January 29, 2016

TOKAI Holdings Corporation
Katsuhiko Tokita, President & CEO(Code No. 3167 Tokyo Stock Exchange First Section)

To whom it may concern

TOKAI Holdings Converts Tokaizosen-unyu Corporation to a Wholly Owned
Subsidiary through a Simplified Share Exchange

TOKAI Holdings Corporation (Headquarters: Aoi-ku, Shizuoka; President & CEO: KatsuhikoTokita; hereafter “the Company”) and the Company’s consolidated subsidiary, Tokaizosen-unyu
Corporation (“Tokaizosen-unyu”) resolved, at Board of Directors meetings of the two companies heldtoday, January 29, 2016, to conduct a share exchange (“the Share Exchange”) with an effective date ofMarch 4, 2016, with the Company as the wholly owning parent company and Tokaizosen-unyu as thewholly owned subsidiary company. The two companies have concluded a share exchange agreement,
as described below.
As the Share Exchange involves the conversion of a consolidated subsidiary to a wholly owned
subsidiary company through a simplified share exchange, this disclosure omits certain disclosure
items and content.

1. Purpose of the Share Exchange
The Company has decided to conduct the Share Exchange to convert Tokaizosen-unyu, aconsolidated subsidiary, to a wholly owned subsidiary with the aim of enhancing the maneuverabilityof Group management and creating a more efficient Group management structure.
2. Overview of the Share Exchange(1) Schedule
Board of Directors resolutions (both companies) January 29, 2016
Conclusion of share exchange agreement
January 29, 2016
Effective date
March 4, 2016
(Note 1) As the Company plans to conduct simplified share exchange procedures as provided by Article 796, Paragraph 2of the Companies Act, it intends to perform the Share Exchange without receiving approval at its general
meeting of shareholders.
(Note 2) As Tokaizosen-unyu plans to conduct summary share exchange procedures as provided by Article 784,
Paragraph 1 of the Companies Act, it intends to perform the Share Exchange without receiving approval at its
general meeting of shareholders.

(2) Form of the Share ExchangeThis is a share exchange in which the Company is the wholly owning parent company
in share exchange and Tokaizosen-unyu is the wholly owned subsidiary company inshare exchange.
1(3) Allotments Related to the Share Exchange
TOKAI Holdings CorporationCompany NameTokaizosen-unyu Corporation(wholly owning parent company in (wholly owned subsidiaryshare exchange)

company in share exchange)

Content of allotments related tothe Share Exchange (share14.17exchange ratio)
Number of shares to be allotted

Shares in the Company: 152,845

in the Share Exchange(Note 1) One of Tokaizosen-unyu’s shares is to be allotted in exchange for each 4.17 shares in the Company. However,shares will not be allocated through the Share Exchange for the 363,336 shares in Tokaizosen-unyu held by theCompany.
(Note 2) The Company plans to allot 152,845 shares of treasury stock to grant as an allotment in the Share Exchange.
Accordingly, the Company will not issue new shares.

(4) Treatment of Stock Acquisition Rights and Bonds with Stock Acquisition Rights of Wholly
Owned Subsidiary Company
Not applicable.
3. Basis for Calculation of Allotment Related to the Share Exchange
To ensure fairness and appropriateness in calculating the share exchange ratio for the Share
Exchange, the Company asked a third-party institution, Benedi Consulting Co., Ltd., which isindependent from the Company and Tokaizosen-unyu, to calculate the share exchange ratio.
As the Company is listed on the Tokyo Stock Exchange and has a market share price, Benedi
Consulting used the market share price method for the Company.
For calculating the share price of Tokaizosen-unyu, which is not listed but for which multiple
comparable listed companies exist, Benedi Consulting used the comparable peer company method
to compute an analogous share price. In its calculation, Benedi Consulting also employed the net
asset method to value Tokaizosen-unyu’s current asset value.
Considering the results of these calculations, the Company decided on the above-stated shareexchange ratio, following discussions with Tokaizosen-unyu and taking into overall account suchfactors as the two companies’ financial conditions and future outlooks.
In the event of material changes in the conditions used as a basis for calculating the shareexchange ratio, the ratio may be revised following discussions between the two parties.

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4. Outline of Parties in the Share Exchange(As of March 31, 2015)
Wholly owning parent

Wholly owned subsidiarycompany in share exchange

company in share exchange(1) Name

TOKAI Holdings Corporation

Tokaizosen-unyu Corporation(2) Address

2-6-8 Tokiwa-cho, Aoi-ku, Shizuoka City,

3899-4 Kogawa, Yaizu City,

Shizuoka Prefecture

Shizuoka Prefecture

Katsuhiko Tokita, President & CEO

Toshiaki Isashi, President & CEO

Holding company, management of Group

Ship repair business, other(3) Name and title ofrepresentative(4) Business description

companies, other(5) Paid-in capital

14,000 million yen

200 million yen(6) Establishment

April 1, 2011

May 25, 1942

(7) Shares issued

155,199 thousand (*)

400 thousand(8) Fiscal year-end

March 31

March 31

(9) Principal shareholders

Aioi Nissay Dowa Insurance Co., Ltd.

TOKAI Holdings Corporationand stake

90.83%4.87%
Suzuyo Shoji Co., Ltd.

3.74%

Tokio Marine & Nichido Fire InsuranceCo., Ltd.

3.21%

The Shizuoka Bank, Ltd.

2.62%

TOKAI Group Employee Shareholders
Association

2.47%

Sumitomo Mitsui Trust Bank, Ltd. 2.46%
Mizuho Bank, Ltd.

2.31%

The Master Trust Bank of Japan, Ltd.
(trust account)

1.92%

Japan Trustee Services Bank, Ltd. 1.83%
Astomos Energy Corporation

1.76%(10) Financial conditions and operating results in most recent fiscal year
Fiscal period

Fiscal year ended March 31, 2015

Fiscal year ended March 31, 2015

(consolidated)
Net assets

43,467 million yen

906 million yen

Total assets

165,702 million yen

3,666 million yen

Net assets per share

368.15 yen

2,266.97 yen

Sales

187,511 million yen

3,328 million yen

Operating profit

9,003 million yen

69 million yen

Recurring profit

8,549 million yen

119 million yen

Net income attributable to3,934 million yen

59 million yen

34.16 yen

148.36 yenowners of the parent
Net income per share* The Company cancelled 15,520,000 shares of treasury stock (equivalent to 10.0% of its total number of shares outstanding)on November 6, 2015.

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5. Status after the Share Exchange
The Share Exchange will result in no changes of company name, business content, location,representative, paid-in capital, or fiscal year-end.
6. Future Outlook
As the parties to the Share Exchange include the Company and a consolidated subsidiary ofthe Company, any impact on consolidated financial results is expected to be slight.

[Reference] The Company’s Earnings Forecasts and Previous Fiscal Year Results(Unit: million yen)
Net IncomeSales

Operating Profit

Recurring Profit

Attributable toOwners of the Parent

Current fiscal year
(Ending March 31, 2016)
Previous fiscal year
(Ended March 31, 2015)

192,200

7,760

7,410

3,240

187,511

9,003

8,549

3,934

Contact: Yoshihiro Taniguchi
Public Relations and Investor Relations Office
TEL: +81-(0)54-669-7676
Email: overseas_IR@tokaigroup.co.jp

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