The transactions pursuant to the joint share transfer described in this document involve securities of aJapanese 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 fromfinancial 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 the issuer is located in Japan and some or all of its officers and directors reside outsideof the United States. You may not be able to sue a Japanese company or its officers or directors in a
Japanese court for violations of the U.S. securities laws. It may be difficult to compel a Japanese 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 joint share transfer, such as in the open market or throughprivately negotiated purchases.
This document has been translated from the Japanese original for reference purposes only. In the event ofany discrepancy between this translated document and the Japanese original, the original shall prevail. NPR
and Riken assume no responsibility for this translation or for direct, indirect or any other forms of damages
arising from the translation.
(Stock Exchange Code 6461)
June 8, 2023
(Electronic Provision Measures Commencement Date: June 1, 2023)
To Shareholders with Voting Rights:
Teruo Takahashi
President
NIPPON PISTON RING CO., LTD.
Head Office: 5-12-10,
Honmachi-Higashi, Chuo-ku,
Saitama City, Saitama Prefecture
NOTICE OF CONVOCATION OF
THE 129th ANNUAL GENERAL MEETING OF SHAREHOLDERS
We would like to express our appreciation for your continued support and patronage.
You are cordially invited to attend the 129th Annual General Meeting of Shareholders of NIPPON PISTON
RING CO., LTD. (the “Company”). The meeting will be held for the purposes as described below.
The Company takes measures for electronic provision in performing the convocation procedures for the129th General Meeting of Shareholders. The matters concerning such electronic provision measure withregards to the convocation of this meeting of shareholders are posted on the Company’s website below.
[The Company’s website]
https://www.npr.co.jp/english/ir/ir0206.html(Please access the above website and refer to “129th Annual General Meeting of Shareholders (FY2022)”
under “General Shareholders Meetings.”
In addition to the above, the information is also posted on the following website.
[Tokyo Stock Exchange’s website (Listed Company Search)]https://www2.jpx.co.jp/tseHpFront/JJK020010Action.do?Show=Show(Please access the Tokyo Stock Exchange’s website above, enter “Nippon Piston Ring” in the “Issue name(company name)” field or “6461” (half width) in the stock exchange “Code” field, click “Search,” click“Basic information,” go to the “Documents for public inspection/PR information” tab, and select the “Notice-1-

of General Shareholders Meeting/Informational Materials for a General Shareholders Meeting” under “Filed
information available for public inspection” section.)[Convocation Notice via the Internet]
This Convocation Notice can be viewed on your computer, smartphone, or a tablet device. Please find thedetails from the link below.
https://s.srdb.jp/6461/
If you are unable to attend the meeting, you can exercise your voting rights by mail or via theInternet. Please review the Reference Documents for the General Meeting of Shareholders posted on
our website as the matters concerning the electronic provision measures,and exercise your voting rights
by 5:30 p.m. on Thursday, June 22, 2023, Japan time.

-2-

1. Date and Time:

Friday, June 23, 2023 at 10:00 a.m. Japan time

2. Place:

2F Hall, NPR Yono Building (the Company’s Head Office Building) located at
5-12-10, Honmachi-Higashi, Chuo-ku, Saitama City, Saitama Prefecture, Japan

3. Meeting Agenda:
Matters to be reported: 1. The Business Report, Consolidated Financial Statements for the Company’s
127th Fiscal Year (April 1, 2022 - March 31, 2023) and results of audits by
the Accounting Auditor and the Audit & Supervisory Committee of theConsolidated Financial Statements
2. Non-consolidated Financial Statements for the Company’s 127th Fiscal Year
(April 1, 2022 - March 31, 2023)
Proposals to be resolved:
Proposal 1:
Approval of Share Transfer Plan
Proposal 2:
Appropriation of Surplus
Proposal 3:
Election of Six Directors (Excluding Directors Who Are Audit & Supervisory
Committee Members)
Proposal 4:
Election of Three Directors Who Are Audit & Supervisory Committee Members
Proposal 5:
Election of One Substitute Director Who Is an Audit & Supervisory Committee
Member〰〰〰〰〰〰〰〰〰〰〰〰〰〰〰〰〰〰〰〰〰〰〰〰〰〰〰〰〰〰〰〰〰〰〰〰〰〰〰〰〰〰
Request to our shareholders:• When attending the meeting, please submit the Voting Rights Exercise Form sent along with this Noticeto the reception desk. In order to save resources, please bring this Notice with you to the meeting.
• If there is no indication of your vote for or against the proposals on the Voting Rights Exercise Form, it
will be treated in the same manner as if you have indicated your approval.
• These documents also serve as the documents stating the matters concerning the electronic provision
measures which are provided in response to any request for delivery of documents. Please note that thefollowing documents are not provided in this Notice in accordance with the provisions of laws andregulations as well as Article 15 of the Company’s Articles of Incorporation. The Business Report, theConsolidated Financial Statements and Non-consolidated Financial Statements included in these
documents were among the documents that the Accounting Auditor and the Audit & Supervisory
Committee audited upon preparing the respective of the accounting audit report and the audit report.
o The Systems for Ensuring the Properness of Business Activities in the Business Report;o Basic Policy on the Control over the Company in the Business Report;
o Notes to Consolidated Financial Statements;o Notes to Non-consolidated Financial Statements; ando “Details of financial statements of Riken’s final fiscal year (Fiscal year ended March 31, 2023)”
under “5. Matters related to Riken” under Proposal 1 “Approval of Share Transfer Plan.”• Should electronic provision measures matters require revisions, such revisions will be posted on the
Company’s respective websites.

-3-

<Procedures for Exercising Voting Rights via the Internet >When exercising your voting rights via the Internet, please confirm the following items before exercising
your voting rights.
If you are attending the meeting, you do not need to exercise your voting rights by mail (Voting Rights
Exercise Form) or via the Internet.
1. Website for exercising your voting rights(1) Exercise of voting rights via the Internet is only available by accessing the Voting Rights Exercise
Website designated by the Company (https://evote.tr.mufg.jp/) from a computer or smartphone. (Please
note that the service is not available from 2:00 a.m. to 5:00 a.m. every day.)(2) Exercise of voting rights via the Internet may not be available depending on your internet environment,such as when you use a firewall, anti-virus software or proxy server, or you have not specified TLS
encrypted communication.
(3) Exercise of voting rights via the Internet will be accepted until 5:30 p.m. on Thursday, June 22, 2023.
Please exercise your voting rights as early as possible, and if you have any questions, please contact theHelp Desk.
2. How to exercise your voting rights via the Internet(1) From a computer・On the Voting Rights Exercise Website (https://evote.tr.mufg.jp/), please enter the “Login ID” and“Temporary Password” provided in the Voting Rights Exercise Form, and enter your approval ordisapproval by following the instructions on the screen.
・In order to prevent unauthorized access (i.e. spoofing) by third parties other than shareholders andfalsification of contents of the exercised voting rights, shareholders will be asked to change their“Temporary Password” on the Voting Rights Exercise Website.
(2) From a smartphone
・By scanning the “Login QR Code” on the Voting Rights Exercise Form with your smartphone, you
can automatically connect to the Voting Rights Exercise Website and exercise your voting rights.
(You do not need to enter your “Login ID” or “Temporary Password.”)・Depending on the smartphone model, you may not be able to log in with the QR code. If you areunable to log in using the QR code, please exercise your voting rights using a computer as described in
2. (1) above.
* QR code is a registered trademark of DENSO WAVE INCORPORATED.
3. Handling of Voting Rights when exercised more than once
(1) If you exercise your voting rights both by mail and via the Internet, your voting rights exercised via theInternet will be considered valid.
(2) If you exercise your voting rights more than once via the Internet, the last vote exercised during thevoting right exercise period will be considered valid.
4. Costs incurred when accessing the Voting Rights Exercise Website
You will be responsible for any costs incurred in accessing the Voting Rights Exercise Website (Internet
connection fees, etc.).
For inquiries regarding the system, please contact:
Stock Transfer Agent Department, Mitsubishi UFJ Trust and Banking Corporation (Help Desk)
Tel: 0120-173-027 (Open hours: 9:00-21:00, toll-free)-4-Reference Documents for the General Meeting of Shareholders
Proposal 1:

Approval of Share Transfer Plan

The details of the proposal are described in the “Supplement to Proposal 1 of the Reference Documents
for the General Meeting of Shareholders.”-5-Proposal 2:

Appropriation of Surplus

It is proposed that the surplus be appropriated as indicated below.
1.

Matters Concerning Year-End Dividend
It is proposed that the year-end dividend for the 127th fiscal year be as follows, taking into
consideration matters such as business results for the fiscal year under review and future businessdevelopment.
(1) Type of dividend
Cash(2) Matters concerning allotment of property to be distributed and total amount thereof
50 yen per share of the Company’s common stock will be distributed, and the total dividend
will be 400,806,450 yen. The annual dividend including the interim dividend will be ¥70 per
share for the 127th fiscal year.
(3) Effective date of dividend of surplus
June 26, 2023

2.

Matters Concerning Other Appropriation of Surplus
Not applicable.

-6-

Proposal 3:
Election of Six Directors (Excluding Directors Who Are Audit &Supervisory Committee Members)
As the terms of six (6) Directors (excluding Directors who are Audit & Supervisory Committee
Members), Mr. Teruo Takahashi, Mr. Yuji Sakamoto, Mr. Masaaki Fujita, Mr. Zhongliang Yang, Mr.
Nobuyasu Nara, and Ms. Hiromi Nakazawa will expire at the conclusion of this General Meeting of
Shareholders, the Company proposes to elect six (6) Directors (excluding Directors who are Audit &Supervisory Committee Members).
The candidates for Directors (excluding Director who are Audit & Supervisory Committee Members)
are as follows.

No.

Name
(Date of birth)

Past experience, positions, responsibilities,
and significant concurrent positions
April 1981
April 2005
June 2006

1

Number ofshares of theCompany
held

Joined the Company
General Manager, Product Engineering Department II
Executive Officer and General Manager, ProductEngineering Department II, Development Division
Teruo Takahashi(February 10, 1959) June 2009 Director and General Manager, Product Engineering
15,300Department II, in charge of Research and[Reappointment]
Development Department
June 2016 Managing Director, in charge of Research andDevelopment Department
June 2020 Representative Director and President, in charge ofInternal Auditors Office (present position)[Reason for nomination as Director]
Mr. Teruo Takahashi has led corporate management and contributed to the Company’s sustainablegrowth and medium- to long-term corporate value enhancement through various businessdevelopments. We nominated him to continue as a Director based on his continuing extensive
knowledge and experience in all aspects of management and his qualifications for making decisions onimportant matters and supervising the execution of business operations.

-7-

No.

Name
(Date of birth)

Past experience, positions, responsibilities,
and significant concurrent positions
July 1977
April 2001
April 2004

2

Number ofshares of theCompany
held

Joined the Company
General Manager, Tokyo East Sales Department
Executive Officer and General Manager, Tokyo Sales
Department, Sales Division
June 2006 Director, Deputy General Manager, Sales Division,and General Manager, Sales Planning Department,
Sales Division
June 2013 Managing Director, in charge of sales departments
Yuji Sakamoto
June 2020 Representative Director, Managing Director, in charge(October 22, 1957)
of sales departments
19,780June 2021 Representative Director, Senior Managing Executive[Reappointment]
Officer, in charge of Production Control Department,
Global Procurement Department and Tochigi Plant
April 2023 Representative Director, Executive Vice President, incharge of Production Control Department, Global
Procurement Department and Tochigi Plant (present
position)[Significant concurrent positions]
Director and Chairman, NPR Singapore Pte. Ltd.
Director, NPR of Europe GmbH
[Reason for nomination as Director]
Mr. Yuji Sakamoto has extensive knowledge of all aspects of management and has contributed to theCompany’s sustainable growth and enhancement of its corporate value over the medium- to long-term.
We nominated him to continue as a Director based on his continuing extensive knowledge andexperience in all aspects of management and his qualifications for making decisions on importantmatters and supervising the execution of business operations.

-8-

No.

Name
(Date of birth)

Past experience, positions, responsibilities,
and significant concurrent positions
April 1984
April 2005
June 2006
July 2012

Joined the Company
General Manager, Corporate Planning Department
President of NPR of America, Inc.
Operating Officer, President of NPR of America, Inc.

June 2013

President of NPR of America, Inc.

June 2021

3

Number ofshares of theCompany
held

Director, General Manager, Corporate Planning
Department in charge of Corporate Planning
Masaaki Fujita
Department and Overseas Operation Control(May 30, 1961)
Department
13,924September
Director, Managing Executive Officer (present[Reappointment]
2022
position) in charge of Corporate Planning
Department and Accounting and Finance Department
April 2023
In charge of Corporate Planning Department,
Accounting and Finance Department, and Related
Business Department (present position)[Significant concurrent positions]
Komisaris, PT. NT Piston Ring Indonesia
Komisaris, PT. NPR Manufacturing Indonesia
Director, NPR of America, Inc.
[Reason for nomination as Director]
Mr. Masaaki Fujita holds a high level of expertise in the corporate planning and corporate management
fields and has contributed to the Company’s sustainable growth and medium- to long-term enhancementof corporate value. We nominated him to continue as a Director based on his continuing extensive
knowledge and experience in all aspects of management and his qualifications for making decisions onimportant matters and supervising the execution of business operations.

-9-

No.

Name
(Date of birth)

Past experience, positions, responsibilities,
and significant concurrent positions
April 1995
April 2007

4

Number ofshares of theCompany
held

Joined the Company
Overseas Operation Control Division
Plant Manager, NPR Auto Parts Manufacturing(Yizheng) Co., Ltd.
May 2011
Chairman and President, NPR Auto Parts
Manufacturing (Yizheng) Co., Ltd.
December
Chairman and President, NPR Powdered Metals
2012
Manufacturing (Yizheng) Co., Ltd.
July 2013
Executive Officer
Chairman and President, NPR ASIMCO Powdered
Metals Manufacturing (Yizheng) Co., Ltd.
Zhongliang Yang
June 2016
Director in charge of manufacturing and production(July 20, 1962)
departmentsg
10,223[Reappointment] June 2020
Chairman and President, NPR ASIMCO Powdered
Metals Manufacturing (Yizheng) Co., Ltd. (present
position)
June 2021
Director and Managing Executive Officer in chargeof Production Engineering Department I, Production
Engineering Department II and Production
Engineering Department III (present position)[Significant concurrent positions]
President, NPR Iwate Co., Ltd.
President, NPR Fukushima Works Co., Ltd.
Director, NPR Auto Parts Manufacturing (Yizheng) Co., Ltd.
Director, NPR of America, Inc.
[Reason for nomination as Director]
Mr. Zhongliang Yang has a high degree of expertise in technologies and manufacturing departments
and has contributed to the Company’s sustainable growth and medium- to long-term corporate value.
We nominated him to continue as a Director based on his extensive knowledge and experience in all
aspects of management and his qualifications for making decisions on important matters andsupervising the execution of business operations.

- 10 -

No.

Name(Date of birth)

Past experience, positions, responsibilities,
and significant concurrent positions
April 1986
April 2014

5

Joined The Long-Term Credit Bank of Japan, Limited(presently SBI Shinsei Bank, Limited)
Executive Officer, Executive Officer in charge ofInstitutional Business and General Manager of Osaka
Branch, Shinsei Bank, Limited (presently SBI Shinsei
Bank, Limited; the same applies hereinafter)
Executive Officer, General Manager, Institutional
Credit Management Division, Shinsei Bank, Limited
Retired from Shinsei Bank, Limited

Number ofshares of theCompany
held

November
2016
December
2019
January 2020 Joined the Company
AdvisorJune 2020
Director in charge of Corporate Management
Department, General Affairs Department andNobuyasu Nara
(September 21,
Information System Department
1963)
October
In charge of Corporate Management Department,
9,740
2020
General Affairs Department, Information System[Reappointment]
Department and Safety and Health Promotion
Department
June 2021
Director and Managing Executive Officer (present
position)
In charge of Corporate Management Department,
General Affairs Department, Information System
Department and Safety and Health Promotion
Department
April 2023
In charge of General Affairs Department, Information
System Department and Safety and Health Promotion
Department (present position)[Significant concurrent positions]
Director, NPR Iwate Co., Ltd.
Director, NPR Fukushima Works Co., Ltd.
Director and Chairman, SIAM NPR Co., Ltd.
[Reason for nomination as Director]
Mr. Nobuyasu Nara has contributed to the Company’s sustainable growth and medium- to long-term
corporate value enhancement through his expertise in a wide range of areas, including general affairs,
human resources, and information systems. We nominated him to continue as a Director based on his
extensive knowledge and experience in all aspects of management and his qualifications for making
decisions on important matters and supervising the execution of business operations.

- 11 -

No.

Name(Date of birth)

Past experience, positions, responsibilities,
and significant concurrent positions
November
1991

Number ofshares of theCompany
held

Research Fellow, Institute for Research on Higher
Education, University of Pennsylvania, Philadelphia,
USA
September
Visiting Assistant Professor, Economics Department,
1994
Barnard College, New York, USA
April 1995
Associate Professor, Josai University, Department of
Economics
April 1998
Visiting Associate Professor, The Open University ofJapan, Industry and Technology
April 2002
Associate Professor, Meiji Gakuin University,
Department of Economics
April 2004
Professor of National Graduate Institute for Policy
Studies (present position)
Director, Tokyo Foundation for Employment Services(present position)
April 2005
Faculty Fellow, Research Institute of Economy,
Trade and Industry
Masako Kurosawa
April 2012
(July 23, 1962)
Member of the Managing Council, Japan
Organization for Employment of the Elderly, Persons
0[Newly appointed]
with Disabilities and Job Seekers (present position)[Outside]
April 2015
Visiting Fellow, Columbia Business School, Centre
6[Independent]
on Japanese Economy and Business
April 2020
Chair of the Committee Investigation the Integrationof the National Trades Skill Test, Skill Assessment
Office, Human Resources Development Division,
Ministry of Health, Labour and Welfare (present
position)
April 2021
Director and Vice President, National Graduate
Institute for Policy Studies (present position)
April 2022
Standing Member of Productivity Committee, Japan
Productivity Center (present position)
April 2023
Member of Employment Security Committee, Labour
Policy Council, Employment Security Bureau,
Ministry of Health, Labor and Welfare (present
position)[Significant concurrent positions]
Member, Board of Trustees, Vice President and professor, The
National Graduate Institute for Policy Studies[Reason for nomination as Outside Director]
Ms. Masako Kurosawa has not been involved in the management of a company in the past, but wenominated her as an Outside Director because she has a high level of expertise in labor economics as ascholar and is expected to contribute to the management of the Company.
(Notes)1. There are no special interests between the candidates for Directors and the Company.
2. Ms. Masako Kurosawa is a candidate for Outside Director. If the appointment of Ms. Kurosawa isapproved as proposed, the Company intends to report her as an independent director in accordancewith the rules of Tokyo Stock Exchange, Inc.
3. Limited liability agreement with the candidate for Director
If the appointment of Ms. Kurosawa is approved as proposed, the Company intends to enter into anagreement with her in accordance with Article 427, Paragraph 1 of the Companies Act to limit her
liability pursuant to Article 423, Paragraph 1 of the Companies Act. The maximum amount ofliability pursuant to the agreement is the amount stipulated by laws and regulations.
4. The Company plans to take out a directors and officers liability insurance policy as defined under
Article 430-3, Paragraph 1 of the Companies Act, from an insurance company, to ensure that thelegally liable damages and associated litigation cost incurred by the insured person will be
indemnified under such insurance policy. All candidates shall be covered as the insured person under- 12 -

this insurance policy. The Company intends to renew such insurance policy with the same terms andconditions at its next renewal.
5. The name of Ms. Masako Kurosawa in the family register is Ms. Masako Hayashi.

- 13 -

Proposal 4:

Election of Three Directors Who Are Audit & Supervisory Committee Members

As the terms of three (3) Directors who are Audit & Supervisory Committee Members, Mr. Hiroto Koeba,
Mr. Hiroki Kimura, and Mr. Yoshihide Hino will expire at the conclusion of this General Meeting of
Shareholders, the Company proposes to elect 3 Directors who are Audit & Supervisory Committee
Members.
The Audit & Supervisory Committee has previously given its approval to this proposal.
The candidates for Directors who are Audit & Supervisory Committee Members are as follows.
No.

Name
(Date of birth)

Past experience, positions, responsibilities
and significant concurrent positions
April 1988
April 2012

1

Number ofshares of theCompany
held

Joined the Company
General Manager, Accounting and Finance
Department
July 2016
Executive Officer, General Manager, Accounting and
Finance Department
July 2018
Executive Officer, Assistant to Officer Responsible
Hiroto Koeba
for Accounting and Finance Department(April 4, 1965)
1,882
June 2020
Audit & Supervisory Board Member
June 2021
Directors who is Audit & Supervisory Committee
Member (present position)[Significant concurrent positions]Audit & Supervisory Board Member, NPR Iwate Co., Ltd.
Audit & Supervisory Board Member, NPR Fukushima Works Co.,Ltd.
Audit & Supervisory Board Member, Normeca Asia Co., Ltd.
[Reason for nomination as Director who is an Audit & Supervisory Committee Member]
Mr. Hiroto Koeba has a high level of expertise, mainly in the accounting field, and has contributed toensuring the Company’s soundness of management by auditing the execution of duties by Directors
from an objective and fair standpoint. We nominated him as a Director who is an Audit & Supervisory
Committee Member because we expect him to supervise the management and fully audit the executionof duties by Directors in order to achieve the Company's sustainable growth and medium- to long-term
corporate value enhancement.

- 14 -

No.

Name(Date of birth)

Past experience, positions, responsibilities
and significant concurrent positions
April 1984
April 2012

2

Number ofshares of theCompany
held

Joined Asahi Mutual Life Insurance Company
Executive Officer, Head of Finance and Real Estate
Division, Asset Management Administration
Division, Asahi Mutual Life Insurance Company
July 2013
Director, Executive Officer and Head of AssetManagement Administration Division, Asahi MutualLife Insurance Company
June 2014
Outside Auditor, Kanto Denka Kogyo Co., Ltd.
April 2015
Director, Managing Executive Officer in charge ofAsset Management Planning Department andSecurities Management Department, Asahi MutualLife Insurance Company
April 2016
Director, Managing Executive Officer in charge ofCorporate Planning Department and Finance
Department, Asahi Mutual Life Insurance Company
Hiroki Kimura
June 2016
Audit & Supervisory Board Member (Outside) of the(January 19, 1962)
Company0
April 2017
President and Representative Director, Asahi Mutual[Outside]Life Insurance Company (present position)[Independent]
March 2019 Audit & Supervisory Board Member (Outside), The
Yokohama Rubber Co., Ltd.
June 2020
Audit & Supervisory Board Member (External), Zeon
Corporation (present position)
June 2021
Outside Director who is Audit & Supervisory
Committee Member of the Company (present
position)
March 2023 Member of the Board, Member of the Audit &Supervisory Committee (Outside) of The Yokohama
Rubber Co., Ltd. (present position)[Significant concurrent positions]
President and Representative Director, Asahi Mutual Life Insurance
Company
Member of the Board and Member of the Audit & Supervisory
Committee (Outside), The Yokohama Rubber Co., Ltd.
Audit & Supervisory Board Member (External), Zeon Corporation[Reason for nomination as Outside Director who is an Audit & Supervisory Committee Member]
Mr. Hiroki Kimura has extensive experience and broad insight in overall management in the life
insurance industry and has contributed to ensuring the Company’s soundness of management byauditing the execution of duties by Directors from an objective and fair standpoint. We nominated him
as an Outside Director who is an Audit & Supervisory Committee Member because we expect him tosupervise the management and fully audit the execution of duties by Directors in order to achieve theCompany's sustainable growth and medium- to long-term corporate value enhancement.

- 15 -

No.

Name(Date of birth)

Past experience, positions, responsibilities
and significant concurrent positions
April 1990

3

Number ofshares of theCompany
held

Registered as Attorney-at-Law
Joined Sakano Seo Hashimoto Law Office (presently
Tokyo Hatchobori Law Office)April 2000
Partner, Tokyo Hatchobori Law Office (present
position)
October 2013 Part-time Judge, Tokyo District Court (Civil
Mediator)
March 2015 Substitute Auditor, LOOK HOLDINGSINCORPORATED (present position)
April 2016
Mediation Commissioner, Tokyo Summary Court(present position)0
April 2017
Chairperson, Administration Committee, Committee
for Housing Dispute Settlement Agency, Daini Tokyo
Yoshihide Hino
Bar Association(August 2, 1962)
April 2018
Housing Dispute Resolution Body Examination
Committee Member, Japan Federation of Bar[Outside]
Associations (present position)[Independent]
January 2020 Human Rights Volunteer, Ministry of Justice (present
position)
June 2020
Audit & Supervisory Board Member of the Company(Outside)
June 2021
Outside Director who is an Audit & Supervisory
Committee Member of the Company (present
position)
NovemberSpecial Committee Member, Central Construction
2022
Work Disputes Committee, Ministry of Land,
Infrastructure, Transport and Tourism (present
position)[Significant concurrent positions]
Partner, Tokyo Hatchobori Law Office[Reason for nomination as an Outside Director who is an Audit & Supervisory Committee Member]
Mr. Yoshihide Hino has an extensive experience and broad insights as a lawyer familiar with corporate
legal affairs and has contributed to ensuring the Company’s soundness of management by auditing theexecution of duties by Directors from an objective and fair standpoint. We nominated him as an Outside
Director who is an Audit & Supervisory Committee Member because we expect him to supervise themanagement and fully audit the execution of duties by Directors in order to achieve the Company's
sustainable growth and medium- to long-term corporate value enhancement.

(Notes)1. There are no special interests between Mr. Hiroto Koeba and the Company.
2. There are no special interests between Mr. Yoshihide Hino and the Company.
3. Mr. Hiroki Kimura is President and Representative Director of Asahi Mutual Life Insurance
Company. Although said company holds 259,200 shares of the Company, there are no special
interests between Mr. Hiroki Kimura and the Company.
4. Messrs. Hiroki Kimura and Yoshihide Hino are presently Outside Directors of the Company. The
term of Mr. Hiroki Kimura as Outside Director who is an Audit & Supervisory Committee Member
will be two (2) years as of the conclusion of this General Meeting of Shareholders. The term of Mr.
Yoshihide Hino as Outside Director who is an Audit & Supervisory Committee Member will be two(2) years as of the conclusion of this General Meeting of Shareholders. The Company reported themas independent directors in accordance with the rules of Tokyo Stock Exchange, Inc. If their
appointment is approved, they will continue to be reported as independent directors.
5. Limited liability agreement with the candidates for Directors who are Audit & Supervisory
Committee Members
The Company has entered into an agreement with Messrs. Hiroki Kimura and Yoshihide Hino inaccordance with Article 427, Paragraph 1 of the Companies Act to limit their liability pursuant to- 16 -

Article 423, Paragraph 1 of the Companies Act. The maximum amount of liability pursuant to theagreement is the amount stipulated by laws and regulations. If the appointment of Messrs. Hiroki
Kimura and Yoshihide Hino under this proposal is approved as proposed, the Company plans tocontinue such agreement with them.
6.
The Company plans to take out a directors and officers liability insurance policy as defined under
Article 430-3, Paragraph 1 of the Companies Act, from an insurance company, to ensure that thelegally liable damages and associated litigation cost incurred by the insured person will be
indemnified under such insurance policy. All candidates shall be covered as the insured person under
this insurance policy. The Company intends to renew such insurance policy with the same terms andconditions at its next renewal.

- 17 -

(Reference)
Areas of expertise and experience possessed by the candidates for Directors, and Executive Officers(skill matrix)• The candidates for Directors have expertise and experience in the following areas.
Particular areas of specialty where the individuals can excel
Name

Teruo Takahashi

Yuji Sakamoto

Masaaki Fujita

Zhongliang Yang

Nobuyasu Nara

Masako Kurosawa

PositionIndependence(Outside)

Representative
Director andPresident

Corporate
management
Businessstrategies

Finance &Accounting

Manufacturing,
Safety,Technologies &Environment

●

●

●

Representative
Director andExecutive Vice
President
Director andManaging
Executive
Officer
Director andManaging
Executive
Officer
Director andManaging
Executive
Officer
Director●

Sales &
Marketing

●

●

●

●

●

●

●

Governance,
Risk &
Compliance

●

●

●

Innovation &Research andDevelopment

●

●

●

●

●

Hiroki Kimura

Yoshihide Hino

Director and
Audit &
Supervisory
Committee
MemberDirector and
Audit &
Supervisory
Committee
MemberDirector and
Audit &
Supervisory
Committee
Member●●●●Hiroto Koeba

Nomination
andRemuneration
Advisory
Committee

●

●

●

●

●

●

●

●

●

●

●

●

●

●

• The Company has introduced a delegated executive officer system as of June 24, 2021. Areas of expertiseand experience possessed by the Executive Officers who do not concurrently serve as Directors, and arescheduled to be appointed at the Board of Directors’ meeting to be held immediately after the conclusionof this Annual General Meeting of Shareholders are as follows

Name
MakotoKajiwara

PositionManaging
Executive
Officer
Takao
Managing
Kishitani
Executive
Officer
Nobunori
Executive
Tsuda
Officer
Eiichi Chiyo Executive
Officer

Corporate
Independence
management(Outside)
Businessstrategies

Particular areas of specialty where the individuals excel
Manufacturing,
Innovation & Governance,
Finance &Safety,Sales &
Research andRisk &
Accounting Technologies & Marketing
Development Compliance
Environment
●
●

●

●

●

●

●
●

●

●

●
●

- 18 -

Nomination
andRemuneration
Advisory
Committee

[Reasons for Nomination in Each Skill Matrix Area]
Area of expertise
Corporate
management
Businessstrategies

Finance &Accounting
Manufacturing,
Safety,Technologies &Environment
Sales &
MarketingInnovation &Research anddevelopment
Governance,
Risk &
ComplianceReasons for nomination
As the business environment surrounding the Company is changing drastically, thedevelopment of business strategies for sustainable corporate value improvement
requires Directors with management experience and business strategies in the areasof manufacturing, sales, and technologies. In addition, in order to carry out global
management operations, it is necessary to have Directors who have experience ininternational business management, knowledge of foreign customs and cultures, andthe ability to maximize the value of management resources (people, goods, money,
information, etc.), as well as decision-making ability.
In order to build a stronger financial foundation and promote growth strategies andinvestments for sustainable corporate value enhancement, the Company needs
Directors with credible knowledge and experience in the fields of finance andaccounting.
The Company needs Directors with abundant knowledge and experience in safety,
quality, technologies, and the environment in order to further advance theCompany's technological development and reliable manufacturing technologies thatprovide high-quality products in a short period of time with low cost, which will
strengthen the competitiveness of the current business.
The Company needs Directors with solid knowledge and experience in sales
strategy, sales management, etc. They are also well versed in business managementfrom a global perspective and can develop sales strategies from a deep insight into
marketingIn order to continue the progress of technological development that leads to thecreation of new value and new businesses while utilizing the Company's coretechnologies that have been cultivated, the Company needs Directors who have beensuccessfully promoting innovation and possess solid knowledge and experience intechnologies, quality, and the environment
The establishment of an appropriate corporate governance system based oncompliance and risk management is fundamental to sustainable improvement ofcorporate value, and Directors with in-depth knowledge and experience in laws,
regulations, and risk assessment related to the Company are necessary to enhance
the management and supervisory functions of the Board of Directors.

- 19 -

Proposal 5: Election of One Substitute Director Who Is an Audit & Supervisory Committee
Member
The Company proposes to elect one (1) substitute Director who is an Audit & Supervisory Committee
Member to prepare for the case where the number of Directors who are Audit & Supervisory Committee
Members falls short of the level required by laws and regulations.
Such substitute Director who is an Audit & Supervisory Committee Member shall be appointed subject tothe number of Directors who are Audit & Supervisory Committee Members falling short of the level
required by laws and regulations, and his or her term of office shall be the remaining term of office of his or
her predecessor.
The effectiveness of the election under this proposal could be negated only before the assumption of
office by such substitute Director who is an Audit & Supervisory Committee Member and by the resolutionof the Board of Directors upon the consent of the Audit & Supervisory Committee.
The Audit & Supervisory Committee has given its prior approval to this proposal.
The candidate for substitute Director who is an Audit & Supervisory Committee Members is as follows.
Name(Date of birth)

Past experience, positions, responsibilities,
and significant concurrent positions
April 1992
April 2012

Number ofshares of theCompany
heldProfessor, School of Engineering, Nagoya University
Professor Emeritus, Nagoya University (present
position)
Professor, College of Engineering, Kanto Gakuin
University
Vice Director, Materials & Surface Engineering
Osamu Takai
Research Institute, Kanto Gakuin University(November 3, 1947)
June 2013
External Audit & Supervisory Board Member, JCU
0
CORPORATION[Outside]
June 2014
Audit & Supervisory Board Member (Outside)
April 2018
Director, Materials & Surface Engineering ResearchInstitute, Kanto Gakuin University (present position)[Significant concurrent positions]
Professor Emeritus, Nagoya University
Director, Materials & Surface Engineering Research Institute, Kanto
Gakuin University[Reason for nomination as a substitute Director who is an Audit & Supervisory Committee Member]
Mr. Osamu Takai has been engaged in research on materials and surface engineering closely related to thetechnologies of the Company’s products for many years and has contributed to ensuring the Company’ssoundness of management by auditing the execution of duties by Directors from an objective and fairstandpoint. We nominated him as a substitute Director who is an Audit & Supervisory Committee Member
because we expect him to supervise the management and fully audit the execution of duties by Directors inorder to achieve the Company's sustainable growth and medium- to long-term corporate value enhancement.
(Notes)1. There are no special interests between Mr. Osamu Takai and the Company.
2. Mr. Osamu Takai is a candidate for substitute Outside Director who is an Audit & Supervisory
Committee Member. The Company has nominated him as a substitute Director who is an Audit &Supervisory Committee Member since the 127th Annual General Meeting of Shareholders held on
June 24, 2021. If he assumes office as Outside Director who is an Audit & Supervisory Committee
Member, the Company intends to report him to Tokyo Stock Exchange, Inc. as an independent
director.
3. Limited liability agreement with the candidate for Director
If Mr. Osamu Takai is appointed as Director who is an Audit & Supervisory Committee Member, theCompany intends to enter into an agreement with him in accordance with Article 427, Paragraph 1 of
the Companies Act to limit his liability pursuant to Article 423, Paragraph 1 of the Companies Act.
The maximum amount of liability pursuant to the agreement is the amount stipulated by laws andregulations.
4.
The Company plans to take out a directors and officers liability insurance policy as defined under
Article 430-3, Paragraph 1 of the Companies Act, from an insurance company, to ensure that thelegally liable damages and associated litigation cost incurred by the insured person will be- 20 -

indemnified under such insurance policy. If Mr. Osamu Takai assumes office as Director who is an
Audit & Supervisory Committee Member, he shall be covered as the insured person under suchinsurance policy.

- 21 -

Business Report(

Fiscal year under review:)
April 1, 2022 to March 31, 2023

1. Outlook of the Company(1) Business Status for the Fiscal Year
① Progress and Results of the Business
During the fiscal year under review, the global economy continued to recover moderately amid
the progress of normalization of economic activities based on the assumption of the new norm tocoexist with COVID-19. However, due to reasons such as international instability caused by the
prolonged conflict in Ukraine, the surge in resource and energy prices worldwide, continuous interest
rate hikes, and the bankruptcy of financial institutions in the United States, the situation continued to
be unstable.
In Japan, although affected by the seventh to eighth waves of COVID-19, there were signs ofrecovery due to the easing of restrictions on activities and the effects of various policies. On the other
hand, the rapid depreciation of the yen due to the widening interest rate differential between Japan andthe United States led to higher commodity prices, and the pace of recovery remained slow.
In the automobile industry, in which the Company operates, the impact of the shortage ofin-vehicle semiconductors and the stagnant supply of parts continued, but there was a recovery trend
from the same period of the previous fiscal year when we were compelled major production
adjustments, and the global automobile production volume increased.
Within such business environment, the Company recorded net sales of 58,524 million yen (up15.2% year-on-year), due to the effects of the depreciation of yen and the capture of demand in linewith customer trends, in addition to the effects mentioned above.
In terms of profit and loss, although various cost increases associated with soaring raw materials
and fuel costs and the depreciation of the yen were offset by price increases and cost reductions,operating income was 2,385 million yen (down 9.2% year-on-year), ordinary income was 2,755
million yen (down 9.9% year-on-year), and profit attributable to owners of parent was 1,808 million
yen (down 6.3% year-on-year).
In the financial position, interest-bearing debt decreased by 1,911 million yen from the end of theprevious fiscal year to 13,107 million yen. Shareholders’ equity was 36,091 million yen andshareholder's equity ratio was 52.4%.
Our business results by segment for the fiscal year under review are as follows.
(A) Automotive Products Segment
In the automotive products segment, despite the continued impact of in-vehicle
semiconductors shortage and stagnant supply of parts, global automobile production increased
year-on-year, and with the effect of the depreciation of the yen and the capture of demand in linewith customer trends, net sales amounted to 49,853 million yen, up 13.6% year-on-year.
(a) Piston Rings
Net sales increased 14.8% year-on- year to 29,611 million yen, mainly due to an increase inautomobile production.
(b) Valve Seats
Net sales was 10,427 million yen (up 12.7% year-on-year), mainly due to an increase inautomobile production.
(c) Other Automotive Products
Net sales for other automotive products was 9,814 million yen (up 11.0% year-on-year).
(B) Products for Marine Engine and Other Products Segment- 22 -

Net sales in products for marine engine and other products segment was 2,241 million yen(down 4.9% year-on-year), due to a decrease in demand for products for industrial equipment,
which temporarily increased in the previous fiscal year.
(C) Others
Net sales in other segments, including merchandise sales business, was 6,429 million yen (up41.5% year-on-year), mainly due to the consolidation of Normeca Asia Co., Ltd.
(Note) “(C) Others” includes net sales 2,608 million yen as “bearing parts” and net sales 1,170
million yen as “RV-related products.”② Status of Capital Expenditures
Capital expenditures totaled 3,058 million yen in the fiscal year under review.
③ Status of Funding
In the fiscal year under review, the Company repaid 2,633 million yen in long-term loans.
④ Status of Business Transfer, Absorption-type Split or Incorporation-type Split
Not applicable.
⑤ Status of Business Acquisitions of Other Companies
Not applicable.
⑥ Status of Succession of Rights and Obligations Related to the Business of Other Corporations,etc. Through Absorption-type Merger or Absorption-type split
Not applicable.
⑦ Status of Acquisition or Disposal of Shares, Other Equity Interests, Stock Acquisition Rights,
etc. of Other Companies
Not applicable.
(2) Status of Assets, Profit and LossClassification

124th(fiscal year
ended March
2020)

125th
(fiscal year
ended March
2021)(Yen in millions unless otherwise stated)
127th
126th
(fiscalyear under(fiscal year
review)
ended March(fiscal year ended
2022)
March 2023)

Net sales

54,88145,27650,78358,524

Ordinary income

1,776

355

3,058

2,755

ProfitAttributable to
Owners of Parent
Basic earnings per
share (yen) (Note)

490

(813)

1,928

1,808

59.96

(102.56)

250.40232.90Total assets

63,60861,80967,34968,843

Net assets

31,28930,26735,09938,117(Note) The Company introduced the “Trust-Type Employee Shareholding Incentive Plan (E-Ship)” in
November 2020.
The number of shares of common stock held by the “E-Ship Trust Account” is deducted from theaverage number of shares of common stock during the fiscal year under review, which is used to
calculate basic earnings per share for the 125th fiscal year (fiscal year ended March 2021), 126th
fiscal year (fiscal year ended March 2022) and 127th fiscal year (fiscal year ended March 2023).

- 23 -

(3) Status of Significant Subsidiaries① Status of Significant Subsidiaries

NPR Iwate Co.,Ltd.

Capital/Ownership
Investments inratio ofcapitalvoting rights
1,612 million
100 %
JPY
490 million JPY
100 %Noermeca Asia Co., Ltd.

99 million JPY

Company name

NPR Fukushima Works Co., Ltd.

NPR of America, Inc.

100 %Main business
Manufacture of automotive
parts, etc.
Manufacture of automotive
parts, etc.
Sales of disaster emergency
medical products, etc.
Manufacture and sales ofautomotive parts, etc.
Manufacture and sales ofautomotive parts, etc.
Sales of automotive parts,
etc.
Manufacture and sales ofautomotive parts, etc.
Manufacture and sales ofautomotive parts, etc.
Packaging and sales ofautomotive parts, etc.
Manufacture and sales ofautomotive parts, etc.
Manufacture and sales ofautomotive parts, etc.

40 USD100 %95,000 thousand
SIAM NPR Co., Ltd.
100 %
THB
2,500 thousand
NPR of Europe GmbH (Note 3)70 %EUR
19,900 thousand
PT.NT Piston Ring Indonesia
100 %
USD
NPR Auto Parts Manufacturing
140,049,000
100 %(Yizheng) Co., Ltd.
CNYNPR Singapore Pte. Ltd. (Note 4)
118 million yen
90 %13,000 thousand
PT.NPR Manufacturing Indonesia
100 %
USD
NPR Auto Parts Manufacturing India Pvt.
1,000 million
100 %
Ltd.
INR
NPR ASIMCO Powdered Metalsof automotive
Manufacturing (Yizheng) Co., Ltd.
54,630,000CNY
50 % Manufactureparts, etc.
(Note 5)(Note) 1. Capital / Investments in capital is the amount as of March 31, 2023.
2. The Company’s ownership ratio of voting rights includes indirect ownership.
3. Daido Metal Co., Ltd. has contributed 30% of the capital / investments in capital of NPR of EuropeGmbH's capital.
4. Local individual shareholders have contributed 10% of the capital / investments in capital of NPR
Singapore Pte. Ltd.
5. Yizheng Yaxinke Shuanghuan Piston Ring Co., Ltd. has contributed 50% of the capital /investments in capital of NPR ASIMCO Powdered Metals Manufacturing (Yizheng) Co., Ltd.
② Status of Specified Wholly owned Subsidiaries as of the Fiscal Year-end
Not applicable.

(4) Issues to be Addressed
The automotive industry is in the midst of a once-in-a-century transformation, and theenvironment in which the Company’s core engine parts business is located is expected to change
drastically in the amid the popularization of EVs. We believe that the development of environmentallyfriendly engine parts is our mission as long as internal combustion engine vehicles continue to be themain vehicles in the world, even though environmental issues are attracting global attention. At thesame time, we strongly recognize that it is necessary to actively expand into new business domainsthat capture global trends such as SDGs, ESG, and decarbonization, without being bound by internal
combustion engine peripheral components.
Under these conditions, in fiscal year ending March 2024 is the final year of the Eighth Mid-termManagement Plan, we will simultaneously strengthen the profitability of existing businesses, nurtureand establish new business fields, and promote sustainability management based on the results of ourefforts to date. In addition, in order to address management issues more effectively and efficiently withan eye to the future, we have been discussing and studying specific matters toward the management
integration with Riken Corporation. We will strive to further enhance our corporate value by gaining
the understanding of our shareholders and realizing synergies as a new group at an early stage.
■ Eighth Mid-term Management Plan (FY2021 - FY2023）<Policy>- 24 -

“Change as Chance” – Change brings opportunity –<Targets (FY2023)>(Management Target)
Net sales: 54 billion yen or more, operating income margin: 8% or more; percentage net sales from
non-automobile engine sales: 15% or more
(Environmental Target)
CO2 emissions: -25% (compared to FY2013)<Priority Measures>(1) Build an overall optimized product manufacturing system(2) Promote technical solution proposal-oriented sales through utilizing the core technologies andproducts(3) Strengthen the development and creation of new products and business(4) Conduct structural reforms of people and organizations (awareness reforms)(5) Take a leap forward toward becoming a sustainable company<Action Guidelines>
New Five S Speed
Speed of responding to changes
Skill
Skill for planning and carrying out strategies
Science Taking decisions scientifically based on data
SpiritEnthusiasm to want to improve the organization
Safety A safe and secure working environment and safety awareness(5) Main Business (as of March 31, 2023)
The Company consists of 14 companies, including the Company and 13 subsidiaries, andmanufactures and sells automobile-related products (piston rings, valve seats and otherautomobile-related products) and products for marine engine and other products, and engages inbusinesses related thereto.
Classification
Piston ring
Automobile-relat Valve seated products
Other
automobile-relat
ed products
Products for marine engine andother products
OthersMajor productsPiston rings for automobiles, motorcycles and other various
internal combustion engines
Valve seats for automobiles, motorcycles and other various
internal combustion engines
Composite camshafts, cast iron camshafts and cylinder liners
Marine engine components, stationary engine components, andhome appliance components
Merchandise(6) Significant Sales Offices and Production Bases (as of March 31, 2023)① The Company’s Significant Sales Offices and Production BasesBusiness site

Location

Head officeSales
departments/offices
Production Base

Saitama City, Saitama, JapanTokyo (Saitama City, Saitama), Nagoya City (Aichi), Osaka City (Osaka),
Hiroshima City (Hiroshima), Fukuoka City (Fukuoka), Sendai City (Miyagi)
Nogi-machi, Shimotsuga-gun, Tochigi② Subsidiaries

Name of subsidiary

Location

NPR Fukushima Works Co., Ltd.

Kawamata-machi, Date-gun, Fukushima

NPR Iwate Co., Ltd.

Ichinoseki City, Iwate

Normeca Asia Co., Ltd.

Koshigaya City, Saitama

NPR of America, Inc.

Bardstown, Kentucky, USA- 25 -

SIAM NPR Co., Ltd.

PT.NT Piston Ring Indonesia

Saraburi, Thailand
Korntal-Münchingen, Baden-Württemberg,
Germany
Karawang, Jawa Bratat, Indonesia

NPR Auto Parts Manufacturing (Yizheng) Co., Ltd.

Yizheng, Jiangsu, China

NPR Singapore Pte. Ltd.

Singapore

PT.NPR Manufacturing Indonesia

Pasuruan, Jawa Timur, Indonesia

E.A Associates Sdn. Bhd.

Subang Jaya, Selangor, Malaysia

NPR Auto Parts Manufacturing India Pvt. Ltd.

Kolar, Karnataka, India

NPR ASIMCO Powdered Metals Manufacturing(Yizheng) Co., Ltd.

Yizheng, Jiangsu, China

NPR of Europe GmbH

(7) Status of Employees (as of March 31, 2023)① Status of Employees of the Company
Number of employees

Increase (Decrease) from the end of FY2021

3,036 people+ 9 people(Note) The above figures does not include temporary workers, etc.
② Status of Employees of the Company

Number of employees

Increase (Decrease)from end of FY2022

Average age

656 people- 22 people

42.3 years old

Averageduration ofservice18.4 years(Note) The above figures does not include temporary workers, etc.
(8) Status of Major Lenders (as of March 31, 2023)
Amount borrowed (yen in millions)

Lenders
SBI Shinsei Bank, Limited

3,223

MUFG Bank, Ltd.

1,048

Sumitomo Mitsui Banking Corporation

1,112

Saitama Resona Bank, Limited

1,787

Development Bank of Japan Inc.

680

(9) Other Significant Matters Regarding the Status of the Company
Not applicable.
2. Outlook of the Company(1) Status of Shares (as of March 31, 2023)① Total number of shares authorized② Total number of shares issued③ Number of shareholders④ Major shareholders

19,545,000 shares
8,374,157 shares
10,540- 26 -

Number of shares(1,000 shares)
597

Name of shareholders
The Master Trust Bank of Japan, Ltd. (Trust
Account)
Nippon Piston Ring Employee Shareholding
Association
Tokio Marine & Nichido Fire Insurance Co., Ltd.

Percentage ofshareholding (%)
7.45

283

3.53

267

3.33

Custody Bank of Japan, Ltd. (Trust account)

263

3.28

Asahi Mutual Life Insurance Company
The Nomura Trust and Banking Co., Ltd. (Nippon
Piston Ring Employee Shareholding Association
Trust Account)
Nippon Piston Ring Business Partners Shareholding
Association
SBI Shinsei Bank, Limited

259

3.23

225

2.82

188

2.35

165

2.06

Mitsubishi UFJ Trust and Banking Corporation

148

1.85

INTERACTIVE BROKERS LLC

124

1.56

(Note) 1. The shareholding ratio is calculated after deducting the number of shares of treasury stock (358,000
shares) and is rounded to the third decimal place.
2. 358,028 shares of treasury stock does not include the 225,700 shares of the Company owned by The
Nomura Trust and Banking Co., Ltd. (Nippon Piston Ring Employee Shareholding Association
Trust Account).
⑤ Status of shares delivered to officers of the Company as remuneration for the execution of duties
during the fiscal year under review
The details of the share-based remuneration delivered during the fiscal year under review are as
follows.
Number of officers to
Position
Number of shareswhom shares were issued
Directors (excluding Directors
who are Audit & Supervisory
11,050 shares
Five (5) people
Committee Members andOutside Directors)(2) Status of Stock Acquisition Rights
Status of stock acquisition rights issued to and held by officers of the Company as remuneration
for the execution of duties (as of March 31, 2023)
Class andnumber ofAmount Amount ofshares to be
to beassets to be
NumberofName of stock
issuedor
paidincontributed
Numberofacquisition rights holders
transferred
for stock upon exercise Exercise periodof stockstock(Date of issuance acquisition acquisiti
of stockupon
acquisiti
resolution)
exercise ofon rights acquisition
on rights
rightsrightsstock(peracquisition(per share)share)
rights
1st stock
One (1)1,800
August 1, 2008 to
acquisition rights Director of
18
common 1,450 yen
1 yen
July 31, 2033
(June 27, 2008)
the Company
shares
2nd stockThree (3)3,800
August 1, 2013to
acquisition rights Directors of38
common 1,460 yen
1 yen
July 31, 2038
(June 27, 2013)
the Company
shares
3rd stockThree (3)3,400
August 1, 2014 toacquisition rights Directors of34
common 2,040 yen
1 yen
July 31, 2039
(June 27, 2014)
the Company
shares
4th stockacquisition rights

Three (3)Directors of

35

3,500
common 1,900 yen- 27 -

1 yen

August 1, 2015 toJuly 31, 2040

(June 25, 2015)

the Company

shares

5th stock
Four (4)8,000
July 30, 2016 toacquisition rights Directors of80
common 1,203 yen
1 yen
July 29, 2041
(June 29, 2016)
the Company
shares
6th stock
Four (4)5,600
August 1, 2017 toacquisition rights Directors of56
common 1,885 yen
1 yen
July 31, 2042
(June 29, 2017)
the Company
shares
7th stock
Four (4)6,400
August 1, 2018 toacquisition rights Directors of64
common 1,927 yen
1 yen
July 31, 2043
(June 27, 2018)
the Company
shares
8th stock
Four (4)11,200August 1, 2019 toacquisition rights Directors of112
common 1,175 yen
1 yen
July 31, 2044
(June 26, 2019)
the Company
shares(Note) 1. Directors does not include Directors who are Audit & Supervisory Committee Members or Outside
Directors.
2. The conditions to exercise the stock acquisition rights are as follows.
① A holder of stock acquisition rights may exercise his/her stock acquisition rights for a limited
period of 10 days from the day following the date on which he/she loses his/her position as a
Director of the Company.
② In the event that the holder of stock acquisition rights passes away, his/her heir may exercise
his/her stock acquisition rights. The conditions for the exercise of stock acquisition rights by theheir shall be as set forth in the agreement of ③ below.
③ Other conditions shall be stipulated in the “Agreement on Allotment of Stock Acquisition
Rights” to be entered into between the Company and the holders of stock acquisition rights basedon the resolution of the Board of Directors.
(3) Status of Officers① Status of Directors (as of March 31, 2023)

Position

Director andPresident(Representativ
e Director)
Representative
Director
Director

Director

Director

Director
Director who
is a full-time
Audit &
Supervisory
Committee
MemberDirector who

Area of responsibility or status of significant concurrent
positionsTeruo Takahashi Internal Auditors OfficeNameYuji Sakamoto

In charge of Production Control Department, Global Procurement
Department and Tochigi Plant, Director and Chairman at NPR
Singapore Pte. Ltd., and Director at NPR of Europe GmbH
Masaaki Fujita In charge of Corporate Planning Department, Accounting and
Finance Department and Related Operations Control Businesses
Department, Komisaris at PT. NT Piston Ring Indonesia,
Komisaris at PT. NPR Manufacturing Indonesia, and President at
NPR of America, Inc.
Zhongliang Yang In charge of Production Engineering Department I, Production
Engineering Department II and Production Engineering
Department III, President at NPR Iwate Co., Ltd., President at
NPR Fukushima Works Co., Ltd., Director at NPR Auto Parts
Manufacturing (Yizheng) Co., Ltd., Chairman and President at
NPR ASIMCO Powdered Metals Manufacturing (Yizheng) Co.,
Ltd., and Director at NPR of America, Inc.
Nobuyasu Nara In charge of Corporate Management Department, General Affairs
Department, Information System Department and Safety and
Health Promotion Department, Director at NPR Iwate Co., Ltd.,
Director at NPR Fukushima Works Co., Ltd., and Director andChairman at SIAM NPR Co., Ltd.
Hiromi Nakazawa Directors Who Are Audit & Supervisory from outside theCompany at RICOH LEASING COMPANY, LTD.
Hiroto Koeba
Audit & Supervisory Board Member at NPR Iwate Co., Ltd.,
Audit & Supervisory Board Member at NPR Fukushima WorksCo., Ltd., and Audit & Supervisory Board Member at Noermeca
Asia Co., Ltd.
Hiroki Kimura

President and Representative Director at Asahi Mutual Life

- 28 -

is an Audit &Insurance Company, Councilor at The Institute of Medical
Supervisory
Science, Asahi Life Foundation, Audit & Supervisory Board
Committee
Member (Outside) at The Yokohama Rubber Co., Ltd., and Audit& Supervisory Board Member (External) at Zeon Corporation
MemberDirector who
Yoshihide Hino Partner at Tokyo Hatchobori Law Office
is an Audit &Supervisory
Committee
Member(Notes) 1. Among the Directors, Ms. Hiromi Nakazawa, Mr. Hiroki Kimura and Mr. Yoshihide Hino are
Outside Directors. The Company has reported Ms. Hiromi Nakazawa, Mr. Hiroki Kimura and Mr.
Yoshihide Hino as independent directors who does not have conflicts of interest with shareholders
and investors, in accordance with the rules of Tokyo Stock Exchange, Inc.
2. The Company has appointed Mr. Hiroto Koeba as Full-time Audit & Supervisory Committee
Member. The reasons for the selection is to enhance the effectiveness of the activities of the Audit& Supervisory Committee by establishing an auditing environment and sharing information among
all Audit & Supervisory Committee Members obtained through attending important meetings,
regular hearing of business reports from business execution departments, as well as collaborations
with the Accounting Auditor and the Internal Audit Department, etc.
3. The Audit & Supervisory Committee Members’ knowledge of finance and accounting is asfollows.
Mr. Hiroto Koeba, Full-time Audit & Supervisory Committee Member, has many years ofexperience in the Accounting and Finance Department of the Company and has considerable
knowledge of finance and accounting.
Mr. Hiroki Kimura, Outside Audit & Supervisory Committee Member, has extensive experience inoverall management in the life insurance industry and has considerable knowledge of finance andaccounting.
② Overview of the Limited Liability Agreement
The Company has entered into an agreement with the respective Outside Directors (including
Directors who are Audit & Supervisory Committee Members) in accordance with Article 427,
Paragraph 1 of the Companies Act to limit his/her liability pursuant to Article 423, Paragraph 1 of theCompanies Act. The maximum amount of liability pursuant to the agreement is the amount stipulated
by laws and regulations.
③ Overview of the Directors and Officers Liability Insurance Policy
The Company has entered into a directors and officers liability insurance policy as defined under
Article 430-3, Paragraph 1 of the Companies Act, to ensure that the legally liable damages andassociated litigation cost incurred by the insured person in the event of a claim for damages madeagainst the insured person during the insurance period due to acts performed by him/her based on
his/her position will be indemnified under such insurance policy. However, the Company takes
measures to ensure that the appropriateness of the execution of duties by Directors and officers is not
impaired by exempting compensation for damages caused by criminal acts such as bribery or
intentional violations. In addition, there is a provision for an exemption amount in the insurance
contract and damages up to the exemption amount are not covered.
The insured persons under the directors and officers’ liability insurance policy are Directors of
the Company and its subsidiaries (including Outside Directors and Directors who are Outside Audit &Supervisory Committee Members), Audit & Supervisory Board Members, Executive Officers,
important employees (such as managers appointed by the Board of Directors), retiring officers, and theCompany pays the full amount of the insurance premium for all insured persons.
④ Policy for Determining the Details of Remuneration for Individual Directors(a) Method for Determining the Policy for Determining the Amount of Remuneration for Directors
As for the basic policy for determining the amount of remuneration for Directors of theCompany, Directors (excluding Directors who are Audit & Supervisory Committee Members) andDirectors who are Audit & Supervisory Committee Members are distinguished, and the policy for
determining the remuneration of Directors (excluding Directors who are Audit & Supervisory
Committee Members) is determined upon the resolution of the Board of Directors based on the- 29 -

deliberations and reports of Nomination and Remuneration Advisory Committee, and the policy
for determining the remuneration of Directors who are Audit & Supervisory Committee Members
is determined by discussion of the Audit & Supervisory Committee.
(b) Basic Policy for Determining the Amount of Remuneration for Directors
The remuneration of the Company’s Directors is appropriate for attracting and maintaining
excellent human resources who practice the realization of the Company’s Corporate philosophy
and are arousing their motivation to thoroughly fulfill their expected roles in the sustainableenhancement of corporate and shareholder value. Specifically, remuneration for Directors
responsible for business execution consists of basic remuneration, performance-based
remuneration, and share-based remuneration. Remuneration for Directors who are Audit &Supervisory Committee Members and Outside Directors responsible for supervisory functions
consists of basic remuneration only.
In order to fulfill the accountability to shareholders and other stakeholders with regard to thecontent of remuneration for Directors, the Company ensures rationality, objectivity, andtransparency in both the content of remuneration and the decision-making process.
(c) Remuneration Structure for Directors (excluding Directors who are Audit & Supervisory
Committee Members and Outside Directors)
The remuneration for Directors (excluding Directors who are Audit & Supervisory Committee
Members and Outside Directors) consists of basic remuneration, which is a fixed remuneration,and performance-based remuneration and share-based remuneration, which fluctuate depending on
business performance. The ratio of basic remuneration, performance-based remuneration andshare-based remuneration is approximately 7:2:1.
ⅰ. Basic Remuneration
Basic remuneration is a monetary fixed remuneration paid on a monthly basis. The amount ofbasic remuneration shall be determined according to the position, responsibility, and other factors,
and shall be reviewed as appropriate and based on deliberations and reports by the Remuneration
Advisory Committee in consideration of performance, remuneration packages at other companies,
social conditions, etc.
ⅱ. Performance-based Remuneration
・Details of the Performance Indicator and the Reasons for Their Selection
In order to realize sustainable enhancement of corporate value, the Company strives to improve
growth potential and efficiency, and for performance-based remuneration for Directors (excluding
Directors who are Audit & Supervisory Committee Members and Outside Directors), ordinary
income (consolidated) is used as an indicator taking into account the characteristics of theCompany's business.
・Method for Calculating the Amount or Number of Performance-based Remuneration
The Company introduced performance-based remuneration into monetary remuneration for
Directors (excluding Directors who are Audit & Supervisory Committee Members and Outside
Directors). Performance-based remuneration under monetary remuneration is paid at a certain time
every year, up to a maximum of 100 million yen, calculated using the consolidated ordinary
income of each fiscal year as an indicator in order to raise awareness of performance improvement,
and based on points corresponding to each Director’s position based on the following formuladetermined by the Board of Directors. The reason for using consolidated ordinary income as anindicator is based on the judgment that non-operating profits and losses, such as interest costs andincomes and foreign exchange profits and losses, for which risk control should be carried out inthe course of management, should also be taken into consideration.
Changes in ordinary income (consolidated) including the fiscal year under review are as
described in “(2) Status of Assets, Profit and Loss,” under “1. Status of the Company” and thepayment month is June.

- 30 -

Method of Calculation for Performance-based Remuneration
Consolidated ordinary income (rounded down to the nearest million yen) × 1.2% = a(rounded down to the nearest million yen)a × each Director’s points / Total points of Directors
Number and points of Directors by position
Number of
Total
Position
Pointspersons
pointsRepresentative Director and
1
100
100
President
Representative Director and
082
0
Executive Vice President
Representative Director andSenior Managing Executive
1
77
77
Officer
Director and Managing
3
68
204
Executive Officer
Total

5

-

381

(Notes) The above figures are calculated based on the number of Directors as of March 31
2023.
(Other Considerations)・Directors are executive officers as stipulated in Article 34, Paragraph 1, Item 3 of the
Corporation Tax Act.
・The consolidated ordinary income (“indicators on profits” as stipulated in Article 34,
Paragraph 1, Item 3 (a) of the Corporation Tax Act) used in the above formula is the consolidated
ordinary income before performance-based remuneration is recorded as expenses.
・The “defined amount” as stipulated in Article 34, Paragraph 1, Item 3 (a) (1) of the
Corporation Tax Act is limited to 100 million yen.
・The difference due to the rounding of individual payments is deducted from the amount paid
to the Representative Director and President.
・In the event that a Director leaves office during the period of execution of his/her duties due
to unavoidable circumstances, remuneration is paid based on the number of months the Director
has been enrolled in during the period of execution of his/her duties (rounded up to one month).
ⅲ. Non-monetary Renumeration
For the purpose of providing an incentive to further share value with shareholders and to improve
medium- to long-term business performance by having Directors who are responsible for businessexecution acquire and hold a certain amount of shares during their term, the Company grants such
Directors restricted stocks with a transfer restriction period of 25 years at a certain time each year.
The number of shares to be granted is determined based on the position, responsibilities, share price,and other factors.
(d) Reasons for the Board of Directors to Determine that the Contents of the Remuneration for
Individual Directors are in Line with the Policy
In determining the content of the remuneration, etc. for individual Directors, the Nomination
and Remuneration Advisory Committee, which the majority of its members are comprised of
Outside Directors, examines the draft from various angles, including the consistency with thedecision policy. The Board of Directors also thoroughly considers the draft to be in line with thedecision policy based on the report of the Advisory Committee.

- 31 -

⑤ Matters Related to Resolutions of the General Meeting of Shareholders with Respect toRemuneration for Directors

At the 127th Annual General Meeting of Shareholders held on June 24, 2021, the remuneration
ceiling for Directors (excluding Directors who are Audit & Supervisory Committee Members) wasapproved at “not more than 280 million yen per annum (including officers’ bonuses)” (of which, theportion for Outside Directors is within 30 million yen per annum), and the remuneration ceiling for
Directors who are Audit & Supervisory Committee Members was approved at not more than 53
million yen per annum.
However, the amount of remuneration for Directors (excluding Directors who are Audit &Supervisory Committee Members) does not include salaries as employees of Directors who
concurrently serve as employees.
In addition, at said Annual General Meeting of Shareholders, it has been separately approved thattransfer restricted share-based remuneration be introduced for Directors (excluding Directors who are
Audit & Supervisory Committee Members and Outside Directors) and that the ceiling of monetaryclaims thereto is 70 million yen or less per year.
There were six (6) Directors (excluding Directors who are Audit & Supervisory Committee
Members) at the conclusion of the said General Meeting of Shareholders (including one (1) Outside
Director) and three (3) Directors who are Audit & Supervisory Committee Members (including two (2)Outside Directors).

⑥ Amount of Remuneration for Directors

Category of officer

Directors (excluding
Directors who are Audit& Supervisory Committee
Members)(of which Outside
Directors)
Directors who are Audit& Supervisory Committee
Members(of which Outside
Directors)
Total

Total amountof
remuneration(million yen)

Total amount of remuneration by type of
remuneration (million yen)
Basic
Performance-bas Non-monetary
renumeration ed remuneration remuneration

Number of
eligible
officers

157
(7)

110
(7)

33
(N/A)

14
(N/A)

6
(1)

30
(12)

30
(12)

N/A
(N/A)

N/A
(N/A)

3
(2)

187

140

33

14

9

(Note) 1. The amount of remuneration for Directors (excluding Directors who are Audit & Supervisory
Committee Members) does not include salaries as employees of Directors who concurrently serve as
employees.
⑦ Matters Related to Outside Officers(a) Significant Concurrent Positions of the Outside Officers and Relationship with the Company
Relationship with the Company andName
Significant concurrent positions
the companies where Outside Officers
hold a significant concurrent position
OutsideThere are no significant transactions or
Directors Who Are Audit & Supervisory
Directorother relationships with the company wherefrom outside the Company at RICOH
Hiromi
Ms.
Hiromi Nakazawa holds a significant
LEASING COMPANY, LTD.
Nakazawa
concurrent position.
President and Representative Director,
OutsideAsahi Mutual Life Insurance Company
Asahi Mutual Life Insurance Company
Directorholds 259,000 shares of the Company.
Councilor at The Institute of Medical
There are no significant transactions or(Audit &Science, Asahi Life Foundation,other relationships with the other companies
Supervisory
Audit & Supervisory Board Member
Committee(Outside), The Yokohama Rubber Co., Ltd. where Mr. Hiroki Kimura holds a- 32 -

Member)
Hiroki
KimuraOutsideDirector(Audit &Supervisory
Committee
Member)Yoshihide
Hino

Audit & Supervisory Board Member(External), Zeon Corporation

significant concurrent position.

Partner, Tokyo Hatchobori Law Office

There are no significant transactions orother relationships with the company where
Mr. Yoshihide Hino holds a significant
concurrent position.

(b) Major Activities for the Fiscal Year Under Review
Name

Major activities

OutsideDirector
HiromiNakazawa

She attended all 14 meetings of the Board of Directors held during the fiscal year underreview. From the viewpoint of an accounting expert, she has provided advice andopinions as appropriate to ensure the appropriateness and reasonableness ofdecision-making by the Board of Directors. In addition to the above, she served as amember of the Nomination and Remuneration Advisory Committee of the Company andattended all meetings held in the fiscal year under review. By expressing opinions froman independent and objective standpoint, she played an important role in deliberating on
the nomination of and remuneration for Directors and other officers and reporting it to
the Board of Directors.

OutsideDirector(Audit &Supervisory
Committee
Member)Hiroki
KimuraOutsideDirector(Audit &Supervisory
Committee
Member)YoshihideHino

He attended 13 meetings out of all 14 meetings of the Board of Directors and all 12
meetings of the Audit & Supervisory Committee held in the fiscal year under review.
From the viewpoint of a company manager, he has expressed his opinions as appropriate
to ensure the appropriateness of business operations. In addition to the above, he served
as a member of the Nomination and Remuneration Advisory Committee of the Company
and attended all meetings held in the fiscal year under review. By expressing opinionsfrom an independent and objective standpoint, he played an important role indeliberating on the nomination of and remuneration for Directors and other officers andreporting it to the Board of Directors.
He attended all 14 meetings of the Board of Directors and all 12 meetings of the Audit &Supervisory Committee held during the fiscal year under review. He expressed opinions
as appropriate to ensure the adequacy of business operations mainly from a legal point ofview. In addition to the above, he served as a member of the Nomination andRemuneration Advisory Committee of the Company and attended all meetings held in
the fiscal year under review. By expressing opinions from an independent and objective
standpoint, he played an important role in deliberating on the nomination of andremuneration for Directors and other officers and reporting it to the Board of Directors.

(4) Status of Accounting Auditor① Name of Accounting Auditor

Ernst & Young ShinNihon LLC② Compensation to Accounting Auditor

Amount paid (million yen)Compensation to Accounting Auditor for the fiscal year under55
review
Total amount of cash and other property benefits payable by the61
Company and its subsidiaries(Notes) 1. The Audit & Supervisory Committee closely examined the Accounting Auditor’s audit plan (thenumber of audit days, the number of auditors, the verification and evaluation of performanceagainst the audit plan for the previous fiscal year, the appropriateness of the performance of audits
by the Accounting Auditor, basis for calculating the estimated compensation and others) for which
explanation was received from the Accounting Auditor and changes in the compensations toaccounting auditors, and thereupon decided that the amount of compensation to the Accounting
Auditor is appropriate and agreed thereto pursuant to Article 399, Paragraph 1 of the Companies
Act.
2. The Company’s significant overseas subsidiaries are audited by certified public accountants or- 33 -

audit firms other than the Company’s Accounting Auditor.
3. The audit agreement between the Accounting Auditor and the Company does not distinguishbetween the compensation for auditing services under the Financial Instruments and Exchange Act
and the Companies Act, as it is practically impossible to distinguish them. Therefore, the amount of
remuneration to be paid to the Accounting Auditor is the aggregate amount of the aforementioned
remunerations.
③ Details of Non-audit Services Provided by the Accounting Auditor
Not applicable.

④ Policy Regarding Decisions on the Dismissal or Non-reappointment of the Accounting
AuditorIf the Board of Directors determines that a situation has arisen in which the Accounting Auditor
is materially impairing the Company's auditing services, the Board of Directors will propose thedismissal or non-reappointment of the Accounting Auditor at a general meeting of shareholders withthe consent of the Audit & Supervisory Committee Members or at the request of the Audit &Supervisory Committee as described below. If the Audit & Supervisory Committee determines that asituation has arisen in which the Accounting Auditor is materially impairing the Company's auditing
services, it will request the Board of Directors to submit a proposal for the dismissal or
non-reappointment of the Accounting Auditor at a general meeting of shareholders. In the event that
the Accounting Auditor is determined to fall under any of the items of Article 340, Paragraph 1 of theCompanies Act, the Audit & Supervisory Committee will dismiss the Accounting Auditor upon theunanimous consent of the Audit & Supervisory Committee Members after discussing within the Audit& Supervisory Committee.
In this case, the Audit Supervisory Committee Member chosen by the Audit Committee willreport the dismissal of the Accounting Auditor and the reasons thereof at the first general meeting ofshareholders convened after the dismissal.
⑤ Description on Limited Liability Agreement
Not applicable〰〰〰〰〰〰〰〰〰〰〰〰〰〰〰〰〰〰〰〰〰〰〰〰〰〰〰〰〰〰〰〰〰〰〰〰〰〰〰〰〰〰
Figures reported in the Business Report are rounded down to the nearest unit, except for the ratios stated in“① Progress and Results of the Business” under “(1) Business Status for the Fiscal Year” under “1. Outlookof the Company” and “④ Major shareholders” under “Status of Shares” under “2. Outlook of the Company.”- 34 -

Consolidated Balance Sheets(As of March 31, 2023)(Unit: million yen)
Item
Amount(Liabilities)
32,654Current liabilities
22,416Notes
andaccounts
5,606
3,725
payable-trade
Electronically recorded
11,7194,326
obligations
7,614
Short-term loans payable
5,940
Current portion of long-term
2,612
2,720
loans payable
3,078
Lease liabilities
142
2,048
Accrued Income taxes
380(24)
Notes payable-equipments
116
Non-operating
electronically
36,188
1,034
recorded obligations
28,382
Other
4,029
7,351
Fixed liabilities
8,309
13,715Long-term loans payable
3,939
5,784
Lease liabilities
364
723
Deferred tax liabilities
1,034
Defined benefit plan
807
2,819
liabilities
930
Other
151
231
Total liabilities
30,725
698(Net Assets)
6,875
Shareholders’ equity
31,417
5,198
Capital stock
9,839
1,408
Capital surplus
6,080
95
Retained earnings
16,265
175
Treasury shares(767)
Accumulated
other
(2)
4,673
comprehensive income
Other securities valuation
2,743
differences
Foreign currency translation
3,060
adjustment
Accumulated remeasurements(1,130)of defined benefit plan
Share options
67
Non-controlling interests
1,958
Total net assets
38,117
Total assets
68,843
Total liabilities and net assets
68,843(Note) Stated amounts are rounded down to the nearest million yen.
Item
(Assets)
Current assets
Cash and deposits
Notes receivable-trade,
accounts receivable-trade,and contract assets
Merchandise and products
Work in progress
Raw materials and supplies
Other
Allowance for doubtful
accounts
Fixed assets
Property, plant, andequipments
Buildings and structures
Machinery and transport
equipments
Land
Construction in progress
Other
Intangible fixed assets
Goodwill
Other
Investment and other assets
Investment securities
Defined benefit plan assets
Deferred tax assets
Other
Allowance for doubtful
accounts

Amount- 35 -

Consolidated Profit and Loss Statement(From April 1, 2022 to March 31, 2023)
Item
Net sales
Cost of sales
Gross profit
Selling, general, andadministrative expenses
Operating profit
Non-operating revenue
Interest income
Dividend income
Foreign exchange gains
Subsidy income
Government grant income
Gain on sale of scrap
Other
Non-operating expenses
Interest payable
Loss on disposal of fixed assets
Commitment fees
Depreciation of assets for rent
Other
Ordinary profit
Extraordinary profit
Gain on sale of investment
securities
Extraordinary loss
Impairment loss
Profit before tax
Income taxes-current
Income taxes-deferred
ProfitProfit attributable to non-controllinginterests
Profit attributable to owners of parent(Note) Stated amounts are rounded down to the nearest million yen.

- 36 -(Unit: million yen)Amount58,524
46,271
12,252
9,867
2,385
607
12
156
80
64
85
88
120
237
93
9
10
32
91
2,755
104
104
35
35
2,824
898
30
1,895
87
1,808

Consolidated Statement of Changes in Net Assets(From April 1, 2022 to March 31, 2023)(Unit: million yen)

Shareholders’ Equity
Capital Stock Capital Surplus
Balance at beginning of
periodCumulative effect ofchanges in accounting
policies
Balance at beginning of
period reflecting changes
to accounting policies
Changes of items during
periodDividends of surplus
Profit attributable toowners of parent
Acquisition of treasury
shares
Disposal of treasury
sharesTransfer of loss on
disposal of treasury
sharesChanges of items otherthan shareholders’equity (net)Total changes of items
during period
Balance at end of period

Balance at beginning of
periodCumulative effect ofchanges to accounting
policies
Balance at beginning of
period reflecting changes
to accounting policies
Changes of items during
periodDividends of surplus
Profit attributable toowners of parent
Acquisition of treasury
shares
Disposal of treasury
sharesTransfer of loss on
disposal of treasury
sharesChanges of items otherthan shareholders’equity (net)

9,839

6,080

9,839

6,080

14,885

Total
Shareholders’Equity(835)
29,969136

136

Retained
Earnings

Treasury
Shares15,021

(835)

(560)

(560)

1,808

1,808

(4)

－

30,105

4

(4)

－

1,243

(0)

(0)

68

64
－

68

1,312

9,839
6,080
16,265(767)
31,417
Accumulated Other Comprehensive Income
Foreign Accumula
Total
Other Currency
ted
Non-Cont Total Net
Accumula
Securities Translatio Remeasur ted Other Sharerolling
Assetsements of Comprehe Options Interests
ValuationnDifferenc Adjustme DefinednsiveesBenefits Income
nt
Plan
3,351

3,351

838

(1,018)

3,171

8

(52)

(43)

846

(1,070)

3,127

67

1,798

35,006
92

67

1,798

35,099

(560)
1,808
(0)
64
－
(607)

2,213

(60)

- 37 -

1,545

－

160

1,705

Total changes of items
(607)
2,213
(60)
1,545
during the period
Balance at end of period
2,743
3,060
(1,130)4,673(Note) Stated amounts are rounded down to the nearest million yen.

- 38 -

－

160

3,018

67

1,958

38,117

Non-Consolidated Balance Sheets(As of March 31, 2023)
Item(Assets)
Current assets
Cash and deposits
Notes receivable-trade
Accounts receivable-trade
Merchandise and products
Work in progress
Raw materials and supplies
Prepaid expenses
Advance payments
Short-term loans to relatedcompanies
Accounts receivable-other
Other
Fixed assets
Property, plant, and equipment
Buildings
Structures
Machinery and equipment
Vehicles and transport
equipment
Tools, instruments, andfurnishings
Land
Construction in progress
Intangible fixed assets
Software
Other
Investment and other assets
Investment securities
Related company shares
Capital contributions
Capital contributions torelated companies
Long-term loans to relatedcompanies
Prepaid pension expenses
Other
Allowance for doubtful
accounts

Amount17,013
407
1,428
7,848
1,582
1,154
586
85
23
2,629
1,004
262
39,107
13,706
3,564
125
5,768
4

Item
(Liabilities)
Current liabilities
Notes payable-trade
Electronically recorded
obligations
Accounts payable-trade
Short-term loans payable
Current portion of long-termloans payable
Lease liabilities
Accounts payable-otherAccrued expenses
Advances received
Accrued income taxes
Deposits
Notes payable-equipment
Non-operating electronicallyrecorded obligations
Fixed liabilities
Long-term loans payable
Lease liabilities
Deferred tax liabilities(Unit: million yen)Amount243
Other
3,764 Total liabilities
235(Net assets)
186
Shareholders’ equity
181
Capital stock4
Capital surplus
25,215
Capital reserves
5,198
Retained earnings
16,276
Other retained earnings
Reserve for reduction entry
1of fixed assets
2,536
Special reserve
Retained earnings brought
260
forward822
Treasury shares
Valuation and translation121
differences
Other securities valuation(2)
differences
Share options
Total net assets
Total assets
56,120Total liabilities and net assets(Note) Stated amounts are rounded down to the nearest million yen.

- 39 -

18,740
93
2,391
6,538
4,770
2,560
62
252
1,085
4
171
287
52
469
5,099
3,699
172
1,163
63
23,83929,470
9,839
5,810
5,810
14,587
14,5876
1,600
12,981
(767)
2,743
2,743
67
32,28056,120Non-Consolidated Profit and Loss Statement(From April 1, 2022 to March 31, 2023)
Item
Net sales
Cost of sales
Gross profit
Selling, general, andadministrative expenses
Operating profit
Non-operating revenue
Interest income
Dividend income
Rent income
Foreign exchange gains
Other
Non-operating expenses
Interest payable
Loss on disposal of fixed assets
Depreciation of assets for rent
Other
Ordinary profit
Extraordinary profit
Gains on sale of investment
securities
Profit before tax
Income taxes-current
Income taxes-deferred
Profit(Unit: million yen)Amount34,94528,755
6,190
5,906
283
1,796
22
1,508
37
152
75
209
94
7
32
75
1,870
104
104
1,974
342
(57)
1,689

(Note) Stated amounts are rounded down to the nearest million yen.

- 40 -

Non-Consolidated Statement of Changes in Net Assets(From April 1, 2022 to March 31, 2023

Balance at beginning of
periodChanges of items
during period
Reversal of reserve
for reduction entry of
fixed assets
Dividends of surplus
ProfitAcquisition oftreasury shares
Disposal of treasury
sharesTransfer of loss on
disposal of treasury
sharesChanges of items
other thanshareholders’ equity(net)
Total changes of items
during period
Balance at end of
period(Unit: million yen)
Shareholders’ Equity
Capital Surplus
Retained Earnings
Other Retained Earnings
Reserve
Capital
Other
Total
for
Retained Total
CapitalStock
Capital Capital Reductio Special Earnings Retained
Reserves Surplus
Surplus n Entry Reserve Brought Earnings
of Fixed
ForwardAssets
9,839
5,810
5,810
6
1,600 11,855 13,461
－
(0)

(4)

(4)

4

4

0

－

(560)
1,689

(560)
1,689
－

(4)

(4)

－

－

－

－

(0)

－

1,126

1,125

9,839

5,810

－

5,810

6

1,600

12,981

14,587

Shareholders’Valuation and Translation
EquityDifferences
Total
Other
Total
Treasury Sharehold Securities
Valuation andSharesers’
Valuation
Translation
EquityDifferences
Differences
Balance at beginning of(835)
28,276
3,351
3,351
periodChanges of items
during period
Reversal of reserve
for reduction entry of
fixed assets
Dividends of surplus(560)
Profit1,689
Acquisition of(0)(0)
treasury shares
Disposal of treasury
68
64
sharesTransfer of loss on
disposal of treasury
sharesChanges of items
other than
(607)
(607)
shareholders’ equity(net)
Total changes of items
68
1,193
(607)
(607)
during period
Balance at end of(767)
29,4702,743
2,743
period(Note) Stated amounts are rounded down to the nearest million yen.

- 41 -

Share
Options
67

Total Net
Assets31,694

－
(560)
1,689
(0)
64
－
(607)
－

586

67

32,280Accounting Audit Report on Consolidated Financial Statements
Independent Auditor’s Report(English Translation*)
May 17, 2023
To the Board of Directors of Nippon Piston Ring Co., Ltd.
Ernst & Young ShinNihon LLC
Tokyo Head Office
Designated
Limited Liability
PartnerEngagement
Partner
Designated
Limited Liability
PartnerEngagement
Partner

CPA

Yuji Mukaide

CPA

Masaki Yoshioka

OpinionWe have audited, pursuant to Article 444, Paragraph 4 of the Companies Act of Japan, theaccompanying consolidated financial statements, which comprise the consolidated balance sheet, theconsolidated statement of profit and loss, the consolidated statements of changes in net assets and thenotes to consolidated financial statements, of Nippon Piston Ring Co., Ltd. (the “Company”) for the
fiscal year from April 1, 2022 to March 31, 2023.
In our opinion, the consolidated financial statements referred to above present fairly, in all material
respects, the financial position and the financial performance of the Company and its consolidated
subsidiaries for the period covered by the consolidated financial statements in accordance with theaccounting principles generally accepted in Japan.
Basis for the Opinion
We conducted our audit in accordance with auditing standards generally accepted in Japan. Our
responsibilities under those standards are further described in the Auditor’s Responsibilities for the
Audit of the Consolidated Financial Statements section of our report. We are independent of theCompany and its consolidated subsidiaries in accordance with the relevant professional ethicalrequirements in Japan, and we have fulfilled our other ethical responsibilities in accordance with theserequirements. We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our opinion.
Other Information
The other information comprises the Business Report and its accompanying supplementaryschedules. Management is responsible for the preparation and disclosure of the other information and
the Audit & Supervisory Committee is responsible for overseeing the Directors’ execution of duties
relating to the design and operation of the reporting process of the other information.
Our opinion on the consolidated financial statements does not cover the descriptions in otherinformation and we do not express any form of opinion thereon.
Our responsibility in connection with our audit of the consolidated financial statements is to readthe other information and, in doing so, consider whether the other information is materiallyinconsistent with the consolidated financial statements, or our knowledge obtained in the course of theaudit or otherwise pay close attention to appearances of material misstatements.
If, based on the work we have performed, we conclude that there is a material misstatement of thisother information, we are required to report that fact.
We have nothing to report in this regard.
Responsibilities of Management and the Audit & Supervisory Committee for the Consolidated
Financial Statements
Management is responsible for the preparation and fair presentation of the consolidated financial
statements in accordance with the auditing standards generally accepted in Japan, and for the designand operation of such internal control as management determines is necessary to enable the preparationand fair presentation of the consolidated financial statements that are free from material misstatements,
whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing theappropriateness of use of the going concern basis of accounting and disclosing, as applicable, mattersrelated to going concern in accordance with the auditing standards generally accepted in Japan.

- 42 -

The Audit & Supervisory Committee is responsible for overseeing the performance of duties of the
Directors in the design and operation of the Company’s financial reporting process.
Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements
Our responsibilities are to obtain reasonable assurance about whether the consolidated financial
statements as a whole are free from material misstatements, whether due to fraud or error, and to issue
an opinion in a report from an independent standpoint. Misstatements can arise from fraud or error andare considered material if, individually or in the aggregate, they could reasonably be expected toinfluence the economic decisions of users taken on the basis of these consolidated financial statements.
As part of an audit in accordance with auditing standards generally accepted in Japan, we exercise
professional judgment and maintain professional skepticism throughout the audit. We also:• Identify and assess the risks of material misstatement of the consolidated financial statements,
whether due to fraud or error, design and perform audit procedures responsive to those risks,and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion.
• Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances when assessing the risks, while thepurpose of the consolidated financial statements audit is not to express an opinion on theeffectiveness of the Company’s internal control.
• Evaluate the appropriateness of accounting policies and their applications which management
adopted, and the reasonableness of the accounting estimates and the appropriateness of therelated disclosures made by management.
• Conclude on the appropriateness of management’s use of the going concern basis ofaccounting in preparing the consolidated financial statements and, based on the audit evidence
obtained, whether a material uncertainty exists related to events or conditions that may castsignificant doubt on the Company’s ability to continue as a going concern. If we conclude thata material uncertainty exists with respect to the going concern basis, we are required to draw
attention in our auditor’s report to the related disclosures in the consolidated financial
statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are
based on the audit evidence obtained up to the date of our auditor’s report. However, future
events or conditions may cause the Company to cease to continue as a going concern.
• Assess whether the presentation of the consolidated financial statements and the related
disclosures therein are prepared in accordance with the auditing standards generally acceptedin Japan, as well as whether the presentations, compositions, and contents of the consolidated
financial statements and related disclosures therein properly present the transactions andaccounting events on which the consolidated financial statements are based.
• Obtain sufficient and appropriate audit evidence about the financial information of theCompany and its consolidated subsidiaries to express an opinion on the consolidated financial
statements. The auditor is responsible for the direction, supervision, and implementation of theaudit of the consolidated financial statements. The auditor is solely responsible for the audit
opinion.
We communicate with the Audit & Supervisory Committee regarding, among other mattersrequired by the auditing standards, the planned scope and timing of the audit and significant audit
findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide the Audit & Supervisory Committee with a statement that we have complied with
relevant professional ethical requirements in Japan regarding independence and communicate withthem all relationships and other matters that may reasonably be thought to bear on our independence,
and where applicable, related safeguards in order to remove or reduce the risk of matters which may
deteriorate our independence.
Interests required to be disclosed by the Certified Public Accountants Act of Japan
Our firm and its designated engagement partners do not have any interest in the Company and its
consolidated subsidiaries that is required to be disclosed pursuant to the provisions of the Certified
Public Accountants Act of Japan.
* Notes to the Readers of Independent Auditor’s Report
This is an English translation of the Independent Auditor’s Report as required by the Companies Act ofJapan for the conveniences of the readers.

- 43 -

Accounting Audit Report on Non-consolidated Financial Statements
Independent Auditor’s Report(English Translation*)
May 7, 2023
To the Board of Directors of Nippon Piston Ring Co., Ltd.
Ernst & Young ShinNihon LLC
Tokyo Head Office
Designated
LimitedLiability Partner
Engagement
Partner
Designated
LimitedLiability Partner
Engagement
Partner

CPA

Yuji Mukaide

CPA

Masaki Yoshioka

OpinionWe have audited, pursuant to Article 436, Paragraph 2, Item 1 of the Companies Act of Japan, theaccompanying financial statements, which comprise the balance sheet, statement of profit and loss,
statement of changes in net assets and notes to the financial statements, and the supplementaryschedules (the “Financial Statements”) of Nippon Piston Ring Co., Ltd. (the “Company”) for the 127th
fiscal year from April 1, 2022 to March 31, 2023.
In our opinion, the Financial Statements referred to above present fairly, in all material respects, thefinancial position and the financial performance of the Company for the period covered by the
Financial Statements in accordance with the accounting principles generally accepted in Japan.
Basis for the Opinion
We conducted our audit in accordance with auditing standards generally accepted in Japan. Our
responsibilities under those standards are further described in the Auditor’s Responsibilities for the
Audit of the Financial Statements and the Supplementary Schedules section of our report. We are
independent of the Company in accordance with the relevant professional ethical requirements inJapan, and we have fulfilled our other ethical responsibilities in accordance with these requirements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis forour opinion.
Other Information
The other information comprises the Business Report and its accompanying supplementaryschedules. Management is responsible for the preparation and disclosure of the other information and
the Audit & Supervisory Committee is responsible for overseeing the Directors’ execution of duties
relating to the design and operation of the reporting process of the other information.
Our opinion on the Financial Statements does not cover the other information and we do not
express any form of opinion thereon.
Our responsibility in connection with our audit of the Financial Statements is to read the otherinformation and, in doing so, consider whether the other information is materially inconsistent with the
Financial Statements or our knowledge obtained in the course of audit or otherwise pay close attention
to appearances of material misstatements.
If, based on the work we have performed, we conclude that there is a material misstatement of thisother information, we are required to report that fact.
We have nothing to report in this regard.
Responsibilities of Management and the Audit & Supervisory Committee for the Financial Statements
Management is responsible for the preparation and fair presentation of the Financial Statements inaccordance with the auditing standards generally accepted in Japan, and for the design and operation ofsuch internal control as management determines is necessary to enable the preparation and fairpresentation of the Financial Statements that are free from material misstatements, whether due tofraud or error.
In preparing the Financial Statements, management is responsible for assessing the appropriatenessof use of the going concern basis of accounting, and disclosing, as applicable, matters related to going
concern in accordance with the auditing standards generally accepted in Japan.
The Audit & Supervisory Committee is responsible for overseeing the performance of duties of the- 44 -

Directors in the design and operation of the Company’s financial reporting process.
Auditor’s Responsibilities for the Audit of the Financial Statements
Our responsibilities are to obtain reasonable assurance about whether the Financial Statements as awhole are free from material misstatements, whether due to fraud or error, and to issue an opinion in areport from an independent standpoint. Misstatements can arise from fraud or error and are consideredmaterial if, individually or in the aggregate, they could reasonably be expected to influence theeconomic decisions of users taken on the basis of these Financial Statements.
As part of an audit in accordance with auditing standards generally accepted in Japan, we exercise
professional judgment and maintain professional skepticism throughout the audit. We also:• Identify and assess the risks of material misstatement of the Financial Statements, whether due
to fraud or error, design and perform audit procedures responsive to those risks, and obtain
audit evidence that is sufficient and appropriate to provide a basis for our opinion.
• Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances when assessing the risks, while thepurpose of the Financial Statements audit is not to express an opinion on the effectiveness of
the Company’s internal control.
• Evaluate the appropriateness of accounting policies and their applications which management
adopted, and the reasonableness of the accounting estimates and the appropriateness of therelated disclosures made by management.
• Conclude on the appropriateness of management’s use of the going concern basis ofaccounting in preparing the Financial Statements and, based on the audit evidence obtained,
whether a material uncertainty exists related to events or conditions that may cast significant
doubt on the Company’s ability to continue as a going concern. If we conclude that a material
uncertainty exists with respect to the going concern basis, we are required to draw attention in
our auditor’s report to the related disclosures in the Financial Statements or, if suchdisclosures are inadequate, to modify our opinion. Our conclusions are based on the audit
evidence obtained up to the date of our auditor’s report. However, future events or conditions
may cause the Company to cease to continue as a going concern.
• Assess whether the presentation of the Financial Statements and the related disclosures therein
are prepared in accordance with the auditing standards generally accepted in Japan, as well as
whether the presentations, compositions, and contents of the Financial Statements and related
disclosures therein properly present the transactions and accounting events on which the
Financial Statements are based.
We communicate with the Audit & Supervisory Committee regarding, among other mattersrequired by the auditing standards, the planned scope and timing of the audit and significant audit
findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide the Audit & Supervisory Committee with a statement that we have complied with
relevant professional ethical requirements in Japan regarding independence and communicate withthem all relationships and other matters that may reasonably be thought to bear on our independence
and, if applicable, related safeguards in order to remove or reduce the risk of matters which may
deteriorate our independence.
Interests required to be disclosed by the Certified Public Accountants Act of Japan
Our firm and its designated engagement partners do not have any interest in the Company that isrequired to be disclosed pursuant to the provisions of the Certified Public Accountants Act of Japan.
* Notes to the Readers of Independent Auditor’s Report
This is an English translation of the Independent Auditor’s Report as required by the Companies Act
of Japan for the conveniences of the readers.

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Audit & Supervisory Committee’s Report
Audit Report
The Audit & Supervisory Committee has audited the execution of duties by the Directors of Nippon
Piston Ring Co., Ltd. (the “Company”) during the 127th fiscal year from April 1, 2022 to March 31,
2023, and reports on its methods and results as follows.
1. Methods and Contents of Audit
The Audit & Supervisory Committee received regular reports from Directors, employees, etc.
regarding the details of the resolutions of the Board of Directors concerning matters listed in Article399-13, Paragraph 1, Item 1(b) and (c) of the Companies Act of Japan and the status of the design andoperation of the internal control system established based on such resolutions, requested explanations
as necessary, expressed opinions, and conducted audits in the following manner.
Based on the Audit & Supervisory Committee Rules adopted by the Audit & Supervisory①
Committee, in accordance with audit policies and assignment of duties and in cooperation with
the internal audit department of the Company, the Audit & Supervisory Committee attended themeetings of the Board of Directors and other important meetings in person or online, andrequested explanations as necessary, and thoroughly understood the progress and results ofdeliberations on matters to be discussed and reported. The Audit & Supervisory Committee also
reviewed important approval documents and surveyed operations and assets at the Company’shead office and major business sites. Furthermore, the Audit & Supervisory Committee attended
the meeting of the Board of Directors and other important meetings of the subsidiaries in personor online, exchanged opinions and information with the Directors and Audit & Supervisory
Committee Members thereof, and received reports on business from them, as necessary.
With regard to the basic policy set forth in Article 118, Item 3(a) of the Regulations for②
Enforcement of the Companies Act of Japan and the respective initiatives set forth in (b) of thesame item, as well as the matters noted in Article 118, Item 5 (a) and the judgement and reason
set forth in (b) of the same item, which are all described in the Business Report, the details were
examined based on the status of deliberations at meetings of the Board of Directors and othermeetings.
The Audit & Supervisory Committee monitored and verified whether the Accounting③
Auditor maintained its independence and conducted appropriate audits and received reports
from the Accounting Auditor on the status of the execution of their duties and requested
explanations as necessary. The Audit & Supervisory Committee also received notice from the
Accounting Auditor and requested explanations as necessary confirming that the “systems for
ensuring that the performance of the duties of financial auditor are being carried out correctly”(as described in each item of Article 131 of the Regulations on Corporate Accounting of Japan)
in accordance with the Standard on Quality Control for Audits (Business Accounting Council,
October 28, 2005) has been properly designed.
Based on the aforementioned methods, the Audit & Supervisory Committee considered theBusiness Report and its supplementary schedules, financial statements (balance sheet, statement of
profit and loss, statement of changes in net assets and notes to non-consolidated financial statements)
and their supplementary schedules as well as the consolidated financial statements (consolidatedbalance sheet, consolidated statement of profit and loss, consolidated statement of changes in net
assets, and notes to consolidated financial statements).
2. Results of Audit(1) Audit Results Concerning the Business Report① The Business Report and its supplementary schedules accurately represent the Company’ssituation as required by laws and regulations and the Articles of Incorporation.
② No irregularity or significant violation of applicable laws or regulations or the Articles ofIncorporation was found with respect to the execution of duties by the Directors.
③ Resolutions of the Board of Directors concerning the internal control system are appropriate.
The Audit & Supervisory Committee has nothing to point out concerning the descriptions in
the Business Report or the execution of duties by the Directors with respect to the internal
control system.
④ No matters to be pointed out with regard to the basic policy on the persons who control
decisions on the Company's financial and business policies were found in the Business Report.
The Audit & Supervisory Committee acknowledges that Article 118, Item 3(b) of theRegulations for Enforcement of the Companies Act of Japan described in the Business Report- 46 -

is in line with the said basic policy and are not detrimental to the common interests of theCompany's shareholders, nor are they intended to maintain the status of the Company's
corporate officers.
(2) Audit Results Concerning Non-consolidated Financial Statements and its Supplementary
Schedules
The auditing method of Ernst & Young ShinNihon LLC, the Accounting Auditor, and theresults of the audit, are appropriate.
(3) Audit Results of Consolidated Financial Statements
The auditing method of Ernst & Young ShinNihon LLC, the Accounting Auditor, and theresults of the audit, are appropriate.
May 22, 2023
Audit & Supervisory Committee of Nippon Piston Ring Co.,Ltd.
Full-time Audit &Supervisory Committee
Hiroto Koeba(seal)
MemberOutside Audit &Supervisory Committee
Hiroki Kimura (seal)
MemberOutside Audit &Yoshihide
Supervisory Committee(seal)
Hino
MemberNote: Hiroki Kimura and Yoshihide Hino, who are Audit & Supervisory Committee Members, areOutside Directors as stipulated in Article 2, Item 15 and Article 331, Paragraph 6 of theCompanies Act of Japan.

- 47 -

(NOTICE OF CONVOCATION OF THE 129th ANNUAL GENERAL MEETING OF
SHAREHOLDERS)

Reference Documents for the General Meeting of Shareholders
Supplement to Proposal 1

NIPPON PISTON RING CO., LTD.

Proposal 1:

Approval of Share Transfer Plan

The Company and Riken Corporation (hereinafter referred to as “Riken”; the Company and Riken referred
to collectively as “both companies”) agreed to enact a joint share transfer (hereinafter the “Joint Share
Transfer”) to establish NPR-RIKEN 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”) and upon resolutions of their respective Board of Directors at the meeting held on May 23,
2023, jointly prepared a share transfer plan as of the same date.
Therefore, we request your approval of the share transfer plan (hereinafter the “Joint Share Transfer Plan”)
to effect the Joint Share Transfer.
The reason for carrying out the Joint Share Transfer, an overview of the contents of the Joint Share Transfer
Plan, and other matters related to this proposal are shown below.
1. Reason for the Joint Share Transfer(1) Background of the Joint Share Transfer
The Company was established in 1934, and has been supplying high-performance, high-quality
internal combustion engine parts including piston rings, valve seats, and camshafts based on our own
technology, and in this way, we have contributed to the progress of motorization globally.
Riken was founded in 1927 with the aim of bringing research results from the Institute of Physical andChemical Research to the market, and since then, it has continued refining its surface treatment
technologies, processing technologies, and material technologies for its main products including pistonrings. In this way, Riken has contributed to the development of the global automobile industry for over
90 years.
The automobile industry is undergoing a once-in-a-century transformation, and market awareness ofengine parts has become more severe. At the same time, while people are focusing more on
environmental issues, internal combustion engines will continue to be the main powertrains for theforeseeable future, so it is the mission of both companies to develop engine parts that areenvironmentally friendly. Both companies believe that it is necessary to increase investment in new
business areas in addition to internal combustion engine peripheral parts based on global trends such as
SDGs, ESG, and decarbonization.
As a first step toward future development, the Company and Riken will utilize their brands that havebeen established over many decades through management integration. Both companies recognize that byproperly allocating management resources and developing new core business under integrated
governance, it will be possible to accelerate efforts to achieve decarbonization as both companies
generate powerful synergies, and evolve into a completely new business entity, which will result insustainable growth and improve the corporate value for both companies. By sharing this recognition, thetwo companies jointly prepared the Joint Share Transfer Plan under the conviction that such decision is
the optimal choice for the shareholders, employees, and all stakeholders of both companies.
(2) Purpose of the Joint Share Transfer and expected synergistic effect
Under this Joint Share Transfer, both companies will endeavor to integrate and utilize the management
resources of both companies by creating synergies in order to strengthen the profitability of existing
businesses, especially automobile engine parts, and will work with a sense of urgency on new corebusinesses and creation of new products in the area of non-automotive engine parts including marine
engine, hydrogen, new energy business, thermal engineering, EMC (electromagnetic compatibility)business, metamolds (metal powder injection molding), medical equipment, and axial gap type motors(thin, disk-shape high-torque motors). The aim of both companies is to achieve global development of
unique functional parts and key components that can be applied to the proprietary technologies of bothcompanies with the goal of further improving corporate value by evolving into a completely new type ofleading company.
(i) Strengthening existing businesses by shifting management resources and quickly developing newcore productsCompanies in the automobile industry have been forced to improve their technical capabilities andreform their organizations in recent years in response to newly developed fields such as CASE and MaaS
Both companies must collaborate with external institutions and research facilities to develop-2-technological capabilities that will result in differentiation, and ensure resources for creating innovation.
The purpose of the Joint Share Transfer is to achieve the following:[Strengthen ability to generate cash flow in existing businesses]
Both companies will work to improve business efficiency and strengthen development capabilities
by adjusting the capital investment level, optimizing production over a wide area, and by centralizing
and effectively utilizing development themes. Based on such efforts, earning power will be improved
and our ability to generate cash flow will strengthen while also meeting the expectations of customers
for high-quality, low-cost products.
[New core businesses and creation of new products]
Improving the efficiency of existing businesses will make it possible to integrate resources that had
been allocated to the development of internal combustion engines for making a bold shift to new corebusinesses and new product fields. We will accelerate investment in effective new productdevelopment, promote sharing between technologies and bases, and quickly develop new products thathave high added value and cost competitiveness.
(ii) Strengthening ability to respond in an increasingly decarbonized society
The world is moving toward a decarbonized society. Therefore, both companies must respond to
global environmental issues. By combining and developing the technologies and resources related to
products and production cultivated by both companies, it will be possible to develop technologies in theenvironmental field and accelerate product decarbonization. We will actively work to reduce carbon
dioxide emissions throughout the supply chain and actively contribute toward realizing a sustainable
society.
(iii) Reducing cost through shared resource usage including infrastructure
By improving productivity throughout the supply chain, from purchasing and production to sales, andby standardizing the in-house production processes of both companies, we will reduce outflow costs,
reduce procurement costs through joint purchasing, and improve efficiency by eliminating duplicate
systems and indirect operations, resulting in better operational efficiency and cost reduction whileensuing competitive advantage.
(iv) Reducing manufacturing costs through better production efficiency based on complementary
products, and timely and appropriate responses to supply responsibilities
By taking advantage of the technologies and infrastructure owned by both companies, it will bepossible to promote shared use of factories and optimize production bases beyond the conventionalframework with the goal of realizing significant productivity improvements, expanding the system for
supplying high-quality products, and reducing fixed costs. We also intend to fulfill supply responsibilities
to customers in a timely and appropriate manner by establishing a sustainable production system.
(v) Enhancing human skills by exchanging people and technologies
Actively exchanging the knowledge and technologies possessed by executives and employees in bothcompanies will produce opportunities in various areas and positions for creating new ideas that leverage
the strengths of both companies. We will therefore endeavor to establish an environment in each
workplace that allows for greater employee engagement.
2. Overview of the Joint Share Transfer Plan
The following “Share Transfer Plan (Copy)” provides details on the Joint Share Transfer Plan.
Share Transfer Plan (Copy)
Riken Corporation (hereinafter referred to as the “First Party”) and Nippon Piston Ring Co., Ltd. (hereinafterreferred to as the “Second Party”) have agreed to carry out a share transfer through a joint share transfer, andhave jointly prepare this Share Transfer Plan (hereinafter referred to as the “Plan”) according to the following.
Article 1(Share transfer)According to the provisions of this Plan, the First and Second Parties shall establish a wholly owning parent
company (hereinafter referred to as the “New Company”) via by means of a joint share transfer that causes the
New Company to acquire all of the issued shares of the First Party and Second Party on the date ofestablishment (as defined in Article 7; the same shall apply hereinafter) by means of a share transfer-3-

(hereinafter referred to as the “share transfer”), and the First and Second Parties shall become wholly owned
subsidiaries of the New Company.
Article 2(Purpose of the New Company, trade name, location of head office, total number of authorizedshares, and other matters stipulated in the Articles of Incorporation)
1.
The purpose, trade name, location of the head office and total number of authorized shares of the
New Company shall be according to the following items.
(1)
PurposeThe purpose of the New Company shall be as described in Article 2 of the Articles of Incorporation in
Attachment 1.
(2)
Trade name
The trade name of the New Company shall be リケン NPR 株式会社, and the name in English shall be
NPR-RIKEN CORPORATION.
(3)
Location of head office
The head office of the New Company shall be located in Chiyoda-ku, Tokyo, and the address of thehead office shall be 8-1, Sanbancho, Chiyoda-ku, Tokyo.
(4)
Total number of authorized shares
The total number of authorized shares of the New Company shall be 59,935,000 shares.
2.
In addition to the matters listed in the preceding paragraphs, matters stipulated in the Articles ofIncorporation of the New Company shall be as stated in Attachment 1 of the Articles of Incorporation.
Article 3(Names of Directors and names of Accounting Auditors at the time the New Company isestablished)1.
The names of the Directors at the time the New Company is established (excluding Directors at thetime of incorporation who are Audit and Supervisory Committee members at the time of incorporation)
shall be according to the following.
Director (Plan to appoint Representative Director, Chairman and CEO)Yasunori Maekawa
Director (Plan to appoint Representative Director, President and COO)
Teruo Takahashi
Director
Kaoru ItohDirector
Yuji Sakamoto
Director
Hidehiro Sakaba
Director
Masaaki Fujita
Outside Director (Part-time)
Eiji Hirano
Outside Director (Part-time)
Masako Kurosawa
2.
The names of the Directors at the time of establishment who serve as Audit and Supervisory
Committee members at the time the New Company is established shall be according to the following.
Director (Audit and Supervisory Committee Member)
Kouei Watanabe
Director (Audit and Supervisory Committee Member)
Hiroto Koeba
Outside Director (Audit and Supervisory Committee Member) (Part-time)
Osamu Honda
Outside Director (Audit and Supervisory Committee Member) (Part-time)
Hiroki Kimura
Outside Director (Audit and Supervisory Committee Member) (Part-time)
Tatsuya Sakuma
3.
The names of the Accounting Auditor at the time the New Company is established shall beaccording to the following.
Deloitte Touche Tohmatsu LLC
Article 4(Matters related to the number of shares of the New Company to be issued upon the sharetransfer, and their allotment)
1.
For shareholders of the First and Second Parties just prior to the time that all of the issued shares of
the First and Second Parties are acquired (hereinafter referred to as the “base time”), at the time of theshare transfer, the New Company shall issue common stock of the New Company (hereinafter referred toas “issued shares”) equal to the total number obtained by multiplying the total number of common sharesissued by the First Party at the time of the base time by 2, and the total number of common shares issued
by the Second Party at the time of the base time multiplied by 1.02 in place of the common shares of theFirst and Second Parties held respectively by them.
2.
The New Company shall allocate the shares to be issued according to the provisions of thepreceding paragraph to the shareholders of the First and Second Parties at the time of the base time
according to following ratio (hereinafter referred to as the “share transfer ratio”).
(1)
For shareholders of the First Party, two shares of common stock of the New Company for eachshare of common stock of the First Party held

-4-

(2)
3.

For shareholders of the Second Party, 1.02 shares of common stock of the New Company for eachshare of common stock of the Second Party held
For the calculations in the preceding two paragraphs, fractions of less than one share shall behandled in accordance with Article 234 of the Companies Act and other related laws and regulations.

Article 5(Matters related to the amount of capital and reserves of the New Company)
The amount of capital and reserves on the date the New Company is established shall be according to thefollowing.
(1)
Amount of capital: 5,000,000,000 yen(2)
Amount of legal capital surplus: 1,250,000,000 yen(3)
Amount of legal reserved surplus: 0 yen(4)
Amount of capital surplus: This shall be the amount obtained by subtracting the total amount of (1)and (2) above from the change in shareholders equity as stipulated in Article 52, Paragraph 1 of theRegulations on Corporate Accounting.
Article 6(Stock acquisition rights to be issued upon share transfer and their allocation)
1.
Issuance of Stock Acquisition Rights(1)
At the time of the share transfer, the New Company shall issue the stock acquisition rights listed inColumn 2 for the New Company that are equal to the total number of the relevant stock acquisitionrights as of the time of the base time to persons with stock acquisition rights for each stock acquisitionright issued by the First Party listed in ① to ④ of Column 1 in the following table as of the time of
the base time in place of the stock acquisition rights of the First Party owned by each party.
Column 1
Column 2
Name
Contents
Name
Contents
Riken Corporation
NPR-RIKEN CORPORATION
Issuance of Stock Acquisition
1st Stock Acquisition Rights ofAttachment 2
Attachment 2
Rights in June 2014
2023
①
1-①
2-①
(Stock Compensation-type Stock(Stock Compensation-type Stock
Options)
Options)
Riken Corporation
NPR-RIKEN CORPORATION
Issuance of Stock Acquisition
2nd Stock Acquisition Rights ofAttachment 2
Attachment 2
Rights in June 2015
2023
②
1-②
2-②
(Stock Compensation-type Stock(Stock Compensation-type Stock
Options)
Options)
Riken Corporation
NPR-RIKEN CORPORATION
Issuance of Stock Acquisition
3rd Stock Acquisition Rights ofAttachment 2
Attachment 2
Rights
in
June
2016
2023
③
1-③
2-③
(Stock Compensation-type Stock(Stock Compensation-type Stock
Options)
Options)
Riken Corporation
NPR-RIKEN CORPORATION
Issuance of Stock Acquisition
4th Stock Acquisition Rights ofAttachment 2
Attachment 2
Rights in June 2017
2023
④
1-④
2-④
(Stock Compensation-type Stock(Stock Compensation-type Stock
Options)
Options)(2)

At the time of the share transfer, the New Company shall issue the stock acquisition rights listed inColumn 2 for the New Company that are equal to the total number of the relevant stock acquisitionrights as of the time of the base time to persons with stock acquisition rights for each stock acquisitionright issued by the Second Party listed in ① to ⑧ of Column 1 in the following table as of the time of
the base time in place of the stock acquisition right of the Second Party owned by each party.
Column 1
Column 2
Name
Contents
Name
Contents
Nippon Piston Ring Co., Ltd.
NPR-RIKEN CORPORATION
Issuance of Stock Acquisition
5th Stock Acquisition Rights ofAttachment 3
Attachment 3
Rights in June 2008
2023
1-①
2-①
(Stock Compensation-type Stock(Stock Compensation-type Stock
Options)
Options)
Nippon Piston Ring Co., Ltd. Attachment 3 NPR-RIKEN CORPORATION Attachment 3
Issuance of Stock Acquisition
1-②
6th Stock Acquisition Rights of
2-②

-5-

Column 1
Column 2
Name
Contents
Name
Contents
Rights in June 2013
2023
(Stock Compensation-type Stock(Stock Compensation-type Stock
Options)
Options)
Nippon Piston Ring Co., Ltd.
NPR-RIKEN CORPORATION
Issuance of Stock Acquisition
7th Stock Acquisition Rights ofAttachment 3
Attachment 3
Rights in June 2014
2023
1-③
2-③
(Stock Compensation-type Stock(Stock Compensation-type Stock
Options)
Options)
Nippon Piston Ring Co., Ltd.
NPR-RIKEN CORPORATION
Issuance of Stock Acquisition
8th Stock Acquisition Rights ofAttachment 3
Attachment 3
Rights in June 2015
2023
1-④
2-④
(Stock Compensation-type Stock(Stock Compensation-type Stock
Options)
Options)
Nippon Piston Ring Co., Ltd.
NPR-RIKEN CORPORATION
Issuance of Stock Acquisition
9th Stock Acquisition Rights ofAttachment 3
Attachment 3
Rights in June 2016
2023
1-⑤
2-⑤
(Stock Compensation-type Stock(Stock Compensation-type Stock
Options)
Options)
Nippon Piston Ring Co., Ltd.
NPR-RIKEN CORPORATION
Issuance of Stock Acquisition
10th Stock Acquisition Rights ofAttachment 3
Attachment 3
Rights in June 2017
2023
1-⑥
2-⑥
(Stock Compensation-type Stock(Stock Compensation-type Stock
Options)
Options)
Nippon Piston Ring Co., Ltd.
NPR-RIKEN CORPORATION
Issuance of Stock Acquisition
11th Stock Acquisition Rights ofAttachment 3
Attachment 3
Rights in June 2018
2023
1-⑦
2-⑦
(Stock Compensation-type Stock(Stock Compensation-type Stock
Options)
Options)
Nippon Piston Ring Co., Ltd.
NPR-RIKEN CORPORATION
Issuance of Stock Acquisition
12th Stock Acquisition Rights ofAttachment 3
Attachment 3
Rights in June 2019
2023
1-⑧
2-⑧
(Stock Compensation-type Stock(Stock Compensation-type Stock
Options)
Options)2.

Allotment of Stock Acquisition Rights
When Stock Transfer is performed, for one stock acquisition right listed in ① to ④ of Column 1 of
the table in (1) of the preceding paragraph owned by persons with stock acquisition rights of the First
Party at the time of the base time, the New Company shall allocate one stock acquisition right of the
New Company listed in Column 2, respectively.
(2)
When Stock Transfer is performed, for one stock acquisition right listed in ① to ⑧ of Column 1 of
the table in (2) of the preceding paragraph owned by persons with stock acquisition rights of theSecond Party at the time of the base time, the New Company shall allocate one stock acquisition rightof the New Company listed in Column 2, respectively.

(1)

Article 7(Date of establishment of the New Company)
The date on which the establishment of the New Company is registered (hereinafter referred to as the“establishment date”) shall be October 2, 2023. However, this may be changed upon mutual agreement
between the First and Second Parties due to necessary proceedings related to the share transfer and otherreasons.
Article 8(Shareholders meetings for approval of the Share Transfer Plan)
1.
The First Party shall convene a general meeting of shareholders on June 23, 2023 for gaining
approval of the Plan and passing resolutions for matters necessary for the share transfer.
2.
The Second Party shall convene a general meeting of shareholders on June 23, 2023 for gaining
approval of the Plan and passing resolutions for matters necessary for the share transfer.
3.
If necessary for share transfer procedures or other reasons, the date of each General Meeting of
Shareholders for gaining approval of the Plan stipulated in the preceding two paragraphs and for-6-resolutions on the matters necessary for the share transfer may be changed based on mutual agreement
after consultation.
Article 9(Stock listing and administrator of shareholder registry for the New Company)
1.
On the establishment date, the New Company plans to list the common stock to be issued on theprime market of the Tokyo Stock Exchange, and necessary procedures for the listing shall be performed
with mutual cooperation based on consultation between the First and Second Parties.
2.
The First and Second Parties shall cooperate with each other to carry out necessary procedures formaintaining the listing of common stock issued by the New Company on the Prime Market of the Tokyo
Stock Exchange.
3.
Sumitomo Mitsui Trust Bank, Limited shall be the shareholder register administrator at the time ofthe establishment of the New Company.
Article 10 (Dividends of surplus)
1.
Dividends of surplus up to 60 yen per share may be paid by the First Party to shareholders or
registered pledgees of shares listed or recorded in the final shareholder registry as of March 31, 2023. In
addition, if the date of establishment of the New Company is on or after October 1, 2023, the First Party
may pay interim dividends up to 60 yen per share to the shareholders or registered pledgees of shares
listed or recorded in the final shareholder register as of September 30, 2023.
2.
Dividends of surplus up to 50 yen per share may be paid by the Second Party to shareholders or
registered pledgees of shares listed or recorded in the final shareholder registry as of March 31, 2023. In
addition, if the date of establishment of the New Company is on or after October 1, 2023, the Second
Party may pay interim dividends up to 35 yen per share to the shareholders or registered pledgees ofshares listed or recorded in the final shareholder register as of September 30, 2023.
3.
Except for cases specified in the preceding two paragraphs, after the creation of this Plan, the Firstand Second Parties shall not adopt any resolution for dividends of surplus with a record date prior to theestablishment date of the New Company. However, this shall not apply in cases where an agreement has
been made after consultation between the First and Second Parties.
Article 11 (Cancellation of treasury stock)
Based on a resolution of their respective boards of directors held by the day before the establishment date of
the New Company, the First and Second Parties shall cancel all of the treasury stock held by each party at thebase time (including treasury stock acquired in response to a request from dissenting shareholders forpurchase of shares as specified in Article 806, Paragraph 1 of the Companies Act issued at the stock transfer).
Article 12 (Management of company assets, etc.)
1.
After the creation of this Plan, the First and Second Parties shall execute their business and manageand operate their assets with the care of a good manager until the establishment date of the New
Company, and shall have their subsidiaries execute their duties and manage and operate property with thecare of a good manager. Unless otherwise specified in this Plan, the First and Second Parties shall consultin advance and obtain the consent of the other party before taking any action that could have a significant
impact on their property or rights and obligations, or have the other party execute it.
2.
During the period from the creation of the Plan until the establishment date of the New Company, if
the First or Second Parties finds any reason or event that may have a significant negative effect on theexecution of the share transfer or the rationality of the share transfer ratio, the First and Second Parties
shall promptly notify the other party to that effect in writing, and the First and Second Parties shalldiscuss the matter in good faith.
Article 13 (Effectiveness of this plan)This Plan shall become invalid if the First Party or Second Party is not able to obtain approval of the Plan andresolutions on matters necessary for the share transfer at the general meeting of shareholders as stipulated in
Article 8, or if permission or approval required for the implementation of the share transfer is not obtained
from the relevant government agencies by the establishment date of the New Company, or if the share transfer
is canceled pursuant to the following article.
Article 14 (Change in the share transfer terms or cancellation of the share transfer)
The First Party and Second Party may change the contents of this Plan or the terms and conditions of the sharetransfer, etc. or cancel this Plan if a significant change occurs in the financial or management status of either
the First Party or Second Party during the period from the creation of this Plan until the establishment date of-7-the New Company, or if a serious obstacle to the implementation of the share transfer arises or becomesapparent, or if it becomes extremely difficult to achieve the objectives of the Plan.
Article 15 (Consultation in good faith)
Matters not stipulated in this Plan and other matters necessary for the share transfer shall be determined basedon mutual consent after consultation in good faith between the First and Second Parties in accordance with the
purpose of the Plan.
In witness whereof, the parties hereto certify that this Plan has been prepared in duplicate as described above
with each party retaining one copy after affixing their name and seal.
May 23, 2023
(First Party)
8-1, Sanbancho, Chiyoda-ku, Tokyo
Riken Corporation
Representative Director and President Yasunori Maekawa(Second Party)
5-12-10, Honmachi-Higashi, Chuo-ku, Saitama City, Saitama
Nippon Piston Ring Co., Ltd.
Representative Director and President Teruo Takahashi-8-Attachment 1

NPR-RIKEN CORPORATION Articles of Incorporation

Chapter 1 General Rules(Trade name)
Article 1 The name of the Company shall be Riken NPR kabushiki-gaisha, and the name in English shall be
NPR-RIKEN CORPORATION.
(Purpose)
Article 2 The purpose of the Company shall be to manage the business activities of the following companies
by operating the following businesses and owning shares or equity in the companies that operate thesebusinesses.
(1) Development, manufacture and sale of precision machine parts(2) Development, manufacture and sale of parts for transportation, construction machinery, agricultural
machinery, ships and aircraft(3) Development, manufacture and sale of plumbing equipment(4) Development, manufacture and sale of heating wires and heating equipment(5) Development, manufacture and sale of electrical, communication and electronic equipment andparts(6) Development, manufacture and sale of medical and disaster emergency equipment, machinery,
instruments and related products such as parts and materials(7) Development and installation of industrial furnaces and incinerators(8) Development and installation of electromagnetic environment testing facilities, sale of such testing
equipment, and measurement services(9) Development, manufacture and sale of equipment and parts for renewable energy anddecarbonization, and power generation services(10) Construction, real estate, transportation, temporary staffing, sale of goods, fuel sales, insurance sales,
operation of sports facilities, financial services, etc.
(11) Any businesses incidental or related to the preceding items(Location of head office)
Article 3 The head office of the Company shall be located in Chiyoda-ku, Tokyo.
(Institution)
Article 4 As a company with an Audit and Supervisory Committee, the Company shall have the following
organizations in addition to the General Meeting of Shareholders and Directors.
(1) Board of Directors(2) Audit and Supervisory Committee(3) Accounting Auditor(Publishing method)
Article 5 The Company’s method for public notice shall be electronic public notice. However, if it is notpossible to make an electronic public notice due to some accident or other unavoidable reason, it shall be
published in the Nihon Keizai Shimbun.
Chapter 2 Shares(Total number of shares that can be issued)
Article 6 The total number of authorized shares of the Company shall be 59,935,000 shares.
(Acquisition of treasury shares)
Article 7 According to the provision of Article 165, Paragraph 2 of the Companies Act, the Company may
acquire its own shares through market transactions, etc. based on a resolution by the Board of Directors.
(Share unit number)
Article 8 The share unit number of the Company shall be 100 shares.
(Rights regarding fractional shares)-9-Article 9 Company shareholders may not exercise rights other than the rights listed below regarding shares
held by the Company that constitute less than one unit (hereinafter referred to as “fractional unit shares”).
(1) Rights listed in each item of Article 189, Paragraph 2 of the Companies Act.
(2) Right to make requests under Article 166, Paragraph 1 of the Companies Act.
(3) Right to receive an allotment of shares for subscription and allotment of stock acquisition rights forsubscription based on the number of shares held by shareholders(4) Right to make requests shown in the following article(Demand for sale of fractional unit shares)
Article 10According to the provisions in the Rules for Handling Shares, Company shareholders may request
the sale of the number of shares that, together with the fractional unit shares held by the Company, constitutethe share unit number.
(Rules for Handling Shares)
Article 11In addition to stipulations in laws and regulations or the Articles of Incorporation, the handling ofCompany shares and fees shall be according to the Rules for Handling Shares established by the Board of
Directors.
(Shareholder Registry Administrator)
Article 12The Company shall appoint a Shareholder Registry Administrator.
2 The Shareholder Registry Administrator and their place of business shall be determined by a resolution of
the Board of Directors and shall be announced publicly.
3 The Shareholder Registry Administrator shall be entrusted with the preparation and maintenance of theCompany shareholder registry and stock acquisition rights registry, as well as other clerical work related toshares and stock acquisition rights, and such shall not be handled by the Company.
Chapter 3 General Meeting of Shareholders(Convocation)
Article 13The Company’s Ordinary General Meeting of Shareholders shall be convened in June of each year,
and extraordinary general meetings of shareholders shall be convened whenever necessary.
(Record Date for Ordinary General Meeting of Shareholders)
Article 14The record date for voting rights at the Company’s Ordinary General Meeting of Shareholders shallbe March 31 of each year.
(Convenor and Chairman)
Article 15General Meetings of Shareholders shall be convened and chaired by the Representative Director
based on a resolution of the Board of Directors.
2 If there is more than one Representative Director, General Meetings of Shareholders shall be convened
and chaired according to the order predetermined by the Board of Directors.
3 If there is an accident involving the Representative Director, another Director shall convene the General
Meeting of Shareholders according to the order predetermined by the Board of Directors and act as thechairperson.
(Electronic provision measures, etc.)
Article 16When the Company convenes a general meeting of shareholders, it shall take measures forproviding information that constitutes the content of reference documents for the general meeting ofshareholders, etc. in electronic format.
2 Among items for which the measures for providing information in electronic format will be taken, theCompany may exclude all or some of those items designated by the Ministry of Justice Order from statementsin the paper-based documents to be delivered to shareholders who requested the delivery of paper-based
documents by the record date of voting rights.
(Method of Resolutions)
Article 17Unless otherwise provided for by laws and regulations or the Articles of Incorporation, resolutionsof a General Meeting of Shareholders shall be made by a majority of the votes of the shareholders who arepresent at the meeting and entitled to exercise their votes at such meetings.

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2 Resolutions of a General Meeting of Shareholders as prescribed in Article 309, Paragraph 2 of theCompanies Act shall be made by at least two-thirds of the votes of the shareholders present at the meeting
where the shareholders holding at least one-third of the voting rights of the shareholders entitled to exercise
their votes at such meetings are present.
(Exercise of voting rights by proxy)
Article 18A shareholder of the Company may exercise their voting rights by authorizing one (1) othershareholder of the Company with voting rights to act as a proxy.
However, a letter of proxy must be submitted to the Company for each General Meeting of Shareholders.
(Meeting minutes)
Article 19A summary of the progress of the agenda of the General Meeting of Shareholders and the results
thereof, along with other matters provided for by laws and regulations shall be specified or recorded in themeeting minutes.
Chapter 4 Directors and Board of Directors(Number of members)
Article 20The Company shall have no more than ten Directors (excluding Directors who are Audit andSupervisory Committee Members), and shall have no more than six Directors who are Audit and Supervisory
Committee Members.
(Method of appointment)
Article 21Directors shall be elected at the General Meeting of Shareholders and distinguished as Directors
who are Audit and Supervisory Committee Members and other Directors.
2 Elections of Directors shall be resolved by a majority of the votes of the shareholders present at themeeting where shareholders holding at least one-third of the voting rights of the shareholders entitled toexercise their votes at such meetings are present.
3 The election of Directors shall not be conducted by cumulative voting.
(Term of office)
Article 22The term of office of Directors (excluding Directors who are Audit and Supervisory Committee
Members) shall be until the conclusion of the Ordinary General Meeting of Shareholders for the last businessyear ending within one year after their election.
2 The term of office of Directors who are Audit and Supervisory Committee Members shall be until theconclusion of the Ordinary General Meeting of Shareholders for the last business year ending within two
years after their election.
3 The term of office of Directors who are Audit and Supervisory Committee Members elected as a substitutefor a Director who is an Audit and Supervisory Committee Member and resigned before the expiration of theirterm of office shall be until the expiration of the term of office of the retired Director who is an Audit andSupervisory Committee Member.
4 Unless shortened by such resolution, the effective period of the resolution for the appointment of a
Substitute Audit and Supervisory Committee Member shall be until the commencement of the Ordinary
General Meeting of Shareholders for the last business year ending within two years after such resolution.
(Representative Director and Executive Director)
Article 23The Board of Directors shall elect a Representative Director from among the Directors (excluding
Directors who are Audit and Supervisory Committee Members) by means of a resolution.
2 The Company may, by resolution of the Board of Directors, appoint one President, as well as one
Chairperson and a small number of Vice Presidents as needed from among the Directors (excluding Directors
who are Audit and Supervisory Committee Members).
(Convener and Chairperson of the Board of Directors, Authority of Directors)
Article 24Board of Director Meetings shall be convened and chaired by a Director selected by a resolution of
the Board of Directors, excluding particular instances stipulated in laws and regulations.
2 In cases where the Chairperson of the Board of Directors meeting stipulated in the preceding paragraph isprevented from acting due to absence or an accident, another Director designated according an order ofpriority determined in advance by the Board of Directors shall so act.

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(Notice of Convocation of Board of Directors)
Article 25Notices of convocation of meetings of the Board of Directors shall be issued to each Director atleast two days prior to the date of the meeting. However, this period may be shortened in cases of emergency.
2 If agreed upon by all Directors, a meeting of the Board of Directors may be held without going throughthe convocation procedures.
(Method of Resolutions by the Board of Directors)
Article 26A resolution of the Board of Directors shall be adopted by a majority vote at a session with anattendance of a majority of Directors eligible for voting.
(Omission of Board Resolution)
Article 27For passing a matter to be resolved, it shall be deemed that the resolution of the Board of Directors
has been passed for passing the matter to be resolved when all directors agree in writing or electronically on
matters to be resolved by the Board of Directors.
(Minutes of the Board of Directors)
Article 28The minutes of Board of Directors meetings shall be prepared in writing or in an electronic record
as stipulated by laws and regulations, and the Directors present shall write and seal their names or provide anelectronic signature.
(Delegation to Directors)
Article 29In accordance with Article 399-13, Paragraph 6 of the Companies Act, the Company may delegate
all or part of a decision regarding execution of important duties that should be resolved at a Board of Directors
meeting to a Director by resolution of the Board of Directors (excluding matters set forth in items of
Paragraph 5 of the same Article).
(Remuneration, etc.)
Article 30Remuneration, bonuses and other property benefits received by Directors from the Company inexchange for the execution of duties shall be determined by a resolution of the General Meeting of
Shareholders after distinguishing according to Directors who are Audit and Supervisory Committee Members
and other Directors.
(Contract for Limitation of Liability of Directors)
Article 31Pursuant to Article 427, Paragraph 1 of the Companies Act, the Company may enter into contracts
with Directors (excluding those are Executive Directors, etc.) that will limit their liabilities specified in Article
423, Paragraph 1 of the Companies Act to the minimum liability amount as specified in applicable laws andregulations.
(Board of Directors Regulations)
Article 32Matters concerning the Board of Directors shall be governed by laws and regulations, these Articles
of Incorporation, and the Board of Directors Regulations established by the Board of Directors.
Chapter 5 Audit and Supervisory Committee(Full-Time Audit and Supervisory Committee Members)
Article 33The Audit and Supervisory Committee may, by its resolution, elect full-time Audit and Supervisory
Committee Members.
(Notice of Convocation of Audit and Supervisory Committee)
Article 34Notices of Audit and Supervisory Committee meetings shall be issued to each Audit andSupervisory Committee Member at least two days prior to the date set for such meeting. However, this period
may be shortened in cases of emergency.
2 If agreed upon by all Audit and Supervisory Committee Members, a meeting of the Audit and Supervisory
Committee may be held without going through the convocation procedures.
(Audit and Supervisory Committee Regulations)
Article 35Matters related to the Audit and Supervisory Committee shall be governed by Regulations on the
Audit and Supervisory Committee stipulated by the Audit and Supervisory Committee, in addition to laws andregulations and these Articles of Incorporation.

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Chapter 6 Accounting Auditor(Method of appointment)
Article 36Accounting Auditors shall be appointed by means of a resolution at a General Meeting of
Shareholders.
(Term of office)
Article 37The term of office of Accounting Auditors shall be until the conclusion of the Ordinary General
Meeting of Shareholders for the last business year ending within one year after their election.
2 Unless otherwise resolved at the Ordinary General Meeting of Shareholders in the preceding paragraph,
the Accounting Auditor shall be deemed to have been reelected at such Ordinary General Meeting of
Shareholders.
(Remunerations, etc.)
Article 38Remuneration, etc. for Accounting Auditors shall be determined by the Representative Director
based on the consent of the Audit and Supervisory Committee.
Chapter 7 Calculation(Business Years)
Article 39The business year of the Company shall commence on April 1st of each year and end on March 31stof the following year.
(Record Date for Year-end Dividends of Surplus)
Article 40The record date of the year-end dividends of the Company shall be March 31st of each year.
2 The record date for interim dividends of the Company shall be September 30th of each year.
3 In addition to the preceding paragraphs, the Company may set other record dates and distribute dividendsof surplus.
(Institution for Determining Dividends of Surplus, etc.)
Article 41Unless otherwise provided for by laws and regulations, the Company may, by resolution of theBoard of Directors, determine dividends of surplus and other matters set forth in the items of Article 459,
Paragraph 1 of the Companies Act.
(Exemption period for dividends, etc.)
Article 42In cases where the dividend property is monetary and the dividends have not been received after thelapse of three full years from the date of commencement of payment thereof, the Company shall be exempt
from the obligation to pay such dividends. No interest shall accrue on the unpaid dividend property.
Supplementary Provisions(First year of business)
Article 1 Notwithstanding the provisions in Article 39, the first year of business of the Company shall befrom the Company establishment date until March 31, 2024.
(Initial remunerations for Directors, etc.)
Article 2 Notwithstanding the provisions in Article 30, within the remuneration, etc. for Directors (excluding
Directors who are Audit and Supervisory Committee Members) from the Company establishment date until
the conclusion of the first Ordinary General Meeting of Shareholders, the total amount paid in cash shall be no
more than 400,000,000 yen.
2 Notwithstanding the provisions in Article 30, the total amount of remuneration, etc. for Directors who are
Audit and Supervisory Committee Members from the Company establishment date until the conclusion of thefirst Ordinary General Meeting of Shareholders shall be no more than 60,000,000 yen.
3 Notwithstanding the provisions of Article 30, the total amount of monetary compensation to be paid ascompensation, etc. related to restricted stock allocated as stock compensation (hereinafter referred to as the“Restricted Stock”) as part of the remuneration, etc. for Directors (excluding Directors who are Audit andSupervisory Committee Members and Outside Directors; hereinafter referred to as “Eligible Directors”) fromthe Company establishment date until the conclusion of the first Ordinary General Meeting of Shareholders- 13 -

shall be shall be no more than 100,000,000 yen, with a maximum of 100,000 shares in allocated stock, as
described below.
(1) Eligible Directors who receive an allotment of Restricted Stock may not, in relation to such
Restricted Stock, transfer, establish a pledge of rights, establish a security interest, gift while alive,
bequest or undertake any other form of disposal to a third party during the period from the day
when the allotment was received until the day of retirement from office as both the Director andExecutive Officer of the Company and its subsidiaries (hereinafter referred to as “Restriction
Period”).
(2) The Company shall naturally acquire the Restricted Stock allotted to Eligible Directors without
contribution, if Eligible Directors who received an allotment of Restricted Shares have retired fromoffice as both the Director and Executive Officer of the Company and its subsidiaries by the day
preceding the day on which the Company’s first Ordinary General Meeting of Shareholders is held
following the commencement of the Restriction Period, except in cases where the Company’s
Board of Directors acknowledge the reason as being justified. In addition, the Company shallnaturally acquire any allotted Restricted Stock for which Transfer Restrictions have not been
removed in accordance with the provisions of the removal of transfer restrictions without
contribution when the Restriction Period has expired.
(3) The Company shall pay Eligible Directors the monetary compensation within the scope of theaforementioned per annum amount as compensation for Restricted Shares in accordance with theresolution of the Board of Directors, and each Eligible Director shall receive an allotment of
Restricted Shares with all such monetary compensation provided using the investment in kind
method.
(4) The payment amount for Restricted Shares shall be determined by the Board of Directors to theextent not particularly favorable to the Eligible Directors subscribing to such Restricted Shares on
the basis of the closing price of the Company’s common shares on the Tokyo Stock Exchange on
the business day preceding the date of the resolution of the Board of Directors (if no trades are
made on this day, the closing price on the most recent day of trading before that) pertaining to such
issue or disposal. In addition, the payment of the aforementioned monetary compensation is
subject to Eligible Directors agreeing to the aforementioned investment in kind and executing a
restricted stock allotment agreement.
(Deletion of supplementary provisions)
Article 3 These supplementary provisions shall be deleted at the conclusion of the Company’s first Ordinary
General Meeting of Shareholders.

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Attachment 2
1.
Stock Acquisition Rights issued by Riken Corporation① Details of stock acquisition rights (stock compensation-type stock options) issued by Riken Corporation inJune 2014
Number of shares to be issued upon exercise of stock acquisition rights(Note) 1(shares)Amount to be paid upon exercise of stock acquisition rights (transfer price)(Note) 2(yen)
From July 15, 2014
Exercise period for stock acquisition rights
to July 14, 2044
Share issue price and capitalization amount (yen) when shares are issued(Note) 3
upon exercise of stock acquisition rights
Conditions for exercising stock acquisition rights(Note) 4
Acquisition of the stockacquisition rights by transfer shallMatters concerning transfer of stock acquisition rights
require the approval of the Boardof Directors.
Acquisition terms of stock acquisition rights(Note) 5
Matters concerning the issuance of stock acquisition rights related to(Note) 6
organizational restructuring② Details of stock acquisition rights (stock compensation-type stock options) issued by Riken Corporation inJune 2015
Number of shares to be issued upon exercise of stock acquisition rights(Note) 1(shares)Amount to be paid upon exercise of stock acquisition rights (transfer price)(Note) 2(yen)
From July 15, 2015
Exercise period for stock acquisition rights
to July 14, 2045
Share issue price and capitalization amount (yen) when shares are issued(Note) 3
upon exercise of stock acquisition rights
Conditions for exercising stock acquisition rights(Note) 4
Acquisition of the stockacquisition rights by transfer shallMatters concerning transfer of stock acquisition rights
require the approval of the Boardof Directors.
Acquisition terms of stock acquisition rights(Note) 5
Matters concerning the issuance of stock acquisition rights related to(Note) 6
organizational restructuring③ Details of stock acquisition rights (stock compensation-type stock options) issued by Riken Corporation inJune 2016
Number of shares to be issued upon exercise of stock acquisition rights(Note) 1(shares)Amount to be paid upon exercise of stock acquisition rights (transfer price)(Note) 2(yen)
From July 14, 2016
Exercise period for stock acquisition rights
to July 13, 2046
Share issue price and capitalization amount (yen) when shares are issued(Note) 3
upon exercise of stock acquisition rights
Conditions for exercising stock acquisition rights(Note) 4
Acquisition of the stockacquisition rights by transfer shallMatters concerning transfer of stock acquisition rights
require the approval of the Boardof Directors.
Acquisition terms of stock acquisition rights(Note) 5- 15 -

Matters concerning the issuance of stock acquisition rights related toorganizational restructuring(Note) 6④ Details of stock acquisition rights (stock compensation-type stock options) issued by Riken Corporation inJune 2017
Number of shares to be issued upon exercise of stock acquisition rights(Note) 1(shares)Amount to be paid upon exercise of stock acquisition rights (transfer price)(Note) 2(yen)
From July 13, 2017
Exercise period for stock acquisition rights
to July 12, 2047
Share issue price and capitalization amount (yen) when shares are issued(Note) 3
upon exercise of stock acquisition rights
Conditions for exercising stock acquisition rights(Note) 4
Acquisition of the stockacquisition rights by transfer shallMatters concerning transfer of stock acquisition rights
require the approval of the Boardof Directors.
Acquisition terms of stock acquisition rights(Note) 5
Matters concerning the issuance of stock acquisition rights related to(Note) 6
organizational restructuring(Notes)1

Number of shares to be issued upon exercise of stock acquisition rights
The number of shares to be issued upon exercise of stock acquisition rights (hereinafter referred
to as the “number of allotted shares”) shall be 100 shares. However, if Riken Corporation conducts astock split of [Riken Corporation] common stock (including gratis allotment of Riken Corporationcommon stock; the same applies to the description of the stock split hereinafter) or a stock merger
which affects the number of allotted shares according to the following formula, any fractions of lessthan one share resulting from the adjustment shall be rounded down.
Number of allotted shares after adjustment = Number of allotted shares before adjustment × Ratio ofstock split or stock merger
The number of allotted shares after adjustment shall apply from the next day of the record dateof the stock split in the case of a stock split (if the record date is not set, from the effective date), andfrom the effective date of the stock merger in case of a stock merger. However, when a stock split isperformed with the condition that a proposal to reduce the amount of surplus and increase capital orreserves is approved at the General Meeting of Shareholders, if the record date for the split isdetermined to be a day prior to the date of the conclusion of the relevant General Meeting of
Shareholders, the number of allotted shares after the adjustment shall be applied retroactively to the
day after the record date after the day following the date of the conclusion of the General Meeting of
Shareholders.
Moreover, if Riken Corporation performs a merger or company split and it is necessary to adjust
the number of allotted shares in accordance with such cases, Riken Corporation may adjust the
number of allotted shares as appropriate within a reasonable degree.
When adjusting the number of allotted shares, Riken Corporation shall notify or give public
notice to the holders of each stock acquisition right recorded in the stock acquisition rights ledger(hereinafter referred to as “holders of stock acquisition rights”) by the day before the date when thenumber of allotted shares after adjustment is applied. However, if notice or public notice cannot bemade by the day before the applicable date, notice or public notice shall be made promptly thereafter.

2

Amount of assets to be contributed upon exercise of stock acquisition rights
The amount of assets to be contributed upon the exercise of each stock acquisition right shall be
determined by multiplying the per-share value by the number of allotted shares, where the value pershare to be received by the exercise of each stock acquisition right shall be ¥1.

- 16 -

3

Matters concerning the amount of capital and legal capital surplus to be increased if the Company
issues shares upon exercise of stock acquisition rights(i) The amount of capital to be increased in the event that the Company issues shares upon
exercise of stock acquisition rights shall be one-half of the amount of the maximum limit on
the increase in capital as calculated according to Article 17, Paragraph 1 of the Regulations on
Corporate Accounting. Any fraction of less than one yen resulting from the calculation
mentioned above shall be rounded up to the nearest yen.
(ii) The amount of legal capital surplus to be increased in the event that the Company issues shares
upon exercise of stock acquisition rights shall be obtained by deducting the amount of capital
to be increased as set forth in the above (i) from the amount of the maximum limit on theincrease in capital provided in the above (i).

4

Conditions for the exercise of stock acquisition rights(i) Holders of stock acquisition rights may exercise their stock acquisition rights from the day
following the day on which they cease to hold the office of Director and Executive Officer ofRiken Corporation.
(ii) The above (i) is not applicable to a successor who acquires the stock acquisition rights throughinheritance.
(iii) Holders of stock acquisition rights who have abandoned their stock acquisition rights cannot
exercise such stock acquisition rights.

5

Acquisition terms of the stock acquisition rights
Riken Corporation may acquire the stock acquisition rights without compensation on the dateseparately prescribed by the Riken Corporation’s Board of Directors, in the case that one of thefollowing agenda items (i), (ii), (iii), (iv) or (v) is approved at a General Meeting of Shareholders of
Riken Corporation (or, if approval of the General Meeting of Shareholders is not required, is resolved
at the Riken Corporation’s Board of Directors or determined by an executive officer delegated inaccordance with the provisions of Article 416, Paragraph 4 of the Companies Act).
(i) A merger agreement under which Riken Corporation shall be extinguished.
(ii) An absorption-type company split agreement or an incorporation-type company split plan,under which Riken Corporation shall be split.
(iii) A share exchange agreement or a share transfer plan, under which Riken Corporation shallbecome a wholly owned subsidiary.
(iv) An amendment to the articles of incorporation to establish new provisions by which any
proposed transfer of shares issued by Riken Corporation shall require the approval of Riken
Corporation.
(v) An amendment to the articles of incorporation to establish new provisions by which any
proposed transfer of any class shares to be issued upon exercise of the stock acquisition rights
shall require the approval of Riken Corporation or by which Riken Corporation may acquire allof the class shares to be issued upon exercise of the stock acquisition rights by a General
Meeting of Shareholders.

6

Treatment of stock acquisition rights upon Company reorganization
If Riken Corporation performs a merger (limited to the case where Riken Corporation is to be
extinguished as a result of the merger), absorption-type company split or incorporation-type company
split (limited to the case where Riken Corporation becomes a split company), a share exchange or ashare transfer (limited to the case where Riken Corporation becomes a wholly owned subsidiary
respectively) (hereinafter collectively referred to as “acts of structural reorganization”), stockacquisition rights of the companies listed in (a) to (e) of Article 236, Paragraph 1, Item 8, of theCompanies Act (hereinafter referred to as the “Reorganized Company”) shall be issued, in each of theabove cases, to right holders who hold the stock acquisition rights remaining (hereinafter referred toas “Remaining Stock Acquisition Rights”) just before the effective date of the relevant acts ofstructural reorganization (for an absorption-type merger, the date on which the absorption-typemerger takes effect; for a consolidation merger, the date of establishment of the joint stock company;
for an absorption-type company split, the date on which the absorption-type company split takes
effect; for an incorporation-type company split, the date of establishment of the stock company
incorporated in the incorporation-type company split; for a share exchange, the date on which theshare exchange takes effect; for a share transfer, the date of establishment of the wholly owning- 17 -

parent company incorporated in the share transfer; the same shall apply hereinafter) according to thefollowing conditions. However, the provision above shall apply only in cases where the allotment ofstock acquisition rights of the Reorganized Company under the following terms and conditions is
stipulated in the relevant absorption-type merger agreement, consolidation-type merger agreement,
absorption-type company split agreement, incorporation-type company split plan, share exchange
agreement, or share transfer plan.
(i) Number of stock acquisition rights to be issued by the Reorganized Company
The same number of stock acquisition rights as the number of outstanding stock acquisitionrights held by each holder shall be allotted.
(ii) Class of shares of the Reorganized Company to be issued or transferred upon exercise of stockacquisition rights
It shall be shares of common stock of the Reorganized Company.
(iii) Number of shares of the Reorganized Company to be issued or transferred upon exercise ofstock acquisition rights
It shall be determined in accordance with the above 1. based on the consideration of conditions
for the acts of structural reorganization, etc.
(iv) Amount of assets to be contributed upon exercise of stock acquisition rights
The value of the property to be invested upon exercise of each stock acquisition right to beissued shall be the amount obtained by multiplying the exercise price after reorganization
specified below by the number of shares of the Reorganized Company subject to the stockacquisition rights determined according to the above (iii). The exercise price after reorganization
shall be 1 yen per share of the Reorganized Company that can be allotted by exercising eachissued stock acquisition right.
(v) Period for exercise of stock acquisition rights
From the start date of the period when stock acquisition rights can be exercised or the effective
date of the reorganization, whichever is later, until the expiration date of the period for exercisingstock acquisition rights.
(vi) Matters concerning the amount of capital and legal capital surplus to be increased if theCompany issues shares upon exercise of stock acquisition rights
It shall be determined according the above 3.
(vii) Restrictions on transfer of stock acquisition rights
Any proposed transfer of stock acquisition rights shall be subject to the approval of theCompany’s Board of Directors of the Reorganized Company.
2.
Stock acquisition rights issued by NPR-RIKEN CORPORATION① Details of 1st stock acquisition rights (stock compensation-type stock options) issued by NPR-RIKENCORPORATION
Number of shares to be issued upon exercise of stock acquisition rights(Note) 1(shares)Amount to be paid upon exercise of stock acquisition rights (transfer price)(Note) 2(yen)
From October 2, 2023
Exercise period for stock acquisition rights
to July 14, 2044
Share issue price and capitalization amount (yen) when shares are issued(Note) 3
upon exercise of stock acquisition rights
Conditions for exercising stock acquisition rights(Note) 4
Acquisition of the stockacquisition rights by transfer shallMatters concerning transfer of stock acquisition rights
require the approval of the Boardof Directors.
Acquisition terms of stock acquisition rights(Note) 5
Matters concerning the issuance of stock acquisition rights related to(Note) 6
organizational restructuring② Details of 2nd stock acquisition rights (stock compensation-type stock options) issued by NPR-RIKENCORPORATION
Number of shares to be issued upon exercise of stock acquisition rights(Note) 1(shares)- 18 -

Amount to be paid upon exercise of stock acquisition rights (transfer price)(yen)
Exercise period for stock acquisition rights
Share issue price and capitalization amount (yen) when shares are issued
upon exercise of stock acquisition rights
Conditions for exercising stock acquisition rights
Matters concerning transfer of stock acquisition rights
Acquisition terms of stock acquisition rights
Matters concerning the issuance of stock acquisition rights related toorganizational restructuring(Note) 2
From October 2, 2023
to July 14, 2045
(Note) 3(Note) 4
Acquisition of the stockacquisition rights by transfer shallrequire the approval of the Boardof Directors.
(Note) 5(Note) 6③ Details of 3rd stock acquisition rights (stock compensation-type stock options) issued by NPR-RIKENCORPORATION
Number of shares to be issued upon exercise of stock acquisition rights(Note) 1(shares)Amount to be paid upon exercise of stock acquisition rights (transfer price)(Note) 2(yen)
From October 2, 2023
Exercise period for stock acquisition rights
to July 13, 2046
Share issue price and capitalization amount (yen) when shares are issued(Note) 3
upon exercise of stock acquisition rights
Conditions for exercising stock acquisition rights(Note) 4
Acquisition of the stockacquisition rights by transfer shallMatters concerning transfer of stock acquisition rights
require the approval of the Boardof Directors.
Acquisition terms of stock acquisition rights(Note) 5
Matters concerning the issuance of stock acquisition rights related to(Note) 6
organizational restructuring④ Details of 4th stock acquisition rights (stock compensation-type stock options) issued by NPR-RIKENCORPORATION
Number of shares to be issued upon exercise of stock acquisition rights(Note) 1(shares)Amount to be paid upon exercise of stock acquisition rights (transfer price)(Note) 2(yen)
From October 2, 2023
Exercise period for stock acquisition rights
to July 12, 2047
Share issue price and capitalization amount (yen) when shares are issued(Note) 3
upon exercise of stock acquisition rights
Conditions for exercising stock acquisition rights(Note) 4
Acquisition of the stockacquisition rights by transfer shallMatters concerning transfer of stock acquisition rights
require the approval of the Boardof Directors.
Acquisition terms of stock acquisition rights(Note) 5
Matters concerning the issuance of stock acquisition rights related to(Note) 6
organizational restructuring(Notes)1

Number of shares to be issued upon exercise of stock acquisition rights
The number of shares to be issued upon exercise of stock acquisition rights (hereinafter referred
to as the “number of allotted shares”) shall be 200 shares. However, if NPR-RIKENCORPORATION conducts a stock split of NPR-RIKEN CORPORATION common stock (including- 19 -

gratis allotment of NPR-RIKEN CORPORATION common stock; the same applies to the descriptionof the stock split hereinafter) or a stock merger which affects the number of allotted shares according
to the following formula, any fractions of less than one share resulting from the adjustment shall be
rounded down.
Number of allotted shares after adjustment = Number of allotted shares before adjustment × Ratio ofstock split or stock merger
The number of allotted shares after adjustment shall apply from the next day of the record dateof the stock split in the case of a stock split (if the record date is not set, from the effective date), andfrom the effective date of the stock merger in case of a stock merger. However, when a stock split isperformed with the condition that a proposal to reduce the amount of surplus and increase capital orreserves is approved at the General Meeting of Shareholders, if the record date for the split isdetermined to be a day prior to the date of the conclusion of the relevant General Meeting of
Shareholders, the number of allotted shares after the adjustment shall be applied retroactively to the
day after the record date after the day following the date of the conclusion of the General Meeting of
Shareholders.
Moreover, if NPR-RIKEN CORPORATION performs a merger or company split and it isnecessary to adjust the number of allotted shares in accordance with such cases, NPR-RIKENCORPORATION may adjust the number of allotted shares as appropriate within a reasonable degree.
When adjusting the number of allotted shares, NPR-RIKEN CORPORATION shall notify orgive public notice to the holders of each stock acquisition right recorded in the stock acquisitionrights ledger (hereinafter referred to as “holders of stock acquisition rights”) by the day before thedate when the number of allotted shares after adjustment is applied. However, if notice or public
notice cannot be made by the day before the applicable date, notice or public notice shall be madepromptly thereafter.
2

Amount of assets to be contributed upon exercise of stock acquisition rights
The amount of assets to be contributed upon the exercise of each stock acquisition right shall be
determined by multiplying the per-share value by the number of allotted shares, where the value pershare to be received by the exercise of each stock acquisition right shall be ¥1.

3Matters concerning the amount of capital and legal capital surplus to be increased if the Company
issues shares upon exercise of stock acquisition rights(i) The amount of capital to be increased in the event that the Company issues shares upon
exercise of stock acquisition rights shall be one-half of the amount of the maximum limit on
the increase in capital as calculated according to Article 17, Paragraph 1 of the Regulations on
Corporate Accounting. Any fraction of less than one yen resulting from the calculation
mentioned above shall be rounded up to the nearest yen.
(ii) The amount of legal capital surplus to be increased in the event that the Company issues shares
upon exercise of stock acquisition rights shall be obtained by deducting the amount of capital
to be increased as set forth in the above (i) from the amount of the maximum limit on theincrease in capital provided in the above (i).

4

Conditions for the exercise of stock acquisition rights(i) Holders of stock acquisition rights may exercise their stock acquisition rights from the day
following the day on which they cease to hold the office of Director and Executive Officer of
NPR-RIKEN CORPORATION.
(ii) The above (i) is not applicable to a successor who acquires the stock acquisition rights throughinheritance.
(iii) Holders of stock acquisition rights who have abandoned their stock acquisition rights cannot
exercise such stock acquisition rights.

5

Conditions for acquisition of the stock acquisition rights
NPR-RIKEN CORPORATION may acquire the stock acquisition rights without compensationon the date separately prescribed by the NPR-RIKEN CORPORATION’s Board of Directors, in thecase that one of the following agenda items (i), (ii), (iii), (iv) or (v) is approved at a General Meetingof Shareholders of NPR-RIKEN CORPORATION (or, if approval of the General Meeting of
Shareholders is not required, is resolved at the NPR-RIKEN CORPORATION’s Board of Directors- 20 -

or determined by an executive officer delegated in accordance with the provisions of Article 416,
Paragraph 4 of the Companies Act).
(i) A merger agreement under which NPR-RIKEN CORPORATION shall be extinguished(ii) An absorption-type company split agreement or an incorporation-type company split plan,under which NPR-RIKEN CORPORATION shall be split.
(iii) A share exchange agreement or a share transfer plan, under which NPR-RIKENCORPORATION shall become a wholly owned subsidiary.
(iv) An amendment to the articles of incorporation to establish new provisions by which any
proposed transfer of shares issued by NPR-RIKEN CORPORATION shall require the approvalof NPR-RIKEN CORPORATION(v) An amendment to the articles of incorporation to establish new provisions by which any
proposed transfer of any class shares to be issued upon exercise of the stock acquisition rights
shall require the approval of NPR-RIKEN CORPORATION or by which NPR-RIKENCORPORATION may acquire all of the class shares to be issued upon exercise of the stockacquisition rights by a General Meeting of Shareholders.
6

Treatment of stock acquisition rights upon Company reorganization
If NPR-RIKEN CORPORATION performs a merger (limited to the case where NPR-RIKENCORPORATION is to be extinguished as a result of the merger), absorption-type company split orincorporation-type company split (limited to the case where NPR-RIKEN CORPORATION becomesa split company), a share exchange or a share transfer (limited to the case where NPR-RIKENCORPORATION becomes a wholly owned subsidiary respectively) (hereinafter collectively referred
to as “acts of structural reorganization”), stock acquisition rights of the companies listed in (a) to (e)of Article 236, Paragraph 1, Item 8, of the Companies Act (hereinafter referred to as the“Reorganized Company”) shall be issued, in each of the above cases, to right holders who hold thestock acquisition rights remaining (hereinafter referred to as “Remaining Stock Acquisition Rights”)
just before the effective date of the relevant acts of structural reorganization (for an absorption-typemerger, the date on which the absorption-type merger takes effect; for a consolidation merger, thedate of establishment of the joint stock company; for an absorption-type company split, the date on
which the absorption-type company split takes effect; for an incorporation-type company split, thedate of establishment of the stock company incorporated in the incorporation-type company split; fora share exchange, the date on which the share exchange takes effect; for share transfer, the date ofestablishment of the wholly owning parent company incorporated in the share transfer; the same shallapply hereinafter) according to the following conditions. However, the provision above shall apply
only in cases where the allotment of stock acquisition rights of the Reorganized Company under thefollowing terms and conditions is stipulated in the relevant absorption-type merger agreement,
consolidation-type merger agreement, absorption-type company split agreement, incorporation-typecompany split plan, share exchange agreement, or share transfer plan.
(i) Number of stock acquisition rights to be issued by the Reorganized Company
The same number of stock acquisition rights as the number of outstanding stock acquisitionrights held by each holder shall be allotted.
(ii) Class of shares of the Reorganized Company to be issued or transferred upon exercise of stockacquisition rights
It shall be shares of common stock of the Reorganized Company.
(iii) Number of shares of the Reorganized Company to be issued or transferred upon exercise ofstock acquisition rights
It shall be determined in accordance with the above 1. based on the consideration of
conditions for the acts of structural reorganization, etc.
(iv) Amount of assets to be contributed upon exercise of stock acquisition rights
The value of the property to be invested upon exercise of each stock acquisition right to beissued shall be the amount obtained by multiplying the exercise price after reorganization
specified below by the number of shares of the Reorganized Company subject to the stockacquisition rights determined according to the above (iii). The exercise price after reorganization
shall be 1 yen per share of the Reorganized Company that can be allotted by exercising eachissued stock acquisition right.
(v) Period for exercise of stock acquisition rights
From the start date of the period when stock acquisition rights can be exercised or theeffective date of the reorganization, whichever is later, until the expiration date of the period forexercising stock acquisition rights.

- 21 -

(vi) Matters concerning the amount of capital and legal capital surplus to be increased if theCompany issues shares upon exercise of stock acquisition rights
It shall be determined according the above 3.
(vii) Restrictions on transfer of stock acquisition rights
Any proposed transfer of stock acquisition rights shall be subject to the approval of theCompany’s Board of Directors of the Reorganized Company.

- 22 -

Attachment 3
1.
Stock acquisition rights issued by Nippon Piston Ring Co., Ltd.
① Details of stock acquisition rights (incentive stock option) issued by Nippon Piston Ring Co., Ltd. in June
2008
Number of shares to be acquired upon exercise of thestock acquisition rights (shares)(Note) 1

Amount to be paid (transfer price) upon exercise of thestock acquisition rights (yen)(Note) 2

Exercise period of stock acquisition rights

August 1, 2008 - July 31, 2033

Issuance price of shares and amount to be incorporated
into capital if shares are issued upon exercise of thestock acquisition rights (yen)(Note) 3

Conditions for exercising stock acquisition rights(Note) 4

Matters regarding the transfer of stock acquisitionrightsAcquisition of the stock acquisition rights by transfer
shall require the approval of the Board of Directors.

Acquisition terms of stock acquisition rights(Note) 5

Matters concerning the delivery of stock acquisitionrights in organizational restructuring(Note) 6

Rules pertaining to fractions of less than one (1) sharearising from the exercise of stock acquisition rights

Fractions of less than one (1) share in the number ofshares to be delivered to holders of stock acquisitionrights who exercised stock acquisition rights shall be
rounded down.

② Details of the stock acquisition rights (incentive stock option) issued by Nippon Piston Ring Co., Ltd. inJune 2013
Number of shares to be acquired upon exercise of the(Note) 1
stock acquisition rights (shares)
Amount to be paid (transfer price) upon exercise of thestock acquisition rights (yen)Exercise period of stock acquisition rights(Note) 2

August 1, 2013 - July 31, 2038

Issuance price of shares and amount to be incorporated
into capital if shares are issued upon exercise of thestock acquisition rights (yen)- 23 -(Note) 3

Conditions for exercising stock acquisition rights(Note) 4

Matters regarding the transfer of stock acquisitionrightsAcquisition of the stock acquisition rights by transfer
shall require the approval of the Board of Directors.

Acquisition terms of stock acquisition rights(Note) 5

Matters concerning the delivery of stock acquisitionrights in organizational restructuring(Note) 6

Rules pertaining to fractions of less than one (1) sharearising from the exercise of stock acquisition rights

Fractions of less than one (1) share in the number ofshares to be delivered to holders of stock acquisitionrights who exercised stock acquisition rights shall be
rounded down.

③ Details of the stock acquisition rights (incentive stock option) issued by Nippon Piston Ring Co., Ltd. inJune 2014
Number of shares to be acquired upon exercise of the(Note) 1
stock acquisition rights (shares)
Amount to be paid (transfer price) upon exercise of thestock acquisition rights (yen)(Note) 2

Exercise period of stock acquisition rights

August 1, 2014 - July 31, 2039

Issuance price of shares and amount to be incorporated
into capital if shares are issued upon exercise of thestock acquisition rights (yen)(Note) 3

Conditions for exercising stock acquisition rights(Note) 4

Matters regarding the transfer of stock acquisitionrightsAcquisition of the stock acquisition rights by transfer
shall require the approval of the Board of Directors.

Acquisition terms of stock acquisition rights(Note) 5

Matters concerning the delivery of stock acquisitionrights in organizational restructuring(Note) 6

Rules pertaining to fractions of less than one (1) sharearising from the exercise of stock acquisition rights

Fractions of less than one (1) share in the number ofshares to be delivered to holders of stock acquisitionrights who exercised stock acquisition rights shall be
rounded down.

④ Details of the stock acquisition rights (incentive stock option) issued by Nippon Piston Ring Co., Ltd. inJune 2015
Number of shares to be acquired upon exercise of the(Note) 1
stock acquisition rights (shares)- 24 -

Amount to be paid (transfer price) upon exercise of thestock acquisition rights (yen)(Note) 2

Exercise period of stock acquisition rights

August 1, 2015 - July 31, 2040

Issuance price of shares and amount to be incorporated
into capital if shares are issued upon exercise of thestock acquisition rights (yen)(Note) 3

Conditions for exercising stock acquisition rights(Note) 4

Matters regarding the transfer of stock acquisitionrightsAcquisition of the stock acquisition rights by transfer
shall require the approval of the Board of Directors.

Acquisition terms of stock acquisition rights(Note) 5

Matters concerning the delivery of stock acquisitionrights in organizational restructuring(Note) 6

Rules pertaining to fractions of less than one (1) sharearising from the exercise of stock acquisition rights

Fractions of less than one (1) share in the number ofshares to be delivered to holders of stock acquisitionrights who exercised stock acquisition rights shall be
rounded down.

⑤ Details of the stock acquisition rights (incentive stock option) issued by Nippon Piston Ring Co., Ltd. inJune 2016
Number of shares to be acquired upon exercise of the(Note) 1
stock acquisition rights (shares)
Amount to be paid (transfer price) upon exercise of thestock acquisition rights (yen)(Note) 2

Exercise period of stock acquisition rights

July 30, 2016 - July 29, 2041

Issuance price of shares and amount to be incorporated
into capital if shares are issued upon exercise of thestock acquisition rights(Note) 3(yen)
Conditions for exercising stock acquisition rights(Note) 4

Matters regarding the transfer of stock acquisitionrightsAcquisition of the stock acquisition rights by transfer
shall require the approval of the Board of Directors.

Acquisition terms of stock acquisition rights(Note) 5

Matters concerning the delivery of stock acquisitionrights in organizational restructuring(Note) 6- 25 -

Fractions of less than one (1) share in the number ofRules pertaining to fractions of less than one (1) share shares to be delivered to holders of stock acquisition
arising from the exercise of stock acquisition rights
rights who exercised stock acquisition rights shall be
rounded down.
⑥ Details of the stock acquisition rights (incentive stock option) issued by Nippon Piston Ring Co., Ltd. inJune 2017
Number of shares to be acquired upon exercise of the(Note) 1
stock acquisition rights (shares)
Amount to be paid (transfer price) upon exercise of thestock acquisition rights (yen)(Note) 2

Exercise period of stock acquisition rights

August 1, 2017 - July 31, 2042

Issuance price of shares and amount to be incorporated
into capital if shares are issued upon exercise of thestock acquisition rights (yen)(Note) 3

Conditions for exercising stock acquisition rights(Note) 4

Matters regarding the transfer of stock acquisitionrightsAcquisition of the stock acquisition rights by transfer
shall require the approval of the Board of Directors.

Acquisition terms of stock acquisition rights(Note) 5

Matters concerning the delivery of stock acquisitionrights in organizational restructuring(Note) 6

Fractions of less than one (1) share in the number ofRules pertaining to fractions of less than one (1) share shares to be delivered to holders of stock acquisition
arising from the exercise of stock acquisition rights
rights who exercised stock acquisition rights shall be
rounded down.
⑦ Details of the stock acquisition rights (incentive stock option) issued by Nippon Piston Ring Co., Ltd. inJune 2018
Number of shares to be acquired upon exercise of the(Note) 1
stock acquisition rights (shares)
Amount to be paid (transfer price) upon exercise of thestock acquisition rights (yen)Exercise period of stock acquisition rights(Note) 2

August 1, 2018 - July 31, 2043

- 26 -

Issuance price of shares and amount to be incorporated
into capital if shares are issued upon exercise of thestock acquisition rights (yen)(Note) 3

Conditions for exercising stock acquisition rights(Note) 4

Matters regarding the transfer of stock acquisitionrightsAcquisition of the stock acquisition rights by transfer
shall require the approval of the Board of Directors.

Acquisition terms of stock acquisition rights(Note) 5

Matters concerning the delivery of stock acquisitionrights in organizational restructuring(Note) 6

Fractions of less than one (1) share in the number ofRules pertaining to fractions of less than one (1) share shares to be delivered to holders of stock acquisition
arising from the exercise of stock acquisition rights
rights who exercised stock acquisition rights shall be
rounded down.
⑧ Details of the stock acquisition rights (incentive stock option) issued by Nippon Piston Ring Co., Ltd. inJune 2019
Number of shares to be acquired upon exercise of the(Note) 1
stock acquisition rights (shares)
Amount to be paid (transfer price) upon exercise of thestock acquisition rights (yen)(Note) 2

Exercise period of stock acquisition rights

August 1, 2019 - July 31, 2044

Issuance price of shares and amount to be incorporated
into capital if shares are issued upon exercise of thestock acquisition rights (yen)(Note) 3

Conditions for exercising stock acquisition rights(Note) 4

Matters regarding the transfer of stock acquisitionrightsAcquisition of the stock acquisition rights by transfer
shall require the approval of the Board of Directors.

Acquisition terms of stock acquisition rights(Note) 5

Matters concerning the delivery of stock acquisitionrights in organizational restructuring(Note) 6

Fractions of less than one (1) share in the number ofRules pertaining to fractions of less than one (1) share shares to be delivered to holders of stock acquisition
arising from the exercise of stock acquisition rights
rights who exercised stock acquisition rights shall be
rounded down.
(Notes)1

Number of shares to be issued upon exercise of the stock acquisition rights- 27 -

2

3

4

5

Number of shares to be issued upon exercise of each stock acquisition right (hereinafter referred
to as the “Number of Shares Granted”) shall be 100 shares.
Provided, however, in case Nippon Piston Ring Co., Ltd. carries out a share split (including
allotment of shares of its common stock without contribution; the same applies to following
references to the share split) or share consolidation, the Number of Shares Granted shall be adjusted
according to the following formula. Such adjustment shall be made for the number of shares to beissued upon exercise of the stock acquisition rights that have not been exercised at the time, with theresulting fractions of less than one (1) share occurring upon such adjustment rounded down.
Number of Shares Granted after adjustment = Number of Shares Granted before adjustment ×
Ratio of share split or share consolidation
In the case of a share split, the Number of Shares Granted after adjustment shall apply from the
day immediately following the record date (or the day the share split becomes effective when a record
date is not specified) of the said share split, and in the case of a share consolidation, the Number of
Shares Granted after adjustment shall apply from the day the share consolidation becomes effective.
Provided, however, in cases where the Company conducts a share split conditional on approval at a
general meeting of shareholders of Nippon Piston Ring Co., Ltd of a proposal to reduce surplus andincrease capital or capital reserve, and the record date for the share split is the day prior to the day on
which said shareholders’ meeting closes, the Number of Shares Granted after adjustment shall apply
from the day immediately following the day the said shareholders’ meeting closes.
In addition to above, in cases where Nippon Piston Ring Co., Ltd carries out a merger, company
split or share exchange after the allotment date, or any other cases where it is necessary to adjust the
Number of Shares Granted, Nippon Piston Ring Co., Ltd. may make adjustment to the Number of
Shares Granted that is deemed necessary by the Board of Directors of Nippon Piston Ring Co., Ltd.
Value of property to be contributed upon exercise of stock acquisition rights
The value of property to be contributed upon exercise of stock acquisition rights shall be theexercise price of one (1) yen per share to be delivered upon exercise of each stock acquisition right,
multiplied by the Number of Shares Granted.
Matters regarding increase in capital and capital reserve by the issuance of shares upon exercise ofstock acquisition rights(i) The amount of increase in capital by issuing shares upon exercise of stock acquisition rights shallbe half of the maximum amount of increase in capital calculated in accordance with theprovisions of Article 17, Paragraph 1 of the Regulations on Corporate Accounting, and theresulting fractions of less than one (1) yen occurring upon such calculation shall be rounded up.
(ii) The amount of increase in capital reserve by issuing shares upon exercise of stock acquisitionrights shall be the maximum amount of capital increase as described in (a) above less the amountof increase in capital set out in (a) above.
Conditions for exercising shares acquisition rights(i) Holders of stock acquisition rights may exercise their rights only for ten days from the day
immediately following the day when they lose their positions as Directors of Nippon Piston Ring
Co., Ltd.
(ii) In the event of the death of a holder of stock acquisition rights, his/her heirs may exercise therights. Conditions for the exercise of the stock acquisition rights by heirs shall be as set forth in
the agreement described in (c) below.
(iii) Other conditions shall be as set forth in the Stock Acquisition Right Allotment Agreement to be
executed between Nippon Piston Ring Co., Ltd and the holders of stock acquisition rights basedon the resolution of the Board of Directors.
Acquisition terms of stock acquisition rights
In case that a resolution for the approval of any of the proposals (a), (b), (c), (d), or (e) below isapproved at a general meeting of shareholders of Nippon Piston Ring Co., Ltd (or by resolution at a
meeting of the Board of Directors of Nippon Piston Ring Co., Ltd, or by decision of an executive
officer delegated pursuant to provisions of Article 416, Paragraph 4 of the Companies Act, if
resolution at a general meeting of shareholders is not required), the Nippon Piston Ring Co., Ltd. may
acquire the stock acquisition rights without contribution on the date separately determined by the
Board of Directors of Nippon Piston Ring Co., Ltd.
(i) Proposal for approval of a merger agreement under which Nippon Piston Ring Co., Ltd. will
become the absorbed company(ii) Proposal for approval of a company split agreement or a company split plan under which Nippon
Piston Ring Co., Ltd. will become the splitting company(iii) Proposal for approval of a share exchange agreement or a share transfer plan under which Nippon- 28 -

6

Piston Ring Co., Ltd. will become a wholly-owned subsidiary(iv) Proposal for approval of amendment of the Articles of Incorporation to create a provision to theeffect that, as a feature of all shares issued by Nippon Piston Ring Co., Ltd., approval of Nippon
Piston Ring Co., Ltd. is required for the acquisition of such shares by transfer(v) Proposal for approval of amendment of the Articles of Incorporation to create a provision to theeffect that, as a feature of the class of shares underlying the stock acquisition rights, approval of
Nippon Piston Ring Co., Ltd. is required for the acquisition of such class of shares by transfer, orto the effect that Nippon Piston Ring Co., Ltd. will acquire all of such class of shares byresolution of a general meeting of shareholders
Matters concerning the delivery of stock acquisition rights in organizational restructuring
In the event that Nippon Piston Ring Co., Ltd. carries out a merger (only if Nippon Piston Ring
Co., Ltd becomes a dissolving company due to the merger), an absorption-type company split or an
incorporation-type company split (only if Nippon Piston Ring Co., Ltd becomes the splitting
company in both cases), a share exchange or a share transfer (but only if Nippon Piston Ring Co., Ltd
becomes a wholly-owned subsidiary in both cases) (hereinafter collectively referred to as the“Organizational Restructuring”), stock acquisition rights of a stock company listed in Article 236,
Paragraph 1, Item (viii), (a) through (e) of the Companies Act (hereinafter referred to as the“Reorganized Company”) shall be granted to holders of stock acquisition rights who hold remaining
stock acquisition rights immediately prior to the effective date of the Organizational Restructuring(refers to the day on which the absorption-type merger takes effect, the day on which a stockcompany is incorporated through the consolidation-type merger, the day on which the absorption-typecompany split takes effect, the day on which a stock company is incorporated through theincorporation-type company split, the day on which the share exchange takes effect, or the day on
which a wholly-owning parent company is incorporated by the share transfer; the same shall apply
hereinafter) (hereinafter referred to as “Remaining Stock Acquisition Rights”). Provided, however,that the foregoing shall apply only to cases in which the delivery of stock acquisition rights of theReorganized Company in accordance with the following conditions is stipulated in theabsorption-type merger agreement, the consolidation-type merger agreement, the absorption-typecompany split agreement, the incorporation-type company split plan, the share exchange agreement
or the share transfer plan.
(i) Number of stock acquisition rights of the Reorganized Company to be delivered
The Company shall deliver stock acquisition rights the number of which shall equal thenumber of Remaining Stock Acquisition Rights held by the holders of the stock acquisitionrights.
(ii) Class of shares of the Reorganized Company to be issued upon exercise of stock acquisitionrights Common stock of the Reorganized Company(iii) Number of shares of the Reorganized Company to be issued upon exercise of stock acquisitionrightsTo be decided according to the aforementioned “Class and number of shares to be issued
upon exercise of stock acquisition rights” after taking into consideration the conditions, etc. of
the Organizational Restructuring.
(iv) Value of property to be contributed upon exercise of stock acquisition rights
The value of property to be contributed upon exercise of each stock acquisition right to bedelivered shall be the amount obtained by the post-restructuring exercise price as stipulated
below multiplied by the number of shares of the Reorganized Company to be issued upon
exercise of the stock acquisition rights as determined in accordance with (c) above. The
post-restructuring exercise price shall be one (1) yen per share of the Restructured Company thatshall be delivered upon the exercise of each stock acquisition right to be delivered.
(v) Exercise period in which stock acquisition rights may be exercised
The period shall start from the later of either the commencement date of the exercise period ofstock acquisition rights as stipulated in the aforementioned “Exercise period of stock acquisitionrights” or the effective date of the Organizational Restructuring, and end on the expiration dateof the exercise period in which stock acquisition rights may be exercised as stipulated in the
aforementioned “Exercise period of stock acquisition rights.”(vi) Matters regarding increase in capital and capital reserve by the issuance of shares upon exerciseof stock acquisition rights
To be determined in accordance with the aforementioned “Matters regarding increase incapital and capital reserve by the issuance of shares upon exercise of stock acquisition rights.”(vii) Restriction on acquisition of stock acquisition rights by transfer- 29 -

Acquisition of the stock acquisition rights by transfer shall require the approval by resolutionof the Board of Directors of the Reorganized Company.
(viii) Conditions for exercising shares acquisition rights
To be determined in accordance with the aforementioned “Conditions for exercising sharesacquisition rights.”(ix) Acquisition terms of stock acquisition rights
To be determined in accordance with the aforementioned “Acquisition terms of stockacquisition rights.”
2.
Stock acquisition rights to be issued by NPR-Riken Corporation① Details of the 5th Series Stock Acquisition Rights of NPR-Riken Corporation (incentive stock option)
Number of shares to be acquired upon exercise of the(Note) 1
stock acquisition rights (shares)
Amount to be paid (transfer price) upon exercise of thestock acquisition rights (yen)(Note) 2

Exercise period of stock acquisition rights

October 2, 2023 - July 31, 2033

Issuance price of shares and amount to be incorporated
into capital if shares are issued upon exercise of thestock acquisition rights (yen)(Note) 3

Conditions for exercising shares acquisition rights(Note) 4

Matters regarding the transfer of stock acquisitionrightsAcquisition of the stock acquisition rights by transfer
shall require the approval of the Board of Directors.

Acquisition terms of stock acquisition rights(Note) 5

Matters concerning the delivery of stock acquisitionrights in organizational restructuring(Note) 6

Rules pertaining to fractions of less than one (1) sharearising from the exercise of stock acquisition rights

Fractions of less than one (1) share in the number ofshares to be delivered to holders of stock acquisitionrights who exercised stock acquisition rights shall be
rounded down.

② Details of the 6th Series Stock Acquisition Rights of NPR-Riken Corporation (incentive stock option)
Number of shares to be acquired upon exercise of the(Note) 1
stock acquisition rights (shares)
Amount to be paid (transfer price) upon exercise of thestock acquisition rights (yen)Exercise period of stock acquisition rights(Note) 2

October 2, 2023 - July 31, 2038

- 30 -

Issuance price of shares and amount to be incorporated
into capital if shares are issued upon exercise of thestock acquisition rights (yen)(Note) 3

Conditions for exercising shares acquisition rights(Note) 4

Matters regarding the transfer of stock acquisitionrightsAcquisition of the stock acquisition rights by transfer
shall require the approval of the Board of Directors.

Acquisition terms of stock acquisition rights(Note) 5

Matters concerning the delivery of stock acquisitionrights in organizational restructuring(Note) 6

Rules pertaining to fractions of less than one (1) sharearising from the exercise of stock acquisition rights

Fractions of less than one (1) share in the number ofshares to be delivered to holders of stock acquisitionrights who exercised stock acquisition rights shall be
rounded down.

③ Details of the 7th Series Stock Acquisition Rights of NPR-Riken Corporation (incentive stock option)
Number of shares to be acquired upon exercise of the(Note) 1
stock acquisition rights (shares)
Amount to be paid (transfer price) upon exercise of thestock acquisition rights (yen)(Note) 2

Exercise period of stock acquisition rights

October 2, 2023 - July 31, 2039

Issuance price of shares and amount to be incorporated
into capital if shares are issued upon exercise of thestock acquisition rights (yen)(Note) 3

Conditions for exercising shares acquisition rights(Note) 4

Matters regarding the transfer of stock acquisitionrightsAcquisition of the stock acquisition rights by transfer
shall require the approval of the Board of Directors.

Acquisition terms of stock acquisition rights(Note) 5

Matters concerning the delivery of stock acquisitionrights in organizational restructuring(Note) 6

Rules pertaining to fractions of less than one (1) sharearising from the exercise of stock acquisition rights

Fractions of less than one (1) share in the number ofshares to be delivered to holders of stock acquisitionrights who exercised stock acquisition rights shall be
rounded down.

④ Details of the 8th Series Stock Acquisition Rights of NPR-Riken Corporation (incentive stock option)
Number of shares to be acquired upon exercise of the(Note) 1
stock acquisition rights (shares)- 31 -

Amount to be paid (transfer price) upon exercise of thestock acquisition rights (yen)(Note) 2

Exercise period of stock acquisition rights

October 2, 2023 - July 31, 2040

Issuance price of shares and amount to be incorporated
into capital if shares are issued upon exercise of thestock acquisition rights (yen)(Note) 3

Conditions for exercising shares acquisition rights(Note) 4

Matters regarding the transfer of stock acquisitionrightsAcquisition of the stock acquisition rights by transfer
shall require the approval of the Board of Directors.

Acquisition terms of stock acquisition rights(Note) 5

Matters concerning the delivery of stock acquisitionrights in organizational restructuring(Note) 6

Rules pertaining to fractions of less than one (1) sharearising from the exercise of stock acquisition rights

Fractions of less than one (1) share in the number ofshares to be delivered to holders of stock acquisitionrights who exercised stock acquisition rights shall be
rounded down.

⑤ Details of the 9th Series Stock Acquisition Rights of NPR-Riken Corporation (incentive stock option)
Number of shares to be acquired upon exercise of the(Note) 1
stock acquisition rights (shares)
Amount to be paid (transfer price) upon exercise of thestock acquisition rights (yen)(Note) 2

Exercise period of stock acquisition rights

October 2, 2023 - July 29, 2041

Issuance price of shares and amount to be incorporated
into capital if shares are issued upon exercise of thestock acquisition rights (yen)(Note) 3

Conditions for exercising shares acquisition rights(Note) 4

Matters regarding the transfer of stock acquisitionrightsAcquisition of the stock acquisition rights by transfer
shall require the approval of the Board of Directors.

Acquisition terms of stock acquisition rights(Note) 5

Matters concerning the delivery of stock acquisitionrights in organizational restructuring(Note) 6- 32 -

Rules pertaining to fractions of less than one (1) sharearising from the exercise of stock acquisition rights

Fractions of less than one (1) share in the number ofshares to be delivered to holders of stock acquisitionrights who exercised stock acquisition rights shall be
rounded down.

⑥ Details of the 10th Series Stock Acquisition Rights of NPR-Riken Corporation (incentive stock option)
Number of shares to be acquired upon exercise of the(Note) 1
stock acquisition rights (shares)
Amount to be paid (transfer price) upon exercise of thestock acquisition rights (yen)(Note) 2

Exercise period of stock acquisition rights

October 2, 2023 - July 31, 2042

Issuance price of shares and amount to be incorporated
into capital if shares are issued upon exercise of thestock acquisition rights (yen)(Note) 3

Conditions for exercising shares acquisition rights(Note) 4

Matters regarding the transfer of stock acquisitionrightsAcquisition of the stock acquisition rights by transfer
shall require the approval of the Board of Directors.

Acquisition terms of stock acquisition rights(Note) 5

Matters concerning the delivery of stock acquisitionrights in organizational restructuring(Note) 6

Rules pertaining to fractions of less than one (1) sharearising from the exercise of stock acquisition rights

Fractions of less than one (1) share in the number ofshares to be delivered to holders of stock acquisitionrights who exercised stock acquisition rights shall be
rounded down.

⑦ Details of the 11th Series Stock Acquisition Rights of NPR-Riken Corporation (incentive stock option)
Number of shares to be acquired upon exercise of the(Note) 1
stock acquisition rights (shares)
Amount to be paid (transfer price) upon exercise of thestock acquisition rights (yen)Exercise period of stock acquisition rights(Note) 2

October 2, 2023 - July 31, 2043

Issuance price of shares and amount to be incorporated
into capital if shares are issued upon exercise of thestock acquisition rights (yen)(Note) 3

Conditions for exercising shares acquisition rights(Note) 4- 33 -

Matters regarding the transfer of stock acquisitionrightsAcquisition of the stock acquisition rights by transfer
shall require the approval of the Board of Directors.

Acquisition terms of stock acquisition rights(Note) 5

Matters concerning the delivery of stock acquisitionrights in organizational restructuring(Note) 6

Rules pertaining to fractions of less than one (1) sharearising from the exercise of stock acquisition rights

Fractions of less than one (1) share in the number ofshares to be delivered to holders of stock acquisitionrights who exercised stock acquisition rights shall be
rounded down.

⑧ Details of the 12th Series Stock Acquisition Rights of NPR-Riken Corporation (incentive stock option)
Number of shares to be acquired upon exercise of the(Note) 1
stock acquisition rights (shares)
Amount to be paid (transfer price) upon exercise of thestock acquisition rights (yen)(Note) 2

Exercise period of stock acquisition rights

October 2, 2023 - July 31, 2044

Issuance price of shares and amount to be incorporated
into capital if shares are issued upon exercise of thestock acquisition rights (yen)(Note) 3

Conditions for exercising shares acquisition rights(Note) 4

Matters regarding the transfer of stock acquisitionrightsAcquisition of the stock acquisition rights by transfer
shall require the approval of the Board of Directors.

Acquisition terms of stock acquisition rights(Note) 5

Matters concerning the delivery of stock acquisitionrights in organizational restructuring(Note) 6

Rules pertaining to fractions of less than one (1) sharearising from the exercise of stock acquisition rights

Fractions of less than one (1) share in the number ofshares to be delivered to holders of stock acquisitionrights who exercised stock acquisition rights shall be
rounded down.

(Notes)1

Number of shares to be issued upon exercise of the stock acquisition rights
Number of shares to be issued upon exercise of each stock acquisition right (hereinafter referred
to as the “Number of Shares Granted”) shall be 102 shares.
Provided, however, in case NPR-Riken Corporation carries out a share split (including allotmentof shares of its common stock without contribution; the same applies to following references to theshare split) or share consolidation, the Number of Shares Granted shall be adjusted according to thefollowing formula. Such adjustment shall be made for the number of shares to be issued upon
exercise of the stock acquisition rights that have not been exercised at the time, with the resulting
fractions of less than one (1) share occurring upon such adjustment rounded down.

- 34 -

Number of Shares Granted after adjustment = Number of Shares Granted before adjustment ×
Ratio of share split or share consolidation

2

3

4

5

In the case of a share split, the Number of Shares Granted after adjustment shall apply from the
day immediately following the record date (or the day the share split becomes effective when a record
date is not specified) of the said share split, and in the case of a share consolidation, the Number of
Shares Granted after adjustment shall apply from the day the share consolidation becomes effective.
Provided, however, in cases where the Company conducts a share split conditional on approval at a
general meeting of shareholders of NPR-Riken Corporation of a proposal to reduce surplus andincrease capital or capital reserve, and the record date for the share split is the day prior to the day on
which said shareholders’ meeting closes, the Number of Shares Granted after adjustment shall apply
from the day immediately following the day the said shareholders’ meeting closes.
In addition to above, in cases where NPR-Riken Corporation carries out a merger, company split
or share exchange after the allotment date, or any other cases where it is necessary to adjust the
Number of Shares Granted, NPR-Riken Corporation may make adjustment to the Number of Shares
Granted that is deemed necessary by the Board of Directors of NPR-Riken Corporation.
Value of property to be contributed upon exercise of stock acquisition rights
The value of property to be contributed upon exercise of stock acquisition rights shall be theexercise price of one (1) yen per share to be delivered upon exercise of each stock acquisition right,
multiplied by the Number of Shares Granted.
Matters regarding increase in capital and capital reserve by the issuance of shares upon exercise ofstock acquisition rights(i) The amount of increase in capital by issuing shares upon exercise of stock acquisition rights
shall be half of the maximum amount of increase in capital calculated in accordance with theprovisions of Article 17, Paragraph 1 of the Regulations on Corporate Accounting, and theresulting fractions of less than one (1) yen occurring upon such calculation shall be rounded up.
(ii) The amount of increase in capital reserve by issuing shares upon exercise of stock acquisitionrights shall be the maximum amount of capital increase as described in (a) above less theamount of increase in capital set out in (a) above.
Conditions for exercising shares acquisition rights(i) Holders of stock acquisition rights may exercise their rights only for ten days from the day
immediately following the day when they lose their positions as Directors of NPR-Riken
Corporation.
(ii) In the event of the death of a holder of stock acquisition rights, his/her heirs may exercise therights. Conditions for the exercise of the stock acquisition rights by heirs shall be as set forth in
the agreement described in (c) below.
(iii) Other conditions shall be as set forth in the Stock Acquisition Right Allotment Agreement to be
executed between NPR-Riken Corporation and the holders of stock acquisition rights based on
the resolution of the Board of Directors.
Acquisition terms of stock acquisition rights
In case that a resolution for the approval of any of the proposals (a), (b), (c), (d), or (e) below isapproved at a general meeting of shareholders of NPR-Riken Corporation (or by resolution at a
meeting of the Board of Directors of NPR-Riken Corporation, or by decision of an executive officerdelegated pursuant to provisions of Article 416, Paragraph 4 of the Companies Act, if resolution at a
general meeting of shareholders is not required), the NPR-Riken Corporation may acquire the stockacquisition rights without contribution on the date separately determined by the Board of Directors of
NPR-Riken Corporation.
(i) Proposal for approval of a merger agreement under which NPR-Riken Corporation will become
the absorbed company(ii) Proposal for approval of a company split agreement or a company split plan under which
NPR-Riken Corporation will become the splitting company(iii) Proposal for approval of a share exchange agreement or a share transfer plan under which
NPR-Riken Corporation will become a wholly-owned subsidiary(iv) Proposal for approval of amendment of the Articles of Incorporation to create a provision to theeffect that, as a feature of all shares issued by NPR-Riken Corporation, approval of NPR-Riken
Corporation is required for the acquisition of such shares by transfer(v) Proposal for approval of amendment of the Articles of Incorporation to create a provision to theeffect that, as a feature of the class of shares underlying the stock acquisition rights, approval of
NPR-Riken Corporation is required for the acquisition of such class of shares by transfer, or to- 35 -

6

the effect that NPR-Riken Corporation will acquire all of such class of shares by resolution of ageneral meeting of shareholders
Matters concerning the delivery of stock acquisition rights in organizational restructuring
In the event that NPR-Riken Corporation carries out a merger (only if NPR-Riken Corporation
becomes a dissolving company due to the merger), an absorption-type company split or an
incorporation-type company split (only if NPR-Riken Corporation becomes the splitting company inboth cases), a share exchange or a share transfer (but only if NPR-Riken Corporation becomes awholly-owned subsidiary in both cases) (hereinafter collectively referred to as the “Organizational
Restructuring”), stock acquisition rights of a stock company listed in Article 236, Paragraph (1), Item
(viii), (a) through (e) of the Companies Act (hereinafter referred to as the “Reorganized Company”)
shall be granted to holders of stock acquisition rights who hold remaining stock acquisition rights
immediately prior to the effective date of the Organizational Restructuring (refers to the day on which
the absorption-type merger takes effect, the day on which a stock company is incorporated throughthe consolidation-type merger, the day on which the absorption-type company split effect, the day on
which a stock company is incorporated through the incorporation-type company split, the day on
which the share exchange takes effect, or the day on which a wholly-owning parent company isincorporated by the share transfer; the same shall apply hereinafter) (hereinafter referred to as“Remaining Stock Acquisition Rights”). Provided, however, that the foregoing shall apply only tocases in which the delivery of stock acquisition rights of the Reorganized Company in accordancewith the following conditions is stipulated in the absorption-type merger agreement, theconsolidation-type merger agreement, the absorption-type company split agreement, theincorporation-type company split plan, the share exchange agreement or the share transfer plan.
(i) Number of stock acquisition rights of the Reorganized Company to be delivered
The Company shall deliver stock acquisition rights the number of which shall equal thenumber of Remaining Stock Acquisition Rights held by the holders of the stock acquisitionrights.
(ii) Class of shares of the Reorganized Company to be issued upon exercise of stock acquisitionrights Common stock of the Reorganized Company(iii) Number of shares of the Reorganized Company to be issued upon exercise of stock acquisitionrightsTo be decided according to the aforementioned “Class and number of shares to be issued
upon exercise of stock acquisition rights” after taking into consideration the conditions, etc. of
the Organizational Restructuring.
(iv) Value of property to be contributed upon exercise of stock acquisition rights
The value of property to be contributed upon exercise of each stock acquisition right to bedelivered shall be the amount obtained by the post-restructuring exercise price as stipulated
below multiplied by the number of shares of the Reorganized Company to be issued upon
exercise of the stock acquisition rights as determined in accordance with (c) above. The
post-restructuring exercise price shall be one (1) yen per share of the Restructured Company thatshall be delivered upon the exercise of each stock acquisition right to be delivered.
(v) Exercise period in which stock acquisition rights may be exercised
The period shall start from the later of either the commencement date of the exercise period ofstock acquisition rights as stipulated in the aforementioned “Exercise period of stock acquisitionrights” or the effective date of the Organizational Restructuring, and end on the expiration dateof the exercise period in which stock acquisition rights may be exercised as stipulated in the
aforementioned “Exercise period of stock acquisition rights.”(vi) Matters regarding increase in capital and capital reserve by the issuance of shares upon
exercise of stock acquisition rights
To be determined in accordance with the aforementioned “Matters regarding increase incapital and capital reserve by the issuance of shares upon exercise of stock acquisition rights.”(vii) Restriction on acquisition of stock acquisition rights by transfer
Acquisition of the stock acquisition rights by transfer shall require the approval by resolutionof the Board of Directors of the Reorganized Company.
(viii)Conditions for exercising shares acquisition rights
To be determined in accordance with the aforementioned “Conditions for exercising sharesacquisition rights.”(ix) Acquisition terms of stock acquisition rights
To be determined in accordance with the aforementioned “Acquisition terms of stockacquisition rights.”- 36 -

3. Matters concerning the reasonableness of provisions related to matters provided under Article 773,
Paragraph 1, Items 5 and 6 of the Companies Act(1)

Matters concerning the shares of the Joint Holding Company to be delivered by the Joint Holding
Company to shareholders of both companies upon the Joint Share Transfer, and the allotment of sharesof the Joint Holding Company
Both companies have determined the allotment ratio for common shares of the Joint Holding Company
to be allotted and delivered to the shareholders of each company upon the establishment of the Joint
Holding Company by the Joint Share Transfer (hereinafter referred to as the “Share Transfer Ratio”) as
follows.
(a) Details of the allotment pertaining to the Joint Share Transfer (Share Transfer Ratio)
Company nameRiken
The Company
Share Transfer Ratio
2
1.02(Note 1)

Details of the allotment pertaining to the Joint Share Transfer
For each share of the common stock of the Company, 1.02 shares of the common stockof the Joint Holding Company will be allotted and delivered, and for each share of thecommon stock of Riken, two (2) shares of the common stock of the Joint Holding Company
will be allotted and delivered. 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 two companies
The number of shares that constitute one unit of shares of the Joint Holding Company isscheduled to be 100 shares.
In the event that fractions of less than one (1) share of common stock of the Joint
Holding Company arise that must be delivered to shareholders of both companies in the Joint
Share Transfer, a monetary amount equivalent to the fractional portion less than one (1)share will be paid to those shareholders, in accordance with the provisions of Article 234 of
the Companies Act and other related laws and regulations.
(Note 2)
Number of new shares to be granted by the Joint Holding Company through the Joint
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 the Company as of March 31, 2023 and on the total number of outstanding shares(10,688,866shares) of Riken as of March 31, 2023. However, as both companies intend, byresolutions of meetings of their respective Boards of Directors convened by the day before
the Effective Date of the Joint Share Transfer, to cancel all treasury stock held by eachcompany (including treasury shares acquired by the companies on the occasion of the Joint
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 theCompany 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 the scope of the granting of newshares in the above calculation.
The actual number of treasury shares that will be retired by the Base 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 shares of less than one unit
Shares of the Joint Holding Company that will be allotted to shareholders of theCompany and Riken as a result of the Joint Share Transfer are scheduled to be listed on theTokyo 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 toshareholders of the Company or Riken who hold [99] or more shares of stock of theCompany or [50] or more shares of stock of Riken and who receive allotment of 100 or moreshares, i.e., one unit of shares, of the Joint Holding Company through the Joint Share
Transfer.
While shareholders of the Company 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- 37 -

the Tokyo Stock Exchange or on other financial instruments exchanges, it will be possible torequest the purchase of such odd-lot shares to the Joint Holding Company. Pursuant toprovisions 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 the number of odd-lot shares held, constitute one unit of shares is alsoplanned.
(b) Calculation base for details of allotments related to the Joint Share Transfer(i) Grounds and reasons for the details of the allotment
In order to ensure the fairness and validity of the Share Transfer Ratio calculated as
described in “3. (1) (a) Details of the allotment pertaining to the Joint Share Transfer (Share
Transfer Ratio)” above, the Company has selected Nomura Securities Co., Ltd. (hereinafter“Nomura Securities”) and Riken has selected IR Japan, Inc. (hereinafter “IR Japan”) to serve
as financial advisors and third-party calculation institutions independent from either
company.
Based on advice and on results of calculations of Share Transfer Ratio submitted by thethird-party calculation institution Nomura Securities noted in “i. Acquisition of calculation
reports from independent third-party calculation institutions” in “3. (1) (b) (iv) Measures toensure fairness” below, based on legal advice from Marunouchi Sogo Law Office noted in“ii. Advice from an independent law firm” in “3. (1) (b) (iv) Measures to ensure fairness”
below, and based on the findings of due diligence concerning Riken conducted by theCompany and its advisors, and as a result of careful discussion and consideration taking into
account the financial conditions, performance trends, stock price movements, etc. of bothcompanies, the Company has arrived at the conclusion that the Share Transfer Ratio noted in“3 (1) (a) Details of the allotment pertaining to the Joint Share Transfer (Share Transfer
Ratio)” above is valid and the Joint Share Transfer is in the interest of the Company’s
shareholders.
Based on advice and on results of calculations of Share Transfer Ratio submitted by thethird-party calculation institution IR Japan noted in “i. Acquisition of calculation reports
from independent third-party calculation institutions” in “3. (1) (b) (iv) Measures to ensure
fairness” below, based on legal advice from City Yuwa Partners noted in “ii. Advice from an
independent law firm” in “3. (1) (b) (iv) Measures to ensure fairness” below, and based on
the findings of due diligence concerning the Company conducted by Riken and its advisors,
and as a result of careful discussion and consideration taking into account the financial
conditions, performance trends, stock price movements, etc. of both companies, Riken has
arrived at the conclusion that the Share Transfer Ratio noted in “3. (1) (a) Details of theallotment pertaining to the Joint Share Transfer (Share Transfer Ratio)” above is valid andthe Joint Share Transfer is in the interest of Riken shareholders.
In this way, with reference to calculations and analyses by these third-party calculation
institutions and the advice of legal 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 both companies, the conclusion was ultimately reached that the Share Transfer Ratio
described in “3. (1) (a) Details of the allotment pertaining to the Joint Share Transfer (Share
Transfer Ratio)” above is valid and the Joint Share Transfer is in the interests of theshareholders of both companies. Having resolved to conclude a consolidation agreement atmeetings of the Boards of Directors of both companies convened on May 23, 2023, thecompanies entered into such consolidation agreement and jointly created the Joint Share
Transfer Plan.
(ii) Matters related to calculations(a) Names of the calculation institutions and their relationships with both companies
Neither Nomura Securities, the financial advisor (third-party calculation
institution) of the Company, nor IR Japan, the financial advisor (third-party calculation
institution) of Riken, are related parties of the Company or Riken. Neither has any
material special interests that require disclosure in regard to the Joint Share Transfer.
(b)
Matters related to calculations
Nomura Securities calculated the Share Transfer Ratio in accordance with themarket share price averaging method, given that shares of both the Company and- 38 -

Riken are listed on the Tokyo Stock Exchange Prime Market and a market share priceexists for each. Nomura Securities also performed calculations using the comparable
multiple valuation method due to the facts that multiple listed companies exist that arecomparable to the Company and Riken and that analogizing stock prices throughcomparable company valuation is possible, and further performed calculations using
the discounted cash flow method (hereinafter “DCF method”) in order to reflect thestate of future business activities in the evaluation.
The results of calculations based on each method are as stated below. The
calculation ranges of the Share Transfer Ratio below are the calculation ranges for thenumber of common shares of the Joint Holding Company to be allotted per commonshare of the Company, in the event that two (2) common shares of the Joint Holding
Company is allotted per common share of Riken.
Methods used
Calculation range of the 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, thebusiness day prior to July 27, 2022 (the date on which conclusion of the Memorandumof Understanding was announced), as calculation reference date (i), calculation was
performed of the closing stock price on calculation reference date (i), the averageclosing 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 calculation reference date (i), as well as the averageclosing stock price for the six-month period from January 27, 2022 to calculationreference date (i); and, setting May 22, 2023 as calculation reference date (ii),calculation was performed of the closing price on calculation reference date (ii), theaverage closing stock price for the five-day period from May 16, 2023 to calculationreference date (ii), the average closing stock price for the one-month 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 both companies, publicly available information, etc., doing so under theassumption that all of the materials, information, etc. are accurate and complete andwithout 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 of individual assets and liabilities, and appraisal andassessment by a third party was not requested. Nomura Securities’ calculation of the
Share Transfer Ratio incorporates information and economic conditions up to the dateof May 22, 2023. Financial projections and other forward-looking information
concerning the Company was rationally prepared on the basis of best-effort andgood-faith forecasts and judgments currently available to the management of theCompany. Financial projections and other forward-looking information concerning
Riken was rationally examined and confirmed on the basis of best-effort and good-faith
forecasts and judgments currently available to the management of Riken. IR Japan’s
calculation of the Share Transfer Ratio assumes that the financial status of theCompany and of Riken will change in line with these forecasts.
The business plans of the Company and Riken, used by Nomura Securities aspremises for calculation under the DCF method, do not incorporate synergies resulting
from the Consolidation. The business plan of the Company for the period from thefiscal 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, include fiscal
years in which significant increase in profit are anticipated. Specifically, in the fiscal
year ending March 2024, a significant year-on-year increase in profit is expected as the- 39 -

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 aspremises for calculation under the DCF method, includes a business year in which asignificant increase in profit is anticipated. Specifically, in the fiscal year ending March
31, 2025, Riken is expected to achieve a significant year-on-year increase in profit
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.
IR Japan calculated the Share Transfer Ratio in accordance with the market shareprice averaging method, given that shares of both companies are listed on the Tokyo
Stock Exchange Prime Market and a market share price exists for each. IR Japan also
conducted calculations using the comparable multiple valuation method due to thefacts that multiple listed companies exist that are comparable to NPR and Riken andthat analogizing stock prices through comparable company valuation is possible, andfurther performed calculations using the DCF method in order to reflect the state of
future business activities in the evaluation.
The results of calculations based on each method are as stated below. The
calculation ranges of the Share Transfer Ratio below are the calculation ranges for thenumber of common shares of the Joint Holding Company to be allotted per commonshare of Riken, in the event that two (2) common shares of the Joint Holding Company
is allotted per common share of the Company.
Methods used
Calculation range of the Share Transfer
Ratio
Market share price averaging method
0.97～1.09
Comparable multiple valuation method0.95～1.26
DCF method
0.65～1.42
With regard to the market share price averaging method, setting July 26, 2022, thebusiness day prior to July 27, 2022 (the date on which conclusion of the Memorandumof Understanding was announced), as calculation reference date (i), calculation was
performed of the closing stock price on calculation reference date (i), the averageclosing stock price for the one-month period from June 27, 2022 to calculationreference date (i), the average closing stock price for the three-month period from April
27, 2022 to calculation reference date (i), as well as the average closing stock price forthe 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 forthe one-month period from April 24, 2023 to calculation reference date (ii), the averageclosing stock price for the three-month period from February 24, 2023 to calculationreference 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 assumptionthat 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 of individual assets and liabilities, and appraisal and assessment by athird party was not requested. IR Japan’s calculation of the Share Transfer 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 of best-effort and good-faith forecasts and judgments
currently available to the management of Riken. Financial projections and otherforward-looking information concerning the Company were rationally examined andconfirmed on the basis of best-effort and good-faith forecasts and judgments currently
available to the management of the Company. IR Japan’s calculation of the Share- 40 -

Transfer Ratio assumes that the financial status of the Company and of Riken willchange in line with these forecasts.
The business plans of the Company and Riken, used by IR Japan as premises forcalculation under the DCF method, do not incorporate synergies resulting from theconsolidation. The business plans of both Companies 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, includes business years in which asignificant fluctuation in profit is anticipated. Specifically, in the fiscal year ending
March 31, 2025, Riken is projected to achieve a significant year-on-year increase inprofit mainly attributable to the passing through of increases in procurement costs,
such as raw materials costs, energy prices, and outsourcing costs, to sales prices andcorporate efforts such as rationalization activities. In addition, the Company expects asignificant year-on-year increase in profit in the fiscal year ending March 2024, as theCompany’s efforts to pass though procurement costs to sales prices contribute toearnings.
(iii) Matters concerning application for listing of the Joint Holding Company
Both companies 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, the registration date forestablishment of the Joint Holding Company.
Through the Joint Share Transfer, both companies 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. Iflisting of the Joint Holding Company is approved, the shareholders of both companies
will be able to trade shares of the Joint Holding Company granted through the Joint
Share Transfer on the Tokyo Stock Exchange.
Common stock of the Company is currently listed on the Tokyo Stock Exchange
Prime Market. As the stock does not meet the criterion for market capitalization of
tradable stock included among the criteria for maintaining listing in said market, on
November 29, 2021 the company submitted a Plan for Meeting the Criteria for
Maintenance of Listing in the New Market Segment (hereinafter the “Plan”) and has
been subjected to the application of interim measures. It is assumed at present that themarket capitalization of tradable stock of the Joint Holding Company scheduled to belisted 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 to enhance its corporate value in accordance withthe aims of the plan.
(iv) Measures to ensure fairness
To ensure the fairness of the Share Transfer Ratio and of the Joint Share Transfer,both companies have implemented the following measures.
i.
Acquisition of calculation reports from independent third-party calculation
institutions
On behalf of the shareholders of the Company, the Company has obtained acalculation report on the Share Transfer Ratio, dated May 23, 2023, from
Nomura Securities, a third-party calculation institution independent from bothcompanies. See “(ii) Matters related to calculations” in “3. (1) (b) Grounds, etc.
for details of allotments related to the Share Transfer” for an overview of thecalculation report.
Meanwhile, on behalf of the shareholders of Riken, Riken has obtained acalculation report on the Share Transfer Ratio, dated May 23, 2023, from IR
Japan, a third-party calculation institution independent from Riken and theCompany. See “(ii) Matters related to calculations” in “3. (1) (b) Grounds, etc.
for details of allotments related to the Share Transfer” for an overview of thecalculation report.
ii.
Advice from an independent law firm
The Company has received advice from a legal perspective from
Marunouchi Sogo Law Office as its legal advisor for the Joint Share Transfer,concerning procedures for the Share Transfer and methods and processes for
decision-making by the Board of Directors.

- 41 -Meanwhile, NPR has received advice from a legal perspective from
City-Yuwa Partners as its legal advisor for the Joint 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 companies and have no material interests of note with both companies.
(v) Measures to avoid conflicts of interest
As no particular conflicts of interest exists between both companies in connection
with the Joint Share Transfer, no special measures have been taken.
(2)

Matters regarding the amounts of capital and capital reserve of the Joint Holding Company
The Company and Riken have determined the amounts of capital and capital reserve of the Joint
Holding Company upon the establishment of the Joint Holding Company by the Joint Share Transfer asfollows.
(i) Amount of capital
5,000,000,000 yen(ii) Amount of capital reserve
1,250,000,000 yen(iii) Amount of legal reserve
0 yen
These amounts of capital and reserves have been determined within the range stipulated in Article 52of the Regulations on Corporate Accounting after comprehensively considering and examining the sizeand other circumstances of the Joint Holding Company and upon consultation between the Company and
Riken.

4.

Matters concerning the reasonableness of provisions related to matters provided under Article 773,
Paragraph 1, Items 9 and 10 of the Companies Act
Upon the Joint Share Transfer, the Joint Holding Company will deliver stock acquisition rights listedin Column 2 of the table below that is equal to the total number of stock acquisition rights subject toallotment (hereinafter referred to as the “stock acquisition rights issued by the Joint Holding Company”)
in lieu of stock acquisition rights subject to allotment to the holders of each stock acquisition right listedin Column 1 of the table below that has been issued by the Company and Riken (hereinafter referred to as
the “stock acquisition rights subject to allotment”) as of the Base Time. The Joint Holding Company will
allot one (1) stock acquisition right issued by the Joint Holding Company for one (1) stock acquisitionright subject to allotment held by holders of stock acquisition rights subject to allotment as of the BaseTime.
The Company determined that, on the premise of the Share Transfer Ratio of the Joint Share Transfer,handling of these matters is appropriate as the Joint Holding Company will deliver stock acquisitionrights issued by the Joint Holding Company that are substantially the same in nature and number as thestock acquisition rights subject to allotment.

- 42 -

RikenColumn 1

Name

Contents①

Riken Corporation
Issuance of Stock Acquisition
Rights in June 2014
(Stock Compensation-type
Stock Options)

Attachment 2
1-①②

Riken Corporation
Issuance of Stock Acquisition
Rights in June 2015
(Stock Compensation-type
Stock Options)

Attachment 2
1-②③

Riken Corporation
Issuance of Stock Acquisition
Rights in June 2016
(Stock Compensation-type
Stock Options)

Attachment 2
1-③④

Riken Corporation
Issuance of Stock Acquisition
Rights in June 2017
(Stock Compensation-type
Stock Options)

Attachment 2
1-④

The Company
Column 1

Name

Contents①

Nippon Piston Ring Co., Ltd.
Issuance of Stock Acquisition
Rights in June 2008
(Stock Compensation-type
Stock Options)

Attachment 3
1-①②

Nippon Piston Ring Co., Ltd.
Issuance of Stock Acquisition
Rights in June 2013
(Stock Compensation-type
Stock Options)

Attachment 3
1-②③

Nippon Piston Ring Co., Ltd.
Issuance of Stock Acquisition
Rights in June 2014
(Stock Compensation-type
Stock Options)

Attachment 3
1-③④

Nippon Piston Ring Co., Ltd.
Issuance of Stock Acquisition
Rights in June 2015
(Stock Compensation-type
Stock Options)

Attachment 3
1-④

Nippon Piston Ring Co., Ltd.
Issuance of Stock Acquisition

Attachment 3
1-⑤⑤- 43 -

Column 2

Name
NPR-RIKENCORPORATION
1st Stock Acquisition Rightsof 2023(Stock Compensation-type
Stock Options)
NPR-RIKENCORPORATION
2nd Stock Acquisition Rightsof 2023(Stock Compensation-type
Stock Options)
NPR-RIKENCORPORATION
3rd Stock Acquisition Rightsof 2023(Stock Compensation-type
Stock Options)
NPR-RIKENCORPORATION
4th Stock Acquisition Rightsof 2023(Stock Compensation-type
Stock Options)

Column 2

Name
NPR-RIKENCORPORATION
5th Stock Acquisition Rightsof 2023(Stock Compensation-type
Stock Options)
NPR-RIKENCORPORATION
6th Stock Acquisition Rightsof 2023(Stock Compensation-type
Stock Options)
NPR-RIKENCORPORATION
7th Stock Acquisition Rightsof 2023(Stock Compensation-type
Stock Options)
NPR-RIKENCORPORATION
8th Stock Acquisition Rightsof 2023(Stock Compensation-type
Stock Options)
NPR-RIKENCORPORATION

Contents
Attachment 2
2-①

Attachment 2
2-②

Attachment 2
2-③

Attachment 2
2-④

Contents
Attachment 3
2-①

Attachment 3
2-②

Attachment 3
2-③

Attachment 3
2-④
Attachment 3
2-⑤

Column 1

Name
Rights in June 2016
(Stock Compensation-type
Stock Options)5.

Contents⑥

Nippon Piston Ring Co., Ltd.
Issuance of Stock Acquisition
Rights in June 2017
(Stock Compensation-type
Stock Options)

Attachment 3
1-⑥⑦

Nippon Piston Ring Co., Ltd.
Issuance of Stock Acquisition
Rights in June 2018
(Stock Compensation-type
Stock Options)

Attachment 3
1-⑦⑧

Nippon Piston Ring Co., Ltd.
Issuance of Stock Acquisition
Rights in June 2019
(Stock Compensation-type
Stock Options)

Attachment 3
1-⑧

Column 2

Name
9th Stock Acquisition Rightsof 2023(Stock Compensation-type
Stock Options)
NPR-RIKENCORPORATION
10th Stock Acquisition Rightsof 2023(Stock Compensation-type
Stock Options)
NPR-RIKENCORPORATION
11th Stock Acquisition Rightsof 2023(Stock Compensation-type
Stock Options)
NPR-RIKENCORPORATION
12th Stock Acquisition Rightsof 2023(Stock Compensation-type
Stock Options)Contents

Attachment 3
2-⑥

Attachment 3
2-⑦

Attachment 3
2-⑧

Matters related to Riken(1) Details of financial statements of Riken’s final fiscal year (Fiscal year ended March 31, 2023)
Details of Riken’s financial statements for fiscal year ended March 31, 2023 are excluded from thisdocument in accordance with the provisions of laws and regulations and Article 15 of the Company’s
Article of Incorporation. Such details are posted on the Company’s website and the TSE website.
<The Company’s website>
https://www.npr.co.jp/english/ir/ir0206.html#pagetitle01(2) Details of events materially affecting the status of corporate property that occurred after the last dayof the final fiscal year
(Business combination through acquisition)
The Company acquired 76.56% of the shares in JFE Pipe Fitting Mfg. Co., Ltd. from JFE SteelCorporation on May 9, turning it into a subsidiary. The names of the company was changed that same
day to NIPPON PIPE FITTING Corporation (hereinafter referred to as “Nippon-PF”).
(a) Overview of the business combination(i) Name and description of business of the acquired company
Name of the acquired company:
JFE Pipe Fitting Mfg. Co., Ltd.
Description of business:
Manufacture and sale of fittings for gas, water andother piping, and parts for architectural andindustrial machines; and processing of
prefabricated pipes(ii) Primary reasons for the business combination
In recent year, the automobile industry has faced what is referred to as a once a hundredyear major revolution and the market awareness surrounding engine components, a mainstay
business of the Company, has become severe. As put forward in our mid-term strategic plan
“PLAN2022,” the Company is planning to expand Non-ICE (Internal-combustion engine)
business as a next generation new business, and has considered the aggressive use of M&A toexpand the portfolio in business domains with which the Company has a high affinity.
Nippon-PF manufactures and sells a broad range of pipe fittings and has solid relationships
through transactions with many customers over a long period of time due to its high quality
product capabilities, and is positioned a leading player within the industry.
Nippon-PF has a firm presence in the gas pipe fittings domain and we are aware that its
mainstay products are adequately separated from those of the Company. This acquisition of- 44 -

shares is expected to create wide-ranging synergies to enable both companies to fulfill their
responsibilities to manufacture and supply pipe fittings that play an important role insupporting critical infrastructure in a timely and appropriate manner. Furthermore, in addition
to major improvements in productivity and being able to establish sustainable systems that can
supply high quality products, we decided to acquire the shares in the belief that this will enable
us to accelerate initiatives to address climate change issues towards the Group’s carbon neutral
target.
The Company aims to achieve sustained growth and improved corporate value throughmedium to long-term management stability by continuing to provide customers with highquality products by welcoming Nippon-PF to the Group and utilizing the strengths of bothcompanies.
(iii) Date of business combination
May 9, 2023 (deemed acquisition date: April 1, 2023)(iv) Legal form of the business combination
Share acquisition in consideration of cash(v) Company name after business combination
NIPPON PIPE FITTING Corporation(vi) Ratio of voting rights to acquire
76.56%(vii) Main grounds for determining the acquiring company
The Company acquired the shares for cash as consideration.
(b) Acquisition cost of acquired company and the breakdown by consideration typeNot disclosed due to arrangements with the counterparty to this acquisition of shares.
The acquisition cost of the shares is determined based on the share value reasonably calculated bya third-party.
(c) Content and amount of major acquisition-related costs
The major acquisition-related costs are advisory fees, which are not yet determined.
(d) Amount of goodwill, reason for recognition, amortization method and amortization period
Not yet determined.
(e) Assets acquired and liabilities assumed on the date of business combination and the main
breakdown
Not yet determined.
(Large amount of borrowings)
In accordance with a resolution at the Board of Directors meeting held on March 22, 2023, theCompany undertook borrowings on April 28, 2023, mainly to provide the funds required to acquire theshares of NIPPON PIPE FITTING Corporation (formerly, JFE Pipe Fitting Mfg. Co., Ltd.), as follows.
(i) Lender: Mizuho Bank, Ltd.
(ii) Amount of borrowing:
3,000 million yen(iii) Interest rate on borrowings: Base interest rate + spread(iv) Date of borrowing: April 28, 2023
(v) Period of borrowing:
Five (5) years(vi) Collateral:
No collateral, no guarantee
6.

Details of events materially affecting the status of corporate property that occurred in the Company
after the last day of the final fiscal year
Not applicable.

7.
Regulations for Enforcement of the Companies Act regarding persons who will become Directors of
the Joint Holding Company (excluding Directors who are Audit and Supervisory Committee Members)
Matters stipulated in Article 74
Persons who will become Directors of the Joint Holding Company (excluding Directors who are Audit
and Supervisory Committee Members) are as follows.

- 45 -

No.

Name(Date ofbirth)

Career summary, position and responsibilities, and significant
concurrent positions outside the Company

March 1986
February
2004
June 2010

1(1) Number of theCompany’s shares
owned(2) Number of Riken’s
shares owned(3) Number of the
Joint Holding
Company’s sharesallotted

Joined Riken Corporation
General Manager of Nagoya Sales Division of
Riken Corporation
Director, Chairman of Overseas Committee of
Riken Corporation
May 2013
Director of Riken Corporation
June 2015
Managing Director of Riken Corporation
May 2016
Director, Managing Executive Officer of Riken
Yasunori
Corporation(1) –Maekawa
April 2019
Director, Senior Managing Executive Officer(2) 24,900(Februaryof Riken Corporation(3) 49,800
27, 1958)
June 2019
Representative Director, Senior Managing
Executive Officer of Riken Corporation
April 2020
Representative Director, President (COO) of
Riken Corporation
April 2022
Representative Director, President (CEO &COO) of Riken Corporation
DecemberRepresentative Director, President (CEO,2022
COO, CIO & CISO) of Riken Corporation(present position)(Reasons for nomination as candidate for Director)
Yasunori Maekawa has contributed to the sustained growth of the Riken Group and to increasing its
medium-to long-term growth by directing management and working on global business expansion andmanagement issues following long years of service in leading overseas sales, domestic sales andoverseas business.
He has extensive knowledge and experience in overall management, so he is considered to be qualified
to make decisions on important matters and supervise business execution and the Company nominates
him as a candidate for Director of the newly established Joint Holding Company.

- 46 -

No.

Name(Date ofbirth)

Career summary, position and responsibilities, and significant
concurrent positions outside the Company

April 1981
April 2005

2(1) Number of theCompany’s shares
owned(2) Number of Riken’s
shares owned(3) Number of the
Joint Holding
Company’s sharesallotted

Joined Nippon Piston Ring Co., Ltd.
General Manager, Product Engineering
Department II of Nippon Piston Ring Co., Ltd.
June 2006
Executive Officer and General Manager,
Product Engineering Department II,
Development Division of Nippon Piston Ring
Co., Ltd.
Teruo(1) 15,300
June 2009
Director and General Manager, ProductTakahashi(2)–
Engineering Department II, in charge of(February(3) 15,606
Research and Development Department of
10, 1959)
Nippon Piston Ring Co., Ltd.
June 2016
Managing Director, in charge of Research andDevelopment Department of Nippon Piston
Ring Co., Ltd.
June 2020
Representative Director and President, incharge of Internal Auditors Office of Nippon
Piston Ring Co., Ltd. (present position)(Reasons for nomination as candidate for Director)
Teruo Takahashi has led corporate management and contributed to the Nippon Piston Ring Group’s
sustainable growth and medium to long term corporate value enhancement through various businessdevelopments. We nominated him as a candidate for Director of the Joint Holding Company to be
newly established based on his continuing extensive knowledge and experience in all aspects ofmanagement and his qualifications for making decisions on important matters and supervising theexecution of business operations.

- 47 -

No.

Name(Date of birth)

Career summary, position and responsibilities,
and significant concurrent positions outside theCompany

April 1976

3(1) Number of theCompany’s shares
owned(2) Number of Riken’s
shares owned(3) Number of the Joint
Holding Company’s
shares allotted

Joined The Industrial Bank ofJapan, Limited
April 2005
Managing Executive Officer ofMizuho Bank, Ltd.
March 2008 President and CEO of Mizuho
Research Institute Ltd.
June 2012Managing Director of Riken
Corporation
June 2013
Senior Managing Director,
Chairman of the Corporate(1) –Kaoru Itoh
Strategy Committee of Riken(2) 29,900
Corporation(April 9, 1953)(3) 59,800
June 2015
Representative Director, President(COO) of Riken Corporation
April 2018
Representative Director, President(CEO & COO) of Riken
Corporation
April 2020
Chairman (CEO) of Riken
Corporation
April 2022
Representative Director, Chairmanof Riken Corporation (present
position)(Reasons for nomination as candidate for Director)
Kaoru Itoh has contributed to the sustained growth of the Riken Group and to increasing its
medium-to long-term growth by directing management and working on global business expansion
and management issues. He has extensive knowledge and experience in overall management, so
he is considered to be qualified to make decisions on important matters and supervise businessexecution and the Company nominates him as a candidate for Director of the newly established
Joint Holding Company.

- 48 -

No.

Name(Date of birth)

Career summary, position and responsibilities, andsignificant concurrent positions outside theCompany

July 1977

4(1) Number of theCompany’s shares
owned(2) Number of Riken’s
shares owned(3) Number of the
Joint Holding
Company’s sharesallotted

Joined Nippon Piston Ring Co.,Ltd.
April 2001
General Manager, Tokyo East
Sales Department of Nippon Piston
Ring Co., Ltd.
April 2004
Executive Officer and General
Manager, Tokyo Sales Department,
Sales Division of Nippon Piston
Ring Co., Ltd.
June 2006
Director, Deputy General Manager,
Sales Division, and General
Manager, Sales Planning
Department, Sales Division of
Nippon Piston Ring Co., Ltd.
June 2013
Managing Director, in charge ofsales departments of Nippon Piston
Ring Co., Ltd.
Yuji Sakamoto(1) 19,780
June 2020
Representative Director, Managing(October 22,(2) –Director, in charge of sales
1957)(3) 20,175
departments of Nippon Piston Ring
Co., Ltd.
June 2021
Representative Director, Senior
Managing Executive Officer, incharge of Production Control
Department, Global Procurement
Department and Tochigi Plant of
Nippon Piston Ring Co., Ltd.
April 2023
Representative Director, Executive
Vice President, in charge of
Production Control Department,
Global Procurement Department
and Tochigi Plant of Nippon Piston
Ring Co., Ltd. (present position)(Significant concurrent positions)
Director and Chairman, NPR Singapore Pte. Ltd.
Director, NPR of Europe GmbH
(Reasons for nomination as candidate for Director)
Yuji Sakamoto has extensive knowledge of all aspects of the management, and has contributed to
the Nippon Piston Ring Group’s sustainable growth and enhancement of its corporate value overthe medium to long term. We nominated him as a candidate for Director of the Joint Holding
Company to be newly established based on his continuing extensive knowledge and experience inall aspects of management and his qualifications for making decisions on important matters andsupervising the execution of business operations.

- 49 -

No.

Name(Date of birth)

Career summary, position and responsibilities, andsignificant concurrent positions outside theCompany

April 1985
June 2011

5(1) Number of theCompany’s shares
owned(2) Number of Riken’s
shares owned(3) Number of the
Joint Holding
Company’s sharesallotted

Joined Riken Corporation
General Manager of Corporate
Planning Division of Riken
Corporation
May 2016
Executive Officer, General
Manager of Corporate Planning
Division of Riken Corporation
June 2020
Executive Officer of Riken
Corporation, President of Riken
Mexico, S.A. DE C.V.
(1) –Hidehiro Sakaba
April
2022
Managing Executive Officer of(2) 9,800(November 22,
Riken Corporation, President of(3) 19,600
1962)
Riken Mexico, S.A. DE C.V.
May 2022
Managing Executive Officer,
General Manager of Corporate
Management Head Office of Riken
Corporation
June 2022
Director, Managing Executive
Officer, General Manager ofCorporate Management Head
Office of Riken Corporation(present position)(Reasons for nomination as candidate for Director)
Hidehiro Sakaba has in-depth expertise in corporate planning, accounting and finance, andcorporate management divisions. He has contributed to the sustained growth of the Riken Groupand to increasing its medium-to long-term growth. He has extensive knowledge and experience inoverall management, so the Company deems him qualified to make decisions on importantmatters and supervise business execution and the Company nominates him as a candidate for
Director of the newly established Joint Holding Company.

- 50 -

No.

Name(Date of birth)

Career summary, position and responsibilities, andsignificant concurrent positions outside theCompany

April 1984

6(1) Number of theCompany’s shares
owned(2) Number of Riken’s
shares owned(3) Number of the
Joint Holding
Company’s sharesallotted

Joined Nippon Piston Ring Co.,Ltd.
April 2005
General Manager, Corporate
Planning Department of Nippon
Piston Ring Co., Ltd.
June 2006
President of NPR of America, Inc.
July 2012
Operating Officer of Nippon Piston
Ring Co., Ltd.
President of NPR of America, Inc.
June 2013
Director, General Manager,
Corporate Planning Department incharge of Corporate Planning
Department and Overseas
Operation Control Department of
Nippon Piston Ring Co., Ltd.
June 2021
Director, Managing Executive
Officer (present position) in charge (1) 13,924
Masaaki Fujita
of Corporate Planning Department(2) –(May 30, 1961)
and Accounting and Finance(3) 14,202
Department of Nippon Piston Ring
Co., Ltd.
September
In charge of Corporate Planning2022
Department, Accounting and
Finance Department, and Related
Business Department of Nippon
Piston Ring Co., Ltd.
April 2023
In charge of Corporate
Administration Department,
Accounting and Finance
Department, and Related Business
Department of Nippon Piston Ring
Co., Ltd. (present position)(Significant concurrent positions)
Komisaris, PT. NT Piston Ring Indonesia
Komisaris, PT. NPR Manufacturing Indonesia
Director, NPR of America, Inc.
(Reasons for nomination as candidate for Director)
Masaaki Fujita holds a high level of expertise in the corporate planning department and corporate
administration department, and has contributed to the Nippon Piston Ring Group’s sustainablegrowth and medium to long term enhancement of corporate value. We nominated him as a
candidate for Director of the Joint Holding Company to be newly established based on his
continuing extensive knowledge and experience in all aspects of management and his
qualifications for making decisions on important matters and supervising the execution ofbusiness operations.

- 51 -

No.

Name(Date of birth)

Career summary, position and responsibilities, andsignificant concurrent positions outside theCompany

April 1973
May 1999

7(1) Number of theCompany’s shares
owned(2) Number of Riken’s
shares owned(3) Number of the
Joint Holding
Company’s sharesallotted

Joined Bank of Japan
Director-General of International
Department of Bank of Japan
June 2002
Executive Director of Bank ofJapan
June 2006
Director, Vice President of Toyota
Financial Services Corporation
May 2015
Director, Representative Statutory
Executive Officer of MetLife, Inc.
June 2015
Outside Director of Riken
Corporation (present position)
Eiji Hirano
June 2016
Outside Director of NTT DATA
(1) –Corporation (present position)(2) –(September 15,(3) –September
Director, Vice Chairman of
1950)
2017
MetLife, Inc. (present position)
October
Chairperson of the Board of2017
Governors of Government Pension
Investment Fund
June 2022
Outside Director of Ichiyoshi
Securities Co., Ltd. (present
position)(Significant concurrent positions)
Director, Vice Chairman of MetLife, Inc.
Outside Director of NTT DATA Corporation
Outside Director of Ichiyoshi Securities Co., Ltd.
(Reasons for nomination as candidate for Outside Director and outline of expected role)
Eiji Hirano held a top post in the Bank of Japan, has in-depth expertise in overall corporate
management such as at financial institutions as well as extensive international experience andbroad insights. He has proactively provided his opinions of the overall management of the Riken
Group from an objective perspective, while fulfilling his role of supervising management. The
Company has nominated him as a candidate for Outside Director as we expect him to fulfill his
important role of providing recommendations and advice to ensure the adequacy andappropriateness of the Board of Directors decision making also at the newly established Joint
Holding Company from an independent perspective.

- 52 -

No.

Name(Date of birth)

Career summary, position and responsibilities, andsignificant concurrent positions outside theCompany

November
1991
September
1994
April 1995
April 1998
April 2000
April 2004

April 2005
8

Masako Kurosawa(July 23, 1962)

April 2012

September
2015
February
2020

April 2021
April 2022
April 2023

Research Fellow, Institute for
Research on Higher Education,
University of Pennsylvania,
Philadelphia, USA
Visiting Assistant Professor,
Economics Department, Barnard
College, New York, USA
Associate Professor, Josai
University, Department of
Economics
Visiting Associate Professor, The
Open University of Japan, Industry
and Technology
Associate Professor, Meiji Gakuin
University, Department of
Economics
Professor of National Graduate
Institute for Policy Studies (present
position)
Director, Tokyo Foundation for
Employment Services(present position)
Faculty Fellow, Research Instituteof Economy, Trade and Industry
Member of the Managing Council,
Japan Organization for
Employment of the Elderly,
Persons with Disabilities and Job
Seekers (present position)
Visiting Fellow, Columbia
Business School, Centre on
Japanese Economy and Business
Chair of the Committee
Investigation the Integration of the
National Trades Skill Test, Skill
Assessment Office, Human
Resources Development Division,
Ministry of Health, Labour andWelfare (present position)
Director and Vice President,
National Graduate Institute for
Policy Studies (present position)
Standing Member of Productivity
Committee, Japan Productivity
Center (present position)
Member of Employment Security
Committee, Labour Policy Council,
Employment Security Bureau,
Ministry of Health, Labor and- 53 -(1) Number of theCompany’s shares
owned(2) Number of Riken’s
shares owned(3) Number of the
Joint Holding
Company’s sharesallotted

(1) –
(2) –
(3) –

No.

Name
(Date of birth)

Career summary, position and responsibilities, andsignificant concurrent positions outside theCompany(1) Number of theCompany’s shares
owned(2) Number of Riken’s
shares owned(3) Number of the
Joint Holding
Company’s sharesallotted

Welfare (present position)(Significant concurrent positions)
Director, Vice President and Professor, National
Graduate Institute for Policy Studies(Reasons for nomination as candidate for Outside Director and outline of expected role)
Masako Kurosawa has no past experience in management of a company, but she has a high levelof expertise in labor economics as an academic. For this reason the Company has nominated her
as a candidate for Outside Director as we expect her to fulfill her important role of providing
recommendations and advice to ensure the adequacy and appropriateness of the Board of
Directors decision making also at the newly established Joint Holding Company.

(Notes)1
The class and number of shares of the Company and Riken held by each candidate are based on theshareholding status as of March 31, 2023, and the class and number of shares of the Joint Holding
Company to be allotted are based on the said shareholding status, taking into account the Share Transfer
Ratio. Therefore, the actual number of shares of the Joint Holding Company to be allotted may varydepending on the number of shares held immediately prior to the date of the establishment of the Joint
Holding Company.
2
There are no special interests between each candidate and the Company and Riken, nor are they
expected to have any special interests with respect to the Joint Holding Company.
3
Eiji Hirano and Masako Kurosawa are candidates for Outside Directors.
4
If Eiji Hirano and Masako Kurosawa are elected as Outside Directors, the Joint Holding Company
plans to register them as independent directors without any risk of conflict of interest with generalshareholders with the Tokyo Stock Exchange.
5
If each of the candidates for Outside Directors assumes the office, the Joint Holding Company willenter into an agreement with each of them limiting his/her liability for damages to the Joint Holding
Company to the extent stipulated in legislation under Article 423, Paragraph 1 of the Companies Act.
6
If each of the candidates for Directors assumes the office, the Joint Holding Company will enter intoa liability insurance contract for officers, etc. (D&O Insurance Contract) under Article 430-3, Paragraph
1 of the Companies Act with an insurance company, under which legal damages or legal costs, etc. thatshall be borne by the insured will be covered, with all the Directors including Directors who are Audit
and Supervisory Committee Members as the insured.
8.
Matters stipulated in Article 74-3 of the Regulations for Enforcement of the Companies Act
regarding persons who will become Directors who are Audit and Supervisory Committee Members of the
Joint Holding Company
Persons who will become Directors who are Audit and Supervisory Committee Members are as follows.

- 54 -

No.

Name(Date of birth)

Career summary, position and responsibilities, andsignificant concurrent positions outside theCompany

April 1976
October
20141(1) Number of theCompany’s shares
owned(2) Number of Riken’s
shares owned(3) Number of the
Joint Holding
Company’s sharesallotted

Joined Riken Corporation
General Manager of Quality
Assurance Division of Riken
Corporation
April 2017 Executive Officer, General
Manager of Piston Ring Division #2 of Riken Corporation
April 2020 Managing Executive Officer,
General Manager of the Technology(1) –Kouei Watanabe
Management Division of Riken(2) 12,200(November 19,
Corporation(3) 24,400
1958)
April 2021 Managing Executive Officer,
General Manager of Technology
Management Head Office of Riken
Corporation
June 2021
Director, Managing Executive
Officer, Chief Technical Officer(CTO) of Riken Corporation
April 2023 Director of Riken Corporation(present position)(Reasons for nomination as candidate for Director who is Audit and Supervisory Committee
Member)Kouei Watanabe has in-depth expertise mainly in technology fields and has contributed toincrease the corporate value of the Riken Group. For this reason, the Company deems him
qualified to audit the business execution of Directors from an objective and fair perspective and toaudit the newly established Joint Holding Company, so the Company has nominated him as a
candidate for Director who is an Audit and Supervisory Committee Member.

- 55 -

No.

Name(Date of birth)

Career summary, position and responsibilities,
and significant concurrent positions outside theCompany

April 1988

2

(1) Number of theCompany’s shares
owned(2) Number of Riken’s
shares owned(3) Number of the Joint
Holding Company’s
shares allotted

Joined Nippon Piston Ring Co.,Ltd.
April 2012 General Manager, Accounting and
Finance Department of Nippon
Piston Ring Co., Ltd.
July 2016
Executive Officer, General
Manager, Accounting and Finance
Department of Nippon Piston Ring
Co., Ltd.
July 2018
Executive Officer, Assistant to
Officer Responsible for
Accounting and Finance
Department of Nippon Piston Ring
(1) 1,882
Co., Ltd.
Hiroto Koeba(2) –(April 4, 1965)
June 2020
Audit & Supervisory Board(3) 1,919
Member of Nippon Piston Ring
Co., Ltd.
June 2021
Directors who is Audit &Supervisory Committee Memberof Nippon Piston Ring Co., Ltd.
(present position)(Significant concurrent positions)Audit & Supervisory Board Member of NPR
IWATE CO., Ltd.
Audit & Supervisory Board Member of NPR
Fukushima Works Co., Ltd.
Audit & Supervisory Board Member of
NORMECA ASIA CO., LTD.
(Reasons for nomination as candidate for Director who is Audit and Supervisory Committee
Member)Hiroto Koeba has in-depth expertise mainly in the accounting field and has contributed to auditing
the business execution of Directors from an objective and fair perspective and ensuring thesoundness of management. For these reasons, the Company deems him qualified to audit the
newly established Joint Holding Company and has nominated him as a candidate for Director who
is an Audit and Supervisory Committee Member.

- 56 -

No.

Name(Date of birth)

Career summary, position and responsibilities, andsignificant concurrent positions outside theCompany

April 1981

3(1) Number of theCompany’s shares
owned(2) Number of Riken’s
shares owned(3) Number of the
Joint Holding
Company’s sharesallotted

Joined The Industrial Bank ofJapan, Limited
April 2009 Executive Officer, General
Manager, Corporate PlanningGroup HR Division of Mizuho
Securities Co., Ltd.
June 2011
Vice President and Director ofJapan Securities Agents, Ltd.
June 2012
Director of Japan Information
Processing Service Co., Ltd.
June 2015
Director, Senior Managing
Executive Officer of Securities(1) –Japan, Inc.
Osamu Honda(2) –(March 4, 1958)
June 2017
Representative Director and Senior(3) –Managing Director of Nitchitsu Co.,Ltd.
June 2019
Representative Director and Vice
President of Nitchitsu Co., Ltd.
June 2021
Outside Auditor of Kurimoto Ltd.
(present position)
June 2021
Outside Directors who is Audit andSupervisory Committee Member ofRiken Corporation (present
position)(Significant concurrent positions)
Outside Auditor of Kurimoto Ltd.
(Reasons for nomination as candidate for Outside Director who is Audit and Supervisory
Committee Member and outline of expected role)
Osamu Honda has in-depth expertise, extensive experience and broad insights on corporate
management overall such as financial institutions, as well as management experience at othercompanies. He has contributed to auditing the business execution of Directors from an objective
and fair perspective and ensuring the soundness of management. For these reasons, the Company
expects he will adequately supervise management and audit the execution of duties at the newly
established Joint Holding Company as well, so the Company has nominated him as a candidate
for Outside Director who is an Audit and Supervisory Committee Member.

- 57 -

No.

Name(Date of birth)

Career summary, position and responsibilities,
and significant concurrent positions outside theCompany

April 1984

4

Hiroki Kimura(January 19, 1962)

Joined Asahi Mutual Life
Insurance Company
April 2012 Executive Officer, Head ofFinance and Real Estate Division,
Asset Management Administration
Division, Asahi Mutual Life
Insurance Company
July 2013
Director, Executive Officer andHead of Asset Management
Administration Division, Asahi
Mutual Life Insurance Company
June 2014
Outside Auditor, Kanto Denka
Kogyo Co., Ltd.
April 2015 Director, Managing Executive
Officer in charge of AssetManagement Planning Department
and Securities Management
Department, Asahi Mutual Life
Insurance Company
April 2016 Director, Managing Executive
Officer in charge of Corporate
Planning Department and Finance
Department, Asahi Mutual Life
Insurance Company
June 2016
Audit & Supervisory Board
Member (Outside) of Nippon
Piston Ring Co., Ltd.
April 2017 President and Representative
Director, Asahi Mutual Life
Insurance Company (present
position)
March
Audit & Supervisory Board
2019
Member (Outside), The Yokohama
Rubber Co., Ltd.
June 2020
Audit & Supervisory Board
Member (External), Zeon
Corporation (present position)
June 2021
Outside Director who is Audit &Supervisory Committee Memberof Nippon Piston Ring Co., Ltd.
(present position)
MarchMember of the Board, Member of2023
the Audit & Supervisory
Committee (Outside) of The
Yokohama Rubber Co., Ltd.
(present position)(Significant concurrent positions)
President and Representative Director, Asahi
Mutual Life Insurance Company
Member of the Board, Member of the Audit &- 58 -(1) Number of theCompany’s shares
owned(2) Number of Riken’s
shares owned(3) Number of the Joint
Holding Company’s
shares allotted

(1) –
(2) –
(3) –

No.

Name
(Date of birth)

Career summary, position and responsibilities,
and significant concurrent positions outside theCompany(1) Number of theCompany’s shares
owned(2) Number of Riken’s
shares owned(3) Number of the Joint
Holding Company’s
shares allottedSupervisory Committee (Outside) of The
Yokohama Rubber Co., Ltd.
Audit & Supervisory Board Member (External),
Zeon Corporation(Reasons for nomination as candidate for Outside Director who is Audit and Supervisory
Committee Member and outline of expected role)
Hiroki Kimura has extensive experience and broad insights on overall management in the life
insurance industry. He has contributed to auditing the business execution of Directors from an
objective and fair perspective and ensuring the soundness of management. For these reasons, theCompany expects he will adequately supervise management and audit the execution of duties at
the newly established Joint Holding Company as well, so the Company has nominated him as a
candidate for Outside Director who is an Audit and Supervisory Committee Member.

- 59 -

No.

Name(Date of birth)

Career summary, position and responsibilities,
and significant concurrent positions outside
the Company

April 1983

September
1999
January
2003
June 2004

December
2005

5

Tatsuya Sakuma(October 2, 1956)

January
2007
July 2008
July 2010

January
2019
March
2019
June 2019
November
2019
March

Public Prosecutor of Tokyo,
Naha and Niigata District
Public Prosecutors Offices, of
Criminal Affairs Bureau of the
Ministry of Justice, and as First
Secretary of Embassy of Japanin the United States of America
Chief of Investigations, Human
Rights Bureau of the Ministryof Justice
Chief of Public Security
Division, Criminal Affairs
Bureau of the Ministry ofJustice
Chief of Criminal Affairs
Division, Criminal Affairs
Bureau of the Ministry ofJustice
Deputy Head of special
investigation task force of theTokyo District Public
Prosecutors Office
Head of General Affairs
Department of the Tokyo
District Public Prosecutors
OfficeHead of special investigation
task force of the Tokyo District
Public Prosecutors Office
Chief Public Prosecutor ofOtsu, Maebashi and Chiba
District Public Prosecutors
Offices, Director of United
Nations Asia and Far East
Institute, and Director-Generalof the Research and Training
Institute of the Minister ofJustice
Retired from the position
Outside Director of bitFlyer,
Inc.
Outside Director of AEON
Financial Service Co., Ltd.
(present position)
Registered as an
attorney-at-law
Attorney-at-law of a law firm
‘Aoyama TS’ (present position)
External Director of PowerX,- 60 -(1) Number of theCompany’s shares
owned(2) Number of Riken’s
shares owned(3) Number of the Joint
Holding Company’s
shares allotted

(1) –
(2) –
(3) –

No.

Name
(Date of birth)

Career summary, position and responsibilities,
and significant concurrent positions outside
the Company(1) Number of theCompany’s shares
owned(2) Number of Riken’s
shares owned(3) Number of the Joint
Holding Company’s
shares allotted2022
Inc. (present position)(Significant concurrent positions)
Outside Director of AEON Financial Service
Co., Ltd.
External Director of PowerX, Inc.
Attorney-at-law of a law firm ‘Aoyama TS’(Reasons for nomination as candidate for Outside Director who is Audit and Supervisory
Committee Member and outline of expected role)
Tatsuya Sakuma has no past experience in management of a company other than as an outside
officer, but he has extensive experience and broad insights in legal circles, as well as experience
as an outside director at other companies. For these reasons, the Company expects he will
adequately supervise management and audit the execution of duties at the newly established Joint
Holding Company as well, so the Company has nominated him as a candidate for Outside
Director who is an Audit and Supervisory Committee Member.
(Notes)1
The class and number of shares of the Company and Riken held by each candidate are based on theshareholding status as of March 31, 2023, and the class and number of shares of the Joint Holding
Company to be allotted are based on the said shareholding status, taking into account the Share Transfer
Ratio. Therefore, the actual number of shares of the Joint Holding Company to be allotted may varydepending on the number of shares held immediately prior to the date of the establishment of the Joint
Holding Company.
2
There are no special interests between each candidate for Directors who are Audit and Supervisory
Committee Members and the Company and Riken, nor are they expected to have any special interests
with respect to the Joint Holding Company.
3
Osamu Honda, Hiroki Kimura and Tatsuya Sakuma are candidates for Outside Directors who are
Audit and Supervisory Committee Members.
4
If Osamu Honda, Hiroki Kimura and Tatsuya Sakuma are elected as Outside Directors who are
Audit and Supervisory Committee Members, the Joint Holding Company plans to register them as
independent directors without any risk of conflict of interest with general shareholders with the Tokyo
Stock Exchange.
5
If each of the candidates for Directors who are Audit and Supervisory Committee Members assumes
the office, the Joint Holding Company will enter into an agreement with each of them limiting his/her
liability for damages to the Joint Holding Company to the extent stipulated in legislation under Article
423, Paragraph 1 of the Companies Act.
6
If each of the candidates for Directors who are Audit and Supervisory Committee Members assumes
the office, the Joint Holding Company will enter into a liability insurance contract for officers, etc.
(D&O Insurance Contract) under Article 430-3, Paragraph 1 of the Companies Act with an insurancecompany, under which legal damages or legal costs, etc. that shall be borne by the insured will becovered, with all the Directors including Directors who are Audit and Supervisory Committee Members
as the insured.
9.

Matters stipulated in Article 77 of the Regulations for Enforcement of the Companies Act regarding
an entity that will become the accounting auditor of the Joint Holding Company
The entity which will become the accounting auditor of the Joint Holding Company is as follows.

- 61 -

(As of February 28, 2023)
Name
Location of the principal
officeHistory

Deloitte Touche Tohmatsu LLC
Marunouchi Nijubashi Building
2-3, Marunouchi 3-chome, Chiyoda-ku, Tokyo
May 1968
Establishment of Tohmatsu Awoki & Co.
May 1975
Joined Touche Ross International (currently Deloitte Touche
Tohmatsu Limited) allianceFebruary 1990 Name changed to Tohmatsu & Co.
July 2009
Transitioned to a limited liability company and changed nameto Deloitte Touche Tohmatsu LLC
Number of audit clients
3,244 companies (As of May 31, 2022)
Paid-in capital
1,138 million yen
Partners and staff
Partners (Certified Public Accountants):
486 persons
Specified partners:
59 persons
Staff
Certified Public Accountants:
2,586 persons
Successful applicants of the CPA examination, etc.
(including junior Certified Public Accountants):
1,176 persons
Other professional staff:
3,142 persons
Administrative staff:
85 persons
Total:
7,534 persons(Note) Deloitte Touche Tohmatsu LLC was selected as a candidate for the accounting auditor because thesaid auditing firm has the expertise, independence and internal control systems, etc., required of theaccounting auditor of the Joint Holding Company and therefore was determined as qualified.

- 62 -Electronic Provision Measures Commencement Date: June 1, 2023

Convocation of the 129th Annual General Meeting of Shareholders
Other Electronic Provision Measures Matters(matters omitted from delivered documents)■ Business Report(1) Systems for Ensuring the Properness of Business Activities(2) Basic Policy on the Control over the Company■ Consolidated Financial Statements
Notes to Consolidated Financial Statements■ Financial Statements
Notes to Non-Consolidated Financial Statements■ Reference Documents for the General Meeting of Shareholders in relation to
Proposal 1
Below items referenced in Proposal 1 “Approval of Share Transfer Plan”
are included in this document:
Details of Financial Statements of Riken
・Riken Corporation
Corporation’s Final Fiscal Year (Fiscal Year
Ended March 31, 2023)
Matters Related to Company Stock Acquisition
・Riken Corporation
Rights, etc.
Systems to Ensure the Appropriateness of・Riken Corporation
Operations
Consolidated Statement of Changes in Equity
・Riken Corporation
Notes to the Consolidated Financial Statements
・Riken Corporation
Statement of Changes in Equity
・Riken Corporation
Notes to the Non-consolidated Financial
・Riken Corporation
Statements(From April 1, 2022 to March 31, 2023)

(1) Systems for Ensuring the Properness of Business Activities
The following provides an outline of the systems for ensuring that the execution of the duties of Directors
complies with laws, regulations, and the Articles of Incorporation and the operation of those systems.
Please note that a resolution partially revising these systems was adopted at the meeting of the Board of
Directors held on April 27, 2023.
1.

Systems for Ensuring that the Execution of Duties of Directors and Employees of the Company and its
Subsidiaries Complies with Laws, Regulations, and the Articles of Incorporation① The Company has established a “Compliance Policy” for the Group and directs the Group’s officers
and employees to always carry out day-to-day activities appropriately from the perspectives of laws
and regulations, corporate ethics, and compliance with internal rules. The Company also responds tothe enactment and revision of new business activity-related laws and regulations with timely andsubstantial measures.
② At the same time that it established the “Compliance Policy,” the Company set up a “Compliance
Consultation Hotline (internal and external contact points),” and pursuant to the Whistle-Blower
Protection Act has implemented a system enabling the Group’s officers and employees toimmediately consult with this hotline when conduct believed to be in breach of laws, regulations, or
the Articles of Incorporation is discovered.
③ In the “Compliance Policy,” the Group has set forth rules regarding the banning of relationships with
antisocial forces and organizational responses to antisocial forces, and endeavors to ensure that theGroup’s officers and employees are thoroughly aware of them.
④ In order to appropriately prepare internal control reports stipulated in Article 24-4-4 of the Financial
Instruments and Exchange Act, the Board of Directors passed a resolution for the “Internal Control
Policy for Financial Reporting,” and the Company established “Rules Regarding ‘Internal Control
for Financial Reporting’,” implemented a system for facilitating those internal controls and put inplace a system for its operation, under the supervision of the President.
⑤ The Company has appointed multiple Outside Directors and ensures the supervisory function of theBoard of Directors. The Company’s Audit & Supervisory Committee Members attend meetings ofthe Board of Directors and other important meetings, and request reports from Directors, etc. asnecessary. (excluding Directors who are Audit & Supervisory Committee Members) and audit theexecution of duties by Directors (excluding Directors who are Audit & Supervisory Committee
Members). The Company has also established an internal audit department (Internal Auditors
Office), implements audits of business activities to confirm whether there are any breaches of laws,
regulations, or internal rules in relation to the Group’s internal business activities, and has
established a close-knit cooperative relationship with the Audit & Supervisory Committee.
⑥ The Company is engaged in organization-wide initiatives to sever ties with antisocial forces and has
put in place systems to exclude antisocial forces such as organized crime groups and their members,in order to ensure the safety of officers and employees and for the purpose of fair trade practices.

2.

Systems for the Retention and Management of Information Regarding the Execution of Duties of
Directors of the Company① The Company has internal rules regarding the Company’s organization, systems, and operation ofother business activities (“Document Architecture Regarding General Management”). Within this, theCompany has set forth “Standards Management Rules,” maintains and manages the establishment,
revision, abolition, and promulgation, etc. of rules in the Company, and also processes the retention
and management of information regarding the execution of duties of Directors pursuant to such
“Standards Management Rules.”② The Company has set forth “Information Management Rules” regarding the protection and preventionof external leaks of important information concerning the Company’s management and manages
information pursuant to those rules.
③ Rules created by each supervisory department are strictly examined, recorded, retained, and managed
by the department responsible for management.

3.

Rules Regarding Management of the Risk of Loss for the Company and its Subsidiaries and Other
Systems
The Company has established a BCP Subcommittee, examines, calculates, and assesses the risks

surrounding the Company’s business, and continuously works to reduce risk.
4.

Systems for Ensuring that the Duties of Directors of the Company and its Subsidiaries Are Carried out
Efficiently① The Company has introduced an executive officer system, and business activities for which decisions
have been made by the Board of Directors are executed under the direction and supervision of the
President. This system makes it possible for Directors to delegate authority to executive officers andfacilitates the streamlining of management.
② In order to make the execution of business nimbler, an officer-in-charge system has been introduced
at departments that execute business, interim and annual business plans are prepared, and together
with the sharing of that information, supervision and monitoring are carried out.
③ In addition to the Board of Directors, the Company has the following committees:(a) Management Strategy Committee
Comprised of executive officers nominated by the Directors (excluding Directors who are Audit &Supervisory Committee Members) and the President; deliberates management policies and management
strategies, etc. (once (1) per month in principle).
(b) Executive Committee
Comprised of Directors (excluding Directors who are Audit & Supervisory Committee Members),
Audit & Supervisory Committee Members, executive officers, department heads, etc.; manages the
progress status of business activities and ensures thorough knowledge of other important matters (once(1) per month in principle)

5.

Systems for Ensuring the Properness of Business Activities in the Group① In order to promote the development of the Group and mutual interests, the Company has set forth the“Affiliated Company Management Rules” and carries out appropriate management.
② The Company’s full-time Audit & Supervisory Committee Member concurrently serves as company
auditor at material consolidated subsidiaries in Japan. This system has been implemented in order for
the Company’s supervision and monitoring function to work effectively with respect to domestic
consolidated subsidiaries.

6.

System for the Company’s Audit & Supervisory Committee Members to Request Employees be
Appointed to Assist their Duties, Matters for Ensuring the Independence of Such Employees from
Directors (excluding Directors who are who Audit & Supervisory Committee Members) and the
Effectiveness of Directions to Such Employees① In the “Rules of the Audit & Supervisory Committee,” the Company stipulates that Audit &Supervisory Committee Members may, as necessary, request appropriate assistants from among
company employees with the consent of Directors (excluding Directors who are Audit &Supervisory Committee Members) and executive officers, and when such necessity arises, theCompany will put in place a system pursuant to such rules.
② The fact that such employees who are to assist the duties of Audit & Supervisory Committee
Members are in a position that is independent of Directors (excluding Directors who are Audit &Supervisory Committee Members) and serve pursuant to the directions and orders of Audit &Supervisory Committee Members is public knowledge at the Company.

7.

System for Reporting to Audit & Supervisory Committee Members① Pursuant to the “Rules of the Audit & Supervisory Committee,” it is possible for the Audit &Supervisory Committee may, as necessary, request reports from the Accounting Auditor, Directors(excluding Directors who are Audit & Supervisory Committee Members), and employees of theinternal audit department (Internal Auditors Office), and Audit & Supervisory Committee Members
are able to collect information by receiving such reports.
② Audit & Supervisory Committee Members may attend meetings of important boards andcommittees, etc., such as the Board of Directors and the Executive Committee, and collectinformation.
③ The Group has implemented a system enabling officers and employees to immediately consult the“Compliance Consultation Hotline (internal and external contact points)” regarding facts that could

④significantly damage the Company or its subsidiaries, such as breaches of laws, regulations, or the
Articles of Incorporation, whenever they are discovered. The department in charge of the Group’s“Compliance Consultation Hotline (internal and external contact points)” periodically reports to the
Audit & Supervisory Committee Members whistleblowing reports from the Group’s officers andemployees.
The Group’s Directors (excluding Directors who are Audit & Supervisory Committee Members) andemployees will not be treated disadvantageously for the reason of having made such a report, and theGroup ensures that this is well known within the Group.

8.

Matters Regarding Policies for the Processing of Expenses, etc. Incurred with Respect to the Executionof Duties of Audit & Supervisory Committee Members
If a claim for necessary expenses is received from an Audit & Supervisory Committee Member, such asprocedures for advance payment or reimbursement of expenses incurred with respect to the execution ofduties of Audit & Supervisory Committee Members or the processing of other expenses or liabilities
incurred with respect to the execution of the duties of Audit & Supervisory Committee Members, theCompany shall bear such expenses, except for cases where they are found to clearly not be necessary forthe execution of duties of Audit & Supervisory Committee Members.

9.

Systems for Ensuring that Audits by Audit & Supervisory Committee Members are Conducted Effectively① Pursuant to the “Rules of the Audit & Supervisory Committee” and the like, the Audit &Supervisory Committee periodically meets with the President and carries out an exchange of
opinions regarding material issues in the audit of issues, etc. that the company needs to address.
② In addition, when conducting audits, Audit & Supervisory Committee Members strive to coordinate
closely with the Accounting Auditor, the internal audit department (Internal Auditors Office), and
the Group’s company auditors.

[Outline of Operation of Systems]
1.

Initiatives in order for the Execution of Duties of the Companies Directors to be Carried out Efficiently
In order to further increase transparency and objectivity with respect to the nomination andremuneration of Directors, the Company has established a Nomination and Remuneration Advisory
Committee, comprising a majority of members who are Outside Directors, as a discretionary advisorycommittee of the Board of Directors. The committee met twice in FY2022.

2.

Initiatives in Relation to the CSR Promotion Committee
The CSR Promotion Committee meets periodically to deliberate important issues regarding safety,
quality, human rights, labor, the environment, compliance, information disclosure, risk management, andcontribution to society, and also confirms the roll-out status of internal activities and instructs eachsubcommittee established under the CSR Promotion Committee (compliance, risk management, etc.) andthe responsible departments to examine measures for each issue.
In FY2022, the Compliance Subcommittee conducted interviews for the purpose of strengthening
governance at overseas bases and implemented measures after examining the issues. In order to respond to
the wide range of risks facing companies these days, the Risk Management Subcommittee was integrated
with the BCP Subcommittee, risk assessments were organized (extracting high risks), and business
continuity plans were prepared for businesses deemed to be high risk.

3.

Audit System of the Audit & Supervisory Committee
Pursuant to policies and plans formulated at the Audit & Supervisory Committee, Audit & Supervisory
Committee Members attend meetings of important boards and committees such as the Board of Directors
to audit the execution of duties of Directors (excluding Directors who are Audit & Supervisory Committee
Members). In order to enhance the effectiveness of audits, the Audit & Supervisory Committee also
exchanges opinions with the President, the Accounting Auditor, the internal audit department (Internal
Auditors Office), and the Group’s company auditors, respectively, as well as attending meetings of the
CSR Promotion Committee and confirming the situation with regard to compliance and risk management.

(2) Basic Policy on the Control over the Company
The details of the basic policy on requirements for persons who control the Company’s decisions on
financial and business policies, initiatives contributing to achieving the basic policy, and countermeasuresagainst large-scale purchase actions for the Company’s shares (the “Plan”) are as follows.
① Basic policy on requirements for persons who control the Company’s decisions on financial and business
policies
The Company believes that it is desirable that persons who control the Company’s decisions on financial
and business matters have a full understanding of the Company’s financial and business matters and of thesource of its corporate value, and are capable of ensuring and enhancing the corporate value of theCompany and the common interests of our shareholders in a continuous and sustainable manner.
Nevertheless, as a corporate entity listed on a financial instruments exchange, the Company respects thefree trading of the Company’s shares in the market and will not absolutely deny any large-scale purchaseaction by a specific party, as long as it contributes to the corporate value of the Company and the common
interests of our shareholders. The Company also believes that the decision as to whether to agree to a proposal
for a large-scale purchase of shares should ultimately be made pursuant to the wishes of the shareholders.
However, recently in Japan’s capital market, there are some cases in which a large-scale share purchaseaction is undertaken “hostilely” without going through a sufficient discussion and agreement process withthe management team of the target company, and many such large-scale purchase actions do not contributeto the corporate value of the target company or the common interests of its shareholders. These include 1)
those that may clearly harm the corporate value and common interests of shareholders in light of theobjectives of the takeover and/or management policies after the takeover; 2) those that may effectively force
shareholders to sell their shares; 3) those that do not provide sufficient time or information for the Board of
Directors or shareholders to consider the terms, etc. of the purchase or for the Board of Directors to present
an alternative proposal; and 4) those that require the target company to negotiate with the purchaser in orderto procure conditions more favorable than those originally proposed by the purchaser.
Furthermore, as outlined below in ②I. below, “The Company’s Corporate Philosophy and Source ofcorporate value,” the Company’s business is based on the collaboration of various stakeholders, including
our customer companies, employees, and local communities. Creating a sound system that enables thesestakeholders to involve themselves in our business with confidence, and providing a stable supply of cuttingedge and high-quality services required globally are essential factors in raising the Company’s corporate
value. Unless the person(s) undertaking the large-scale purchase of the Company’s shares can ensure andenhance the Company’s corporate value in the medium- and long-term based on an understanding of thesesources of the Company’s corporate value, it is possible that the corporate value of the Company and thecommon interests of our shareholders will be damaged.
The Company believes that those who conduct such inappropriate large-scale purchases are not appropriate
as individuals who control the Company’s decisions on financial and business policies, and further believes
that it is necessary to ensure the corporate value of the Company and the common interests of ourshareholders by taking necessary and appropriate measures against large-scale purchases of shares by suchindividuals.
② Initiatives to Contribute to the Source of the Corporate Value of the Company and the Realization of Our
Basic Policy
Ⅰ．The Company’s Corporate Philosophy and the Source of Corporate Value
In our efforts to respond promptly and accurately to our customer’s needs, we have formulated our
corporate philosophy and specified our action guidelines as follows: “Let us build the prosperity of theCompany and of our lives by combining the ingenuity and efforts of each individual by strengthening thecollaboration between manufacturing, sales and technology.”<Corporate Philosophy>
1. We pursue every business operation on the principle of placing the No. 1 priority on customers.
2. We respond with flexibility to changes in the environment and secure appropriate levels of profits
to reflect our appreciation of our shareholders, suppliers, and business partners.
3. In harmony with society, we contribute to humanity’s progress by securing the position as a global
comprehensive parts manufacturer.
4. We strive for the prosperity of the corporation and the welfare of its employees through perpetual
efforts for innovation and improvement in performance.
Fully recognizing our role as a global comprehensive manufacturer of parts while valuing relationships

with our customers, employees, and local communities, we attribute the growth of the Company thus far
to our shareholders’ support as well as the results of our efforts to establish a supply system, improve
quality, and to make technological innovations, etc. based on the corporate philosophy stated above. We
believe this is the major source of the Company’s corporate value.
Ⅱ．Initiatives to enhance corporate value
Through the development of products responding to the requirements of fuel efficiency and exhaustemission regulations on the back of the global trend on environmental measures, the Company proactively
works to resolve issues facing society.
In the field of automobile engines, which is an existing business, the Company is moving forward withthe development of products tied to achieving high thermal efficiency and clean emissions, as well as
providing solutions utilizing unique technologies, and has been undertaking initiatives in its businessactivities with the aim of becoming a company chosen by customers for its quality and ability to come up
with proposals that meet customer needs. On the manufacturing front, through the introduction of innovative
production lines and the promotion of cost reduction and automation, etc., the Company strives toimplement systems to produce quality products even more efficiently.
With respect to new business in the field of non-automobile engines, the Company has been focusing
efforts on the development and commercialization of new products, etc. using new materials, centered on
the medical equipment and motor fields as the core of new businesses with an eye on the future. In thedevelopment of these businesses, the Company will continue to strive to achieve high levels of innovation
to add even more value, through collaboration with industry, government, and academia, and proactive
collaborative business, including alliances with other companies, using its own technology as the foundation.
The trend of placing greater value on social responsibility in corporate activities has also strengthened inrecent years. In addition to working to reduce the environmental impact of its core business, the Company
plans to proactively engage in important issues from the perspective of sustainability, such as respecting
diversity, human rights, and improving governance, even more actively than it has in the past, together withshareholders, customers, local communities, suppliers, and employees.
Based on this fundamental awareness, the Company will undertake the 8th Mid-Term Management Plan
with “Change as Chance ～ finding opportunities within change～” as its basic policy, aim for sustainablegrowth and medium- to long-term enhancement of corporate value, and realize further development of theCompany.
Ⅲ．Strengthening of Corporate Governance
The Company’s basic policies of corporate governance are to “improve management transparency,”“achieve accountability to stakeholders,” and “accelerate management,” and with the enhancement of theseas one of its key action points, the Company has been undertaking proactive initiatives.
③ Initiatives to prevent unsuitable parties from controlling decisions on the Company’s financial and business
policies in light of the basic policy
Ⅰ．Objectives of the introduction of the plan
The Plan was introduced as an initiative to prevent an unsuitable party from controlling the decisions
on the Company’s financial and business policies in light of the above basic policy and to deter largescale purchases that counter the Company’s corporate value and the common interests of shareholders.
Ⅱ．Details of the Plan(i) Details of Large-Scale Purchase Rules
The Large-Scale Purchase Rules that a large-scale purchaser must comply with before any large-scalepurchase action are as follows: i) The large-scale purchaser presents necessary and sufficient
information concerning the large-scale purchase action to the Board of Directors in advance; ii) the
Board of Directors sets a certain evaluation period then consults the Independent Committee, tocarefully formulate and announce their opinion as the Board of Directors, including the invoking ofcountermeasures; and iii) The large-scale purchaser commences said purchase action after theprocedures of i) and ii).
(a) Large-scale purchase actions, etc. subject to the Plan
The Plan applies to acts resulting in the purchaser holding 20% or more of the Company’s shares, etc.
or tender offers that result in holdings of 20% or more, or actions equivalent thereto or proposals therefor,and large-scale purchasers must comply with the large-scale purchase rules set forth in the Plan inadvance.
(b) Submission of letter of intent and provision of information
Prior to implementing the large-scale purchase action, the large-scale purchaser subject to the Plan shallsubmit to the Board of Directors a letter of intent stating matters including an outline of the large-scalepurchaser and their group, the objectives, method, and outline of the large-scale purchase action, etc., apledge expressing the intent to comply with the Large-Scale Purchase Rules prescribed in the Plan, andcompensation wording in the event of a violation.
(c) Evaluation and investigation, etc. by the Board of Directors
The Board of Directors shall set a period during which the Company’s Directors evaluate, investigate,negotiate, form opinions, and formulate alternative proposals (hereinafter, “Board of Directors’
Investigation Period”) in accordance with the level of difficulty of evaluating the large-scale purchaseaction, etc.
(d) Establishment of the Independent Committee and recommendations to the Board of Directors
The Company has established an Independent Committee as an independent organization toappropriately implement the Plan and prevent arbitrary decisions by the Board of Directors. The
Independent Committee consists of three or more members who are appointed from among theCompany’s Outside Directors, Outside Audit & Supervisory Board Members, and external experts toensure fair and neutral judgments.
The Independent Committee shall, during the Board of Directors’ Investigation Period, investigate thedetails of the large-scale purchase action, etc. from the perspective of ensuring and enhancing thecorporate value of the Company and the common interests of our shareholders, and shall makerecommendations to the Board of Directors, including the appropriateness of invoking
countermeasures.
(e) Resolutions by the Board of Directors, and general meeting of shareholders for confirmation ofshareholders’ intentions
The Board of Directors shall comply with the aforementioned recommendations of the Independent
Committee and, as a body under the Companies Act, pass a resolution concerning the invoking or noninvoking of countermeasures against the large-scale purchase action, etc.
However, when invoking countermeasures, in addition to Independent Committee consultation
procedures, the Board of Directors may, after first determining the details of specific countermeasures,convene a general meeting of shareholders to confirm the intent of the Company’s shareholders
regarding the invocation of countermeasures (“General Meeting of Shareholders for Confirmation ofIntent”) (i) if the Board of Directors determines that it is in practice possible to confirm the intent of
the Company’s shareholders – taking into consideration whether a substantive judgment based on thedetails of the large-scale purchase action, etc. from the perspective of ensuring and enhancing
corporate value and the common interests of shareholders is necessary and various circumstances suchas other details of the large-scale purchase action, etc. and the time available – and that it isappropriate in light of laws, regulations, and the Directors’ duty of care of a prudent manager, etc. or(ii) if the Independent Committee makes a recommendation with a reservation that the intent of theCompany’s shareholders should be confirmed with respect to the large-scale purchase action, etc.
(ⅱ) Countermeasures if the large-scale purchase, etc. takes place(a) Conditions for invoking countermeasures(A) When a large-scale purchaser does not comply with the Large-Scale Purchase Rules
In the event that a large-scale purchaser does not comply with the Large-scale Purchase Rules
stipulated in the Plan, and it is not corrected within five business days after the Board of Directors
requests such correction in writing, in cases other than where it is obvious that there is a necessity not
to invoke countermeasures for the sake of ensuring and enhancing the corporate value of theCompany and the common interests of our shareholders or other special circumstances, theIndependent Committee shall, in principle, recommend that the Board of Directors invokecountermeasures.
The Board of Directors shall decide to invoke the countermeasures in accordance with therecommendations of the Independent Committee. However, in the event that a General Meeting of

Shareholders for Confirmation of Intent is held in addition to the recommendations of the
Independent Committee, the Board of Directors shall decide to invoke countermeasures pursuant to
the judgment of shareholders at the General Meeting of Shareholders for Confirmation of Intent.
(B) When a large-scale purchaser complies with the Large-Scale Purchase Rules
In the event that the large-scale purchaser complies with the Large-Scale Purchasing Rules, theIndependent Committee shall, in principle, recommend that the Board of Directors does not invokecountermeasures against the large-scale purchase action, etc. However, even if the Large-Scale
Purchase Rules are complied with, if the Independent Committee determines that the Company’s
corporate value and the common interests of our shareholders will be significantly harmed, theIndependent Committee will recommend that the Board of Directors invoke countermeasures against
the large-scale purchase action, etc.
(b) Details of countermeasures
Countermeasures against the large-scale purchase action, etc. by the Company in accordance with thePlan shall be based on the gratis allotment of share options prescribed in Article 277 and following
articles of the Companies Act.
(ⅲ) Effective term, abolition, and amendment of the Plan
The effective term of the Plan shall be until the conclusion of the annual general meeting ofshareholders scheduled to be held in June 2023. However, even prior to the expiration of the effective
term of the Plan, the Company shall review the Plan from time to time from the perspective of ensuring
and enhancing the corporate value of the Company and the common interest of our shareholders, and thePlan shall be abolished or amended by resolution of the general meeting of shareholders or the Board of
Directors.
④ The fact that the Plan is in accordance with basic policies does not harm the common interests of theCompany’s shareholders, and is not for the purpose of maintaining the position of the Company’s officers,
and the reasons therefor
Ⅰ．Consistency with guidelines and timely disclosure rules for anti-takeover measures
The Plan is in accordance with details of the “Guidelines Regarding Takeover Defenses for the
Purposes of Protection and Enhancement of Corporate Value and Shareholders’ Common Interests”
jointly released by the Ministry of Economy, Trade and Industry and the Ministry of Justice on May 27,
2005 and takes into full consideration the “Takeover Defense Measures in Light of Recent
Environmental Changes” released on June 30, 2008 by the Corporate Value Study Group of the Ministryof Economy, Trade and Industry. In addition, the Plan also fulfils the intent of the various regulations
pertaining to the introduction of anti-takeover measures prescribed by Tokyo Stock Exchange, Inc.
Ⅱ．Introduction for the purpose of ensuring and enhancement of the common interests of shareholders
Introduction of the Plan is for the purpose of ensurance and enhancement of corporate value andcommon interests of shareholders by securing the necessary information and time required forshareholders to judge whether the large-scale purchase action, etc. is appropriate, and enablingnegotiations to be conducted for the benefit of shareholders when such large-scale purchase action, etc.
is carried out against the Company.
Ⅲ．Sufficient respect for shareholders’ Intentions (sunset provision)
The Plan was introduced upon being approved at the annual general meeting of shareholders held on
June 26, 2020. In addition, in the event that the Board of Directors judges it to be appropriate in lightof laws, regulations, or the duty of care of a prudent manager of the Company’s Directors, or the
Independent Committee makes a recommendation with a reservation that the intentions of shareholders
should be confirmed, it shall be possible to confirm the intentions of shareholders with regard to theinvoking or non-invoking of countermeasures at the general meeting of shareholders.
Ⅳ．Eliminating arbitrariness of the Board of Directors
The Company has established the Independent Committee as a unit independent from the Board of
Directors to appropriately carry out this countermeasure, prevent arbitrary judgments by the Board of

Directors, and to ensure the rationality and fairness of the judgments. In the event that a large-scalepurchase action, etc. is carried out against the Company, the Independent Committee shall make a
substantive judgment as to whether the large-scale purchase action, etc. will damage the corporate valueof the Company and the common interests of our shareholders, and the Board of Directors shall pass a
resolution in accordance with this judgment as a body under the Companies Act, thus ensuring amechanism for the transparent operation of the Plan in order to maintain the corporate value of theCompany and the common interests of our stockholders.
Ⅴ．Setting objective and reasonable requirements
The Plan is designed in such a way that countermeasures will not be invoked unless the Independent
Committee deems that reasonable and detailed objective requirements have been satisfied.
Ⅵ．No dead-hand or slow-hand anti-takeover measure
The Plan is designed in such a way that it may be abolished even prior to the expiration of its
effective term by a decision of the Board of Directors, which comprises Directors appointed at thegeneral meeting of shareholders, and the Company believes that the Plan is of a completely different
nature to the rights plans known as the dead-hand anti-takeover measure and the slow-hand antitakeover measure that make it impossible or difficult for the management team to abolish a plan.
Ⅶ．Acquiring the opinions of third-party experts
The Plan enables the Independent Committee to receive advice from independent third-parties(financial advisors, certified public accountants, attorneys-at-law, consultants, and other experts) at theCompany’s expense. This mechanism more securely guarantees the fairness and objectivity of
judgments by the Independent Committee.

Notes to Consolidated Financial Statements
1. Notes, etc. Regarding Significant Matters Forming the Basis for Preparation of Consolidated Financial
Statements(1) Scope of consolidationa. No. of consolidated
13
subsidiaries
NPR of America, Inc.
b. Names of main
consolidated subsidiaries NPR Fukushima Works Co., Ltd.
NPR Iwate Co., Ltd.
NPR of Europe GmbH
PT. NT Piston Ring Indonesia
SIAM NPR Co., Ltd.
NPR Auto Parts Manufacturing (Yizheng) Co., Ltd.
NPR Singapore Pte. Ltd.
PT. NPR Manufacturing Indonesia
E.A. Associates Sdn. Bhd
NPR Auto Parts Manufacturing India Pvt. Ltd.
NPR ASIMCO Powdered Metals Manufacturing (Yizheng) Co., Ltd.
Normeca Asia Co., Ltd.
(2) Equity method application
Non-consolidated subsidiaries to which the equity method is applied
・Number of non-consolidated subsidiaries or affiliated companies to which the equity method is applied
Not applicable.
(3) Changes to the scope of consolidation and scope of application of the equity method
Not applicable.
(4) Fiscal year end dates, etc. of consolidated subsidiaries
The fiscal year of consolidated subsidiaries is the same as the consolidated fiscal year, with the exception of
NPR of America, Inc., NPR of Europe GmbH, PT. NT Piston Ring Indonesia, SIAM NPR Co., Ltd., NPR Auto
Parts Manufacturing (Yizheng) Co., Ltd., NPR Singapore Pte. Ltd., PT. NPR Manufacturing Indonesia, E.A.
Associates Sdn. Bhd, NPR Auto Parts Manufacturing India Pvt. Ltd., and NPR ASIMCO Powdered Metals
Manufacturing (Yizheng) Co., Ltd. for which the fiscal year ends on December 31. When preparing theconsolidated financial statements, necessary consolidation adjustments are carried out based on the financial
statements of each company for significant transactions, etc. arising before the end of the consolidated fiscal
year.
(5) Accounting policies① Valuation standards and valuation methods for significant assets
a. Securities
Other securities
Fair value method (valuation differences are all included directly in・ Securities otherthan shares, etc.
net assets, and the cost of securities sold is calculated using thewithout amoving average method).
market price
Cost method using the moving average method.
・ Shares, etc.
without amarket priceb. Derivatives
Fair value method.
c. Inventory
Mainly cost method using the moving average method (by means ofa write-down of book value due to reduction in profitability)② Depreciation methods for significant depreciable assets
a. Property, plant, andequipment
The straight-line method is mainly used for machinery and transport
・ Property, plant, andequipment other than lease equipment, with the declining balance method mainly used for
assetseverything else.
However, the straight-line method is mainly used for buildings
acquired on or after April 1, 1998 (excluding facilities and equipment
ancillary to buildings) and facilities and equipment ancillary tobuildings and structures acquired on or after April 1, 2016.

・ Lease assets

Lease assets under finance lease transactions with a transfer ofownership
The same depreciation method is applied to fixed assets owned by theCompany.
Lease assets under finance transactions without transfer of ownership
The lease term is used as the useful life, and the straight-line method isused with the residual value set as zero.

b. Intangible
fixed
assets・ Intangible fixed assets otherthan lease assets
Software for internal use The straight-line method based on the internal usable period (five (5)years).
Other intangible fixed
Straight-line method.
assetsLease assets under finance transactions without transfer of ownership・ Lease assets
The lease term is used as the useful life, and the straight-line method
is used with the residual value set as zero.
③ Standards for recording significant allowances
Allowance for
The historical bad debt rate is used to provide for loss due to bad
doubtful accounts
debt for general accounts receivable, and for certain debts, such as
doubtful accounts receivable, the recoverability is examined
individually and the estimated unrecoverable amount is recorded.
④ Standard for conversion of significant foreign currency-denominated assets or liabilities into Japanese Yen
Foreign currency-denominated assets and liabilities are converted
into Japanese Yen at the foreign exchange spot rate on the last day ofthe consolidated fiscal year and foreign currency translationdifferences are accounted for as loss or profit. The assets andliabilities of foreign subsidiaries are converted into Japanese Yen at
the foreign exchange spot rate on the last day of the consolidated
fiscal year, revenue and expenses are converted to Japanese Yen at
the average rate for the period, and translation differences arerecorded by inclusion in “Foreign currency translation adjustment”
and “Non-controlling interests” under net assets.
⑤ Significant hedge accounting methods
a. Hedge accounting
Deferred hedge accounting is used.
methods
Interest rate swaps that satisfy the requirements for special treatment
are by special treatment, and forward exchange contracts that satisfy
the requirements for allocation treatment are by allocation treatment.
b. Hedging instruments and Hedging instruments: forward exchange contract transactions, interest
rate swap transactions.
hedged items
Hedged items: foreign currency-denominated assets and liabilities,
loans payablec. Method for evaluating the In order to hedge against risks from market rate fluctuations, risk
management pursuant to internal rules is implemented for assets oreffectiveness of hedging
liabilities based on actual demand and the effectiveness is evaluated.
policies and hedges⑥ Other significant matters for the preparation of consolidated financial statementsa. Accounting method forWhen calculating retirement benefit liabilities, the method ofretirement benefits
attributing the estimated amount of retirement benefits to the period
until the end of the consolidated fiscal year is based on the benefit
calculation formula.
Actuarial differences are accounted for as expenses from thefollowing consolidated fiscal year after they respectively arise, using
the straight-line method based on the average remaining service
period of employees when it arises.

b. Goodwill amortization
method and amortization
periodc. Standards for recording
revenue and expenses

Unrecognized actuarial differences are recorded as accumulated
remeasurement of defined benefits plan under accumulated othercomprehensive income in the net assets section after adjusting the tax
effect.
Goodwill is amortized over a period of 7 years using the straight-line
methodThe main business of the Group is production and sale of automobile
products, marine engine products, and other products. In its
automobile product business, the Group manufactures automobile
engine parts including piston rings and valve seat inserts at
manufacturing bases in Japan and overseas, and sells them toautomobile manufacturers, etc. For the replacement parts market, theGroup also sells to business operators, etc., handling automobile
parts. In the marine engine products and other products businesses,
the Group sells piston rings for ships and products applying a metal
injection molding (METAMETAL) process, etc. to ship
manufacturers and industrial equipment manufacturers, etc.
respectively. In the other products business, the Group sells
automobile bearing parts and RV products, etc. to automobile
manufacturers and retailers, etc.
Revenue generated from contracts with customers is recognized at
the time that control of the product transfers to the customer. In
domestic sales, revenue is mainly recognized at the time of shipping
because the time from shipping until control of the product transfers
to the customer is a normal period of time (shipping basis applied).
With respect to domestic sales where shipping basis is not applied,revenue is recognized when the product is delivered to the customer.
With respect to export transactions, revenue is recognized at the timeof delivery to the customer set forth in the International Commercial
Terms.
Transaction consideration is received within one (1) year ofsatisfaction of the performance obligations, and does not include
significant finance components.

2. Notes Regarding Changes to Accounting Policies(Changes to Accounting Policies in Conjunction with Revisions to Accounting Standards, etc.)(Application of ASC 842 Lease Accounting)Foreign subsidiaries that applies the US accounting standards have applied ASC 842 Lease Accounting since thebeginning of the current consolidated fiscal year. Under this standard, parties taking out leases are in principle
required to recognize all leases as assets and liabilities on their balance sheets.
When applying this accounting standard, we have adopted a method of recognizing on the applicationcommencement date the cumulative effects of the application of accounting standards permitted as transitional
measures.
Consequently, at the end of the current consolidated fiscal year “Intangible fixed assets” increased by ¥263 million,“Lease liabilities” under current liabilities increased by ¥75 million, and “Lease liabilities” under fixed liabilities
increased by ¥186 million. Please note that the impact on loss or profit for the current consolidated fiscal year isminor. The impact on loss and profit for the current consolidated fiscal year is minor.
(Changes to Method of Attribution to Service Period for Retirement Benefits)
In April 2022, the method of recognizing retirement benefits liabilities was clarified by the press release“Attributing Benefit to Periods of Service” by the Indonesian Financial Accounting Standards Board (Dewan
Standar Akuntansi Keuangan or DSAK) of the Institute of Indonesia Chartered Accountants (Ikatan Akuntan
Indonesia or IAI) based on the Agenda Decision of the IFRS Interpretations Committee (IFRIC) Attributing
Benefit to Periods of Service (IAS 19 Employee Benefits). In conjunction with this, in the past, retirement benefits
were recognized by corresponding to employees’ period of service, but from the current consolidated fiscal year,
some foreign subsidiaries apply a method whereby they are recognized by corresponding to the period when theliability burden is incurred.
As a result of recognizing the cumulative effect of the commencement of application of this change as a revision

of the balance of retained earnings and the like at the beginning of the period, the balance of “retained earnings” at
the beginning of the current consolidated fiscal year increased by ¥136 million, “foreign currency translation
adjustment” increased by ¥8 million, and the “cumulative adjustment for retirement benefits” reduced by ¥52
million. The impact on loss and profit for the current consolidated fiscal year is minor.
3. Additional Information(Notes Regarding Transactions Delivering the Company’s Shares to Employees, etc. through a Trust)At the Board of Directors’ meeting held on September 24, 2020, the Company passed a resolution to
introduce a trust-type employee shareholding incentive plan with the aim of incentivizing employees to improve
the Company’s medium- and long-term corporate value.
① Outline of transaction
Under the plan, a trust exclusively for the Nippon Piston Ring Employee Shareholding Association isestablished at a trust bank (“Employee Shareholding Trust”) and will acquire in advance the number ofshares of the Company expects to be acquired by the shareholding association over a five-year period.
Subsequently, the Employee Shareholding Trust continuously sells the Company’s shares to the shareholding
association, and if an amount equivalent to the profit on the sale of shares has accumulated in the Employee
Shareholding Trust when the trust terminates, that amount equivalent to the profit on the sale of shares will
be distributed as residual assets to those who satisfy the beneficiary qualification conditions. Because theCompany is a guarantor for loans payable for the purpose of the Employee Shareholding Trust acquiring theCompany’s shares, if the Company’s share price drops, causing an amount equivalent to loss on the sale ofshares to accumulate within the Employee Shareholding Trust and there are outstanding loans payableequivalent to the loss on the sale of such shares within the Employee Shareholding Trust when the trust
terminates, the Company shall repay such outstanding liabilities.
② Accounting treatment
With respect to the accounting treatment, “Practical Solution on Transactions of Delivering the Company’s
Own Stock to Employees etc. through Trusts” (Practical Issues Task Force No. 30, March 26, 2015) is appliedand accounting treatment is carried out in accordance with such guidelines.
③ Shares of the Company held by the trust
The shares of the Company held by the Employee Shareholding Trust are recorded as treasury shares in the
net assets section based on the book value in the Employee Shareholding Trust (excluding the amount ofancillary expenses). At the end of the current consolidated fiscal year, there were 225,700 such treasury shareswith a book value of ¥216 million.
④ Book value of loans payable recorded due to the application of the gross method¥164 million at the end of the current consolidated fiscal year.
(Change to Consolidation Schedule)
As announced 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. andRiken Corporation” dated July 27, 2022, the Company and Riken Corporation have concluded a memorandum of
understanding to consolidate the two companies on equal terms and started concrete discussions andinvestigations.
In the press release “Notice Regarding the Schedule for the Consolidation of Nippon Piston Ring Co., Ltd. And
Riken Corporation” dated November 28, 2022, we announced that we have changed the schedule for the
consolidation in consideration of the time required for the business combination review by the Japan Fair Trade
Commission (JFTC), and we hereby give notice that on May 2, 2023, all procedures for notification to the JFTC
and investigation procedures were completed and we received a notice from the JFTC to the effect that it would
not issue a cease-and-desist order. The two companies will continue discussions and deliberations with the aim ofrealizing the consolidation as early as possible. With respect to the schedule that we had stated as “TBD,” we willproceed according to the following schedule and will provide notice again once it is finalized by officiallyapproved decisions of the two companies.
Conclusion of final contract regarding the consolidation
Annual general meeting of shareholders (resolution approving the sharetransfer)
Date of delisting from Tokyo Stock Exchange (TSE)May 23, 2023 (scheduled)
June 23, 2023 (scheduled)
September 28, 2023

(scheduled)
Effective date of the Share Transfer and listing date of the joint holding

October 2, 2023 (scheduled)company(Note) The above is the current schedule and it may be changed by agreement upon discussion between the twocompanies when necessary due to the progress of the consolidation or necessary due to other grounds.
4. Notes Regarding Accounting Estimates(Recoverability of Deferred Tax Assets at Nippon Piston Ring Co., Ltd.)(1) Amount recorded in the consolidated financial statements for the current consolidated fiscal year
Deferred tax assets:¥95 million
Deferred tax liabilities: ¥1,034 million
Of which, amounts pertaining to Nippon Piston Ring Co., Ltd
Deferred tax assets:¥－ million
Deferred tax liabilities: ¥1,163 million
The Company has set off ¥358 million of deferred tax assets against deferred tax liabilities.
(2) Other information for understanding the details of estimates① Calculation method
With respect to the taxable temporary difference after taking into consideration the reversal schedule fortaxable temporary difference, we estimate future taxable income and then determine the recoverability ofdeferred tax assets. The estimate of taxable income is based on the business plan for the following fiscal
year approved by the Board of Directors, and its feasibility is reasonably determined.
② Key assumptions
The key assumptions used to formulate the business plan for the following fiscal year that forms the basisof the taxable income estimate are the projected volume of sales and the projected cost of raw materials,
assuming a certain business environment, etc.
③ Impact on consolidated financial statements for the following consolidated fiscal year
If changes in the business environment, etc. cause a significant change in the key assumptions – theprojected volume of sales and the projected cost of raw materials – and the estimated amount of taxable
income reduces, there is the risk that it will have a material impact on the determination of recoverability ofdeferred tax assets.
5. Notes Regarding Consolidated Balance Sheets(1) Assets pledged as collateral
Details and value of collateral assets(Mortgageable factory assets)
Buildings and structures
Machinery and equipment
Land(Other)Buildings and structures
Land
Liabilities secured by the above collateral assets(For mortgageable factory assets)
Short-term loans payable
Current portion of long-termloans payable
Long-term loans payable(Other)Short-term loans payable
Current portion of long-termloans payable
Long-term loans payable(2) Accumulated depreciation ofproperty, plant, and equipment
6. Notes to Consolidated Statement of Changes in Net Assets(1) Class and total number of issued shares¥2,895 million¥5,354 million¥2,832 million¥477 million¥675 million¥1,851 million¥1,672 million¥2,108 million
504 million¥123 million¥158 million¥91,624 million

Class of Shares
Common stock

Number of Shares
at Beginning ofCurrent
Consolidated
Fiscal Year8,374,157

Increase in the
Number of Sharesin Current
Consolidated
Fiscal Year－

Decrease in the
Number of Sharesin Current
Consolidated
Fiscal Year－

Number of Shares
at End of Current
Consolidated
Fiscal Year8,374,157(2) Dividends of surplus① Amount of dividends paid
Dividends pursuant to resolution of the 128th Annual General Meeting of Shareholders held on June 28, 2022
・ Total amount of¥400 Million
dividends
・ Dividend per
¥50
share
March 31, 2022
・ Record dateJune 29, 2022
・ Effective date
(Note)The total amount of dividends pursuant to the June 28, 2022 resolution of the annual general
meeting of shareholders includes dividends of ¥4 million for shares held by the Employee
Shareholding Trust (as of the record date of March 31, 2022: 271,200 shares).
Dividends pursuant to resolution of a meeting of the Board of Directors held on November 11, 2022
・ Total amount of¥160 Million
dividends
・ Dividend per
¥20
share
September 30,
・ Record date2022
December 6, 2022
・ Effective date
(Note)The total amount of dividends pursuant to the November 11, 2022 resolution of the Board of
Directors includes dividends of ¥4 million for shares held by the Employee Shareholding Trust (asof the record date of September 30, 2022: 246,700 shares).
② Dividends with a record date that falls in the current consolidated fiscal year that have an effective date in
the subsequent period
The following proposal was made for resolution at the 129th Annual General Meeting of Shareholders to beheld on June 23, 2023
・ Total amount of¥400 Million
dividends
・ Source ofRetained earnings
dividend・ Dividend per
¥50
share
March 31, 2023
・ Record dateJune 26, 2023
・ Effective date
(Note)The total amount of dividends pursuant to the June 23, 2023 resolution of the annual general
meeting of shareholders includes dividends of ¥11 million for shares held by the Employee
Shareholding Trust (as of the record date of March 31, 2023: 225,700 shares).

(3) Number of shares underlying share options issued by the Company on the last day of the current consolidated
fiscal year
Common shares
43,7007. Notes Regarding Financial Instruments(1) Financial instruments
The Group raises necessary funds (mainly from bank loans) based on a capital investment plan in order tocarry out its business manufacturing and selling various products, including automobile products.
Customer credit risk pertaining to notes and accounts receivable-trade is managed for each businesscounterparty in accordance with the Group’s Credit Management Rules and the credit risk for key businesscounterparties is continuously monitored and risk reduction implemented.
Additionally, although accounts receivable-trade denominated in foreign currencies are exposed to foreignexchange risk, derivatives transactions (foreign exchange forward transactions) are utilized as a hedge inorder to mitigate foreign exchange risk and fix the amount recovered for some of these.
Shares, which are investment securities, are exposed to market price fluctuation risks, but the fair value isassessed quarterly.
Loans payable are used for operating funds (mainly short-term) and capital investment funds (mainly
long-term, within five (5) years) and are exposed to interest rate fluctuation risks in the case of loans
payable with variable interest rates, but for some long-term loans payable, derivatives transactions (interest
rate swap transactions) are used for individual agreements in order to mitigate the risks of fluctuations ininterest payable and fix the amount of interest payable.
The implementation and management of derivatives transactions are carried out in accordance with theinternal rules set forth by our bank of account, and when utilizing derivatives, in order to reduce credit risk,
we only carry out transactions with major financial institutions. Please note that our policy is to utilize
derivatives to mitigate the above foreign exchange risks and interest rate fluctuation risks, and not as
speculative transactions.
(2) Fair value, etc. of financial instruments
The value recorded in consolidated balance sheets, fair value, and the difference between the two as ofMarch 31, 2023, are as follows
Value Recorded in(millions of Difference (millions ofConsolidated Balance Fair Value
yen)
yen)
Sheets (millions of yen)

① Notes, accounts
receivable-trade and11,71911,719－contract assets② Investment securities
Other securities
5,195
5,195
－
Total assets
16,914
16,914－③ Notes and accounts
3,725
3,725
－
payable-trade④ Electronically recorded
4,326
4,326
－
obligations
5,940
5,940
－
⑤ Short-term loans payable
6,659
6,634
⑥ Long-term loans payable(25)(including current portion)
Total liabilities
20,651
20,626(25)(Note 1)
“Cash and deposits” have been omitted because it is cash and deposits have a fair value thatapproximates book value due to being paid in a short time
(Note 2)
Shares, etc. without a market price are not included in “② Investment securities.” The valueof these financial instruments recorded in the consolidated balance sheets is as follows.
Shares, etc. Without a Market Price
Current Consolidated Fiscal
Category
Year (millions of yen)
Unlisted shares
3(3) Breakdown, etc. of fair value level of financial instruments
The fair value of financial instruments is divided into three levels depending on the observability andimportance of inputs for the calculation of fair value.
Level 1 fair value:
Inputs for calculation of an observable fair value where the fair value calculated using
the market price of assets or liabilities whose fair value is being calculated is formed in an
active market
Level 2 fair value:
Inputs for calculation of an observable fair value where the fair value is calculatedusing inputs for calculation of fair value other than those for level 1
Level 3 fair value:
Fair value calculated using inputs for the calculation of fair value that areunobservable
In cases where multiple inputs which have a material effect on the calculation of the fair value are used,among the levels to which the respective inputs belong, the fair value is categorized at the level with thelowest priority in the fair value calculation.
① Financial instruments recorded at fair value in consolidated balance sheets
Current Consolidated Fiscal Year (March 31, 2023)

Category
Investment
securities
Total assets

Fair Value (millions of yen)
Level 1

Level 2

Level 3

Total

5,195

－

－

5,195

5,195

－

－

5,195

② Financial instruments other than financial instruments recorded at fair value in consolidated balance sheets
Current Consolidated Fiscal Year (March 31, 2023)
Category
Notes, accounts
receivable-trade andcontract assets
Total assets
Notes and accounts
payable-trade
Electronicallyrecorded obligations
Short-term loans
payableLong-term loans
payableTotal liabilities

Fair Value (millions of yen)
Level 1

Level 2

Level 3

Total－

11,719－11,719－11,719－11,719

－

3,725

－

3,725

－

4,326

－

4,326

－

5,940

－

5,940

－

6,634

－

6,634

－

20,626－

20,626(Note) Explanation of valuation techniques and inputs used to calculate the fair value
Investment securities
Listed shares are valued using the market price. Because listed shares are traded on active markets, their fairvalue is categorized as a level 1 fair value. On the other hand, other securities held by the Company are nottraded on the market and a market price on an active market cannot be determined, so therefore they are noted
as shares without a market price.
Notes, accounts receivable-trade and contract assets
The fair value of notes and accounts receivable–trade is calculated using the discounted cash flow method
based on interest rates considering the claim amount, the period until maturity, and the credit risk for each claim
divided into set periods, and this is categorized as a level 2 fair value.
Notes and accounts payable-trade, electronically recorded claims, and short-term loans payable
The fair value of notes and accounts payable-trade, electronically recorded claims and short-term loans payableis calculated using the discounted cash flow method based on interest rates considering the future cash flow, theperiod until the payment due date, and the credit risk for each obligation divided into set periods, and this iscategorized as a level 2 fair value.
Long-term loans payable
The fair value of long-term loans payable with variable interest rates is their book value because the fairvalue is regarded as approximating book value since it reflects market interest rates over the short-term and thecredit standing of the Company has not changed significantly after drawdown. The fair value of long-term loans
payable with fixed interest rates is calculated by discounting the total amount of principal and interest by theinterest rate if a similar loan were newly taken out, and these are categorized as a level 2 fair value.
8. Notes Regarding Revenue Recognition(1) Analysis information for revenue generated from contracts with customers
Information regarding the breakdown of revenue by main types of goods or services.
Reporting Segment
Marine Engine
Automobile
and OtherBusiness
Products
Business
Net sales

Total

Other

(Unit: million yen)
Total

Japan16,8981,361

18,2603,450

21,711

Asia

15,663626

16,290208

16,498Europe

4,841

253

5,094

2,614

7,709

North America

6,519

－

6,519

143

6,663

Other regions

5,929

－

5,929

12

5,942

Total
Net sales to externalcustomers

49,8532,241

52,094

6,429

58,52449,8532,241

52,094

6,429

58,524(2) Information for understanding the amount of revenue for the current period and the following period onwards
a. Balance, etc. of contract liabilities
Current Consolidated
Fiscal Year (millions ofyen)
Receivables arising from contracts with
11,122
customers (balance at beginning of period)
Receivables arising from contracts with
11,719customers (balance at end of period)
Contract liabilities (balance at beginning of
80
period)Contract liabilities (balance at end of
87
period)Contract liabilities for sales contracts in export transactions mainly for the replacement parts market are withrespect to advances received from customers pursuant to the payment terms. Contract liabilities are reversed
when revenue is recognized.
Of revenue recognized for the current consolidated fiscal year, ¥80 million was included in the balance ofcontract liabilities as of the beginning of the period. The main reason for the ¥7 million increase in contract
liabilities in the current consolidated fiscal year was an increase in advances received pertaining to exporttransactions at foreign subsidiaries.
The amount of revenue recognized in the current consolidated fiscal year from performance obligations
fulfilled (or partially fulfilled) in past periods is not significant.
b. Transaction price allotted to outstanding performance obligations
As there are no significant transactions for which the expected contract term of an individual agreement
exceeds one year in the Group, practical shortcuts are applied and information on outstanding performanceobligations has been omitted. Additionally, there are no significant amounts in consideration generated fromcontracts with customers that has not been included in transaction prices.
9. Notes Regarding Per Share Information(1) Net assets per share¥4,632.77(2) Basic earnings per share¥232.90
The Company introduced the “Trust-Type Employee Shareholding Incentive Plan (Employee Shareholding
Trust)” in November 2020.
When calculating the “Net assets per share,” the Company’s shares held by the employee shareholding trust
account are included in the treasury shares deducted from the total number of issued shares at the end of theperiod (225,700 shares in the current consolidated fiscal year), and when calculating the “Basic earnings per
share,” are included in the treasury shares deducted when calculating the average number of shares during
the period (247,246 shares in the current consolidated fiscal year).

Notes to Non-Consolidated Financial Statements
1. Notes Regarding Significant Accounting Policies(1) Valuation standards and valuation methods for assets① Securities
a. Shares of
Cost method using the moving average method.
subsidiaries
b. Othersecurities
Fair value method (valuation differences are all included directly in・ Securities other thanshares, etc. without a
net assets, and the cost of securities sold is calculated using themarket pricemoving average method).
Cost method using the moving average method.
・ Shares, etc. without amarket price
Fair value method.
② Derivatives
Cost method using the moving average method (by means of write③ Inventory
down of book value due to reduction in profitability).
(2) Fixed asset depreciation method① Property, plant, andequipmenta. Property,
The straight-line method for machinery and equipment, withdeclining balance method used for everything else.
plant, andHowever, the straight-line method is used for buildings acquired on
equipment
or after April 1, 1998 (excluding facilities and equipment ancillary
other than
to the building) and facilities and equipment ancillary to buildings
lease assets
and structures acquired on or after April 1, 2016.
b. Lease assets
Lease assets under finance lease transactions with transfer ofownership
The same depreciation method as is applied to fixed assets owned by
the Company.
Lease assets under finance transactions without transfer of ownership
The lease term is used as the useful life, and the straight-line method
is used with the residual value set as zero.
② Intangible fixed assets
a. Intangible fixed assets other than lease assets
・Software used internally The straight-line method based on the internal usable period (five (5)years).
Straight-line method.
・Other intangible fixed
assetsb. Lease assets
Lease assets under finance transactions without transfer of ownership
The lease term is used as the useful life, and the straight-line method isused with the residual value set as zero.
(3) Standards for recording allowances
The historical bad debt rate is used to provide for loss due to bad debt
① Allowance for doubtful
accounts
for general accounts receivable, and for certain debts, such as doubtful
accounts receivable, the recoverability is examined individually andthe estimated unrecoverable amount is recorded.
② Allowance for retirement To provide for employee retirement benefits, the amount arising at thebenefits
end of the current fiscal year is recorded based on the estimatedretirement benefit obligations and pension assets at the end of thecurrent fiscal year.
Actuarial differences are accounted for as expenses from thefollowing fiscal year after they respectively arise, using the straightline method based on the average remaining service period of
employees when it arises.
(4) Standards for recording revenue and expenses① Details of main performanceThe Company’s main business is the manufacture and sale ofobligations in theautomobile products, marine engine products, and other products. In
company’s main business its automobile product business, the Company manufactures
automobile engine parts including piston rings and valve seat inserts

at manufacturing bases in Japan and oversea, and sells them toautomobile manufacturers, etc. For the replacement parts market, theCompany also sells to business operators, etc. handling automobile
parts. In the marine engine products and other products business, theCompany sells piston rings for ships and products applying a metal
injection molding (METAMETAL) process, etc. to ship
manufacturers and industrial equipment manufacturers, etc.
respectively. In the other products business, the Company sells
automobile-bearing parts and RV products, etc. to automobile
manufacturers and retailers, etc.
Revenue generated from contracts with customers is recognized at the② Time that the company
normally satisfies suchtime that control of the product transfers to the customer. In domestic
performance obligations
sales, revenue is normally recognized at the time of shipping because(the time when revenue is the time from shipping until control of the product transfers to thenormally recognized)
customer is a normal period of time (shipping basis applied). With
respect to domestic sales where a shipping basis is not applied,revenue is recognized when the product is delivered to the customer.
With respect to export transactions, revenue is recognized at the timeof delivery to the customer set forth in the International Commercial
Terms.
Transaction consideration is received within 1 year of satisfaction of
the performance obligations and does not include significant financecomponents.
(5) Significant hedge accounting methods① Hedge accounting methods Deferred hedge accounting is used.
Interest rate swaps that satisfy the requirements for special treatment
are by special treatment, and forward exchange contracts that satisfy
the requirements for allocation treatment are by allocation treatment.
② Hedging instruments and Hedging instruments: forward exchange contract transactions,hedged items
interest rate swap transactions
Hedged items: foreign currency-denominated receivables andpayables, loans payable③ Method for evaluating the In order to hedge against risks from market rate fluctuations, risk
effectiveness of hedging
management pursuant to internal rules is implemented forpolicies and hedges
receivables or payables based on actual demand and theeffectiveness is evaluated.
2.

Notes Regarding Changes to Accounting Policies(Change to Accounting Policies in Conjunction with Revisions to Accounting Standards, etc.)(1) Application of accounting standards, etc. regarding the calculation of fair value
This has the same content as the notes stated in the Notes to Consolidated Financial Statements so has been
omitted here.
(2) Application of “Accounting standards, etc. regarding revenue recognition” and “Application policies foraccounting standards regarding revenue recognition”
This has the same content as the notes stated in the Notes to Consolidated Financial Statements so has been
omitted here.

3.

Notes Regarding Changes to Presentation Methods(Profit and Loss Statement)
As “Commitment fees” recorded as a category in the previous fiscal year has reduced in importance, it isincluded in “Other” under “Non-operating revenue.”

4.

Additional Information(Notes Regarding Transactions Delivering the Company’s Shares to Employees, etc. through a Trust)
Notes regarding the Employee Shareholding Trust have been omitted here because they have the same content
as stated in “1. Notes, etc. Regarding Significant Matters Forming the Basis for Preparation of Consolidated
Financial Statements (3. Additional Information)” in the Notes to Consolidated Financial Statements.

(Change to Consolidation Schedule)

Notes regarding changes to the schedule for the consolidation of the Company and Riken Corporation havebeen omitted here because they consists of the same content as stated in “1. Notes, etc. Regarding Significant
Matters Forming the Basis for Preparation of Consolidated Financial Statements (3. Additional Information)” in
the Notes to Consolidated Financial Statements.
5.

Notes Regarding Accounting Estimates(Recoverability of Deferred Tax Assets)(1) Amount recorded in the non-consolidated financial statements for the current fiscal year
Deferred tax liabilities (net amount): ¥1,163 million
Deferred tax assets before set-off against deferred tax liabilities: ¥358 million(2) Other information for understanding the details of estimates
This has the same content as the notes stated in the Notes to Consolidated Financial Statements so has been
omitted here.

6. Notes Regarding Non-Consolidated Balance Sheets(1) Assets pledged as collateral(Mortgageable factory assets)
Buildings
Structures
Machinery and equipment
Land(Other)Buildings
Structures
Land
Liabilities secured by the above collateral assets(For mortgageable factory assets)
Short-term loans payable
Current portion of long-termloans payable
Long-term loans payable(Other)Short-term loans payable
Current portion of long-termloans payable
Long-term loans payable(2) Accumulated depreciation ofproperty, plant, and equipment¥2,784 million¥78 million¥5,353 million¥2,832 million¥463 million¥13 million¥675 million¥1,851 million¥1,672 million¥2,108 million¥504 million¥123 million¥158 million¥44,072 million(3) Monetary claims and liabilities (excluding those presented by category) against related companies are as
follows¥3,283 million① Short-term monetary claims¥5,908 million② Short-term monetary liabilities

7.

Notes Regarding Profit and Loss Statement
Volume of trade with related companies① Net sales② Purchases③ Volume of trade arising fromtransactions that are notbusiness transactions
Non-operating revenue¥8,791 million¥20,943 million¥1,408 million

8.

Notes Regarding Non-Consolidated Statement of Changes in Net Assets
Class and number of treasury shares
Increase in the
Decrease in the
Number of Shares
Numberof
SharesNumberof SharesattheBeginning
Class of Sharesin the Current
in the Currentof the Current
Fiscal Year
Fiscal Year
Fiscal Year
Common stock
645,290
118
61,6809.

Number of Sharesat the End of theCurrent Fiscal
Year583,728

Notes Regarding Tax Effect Accounting
Breakdown of deferred tax assets and deferred tax liabilities by main causes
The main causes giving rise to deferred tax assets are the allowance for retirement benefits and unpaid
bonuses.
The main causes giving rise to deferred tax liabilities are prepaid pension expenses and other securities
valuation differences

10. Notes Regarding Transactions with Affiliated Parties
Subsidiaries, etc.

Type

(Unit: million yen)

Ratio Details of RelationshipofTransac
Company,
Details of
Voting Number oftion
Business
etc. NameTransactions
Rights, Interlocking, RelationshipValue
etc. Officers, etc.
Purchase, etc.
products

NPR
Manufacture Lending ofThree (3)Fukushima Directof thefunds (Note 2)
Subsidiaryinterlocking
100％
Works
Company’s
officersCo., Ltd.
products
Collection offunds
Receipt ofinterest
Manufacture
Three (3)Delegation of
NPR Iwate Directof theSubsidiaryinterlocking
product
100％Co., Ltd.
Company’s
officers
manufacture
products
Sale ofproducts
NPR ofSubsidiary EuropeGmbH

One (1) Sale of the Lending of
Directinterlocking Company’s funds (Note 2)
70％
officer
products
Collection offunds
Receipt ofinterest
Sale ofproducts

NPR ofSubsidiary America,
Inc.

SIAM
Subsidiary NPR Co.,Ltd.
PT. NT
PistonSubsidiary
Ring
Indonesia

Manufacture
Two (2) and sale of Lending of
Directfunds (Note 2)interlocking the100％
officers Company’s
products
Collection offunds
Receipt ofinterest
Manufacture
One (1) and sale of
DirectReceipt ofinterlocking the100%
dividends
officerCompany’s
products
Manufacture
One (1) and sale of
DirectReceipt ofinterlocking the100%
dividends
officerCompany’s
products

Item

Accounts
payabletrade
Short-termloans to1,363
relatedcompanies

8,499

Balanceat EndofPeriod
3,235

1,363

1,189

―

―

5

―

―

Accounts
payabletrade

2,232

8,602

Accounts
3,648 receivabletrade
Short-termloans to624
relatedcompanies

1,439

204

420

―

―

4

―

―

Accounts
2,145 receivabletrade
Short-termloans to971
relatedcompanies

966

801

1,271

―

―

9

―

―

581

―

―

675

―

―

(Notes) Transaction terms and policy for determining transaction terms
1. Transaction terms on price take into account the market price and are determined through pricenegotiations.

2. For the lending of funds, interest is reasonably determined taking into account the market rate forloan interest rates.
3. Transaction amounts do not include consumption tax, etc. With the exception of related company
loans receivable, the balance at the end of the period includes consumption tax, etc.
11. Notes Regarding Revenue Recognition
Information that is the basis for understanding revenue is the same as stated in the notes in the Notes toConsolidated Financial Statements of Riken Corporation and has therefore been omitted here.
12. Notes Regarding Per Share Information(1) Net assets per share¥4,135.01(2) Basic earnings per share¥217.65
The Company introduced the “Trust-Type Employee Shareholding Incentive Plan (Employee Shareholding
Trust)” in November 2020.
When calculating the “Net assets per share,” the Company’s shares held by the employee shareholding trust
account are included in the treasury shares deducted from the total number of issued shares at the end of theperiod (225,700 shares in the current fiscal year), and when calculating the “Basic earnings per share,” areincluded in the treasury shares deducted when calculating the average number of shares during the period(247,246 shares in the current fiscal year).

Reference Documents Concerning Riken Corporation for the General Meeting of
Shareholders in Relation to Proposal 1

Details of Financial Statements of Riken Corporation’s Final Fiscal Year (Fiscal
Year Ended March 31, 2023)(see the following pages)

(Attachment)

Business Report of Riken Corporation(From April 1, 2022 to March 31, 2023)

1. Matters Regarding the Current Status of the Corporate Group
1-1 Business Progress and Results
During the current consolidated fiscal year (April to March in Japan and India, January to December inthe rest of the world), global economies showed signs of recovery thanks to the easing of restrictions on
activities aimed at preventing the spread of COVID-19. However, the economies remained weak due tohigh inflation caused by geopolitical risks and policy rate hikes mainly in the U.S. and Europe.
In Japan, as well, although there have been signs of a recovery in economic activities such as consumer
spending, the economy has not seen a strong recovery due to soaring raw material and energy prices andsharp fluctuations in foreign exchange rates.
With regard to the automobile industry, which has a close relationship with the Group, althoughautomobile production has increased compared to the previous year, it still has not fully recovered due
to such factors as the shortage of semiconductor parts in many countries.
Amid these conditions, the Group's net sales for the current consolidated fiscal year increased to 86,382
million yen (up 10.2% year-on-year) due to a recovery in automobile production and the foreignexchange impact of a weaker yen. Operating profit was 4,676 million yen (down 8.7% year-on-year)
due to the impact of soaring raw material and energy prices, despite the positive impact of a weaker yen.
Ordinary profit was 7,374 million yen (up 12.9% year-on-year) due to increased profits from overseas
equity-method affiliates, insurance income, etc. Profit attributable to owners of parent was only 4,318
million yen (down 0.3% year-on-year), mainly due to an increase in impairment losses.

1-2 Status of Capital Investments, etc.
The total amount of capital investment made by the Group during the current consolidated fiscal year
was 2,878 million yen, with the main investments being as follows.
(1) Major facilities completed during the current consolidated fiscal year
• Kashiwazaki Plant
Additional machine processing and surface treatment facilities (Automotive & Machinery Parts
Business)• Kumagaya Plant
Additional machine processing and surface treatment facilities (Automotive & Machinery Parts
Business)(2) New and enhanced major facilities during the current consolidated fiscal year
• Kashiwazaki Plant
Additional machine processing and surface treatment facilities (Automotive & Machinery Parts
Business)
Hydrogen engine business-related R&D facilities (Automotive & Machinery Parts Business)• Kumagaya Plant
Additional machine processing and surface treatment facilities (Automotive & Machinery Parts
Business)
R&D facilities for new business creation (Other)・Riken Heat Techno Co., Ltd.
Thermal engineering-related manufacturing facilities (Other)• RIKEN AUTOMOBILE PARTS (WUHAN) CO., LTD.
Additional machine processing facilities (Automotive & Machinery Parts Business)

1-3 Status of Financing
There were no special items to be noted during the current consolidated fiscal year.
(Details of Financial Statements of Riken Corporation’s Final Fiscal Year)-1-

1-4 Issues that Need to be Addressed
The global economy in FY2023 is forecasted to grow at a low rate, impacted by such factors as rising
prices and turmoil in the financial sector. While the economy is gradually emerging from the stagnationof economic growth caused by COVID-19 and supply chain disruptions, geopolitical risks such as
Russia's invasion of Ukraine and the U.S.-China trade conflict remain high, and uncertainty remains in
the global economic forecast.
The automotive industry, which has a close relationship with the Group, is in the midst of a “once-in-acentury period of great transformation” with an increase in the number of environmentally friendly
vehicles such as electric vehicles and the development of technologies such as automated driving, etc.
The Company projects that the global market will expand with accelerated “social transformation” andqualitative changes impacted by to the spread of COVID-19 infection.
The global trend toward carbon neutrality is on the rise, which is leading to an increase in the numberof environmentally friendly vehicles and a further acceleration in the diversification of power sources
for automobiles. It can be said that the decarbonization of mobility is entering an increasingly diversestage of development, as decarbonized fuels, which are rapidly gaining momentum in Europe inparticular, are becoming a realistic option. The increasing instability of world affairs and geopoliticalrisks have also highlighted the vulnerabilities of existing supply chains, while at the same time drawing
greater attention to the instability of the supply of raw materials, such as rare metals, which are extremely
unevenly distributed. In addition to these types of environmental changes, the diversification of
automotive power is making it difficult to predict the future, as evidenced by the review of life cycle
assessment of carbon dioxide emission reductions, which is an indicator in the quest for carbon neutrality.
For the Company, in order to overcome all possible scenarios and develop our business, we will continue
to “strengthen the cost competitiveness of our core businesses,” “restructure our management base in
response to crises,” and “expand our new core next-generation business and new products of noninternal combustion engines.”
In “strengthening cost competitiveness of our core businesses,” the Company aims to win the battle inexisting engine parts such as piston rings, while expanding our existing non-internal combustion engines
business and strengthening cost competitiveness. Until the mid-2020s, we will expand profits andbusiness of existing parts and products, including engine-related parts, shift management resources, andstreamline domestic and overseas investments with the keywords of building an optimal production
system. We will subsequently manage and control strictly the investment in increased production ofengine parts in particular, both in Japan and overseas, until around 2030, and promote rationalizationand labor-saving investments.
In “restructuring of management base in response to crises,” we will strive to lower the break-even pointby reviewing the operation system, streamlining operations, and further improving productivity. To
achieve this, our policy is to continue to reduce fixed costs, such as labor and expenses, throughmeasures such as selection and concentration without sanctuary, and to further promote business reforms
through DX (Digital Transformation). By pursuing “cost competitiveness in our core businesses” and“restructuring our management base,” we will strengthen our capacity to generate cash flow fromexisting businesses and shift the cash we have generated to investments for the “expansion of our nextgeneration core businesses and new products in non-internal combustion engines,” as well as in reducing
greenhouse gases in our manufacturing processes to achieve a decarbonized society, and in developing
products with superior environmental performance.
Also, for the “expansion of our next-generation core businesses and new products in non-internal
combustion engines,” by pursuing open innovation through business and capital alliances and joint
development with other companies, will further accelerate the development of new products mainly fornext-generation automobiles and the creation and expansion of non-automotive businesses throughvertical and horizontal expansion taking advantage of M&A and other opportunities around existing
non-automotive internal combustion engine business areas. For this reason, in addition to transforming“materials technologies” “processing technologies,” and “surface treatment technology” derived fromour existing businesses into our next-generation core businesses and new products, we are developing“technologies related to new-type engines that utilize hydrogen, e-Fuel, and other next-generation fuels,”“technologies such as high-performance resins and technologies for heterogeneous material joining,”“EMC (electromagnetic compatibility) technologies for anechoic chambers, radio frequency absorbers,
and next-generation noise suppression shields,” and “thermal engineering technologies for industrial
electric furnaces and high-performance electric heating wires for high-temperature applications.” We(Details of Financial Statements of Riken Corporation’s Final Fiscal Year)-2-

will continue to invest aggressively in these businesses in order to develop advanced technologies thatwill lead to new products that are compatible with CASE and carbon neutrality, which have become
popular in the world’s automotive and mobility industries, such as engineering technologies forindustrial electric furnaces and high-performance electric heating wires for high temperature bands, andnew engine technologies that utilize next-generation fuels. This May 9, NIPPON PIPE FITTING Corp.,
a manufacturer of plumbing fittings known as the Yubiwa brand, joined the Group. Through this addition,from now on we will further increase the ratio of sales of non-internal combustion engines and strive tofurther expand earnings by creating synergies with the existing piping components business.
Also, in light of the inconvenience and concern caused to our stakeholders by the illicit attacks on
Company servers last fiscal year, we are building a robust cyber security system and will strive to preventa recurrence by maintaining and improving this system.
By pursuing these measures, we will strive to strengthen the Company's competitiveness andcontinuously increase the Company's corporate value.
Lastly, regarding the business consolidation between the Company and Nippon Piston Ring Co., Ltd.
after the basic agreement on July 27, 2022, the two companies have been discussing and considering theconsolidation, and on May 23 of this year, the two companies signed a business consolidation agreement
and formulated a share transfer plan.
Subject to the approval of the General Meeting of Shareholders, NPR-Riken Corporation will beestablished as of October 2 of this year as the wholly owning parent company of both companies bymeans of a mutual share transfer.
The Consolidation, in addition to strengthening the profitability of existing businesses centered on
automotive engine parts, will allow the two companies to consolidate and effectively utilize their
management resources to create the next core businesses and new products with a greater sense ofurgency in the non-automotive engine parts domain, such as marine vessels, hydrogen, new energy
projects, thermal engineering, EMC business, Metamold (metal powder injection molding parts),
medical equipment, and axial gap motors (disk-shaped thin high torque motors). We will evolve into acompletely new leading company that develops distinctive functional parts and key components globallythat harness the techniques
and technologies developed by both companies, and further enhance corporate value in line with theglobal trend toward carbon neutrality.

1-5 Changes in the Status of Assets and Gains or Losses(1)

Changes in the status of assets and gains or losses of the corporate group
96th Term(FY2019)

Category

97th Term(FY2020)98th Term(FY2021)99th Term(FY2022)[current consolidated fiscal
year](millions
Net salesof yen)(millions
Ordinary profit
of yen)Profit attributable to(millions
owners of parentof yen)Earnings per share
Total assets
Net assets
Net assets per share(yen)(millionsof yen)(millionsof yen)(yen)

84,53069,72078,37286,382

5,964

4,323

6,529

7,374

3,517

1,880

4,329

4,318

355.26

189.05433.47431.60107,920

110,544

115,707

123,728

75,90580,14287,082

94,983

7,059.13

7,507.92

8,109.98

8,810.30(Details of Financial Statements of Riken Corporation’s Final Fiscal Year)-3-

(2) Changes in the Status of the Company's Assets and Gains or Losses
96th Term(FY2019)

Category

Net sales
Ordinary profit
Profit(millionsof yen)(millionsof yen)(millionsof yen)Earnings per share
Total assets
Net assets(yen)(millionsof yen)(millionsof yen)Net assets per share(yen)

97th Term(FY2020)98th Term(FY2021)99th Term(FY2022)[Current fiscal
year]

53,41446,09951,08051,909

2,623

2,012

4,172

7,285

2,293

1,030

3,784

5,625

231.63103.58378.84562.27

68,82069,31472,29377,02742,61644,62747,86953,2724,280.02

4,487.84

4,775.90

5,295.07

1-6 Status of Important Parent Companies and Subsidiaries(1)

Relationship with parent company
Not applicable.

(2)

Status of important subsidiaries and affiliated companies
Status of important subsidiaries
Company nameShare capital

Shareholding ratio Primary businesses

RIKEN CASTEC Co,.Ltd.

200 million yen

RIKEN
ENVIRONMENTALSYSTEM Co.,Ltd.

100 million yen

Riken Heat Techno Co., Ltd.

30 million yen

P.T. PAKARTI RIKEN
INDONESIA
RIKEN AUTOMOBILE PARTS(WUHAN) CO., LTD.

4,150 million
rupiahManufacture of casting parts forautomobiles, etc.
Manufacture of anechoic chamber
100.0%
equipment
Manufacture of electric heating wire
100.0%and industrial furnaces
Manufacture of casting parts for40.0%
automobiles, etc.

US$19 million

60.0%Manufacture of automotive parts

620 million pesos

100.0%Manufacture of automotive parts

RIKEN MEXICO, S.A. DE C.V.
RIKEN OF AMERICA, INC.

US$ 250,000

EURO-RIKEN GMBH

664,000 euros

100.0%

Sales of the Company products inNorth America
Sales of the Company products in
100.0%
Europe100.0%

Note: Shareholding ratios include indirect holdings.

(Details of Financial Statements of Riken Corporation’s Final Fiscal Year)-4-

1-7 Primary Content of Business (as of March 31, 2023)
The Group is primarily engaged in the manufacturing and sales of automotive and industrial machineryparts, including piston rings and camshafts, as well as industrial products such as steel pipe fittings andelectric heating wires. We have a global presence with operations in both domestic and international
markets. (See details below)
Automotive & Machinery Parts Business:
Engine Parts (piston rings, camshafts, etc.)
Transmission Parts (seal rings, differential cases, etc.)
Drive and Chassis Parts (knuckles, brake calipers, etc.)
Other:
Piping Products (steel pipe fittings, stainless steel pipe fittings, etc.)
Thermal Engineering Products (electric heating wires, industrial furnaces, etc.)
EMC Products (Shield Rooms, Radio Frequency Anechoic Chambers, etc)

1-8 Primary Sales Offices and Plants (as of March 31, 2023)(Domestic sales offices)
Head Office (Chiyoda-ku, Tokyo), Sapporo Sales Office (Sapporo, Hokkaido), Sendai Sales Office(Sendai, Miyagi), Kanagawa Sales Office (Atsugi, Kanagawa), Hamamatsu Sales Office (Hamamatsu,
Shizuoka), Nagoya Sales Office (Nagoya, Aichi), Osaka Sales Office (Osaka), Hiroshima Sales Office(Hiroshima), Fukuoka Sales Office (Fukuoka City, Fukuoka Prefecture), Riken Trading Co. Ltd.
(Chiyoda-ku, Tokyo)(Domestic Plants)
Kashiwazaki Plant (Kashiwazaki City, Niigata), Kumagaya Plant (Kumagaya City, Saitama), RIKEN
CASTEC Co,.Ltd. (Kashiwazaki City, Niigata), Riken Kikai Co., Ltd. (Kashiwazaki City, Niigata),
NIHON MEKKI INDUSTRY CO.,LTD. (Kashiwazaki City, Niigata), Kashiwazaki Piston Ring Co. Ltd.
(Kashiwazaki City, Niigata), Riken EP Corporation (Kashiwazaki City, Niigata), RIKENENVIRONMENTAL SYSTEM CO., Ltd. (Kumagaya City, Saitama), Riken Heat Techno Co.,LTD.
(Kumagaya City, Saitama), BROTHER PRECISION IND. CO., LTD. (Chiryu, Aichi)(Overseas sales offices)
RIKEN OF AMERICA, INC. (USA), EURO-RIKEN GMBH (Germany), PT. RIKEN OF ASIA
(Indonesia), RIKEN SALES AND TRADING (THAILAND) CO., LTD. (Thailand)(Overseas Plants)
P.T. PAKARTI RIKEN INDONESIA (Indonesia), RIKEN AUTOMOBILE PARTS (WUHAN) CO.,LTD. (China), RIKEN SEAL PRODUCTS (WUHAN) CO., LTD. (China), RIKEN MEXICO, S.A. DE
C.V. (Mexico), TAIWAN RIKEN IND. CO., LTD. (Taiwan), SIAM RIKEN IND. CO., LTD. (Thailand),SHRIRAM PISTONS &RINGS LTD. (India), XIAMEN RIKEN IND. CO., LTD. (China), Riken Power
System (Nanjing) Co., Ltd. (China)(Details of Financial Statements of Riken Corporation’s Final Fiscal Year)-5-

1-9 Status of Employees (as of March 31, 2023)(1)

Status of corporate group employees
Number of employees at the end of the
Increase (decrease) from the end of thecurrent consolidated fiscal year
previous consolidated fiscal year
persons
persons
4,153
Decrease of 179(2)

Status of company employees
End of the current Compared to the end
fiscal yearof previous fiscal year
No. of employees
Increase (decrease)persons
persons
1,206 Decrease of

1-10

28

Average years of
employment

Average age
years of age

years

42.6

18.8

Primary lenders (as of March 31, 2023)
LenderLoans outstanding (millions of yen)Mizuho Bank, Ltd.

3,150

MUFG Bank, Ltd.

2,250

Nippon Life Insurance Company

1,760

Daishi Hokuetsu Bank, Ltd.

1,250

(Details of Financial Statements of Riken Corporation’s Final Fiscal Year)-6-

2. Matters Regarding the Company's Stock (as of March 31, 2023)
2-1 Total number of authorized shares
20,000,000

2-2 Total number of shares issued
10,688,866 (including 646,482 treasury shares)

2-3 Number of shareholders
11,689 (including one (1) shareholder holding treasury shares)

2-4 Major shareholders
Shareholder nameShares held

Shareholding ratio

thousands ofshares982%
9.78

Mizuho Bank, Ltd.

486

4.84

Nippon Life Insurance Company

428

4.27

Daishi Hokuetsu Bank, Ltd.

320

3.19

Custody Bank of Japan, Ltd.

275

2.75

Sumitomo Mitsui Trust Bank, Limited

261

2.61

MUFG Bank, Ltd.

255

2.54

Riken Kashiwazaki Shareholding Association

241

2.40

Sompo Japan Insurance Inc.

190

1.89

177

1.76

The Master Trust Bank of Japan ,Ltd. (Trust account)Proterial, Ltd.
Note: Shareholding ratio is calculated excluding treasury shares.

2-5 Status of shares issued to Company Executives as compensation for the execution of theirduties during the current fiscal year
The details of the stock-based compensation granted during the current fiscal year are as follows.
At a meeting of the Board of Directors held on February 28, 2023, the following resolution to issue
new shares as restricted stock-based compensation was passed.
Total shares issued to Directors and other Officers by category
Number of shares
Director(excluding Outside Directors and Directors who are Audit and 22,700shares
Supervisory Committee Members)(Details of Financial Statements of Riken Corporation’s Final Fiscal Year)

Number of persons tobe granted
5 persons-7-3. Matters Regarding Company Executives
3-1 Names of Directors (as of March 31, 2023)
Position in the Company
Representative
Chairman
Representative
President

Director,
Director,

Name
Kaoru ItohYasunori Maekawa

Director

Kouei Watanabe

Director

Takashi Ohashi

Director

Hidehiro Sakaba

Outside Director

Eiji Hirano

Outside Director

Koji Tanabe

Responsibilities and significant concurrent positions
outside the Company
Chairman of the Board of Directors, Chairman of the
Sustainability Committee
CEO, COO, CIO (Chief Information Officer）, CISO
(Chief Security Officer）

Managing Executive Officer, CTO (Chief Technical
Officer), General Manager of Technologies
Management Head Office, Chairman of theTechnical Committee, in charge of Quality
Assurance, Precision Components Business,
Thermal Engineering Business, EMC Business, andsupervising Kumagaya Plant
Managing Executive Officer, in charge of Global
Procurement, Maintenance Division, Engineered
Plastic Products Business, Casting Components
Business, Marine and Industrial Business, andCamshaft Business, General Manager ofKashiwazaki Plant
Managing Executive Officer, General Manager ofCorporate Management Head OfficeDirector, Vice Chairman of MetLife, Inc.
Outside Director of NTT DATA Corporation
External Director, Ichiyoshi Securities Co., Ltd.
Professor Emeritus of Tokyo Institute of Technology
Director of Intron Space Inc.

Director(Full-Time Audit
and
Akira Kunimoto
Supervisory
Committee
Member)Outside Director(Audit and Supervisory Shuji Iwamura
Committee Member)

Outside Auditor of CANON ELECTRONICS INC.
Outside Corporate Auditor of The Hokkaido Bank,Ltd.
Outside Director of Hayashikane Sangyo Co., Ltd.
Attorney at T&K Partners

Outside Director(Audit and Supervisory Osamu Honda
Committee Member)

Outside Auditor of Kurimoto Ltd.

*1. Outside Directors are as follows.
Eiji Hirano
Koji Tanabe*2. Outside Directors (Audit and Supervisory Committee Members) are as follows.
Shuji Iwamura
Osamu Honda*3. There is no special interest between MetLife and the Company.
*4. There is no special interest between NTT DATA Corporation and the Company.
*5. There is no special interest between Ichiyoshi Securities Co., Ltd. and the Company.
*6. There is no special interest between Tokyo Institute of Technology and the Company.
*7. There is no special interest between Intron Space Inc. and the Company.
*8. There is no special interest between CANON ELECTRONICS INC. and the Company.
*9. There is no special interest between The Hokkaido Bank, Ltd. and the Company.
*10. There is no special interest between Hayashikane Sangyo Co., Ltd. and the Company.
*11. There is no special interest between T&K Partners and the Company.
*12. There is no special interest between Kurimoto Ltd. and the Company.
(Details of Financial Statements of Riken Corporation’s Final Fiscal Year)-8-*13. Based on the provisions of Article 427, Paragraph 1 of the Companies Act, the Company has entered into a limited
liability agreement with Outside Directors Eiji Hirano and Koji Tanabe, Outside Directors (Audit and Supervisory
Committee Members) Shuji Iwamura and Osamu Honda, and Director (Audit and Supervisory Committee Member)
Akira Kunimoto, which limits their liability to the minimum liability amount stipulated by the Act with respect toliability under Article 423, Paragraph 1 of the same Act.
*14. The Company appoints Full-Time Audit and Supervisory Committee Members for the purpose of collecting
information and enhancing the effectiveness of audits, including continuous and effective attendance at important
meetings other than meetings of the Board of Directors.
*15. The Company appointed Eiji Hirano, Koji Tanabe, Shuji Iwamura and Osamu Honda as independent officers with
the Tokyo Stock Exchange per the regulations of the Exchange.

3-2 Amount of Director Compensation(1) Policies Regarding the Determination of Details of Compensation for Officers, etc.
The following resolutions were passed at the General Meeting of Shareholders held on June 21, 2019
regarding compensation for officers.
As of the close of this General Meeting of Shareholders, there were eight (8) directors (excluding
Director who are Audit and Supervisory Committee Members) and three (3) Audit and Supervisory
Committee members.
• Directors (excluding Directors who are Audit and Supervisory Committee Members) “ An annual
amount not exceeding ¥400 million (including officers' bonuses)”• Directors who are Audit and Supervisory Committee Members “not exceeding an annual amountof ¥60 million”• Stock-based compensation (excluding Directors who are Audit and Supervisory Committee
Members and outside Directors) “An annual amount not exceeding ¥100 million”
The Articles of Incorporation stipulate that the number of directors (excluding Directors who are
Audit and Supervisory Committee Members) shall be limited to ten (10), and the number of Directors
who are Audit and Supervisory Committee Members shall be limited to five (5). As of March 31, 2023,
there were seven (7) Directors (excluding Directors who are Audit and Supervisory Committee
members) and three (3) Audit and Supervisory Committee Members.
At a meeting of the Board of Directors held on March 24, 2021, the Company resolved a policy for
determining the content of compensation for individual Directors (excluding Directors who are Audit
and Supervisory Committee members).
a. Basic Policy
Under the Company's compensation for officers system, a standard amount of totalcompensation for each officer’s position (hereinafter referred to as “Standard Total Compensation”)
shall be set, and the Nomination and Compensation Committee shall annually verify theappropriateness of the standard amount by benchmarking each level of compensation to a middle
level of listed companies in Japan based on the results of a compensation survey conducted byexternal compensation consultants.
The Standard Total Compensation shall consist of fixed compensation and performance-linked
compensation in the form of cash bonuses and stock-based compensation.
Furthermore, Audit and Supervisory Committee member directors, external Directors, andforeign national directors who are paid an annual salary shall receive only fixed compensation.
b.

The policy concerning the determination of the amount of compensation (monetary compensation
not linked to performance) or the method of calculation thereof (including the policy concerning thedetermination of the timing or conditions of granting compensation, etc.)
Fixed compensation (cash) shall be paid on a monthly basis with a pre-determined standard
amount based on the Standard Total Compensation based on the officer’s position.
c. The policy concerning the determination of the details and the method of calculation of the amountor number of performance-linked compensation and non-monetary compensation (including thepolicy concerning the determination of the timing or conditions of granting compensation, etc.).
Cash bonuses, which are short-term performance-linked compensation, are determined annually
by multiplying the evaluation coefficient, which is calculated as a result of a “company performance(Details of Financial Statements of Riken Corporation’s Final Fiscal Year)-9-evaluation,” using the consolidated ordinary profit target value of the Medium-term Management
Plan and the Single-year Management Plan as the evaluation indicator and an “individual
performance evaluation” of each officer, by a predetermined standard amount based on the Standard
Total Compensation based on the officer’s position. The amount shall be paid at a certain time eachyear.
＜Calculation Method of the Short-term Performance-linked Compensation Payment Amount>- Cash bonus = Cash bonus standard compensation x Company performance evaluation coefficient x
Individual performance evaluation coefficient
As non-monetary compensation, etc., stock-based compensation (restricted stock), an incentive
compensation that fluctuates based on performance, will be introduced to share a sense of profit withshareholders and to motivate them to achieve their medium to long term goals. The following two
types of stock-based compensation (restricted stock) with different “restricted transfer periods” willbe established.
(i) Type I shares with transfer restrictions: For a period between two and five years, as determinedby the Company's Board of Directors.
(ii) Type II shares with transfer restrictions: 30-year restricted transfer period
Stock-based compensation (restricted stock) shall be paid at a certain time each year with a predetermined base amount based on Standard Total Compensation based on the officer’s position.
d. Policy regarding the determination of the percentage of each type of compensation, etc.
The ratio of the amount of compensation by type shall be as follows.
Composition of compensation for officers
Monetary compensation
Officer category
Fixedcompensation

Stock-based compensation

Short-term performance-linked

Long-term
performancelinked

Bonus

Type II shares

Type I shares

Total

Director
62%
13%
11%
14%
100%
Excluding Outside Directors, Directors who are Audit and Supervisory Committee members, andforeign national Directors.
(Note) 2: This table is a model for when 100% of the performance-linked compensation base amount is paid,
and the above percentages will vary depending on the Company's performance, stock price fluctuations,etc.
(Note) 1:

e. Matters concerning the determination of the details of compensation for individual Directors
Individual compensation for officers shall be categorized by Directors (excluding persons who
are Audit and Supervisory Committee Members) and those who are members of the Audit andSupervisory Committee. Compensation for Directors (excluding persons who are Audit andSupervisory Committee members) shall be deliberated and determined by the Nomination andRemuneration Committee, while that for Audit and Supervisory Committee members shall be
determined by the Board of Directors who are Audit and Supervisory Committee Members throughdiscussion.
(2) Reasons why the Board of Directors judged that compensation for individual Directors for the current
fiscal year is in line with the policy for determining the content of compensation
Compensation for individual Directors is discussed by the Nomination and Remuneration Committee,
the majority of whose members are independent outside Directors, and passed a resolution by the Boardof Directors based on the Committee's recommendation.
The Nomination and Compensation Committee, in deliberating and determining the details ofcompensation for individual Directors, considers the industry and the level of remuneration of otherexecutives and employees of the Company, as well as the consistency of such details with the policy for
determining the content of compensation. In addition, the Board of Directors also confirms that thedetails of compensation for individual Directors are in line with the policy for determining the content
of compensation and determines compensation for individual Directors.
(Details of Financial Statements of Riken Corporation’s Final Fiscal Year)-10-

(3) Total amount of compensation, etc. for the current fiscal year

Officer category

Directors (excluding Audit andSupervisory
Committee
members)(of which are Outside Directors)
Director (Audit and Supervisory
Committee Member)(of which are Outside Directors)
Total(of which are Outside Directors)

Total amount of compensation, etc by type (millions of
Total amountyen)of
Number ofcompensation,
officers
Restrictedetc
coveredstock-based
Fixed
Bonus
Stock options(millions of compensationcompensation (Persons)
yen)
.
247

150

38

－

57

7

(12)

(12)

(－)

(－)

（－)

(2)

34

34

－

－

－

3

(16)

(16)

(－)

(－)

(－)

(2)

281

185

38

－

57

10

(28)

(－)

(－)

(－)

(4)

(28)

Bonuses to officers for the fiscal year are as follows and are included in the amount of compensation
above.
- Officers' bonuses scheduled to be paid in June 2023
Director
42 Millions of yen(of which is external - millions of yen)
Under the Company's compensation for officers system, officer compensation consists of monthly
remuneration as fixed compensation, a cash bonus as performance-linked compensation (excluding
outside Directors and Audit and Supervisory Committee member members), and stock-based
compensation (restricted stock). The amount of fixed compensation, cash bonus, and stock-based
compensation for each officer position is determined in advance as a base amount based on the baseamount of total compensation for each officer’s position.
Based on the standard bonus amount, the ratio of fixed compensation to performance-linked
compensation is generally 6:4.
Currently, there are two types of stock-based compensation (restricted stock) with different
restricted transfer periods. Type I shares with a two-year restricted transfer period and Type II shareswith a 30-year restricted transfer period. Type I shares are paid once a year to supplement cash bonuses
as short-term performance-linked compensation and to raise awareness of the Company's performanceand stock price. Type II shares are also paid once a year as long-term performance-linked compensation,with the restriction being lifted when the Company's officers actually retire from their positions as either
Directors or Executive Officers.
Regarding cash bonuses, the amount of each officer's base bonus is determined by multiplying theevaluation coefficient calculated as a result of the "Company performance evaluation" and each officer's"Individual performance evaluation" by the standard bonus amount for each officer’s position. The“Company performance evaluation” uses the consolidated ordinary profit target of the Medium-termManagement Plan and the single-year Management Plan as the evaluation indicator. When a serious
accident, scandal, or extraordinary loss occurs, the standard bonus amount is adjusted in considerationof the severity of the situation. The “Individual performance evaluation” is also based on the CEO's
overall assessment of the contribution to management on a five-point scale based on the achievement of
the three key issues, quantitative targets, and qualitative evaluation items. The reason for selecting theconsolidated ordinary profit target as an evaluation indicator is that we judged that ordinary profit
excluding extraordinary gains or losses, which is a temporary and transitory a gains or losses item, is anappropriate indicator of the company's ability.
While the consolidated ordinary profit targets of the Medium-term Management Plan and the single
fiscal year management plan for FY2022 were ¥6,000 million and ¥6,100 million, respectively, theactual consolidated ordinary profit was ¥7,374 million, exceeding the targets. As a result, the evaluation
coefficient for the "Company performance evaluation" was +30%.

(Details of Financial Statements of Riken Corporation’s Final Fiscal Year)-11-

3-3 Matters Regarding Outside Officers
Director Hirano attended 18 out of the 19 Meetings of the Board of Directors held during the current
fiscal year. Based on his extensive experience and insight at the Bank of Japan, Toyota Financial
Services, and other organizations, Mr Hirano has provided opinions mainly from a professional
perspective on international finance and treasury matters, and he plays an appropriate role in ensuring
the validity and appropriateness of decision-making processes to ensure sound decision-making. Also,
as the Chairman of the Nomination and Compensation Committee, he attended all 2 Committee
meetings held during the current fiscal year and led the supervisory function in the process of appointing
candidates for officers and determining compensation for officers from an objective and neutral
standpoint.
Director Tanabe attended all of the 19 meetings of the Board of Directors held during the current
fiscal year. Based on his extensive experience and insight at the Ministry of Economy, Trade and Industry,
Tokyo Institute of Technology, etc., he has provided his opinions mainly from an expert perspective on
innovation management and technology management, and he plays an appropriate role in ensuring thevalidity and appropriateness of decision-making processes to ensure sound decision-making. Also, as amember of the Nomination and Compensation Committee, he attended all 2 Committee meetings held
during the current fiscal year and fulfilled his supervisory function in the process of appointing
candidates for officers and determining compensation for officers from an objective and neutral
standpoint.
Director Iwamura (Audit and Supervisory Committee member) attended 17 of the 19 meetings ofthe Board of Directors and also all of the 15 Audit and Supervisory Committee meetings held during thecurrent fiscal year. Based on his extensive experience and insight as a prosecutor and lawyer, as well as
his experience as an auditor of other companies, he has made statements at meetings of the Board of
Directors to ensure the validity and appropriateness of decision-making, and has made necessary
statements at Audit and Supervisory Committee meetings regarding the Company's audit as appropriate.
Also, as a member of the Nomination and Compensation Committee, he attended all 2 Committee
meetings held during the current fiscal year and fulfilled his supervisory function in the process of
appointing candidates for officers and determining compensation for officers from an objective andneutral standpoint.
Director Honda (Audit and Supervisory Committee member) attended all 19 meetings of the Boardof Directors held after his appointment and also attended all 15 Audit and Supervisory Committee
meetings held after his appointment. Based on his experience in finance at financial institutions andexperience and insight in the management of other companies, he has stated at meetings of the Board of
Directors to ensure the validity and appropriateness of decision-making, and at Audit and Supervisory
Committee meetings, he has made necessary statements as needed regarding the Company's audits. Also,
as a member of the Nomination and Remuneration Committee, he has attended 2 committee meetings
held since his appointment and has fulfilled his supervisory function in the process of appointing
candidates for the Company's officers and determining compensation for officers from an objective andneutral standpoint.

3-4 Overview of the Details of the Officers' Liability Insurance Policy
The Company has concluded a liability insurance contract for officers, etc. (D&O Insurance Contract)
under Article 430-3 (1) of the Companies Act with an insurance company, with all the Directors
including Directors who are Audit and Supervisory Committee Members as the insured. Under the
insurance contract, damages or legal costs, etc. that may be incurred by the insured due to claims fordamages being filed arising due to acts (including omissions) committed by the insured based on thestatus of company officer, etc. will be covered. However, there are certain exclusion reasons, such as
damages arising from an act upon recognition of the illegality of the act not being covered. Insurance
premiums for the insurance contract are covered by the Company, based on approval by the Board of
Directors and the consent of the Outside Directors.

(Details of Financial Statements of Riken Corporation’s Final Fiscal Year)-12-

4. Status of Accounting Auditor
4-1 Name of Accounting Auditor
Deloitte Touche Tohmatsu LLC

4-2 Amount of Compensation to the Accounting Auditor for the Current Fiscal Year
(1) Amount of compensation for work stipulated in Article 2, Paragraph 1 of the Certified Public
Accountants Act
88 Millions of yen(2) Amount of remuneration for work other than the work stipulated in Article 2, Paragraph 1 of theCertified Public Accountants Act- Millions of yen(3) Total amount of compensation to be paid by the Company and its consolidated subsidiaries to the
Accounting Auditor
88 Millions of yen(Notes) 1. With respect to such amount, after receiving an explanation of the audit plan (audit policy, audit items,
scheduled audit time, etc.) from the Accounting Auditor, the Company considered the details and theestimated amount of compensation based on the evaluation of the results of the previous fiscal year, bycomparing the plan for the previous fiscal year with the actual results, total compensation, and unit price ofcompensation per hour, and by confirming the information and views of the accounting department. As aresult, the Company judged the amount of compensation, etc. to be appropriate and gave its consent as
stipulated in Article 399, Paragraph 1 of the Companies Act.
2. Of the Company's significant subsidiaries, the Company's overseas subsidiaries are audited by auditing firms
other than the Company’s Accounting Auditor.

4-3 Policies for Determining the Dismissal or Non-reappointment of Accounting Auditors
If the Company’s Audit and Supervisory Committee judges that the Accounting Auditor falls under anyof the items of Article 340, Paragraph 1 of the Companies Act, the Accounting Auditor shall be dismissedwith the unanimous consent of all Audit and Supervisory Committee members.
In the event that the Audit and Supervisory Committee determines that proper auditing is difficult
due to the Company's circumstances or factors that would impair the qualifications of the Accounting
Auditor, the Committee will decide on the content of the proposal for dismissal or non-reappointmentof the Accounting Auditor to be submitted to the General Meeting of Shareholders. The Board of
Directors will then decide to convene the General Meeting of Shareholders to resolve on such proposal.

(Details of Financial Statements of Riken Corporation’s Final Fiscal Year)-13-

5.Basic Policy for the Control of the Company
The contents of the Basic Policy regarding who should control decisions regarding the financial
and business policies of the Company, efforts to realize the Basic Policy, and “Measures to Respond toa Large-Scale Acquisition of Our Company’s Stock” are as follows:<Basic Policy Regarding Who Should Oversee Decisions Regarding the Financial and Business Policiesof the Company>

5-1 Details of the Basic Policy
As a publicly traded company, we believe that shareholders come to us thanks to a freedom to trade on
the share market. Therefore, we believe that the final decision concerning whether or not to accept
proposals regarding acquisitions accompanying the transfer of control of the Company should lie withthe shareholders. Also, even if a Large-Scale Acquisition does occur, it will not generally rejected if its
purpose contributes to the Company’s corporate value and the common interests of its shareholders.
However, some large-scale share acquisitions can undermine the value of the Company or the common
interests of our shareholders, including those that may virtually force shareholders into selling theirshares or those that do not provide the Board of Directors and shareholders of the Company with thereasonably needed amount of time and information to consider the details of the acquisition. As an
exception, the Company considers any person who undertakes this kind of inappropriate large-scaleacquisitions to be unfit to oversee decisions concerning the financial and business policies of theCompany.

5-2 Efforts that Contribute to the Realization of the Basic Policy
In order to ensure that many investors continue to invest in the Company over the long term, theCompany implements the following measures to enhance the Company's corporate value and, in turn,the common interests of its shareholders.
We believe that these efforts will also contribute to the realization of the Basic Policy described in(1) above.
<Enhancement of Corporate Value Through the Implementation of our Management Philosophy andMedium-term Management Plan>
In 1927, RIKEN, formerly known as the Institute of Physical and Chemical Research, was founded
to commercialize its own invention, the piston ring manufacturing method. Since then, the Company
has been operating globally by providing a wide variety of products, including, of course, piston rings
which are its core competency, camshafts and other internal-combustion engine parts, cast iron parts forautomobiles and industrial machinery, piping materials, and products for thermal engineering and EMC
businesses. The Company has defined the Group Mission Statements outlined in the following paragraph.
It also sets out the following Guiding Principles: “Be Customer Driven. Be Compliant with the Law. Be
focused on the Basics. Be Open. Be Proactive. Be Prompt.” In addition, it developed the Midterm
Strategic Plan and the Annual Management Plan in its effort to help its customers strengthen their global
competitiveness and to develop and sell products that are highly satisfactory in terms of quality,
technology, and price.
<Mission Statement>• We continue to be a corporate citizen committed to protecting global environment and serving the society
in which we conduct our business.
• We are committed to creating corporate value from a global perspective by effectively utilizing the capital
invested by our shareholders.
• We will offer products and services that continually exceed our global customers’ increasing expectations
through constant innovation and continued advancements in knowledge and technology.
• We have high aspirations and a broad vision, and we are always willing to change.
<Enhancement of Corporate Value by Improving Corporate Governance>
The Company aims for continuous improvement in corporate value by fulfilling its responsibilities
in a variety of fields including economy, environment, and society. It regards the implementation of
corporate governance as the top-priority management issue.
(Details of Financial Statements of Riken Corporation’s Final Fiscal Year)-14-

The Company has introduced an executive officer system to separate the business executionfunction from the management decision-making and supervision function.
The Company transitioned from a Company with a Board of Corporate Auditors to a "Company
with an Audit and Supervisory Committee" in June 2019 in an effort to further strengthen the audit andsupervisory functionality of the Board of Directors and to further promote corporate governance. The
Company’s Audit and Supervisory Committee consists of one Full-Time Audit Committee Member andtwo Outside Directors who are independent and maintain a neutral and fair position, thereby
strengthening the functionality of the Audit and Supervisory Committee with respect to the directors'
execution of their duties.
Furthermore, in May 2019, the Company established the Nomination and Compensation
Committee, which is a voluntary advisory body with the majority of members being independent outside
directors, in its efforts to reinforce the supervision function of the Board of Directors by assuring thetransparency and objectivity of the procedure related to the nomination and compensation of directors,
etc., and further enhance corporate governance.
Thus far, the Company has been working to appropriately operate management bodies (Board of
Directors and Management Meeting) and ensure corporate transparency, efficiency and soundness, suchas thorough compliance and complete risk management in accordance with the Basic Policy for
Developing an Internal Control System (the development of systems necessary to ensure that theexecution of the duties by the directors complies with the laws and regulations and the articles ofincorporation, and other systems prescribed by Ministry of Justice Order as systems necessary to ensure
the properness of operations of a Stock Company).
Furthermore, the Company has reinforced internal control by establishing the Sustainability
Committee and the Compliance Committee, and works to improve further by having the entire Groupoversee environmental activities, activities that contribute to society, accurate and appropriate
information disclosure, the creation of CS (customer satisfaction), etc.

5-3 Overview of measures to prevent decisions concerning the financial and business policiesof the Company from being controlled by persons deemed inappropriate in light of the
Basic Policy.
In order to prevent decisions concerning the financial and business policies of the Company from being
controlled by persons deemed inappropriate in light of the Basic Policy and to ensure and enhance thecorporate value of the Company and, in turn, the common interests of its shareholders, at a Meeting of
the Board of Directors held on May 24, 2022, the Company adopted the "Measures to Respond to a
Large-Scale Acquisition of Our Company’s Stocks" (hereinafter referred to as “the Plan”). Approval forthe continuation of the Plan was obtained at the 98th Ordinary General Meeting of Shareholders held on
June 24, 2022.
A Large-Scale Acquisition of Our Company's Stocks subject to the Plan is defined as an acquisitionof the Company's shares with the aim of increasing the ratio of voting rights of a specific group ofshareholders to 20% or more, or an acquisition of the Company's shares that results in a specific groupof shareholders holding 20% or more of the voting rights of the Company, and an entity involved in suchacquisitions is referred to as a “large-scale purchaser.”In this plan, certain rules regarding the provision of information and the allocation of sufficient
time for consideration during a large-scale acquisition (referred to as the "Large-scale Acquisition
Rules") are as follows: (1) The large-scale purchaser must provide adequate information to theCompany’s Board of Directors in advance; (2) After the completion of necessary information provision,in the case of a public tender offer for all shares of our company with cash consideration only, amaximum Board of Directors evaluation period of 60 days will be set or for other forms of large-scaleacquisition, a maximum Board of Directors evaluation period to evaluate and consider of 90 days will
be set. Upon the expiration of the Board of Directors evaluation period, the large-scale acquisition may
commence. However, if a General Meeting of Shareholders is held to confirm the will of shareholders
regarding the details of the countermeasure, the Large-Scale Acquisition may not be commenced until
the procedures for implementation or non-implementation of the countermeasure have been completed.
Under the Plan, when a large-scale purchaser complies with the Large-scale Acquisition Rules, theCompany will not, in principle, take any countermeasures against the large-scale purchase. However, inthe event that a large-scale purchaser fails to comply with the above-mentioned Large-scale Acquisition
Rule, or even if the large-scale purchaser complies with the above-mentioned Large-scale Acquisition
Rule, when it is judged that the large-scale acquisition will cause irreparable damage to the Company or(Details of Financial Statements of Riken Corporation’s Final Fiscal Year)-15-

otherwise materially damage the Company’s corporate value and/or the common interests ofshareholders, the Company can, to the extent necessary and reasonable, implement countermeasures thatcan be considered under the Companies Act, other laws, and the Company's Articles of Incorporation,such as the gratis allotment of share acquisition rights.
In this way, in the event that countermeasures are taken, in order to ensure the reasonableness andfairness of such judgments, the Board of Directors, prior to judging whether or not to take thecountermeasures, shall consult with an Independent Committee consisting of outside Directors who are
independent of the management team that conducts the Company's business, or members appointed fromoutside experts, as to the appropriateness of taking the countermeasures. The Independent Committee
shall make a recommendation on the appropriateness of taking the countermeasures within the Board of
Directors evaluation period. In judging whether or not to implement countermeasures, the Company's
Board of Directors will follow the recommendation of the Independent Committee.
Furthermore, the effective period of the Plan shall expire at the conclusion of the 101st Ordinary
General Meeting of Shareholders of the Company to be held in June 2025. However, (1) if a resolution
is passed at a General Meeting of Shareholders of the Company for the cancellation of the Plan, or (2)if such a resolution is passed by the Board of Directors of the Company, the Plan shall be canceled
immediately.
For more information on the Plan, please refer to the Company's website at https://www.riken.co.jp/.

5-4 That Complies With Our Basic Policies and Seeks to Enhance the Common Interests of
Our Shareholders, Instead of Focusing on Maintaining the Positions of the Company
Executives
The efforts mentioned above in (2) to enhance the corporate value of the Company and, in turn, thecommon interests of its shareholders are in line with the Basic Policy. As described in (3) above, indesigning this Plan, we have given due consideration to the following points the Company has given
due consideration and believes that this Plan is in line with the Basic Policy and consistent with thecorporate value of the Company and the common interests of its shareholders, and believes it is not
aimed at maintaining the status of the Company's Executives.
1) The Plan satisfies the requirements of policies regarding takeover defense measures.
2) The Plan with the aim of securing and improving the common interests of shareholders continues.
3) The plan reflects the intent of the shareholders.
4) The Plan respects the decision made by independent external entities.
5) The Plan does not constitute a dead-hand or slow-hand takeover defense measure.

6.Policy Regarding Determination of Dividends from Surplus, etc.
Regarding the distribution of surplus earnings, the Company believes that its basic policy is to maintain astable dividend level by paying an interim dividend and a year-end dividend twice a year, taking into
consideration the Company's business performance, dividend payout ratio, etc.
The Company will use retained earnings to invest in future business growth and to strengthen its financial
position.

(Details of Financial Statements of Riken Corporation’s Final Fiscal Year)-16-

Consolidated balance sheets(March 31, 2023)(Millions of yen)

AssetsItem

AmountCurrent assets

Notes and accounts receivable trade, and contract assets
Merchandise and finished
goodsWork in process
Raw materials and supplies
for

Item

Amount

66,321 Current liabilities
Notes and accounts payable 23,818
tradeCurrent portion of long-termborrowing

Cash and deposits

Other
Allowanceaccounts

Liabilities

doubtful

Non-current assets
Property, plant and equipment
Buildings and structures
Machinery, equipment andvehiclesLand
Construction in progress
Other

19,0639,881
3,000

21, 962

Income taxes payable

512

10,598Provision for bonuses

1,713

3,649

Other

3,956

3,738 Non-current liabilities

9,681

2,611

Long-term borrowings

7,000

(57)

Retirement benefit liability

1,293

Provisionfor
product
warranties
Provision for environmental
26,135
measures10,475
Other

1,093

10,329 Total liabilities

28,74557,406

2,514

285
9

Net assets

1,830 Shareholders' equity

80,554985

Share capital

8,627

Intangible assets

2,248

Capital surplus

7,178

Leased assets

1,652

Retained earnings

67,644595

Other
Investments and other assets
Investment securities
Deferred tax assets
Retirement benefit asset
Insurance funds
Other
Allowance for doubtful
accounts

Treasury shares(2,896)29,022 Accumulated other comprehensive income
Valuationdifference
on
23,144
available-for-sale securities
Deferred gains or losses on
1,205
hedgesForeign currency translation
3,576
adjustment
Remeasurements of defined61
benefit plans
1,038 Share acquisition rights

7,922(4) Non-controlling interests

6,409

Total net assets
Total assets

123,728 Total liabilities and net assets(Details of Financial Statements of Riken Corporation’s Final Fiscal Year)

1,908
10
3,474
2,529
97

94,983
123,728-17-

Consolidated statements of income(From April 1, 2022 to March 31, 2023)(Millions of yen)Item
Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating profit
Non-operating income
Interest and dividend income
Share of profit of entities accounted for using equity
methodForeign exchange gains
Dividend income of life insurance
Subsidy income
Insurance income
Other
Non-operating expenses
Interest expenses
Other
Ordinary profit
Extraordinary income
Gain on sale of non-current assets
Extraordinary losses
Loss on retirement of non-current assets
Impairment losses
System failure response costs
Loss on sale of investment securities
Profit before income taxes
Income taxes - current
Income taxes - deferred
ProfitProfit attributable to non-controlling interests
Profit attributable to owners of parent(Details of Financial Statements of Riken Corporation’s Final Fiscal Year)

Amount86,382
69,13817,244
12,567
4,676
540
1,428
66
160
8
600
205

3,010

111
201

312
7,374

30

30

69
539
145
116

871
6,533

1,571
162

1,734
4,799
481
4,318

-18-

Balance Sheet(March 31, 2023)(Millions of yen)

AssetsItem
Current assets
Cash and deposits
Notes receivable - trade
Accounts receivable - trade
Merchandise and finishedgoods
Raw materials and supplies
Work in process
Prepaid expenses
Short-term loans receivablefrom subsidiaries and associates
Income taxes receivable
Other
Allowancefordoubtfulaccounts
Non-current assets
Property, plant and equipment
Buildings
Structures
Machinery and equipment
VehiclesTools,
furnitureandfixturesLand
Leased assets
Construction in progress
Intangible assets
Leasehold right
Software
Software in progress
Leased assets
Other
Investments and other assets
Investment securities
Shares of subsidiaries andassociates

Liabilities
AmountItem39,869 Current liabilities
12,374
Notes payable - trade
2,896
Accounts payable - trade
Current portion of long-term
13,870borrowings
Lease obligations

23

1,222
2,284
201

Accounts payable - otherAccrued expenses
Income taxes payable

248
965
79

913

Deposits received

3,136

418
1,777

Provision for bonuses
Notes payable - facilities

1,040
614

(267)

Other

37,158 Non-current liabilities
12,739Long-term borrowings
6,057
Lease obligations
Provision for environmental
572
measures
3,726
Other
14 Total liabilities
322

doubtful

7,137
7,000
57
9
70
23,755

Net assets

1,158 Shareholders' equity
102
Share capital
785
Capital surplus
2,065
Legal capital surplus
30
Retained earnings
222
Legal retained earnings
142
Other retained earnings
1,652 Reserve for dividends
16 Reserve for overseas business
22,353 Reserve for reduction entry
Reserve for reduction entry of
11,932
replaced property

51,319
8,627
6,658
6,658
38,9291,457
37,471
4,000
10,00010

6,172 General reserve

5,500

earnings

brought

2,560 Treasury shares
1,090

Prepaid pension cost
Insurance funds
Other
Allowanceforaccounts
Total assets

53

Valuationandtranslation
adjustments
Valuation difference on available-for-sale272
securities
51 Deferred gains or losses on hedges
276 Share acquisition rights

Deferred tax assets

3,000

4,176

Retainedforward
Investments in capital ofsubsidiaries and associates

Amount16,6183,433
4,022(4) Total net assets
77,027 Total liabilities and net assets(Details of Financial Statements of Riken Corporation’s Final Fiscal Year)31

17,929(2,896)
1,855
1,844
11
97
53,27277,027-19-

Non-consolidated statements of Income(From April 1, 2022 to March 31, 2023)(Millions of yen)Item
Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating profit
Non-operating income
Interest income
Dividend income
Dividend income of life insurance
Foreign exchange gains
Insurance income
Other
Non-operating expenses
Interest expenses
Other
Ordinary profit
Extraordinary income
Gain on sale of non-current assets
Extraordinary losses
Loss on retirement of non-current assets
Impairment losses
System failure response costs
Loss on sales of investment securities
Provision of allowance for doubtful accounts for
subsidiaries and associates
Profit before income taxes
Income taxes - current
Income taxes - deferred
Profit(Details of Financial Statements of Riken Corporation’s Final Fiscal Year)

Amount
51,90941,762
10,146
8,745
1,401
27
5,124
148
68

600
129

94
119

16

6,098

214
7,285
16

40
154
138
116
138

589
6,713

697
390

1,087

5,625

-20-

Certified Copy of the Accounting Auditor Audit Report on theConsolidated Financial Statements
Independent Auditor’s Audit Report
May 22, 2023
Riken Corporation
To the Board of Directors
Deloitte Touche Tohmatsu LLC Tokyo Office
Designated Limited Liability Partner, Engagement Partner
CPA
Masahiro Ide
Designated Limited Liability Partner, Engagement PartnerCPA
Yae Sugiura
Designated Limited Liability Partner, Engagement Partner
CPA
Yoshi Ishikawa

Audit Opinion
Pursuant to Article 444, Paragraph 4 of the Companies Act, we have audited the consolidated financial
statements of Riken Corporation (the “Company”) for its consolidated financial year from April 1, 2022 toMarch 31, 2023, which are, specifically, the Consolidated Balance Sheet, Consolidated Statement of Income,Consolidated Statement of Changes in Equity, Notes to Consolidated Financial Statements.
In our opinion, the Consolidated Financial Statements referred to above present fairly, in all material
respects, the financial position and results of operations for the period covered by the relevant Consolidated
Financial Statements of the corporate group consisting of Riken Corporation and its consolidated subsidiaries
in accordance with accounting principles generally accepted in Japan.

Basis for Opinion
We performed our audit in accordance with auditing standards generally accepted in Japan. Our
responsibilities under the standards are further described in the Auditor’s Responsibilities for the Audit of theConsolidated Financial Statements section of our report. We are independent of the Company and its
consolidated subsidiaries in accordance with the provisions related to professional ethics in Japan, and wehave fulfilled our other ethical responsibilities as auditors. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our opinion.

Other Statements
The other statements are the Business Report and supplementary schedules. Management is responsible
for the preparation and disclosure of the other statements. The Audit and Supervisory Committee are also
responsible for overseeing execution of duties by Directors relating to the design and operation of thereporting process for the other statements.
Our audit opinion on the Consolidated Financial Statements does not include other statements, and we
express no opinion on other statements.
Our responsibility in the audit of the Consolidated Financial Statements is to read through the otherstatements and, in the course of reading through the other statements, to consider whether there are material
differences between the other statements and the Consolidated Financial Statements or knowledge we haveacquired in the course of our audit. We also pay attention to whether there are any other indications ofmaterial errors in the other statements.
Based on the work we have performed, we are required to report that fact when we judge that there arematerial errors in the other statements.
We have no matters to report with respect to the other statements.

Responsibilities of Management and the Audit and Supervisory Committee for
the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of the Non-consolidated Financial
Statements and Schedules in accordance with accounting principles generally accepted in Japan, and for(Details of Financial Statements of Riken Corporation’s Final Fiscal Year)-21-

the design and operation of internal controls that management determines are necessary to enable thepreparation and fair presentation of the Consolidated Financial Statements that are free from material
misstatement, whether due to fraud or error.
In preparing the Consolidated Financial Statements, management is responsible for assessing whether or
not it is appropriate to prepare the Consolidated Financial Statements based on the assumption of a going
concern, and in accordance with accounting principles generally accepted in Japan, for disclosing, as
necessary, matters related to going concern.
The Audit and Supervisory Committee are responsible for overseeing execution of duties by Directors
relating to the design and operation of the financial reporting process.

Auditor’s Responsibilities for the Audit of the Consolidated Financial
Statements
Our responsibilities are to obtain reasonable assurance about whether or not the Consolidated Financial
Statements as a whole are free from material misstatement, whether due to fraud or error, based on the audit
performed by us and to express our opinion on the Consolidated Financial Statements in the audit reportfrom an independent point of view. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the decisions of users ofthese Consolidated Financial Statements.
In accordance with auditing standards generally accepted in Japan, we exercise professional judgment
and maintain professional skepticism throughout the audit process, and conduct the following.
• We identify and assess the risks of material misstatement, whether due to fraud or error, and design
and perform audit procedures responsive to those risks. Selection and application of audit proceduresis at the discretion of the auditor. In addition, we obtain audit evidence that is sufficient andappropriate to provide a basis for our opinion.
• The purpose of an audit of the Consolidated Financial Statements is not to express an opinion on theeffectiveness of the entity’s internal control; however, in making risk assessments, the auditor
considers internal control relevant to the audit in order to design audit procedures that are appropriate
in the circumstances.
• We evaluate the appropriateness of accounting policies used by management and their method of
application, as well as the reasonableness of accounting estimates made by management and thevalidity of related notes.
• We make a conclusion on the appropriateness of the Consolidated Financial Statements and Schedules
being prepared by management based on the assumption of a going concern, and based on the audit
evidence obtained, on whether a material uncertainty exists related to events or conditions that may
cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that amaterial uncertainty regarding going concern exists, we are required to draw attention in our audit
report to the related notes in the Consolidated Financial Statements or, if such notes are inadequate, toexpress a qualified opinion with exceptions on the Consolidated Financial Statements. Our
conclusions are based on the audit evidence obtained up to the date of the audit report. However,
future events or conditions may cause the Company to cease to continue as a going concern.
• We evaluate whether the presentation of the Consolidated Financial Statements and Notes thereto arein accordance with accounting principles generally accepted in Japan, as well as the overall
presentation, structure, and content of the Consolidated Financial Statements, including the related
Notes thereto, and whether the Consolidated Financial Statements represent the underlying
transactions and accounting events in a manner that achieves fair presentation.
• We obtain sufficient and appropriate audit evidence regarding the financial information of theCompany and its consolidated subsidiaries to express an opinion on the Consolidated Financial
Statements. We are responsible for the direction, supervision and performance of the audit of theConsolidated Financial Statements. We are solely responsible for our audit opinion.
We communicate with the Audit and Supervisory Committee regarding the planned scope and timing of
the audit and significant audit findings, including any significant deficiencies in internal control that we
identify during our audit process, and other matters required by auditing standards.
We also provide the Audit and Supervisory Committee with a statement that we have complied withthe provisions related to professional ethics in Japan concerning independence, and communicate with themmatters that may reasonably be thought to bear on our independence, and where applicable, related
safeguards in order to eliminate or reduce obstruction factors.

(Details of Financial Statements of Riken Corporation’s Final Fiscal Year)-22-

Interest RelationshipOur firm and its engagement partners do not have any interest in the Company and its consolidated
subsidiaries that is required to be disclosed pursuant to the provisions of the Certified Public Accountants Act
of Japan.
End of document(Details of Financial Statements of Riken Corporation’s Final Fiscal Year)-23-

Certified Copy of the Accounting Auditor Audit Report on the Nonconsolidated Financial Statements
Independent Auditor’s Audit Report
May 22, 2023
Riken Corporation
To the Board of Directors
Deloitte Touche Tohmatsu LLC Tokyo Office
Designated Limited Liability Partner, Engagement Partner
CPA
Masahiro Ide
Designated Limited Liability Partner, Engagement PartnerCPA
Yae Sugiura
Designated Limited Liability Partner, Engagement Partner
CPA
Yoshi Ishikawa

Audit Opinion
Pursuant to Article 436, Paragraph 2, Item 1 of the Companies Act, we have audited the Nonconsolidated Financial Statements of Riken Corporation (the “Company”) for the 99th fiscal year from April
1, 2022 to March 31, 2023, which are, specifically, the Non-consolidated Balance Sheet, Non-consolidated
Statement of Income, Non-consolidated Statement of Changes in Equity, Notes to the Non-consolidated
Financial Statements, and their supplementary schedules (hereinafter, “Non-consolidated Financial
Statements and Schedules”).
In our opinion, the Non-consolidated Financial Statements and Schedules referred to above present
fairly, in all material respects, the status of assets and income for the period covered by the Non-consolidated
Financial Statements and Schedules in accordance with accounting principles generally accepted in Japan.

Basis for Opinion
We performed our audit in accordance with auditing standards generally accepted in Japan. Our
responsibilities under the standards are further described in the Auditor’s Responsibilities for the Audit of theNon-consolidated Financial Statements and Schedules section of our report. We are independent of theCompany in accordance with the provisions related to professional ethics in Japan, and we have fulfilled ourother ethical responsibilities as auditors. We believe that the audit evidence we have obtained is sufficientand appropriate to provide a basis for our opinion.

Other Statements
The other statements are the Business Report and supplementary schedules. Management is responsible
for the preparation and disclosure of the other statements. The Audit and Supervisory Committee are also
responsible for overseeing execution of duties by Directors relating to the design and operation of thereporting process for the other statements.
Our audit opinion on the non-consolidated financial statements does not include any other statements,
and we express no opinion on other statements.
Our responsibilities in auditing the non-financial statements are to read the other statements carefully
and, in the process of reading it, to consider whether there are any material differences between the otherstatements and the non-consolidated financial statements or our knowledge of them as a result of our audit.
We also to pay attention to whether there is any indication of material errors in the other statements otherthan such material differences.
Based on the work we have performed, we are required to report that fact when we judge that there arematerial errors in the other statements.
We have no matters to report with respect to the other statements.

(Details of Financial Statements of Riken Corporation’s Final Fiscal Year)-24-

Responsibilities of Management and the Audit and Supervisory Committee for
the Non-consolidated Financial Statements and Schedules
Management is responsible for the preparation and fair presentation of the Non-consolidated Financial
Statements and Schedules in accordance with accounting principles generally accepted in Japan, and forthe design and operation of internal controls that management determines are necessary to enable thepreparation and fair presentation of the Non-consolidated Financial Statements and Schedules that are freefrom material misstatement, whether due to fraud or error.
In preparing the Non-consolidated Financial Statements and Schedules, management is responsible forassessing whether or not it is appropriate to prepare the non-consolidated financial statements and Schedules
based on the assumption of a going concern, and in accordance with accounting principles generally
accepted in Japan, for disclosing, as necessary, matters related to going concern.
The Audit and Supervisory Committee are responsible for overseeing execution of duties by Directors
relating to the design and operation of the financial reporting process.

Auditor’s Responsibilities for the Audit of the Non-consolidated Financial
Statements and Schedules
Our responsibilities are to obtain reasonable assurance about whether or not the Non-consolidated
Financial Statements and Schedules as a whole are free from material misstatement, whether due to fraud or
error, based on the audit performed by us and to express our opinion on the Non-consolidated Financial
Statements and Schedules in the audit report from an independent point of view. Misstatements can arise
from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be
expected to influence the decisions of users of these Non-consolidated Financial Statements and Schedules.
In accordance with auditing standards generally accepted in Japan, we exercise professional judgment
and maintain professional skepticism throughout the audit process, and conduct the following.
• We identify and assess the risks of material misstatement, whether due to fraud or error, and design
and perform audit procedures responsive to those risks. Selection and application of audit proceduresis at the discretion of the auditor. In addition, we obtain audit evidence that is sufficient andappropriate to provide a basis for our opinion.
• The purpose of an audit of the Non-consolidated Financial Statements is not to express an opinion on
the effectiveness of the entity’s internal control; however, in making risk assessments, the auditor
considers internal control relevant to the audit in order to design audit procedures that are appropriate
in the circumstances.
• We evaluate the appropriateness of accounting policies used by management and their method of
application, as well as the reasonableness of accounting estimates made by management and thevalidity of related notes.
• We make a conclusion on the appropriateness of the Non-consolidated Financial Statements and
Schedules being prepared by management based on the assumption of a going concern, and based on
the audit evidence obtained, on whether a material uncertainty exists related to events or conditions
that may cast significant doubt on the Company’s ability to continue as a going concern. If weconclude that a material uncertainty regarding going concern exists, we are required to draw attention
in our audit report to the related notes in the Non-consolidated Financial Statements and Schedules or,if such notes are inadequate, to express a qualified opinion with exceptions on the Non-consolidated
Financial Statements and Schedules. Our conclusions are based on the audit evidence obtained up to
the date of the audit report. However, future events or conditions may cause the Company to cease tocontinue as a going concern.
• We evaluate whether the presentation of the Non-consolidated Financial Statements and Schedules
and Notes thereto are in accordance with accounting principles generally accepted in Japan, as well as
the overall presentation, structure, and content of the Non-consolidated Financial Statements and
Schedules, including the related Notes thereto, and whether the Non-consolidated Financial
Statements and Schedules represent the underlying transactions and accounting events in a mannerthat achieves fair presentation.
We communicate with the Audit and Supervisory Committee regarding the planned scope and timing of
the audit and significant audit findings, including any significant deficiencies in internal control that we
identify during our audit process, and other matters required by auditing standards.
We also provide the Audit and Supervisory Committee with a statement that we have complied with theprovisions related to professional ethics in Japan concerning independence, and communicate with them

(Details of Financial Statements of Riken Corporation’s Final Fiscal Year)-25-

matters that may reasonably be thought to bear on our independence, and where applicable, related
safeguards in order to eliminate or reduce obstruction factors.

Interest RelationshipOur firm and its engagement partners do not have any interest in the Company that is required to bedisclosed pursuant to the provisions of the Certified Public Accountants Act of Japan.
End of document
Certified Copy of the Audit and Supervisory Committee Audit Report

Audit Report
The Audit and Supervisory Committee has audited the execution of duties by Directors for the 99th
fiscal year from April 1, 2022 to March 31, 2023. The methods and results are reported as follows.
1. Audit Methods and Their Description
The Audit and Supervisory Committee regularly received reports from Directors and employees
regarding the details of the Board of Directors' resolutions concerning matters prescribed in Article 399-13,
Paragraph 1, Items 1(b) and 1(c) of the Companies Act and the status of the establishment and operation of
the systems (internal control systems) based on such resolutions, and requested explanations and expressed
opinions as necessary, and conducted its audit in the following manner. Furthermore, with respect to internal
control over the financial reporting, they received reports from Directors, etc. and Deloitte Touche Tohmatsu
LLC regarding the status of evaluation and audit of such internal control, and requested explanations asnecessary.
(1) Pursuant to the Audit and Supervisory Committee’s audit policy, audit plan, and assignment of duties forthe current fiscal year and in accordance with the Audit and Supervisory Committee's audit standards
established by the Company's Internal Audit Department and other departments in charge of internal
control, utilizing various means, such as via the telephone or the Internet, etc., they attended important
meetings, received reports from Directors and employees regarding matters concerning the execution of
their duties, requested explanations, as necessary, particularly with respect to priority audit items, andhandling of incidents, etc., attended individual meetings, etc., viewed important decision documents,
etc., and also examined the status of operations and assets at the Head Office and main offices of theCompany. Also, with respect to domestic and overseas subsidiaries, they requested business reports
from subsidiaries as necessary and examined the status of their operations and assets.
(2) Audit & Supervisory Board Members reviewed and discussed, based on deliberations by the Board of
Directors and other committees, the particulars indicated in the Business Report to be given due
consideration under Item (iii) (a) of Article 118 of the Regulations for Enforcement of the Companies
Act and the basic policy and each of the initiatives under Item (iii) (b) of the same article of theordinance.
(3) Audit & Supervisory Board Members monitored and verified whether the Accounting Auditor
maintained its independence and conducted audits appropriately, received reports from the Accounting
Auditor on the performance of its duties, and requested explanations as necessary. In addition, Audit &Supervisory Board Members were informed by the Accounting Auditor that “systems for ensuring thatthe performance of the duties of financial auditor is being carried out correctly” (matters stipulated in
the items of Article 131 of the Regulations on Corporate Accounting) are being developed in accordancewith the Quality Control Standards for Audits (Business Accounting Council, October 28, 2005) andother standards and requested explanations as necessary. Furthermore, with regard to principal mattersfor consideration in our audit process, they deliberated with Deloitte Touche Tohmatsu LLC, received
reports on the status of their audits, and requested explanations as necessary.
Based on the aforesaid methods, Audit & Supervisory Board Members examined the Business
Reports and its supplementary schedules, the Non-consolidated Financial Statements (Non-consolidated
Balance Sheet, Nonconsolidated Statement of Income, Non-consolidated Statement of Changes in Equity,
and Notes to the Nonconsolidated Financial Statements) and their supplementary schedules, and theConsolidated Financial Statements (Consolidated Balance Sheet, Consolidated Statement of Income,Consolidated Statement of Changes in Equity, and Notes to the Consolidated Financial Statements) for the
relevant fiscal year.
(Details of Financial Statements of Riken Corporation’s Final Fiscal Year)-26-

2. Results of Audit(1) Results of Audit of Business Report and Other Relevant Documentsi) We acknowledge that the Business Report and its supplementary schedules accurately present thestatus of the Company in accordance with laws, regulations, and the Articles of Incorporation.
ii) We acknowledge there is no misconduct or material fact in violation of the law, regulations, or the
Articles of Incorporation related to the execution of duties by Directors.
iii) We acknowledge that the resolutions of the Board of Directors related to internal control systems areappropriate. We also did not find any matter bearing mention related to statements in the Business
Report or the execution of duties by Directors in connection with internal control systems, includinginternal control over the financial reports. Moreover, as described in the Business Report, in
response to the cyber incident that occurred at the Company, the Audit and Supervisory Committee
confirmed that the Company is implementing measures to prevent recurrence by strengthening
security and rebuilding the emergency response system based on an investigation and analysis of thecauses.
iv) We acknowledge that the basic policy on the individuals who control decision-making of financial
and business policies of the business corporation as described in the business report is appropriate.
We acknowledge that each of the initiatives prescribed in Article 118, Item (iii) (b) of theRegulations for Enforcement of the Companies Act, as described in the Business Report, is in linewith the said basic policy, is not harmful the interests of the Company and the common interests ofour shareholders, and is not intended to maintain the status of the Company's officers.
(2) Results of Audit of Non-consolidated Financial Statements and Supplementary Schedules
We acknowledge that the audit methods and findings of the Accounting Auditor, Deloitte Touche
Tohmatsu LLC, are appropriate.
(3) Results of Audit of Consolidated Financial Statements
We acknowledge that the audit methods and findings of the Accounting Auditor, Deloitte Touche
Tohmatsu LLC, are appropriate.
3．Post-Balance Sheet Event
At a meeting of the Board of Directors held on November 4, 2022, a resolution was passed to acquire sharesof JFE Fittings Corporation and acquire JFE Pipe Fitting Mfg. Co., Ltd. n JFE Fittings Corporation, and basedon a share transfer agreement executed on the same day, the transfer of the company’s shares was completed
on May 9, 2023.
May 22, 2023
Riken Corporation Audit and Supervisory Committee
Full-Time Audit and Supervisory Committee Member
Audit and Supervisory Committee Member
Audit and Supervisory Committee Member

Akira Kunimoto
Shuji Iwamura
Osamu Honda

Seal
Seal
Seal

(Note) Audit and Supervisory Committee members Mr. Shuji Iwamura and Mr. Osamu Honda are outside Directors as
defined in Article 2, Item 15 and Article 331, Paragraph 6 of the Companies Act.

(Details of Financial Statements of Riken Corporation’s Final Fiscal Year)-27-

Matters Related to Company Stock Acquisition Rights, etc. of Riken Corporation
Status of stock acquisition rights for Company Executives (as of March 31, 2023)(Based on a resolution passed by the Board of Directors on June 25, 2014)• Number of stock acquisition rights
23 (100 shares per stock acquisition right)• Type and number of shares to be acquired upon the exercise
2,300 common shares• Exercise price
100 yen (per stock acquisition right)• Vesting conditions
Rights may be exercised on and after the day following the day on which the person loses his/her position
as a director or executive officer of the Company. However, such rights may not be exercised when
waived.
• Exercise period
July 15, 2014 - July 14, 2044
• Status of unexercised stock acquisition rights held by officers of the Company of the above
Category

Number of stockacquisition rights

Directors of the Company(excluding Outside directors/membersof the Audit and Supervisory
Committee)

Type and number of
Number ofshares to be acquired upon
holders
the exercise

23 2,300 common shares

2 persons(Based on a resolution passed by the Board of Directors on June 23, 2015)• Number of stock acquisition rights
38 (100 shares per stock acquisition right)• Type and number of shares to be acquired upon the exercise
3,800 common shares• Exercise price
100 yen (per stock acquisition right)• Vesting conditions
Rights may be exercised on and after the day following the day on which the person loses his/her position
as a director or executive officer of the Company. However, such rights may not be exercised when
waived.
• Exercise period
July 15, 2015 - July 14, 2045
• Status of unexercised stock acquisition rights held by officers of the Company of the above
Category
Directors of the Company(excluding Outside directors/membersof the Audit and Supervisory
Committee)

Number of stockacquisition rights

Type and number of
Number ofshares to be acquired upon
holders
the exercise

38 3,800 common shares

2 persons(Based on a resolution passed by the Board of Directors on June 24, 2016)• Number of stock acquisition rights
57 (100 shares per stock acquisition right)• Type and number of shares to be acquired upon the exercise
5,700 common shares• Exercise price
100 yen (per stock acquisition right)• Vesting conditions
Rights may be exercised on and after the day following the day on which the person loses his/her position
as a director or executive officer of the Company. However, such rights may not be exercised when
waived.
• Exercise period
July 14, 2016 - July 13, 2046
• Status of unexercised stock acquisition rights held by officers of the Company of the above
Category

Number of stockacquisition rights

Directors of the Company(excluding Outside directors/membersof the Audit and Supervisory
Committee)

Type and number of
Number ofshares to be acquired upon
holders
the exercise

57 5,700 common shares

2 persons(Based on a resolution passed by the Board of Directors on June 22, 2017)• Number of stock acquisition rights
41 (100 shares per stock acquisition right)• Type and number of shares to be acquired upon the exercise
4,100 common shares• Exercise price
100 yen (per stock acquisition right)• Vesting conditions
Rights may be exercised on and after the day following the day on which the person loses his/her position
as a director or executive officer of the Company. However, such rights may not be exercised when
waived.
• Exercise period
July 13, 2017 - July 12, 2047
• Status of unexercised stock acquisition rights held by officers of the Company of the above
Category
Directors of the Company(excluding Outside directors/membersof the Audit and Supervisory
Committee)

Number of stockacquisition rights

Type and number of
Number ofshares to be acquired upon
holders
the exercise

41 4,100 common shares

2 persons

Riken Corporation’s Systems to Ensure the Appropriateness of Operations
The matters concerning the basic policy for the development of internal control systems passed a
resolution by the Company's directors are as follows:(Basic policy)
The Group has defined the Group Mission Statements outlined in the following paragraph. It also sets out
the following Guiding Principles: “Be Customer Driven. Be Compliant with the Law. Be focused on the Basics.
Be Open. Be Proactive. Be Prompt.” and promotes our corporate activities accordingly.
Furthermore, it is the Company's basic policy that the Directors and employees of the Group shall performtheir duties based on the RIKEN Group Code of Conduct, internal company regulations, and social good sense,in accordance with laws, regulations, and social norms.
<Mission Statement>• We continue to be a corporate citizen committed to protecting global environment and serving the society
in which we conduct our business.
• We are committed to creating corporate value from a global perspective by efficiently utilizing the capital
invested by our shareholders.
• We will offer products and services that continually exceed our global customers’ increasing expectations
through constant innovation and continued advancements in knowledge and technology.
• We have high aspirations and a broad vision, and we are always willing to change.
Under this Mission Statement, the Company recognizes that it is an important management responsibility
to establish and operate a system for proper business execution, and will strive to further improve the Group's
internal control system to make it more appropriate.

(1)

Systems necessary to ensure that the execution of the duties by directors and employees
complies with laws and regulations and our articles of incorporation

The Group recognizes that thorough compliance (Be Compliant with the Law) is essential for the survivalof a company, and all Directors and employees shall comply with laws, regulations, and social norms, act basedon fair ethical standards, and strive to establish a management system that will be widely trusted by society.
(i)

In order to establish a system for the Directors and employees of the Group to comply with laws,
regulations, and the Articles of Incorporation and to conduct appropriate business activities, theCompany has established a Code of Conduct and Guiding Principles that shall apply to the entire
Group.

(ii) To enhance the soundness and efficiency of management, the Company shall establish an Audit andSupervisory Committee Meeting in which the majority of members shall be Outside Directors.
(iii) In order to establish a management system that is trusted by society, the Compliance Committee, acompany-wide committee chaired by the CEO, shall be established to promote various activities
necessary to ensure that compliance takes root and is thoroughly implemented.
(iv) In an effort to ensure thorough compliance, theHR and General Affairs Divisions shall systematicallyand systematically provide compliance education to directors and employees.
(v) The Company has also established an external contact point for consultation on compliance matters andreporting of misconduct and operates an internal reporting system that protects whistleblowers.
(vi) The Internal Control Department shall conduct periodic internal audits to ascertain the status of theCompany's business operations, investigate and verify whether all business operations are conducted
properly, appropriately, and reasonably in accordance with laws, the Articles of Incorporation, andinternal rules and regulations, and whether the Company's systems, organization, and rules andregulations are proper and appropriate, and report the audit results to the President and the Audit
Committee.
(vii) The above compliance-related activities shall be reported to the Board of Directors on a regular basis.

(2)

Systems for the storage and management of information related to the execution ofduties by directors

Company shall properly record information related to the execution of duties by directors in accordancewith laws and regulations and document management rules, including records related to decision-making at
meetings of the Board of Directors and other important meetings and documents approved by each director
based on the segregation of duties and decision-making standards, and shall retain such records for theprescribed period.
(i)Based on laws and regulations and document management rules, the following documents (including

electromagnetic records) shall be stored together with related materials.
(i)-1Documents required by laws and regulations• Minutes of General Meeting of Shareholders (Companies Act, Article 318), Minutes of Directors'
Meetings (Companies Act, Article 369)(i)-2Documents based on document management rules• Management Committee minutes, Technology Committee minutes, Sustainability Committee minutes,
Compliance Committee minutes• Minutes of other meeting committee meetings chaired and presided over by a director• Decision documents in which a director is the decision-maker• Other important documents as stipulated in the document management rules(ii) Unless otherwise stipulated by law, the above documents shall be managed by the department in chargeof each document based on the document management rules.

(3)

Regulations and Other Systems for Managing Risk of Loss

The Group shall strive to develop an organized response to various risks of loss in order to minimize therisk of loss by preparing appropriate countermeasures in advance according to the size of the risk and thelikelihood of its occurrence.
(i)

To establish a risk management system for the whole Group, and to implement appropriate risk
responses, risk management rules and related regulations, including a basic risk management policy,
shall be established.

(ii) The Company has established a Risk Management Subcommittee and a BCM Subcommittee under the
Sustainability Committee to promote various activities necessary for the establishment and promotes thethorough operation of risk management and business continuity plans.
(iii) Based on the risk management rules, we identify and evaluate the risks of business opportunities andrisks associated with the execution of business activities in the Group every year, and formulate andpromote a risk mitigation plan.
(iv) The Company aims to prevent large-scale accidents, disasters, scandals, etc., and when they occur, aCrisis Response Headquarters with the President (or a person designated by the President) as its
chairperson shall be established to address the situation.
(v) The activities related to risk management described above shall be reported regularly to the Board of
Directors.

(4)Systems to ensure that directors execute their duties efficiently

The Company formulates and promotes its Mid-term Management Plan and Annual Management Plan inorder to respond to changes in the environment. We strive to improve the efficiency of our directors' day-today execution of their duties with the aim of achieving the objectives of the management plans.
(i)

The duties and decision-making authority of directors shall be stipulated in the Organization Rules, theRules on Segregation of Duties, and the Rules on Decision-Making Standards.

(ii) The Board of Directors shall make decisions on management policies, matters required by law and otherimportant matters concerning management, and supervise the status of directors' execution of theirduties.
(iii) Under the Board of Directors, a Management Committee chaired by the President shall be established(held, generally, twice a month) to deliberate in advance on matters passed a resolution by the Board of
Directors, and to deliberate and make decisions on the execution of the Company's business and theimplementation of measures, etc., within the scope of the authority delegated by the Board of Directors.

(5)

Systems to ensure the appropriateness of operations of the GroupThe Company aims to establish an internal control system for the RIKEN Group, including its affiliatedcompanies, and strives for appropriate Group management while respecting the autonomy of each subsidiary
based on the “Affiliated Companies Management Regulations.”(i)

As group management, we share our Mission Statement and Code of Conduct, and compliance-related
regulation manuals with affiliated companies, and collaboratively promote the RIKEN GroupManagement Plan.

(ii) For domestic affiliated companies, the Corporate Planning Department, and for overseas affiliatedcompanies, overseas business units will participate in each company's Board of Directors Meetings andconduct interviews to confirm the legality and efficiency of the management.
(iii) The Internal Control Department periodically conducts audits of affiliated companies.
(iv) For our major affiliated companies, the Company's Audit and Supervisory Committee members shall be
appointed as Corporate Auditors and shall conduct accounting and operational audits.

(6)

Employees who assist Audit and Supervisory Committee members in their duties

When the Audit and Supervisory Committee member requests a full-time employee to assist the Audit
and Supervisory Committee in the performance of its duties, the Company shall assign such employee after
consultation with the Audit and Supervisory Committee.

(7)Matters related to the independence of employees set forth in the preceding paragraphfrom directors (excluding directors who are Audit and Supervisory Committee
Members)

The employees set forth in the preceding paragraph shall not receive orders from directors (excluding
directors who are Audit and Supervisory Committee Members), but shall be under the direction and orders of

the Audit and Supervisory Committee. The Audit and Supervisory Committee shall be informed of and approve
any personnel transfers and evaluations in advance.

(8)

Systems for directors (excluding directors who are Audit and Supervisory Committee
Members) and employees to report to the Audit and Supervisory Committee and othersystems related to reporting to the Audit and Supervisory Committee.

Directors (excluding directors who are Audit and Supervisory Committee Members) and employees of
the Group shall report to the Audit and Supervisory Committee facts that may cause significant damage to theGroup and other important matters concerning business operations. Directors (excluding directors who are
Audit and Supervisory Committee Members) and employees who report to the Audit and Supervisory
Committee shall not receive any disadvantageous treatment because of such reporting. We actively promoteawareness and thorough understanding of this policy.
)Matters to be reported to the Audit and Supervisory Committee and the method of reporting shall beestablished in consultation with the Audit and Supervisory Committee, and directors (excluding directors who
are Audit and Supervisory Committee Members) and employees shall carry out appropriate reporting.
Also, the Audit and Supervisory Committee shall establish, in consultation with the Audit and Supervisory
Committee, meetings of the Conference Committee at which Audit and Supervisory Committee members shallattend the Committee Meetings and review meeting materials and minutes.

(9)Matters related to the policy for processing expenses related to the execution of duties by
the Audit Committee members.

When the Company receives a request from Audit Committee members for advance payment or
reimbursement of expenses incurred in the performance of their duties as Audit Committee members and othernecessary expenses, such as processing of expenses or obligations incurred in the performance of such duties,
the Company shall bear these expenses, except when it is deemed that such expenses are not made clear thatsuch expenses are necessary for the performance of their duties.

(10) Systems to ensure that other Supervisory Committee's audits are conducted effectively
In an effort to ensure mutual communication with the President, the Audit and Supervisory Committee
shall hold regular meetings and collaborate with the Internal Control Department, the accounting auditor, andCorporate Auditors of affiliated companies to ensure the effectiveness of the Audit and Supervisory
Committee's audits.

(11) Overview of the status of operation of systems to ensure the appropriateness ofoperations
The Company continuously confirms through internal audits and other means the status of thedevelopment and operation of internal control systems with respect to the aforementioned systems to ensure
the appropriateness of operations, and reports the status of the systems to the Board of Directors on a quarterly
basis. The Company strives to operate a more appropriate internal control system by taking corrective actions
for points identified as a result of internal audits.
The status of the operation of the internal control systems for Group during the current consolidated fiscal
year is as follows(i)Compliance-related efforts
The Company convenes the Compliance Committee, a company-wide committee chaired by the CEO,to promote the establishment and thorough operation of compliance.

The Company has also established an external contact point for consultation on compliance matters andreporting of misconduct, and operates an internal reporting system that protects whistleblowers andreports quarterly to the Board of directors.
In addition, the company strives to instill compliance awareness among officers and employees throughtraining programs.
(ii) Strengthening of risk management systems
In order to establish a Group-wide risk management system and respond appropriately to risks, theCompany has established a Risk Management Subcommittee and a BCM Subcommittee under the
Sustainability Committee to ensure that risk management and business continuity plans are firmly inplace and thoroughly implemented.
(iii) The Audit and Supervisory Committee’s audit systems
The Audit and Supervisory Committee meets regularly with the Representative Director to ensure
mutual communication. The Audit and Supervisory Committee also strives to ensure the effectivenessof its audits by holding regular quarterly meetings with the Internal Control Department and theaccounting auditor, as well as holding meetings as necessary.

Consolidated Statement of Changes in Equity of Riken Corporation(From April 1, 2022 to March 31, 2023)(Millions of yen)
Shareholders' equity
Share capital
Balance at beginning ofcurrent period
Changes of items during
periodIssuance of new shares
Distribution of dividendsof surplus
Profit attributable toowners of parent
Acquisition of treasury
sharesAppropriation of treasury
sharesChange in ownershipinterest of parent due totransactions with noncontrolling interests
Net changes of items
during period other thanshareholders' equity
Total changes of items during
periodBalance at end of current
periodCapitalsurplusRetained earnings

8,573

7,119

53

53

64,526

Total
shareholders'equityTreasuryshares(2,894)

77,324107(1,200)(1,200)

4,318

4,318

(0)

(1)

(1)

0

(0)

5

5

53

59

3,118

(1)

3,229

8,627

7,178

67,644(2,896)80,554

Accumulated other comprehensive income
Other
Total
Foreign
Share
NonRemeasur
Valuation
accumulat
Deferred currency
acquisiti
controllin
ements ofdifference
ed othergains or translatioongdefinedoncomprehenlosses onrightsinterests
benefitavailablensive
hedges adjustmen
plans
for-saleincometsecurities

Balance at beginning ofcurrent period
Changes of items during
periodIssuance of new shares
Distribution of dividendsof surplus
Profitattributabletoowners of parent
Acquisition of treasury
sharesAppropriation of treasury
sharesChange in ownershipinterest of parent due totransactions with noncontrolling interests
Net changes of items
during period other thanshareholders' equity
Total changes of items
during period
Balance at end of current
period

1,045

(60)

622

2,189

3,797

97

5,863

Total net
assets87,082107(1,200)
4,318

(1)
(0)
5

862

71

2,851

339

4,125

862

71

2,851

339

4,125

1,908

10

3,474

2,529

7,922

546

4,671

－

546

7,900

97

6,409

94,983

Notes to the Consolidated Financial Statements of Riken Corporation(Notes regarding important matters concerning the preparation of the consolidated financial statements)
1. Amounts are rounded down to the nearest million yen.
2. Matters related to the scope of consolidation(1) Status of consolidated subsidiaries
Number of consolidated subsidiaries:
20 companies
Names of main consolidated subsidiaries:
RIKEN CASTEC Co,.Ltd.
RIKEN ENVIRONMENTAL SYSTEM Co., Ltd.
RINKEN HEAT TECHNO CO., LTD.
P.T. PAKARTI RIKEN INDONESIA
RIKEN AUTOMOBILE PARTS (WUHAN) CO., LTD.
RIKEN MEXICO , S.A. DE C.V.
RIKEN OF AMERICA, INC.
EURO-RIKEN GMBH
(2) Status of non-consolidated subsidiaries
Number of non-consolidated subsidiaries:
1 company
Name of non-consolidated subsidiary:
AMTEK RIKEN
It is a small-scale company, and its total assets, net sales, net income/loss, and retained earnings do nothave a material effect on the consolidated financial statements.
3. Matters related to the application of the equity method of accounting(1) Status of affiliated companies accounted for by the equity method
Number of affiliated companies accounted for by the equity method:
4 companies
Names of affiliated companies accounted for by the equity method:
Taiwan Riken Corp
SIAM RIKEN IND. CO., LTD.
SHRIRAM PISTONS & RINGS LTD.
Riken Power System (Nanjing) Co., Ltd.
(2) Status of non-consolidated or affiliated companies not accounted for by the equity method
Names of affiliated companies not accounted for by the equity method:
Yaesu Export & Import Co., Ltd.
Companies not accounted for by the equity method are not accounted for by the equity method because
they do not have a material impact on current fiscal year net income/loss, retained earnings, etc., and are
not significant in the aggregate so are excluded from the application of the equity method.
4. Matters related to the fiscal year of consolidated subsidiaries

The closing date for Riken Corporation of America, RIKEN OF AMERICA, INC., RIKEN MEXICO ,S.A. DE C.V., EURO-RIKEN GMBH, P.T. PAKARTI RIKEN INDONESIA, RIKEN AUTOMOBILE PARTS(WUHAN) CO., LTD., PT. RIKEN SEAL PRODUCTS （ WUHAN ） CO., LTD., RIKEN OF ASIA,
RIKEN SALES AND TRADING (THAILAND) CO., LTD. is December 31, 2022. In preparing theconsolidated financial statements, the financial statements as of the current date are used, and necessary
adjustments are made to reflect significant transactions that occurred between the current date and theconsolidated balance sheet date.
5. Matters related to accounting policies(1) Valuation criteria and methods for significant assets(i) Securities
Held-to-maturity debt securities:
Calculated using the amortized cost method (straight-line method).
Other securities
Other than stocks and other securities with no market value:
Calculated using the market value method (valuation differences are processed by the total direct
capitalization method and the cost of sales is determined by the moving average method).
Stocks, etc. without market prices:
Calculated using the cost method using the moving-average method.
(ii) Inventories:
Mainly calculated using the cost method (a method of book value devaluation determined on decline inprofitability) using the moving-average method.
(iii) Derivatives:
Market value method(2) Methods of depreciation and amortization of significant depreciable assets
Property, plant and equipment (excluding leased assets):
Mainly calculated using the declining-balance method.
However, we apply the straight-line method to buildings (excluding building fixtures) acquired on or after
April 1, 1998 and for building fixtures and structures acquired on or after April 1, 2016. Useful life and residual
value are mainly calculated using the same criteria as stipulated in the Corporation Tax Law.
Intangible assets (excluding leased assets):
Calculated using the straight-line method. Useful life is mainly determined by the same criteria as
stipulated in the Corporation Tax Law.
Software (for internal use) is amortized by the straight-line method based on the period of internal use (5to 10 years).
Leased assets:
Leased assets related to finance lease transactions that transfer ownership of the leased assets to the lessee
are calculated using the same depreciation method as that applied to owned fixed assets. Lease assets related
to finance lease transactions that do not transfer ownership of the leased assets to the lessee are calculatedusing a method in which the lease period is deemed as the useful life of the asset and the residual value is set
at zero.
(3) Criteria for recording significant allowances

Allowance for doubtful accounts:
To provide for possible bad debt losses, the Company records allowances for general receivables basedon historical bad debt ratios, and allowances for specific doubtful receivables based on the financial conditionassessment method.
Allowance for bonuses:
To provide for the payment of bonuses to employees, the Company provides for the estimated amount ofbonuses to be paid to employees, which is attributable to the current consolidated fiscal year.
Allowance for environmental measures:
To provide for expenditures for the disposal of polychlorinated biphenyls (PCBs), an estimated amountof expenditures that can be reasonably estimated was recorded.
Allowance for product warranties:
Domestic consolidated subsidiaries provide for expenditures for repair work projected to be incurred in
the Radio Frequency Anechoic Chambers/Shield Rooms business by posting an estimated amount ofexpenditures that can be reasonably estimated.
(4) Criteria for recording significant income and expenses
The Group is primarily engaged in the manufacture and sale of automotive and machinery parts. We also
construct Radio Frequency Anechoic Chambers/Shield Rooms
With respect to sales of merchandise and products, the performance obligation is satisfied when themerchandise and products are delivered to the customer; therefore, income is recognized at that point in time.
Also, for the construction of Radio Frequency Anechoic Chambers/Shield Rooms, the Company
recognizes income based on the percentage of completion based on the cost incurred when the performanceobligation is fulfilled over a certain period of time based on the contract and the degree of completion can bereasonably estimated. Also, when the degree of progress cannot be reasonably estimated, we recognize as
income an amount equal to the section of the cost incurred that is expected to be recovered.
(5) Method of accounting for retirement benefits(i) Method of attributing estimated retirement benefits to periods of service
In calculating retirement benefit obligations, we calculate the estimated amount of retirement benefits
attributed to the period through the end of the current consolidated fiscal year using the benefit calculation
method.
(ii) Method of processing prior service costs and actuarial calculation differences
We process prior service costs based on a certain number of years (10 years) within the average remaining
service period of employees when incurred.
Actuarial calculation differences are amortized by the straight-line method over a fixed number of years(10 to 13 years) within the average remaining service period of employees at the time of accrual of eachconsolidated fiscal year and the amount is amortized from the following consolidated fiscal year from whenincurred.
(6) Criteria for converting foreign currency-denominated assets and liabilities into Japanese yen
Assets and liabilities of overseas subsidiaries are translated into yen at the spot exchange rate prevailingat the end of the fiscal year, income and expenses are translated into yen at the average exchange rate during
the fiscal year, and translation adjustments are included in foreign currency translation adjustments andnoncontrolling interests in net assets.
(7) Processing of hedge accounting

Method of hedge accounting:
The Company has adopted deferred hedge processing. The allocation method is applied to forward
exchange contracts when they meet the requirements for the allocation processing.
Hedging methods:
Forward exchange contracts
Hedging target:
Operating receivables in foreign currencies
Hedging policy:
Our basic policy on derivatives transactions is determined by the Management Committee, which has
established internal management regulations that stipulate transaction authority and transaction limits, and weuse forward exchange contracts to avoid foreign exchange fluctuation risks.
Method of evaluating hedging effectiveness:
Forward exchange contracts are based on scheduled future transactions (e.g., exports), and the assessmentof validity is omitted because the probability of execution is extremely high.
(Changes in accounting policies)
Not applicable.

(Notes regarding Accounting Estimates)
1. Impairment of fixed assets(1) Amount recorded in the Consolidated Financial Statements
Major fixed assets of domestic subsidiaries that have been identified as impaired(After impairment loss isrecorded)
Buildings and structures
1,302 millions of yen
Machinery, equipment and vehicles
441 millions of yen
Land
714 millions of yen
Other
314 millions of yen
Major fixed assets of the Company's business units that have been identified as impaired.
Buildings and structures
649 millions of yen
Machinery, equipment and vehicles
1,098 millions of yen
Land
55 millions of yen
Other
11 millions of yen(2) Information that contributes to an understanding of the details of accounting estimates
In the current consolidated fiscal year, the Company identified signs of impairment for the fixed
assets of the Company’s business units that have reported operating losses for two consecutive fiscal
years, and compared the total undiscounted future cash flows from the division's operations with thecarrying amount of the assets. As a result of comparing the total undiscounted future cash flows fromthe operations of the units with their carrying amount, no impairment loss was recognized because such
undiscounted cash flows exceeded its carrying amount.
Also, during the current consolidated fiscal year, the Company identified an impairment loss for adomestic subsidiary that has reported operating losses for two consecutive fiscal years and a domestic
subsidiary that is expected to continue to report operating losses. As a result of comparing the total
undiscounted future cash flows from the operations of the subsidiary with its carrying amount, an
impairment loss was recognized for the subsidiary whose undiscounted cash flows were less than its
carrying amount.
We estimate these future results and cash flows based on the assumption that profitability will
improve to a certain degree in the next fiscal year and thereafter.
In the event that the assumptions used in these estimates need to be revised due to external changes
in the environment, such as a shortage of semiconductors or increases in raw material prices and energy
costs, additional impairment losses may be recognized in the next fiscal year.
2. Recoverability of deferred tax assets(1) Amount recorded in the Consolidated Financial Statements
Company has recorded deferred tax assets of 1,090 million yen as described in the Notes regarding Tax EffectAccounting in the Notes regarding Non-Consolidated Financial Statements.
(2) Information that contributes to an understanding of the details of accounting estimates
As described in the Notes regarding Tax Effect Accounting in the Notes regarding Non-Consolidated
Financial Statements, the Company has deferred tax assets of 3,163 million yen before offsetting deferred tax
liabilities and deducting valuation allowance of 905 million yen from the total deferred tax assets of 4,068
million yen related to the temporary differences that will be deducted in the future
The Company judges the recoverability of deferred tax assets by estimating taxable income within areasonably estimable period (generally five years) in the future. Estimates of such taxable income are affectedby factors such as the forecasted production volume of the automotive industry, which is closely related to theCompany.
If the assumptions used in these estimates need to be revised due to changes in the external environment,such as a shortage of semiconductors or increases in raw material and energy costs, there is a possibility that

deferred tax assets that are not expected to be recovered will be reversed in the following consolidated fiscal
year.
(Additional information)(Change of schedule regarding business consolidation)
As publicly announced in the press release dated July 27, 2022, “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,” the two companies have entered into a basic agreement to consolidate their management based on a spirit of equality,
and are proceeding with specific discussions and considerations.
Also, in our press release dated November 28, 2022, “Notice Regarding the Schedule for the Consolidation of Riken Corporation
and Nippon Piston Ring Co., Ltd.,” in consideration of the time required for the examination of the business combination by theJapan Fair Trade Commission, we announced a change in the schedule for the said corporate consolidation. However, on May 2,2023, we received a notice from the Japan Fair Trade Commission that it will not issue a cease and desist order in connection withthe business consolidation, and that all notification and examination procedures for the business consolidation have been completed.
The two companies will continue discussions and considerations with the aim of realizing the business consolidation as soon as
possible. Although the schedule for the future has not yet been determined, the following schedule will be publicly announced assoon as it is finalized through a decision by the organizations.
Final signing of agreement on business consolidation

May 23, 2023 (scheduled)

Ordinary General Meeting of Shareholders (resolution to approve the stock transfer) June 23, 2023 (scheduled)Tokyo Stock Exchange delisting date

September 28, 2023 (scheduled)

Effective date of the stock transfer

October 2, 2023 (scheduled)

Note: The above is the current schedule and may be subject to change by mutual agreement upon consultation between the twocompanies when necessary due to the progress of the business consolidation process or for other reasons.

(Notes regarding Consolidated Balance Sheets)
1. Accumulated depreciation of property, plant and equipment
98,988 millions of yen(Notes regarding Consolidated Statements of Income)
1. Impairment losses
Impairment losses were recorded for the following asset groups:
USE

CATEGORY

PLACE

Automobile
parts Machinery, equipment and Kashiwazaki City, Niigata
manufacturing equipment vehicles
Prefecture
Kashiwazaki City, Niigata
Automobile
parts
Land
Prefecture
manufacturing equipment
Automobile
parts
Kashiwazaki City, Niigata
Buildings and structures
manufacturing equipment
Prefecture
Automobile
parts
Kashiwazaki City, Niigata
Other
manufacturing equipment
Prefecture
Total

AMOUNT(millions of yen)
315
108

48
65
539

(Background)
In the automobile parts manufacturing equipment, the Company and its subsidiaries recognizedimpairment losses as signs of impairment based on the “Accounting Criteria for Impairment of Fixed Assets”
were recognized due to a decline in profitability, etc.
(Methods of grouping)The Company's automotive parts manufacturing equipment is grouped as a cash flow-generating unit,
independent of the Company's business units and subsidiaries, that conducts the relevant manufacturing. For
idle assets that are not expected to be used in the future, they are grouped into individual asset units based on
management accounting classifications.
(Calculation method of recoverable amount, etc.)
In the Company, it is measured at its net realizable value, which is based on a valuation reasonably
estimated by a third party. The Company's subsidiaries measure the value in use, which is calculatedby discounting future cash flows.

(Notes regarding Consolidated Statement of Changes in Equity)
1. Matters related to outstanding shares

Common shares

Current consolidated
fiscal year
Increase in number Decrease in number
Number of shares atof shares (shares)of shares (shares)
beginning of period(stocks)
10,648,466
40,400–End of the current
consolidated fiscal
year
Number of shares(shares)
10,688,866

Note: The increase in common shares was due to the issuance of 40,400 new shares.

2. Matters related to treasury shares
Current consolidated
End of the current
fiscal year
consolidated fiscal
Increase in number Decrease in number
Number of shares at
yearof shares (shares)of shares (shares)
beginning of period
Number of shares(stocks)(shares)Common shares
645,730837
85
646,482(Notes) The increase in treasury stock of common shares was due to the purchase of 837 odd-lot shares.
The decrease in treasury stock of common shares was due to 85 requests for additional purchases of odd-lot
shares.

3. Matters related to share acquisition rights (excluding those for which the first day of the exercise period has
not yet arrived)

Company
nameThe
Company

Number of shares to be acquired
Type of
Beginning of
Beginning ofComprehensive income shares to be
current
current
attributable toacquired
Increase
Decreaseconsolidated
consolidated
fiscal year
fiscal year
Share acquisition rights Common
23,100––23,100as stock options
shares4. Matters related to dividends(1) Dividends paid

Resolution

June 24, 2022
Ordinary General
Meeting of
Shareholders
November 11, 2022
Meeting of the Boardof Directors

Type ofsharesTotalamount ofDividend per
dividends
share
paid
(Yen)
(Millions ofyen)Reference date

Effective dateCommonshares600

60.00 March 31, 2022

Commonshares600

60.00 September 30, 2022 December 6, 2022

June 27, 2022

(2) Of the dividends for the current consolidated fiscal year, those with an effective date in the following
consolidated fiscal year
The following proposal was submitted to the Ordinary General Meeting of Shareholders on June 23, 2023.

Resolution

June 23, 2023
Ordinary General
Meeting of
Shareholders

SourceType ofofshares dividendsCommon shares

ProfitSurplus

Total amountof dividends
paid(Millions of
yen)
602

Dividend
per share(Yen)

Reference date

Effective date

60.00 March 31, 2023 June 26, 2023

(Notes regarding Financial Instruments)
1. Matters related to the status of financial instruments(1) Policy regarding financial instruments
The Group’s principle investment policy is to use short-term deposits, etc., for fund management, and also
to procure funds mainly through borrowings from banks and other financial institutions. Derivatives are used
to hedge the risk of exchange rate fluctuations in accounts receivable, etc but the Company does not engage in
speculative transactions.
(2) Description of financial instruments, their risks and risk management systems
Trade notes and accounts receivable which are operating receivables are exposed to customer credit risk.
To manage this risk, the Company manages due dates and outstanding balances by counterparty in accordancewith the Group's credit management regulations.
We monitor market price fluctuations for stocks, which are investment securities.
For notes and accounts payable-trade, which are operating obligations, most of the payment due dates arewithin one year.
Long-term borrowings (generally within 5 years) are mainly for financing capital expenditures and M&A.
The Company executes and manages derivatives transactions in accordance with internal rules that
stipulate transaction authority. In addition, in order to mitigate credit risk when using derivatives, we only enter
into transactions with financial institutions with high credit ratings.

2. Matters related to the fair value of financial instruments
As of March 31, 2023, the consolidated balance sheet amounts, fair values, and their differences are as
follows. Stocks and other securities with no market value (consolidated balance sheet amount: 5,976 million
yen) are not included in (1) Investment securities. Also, for cash and deposits, trade notes and accounts
receivable, and trade notes and accounts payable, notes are omitted because the fair values approximate theirbook values due to their short maturities.
(Millions of yen)
Consolidated balance
sheetsBalance sheet
amounts (*1)

Fair value(*1)

Difference(1) Investment securities
Affiliated companies’ shares
Other securities(2) Long-term borrowings (including current portion of
long-term borrowings)(3) Derivatives transactions (*2)
(*1)
(*2)

5,300

7,749

2,449

11,867

11,867–(10,000)(9,857)

(142)

15

15

–

Items recorded in liabilities are shown in parentheses.
Net receivables and obligations arising from derivative transactions are presented on a net basis, and items that,in the aggregate, result in a net liability are presented in parentheses.

3.Matters related to the breakdown of the fair value of financial instruments by appropriate category
The fair value of financial instruments is classified into the following three levels based on theobservability and materiality of the inputs used to calculate fair value.
Level 1 fair value:
Of the inputs used to calculate the observable fair value, the fair value calculated
based on quoted market prices for the assets or liabilities for which such fair value
is calculated that are formed in an active market.
Level 2 fair value:
Of the inputs used to calculate the observable fair value, the fair value calculatedusing the inputs used to calculate the fair value other than Level 1 inputs.
Level 3 fair value:
Fair value calculated using inputs for unobservable fair value calculations
When multiple inputs that have a significant impact on the calculation of fair value are used, fair value isclassified to the level with the lowest priority in the calculation of fair value among the levels to which eachof those inputs belongs.
(1) Financial instruments whose fair value is recognized in the consolidated balance sheets(Millions of yen)
Category
Investment securities
Other securities

Level 1
11,867

Fair value
Level 2
Level 3–

Total–

11,867(2) Financial instruments whose fair value is not recognized in the consolidated balance sheets(Millions of yen)
Category

Fair value
Level 2
Level 3

Level 1
Total
Investment securities
Affiliated companies’ shares
7,749
–
–
7,749
Long-term borrowings (including
current
portionof
long-term
–
9,857
–
9,857
borrowings)
Derivatives transactions
–
15
–
15
(Notes) Description of valuation techniques and inputs used in the calculation of fair value
Other marketable securities and stocks of affiliated companies are listed stocks and are valued using quoted
market prices. Listed stocks are classified as Level 1 fair value because they are traded in an active market.
The fair value of long-term borrowings (including current portion of long-term borrowings) is calculated basedon the discounted present value of the total principal and interest and the interest rate that takes into account theremaining term of the obligations and credit risk, and is classified as Level 2 fair value.
Derivatives transactions are classified as Level 2 fair value using the discounted current value method withobservable inputs such as foreign exchange rates.

(Notes regarding Income Recognition)
1. Information that disaggregates income arising from contracts with customers
Main geographic markets(Millions of yen)
Automotive & Industrial
Machinery parts business

Other
(*1)

Total

Japan
Asia
U.S.
Other

33,62812,87346,501

20,357301

20,658

10,563169

10,732

8,353

136

8,489

Income arising from contracts with customers

72,902

13,47986,382－－－Other income

Net sales to external customers
72,902
13,47986,382(*1)“Other” is a business segment not included in the reportable segments and includes the piping fittings business,
EMC products business, and thermal engineering products business.

Timing of income recognition(Millions of yen)
Automotive & Industrial
Machinery parts business
Goods or services transferred at some point in
time
Goods or services transferred over a period oftime
Income arising from contracts with customers
Other income

Other (*1)

Total

72,902

12,06584,968

－

1,414

1,414

72,902

13,47986,382－－－

Net sales to external customers
72,902
13,47986,382(*1)“Other” is a business segment not included in the reportable segments and includes the piping fittings business,
EMC products business, and thermal engineering products business.

2. Information that provides a basis for understanding income arising from contracts with customers
As stated in “5. Matters related to accounting policy (4) Criteria for recording significant income andexpenses” in “Notes regarding important matters concerning the preparation of the consolidated financial
statements.”

3. Information to understand the amount of income for the current consolidated fiscal year and the following
consolidated fiscal years and thereafter(1) Balance of contract assets, etc.
(Millions of yen)AmountReceivables arising from contracts with customers (beginningbalance)
Receivables arising from contracts with customers (endingbalance)
Contract assets (beginning balance)
Contract assets (ending balance)

19,751
21,713
78
249

Contract assets arise from the construction of Radio Frequency Anechoic Chambers/Shield Rooms.
(2) Transaction price allocated to remaining performance obligations
Since the Group does not have any significant contracts with an initial projected contract period of morethan one year, the practical expedient method is applied and the statement regarding the transaction priceallocated to the remaining performance obligations has been omitted. The amount of consideration received
from contracts with customers does not include the amount of significant variable consideration not includedin the transaction price.
(Notes regarding per share information)
1. Net asset value per share
2. Earnings per share
3. Diluted earnings per share for the current fiscal year

8,810.30 yen
431.60 yen
430.61 yen

(Significant subsequent events)(Corporate consolidation through acquisition)
On May 9, the Company acquired 76.56% of the shares of JFE Pipe Fitting Mfg. Co., Ltd. from JFE SteelCorporation, making NIPPON JFE Pipe Fitting Mfg. Co., Ltd. a subsidiary of the Company. Also on the sameday, the company implemented a trade name change to NIPPON PIPE FITTING Corp. (hereinafter, “NIPPONPIPE FITTING”
1. Overview of corporate consolidation(i) Name of acquired company and its business
Name of acquired company: JFE Pipe Fitting Mfg. Co., Ltd.
Description of business: Manufacturing and sales of fittings for gas, water, and other piping, as well as partsfor construction and industrial machinery,Prefabricated piping processing(ii) Main reason for the corporate consolidation
In recent years, the automotive industry has been undergoing a once-in-a-century transformation, and themarket perception of the Company's core business, engine components, has become increasingly harsh. As
stated in our Midterm Plan “PLAN2022,” the Company plans the expansion of new next-generation
businesses, such as non-ICE (internal-combustion engines, such as automobile engines), and has been
considering proactive use of M&A to expand its portfolio in a business domain with a high affinity.
NIPPON PIPE FITTING manufactures and sells an extensive lineup of piping fittings and enjoys a position
as one of the leading players in the industry, maintaining strong relationships with many customers over theyears for this reason for our high-quality product capabilities.
While NIPPON PIPE FITTING has a solid presence in the field of gas pipe fittings, we recognize that ourcore products are accurately segregated from those of Company. In order for both companies to continue toproperly and timely fulfill their supply responsibilities in the manufacture and sale of piping fittings, which
are important products that support lifelines, the acquisition of these shares is expected to generate extensivesynergies. In addition to enabling significant productivity improvements and the establishment of a sustainablestructure capable of supplying high quality products, the decision to acquire the shares was based on our belief
that the acquisition will accelerate the Company's efforts to become carbon neutral and to address climatechange issues.
By welcoming NIPPON PIPE FITTING to the Group, the Company aims to achieve sustainable growth andincreased corporate value through mid- to long-term management stability by continuously providing
customers with high-quality products that leverage the strengths of both companies.
(iii) Date of corporate consolidation
May 9, 2023 (deemed acquisition date: April 1, 2023)(iv) Legal form of corporate consolidation
Acquisition of shares with cash consideration(v) Name of company after consolidation
NIPPON PIPE FITTING Corp.
(vi) Percentage of voting rights to be acquired
76.56％(vii) Main basis for the decision to acquire the company
The Company is acquiring its shares as cash consideration.
2. Acquisition cost of the acquired company and breakdown by type of consideration
As per the agreement with the counterparty of this share acquisition, this information will not be disclosed.
The acquisition cost of the shares was determined based on the share value reasonably calculated by a third
party.
3. Details and amounts of major acquisition-related expenses
Major acquisition-related costs include advisory and other expenses, which have not been finalized at this time.
4. Amount of goodwill incurred, reason for incurrence, amortization method and amortization period
The amount has not been finalized at this time.
5. Assets received and liabilities assumed on the date of corporate consolidation and their major breakdowns
The amount has not been finalized at this time.

(Borrowing large sum of capital)
Based on a resolution passed on March 22, 2023 by the Company's Board of Directors, the Company
borrowed funds on April 28, 2023 as follows mainly to fund the acquisition of shares in NIPPON PIPE
FITTING Corp. (formerly JFE Pipe Fitting Mfg. Co., Ltd.).
(1) Lender: Mizuho Bank, Ltd.
(2) Loan amount: 3 billion yen(3) Loan rate: base rate + spread(4) Loan date: April 28, 2023
(5) Loan period: 5 years(6) Collateral: Unsecured and unguaranteedStatement of Changes in Equity of Riken Corporation(From April 1, 2022 to March 31, 2023)(Millions of yen)
Shareholders' equity
Capital surplus

Retained earnings
Other retained earnings
Legal

Share

Legal

Total

capital capital capitalretainedsurplus surplus earnin
gs
Balanceatbeginning

of

8,573

6,604

6,604

53

53

53

Reserve
Reserveforforoverseas

dividends operation
s

1,457

4,000

Total

Reserve
Reservefor

for

Retained

reduction General earnings

reduction entry of reserve
entry

replacedbrought

Total

Treasury shareho

retainedshareslders'

earnings

equity34,504(2,894) 46,787

forwardproperty

10,000

10

33

5,500

13,501current period
Changes of items
during period
Issuance of newshares107

Distribution ofdividends of(1,200)(1,200)(1,200)

5,625

5,625

5,625

surplusProfit for thecurrent fiscal year
Acquisition oftreasury shares
Appropriation oftreasury shares

(1)

(1)

0

0

(0)

(0)

0

–

–

1

–

–

Reversal ofreserve for(0)

reduction entry
Provision ofreserve for
reduction entry of(1)

replaced property
Reversal ofreserve
Net changes of
items during
period other thanshareholders'equityTotal changes of
items

during

53

53

53

–

–

–

(0)

(1)

–

4,427

4,425

8,627

6,658

6,658

1,457

4,000

10,000

10

31

5,500

17,92938,929(1)

4,531

periodBalance at end ofcurrent period(2,896) 51,319

Valuation and translation adjustments
Total of
Valuation
Deferred gains
valuation anddifference onor losses ontranslation
available-for-salehedgesadjustments
securities
Balance at beginning of current
periodChanges of items during period
Issuance of new shares
Distribution of dividends ofsurplusProfit for the current fiscal year
Acquisition of treasury shares
Appropriation of treasury shares
Reversal of reserve for reduction
entry
Provision of reserve for reduction
entry of replaced property
Reversal of reserve
Net changes of items during
period other than shareholders'equityTotal changes of items during
periodBalance at end of current period

1,039

(55)

984

Share
acquisitionrightsTotal net assets

97

47,869107(1,200)
5,625
(1)
0
–
–

805

66

871

–

871

805

66

871

–

5,403

1,844

11

1,855

97

53,272

Notes to the Non-Consolidated Financial Statements of Riken Corporation(Notes regarding matters concerning significant accounting policies)
1. Amounts are rounded down to the nearest million yen.
2. Asset valuation criteria and methods(1) Securities
Held-to-maturity debt securities:
Calculated using the amortized cost method (straight-line method).
Stocks of subsidiaries and affiliates:
Calculated using the cost method using the moving-average method.
Other securities
Other than stocks and other securities with no market value:
Calculated using the market value method (valuation differences are processed by the total direct
capitalization method and the cost of sales is determined by the moving average method).
Stocks, etc. without market prices:
Calculated using the cost method using the moving-average method.
(2) Inventories:
Cost method based on the moving average method (method of writing down the book value of assets
due a decline in profitability)(3) Derivatives:
Market value method

3. Fixed assets depreciation method:
Property, plant and equipment (excluding leased assets):
Calculated using the declining-balance method.
However, we apply the straight-line method to buildings (excluding building fixtures) acquired on or after
April 1, 1998 and for building fixtures and structures acquired on or after April 1, 2016. Useful life and residual
value are determined based on the same criteria as stipulated in the Corporation Tax Law
Intangible assets (excluding leased assets):
Calculated using the straight-line method.
Useful life is determined based on the same criteria as stipulated in the Corporation Tax Law
Note that software (for internal use) is amortized by the straight-line method based on the period ofinternal use (5 to 10 years).
Leased assets:
Leased assets related to finance lease transactions that transfer ownership of the leased assets to the lessee
are calculated using the same depreciation method as that applied to owned fixed assets. Lease assets related
to finance lease transactions that do not transfer ownership of the leased assets to the lessee are calculatedusing a method in which the lease period is deemed as the useful life of the asset and the residual value is set
at zero.

4. Criteria for recording allowances
Allowance for doubtful accounts:
To provide for possible bad debt losses, the Company records allowances for general receivables basedon historical bad debt ratios, and allowances for specific doubtful receivables based on the financial conditionassessment method.
Allowance for bonuses:
To provide for the payment of bonuses to employees, the Company records the estimated amount ofbonuses to be paid to employees attributable to the fiscal year.
Allowance for retirement benefits
To provide for the payment of retirement benefits to employees, the Company records an amount basedon the projected benefit obligations and pension benefit assets at the end of the fiscal year. When the estimatedamount of pension assets is less than the estimated amount of projected benefit obligations plus or minus
unrecognized prior service costs and unrecognized actuarial calculation differences, the difference is recorded
as allowance for retirement benefits, and when the difference exceeds the projected benefit obligations, theexcess amount is recorded as prepaid pension cost.
(i) Method of attributing estimated retirement benefits to periods of service
In calculating retirement benefit obligations, the estimated amount of retirement benefits is attributed
to the period up to the end of the current fiscal year based on the benefit calculation method.
(ii) Method of processing prior service costs and actuarial calculation differences
Prior service costs are amortized by the straight-line method over a fixed number of years (10 years)
within the average remaining service period of employees at the time the cost is incurred.
Actuarial calculation differences are amortized by the straight-line method over a fixed number of years(10 years) within the average remaining service period of employees at the time of occurrence of eachfiscal year, with the amount prorated from the following fiscal year of occurrence.
The method of accounting for unrecognized actuarial calculation differences and unrecognized priorservice costs related to retirement benefits differs from the method of accounting for these items in the
consolidated financial statements.
Allowance for environmental measures:
To provide for expenditures for disposal of polychlorinated biphenyls (PCBs), etc., the Company records
an estimated amount of expenditures that can be reasonably estimated.
5. Criteria for recording significant income and expenses
The company is primarily engaged in the manufacture and sale of automotive and machinery parts. For
the sale of such goods and products, the performance obligation is satisfied when the goods and products aredelivered to the customer, and therefore income is recognized at that time.
6. Processing of hedge accounting
Method of hedge accounting:
The Company has adopted deferred hedge processing. The allocation method is applied to forward
exchange contracts when they meet the requirements for the allocation processing.
Hedging methods:
Forward exchange contracts
Hedging target:
Operating receivables in foreign currencies
Hedging policy:
Our basic policy on derivatives transactions is determined by the Management Committee, which has
established internal management regulations that stipulate transaction authority and transaction limits, and weuse forward exchange contracts to avoid foreign exchange fluctuation risks.

Method of evaluating hedging effectiveness:
Forward exchange contracts are based on scheduled future transactions (e.g., exports), and the assessmentof validity is omitted because the probability of execution is extremely high.
(Changes in accounting policies)
N/A

(Notes regarding Accounting Estimates)
1. Impairment of fixed assets(1) Amount recorded in the Consolidated Financial Statements
Major fixed assets of the Company's business units that were identified in determining the indication of
impairment
Buildings and structures
649 millions of yen
Machinery, equipment and vehicles
1,098 millions of yen
Land
55 millions of yen
Other
11 millions of yen(2) Information that contributes to an understanding of the details of accounting estimates
In the current consolidated fiscal year, the Company identified signs of impairment for the fixed
assets of business units that have reported operating losses for two consecutive fiscal years, andcompared the total undiscounted future cash flows from the division's operations with the carrying
amount of the assets. As a result of comparing the total undiscounted future cash flows from theoperations of the units with their carrying amount, no impairment loss was recognized because such
undiscounted cash flows exceeded its carrying amount.
We estimate these future results and cash flows based on the assumption that profitability will improveto a certain degree in the next fiscal year and thereafter.
In the event that the assumptions used in these estimates need to be revised due to external changes
in the environment, such as a shortage of semiconductors or increases in raw material prices and energy
costs, additional impairment losses may be recognized in the next fiscal year.
2. Recoverability of deferred tax assets(1) Amount recorded in the Consolidated Financial Statements
Deferred tax assets 1,090 millions of yen(2) Information that contributes to an understanding of the details of accounting estimates
As stated in the notes to the financial statements regarding tax effect accounting, the Company hasdeferred tax assets of 3,163 million yen before offsetting deferred tax liabilities and total deferred tax assets of
4,068 million yen related to temporary differences, less a valuation allowance of 905 million yen.
The Company judges the recoverability of deferred tax assets by estimating taxable income within areasonably estimable period (generally five years) in the future. Estimates of such taxable income are affectedby factors such as the forecasted production volume of the automotive industry, which is closely related to theCompany.
If the assumptions used in these estimates need to be revised due to changes in the external environment,such as a shortage of semiconductors or increases in raw material and energy costs, there is a possibility thatdeferred tax assets that are not expected to be recovered will be reversed in the next consolidated fiscal year.

(Notes regarding Balance Sheets)
1.

Accumulated depreciation of property, plant and equipment

67,399 millions of yen

2. Monetary receivables from and monetary obligations to subsidiaries and affiliates (excluding thoseseparately presented)
Short-term monetary receivables
5,737 millions of yen
Short-term monetary obligations
5,235 millions of yen(Notes regarding Statements of Income)1.

Transaction volume with affiliated companies
Trading volume from operating transactions
Net sales
Amount of goods purchased
Selling, general and administrative expenses
Trading volume from non-operating transactions

13,652 millions of yen
18,758 millions of yen
266 millions of yen
5,174 millions of yen(Notes regarding Statements of Changes in Equity from Non-Consolidated Financial Statements
1. Matters related to the class and number of treasury shares

Common shares

The fiscal year
Number of shares at
beginning of period(stocks)

Increase in numberof shares (stocks)

Decrease in numberof shares (stocks)

The end of the fiscal
year
Number of shares(stocks)

645,730837

85

646,482(Notes) The increase in treasury stock of common shares was due to the purchase of 837 odd-lot shares.
The decrease in treasury stock of common shares was due to 85 requests for additional purchases of odd-lot
shares.

(Notes to the financial statements of Riken Corporation regarding tax effect accounting)
1.

2.

Breakdown of deferred tax assets and deferred tax liabilities by major cause
Deferred tax assets
Allowance for bonuses
Accrued expenses
Accrued enterprise tax
Loss on valuation of inventories
Allowance for retirement benefits
Depreciation
Loss on valuation of stocks of affiliated companies
Accrued amount payable
Other
Subtotal
Valuation allowance
Total deferred tax assets

316 million yen
95 million yen
9 million yen
103 million yen
2,193 million yen
598 million yen
414 million yen
3 million yen
332 million yen
4,068 million yen(905 million yen)
3,163 million yen

Deferred tax liabilities
Gain on contribution of securities to retirement benefit trust
Valuation difference on available-for-sale securities
Reserve for reduction entry of replaced property
Reserve for reduction entry
Forward exchange contracts
Total deferred tax liabilities
Net deferred tax assets(1,242 million yen)(806 million yen)
(13 million yen)
(4 million yen)
(4 million yen)
(2,072 million yen)
1,090 million yen

Breakdown of significant differences between the statutory effective tax rate and the effective tax rate
after the application of tax effect accounting, by major item that caused the differences
Statutory effective tax rate
(Adjustments)
Items not permanently deductible for income tax purposes, such asentertainment expenses
Items not permanently includable in income, such as dividends received
Inhabitant tax on per capita basis
Change in valuation allowance
Tax credit for experimental research expenses
Foreign withholding tax
Other
Income tax expense ratio after application of tax-effect accounting

30.5%
0.0%
–20.4%
0.3%
1.2%
–1.2%
6.0%
–0.1%
16.2%

Notes regarding transactions with related parties
1.

Subsidiaries and affiliated companies
Relation

Percentage ofAttribution

Name ofcompany, etc.

voting rights, etc.

Concurrent

held

ly serving

Business(controlling

officers,

relationshipownership)etc.

Balance atTransaction
Details ofamountstransactions(Millions of

end ofItemperiod(Millions of

yen)

yen)

Outsourcing
RIKEN
Subsidiary CASTEC
Co,.Ltd.

theOwnership
Direct 100.0%

Yes

Company's

manufacturing productsof automotive

outsource

casting parts,

manufacturing

5,800

Accounts
payable675

etc.
NIHON MEKKI
Subsidiary INDUSTRY
CO.,LTD.

Outsourcing ofOwnership
Direct 64.4%

Yes

surface

Custody ofprocessing offunds－ Deposits

piston rings

RIKEN
BROTHER
Subsidiary PRECISION
INDUSTRY

AffiliatedOwnership
Direct 51.0%

companies

Outsourcing ofYescamshaft

Loan of funds－ Short-term

Subsidiary

RIKEN OF

817

loans

manufacturing

CORPORATION

Subsidiary986

receivable
Ownership

AMERICA, INC. Indirect 100.0%

EURO-RIKEN

Ownership

GMBH

Direct 100.0%

Yes

No

Sales ofCompany's

Company

products

products in the consignment
U.S.

sales

Sales ofCompany's

Company

products

products inconsignment

Europe

sales

4,847

1,853

Accounts
receivable

Accounts
receivable

1,284

697

(Notes) 1. For the sale and purchase of products, prices and other transaction terms are determined through pricenegotiations with reference to prevailing market prices, etc.
2. The Company manages the Group's funds in a centralized manner with respect to loans and deposits of funds.
Since balances fluctuate daily based on the basic contract, only balances at end of period are described.
Interest rates are determined based on market interest rates.
3. . We recorded 267 million yen as allowance for doubtful accounts for loans to affiliated companies. A provision for
doubtful accounts of 138 million yen was also recorded for this fiscal year.

(Notes regarding Income Recognition)
Information that provides a basis for understanding income arising from contracts with customers
As described in “Notes regarding matters concerning significant accounting policies 5. Criteria forrecording significant revenues and expenses.”(Notes regarding per share information)
1.
2.
3.

Net asset value per share
Earnings per share
Diluted earnings per share for the current fiscal year

5,295.07 yen
562.27 yen
560.98 yen(Significant subsequent events)(Borrowing large sum of capital)
As the same information has been described in the “Notes to the Consolidated Financial Statements of Riken
Corporation (Significant subsequent events),” this note has been omitted.