2023/05/16 21:13:17 / 22961354_株式会社日立製作所_招集通知(15) Unconsolidated Statement of Changes in Net Assets (April 1, 2022 to March 31, 2023)(Millions of yen)
Stockholders’ equity
Capital surplus

Retained earnings
OthersCommonstock

Balance at beginning of year

Reserve for
Total capital advanced
surplusdepreciationof
fixed assets

Capitalreserve

Others461,731

179,697272,775

1,086

1,086

452,473

1,026

Retainedearnings
carriedforward

Total retained
earnings

1,642,808

1,643,835

Treasurystock(3,002)

Total
stockholders’equity2,555,037

Change during year
Issuance of new shares

1,086

Reversal of reserve foradvanced depreciation of
fixed assets

2,172
(98)

98

-

-

Distribution of surplus(129,148)(129,148)(129,148)

Net income

987,946

987,946

987,946

Acquisition of treasury
stock(200,212)(200,212)

Disposition of treasury
stock

(8)

(8)

258

249

Cancellation of treasurystock(199,417)(199,417)

199,417-(Net) Change in items
other than stockholders’equity during year
Total change during year

1,086

1,086

(199,426)(198,339)(98)

858,896858,797(537)

661,007

Balance at end of year

462,817

180,783

73,349254,133927

2,501,705

2,502,632(3,539)3,216,044

Valuation and translation adjustments

Balance at beginning of year

Unrealized
holding gains
on securities

Deferred
profitor loss onhedges76,502

10,725

Total
Subscription
valuationrights toandsharestranslation
adjustments
87,227

1,468

Total net
assets2,643,733

Change during year
Issuance of new shares

2,172

Reversal of reserve foradvanced depreciation of
fixed assets-

Distribution of surplus(129,148)

Net income

987,946

Acquisition of treasury
stock
Disposition of treasury
stock
Cancellation of treasury
stock(Net) Change in items
other than stockholders’equity during year

(200,212)
249
26,876

5,255

32,132(235)

31,896

Total change during year

26,876

5,255

32,132(235)

692,903

Balance at end of year

103,379

15,980

119,359

1,233

3,336,637

65

6. Unconsolidated Statement of Changes in Net Assets

2023/05/16 21:13:17 / 22961354_株式会社日立製作所_招集通知(16) Notes to Unconsolidated Financial Statements(Notes on Important Accounting Policy)
1. Inventories
Finished goods, semi-finished goods and work in process: Stated at cost. Cost is determined by the specificidentification method or the moving average method. (The figures shown in the Balance Sheet have been
calculated in accordance with the write-down approach based on decline in profitability.)
Raw materials: Stated at cost. Cost is determined by the moving average method. (The figures shown in the
Balance Sheet have been calculated in accordance with the write-down approach based on decline inprofitability.)
2. Securities
Affiliated companies’ common stock and investments in affiliated companies are stated at cost. Cost isdetermined by the moving average method.
Other securities except stock and investments without market value are stated at fair value. The difference
between acquisition cost and carrying cost of other securities except stock and investments without market value
is recognized in “Unrealized holding gains on securities.”
The cost of other securities except stock and investments without market value is computed based on themoving average method.
Other stock and investments without market value are stated at cost determined by the moving average method.
3. Derivatives
Derivatives are stated at fair value.
4. Depreciation of tangible fixed assets (excluding lease assets)
Straight-line method.
5. Amortization of intangible fixed assets (excluding lease assets)
Selling, leasing, or otherwise marketing software: Amortized based on expected gross revenues ratably.
Other intangible fixed assets: Straight-line method.
6. Depreciation of lease assets
Financial leases other than those that are deemed to transfer the ownership of the leased property to the lessee:
Depreciation is calculated by the straight-line method with no residual value, using the lease term as useful life.
Of the financial leases other than those that are deemed to transfer the ownership of the leased property to thelessee, leases commencing on or before March 31, 2008 are accounted for based on accounting methods
applied to ordinary lease transactions.
7. Allowances and Provisions
Allowance for doubtful receivables:
Estimated uncollectible amounts are accounted for based on loan loss ratios in the case of general
receivables and based on case-by-case examination of collectability in the case of specific receivables
including doubtful receivables.
Provision for product warranties:
In order to prepare for expenditures related to after-sales product services, estimated in-warranty service
costs are accounted for based on past records.
Provision for loss on construction contracts:
In order to provide for losses relating to construction contracts and made-to-order software, an estimated loss
for subsequent fiscal years is accounted for.
Accrued pension liability:
Accrued pension liability is provided for employees’ retirement and severance benefits. Such liability isdetermined based on projected benefit obligation and expected plan assets as of the end of this fiscal year.
The projected benefit obligation is determined by attributing the expected retirement and severance benefits
to each year by the benefit formula basis.
Prior service cost is amortized by the straight-line method over the estimated average remaining service
years of employees.
Unrecognized actuarial gain or loss is amortized by the straight-line method mainly over the estimatedaverage remaining service years of employees from the next fiscal year.
Provision for loss on business of affiliated companies:
In order to provide for losses relating to the business of affiliated companies, the amount the Company is
expected to bear in excess of the amounts invested in and loaned to for such companies is accounted for.

66

7. Notes to Unconsolidated Financial Statements(Notes on Important Accounting Policy)1. Invento

2023/05/16 21:13:17 / 22961354_株式会社日立製作所_招集通知8.

Accounting standard for income and expenses
The Company recognizes revenue in accordance with the following five-step approach.
Step 1: Identify the contract(s) with a customer
Step 2: Identify the performance obligations in the contract
Step 3: Determine the transaction price
Step 4: Allocate the transaction price to the performance obligations in the contract
Step 5: Recognize revenue when (or as) the Company satisfies a performance obligation

The Company sells goods and services such as system integration, cloud services, control systems, software, IT
products, industry & distribution systems, energy solutions, and railway systems. Long-term projects provide
goods and services and control over the goods is transferred to customers over a specified period of time. Thus,
revenue is recognized over the specified period of time. Further to other goods and services, revenue isrecognized when control over the goods is transferred to customers as performance obligations are satisfied atdelivery of the goods.
In addition, multiple solutions are offered to meet its customers’ needs which may involve the delivery or
performance of multiple elements, such as goods or services. When the Company enters into multiple contracts
for providing the goods or services, related contracts are combined based on interdependencies between eachcontract’s consideration and the time the Company entered into such contracts, and the transaction price isallocated to each performance obligation on the basis of the relative stand-alone selling prices of each distinct
goods or services for the purpose of recognizing revenue.
In estimating the stand-alone selling price, the Company considers various factors such as market conditions,entity-specific factors and information about the customer or situation of customer.
The transaction price is the amount of consideration to which the Company expects to be entitled in exchange fortransferring promised goods or services to a customer. Variable consideration such as discounts is included in
the transaction price only to the extent that it is highly probable that a significant reversal in the amount of
cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration issubsequently resolved. The promised amount of consideration does not include a significant financing
component.
For a performance obligation satisfied over time, the Company measures its progress towards complete
satisfaction of that performance obligation based on the costs incurred or the period of services being provided inconsideration of the nature of the goods and services for the purpose of recognizing revenue. When the
Company cannot reasonably measure the progress, revenue is recognized only to the extent of the costs
incurred.
Revenue recognition under long-term projects requires significant assumptions about the estimated total cost,estimated total selling price, risk associated with the contract, and other factors. These estimates are subject tovariance of uncertain economic conditions in the future and may vary due to a variety of reasons beyond ourcontrol. The Company reviews these estimates on an ongoing basis and reflects them in accounting practices.
9. Hedge accounting
Deferral hedge accounting is employed.
10. Accounting for income taxes and related tax effect accounting
From fiscal 2022, the Company adopted the group tax sharing system. In addition, in accordance with the"Practical Solution on the Accounting and Disclosure Under the Group Tax Sharing System" (ASBJ PITF No.42,
August 12, 2021), the Company performs the accounting for income taxes, and accounting and disclosure of
related tax effect accounting.

67(Notes on Important Accounting Policy)8. Accounting standard for income and expenses、(Notes on Important Accounting Policy)9. Hedge accounting、(Notes on I

2023/05/16 21:13:17 / 22961354_株式会社日立製作所_招集通知(Notes on Accounting Estimates)
1. Valuation of affiliated companies’ common stock and investments in affiliated companies(1) Amounts recorded in the financial statements of this fiscal year
The ending balance of Affiliated companies’ common stock and investments in affiliated companies, withoutmarket value: 3,851,309 million yen(2) Information that contributes to understanding of accounting estimates
Affiliated companies’ common stock without market value is evaluated by considering possibility of recovery
based on the performance according to the business plan of those companies if the real value of the stock
has declined significantly as compared to the purchase price. A part of affiliated companies’ common stock isevaluated based on the real value which includes the excess earning power calculated by enterprise value
measurement at the time of the acquisition of the Company concerned. Necessity of impairing the excess
earning power is determined by the possibility of achieving the future business plan.
Business plans are estimated based on revenue growth rate and gross margin ratio, and other factors. In
addition, although a certain amount of negative impact caused by soaring material prices and a shortage ofsemiconductor is included in current business plans, these plans may be affected by risks related to market
or economic environment, and actual result may differ from the estimates.
Significant changes in primary assumptions of the business plan could result in the real value being less thanthe purchase price.
2. Loss on impairment of Fixed Assets(1) Amounts recorded in the financial statements of this fiscal year
The ending balance of Tangible fixed assets: 192,605 million yen
The ending balance of Intangible fixed assets (excluding selling, leasing, or otherwise marketing software):78,036 million yen(2) Information that contributes to understanding of accounting estimates
This note is omitted as the same content is stated in ‘6. Property, plant and equipment, Goodwill and Other
intangible assets’ under ‘Notes on Important Matters for Basis of Presentation of Consolidated Financial
Statements’ in the Notes to Consolidated Financial Statements.
3. Provision for loss on business of affiliated companies(1) Amounts recorded in the financial statements of this fiscal year
The ending balance of Provision for loss on business of affiliated companies: 139,422 million yen(2) Information that contributes to understanding of accounting estimates
This note is omitted as the same content is stated in ‘7. Allowances and Provisions’ under ‘Notes on
Important Accounting Policy’ in the Notes to Unconsolidated Financial Statements.
4. Accrued pension liability(1) Amounts recorded in the financial statements of this fiscal year
The ending balance of Accrued pension liability: 75,212 million yen(2) Information that contributes to understanding of accounting estimates
This note is omitted as the same content is stated in ‘7. Allowances and Provisions’ under ‘Notes on
Important Accounting Policy’ in the Notes to Unconsolidated Financial Statements and ‘2. Employee
Retirement Benefits’ under ‘Notes on Accounting Estimates’ in the Notes to Consolidated Financial
Statements.
5. Provision for loss on construction contracts(1) Amounts recorded in the financial statements of this fiscal year
The ending balance of Provision for loss on construction contracts: 37,272 million yen(2) Information that contributes to understanding of accounting estimates
This note is omitted as the same content is stated in ‘7. Allowances and Provisions’ under ‘Notes on
Important Accounting Policy’ in the Notes to Unconsolidated Financial Statements and ‘3. Long-term
projects’ under ‘Notes on Accounting Estimates’ in the Notes to Consolidated Financial Statements.
6. Deferred tax assets(1) Amounts recorded in the financial statements of this fiscal year
The ending balance of Deferred tax assets: 58,624 million yen(2) Information that contributes to understanding of accounting estimates
This note is omitted as the same content is stated in ‘4. Deferred tax assets’ under ‘Notes on Accounting
Estimates’ in the Notes to Consolidated Financial Statements.

68(Notes on Accounting Estimate)2023/05/16 21:13:17 / 22961354_株式会社日立製作所_招集通知(Notes to Unconsolidated Balance Sheet)
1. Collateralized assets(Millions of yen)

2.

3.

4.

Type of asset
Affiliated companies’ common
stock
Investments in securities

Year-end book value

Description

46

Collaterals for borrowings by affiliated companies

8Long-term loan receivables

37

Collaterals for borrowings by investees
Collaterals for borrowings by affiliated companies
and investees

Total
91
Accumulated depreciation of tangible fixed assets
Buildings
136,017 million yen
Structures
23,622 million yen
Machinery
82,408 million yen
Vehicles
933 million yen
Tools and equipment
144,138 million yen
Lease assets
7,583 million yen
Guarantees
The Company guarantees financial guarantees from financial institutions concerning
subsidiaries' order received, subsidiaries' borrowings from financial institutions, etc. as
follows.
(Millions of yen)
Guarantee
Year-end balance
Hitachi Energy Ltd
528,104
Hitachi Rail STS S.p.A.
271,048
Hitachi America Capital, Ltd.
93,471
Hitachi International (Holland) B.V.
39,781
Hitachi Rail Ltd.
35,234
Hitachi Energy Switzerland Ltd
6,013
Hitachi Energy Canada Inc.
5,219
Kawasaki Railcar Manufacturing Co., Ltd.
1,600
Others3,039
Total
983,513
In addition to the foregoing, the Company has entered into an agreement with each of thefollowing overseas affiliated companies on maintaining their finances in a sound condition,etc., mainly to enhance their credit in order to support their financing activities:
Hitachi America Capital, Ltd., Hitachi International (Holland) B.V., Hitachi International
Treasury Ltd., Hitachi (China) Finance Co., Ltd. and Hitachi Power Europe GmbH
Short-term receivables from affiliated companies
311,266 million yen
Long-term receivables from affiliated companies
372,441 million yen
Short-term payables to affiliated companies
755,838 million yen
Long-term payables to affiliated companies
6,308 million yen

69(Notes to Unconsolidated Balance Sheet)1. Collateralized assets、(Notes to Unconsolidated Balance Sheet)2. Accumulated depreciation of tangible fixed assets

2023/05/16 21:13:17 / 22961354_株式会社日立製作所_招集通知(Notes to Unconsolidated Statement of Operations)
1. Loss on impairment of assets(1) Summary of the major assets or asset groups for which impairment loss was recognizedClassification
Description
Category
Location
Software relating toAssets to be held
Softwareservice business forand usedfinancial institutions
Software relating toAssets to be held
Softwareaccounting and tax
and used
return(2) Reason to recognize impairment loss
The Company recognized the impairment loss for assets to be held and used since amounts invested in theabove assets are expected to be irrecoverable due to decline in their profitability.
(3) Amounts of impairment loss
Buildings
116 million yen
Structures
10 million yen
Machinery
396 million yen
Vehicles10 million yen
Tools and equipment
147 million yen
Land
133 million yen
Lease assets
8 million yen
Software10,447 million yen
Others819 million yen
Total
12,091 million yen(4) Method of grouping assets
Although the grouping of assets is principally based on business divisions or places of business, some assets
and asset groups are grouped as a separate unit that generates cash flows independently of other asset
groups.
(5) Calculation of recoverable amounts
For assets to be held and used, calculation is based on the higher of net sales price and value in use, andnet sales price is calculated by deducting the estimated cost of disposal from real estate appraisal value.
2. Revenues from affiliated companies
393,722 million yen
Purchases from affiliated companies
759,478 million yen
Non-operating transactions with affiliated companies
687,298 million yen

70(Notes to Unconsolidated Statement of Operations)1. Loss on impairment of assets、(Notes to Unconsolidated Statement of Operations)2. Sales to affiliated co2023/05/16 21:13:17 / 22961354_株式会社日立製作所_招集通知(Note to Unconsolidated Statement of Changes in Net Assets)
Matters related to Class and Number of Treasury Stock(Shares)Number of shares
At beginning of year Increase during year Decrease during year
At end of year
Common stock
998,72130,084,761
30,572,652
510,830
Summary of Reason for Change
The increase during this fiscal year by 30,084,761 shares is due to the repurchase of 29,983,800 shares of its own
common stock pursuant to Article 459, Paragraph 1 of the Companies Act of Japan and Article 32 of Hitachi's
Articles of Incorporation, which was approved at the Board of Directors meeting held on April 28, 2022, and theacquisition of 69,200 shares without consideration in accordance with the restricted stock compensation plan, andthe purchase of 31,761 shares from less-than-one unit shareholders at their request. The decrease during thisfiscal year by 30,572,652 shares is due to the cancellation of 30,488,800 shares of its treasury shares pursuant to
Article 178 of the Companies Act of Japan, and the disposition of 81,660 shares as a result of the exercise of stockacquisition rights, and the sale of 2,192 shares to less-than-one unit shareholders at their request.
Class(Note on Revenue Recognition)
Information about the basis to understand revenue is omitted as the same content is stated in ‘8. Accounting
standard for income and expenses’ under ‘Notes on Important Accounting Policy’ in the Notes on
Unconsolidated Financial Statements and ‘3. Accounting standard for income and expenses’ under ‘Notes on
Important Matters for Basis of Presentation of Consolidated Financial Statements’ in the Notes to Consolidated
Financial Statements.
Information about disaggregation of revenue and to understand the amount of revenue in the current and thefollowing fiscal years are omitted as the same content is stated in ‘Note on Revenue Recognition’ in the Notes
to Consolidated Financial Statements. Of the revenue recognized during the fiscal year ended on March 31,
2023, the amount of revenue recognized based on the pattern of the cost accrual arising from long-term project
was 390,496 million yen.
(Note on Accounting for Deferred Taxes)
The major causes of deferred tax assets are accrued pension liability and accrued bonuses to employees.
(Note on Leased Fixed Assets)
In addition to the capitalized fixed assets, as significant equipment, the Company utilizes cogeneration
facilities under lease arrangements.

71(Note to Unconsolidated Statement of Changes in Net Assets)、(Note on Revenue Recognition)、(Note on Accounting for Deferred Taxes)、(Note on Leased Fixed A

2023/05/16 21:13:17 / 22961354_株式会社日立製作所_招集通知(Note on Transactions with Related Parties)(Millions of yen)
Name of company
Attributeetc.
Hitachi Energy
Subsidiary
Finance Ltd% of voting
rights held

Relationship with therelated parties

Indirect: 100.0% Loans

Description oftransaction
Loan (Note 3)

Sale of the
Deposit received
Direct: 100.0% Company's products,(Note 4)etc.
Outsourcing of theCompany's softwaredevelopment,
Deposit received
outsourcing of
Subsidiary Hitachi Systems, Ltd. Direct: 100.0%(Note 4)maintenance of theCompany's
telecommunications
equipment *Manufacturing, sale
Hitachi Global Life
Deposit received
Subsidiary
Direct: 100.0% and maintenance of
Solutions, Inc.
(Note 4)
the Group's products *Outsourcing of theCompany's
Hitachi Solutions,
Deposit received
Subsidiary
Direct: 100.0% information systems
Ltd.
(Note 4)and softwaredevelopment *Subsidiary Hitachi Energy Ltd
Direct: 100.0% *Guarantee
Manufacturing, sale,
Hitachi Rail STS
engineering andSubsidiary
Indirect: 100.0%
Guarantee
S.p.A.
maintenance of theGroup's products, etc.
Hitachi America
Subsidiary
Indirect: 100.0% *Guarantee
Capital, Ltd.
Transfer of sharesof Hitachi Metals,
Hitachi Metals, Ltd. Direct:
Purchase of Hitachi
Subsidiary
53.4%
Ltd. (Note 1)(Note 1)
(Note 1)
Metals' products
Transfer priceProfits
Transfer of sharesof Hitachi
Hitachi Transport
Oursourcing of the
Direct:Transport System,
Affiliate System, Ltd.
39.9% Company's products(Note 2)
Ltd. (Note 2)(Note 2)transport and strage
Transfer priceProfits
Subsidiary

Hitachi High-Tech
Corporation

Transaction
Classification
amountLong-term loan
26,736
receivables

Year-endbalance
320,472

21,109Depositreceived

112,296

9,984

Depositreceived

74,676(23,945)

Depositreceived

71,2013,805

Depositreceived

61,591

528,104--

271,048--

93,471

-

-

-

-

-

-

382,042
328,648

221,983
210,653* The Company’s Directors, Executive Officers or employees concurrently hold position of directors or officers at thesubsidiary.
Notes: 1. Hitachi Metals, Ltd. changed its company name to Proterial, Ltd. on January 4, 2023. The Company
transferred all stocks of Hitachi Metals, Ltd. to Hitachi Metals, Ltd. in association with the acquisition oftreasury stock by itself on January 5, 2023. As a result, it is no longer a related party. The transfer price
was determined with due consideration to the valuation amount presented by an independent third party.
2. Hitachi Transport System, Ltd. changed its company name to LOGISTEED, Ltd. on April 1, 2023. The
Company transferred all stocks of Hitachi Transport System, Ltd. to Hitachi Transport System, Ltd. inassociation with the acquisition of treasury stock by itself on March 1, 2023. As a result, it is no longer a
related party. The transfer price was determined with due consideration to the valuation amount presented
by an independent third party.
3. The interest rate was determined with due consideration to market interest rates. The transaction amountof the loans indicates the change from the balance at the beginning of the fiscal year.
4. These are loans or deposits made based on the pooling system wherein the funds of affiliated companies
are concentrated at the Company to be loaned to affiliated companies who have financing needs. Theinterest rates on loans and deposits are determined with due consideration to market interest rates. The
transaction amount indicates the increase or decrease from the balance at the beginning of the fiscal year,
including interest received and paid.
(Note on Per Share Information)
Net assets per share
3,557.49 yen
Net income per share 1,041.20 yen

72(Note on Transactions with Related Parties)、(Note on Per Share Information)

2023/05/16 21:13:17 / 22961354_株式会社日立製作所_招集通知(Note on Major Subsequent Events)
Repurchase of Shares of Common Stock
The Board of Directors decided to repurchase shares of its own common stock pursuant to Article 459, Paragraph
1 of the Companies Act of Japan and Article 32 of the Company’s Articles of Incorporation, as follows.
(a) Reason for repurchase
The Company views the return of profits to shareholders through enhancing corporate value from mid- andlong-term perspective and paying dividends continuously as an important managerial issue. The Company has
decided to repurchase its own shares this time, taking into consideration its financial condition and the price ofits common stock as well as the progress of the review of the business portfolio.
(b) Outline of the Repurchase(i) Class of shares to be repurchased
Common stock of the Company(ii) Aggregate number of shares to be repurchased
Up to 20 million shares(2.13% of the number of outstanding shares (excluding treasury stocks))(iii) Aggregate amount of repurchase
Up to 100.0 billion yen(iv) Period of the repurchase
From April 28, 2023 to March 31, 2024(v) Method of repurchase
Expected open market purchase through the Tokyo Stock Exchange(Additional Information)
Transfer of subsidiary’s shares
On March 30, 2023, the Company entered into the following two agreements regarding the transfer of a part of theshares of Hitachi Astemo, Ltd. (hereinafter “Hitachi Astemo”), a consolidated subsidiary of the Company, to Hitachi
Astemo and Honda Motor Co. Ltd.(hereinafter “Honda”) and for inviting JIC Capital, Ltd. (hereinafter “JICC”) as a
new joint partner.
(i) Share Subscription Agreement with JICC-01 Limited Partnership (hereinafter “JICC-01”) managed by JICC-01
G.K., which is a wholly owned subsidiary of JICC including that Hitachi Astemo issues Class shares to JICC-01,
and Hitachi Astemo purchases a part of shares of its common shares held by the Company, using a portion of
the funds raised through the issuance of Class shares(ii) Agreement for investment in kind and share transfer with Honda including that Hitachi Astemo issues commonshares to Honda in exchange for Honda to invest the shares of Hitachi Astemo Electric Motor Systems, Ltd. inkind and the Company transfers a part of shares of Hitachi Astemo’s common shares to Honda.
The consideration is expected to be approximately 158.0 billion yen. Assuming the series of transactions based on
the agreements are settled, the Company plans to post an extraordinary gain of approximately 108.0 billion yen ingain on sale of affiliated companies' common stock in the unconsolidated statement of operations for the fiscal year
ending March 31, 2024 (from April 1, 2023 to March 31, 2024).

73(Note on Major Subsequent Events)、(Additional Information)