We would like to take this opportunity to thank all of our shareholders for your exceptional support.

Regarding the global economy during fiscal 2023, the European economy was sluggish due to monetary tightening and the impact of the energy situation, etc., and the Chinese economy slowed down due to stagnation in the real estate market, while the U.S. economy remained steady supported by a solid employment and income environment even in an environment where monetary tightening was maintained. Regarding the Japanese economy, amid an improving employment and income environment, the economy has been recovering gradually, although it is still affected by global inflation.
In the second quarter ended September 30, 2023, the IHI Group recorded a significant loss due to the additional inspection program for shipped PW1100G-JM engines and settlement of litigation involving IHI’s consolidated subsidiary.
With respect to the additional inspection program for shipped PW1100G-JM engines, costs related to compensation, additional maintenance, and so forth are expected to be incurred. There has been no change in these assumptions during the fourth quarter ended March 31, 2024. Currently, IHI is taking measures to shorten the period of aircraft on the ground, such as increasing the maintenance capacity of the factory and securing a stable supply of parts.
The IHI Group will work with program partners to enhance the overall maintenance capacity to reduce the impacts on airlines as customers and to restore their confidence.
With regard to the misconduct related to the engine test run records that occurred at IHI Power Systems Co., Ltd announced on April 24, 2024, the IHI Group submitted the interim report to the Ministry of Land, Infrastructure, Transport and Tourism on June 4 of this year. The investigation by the special investigation committee comprising outside experts is ongoing.
In addition, with regard to the misconduct in a test to measure the maximum capacity of snowblower equipped with rotary snowplows for roads which were manufactured and sold by NIIGATA TRANSYS CO.,LTD. announced on July 31, 2024, is currently investigating the facts and determining the cause of the issue.
The IHI Group will sincerely respond to the customers to whom the subject products delivered.

For the fiscal 2024, under the “Group Management Policies 2023” announced in May of last year, we have classified our businesses into three categories: growth business, development-focus business, and conventional businesses. Through a bold shift of management resources to the growth business and development-focus business, we are making steady progress in our efforts to achieve sustainable growth.
For example, in the Aero Engines and Space field, which is the growth business, the current challenge is to respond to the above-mentioned issue. However, demand is expected to grow in both the civilian and defense sectors, and will continue to drive the Company’s growth. In the development-focus businesses, we are promoting initiatives for fuel conversion to ammonia, etc. at power generation facilities, and for establishment of a value chain from production to transportation and storage of fuel ammonia. In the conventional businesses, we will further expand the lifecycle businesses and thorough business structure reform to secure investment capital for the growth and development-focus businesses.

We will do our utmost to restore trust in the Company and achieve future growth, and we ask you for the continued support.