NOTICE OF THE 93RD ANNUAL GENERAL MEETING OF SHAREHOLDERS

Transcription

1 (Note) This is a translation of the official Japanese original for reference purposes only. In the event of any discrepancy between this translation and the official Japanese original, the Japanese original shall prevail. Please note that differences between this translation and those in the previous years may not necessarily mean that there have been changes in the official Japanese original, since the translation differences may stem only from a more accurate translation. To the Shareholders: [Security Code: 7011] June 1, 2018 Shunichi Miyanaga, President and CEO Mitsubishi Heavy Industries, Ltd. 16-5, Konan 2-chome, Minato-ku, Tokyo NOTICE OF THE 93RD ANNUAL GENERAL MEETING OF SHAREHOLDERS You are cordially invited to attend the 93rd Annual General Meeting of Shareholders of Mitsubishi Heavy Industries, Ltd. ( MHI ) to be held as described below. In the event that you are unable to attend, MHI kindly asks that you exercise your voting rights in writing or via the Internet (as explained in the Instructions for voting, on page 3 4). Please examine the Reference Materials Relating to the General Meeting of Shareholders (pages 5 22), and exercise your voting rights by 5:30 p.m. on Wednesday, June 20, 2018 (Japan time). 1. Date and Time: Thursday, June 21, 2018 at 10:00 a.m. (Japan time) 2. Place: Grand Prince Hotel New Takanawa, Hiten 13-1, Takanawa 3-chome, Minato-ku, Tokyo 3. Purposes: To report on the following items: Item No.1: Business Report, Consolidated Financial Statements for the 2017 fiscal year (from April 1, 2017 to March 31, 2018), and Audit Report on the Consolidated Financial Statements by the Financial Auditor and Audit and Supervisory Committee. Item No.2: Non-consolidated Financial Statements for the 2017 fiscal year (from April 1, 2017 to March 31, 2018). To consider and resolve the following proposals: Proposal No. 1: Appropriation of Surplus 1

2 Proposal No. 2: Partial Amendments to the Articles of Incorporation Proposal No. 3: Election of 6 Directors (excluding Directors who are serving as Audit and Supervisory Committee Members) Proposal No. 4: Election of 1 Director who is serving as an Audit and Supervisory Committee Member (End) Information concerning the following items is not included in the Attachment to the Notice of 93rd Annual General Meeting of Shareholders, but is posted on MHI s website on the Internet (at the URL shown below) pursuant to the laws of Japan and the Article 16 of MHI s Articles of Incorporation. (i) Stock Acquisition Rights of MHI and Establishing a Framework for Ensuring Appropriate Business Conduct of Business Report (ii) Consolidated Statement of Changes in Net Assets and Notes to the Consolidated Financial Statements of Consolidated Financial Statements and (Reference) Consolidated Statement of Cash Flows (iii) Non-Consolidated Statement of Changes in Net Assets and Notes to the Non-consolidated Financial Statements of Non-consolidated Financial Statements Should there be a need to amend the Reference Materials Relating to the General Meeting of Shareholders, or the Business Report, the Consolidated and the Non-consolidated Financial Statements, the amended material will be posted on MHI s website on the Internet (at the URL shown below). Website of MHI: 2

3 INSTRUCTIONS FOR VOTING You are kindly requested to exercise your voting right by either of the following methods. Attend the General Meeting of Shareholders Please present the voting card enclosed with this notice to the reception desk on the day of the General Meeting of Shareholders. Date and Time: Thursday, June 21, 2018 at 10:00 a.m. Place: (The reception desk will open at 9:00 a.m.) (Japan time) Grand Prince Hotel New Takanawa, Hiten 13-1, Takanawa 3-chome, Minato-ku, Tokyo - If you exercise your voting right by proxy, the proxy shall be limited to one other shareholder who has the voting right. In this case, in addition to the voting card for exercising voting rights as proxy and the letter of attorney, the proxy should submit the proxy s own voting card. - If you attend the General Meeting of Shareholders, we kindly ask you to bring this notice as reference documents describing the planned proceedings. Exercise of Voting Rights in Writing Please examine the following Reference Materials Relating to the General Meeting of Shareholders (pages 5 22) and indicate whether you are for or against each proposal on the enclosed voting card and post it without affixing a postage stamp. If neither the agree nor against box on the voting card is checked, it will be deemed to be a vote to agree to the proposal Exercise due date: No later than 5:30 p.m., on Wednesday, June 20, 2018 (Japan time) Guidance for filling in the voting card Proposal No. 1, Proposal No. 2 and Proposal No. 4: - When you are for the proposal, mark 〇 in the agree box. - When you are against the proposal, mark 〇 in the against box. Proposal No. 3: - When you are for all of the proposed persons in the proposal, mark 〇 in the agree box. - When you are against all of the proposed persons in the proposal, mark 〇 in the against box. - If you are against certain candidates, mark 〇 in the agree box, and also write the candidate number for each candidate you are against inside the parentheses on the right side of the agree box (a consecutively ordered number has been given to each candidate in the Reference Materials Relating to the General Meeting of Shareholders). Exercise of Voting Rights via the Internet Please examine the following Reference Materials Relating to the General Meeting of Shareholders (pages 5 22) and indicate whether you are for or against each proposal by accessing the site Procedures for Shareholders Meetings ( For details, please refer to the Instructions for Voting via the Internet on the following. Exercise due date: No later than 5:30 p.m., on Wednesday, June 20, 2018 (Japan time) 3

4 Handling of the Duplicated Exercises of Voting Rights for the Same Proposal - If the voting right is exercised multiple times both in writing and via the Internet, the exercise of the voting right via the Internet will be deemed effective. - If the voting right is exercised multiple times other than as described above, the last exercise of the voting right will be deemed effective. Instructions for Voting Right via the Internet 1. Access to the Website to Exercise of Voting Rights Please indicate whether you are for or against each proposal by accessing the site Procedures for Shareholders Meetings ( using a computer, a smartphone or a mobile phone in accordance with instructions on the screen. (Please note that the website will be unavailable every day from 2:00 a.m. to 5:00 a.m. Japan time) 2. Notes regarding the Exercise of the Voting Right via the Internet (1) When voting by a computer, please read the site s Terms of Use and Usage Guide. When voting by a smart phone, please read the site s Terms of Use and Usage Guide. When voting by a mobile phone, please read the Usage Guide. (2) When voting by a mobile phone, please use a handset capable of TLS encrypted communication and mobile phone data transmission. (3) The login ID and temporary password stated on the voting card (or the password registered by the shareholder) are required to exercise your voting rights. (4) Shareholders will be responsible for the Internet connection charges and the communication charges, etc. arising from accessing the site Procedures for Shareholders Meetings. (5) Please contact the following if you have questions about the site Procedures for Shareholders Meetings : Mitsubishi UFJ Trust and Banking Corporation, Corporate Agency Division (Help Desk) Telephone: (toll free) Service Hours: 9:00 a.m. to 9:00 p.m. (Japan time) Shareholders participating in the Electronic Proxy Voting Platform managed by ICJ, Inc. may place their votes through this platform. 4

5 REFERENCE MATERIALS RELATING TO THE GENERAL MEETING OF SHAREHOLDERS Proposal No.1: Appropriation of Surplus In its 2015 Medium-Term Business Plan, MHI targeted to achieve ROE of at least 10% and increase in equity capital to 2 trillion. During the course toward the achievement, our basic policy has been implementing returns to shareholders with a consolidated dividend payout ratio of around 30% while always considering a balance between investing in future business and strengthening of equity capital. In its 2018 Medium-Term Business Plan, MHI has set the year of achievement as FY2020 and the numerical target for its equity capital as 1,650.0 billion based on the International Financial Reporting Standards (IFRS). However, it has not changed its basic policy on returns to shareholders. Based on this policy and taking full account of our business results for the fiscal year under review, financial position as of the end of the fiscal year under review and others, MHI proposes to pay a dividend of 60 per share as the Year-end Dividend defined in Article 43 of the Articles of Incorporation. Combined with the Interim Dividend of 60 per share paid in December 2017, the total annual dividend will be 120 per share, the same as in the previous fiscal year (FY2016). 1. Kind of Dividend Property Cash 2. Dividend Allocation and Total Amount of Dividends Dividend allocation: 60 per share of MHI s common stock Total amount of dividends: 20,190,695, Effective Date of Dividend Allocation June 22, 2018 (Note) On October 1, 2017, MHI conducted a consolidation of its shares on a one for 10 basis, and the amount of dividends for this proposal has been recalculated to reflect this share consolidation. 5

6 Proposal No.2: Partial Amendments to the Articles of Incorporation 1. Reason for proposal MHI proposes to make necessary amendments to its current Articles of Incorporation for the following reasons. This proposal, when approved, shall take effect at the conclusion of this General Meeting of Shareholders, excluding (1) below. (1) In accordance with the relocation of MHI s head office to a building currently under construction in Chiyoda-ku, Tokyo, the Articles of Incorporation shall be amended to reflect the location of the head office (Article 2 of Proposed Amendments). Moreover, this amendment is to come into effect on the date of the relocation of the head office, to be determined by a meeting of the Board of Directors to be held before the 94th Annual General Meeting of Shareholders scheduled to be held in 2019, and a provision to that effect shall be made in the supplementary provisions (Supplementary Provision Article 2 of Proposed Amendments). (2) In order to maintain the number of members on the entire Board of Directors at an appropriate size, the maximum number of Directors stipulated in the Articles of Incorporation shall be reduced from twenty (20) to fifteen (15), and the maximum number of Directors who are serving as Audit and Supervisory Committee Members stipulated in the Articles of Incorporation shall be reduced from ten (10) to seven (7) (Article 20 of Proposed Amendments). (3) With the goal of allowing the flexible construction of an optimal management structure, it shall be made possible to appoint the President not only from among Directors (excluding Directors who are serving as Audit and Supervisory Committee Members) but also from among Senior Vice Presidents (Article 35 of Proposed Amendments). Also, in accordance with this amendment, in addition to making the necessary amendments to the provisions related to Directors with special title and to the provisions related to persons entitled to convene general meetings of shareholders and meetings of the Board of Directors, and to the Chairman thereof (Article 15, Article 24, and Article 25 of Proposed Amendments), in order to clarify the position and responsibilities of Senior Vice Presidents, a provision related to Senior Vice Presidents shall be newly established (Article 34 of Proposed Amendments). (4) Other than the above, in accordance with the establishment of new provisions, the numbering of articles will be moved down etc. as necessary. 6

7 2. Contents of Amendments The details of the amendments are as follows. Current Articles of Incorporation Article 2. (Location of Head Office) The head office of the Company shall be situated in Minato-ku, Tokyo. Article 15. (Persons Entitled to Convene Meetings and Chairman) 1. In accordance with a resolution of the Board of Directors, the President shall convene General Meetings of Shareholders and shall act as chairman thereof. 2. If the President is prevented from so acting, one of the other Representative Directors shall act for him/her. Article 20. (Number of Directors) 1. The Directors of the Company shall not be more than twenty (20) in number. 2. Among the Directors mentioned in the preceding paragraph, the Directors who are serving as Audit and Supervisory Committee Members shall not be more than ten (10) in number. Article 24. (Director with Special Title) 1. A President shall be determined from among the Directors (excluding Directors who are serving as Audit and Supervisory Committee Members) by a resolution of the Board of Directors. 2. A Chairman of the Board may be determined from among the Directors (excluding Directors who are serving as Audit and Supervisory Committee Members) by a resolution of the Board of Directors. Article 25. (Convocation and Chairman of Meetings of the Board of Directors) 1. The Chairman of the Board shall convene the Meetings of the Board of Directors, at which he/she shall assume the position of chairman unless otherwise provided for by laws and ordinances. If the Chairman of the Board is vacant or the Chairman of the Board is prevented from so acting, the President or one of the other Representative Directors shall act for him/her. (Underlined portions indicate the proposed changes) Proposed Amendments Article 2. (Location of Head Office) The head office of the Company shall be situated in Chiyoda-ku, Tokyo. Article 15. (Persons Entitled to Convene Meetings and Chairman) 1. In accordance with a resolution of the Board of Directors, the Chairman of the Board or the President shall convene General Meetings of Shareholders and shall act as chairman thereof. 2. If the Chairman of the Board and the President are prevented from so acting, one of the other Directors shall act for them. Article 20. (Number of Directors) 1. The Directors of the Company shall not be more than fifteen (15) in number. 2. Among the Directors mentioned in the preceding paragraph, the Directors who are serving as Audit and Supervisory Committee Members shall not be more than seven (7) in number. Article 24. (Chairman of the Board) (Deleted) A Chairman of the Board may be determined from among the Directors (excluding Directors who are serving as Audit and Supervisory Committee Members) by a resolution of the Board of Directors. Article 25. (Convocation and Chairman of Meetings of the Board of Directors) 1. The Chairman of the Board shall convene the Meetings of the Board of Directors, at which he/she shall assume the position of chairman unless otherwise provided for by laws and ordinances. If the Chairman of the Board is vacant or the Chairman of the Board is prevented from so acting, one of the other Directors shall act for him/her. 7

8 Current Articles of Incorporation 2. Notice to convene a Meeting of the Board of Directors shall be given to each Director not less than five days before the date set for such Meeting. However, such notice period may be shortened in case of unavoidable emergency. (Newly established) (Newly established) Articles (Omitted) SUPPLEMENTARY PROVISION (Transitional measures concerning exemption from liability of Statutory Auditors) 1. Concerning exemption from liability by a resolution of the Board of Directors, stipulated in Article 423, Paragraph 1 of the Companies Act, for the damages arising from the acts of Statutory Auditors (including former Statutory Auditors) committed prior to the 90th Annual General Meeting of Shareholders (June 2015), the provisions then in force shall remain applicable. 2. Concerning contracts for limitation of liability, stipulated in Article 423, Paragraph 1 of the Companies Act, for the damages arising from the acts of Outside Statutory Auditors (including former Outside Statutory Auditors) committed prior to the 90th Annual General Meeting of Shareholders (June 2015), the provisions then in force shall remain applicable. Proposed Amendments 2. Notice to convene a Meeting of the Board of Directors shall be given to each Director not less than five days before the date set for such Meeting. However, such notice period may be shortened in case of unavoidable emergency. Article 34. (Corporate Officers) The Company may appoint Corporate Officers and have them share the responsibilities for the execution of operations of the Company. Article 35. (President) A President shall be determined from among the Directors (excluding Directors who are serving as Audit and Supervisory Committee Members) or Corporate Officers by a resolution of the Board of Directors. Articles (Unchanged) SUPPLEMENTARY PROVISION Article 1. (Transitional measures concerning exemption from liability of Statutory Auditors) 1. Concerning exemption from liability by a resolution of the Board of Directors, stipulated in Article 423, Paragraph 1 of the Companies Act, for the damages arising from the acts of Statutory Auditors (including former Statutory Auditors) committed prior to the 90th Annual General Meeting of Shareholders (June 2015), the provisions then in force shall remain applicable. (Change in Japanese only; English unchanged) 2. Concerning contracts for limitation of liability, stipulated in Article 423, Paragraph 1 of the Companies Act, for the damages arising from the acts of Outside Statutory Auditors (including former Outside Statutory Auditors) committed prior to the 90th Annual General Meeting of Shareholders (June 2015), the provisions then in force shall remain applicable. (Change in Japanese only; English unchanged) 8

9 Current Articles of Incorporation (Newly established) Proposed Amendments Article 2. (Effective date of amendment to Article 2 of the Articles of Incorporation) The amendment to Article 2 of the Articles of Incorporation (Location of Head Office) is to come into effect on the date of the relocation of the head office, to be determined by a meeting of the Board of Directors to be held before the 94th Annual General Meeting of Shareholders scheduled to be held in Furthermore, after the effective date of the relocation of the head office, this article shall be deleted. 9

10 Proposal No.3: Election of 6 Directors (excluding Directors who are serving as Audit and Supervisory Committee Members) The terms of the 6 current Directors (excluding Directors who are serving as Audit and Supervisory Committee Members) will expire at the conclusion of this General Meeting of Shareholders. Accordingly, MHI proposes to elect 6 Directors (excluding Directors who are serving as Audit and Supervisory Committee Members). Candidates for Directors (excluding Directors who are serving as Audit and Supervisory Committee Members) are as follows: No. Name Position and Responsibility in MHI 1 Hideaki Omiya Re-election Chairman of the Board 2 Shunichi Miyanaga Re-election *President and CEO 1 (Member of the Board) The Number of Attendance at the Board of Directors Meetings (FY2017) 15 out of 15 times 15 out of 15 times The Number of Years in Office as Director (as of the conclusion of this General Meeting of Shareholders) 16 years 10 years *Director (Member of the 3 Masanori Koguchi Re-election Board), Senior Executive Vice President, CFO 2, Head of Business Strategy 15 out of 15 times 3 years Office Director (Member of the 4 Seiji Izumisawa Newly nominated Board) Full-time Audit and Supervisory Committee 11 out of 11 times 1 year Member 5 Naoyuki Shinohara Re-election Outside Independent Director (Member of the Board) 15 out of 15 times 3 years 6 Ken Kobayashi Re-election Outside Independent 1 CEO: Chief Executive Officer 2 CFO: Chief Financial Officer Director (Member of the Board) 11 out of 14 times 2 years (Notes) 1. An asterisk mark (*) indicates a Representative Director. 2. Mr. Seiji Izumisawa is currently a Director, Full-time Audit and Supervisory Committee Member of the Company, but as of the conclusion of this General Meeting of Shareholders he is scheduled to resign from that position, and, on that assumption, it is requested in this proposal that he be appointed a Director who is not serving as an Audit and Supervisory Committee Member. 10

11 3. The number of times Mr. Seiji Izumisawa attended meetings of the Board of Directors in FY2017 and the number of his years in office as Director (as of the conclusion of this General Meeting of Shareholders) are shown for his position as Director, Full-time Audit and Supervisory Committee Member of the Company. As Mr. Seiji Izumisawa took up his position as of June 22, 2017 (on the date of the 92nd Annual General Meeting of Shareholders), the number of times he attended the Board of Directors meetings for the year is different from that of the other candidates for the position of a Director. 4. Mr. Ken Kobayashi serves as the Chairman of the Board of Mitsubishi Corporation, which was the counterparty in the tender offer for shares in Mitsubishi Motors Corporation, to which the Company tendered shares. Accordingly, with regard to the Board of Directors meeting at which said tender offer was the only matter considered, this was treated as a similar situation in which there were special interests as prescribed in the provisions of Article 369 Paragraph 2 of the Companies Act, and that he should therefore refrain from attending. As a result the number of times he attended the Board of Directors meetings for the year is different from that of the other candidates for the position of a Director. 11

12 1 Position and Responsibility in MHI Chairman of the Board Hideaki Omiya (July 25, 1946: 71 years old) [Re-election] Number of MHI Shares Owned 18,600 The number of years in office as Director (as of the conclusion of this General Meeting of Shareholders) 16 years The number of attendance at the Board of Directors meetings in FY out of 15 times Career summary June 1969 Joined Mitsubishi Heavy Industries, Ltd. June 2002 Director (Member of the Board), Deputy Head of Air-Conditioning & Refrigeration Systems Headquarters April 2003 Director (Member of the Board), Head of Air-Conditioning & Refrigeration Systems Headquarters June 2005 *Director (Member of the Board), Executive Vice President, Head of Air-Conditioning & Refrigeration Systems Headquarters April 2007 *Director (Member of the Board), Senior Executive Vice President April 2008 *President and CEO (Member of the Board) April 2013 *Chairman of the Board June 2014 Chairman of the Board (Present position) (Note) An asterisk mark (*) indicates a Representative Director. Important concurrent positions Member of the Board, Mitsubishi Corporation Director, Seiko Epson Corporation Reason for the nomination as a candidate for Director Mr. Hideaki Omiya is being re-nominated for the position of a Director because he has extensive experience in operations of Aerospace Systems and Air-Conditioning & Refrigeration Systems, and moreover, because he has demonstrated superior management skills by promoting management reform, such as the enhancement of MHI s business operations structure, as President and CEO (Member of the Board) from April 2008 through March From April 2013, he has been serving as a Chairman of the Board and conducting MHI s management oversight as a Chairman of Meetings of the Board of Directors. Based on this knowledge and track record, MHI judges that he will contribute to the sustained growth of MHI and improvement of its corporate value in the medium- and long-term through participation in MHI s management decision-making, playing a leading role in management oversight. Special interest between the candidate and MHI There is no special interest between Mr. Hideaki Omiya and MHI. 12

13 2 Position and Responsibility in MHI *President and CEO (Member of the Board) Shunichi Miyanaga (April 27, 1948: 70 years old) [Re-election] Number of MHI Shares Owned 21,100 The number of years in office as Director (as of the conclusion of this General Meeting of Shareholders) 10 years The number of attendance at the Board of Directors meetings in FY out of 15 times Career summary April 1972 Joined Mitsubishi Heavy Industries, Ltd. April 2006 Senior Vice President, Deputy Head of Machinery Headquarters May 2006 Senior Vice President, Deputy Head of Machinery & Steel Structures Headquarters April 2008 Executive Vice President, Head of Machinery & Steel Structures Headquarters June 2008 *Director (Member of the Board), Executive Vice President, Head of Machinery & Steel Structures Headquarters April 2011 *Director (Member of the Board), Senior Executive Vice President, Head of the Presidential Administration Office April 2013 *President and CEO (Member of the Board) April 2014 *President and CEO (Member of the Board) (Present position) (Note) An asterisk mark (*) indicates a Representative Director. Important concurrent positions Director, Mitsubishi Motors Corporation Reason for the nomination as a candidate for Director Mr. Shunichi Miyanaga is being re-nominated for the position of a Director because he has extensive experience in operations of Machinery & Steel Structures, and moreover, from April 2013, he has been serving as a President and CEO, demonstrating superior management skills by promoting the management reform such as the shift to a domain business structure. He currently serves as a Chief Executive Officer (CEO) in charge of the system for execution of business of MHI. Based on these reasons, MHI judges that he will contribute to the sustained growth of MHI and improvement of its corporate value in the medium- and long-term through participation in MHI s management decision-making, providing management direction. Special interest between the candidate and MHI There is no special interest between Mr. Shunichi Miyanaga and MHI. 13

14 3 Masanori Koguchi (July 12, 1955: 62 years old) [Re-election] Position and Responsibility in MHI *Director (Member of the Board), Senior Executive Vice President, CFO, Head of Business Strategy Office Number of MHI Shares Owned 2,100 The number of years in office as Director (as of the conclusion of this General Meeting of Shareholders) 3 years The number of attendance at the Board of Directors meetings in FY out of 15 times Career summary April 1978 Joined Mitsubishi Heavy Industries, Ltd. April 2014 Senior Vice President, Head of Business Strategy Office June 2015 *Director (Member of the Board), Executive Vice President, CFO, Head of Business Strategy Office April 2018 *Director (Member of the Board), Senior Executive Vice President, CFO, Head of Business Strategy Office (Present position) (Note) An asterisk mark (*) indicates a Representative Director. Important concurrent positions None Reason for the nomination as a candidate for Director Mr. Masanori Koguchi is being re-nominated for the position of a Director because he has extensive experience in operations of business strategy, accounting and finance, and has been making a substantial contribution to reform the methods of business management, etc. through reinforcement of financial base of MHI and implementation of the strategic business evaluation system. He has been serving as CFO from June 2015, and promoting financing activities that respond to economic conditions and the business environment. Based on these reasons, MHI judges that he will contribute to the sustained growth of MHI and improvement of its corporate value in the medium- and long-term through participation in MHI s management decision-making, providing expertise in the finances of MHI. Special interest between the candidate and MHI There is no special interest between Mr. Masanori Koguchi and MHI. 14

15 4 Seiji Izumisawa (September 3, 1957: 60 years old) [Newly nominated] Position and Responsibility in MHI Director (Member of the Board), Full-time Audit and Supervisory Committee Member Number of MHI Shares Owned 1,500 The number of years in office as Director (as of the conclusion of this General Meeting of Shareholders) 1 year The number of attendance at the Board of Directors meetings in FY out of 11 times (Note) As Mr. Seiji Izumisawa is currently a Director, Full-time Audit and Supervisory Committee Member of the Company, the number of his years in office as Director (as of the conclusion of this General Meeting of Shareholders) and the number of times he attended the Board of Directors meetings in FY2017 are shown for this position. Career summary April 1981 Joined Mitsubishi Heavy Industries, Ltd. April 2008 Senior General Manager, Technology Management Department of Technical Headquarters April 2011 Senior General Manager, Technology Management Department of Technology & Innovation Headquarters April 2013 Senior Executive Officer, Mitsubishi Motors Corporation June 2013 Director, Mitsubishi Motors Corporation April 2016 Senior Vice President, Senior General Manager of Technology Strategy Office June 2017 Important concurrent positions None Director (Member of the Board), Full-time Audit and Supervisory Committee Member (Present position) Reason for the nomination as a candidate for Director Mr. Seiji Izumisawa has extensive work experience of involvement in such areas as research and development, technology management and operations related to strategic technology development, and has made significant contributions to strengthening and developing MHI s technology infrastructure. Since June 2017, he has filled the role of Director who is serving as an Audit and Supervisory Committee Member and has not only participated in management decision-making as an individual deeply familiar with technology management at MHI, but also has striven to ensure the soundness and appropriateness of decision-making at MHI, as well as the improvement of its transparency, by ensuring the effectiveness of audits by the Audit and Supervisory Committee. MHI judges that, going forward, he will contribute to the sustained growth and to the improvement of its corporate value in the medium- and long-term through his participation in MHI s management decision-making as an executive, and hence MHI nominates Mr. Seiji Izumisawa as a candidate for Director who is not serving as an Audit and Supervisory Committee Member. Special interest between the candidate and MHI There is no special interest between Mr. Seiji Izumisawa and MHI. 15

16 5 Position and Responsibility in MHI Director (Member of the Board) Naoyuki Shinohara (February 8, 1953: 65 years old) [Re-election] [Outside] [Independent] Number of MHI Shares Owned 700 The number of years in office as Director (as of the conclusion of this General Meeting of Shareholders) 3 years The number of attendance at the Board of Directors meetings in FY out of 15 times Career summary April 1975 Joined Ministry of Finance July 2006 Director-General of the International Bureau, Ministry of Finance July 2007 Vice Minister of Finance for International Affairs, Ministry of Finance July 2009 Special Advisor to the Minister of Finance February 2010 Special Advisor to the International Monetary Fund (IMF) March 2010 Deputy Managing Director, the International Monetary Fund (IMF) (until February 2015) June 2015 Director (Member of the Board), Mitsubishi Heavy Industries, Ltd. (Present position) July 2015 Professor, Policy Alternatives Research Institute, The University of Tokyo (until March 2018) Important concurrent positions Statutory Auditor, Media Kobo, Inc. Reason for the nomination as a candidate for outside director Mr. Naoyuki Shinohara is being re-nominated for the position of an outside director because he has wide range of insights related to financial policy gained as a regulator and a global perspective gained as an international institution executive when he served as Vice Minister of Finance for International Affairs and Deputy Managing Director of the International Monetary Fund (IMF), even though he has not been involved in corporate management, except for acting as an outside director or outside statutory auditor. Based on these reasons, MHI judges that he will contribute to the improvement of the soundness and transparency of MHI s management decision-making through providing insightful views and frank assessments to MHI s management as an outside director, thereby contributing to the sustained growth of MHI and improvement of its corporate value in the medium- and long-term. Special interest between the candidate and MHI There is no special interest between Mr. Naoyuki Shinohara and MHI. Matters concerning the independence of outside director Since Mr. Naoyuki Shinohara meets the Independence Criteria for Outside Directors (stated on page 20 21) provided by MHI, MHI judges him to be independent from its management. Accordingly, MHI has notified Tokyo Stock Exchange, Inc. and other listed financial instruments exchanges in Japan that he is an independent officer. Although MHI has a trading relationship with and donated to The University of Tokyo, where Mr. Naoyuki Shinohara served as a professor, the amount of trading and donation does not exceed the base amount stipulated in Independence Criteria for Outside Directors, and therefore MHI judges that it will not affect his independence. 16

17 6 Position and Responsibility in MHI Director (Member of the Board) Ken Kobayashi (February 14, 1949: 69 years old) [Re-election] [Outside] [Independent] Number of MHI Shares Owned 500 The number of years in office as Director (as of the conclusion of this General Meeting of Shareholders) 2 years The number of attendance at the Board of Directors meetings in FY out of 14 times Career summary July 1971 Joined Mitsubishi Corporation June 2007 Member of the Board, Executive Vice President, Mitsubishi Corporation June 2008 Executive Vice President, Mitsubishi Corporation April 2010 Senior Executive Vice President, Mitsubishi Corporation June 2010 Member of the Board, President and CEO, Mitsubishi Corporation April 2016 Chairman of the Board, Mitsubishi Corporation (Present position) June 2016 Director (Member of the Board), Mitsubishi Heavy Industries, Ltd. (Present position) Important concurrent positions Chairman of the Board, Mitsubishi Corporation Director, Mitsubishi Motors Corporation Director, NISSIN FOODS HOLDINGS CO., LTD. Reason for the nomination as a candidate for outside director Mr. Ken Kobayashi is being re-nominated for the position of an outside director because he has extensive knowledge and experience as top executive who can perform well in global markets and because of his expertise in various fields, having served as a Member of the Board, President and CEO, and Chairman of the Board of Mitsubishi Corporation. Based on these reasons, MHI judges that he will contribute to the improvement of the soundness and transparency of MHI s management decision-making through providing insightful views and frank assessments to MHI s management as an outside director, thereby contributing to the sustained growth of MHI and improvement of its corporate value in the medium- and long-term. Special interest between the candidate and MHI There is no special interest between Mr. Ken Kobayashi and MHI. Matters concerning the independence of outside director Since Mr. Ken Kobayashi meets the Independence Criteria for Outside Directors (stated on page 20 21) provided by MHI, MHI judges him to be independent from its management. Accordingly, MHI has notified Tokyo Stock Exchange, Inc. and other listed financial instruments exchanges in Japan that he is an independent officer. Although MHI has a trading relationship with Mitsubishi Corporation, where Mr. Ken Kobayashi serves as a Chairman of the Board, the amount of trading does not exceed the base amount stipulated in Independence Criteria for Outside Directors, and therefore MHI judges that it will not affect his independence. 17

18 (Notes) 1. Mr. Naoyuki Shinohara and Mr. Ken Kobayashi are the candidates for outside directors as defined in Article 2, Paragraph 3, Item 7 of the Ordinance for Enforcement of the Companies Act. 2. MHI has submitted notifications, specifying Mr. Naoyuki Shinohara and Mr. Ken Kobayashi, as independent officers, to Tokyo Stock Exchange, Inc. and other listed financial instruments exchanges in Japan, and should they be elected as Directors (excluding Directors who are serving as Audit and Supervisory Committee Members), MHI will re-submit notifications specifying them as independent officers. 3. MHI has entered into a liability limitation agreement with Mr. Naoyuki Shinohara and Mr. Ken Kobayashi, which provides a limitation on their liabilities to compensate for damages under Article 423, Paragraph 1 of the Companies Act, the amount of which is the higher of 10 million or the minimum amount of liability defined in Article 425, Paragraph 1 of the Companies Act. Should Mr. Naoyuki Shinohara and Mr. Ken Kobayashi be elected, MHI is bound to continue the abovementioned agreement with each of them. 4. It was discovered that a wrongful act had been committed in connection with fuel consumption testing of a vehicle manufactured by Mitsubishi Motors Corporation, where Mr. Ken Kobayashi serves as an outside director. The discovery was made in April 2016, prior to Mr. Ken Kobayashi s becoming an outside director at the company. In September 2016, after Mr. Ken Kobayashi had become an outside director, the Ministry of Land, Infrastructure, Transport and Tourism indicated that it acknowledged wrongdoing in the course of internal testing conducted by Mitsubishi Motors Corporation for the purpose of re-examining vehicle fuel consumption values that had been found to be fraudulently fabricated. Furthermore, citing a violation of the Act Against Unjustifiable Premiums and Misleading Representations in connection with language in documents that included catalogs of Mitsubishi Motors Corporation vehicles that had been involved in the fuel consumption testing, the Consumer Affairs Agency issued administrative orders and surcharge payment orders to the company in January and July Mr. Ken Kobayashi was aware of neither fact and has, at meetings of the Board of Directors and other opportunities, called for greater attention from the viewpoint of ensuring compliance. Furthermore, since these incidents came to light, he has been committed to thoroughly investigating the facts and taking steps to ensuring similar situations do not happen again. Opinions of the Audit and Supervisory Committee In regard to the election, remuneration, etc. of the Directors (excluding Directors who are serving as Audit and Supervisory Committee Members), all three outside directors who are serving as Audit and Supervisory Committee Members attended the Nomination and Remuneration Meeting(s) and provided their respective opinions, and the Full-time Audit and Supervisory Committee Members confirmed, such matters as the approach to remuneration structure and the specific computation method of remuneration, as well as the basic framework and approach relating to the Board of Directors and Directors of MHI and the policy for electing the candidates for the Board of Directors and made reports and participated in mutual discussions at the Meeting of the Audit and Supervisory Committee. Accordingly, the Audit and Supervisory Committee has determined that there are no special matters or opinions that need to be stated at the General Meeting of Shareholders with regard to the election and remuneration, etc. of Directors (excluding Directors who are serving as Audit and Supervisory Committee Members) based on the provisions of the Companies Act. 18

19 Proposal No.4: Election of 1 Director who is serving as an Audit and Supervisory Committee Member Mr. Seiji Izumisawa, a Director who is serving as Audit and Supervisory Committee Member, will resign his Director office at the conclusion of this General Meeting of Shareholders. Accordingly, MHI proposes to elect 1 Director who is serving as an Audit and Supervisory Committee Member. Candidate for Director who will serve as an Audit and Supervisory Committee Member is as follows. In addition, the consent of the Audit and Supervisory Committee has been obtained for this proposal. 1 Position and Responsibility in MHI (Newly nominated) Hiroki Kato (December 24, 1955: 62 years old) [Newly nominated] Number of MHI Shares Owned 900 Career summary April 1979 Joined Mitsubishi Heavy Industries, Ltd. April 2010 Senior General Manager, Material Department April 2014 Vice President of Commercial Aviation & Transportation Systems April 2015 Senior Vice President, Vice President of Machinery, Equipment & Infrastructure April 2017 Senior Vice President, Senior General Manager of Managerial & Financial Planning Department, Senior General Manager of Financial Management Division (Present position) Important concurrent positions None Reason for the nomination as a candidate for Director Mr. Hiroki Kato has held various important posts in material procurement, general affairs and business divisions at MHI, and has leveraged his extensive experience to contribute significantly to the development of Company business. Since April 2017, he has served as Senior General Manager of the Managerial & Financial Planning Department and Senior General Manager of Financial Management Division. Based on these reasons, as MHI judges that he will contribute to ensuring effective audits, ensuring the soundness and appropriateness of decision-making at MHI, and improving its transparency through his participation in management decision-making as an individual with considerable knowledge of finance and accounting, and also help MHI achieve sustained growth and improvement of its corporate value in the medium- and long-term, MHI nominates Mr. Hiroki Kato as a candidate for Director who is serving as an Audit and Supervisory Committee Member. Special interest between the candidate and MHI There is no special interest between Mr. Hiroki Kato and MHI. (Reference) Mr. Toshifumi Goto, Mr. Nobuo Kuroyanagi, Ms. Christina Ahmadjian, and Mr. Shinichiro Ito will each continue in their roles as Directors who are serving as Audit and Supervisory Committee Members. 19

20 Matters for Consideration for Proposals No. 3 and No. 4 Policy and Procedures for Nominating Candidates for Directors As a company that provides the infrastructure that forms the foundation of society, MHI will work toward separating management oversight and execution in order to pursue the realization of supervision with a high degree of soundness and transparency, which includes an external point of view, and to improve the efficiency and flexibility concerning execution of business, which will promote sustained growth and improved corporate value in the medium- and long-term. To realize this, it will be MHI s policy to nominate as candidates to be Directors (excluding Directors who are serving as Audit and Supervisory Committee Members) of the individuals from MHI who are active in the core of MHI s management, who have extensive experience in executing MHI s business, and who see things from the perspective of a senior management; and in addition, to invite more than one individual as candidates for the role of outside directors to perform supervision from an objective standpoint while giving consideration to external stakeholders. Furthermore, from the perspective of ensuring effective audits, as Directors who are serving as Audit and Supervisory Committee Members, MHI s policy is to select individuals who have extensive knowledge and experience in various fields such as corporate management, legal, finance and accounting in a well-balanced manner. When selecting Director candidates, the President & CEO prepare a proposed list of candidates based on the above policy and discuss such proposed list with the outside directors at a meeting (or meetings) constituted solely by the outside directors and the President & CEO. The Board of Directors selects the final Director candidates from the proposed candidates resulting from the Nomination and Remuneration Meeting(s). Independence Criteria for Outside Directors Anyone who meets any of the following criteria, in addition to the independence criteria prescribed by Tokyo Stock Exchange, Inc. and other listed financial instruments exchanges in Japan, shall not be deemed to be independent by MHI. 1. A person who is currently: (i) A major shareholder of MHI (i.e., a shareholder who holds 10% or more of voting rights), or any executive (a person who executes operations) of such shareholder; (ii) A counterparty with whom MHI transacts in cases when MHI s transaction amount with said counterparty in the last business year exceeded 2% of MHI s annual consolidated gross sales in amount, or any executive of said counterparty; (iii) A counterparty that transacts with MHI in cases when said counterparty s transaction amount with MHI in the last business year exceeded 2% of said counterparty s annual consolidated gross sales in amount, or any executive of said counterparty; (iv) A financial institution or any large creditor on which MHI is dependent to the extent that it is indispensable for MHI s financing and is not substitutable, or any executive of said financial institution or large creditor; (v) A certified public accountant or employee, partner or staff of an audit corporation serving as the financial auditor of MHI (excluding staff serving as an assistant); (vi) Any executive of an organization that received a donation or subsidy from MHI exceeding 10 million or 30% of said organization s average annual total expenses in the last business year, whichever is higher; (vii) An attorney, certified public accountant, certified tax accountant or any other consultant who 20

21 received 10 million or more in the form of money or other financial benefits on average in the past three business years from MHI, other than remuneration as a MHI officer; or (viii) Anyone who belongs to a law firm, audit corporation, tax accountant corporation, consulting firm or any other expert advisory firm that received payments accounting for 2% or more of its annual consolidated gross sales on average in the past three business years from MHI (excluding staff serving as an assistant). 2. A person who corresponded to any of the items from (i) to (vi) above at any point in time over the past three years. 3. A person who served as an outside director of MHI for more than 8 years in total. 21

22 Structure of the Board of Directors after the election If Proposals No. 3 and No. 4 are approved as submitted, the Board of Directors is scheduled to be comprised of the following members. Name Position and Responsibility in MHI Hideaki Chairman of the Board Omiya Shunichi President and CEO Miyanaga (Member of the Board) Masanori Director (Member of the Koguchi Board), Senior Executive Vice President, CFO Seiji Director (Member of the Izumisawa Board), Executive Vice President, CSO*, Head of Business Strategy Office Naoyuki Director (Member of the Shinohara Board) Ken Director (Member of the Kobayashi Board) Toshifumi Director (Member of the Goto Board) Full-time Audit and Supervisory Committee Member Hiroki Kato Director (Member of the Board) Full-time Audit and Supervisory Committee Member Nobuo Kuroyanagi Christina Ahmadjian Director (Member of the Board) Audit and Supervisory Committee Member Director (Member of the Board) Audit and Supervisory Committee Member Shinichiro Director (Member of the Ito Board) Audit and Supervisory Committee Member CSO: Chief Strategy Officer Representative Director Audit and Supervisory Committee Member Outside Director Independent Director Newly nominated Director (End) 22

23 ATTACHMENT TO THE NOTICE OF THE 93RD ANNUAL GENERAL MEETING OF SHAREHOLDERS BUSINESS REPORT FOR THE 2017 FISCAL YEAR (April 1, 2017 to March 31, 2018) OVERVIEW OF MITSUBISHI HEAVY INDUSTRIES, LTD. (MHI) GROUP 1 REVIEW AND THE RESULTS OF BUSINESS ACTIVITIES OVERVIEW During the fiscal year under review, the world economy suffered from uncertainty regarding trade and monetary policies in various countries, but driven mainly by developed countries, was generally strong. The Japanese economy also saw continued gradual expansion, as a result of such factors as improvements in employment and income. Orders, Sales and Profits/Losses In this operating environment, among the consolidated orders received for MHI Group in the fiscal year under review, MHI Group recorded decreases in orders for Power Systems and Aircraft, Defense & Space, while orders increased in Industry & Infrastructure. As a result, total consolidated orders received by MHI Group decreased 9.4% year on year to 3,875.7 billion. Overall consolidated net sales increased 5.0% year on year to 4,110.8 billion, as a result of increases in the segments of Industry & Infrastructure, Power Systems, and Aircraft, Defense & Space. On the other hand, due to profit declines in Aircraft, Defense & Space and Industry & Infrastructure and other factors, operating profit fell by 24.0 billion year on year to billion, while ordinary profit declined 9.8 billion year on year to billion. In addition, compared to the previous fiscal year, in which a gain on sales of fixed assets was posted, there was a decline in extraordinary gain, resulting in profit attributable to owners of parent falling below the level of the previous fiscal year by 17.2 billion, to 70.4 billion. 23

24 MHI Group Initiatives in FY2017 In the fiscal year under review, which was the final year of the 2015 Medium-Term Business Plan, MHI Group worked to strengthen its financial base, while promoting business structure reforms, and pushed strongly forward with various measures designed to lead to future expansion in the scale of the business and to increase profitability. - Strengthening Financial Base With regard to the strengthening of the financial base, through thoroughgoing cash flow management and asset management initiatives, results considerably overshot the original 2015 Medium-Term Business Plan. Specifically, free cash flow exceeded the original target to reach billion, in addition to which interest-bearing debt was reduced by more than the target, and the index which shows the ratio of interest-bearing debt to equity (the debt equity ratio) also hit its lowest ever level of As a result of the above, MHI Group was left with more freedom to invest aggressively in areas of expansion and in new businesses that will drive the medium- to long-term growth strategy. - Business Structure Reforms In Industry & Infrastructure, new companies were established in the engineering business and the shipbuilding business as part of the completion process of structural reforms through the selection and concentration of businesses. As a result, all businesses in the segment now have been spun off into their own business companies, resulting in an environment that facilitates prompt decision-making within a structure optimized for the implementation of each business. In particular, at Mitsubishi Heavy Industries Engineering, Ltd., which is the result of the integration of engineering businesses related to chemical plants, land transportation systems and environmental systems, through the flexible management of unified technology, businesses and human resources, a structure has been put in place that is more than sufficient for initiatives created in response to growth businesses. Also, in the shipbuilding business, in order to be able to put initiatives in place for the field of marine engineering for reduced environmental impact, which is expected to grow in future, in addition to the ferries and governmental vessels that are a strength of MHI Group, we have adopted a two-company structure consisting of Mitsubishi Shipbuilding Co., Ltd. and Mitsubishi Heavy Industries Marine Structure Co., Ltd. Furthermore, in the material handling equipment business, Mitsubishi Logisnext Co., Ltd. was established in October 2017 as a result of the integration of Mitsubishi Nichiyu Forklift Co., Ltd. and UniCarriers Corporation. While promoting improved productivity and reductions in procurement costs, as a comprehensive manufacturer of material handling equipment, this new company makes use of multiple brands as part of its strategy to meet customer needs in all corners of the globe. - Expanding Scale of Business In Power Systems, in addition to winning its first order in Poland for a natural gas-fired thermal power plant, at Nuon Magnum Power Plant in the Netherlands, MHI Group is participating in a hydrogen-fired power generation conversion project that could contribute to significant reductions in CO 2 emissions, and has confirmed that hydrogen-fired power generation is possible by replacing the combustors. In addition, following the reorganization of the French general nuclear power manufacturer AREVA Group, MHI has invested in a business company focusing on the design and manufacture of nuclear power plant equipment and systems, as well as in a business company working mainly in the mining, enrichment and conversion of uranium, and the reprocessing of spent fuel. By seizing this opportunity to expand personnel and technology collaborations between Japan and France, MHI Group will establish a structure that will allow wide-ranging development of nuclear power generation technology that is at the cutting edge of safety and reliability. 24