperations(5) Capital(6) Date of
Establishment(7) Number ofShares
Outstanding(8) Fiscal YearEnd(9) Number of
Employees(10) Main
Customers(11) Main
Banking
Relationships

Sumiju Small Gear
Motor Co., Ltd.
(Surviving Company
through Incorporation
Type Company Split) –Projected November 1,2011
Sumiju Small Gear
Motor Co., Ltd.
1 Asahi-Cho 6-Chome,Obu-shi, Aichi
Prefecture
Takeshi Okabe,
President

Sumitomo Heavy
Industries, Ltd.
1-1 Osaki 2-Chome,
Shinagawa-ku, Tokyo,
Japan
Yoshinobu Nakamura,President

Sumiju Technos, Ltd.

Manufacturing and saleof various industrial
machinery ranging fromgeneral machinery toprecision controls¥30,872 million
November 1, 1934

Planning, design, repair,and contractmanufacturing of plantand machinery

Manufacturing and saleof power transmission
equipment and motors¥20 million
August 1, 1983

¥250 million
November 1, 2011

614,527,405 shares

400 shares

5,000 shares

March 31

March 31

March 31

17,025 (Consolidated)

185

95

Sumitomo Corporation,
Itochu Corporation,
among others
Sumitomo Mitsui
Banking Corporation,
The Sumitomo Trust &Banking Co., Ltd.

Sumitomo Heavy
Industries, Ltd.

Sumitomo Heavy
Industries, Ltd.

Sumitomo Mitsui
Banking Corporation

Sumitomo Mitsui
Banking Corporation

1 Asahi-Cho 6-Chome,Obu-shi, Aichi
Prefecture
Masanori Oonishi,
President

(12) MajorShareholders andShareholding
Ratios(13) Relationship
Between Entities

Japan Trustee Services
Bank, Ltd. (15.5%)
The Master Trust Bankof Japan, Ltd. (7.1%)
State Street Bank andTrust Company (6.0%)
Sumitomo Life
Insurance Company(3.7%)
Trust & Custody
Services Bank, Ltd.
(3.1%)
Capital Relationship
Personnel RelationshipTransactional
Relationship

Sumitomo Heavy
Industries, Ltd. (100%)

Sumitomo Heavy
Industries, Ltd. (100%)

Technos and Sumiju Small Gear Motor are
wholly-owned subsidiaries of the Company
The President and Representative Officer of bothTechnos and Sumiju Small Gear Motor are
originally from the Company. Personnel fromTechnos and the Company will either be seconded
or transferred to Sumiju Small Gear Motor
Technos renders services to the Company. The
Company will carry out such activities asdevelopment support and factory leasing to Sumiju
Small Gear Motor
Both Technos and Sumiju Small Gear Motor are
consolidated subsidiaries of the Company

Consolidation
Applicability of Parties
Involved(14) Operating Results and Financial Condition for the Past Three Years (Units: in ¥ millions)Fiscal Year
Sumitomo Heavy Industries,
Sumiju Technos, Ltd.
Ltd. (Splitting Company)(Splitting Company)
PeriodPeriodPeriodPeriodPeriodPeriodEnded
Ended
Ended
Ended
Ended
Ended
March
March
March
March
March
March
2009
2010
2011
20092010
2011
Consolidated Net Assets
238,697
254,153
269,380
76
(10)
(10)
Consolidated Total Assets

657,436

610,087

626,829

277

214

210

Consolidated Net Assets per
Share (¥)
Consolidated Net Sales

378.78404.73435.10191.06(24.05)(24.22)642,918

516,165

548,015

1,573

1,109

1,310

Consolidated Operating Income

56,94028,25445,803

(82)

(91)

8

Consolidated Ordinary Income

50,27526,33344,253

(78)

(91)

7

Consolidated Net Income

13,64913,28027,926(47)(86)(0)22.62

22.01

45.87

(118.45)(215.11)(0.17)

6.0

4.0

8.0

0.0

0.0

0.0

Consolidated Net Income perShare (¥)
Dividend per Share (¥)i)

Description of Business Operations of the Company to be Separated
Businesses related to the manufacturing of compact gear motorsii) Operating Results of the Company to be Separated (for the period ended March 2011)
Business to be Split Off
Company (Consolidated) (b)(a)
Net Sales (in7,468
548,015¥ millions)(a) / (b)1.4%

iii) Items and Amounts Associated with Assets and Liabilities to be Succeeded by the SucceedingCompany (projected end of October 2011)(Units: ¥ millions)
Item
Book Value
Item
Book Value
Current Assets
2,180 Current Liabilities
2,000
Fixed Assets
90 Long-Term Liabilities
20
4.

Status of the Company after the Separation
There will be no change to the company name, description of business operations, location of thehead office, representative, capital, and fiscal year arising from the incorporation-type company split.

5.

Future Outlook
Since Sumiju Small Gear Motor (the newly formed entity through the incorporation-type companysplit) is a wholly-owned subsidiary, there is no anticipated impact to the consolidated financial
performance of the Company.
END(Reference)
Current Year Consolidated Operating Forecast (as disclosed on July 29, 2011) and Previous Year
Operating Results:(Units: ¥ millions)
Consolidated
Consolidated
Consolidated
Consolidated
Net Sales
Operating Income
Ordinary Income
Net Income
Current Year Operating
630,000
54,00050,50030,000
Forecast(Period Ending March 2012)

Previous Year Operating
Results(Period Ended March 2011)

548,01545,80344,25327,926