RIKEN CORPORATION

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Kaoru Itoh, President & CEO

At the outset, I would like to express my heartfelt gratitude for your continued support and understanding of our company.

Our company completed the closing of its financial accounts for the fiscal year 2016 ending March 31, 2017.

During the fiscal year 2016, the Japanese economy was on a moderate recovery track supported by an upturn in consumer spending in response to solid employment and steady income.

The US economy expanded with a solid domestic consumption and the European economy, especially German and French, showed sign of recovery. The Asian economy, led by China, continued to grow at a steady pace.

With regards to the automotive industry, which is our primary market, the global car production increased year on year, due to growth in Europe and emerging countries, such as China and India. Domestic car production increased by 1.9% year on year, since the sales of passenger and compact cars increased and the sales of mini vehicle "Kei" has bottomed out.

Under such a business environment, our consolidated sales were 75,904 million yen, increased by 3.6% year on year, due to strong demand and sales expansion to foreign carmakers in the US, European and Chinese market. The consolidated operating profit was 5,902 million yen, increased by 5.8% year on year, due to scale merit of increased production and rationalization absorbing the increased expenses in the domestic operation. Ordinary profit was 5,982 million yen, decreased by 2.9% year on year mainly due to currency exchange loss. Net profit increased to 3,928 million yen, an 11.5% increase year on year.

As for the year-end dividend, we will pay 60 yen per share from June 23, 2017, taking into account our company's performance and payout ratio.

We look forward to the continued, long term support and understanding of our shareholders and other investors.

Sincerely,

June 2017
Kaoru Ito, President & COO