August 21, 2024
No. 2024041

Company name

Kawasaki Heavy Industries, Ltd.

RepresentativeYasuhiko Hashimoto
Representative DirectorPresident and CEOSecurities code

7012 TSE (Prime Market)/NSE (PremierMarket)

Contact

Takashi Torii
Executive Officer
Group Manager
Corporate Communications Group
Tel. (Tokyo): +81-3-3435-2130
Tel (Kobe): +81-78-371-9531

Notice Regarding Misconduct in the Testing of Marine Diesel Engines
Kawasaki Heavy Industries, Ltd., announced today that it has discovered misconduct regarding shop trials
conducted for its two-stroke diesel engines for commercial marine vessels. The Company takes this incident
very seriously and offers its assurances to customers and other stakeholders that every effort will be made toensure it does not happen again.

The Company is currently examining whether this matter will impact its financial results and will immediately
issue notification should such an impact be confirmed.

Overview of the Situation
On July 5, 2024, Japan’s Ministry of Land, Infrastructure, Transport and Tourism requested that the Company
conduct a fact-finding investigation into whether there had been misconduct in its nitrogen oxide (NOx)emissions verification tests for its marine diesel engines. The Company responded by carrying out an internal
investigation of such engines, which are subject to International Maritime Organization (IMO) Tier 1 and otherregulations governing NOx emissions from marine engines. This investigation uncovered misconduct during
shop trials, including verification tests for NOx emissions.

Specifically, the investigation confirmed that shop trial fuel consumption rates for the Company’s marine diesel
engines had been altered through the manipulation of testing equipment to keep values within the permissible
range of customer specifications and to reduce data discrepancies. This has the potential to impact NOx
emissions calculations for these engines.

1As of the date of this news release, there have been no confirmed cases of this having affected the safety ofthese engines during sea trials or actual use.

Results of the Internal Investigation to Date
Misconduct was confirmed on June 12, 2024. Subsequently, the Company carried out a thorough internal
investigation of 674 engines subject to NOx emissions regulations for marine vessels the keels of which werelaid on or after January 1, 2000, as shown in the table below. This investigation confirmed that data had beenaltered for the 673 two-stroke diesel engines for commercial marine vessels. No data alterations were foundto have been made for the single four-stroke engine.

Number of Engines InvestigatedBreakdownEngines subject to NOx
Engine typeEngines for Japan-emissions regulations

registered* vessels(Number of(Number ofengines/vessels)engines/vessels)Two-stroke

67327

Four-stroke

11

Engines for othercountry/state-registered*vessels(Number ofengines/vessels)
646
0* At time of construction

Actions to Be Taken
The Company will further investigate and report on the effect of this incident on its compliance with NOx andCO2 emissions regulations set by the IMO. Additionally, a special investigative committee of third-party experts
will be established promptly to further probe the details of this incident and analyze the root causes, as well as
to formulate and implement measures to prevent recurrence.
Going forward, the Kawasaki Group will take swift, rigorous steps to discover the full facts behind thismisconduct and will do its utmost to regain the trust of customers, partners, investors and the general public.

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