Notice on Making NICHIZO TECH INC. a Wholly Owned Subsidiary Through Share Exchange

					                                                                                            November 28, 2013
                                                                               Hitachi Zosen Corporation

Notice on Making NICHIZO TECH INC. a Wholly Owned Subsidiary Through Share

Hitachi Zosen Corporation (the “Company”) resolved to make NICHIZO TECH INC. (“NICHIZO TECH”) a
wholly owned subsidiary through a share exchange at a meeting of the Board of Directors held today, and
concluded the share exchange agreement with NICHIZO TECH.

1. Purpose of making NICHIZO TECH a wholly owned subsidiary through share exchange
       NICHIZO TECH, established in 1975, merged with four maintenance companies and changed to its
    present company name in 1986. After that, NICHIZO TECH expanded its business operations and now
    has comprehensive operations in three technical fields. These are “Technical Consulting,” which consists
    of inspecting, measuring and examining various types of structures and others; “Engineering,” which
    covers industrial plant equipment, production equipment, parking space guidance and control systems
    and others; and “Maintenance,” which includes maintenance, inspection and operation of machines and
    equipment. NICHIZO TECH is the main subsidiary of the Hitachi Zosen Group (the “Group”) in the
    business areas of industrial plants and social infrastructure and disaster prevention.
       The Company and NICHIZO TECH already have shared a management strategy as members of the
    Group, and use the collective strength of the Group in operations. However, looking at the business
    environment surrounding the Group, including NICHIZO TECH, competition for orders is severe in both
    the public and private sectors, and overall conditions are expected to remain difficult. Specifically, public
    sector demand is being affected by a decline in total order volume and an increase in companies entering
    this market, while in the area of private sector demand, although the export environment is picking up,
    there have been no signs of substantial improvement in capital investment in Japan. In these
    circumstances, the Company decided to make NICHIZO TECH a wholly owned subsidiary in order to
    fully utilize NICHIZO TECH’s business characteristics and the advantages of its operations and
    structure, and also strengthen cooperation between both companies. Making NICHIZO TECH a wholly
    owned subsidiary will enable the Company to speed up efforts to stimulate further growth in the Group’s
    social infrastructure and disaster prevention operations, and also strengthen its solution businesses and
    expand its overseas operations. The Company believes that these initiatives will be extremely beneficial
    in enhancing the overall corporate value of the Group.
       Specifically, the Company expects that NICHIZO TECH’s inspecting, measuring and examining
    technologies and related information will strengthen the Company’s proposal capability regarding work
    to rectify the deterioration of social infrastructure such as bridges and hydraulic gates, which has become
    a pressing issue in Japan in recent years. NICHIZO TECH is also expected to meet customer needs in
    areas including renewing, modifying, and maintaining plants supplied by the Company and to expand
    NICHIZO TECH’s overseas business by taking a more aggressive approach to major customers who
    would like to advance their business overseas. Furthermore, strengthening and enhancement of Group
    management is expected to lead to such synergies as enabling the effective use of qualified personnel,
    technical experts and other human resources, and speeding up the commercialization of development
    themes and others.
2. Method of share exchange
     Through the share exchange, the Company will become the wholly owning parent company in share
   exchange and NICHIZO TECH will become the wholly owned subsidiary in share exchange. The
   Company intends to carry out the share exchange without obtaining approval at its general meeting of
   shareholders through a simplified share exchange procedure pursuant to the provisions of Article 796,
   paragraph 3 of the Companies Act. NICHIZO TECH intends to carry out the share exchange after
   obtaining approval for the share exchange agreement at an extraordinary general meeting of
   shareholders scheduled for February 14, 2014.

3. Content of allotments related to share exchange
                                                    The Company                             NICHIZO TECH
                                                 (wholly owning parent                 (wholly owned subsidiary in
                                               company in share exchange)                    share exchange)
          Content of allotments
                                                               1                                      0.82
        related to share exchange
            Number of shares to be
            delivered through share           Common stock of the Company: 2,063 thousand shares (tentative)
    Notes: 1. Ratio of share allotments
                 0.82 shares of the Company’s common stock will be delivered for each share of NICHIZO TECH’s
                 common stock. Common stock of NICHIZO TECH held by the Company will not be included in the share
             2. Number of shares to be delivered through share exchange
                 In the share exchange, the Company will allot and deliver to shareholders of NICHIZO TECH (excluding
                 the Company) immediately prior to its acquisition of all issued shares of NICHIZO TECH (excluding
                 common stock of NICHIZO TECH held by the Company; and provided that, if the share exchange
                 effective date occurs on the effective date of a planned merger with Daiki Ataka Engineering Co.,
                 Ltd., this shall apply to the shareholders at a time after the point of time the merger will become
                 effective) 2,063 thousand shares (tentative) of the Company’s common stock. NICHIZO TECH will
                 cancel all of the treasury stock it holds immediately prior to the share exchange.

4. Schedule
      Date of resolutions of boards of directors for conclusion            November 28, 2013
      of share exchange agreement (both companies)
      Date of conclusion of share exchange agreement                       November 28, 2013
      (both companies)
      Date of extraordinary general meeting of shareholders                February 14, 2014 (tentative)
      Final trading date (NICHIZO TECH)                                    March 26, 2014 (tentative)
      Delisting date (NICHIZO TECH)                                        March 27, 2014 (tentative)
      Effective date of share exchange                                     April 1, 2014 (tentative)
    Note:     If any changes become necessary in order to advance the share exchange procedure or for any other
              reason, such changes shall be made on the basis of discussions and agreement between both companies.
5. Overview of NICHIZO TECH (as of March 31, 2013)
      (1)    Name                     NICHIZO TECH INC.
      (2)    Location                 15-26, Tsurumachi 2-chome, Taisho-ku, Osaka
             Title and name of        President
             representative           Michio Hishikawa
                                      Inspecting, measuring and examining various types of structures
                                      and other items; engineering of machines, equipment, industrial
      (4)    Business activities
                                      plants and others; and technical services from equipment
                                      maintenance and inspection to operation, among others
      (5)    Paid-in capital          1,242 million yen
      (6)    Date of establishment    January 21, 1975
             Number of shares         6,600,000 shares
      (8)    Fiscal year-end          March 31
      (9)    Number of employees      502 (consolidated)
                                      The Company, Japan Marine United Corporation, THE GENERAL
                                      ENVIRONMENTAL TECHNOS Co., LTD., YASKAWA Electric
      (10)   Main customers
                                      Corporation, HONDA MOTOR CO., LTD., Bridgestone Plant
                                      Engineering Co., Ltd., Maizuru City
      (11)   Relationships with the Company
                                      The Company owns 4,085,850 shares (including indirectly held
     Capital relationships            shares) of NICHIZO TECH, equivalent to 61.9% of that company’s
                                      total issued shares (6,600,000 shares).
                                      One employee of the Company is an Outside Director of NICHIZO
     Personal relationships           TECH and one employee of the Company is an Outside Corporate
                                      Auditor of NICHIZO TECH.
                                      NICHIZO TECH undertakes outsourced inspection work for the
                                      Company and carries out contract work for the Company in areas
     Business relationships           including the design, production and installation of industrial plant
                                      devices; engineering; and the construction and maintenance of
                                      factory equipment.
     Current status as a related      NICHIZO TECH is a consolidated subsidiary of the Company, and
     party                            the Company and NICHIZO TECH are related parties.
      (12)   Operating results and financial position of last three years
                  Fiscal year ended      March 31, 2011          March 31, 2012         March 31, 2013
     Consolidated net assets                          5,577                  5,602                    5,748
     Consolidated total assets                       10,174                 10,619                  10,038
     Consolidated net assets per
                                                     845.43                 849.15                  871.43
     share (yen)
     Consolidated net sales                          11,382                 11,184                    9,965
     Consolidated operating income                        517                  288                     399
     Consolidated ordinary income                         533                  346                     414
     Consolidated net income                              246                  124                     235
     Consolidated net income per
                                                      37.30                  18.89                    35.66
     share (yen)
     Dividends per share (yen)                        15.00                  15.00                    15.00
                                                                 (Millions of yen, unless otherwise stated)

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