News Release
July 17, 2020
Sumitomo Precision Products Co., Ltd.

Regarding the withdrawal of certificates for compliance withthe European Pressure Equipment Directive for our industrial plate fin heat exchangers, andmeasures taken by us in response
In response to the publication of “Announcement regarding deviations from manufacturing andinspections processes of the specified facilities (heat exchangers) under the High Pressure Gas
Safety Act” dated February 5, 2020, we hereby report that certificates of conformity to theEuropean Pressure Equipment Directive (PED), which had been issued by a private certifying
institution for each heat exchanger delivered overseas by us in the past, were withdrawn due tonon-conformity with the PED and we confirmed that the withdrawal was notified to the relevant
authority on July 16th, 2020. We take this decision seriously and will make every effort to neverrepeat similar incidents in the future. We sincerely apologize for any inconvenience and concernthat we have caused to our customers and other stakeholders.
1. Details regarding the withdrawal of certificates
This release is made in relation to industrial plate fin heat exchangers (“the Products”), used
for applications such as industrial gas production and petro-chemical plants, etc., which weredelivered by us and which had been certified under the PED*. It has come to our attention that
there have been certain instances of non-conformity to the PED, such as a part of the welding
work of the Products having been done under inappropriate qualification management which
may not have followed the requirements of the PED. We voluntarily reported this information
to a private certifying institution, and the certificates of compliance with the PED for each
Product were subsequently withdrawn.
Because a certificate is provided for each individual Product, we have already establishedmeasures to ensure that all future Products are fully PED certified and compliant.
In addition, we are currently in discussions with private certifying institutions regarding
existing Products that have received certificates other than the PED, and we will continue towork towards a solution with these organizations.
*The directive applies to the export, to the European Union, of equipment with a maximum allowable pressure ofmore than 0.5 bar.

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2. Product safety
Prior to shipment of the Products, we have conducted all of the necessary pressure-resistancetests to ensure product strength, as well as all airtightness tests to prevent leakage, as requiredby the PED. We have only shipped Products that have passed these tests.
We have already started communicating with affected customers to explain the situation andwill continue to provide detailed explanations and updates regarding the safety of alreadydelivered Products so that our customers can continue to use them.
Furthermore, the European Industrial Gases Association (a European industry association)
announced on July 15, 2020 that no accidents or malfunctions have been confirmed to be
attributed to these non-conformities, despite the fact that the delivered Products have been in
operation for a long period of time. Therefore, the Association has not recommended new
actions or precautions for the continued safe operation of already installed Products.
3. Future measures
Following our discovery of an inappropriate manufacturing process under the High Pressure
Gas Safety Act at a specific registered facility, we have rectified our manufacturing processcontrol system to ensure compliance with the PED. All future Products will be shipped only
after receiving an individual certificate from a private certifying institution.
We will take measures to prevent the recurrence of similar incidents in the future, and will
strive to further raise awareness of compliance within us.
4. Business outlook
The withdrawal of these certificates may result in compensation for customers to whom theProducts were shipped. We are currently analyzing the potential impacts of any compensation
payments on our financial results and will promptly disclose this information as soon as thedetails become clear .
For reference, between FY2016 and FY2018, the average annual number of Products shipped
overseas was approximately 116 units per year. Average overseas sales for those years wereapproximately 1.3 billion yen per year.

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