The transactions pursuant to the joint share transfer described in this press release involve securities of a Japanese company. The joint
share transfer is subject to disclosure requirements of Japan that are different from those of the United States. Financial information
included in this document, if any, was excerpted from financial statements 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 U.S. federal securities laws, since theissuer is located in Japan and some or all of its officers and directors reside outside of the United States. You may not be able to sue aJapanese company or its officers or directors in a Japanese court for violations of the U.S. securities laws. It may be difficult to compel aJapanese company and its affiliates to subject themselves to a U.S. court’s judgment. You should be aware that the issuer may purchasesecurities otherwise than under the joint share transfer, such as in the open market or through privately negotiated purchases.
This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between thistranslated document and the Japanese original, the original shall prevail. NPR and Riken assume no responsibility for this translation orfor direct, indirect or any other forms of damages arising from the translation.

May 23, 2023
Company:

Nippon Piston Ring Co., Ltd.

Representative: President and Representative Director
Teruo Takahashi(Code: 6461, TSE Prime Market)
Contact:

Executive Officer, General Manager
Corporate Planning Department
Eiichi Chiyo(TEL: +81-48-856-5014)

Company:

Riken Corporation

Representative: President, CEO & COO
Yasunori Maekawa(Code: 6462, TSE Prime Market)
Contact:

General Manager, Corporate Planning Div.,
Corporate Management Head OfficeTenya Mitsuboshi(TEL: +81-3-3230-3911)

Conclusion of Final Agreement Concerning the Consolidation by Nippon Piston Ring Co., Ltd. and Riken
Corporation through Establishment of a Joint Holding Company by Means of Share Transfer
Nippon Piston Ring (hereinafter “NPR”) and Riken Corporation (hereinafter “Riken”) hereby announce that, based on a
Memorandum of Understanding concerning a business merger signed by the two companies on July 27, 2022 (hereinafter
the “Memorandum of Understanding”), and subject to approval at shareholders’ meetings of both companies and the approvalof relevant authorities, etc., the two companies have resolved in meetings of their respective Board of Directors convened
today to enact a joint share transfer (hereinafter the “Share Transfer”) to establish (hereinafter the “Consolidation”) NPRRIKEN CORPORATION (hereinafter the “Joint Holding Company”), which will become a wholly owning parent company
of both companies effective October 2, 2023 (hereinafter the “Effective Date”). Moreover, the two companies have today1signed a consolidation agreement (hereinafter the “Consolidation Agreement”) grounded in a spirit of equality and havejointly prepared a share transfer plan (hereinafter the “Share Transfer Plan”) to effect the share transfer, with details as follows.

1. Background to and purpose of the Consolidation(1) Background to the Consolidation
Since its establishment in 1934, NPR has contributed to the development of motorization worldwide throughthe provision of high-performance, high-quality piston rings, valve seat inserts, camshafts, and other parts
primarily for use in internal combustion engines, manufactured using its own original techniques and technologies.
Riken was established in 1927 in order to commercialize the research of RIKEN (the Institute of Physical andChemical Research), and has contributed to the development of the global automotive industry for over 90 years
through its continued study of surface treatment, processing, and materials technologies for piston rings (thecompany’s primary focus) and other parts.
The automotive industry is undergoing a remarkable transformation that is said to occur only once every 100
years, and the market for engine parts is becoming clearly more challenging. However, although environmental
issues are attracting attention around the world, for the time being, the internal combustion engine will remain the
primary form of power train and both companies believe that it is their mission to develop eco-friendly engine
parts. At the same time, the companies believe it is necessary to think outside of the realm of internal combustionrelated parts and increase investment in SDGs, ESG, decarbonization, and other new areas in line with global
trends.
As the first step in development for the future, the two companies realize the need to utilize the brands they havenurtured over the years and to harness their integrated governance to promote management resource allocation andcultivate future core businesses. This will make it possible to achieve major synergy as the companies accelerate
their efforts to achieve decarbonization, and thereby allow them to evolve into a completely new business entity
capable of achieving sustainable growth and increasing corporate value.
As noted in the press release “Conclusion of a Memorandum of Understanding concerning Consolidation
through the establishment of a joint holding company (stock transfer) between Nippon Piston Ring Co., Ltd. And
Riken Corporation“ dated July 27, 2022, the two companies have already discussed and examined theestablishment of a Joint Holding Company by means of a joint share transfer based on the Memorandum ofUnderstanding and the execution of a Consolidation. Today, adhering to that spirit of equality, the two companies
have reached a final agreement and concluded a Consolidation Agreement under the conviction that theConsolidation is the optimal choice for the shareholders, employees, and all stakeholders of both companies.
As noted in the press release “Notice Regarding the Schedule for the Consolidation of Nippon Piston Ring Co.,
Ltd. and Riken Corporation,” dated November 28, 2022, due to the time and other factors required for the reviewof the business combination by the Fair Trade Commission as a prerequisite for the Consolidation, the date of theConsolidation had been unscheduled. However, the companies submitted a notification to the Fair Trade
Commission dated April 19, 2023 in accordance with the provisions of Article 15-3, paragraph 2 of the Act on
Prohibition of Private Monopolization and Maintenance of Fair Trade, and, as noted in the press release “NoticeRegarding Result of the Fair Trade Commission Review of Consolidation by Nippon Piston Ring Co., Ltd. andRiken Corporation,” dated May 8, 2023, they have received a notice dated May 2, 2023 to the effect that the Fair
Trade Commission will not issue a cease and desist order.
(2) Purpose of the Consolidation and expected synergistic effects
The Consolidation will allow the two companies to integrate and make effective use of both companies’
management resources to achieve desired synergistic effects as detailed below. By doing so, the companies seek tostrengthen the profitability of their existing businesses centered on automobile engine parts, while also2

accelerating their efforts toward the creation of next-generation core products and new products in non-automotiveengine component fields including marine vessels, hydrogen, new energy projects, thermal engineering,
electromagnetic compatibility projects, metal powder injection molded parts, medical equipment, axial gap motors(disk-shaped, thin, high-torque motors), and other fields. The two companies aim to evolve into a new company
that will lead the world in globally developing distinctive functional parts and key components through thecompanies’ proprietary technologies, further enhancing each company’s corporate value.
(i) Reinforcement of existing businesses through the reallocation of management resources, and early
development of products that will form the core of future businessIn recent years, companies in the automobile industry have been compelled to improve their technicalcapabilities and reform their organizations in response to CASE, MaaS, and other new fields of development.
NPR and Riken, too, in collaboration with research bodies and other external organizations, face the need tosecure resources to create proprietary innovation and to nurture talent that will serve as sources ofdifferentiation. Through the Consolidation, the companies aim to achieve the following:
Strengthening of cash flow creation capabilities in existing businesses
Both companies will work to enhance their business efficiency and development capabilities by means
including adjustment of capital investment priorities, optimization of production over a wide range, andimproved centralization and effectiveness of development themes. Through such efforts, the companies willachieve improved profitability and strengthened cash flow creation capabilities while meeting customers’
expectations for the supply of high-quality, low-cost products.
Future core businesses and the creation of new products
Increasing business efficiency in the above-mentioned areas will enable integration of resources that had
been dedicated to the development of products for internal combustion engines and allow for a bold shift
toward future core businesses and the creation of new products. The companies will accelerate effective
investment in effective new product development, promote reciprocal integration of technologies andcorporate bases, and accelerate the development of new products that offer high added value and costcompetitiveness.
(ii) Strengthening of capabilities to respond to an increasingly decarbonizing society
Amid the global movement toward the decarbonization of society, both companies face a need to respondto global environmental issues. By bringing together and expanding their product and production
technologies, the two companies will advance their technologies in the environmental field and accelerate thedecarbonization of products. At the same time, they will aggressively work to reduce carbon dioxide
emissions throughout the supply chain and actively contribute to the creation of a sustainable society.
(iii) Reduction of costs through shared use of infrastructure and other resources
By enhancing productivity throughout the supply chain (from purchasing and production to sales), reducing
external outflow costs through standardization of internal manufacturing in both companies, reducing
procurement costs through joint purchasing, and eliminating duplication of systems and indirect operations toraise efficiency, the companies aim to enhance operational efficiency and cut costs to secure competitive
advantages.
(iv) Reduction of manufacturing costs by enhancing production efficiency through shared product integration, andtimely and appropriate fulfillment of supply responsibilities
Harnessing their technologies and infrastructures, the two companies will engage in unconventional sharedutilization of factories and optimization of production hubs, with the goal of significant productivity
improvements, enhanced capability for offering high-quality products, and reduction of fixed costs. Through3

the establishment of a sustainable production system, the companies will also fulfill their responsibilities tosupply products to customers in a timely and appropriate manner.
(v) Upgrading of interpersonal abilities through exchanges of personnel and technologies
Through active exchanges of the knowledge and skills of their respective executives and employees, thetwo companies will harness the strengths of both to provide opportunities for new ideas to be born in varied
areas and job positions. Through this, the companies will strive to build workplace environments that willraise employee engagement to new heights.
2. Abstract of the Consolidation(1) Schedule for the Consolidation
Date of record of Ordinary General Meeting of Shareholders (bothcompanies)
Board of Directors meetings to approve the Consolidation Agreement
and the Share Transfer Plan (both companies)
Conclusion of the Consolidation Agreement and preparation of the
Share Transfer Plan (both companies)
Ordinary General Meetings of Shareholders to approve the Share
Transfer Plan (both companies)
Date of delisting from the Tokyo Stock Exchange (both companies)
Effective Date of the Share Transfer (registration date forestablishment of the Joint Holding Company)
Date of listing of shares of the Joint Holding Company
Note:

March 31, 2023
May 23, 2023 (today)
May 23, 2023 (today)
June 23, 2023 (scheduled)
September 28, 2023 (scheduled)
October 2, 2023 (scheduled)
October 2, 2023 (scheduled)

The above represents current plans and is subject to change through discussion and agreement by the two companies
if necessary for reasons pertaining to the progress of procedures for the Consolidation or for other reasons.

(2) Method of the Consolidation
NPR and Riken will conduct a joint share transfer that will leave the two companies as wholly owned
subsidiaries following share transfer and will leave the new established Joint Holding Company as the wholly
owning parent company following share transfer.
(3) Allotments related to the Share Transfer (share transfer ratio)
Riken

NPR

2

1.02

Share transfer ratio

Note 1: Details of share allotments related to the Share Transfer
For each share of common stock of NPR, 1.02 shares of common stock of the Joint Holding Company will beallotted and granted, and for each share of common stock of Riken, 2 shares of common stock of the Joint Holding
Company will be allotted and granted. However, in the event of material change in the conditions underlying the
calculation of the above share transfer ratio, the ratio may be changed through consultation between the twocompanies.
The number of shares that constitute one unit of shares of the Joint Holding Company is scheduled to be 100
shares.
If, as a result of the Share Transfer, the number of shares of common stock of the Joint Holding Company that must
be granted to a shareholder of NPR or Riken includes a fraction of less than one share, a monetary amountcorresponding to the fraction of less than one share will be paid to the shareholder, in accordance with Article 234 of
the Companies Act and related laws and regulations.

4Note 2: Number of new shares to be granted by the Joint Holding Company through the Share Transfer (scheduled): Common
stock: 28,031,005 shares
The above number is based on the total number of outstanding shares (8,374,157 shares) of NPR as of March 31,
2023 and on the total number of outstanding shares (10,688,866 shares) of Riken as of March 31, 2023. However, as
NPR and Riken intend, by resolutions of meetings of their respective Boards of Directors convened by the day before
the Effective Date of the Share Transfer, to cancel all treasury stock held by each company (including treasury sharesacquired by the companies on the occasion of the Share Transfer through share purchase requests made pursuant to
the provisions of Article 806, paragraph 1 of the Companies Act) immediately prior to the Effective Date (hereinafter
the “Base Time”), 583,728 shares of common stock that are treasury shares held by NPR as of March 31, 2023 and
646,482 shares of common stock that are treasury shares held by Riken as of March 31, 2023 are excluded from thescope of the granting of new shares in the above calculation. The number of treasury shares that will be retired by theBase Time is currently undetermined, and the number of new shares to be granted by the Joint Holding Company issubject to change in the future.
Note 3: Handling of odd-lot shares, etc.
Shares of the Joint Holding Company that will be allotted to shareholders of NPR and Riken as a result of the
Share Transfer are scheduled to be listed on the Tokyo Stock Exchange via application. If said application is approved,
trading of shares of the Joint Holding Company on the Tokyo Stock Exchange will be possible. Accordingly, thecompanies intend for shares of the Joint Holding Company to offer continued liquidity to shareholders of NPR or
Riken who hold 99 or more shares of stock of NPR or 50 or more shares of stock of Riken and who receive allotmentof 100 or more shares, i.e., one unit of shares, of the Joint Holding Company through the Share Transfer.
While shareholders of NPR and Riken who receive an allotment of less than 100 shares of stock of the Joint
Holding Company will not be able to sell said allotted shares on the Tokyo Stock Exchange or on other financial
instruments exchanges, it will be possible to request the purchase of such odd-lot shares to the Joint Holding
Company. Pursuant to provisions scheduled to be stipulated in the Articles of Incorporation of the Joint Holding
Company, the ability to purchase additional shares from the Joint Holding Company that, in combination with thenumber of odd-lot shares held, constitute one unit of shares is also planned.

(4) Handling of subscription rights to shares and of bonds with subscription rights to shares associated with the Share
Transfer
In the Share Transfer, subscription rights to shares of the Joint Holding Company will be allotted and granted toholders of, and in place of, subscription rights to shares issued by NPR and Riken as of the Base Time, based on
details of said subscription rights to shares and on the share transfer ratio.
Neither NPR nor Riken has issued bonds with subscription rights to shares.
(5) Dividends of surplus
Under the Consolidation Agreement, the two companies have agreed on the payment dividends of surplus asfollows: NPR may pay dividends of surplus in the amount of (1) 50 yen per share to shareholders or registeredshare pledgees of common shares of NPR listed or recorded in the final shareholder registry on March 31, 2023 or(2) up to 35 yen per share to shareholders or registered share pledgees of common shares of NPR listed orrecorded in the final shareholder registry on September 30, 2023; and Riken may pay dividends of surplus in theamount of (1) 60 yen per share to shareholders or registered share pledgees of common shares of Riken listed orrecorded in the final shareholder registry on March 31, 2023 or (2) up to 60 yen per share to shareholders or
registered share pledgees of common shares of Riken listed or recorded in the final shareholder registry on
September 30, 2023.

5

3. Grounds, etc. for details of allotments related to the Share Transfer(1) Grounds and reasons for details of the allotments
In order to ensure the fairness and validity of the share transfer ratio calculated as described in “(3) Allotments
related to the Share Transfer (share transfer ratio)” in “2. Abstract of the Consolidation” above (hereinafter the“Share Transfer Ratio”), NPR has selected Nomura Securities Co., Ltd. (hereinafter “Nomura Securities”) andRiken has selected IR Japan, Inc. (hereinafter “IR Japan”) to serve as financial advisors and third-party valuation
bodies independent from either company.
Based on advice and on calculations of share transfer ratio submitted by the third-party valuation body Nomura
Securities noted in “(i) Acquisition of calculation reports from independent third-party valuation bodies” in “(4)Measures to ensure fairness” below, based on legal advice from Marunouchi Sogo Law Office noted in “(ii)Advice from an independent law firm” in “(4) Measures to ensure fairness” below, and based on the findings ofdue diligence concerning Riken conducted by NPR and its advisors, and as a result of careful discussion andconsideration taking into account the financial conditions, performance trends, stock price movements, etc. of bothcompanies, NPR has arrived at the conclusion that the Share Transfer Ratio noted in “(3) Allotments related to the
Share Transfer (share transfer ratio)” in “2. Abstract of the Consolidation” above is valid and is in the interest of
NPR shareholders.
Based on advice and on calculations of share transfer ratio submitted by the third-party valuation body IR Japan
noted in “(i) Acquisition of calculation reports from independent third-party valuation bodies” in “(4) Measures toensure fairness” below, based on legal advice from City-Yuwa Partners noted in “(ii) Advice from an independent
law firm” in “(4) Measures to ensure fairness” below, and based on the findings of due diligence concerning NPR
conducted by Riken and its advisors, and as a result of careful discussion and consideration taking into account thefinancial conditions, performance trends, stock price movements, etc. of both companies, Riken has arrived at theconclusion that the Share Transfer Ratio noted in “(3) Allotments related to the Share Transfer (share transfer
ratio)” in “2. Abstract of the Consolidation” above is valid and is in the interest of Riken shareholders.
In this way, with reference to calculations and analyses by these third-party valuation bodies and the advice oflegal advisors, and based on the findings of due diligence conducted by each of the companies on the other party,
and furthermore as a result of repeated negotiations and discussions between the two companies comprehensively
taking into account factors including financial status, share price movements, and the future outlook for bothcompanies, the conclusion was ultimately reached that the Share Transfer Ratio described in “(3) Allotments
related to the Share Transfer (share transfer ratio)” in “2. Abstract of the Consolidation” above is valid and is in theinterests of the shareholders of both companies. Having resolved to conclude the Consolidation Agreement atmeetings of the Boards of Directors of both companies convened today, the companies entered into theConsolidation Agreement and jointly created the Share Transfer Plan.
(2) Matters related to calculation(i) Names of valuation bodies, and their relationships with listed companies and with the two companies
Neither Nomura Securities nor IR Japan is a related party of NPR or Riken, nor does either have any
material interest of note with regard to the Share Transfer.
(ii) Overview of calculations
Nomura Securities calculated the Share Transfer Ratio in accordance with the market share price averaging
method, given that shares of both NPR and Riken are listed on the Tokyo Stock Exchange Prime Market anda market share price exists for each. Nomura Securities also conducted calculations using the comparable
multiple valuation method due to the facts that multiple listed companies exist that are comparable to NPR
and Riken and that analogizing stock prices through comparable company valuation is possible, and further

6performed calculations using the discounted cash flow method (hereinafter “DCF method”) in order to reflect
the state of future business activities in the evaluation.
The results of calculations using the methods are as follows. The calculated range for share transfer ratio
below notes the calculated range for shares of the Joint Holding Company to be allocated per share ofcommon stock of NPR when two shares of common stock of the Joint Holding Company is allotted per shareof common stock of Riken.

Method used

Calculated range for share transfer ratio

Market share price averaging method

0.97–1.09

Comparable multiple valuation method

0.94–1.44

DCF method

0.92–1.30

With regard to the market share price averaging method, setting July 26, 2022, the business day prior to
July 27, 2022 (the date on which conclusion of the Memorandum of Understanding was announced), as
calculation reference date (i), calculation was performed of the closing stock price on calculation reference
date (i), the average closing stock price for the five-day period from July 20, 2022 to calculation reference
date (i), the average closing stock price for the one-month period from June 27, 2022 to calculation reference
date (i), the average closing stock price for the three-month period from April 27, 2022 to calculationreference date (i), as well as the average closing stock price for the six-month period from January 27, 2022 to
calculation reference date (i); and, setting May 22, 2023 as calculation reference date (ii), calculation was
performed of the closing price on calculation reference date (ii), the average closing stock price for the fiveday period from May 16, 2023 to calculation reference date (ii), the average closing stock price for the onemonth period from April 24, 2023 to calculation reference date (ii), the average closing stock price for thethree-month period from February 24, 2023 to calculation reference date (ii), as well as the average closing
stock price for the six-month period from November 24, 2022 to calculation reference date (ii).
In calculating the above share transfer ratio, Nomura Securities used information provided by bothcompanies, publicly available information, etc., doing so under the assumption that all of the materials,
information, etc. are accurate and complete and without conducting independent verification of the accuracy
or completeness of these. With regard to the assets and liabilities of the two companies and their affiliates(including financial derivatives, off-the-book assets and liabilities, and other contingent liabilities),
independent valuation, appraisal, or assessment was not performed, including analysis and valuation ofindividual assets and liabilities, and appraisal and assessment by a third party was not requested. Nomura
Securities’ calculation of the share transfer ratio incorporates information and economic conditions up to thedate of May 22, 2023. Financial projections and other forward-looking information concerning NPR was
rationally prepared on the basis of best-effort and good-faith forecasts and judgments currently available to the
management of NPR. Financial projections and other forward-looking information concerning Riken wererationally examined and confirmed on the basis of best-effort and good-faith forecasts and judgments
currently available to the management of NPR. Nomura Securities’ calculation of the Share Transfer Ratio
assumes that the financial status of NPR and of Riken will change in line with these forecasts.
The business plans of NPR and Riken, used by Nomura Securities as premises for calculation under the
DCF method, do not incorporate synergies resulting from the Consolidation. The business plan of NPR fromthe fiscal year ending March 31, 2024 to the fiscal year ending March 31, 2026, used by Nomura Securities aspremises for calculation under the DCF method, includes a business year in which a significant increase inprofit is anticipated. Specifically, in the fiscal year ending March 2024, a significant year-on-year increase inprofit is expected as the company’s efforts to pass though procurement costs to sales prices contribute toearnings. Furthermore, the business plan of Riken from the fiscal year ending March 31, 2024 to the fiscal
year ending March 31, 2026, used by Nomura Securities as premises for calculation under the DCF method,7

includes a business year in which a significant increase in profit is anticipated. Specifically, in the fiscal year
ending March 31, 2025, Riken is projected to achieve a significant increase in profit from the previous fiscal
year, mainly attributable to the passing through of increases in procurement costs, such as raw materials costs,
energy prices, and outsourcing costs, to sales prices and corporate efforts such as rationalization activities.
IR Japan calculated the Share Transfer Ratio in accordance with the market share price averaging method,
given that shares of both Riken and NPR are listed on the Tokyo Stock Exchange Prime Market and a market
share price exists for each. IR Japan also performed calculations using the comparable multiple valuation
method due to the facts that multiple listed companies exist that are comparable to Riken and NPR and that
analogizing stock prices through comparable company valuation is possible, and further performed
calculations using the DCF method in order to reflect the state of future business activities in the evaluation.
The results of calculations using the methods are as follows. The calculated range for share transfer ratio
below notes the calculated range for shares of the Joint Holding Company to be allocated per share ofcommon stock of NPR when two shares of common stock of the Joint Holding Company is allotted per shareof common stock of Riken.
Method used

Calculated range for share transfer ratio

Market share price averaging method

0.97–1.09

Comparable multiple valuation method

0.95–1.26

DCF method

0.65–1.42

With regard to the market share price averaging method, setting July 26, 2022, the business day prior to
July 27, 2022 (the date on which conclusion of the Memorandum of Understanding was announced), as
calculation reference date (i), calculation was performed of the closing stock price on calculation reference
date (i), the average closing stock price for the one-month period from June 27, 2022 to calculation reference
date (i), the average closing stock price for the three-month period from April 27, 2022 to calculationreference date (i), as well as the average closing stock price for the six-month period from January 27, 2022 to
calculation reference date (i); and, setting May 22, 2023 as calculation reference date (ii), calculation was
performed of the closing price on calculation reference date (ii), the average closing stock price for the onemonth period from April 24, 2023 to calculation reference date (ii), the average closing stock price for thethree-month period from February 24, 2023 to calculation reference date (ii), as well as the average closing
stock price for the six-month period from November 24, 2022 to calculation reference date (ii).
In calculating the above share transfer ratio, IR Japan used information provided by both companies,
publicly available information, etc., doing so under the assumption that all of the materials, information, etc.
are accurate and complete and without conducting independent verification of the accuracy or completenessof these. With regard to the assets and liabilities of the two companies and their affiliates (including financial
derivatives, off-the-book assets and liabilities, and other contingent liabilities), independent valuation,
appraisal, or assessment was not performed, including analysis and valuation of individual assets andliabilities, and appraisal and assessment by a third party was not requested. IR Japan’s calculation of the sharetransfer ratio incorporates information and economic conditions up to the date of May 22, 2023. Financial
projections and other forward-looking information concerning Riken was rationally prepared on the basis ofbest-effort and good-faith forecasts and judgments currently available to the management of Riken. Financial
projections and other forward-looking information concerning NPR was rationally examined and confirmedon the basis of best-effort and good-faith forecasts and judgments currently available to the management of
NPR. IR Japan’s calculation of the Share Transfer Ratio assumes that the financial status of Riken and of
NPR will change in line with these forecasts.
The business plans of Riken and NPR, used by IR Japan as premises for calculation under the DCF
method, do not incorporate synergies resulting from the Consolidation. The business plans of Riken and NPR
8for the period from the fiscal year ending March 31, 2024 to the fiscal year ending March 31, 2026, used by
IR Japan as premises for calculation under the DCF method, do not include fiscal years in which significant
fluctuations in profit are anticipated. Specifically, Riken is expected to achieve a significant increase in profit
for the fiscal year ending March 31, 2025, mainly attributable to passing through of increases in procurement
costs, such as raw material costs, energy prices, and outsourcing costs, to sales prices, and corporate efforts
such as rationalization activities. Moreover, NPR is expected to achieve a significant increase in profit for the
fiscal year ending March 31, 2024, with a contribution to earnings form the passing through of procurement
costs to sales prices and corporate efforts.
(3) Matters concerning application for listing of the Joint Holding Company
NPR and Riken plan to apply for a new listing (technical listing) on the Tokyo Stock Exchange Prime Market
for shares of the established Joint Holding Company. The date of listing is scheduled for October 2, 2023, theregistration date for establishment of the Joint Holding Company.
Through the Share Transfer, NPR and Riken will become wholly owned subsidiaries of the Joint Holding
Company, and, in accordance with the listing of the Joint Holding Company, are scheduled to be delisted effective
September 28, 2023. If listing of the Joint Holding Company is approved, the shareholders of NPR and Riken will
be able to trade shares of the Joint Holding Company granted through the Share Transfer on the Tokyo Stock
Exchange.
Common stock of NPR is currently listed on the Tokyo Stock Exchange Prime Market. As the stock does notmeet the criterion for market capitalization of tradable stock included among the criteria for maintaining listing insaid market, on November 29, 2021 the company submitted a Plan for Meeting the Criteria for Maintenance ofListing in the New Market Segment (hereinafter the “Plan”) and has been subjected to the application of interim
measures. It is assumed at present that the market capitalization of tradable stock of the Joint Holding Company
scheduled to be listed will satisfy the above criteria. While the Plan is on hold pending the condition that the above
technical listing application is approved by the Tokyo Stock Exchange, the company will continue striving toenhance its corporate value in accordance with the aims of the plan.
(4) Measures to ensure fairness
To ensure the fairness of the Share Transfer Ratio and of the Share Transfer, NPR and Riken have implemented
the following measures.
(i) Acquisition of calculation reports from independent third-party valuation bodies
On behalf of the shareholders of NPR, NPR has obtained a calculation report on the share transfer ratio,
dated May 23, 2023, from Nomura Securities, a third-party valuation body independent from NPR and Riken.
See “(2) Matters related to calculation” in “3. Grounds, etc. for details of allotments related to the Share
Transfer” for an overview of the calculation report.
Conversely, on behalf of the shareholders of Riken, Riken has obtained a calculation report on the sharetransfer ratio, dated May 23, 2023, from IR Japan, a third-party valuation body independent from Riken and
NPR. See “(2) Matters related to calculation” in “3. Grounds, etc. for details of allotments related to the Share
Transfer” for an overview of the calculation report.
(ii) Advice from an independent law firm
NPR has received advice from a legal perspective from Marunouchi Sogo Law Office as its legal advisor
for the Share Transfer, concerning procedures for the Share Transfer and methods and processes for decisionmaking by the Board of Directors.

9

Conversely, Riken has received advice from a legal perspective from City-Yuwa Partners as its legal
advisor for the Share Transfer, concerning procedures for the Share Transfer and methods and processes for
decision-making by the Board of Directors.
Both Marunouchi Sogo Law Office and City-Yuwa Partners are independent from both NPR and Riken
and have no material interests of note with the two companies.
(5) Measures to avoid conflicts of interest
As no particular conflicts of interest will arise between NPR and Riken in connection with the Share Transfer,no special measures have been taken.
4. Overview of the companies concerned in the Share Transfer (as of March 31, 2023)
(1)

Name

(2)

Location(3)

Nippon Piston Ring Co., Ltd.
5-12-10 Honmachi Higashi, Chuo-ku,
Saitama, Saitama Prefecture

Riken Corporation
8-1 Sanbancho, Chiyoda-ku, Tokyo

Title and name of

President and Representative Director

President (CEO and COO)

representative

Teruo Takahashi

Yasunori Maekawa

Manufacture and sale of automotive(4)Description ofrelated products; manufacture and sale

Manufacture and sale of automotive

businessof marine-related and other products;

parts and other industrial parts; etc.

etc.
(5)
(6)
(7)
(8)

Capital9,839 million yen

8,627 million yen

December 20, 1934

December 1, 1949

8,374,157 shares

10,688,866 shares

March 31

March 31

employees

586

1,206

(Consolidated)(3,036)(4,153)

Toyota Motor Corporation

Honda Motor Co., Ltd.

Date ofestablishment
Number ofoutstanding sharesFiscal year end
Number of

(9)

(10)

Major business
partners

SBI Shinsei Bank, Limited
MUFG Bank, Ltd.
(11)

Main banks

Sumitomo Mitsui Banking
Corporation
Saitama Resona Bank, Limited
The Development Bank of Japan

Major shareholders
and shareholding(12)

ratios(As of September
30, 2022)

Mizuho Bank, Ltd.
MUFG Bank, Ltd.
Daishi Hokuetsu Bank, Ltd.
The Musashino Bank, Ltd.
Sumitomo Mitsui Banking
Corporation
Sumitomo Mitsui Trust Bank, Limited

The Master Trust Bank of Japan, Ltd.

The Master Trust Bank of Japan, Ltd.

(trust account) 7.45%(trust account) 9.78%

Nippon Piston Ring Employee

Mizuho Bank, Ltd. 4.84%

Shareholding Association 3.53 %Nippon Life Insurance Company

Tokio Marine & Nichido Fire

4.27%

Insurance Co., Ltd. 3.33%

Daishi Hokuetsu Bank, Ltd. 3.19%

Custody Bank of Japan, Ltd. (trust

Custody Bank of Japan, Ltd. (trust

account) 3.28%

account) 2.75%
10

Asahi Mutual Life Insurance Company

Sumitomo Mitsui Trust Bank, Limited

3.23%

2.61%

The Nomura Trust and Banking Co.,MUFG Bank, Ltd. 2.54%

Ltd. (NIPPON PISTON RING

Riken Kashiwazaki Stock Ownership

Employee Stock Purchase Plan Trust

Association 2.40%

Account) 2.82%

Sompo Japan Insurance Inc. 1.89%

NIPPON PISTON RING Business

Proterial, Ltd. 1.76%

Partners Shareholders’ Association
2.35%
SBI Shinsei Bank, Limited 2.06%
Mitsubishi UFJ Trust and Banking
Corporation 1.85%
INTERACTIVE BROKERS LLC(standing proxy, Interactive Brokers
Securities Japan Inc.)
1.56%
(13)

Relationships between companies concerned
Capitalrelationship
Personnel
relationships
Businessrelationships
Applicability torelated parties(14)

No relevant matters apply.
No relevant matters apply.
Product sales from NPR to Riken and product sales from Riken to NPR exist. For
each of these, sales are carried out at the request of the final sales destination forthe purpose of trouble-free delivery to the final sales destination.
No relevant matters apply.

Business performance and financial condition for the most recent three years (unit: million yen unlessspecified otherwise)

Nippon Piston Ring Co., Ltd.

Riken Corporation

Fiscal year

Fiscal year

Fiscal year

Fiscal year

Fiscal year

Fiscal year

ended

ended

ended

ended

ended

ended

March 31,

March 31,

March 31,

March 31,

March 31,

March 31,

2021

2022

2023

2021

2022

2023

Consolidated net assets

30,26735,09938,11780,14287,082

94,983

Consolidated total assets

61,80967,34968,843

110,544

115,707

123,728

3,740.29

4,299.86

4,632.77

7,507.92

8,109.98

8,810.30

45,27650,78358,52469,72078,37286,382

(165)

2,627

2,385

2,728

5,122

4,676

355

3,058

2,755

4,323

6,529

7,374

(813)

1,928

1,808

1,880

4,329

4,318

(102.56)

250.40232.90189.05433.47431.60Fiscal term

Consolidated net assets per
share (yen)Consolidated net sales
Consolidated operating
profitConsolidated ordinary
profitProfit for the fiscal year
attributable to owners ofparentConsolidated earnings per
share (yen)11Dividend per share (yen)

20.00

70.00

70.00

90.00

120.00120.005. Overview of the company (Joint Holding Company) to be established through the Share Transfer(1)

Trade nameRiken NPR kabushiki-gaisha(English name: NPR-RIKEN CORPORATION)(2)

Description ofbusiness

Manufacture and sale of automotive-related products; manufacture and sale ofshipping-related and other products; etc.

(3)

Location of main
officeLocation of main office: 8-1 Sanbancho, Chiyoda-ku, Tokyo(4)

Locations ofmain office
functionsTokyo Main Office 8-1 Sanbancho, Chiyoda-ku, Tokyo
Saitama Main Office 5-12-10 Honmachi Higashi, Chuo-ku, Saitama, Saitama
Prefecture
Note: The space of the two main offices will be used effectively to conduct efficientbusiness operations.

(5)

Organizational
structure

Company with an Audit and Supervisory Committee(6)

Schedule forassumption of
office byrepresentativeand officers

Chairman and Representative Director, CEO Yasunori Maekawa
President and Representative Director, COO Teruo Takahashi
Director
Kaoru ItohDirector
Yuji Sakamoto
Director
Hidehiro Sakaba
Director
Masaaki Fujita
Outside Director
Eiji Hirano
Outside Director
Masako Kurosawa
Director (Audit and Supervisory Committee Member)
Kouei Watanabe
Director (Audit and Supervisory Committee Member)
Hiroto Koeba
Outside Director (Audit and Supervisory Committee Member) Osamu Honda
Outside Director (Audit and Supervisory Committee Member) Hiroki Kimura
Outside Director (Audit and Supervisory Committee Member) Tatsuya Sakuma(7)

Capital5,000 million yen(8)

Fiscal year end

March 31(9)

Net assets(consolidated)

Not finalized at present.

(10)

Total assets(consolidated)

Not finalized at present.

6. Overview of accounting treatment associated with the Share Transfer
As accounting treatment associated with the Share Transfer falls under acquisitions according to accounting
standards for business combinations, it is expected that the purchase method will be applied. In accordance withthe application of the purchase method, it is expected that goodwill (or negative goodwill) will appear in the
consolidated financial statements of the Joint Holding Company, but the amount has not been determined at thistime.
7. Future outlook
Business policies, plans, performance forecasts, etc. of the Joint Holding Company to be established through the
Share Transfer will be examined by the two companies and will be announced once determined.
12