(Translation) (Securities Code 7004) June 3, 2015 Dear Shareholders

Minoru Furukawa, Chairman Hitachi Zosen Corporation 7-89, Nanko-kita 1-chome, Suminoe-ku, Osaka

NOTICE OF THE 118TH ORDINARY GENERAL MEETING OF

SHAREHOLDERS

You are cordially invited to attend the 118th Ordinary General Meeting of Shareholders of Hitachi Zosen Corporation (“the Company”). The meeting shall be held as described below. If you are unable to attend the meeting in person, we kindly ask you to review the “Reference Documents for the General Meeting of Shareholders” (described hereinafter), and exercise your voting rights in writing or via the Internet, etc. by 5:00 p.m. on Monday, June 22, 2015 (exercise date).

[If you exercise your voting rights by mail (in writing)] Please indicate your vote for or against the proposals on the enclosed Voting Right Exercise Form, and return it so that it is delivered by the above-mentioned exercise date.

[If you exercise your voting rights via the Internet] After reviewing the “Instructions on Exercising Voting Rights via the Internet” (page 3), please access the designated website (http://www.evote.jp/) (available in Japanese only) with login ID and temporary password stated on the enclosed Voting Right Exercise Form, and follow the online instructions to exercise your vote by the above-mentioned exercise date.

1. Date and Time: June 23, 2015 (Tuesday), 10:00 a.m. (Doors open 9:00 a.m.)

2. Place: Hotel Osaka Bay Tower, 4th Floor, “Bay Tower Hall” ORC 200, 2-1, Benten 1-chome, Minato-ku, Osaka, Japan

‐1‐ 3. Purposes I. Matters to be Reported: 1. The Business Report and report on the Consolidated Financial Statements and Non- consolidated Financial Statements for the 118th business year (from April 1, 2014 to March 31, 2015) 2. The Audit Reports of the Accounting Auditor and the Board of Corporate Auditors on the Consolidated Financial Statements for the 118th business year II. Matters to be Resolved: Proposal 1: Appropriation of Surplus Proposal 2: Partial Amendments to the Articles of Incorporation Proposal 3: Election of Ten (10) Directors Proposal 4: Election of One (1) Corporate Auditor

4. Matters Decided for Convocation (1) If the voting rights are exercised multiple times both in writing and via the Internet: The exercise of the voting rights via the Internet will be deemed effective. (2) If the voting rights are exercised multiple times via the Internet: The last exercise of the voting rights will be deemed effective. This shall also apply in cases where voting rights are exercised multiple times via PC, smartphone and cellular phone.

* The Consolidated Financial Statements and Non-consolidated Financial Statements provided in the attachment to this Notice are part of the Consolidated Financial Statements and Non- consolidated Financial Statements that have been audited by the Corporate Auditors and the Accounting Auditor. Based on the relevant laws and regulations and Article 15 of the Articles of Incorporation of the Company, the following items are provided on the website of the Company: http://www.hitachizosen.co.jp/ir/stock/meeting.html (Japanese only) 1) Notes to the Consolidated Financial Statements 2) Notes to the Non-consolidated Financial Statements * Any modification that may be required in the Business Report, the Consolidated Financial Statements or the Non-consolidated Financial Statements, or in the Reference Documents for the General Meeting of Shareholders will be published on the website of the Company: http://www.hitachizosen.co.jp/ir/stock/meeting.html (Japanese only)

‐2‐ Instructions on Exercising Voting Rights via the Internet

Voting rights can be exercised via the Internet using a PC, a smartphone or a cellular phone through the website for exercising voting rights designated by the Company (http://www.evote.jp/) (available in Japanese only). The website is not available from 2:00 a.m. to 5:00 a.m. each day.

When exercising your voting rights via the Internet, you must do so before 5:00 p.m. June 22, 2015 (Monday).

How to exercise voting rights via Internet (1) To exercise your voting rights via the Internet, you need the “login ID” and “temporary password” stated on the enclosed Voting Right Exercise Form. Please have them ready when exercising your voting rights. (2) Please access the website for exercising voting rights designated by the Company (http://www.evote.jp/) via PC, smartphone or cellular phone, and indicate your vote for or against the proposals by following the online instructions. (3) Please note that shareholders exercising voting rights via the Internet will be asked to change their “temporary password” on the website for exercising voting rights in order to prevent unauthorized access (identity theft) or alteration of the voting by non-shareholders.

Cautionary matters (1) Exercising voting rights via PC or smartphone may not be possible depending on your Internet usage environment, for example if you use a firewall for your Internet connection, if you have anti-virus software installed, or if you use a proxy server. (2) When exercising voting rights via cellular phone, please use one of the following services: i-mode, EZweb or Yahoo! Keitai. For security purposes, voting rights cannot be exercised via models that do not allow encrypted communication (SSL communication) or transmission of the cellular phone information. * “i-mode,” “EZweb” and “Yahoo!” are trademarks or registered trademarks of NTT DOCOMO, INC., KDDI Corporation and U.S. Yahoo! Inc., respectively. (3) Any fees for accessing the website for exercising voting rights (Internet connection fees, etc.) shall be borne by the shareholder.

If you have any inquiries, please contact the helpdesk, for which the details are provided below.

Mitsubishi UFJ Trust and Banking Corporation Corporate Agency Division (helpdesk) Telephone: 0120-173-027 (toll free and available from 9:00 a.m. to 9:00 p.m.; within Japan only)

‐3‐ Platform for Exercise of Voting Rights

The Company participates in the Electronic Voting Platform for Institutional Investors managed by ICJ Inc. For shareholders registered in the name of a custodian trust bank, etc. (including permanent agents), by making prior application for the said platform’s use, it is possible to exercise one’s voting rights for the Company’s General Meeting of Shareholders using the said platform as a method for exercising one’s voting rights by electronic method, separate to the exercising of one’s voting rights via the Internet mentioned above.

Disclaimer: These documents have been translated from Japanese originals for reference purposes only. In the event of any discrepancy between these translated documents and the Japanese originals, the originals shall prevail. The Company assumes no responsibility for this translation or for direct, indirect or any other forms of damages arising from the translations.

‐4‐ Reference Documents for the General Meeting of Shareholders

Proposals and References

Proposal 1: Appropriation of Surplus Our basic policy on distribution of profit is that we provide stable and sustainable dividends based on business results, and enhance retained earnings required for future business development. Retained earnings should be employed for capital investment, R&D and business investment, aiming to strengthen our business base and expand business field. In accordance with the above policy, from the comprehensive perspective of the business result for the current business year and retained earnings for the future business development, we hereby propose the year-end dividend for the current business year as follows: (i) Dividend to be paid by cash (ii) Items concerning allocation of dividend property to shareholders and total amount thereof Dividend per share of the Company’s common stock: 10 yen Total amount: 1,670,140,050 yen (iii) Effective date of commencement of payment: June 24, 2015

‐5‐ Proposal 2: Partial Amendments to the Articles of Incorporation 1. Reason for amendments We propose to make the following amendments following enforcement of the “Act for Partial Revision of the Companies Act” (Act No. 90 of 2014) effective May 1, 2015. (1) We are allowed to enter into limited liability agreements with Directors who do not engage in operations and Corporate Auditors who are not Outside Corporate Auditors. Accordingly, the provisions of Article 29 (Limitation of Liabilities of Directors) and Article 39 (Limitation of Liabilities of Corporate Auditors) of the Articles of Incorporation shall be amended so that they can fulfill their expected roles. Note that the consent from each Corporate Auditor has been received concerning the amendments to Article 29 (Limitation of Liabilities of Directors). (2) The provisions of the Companies Act referred to in Article 32 (Validity of Resolution of Election of Substitute Corporate Auditors) of the current Articles of Incorporation shall be amended to include the corresponding provisions. 2. Contents of amendments The partial amendments to the Articles of Incorporation shall be carried out as described in the proposed amendments in the “comparison table of extracts from current Articles of Incorporation and proposed amendments” below.

Comparison table of extracts from current Articles of Incorporation and proposed amendments

(Underlining denotes amendment) Extracts from current Articles of Incorporation Proposed amendments

CHAPTER 4 – DIRECTORS AND BOARD OF CHAPTER 4 – DIRECTORS AND BOARD OF DIRECTORS DIRECTORS

Article 29. (Limitation of Liabilities of Article 29. (Limitation of Liabilities of Directors) Directors) Pursuant to the provisions of Article 426, Pursuant to the provisions of Article 426, paragraph 1 of the Companies Act, the paragraph 1 of the Companies Act, the Company may, by the resolution of the Board Company may, by the resolution of the Board of Directors, limit the liabilities of each of Directors, limit the liabilities of each Director (including each former director) Director (including each former director) stipulated in Article 423, paragraph 1 of the stipulated in Article 423, paragraph 1 of the Companies Act, to the extent permitted by Companies Act, to the extent permitted by laws. laws. Pursuant to the provisions of Article 427, Pursuant to the provisions of Article 427, paragraph 1 of the Companies Act, the paragraph 1 of the Companies Act, the Company may enter into agreements with each Company may enter into agreements with each Outside Director, which limit the maximum Director (excluding a director who is an amount of his liabilities stipulated in Article executive director, etc.), which limit the 423, paragraph 1 of the Companies Act to the maximum amount of his liabilities stipulated minimum amount stipulated by laws. in Article 423, paragraph 1 of the Companies Act to the minimum amount stipulated by laws.

‐6‐

Extracts from current Articles of Incorporation Proposed amendments

CHAPTER 5 – CORPORATE AUDITORS AND CHAPTER 5 – CORPORATE AUDITORS AND BOARD OF CORPORATE AUDITORS BOARD OF CORPORATE AUDITORS Article 32. (Validity of Resolution of Election of Article 32. (Validity of Resolution of Election of Substitute Corporate Auditors) Substitute Corporate Auditors) The validity of the election of each substitute The validity of the election of each substitute corporate auditor stipulated in Article 329, corporate auditor stipulated in Article 329, paragraph 2 of the Companies Act shall expire paragraph 3 of the Companies Act shall expire at the beginning of the Ordinary General at the beginning of the Ordinary General Meeting of Shareholders with respect to the Meeting of Shareholders with respect to the last business year ending within four (4) years last business year ending within four (4) years after his election. after his election.

Article 39. (Limitation of Liabilities of Article 39. (Limitation of Liabilities of Corporate Auditors) Corporate Auditors) Pursuant to the provisions of Article 426, Pursuant to the provisions of Article 426, paragraph 1 of the Companies Act, the paragraph 1 of the Companies Act, the Company may, by the resolution of the Board Company may, by the resolution of the Board of Directors, limit the liabilities of each of Directors, limit the liabilities of each Corporate Auditor (including each former Corporate Auditor (including each former corporate auditor) stipulated in Article 423, corporate auditor) stipulated in Article 423, paragraph 1 of the Companies Act, to the paragraph 1 of the Companies Act, to the extent permitted by laws. extent permitted by laws. Pursuant to the provisions of Article 427, Pursuant to the provisions of Article 427, paragraph 1 of the Companies Act, the paragraph 1 of the Companies Act, the Company may enter into agreements with each Company may enter into agreements with each Outside Corporate Auditor, which limit the Corporate Auditor, which limit the maximum maximum amount of his liabilities stipulated amount of his liabilities stipulated in Article in Article 423, paragraph 1 of the Companies 423, paragraph 1 of the Companies Act to the Act to the minimum amount stipulated by minimum amount stipulated by laws. laws.

‐7‐ Proposal 3: Election of Ten (10) Directors The term of office of all ten (10) present Directors will expire at the close of this General Meeting of Shareholders. Accordingly, we propose to elect ten (10) Directors.

The candidates for Directors are as follows: Career summary Number of the Candidate Name (Position and Areas of Responsibility at the Company, and Company’s No. (Date of Birth) Significant Concurrent Positions) share owned April 1966 Joined the Company June 1998 Director, the Company June 1999 Executive Officer, the Company June 2001 Representative Director, Senior Managing Director, the Company Minoru Furukawa 1 April 2005 Representative Director, President, the Company 139,657 (June 13, 1943) June 2010 Representative Director, Chairman and President, the Company April 2013 Representative Director, Chairman and Chief Executive Officer, the Company (current position) April 1973 Joined the Company April 2009 Executive Officer, the Company April 2010 General Manager of Precision Machinery Headquarters, and General Manager of Chikkou Works, the Company June 2010 Director, the Company June 2010 Responsible for Precision Machinery Headquarters, and General Manager of Precision Machinery Headquarters, and General Manager of Chikkou Works, the Company April 2011 Responsible for Precision Machinery Takashi Tanisho Headquarters, and General Manager of Precision 2 60,986 (February 26, 1949) Machinery Headquarters, and General Manager of Business & Product Development Division, Precision Machinery Headquarters, the Company April 2012 Managing Director, the Company April 2012 Responsible for Business & Product Development Headquarters and Precision Machinery Headquarters, and General Manager of Business & Product Development Headquarters, the Company April 2013 Representative Director, President and Chief Operating Officer, the Company (current position)

‐8‐

Career summary Number of the Candidate Name (Position and Areas of Responsibility at the Company, and Company’s No. (Date of Birth) Significant Concurrent Positions) share owned April 1971 Joined The Sanwa Bank, Limited June 1998 Director, The Sanwa Bank, Limited June 1999 Executive Officer, The Sanwa Bank, Limited March 2001 Managing Executive Officer, The Sanwa Bank, Limited January 2002 Managing Executive Officer, UFJ Bank Limited May 2002 Senior Managing Executive Officer, UFJ Bank Limited April 2003 Director, Executive Vice President, Nissho Iwai - Nichimen Holdings Corporation June 2003 Executive Vice President, Nissho Iwai Masaki Hashikawa Corporation 3 10,145 (January 25, 1949) April 2004 Representative Director, Chairman, Sojitz Corporation July 2004 Director, Executive Vice President, Sojitz Holdings Corporation October 2004 Director, Executive Vice President, Sojitz Corporation October 2005 Representative Director, Executive Vice President, Sojitz Corporation April 2008 Representative Director and Vice Chairman, Sojitz Corporation June 2012 Corporate Advisor, Sojitz Corporation June 2013 Vice-Chairman, the Company (current position)

‐9‐

Career summary Number of the Candidate Name (Position and Areas of Responsibility at the Company, and Company’s No. (Date of Birth) Significant Concurrent Positions) share owned April 1972 Joined the Company June 2006 Director, the Company April 2009 Managing Director, the Company April 2011 Responsible for Global Business Promotion Headquarters, and General Manager of Global Business Promotion Headquarters, the Company April 2012 Responsible for Production, and responsible for Procurement Headquarters, Business Planning Headquarters and Production Engineering Dept., and General Manager of Procurement Headquarters, the Company April 2013 Representative Director, Executive Vice- President, the Company (current position) April 2013 Assistant to the President (Responsible for Machinery & Infrastructure Headquarters, Hisao Matsuwake Procurement Headquarters and Production 4 17,465 (July 16, 1949) Engineering Dept.), and General Manager of Machinery & Infrastructure Headquarters, and General Manager of Procurement Headquarters, the Company July 2014 Assistant to the President (Responsible for Machinery & Infrastructure Headquarters, Procurement Headquarters, Production Engineering Dept. and Nuclear Equipment Business Promotion Dept.), and General Manager of Machinery & Infrastructure Headquarters, and General Manager of Procurement Headquarters, the Company April 2015 Assistant to the President (Responsible for Production Engineering Dept.) and General Manager of Procurement Headquarters, the Company (current position)

‐10‐

Career summary Number of the Candidate Name (Position and Areas of Responsibility at the Company, and Company’s No. (Date of Birth) Significant Concurrent Positions) share owned April 1974 Joined the Company June 2006 General Manager of Accounting & Finance Dept., the Company April 2009 Executive Officer, the Company June 2010 Director, the Company June 2010 Responsible for Corporate Planning Dept., Accounting & Finance Dept. and Overseas Business Administration Dept., and General Manager of Corporate Planning Dept., the Company April 2012 Managing Director, the Company (current position) Masayuki Morikata 5 April 2012 Responsible for Corporate Planning Dept., 28,118 (September 2, 1951) Accounting & Finance Dept. and Overseas Business Administration Dept., the Company April 2014 Responsible for Corporate Planning Dept., Accounting & Finance Dept., Subsidiary Administration Dept. and Overseas Business Administration Dept., the Company April 2015 General Manager of Corporate Planning Headquarters, the Company (current position) (Significant Concurrent Positions) President, Ito Country Club Corporation President, Accounting & Finance Corporation President, HITACHI ZOSEN TOURIST Co., Ltd.

‐11‐

Career summary Number of the Candidate Name (Position and Areas of Responsibility at the Company, and Company’s No. (Date of Birth) Significant Concurrent Positions) share owned April 1975 Joined the Company April 2008 Executive Officer, the Company April 2010 General Manager of Business & Product Development Headquarters, the Company June 2010 Director, the Company April 2012 General Manager of Precision Machinery Headquarters, and General Manager of Business & Product Development Division, Precision Machinery Headquarters, the Company April 2013 Responsible for Technology Development Headquarters and Precision Machinery Toru Shimizu 6 Headquarters, and General Manager of 20,558 (March 10, 1951) Technology Development Headquarters, the Company April 2014 Managing Director, the Company (current position) April 2014 Responsible for Technology Development Headquarters, Precision Machinery Headquarters and Information System Dept., and General Manager of Technology Development Headquarters, the Company April 2015 General Manager of Technology Development Headquarters, the Company (current position) April 1974 Joined the Company April 2010 Executive Officer, the Company April 2012 General Manager of Business Planning Headquarters, the Company June 2012 Director, the Company Wataru Kobashi April 2013 Responsible for Business Planning Headquarters, 7 12,444 (January 24, 1952) and General Manager of Business Planning Headquarters, the Company April 2014 Managing Director, the Company (current position) April 2015 General Manger of Machinery Business Headquarters, the Company (current position)

‐12‐

Career summary Number of the Candidate Name (Position and Areas of Responsibility at the Company, and Company’s No. (Date of Birth) Significant Concurrent Positions) share owned April 1982 Joined the Company April 2010 General Manager of Environmental Solutions EPC Business Unit, Environmental Systems & Solutions Division, Engineering Headquarters, the Company April 2011 Executive Officer, the Company April 2011 General Manager of Environmental Solutions EPC Business Unit, Engineering Headquarters, the Company April 2012 General Manager of Environmental Solutions EPC *Sadao Mino Business Unit, Environmental Systems & 8 11,500 (August 27, 1957) Solutions Division, Engineering Headquarters, the Company January 2013 General Manager of Engineering Business Division, Environment, Energy & Plant Headquarters, the Company April 2013 Managing Executive Officer, the Company (current position) April 2015 General Manager of Environment Business Headquarters, responsible for Architect Supervision Dept. and Quality Assurance Dept., the Company (current position) April 1970 Joined Fujitsu Limited June 2004 Corporate Executive Vice President and Director, Fujitsu Limited June 2006 Corporate Senior Executive Vice President and Representative Director, Fujitsu Limited Chiaki Ito 9 June 2008 Vice Chairman and Director, Fujitsu Limited none (October 10, 1947) April 2010 Chairman and Representative Director, FUJITSU RESEARCH INSTITUTE June 2012 Senior Executive Advisor, FUJITSU RESEARCH INSTITUTE (retired in May 2014) June 2013 Director, the Company (current position) April 1974 Joined Sony Corporation August 2000 Director, Sony Digital Network Applications, Inc. April 2003 Representative Director, Sony Digital Network Applications, Inc. October 2008 VP in charge of Environment, Sony Corporation *Kazuko April 2012 Advisor, YAMAGATA INTECH Corporation 10 Takamatsu April 2013 Executive Director and Secretariat, Japan none (August 27, 1951) Institute for Women’s Empowerment & Diversity Management (current position) May 2015 External Director, Dexerials Corporation (current position) (Significant Concurrent Position) External Director, Dexerials Corporation Notes: 1. *mark indicates a candidate for new Director. 2. Mr. Chiaki Ito and Ms. Kazuko Takamatsu are candidates for Outside Directors. Mr. Chiaki Ito is currently an Outside Director of the Company, and his term of office will have been two years at the close of this General Meeting of Shareholders. The reasons for the appointment of both Mr. Chiaki Ito and Ms. Kazuko Takamatsu as Outside Directors are as follows. (1) Mr. Chiaki Ito has wide-ranging insight into company management based on his extensive experience as a manager responsible for overseas business in the information

‐13‐ and communication equipment industry. The Company, as it promotes the development of new products and new businesses and the globalization of business, anticipates that Mr. Ito will provide the Board of Directors with opinions and advice for appropriate decision-making from a wide-ranging perspective and has deemed Mr. Ito is able to contribute to the strengthening of corporate governance and supervisory functions in the execution of the Company’s work. In addition to the above, Mr. Ito is currently appropriately performing duties as an Outside Director of the Company, and the same can be expected from him in the future. Thus, the Company has designated him a candidate for Outside Director. (2) Ms. Kazuko Takamatsu has extensive experience and wide-ranging insights based on her career in global companies. In addition, she has an excellent sense of balance as a business manager based on her experience of being involved directly in company management as the Chief Executive of a company engaged in developing built-in software for digital cameras and mobile phones. The Company anticipates that Ms. Takamatsu will be able to contribute to strengthening corporate governance and supervisory functions in the execution of the Company’s work. Thus, the Company has designated her as a candidate for Outside Director. 3. The Company has concluded an agreement with Mr. Ito that limits the maximum amount of his liabilities to the minimum amount stipulated by laws and regulations concerning liability for compensation for damages pursuant to the provisions of Article 423, paragraph 1 of the Companies Act. In the event that his reelection is approved, the Company intends to continue the said agreement. Also, in the event that Ms. Kazuko Takamatsu is elected, the Company intends to conclude the same type of agreement with her. 4. The Company has designated Mr. Chiaki Ito as independent director as prescribed by Tokyo Stock Exchange, Inc. Ms. Kazuko Takamatsu meets the requirements for an independent director as prescribed by Tokyo Stock Exchange, Inc., and the Company plans to designate her as independent director. The reasons for determining that both Mr. Chiaki Ito and Ms. Kazuko Takamatsu are independent are as follows. (1) Note that there is no business relationship between the Company and FUJITSU RESEARCH INSTITUTE, where Mr. Ito served as Senior Executive Advisor until May 2014. While there is a business relationship between the Company and Fujitsu Corporation, where Mr. Ito formerly served as Director, in fiscal year 2014, there were no sales by the Company to Fujitsu Corporation, and the ratio of the Company’s sales accounted for by purchases from Fujitsu Corporation was less than 0.1%, which is very small relative to the scales of business of the Company and Fujitsu Corporation. (2) Note that there is no business relationship between the Company and both Dexerials Corporation, where Ms. Takamatsu serves as External Director, and Sony Corporation, where Ms. Takamatsu formerly served as VP.

‐14‐ Proposal 4: Election of One (1) Corporate Auditor At the conclusion of the General Meeting of Shareholders, Mr. Motohiro Fujii will resign as Corporate Auditor of the Company. Accordingly, we propose to elect one (1) Corporate Auditor. The Board of Corporate Auditors has approved this proposal.

The candidate for Corporate Auditor is as follows: Number of the Name Career summary Company’s share (Date of Birth) (Position at the Company and Significant Concurrent Positions) owned April 1973 Joined the Company December 2005 General Manager of Legal & Intellectual Property Dept., the Company April 2009 Executive Officer, the Company April 2011 Managing Executive Officer, the Company Koji Abo June 2012 Managing Director, the Company (current position) 43,082 (September 19, 1949) June 2012 Responsible for Legal & Intellectual Property Dept., General Affairs & Human Resources Dept. and Environmental Management & Safety Dept., the Company April 2015 General Manager of General Administration Headquarters, the Company (current position) Notes: 1. Mr. Koji Abo is a candidate for new Corporate Auditor. 2. Provided Proposal 2 “Partial Amendments to the Articles of Incorporation” is approved and passed, in the event that Mr. Koji Abo is elected to the office of Corporate Auditor, the Company intends to conclude an agreement with Mr. Abo that limits the maximum amount of his liabilities to the minimum amount stipulated by laws and regulations concerning liability for compensation for damages pursuant to the provisions of Article 423, paragraph 1 of the Companies Act.

‐15‐

Business Report (From April 1, 2014 to March 31, 2015)

I. Matters Concerning the Current Status of the Group

(1) Business Developments and Results 1) Overall summary Reviewing economic conditions during the current business year, although conditions overseas followed a gradual recovery trend, there are concerns over a sovereign debt crisis in Europe, weakening of the monetary easing policy in the United States, and an uncertain future economy and geopolitical risks in China and other emerging countries. In Japan, economic and monetary easing policies by the government and the Bank of Japan have had spillover effects on the real economy, which staged a modest recovery due to improved employment and income environments and lower crude oil prices.

• Initiatives by the Hitachi Zosen Group (“the Group”) The Group aimed to evolve into a highly profitable enterprise that enjoys public recognition under the “Hitz Vision II” medium-term management plan, which started from fiscal year 2014. From the perspective of innovation in our businesses and our business management, we have made determined efforts for key measures such as focusing management resources on our key fields of environment/green energy and social infrastructure and disaster prevention, developing a business strategy to strengthen profitability, promoting overseas local businesses, continuing to expand businesses, early commercialization and monetization of new products and businesses, strengthening the Group’s capabilities, promoting M&As, and reinforcing the Group’s financial position. In Japan, the Group worked on the overseas expansion of its water treatment business and business development to achieve synergies with Daiki Ataka Engineering Co., Ltd., which the Company absorbed and merged with in April 2014. Furthermore, NICHIZO TECH INC., which was made a wholly-owned subsidiary in April 2014, integrated its operations with those of HEC ENGINEERING CORPORATION in October 2014, and the Group aimed to strengthen its plant engineering business including design, production, installation, and test operation and maintenance businesses, and reinforce its ability to make proposals for inspections and maintenance in construction work for repairing deteriorated social infrastructure, such as bridges and hydraulic gates. Looking overseas, the Group expanded its refuse incineration power-generation (hereinafter called “Energy-from-Waste” or “EfW”) business centered on Asia in collaboration with Hitachi Zosen Inova AG, a Europe-based company operating an EfW business. Hitachi Zosen Inova AG executed an M&A for a biogas facilities and maintenance-related company and established a local subsidiary in Australia to expand its product range and market. We also restructured the Group and engaged in M&As proactively to strengthen its business foundations. For example, the Group made the Cumberland Group subsidiaries, which develops engineering services for seawater electrolysis equipment, etc., mainly in the Middle East to achieve synergies with the Group in the water treatment business, and made it the business base of the Group in the Middle East.

• Status of orders, sales, and profit/loss Total order intake for the current business year grew significantly over the level for the previous business year at 452,757 million yen, due to sharp increases in the Environmental Systems and Industrial Plants Business, despite a decrease in order intake in the Process Equipment Business. Net sales increased from the previous business year to 359,332 million yen, as a result of

‐16‐ increased sales in line with the progress of large-scale construction in the Environmental Systems and Industrial Plants Business, for which an order was received in the previous business year, and increased sales from the growth of after-sale services, despite a decrease in sales of the Infrastructure Business. In terms of profit and loss, operating income increased from the previous business year to 12,818 million yen, due to an increased contribution from the Environmental Systems and Industrial Plants Business and improved performance of the Machinery Business, Process Equipment Business and Precision Machinery Business. Ordinary income increased from the previous business year to 7,568 million yen. The Group recorded an impairment loss for the Mukaishima Works as an extraordinary loss accompanied by a deterioration in the profitability of the Steel Structure Business. However, we posted a gain on bargain purchase under extraordinary income related to the absorption-type merger with Daiki Ataka Engineering Co., Ltd. and conversion of NICHIZO TECH INC. into a wholly-owned subsidiary and, as a result, net income for the business year increased from the previous business year to 5,100 million yen.

• Year-end dividend With respect to the year-end dividend, the Company has decided to propose to the General Meeting of Shareholders a payment of 10 yen per share, in accordance with the Company’s policy of providing stable dividends on a continuous basis.

2) Summary by business segments [Environmental Systems and Industrial Plants] The Company’s Environmental Systems Business received many large-scale orders for construction, upgrading of key facilities and operation of EfW plants, including FY2014 Namie Town Target Zone Waste Disposal Treatment Work (Volume Reducing Treatment) for Fukushima Office for Environmental Restoration, Ministry of the Environment and construction and operation of municipal waste treatment facility for Joetsu City (Niigata Prefecture). In addition, the Company received several orders for the construction of water and sludge recycling facilities including the Polluted Water Recycling Center for Shimabara City (Nagasaki Prefecture). Besides, we completed construction of EfW plant for Murakami City (Niigata Prefecture), Gotemba-Oyama Regional Administrative Association (Shizuoka Prefecture), and the Clean Association of Hagi-Nagato (Yamaguchi Prefecture), as well as the Sludge Recycling Center for the Eastern Clean Centers Association (Okinawa Prefecture), and handed them over. In Murakami City, we started long-term operation of EfW plant. In addition, the Company launched a development project to promote an optimal operation control system for EfW plants, in order to achieve manpower savings through automation and carry out preventive maintenance by leveraging information it has accumulated over more than 10 years using information and communications technology (ICT). The Company received orders overseas for the construction of EfW plants in India, Poland, Ireland, China, and the UK. It was the first time a Japanese company group had received an order in India and for the Hitz Group to receive orders in Poland and Ireland. As a result, our order intake overseas grew significantly. The Group also completed construction of EfW plants in China and Finland, and handed them over. In the Industrial Plants Business, we completed fuel conversion work for the No. 2 Power Generator at our Ibaraki Works, switching to LNG-fuelled high-efficiency gas turbine facilities, and began its operation to supply electric power.

[Machinery] In the Marine Diesel Engines Business and Deck Machinery Business, amidst a severe ongoing environment for orders, we received and delivered many orders for marine diesel engines and deck machinery to shipyards in Japan and overseas, including Imabari

‐17‐ Shipbuilding Co., Ltd. and Japan Marine United Corporation. In addition, we became the first company in the world to obtain certification from MAN Diesel & Turbo SE, which has more than an 80% share of the global market for marine diesel engines, for marine Selective Catalytic Reduction (SCR) systems that conform to the third regulations of NOx established by the International Maritime Organization (IMO), and actively began order intake activities worldwide. In the Press Machines Business, we also received and delivered orders for various types of press machines and various types of FA system products, including press peripherals automation equipment, bound for domestic and overseas automobile manufacturers and other customers. In addition, we received orders for after-sales service work, such as repairing, modifying, checking, and reinstalling FA system products we had delivered, and completed delivery.

[Process Equipment] In the Process Equipment Business, we received orders for pressure vessels including fertilizer plants for North America, Central America, Central Asia, and Southeast Asia, amidst increasing competition as a result of the rise of overseas competitors. We also received and delivered orders for various plant equipment. The joint-venture company in India increased its production capacity, and the company stepped up activities to receive orders in the Indian market, as well as in the global market. In the field of equipment in the nuclear power sector, we promoted an integrated solution business by combining NAC International’s design, transport, and consulting businesses with the Company’s manufacturing technologies. For example, we received and delivered orders for 24 canisters used to transport and store nuclear spent fuels for decommissioned nuclear reactors of a US power plant as the first large-scale order intake since NAC International became a Group subsidiary in March 2013.

[Infrastructure] In the steel structure business, the Company received and delivered orders for bridges, hydraulic gates, steel chimneys, marine structures, and other projects, such as disaster recovery works off the wharf of the Port of Shiogama fish market (Part 2), for the Ministry of Land, Infrastructure, Transport and Tourism (MLIT), local governments, expressway companies, and electric power companies. The Company received the 16th Infrastructure Technology Development Award (the first prize) for a floating-type temporary cofferdam method, which achieves cost reductions and the like in dam redevelopment projects, jointly with KAJIMA CORPORATION. In the disaster prevention field, we received steady orders for land-mounted flap-gate type seawalls (neo RiSe), which prevent floods caused by tsunami, high tides, and heavy rains. In the large full-size flowing water demonstration system that has been newly installed at the Company’s Sakai Works, we installed a neo RiSe, thus enabling live demonstrations of the rising performance of the flap gate in flowing water, and we started promotional activities aimed at the wide-spread adoption of neo RiSe. In the field of shield tunneling machines, amidst growing demand for roads and transportation infrastructure centered on emerging countries, the Company received and delivered orders from Singapore and Korea and others for various types of shield tunneling machine for construction companies in Japan and overseas.

[Precision Machinery] In the field of precision machinery, the Company received and delivered orders for various types of plastic extrusion molding equipment for LCD panels and foodstuff packing-related products in Japan and overseas, and for various types of filling system from food companies and pharmaceutical companies in Japan. The Company also received and delivered orders for laser processing systems and conveyor systems for the solar battery market, as well as

‐18‐ various vacuum equipment, special valves and special grinders. In the solar power plant construction business, which the Company launched in fiscal year 2013, we received orders for construction work for large-scale mega solar power plants using the former site of a golf course. In addition, the Company received and delivered orders for non-destructive radioactive cesium-testing equipment for semi-dried persimmon (ampo persimmons), which are a specialty of Fukushima Prefecture, from the Fukushima Prefecture Semi-Dried Persimmon Promotion Council. We contributed to reconstruction assistance for disaster- stricken areas and environmental conservation through our products and technologies. In the electronic control equipment business, we received and delivered orders for various types of electronics equipment, food defense & management recording systems for food companies, and train event recorders for railway companies. In the field of GPS positioning technology, we received and delivered orders for observation systems and equipment from Geospatial Information Authority of Japan and Japan Meteorological Agency. For private- sector customers, the Company launched sales of a new product of GPS survey terminals.

[Others] In Others, the Company received and implemented orders for, among others, warehousing and port-loading and unloading operations, and inland and marine transportation of various types of plant, steel structure, large machine and others.

3) Order intake and net sales by business segment Order Intake Net Sales Business Segment 117th 118th 117th 118th Change Change Business Year Business Year Business Year Business Year Millions of yen Millions of yen % Millions of yen Millions of yen % Environmental Systems and 204,984 316,536 54.4 206,298 227,966 10.5 Industrial Plants Machinery 53,317 56,728 6.4 51,941 55,172 6.2 Process Equipment 17,305 12,690 (26.7) 15,976 21,966 37.5 Infrastructure 22,535 27,740 23.1 28,092 19,420 (30.9) Precision Machinery 21,865 29,673 35.7 22,624 25,346 12.0 Others 8,425 9,387 11.4 8,500 9,460 11.3 Total 328,433 452,757 37.9333,433 359,332 7.8

‐19‐ (2) Capital Investment In the current business year, the Company carried out total capital investments of 11,882 million yen, mainly consisting of rationalization investment for improving productivity, capital investment for developing and commercializing new products and businesses, and capital investment for strengthening production capacity.

• Major capital investment by business segment (Millions of yen) Business Segment Amount Summary of Investment Environmental Modification of power-generation plant at the Systems and 7,789 Ibaraki Works, construction of new woody biomass Industrial Plants power-generation plant Introduction of five-face machining equipment, Machinery 990 upgrading and introducing welding machines for diesel engines Introducing automatic welding machines for the Process Equipment 136 production of process equipment New construction of a large-scale demonstration Infrastructure 430 system in flowing water for a land-mounted flap- gate type seawall Strengthening of production facilities for precision Precision Machinery 347 machinery New construction of warehouse facility, introduction Others/ 2,187 of vessels, introduction of equipment for analyzing Company-wide and measuring functional new materials Total 11,882 (Note) Capital investment not attributable to any business segment is included under Other Businesses.

(3) Funds Procurement In the current business year, 33,254 million yen in funds was procured through long-term loans payable primarily to appropriate funds for future working capital and for business investment. In September 2014, the Company conducted the 23rd issue of unsecured straight bonds, with a value of 10,000 million yen, to appropriate funds for capital investment and working capital.

‐20‐ (4) Trends in Assets and Profit and Loss (Millions of yen) 115th 116th 117th 118th

Business Year Business Year Business Year Business Year Order intake 289,714 382,847 328,433 452,757 Net sales 303,036 296,792 333,433 359,332 Operating income 11,367 11,362 7,878 12,818 Ordinary income 10,768 11,246 6,220 7,568 Net income 9,318 7,410 3,719 5,100 Net income per share 11.74 9.36 23.77 30.52 (Yen) Total assets 375,788 366,346 379,414 408,803 (Note) The Company conducted a share consolidation of common stock with a ratio of five shares to one share on October 1, 2013. Accordingly, net income per share for the fiscal year 2013 (117th business year) is calculated with assumption that the share consolidation was conducted at the beginning of the business year.

(5) Issues to be Addressed  “Hitz Vision II” medium-term management plan (fiscal year 2014 to fiscal year 2016) Under the “Hitz Vision II” medium-term management plan started in fiscal year 2014, the Group aims to deliver steady results, based on its business foundation built under the “Hitz Vision” medium-term management plan for the three-year period from fiscal year 2011 to fiscal year 2013, toward achieving the goals set in its long-term vision “Hitz 2016 Vision.” The basic concept behind the management measures in “Hitz Vision II” is to become a Technology-oriented Company. Based on the Technology-oriented Company concept, in which we will focus technological capabilities, which is our core competence, and build them up in a broad sense, including operating processes for providing better products and services to acquire customer satisfaction and achieve higher added value, we will engage in technology-oriented management, construct optimal business strategies, and concentrate management resources in the business fields of environment/green energy and social infrastructure and disaster prevention, while aiming for sustainable growth.

 Issues faced by the Group As we reported in “Business Development and Results,” both our order intake and net sales for fiscal year 2014 exceeded the levels in the previous fiscal year and the scale of business expanded steadily. However, the Group needs to strengthen its profitability and expand its business scale further, in order to achieve the goals set out in the long-term vision “Hitz 2016 Vision” to envision our desired form in fiscal year 2016, and evolve into a highly profitable enterprise that enjoys public recognition.

1) Strengthen profitability

In the Environmental Business, we will expand the After-sales Service, Operation and Maintenance (AOM) Business and long-term operation, as well as ongoing businesses (businesses that contribute to stable earnings), including selling electric power both in Japan and overseas to strengthen profitability. In the business of marine diesel engines and shield tunneling machines, we will strengthen profitability by rebuilding business strategies and reviewing operating processes. We will strengthen the product competitiveness of our marine diesel engines business and improve earnings through the marine SCR system. We will also strengthen the product competitiveness of our shield tunneling machines business by developing differentiated technologies that achieve stable drilling operation.

‐21‐ Regarding Works, which is the Group’s production base, we will increase productivity and reduce manufacturing costs by promoting the use of ICT, automation through the introduction of robots, and product mix. In particular, we will press on with efforts to use ICT including big data and automation with robots as key issues for the current business year, by launching the ICT Promotion Team and Robot/Automation Promotion Team, which are cross-organizational teams directly under the President, aimed at not only more efficient but also for pursuing customer satisfaction from the resulting improvements in the Company’s products and services.

2) Expanding the scale of operations

• Promoting overseas local businesses

To strengthen the potential to grow our businesses further by achieving synergies from reinforcing the Group’s capabilities, Hitachi Zosen Inova AG received successive orders for construction of large-scale EfW plants in Europe, and completed delivery, while conducting aggressive business management by executing a M&A for a biogas facilities and maintenance company and establishing a new business base in Australia. We will strengthen collaboration with the company to become the clear number one in the world in the EfW business. Through the absorption-type merger with Daiki Ataka Engineering Co., Ltd., which has strengths in the water treatment business, and collaboration with the Cumberland Group, which has an engineering business for seawater electrolysis equipment operating mainly in the Middle East and the UK, we will proactively propose seawater desalination units and water supply and sewage treatment units that respond to water shortages in the Middle East and Asia regions. In addition, we aim to expand our overseas business fields by conducting businesses, including after-sales services, operation and management services, which can provide value continuously to local communities.

• Promoting new products/businesses

Land-mounted flap-gate type seawalls (neo RiSe) and movable flap-gate type breakwater systems installed on the seabed, products that protect human lives and assets from tsunamis, high tides, and inundations, are being increasingly recognized as disaster-prevention products, and we aim to steadily increase order intake through efforts to meet the needs of customers. We will continue to develop “only one” products that create customer value and aim to promptly commercialize new products following flap-gates, marine SCR systems, and electron beam sterilization systems. In addition, we will promote the onshore/offshore wind power-generation business using renewable energy and the energy-related business with an eye on the coming age of hydrogen society, in order to expand the scale of operations through new businesses.

3) Promoting balanced management

We will implement the above-mentioned measures by promoting balanced management (the three balances, i.e. balance between domestic and external businesses, balance between new construction and after-sales services, and balance between new businesses/models and existing businesses/models), in order to expand the scale of operations and strengthen our management base based on improved fundamental profitability.

‐22‐ 4) Reinforcing Group strengths

We are aiming for early achievement and expansion of synergies in the “environment/green energy business” field through the absorption-type merger with Daiki Ataka Engineering Co., Ltd. and “social infrastructure and disaster prevention business” field through the conversion of NICHIZO TECH INC. into a wholly-owned subsidiary, transactions which were both executed in fiscal year 2014. In April 2015, the Company merged its subsidiaries Nisshin Service Co., Ltd. and Kansai Service Co., Ltd., which control operations of EfW plants, to launch Hitz Environment Service Co., Ltd. By combining the know-how the two companies built up, we will reinforce our sales capabilities and enhance our operation control techniques. In addition, we will use qualified personnel and increase the efficiency of operations to further solidify the foundations of the Group’s AOM Business.

5) Securing diversified human resources and personnel training

To resolve the issues above with certainty and perform business activities, the Group needs to secure human resources in order to respond properly to the market globalization and business expansion. Therefore, we are aiming for the early development of global human resources through the proactive recruitment of diversified human resources including global hiring, various training systems, in-house OJT (On- the-Job Training), and dispatching employees overseas.

With the aim of responding to increased and diversified management risks arising from the globalization of business activities and expanded scale of operations, we will ensure a thorough safety control, aim to prevent accidents, and share values on compliance under our corporate philosophy and ethics on a Group-wide basis, including overseas subsidiaries, and ensure implementation of compliance and a stronger governance system. The Group continues to aim at being a Corporate Group that is trusted by shareholders and all other stakeholders by striving for further growth through the steady execution of key measures in “Hitz Vision II” and by using technological and problem-solving capabilities that contribute to creating a healthy natural environment and strong social infrastructure. We ask our shareholders for their continued understanding of the Group’s management policies, as well as their support and cooperation.

‐23‐ (6) Significant Parent Company and Subsidiaries (As of March 31, 2015) 1) Parent company The Company does not have a parent company.

2) Significant subsidiaries Amount of Holding Ratio Name of Company Major Lines of Business Capital (Direct) (%) Design, manufacture and sale of boilers, pressure vessels, diesel IMEX Co., Ltd. ¥1,484 million 100.0 engines, industrial machinery, and steel structures Comprehensive examination, maintenance, checking and repair of products made of steel, concrete, etc., various types of plant equipment, piping NICHIZO TECH ¥1,242 million 100.0 equipment, etc., and design, INC. creation, and on-site construction of chemical plants, industrial machinery and nuclear power generation- related equipment Manufacture and sale of various types of presses, chemical Hitachi Zosen Fukui machinery, conveyance ¥1,055 million 53.6 Corporation machinery, and electronic control machinery and equipment Warehousing and port loading OHNAMI and unloading, inland ¥525 million 41.5 CORPORATION transportation, marine transportation, and construction Design, creation, sale, Hitachi Zosen Inova CHF40 million 100.0 maintenance and operation of AG Energy-from-Waste plants Design, transport and NAC International consulting related to the storage USD43 million - Inc. and transportation of spent nuclear fuel control equipment (Notes) 1. There are 87 consolidated subsidiaries, including the 6 major subsidiaries mentioned above, and 13 equity method companies. 2. Effective April 1, 2014, Daiki Ataka Engineering Co., Ltd. was absorbed by the Company through an absorption-type merger, and was dissolved on the same day. 3. Effective April 1, 2014, NICHIZO TECH INC. became a wholly-owned subsidiary of the Company. Effective October 1, 2014, NICHIZO TECH INC. absorbed HEC ENGINEERING CORPORATION through an absorption-type merger, which resulted in the expansion of its lines of business. 4. Effective April 1, 2014, the Company’s ownership ratio in OHNAMI CORPORATION increased by 2.7% because the Company carried out an absorption-type merger with Daiki Ataka Engineering Co., Ltd., a shareholder of OHNAMI CORPORATION. 5. NAC International Inc. is a wholly-owned subsidiary of Hitz Holdings U.S.A. Inc., a holding company in the United States that is wholly-owned by the Company.

‐24‐ 3) Significant technology alliances Alliance Partner Country Contents of Alliance MAN Diesel & Turbo SE Germany MAN B&W-type diesel engines

(7) Major Lines of Business (As of March 31, 2015) Major Business Major Products and Businesses EfW plants, Recycling systems, Water and sludge treatment, Environmental Systems EfW plants, Biomass utilization, Seawater desalination plants and Industrial Plants and other plants, Power-generation facilities, IPP (Independent Power Producer) business Marine diesel engines, Deck machinery, Press machines, Machinery Boilers, NOx removal catalysts Pressure vessels and other process equipment, Nuclear power Process Equipment generation-related equipment Bridges, Hydraulic gates, Chimneys, Marine civil engineering, Infrastructure Shield tunneling machines, Disaster prevention systems Plastic machinery, Food machinery, Pharmaceutical Precision Machinery machinery, Precision machinery, Electronics systems, Control systems Others Transportation, Warehousing, Port cargo handling (Notes) 1. Beginning from fiscal year 2014, the Company transferred NOx removal catalyst to the Machinery Business from the Environmental Systems and Industrial Plants Business, in order to accelerate the development and expansion of operations through the integration of the business for NOx removal catalyst used in power-generation facilities and that for marine diesel engines. 2. Beginning from fiscal year 2015, the Company changed its segment presentation by integrating the Machinery, Process Equipment, and Precision Machinery Businesses to form the Machinery Business.

(8) Major Sales Offices, Plants, etc. (As of March 31, 2015) 1) The Company Head Office: 7-89, Nanko-kita 1-chome, Suminoe-ku, Osaka Tokyo Head Office: 26-3, Minami-ohi 6-chome, Shinagawa-ku, Tokyo Domestic Offices: Sapporo Office (Sapporo), Sendai Office (Sendai), Nagoya Office (Nagoya), Hiroshima Office (Hiroshima), Fukuoka Office (Fukuoka) Works, etc.: Technical Research Institute (Osaka), Ibaraki Works (Hitachi-omiya), Maizuru Works (Maizuru), Chikkou Works (Osaka), Sakai Works (Sakai), Mukaishima Works (Onomichi), Innoshima Works (Onomichi), Ariake Works (Tamana-gun, Kumamoto), Tokyo Works (Kashiwa, Matsudo), Wakasa Works (Oi-gun, Fukui) Overseas Offices Taipei Branch (Taiwan), Seoul Branch (South Korea), Singapore Branch (Singapore), Abu Dhabi Branch (United Arab Emirates), Shanghai Office (China), Bangkok Office (Thailand), Ho Chi Minh City Office (Vietnam) (Notes) 1. Following the merger of Daiki Ataka Engineering Co., Ltd. through an absorption-type merger effective April 1, 2014, the Company incorporated Daiki Ataka’s Tokyo Works into the Company’s organization. 2. In accordance with the establishment of Hitachi Zosen Trading (Shanghai) Co., Ltd., the Company closed the Shanghai Office (China) effective April 1, 2015.

‐25‐ 2) Subsidiaries IMEX Co., Ltd. 2293-1, Innoshimahabu-cho, Onomichi, Hiroshima NICHIZO TECH INC. 15-26, Tsuru-machi 2-chome, Taisho-ku, Osaka Hitachi Zosen Fukui Corporation 8-28, Jiyugaoka 1-chome, Awara, Fukui OHNAMI CORPORATION 6-33, Edobori 2-chome, Nishi-ku, Osaka

Hitachi Zosen Inova AG Switzerland NAC International Inc. U.S.A. HITACHI ZOSEN EUROPE Limited U.K. Hitachi Zosen U.S.A. Ltd. U.S.A. Hitachi Zosen India Private Limited India Hitachi Zosen Myanmar Co., Ltd. Myanmar PT. HITZ INDONESIA Indonesia Hitachi Zosen Trading (Shanghai) Co., Ltd. China Cumberland International L.L.C United Arab Emirates (Note): Effective August 4, 2014, the Company made Cumberland International L.L.C a consolidated subsidiary.

(9) Status of Employees (As of March 31, 2015) 1) Status of employees of the Group Business Segment Number of Employees Environmental Systems and Industrial Plants 5,711 Machinery 1,196 Process Equipment 270 Infrastructure 661 Precision Machinery 725 Others 495 Corporate (company-wide) 523 Total 9,581 (year-on-year increase of 410) (Note) For the number of employees, the number of employees currently working at the Group is provided.

2) Status of employees of the Company Number of Employees Average Age Average Years of Service 3,808 (year-on-year increase of 653) 42.6 17.5 (Notes) 1. For the number of employees, the number of employees currently working at the Company is provided. The number includes 119 employees on loan to the Company from outside. 2. The number of employees increased due mainly to the merger with Daiki Ataka Engineering Co., Ltd. by the Company through an absorption-type merger effective April 1, 2014.

(10) Major Lenders (As of March 31, 2015) Lender Amount (Millions of yen) The Bank of Tokyo-Mitsubishi UFJ, Ltd. 24,195 Mizuho Bank, Ltd. 7,961 The Hiroshima Bank, Ltd. 4,559 Mitsubishi UFJ Trust and Banking Corporation 4,530 Sumitomo Mitsui Trust Bank, Limited 4,000

‐26‐ II. Matters Concerning Stock in the Company (As of March 31, 2015)

(1) Total Number of Shares Authorized to Be Issued 400,000,000 shares (2) Total Number of Issued Shares 167,843,845 shares (including 829,840 shares of treasury stock) (3) Number of Shares Constituting One Unit of Shares 100 shares (Note) The total number of issued shares of the Company increased by 8,629,189 from the previous year-end’s total of 159,214,656 due to a new share issuance following the merger with Daiki Ataka Engineering Co., Ltd. through an absorption-type merger effective April 1, 2014. (4) Number of Shareholders 93,393 (Year-on-year decline of 635 shareholders) (5) Major Shareholders (Top 10) Numbers of Holding Name of Shareholder Shares Held Ratio (Thousands of shares) (%) Japan Trustee Services Bank, Ltd. (Trust Account) 12,462 7.5 The Master Trust Bank of Japan, Ltd. (Trust Account) 10,786 6.5 The Bank of Tokyo-Mitsubishi UFJ, Ltd. 5,023 3.0 Trust & Custody Services Bank, Ltd. 3,131 1.9 (Investment Trust Collateral Account) Sompo Japan Nipponkoa Insurance Inc. 2,357 1.4 HAYAT 2,335 1.4 BNP Paribas Securities (Japan) Limited 2,266 1.4 EVERGREEN 2,176 1.3 Japan Trustee Services Bank, Ltd. (Trust Account 1) 1,705 1.0 Japan Trustee Services Bank, Ltd. (Trust Account 5) 1,627 1.0 (Notes) 1. The holding ratio does not include treasury stock. 2. Sompo Japan Insurance Inc., a major shareholder of the Company, merged with NIPPONKOA Insurance Co., Ltd. effective September 1, 2014 and changed its trade name to Sompo Japan Nipponkoa Insurance, Inc.

III. Matters Concerning Subscription Rights to Shares of the Company

Not applicable

‐27‐ IV. Matters Concerning Directors and Corporate Auditors of the Company

(1) Status of Directors and Corporate Auditors Significant Concurrent Name Position and Areas of Responsibility Positions Representative Director, Chairman and Minoru Furukawa Chief Executive Officer Representative Director, President Takashi Tanisho and Chief Operating Officer Masaki Hashikawa Vice-Chairman Representative Director, Executive Vice-President Assistant to the President (Responsible for Machinery & Infrastructure Headquarters, Procurement Headquarters, Production Engineering Hisao Matsuwake Dept. and Nuclear Equipment Business Promotion Dept.), and General Manager of Machinery & Infrastructure Headquarters, and General Manager of Procurement Headquarters President, Ito Country Managing Director Club Corporation Responsible for Corporate Planning Dept., President, Accounting & Masayuki Morikata Accounting & Finance Dept., Subsidiary Finance Corporation Administration Dept., and Overseas Business Administration Dept. President, HITACHI ZOSEN TOURIST Co., Ltd. Managing Director Responsible for Legal & Intellectual Koji Abo Property Dept., General Affairs & Human Resources Dept. and Environmental Management & Safety Dept. Managing Director Responsible for Environment, Energy & Plant Headquarters, Water Treatment & Industrial Equipment Headquarters, Toru Yoshioka Architect Supervision Dept., Offshore Wind Power Business Promotion Dept. and Quality Assurance Dept., and General Manager of Environment, Energy & Plant Headquarters Managing Director Responsible for Technology Development Headquarters, Precision Machinery Toru Shimizu Headquarters and Information System Dept., and General Manager of Technology Development Headquarters Managing Director Responsible for Business Planning Wataru Kobashi Headquarters and General Manager of Business Planning Headquarters

‐28‐ Significant Concurrent Name Position and Areas of Responsibility Positions Chiaki Ito Director Masamichi Tokuhira Full-time Corporate Auditor Motohiro Fujii Full-time Corporate Auditor President and Representative Director, The Kansai Electric Power Co., Inc. Makoto Yagi Corporate Auditor Chairman, The Federation of Electric Power Companies of Japan Kenichi Takashima Corporate Auditor (Notes) 1. Positions and areas of responsibility, and significant concurrent positions both describe conditions as of March 31, 2015. Changes during the current business year are as follows. (1) Changes in position and areas of responsibility

Name After Change Before Change Date of Change

Representative Director, Executive Representative Director, Executive Vice-President Vice-President Assistant to the President Assistant to the President (Responsible for Machinery & (Responsible for Machinery & Infrastructure Headquarters, Infrastructure Headquarters, Procurement Headquarters, Procurement Headquarters, and Hisao Matsuwake Production Engineering Dept. and Production Engineering Dept.), July 1, 2014 Nuclear Equipment Business and General Manager of Promotion Dept.), and Machinery & Infrastructure General Manager of Machinery & Headquarters, and Infrastructure Headquarters, and General Manager of Procurement General Manager of Procurement Headquarters Headquarters Managing Director Managing Director Responsible for Corporate Responsible for Corporate Planning Dept., Accounting & Planning Dept., Accounting & Masayuki Morikata Finance Dept., Subsidiary Finance Dept., and Overseas April 1, 2014 Administration Dept., and Business Administration Dept. Overseas Business Administration Dept. Managing Director Managing Director Responsible for Environment, Responsible for Environment, Energy & Plant Headquarters, Energy & Plant Headquarters, Water Treatment & Industrial Architect Supervision Dept., Equipment Headquarters, Offshore Wind Power Business Toru Yoshioka Architect Supervision Dept., Promotion Dept. and Quality April 1, 2014 Offshore Wind Power Business Assurance Dept., and General Promotion Dept. and Quality Manager of Environment, Energy Assurance Dept., and General & Plant Headquarters Manager of Environment, Energy & Plant Headquarters Managing Director Director Responsible for Technology Responsible for Technology Development Headquarters, Development Headquarters, Precision Machinery Precision Machinery Toru Shimizu April 1, 2014 Headquarters, and Information Headquarters, and General System Dept., and General Manager of Technology Manager of Technology Development Headquarters Development Headquarters Managing Director Director Responsible for Business Planning Responsible for Business Planning Wataru Kobashi Headquarters and General Headquarters and General April 1, 2014 Manager of Business Planning Manager of Business Planning Headquarters Headquarters

‐29‐ (2) Changes in significant concurrent positions Director Chiaki Ito retired as Senior Executive Advisor of FUJITSU RESEARCH INSTITUTE on May 25, 2014. 2. Director Chiaki Ito is Outside Director. 3. Corporate Auditors Makoto Yagi and Kenichi Takashima are Outside Corporate Auditors. 4. The Company has designated all Outside Directors and Outside Corporate Auditors as independent officers, as prescribed by Tokyo Stock Exchange, Inc. 5. Full-time Corporate Auditor Masamichi Tokuhira and Corporate Auditor Kenichi Takashima possess considerable knowledge of finance and accounting as described below. • Full-time Corporate Auditor Masamichi Tokuhira has many years of experience in accounting and financial operations, including experience as the General Manager of Accounting & Finance Department in the Company. • Corporate Auditor Kenichi Takashima has many years of experience in accounting and financial operations, including experience as General Manager of Accounting Division and Finance Division in Honda Motor Co., Ltd. 6. At the 117th Ordinary General Meeting of Shareholders held on June 24, 2014, Mr. Kenichi Takashima was newly elected as Corporate Auditor and assumed the position thereof. 7. At the conclusion of the 117th Ordinary General Meeting of Shareholders held on June 24, 2014, Corporate Auditor Junnosuke Ban retired due to expiration of term of office. 8. The positions and areas of responsibility of the below-mentioned six (6) Directors were changed as follows on April 1, 2015. Name Position and Areas of Responsibility Assistant to the President (Responsible for Production Representative Director, Hisao Matsuwake Engineering Dept.), and General Manager of Procurement Executive Vice-President Headquarters

Masayuki Morikata Managing Director General Manager of Corporate Planning Headquarters

Koji Abo Managing Director General Manager of General Administration Headquarters

Responsible for special assignments (Environment Business Toru Yoshioka Managing Director Headquarters (excluding Water Treatment Business Unit) and Sales of Infrastructure Business Headquarters)

Toru Shimizu Managing Director General Manager of Technology Development Headquarters

Wataru Kobashi Managing Director General Manager of Machinery Business Headquarters

‐30‐ (2) Total Amount of Remuneration, etc. of Directors and Corporate Auditors for the Current Business Year Remuneration of Directors consists of fixed remuneration and corporate performance-based bonus calculated on the basis of given indicators, and following a resolution passed by the Board of Directors, is paid within the remuneration limit determined by a resolution of the General Meeting of Shareholders. From the perspective of assuring independence, remuneration of Corporate Auditors consists only of fixed remuneration, and, following consultations with Corporate Auditors, is paid within the remuneration limit determined by a resolution of the General Meeting of Shareholders. Note that, as of the conclusion of the 115th Ordinary General Meeting of Shareholders held on June 22, 2012, the Company has abolished its retirement benefits system for Directors and Corporate Auditors. Total Amount of Classification Number of Recipients Remuneration, etc. (Millions of yen) Directors 10 384 (of which, Outside Directors) (1) (9) Corporate Auditors 5 75 (of which, Outside Corporate Auditors) (3) (13) Total 15 459 (of which, outside officers) (4) (22) (Notes) 1. By a resolution of the General Meeting of Shareholders, the upper limits on remuneration for Directors and Corporate Auditors are set at 550 million yen on a yearly basis for Directors (excluding salaries for concurrent service as employees) and 100 million yen on a yearly basis for Corporate Auditors. None of the above-mentioned Directors undertake concurrent service as employees. 2. As of March 31, 2015, the Company has 10 Directors (of which one (1) is an Outside Director) and 4 Corporate Auditors (of which two (2) are Outside Corporate Auditors). The difference from the number of recipients noted above is due to the latter’s inclusion of one (1) Outside Corporate Auditor who retired from his post at the conclusion of the 117th Ordinary General Meeting of Shareholders held on June 24, 2014.

‐31‐ (3) Matters Concerning Outside Directors and Outside Corporate Auditors 1) Concurrent positions as executive officers and outside officers for other corporations, etc. served by Outside Directors and Outside Corporate Auditors Classification Name Significant Concurrent Positions President and Representative Director, Outside Corporate The Kansai Electric Power Co., Inc. Makoto Yagi Auditor Chairman, The Federation of Electric Power Companies of Japan. (Note) While a sales transaction relationship exists between the Company and The Kansai Electric Power Co., Inc. (KEPCO), the value of the said transactions is very small relative to the scales of business of each company. Sales to KEPCO by the Company as a percentage of the Company’s overall sales, and the value of purchasing from KEPCO by the Company as a percentage of the Company’s overall cost of sales, were each less than 1% in the fiscal year 2014. There is no special relationship between the other companies where the concurrent positions are held and the Company.

2) Main activities during the current business year Classification Name Main Activities Mr. Ito attended all 15 meetings of the Board of Directors held during the current business year, and based on his experience and knowledge concerning corporate Outside Chiaki Ito management, made statements to ensure the improvement Director of the Group’s corporate value and the validity and appropriateness of the Company’s decision-making and business execution. Mr. Yagi attended 14 of the 15 meetings of the Board of Directors and 10 of the 11 meetings of the Board of Corporate Auditors held during the current business year, Makoto and based on his experience and knowledge concerning Yagi corporate management, made statements to ensure the legality and appropriateness of the Company’s decision- Outside making and business execution. Corporate Mr. Takashima attended all 12 meetings of the Board of Auditors Directors and all 8 meetings of the Board of Corporate Auditors held following his appointment on June 24, 2014, Kenichi and based on his experience and knowledge concerning Takashima corporate management, made statements to ensure the legality and appropriateness of the Company’s decision- making and business execution.

3) Outline of agreements for limitation of liabilities The Company has entered into an agreement with each of one (1) Outside Director and two (2) Outside Corporate Auditors, which limits the maximum amount of their liabilities for damages stipulated in Article 423, Paragraph 1 of the Companies Act to the minimum amount stipulated by laws and regulations.

‐32‐ V. Status of Accounting Auditor

(1) Name of Accounting Auditor KPMG AZSA LLC

(2) Amount of Remuneration, etc. of Accounting Auditor for the Current Business Year (Millions of yen) Category Amount of Remunerations, etc. Amount of remuneration, etc. payable by the Company 81 Total amount of cash and other financial benefits payable 198 by the Company and its subsidiaries (Notes) 1. In the audit agreement between the Company and the Accounting Auditor, no differentiation is made between remuneration on the basis of the Companies Act and remuneration on the basis of the Financial Instruments and Exchange Act, and it is not possible to make a substantial differentiation between the two. As a consequence, the amount of remuneration, etc. for services as Accounting Auditor of the Company provided in the table above is the total of the two. 2. Of the Company’s significant subsidiaries, the auditing of Hitachi Zosen Inova AG and NAC International Inc. is performed by audit corporations other than the Accounting Auditor of the Company (including those with equivalent status overseas).

(3) Non-audit Services The Company outsources work (Non-audit Services), including financial due diligence that is work other than that provided for in Article 2, Paragraph 1 of the Certified Public Accountants Act, to the Accounting Auditor and pays for these services.

(4) Policy for Determining Dismissal or Non-reappointment of Accounting Auditor After taking into consideration such matters as the execution of duties of the Accounting Auditor and the number of years it has been performing audits, the Board of Corporate Auditors shall, if it deems necessary, determine details of a proposal for dismissal or non- reappointment of the Accounting Auditor to be submitted to the General Meeting of Shareholders. If it is deemed that the Accounting Auditor falls within the grounds of each item of Article 340, Paragraph 1 of the Companies Act and that no improvement in the situation is expected, the Board of Corporate Auditors shall dismiss the Accounting Auditor based on the agreement of all of the Corporate Auditors.

(Note) With the enforcement of the Act for Partial Revision of the Companies Act (Act No. 90 of 2014) effective May 1, 2015, the Company has changed the decision-making body for proposals for dismissal or non-reappointment of the Accounting Auditor from the Board of Directors to the Board of Corporate Auditors.

‐33‐ VI. Matters Concerning the Development of Systems to Ensure Appropriateness of Operations The following summarizes the contents of the resolutions of the Company’s Board of Directors concerning the development of systems to ensure that the execution of duties by Directors is in compliance with laws and regulations and the Articles of Incorporation and other systems necessary to ensure the appropriateness of operations.

(1) Systems to Ensure that the Execution of Duties by Directors and Employees of the Company and Group Companies Complies with the Laws and Regulations and the Articles of Incorporation 1) The Company shall formulate the Charter of Ethical Behavior with which all Directors, Corporate Auditors, and employees must comply, and shall make this charter known to all Directors, Corporate Auditors, and employees. In addition, the top management shall ceaselessly and clearly demonstrate the spirit of such charter to the Directors, Corporate Auditors, and employees, thus ensuring that compliance with laws and regulations and corporate ethics forms the basis of the Company’s existence and the premise of all corporate activities. 2) The Company shall establish the Compliance Committee, with a Representative Director of the Company as Chairperson. This committee shall continuously implement measures with respect to compliance and shall make reports on its activities to the Board of Directors of the Company. 3) The Company shall work to prevent violations of laws and regulations, discover such violations at an early stage and deal with them promptly and effectively by establishing a whistle-blowing system that enables the opinions of Directors, Corporate Auditors, and employees regarding compliance to be reflected in company management. 4) The Company shall have all Directors, Corporate Auditors, and employees of the Company enter into covenants regarding compliance with laws and regulations and corporate ethics and develop disciplinary measures to be taken against violators and those who are aware of violations but conceal them. 5) Rules on the management of financial data and other important facts about the operations of the Company and the Group shall be formulated, and such facts shall be disclosed in a timely and appropriate manner. 6) To ensure the reliability of its financial reporting on the basis of the Financial Instruments and Exchange Act, the Company shall establish a department dedicated to this purpose, and shall regularly evaluate the development and management of financial reporting through a system of cooperation among departments of the Company and work to make improvements accordingly. 7) The department of the Company in charge of internal auditing shall perform audits of compliance and shall report to the Board of Directors. 8) The Charter of Ethical Behavior shall be made known to Group companies, which shall work to develop structures for compliance with laws and regulations and corporate ethics in accordance with the circumstances of each company with support from the Company. Furthermore, the Company’s whistle-blowing system shall be made available for use by the Directors, Corporate Auditors, and employees of Group companies. 9) Internal auditing performed by the department of the Company in charge of internal auditing shall also be applicable to Group companies, and the Company’s rules regarding internal auditing shall apply mutatis mutandis to the guidelines for such auditing. 10) The Company shall determinedly eliminate and block anti-social forces, and the department in charge of general affairs shall construct and develop a system for this purpose in cooperation with external specialist bodies such as law enforcement.

‐34‐ (2) Systems to Retain and Manage Information Concerning the Directors’ Execution of Duties 1) Minutes of meetings of the Board of Directors and other management bodies holding meetings shall be prepared, retained, and managed appropriately by the administrative offices of each management body in accordance with laws and regulations and internal rules. 2) Records of information concerning decision making and execution of duties by the Directors shall be retained and managed appropriately in accordance with the rules on the management of documents or electromagnetic records stipulated by the Company. 3) Rules regarding the retention and management of company secrets, significant matters that are not publicly disclosed, and personal information shall be formulated, and the relevant information shall be managed with due care.

(3) Rules and Other Organizational Structures of the Company and Group Companies Concerning Management of Risk of Loss 1) Risks that may occur in the course of business operations shall be evaluated and monitored continuously. Risks with the potential to have a substantial impact on the financial position and business results shall be reported to the Board of Directors of the Company. 2) To prevent and eliminate risks related to earnings from individual products, appropriate risk management shall be carried out through deliberations to identify and evaluate risks and formulation of avoidance measures at the Risk Examination Committee. 3) To promptly and appropriately deal with such a serious risk that has emerged, , systems shall be developed in advance including the formulation of rules on such matters as means of transmitting information, methods of handling such events, and structures for their management. 4) The department of the Company in charge of internal auditing shall monitor risk management statuses at each department of the Company and each Group company. It shall also perform audits of the effectiveness and adequacy of risk management and make reports on this to the Board of Directors of the Company.

(4) Systems to Ensure that Directors of the Company and Group Companies Execute their Duties in an Efficient Manner 1) Meetings of the Board of Directors shall in principle be held once a month and extraordinary meetings of the Board of Directors shall be held as necessary to determine important matters and to supervise the execution of business. For meetings of the Board of Directors to be operated appropriately and efficiently, rules on the matters to be decided upon at the meetings and standards for submitting such matters for deliberation and reporting on them shall be formulated. 2) The Company shall establish the Management Strategy Committee comprising Directors of the Company in charge of business operations and other key management personnel, at which sufficient advance deliberations on basic strategies and important matters shall be carried out, thus putting in place a system enabling accurate managerial judgment. 3) The Board of Directors of the Company shall determine the Group’s medium-term management plans and plans for each year. Based on such plans, all Directors of the Company shall develop detailed measures and systems for efficient business execution, and make progress reports on these measures to the Board of Directors of the Company. 4) The Company shall establish the Management Plan Follow-Up Committee with the President of the Company as Chairperson. This committee shall monitor and inspect progress made with the measures and work towards the early discovery and prevention of problems, thus ensuring efficient business operations. 5) To efficiently achieve management targets, the Company shall formulate rules on organizational structure, division of duties, and decision-making authority, and clarify duties and authorities. The Company shall also formulate rules on the operation of

‐35‐ information and communication systems and the protection of information assets, and shall utilize such rules effectively. 6) The department of the Company in charge of internal auditing shall perform audits to determine whether business operations at each department of the Company and each Group company are carried out efficiently in accordance with laws and regulations, the Articles of Incorporation and other internal rules, and shall report to the Board of Directors on this matter.

(5) Systems for Reporting to the Company on the Matters regarding Execution of Duties by Directors of Group Companies To carry out deliberations on establishing internal control systems and sharing information on Group management policies and other matters, the Company shall regularly hold conferences attended by the Directors of the Company and the Presidents of all the Group companies. Group companies shall report any material events at the conferences.

(6) Other Systems to Ensure Appropriateness of Operations in the Group Consisting of the Company and the Group companies 1) Regarding the management of Group companies, the Company shall supervise and monitor the appropriateness of operations at Group companies, while also respecting their autonomy, by assigning Directors and Corporate Auditors of the Company to work at each Group company, thus working to strengthen governance and supervisory functions under Group management. 2) The Company shall establish a main control division in the Company to control and guide Group companies, thus advancing efficient Group management in accordance with the standards for Group control and management. The control division shall also provide support for the establishment of internal control systems at each Group company.

(7) Matters Concerning Employees who are Requested by Corporate Auditors to Assist in the Duties of Corporate Auditors and Matters Concerning Ensuring the Independence from Directors of Such Employees and the Effectiveness of Directions to Such Employees 1) The Company shall put in place the Assistant to the Corporate Auditors as a body to assist the Corporate Auditors of the Company in their duties. 2) Employees belonging to other departments shall not be precluded from serving concurrently as staff in the Assistant to the Corporate Auditors. However, if Corporate Auditors request the assignment of dedicated staff to the Assistant to the Corporate Auditors, this shall not be refused without rational grounds. 3) When performing duties in accordance with the directions of the Corporate Auditors, staff in the Assistant to the Corporate Auditors shall not be under the command of Directors or other business executives. 4) Personnel matters relating to staff in the Assistant to the Corporate Auditors shall be determined by the Directors after deliberations with the Corporate Auditors.

(8) Systems for Reporting to Corporate Auditors of the Company by Directors, Corporate Auditors, and Employees of the Company and Group Companies, Other Systems Concerning Reporting to Corporate Auditors, and Systems to Ensure that Persons who Report to Corporate Auditors Are not Treated Unfavorably as a Result of Making Such Report 1) If a Director of the Company discovers a matter with the potential to cause substantial harm to the Company and the Group, such Director shall report such matter to the Board of Corporate Auditors of the Company immediately. 2) To monitor important decision-making processes and the status of business execution, the Corporate Auditors of the Company shall be permitted to attend meetings of the Board of Directors and other important meetings of the Company, and shall be permitted to request explanations on such matters from Directors or employees. Furthermore, when

‐36‐ they are unable to attend such meetings due to circumstances, Corporate Auditors shall be permitted to receive explanations of the contents of such meetings, and inspect minutes and other related documents. 3) Corporate Auditors of the Company shall be permitted to inspect important documents related to business execution, and to request explanations of such matters from Directors or employees of the Company and Group companies as necessary. 4) Representative Directors of the Company shall regularly hold talks with Corporate Auditors of the Company, make reports to the Corporate Auditors of the Company regarding important matters with an impact on the Company and the Group, and exchange opinions with the Corporate Auditors on such matters. 5) It is prohibited for Directors, Corporate Auditors, and employees of the Company or Group Companies who report to Corporate Auditors of the Company to be treated unfavorably as a result of making such report.

(9) Matters Concerning the Policy Relating to Advance Payment of Expenses Accompanying Execution of Duties by the Corporate Auditors or Reimbursement thereof, or Other Treatments of Expenses or Liabilities Generated from Execution of those Relevant Duties When Corporate Auditors of the Company request advance payment of expenses and others on the basis of Article 388 of the Companies Act for executing their duties, those expenses or liabilities shall be processed immediately through deliberation within the department in charge, except as may be recognized as unnecessary for executing duties of the Corporate Auditor.

(10) Other Systems to Ensure that Corporate Auditors Effectively Perform Audits 1) The Directors of the Company shall cooperate with the Corporate Auditors of the Company to enable them to perform effective audits through cooperation with the Accounting Auditor, the department in charge of internal auditing, and the Corporate Auditors of Group companies. 2) The Directors of the Company shall have an awareness and understanding of the importance and usefulness of auditing by the Corporate Auditors. They shall also inform employees of the rules relating to auditing operations and auditing standards and help to establish an environment in which the Corporate Auditors can perform their audits effectively. 3) The department of the Company in charge of internal auditing shall provide internal audit plans, internal audit reports and other necessary information it receives in the course of performing internal auditing to the Corporate Auditors.

(Note) The partial revision based on a resolution passed at a meeting of the Board of Directors held on April 24, 2015 are reflected in the above contents. In accordance with enforcement of the “The Act for Partial Revision of the Companies Act” (Act No.90 of 2014) and “Ministerial Ordinance for Partial Revision of the Ordinance for Enforcement of the Companies Act” (Ordinance of the Minister of Justice No.6 of 2015) effective May 1, 2015, The Group reviewed its systems to ensure the appropriateness of operations and systems regarding audits to reflect the current situation of the Group and changed their wordings to more specific and clear expressions in line with the revision of the laws and regulations.

[Reference] Monetary amounts and numbers of shares provided in this business report are presented with fractional units discarded. Percentages are rounded off to the nearest unit.

‐37‐ Consolidated Balance Sheets As of March 31, 2015

(Millions of yen) Assets 408,803 Current assets 239,388 Cash and time deposits 62,384 Notes and accounts receivable-trade 136,520 Marketable securities 1 Merchandise and finished goods 1,289 Work in progress 19,929 Raw materials and supplies 4,899 Deferred tax assets 5,658 Other current assets 10,424 Allowance for doubtful receivables (1,718) Noncurrent assets 169,367 Property, plant and equipment, net [125,337] Buildings and structures 32,397 Machinery, equipment and vehicles 20,418 Tools, furniture and fixtures 2,115 Land 66,504 Lease assets 889 Construction in progress 3,010 Intangible assets [10,596] Goodwill 5,701 Other intangible assets 4,895 Investments and other noncurrent assets [33,433] Investments in securities 24,488 Long-term loans receivable 47 Net defined benefit assets 541 Deferred tax assets 2,161 Other investments and noncurrent assets 7,209 Allowance for doubtful receivables (1,014) Deferred assets 46 Bond issue expenses 46 Total assets 408,803

‐38‐

(Millions of yen) Liabilities 291,272 Current liabilities 192,460 Notes and accounts payable-trade 41,767 Electronically recorded obligations 17,101 Short-term borrowings 28,984 Current portion of long-term debt 10,000 Accrued expenses 57,783 Accrued income taxes 1,660 Advances received on work in progress 14,926 Reserve for directors’ and corporate auditors’ bonuses 13 Reserve for product warranty 4,328 Reserve for losses on construction contracts 5,569 Other current liabilities 10,324 Noncurrent liabilities 98,811 Bonds payable 10,000 Long-term borrowings 69,242 Deferred tax liabilities 1,235 Net defined benefit liability 15,490 Directors’ and corporate auditors’ severance and retirement 384 benefits Asset retirement obligations 917 Other noncurrent liabilities 1,541 Net assets 117,530 Shareholders’ equity 107,696 Common stock 45,442 Capital surplus 9,575 Retained earnings 53,088 Treasury stock, at cost (410) Accumulated other comprehensive income 1,069 Net unrealized holding gains (losses) on securities 852 Net unrealized holding gains (losses) on hedging derivatives (844) Land revaluation difference (4) Foreign currency translation adjustments 4,266 Remeasurements of defined benefit plans (3,200) Minority interests in consolidated subsidiaries 8,764 Total liabilities and net assets 408,803

‐39‐ Consolidated Statements of Income For the business year ended March 31, 2015

(Millions of yen) Net sales 359,332 Cost of sales 302,494 Gross profit 56,837 Selling, general and administrative expenses 44,018 Operating income 12,818 Non-operating income Interest income 82 Dividend income 269 Other non-operating income 815 1,167 Non-operating expenses Interest expense 1,056 Equity in net loss of nonconsolidated subsidiaries and 909 affiliates Other non-operating expenses 4,452 6,418 Ordinary income 7,568 Extraordinary income Gain on bargain purchase 3,146 3,146 Extraordinary loss Impairment loss 1,336 1,336 Income before income taxes and minority interests 9,378 Income taxes-current 2,764 Income taxes-deferred 465 Income before minority interests 6,148

Minority interests in net income of consolidated 1,048 subsidiaries

Net income 5,100

‐40‐ Consolidated Statements of Changes in Net Assets For the business year ended March 31, 2015

(Millions of yen) Shareholders’ equity Common stock Capital surplus Retained earnings Treasury stock Total shareholders’ equity Balance at beginning of year 45,442 5,973 50,466 (1,994) 99,888 Cumulative effects of changes (690) (690) in accounting policies Restated balance 45,442 5,973 49,775 (1,994) 99,197 Changes of items during the period Cash dividends (1,564) (1,564) Increase by merger 3,602 1,990 5,592 Net income 5,100 5,100 Treasury stock disposed, net (0) 0 0 Treasury stock purchased, net (406) (406) Change arising from decrease in equity in (204) (204) affiliates Reversal of land revaluation difference (17) (17) Net changes of items other than shareholders’ equity Total changes of items during the period – 3,602 3,312 1,584 8,499 Balance at end of year 45,442 9,575 53,088 (410) 107,696

Accumulated other comprehensive income Net Net Remeasure- Total Subscrip- Minority unrealized unrealized Land Foreign ments of accumulated interests in Total net holding holding gains currency tion rights consolidated assets revaluation defined other to shares gains (losses) on difference translation benefit comprehen- subsidiaries (losses) on hedging adjustments plans sive income securities derivatives Balance at beginning of year 416 (775) (21) 2,504 (1,688) 434 0 17,241 117,564 Cumulative effects of changes in accounting (690) policies Restated balance 416 (775) (21) 2,504 (1,688) 434 0 17,241 116,874 Changes of items during the period Cash dividends (1,564) Increase by merger 5,592 Net income 5,100 Treasury stock disposed, net 0 Treasury stock purchased, net (406) Change arising from decrease in (204) equity in affiliates Reversal of land revaluation 17 17 – difference Net changes of items other than 436 (68) – 1,762 (1,512) 616 (0) (8,476) (7,860) shareholders’ equity Total changes of items during the period 436 (68) 17 1,762 (1,512) 634 (0) (8,476) 656 Balance at end of year 852 (844) (4) 4,266 (3,200) 1,069 – 8,764 117,530

[Reference] Monetary amounts in the Consolidated Financial Statements are presented with amounts of less than 1 million yen discarded.

‐41‐ Non-consolidated Balance Sheets As of March 31, 2015

(Millions of yen) Assets 314,616 Current assets 155,365 Cash and time deposits 28,782 Trade notes receivable 3,529 Trade accounts receivable 89,221 Work in progress 15,046 Raw materials and supplies 3,125 Advance payments 2,033 Prepaid expenses 374 Deferred tax assets 2,898 Other accounts receivable 4,672 Advances paid 2,170 Short-term loans receivable 2,523 Other current assets 2,826 Allowance for doubtful receivables (1,840) Noncurrent assets 159,204 Property, plant and equipment, net [104,057] Buildings 19,469 Structures 6,209 Machinery and equipment 15,610 Vehicles 45 Tools, furniture and fixtures 899 Land 58,302 Lease assets 549 Construction in progress 2,969 Intangible assets [1,148] Patent rights 101 Software 754 Rights of using facilities 105 Other intangible assets 186 Investments and other noncurrent assets [53,998] Investments in securities 14,905 Stocks of subsidiaries and affiliates 32,896 Investments in capital of subsidiaries and affiliates 3,929 Long-term loans receivable 1,096 Noncurrent prepaid expenses 501 Deferred tax assets 142 Other investments and noncurrent assets 1,482 Allowance for doubtful receivables (954) Deferred assets 46 Bond issue expenses 46 Total assets 314,616

‐42‐

(Millions of yen) Liabilities 228,786 Current liabilities 142,278 Trade notes payable 6,124 Electronically recorded obligations 13,804 Trade accounts payable 25,587 Current portion of long-term debt 10,000 Short-term borrowings 24,161 Lease obligations 161 Other accounts payable 923 Accrued expenses 31,602 Accrued income taxes 580 Advances received on work in progress 11,696 Deposits received 10,300 Reserve for product warranty 2,216 Reserve for losses on construction contracts 3,650 Other current liabilities 1,470 Noncurrent liabilities 86,507 Bonds payable 10,000 Long-term borrowings 67,779 Lease obligations 402 Employees’ severance and retirement benefits 6,945 Asset retirement obligations 793 Other noncurrent liabilities 585 Net assets 85,830 Shareholders’ equity 86,139 Common stock 45,442 Capital surplus 9,549 Additional paid-in capital 5,946 Other capital surplus 3,602 Retained earnings 31,559 Legal retained earnings 789 Other retained earnings 30,769 Retained earnings brought forward 30,769 Treasury stock, at cost (410) Valuation and translation adjustments (309) Net unrealized holding gains (losses) on securities 291 Net unrealized holding gains (losses) on hedging derivatives (280) Land revaluation difference (320) Total liabilities and net assets 314,616

‐43‐ Non-consolidated Statements of Income For the business year ended March 31, 2015

(Millions of yen) Net sales 196,204 Cost of sales 169,569 Gross profit 26,635 Selling, general and administrative expenses 22,066 Operating income 4,569 Non-operating income Interest income 58 Dividend income 1,764 Other non-operating income 999 2,822 Non-operating expenses Interest expense 1,139 Other non-operating expenses 2,486 3,626 Ordinary income 3,766 Extraordinary income Gain on extinguishing tie-in shares 3,013 Gain on bargain purchase 1,335 4,348 Extraordinary loss Impairment loss 1,336 Loss on valuation of investments in capital of 1,144 2,480 subsidiaries and affiliates Income before income taxes 5,633 Income taxes-current (65) Income taxes-deferred 391 Net income 5,308

‐44‐ Non-consolidated Statements of Changes in Net Assets For the business year ended March 31, 2015

(Millions of yen) Shareholders’ equity Capital surplus Retained earnings Other retained Total Common earnings Treasury Additional Other Total Legal Total shareholders’ stock stock paid-in capital capital retained Retained retained equity capital surplus surplus earnings earnings earnings brought forward Balance at beginning of year 45,442 5,946 0 5,947 633 27,937 28,570 (1,994) 77,965 Cumulative effects of changes in (755) (755) (755) accounting policies Restated balance 45,442 5,946 0 5,947 633 27,181 27,815 (1,994) 77,209 Changes of items during the period Cash dividends (1,564) (1,564) (1,564) Reserve for dividends payment 156 (156) – – Increase by merger 3,602 3,602 1,990 5,592 Net income 5,308 5,308 5,308 Treasury stock disposed, net (0) (0) 0 0 Treasury stock purchased, net (406) (406) Net changes of items other than

shareholders’ equity Total changes of items during the period – – 3,602 3,602 156 3,587 3,744 1,584 8,930 Balance at end of year 45,442 5,946 3,602 9,549 789 30,769 31,559 (410) 86,139

Valuation and translation adjustments Net unrealized Net unrealized Total valuation holding gains Land revaluation Total net assets holding gains and translation (losses) on hedging difference (losses) on securities adjustments derivatives Balance at beginning of year 80 (388) (320) (628) 77,336 Cumulative effects of changes in (755) accounting policies Restated balance 80 (388) (320) (628) 76,581 Changes of items during the period Cash dividends (1,564) Reserve for dividends payment – Increase by merger 5,592 Net income 5,308 Treasury stock disposed, net 0 Treasury stock purchased, net (406) Net changes of items other than 210 107 – 318 318 shareholders’ equity Total changes of items during the period 210 107 – 318 9,248 Balance at end of year 291 (280) (320) (309) 85,830

[Reference] Monetary amounts in the Non-consolidated Financial Statements are presented with amounts of less than 1 million yen discarded.

‐45‐ Independent Auditor’s Report

May 15, 2015

The Board of Directors Hitachi Zosen Corporation

KPMG AZSA LLC

Tohei Nitta (Seal) Designated Limited Liability Partner Engagement Partner Certified Public Accountant

Yukihisa Tatsumi (Seal) Designated Limited Liability Partner Engagement Partner Certified Public Accountant

Takuya Obata (Seal) Designated Limited Liability Partner Engagement Partner Certified Public Accountant

We have audited the consolidated financial statements, comprising the consolidated balance sheet, the consolidated statement of income, the consolidated statement of changes in net assets and the related notes of Hitachi Zosen Corporation as at March 31, 2015 and for the business year from April 1, 2014 to March 31, 2015 in accordance with Article 444, paragraph 4 of the Companies Act.

Management’s Responsibility for the Consolidated Financial Statements Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with accounting principles generally accepted in Japan, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatements, whether due to fraud or error.

Auditor’s Responsibility Our responsibility is to express an opinion on the consolidated financial statements based on our audit as independent auditor. We conducted our audit in accordance with auditing standards generally accepted in Japan. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on our judgement, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the entity’s preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, while the objective of the financial statement audit is not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

‐46‐

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position and the results of operations of Hitachi Zosen Corporation and its consolidated subsidiaries for the period, for which the consolidated financial statements were prepared, in accordance with accounting principles generally accepted in Japan.

Other Matter Our firm and engagement partners have no interest in the Company which should be disclosed pursuant to the provisions of the Certified Public Accountants Law of Japan.

Notes to the Reader of Independent Auditor’s Report: The Independent Auditor’s Report herein is the English translation of the Independent Auditor’s Report as required by the Companies Act.

‐47‐ Independent Auditor’s Report

May 15, 2015

The Board of Directors Hitachi Zosen Corporation

KPMG AZSA LLC

Tohei Nitta (Seal) Designated Limited Liability Partner Engagement Partner Certified Public Accountant

Yukihisa Tatsumi (Seal) Designated Limited Liability Partner Engagement Partner Certified Public Accountant

Takuya Obata (Seal) Designated Limited Liability Partner Engagement Partner Certified Public Accountant

We have audited the non-consolidated financial statements, comprising the non-consolidated balance sheet, the non-consolidated statement of income, the non-consolidated statement of changes in net assets and the related notes, and the supplementary schedules of Hitachi Zosen Corporation as at March 31, 2015 and for the 118th business year from April 1, 2014 to March 31, 2015 in accordance with Article 436, paragraph 2, item 1 of the Companies Act.

Management’s Responsibility for the Non-consolidated Financial Statements and Others Management is responsible for the preparation and fair presentation of the non-consolidated financial statements and the supplementary schedules in accordance with accounting principles generally accepted in Japan, and for such internal control as management determines is necessary to enable the preparation of non-consolidated financial statements and the supplementary schedules that are free from material misstatements, whether due to fraud or error.

Auditor’s Responsibility Our responsibility is to express an opinion on the non-consolidated financial statements and the supplementary schedules based on our audit as independent auditor. We conducted our audit in accordance with auditing standards generally accepted in Japan. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the non- consolidated financial statements and the supplementary schedules are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the non-consolidated financial statements and the supplementary schedules. The procedures selected depend on our judgement, including the assessment of the risks of material misstatement of the non-consolidated financial statements and the supplementary schedules, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the entity’s preparation and fair presentation of the non-consolidated financial statements and the supplementary schedules in order to design audit procedures that are appropriate in the circumstances, while the objective of the financial statement audit is not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit

‐48‐ also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the non-consolidated financial statements and the supplementary schedules.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion In our opinion, the non-consolidated financial statements and the supplementary schedules referred to above present fairly, in all material respects, the financial position and the results of operations of Hitachi Zosen Corporation for the period, for which the non-consolidated financial statements and the supplementary schedules were prepared, in accordance with accounting principles generally accepted in Japan.

Other Matter Our firm and engagement partners have no interest in the Company which should be disclosed pursuant to the provisions of the Certified Public Accountants Law of Japan.

Notes to the Reader of Independent Auditor’s Report: The Independent Auditor’s Report herein is the English translation of the Independent Auditor’s Report as required by the Companies Act.

‐49‐ Audit Report of the Board of Corporate Auditors

Audit Report

With respect to the Directors’ performance of their duties during the 118th business year (from April 1, 2014 to March 31, 2015), the Board of Corporate Auditors has prepared this audit report as the consensus of all its members after deliberations based on the audit reports prepared by each Corporate Auditor, and hereby reports as follows:

1. Method and Contents of Audit by Corporate Auditors and the Board of Corporate Auditors (1) At the meeting of the Board of Corporate Auditors held on August 1, 2014, the Board made a resolution determining the audit standards of the Corporate Auditors, their audit policies and their audit plan, and each Corporate Auditor performed an audit based on such resolution. (2) Each Corporate Auditor took steps to facilitate communication with Directors, the department in charge of internal auditing and other employees, strove to establish an environment for information collection and auditing, and attended meetings of the Board of Directors, monthly meetings on important management matters and other important meetings. When attending meetings of the Board of Directors, the Corporate Auditors closely monitored the progress and results of deliberations regarding proposals for deliberation and reported matters. At such meetings, where necessary, the Corporate Auditors asked supplementary questions and stated opinions. (3) Each Corporate Auditor received reports on a regular basis from the Directors and employees, etc., requested explanations as necessary, and provided opinions with respect to matters mentioned in the business report. Such matters consist of the contents of the Board of Directors’ resolutions regarding the development and maintenance of the system to ensure that the Directors’ performance of their duties complied with applicable laws and regulations and the Articles of Incorporation of the Company and other systems necessary for ensuring the appropriateness of the corporate affairs of a joint stock company (kabushiki kaisha), and the systems developed and maintained based on such resolutions (internal control systems). Regarding internal control over financial reporting, each Corporate Auditor received reports from Directors and others as well as KPMG AZSA LLC concerning the evaluation of said internal control and the audit status, and requested explanations as necessary. (4) With respect to the subsidiaries, each Corporate Auditor endeavored to facilitate mutual understanding and information exchange with the Directors and Corporate Auditors, etc. of each subsidiary, received from subsidiaries reports on their respective businesses periodically, and investigated as necessary. (5) Each Corporate Auditor discussed the audit plan with the department in charge of internal auditing in advance and received explanations on the results of audits at the time of each audit’s completion. Regarding matters mentioned in audits, each Corporate Auditor confirmed that they had been rectified in a timely manner. (6) With respect to accounting auditing, each Corporate Auditor received an explanation of the audit plan from the Accounting Auditor and agreed it in advance, and received a report on the audit results. In addition, each Corporate Auditor monitored and verified whether the Accounting Auditor maintained its independence and properly conducted its audit, received a report from the Accounting Auditor on the status of its performance of duties, and requested explanations as necessary. Each Corporate Auditor was notified by the Accounting Auditor that it had established a system to ensure that the performance of the duties of the Accounting Auditor was properly conducted in accordance with the

‐50‐ Quality Control Standards for Audits, and requested explanations as necessary. (7) At a meeting of the Board of Corporate Auditors, each Corporate Auditor informed the other Corporate Auditors of their audit results, exchanged opinions, and shared information. Regarding the results of their investigations or audit activities, each Corporate Auditor provided opinions to Directors and those in charge of various departments as necessary. (8) Based on the above-described methods, each Corporate Auditor examined the business report and the supplementary schedule thereto, non-consolidated financial statements (non-consolidated balance sheet, non-consolidated statement of income, non-consolidated statement of changes in net assets, and notes to non-consolidated financial statements) and the supplementary schedule thereto, as well as the consolidated financial statements (consolidated balance sheet, consolidated statement of income, consolidated statement of changes in net assets, and notes to consolidated financial statements), for the business year under consideration.

2. Results of Audits (1) Results of Audit of Business Report, etc. (i) We acknowledge that the business report and the supplementary schedule thereto fairly present the status of the Company in conformity with the applicable laws and regulations and the Articles of Incorporation of the Company. (ii) We acknowledge that no misconduct or material fact constituting a violation of any law or regulation or the Articles of Incorporation of the Company was found with respect to the Directors’ performance of their duties. (iii) We acknowledge that the Board of Directors’ resolutions with respect to the internal control systems are appropriate. We did not find any matter to be mentioned with respect to the contents in the business report and Directors’ performance of their duties concerning the internal control systems, including internal control over financial reporting.

(2) Results of Audit of Non-consolidated Financial Statements and Their Supplementary Schedules We acknowledge that the methods and results of audit performed by the Accounting Auditor KPMG AZSA LLC are appropriate.

(3) Results of Audit of Consolidated Financial Statements We acknowledge that the methods and results of audit performed by the Accounting Auditor KPMG AZSA LLC are appropriate.

May 20, 2015

The Board of Corporate Auditors, Hitachi Zosen Corporation Full-time Corporate Auditor Masamichi Tokuhira (Seal) Full-time Corporate Auditor Motohiro Fujii (Seal) Outside Corporate Auditor Makoto Yagi (Seal) Outside Corporate Auditor Kenichi Takashima (Seal)

‐51‐