Annual Securities Report(The 155th Business Term)
From April 1, 2023 to March 31, 2024

6-6, Marunouchi 1-chome, Chiyoda-ku, Tokyo

Hitachi, Ltd.

[Cover][Document Filed]Annual Securities Report (“Yukashoken Hokokusho”)[Applicable Law]

Article 24, Paragraph 1 of the Financial Instruments and Exchange Act of Japan[Filed with]

Director, Kanto Local Finance Bureau[Filing Date]

June 21, 2024

[Fiscal Year]

The 155th Business Term (from April 1, 2023 to March 31, 2024)[Company Name]

Kabushiki Kaisha Hitachi Seisakusho[Company Name in English]

Hitachi, Ltd.

[Title and Name of

Keiji Kojima, President & CEO

Representative][Address of Head Office]6-6, Marunouchi 1-chome, Chiyoda-ku, Tokyo[Phone No.]

03-3258-1111[Contact Person]

Yuki Fukutani, Manager, Legal Division[Contact Address]

6-6, Marunouchi 1-chome, Chiyoda-ku, Tokyo[Phone No.]

03-3258-1111[Contact Person]

Yuki Fukutani, Manager, Legal Division[Place Where Available forTokyo Stock Exchange, Inc.

Public Inspection](2-1, Nihombashi Kabutocho, Chuo-ku, Tokyo)
Nagoya Stock Exchange, Inc.
(8-20, Sakae 3-chome, Naka-ku, Nagoya)

This is an English translation of the Annual Securities Report filed with the Director of the Kanto Local Finance Bureauvia
Electronic Disclosure for Investors’ NETwork (“EDINET”) pursuant to the Financial Instruments and Exchange Act of Japan withsome contents including cover page, table of contents and URL of the reference information.
Certain information in “Part I. Information on the Company - II. Business Overview - 3. Risk Factors - Risks Related to Our
American Depositary Shares” is only included in this English translation of the Annual Securities Report for ADSs holders and notincluded in the original report.
Certain information in “Part I. Information on the Company - V. Financial Information” in this document incorporates financial
statements prepared in conformity with the International Financial Report Standards (“IFRS”) as issued by the International
Accounting Standards Board and independent auditor’s report instead of the English translation of the Annual Securities Report.
The translation of the Internal Control Report, the Independent Auditors’ Report and the Confirmation Letter for the original
Annual Securities Report are included at the end of this document.
In this document, the terms “we,” “us,” “our” and “Hitachi” refer to Hitachi, Ltd. and consolidated subsidiaries or, as the context
may require, Hitachi, Ltd. on a non-consolidated basis and the term “the Company” refers to Hitachi, Ltd. on a non- consolidated
basis.
Unless otherwise stated, in this document, where we present information in millions or hundreds of millions of yen, we havetruncated amounts of less than one million or one hundred million, as the case may be. Accordingly, the total of figures presented incolumns or otherwise may not equal the total of the individual items. We have rounded all percentages to the nearest percent, onetenth of one percent or one-hundredth of one percent, as the case may be.
References in this document to the “Financial Instruments and Exchange Act” are to the Financial Instruments and Exchange Act
of Japan and other laws and regulations amending and/or supplementing the Financial Instruments and Exchange Act of Japan.
References in this document to the “Companies Act” are to the Companies Act of Japan and other laws and regulations amending
and/or supplementing the Companies Act of Japan.

Part I Information on the Company

1

I.

II.

III.

IV.

Overview of the Company

1

1. Key Financial Data .………………………………………………………………………………
2. History ……………………………………………………………………………………………
3. Description of Business ..…………………………………………………………………………
4. Information on Affiliates …………………………………………………………………………
5. Employees ..………………………………………………………………………………………

1
3
7
12
20

Business Overview

25

1. Management Policy, Business Environment and Challenges Hitachi Group Faces ……………
2. Sustainability Approach and Initiatives .…………………………………………………………
3. Risk Factors ………………………………………………………………………………………
4. Management’s Discussion and Analysis of Consolidated Financial Condition,
Results of Operations and Cash Flows ...…………………………………………………………
5. Material Agreements, etc. ..………………………………………………………………………
6. Research and Development ………………………………………………………………………

25
29
42

Property, Plants and Equipment

74

1. Summary of Capital Investment, etc. .……………………………………………………………
2. Major Property, Plants and Equipment ..…………………………………………………………
3. Plans for Capital Investment, Disposals of Property, Plants and Equipment, etc. .………………

74
75
79

Information on the Company

80

53
68
69

1. Information on the Company’s Stock, etc. .……………………………………………………… 80(1) Total number of shares, etc. ..………………………………………………………………… 80(2) Information on the stock acquisition rights, etc. ..…………………………………………… 81(3) Information on moving strike convertible bonds, etc. .……………………………………… 83(4) Changes in the total number of issued shares and the amount of common stock and other … 83
(5) Shareholders composition …………………………………………………………………… 84(6) Major shareholders ...………………………………………………………………………… 85(7) Information on voting rights .………………………………………………………………… 86
2. Information on Acquisition, etc. of Treasury Stock ...…………………………………………… 87
3. Dividend Policy ..………………………………………………………………………………… 89
4. Corporate Governance, etc. ……………………………………………………………………… 90(1) Corporate Governance ..……………………………………………………………………… 90(2) Directors and Senior Management. ..………………………………………………………… 97(3) Audit .………………………………………………………………………………………… 113(4) Compensation to Directors and Executive Officers .………………………………………… 117(5) Information on shareholdings ...……………………………………………………………… 125

V.

Financial Information ...………………………………………………………………………… 131

VI.

Stock-Related Administration for the Company ...………………………………………… 131

VII. Reference Information on the Company .…………………………………………………… 132

Part II Information on Guarantors, etc. for the Company

134[Consolidated Financial Statements] ..……………………………………………………………………… F-1
Consolidated Financial Statements. ...……………………………………………………………… F-2
Reports of Independent Registered Public Accounting Firm ....…………………………………… F-77
[Internal Control Report (Translation)] ..…………………………………………………………………… A-1[Independent Auditors’ Report (Translation)] ...…………………………………………………………… A-3[Confirmation Letter (Translation)] ...……………………………………………………………………… A-10

Part I Information on the Company
I. Overview of the Company
1. Key Financial Data
(1) Consolidated financial data, etc.
Fiscal year
Year end
Revenues
Income before income taxes(Millions of yen, unless otherwise stated)
151st
152nd
153rd
154th
155th
business term business term business term business term business term
March 2020
March 2021
March 2022
March 2023
March 2024
8,767,263
8,729,196
10,264,602
10,881,150
9,728,716
180,268

844,443

839,333

819,971825,801

Net income attributable to87,596501,613583,470649,124
589,896
Hitachi, Ltd. stockholders
Comprehensive income(8,465)838,237
958,008
905,819
1,013,811
attributable to Hitachi, Ltd.
stockholders
Total Hitachi, Ltd.
3,159,986
3,525,502
4,341,836
4,942,854
5,703,705
stockholders’ equity
Total equity
4,266,739
4,458,232
5,355,277
5,335,567
5,859,603
Total assets
9,930,081
11,852,853
13,887,502
12,501,414
12,221,284
Total Hitachi, Ltd.
3,270.43
3,646.46
4,488.91
5,271.97
6,155.38
stockholders’ equity per share(yen)
Earnings per share attributable
90.71
519.29603.75684.55634.57
to Hitachi, Ltd. stockholders,
basic (yen)Earnings per share attributable
90.60
518.51602.96683.89633.75
to Hitachi, Ltd. stockholders,
diluted (yen)Total Hitachi, Ltd.
31.8
29.7
31.3
39.5
46.7
stockholders’ equity ratio (%)
Return on equity (%)
2.7
15.0
14.8
14.0
11.1
Price earnings ratio (times)
34.6
9.6
10.2
10.6
21.9
Net cash provided by (used in)
560,920
793,128
729,943827,045956,612
operating activities
Net cash provided by (used in)(525,826)(458,840)(1,048,866)
151,063(131,543)
investing activities
Net cash provided by (used in)
2,837(184,838)
202,739(1,142,966)(1,024,907)
financing activities
Cash and cash equivalents at
812,3311,015,886
968,827
833,283
705,367
end of year
Number of employees
301,056
350,864
368,247
322,525
268,655(Notes) 1. Our consolidated financial statements have been prepared in conformity with the International Financial
Reporting Standards (“IFRS”).
2. “Income from continuing operations, before income taxes” is shown in the “Income before income
taxes” columns for the 152nd and prior business terms.
3. The average number of part-time employees is not stated since they represented fewer than 10% of thenumber of employees.

1(2) Financial data, etc. of the Company
Fiscal year
Year end
Revenues
Ordinary income
Net income
Common stock
Number of issued shares (thousandsof shares)
Total net assets
Total assets
Net assets per share (yen)Dividends per share (yen)[Of the above, interim dividends per
share (yen)]
Net income per share, basic (yen)(Millions of yen, unless otherwise stated)
151st
152nd
153rd
154th
155th
business term business term business term business term business term
March 2020 March 2021 March 2022 March 2023 March 2024
1,793,250
1,678,223
1,623,424
1,631,338
1,756,937
355,490
305,461
365,049
354,719
401,001
119,409705,511516,115
987,946
581,570
459,862
460,790
461,731462,817463,417967,280

967,885

968,234

938,083

927,167

1,579,058
4,004,408
1,631.9795[45]

2,243,742
4,982,609
2,318.50105[50]

2,643,733
5,815,620
2,731.77
125[60]

3,336,637
5,940,498
3,557.49
145[70]

3,614,195
6,095,488
3,899.16
180[80]

123.59729.77533.63

1,041.20

625.36123.49729.18533.301,040.62

Net income per share, diluted (yen)625.00
39.4
45.0
45.4
56.1
Stockholders’ equity ratio (%)
59.3
7.6
36.9
21.1
33.1
Return on equity (%)
16.7
25.4
6.9
11.6
7.0
Price earnings ratio (times)
22.2
76.9
14.4
23.4
13.9
Dividend payout ratio (%)
28.8
31,442
29,85029,48528,672
Number of employees
28,111
90.3
145.2
181.0
215.4
Total shareholder return (%)
406.0[Comparative indicator : Dividend[90.5][128.6][131.2][138.8][196.2]
included TOPIX] (%)
4,693.0
5,515.0
7,460.0
7,463.0
Highest share price (yen)14,140.0
2,524.0
2,855.0
4,750.0
5,665.0
Lowest share price (yen)6,992.0(Notes) 1. The average number of part-time employees is not stated since they represented fewer than 10% of thenumber of employees.
2. The highest and lowest share prices are market prices on the Prime Market of the Tokyo Stock
Exchange since April 4, 2022 and the highest and lowest share prices before that are market prices on
the first section of the Tokyo Stock Exchange.
3. Effective from the 153rd business term, the Company adopted the “Accounting Standard for Revenue
Recognition” (ASBJ Statement No.29, March 31, 2020). The figures for key financial data from the153rd business term are restated as the standard is applied.

22. History
1910

Founded as a repair shop at Hitachi copper mine of Kuhara Mining Company

Feb.

1920

Incorporated as Hitachi, Ltd. with the Hitachi and Kameido Works

Feb.

1921

Acquired the Kasado shipyard from Nippon Kisen Co., Ltd. and established
Kasado Works

May

1935

Equity participation in Kyousei Reiki Kogyo K.K. (later changed its name to
Hitachi Plant Engineering & Construction Co., Ltd.)

May

1937

Merged Kokusan Industries, Ltd. and established seven factories, including
Totsuka Works

Apr.

1939

Established Taga Works, spun off the Hitachi Research Laboratory from Hitachi Works

Sep.

1940

Established Mito Works

Apr.

1942

Established the Central Research Laboratory

Sep.

1943

Merged Riken Vacuum Industry and established Mobara Works

Mar.

1944

Spun off Shimizu Works from Kameari Works
Spun off Tochigi Works from Taga Works

Dec.
Apr.

1947

Established Hinode Shokai Co., Ltd. (currently Hitachi High-Tech Corporation)

May

1949

Established Higashi-Nippon Senikikai K.K. (later changed its name to Hitachi
Medical Corporation)

Feb.

1950

Established Nitto Transport K.K. (later Hitachi Transport System, Ltd.)

May

1955

Established Hitachi Sales Corporation

Oct.

1956

Spun off Hitachi Metals Industries, Ltd. (later Hitachi Metals, Ltd.) and Hitachi
Cable, Ltd.
Established Hitachi Kiden Kogyo, Ltd.

Nov.
Jun.

1957

Spun off Kokubu Works from Hitachi Works

Feb.

1959

Established Yokohama Works
Established Hitachi New York, Ltd. (currently Hitachi America, Ltd.)

Oct.
Jun.

1960

Established Hitachi Geppan Corp. (later changed its name to Hitachi Credit Corporation)

Aug.
Feb.

Equity participation in Nippon Business Consultant Co., Ltd. (later changed its name to Hitachi Information
Systems, Ltd.)1961

Spun off Naka Works from Taga Works;
Equity participation in Maxell Electric Industrial Co., Ltd.
Established Katsuta Works

Aug.
Aug.

1962

Established Kanagawa Works

Feb.

1963

Spun off Narashino Works from Kameido Works
Spun off Hitachi Chemical Company, Ltd.

Apr.
Feb.

1966

Established the Mechanical Engineering Research Laboratory

Feb.

1968

Spun off Sawa Works from Taga Works, spun off Tokai Works from Yokohama Works, and spun off Odawara
Works from Kanagawa Works

3

Feb.

1969

Established Software Works

Apr.

Established Ome WorksAug.

Established Omika Works

Dec.

Spun off Hitachi Construction Machinery Co., Ltd.

May

1970

Established Hitachi Software Engineering Co., Ltd.

Sep.
Apr.

Established Takasaki Works

1971

Acquired Asahi Works from Hitachi Denshi, Ltd.
Established the Production Engineering Research Laboratory

Jun.
Feb.

1973

Established the Systems Development Laboratory

Jun.

1974

Established Tsuchiura Works
Relocated Kameido Works and renamed it Nakajo Works

Nov.
Jun.

1982

Established Hitachi Europe Ltd.

Apr.

1985

Established Advanced Research Laboratory

Feb.

1989

Established Hitachi Asia Pte. Ltd. (currently Hitachi Asia Ltd.)

Feb.

1991

Integrated Sawa Works into the Automotive Products Division
Integrated Katsuta Works into the Materials Process Technology Division; integrated Totsuka Works into the
Information & Telecommunication Division; integrated Naka Works into the Instruments Division

Aug.
Feb.

1992

Changed the operation unit of home appliances, computers and electronic devices businesses from a factory to abusiness division

Aug.
Feb.

1993

1994

Integrated Consumer Products Group and Image & Information Media Divisionand renamed them Consumer Products & Information Media Systems Group.
Established Hitachi (China), Ltd.

Oct.
Feb.

Integrated the Semiconductor Technology Development Center, Musashi Works and Takasaki Works into the
Semiconductor Division
Integrated Shimizu Works into the Air Conditioning Division, integrated Nakajo Works and Narashino Works into
the Industrial Equipment Division

Aug.
Aug.

Integrated Yokohama Works and Tokai Works into the AV Products Division

1995

Reorganized business groups as the Power & Industrial Systems Group,
Consumer Products & Information Media Systems Group, Information Systems
Group and Electronics Components Group; integrated a part of the R&D
division and sales division into the business groups
Merged Hitachi Sales Corporation

Apr.
Apr.

1999

Reorganized business groups into de facto companies to independently operate each business group

Oct.

2000

Merged Hitachi Credit Corporation with Hitachi Leasing Corp. and changed its name to Hitachi Capital Corporation

Oct.

2001

Split the Instruments Group and Semiconductor Manufacturing Equipment
Group via a company split and reorganized them as Hitachi High-Technologies Corporation (currently Hitachi High-Tech Corporation);
Split the Industrial Machinery Systems Division via a company split andreorganized it as Hitachi Industries Co., Ltd.

4

Apr.

2002

Split the Display Group via a company split and established Hitachi Displays, Ltd.;
Split the Telecommunication Equipment Division via a company split and reorganized it as Hitachi Communication
Technologies, Ltd.;
Turned Unisia Jecs Corporation (its name later changed to Hitachi Unisia Automotive, Ltd.) into a wholly owned
subsidiary via a share exchange

Oct.

Jan.

Split the Home Appliance Group via a company split and reorganized it as Hitachi Home & Life Solutions, Inc.;
Split the Industrial Equipment Group via a company split and reorganized it as Hitachi Industrial Equipment Systems
Co., Ltd.

2003

Acquired the HDDs business from IBM Corp., and commenced operations as Hitachi Global Storage Technologies
Netherlands B.V.

Apr.

Split the semiconductor business, centering on system LSIs, via a company split and established Renesas
Technology Corp. (It merged with NEC Electronics Corporation and changed its name to Renesas Electronics
Corporation in April 2010, and ceased to be an affiliate of the Company due to a decrease in the Company’sownership percentage of voting rights in September 2013.)

Jun.

Adopted committee system as the Company’s corporate governance structure

Oct.

2004

Merged TOKICO, Ltd. and Hitachi Unisia Automotive, Ltd.;
Split the Mechatronics System Division, centering on ATMs, via a company split and established Hitachi-Omron
Terminal Solutions, Corp. (later changing its name to Hitachi Channel Solutions, Corp.)

Apr.

2006

Split the Social & industrial infrastructure business via a company split and integrated it with Hitachi Plant
Engineering & Construction Co., Ltd., Hitachi Kiden Kogyo, Ltd. and Hitachi Industries Co., Ltd. and reorganizedthem as Hitachi Plant Technologies, Ltd.;
Merged Hitachi Home & Life Solutions, Inc. with Hitachi Air Conditioning Systems Co., Ltd. and changed its nameto Hitachi Appliances, Inc.
Turned Clarion Co., Ltd. into a consolidated subsidiary via a tender offer

Dec.
Jul.

2007

Split the nuclear power systems business via a company split and reorganized it as Hitachi-GE Nuclear Energy, Ltd.

Mar.

2009

Turned Hitachi Koki Co., Ltd. into a consolidated subsidiary via a tender offer;
Turned Hitachi Kokusai Electric Inc. into a consolidated subsidiary via a tender offer

Jul.

Merged Hitachi Communication Technologies, Ltd.;
Split the Automotive Systems Group via a company split and established Hitachi Automotive Systems, Ltd.;
Split the Consumer Business Group via a company split and established Hitachi Consumer Electronics Co., Ltd.

Oct.

Reorganized business groups into in-house companies with independent accounting to promote quick business
operation

Feb.

2010

Turned Hitachi Information Systems, Ltd., Hitachi Software Engineering Co., Ltd. and Hitachi Systems & Services,Ltd. into wholly owned subsidiaries

Apr.

Turned Hitachi Plant Technologies, Ltd. and Hitachi Maxell, Ltd. into wholly owned subsidiaries via shareexchanges (turned Hitachi Maxell, Ltd. into an equity-method associate of the Company via the sale of its shares inMarch 2014, and it ceased to be an affiliate of the Company in March 2017 following the sale of its shares)

Oct.

Merged Hitachi Software Engineering Co., Ltd. with Hitachi Systems & Services, Ltd. and changed its name to
Hitachi Solutions, Ltd.

Oct.

2011

Merged Hitachi Electronics Services Co., Ltd. with Hitachi Information Systems, Ltd. and changed its name to
Hitachi Systems, Ltd.

Mar.

2012

Transferred the HDDs business to Western Digital Corporation via the sale of shares of Viviti Technologies Ltd., aholding company for Hitachi Global Storage Technologies Inc., etc. Transferred small and medium-sized displays
business via the sale of shares of Hitachi Displays, Ltd.

Apr.

2013

Merged Hitachi Plant Technologies, Ltd.

Jul.

Merged Hitachi Metals, Ltd. with Hitachi Cable, Ltd.

5

Feb.

2014

Turned Hitachi Medical Corporation into a wholly owned subsidiary via a share exchange (It changed its name to
Hitachi Healthcare Manufacturing, Ltd. following the reorganization of Hitachi’s healthcare business in April 2016.)

Mar.
Apr.

2015

Reorganized Central Research Laboratory, Hitachi Research Laboratory,
Yokohama Research Laboratory, Design Division and overseas R&D
facilities into Global Center for Social Innovation, Center for Technology
Innovation and Center for Exploratory Research to establish global R&D
structure from the perspective of customers.
Hitachi Appliances, Inc. transferred its air-conditioning systems business to a
joint venture established with Johnson Controls Inc.

Oct.
Apr.

Split the thermal power generating systems business via a company split and transferred it to Mitsubishi Hitachi
Power Systems, Ltd. (It ceased to be an affiliate of the Company in September 2020 following the sale of its shares.)2016

Reorganized in-house companies into business units as a market-specificbusiness structureMay

Turned Hitachi Transport System, Ltd. into an equity-method associate of
the Company via the sale of a part of its shares (It ceased to be an affiliate of
the Company in March 2023 following the sale of its shares)

Oct.

Turned Hitachi Capital Corporation into an equity-method associate of the Company via the sale of a part of its
shares (It ceased to be an affiliate of the Company as a result of the merger with Mitsubishi UFJ Lease & Finance
Company Limited. in April 2021.)

Mar.

2017

Transferred the power tools business via the sale of shares of Hitachi Koki, Co., Ltd.

Jun.

2018

Sold the semiconductor manufacturing equipment business of Hitachi Kokusai Electric Inc. and turned it into an
equity-method associate of the Company

Mar.

2019

Transferred the car information systems business via the sale of shares of Clarion, Co., Ltd.
Merged Hitachi Appliances, Inc. with Hitachi Consumer Marketing, Inc. and changed its name to Hitachi Global
Life Solutions, Inc.

Apr.
Apr.

2020

Transferred the business of Hitachi Chemical Company, Ltd. via a sale of its
sharesMay

Turned Hitachi High-Tech Corporation into a wholly owned subsidiaryJul.

Acquired the power grids business from ABB Ltd and commenced
operations as Hitachi ABB Power Grids Ltd. (later changed its name to
Hitachi Energy Ltd)

Jan.

2021

Merged Hitachi Automotive Systems, Ltd. with Keihin Corporation, Showa
Corporation and Nissin Kogyo Co., Ltd. and changed its name to Hitachi
Astemo, Ltd.

2021
Establishment of Lumada Innovation Hub Tokyo as
the flagship site for co-creationMar.

Split the diagnostic imaging-related business via a company split and sold it to FUJIFILM Healthcare Corporation
via the sale of its shares

July

Hitachi Global Digital Holdings LLC (later changed its name to Hitachi Digital LLC) turned GlobalLogic
Worldwide Holdings, Inc., which is the parent of GlobalLogic Inc., into a wholly owned subsidiary

Aug.

2022

Turned Hitachi Construction Machinery Co., Ltd. into an equity-method associate of the Company via the sale of apart of its shares

Jan.

2023

Transferred the business of Hitachi Metals, Ltd. (currently Proterial, Ltd.) via the sale of its shares

Oct.

Turned Hitachi Astemo, Ltd. into an equity-method associate of the Company via the sale of a part of its shares63. Description of Business
As of March 31, 2024, the Hitachi Group, which comprises the Company and 942 affiliates (573
consolidated subsidiaries and 369 equity-method associates and joint ventures), positions three sectors:
Digital Systems & Services, Green Energy & Mobility, and Connective Industries, as growth areas andallocates related business units into each sector. Ranging over the five segments from the three sectors
above to additional two segments as Automotive System and Others, the Hitachi Group engages in a broad
range of business activities, from product development and manufacturing to sales and services.
(Note) Hitachi Astemo, Ltd. ceased to be a consolidated subsidiary of the Company following the partial
transfer of its shares on October 16, 2023. As a result, the Automotive Systems segment was
abolished on April 1, 2024.
One of Hitachi’s strengths is the ability to provide solutions that use digital technologies to resolve
issues that customers and society face, leveraging its operational technology (OT: Control and Operation
technologies), which run equipment and systems at production sites, and social infrastructure such as
railways and power plant, and its cutting-edge information technology in addition to the its high-quality andhighly reliable products.

As society and business continue to generate more data, Hitachi’s Lumada acts as an engine thatcreates new value from these data and accelerates innovation. Lumada is a general term for the solutions,services and technologies that utilize Hitachi’s advanced digital technologies to create value from
customers’ data and accelerate digital innovation. It is derived from the words “illuminate” and “data” andwas created based on the idea of combining the strengths of OT, IT and products cultivated within Hitachi.
Hitachi has focused on data generated by social and business activities as a new source of value in thesociety of the future and launched the Lumada business in 2016 with the goal of using large volumes of data
to create innovation for the world.
Utilizing digital technology such as data analytics and AI, the Lumada business builds a cycle of value
co-creation with customers that involves understanding customers’ management issues, designing,
implementing, operating and maintaining solutions to those issues, and working to solve the next issues.
Specifically, we provide various solutions, such as:- solutions to prevent equipment from sudden breakdowns by detecting warning signs that lead toabnormalities using learning models created by collecting operation data,- solutions to reduce operation shutdowns due to equipment breakdowns and improve operating rates
by quickly proposing repair locations and methods using AI, and- solutions to improve efficiency and the quality of products by centrally managing all kinds of datasuch as production performance data and utilizing them to review work processes and adjust
production in a timely manner.
In this way, rather than relying merely on product sales, we seek to expand the Lumada business byleveraging our strengths in OT x IT x Products, commercializing our expertise in various industries andoperations, and shifting to digital solutions that can be provided to multiple customers in order to build abusiness model based on value created through the provision of solutions, such as a fee income model.
7In addition to the above, Hitachi believes that AI is a driving force for innovation that improves society.
Hitachi further accelerates the Social Innovation Business through ‟AI transformation” that significantly
improves business productivity and creates new business opportunities through active utilization of rapidly
evolving Generative AI. Hitachi’s main initiatives are as follows.
(1) May 2023: Establishment of Generative AI Center
Hitachi established a new organization called ‟Generative AI Center” to promote the responsible andeffective use of generative AI.
Data scientists and AI researchers who have knowledge of generative AI and specialists in the various
fields of in-house operations bring together in the center. It offers consulting and other services to support
cutting-edge use cases and value creation of generative AI.
(2) December 2023: Assignment of Chief AI Transformation Officer
Hitachi created the position of ‟Chief AI Transformation Officer” in each of the three sectors: Digital
Systems & Services, Green Energy & Mobility, and Connective Industries.
As the promoters leading the implementation of the AI transformation, they are responsible for thecoordination and penetration of the group-wide strategy within each sector. In addition, they also facilitate
the seamless sharing of validation results, technologies, and know-how, accumulating best practices andprompting the creation of synergies with diverse knowledge to accelerate group-wide projects aimed attransforming internal processes through generative AI.
(3) Expansion of the AI Ecosystem through Partnerships: Acceleration of DX through Collaboration withNVIDIAIn March 2024, Hitachi announced it is collaborating on generative AI with U.S. semiconductor giant
NVIDIA Corporation. The two companies accelerate social innovation through DX (digital transformation)by combining Hitachi’s leadership and digital solutions in operational technology (OT) and NVIDIA’s
expertise in generative AI. Hitachi will further expand our AI ecosystem with advanced partners, including
this collaboration.
[Examples of collaboration with NVIDIA]
・Development of solutions to optimize facilities and business processes in the energy andtransportation fields through advanced simulation in virtual spaces
・Creation of new AI solutions through integration of Hitachi’s Lumada solution library with NVIDIA's
platforms
・Provision of AI infrastructure products that integrate NVIDIA’s AI technologies and image
processing semiconductors with Hitachi Vantara’s storage(4) Use Cases
i. Railway Metaverse Evolving Vehicle Design, Maintenance and service
Hitachi developed the Worksite-Augmenting
Metaverse technology that enables to reproduce
railway vehicles and tracks in a virtual space(metaverse) by using generative AI, thereby
permitting optimal design and safe operation ofrolling stock and accurate maintenance of
tracks.
For example, operation and maintenanceinformation can be added to a 3D model of arailway track reproduced in the metaverse, andits status can be indicated by color or othermeans. This technology improves safety andefficiency with support for on-site maintenance
operations, fully remote maintenance, andassistance in training to learn in what
A 3D model of a railway track reproduced incircumstances repairs are needed, among others.
the metaverse

8

ii. Internal Process Reform with Generative AI
Within the Group, Hitachi is promoting the use of generative AI in various operations of more than
250,000 employees and thereby accumulating know-how that will lead to productivity improvement. For
example, Hitachi is reforming its internal process with the following initiatives.
・Improving productivity in software development, such as code generation, testing efficiency, andresponsibility considerations when applying generative AI・Speeding up customer service operations by integrating past inquiries and operational manuals withgenerative AI
Hitachi is continuing internal trials and applying them to collaborative creation activities with its
customers.
(5) Addressing Risks Involved in Use of AI
While the use of AI as a source of innovation has many advantages, it also entails various risks,
including information leakage, copyright and privacy violations, and false information.
Hitachi established Principles guiding the ethical use of AI with a view toward the human-centereddevelopment of AI and its societal implementation in 2021, in addition to continuing its existing privacy
protection efforts. Hitachi is also promoting the use of generative AI while appropriately managing risks,such as creating guidelines for its use, with the leading role played by the Generative AI Center.

9An outline of key businesses for each segment and the positioning of Business Units (BU) of theCompany and principal affiliated companies are described as follows. In addition to the table below, themajor equity-method associates include Hitachi Astemo, Ltd. and Hitachi Construction Machinery Co., Ltd.
as of March 31, 2024.
(As of March 31, 2024)
Segments
Digital Systems &ServicesGreen Energy &Mobility

Connective Industries

Automotive Systems

OthersMain products and services
・Digital Solutions (System Integration,
Consulting, Cloud Services)・IT Products (Storage, Servers)
・Software・ATMs

・Energy Solutions (Power Grids, Renewable
Energy, Nuclear)
・Railway Systems

・Building Systems (Elevators, Escalators)
・Smart Life & Ecofriendly Systems (HomeAppliances, Air Conditioners)
・Measurement and Analysis Systems(Semiconductor Manufacturing Equipment,
Clinical Analyzers)
・Industry & Distribution Solutions
・Water & Environment Solutions
・Industrial Machinery

BU and principal affiliated companies[BU]
Cloud Services & Platforms BU
Digital Engineering BU
Financial Institutions BU
Social Infrastructure Systems BU[Consolidated subsidiaries]
Hitachi Information & Telecommunication
Engineering, Ltd.
Hitachi Channel Solutions Corp.
Hitachi Solutions, Ltd.
Hitachi Systems, Ltd.
GlobalLogic Worldwide Holding, Inc.
Hitachi Computer Products (America), Inc.
Hitachi Digital LLC
Hitachi Digital Services LLC
Hitachi Payment Services Private Limited
Hitachi Vantara LLC[BU]
Power Grids BU
Nuclear Energy BU
Railway Systems BU[Consolidated subsidiaries]
Hitachi-GE Nuclear Energy, Ltd.
Hitachi Plant Construction, Ltd.
Hitachi Power Semiconductor Device, Ltd. (Note 1)
Hitachi Power Solutions Co., Ltd.
Hitachi Energy Ltd
Hitachi Rail Ltd.
[BU]
Building Systems BU
Industrial Digital BU
Water & Environment BU[Consolidated subsidiaries]
Hitachi Building Systems Co., Ltd.
Hitachi Global Life Solutions, Inc.
Hitachi High-Tech Corporation
Hitachi Industrial Equipment Systems Co., Ltd.
Hitachi Industrial Products, Ltd.
Hitachi Industry & Control Solutions, Ltd.
Hitachi Plant Services Co., Ltd.
Hitachi Elevator (China) Co., Ltd.
Hitachi Global Air Power US, LLC
Hitachi Industrial Holdings Americas, Inc.
JR Technology Group, LLC[Equity-method associates]
Hitachi Kokusai Electric Inc.
Arcelik Hitachi Home Appliances B.V.
Johnson Controls-Hitachi Air Conditioning Holding(UK) Ltd[Consolidated subsidiaries](Note 2)・Powertrain
・Chassis
・Advanced Driver Assistance・Motorcycle Systems
・Property Management
・Others[Consolidated subsidiaries]
Hitachi Real Estate Partners, Ltd.
Hitachi America, Ltd. (Note 3)
Hitachi Asia Ltd. (Note 3)
Hitachi (China), Ltd. (Note 3)
Hitachi Europe Ltd. (Note 3)
Hitachi India Pvt. Ltd. (Note 3)(Notes) 1. Hitachi Power Semiconductor Device, Ltd. has ceased to be an affiliate of the Company following the share transfer on

10

May 2, 2024.
2. Hitachi Astemo, Ltd. has ceased to be a consolidated subsidiary of the Company and become an equity-method associate of
the Company following the partial transfer of shares on October 16, 2023. Consequently, there is no company which
belongs to the Automotive Systems segment and Automotive Systems segment was abolished on April 1, 2024.
3. Hitachi America, Ltd., Hitachi Asia Ltd., Hitachi (China), Ltd., Hitachi Europe Ltd. and Hitachi India Pvt. Ltd. are the
Hitachi Group’s regional supervising company for the Americas, Asia, China, Europe and India, and they sell the HitachiGroup’s products.

11

4. Information on Affiliates(1) Consolidated subsidiaries(As of March 31, 2024)
Company nameLocation

Ownership
Commonpercentage ofPrincipal businessstock
voting rights(%)

Hitachi
Nishi-ku,
Information &Yokohama,
Telecommunication
Kanagawa
Engineering, Ltd.

1,350

Digital Systems& Services

Hitachi Channel
Solutions, Corp.

Shinagawaku, Tokyo

8,500

Digital Systems& Services

Hitachi Solutions,Ltd.

Shinagawaku, Tokyo

20,000Digital Systems& Services*Hitachi Systems,
Ltd.

Shinagawaku, Tokyo

19,162

Digital Systems& Services*GlobalLogic
Worldwide
Holdings, Inc.

California,
U.S.A.

Hitachi Computer
Products(America), Inc.

Oklahoma,
U.S.A.

(Thousandsof US Digital Systems
dollars) & Services

9,082,164(Thousandsof US Digital Systems
dollars) & Services

14,00012

Relationship

The Company outsources thedesign, development,
manufacturing, evaluation andvalidation of storage, servers
and telecommunication
100.0 networks equipment, etc. The
Company’s Directors,
Executive Officers or
employees concurrently holdthe position of directors orofficers.
The Company purchases
ATMs and other informationequipment. The Company’s
100.0 Directors, Executive Officers
or employees concurrently
hold the position of directors
or officers.
The Company outsources thedevelopment of information
systems and software, etc. The
Company’s Directors,
100.0
Executive Officers or
employees concurrently holdthe position of directors orofficers.
The Company outsources thecalculation, development ofsoftware, installation andmaintenance of
telecommunication equipment
100.0 and computers. The
Company’s Directors,
Executive Officers or
employees concurrently holdthe position of directors orofficers.
The company operates digitalengineering service business.
The Company’s Directors,[100.0]Executive Officers or
100.0
employees concurrently holdthe position of directors orofficers.
The Company supplies partsfor computer peripherals. The[100.0] Company’s Directors,
100.0 Executive Officers or
employees concurrently holdthe position of directors orofficers.

(As of March 31, 2024)
Company nameLocation

Ownership
Commonpercentage ofPrincipal businessstock
voting rights(%)(Thousandsof US Digital Systems
dollars) & Services*Hitachi Digital
LLC

California,
U.S.A.

*Hitachi Digital
Services LLC

California,
U.S.A.

(Thousandsof US Digital Systems
dollars) & Services[100.0]
100.0

Hitachi Payment
Services Private
LimitedChennai,
India(Thousandsof Indian Digital Systems
rupee) & Services[58.8]
100.0*Hitachi Vantara
LLC

California,
U.S.A.

(Thousandsof US
dollars) Digital Systems[100.0]
100.0

100.0

10,627,301

456,368

79,158925,000& Services

Hitachi-GE Nuclear Hitachi,
Energy, Ltd.
Ibaraki

5,000Green Energy &Mobility

80.0

Hitachi Plant
Construction, Ltd.

Toshimaku, Tokyo

3,000

Green Energy &Mobility

100.0

Hitachi Power
Semiconductor
Device, Ltd.

Hitachi,
Ibaraki

450

Green Energy &Mobility

100.0

13

Relationship
Holding company for Hitachi
Vantara LLC, etc. The
Company’s Directors,
Executive Officers or
employees concurrently holdthe position of directors orofficers.
Operating system integration
business for industries,
financial institutions andothers, mainly in North
America. The Company's
Directors, Executive Officers
or employees concurrently
hold the position of directors
or officers.
Offering the Hitachi Group’s
payment services for financial
institutions in India. The
Company’s Directors,
Executive Officers or
employees concurrently holdthe position of directors orofficers.
Sales company for theCompany’s storage, etc. The
Company outsources
consulting services. The
Company’s Directors,
Executive Officers or
employees concurrently holdthe position of directors orofficers.
The Company delivers nuclear
power generation equipment,
etc. The Company’s Directors,
Executive Officers or
employees concurrently holdthe position of directors orofficers.
The Company orders theConstruction of the Company’s
energy and industrial plants,
etc. The Company’s Directors,
Executive Officers or
employees concurrently holdthe position of directors orofficers.
The Company purchases
semiconductor components.
The Company’s Directors,
Executive Officers or
employees concurrently holdthe position of directors orofficers.

(As of March 31, 2024)
Company nameLocation

Ownership
Commonpercentage ofPrincipal businessstock
voting rights(%)

Hitachi Power
Solutions Co., Ltd.

Hitachi,
Ibaraki

Hitachi Energy Ltd

Zurich,Switzerland(Thousandsof Swiss Green Energy &franc) Mobility

London,U.K.

(Thousandsof Sterling Green Energy &pounds) Mobility*Hitachi Rail Ltd.

Hitachi Building
Systems Co., Ltd.

4,000

Green Energy &Mobility

100.0

100.0

1,250

100.0

878,181

Chiyodaku, Tokyo

5,105

Connective
Industries

100.0

Hitachi Global Life Minato-ku,
Solutions, Inc.
Tokyo

20,000Connective
Industries

100.0

14

Relationship
The Company purchases
power plant parts, andoutsources the maintenance ofpower generation equipment
and control equipment, etc.
The Company’s Directors,
Executive Officers or
employees concurrently holdthe position of directors orofficers.
Holding company for power
grids business companies fromwhich the Company purchases
power grids devices, etc. The
Company’s Directors,
Executive Officers or
employees concurrently holdthe position of directors orofficers.
Manufacturing, sales,
engineering and maintenanceof the Company’s rail systems
products. The Company’s
Directors, Executive Officers
or employees concurrently
hold the position of directors
or officers.
Design, manufacturing, sales,
installation and maintenance,
etc. of the elevators andescalators the Company has
developed. The Company’s
Directors, Executive Officers
or employees concurrently
hold the position of directors
or officers.
Manufacturing and sales of the
Hitachi Group’s home
appliances, and sales, systeminstallation and maintenance,
etc. of the Group’s airconditioning and refrigeratingproducts. The Company’s
Directors, Executive Officers
or employees concurrently
hold the position of directors
or officers.

(As of March 31, 2024)
Company name

Hitachi High-Tech
Corporation

Location

Ownership
Commonpercentage ofPrincipal businessstock
voting rights(%)

Minato-ku,
Tokyo

7,938

Connective
Industries

Hitachi Industrial
Chiyoda-ku,
Equipment Systems
TokyoCo., Ltd.

10,000Connective
Industries

Hitachi Industrial
Products, Ltd.

Chiyoda-ku,
Tokyo

10,000Connective
Industries

Hitachi Industry& Control
Solutions, Ltd.

Taito-ku,
Tokyo

3,000

Connective
Industries

Hitachi Plant
Services Co., Ltd.

Toshimaku, Tokyo

3,000

Connective
Industries

Hitachi Elevator(China) Co., Ltd.

Guangzhou,
China(Thousandsof Chinese Connectiveyuan) Industries

538,806

15

Relationship

The Company sells andpurchases transportationequipment and power-relatedparts, etc. through this
100.0 company. The Company’s
Directors, Executive Officers
or employees concurrently
hold the position of directors
or officers.
The Company
purchases industrial
equipment. The
Company’s Directors,
100.0
Executive Officers or
employees concurrently
hold the position of directors
or officers.
The Company
purchases industrial
equipment. The
Company’s Directors,
100.0
Executive Officers or
employees concurrently
hold the position of directors
or officers.
The Company outsources
development of information
control systems, etc. The
Company’s Directors,
100.0
Executive Officers or
employees concurrently holdthe position of directors orofficers.
The Company orders theconstruction, and outsources
services of industrial andpublic plants, etc. The
100.0 Company’s Directors,
Executive Officers or
employees concurrently holdthe position of directors orofficers.
Sales, installation andmaintenance, etc. of
the Hitachi Group’s
elevators and escalators in[70.0]
China. The Company’s
70.0
Directors, Executive Officers
or employees concurrently
hold the position of directors
or officers.

(As of March 31, 2024)
Company nameLocation

Hitachi Global
Air Power US,
LLC

Indiana,
U.S.A.

*HitachiIndustrial
Holdings
Americas, Inc.

Illinois,
U.S.A.

JR Technology
Group, LLC

Michigan,
U.S.A.

Hitachi Real
Estate Partners,
Ltd.

Chiyoda-ku,
Tokyo*Hitachi America,Ltd.

California,
U.S.A.

Hitachi Asia Ltd.

Singapore

Ownership
Commonpercentage ofPrincipal businessstock
voting rights(%)

Connective
Industries[100.0]
100.0(Thousandsof US Connective
dollars) Industries[100.0]100.0

Connective
Industries[100.0]100.0

Others100.0-

2,102,670

-

2,000

(Thousandsof US
Othersdollars)

100.0

14,651,606(Thousandsof Singapore
dollars) Others

127,649

16

100.0

Relationship
The Company purchases
industrial equipment.
The Company’s Directors,
Executive Officers or
employees concurrently holdthe position of directors orofficers.
Holding company for Hitachi
Global Air Power, LLC and JR
Technology Group, LLC, etc.
The Company’s Directors,
Executive Officers or
employees concurrently holdthe position of directors orofficers.
Holding company for JR
Automation Technology, LLC,
etc. The Company’s Directors,
Executive Officers or
employees concurrently holdthe position of directors orofficers.
The Company outsources the
management of welfare
facilities for employees, etc.
The Company’s Directors,
Executive Officers or
employees concurrently holdthe position of directors orofficers.
The Hitachi Group’s regional
supervising company inAmericas, it sells the HitachiGroup’s healthcare-related
products, etc., and promotes
R&D in Americas. The
Company’s Directors,
Executive Officers or
employees concurrently holdthe position of directors orofficers.
The Hitachi Group’s regional
supervising company for Asia,
it sells the Hitachi Group’s
industrial machinery and train-,healthcare- and informationrelated products, etc. The
Company’s Directors,
Executive Officers or
employees concurrently holdthe position of directors orofficers.

(As of March 31, 2024)
Company nameLocation

Ownership
Commonpercentage ofPrincipal businessstock
voting rights(%)

Hitachi (China),Ltd.

Beijing,
China(Thousandsof US
Othersdollars)*Hitachi Europe
Ltd.

Stoke Poges,
U.K.

(Thousandsof Sterling
Otherspounds)Hitachi India Pvt.
Ltd.

New Delhi,
India(Thousandsof Indian
Othersrupee)

Relationship

The Hitachi Group’s regional
supervising company for
China, it sells the HitachiGroup’s plant, industrial
machinery and train-,healthcare- and information100.0
related products, etc. The
Company’s Directors,
Executive Officers or
employees concurrently holdthe position of directors orofficers.
The Hitachi Group’s regional
supervising company andpromoting R&D company for
Europe, it sells the HitachiGroup’s industrial machinery
100.0 and information-related
products, etc. The Company’s
Directors, Executive Officers
or employees concurrently
hold the position of directors
or officers.
The Hitachi Group’s regional
supervising company for India,
it sells the Hitachi Group’s
plants and industrial machinery[100.0] related products, etc. The
100.0 Company’s Directors,
Executive Officers or
employees concurrently holdthe position of directors orofficers.

226,380

253,049

344,000

Others- 540 companies(Notes) 1. The unit of amounts and currency shown in the “Common stock” column is millions of yen, unlessotherwise specified.
2. The common stock of Hitachi Global Air Power US, LLC and JR Technology Group, LLC is notshown since they are limited liability companies under U.S. law, and do not have common stock.
3. Companies with one asterisk (*) in the “Company name” column are specified subsidiaries.
4. The name of the segment in which the companies are classified is shown in the “Principal business”
column.
5. The amounts in brackets in the upper row of the “Ownership percentage of voting rights” column
represent voting rights owned indirectly by subsidiaries, as a percentage of the total ownership
percentage.
6. A company with negative net worth is shown below, along with the amount of liabilities in excess ofassets.
Hitachi Power Europe GmbH
163,742 million yen
7. Hitachi Power Semiconductor Device, Ltd. has ceased to be an affiliate of the Company through theshare transfer on May 2, 2024.

17

8. Revenues of Hitachi Energy Ltd (excluding intra-group revenue among consolidated companies)
accounts for more than 10% of consolidated revenue.
Key information on profit or loss:
1) Revenues
1,849,245 million yen
2) Income before income taxes
86,661 million yen
3) Net Income
53,291 million yen
4) Total equity
85,386 million yen5) Total assets
2,141,953 million yen

18

(2) Equity-method associates and joint ventures(As of March 31, 2024)
Company nameLocation

Commonstock

Principal business

Hitachi Kokusai
Electric Inc.

Minato-ku,
Tokyo

1,000

Connective
Industries

Arcelik Hitachi
Home Appliances
B.V.

Amsterdam,
Netherlands

10,000Johnson ControlsHitachi Air
Conditioning
Holding (UK) Ltd

Hampshire,
U.K.

Hitachi Astemo, Ltd.

Hitachinaka,Ibaraki

129,126

Automotive
Systems**Hitachi
Construction
Machinery Co., Ltd.

Taito-ku,
Tokyo

81,576

Construction
Machinery(Euros) Connective

Industries(Thousandsof US Connective
dollars) Industries

935,107

Ownership
percentage ofvoting rights(%)

Relationship

The Company
purchases
electronic equipment
and parts, etc. The
20.0 Company’s Directors,
Executive Officers or
employees concurrently
hold the position of
directors or officers.
Holding company for
operating companies[40.0] for the Hitachi
40.0 Group’s home
appliances business inoverseas market.
Holding company for
air-conditioning
systems business[40.0] companies from40.0 which the HitachiGroup purchases airconditioning systems
devices.
The Company
purchases parts forrailway vehicles, etc.
The Company’s
40.0 Directors, Executive
Officers or employees
concurrently hold theposition of directors orofficers.
The Company’s
Directors, Executive
Officers or employees
25.4
concurrently hold theposition of directors orofficers.

Others- 364 companies(Notes) 1. The unit of amounts and currency shown in the “Common stock” column are in millions of yen, unlessotherwise specified.
2. Companies with two asterisks (**) in the “Company name” column submit Securities Registration
Statement or Annual Securities Report.
3. Regarding Hitachi Kokusai Electric Inc., Arcelik Hitachi Home Appliances B.V. and Johnson ControlsHitachi Air Conditioning Holding (UK) Ltd, the name of the segment in which the companies areclassified is shown in the “Principal business” column.
4. A company with negative net worth is shown below, along with the amount of liabilities in excess ofassets.
GE-Hitachi Nuclear Energy Holdings LLC 33,164
million yen

195. Employees(1) Consolidated basis
Name of segment
Digital Systems & Services
Green Energy & Mobility
Connective Industries
Automotive Systems
OthersCorporate (Head Office and others)
Total(As of March 31, 2024)
Number of employees
106,839[15,304]
65,398[3,547]81,514[3,314][-]
11,589[2,631]
3,315[3,315]
268,655[28,111](Note) 1. The number in brackets in the lower row of the “Number of Employees” column is the number of
employees of the Company included in each of the numbers in the upper row.
2. The number of employees of the Hitachi Group (the Company and its subsidiaries) decreased by 53,870
during one year ended March 31, 2024. This is mainly due to the fact that there is no company which
belongs to Automotive Systems segment following the transfer of a part of the Company’s shares in
Hitachi Astemo, Ltd., and Hitachi Astemo, Ltd. has ceased to be a consolidated subsidiary of theCompany.
(2) The Company
Number of employees
Average age
Average length of service
28,111
42.9
19.1 years(Note) Average annual salary includes bonuses and extra wages.

(As of March 31, 2024)
Average annual salary
9,359,857 yen(3) Relationship with labor union
The Company’s labor union, Hitachi Workers Union, is a member of the Japanese ElectricalElectronic And Information Union.
The relationship between management and labor unions in the Hitachi Group is stable andcooperative.
(4) Indicators of diversity
1) Disclosure of indicator under Consolidated basis
Ratio of women
employees inmanagerial
positions (%)(Notes 1-4)

Wage gap between men and women (%)(Ratio of women’s wages to men’s wages)(Notes 1-3, 5-8)
Allemployees

Permanent and full-time employees
Manageriallevel

Non-Manageriallevel

Part-time orfixed-term
employees

The Company and the Hitachi Group

14.1

80.1

80.6

92.3

86.2

74.0

The Hitachi Group(consolidated companies in Japan)

5.7

69.4

70.2

95.7

79.2

61.5

21.7

89.9

89.5

88.8

91.9

97.2

The Hitachi Group(consolidated companies outside
Japan)

20

(Notes) 1. Results from the year ended March 31, 2024 (FY2023) are listed.
2. The companies included in “Hitachi Group (consolidated companies in Japan)” and the assumptions forthese calculation are based on the following “2) Disclosure of indicators under the “Act on the
Promotion of Women’s Active Engagement in Professional Life” and “Act on Childcare Leave,
Caregiver Leave, and Other Measures for the Welfare of Workers Caring for Children or Other Family
Members.”
3. Based on the number of employees (as of March 31, 2024) excluding employees seconded from othercompanies while including employees seconded to other companies and employees on administrative
leave.
4. “Hitachi Group (consolidated companies outside Japan)” does not include some direct employees(manufacturing workers) who are not registered in the human resources database, some employees of
newly consolidated companies, and some employees whose grades (job titles) are not registered in thehuman resources database.
5. “All employees” is the sum of “Permanent and full-time employees” and “Part-time or fixed-term
employees”. The “Permanent and full-time employees” are permanent employees in full-time positions,while the “Part-time or fixed-term employees” are employees who are either part-time or fixed-term
employees.
6. In principle, “Hitachi Group (consolidated companies outside Japan)” includes companies with 250 ormore employees.
7. Calculated in accordance with the laws and regulations of the country where each company is located,basically based on assumed cash compensation including annual basic bonuses, allowances and variablebonuses.
8. We apply the same system of compensation and benefits regardless of the employee’s gender. The
gender pay gap is resulting from factors including a high proportion of men employees in senior
positions including managers and especially in Japan, the proportion of women employees in managerial
position is low and a higher proportion of employees working shorter hours being women rather thanmen. We will continue to increase the number of women employees in managerial positions in Japan andpromote diversity, equity, and inclusion.
2) Disclosure of indicators under the “Act on the Promotion of Women’s Active Engagement inProfessional Life” and “Act on Childcare Leave, Caregiver Leave, and Other Measures for the Welfareof Workers Caring for Children or Other Family Members”(i) The Company

Company name

Ratio of women
employees inmanagerial
positions (%)(Note 1)

Hitachi, Ltd.

7.8

Wage gap between men and women (%)(Ratio of women’s wages to men’s wages)(Notes 1, 2, 6, 7)

Percentage of men
employees taking
childcare leave (%)(Notes 1-5)
All employees

65.2 (*)

69.5

Permanent andfull-time
employees

Part-time orfixed-term
employees

70.9

52.4

(ii) Consolidated subsidiaries

Company name

Ratio of women
employees inmanagerial
positions (%)(Note 1)

Wage gap between men and women (%)(Ratio of women’s wages to men’s wages)
Percentage of men(Notes 1, 2, 6, 7)
employees taking
childcare leave (%)
Permanent andPart-time or(Notes 1-5)
All employees
full-time
fixed-term
employees
employees

Hitachi Urban Support, Ltd.

12.2

-

78.4

64.2

88.9

Hitachi IE Systems Co., Ltd.

1.5

0.0 (*)

65.8

71.1

56.7

Hitachi ICT Business Services,
Ltd.

9.1

50.0 (*)

69.8

63.9

78.0

Hitachi Academy Co., Ltd.

19.7

100.0

68.3

64.7

73.1

21

Company name

Hitachi Advanced Systems
Corporation
Hitachi Appliances Techno
Service, Ltd.
Hitachi Ibaraki Technical
Service Ltd.
Hitachi Pharma Information
Solutions, Ltd.

Ratio of women
employees inmanagerial
positions (%)(Note 1)

Wage gap between men and women (%)(Ratio of women’s wages to men’s wages)
Percentage of men(Notes 1, 2, 6, 7)
employees taking
childcare leave (%)
Permanent andPart-time or(Notes 1-5)
All employees
full-time
fixed-term
employees
employees

1.5

75.0 (*)

64.6

64.2

79.5

0.0

0.0 (*)

63.4

68.2

59.7

3.3

66.7 (*)

87.8

83.8

107.2

5.1

50.0

69.9

68.8

91.1

Hitachi Industrial Products, Ltd.

0.9

63.9 (*)

68.6

70.2

56.0

Okinawa Hitachi Network
Systems, Ltd.

3.3

50.0

75.2

75.6

58.4

Kanto Hitachi Co., Ltd.

1.0

28.6

65.0

64.0

52.1

Kyushu Hitachi Systems, Ltd.

5.5

77.8 (*)

73.6

75.1

89.8

0.0

0.0 (*)

69.3

69.3

-

2.1

36.7 (*)

67.4

69.0

64.9

Hitachi KE Systems, Ltd.

2.8

- (*)

81.1

84.6

68.6

Hitachi Transportation
Technologies, Ltd.

1.2

35.7 (*)

82.9

88.7

62.9

Hitachi Consulting Co., Ltd.

12.4

90.0 (*)

72.5

72.7

68.5

2.9

62.7 (*)

71.0

70.8

53.9

0.0

22.2

48.6

57.9

35.7

0.0

50.0

71.3

74.6

53.3

2.2

78.9 (*)

70.8

69.6

62.1

Shikoku Hitachi Systems, Ltd.

3.1

40.0

76.0

76.4

66.7

Hitachi Systems, Ltd.

6.8

82.8 (*)

71.1

70.3

52.5

5.3

53.8 (*)

73.0

73.5

67.7

13.9

60.0 (*)

79.1

79.1

33.3

3.5

62.5 (*)

61.0

68.3

60.7

5.9

47.1

71.3

72.0

108.8

2.4

81.0 (*)

73.8

72.7

76.3

Hitachi Solutions, Ltd.

7.4

102.0 (*)

72.0

71.4

90.2

Hitachi Solutions Create, Ltd.

7.2

63.3 (*)

72.7

72.7

57.9

Hitachi Air Conditioning
Solutions, Inc.
Hitachi Global Life Solutions,
Inc.

Hitachi Industrial Equipment
Systems Co., Ltd.
Hitachi Industrial Equipment
Technology Service, Co., Ltd.
Hitachi Industrial Equipment
Drive & Solutions Co., Ltd.
Hitachi Industry & Control
Solutions, Ltd.

Hitachi Systems Engineering
Services, Ltd.
Hitachi Systems PowerServices, Ltd.
Hitachi Systems Field Services,
Ltd.
Hitachi Social Information
Services, Ltd.
Hitachi Information &Telecommunication
Engineering, Ltd.

22

Company name

Hitachi Solutions Technology,
Ltd.
Hitachi Solutions West Japan,
Ltd.
Hitachi Solutions East Japan,
Ltd.
Hitachi Channel Solutions,
Corp.
Hitachi Technologies andServices, Ltd.
Hitachi Document Solutions
Co., Ltd.
Hitachi Nico Transmission Co.,Ltd.

Ratio of women
employees inmanagerial
positions (%)(Note 1)

Wage gap between men and women (%)(Ratio of women’s wages to men’s wages)(Notes 1, 2, 6, 7)

Percentage of men
employees taking
childcare leave (%)(Notes 1-5)
All employees

Permanent andfull-time
employees

Part-time orfixed-term
employees

2.8

57.1 (*)

76.5

75.4

89.8

5.1

91.3 (*)

69.8

69.7

52.8

4.7

54.5 (*)

73.2

74.6

53.6

5.5

57.1 (*)

70.9

70.7

60.7

0.0

40.0 (*)

76.2

69.1

66.4

4.6

50.0 (*)

65.4

68.0

47.8

4.4

64.2

68.9

72.7

54.5

Nichiwa Service, Ltd.

3.7

50.0 (*)

50.4

69.7

62.3

Hitachi Hi-System21 Co., Ltd.

6.7

46.7 (*)

67.1

66.8

73.6

Hitachi High-Tech Corporation

5.2

80.7 (*)

69.9

69.1

74.9

50.0

100.0 (*)

72.5

67.0

93.0

4.4

54.5 (*)

69.0

70.8

38.5

14.3

100.0 (*)

93.9

95.4

74.4

1.3

100.0 (*)

70.4

68.9

70.8

7.6

0.0 (*)

58.9

61.2

43.0

2.0

100.0 (*)

68.6

65.9

93.4

1.4

68.4 (*)

65.2

67.4

76.0

1.2

27.7 (*)

66.8

66.5

50.4

1.1

33.3

67.7

67.5

57.5

1.9

38.9 (*)

63.9

65.6

51.7

1.7

58.8 (*)

67.7

73.5

64.3

Hitachi Plant Construction, Ltd.

1.4

45.5 (*)

65.8

70.2

51.6

Hitachi Plant Services Co., Ltd.

1.0

27.3 (*)

66.4

67.0

52.0

Hitachi High-Tech Kyushu
Corporation
Hitachi High-Tech Science
Corporation
Hitachi High-Tech Support
Corporation
Hitachi High-Tech Solutions
Corporation
Hitachi High-Tech Nexus
Corporation
Hitachi High-Tech Fielding
Corporation
Hitachi High-Tech
Manufacturing & Service
Corporation
Hitachi Power Solutions Co.,Ltd.
Hitachi Power Semiconductor
Device, Ltd. (Note 8)
Hitachi Building Systems Co.,Ltd.
Hitachi Building Systems
Engineering Co., Ltd.

23

Company name

Ratio of women
employees inmanagerial
positions (%)(Note 1)

Hitachi Plant Mechanics Co.,Ltd.
HITACHI INSURANCESERVICES, LTD.

Wage gap between men and women (%)(Ratio of women’s wages to men’s wages)(Notes 1, 2, 6, 7)

Percentage of men
employees taking
childcare leave (%)(Notes 1-5)
All employees

Permanent andfull-time
employees

Part-time orfixed-term
employees

1.6

62.5 (*)(**)

64.8

66.8

63.6

9.7

100.0 (*)

61.2

58.9

71.9

Hokkaido Hitachi Systems, Ltd.

5.1

100.0 (*)

75.4

74.5

57.6

Hitachi Management Partner
Corp.

12.5

0.0 (*)

63.8

61.3

56.5

Hitachi You and I Co., Ltd.

27.3

100.0 (*)

112.1

118.0

91.5

Hitachi Real Estate Partners,
4.6
60.0 (*)(**)
64.0
62.9
46.1
Ltd.
(Notes) 1. Results from FY2023 are listed.
2. If there are no employees required for the calculation, “-” is indicated.
3. The figures are calculated by dividing the number of men employees who took childcare leave, etc. in
FY2023 by the number of men employees who had a child born in FY2023.
4. For (*), employees taking leave for childcare purposes are included in the numerator.
5. For (**), the rates of childcare leave used in the employment management category according to the Act
on the Promotion of Women’s Active Engagement in Professional Life are as follows. Employees taking
leave for childcare purposes are not included in the numerator.
Company name

Percentage of men employees taking childcare leave (%)

Management / Professional：28.6
Skilled / General office work：100.0
Management / Professional：55.6
Hitachi Real Estate Partners, Ltd.
Skilled / General office work：100.0
6. “All employees” is the sum of “Permanent and full-time employees” and “Part-time or fixed-term
employees”. The “Permanent and full-time employees” are permanent employees in full-time positions,while the “Part-time or fixed-term employees” are employees who are either part-time or fixed-term
employees.
7. We apply the same system of compensation and benefits regardless of employee’s gender. The gender
pay gap is resulting from factors including a high proportion of men employees in senior positions
including the proportion of women employees in managerial position is low and a higher proportion of
employees working shorter hours being women rather than men. We will continue to increase the numberof women employees in managerial positions and promote diversity, equity, and inclusion.
8. Hitachi Power Semiconductor Device, Ltd. has ceased to be an affiliate of the Company following theshare transfer on May 2, 2024
Hitachi Plant Mechanics Co., Ltd.

For details on the initiatives being pursued by the Company and its consolidated subsidiaries on diversity,
equity and inclusion, please see “Section II Business Overview, 2. Sustainability Approach and Initiatives” and the
Hitachi Sustainability Report 2024.

24

II. Business Overview
1. Management Policy, Business Environment and Challenges Hitachi Group Faces(1) Management Policy
The Hitachi Group aims to achieve further progress by delivering competitive products andservices, thereby creating higher value for customers, following its Mission: to contribute to society
through the development of superior, original technology and products. By taking full advantage of its
diverse management resources, while at the same time reviewing and restructuring businesses, theHitachi Group aims to bolster its competitiveness and achieve growth in global markets. This process
will be consistent with the Hitachi Group’s basic management policy, which is to increase shareholder
value by meeting the expectations of customers, shareholders, employees and other stakeholders.
(2) Business Environment and Challenges the Hitachi Group Faces
1) Business environment and challenges facing the Hitachi Group
In today’s world, the future is increasingly difficult to foresee. A myriad of changes is taking place,including the rising interstate and interregional conflicts and tensions, climate change, resource
shortages, demographic change due to aging populations and problems of urbanization. On the other
hand, innovations to solve increasingly complex social issues are emerging across the globe.
In this business environment, under the Mid-term Management Plan 2024 set out in April, 2022,
the Hitachi Group aims to “support people’s quality of life with data and technology that fosters asustainable society.” Establishing “Digital,” “Green” and “Innovation” as the three pillars, the HitachiGroup focuses on the following measures to realize such society through global growth with One
Hitachi.

i) Strengthening and Expanding the Data-driven Cycle of Value Co-creation with Customers in
LumadaThe Hitachi Group is strengthening the cycle of value co-creation with customers in Lumada
by understanding customer’s management issues, then designing and implementing solutions tothose issues, and implementing operation and maintenance while working to create solutions to thenext issue. Riding the growing demand for DX (digital transformation) and GX (green
transformation) as a tailwind, the Hitachi Group works to create and roll out Lumada solutions byworking with every business in the Hitachi Group including energy, transportation and industry andutilizing cutting-edge technologies such as generative AI.
ii) Promoting Environmental Management and Strengthening Human CapitalThrough the Social Innovation Business, the Hitachi Group works to strike a balance between
solving environmental issues and improving people’s quality of life.
For initiatives aimed at decarbonization, the Hitachi Group has set goals of achieving carbon
neutrality at its business sites (factories and offices) by Fiscal 2030, and across the entire value
chain by Fiscal 2050. The Hitachi Group is making progress in reducing CO2 emissions at a pacethat exceeds its targets. In addition to further promoting reductions, the Hitachi Group is also
helping customers reduce their CO2 emissions by providing solutions with its environmentallyfriendly products.
In addition, to achieve further growth through the utilization of diverse human resources, theHitachi Group is working to increase the percentages of female and non-Japanese executive-levelstaff, to acquire and develop digital human resources, etc., and to improve employee engagement tofoster a growth mindset as One Hitachi.

25iii) Creating Innovation for Growth
The Hitachi Group has advanced the creation of innovation for global business growth andworks to expand corporate venturing investments to collaborate with startups, in addition to R&D
investments including cutting-edge research. The Hitachi Group will achieve sustainable growththat continues into future generations by exploring the issues faced by society and customers, anddevising innovations aimed at solving them.
To generate stable cash even in an unstable business environment that is difficult to foresee,the Hitachi Group strives to grow its business through these efforts and also works to improve asset
efficiency through ongoing business restructuring. While enhancing the ability to generate cash, theHitachi Group will also provide stable returns to shareholders, making the investments necessary
for growth in a swift but carefully selected manner.
2) Business environment in the focused business areas and issues to be addressed
The following are the business environment and issues to be addressed in three focal sectors,
Digital Systems & Services, Green Energy & Mobility, and Connective Industries.
(Digital System & Service)
The use of digital technologies and services such as AI and analytics is increasingly required
to address complex management issues in uncertain social and economic climate. In addition,
against the backdrop of serious social and environmental challenges, DX efforts to transform
corporate management and society through digital technologies are expanding globally.
In this global DX market, the Digital Systems & Services sector is working to solve issues
for customers and society by creating value based on combination of the Hitachi Group’s OT, IT
and products, leveraging the design and digital engineering capabilities of GlobalLogic Inc.
Cooperating with other sectors in the Hitachi Group, the sector will accelerate efforts to provide
value by deepening collaboration with customers continuously, to roll out high value-added
solutions, and to create new markets through ecosystem building with customers and partners.
The Digital Systems & Services Sector will also work to strengthen its management base by
developing and expanding a digitally minded workforce to support these initiatives, whileproviding value as a partner in solving issues faced by society and customers in Japan andoverseas continuously, thereby achieving the sustainable growth of the Lumada business. In
addition, the sector will engage in a various co-creation with customers and partners in Japan andoverseas to create innovation using rapidly evolving generative AI.
(Green Energy & Mobility)
Against the backdrop of climate change and heightened geopolitical risks, energy conversion
has advanced rapidly, and the market is expanding. Specifically, with the electrification ofmobility such as buses and rail, and with the expansion of the microgrids due to the diversificationand decentralization of the power supply mix, new business opportunities are emerging around theworld, including the transformation of conventional social infrastructure businesses into services,and GX efforts to realize a carbon neutral society.
The Green Energy & Mobility Sector helps to achieve sustainable social infrastructure with
its integration capability and range of world-class products. The sector contributes to improving
QoL through green energy and mobility that are friendly to the global environment. Morespecifically, the Green Energy & Mobility Sector’s products, services, and solutions leverage thestrengths derived from a combination of OT, IT, and products in power grids, renewable energy
systems, nuclear power generation systems, railway systems, and other businesses. In the energy
business, the sector will expand the delivery of services and solutions that will contribute toachieving a carbon neutral society by providing new solutions and promoting clean energy
through the fusion of the power grid technologies of Hitachi Energy and digital technologies using
Lumada. In the railway systems business, the sector connects traffic networks digitally andaccelerates the development of railway operation services and other services utilizing data.
Through these activities, the Green Energy & Mobility Sector helps increase people’s
wellbeing, including the delivery of decarbonization, stable energy supply, and delivery of safe,
26

secure, and comfortable railway systems, as the business constituting the core of the creation ofgreen value in the three growth areas in the Mid-term Management Plan 2024. In addition,
through Hitachi Energy and railroad signalling business of Thales which newly joined in the
Hitachi Group, the sector will accelerate its transformation into a highly profitable business byleveraging its global installed base.
(Connective Industries)
In addition to the rapidly increasing uncertainties in the social environment, such as risinggeopolitical risks and an uptick in climate change-driven natural disasters, the rapid advance ofdigital technology has transformed people’s lifestyles and business activities in major ways, andthe demand for new DX/GX is greater than ever. This requires interdisciplinary boundary issuesolving between organizations, companies and industries.
The Connective Industries Sector aims to create sustainable value through digitallyconnecting highly competitive products, including elevators/escalators, home appliances,measurement and analysis equipment, medical equipment and industrial equipment, and providingthem as solutions.
More specifically, the sector will reinforce its frontline engineering capabilities to give shape
to objectives and measures based on an analysis of customer business concepts and issues,leveraging Lumada’s co-creation framework with customers. This will help solve the “edge”
issues that exist between management and workplaces, in the supply chain and between different
industries, while evolving and expanding total seamless solutions for total optimization, from theindustrial sector to the urban, healthcare and green sectors. The sector will also strengthen its
recurring business, which provides value on a continuous and cyclical basis through after-sales
service based on data generated by connected products, and through deep insight into new issues
that the customers need to solve.
Aiming to accelerate global growth, in the industrial fields, the sector will accelerate thedevelopment of Total Seamless Solutions in North America, focusing on robotics SI from JR
Automation, MES (manufacturing execution system) and SCADA (supervisory control and dataacquisition) from Flexware Innovation, air compressors from Hitachi Global Air Power andmarking technologies from Telesis Technologies. Furthermore, the sector is focusing on
deepening collaboration by utilizing bases close to customers in semiconductor manufacturing
equipment business, and strengthening molecular diagnostics and particle therapy business in thehealthcare fields, particularly in North America.
The sector sets out “Connecting data, value, industry, and society” as its purpose and aims tobe “sustainable value creators” through co-creation with customers.

27

(3) Targets under the mid-term management plan
Under the Mid-term Management Plan 2024, Hitachi sets the following indicators as
performance targets for management.
Fiscal 2024
Reason for selection as indicators
TargetAnnual growth rate for revenue
5-7%
Indicator to measure growth(FY 2021-FY 2024 CAGR)(Notes 1, 2)
Adjusted EBITA margin (FY 2024)
12%
Indicator to measure profitability(Note 3)
Indicator to measure profitability
EPS (FY 2024) (Note 4)
600 yenand shareholder’s valueCore free cash flows: cumulative for
Indicator to measure ability to
1.2 trillion yen
3 years (Note 5)
generate cash
Return on invested capital (ROIC)
Indicator to measure investment
10%(Note 6)efficiency(Notes) 1. CAGR is presented as compound annual growth rate.
2. It is calculated excluding listed subsidiaries.
3. Adjusted EBITA is representing the Adjusted operating income (revenues less cost of
sales as well as selling, general and administrative expenses), adding back theamortization of intangible assets, etc. recognized upon business combinations, and adding
or deducting share of profits (losses) of investments accounted for using the equity
method. Adjusted EBITA margin is the ratio calculated by dividing Adjusted EBITA byrevenue.
4. EPS is presented as earnings per share. Calculated based on the number of shares before
the stock split (scheduled to be effective on July 1, 2024)
5. Core free cash flows are cash flows presented as free cash flows excluding cash flows
from M&A and asset sales, etc.
6. ROIC (Return on Invested Capital) is presented as (“NOPAT” + equity in earnings(losses) of affiliates) / “Invested Capital” x 100“NOPAT (Net Operating Profit after Tax)” = Adjusted operating income x (1 - Taxburden rate)“Invested Capital” = interest-bearing debt + total equity
In addition to providing the performance targets above, under the Mid-term Management
Plan 2024, Hitachi will address the following priority items in order to provide value to customers
and society and enhance human capital.

28

2. Sustainability Approach and Initiatives
The Hitachi Group practices sustainable management, which positions sustainability as the core of its
business strategy, to realize a future that achieves both the protection of the earth and a society where every
individual is comfortable and active. Specifically, we contribute to solving global social and environmental
issues and are working toward the realization of a sustainable society through the Social Innovation
Business, which focuses on addressing social challenges. We strive to enhance the resilience of ourbusiness to ensure its continuity and increase corporate value by identifying risks and opportunities in ourbusiness due to social and environmental changes.
The following describes Hitachi Group’s sustainability approach and specific initiatives.
(1) Governance and Risk Management
At the Hitachi Group, the Senior Executive Committee, which includes the Growth Strategy
Meeting, Risk Management Meeting, and Human Resource Strategy Meeting, deliberates and makes
decision on important sustainability issues. These issues are submitted to the Board of Directors asneeded.
The Growth Strategy Meeting discusses matters relating to the management strategies necessary for
the Group’s growth.
The Risk Management Meeting deliberates and makes decisions on important group-wide risks.
The Meeting’s goal is to strengthen the Company’s management base linked to growth strategies
through a unified and horizontal understanding of risks across the entire Group.
The Human Resource Strategy Meeting is positioned as an advisory body to the President, whomakes decisions related to the organization and human capital, and the Meeting discusses mattersneeded to foster an organization and culture aimed at the growth of the Group, and to secure andcultivate human resources.
i) Promotion of Sustainable Management Practices across the Entire GroupWe promote sustainability practices throughout the entire Group under the leadership of the Chief
Sustainability Officer. We hold the Sustainability Promotion Meeting once or twice a year to discuss
important sustainability initiatives and share information. The meeting is chaired by the Chief
Sustainability Officer. The other members are the heads of the Business promotion divisions of eachbusiness unit (BU) and key Group companies and the Sustainability Officers of regional headquarters.
Individual sustainability themes such as carbon neutrality, circular economy, human rights due
diligence (HRDD), diversity, equity, and inclusion (DEI), occupational safety and health, supply
chains, quality assurance, etc. are promoted by meeting bodies consisting of responsible staff at BUs
and principal Group companies as part of cross-organizational activities in the Hitachi Group, who
discuss measures and share information across the entire Group.

29ii) Achievement of Sustainability Targets Used to Determine Compensation to Executive Officers
The degree of achievement of quantitative or qualitative sustainability targets are included in thecriteria for determining compensation to Executive Officers. To motivate them to implement oursustainability strategy, we have set specific indicators and goals related to material issues in thesustainability strategy, such as Environments, Business with Integrity and Quality of Life, and haveincluded them in the criteria for determining short-term incentives and medium- and long-term
incentives.
The compensation to Executive Officers is described in “IV. Information on the Company 4.
Corporate Governance, etc. (4) Compensation to Directors and Executive Officers.”(2) Initiatives to Address Key Issues
We have identified the following issues as material issues related to sustainability: the environment(contributing to decarbonization and resource circulation), resilience (contributing to the maintenanceand rapid recovery of social infrastructure), safety & security (contributing to safe and secure societybuilding), quality of life (contributing to physical and mental wellness and prosperous life), businesswith integrity (adhering to ethical standards and respect for human rights), diversity, equity andinclusion (DEI) (contributing to a society where everyone can shine).
The Group has declared its new goal of “supporting people’s quality of life with data andtechnology that fosters a sustainable society” in the Mid-term Management Plan 2024. The Group is
executing its management strategy to accomplish this goal. The chart below illustrates the Group’s
objectives. Considering planetary boundaries, we aim to achieve carbon neutrality by FY2050
throughout our value chain. This objective is part of our Hitachi Environmental Innovation 2050 longterm environment targets. In pursuit of wellbeing, we aim to help create a society where every individual
is comfortable and active. We strive to enhance our internal and external initiatives and innovate for theworld where people have a 100-year lifespan.

30

i. Activities addressing carbon neutrality and climate change (Disclosure based on TCFD)
In June 2018, the Company announced its endorsement of the recommendations by the Financial
Stability Board’s (FSB) Task Force on Climate-related Financial Disclosures (TCFD) and disclosed
information in line with the TCFD’s recommendations in Hitachi Sustainability Report 2018 publishedin 2018. Since then, we have been disclosing information based on the recommendations. In this annual
securities report, we include an excerpt.
(a) Governance
The Hitachi Group sees climate change and other environmental issues as important management
issues. The governance structure for addressing climate change issues is outlined in the (1) Governanceand Risk Management section above.
(b) Strategy
Hitachi Group established its Environmental Vision and Hitachi Environmental Innovation 2050,
long-term environment targets in FY2016 in line with the Paris Agreement. To help limit the global
temperature rise to 1.5 °C or less as recommended in the subsequent IPCC Global Warming of 1.5 °C
report and the IPCC Sixth Assessment Report, we aim to achieve the carbon neutrality of the HitachiGroup factories and offices by FY2030 and the carbon neutrality of our value chain by FY2050. We are
implementing our decarbonization initiatives to achieve these goals.

Climate-related Risks
We categorize risks associated with climate change into risks related to the transition to a carbonfree society (applying mostly to the 1.5 °C scenario) and risks related to the physical impact ofclimate change (applying mostly to the 4 °C scenario). We analyze and manage each category
separately.
- Risks related to the transition to a decarbonized economy (applying mostly to the 1.5 °C scenario)
In general, the significant risks related to the transition to a decarbonized economy are the risks
that affect businesses that are unable to survive in a carbon-free society, which is related to the risk of
becoming unable to use fossil fuels. Because many of the Hitachi Group’s current businesses use
electricity as an energy source, very few serious risks were found.
In addition to the risk above, the Hitachi Group assumes that the risks related to the transition toa carbon-free society include a carbon tax, taxes on fuel and energy expenses, an increase in the costof business due to the introduction of emissions trading, etc. and the loss of opportunities to sell
products and services due to delayed technological development. Of these risks, the risk of delays inproduct development for a carbon-free society is inextricably linked to opportunities. We believe that
we can avoid this risk by developing businesses that contribute to a carbon-free society.
- Risks related to the physical impacts of climate change (applying mostly to the 4 °C scenario)
The physical risk associated with climate change may include business continuity risks due tometeorological disasters likely caused by climate change, which are, for instance, intensified
typhoons, flooding, drought, etc. (acute risks), and rising sea levels, prolonged heat waves, etc.
(chronic risks).
Our measure to avoid such risks is to consider location conditions and the placement of facilities
in view of damage caused by flooding when building a new factory.
31

Climate-related Opportunities
The Hitachi Group may find numerous opportunities associated with climate change.
Both the carbon neutrality of business establishments and the reduction of CO2 emissions fromthe use of products and services sold, which are a large part of the emissions from entire value chains,
are important for the achievement of the long-term environmental targets and the CO2 emission
reduction target set in the Mid-term Management Plan 2024. The development and provision of
products and services that contribute to the reduction of CO2 emissions through energy conservation,and other actions. is a response to customer needs and contributes to the decarbonization of society.
There are also opportunities to expand businesses that contribute to decarbonization, such as the
spread of carbon-free solutions and services through co-creation with customers. Greentransformation (GX) initiatives are the basis of the Social Innovation Business operated as part of the
Hitachi Group’s management strategies, which creates significant opportunities for short-, mediumand long-term businesses.
The Hitachi Group’s risks and opportunities associated with climate change
The Hitachi Group’s consideration of these risks and opportunities did not result in the discoveryof any serious risks related to climate change that Hitachi is facing at the current stage. We havefound that participating in climate change efforts is an opportunity. In either scenario of 1.5 °C or 4
°C, we think that Hitachi has high resilience in a shift to a carbon-free society from a medium- tolong-term perspective by focusing on market trends and operating the business flexibly andstrategically.
(c) Risk Management
We review and assess climate change-related risks by assessing the environmental impact for each
BU and Group company. The results of these evaluations are summarized by the Sustainability
Promotion Division. When there are risks and opportunities perceived as particularly important, they
will be discussed and decided at the Senior Executive Committee and, if necessary, sent to the Board of
Directors for deliberation.
(d) Indicators and Targets
The Hitachi Group’s Hitachi Environmental Innovation 2050 long-term environment targets
include the following targets.
Medium-term targets: achieve carbon neutrality by FY2030 at Hitachi’s business sites (factories
and offices)Long-term targets: achieve carbon neutrality in the value chain by FY2050
The Group has developed the 2024 Environmental Action Plan to achieve these targets by FY2024.
The plan spans the same three-year period as the Mid-term Management Plan. The Group has set
indicators and targets in the action plan and is managing its progress toward these targets.
Among the indicators related to climate change mitigation and adaptation, the targets and results
related to the rate of the reduction of the total CO2 emissions of the factories and offices are as follows.
Indicator

FY2030(medium-term)

TargetFY2024(short-term)

FY2023(short-term)

FY2023(Result)

Rate of reduction of total
CO2 emissions in the
Carbon neutrality 50% reduction
35% reduction 74% reduction
factories and offices
comparison
to(in
FY2010)(Note) 1. They are targets of the 2024 Environmental Action Plan. For details, please refer to Hitachi
Sustainability Report 2024 which will be published later.
2. Hitachi Astemo, Ltd. has ceased to be a consolidated subsidiary of the Company following thepartial transfer of its shares on October 16, 2023, and the amount of its CO2 emissions are notincluded in the tabulation. The significant improvement in FY 2023 result is due to the
exclusion of the amount of Hitachi Astemo, Ltd. and the Hitachi Group’s efforts to reduce
CO2 emissions.
32

CO2 emissions of the Hitachi Group (FY2023)
Indicator(Result)
Scope1 (Note 1, 2)

282kt-CO2e

Scope2 (Note 1, 3)

196kt-CO2e(Notes) 1. Based on the Environmental Management Classification Criteria established by the Company,
we manage all Group business sites classified into three categories: A, B, and C. In addition,
the companies belonging to the Hitachi Group as of March 31, 2024 are included in thecalculation. Both Scope 1 and Scope 2 cover Category A business sites which have a large
environmental impact within the Hitachi Group.
2. Direct emissions from fuel use and industrial process within the Hitachi Group
3. Indirect emissions associated with use of electricity and heat purchased by the Hitachi Group

33

ii. Activities related to human capital and diversity(a) Strategy
Hitachi believes that human capital – people, in other words, people – are the source of our value.
Therefore, we leverage the combined power of our global network of employees to provide value to ourcustomers and society, contributing to the creation of sustainable societies.
Expanding the Social Innovation Business globally, Hitachi seeks diverse talents who are able tocarry out operations proactively as one team across the boundaries of countries, regions and business
entities. We seek organizations and talent capable of adapting quickly to an ever-changing world.

We strive to promote talent development and improve our internal work environment based on thefollowing policies.
i) Promotion of diversity, equity, and inclusion (DEI)
There is a place for everyone in Hitachi. We welcome diversity in factors including
background, age, gender, sexuality, family status, disability, neurodiversity, race, nationality,
ethnicity, religion, and values, because we believe this diversity is a prerequisite to understanding
markets, brings about excellent ideas, and promotes innovation that contributes to the evolution ofsociety. We therefore created a global structure for DEI promotion with a commitment by thepresident & CEO. We aim to increase the percentage of executive-level officers (executive officers
and corporate officers) who are women and the percentage who are non-Japanese to 15% each by
FY2024. We have been making progress on this, with the ratio of women at 11.8% and nonJapanese at 25% on June 1, 2024. We will continue implementing initiatives in line with our group
DEI theme.
<DEI themes of the Hitachi Group and examples of actions related to promotion of DEI>
Our group’s DEI themes:

34Company-wide actions

Actions in individual business entities and regions

35ii) Global human capital management

To promote the Social Innovation Business, it is necessary to explore the issues faced bycustomers and society and pursue co-creation with customers on new solutions that have notpreviously existed. Hitachi has therefore declared a Mission and Vision for our talent management
based on the Mid-term Management Plan 2024. Specifically, we declared our vision to become an
employer of choice in the global market by developing an organization in which human resourcesoriented toward social contribution gather and thrive. To realize that vision, we defined two things
as a foundation: Ensuring mental and physical health and safety and enhancing and ensuring risk
management. Building on this foundation, we have set three strategic pillars: People, Mindset, andOrganization. We pursue our initiatives based on the foundation and pillars.
● Secure and develop digital talent
Aiming to accelerate the Social Innovation Business with the use of digital technology andachieve expansion of the Lumada business, a growth driver for Hitachi, we are focusing on
securing and developing the human resources (digital talent) who will drive digitaltransformation (DX).
We are acquiring digital talent globally by recruitment and business acquisition in accordancewith the growth of the Lumada business. The acquisition and development of digital talent also
centers on Hitachi Academy, a corporate university of the Hitachi Group, providing an original
DX training scheme including more than 100 courses and leveraging hands-on experience, andenhancing internal talent development using GlobalLogic methodology.
〈Strengthen global talent for the Lumada business growth〉

36

〈Capability of human resources to promote the Lumada business〉● Improving employee engagement and fostering the Hitachi culture globally
We conduct Hitachi Insights, anannual global employee survey, andwork to plan and promote talentmanagement
measures.
Seniormanagement and managers at each
workplace share the survey results fortheir organizations with workplace
members to identify organizational
challenges, and then plan andimplement countermeasures throughthe PDCA cycle.
To increase engagement by promoting actions based on the results of the survey, we
identify engagement drivers (items that are highly corelated to increasing engagement) and use
them to improve measures.
The Mid-term Management Plan 2024 includes a goal of raising the Employee Engagement
Score* to 68.0% by FY2024, which has been achieved ahead of schedule in FY2022. We
therefore started aiming at 71.0% to further improve engagement, and scored 68.6% in 2023.
Considering this result and the challenges we identified with engagement drivers, the entire
group will take actions to improve employee engagement through approaches such as fostering
the Hitachi culture globally, improving well-being, accelerating actions to ensure the right
person is in the right place and enhancing communication from senior executives.

* the percentage of positive responses to employee engagement questions (The score is
calculated from perspectives of: pride in working for Hitachi; whether it is a rewarding place towork; job satisfaction and sense of accomplishment; and desire to continue working for Hitachi
for the foreseeable future.)<Examples of actions to improve employee engagement and foster the Hitachi culture globally>
Company-wide actions

37

Actions in individual business entities and regions● Management leader selection and development
Changing business strategies are leading to changing
requirements for managerial leadership. Hitachi’s leaders are
expected to be able to respond to globalization and DX anduse not only their own knowledge and experience but also
insights derived from inside and outside Hitachi to beaccountable for their judgements and decisions. They should
also possess capabilities and personalities suited to change
and execution.

Roundtable conference between Future50
and directors at Stockholm

For this reason, we undertake talent reviews and external appraisal (HLPO*) globally toassess both “performance” and “potential”. We develop diverse people regardless of factors
such as nationality and gender to select members of GT+**, a pool of management leader
candidates, and provide Future 50, a program for emerging talent to assign them to leadership
positions at an early stage.
These initiatives are led in collaboration between top management and the Nominating
Committee using the Global Leadership Development Program (GLD). It is an intensive
program to develop candidates for leadership such as future CEOs and division heads.
Candidates receive on-the-job training (OJT), including tough assignments, and off-the-job
training (Off-JT) such as external education and coaching. We also provide them with
opportunities to speak directly with independent directors.
* Hitachi Leadership Profile Online**Global Talent Plus

38

<Status of selection and development of Hitachi’s leader><Steps to identify more diverse talents>● Putting the right person in the right place and shifting to job-based HR management in JapanWe are building a global integrated human capital management platform and promoting
global talent mobility to secure, assign and develop the best human resources worldwide. We
started using the platform globally, and we are sharing information such as employee skills andcareer aspirations through its cloud-based system. We are using it for global employee database
and team management. Furthermore, we are planning to implement a global training platform tocreate an environment where employees learn with autonomy.
<Penetrate growth-centered behavior through group-wide common HR measures><Actions in Japan>
We are accelerating the shift to job-based HR management. By assigning the right people
to the right jobs according to their personal abilities and motivations, we aim to maximize theperformance of individuals and organizations, improve engagement, and develop bothorganizations and people. We have taken actions for system building such as visualization of jobs
and people through the introduction of job descriptions, promoting the learning experience
platform (LXP), trial of a system of internal and external side jobs, and accelerated actions suchas enhancement of career-related communications between supervisors and employees to change
employees’ behaviors from perspectives of their awareness and practices. Continuing these39

actions, we will then make the behaviors a habit and instill the job-based HR management into
group companies in Japan.

● Ensuring mental and physical health and safety“Health and safety always comes first.” is the basic principle underlining the Hitachi Group
Health and Safety Policy, and is shared by all Hitachi Group companies around the world.
Employees work together with all related companies, including contractors and procurement
partners, to develop a safe, secure, comfortable, and healthy workplace for everyone involved inour business activities.
Aiming to develop safe workplaces with zero accidents, Hitachi has developed andintroduced occupational health and safety management systems best suited to its business, andconducts regular risk assessments and audits, while also working to roll out occupational healthand safety(b) Indicators and Targets
In implementing specific HR initiatives, we clarify how each of them links to management goals
and major management strategies. We set KPIs for each HR strategy and initiative to monitor theirprogresses.

40

Among the indicators above, the following KPIs are particularly important.
Indicators
Targets
Results
Ratio of women and non-JapaneseRatio of women: 11.8%
15% each by FY2024
executives (Global DEI goal)
Ratio of non-Japanese: 25.0%(Note 2)
(Note 1)
(As of June 2024)
97,000 by FY2024
95,000
Number of digital talents(Note 3)(As of March 2024)
Percentage of positive responses to
71% by FY2024
68.6% (FY2023)
employee engagement questions in(Notes 3, 4)
the employee survey
Number of fatal accidents

0 cases per year

4 cases (FY2023)

Total recordable injury frequency Half the rate of FY2021 by
0.16 (FY2023)
rate (TRIFR) (Note 5)
FY2024 (Note 6)(Notes) 1. Targets and results are for the Company only. Executives represent executive officers
and corporate officers of the Company.
2. The numbers reflect personnel transfers on April 1, 2024. We achieved the targeted ratio
of non-Japanese executives of 15% in FY2022 ahead of schedule. We will continue
improving the ratio further.
3. Excluding Hitachi Astemo
4. We have set a new goal since we achieved the original goal, 68% by FY2024 in FY2022
ahead of schedule.
5. Total Recordable Injury Frequency Rate (casualties per 200,000 work hours)
6. FY2021 score was 0.27

We successfully achieved our targets ahead of schedule in fiscal 2022 in terms of the “Ratioof non-Japanese executives” and the “Positive response rate to questions about employee
engagement in employee surveys.” On the other hand, regarding “Number of fatal accidents”, wetake very seriously the fact that partner companies recorded fatal accidents at construction sites.
We launched a working group of our business entities comprising construction divisions andstarted discussions on group-wide measures to improve safety. We will continue taking measures
to become an accident-free workplace under the strong leadership with a vision of “All accidents
can be prevented.”41

3. Risk Factors(1) About Risk Management
The Hitachi Group (“Hitachi”) aims to create new revenue opportunities while controlling risk. To dothis, Hitachi maintains a clear understanding and analysis of the constantly changing business environment,
taking into account social issues as well as its competitive advantages and management resources andconducting risk management with an eye toward the many risks Hitachi should be prepared for as well as
opportunities for further growth.
Hitachi strengthens global risk management by establishing the Risk Management Meeting which
deliberates on important matters related to group-wide risks in Hitachi’s business management. Through theefforts to identify risks centrally and cross-sectionally by deliberation at the Risk Management Meeting,
Hitachi aims to build a solid management base in conjunction with its growth strategy.
(2) Risk Factors
Hitachi conducts business on a global scale across a broad range of business areas and utilizes
sophisticated, specialized technologies to carry out its operations. As such, Hitachi’s business activities areaffected by a wide range of factors. The factors and measures taken for each risk factor are as follows.
The following risks and countermeasures are based on assumptions Hitachi considers reasonable as ofthe date of submission of this report. The countermeasures below will not necessarily eliminate the effectsof the risks and may not effectively mitigate the effects.
1) Risks Related to Economy
Economic Trends
Hitachi’s business is influenced by the global economy, economic and geopolitical conditions incertain regions or countries. Downward economic trends in regions, countries and Japan cause declines in
consumer spending or capital investment. The rising interstate conflicts and tensions could cause restrictions
on or cessations of economic activity in certain regions and subsequently, partially restrict Hitachi’s
products, systems and services or reduce demand for them, which could adversely affect its business,financial condition, and earnings.
In response to this risk, Hitachi combines the many different aspects of the Social Innovation Businessin a range of business fields and regions, and it aims to take prompt countermeasures against geopoliticalchanges through risk evaluation and other means.

Currency Exchange Rates Fluctuations
Since Hitachi conducts business in many foreign countries, its business activities are exposed to risks
from fluctuations in foreign currency exchange rates. Hitachi sells products, provides services and purchases
raw materials and components in local currencies. Therefore, fluctuations in foreign currency exchange rates
may result in lower revenues or higher costs in yen to Hitachi and thus affect its earnings, which arereported in Japanese yen. Hitachi’s price competitiveness may decline if it seeks to increase prices in local
currencies to compensate for lower revenues or to increase prices in yen to absorb the higher cost, and thus
its earnings may be harmed. In addition, since Hitachi holds assets and liabilities denominated in foreign
currencies, fluctuations in foreign currency exchange rates may adversely affect its financial condition
presented in Japanese yen through foreign currency translation.
The table below shows the foreign exchange sensitivity for the fiscal year ending March 31, 2025
(impact of an exchange rate fluctuation of one-yen from the forecast rate) estimated as of March 31, 2024.
Foreign exchange sensitivity (billions of yen)
Currency

Forecast
Revenues

Adjusted EBITA

U.S. dollar

140 yen／U.S. dollar

12.0

1.2

Euro

150 yen／Euro

7.0

0.5

To mitigate the risk, Hitachi hedges the foreign exchange risks using forward exchange contracts andcurrency swap agreements and emphasizes a strategy of selling locally produced goods and services.

42

Financing Environment
Hitachi’s primary sources of funds are cash flows from operations, borrowings from banks and otherinstitutional lenders, and funding from capital markets, such as offerings of commercial paper and other debt
securities, as well as equity securities. Hitachi needs liquid funds to pay its operating expenses, the principalof and interest on its debt and dividends on its capital stock. Hitachi also needs long-term financing to fund,among other things, capital expenditures and research and development expenses. Hitachi currently believes
its cash flows from operations, borrowings from banks and other institutional lenders and funding from thecapital markets can provide sufficient funding for its operations and other liquidity needs. However, a global
economic downturn could adversely affect its cash flows from operations, business results and financial
condition and may adversely affect its credit ratings. If Hitachi’s ratings are downgraded, its ability to obtain
additional financing on terms it considers favorable may be negatively affected.
Hitachi’s reliance on banks and institutional lenders exposes it to risks related to rising interest rates,and Hitachi may need to increase its reliance on external sources of funding. An increased reliance on debt
instruments may adversely affect Hitachi’s credit ratings, which might affect its ability to successfully
obtain additional financing on terms it considers favorable. The inability to successfully obtain suchfinancing may increase Hitachi’s financing costs, and therefore could adversely affect its financial conditionand earnings. To reduce risks related to rising interest rates, Hitachi enters into interest rate swap
agreements.
Furthermore, the failure of one or more of Hitachi’s major lenders or a decision by one or more of themto change the terms and conditions of their loans or to stop lending to Hitachi could have an adverse effecton its access to funding.
Declining Share Prices
Hitachi invests in securities to maintain or promote its business or other relationships with othercompanies. These securities are exposed to the risk of declining stock prices. Such declines may require that
Hitachi writes down equity securities that the Company and its consolidated subsidiaries hold. Further,
contractual and other obligations may require the Company and its consolidated subsidiaries to maintaintheir holdings of these securities despite declining share prices and this may lead to material losses.
The table below shows the number of stock names and the balance sheet amount of the stocks theCompany owned at the end of the fiscal year ended March 31, 2024.
Number ofstock names(stock names)

Total amount recordedin the balance sheet(millions of yen)

Unlisted stocks

122

20,445

Others35

45,889To deal with these risks, Hitachi has a basic policy, under which it will not acquire and hold othercompanies’ shares except for cases where acquiring or holding such shares is necessary in terms oftransactions or business relationship. The Company also has a policy of reducing holdings that it alreadyowns unless the significance and economic rationale of holding the shares are confirmed. Hitachi’s policy
for shareholding and its examination of the reasonableness of holding equity securities held for purposes
other than pure investment are described in “IV Information on the Company - 4. Corporate Governance,
etc. - (5) Information on shareholdings.”
2) Risks Related to Supply Chain
Material and Component Procurement
Hitachi’s manufacturing operations relies on procurement partners for supplies of materials, parts,
components and services of adequate quality and quantity, delivered in a timely manner at a reasonable
price. Procurement partners may not have the sufficient capacity to meet all of Hitachi’s needs during
periods of excess demand. Shortages of materials, parts, components and services may cause a sharp rise in
their prices. In addition, prices of certain raw materials, parts and components which Hitachi purchases inlocal currencies, principally the U.S. dollar and the euro, could be adversely affected by fluctuations inforeign currency exchange rates. Increases in the market price of petroleum and other materials, such as
43

copper, steel, synthetic resins, rare metals and rare-earth minerals, can increase Hitachi’s production costs
and may adversely affect its earnings. Conversely, decreases in commodity prices, such as for raw materials,
parts and components, can result in write-downs of inventory. If natural disasters disrupt the operations ofprocurement partners and damage supply chains, this may adversely affect Hitachi’s production. If there are
violations of laws or regulations regarding human rights at procurement partners such as child labor andforced labor, Hitachi’s reputation as an entity that places orders may decline and the stable procurement of
raw materials or parts from the procurement partners may be hindered, which may adversely affect Hitachi’sbusiness, financial condition and earnings.
To deal with these risks, Hitachi establishes close relationships with procurement partners, responds
appropriately to changes in demand in different regions, pursues a strategy of selling locally produced goods
and services, formulates a business continuity plan (BCP) at domestic bases and major bases overseas tostrengthen its ability to deal with business interruption risk, and uses and strengthens its procurement
function. To prevent violations of laws and regulations at procurement partners, Hitachi uses selfinspections and audits using questionnaires and initiatives to promote understanding.

Credit Risks Arising from Business Transactions
Hitachi enters into transactions with diverse customers and procurement partners in Japan and othercountries. Hitachi sells its products to certain customers on credit and pays in advance for products orservices provided by certain procurement partners. Credit deterioration or a failure of one or more of
Hitachi’s customers and procurement partners could adversely affect Hitachi’s financial condition, earnings
and cash flows.
To deal with these risks, Hitachi takes measures to manage counterparty credit risk, such as regularly
monitoring the credit conditions of such customers or procurement partners and setting limits on transaction
amounts according to their credit conditions.
3) Risks Related to Geopolitics in Overseas Business
Overseas Business Activities
Hitachi seeks to expand its business in overseas markets as part of its business strategy. Through thisoverseas expansion, Hitachi aims to increase revenues, reduce costs and improve profitability. Various
factors in foreign countries where Hitachi operates may adversely affect its overseas business activities.
These factors include:・ changes in regulations relating to investments, exports, tariffs, antitrust, anti-bribery, consumer andbusiness taxation, intellectual property, foreign trade and exchange controls, human rights,
employment and labor, environment, resources and energy;
・ differences in commercial and business customs such as terms and conditions of transactions;・ changes in labor relations and practices;・ deterioration of public sentiment against Japan and local residents’ sentiment against Hitachi, andcriticism and campaigns by various organizations;・ expansion and frequent occurrence of interstate/domestic conflicts;
・ changes in national security and foreign policies;
・ tightening economic security policies; and・ other political and social factors and geopolitical risk as well as economic trends and currency
exchange rate fluctuations.
Because of these factors, there can be no assurance that Hitachi will be able to achieve the aims of its
overseas growth strategy. This may adversely affect Hitachi’s business growth prospects and earnings.
To deal with these risks, Hitachi constantly determines global political and economic conditions andanalyzes their effects on its businesses. Based on the analysis, Hitachi implements group-wide measures,
including the transfer of overseas risk assets.
4) Risks Related to Environment
Tightening of Regulations to Prevent Climate Change (Risks Associated with the Transition to a Carbonneutral Economy)
An increase in business costs due to carbon taxes, taxes on fuel and energy consumption and/or the
introduction of carbon emission rights trading, etc., loss of selling opportunities due to delays in the44

development of technology for products and services, and investors and society’s disapproval of Hitachi’s
stance on addressing the issue of climate change may adversely affect Hitachi’s business activities, earnings
and financial condition.
In response to these risks, Hitachi has established its Hitachi Environmental Innovation 2050 long-term
environmental targets and has been implementing an array of activities to achieve carbon neutrality. Hitachi
will accelerate its efforts to achieve its targets. Divisions are aiming to achieve carbon neutrality for theirown operations by fiscal 2030. They are introducing energy-efficient equipment and power generation using
renewable energy through the introduction of Hitachi Internal Carbon Pricing, streamlining production andtransportation, and promoting the use of electric power from non-fossil energy, etc. to prevent or reduce anincrease in carbon taxes and other business costs and to reduce the risk of negative assessment. Hitachi istargeting carbon neutrality in the value chain by fiscal 2050 and aiming to develop and increase sales ofinnovative products and services that will lead to the reduction of CO2 emissions and develop energyefficient products that will help reduce energy consumption.
5) Risk Related to Human Capital
Retaining Skilled Personnel
To remain competitive in Hitachi, Hitachi must continue to recruit and retain the talent it needs toexecute its business. In particular, Hitachi is currently seeking talent that can operate globally, talent that cancapture needs and provide optimal solution services close to customers, and digital talent that will drive DX.
However, excellent talent is limited, and competition to recruit and retain such talent is intensifying. Therecan be no assurance that Hitachi will be able to recruit or retain the talent it requires.
To deal with these risks, Hitachi is working to secure the talent it needs in a timely manner, both
domestically and globally, by promoting diversity, equity and inclusion (DEI), taking steps to create apleasant workplace and enhance engagement, securing outstanding global talent through a global humanresources system, and securing and developing outstanding talent through the use of a global humanresources platform and through the implementation of in-house educational programs.
6) Risk Related to Technology
Dependence on Information Systems
With the increased usage and importance of information systems in Hitachi’s operating activities,
disruptions in such systems due to computer viruses and other factors could have a negative impact on its
operating activities, earnings and financial condition. The expansion of remote work is at risk of generating
new security risks, including information leaks.
To deal with these risks, Hitachi continuously promotes cybersecurity measures and strictly prescribes
and operates security technologies, products and procedures that apply to remote work. However, they may
not be effective if unprecedented cyberattacks occur, or if there are any vulnerabilities in systems that are
not managed by Hitachi.

Rapid Technological Innovation
New technologies are rapidly emerging in the segments in which Hitachi conducts business. In addition
to the development of advanced technologies, the continuous, timely and cost-effective incorporation ofsuch technologies into products, systems and services and the effective marketing of such products, etc. are
indispensable to remaining competitive. For instance, it is important to respond to technologicalinnovations, including automation and electrification using technologies such as generative AI, digital androbots and environmentally friendly technologies such as decarbonization and resource circulation. Hitachi
is investing substantial management resources in in-house research and development, and in startup
investments through its corporate venture fund to continue to provide value to customers while keeping
track of trends of change. Failure in Hitachi’s endeavors to develop such advanced technologies may
negatively affect Hitachi’s business, financial condition and results of operations.
To mitigate these risks, Hitachi promotes open innovation involving industry, government andacademia, recruits and cultivates digitally savvy human resources and strengthens its grasp of client needs
through a collaborative creation process using Lumada. Through those activities, Hitachi works to create aninnovation ecosystem.

457) Risks Related to Natural disasters
Physical Impacts by Significant Disasters, Climate Change and Similar Events (Including Risks Related to
the Physical Effects of Climate Change)
Hitachi has many facilities, including its R&D facilities, manufacturing facilities and its headquarters
in Japan. Historically, Japan has experienced numerous natural disasters such as earthquakes, tsunamis andtyphoons. Natural disasters in the future may have a significantly adverse effect on an array of Hitachi’s
corporate activities, from production to sales. Hitachi also has overseas facilities in Asia, the U.S. andEurope, which are also subject to similar natural disasters. Natural disasters in each of areas may cause
damage on certain of Hitachi’s plants and offices and the operations of its suppliers and customers. Due toclimate change, large-scale natural disasters, including drought, rising sea levels, long heat waves andfloods, may become more serious. Such significant natural disasters may directly damage or destroy
Hitachi’s facilities, which could disrupt its operations, delay new production and shipments of existing
inventory or result in costly repairs, replacements or other costs, all of which would result in significant
losses. Furthermore, even if such significant natural disasters do not directly affect Hitachi’s facilities, they
could result in disruptions in distribution channels or supply chains. The spread of infectious diseases andgeopolitical and social instability, such as terrorism, crime, civil disturbance and conflict, may also disrupt
Hitachi’s operations, render its employees unable to work, reduce consumer demand for its products or
disrupt its supply and distribution channels, etc. In addition, Hitachi is not insured against all potential
losses, and even losses that insurance covers may not be fully covered, and payment of insurance claims
may be delayed due to objections, etc. Direct and indirect disruption of Hitachi’s operations as a result of
natural disasters or other events could have a negative impact on its operating activities, earnings andfinancial condition.
To deal with these risks, Hitachi works to strengthen its ability to deal with business interruption risk
by formulating BCPs. When Hitachi builds a new plant, it determines the layout of equipment within theplant, taking into consideration possible floods.
8) Risks Related to the Others about the Whole of Company Management
Estimates, Fluctuations in Cost and Cancellation of Long-term Projects
Hitachi enters into a substantial number of long-term projects, particularly in connection with theconstruction of infrastructure systems. When the outcome of a construction can be reliably estimated,
Hitachi recognizes revenue and expenses by reference to the stage of completion of the contract activity. In
this case, revenue is recognized mainly based on the progress of the project, using mostly the cost incurred
relative to the estimated total cost. When the outcome of a construction cannot be reliably estimated, Hitachi
recognizes revenue only to the extent of that contract costs incurred will be recoverable, and recognizes
contract costs as expenses in the period in which such costs are incurred. The revenue recognition for suchlong-term projects requires Hitachi to estimate the estimated total cost, estimated total selling price, contract
risks and other factors using significant assumptions. However, these estimates are subject to change.
Hitachi regularly reviews these estimates and adjusts them as it deems necessary. While Hitachi charges any
anticipated losses on fixed price contracts to operations when it is able to estimate such losses, theseestimates are subject to change. Fluctuations in costs can occur for a variety of reasons, many of which arebeyond Hitachi’s control. In addition, Hitachi or its counterparties may cancel these contracts. These factors
would require Hitachi to revise its initial assumptions regarding a particular contract, and may adversely
affect its business, financial condition and earnings.
To deal with these risks, Hitachi aims to identify and manage risks before the execution of contracts,
and its operating division and finance division continue to manage and share identified risks after the
execution of contracts for accurate estimates in a timely manner.

Intense Competition
Hitachi competes with diverse competitors ranging from huge global corporations to specializedcompanies including startups. To keep competitive in this environment, Hitachi’s products and services
must also be competitive in terms of engineering sophistication, quality and brand value. Hitachi must
introduce its products and services to the markets in a timely manner. There can be no assurance that the
products and services that Hitachi offers will be competitive. The failure of such products and services to be46

competitive may negatively affect Hitachi’s business, financial condition and earnings.
In addition, Advanced products, systems and services are becoming commoditized. Their production
and development are expanding, together with the provision of services in low-cost regions and the use of
the cloud and automation. As a result, price competition is intensifying. On the other hand, soaring raw
material prices and personnel costs may increase costs related to manufacturing, sales and service provision.
Under such circumstances, if Hitachi is unable to charge prices comparable to those of its competitors, itscompetitiveness and overall profitability may be harmed. However, if Hitachi charges comparable prices, it
may cause a loss.
To deal with these risks, Hitachi is emphasizing innovation through research and development, theexpansion of the Lumada business, co-creation with customers, striving to produce high value-added
products, cost reduction through value engineering and negotiating price pass-through with clientcompanies.

Sharp Decline in Demand
Oversupply in the markets in which Hitachi competes may lead to declines in sales prices, revenues
and profitability. In addition, adjustment to demand may force Hitachi to dispose of excess supply or
obsolete equipment or reduce production, which can result in losses. For example, the imbalance between
supply and demand in information equipment, elevators, semiconductor and industrial machinery industries
and resultant deterioration in market conditions could negatively affect Hitachi’s businesses, financial
condition and earnings.
To deal with these risks, Hitachi works to strengthen the competitiveness of its products and services
and controls the supply and inventory of products and services based on demand forecasts.
Overhaul of Cost Structure
Hitachi implements “the Hitachi Smart Transformation Project,” which promotes cost reductions in all
activities of its value chain by thoroughly overhauling its cost structure across the group. Hitachi seeks tostabilize earnings and strengthen cash flows by improving its management efficiency through the Project.
The Project may be less successful than Hitachi currently anticipates. Even if the Project is successful, there
is no assurance that Hitachi will be able to sustain or increase profitability.
Strategy to Strengthen the Social Innovation Business
Hitachi’s business strategy seeks to build its business portfolio and achieve a business structure withhigh growth potential and stable profitability mainly by strengthening the Social Innovation Business. To
strengthen the Social Innovation Business, Hitachi plans to devote significant resources including capital
expenditures and R&D, and is making investments in mergers and acquisitions and in new projects. In
addition, Hitachi attempts to design an organizational structure suitable for promoting the Social Innovation
Business more effectively in response to market changes. To implement this strategy, Hitachi has incurredand may continue to incur considerable expenses. Hitachi’s efforts to implement this strategy may be
unsuccessful or less successful than it currently anticipates. Even if these efforts are successful, there is no
assurance that Hitachi will be able to sustain or increase profitability.
To deal with those risks, Hitachi works to manage implementation in a phase gate process in eachbusiness unit (BU) and analyze and discuss market trends, trends at competitors, technological trends andpotential risks, among other issues, from a range of perspectives, in the Investment Strategy Committee,
Senior Executive Committee, the Board of Directors and Audit Committee.
Acquisitions, Joint Ventures and Strategic Alliances
In every operating sector, Hitachi depends to some degree on acquisitions of other companies, joint
ventures and strategic alliances with outside partners to design and develop key new technologies andproducts, to strengthen competitiveness by complimenting and expanding products, systems and services
and by scaling up and to acquire new locations and customer bases to expand into new regions andbusinesses. Matters which may have adverse effects on Hitachi’s financial condition or profitability aredescribed in “V. Financial Information - Notes to Consolidated Financial Statements - (5) Business
Acquisitions and Divestitures.” Such transactions are inherently risky because of the difficulties in
integrating operations, technologies, products and personnel and achieving a return on investment.
47

Integration issues are complex, time-consuming and expensive and, without proper planning andimplementation, could adversely affect Hitachi’s business. Decisions made by or the performance ofalliance partners that Hitachi cannot control or adverse business trends may also negatively affect thesuccess of its alliances. Hitachi may incur significant acquisition, administrative and other costs inconnection with these transactions, including costs related to the integration or restructuring of acquired
businesses. Major financing for these costs may cause deterioration in Hitachi’s financial condition anddecrease its capacity to finance. If it is expected that the amount invested is irrecoverable due to a decline in
the profitability of an investee, Hitachi may incur significant losses, including impairment loss for goodwill.
Hitachi had goodwill of 1,433,628 million yen in the Digital Systems & Services segment, 690,034 million
yen in the Green Energy & Mobility segment and 248,016 million yen in the Connective Industries segment
as of March 31, 2024. The amount of goodwill in each segment is described in “V. Financial Information Notes to Consolidated Financial Statements - (4) Segment Information.” There can be no assurance thatthese transactions will be beneficial to Hitachi’s business or financial condition. Even assuming thesetransactions are beneficial, there can be no assurance that Hitachi will be able to successfully integrate theacquired businesses or achieve all or any of the initial objectives of these transactions.
To deal with those risks, Hitachi works to manage implementation in a phase gate process in each BU
and analyze and discuss market and industry trends, strategies, purchase prices, PMI (post-merger
integration) processes and potential risks, among other issues, from a range of perspectives, in theInvestment Strategy Committee, Senior Executive Committee, the Board of Directors and Audit Committee.

Business Restructuring
Hitachi’s business strategy seeks to build its business portfolio and achieve a structure with highgrowth potential and profitability in part by:・ closing unprofitable operations;・ divesting subsidiaries and affiliated companies;
・ reorganizing production bases and sales networks; and・ selling select assets.
Hitachi’s restructuring efforts may not be implemented in a timely manner or at all, including due togovernmental regulations, employment issues or a lack of demand in the M&A market for businesses it may
seek to sell. Restructuring efforts may also bring about unintended consequences, such as negative customer
or employee perceptions, and in connection with past business restructuring, have caused and may continue
to cause us to incur significant expenses and other costs, including additional impairment losses on Hitachi’s
fixed assets and intangible assets, write-offs of inventory and losses on the disposal of fixed assets andlosses related to the sale of securities. Current and future restructuring efforts may be unsuccessful or lesssuccessful than Hitachi presently anticipates and may adversely affect its business, financial condition andearnings.
To deal with these risks, Hitachi analyzes and discusses market and industry trends, strategies, sales
prices, processes and potential risks, among other issues, from a range of perspectives, in the Investment
Strategy Committee, Senior Executive Committee, the Board of Directors and Audit Committee.

48Worsening of Business Performance of Equity-Method Affiliates
Hitachi uses the equity-method to account for a number of associates and joint ventures. If one or moreof such equity-method affiliates records a loss during a given period, Hitachi must record that loss in amanner proportionate to its ownership interest in its consolidated financial statements. In addition, if thecarrying amount of Hitachi’s equity-method investments in associates or joint ventures is below therecoverable amount of the investments, Hitachi could be required to record an impairment loss.
The table below shows investments accounted for using the equity method as of March 31, 2024.
(Millions of yen)Segment

March 31, 2024

Digital Systems & Services

49,496

Green Energy & Mobility

104,383

Connective Industries

175,255

Automotive Systems (Note 1)-

Others4,626

Subtotal

333,760

Corporate Items and Eliminations (Note 2)

482,674

Total

816,434(Notes) 1. Hitachi Astemo, Ltd. has ceased to be a consolidated subsidiary of the Company andbecome an equity-method associate of the Company following the partial transfer of shareson October 16, 2023. Consequently, there is no company which belongs to the Automotive
Systems segment.
2. Investments accounted for using the equity method in Hitachi Astemo Ltd., Hitachi
Construction Machinery Co., Ltd. and their subsidiaries are included in “Corporate Items
and Eliminations”.
To deal with these risks, Hitachi practices investment income management using Adjusted EBITA(defined as Adjusted Earnings before interest, taxes and amortization, and representing the Adjusted
operating income (revenues less cost of sales as well as selling, general and administrative expenses),adding back the amortization of intangible assets, etc. recognized upon business combinations, and adding
or deducting the share of profits (losses) of investments accounted for using the equity method) and returnon invested capital (ROIC) and concentrates its investment in fields where profitability and growth are high.
Hitachi monitors the achievement of business plans and the financial position at equity method affiliates inwhich Hitachi invests and sell businesses with low profitability and investee companies whose futurecompetitiveness warrants concern.

Litigation and Other Legal Procedures
Hitachi faces the risk of being involved in litigation and alternative dispute resolution as well as
regulatory investigation and actions in connection with its operations. Lawsuits or any other legal
procedures for resolving disputes and regulatory actions may seek the payment of large, indeterminate
amounts or otherwise limit Hitachi’s operations, and their existence and magnitude may remain unknown
for substantial periods of time.
In past, Hitachi has been the subject of several investigations of alleged antitrust violations in relation
to certain product markets in Japan, Europe and North America, etc. and has received claims for damages
from its customers, etc., which may have adverse effects on its financial condition or profitability. See “V.
Financial Information - Notes to Consolidated Financial Statements - (29) Commitments andContingencies.” These investigations or disputes may result in significant penalties or compensation fordamages, etc. in multiple jurisdictions. Such substantial legal liability or regulatory action could have an
adverse effect on Hitachi’s business, earnings, financial condition, cash flows, credibility and reputation.
Furthermore, even if Hitachi is found to have no legal liability and it is not subject to regulatory actions orcompensation for damages, Hitachi’s credibility and reputation could nonetheless have been affected.
In addition, Hitachi’s business activities are subject to various governmental regulations in countries
where it operates, which include investments, exports, tariffs, antitrust, anti-bribery, consumer and business49

taxation, intellectual property, foreign trade and exchange controls, human rights, employment and labor,
environment, resources and energy. These regulations limit, and other new or amended regulations may
further limit, Hitachi’s business activities or increase operating costs. In addition, the enforcement of such
regulations, including the imposition of fines or surcharges for violations of such regulations, may adversely
affect Hitachi’s earnings, financial condition, cash flows, credibility and reputation. In addition, responding
mainly to regulations on the protection of personal information may have an adverse effect on Hitachi’sbusiness.
To deal with these risks, Hitachi works to identify operations where regulations are applied, assess
risks, take steps in response to risks and provide education to employees.

Product Quality and Liability
Hitachi increasingly provides products and services utilizing sophisticated technologies. Procuringparts from procurement partners reduces Hitachi’s control over quality assurance. The occurrence of defects
in Hitachi’s products and services or inappropriate conduct in respect to quality could negatively affect its
reputation for quality of products and services, expose it to liability for damages caused by such defects andnegatively affect its ability to sell certain products. A significant product defect could adversely affectHitachi’s earnings, financial condition and future business prospects.
To deal with these risks, Hitachi conducts activities to prevent accidents and comply with technicallaws and regulations, thorough risk assessment, and education on quality, reliability and reactions when
product accidents occur. Furthermore, in response to past inappropriate quality-related practices at
subsidiaries of the Company, Hitachi has taken steps to create a structure that puts the safety and security of
the customer first, enhancing the independence of assurance divisions within business divisions by making
them more independent of production design divisions and manufacturing divisions. In addition, Hitachi has
reinforced the reporting line of the quality assurance divisions of the Corporate Quality Assurance Group of
the Company and established systems for close information sharing between the two sides.
Management of Confidential Information
Hitachi maintains and manages personal information obtained from its customers, as well as
confidential information of its customers and clients, relating to its technology, research and development,
production, marketing and business operations in various forms. Unauthorized disclosures of suchinformation could subject Hitachi to complaints or lawsuits for damages or could otherwise have a negative
impact on its business, financial condition, earnings, credibility and reputation.
To deal with these risks, Hitachi establishes and implements rules on the management of confidential
information and implements identity management and access control through encryption and the building ofauthentication infrastructure. Hitachi also examines information security at procurement partners.
Intellectual Property
Hitachi depends in part on proprietary technology and its ability to obtain patents, design rights,
trademarks and other forms of intellectual property rights covering its products, product design,
manufacturing processes and software-based services in Japan and other countries. The fact that Hitachiholds such intellectual property rights does not ensure that they will provide a competitive advantage toHitachi. Various parties may challenge, invalidate Hitachi’s patents, design rights, trademarks and otherintellectual property rights or circumvent their use. There can be no assurance that claims allowed on any
future patents will be sufficiently broad to protect Hitachi’s technology. Effective patent, design right,
copyright and trade secret protection may be unavailable or limited in some of the markets in which Hitachi
operates, and its trade secrets may be vulnerable to disclosure or misappropriation by employees,
contractors and other persons.
To deal with these risks, Hitachi searches known examples before applying for intellectual property
rights to increase the probability of obtaining rights and to obtain rights suitable for business. In countries
where intellectual property protection is unavailable or limited, Hitachi strives to curb the unauthorized useof intellectual property primarily through contracts with employees and contractors.
Hitachi designs many of its products to include software or other intellectual property licenses fromthird parties. Competitors may not make their protected technology available to Hitachi, or may make itavailable to Hitachi only on unfavorable terms and conditions. There can be no assurance that Hitachi will50

be able to maintain a license for such intellectual property if obtained, for economic or other reasons, or thatsuch intellectual property will give Hitachi the commercial advantages that it desires.
To deal with these risks, Hitachi endeavors to maintain good relations with the third parties throughcontracts and negotiations to exercise intellectual property rights.
From time to time, Hitachi is sued or receives notices regarding patent, design right and otherintellectual property claims. Whether or not these claims have legitimacy, they may require significant
resources to defend against and may divert management attention from Hitachi’s business and operations
and result in harm to its reputation. In addition, a successful infringement claims and Hitachi’s inability toobtain the license for the infringed technology or substitute similar non-infringing technology may
adversely affect its business.
To deal with these risks, Hitachi works to avoid disputes with other companies chiefly by conducting apatent clearance study before selling a new product or providing a new service and by changing the designof products or services if necessary.

Employee Retirement Benefits
Hitachi has a significant amount of employee retirement benefit costs that it derives from actuarial
valuations based on a number of assumptions. Inherent in these valuations are actuarial assumptions used inestimating pension costs including mortality, withdrawal and retirement rates, changes in wages and thediscount rate. Hitachi is required to make judgments regarding the actuarial assumptions by taking into
account various factors including personnel demographics, market conditions and expected trends in interest
rates. Although management believes that its actuarial assumptions are reasonable in light of the various
underlying factors, there can be no assurance that the actuarial assumptions will correspond to actual results.
If Hitachi’s actuarial assumptions differ from actual results, the consequent deviation of actual pension costs
from estimated costs may have an adverse effect on Hitachi’s financial condition and earnings. A decreasein the discount rate may result in an increase in the amount of projected benefit obligations. In addition,
Hitachi may change these actuarial assumptions, such as the discount rate. Changes in key assumptions may
also have an adverse effect on Hitachi’s financial condition and earnings.
To mitigate the risk, on April 1, 2019, Hitachi sought to change the corporate pension plan for its
current employees participating in the Hitachi Pension Fund to a risk-sharing corporate pension plan and thechange to a risk-sharing corporate pension plan managed by the Hitachi Pension Fund was completed on
April 1, 2023. The revision can reduce asset management risks for the Company and subsidiaries
participating in the Hitachi Pension Fund by fixing the Company’s premium payments, and it is also
possible to reduce the risk of an adverse effect on Hitachi’s financial condition and earnings bydiscontinuing the recognition of liabilities related to retirement benefits.

519) Risks Related to the American Depositary Shares
Rights of ADS Holders
The rights of shareholders under Japanese law to take actions, including voting their shares, receiving
dividends and distributions, bringing derivative actions, examining the Company’s accounting books andrecords and exercising appraisal rights are available only to shareholders of record. Because the depositary,
through its custodian agents, is the record holder of the shares underlying the American Depositary Shares,
or ADSs, only the depositary can exercise those rights in connection with the deposited shares. The
depositary will make efforts to vote the shares underlying ADSs in accordance with the instructions of ADS
holders and will pay dividends and distributions collected from us as and to the extent provided in thedeposit agreement. However, ADS holders will not be able to bring derivative actions, examine theCompany’s accounting books and records, or exercise appraisal rights through the depositary.
The Company is incorporated in Japan with limited liability. A significant portion of its assets arelocated outside the United States. As a result, it may be more difficult for investors to enforce against us
judgments obtained in U.S. courts predicated upon the civil liability provisions of the federal securities lawsof the United States or judgments obtained in other courts outside Japan. There is doubt as to theenforceability in Japanese courts, in original actions or in actions for enforcement of the judgments of U.S.
courts, of civil liabilities predicated solely upon the federal securities laws of the United States.

Unit Share System
The Companies Act allows companies to establish a “unit” of shares for the purpose of exercising
voting rights at the general meetings of shareholders. Under the Company’s articles of incorporation, one
unit of its shares is composed of 100 shares, equivalent to 50 ADSs. Each unit of the Company’s shares has
one vote. A holder who owns shares or ADSs in other than multiples of 100 or 50, respectively, will own
less than a whole unit (i.e., for the portion constituting fewer than 100 shares, or fewer than 50 ADSs). The
Company’s articles of incorporation, in accordance with the Companies Act, impose significant restrictions
on the rights of holders of shares constituting less than a whole unit, which include restrictions on the rightto vote, to attend a shareholders’ meeting and to bring derivative actions. In addition, less than whole unit
shares cannot be traded on Japanese stock markets. Under the unit share system, holders of the Company’s
shares constituting less than one unit have the right to require us to purchase their shares and the right torequire us to sell them additional shares to create a whole unit of 100 shares. However, holders of its ADSs
are unable to withdraw underlying shares representing less than one unit and, as a practical matter, areunable to require us to purchase those underlying shares. The unit share system, however, does not affect thetransferability of ADSs, which may be transferred in lots of any number of whole ADSs.
Dilution of Shares by Issuances of Additional Shares
The Company may issue additional shares in the future within the unissued portion of its authorizedshare capital and sell shares held as treasury stock, generally without a shareholder vote unless the amountto be paid for shares is significantly lower than the market price. The issuing and sale of its shares in the
future may be at prices below the prevailing market prices and may be dilutive.
Foreign Exchange Fluctuations
Market prices for the Company’s ADSs may fall if the value of the yen declines against the U.S. dollar.
In addition, the amount of cash dividends or other cash payments made to holders of ADSs will decline if
the value of the yen declines against the dollar.

52

4. Management’s Discussion and Analysis of Consolidated Financial Condition, Results of Operations andCash Flows(1) Progress of Management Plan
1) Status of Key Indicators laid out as Management Targets
Under the "the Mid-term Management Plan 2024," the key indicators to measure performance interms of meeting our management goals are as follows.
Index
Annual growth for revenues(Note1)
Adjusted EBITA margin (Note1)
Return on invested capital (ROIC)(Note2)
EPS (Notes2, 3)
Core free cash flows (Note2)

Results(CAGR from Fiscal 2021 to
Fiscal 2023)
13%(Fiscal 2023)
10.1%(Fiscal 2023)
8.7%(Fiscal 2023)
634.57 yen(Cumulative for Fiscal 2022 andFiscal 2023)
987.9 billion yen

Target of the Mid-termManagement Plan 2024
(CAGR from Fiscal 2021 to
Fiscal 2024)
5%-7%
12%
10%
(Fiscal 2024)
600 yen(Cumulative for three years)
1.2 trillion yen(Notes) 1. Presented as the consolidated total excluding the total number of the Automotive Systems,
Hitachi Construction Machinery and Hitachi Metals segments.
2. Calculated based on the consolidated total.
3. “the Mid-term Management Plan 2024” target is calculated using the number of shares before
the share split (scheduled to become effective on July 1, 2024)
2) Global Business Expansion
In the current fiscal year, as the second year of the “the Mid-term Management Plan 2024,” Hitachi
chiefly pursued the following initiatives and accelerate its shift to growth mode.
‒ Further Growth of Social Innovation Business in Response to Rising DX (digital transformation) andGX (green transformation) Demand
While the global market continued to experience
growing DX and GX demand, Hitachi worked as One
Hitachi to strengthen the cycle of value co-creation withcustomers under Lumada by understanding customers’
management issues, then designing and implementing
solutions to those issues, and implementing operationand maintenance while tackling solutions to the next
issues. As a result, Lumada business revenues reached2,334 billion yen, an increase of 19% from the previous
fiscal year.
Orders received by Hitachi were still solid. In
Japan, Hitachi received an order for the next-generation
nationwide load dispatching system and contributes to*stable electricity supply by sharing the nationwide
power supply and demand adjustment systems. Overseas,
Hitachi Energy Ltd secured its largest multi-year
framework agreement to support TenneT with six North
Sea offshore wind connections in partnership withPetrofac. In the railway systems business, Hitachi RailLtd. has received an order from Trenitalia S.p.A in Italy
for high-speed railways worth approximately 140.0
billion yen.
*2

Excluding Okinawa area53‒ Global reorganization to further strengthen Lumada business
We restructured our organization globally to strengthen the cycle of value co-creation in Lumada
and accelerate synergies with the OT (Operational Technology) field. We spun off Hitachi Vantara’s
digital solutions business and established Hitachi Digital Services. As an OT×IT integrator, we will workwith Hitachi Vantara and GlobalLogic, as well as OT fields such as energy, transportation, and industry,
to drive the global growth of the Lumada business with One Hitachi. In addition, we spun off Hitachi
Vantara’s IT products business, which has been responsible for business development, R&D, andproduction of data infrastructure such as storage, and established Hitachi Vantara Co., Ltd., thereby
establishing an unified management system for manufacturing, sales, and services with Hitachi Vantara.
(2) Analysis of Results of Operations
1) Statement of Operations

Revenues decreased 11% from the year ended March 31, 2023 (fiscal 2022), coming to 9,728.7
billion yen. Revenues decreased due mainly to selling a part of the shares of Hitachi Astemo, Ltd., andHitachi Construction Machinery Co., Ltd., and shares of Hitachi Metals, Ltd. (Currently Proterial, Ltd.).
The decrease was partially offset by increased revenues in the Green Energy & Mobility segment which
includes Hitachi Energy Ltd and the Railway Systems business which performed well and in the Digital
Systems & Services segment which includes the solid performance of the Lumada business due to theharvesting of strong demand for DX in Japan and overseas.
Cost of sales decreased 13% to 7,146.6 billion yen, as compared with fiscal 2022, and the ratio of
cost of sales to revenues decreased 2% to 73%. Gross profit decreased 4% to 2,582.0 billion yen, as
compared with fiscal 2022.
Selling, general and administrative expenses decreased 6% from fiscal 2022 to 1,826.2 billion yen.
The ratio of selling, general and administrative expenses to revenues increased 1% from fiscal 2022 to19%.
Share of gains (losses) of investments accounted for using the equity method increased 22.4 billion
yen year on year to the gains of 75.2 billion yen.
As a result of the foregoing, Adjusted EBITA (defined as Adjusted Earnings before Interest, Taxes
and Amortization, and representing the revenues less cost of sales as well as SG&A, adding back theamortization of intangible assets, etc. recognized upon business combinations, and adding or deducting
54

share of profits (losses) of investments accounted for using the equity method) increased 33.5 billion yen
to 918.1 billion yen, as compared with fiscal 2022.
Other income decreased 185.5 billion yen to 116.6 billion yen and other expenses decreased 147.8
billion yen to 97.1 billion yen, as compared with fiscal 2022. The main components are as follows;- The net gain on sales and disposal of property, plant and equipment increased 14.7 billion yen to
17.0 billion yen, as compared with fiscal 2022.
- Impairment losses decreased 100.2 billion yen to 29.6 billion yen, as compared with fiscal 2022.
This mainly reflected an impairment loss on goodwill of Hitachi Energy Ltd due to a sharp risein the discount rate following the significant rise in interest rates, etc., and an impairment loss on
goodwill due to the positioning of the on-premise ERP business as a non-focus area in the
Digital Systems & Services segment.
- The net gain on business reorganization and others decreased 200.3 billion yen year on year to97.0 billion yen due mainly to posting of net gain from the sale of shares of Hitachi Transport
System, Ltd. and Hitachi Metals, Ltd. and the sale of part of our shares of Hitachi Construction
Machinery Co., Ltd. in the same period of fiscal 2022 despite the gains on businessreorganization by selling a part of shares of Hitachi Astemo, Ltd.
- Special termination benefits increased 10.1 billion yen to 19.4 billion yen, as compared withfiscal 2022.
Financial income (excluding interest income) increased 9.5 billion yen to 17.3 billion yen andfinancial expenses (excluding interest charges) decreased 10.4 billion yen to 10.0 billion yen, as
compared with fiscal 2022.
Earnings before interest and taxes increased 12.3 billion yen to 857.9 billion yen, as compared withfiscal 2022.
Interest income increased 13.1 billion yen to 38.7 billion yen, as compared with fiscal 2022 andinterest charges increased 19.6 billion yen to 70.9 billion yen, as compared with fiscal 2022.
Income before income taxes increased 5.8 billion yen to 825.8 billion yen, as compared with fiscal
2022.
Income taxes increased 82.9 billion yen to 199.0 billion yen as compared with fiscal 2022.
Net income decreased 77.1 billion yen to 626.7 billion yen, as compared with fiscal 2022.
Net income attributable to non-controlling interests decreased 17.8 billion yen to 36.8 billion yen,
as compared with fiscal 2022.
As a result of the foregoing, net income attributable to Hitachi, Ltd. stockholders decreased 59.2
billion yen to 589.8 billion yen, as compared with fiscal 2022.
2) Operations by Segment
The following is an overview of earnings by segment. Effective from the fiscal year ended March
31, 2024, the Company reclassified its reportable segment in five segments: Digital Systems & Services,
Green Energy & Mobility, Connective Industries, Automotive systems, and Others. Accordingly, theamounts previously reported for fiscal 2022 have been restated in conformity with the new segments.
Revenues and Adjusted EBITA for the Business Management Reinforcement Division, which werepreviously included in Green Energy & Mobility segment, are included in Others segment from April 1,
2023. Accordingly, the amounts previously reported for the year ended March 31, 2023 have been
restated in conformity with this change.
The numbers within each chart represent the results of the main businesses, etc. in each segment
and revenues for each segment include intersegment transactions, so the sum of these numbers in somesegments does not correspond to the total results in the segments.

55

(Digital Systems & Services)(Notes) 1. [ ]: Estimated year-on-year changes excluding foreign exchange impact. For GlobalLogic, estimated year-on-year changes in US dollar
base.
2. Revenues and Adjusted EBITA for Hitachi Consulting Japan, which were previously included in IT Services, are included in Services &Platforms from April 1, 2023. Accordingly, the amounts previously reported for fiscal 2022 have been restated in conformity with thischange.

Revenues increased year on year due mainly to increased revenues in the Front business whichhandles large-scale system renovation projects in the financial, public, and energy fields and the strongly
performing Lumada business and increased revenues in IT Services due to the solid performance of theLumada business in security, cloud-related services, and services for manufacturing and distribution, as
well as increased revenues in Services & Platforms due to the growth of GlobalLogic and the increase indomestic DX/cloud services.
Adjusted EBITA increased due mainly to an increase in revenues.

56

(Green Energy & Mobility)(Notes) 1. [ ]: Estimated year-on-year changes excluding foreign exchange impact.
2. The Hitachi Power Solutions, which was previously included in the Energy business, is disclosed independently from April 1, 2024.
Accordingly, the amounts previously reported for fiscal 2022 have been restated in conformity with this change.
3. The Hitachi Energy (Standalone) and Railway Systems (Exclude related cost) do not include the Related cost.
4. The Related cost includes PMI related costs associated with acquisition.

Revenues increased year on year due mainly to the increased revenues of Hitachi Energy Ltd,
which are a result of a continued increase in the order backlog and steady sales turnaround, andincreased revenues in Railway Systems resulting from the progress in large projects such as rolling stockand the maintenance business in Europe and the signalling business in North America, as well as in
Hitachi Power Solutions thanks to the solid performance of green business and service businesses suchas renewable energy solutions.
Adjusted EBITA increased year on year due mainly to an increase in revenues and improved
efficiency through production investment in Hitachi Energy Ltd and improved profitability resulting
from a better project mix and accelerated cost reduction in the Railway Systems despite cost increases
associated with the acquisition of a power grids business including PMI-related costs and increases incosts for some projects in the Energy business.

57

(Connective Industries)(Note) [ ]: Estimated year-on-year changes excluding foreign exchange impact.

Revenues increased year on year due mainly to the strong results of Industrial Products, which
performed well in the electrification business, the distribution transformer business, etc., and of Building
Systems, which expanded the building services business. It was also due to the Water & Environment
business, which performed well in air conditioning systems for the semiconductor and electronics
industries in Japan despite decreased revenues in Smart Life & Ecofriendly Systems resulting from adecline in domestic demand for home appliances and in Measurement & Analysis Systems, which was a
result of a decline in sales of semiconductor manufacturing equipment.
Adjusted EBITA increased year on year due mainly to increased revenues, despite sales decreasing
in semiconductor manufacturing equipment in Measurement & Analysis Systems and an increase in
R&D expenditures.
(Automotive Systems)
Revenues decreased 39% to 164.3 billion yen, as compared with fiscal 2022, due mainly to theconversion of Hitachi Astemo, Ltd., which was included in Automotive Systems segment, to an equitymethod affiliate of the Company from its subsidiary as a result of selling a part of shares of Hitachi
Astemo, Ltd. in October 2023.
Adjusted EBITA decreased 22.7 billion yen to 50.6 billion yen, as compared with fiscal 2022.
(Others)
Revenues increased 2% year on year to 507.7 billion yen, as compared with fiscal 2022.
Adjusted EBITA increased 21.9 billion yen to 6.7 billion yen, as compared with fiscal 2022.

58

3) Revenues by Geographic Area
The following is an overview of revenues attributed to geographic areas based on customer location.

(Note) The Consolidated Total is compared to the amount including the Hitachi Construction Machinery and Hitachi Metals.

Japan
Revenues in Japan decreased from fiscal 2022. This was due mainly to the decreased revenues
owing to selling a part of shares of Hitachi Astemo, Ltd. The decrease was partially offset byincreased revenues in Digital Systems & Services segment due to steady growth in the Front
Business, and increased revenues in Connective Industries segment.
Overseas
Revenues in Overseas decreased compared with fiscal 2022, and the ratio to total revenues was
61%, a decline of 1% compared with fiscal 2022. Revenues in each area are as follows;(North America)
Revenues in North America decreased from fiscal 2022, attributable mainly to decreased revenues
due mainly to selling a part of shares of Hitachi Astemo, Ltd. The decrease was partially offset byincreased revenues of power grids business in Green Energy & Mobility segment.
(Europe)
Revenues in Europe increased from fiscal 2022, due mainly to increased revenues of the power
grids business and the railway systems business in Green Energy & Mobility segment. The increase
was partially offset by decreased revenues due mainly to selling a part of shares of Hitachi Astemo,Ltd.
(Asia)
Revenues in Asia composed of China and ASEAN, India and other areas decreased from fiscal
2022, due mainly to decreased revenues resulting from selling a part of shares of Hitachi Astemo, Ltd.
The decrease was partially offset by increased revenues of the power grids business and the railway
systems business in Green Energy & Mobility segment.
(Other Areas)
Revenues in other areas decreased from fiscal 2022, due mainly to decreased revenues due mainly
to selling a part of shares of Hitachi Astemo, Ltd. The decrease was partially offset by increased
revenues of the power grids business in Green Energy & Mobility segment.

59

(3) Analysis of Financial Condition and Cash Flows
1) Liquidity and Capital Resources
Basic Policies for Financing Activities
We consider maintaining an appropriate level of liquidity and securing agile and efficient funds
for current and future business operations to be important policies for our financing activities. Throughthe efficient management of working capital, we are working to optimize the efficiency of capitalutilization throughout our business operations. We endeavor to improve our group cash management by
centralizing this management for both ourselves and our overseas financial subsidiaries.
We introduced ROIC as a management indicator and are focusing on improving capital efficiency
and the growth of highly profitable businesses through our management. ROIC is an indicator that
evaluates returns generated by invested capital, and is calculated by dividing business profit after taxes
by invested capital. To increase returns, ROIC needs to exceed the weighted average cost of capital(WACC), which is the cost of raising invested capital.

In fiscal 2022, we changed the key indicator of profitability from the conventional adjusted
operating income (presented as revenues less cost of sales as well as SG&A) to Adjusted EBITA(representing the operating income, adding back the amortization of intangible assets, etc. recognized
upon business combinations, and adding or deducting the share of profits (losses) of investments
accounted for using the equity method).
We will aim for an Adjusted EBITA margin of 12% and an ROIC of 10% and ensure disciplined
investment judgments using as out criteria the Adjusted EBITA margin and ROIC, which are also used
for assessing business acquisitions, in an effort to further increase both profitability and the efficiency ofbusiness assets.
Trends in the Funding Demands
Our major uses of funds are M&A for growth, investment in human resources, capital investment,
research and development (R&D) investment and shareholder returns. We plan to use cash income fromcore free cash flows and the sale of assets to maintain a good balance between investment in future
growth and shareholder returns.
Major M&A, etc. are described in “V. Financial Statements - Notes to Consolidated Financial
Statements - (5) Business Acquisitions and Divestitures.” The results and plan of the capital investments
are described in “III. Property, Plants and Equipment.” The policy and results of shareholder returns aredescribed in “ IV. Information on the Company - 3. Dividend Policy.”
60

Capital Resources
Our internal sources of funds include cash flows generated by operating activities and cash andcash equivalents. Our management also considers short-term investments to be an immediately available
source of funds. In addition, we raise funds in the capital markets in Japan and overseas by issuingbonds and equity and other capital securities and as well as through borrowings from financial
institutions in response to our capital requirements. Our management’s policy for capital investment andM&A is to finance capital expenditures primarily by internally generated funds and to a lesser extent byfunds raised through the issuance of bonds and equity securities.
When procuring funds through borrowing, our financial discipline policy is to maintain theappropriate financial condition by considering financial indicators such as the D/E ratio and the interestbearing debt/EBITDA ratio. In order to flexibly access funding, we registered our shelf registration withthe maximum outstanding balance of 300.0 billion yen. In December 2023, we issued unsecured straightbonds, totaling 90 billion yen. The unsecured straight bonds are to refinance the short-term financing
used to redeem the partial bonds issued in March 2020 among other things.
We maintain commitment line agreements with multiple financial institutions under which we
may borrow in order to ensure efficient access to the necessary funds. These commitment line
agreements generally provide for a one-year term, renewable upon mutual agreement between us andeach of the lending banks, as well as another commitment line agreement with a contract term of three
years ending on July 29, 2025. As of March 31, 2024, our unused commitment lines totaled 505.0 billion
yen.
We receive debt ratings from Moody’s Japan K.K. (Moody’s), S&P Global Rating Japan Inc.
(S&P), as well as Rating and Investment Information, Inc. (R&I). Our debt ratings as of March 31, 2024
were as follows.
Rating Company
Long-term
Short-term
Moody’s
A3
P-2
S&P
A
A-1
R&I
AAa-1+
With our current ratings, we believe that our access to the global capital markets will remain
sufficient for our financing needs. We seek to maintain and improve our credit ratings.
2) Cash FlowsThe following is a summary of cash flows in fiscal 2023.
(Cash Flows from Operating Activities)
Net cash provided by operating activities was 956.6 billion yen plus in fiscal 2023, and cash
increased by 129.5 billion yen compared with fiscal 2022. This was due mainly to an increase in net
income excluding net gain (loss) on business reorganization and others, and an increase in advances
received (contract liabilities).
(Cash Flows from Investing Activities)
Net cash used in investing activities was 131.5 billion yen minus in fiscal 2023, and cash
decreased by 282.6 billion yen compared with fiscal 2022. This was due mainly to the sale of shares ofHitachi Construction Machinery Co., Ltd. and Hitachi Metals, Ltd. which were consolidated subsidiaries
in fiscal 2022, and the sale of shares of Hitachi Transportation Technologies, Ltd. which was an equity
method affiliate of the Company in fiscal 2022, despite the sale of investments in securities in fiscal
2023 and a decrease in investments to property, plant and equipment compared with fiscal 2022.
(Cash Flows from Financing Activities)
Net cash used in financing activities was 1,024.9 billion yen minus in fiscal 2023, and cash
increased by 118.0 billion yen compared with fiscal 2022. This was due mainly to a decrease inacquisition of common stock for treasury compared with fiscal 2022 and the additional acquisition of
Hitachi Energy Ltd shares in fiscal 2022, despite a decrease in net proceeds (difference between
proceeds and expenditures) from short-term debt.

61

Free cash flow (the sum of cash flows from operating and investing activities) was 825.0 billion
yen plus in fiscal 2023, and cash decreased by 153.0 billion yen compared with fiscal 2022.
Core free cash flow (free cash flows excluding cash flows from M&A and assets sales, etc.) was
571.4 billion yen plus in fiscal 2023, and cash increased by 155.0 billion yen compared with fiscal 2022.
As a result of the foregoing, cash and cash equivalents as of March 31, 2024, were 705.3 billion
yen, decreased by 127.9 billion yen compared with March 31, 2023.
3) Assets, Liabilities and Equity
As of March 31, 2024, total assets amounted to 12,221.2 billion yen, a decrease of 280.1 billion yen
from March 31, 2023. This was attributable to the conversion of Hitachi Astemo, Ltd. to an equitymethod affiliate of the Company, which offset an increase in assets resulting from the impact of foreignexchange. Cash and cash equivalents as of March 31, 2024 amounted to 705.3 billion yen, a decrease of
127.9 billion yen from the amount as of March 31, 2023.
As of March 31, 2024, total interest-bearing debt, the sum of short-term debt and long-term debt
including the current portion of long-term debt, amounted to 1,180.0 billion yen, a decrease of 1,033.3
billion yen from March 31, 2023. As of March 31, 2024, short-term debt, consisting mainly ofborrowings from banks and commercial paper, amounted to 37.8 billion yen, a decrease of 739.8 billion
yen from March 31, 2023, due mainly to decrease in demand for funds as a result of the conversion of
Hitachi Astemo, Ltd. to an equity-method affiliate of the Company. As of March 31, 2024, the current
portion of long-term debt amounted to 187.4 billion yen, an increase of 45.6 million yen from March 31,
2023. As of March 31, 2024, long-term debt (excluding the current portion), consisting mainly ofdebentures, and loans principally from banks and insurance companies, amounted to 954.7 billion yen, adecrease of 339.1 billion yen from March 31, 2023, due mainly to the conversion of Hitachi Astemo,Ltd. to an equity-method affiliate of the Company.
As of March 31, 2024, total Hitachi, Ltd. stockholders’ equity amounted to 5,703.7 billion yen, an
increase of 760.8 billion yen from March 31, 2023. As a result, the ratio of total Hitachi, Ltd.
stockholders’ equity to total assets as of March 31, 2024 was 46.7%, compared with 39.5% as of March
31, 2023.
Non-controlling interests as of March 31, 2024 was 155.8 billion yen, a decrease of 236.8 billion yen
from March 31, 2023.
Total equity as of March 31, 2024 was 5,859.6 billion yen, an increase of 524.0 billion yen fromMarch 31, 2023. The ratio of interest-bearing debt to total equity was 0.20, a decrease of 0.21 point fromMarch 31, 2023.
(4) Production, Order Received and Sales
The Hitachi Group does not present production and orders received in amount or volume terms foreach segment since it produces and sells a wide variety of products, there are variety of specifications
among the same kinds of products and certain products are mass-produced. The balance of unsatisfied
performance obligations for those segments that have contracts under which revenues are recognizedover a long period of time is described in “Consolidated Financial Statements － Notes to V. Financial
Information－Notes to Consolidated Financial Statements － (20) Revenues. Sales are shown in relation
to the results of each segment in “(2) Analysis of Results of Operations.”(5) Important Accounting Policies and Estimates
The preparation of the consolidated financial statements in conformity with IFRS requires ourmanagement to make estimates and assumptions that affect the reported amounts of assets and liabilities
and disclosure of contingent assets and liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Management considers certain
accounting estimates to be critical, and recognizes that given their significance to the financial
statements and the possibility that future events affecting the estimate may differ significantly frommanagement’s current assumptions could have a material impact on the presentation of our financial
situation, on changes in our financial situation or on our earnings. There are two reasons for thisrecognition. First, the estimates require us to make assumptions about matters that are highly uncertain62

at the time the accounting estimates are made. Second, there could be different estimates that wereasonably could have used for the accounting estimate in the current period, or changes in theaccounting estimate that are reasonably likely to occur as time proceeds. Important accounting policies
that require management to make estimates and assumptions are as follows.
Allowance for doubtful receivables
We recognize Allowance for doubtful receivables at the amounts equal to expected credit losses on
trade receivables, contract assets, and other receivables. Expected credit losses are measured by taking
the probability weighted average of the discounted present values of differences between the total
amount of the contractual cash flows and the total amount of cash flows expected to be received in the
future from the financial assets. If one or more events occur, such as overdue payments, extended
payment terms, negative evaluation by third party credit rating agencies, and/or a deterioration in
financial position and operating results, including capital deficit, the financial assets are individuallyassessed as credit-impaired financial assets and expected credit losses are measured based mainly on
historical credit loss experience, future collectible amounts and other factors. The expected credit losseson the financial assets that are not credit-impaired are measured through collective assessment based
mainly on provision rates depending on historical credit loss experience adjusted by the current andfuture economic situation and other factors, if necessary. Expected credit losses are determined based on
the best estimates and judgements but may be affected by deterioration of customers’ financial
conditions in the future or by variance of uncertain economic conditions in the future.
Details of the evaluation of Allowance for doubtful receivables are described in “Consolidated
Financial Statements ― Notes to Consolidated Financial Statements ― (3) Summary of Material
Accounting Policies ― (d) Financial Instruments.” Details of the increase or decrease in the Allowancefor doubtful receivables are described in “Consolidated Financial Statements ― Notes to Consolidated
Financial Statements ― (25) Financial Instruments and Related Disclosures ― (b) Financial Risks ―(iii) Credit Risk.”
Estimates, Fluctuations in Cost and Cancellation of Long-term Projects
We enter into a substantial number of long-term projects, particularly in connection with theconstruction of infrastructure systems. For a project in which control of products and service istransferred over a specified period of time, we measure 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 wecannot reasonably measure the progress, revenue is recognized only to the extent of the costs incurred.
The revenue recognition for such long-term projects requires us to make significant assumptions about
the estimated total cost, estimated total selling price, contract risks and other factors. However, theseestimates are subject to change. We regularly review these estimates and adjust them as we deem
necessary. We charge any anticipated losses on fixed price contracts to operations when we are able toestimate such losses. While we employ our best judgment based on available information, theseestimates are subject to change. Fluctuations in costs can occur for a variety of reasons, many of which
are beyond our control. In addition, we or our counterparties may cancel these contracts. These factors
would require us to revise our initial assumptions regarding a particular contract, and may adversely
affect our business, financial situation and earnings.
Business Combinations
Business combinations are accounted for using the acquisition method. In addition to tangible
assets of the acquiree, intangible assets such as technologies, brands, and customer lists are valued at fairvalue. In these valuations, estimates are made based on appropriate assumptions and future projections
according to each case. Independent external experts are usually involved in the valuation process, but
significant estimates and assumptions in the valuation include inherent uncertainty. We consider theestimates of the key assumptions to be reasonable, but actual results may differ.
Impairment of Assets
We review the carrying amounts of assets that we own and use whenever events or changes in63

circumstances indicate that the carrying amounts may be unrecoverable, to determine whether there is
any indication of impairment. If the carrying amount of an asset is judged to be impaired, the amountthat exceeds the recoverable amount is recognized as an impairment loss. We measure the recoverable
amount of an asset or a CGU (or a group of CGUs) as the higher of fair value less the cost of disposal
and value in use.
In measuring fair values, we primarily use the income approach (present value technique) based on
the estimated future cash flows expected to result from the use of the asset and its eventual disposal or
the market approach to derive reasonable estimates of values in orderly market transactions, such ascomparisons of similar public companies and the current gross value of the asset. Value in use iscalculated using the estimated future cash flows based on business plans approved by management,
discounted at the discount rate, which is derived from the weighted average cost of capital. It is based on
certain assumptions that are considered reasonable as of the filing date of this report, but actual results
may differ significantly depending on market risks, business environment risks, and other factors. The
discount rate used to calculate the value in use is affected by stock market trends and interest rate
fluctuations. We believe that the estimates of future cash flows and value in use are reasonable, butchanges in estimates resulting from unpredictable changes in the business environment that lead todecreases in future cash flows or value in use can adversely affect the valuation of assets. We
appropriately employ external experts depending on the complexity of calculating fair value and value inuse.
Goodwill is the source of excess earning power based on the market competitiveness acquired
through business acquisition, and the difference between the net assets of the acquiree and theconsideration for acquisition is recorded as goodwill except for the amount recorded as intangible assets,etc. Goodwill is not amortized in accordance with IFRS. Irrespective of any indicators of impairment,
we test assets for impairment annually, mainly in the fourth quarter, by estimating the recoverable
amount of each CGU or a group of CGUs to which such assets are allocated. We continuously monitor
the comparison between the initial estimate and the most recent estimate, and conduct impairment tests
if there are signs that the value will fall below the original estimate and the carrying amount will not berecoverable, due to changes in events or circumstances such as in business strategies or in the market
environment. Such changes in the events or circumstances include crises in the global economy andfinancial markets, and if the carrying amount of each CGU or a group of CGUs to which such assets areallocated exceeds the recoverable amount, the excess amount is recognized as an impairment loss.
The breakdowns of impairment and goodwill by segment are described in “V. Financial
Information ― Notes to Consolidated Financial Statements ― (4) Segment Information.” The maincontent is described in “V. Financial Information ― Notes to Consolidated Financial Statements ― (9)Property, Plant and Equipment and (10) Goodwill and Other Intangible Assets."
Deferred Tax Assets
Deferred tax assets are the amounts of taxes that will be recovered in future periods. In assessing
the realizability of deferred tax assets, we consider whether it is more likely than not that some portionor all of the deferred tax assets will not be realized. Although realization is not assured, we consider thescheduled reversals of deferred tax liabilities and projected future taxable income when assessing
realizability. The outlook for future performance, which is the basis for estimating future taxable
income, may differ from actual performance due to unforeseen events such as economic trends, supply
and demand trends in markets, sales prices of products and services, procurement prices of raw materials
and parts, fluctuations in exchange rates, and rapid technological innovations, and may be corrected in
the future. As a result, the amounts of deferred tax assets that are determined to be recognizable may be
adversely affected. The realizability of deferred tax assets is evaluated for each tax payment in each tax
jurisdiction, and even if running similar businesses, the evaluations can differ depending on the productand the tax jurisdiction. The ultimate realization of deferred tax assets is dependent upon the generationof future taxable income in specific tax jurisdictions during the periods in which these deductible
differences become deductible. Based on these factors, we consider it is more likely than not it willrealize the benefits of these deducible differences as of March 31, 2024. However, the actual times andamounts of taxable income occurrence may differ from the estimates.

64

Employee Retirement Benefits
We have a significant amount of employee retirement benefit costs that we derive from actuarial
valuations based on a number of assumptions. Inherent in these valuations are a number of actuarial
assumptions used in estimating employee retirement benefit costs including mortality, withdrawal andretirement rates, changes in wages and the discount rate. We are required to make judgments regarding
the actuarial assumptions by taking into account various factors including personnel demographics,
market conditions and expected trends in interest rates. Although management believes that its actuarial
assumptions are reasonable in light of the various underlying factors, there can be no assurance that theactuarial assumptions will correspond to actual results. If our actuarial assumptions differ from actual
results, the consequent deviation of actual employee retirement benefit costs from estimated costs may
have an adverse effect on our financial situation and earnings. A decrease in the discount rate may resultin an increase in the amount of projected benefit obligations. In addition, we may change these actuarial
assumptions, such as the discount rate. Changes in actuarial assumptions may also have an adverse
effect on our financial situation and earnings. Details of the evaluation of employee retirement benefits
are described in “V. Financial Information ― Notes to Consolidated Financial Statements ― (3)Summary of Significant Accounting Policies ― (k) Retirement and Severance Benefits.”

65

(6) Forward-Looking Statements
Certain statements found in “1. Management Policy, Economic Environment and Challenges
Hitachi Group Faces,” “2. Sustainability Approach and Initiatives,” “3. Risks Factors” and “4.
Management’s Discussion and Analysis of Consolidated Financial Condition, Results of Operations andCash Flows” and other descriptions in this report may constitute “forward-looking statements” asdefined in the U.S. Private Securities Litigation Reform Act of 1995. Such “forward-looking statements”
reflect management’s current views with respect to certain future events and financial performance andinclude any statement that does not directly relate to any historical or current fact. Words such as“anticipate,” “believe,” “expect,” “estimate,” “forecast,” “intend,” “plan,” “project” and similar
expressions which indicate future events and trends may identify “forward-looking statements.” Suchstatements are based on currently available information and are subject to various risks and uncertainties
that could cause actual results to differ materially from those projected or implied in the “forwardlooking statements” and from historical trends. Certain “forward-looking statements” are based uponcurrent assumptions of future events which may not prove to be accurate. Undue reliance should not be
placed on “forward-looking statements,” as such statements speak only as of the date of this report.
Factors that could cause actual results to differ materially from those projected or implied in any“forward-looking statement” and from historical trends include, but are not limited to:• economic conditions, including consumer spending and plant and equipment investment in Hitachi’smajor markets, as well as levels of demand in the major industrial sectors Hitachi serves;• exchange rate fluctuations of the yen against other currencies in which Hitachi makes significant
sales or in which Hitachi’s assets and liabilities are denominated;• uncertainty as to Hitachi’s ability to access, or access on favorable terms, liquidity or long-term
financing;• uncertainty as to general market price levels for equity securities, declines in which may require
Hitachi to write down equity securities that it holds;• fluctuations in the price of raw materials including, without limitation, petroleum and othermaterials, such as copper, steel, aluminum, synthetic resins, rare metals and rare-earth minerals, orshortages of materials, parts and components;• credit conditions of Hitachi’s customers and suppliers;• general socioeconomic and political conditions and the regulatory and trade environment ofcountries where Hitachi conducts business, particularly Japan, Asia, the United States and Europe,
including, without limitation, direct or indirect restrictions by other nations on imports anddifferences in commercial and business customs including, without limitation, contract terms andconditions and labor relations;• uncertainty as to Hitachi’s ability to response to tightening of regulations to prevent climate change• uncertainty as to Hitachi’s ability to maintain the integrity of its information systems, as well as
Hitachi’s ability to protect its confidential information or that of its customers;• uncertainty as to Hitachi’s ability to attract and retain skilled personnel;• uncertainty as to Hitachi’s ability to continue to develop and market products that incorporate newtechnologies on a timely and cost-effective basis and to achieve market acceptance for suchproducts;• the possibility of disruption of Hitachi’s operations by natural disasters such as earthquakes andtsunamis, the spread of infectious diseases, and geopolitical and social instability such as terrorism
and conflict;• estimates, fluctuations in cost and cancellation of long-term projects for which Hitachi uses thepercentage-of-completion method to recognize revenue from sales;• increased commoditization of and intensifying price competition for products;• fluctuations in demand of products, etc. and industry capacity;• uncertainty as to Hitachi’s ability to implement measures to reduce the potential negative impact offluctuations in demand of products, etc., exchange rates and/or price of raw materials or shortages ofmaterials, parts and components;• uncertainty as to the success of cost structure overhaul;• uncertainty as to Hitachi’s ability to achieve the anticipated benefits of its strategy to strengthen its
Social Innovation Business;66• uncertainty as to the success of acquisitions of other companies, joint ventures and strategic alliances
and the possibility of incurring related expenses;• uncertainty as to the success of restructuring efforts to improve management efficiency by divestingor otherwise exiting underperforming businesses and to strengthen competitiveness;• the potential for significant losses on Hitachi’s investments in equity-method associates and joint
ventures;• uncertainty as to the outcome of litigation, regulatory investigations and other legal proceedings ofwhich the Company, its subsidiaries or its equity-method associates and joint ventures have become
or may become parties;• the possibility of incurring expenses resulting from any defects in products or services of Hitachi;• uncertainty as to Hitachi’s access to, or ability to protect, certain intellectual property; and• uncertainty as to the accuracy of key assumptions Hitachi uses to evaluate its employee benefitrelated costs.

The factors listed above are not all-inclusive and are in addition to other factors contained
elsewhere in this report and in other materials published by Hitachi.

67

5. Material Agreements, etc.
(1) Absorption-type Company Split
The Company decided that it would conduct an absorption-type company split (the “Company Split”)
under which Hitachi Vantara, Ltd., a newly established company, would succeed to the Company’s IT Products
business in order to reorganize the IT product business which has been responsible for business development,
research and development, and production of data infrastructure in Japan on October 27, 2023, and entered into
an absorption-type company split agreement with Hitachi Vantara, Ltd. on January 26, 2024.
The details of the Company Split are as follows.
1) Company Split Method
The split is an absorption-type split under which the Company will be the splitting company and Hitachi
Vantara, Ltd. will be the succeeding company.
2) Effective Date of the Company Split
April 1, 2024
3) Assets and liabilities succeeded for the Company Split (As of April 1, 2024 (forecast))
Assets:93.5 billion yen
Liabilities: 49.6 billion yen
4) Details of Allotments Related to the Company Split
Hitachi Vantara, Ltd. will issue 199,000 ordinary shares upon the Company Split and allot all of theshares to the Company.
5) Calculation Basis Concerning Allotment under the Company Split
As the Company holds all of the issued shares of Hitachi Vantara, Ltd. it is considered appropriate that
Hitachi Vantara, Ltd. issue 199,000 shares of common stock and allots all the shares to the Company.
6) Profile of the succeeding company after the Company Split
Name
Hitachi Vantara, Ltd.
Head office
292 Yoshida-cho, Totsuka-ku, Yokohama City, Kanagawa Prefecture
Representative
President Akinobu Shimada
Capital10 billion yen
Design and development of data infrastructure products centered on storage,
Businessdata management software, hybrid cloud infrastructure and related services andsales, operation, monitoring and maintenance in Japan(2) Cross License Agreement
The material contract renewed during the three months ended March 31, 2024 is as follows.
Item underContract
Party
Party
Country
Contract period
contract
description
From January 1, 2008 to
International
Information Cross
Hitachi, Ltd.
the expiration of patents
U.S.A. handlingBusiness
license of(The Company)
applied on or before
Machines Corp.
systems
patents
January 1, 2028
HP Inc.
All
From March 31, 2010 to
Cross
Hitachi, Ltd.
Hewlett Packard
products
the expiration of patents
U.S.A.
license of(The Company)
Enterpriseandapplied on or before
patents
Company
services
December 31, 2014
From January 1, 2003 to
Information Cross
Hitachi, Ltd.
EMC
the expiration of patents
U.S.A. handlinglicense of(The Company)
Corporation
applied on or before
systems
patents
December 31, 2007
Cross
Hitachi-GE Nuclear GE-Hitachi
Nuclear
From October 30, 1991
license ofEnergy, Ltd.
Nuclear Energy U.S.A. reactor(Consolidated
patents and to June 30, 2024
Americas LLC
systems
subsidiary)
technology

68

6. Research and Development(1) Research goals and major issues
The Hitachi Group (Hitachi Ltd. and its consolidated subsidiaries) aims to further evolve its Social
Innovation Business with Digital, Green and Innovation as growth drivers. The Hitachi Group has set“Strengthen initiatives to create innovation with digital and green contributing to global growth” as the R&D
mission of the Hitachi Group. By allocating R&D resources to prioritize innovations that revolutionize thecustomer experience and capture the essential issues facing society, and striving to solve the social issues its
customers face, the Hitachi Group aims to maintain a society that does not exceed planetary boundaries, inbalance with ensuring the wellbeing of each people, and achieve sustainable business growth.
To increase the competitiveness of the Hitachi Group’s business activities and achieve future growth,the Hitachi Group is developing growth scenarios for its customers by giving shape to the Lumada Growth
Cycle and realizing customer experience-driven DX (digital transformation) and GX (green transformation)
through One Hitachi. The Hitachi Group is also driving the creation of Lumada innovations based on the backcasting of corporate R&D from further in the future within a global framework. To this end, the Hitachi Groupis expanding its digital technology base and strengthening its overseas research resources. The Hitachi Groupwill also accelerate the evolution of the Social Innovation Business in collaboration with Hitachi Digital, “theGlobal Environment Business Group”, “Environmental Strategy Planning Office” and “Innovation Growth
Strategy Division”, which lead the growth strategy across the Group.
(2) Research and development scheme
The Hitachi Group is striving to improve the efficiency of R&D through close coordination between the
R&D divisions of the Company and those of its group companies. In addition to collaborations with
universities and research institutions in Japan and overseas, in April 2019 the R&D Group Kokubunji Siteopened the “Kyōsō-no-Mori” R&D center, to accelerate open collaborative creation with customers andpartners. The Corporate Venturing Office was established at the same time, and through three funds that havebeen formed so far, the Hitachi Group has invested in more than 30 startup companies, providing value to its
customers while supporting the growth of each company through collaboration with Hitachi Group’sbusinesses, and contributing to DX, decarbonization and wellbeing in the process.
To accelerate global growth through the Social Innovation Business, the Hitachi Group reorganized its
R&D Group in April 2022. The Global Center for Social Innovation, which has been responsible for thedevelopment of value-driven innovations in tandem with the Hitachi Group’s front-line operations, and theTechnology Innovation Center, which has been responsible for the development of world-leading technologies
supporting value creation, have been integrated into the Center for Digital Services and the Center for
Sustainability, to strengthen value creation through DX and GX. The Center for Exploratory Research, whichis responsible for setting the stage for the future, together with the Hitachi Group’s overseas R&D centers inNorth America, Europe, China, Asia, and India, the Hitachi Group is working together to innovate on a global
scale.
(3) Investment in Innovation
To enable to the Hitachi Group to achieve further growth, the Hitachi Group will increase its investment
in innovation groupwide. The third fund of corporate venturing investment was formed in April 2023 with asize of $300 million, which is twice the size of the first and second funds established previously. We will makestrategic investments in startups driving the latest digital trends including Web3 and generative AI
technologies. In addition, the Hitachi Group will invest a cumulative 100 billion yen in cutting-edge researchover the three-year period of the Mid-term Management Plan 2024. Through these investments, the HitachiGroup aims to create disruptive innovations to solve future social issues and contribute to the Hitachi Group’s
growth by achieving the Lumada growth cycle.

69

(4) R&D expenditures
The Hitachi Group’s R&D expenditures for the fiscal year ended March 31, 2024 were 290.1 billion
yen, 3.0％ of revenues. R&D expenses by segment and R&D expenses trends are shown below.
(Billions of yen)Segment

Fiscal Year ended
March 31, 2024

Digital Systems & Services

54.1

Green Energy & Mobility

65.2

Connective Industries

91.0

Automotive Systems

50.6

Others3.0

Corporate items & Eliminations

25.9

Total

290.1

(5) R&D achievements
Notable R&D achievements in the fiscal year ended March 31, 2024 are as follows.
1) Development of Worksite-Augmenting Metaverse, a fusion of worksite date-collection technology andgenerative AI (Digital Systems & Services segment, Green Energy & Mobility segment and Connective
Industries segment)
The Company developed Worksite-Augmenting Metaverse for applications in industrial sectors, ametaverse technology to expedite worksite operations and improve information sharing and consensus
building between stakeholders off-site (design, quality assurance, management, etc.) and on-site(construction, manufacturing, etc.) on construction, manufacturing, and maintenance worksites in theenergy and transportation sectors. Leveraging its accumulated expertise in the development of digitalsolutions for diverse industrial fields, the Company has established a metaverse space where worksites
can be rapidly replicated using simplified 3D scanning technology as a platform for accumulating andvisualizing associated data using AI technologies including generative AI, which allows even customers
who are unfamiliar with digital technologies to efficiently utilize data. The Hitachi Group will contributeto the sustainable operation and management of social infrastructure globally by improving worksite
efficiency.

Inside a railway vehicle reproduced in the metaverse

702) Development of FloodS, the Ministry of the Environment’s web service for developing countries torapidly simulate flood risks associated with climate change (Digital Systems & Services segment)
In partnership with the Ministry of the Environment, the Company developed FloodS, a flood
forecasting web service which was designed for developing countries and regions in the Asia-Pacificregion and other countries and regions. On November 30, 2023, the Ministry of the Environment beganproviding the service free of charge. This service, which quicky simulates changes in inundation due toriver flooding, rainfall and storm surges over time and displays the forecast results on a map in a web
browser, was introduced at the Japan Pavilion at the 28th session of the Conference of the Parties to the
UN Framework Convention on Climate Change (COP28). The Hitachi Group will continue to support theachievement of the Sustainable Development Goals (SDGs) and the strengthening of the resilience ofsocial infrastructure, such as the enhancement of its adaptability to the intensification and increased
frequency of disasters associated with climate change, through international cooperation in public-private
partnerships leveraging its digital technologies.
3) New limited express Series N100 SPACIA X won the iF Design Award 2024 and the Good DesignAward 2023. (Green Energy & Mobility segment)
N100 SPACIA X (hereinafter “SPACIA X”) won an iF Design Award 2024, sponsored by iF
international Forum Design GmbH and a Good Design Award 2023, sponsored by the Japan Institute of
Design Promotion. Launched on July 15, 2023 as a new limited express train connecting Asakusa to the
Nikko and Kinugawa Onsen areas, SPACIA X was built on the “connect & updatable.” concept. Guided
by this concept, SPACIA X has been manufactured with the aim of being a more advanced and highquality flagship limited express train that maintains and continues the tradition and brand image
established by the conventional Series 100 SPACIA. In addition to adopting a design that incorporates thecultural colors and shapes of the sightseeing spots along the line, including the color of the cars and theirinterior lighting, SPACIA X is available in six seating variations, including a cockpit lounge and cockpit
suite, to meet diverse needs. This time, these awards are presented in recognition of this design. (jointly
awarded with TOBU RAILWAY CO., LTD.)SPACIA X exterior

Cockpit Suite

Cockpit Lounge

SPACIA X logo

4) Launch of a high-capacity multi-port EV charger that contributes to the expansion of charging
infrastructure and the growth of EVs towards the realization of a decarbonized society (Connective
Industries segment)
Hitachi Industrial Products, Ltd. launched a large-capacity multi-port EV charger that enables thefast charging of electric vehicles (EV) in October 2023. This multi-port EV charger is equipped with EV
71

charging technology developed by the Hitachi Group. Increasing the number of vehicles that can be
charged simultaneously by this large capacity multi-port EV charger makes it possible to shorten the
charging time and eliminate the charging congestion. Bidirectional charge/discharge control technology
enables the elimination of grid congestion without the need for grid reinforcement to increase the amountof connected renewable energy sources and to stabilize voltage control. In addition, high-efficiency power
conversion technology maximizes the potential of EVs as distributed energy resources. The HitachiGroup contributes to the realization of a decarbonized society through cooperation within the group.

Multi-port EV charger5) Launch of the GT2000 high-precision electron beam metrology system to meet needs related to
semiconductor device development and mass production in the high-NA EUV era (Connective Industries
segment)
Hitachi High-Tech Corporation announced the launch of its GT2000 high-precision electron beam
metrology system on December 12, 2023. The GT2000 uses Hitachi High-Tech’s technology andexpertise in CD-SEM (Note 1), where it has the largest share of the market. The GT2000 is equipped withnew detection systems to cutting-edge 3D semiconductor devices. It also utilizes low-damage high-speed
multi-point measurement functions for High-NA EUV (Note 2) resist wafers imaging to minimize resist
damage and improve yield in mass production. Through research and development within the HitachiGroup, the Hitachi Group meets clients’ diverse needs and contributes to cutting edge manufacturing.
(Notes) 1. CD-SEM (Critical Dimension-Scanning Electron Microscope): An equipment designed toperform high-precision measurement of the dimensions of fine semiconductor circuit patterns
formed on wafers.
2. High-NA (Numerical Aperture) EUV (Extreme Ultraviolet): Extreme ultraviolet (13.5 nm
wavelength) lithography equipment with an improved numerical aperture compared toconventional equipment.

GT2000, a high-precision electron beam metrology system726) Initiatives for solving social issues and building an ecosystem through open innovation (Corporate
Items).
In order to solve social issues in the future, the Company worked to develop cutting-edge
technologies and build an ecosystem through open innovation.
(i) Silicon quantum computer
Quantum computers are expected to be a new conceptual computing technology that can solve
problems that cannot be solved by conventional computers. In addition to basic research on quantum
physics at Hitachi Cambridge Laboratory, which has more than 30 years of history, the Company has
been working with academia since 2020 through the Japan Science and Technology Agency’sMoonshot Research & Development Program (grant number JPMJMS2065) to promote research on
silicon quantum computers, which have an advantage in large-scale quantum computing. In fiscal
2023, the Company proposed the shuttling qubit, which is able to control quantum dots efficiently,
verified its effect and began joint research with National Institutes of the Natural Sciences Institute for
Molecular Science on quantum operating systems, with the aim of accelerating research toward largescale integration and early commercialization of quantum computers.
(ii) Hitachi-AIST Circular Economy Cooperative Research Laboratory first open forum
Action is increasingly being taken to achieve global sustainability by making the most of finite
resources, including through recycling and reuse along with the growing adoption of renewable energy
sources around the world. Since its establishment by the Company and the National Institute ofAdvanced Industrial Science and Technology in October 2022, the Hitachi-AIST Circular Economy
Cooperative Research Laboratory has been engaged in research aimed at achieving such a society. The
first open forum held in February 2024 addressed the questions of what a circular economy might look
like in 2050 and the technological and institutional challenges to its achievement, debating these topics
in the light of how this transition is progressing in Japan and elsewhere and the research being done at
the laboratory.
(iii) Co-hosting an Open forum of The Institute for the Research Promotion Organization for Digital
Observatory (Corporate Items)
The Institute for the Research Promotion Organization for Digital Observatory, established at
National University Corporation, the University of Tokyo (Hereinafter “The University of Tokyo”),
held an inaugural forum on October 10, 2023. The institute was established for the purpose ofunderstanding, detecting and avoiding social risks through data observation and the utilization ofdiverse social and economic activities and the realization of a resilient society. Through the Institute,
the Company and the University of Tokyo jointly promote two research groups. At the forum, the two
discussed how industry, academia and government should work together to realize a resilient society
in 2050, and discussed ways to resolve issues through dialogue.
(iv) H-UTokyo Lab. held joint workshop with Imperial College London
On November 2, 2023, representatives of H-UTokyo Lab. (Hitachi and the University ofTokyo’s joint research laboratory) and Imperial College London (Hereinafter “ICL”) discussed thefuture of energy systems and how international cooperation should be conducted. In May 2023, theUniversity of Tokyo and ICL concluded a letter of intent to establish a strategic relationship on thecreation of decarbonization and cleantech technologies in the presence of the Company. This
workshop is the first step in specific efforts to strengthen this cooperation. In the panel discussion, thetwo discussed pressing institutional and technological issues based on the respective positions of Japanand the United Kingdom on the future introduction of renewable energy, as well as international issues
related to the transition to carbon neutrality and how to cooperate.

73

III. Property, Plants and Equipment
1. Summary of Capital Investment, etc.
The Hitachi Group (the Company and consolidated subsidiaries) selectively invests in R&D andproduct fields expected to grow over the long term, and it also invests to streamline manufacturing process,etc. and to improve the reliability of its products and services.
Capital investment (based on the amount recorded as tangible fixed assets and the investment property)
in the fiscal year ended March 31, 2024 was 315.8 billion yen. A breakdown of capital investment bysegment is as follows.

Segment

CapitalChange frominvestment
preceding fiscal(Billions of yen)year (%)

Main purpose of investment

Digital Systems &Services

67.8

104

Product development,
Maintenance and renewal of Data center
equipment

Green Energy & Mobility

114.9

159

Facility of production for power grid products,
Facility of production for railway systems

Connective Industries

63.8

104

Manufacturing facilities for industrial
products,
Increase in development and production ofsemiconductor manufacturing equipment, andmeasurement and analysis equipment,
Facility of production for building systems,
Streamline development and production ofother products

Automotive Systems

51.2

77

Increase in production of automotive
equipment

Others21.0

99

Renovation of offices, R&D facilities

Corporate Items &(3.0)
Eliminations
Total
315.8
90
(Notes) 1. The figures in the above table include the amount of the right-of-use assets and the investment property
each of which is recorded as tangible fixed assets and other non-current assets, respectively.
2. These investments were mostly financed by the Hitachi Group’s own capital.

74

2. Major Property, Plants and Equipment
The Hitachi Group (the Company and consolidated subsidiaries) engages in diverse business operationsin Japan and overseas. It discloses information on major property, plants and equipment represented inbreakdown by segment and major facilities of the Company and consolidated subsidiaries.
The situation at the end of the fiscal year ended March 31, 2024 is as follows.
(1) Breakdown by Segment(As of March 31, 2024)
Book value (Millions of yen)Segment

Land
Tools,
Buildings Machinery[Area infurniture Right-of-use
andand
Assetsthousands
andstructures vehicles
2
fixturesof m ]

Other

Constructionin progress

Total

Number of
employees

Digital Systems &Services

7,057
[694]

59,96437,76048,18590,391

13,084

2,431

258,872

106,839

Green Energy &35,892[8,673]

141,764

138,766

27,59063,81635

74,257482,120

65,39837,142[5,021]

152,452

62,972

43,79944,70949

18,480359,603

81,514

[-]

-

-

-

-

-

-

-

-

18,742[1,400]50,750

2,822

9,570

32,209-953

115,046

11,58998,833[15,788]404,930

242,320

129,144

231,125

13,16896,121

1,215,641

265,340(10,384)[866]

18,819152

3,769(6,229)

-

74

6,201

3,315

88,449[16,654]423,749

242,472

132,913

224,896

13,16896,195

1,221,842

268,655

Mobility
Connective
Industries
Automotive Systems
OthersSubtotal
Corporate Items &Eliminations
Total

75

(2) The Company(As of March 31, 2024)
Book value (Millions of yen)
Details ofLand
Tools,
major facilities [Area in Buildings Machinery furniture Right-ofandanduse
and equipment thousands
andstructures vehicles
Assets2
fixturesof m ]

Other

Constructionin progress

Total

Number of
employees

Financial
Institutions
Business Unit,
SocialInfrastructure
Digital Systems
Systems Business& Services
Unit and Digital
Systems &Services Division(Kawasaki,
Kanagawa)

Systemdevelopment
facilities,
manufacturing
facilities forservers, etc.

607
[40]

29,076

192

20,635

21,4098,692

839

81,453

12,194

Head Office(Chiyoda-ku,
Tokyo)

Corporate

Other facilities

5,001
[813]

9,783

148

1,957

12,129-5

29,025

1,291

Research &Development
Group(Kokubunji,
Tokyo)

Others

R&D facilities

4,540
[763]

17,742

1,041

3,070

1,299

-

111

27,8052,150

Railway Systems
Business Unit
(Kudamatsu,
Yamaguchi)

Manufacturing
Green Energy & facilities for
Mobility
railway
vehicles, etc.

1,013
[658]

13,383

4,963

652

3,685

-

271

23,9692,556

Nuclear Energy
Manufacturing
Business Unit andfacilities forGreen Energy &Energy Business
power
Mobility
Unit
generating(Hitachi, Ibaraki)equipment, etc.

9,137
[3,029]

5,198

30

736

1,221

-

7

16,331

1,001

Manufacturing
facilities forindustrial
machinery andplants,Services &Platforms Business Digital Systems switchboards
and calculation& Services
Unit
control(Hitachi, Ibaraki)equipment,
systemdevelopment
facilities

521
[202]

6,639

743

2,048

1,354

0

268

11,576

3,110

Corporate Hospital
Corporate
Group(Hitachi, Ibaraki)

Medicalfacilities

63
[53]

9,851

2

1,417

24

-

69

11,4291,826

IT Strategy &Digital Integration
OthersDivision(Chiyoda-ku,
Tokyo)

Systemdevelopment
facilities

[-]

1,447

0

4,167

11

-

42

5,668

451

Building Systems
Connective
Business Unit
Industries(Hitachinaka,Ibaraki)

Facility of
production forbuilding systems

43
[476]

3,036

71

32

-

-

9

3,193

68

Industry &Distribution
Business Unit andConnective
Water &
Industries
Environment
Business Unit
(Chiyoda-ku,
Tokyo)

Manufacturing
facilities forindustrial
solution, andwater andenvironment
solutionequipment

38
[13]

119

0

2,193

234

-

336

2,923

2,596

Facility(Main location)

Segment76

(3) Domestic subsidiaries(As of March 31, 2024)
Book value (Millions of yen)
Facility(Main location)

Segment

Details ofLand
Tools,
major facilities [Area in Buildings Machinery furniture Right-ofandanduse
and equipment thousands
andstructures vehicles
Assets2
fixturesof m ]

Other

Constructionin progress

Total

Number of
employees

Hitachi HighTech Corporation,
Connective
Naka Area
Industries(Hitachinaka,Ibaraki)

Manufacturing
facilities forsemiconductor
manufacturing
equipment andmeasurement
and analysis
equipment, etc.

4,980
[334]

25,927

7,699

15,188

730

-

1,152

55,678

3,451

Hitachi Global
Life Solutions,Inc., Taga Works(Hitachi, Ibaraki)

Connective
Industries

Manufacturing
facilities forhome appliances

296
[628]

4,664

5,054

5,060

35

-

736

15,847

1,097

Hitachi HighTech Corporation,
Connective
Kasado Area
Industries(Kudamatsu,
Yamaguchi)

Manufacturing
facilities forsemiconductor
manufacturing
equipment, etc.

321
[15]

3,000

5,249

1,700

1,937

-

828

13,037

619

Hitachi Building
Systems Co., Ltd.,
Connective
Head Office
Industries(Chiyoda-ku,
Tokyo)

Other facilities

3,952
[22]

5,347

312

1,348

-

-

136

11,098

1,543

Hitachi Real
Estate Partners,
Ltd., Hitachi
Rectship Totsuka(Yokohama,
Kanagawa)

Rent office[-]

10,426

18

198

-

-

-

10,642-

HitachiInformation
Engineering, Ltd.,
Digital Systems
Data center
Systemplaza& Services
Yokohama(Yokohama,
Kanagawa)

[-]

5,203

-

80

4,634

-

1

9,920

32

OthersHitachi Global
Life Solutions,
Connective
Inc., Tochigi
Industries
Works(Tochigi, Tochigi)

Manufacturing
facilities forhome appliances

112
[889]

3,978

2,341

1,821

3

-

152

8,411

631

Hitachi Industrial
Equipment
Systems Co., Ltd.,
Connective
Sagami BusinessIndustries
Office(Ayase,Kanagawa)

Manufacturing
facilities for air
compressor
systems, etc.

3,176
[87]

2,295

1,002

177

-

-

51

6,701

301

Hitachi Property
and Service, Ltd.,
OthersSea Mark Square(Hitachi, Ibaraki)

Store building,
etc.

[-]

4,466

50

12

-

-

-

4,531

-

Digital Systems Office and data
& Services
center, etc.

1,002
[26]

2,681

-

667

-

-

-

4,350

189

Hitachi Systems,
Ltd., Shonan
Office(Nakai,
Kanagawa)

77

(4) Overseas subsidiaries(As of March 31, 2024)
Book value (Millions of yen)
Subsidiary(Main location)

Segment

Details ofLand
Tools,
major facilities [Area in Buildings Machinery furniture Right-ofandanduse
and equipment thousands
andstructures vehicles
Assets2
fixturesof m ]

Other

Constructionin progress

Total

Number of
employees

Hitachi Energy
Ltd(Zurich,Switzerland)

Manufacturing
Green Energy & facilities for
Mobility
power gridproducts, etc.

19,452[3,642]91,751

120,272

17,48450,543-60,310359,81244,811

Hitachi Vantara
LLC(California,
U.S.A.)

Digital Systems
Other facilities& Services[-]-

17,42915,25918,515

1,607-

52,81012,987

Hitachi Payment
Services Private
Limited(Chennai, India)

Digital Systems
Other facilities& Services[-]-

11,901434

13,440-444

26,21912,354GlobalLogic
Worldwide
Holdings, Inc.
(California,
U.S.A.)

Digital Systems
Other facilities& Services

[-]

1,834

2,937

973

16,335-36

22,11531,440

Hitachi Elevator(China) Co., Ltd.
(Guangzhou,
China)

Connective
Industries

[-]

7,473

1,495

1,672

1,382

-

3,210

15,23225,018

Facility of
production forbuilding systems(Note) The figures above are presented in consolidated basis of each company.

78

3. Plans for Capital Investment, Disposals of Property, Plants and Equipment, etc.
The Hitachi Group (the Company and consolidated subsidiaries) engages in diverse operations in Japanand overseas, and has not decided on specific plans to newly install or expand each of facilities as of the endof the fiscal year. Therefore, it discloses amounts of capital investment by segment.
The amount of capital investment for the fiscal year ending March 31, 2025 is expected to be 360.0
billion yen (new installation and expansions, based on the amount recorded as tangible fixed assets and theinvestment property), and a breakdown by segment is as follows.
Segment

Amount(Billions of yen)

Main purpose of investment

Digital Systems & Services

70.0

Product development, Data center maintenance andupdates

Green Energy & Mobility

157.0

Facility of production for power grid products,
Facility of production for railway systems

Connective Industries

100.0

Manufacturing facilities for industrial products,
Increase in development and production ofsemiconductor manufacturing equipment, andmeasurement and analysis equipment,
Facility of production for building systems,
Streamline development and production of otherproducts

Others17.0

Renovation of offices, R&D facilities

Corporate Items &Eliminations

16.0

-

Total

360.0

-

(Notes) 1. The figures in the above table include the amount of the right-of-use assets and the investment property,
each of which is recorded as tangible fixed assets and other non-current assets, respectively.
2. These planned investments are expected to be mostly financed with the Hitachi Group’s own capital.
3. There are no plans to dispose of or sell principal facilities, with the exception of disposing of andselling facilities due to routine upgrading.

79IV. Information on the Company
1. Information on the Company’s Stock, etc.
(1) Total number of shares, etc.
1) Total number of shares
Class

Total number of shares authorized to
be issued (shares)

Common stock

2,000,000,000

Total

2,000,000,0002) Issued shares

Class

Commonstock
Total

Number of sharesissued as of the end of
fiscal year (shares)(March 31, 2024)

Number of sharesissued as of thefiling date (shares)(Note)(June 21, 2024)

Stock exchange on which
the Company is listed

Description

The number of shares per
927,167,877

927,313,877

Tokyo, Nagoya

927,167,877

927,313,877-

one unit of shares is 100
shares.
-(Note) The Company newly issued 146,000 shares as restricted stock compensation on June 3, 2024. The “Number of shares issued asof the filing date” does not include shares issued upon the exercise of stock acquisition rights from June 1, 2024 to the filing
date.

80

(2) Information on the stock acquisition rights, etc.
1) Details of stock option plans
Name
Date of resolution
Category andnumber of persons towhom stockacquisition rights are
grantedNumber of stockacquisition rights
Class, detail andnumber of shares tobe issued upon
exercise of stockacquisition rights
Amount to be paid in
upon exercise ofstock acquisitionrightsExercise period ofstock acquisitionrightsIssue price for sharesissued upon exerciseof stock acquisitionrights and amount of
capitalization
Conditions for the
exercise of stockacquisition rights
Matters regarding
the acquisition ofstock acquisitionrights throughtransfer
Matters regarding
substitute payment
Matters regarding
grant of stockacquisition rights
upon organizational
restructuring

The First Stock
Acquisition Rights ofHitachi, Ltd.
(Note 1)The Second Stock
Acquisition Rights ofHitachi, Ltd.
(Note 1)The Third Stock
Acquisition Rights ofHitachi, Ltd.
(Note 1)

June 29, 2016

April 6, 2017

April 11, 2018

31 Executive Officers of
the Company
42 Corporate Officers of
the Company

33 Executive Officers of
the Company
37 Corporate Officers of
the Company

33 Executive Officers of
the Company
35 Corporate Officers of
the Company

5,994[4,660]6,508[4,618]6,879[4,593]

Common stock
119,880 shares[93,200 shares](Note 2)

Common stock
130,160 shares[92,360 shares](Note 2)

Common stock
137,580 shares[91,860 shares](Note 2)

¥1 per share¥1 per share¥1 per share

From July 15, 2016
to July 14, 2046

From April 27, 2017
to April 26, 2047

From April 27, 2018
to April 26, 2048

Issue price: ¥1,345(Note 3)
Amount of capitalization:(Note 4)

Issue price: ¥1,843(Note 3)
Amount of capitalization:(Note 4)

Issue price: ¥2,431(Note 3)
Amount of capitalization:(Note 4)(Note 5, 6)(Note 5, 6)(Note 5, 6)

Acquisition of stockacquisition rights throughtransfer shall be subject
to the approval of theBoard of Directors.

Acquisition of stockacquisition rights throughtransfer shall be subject
to the approval of theBoard of Directors.

Acquisition of stockacquisition rights throughtransfer shall be subject
to the approval of theBoard of Directors.

－

－

－

(Note 7)(Note 7)(Note 7)(Notes) 1. The information is that as of the end of fiscal year (March 31, 2024). The number of stock acquisition rights and the numberof shares to be issued upon exercise of stock acquisition rights in brackets in the lower row is information as of the end of
the last month ended before the filing date (May 31, 2024). With regard to the other items, there is no change from theinformation as of the end of fiscal year.
2. If the Company implements a stock split (including gratis allotment of shares of common stock; the same shall apply toreferences to a stock split hereinafter) or a reverse stock split with respect to common stock of the Company after the date ofallotment of the stock acquisition rights, the Number of Shares to be Issued with respect to the stock acquisition rights not
exercised at that time will be adjusted in accordance with following formula:
Number of Shares to be Issued
Number of Shares to be
Ratio of stock split or=×after adjustment
Issued before adjustment
reverse stock split

81

In addition, if there are unavoidable grounds requiring an adjustment of the Number of Shares to be Issued, the Number of
Shares to be Issued may be adjusted to the extent necessary by a resolution of the Board of Directors.
Any fractions of less than one share resulting from the adjustment will be rounded down.
3. The issue price for shares issued upon the exercise of stock acquisition rights is the sum of the amount to be paid in upon
exercise of each of the stock acquisition rights (¥1 per share) and the fair value of each of the stock acquisition right ascalculated at the date of allotment.
4. The increase in common stock upon issuing shares through the exercise of stock acquisition rights shall be one half of the
maximum increase in common stock, etc. calculated in accordance with Article 17, Paragraph 1 of the Ordinance on
Company Accounting. Any fractions of less than one yen resulting from the calculation shall be rounded up to the nearestyen.
5. A holder of stock acquisition rights may exercise all of his/her stock acquisition rights together only within 10 days (in casethe last day is not a business day, the following business day) from the day immediately following the date on which he/sheceases to be an Executive Officer, a Director or a Corporate Officer of the Company.
6. The number of stock acquisition rights which a holder of stock acquisition rights may exercise shall be determined based on
the ratio of (i) total shareholder returns for shares of Hitachi for three years from the beginning of the fiscal year in which
the date of allotment of the stock acquisition rights falls to (ii) the growth rate of Tokyo Stock Price Index (TOPIX) for thesame period (the “TSR/TOPIX Growth Rate Ratio”), in accordance with the stock price conditions:a. If the TSR/TOPIX Growth Rate Ratio is 120% or more
All the stock acquisition rights allotted (the “Allotted Rights”) may be exercised.
b. If the TSR/TOPIX Growth Rate Ratio is 80% or more but less than 120%
Only part of the Allotted Rights may be exercised according to the degree of the TSR/TOPIX Growth Rate Ratio (*).
*Number of stock acquisition
Number of
TSR/TOPIX=×{(× 1.25) – 0.5}
rights exercisable
Allotted Rights
Growth Rate Ratio
Any fraction less than one stock acquisition right will be rounded down.
c. If the TSR/TOPIX Growth Rate Ratio is less than 80%
No Allotted Rights may be exercised.
7. In the event that the Company engages in a merger (only if the Company is to be dissolved as a result of the merger), an
absorption-type company split or incorporation-type company split (in each case, only if the Company is to be a split
company), or share exchange or share transfer (in each case, only if the Company is to be a wholly-owned subsidiary)(hereafter all of which are collectively referred to as “Corporate Reorganization”), then stock acquisition rights for theentities specified under Article 236, Paragraph 1, Item 8 (a) through (e) of the Companies Act (such entity hereinafterreferred to as the “Reorganized Company”) shall be issued to the Stock Acquisition Right Holders holding stock acquisitionrights remaining in effect (the “Remaining Stock Acquisition Rights”) immediately prior to the effective date of the
Corporate Reorganization (hereinafter respectively referring to an effective date of absorption-type merger in the case of anabsorption-type merger, a date of incorporation of a company incorporated through a consolidation-type merger in the caseof a consolidation-type merger, an effective date of absorption-type company split in the case of an absorption-typecompany split, a date of incorporation of a company incorporated through an incorporation-type company split in the caseof an incorporation-type company split, an effective date of a share exchange in the case of a share exchange, or a date ofincorporation of a wholly owning parent company incorporated through share transfer). However, these stock acquisitionrights shall be granted only if provisions for issuing the stock acquisition rights of the Reorganized Company in accordancewith the following conditions are included in an absorption-type merger agreement, a consolidation-type merger agreement,
an absorption-type company split agreement, an incorporation-type company split plan, a share exchange agreement, or ashare transfer plan.
(1) The number of stock acquisition rights of the Reorganized Company to be issued
The number of stock acquisition rights equal to the number of Remaining Stock Acquisition Rights held by respective
Stock Acquisition Right Holders shall be issued.
(2) The class of shares of the Reorganized Company to be issued upon the exercise of stock acquisition rights
Common shares of the Reorganized Company shall be issued.
(3) The number of shares of the Reorganized Company to be issued upon the exercise of stock acquisition rights
The number shall be determined in accordance with the terms and conditions of Remaining Stock Acquisition Rights,
taking into account the conditions and other factors concerning Corporate Reorganization.
(4) Amount of assets to be contributed upon the exercise of stock acquisition rights
The amount of assets contributed upon the exercise of stock acquisition rights to be issued shall be the amountderived by multiplying the amount to be paid in per share to be delivered upon the exercise of stock acquisition rights of
the Reorganized Company (the “Post-reorganization Exercise Price”) prescribed below by the number of shares of theReorganized Company to be issued determined in accordance with paragraph (3) of this section. The PostReorganization exercise price shall be one yen.
(5) Exercise period of stock acquisition rights
The exercise period of stock acquisition rights shall be from the later of the first day of the exercise period of stockacquisition rights or the effective date of the Corporate Reorganization to the expiration date of the exercise period ofstock acquisition rights.
(6) Matters concerning common stock and capital reserve to be increased due to the issuance of shares upon the exercise ofstock acquisition rights
The matters shall be determined in accordance with the terms and conditions of Remaining Stock Acquisition Rights.
(7) Restrictions on acquisition of stock acquisition rights through transfer
The acquisition of stock acquisition rights through transfer shall be subject to the approval of the ReorganizedCompany.
(8) Conditions for the exercise of stock acquisition rights
The matters shall be determined in accordance with the terms and conditions of Remaining Stock Acquisition Rights.
(9) Matters concerning the acquisition of stock acquisition rights
The matters shall be determined in accordance with the terms and conditions of Remaining Stock Acquisition Rights.

822) Details of shareholder right plans
Not applicable.
3) Details of other stock acquisition rights, etc.
Not applicable.
(3) Information on moving strike convertible bonds, etc.
Not applicable.
(4) Changes in the total number of issued shares and the amount of common stock and other
Change in
the total
number ofissued shares(shares)

Date

Balance of thetotal number ofissued shares(shares)

Change incommonstock(Millionsof yen)Balance ofcommonstock(Millionsof yen)Change incapitalreserve(Millionsof yen)Balance ofcapitalreserve(Millionsof yen)May 31, 2019

(Note 1)

587,800

967,280,477

1,072

459,862

1,072

177,828

May 27, 2020

(Note 2)604,800

967,885,277

928

460,790928

178,756

June 15, 2021

(Note 3)

349,600

968,234,877

941

461,731941

179,697

June 15, 2022

(Note 4)

337,000

968,571,877

1,086

462,817

1,086

180,783

December 14, 2022

(Note 5)(30,488,800)

938,083,077-

462,817-

180,783

May 31, 2023

(Note 6)

158,200

938,241,277

600

463,417600

181,383

October 18, 2023

(Note 5)

(11,073,400)

927,167,877-

463,417-

181,383(Notes) 1. This increase is due to the issuance of new shares as restricted stock compensation.
Issue price: 3,647 yen per share
Amount of capitalization: 1,823.5 yen per share
Allottees: 37 Executive Officers of the Company and 34 Corporate Officers of the Company
2. This increase is due to the issuance of new shares as restricted stock compensation.
Issue price: 3,067 yen per share
Amount of capitalization: 1,533.5 yen per share
Allottees: 31 Executive Officers of the Company and 33 Corporate Officers of the Company
3. This increase is due to the issuance of new shares as restricted stock compensation.
Issue price: 5,384 yen per share
Amount of capitalization: 2,692 yen per share
Allottees: 31 Executive Officers of the Company and 35 Corporate Officers of the Company
4. This increase is due to the issuance of new shares as restricted stock compensation.
Issue price: 6,448 yen per share
Amount of capitalization: 3,224 yen per share
Allottees: 35 Executive Officers of the Company, 34 Corporate Officers of the Company and 5 Directors of theconsolidated subsidiaries.
5. The change in the total number of issued shares is due to the cancellation of treasury stock.
6. This increase is due to the issuance of new shares as restricted stock compensation.
Issue price: 7,586 yen per share
Amount of capitalization: 3,793 yen per share
Allottees: 37 Executive Officers of the Company, 38 Corporate Officers of the Company and 5 Directors of theconsolidated subsidiaries.
7. The Company issued its new shares as restricted stock compensation on June 3, 2024. The total number of issued shares,
common stock and capital reserve increased by 146,000 shares, 966 million yen and 966 million yen respectively.

83

(5) Shareholders composition(As of March 31, 2024)
Status of shares (one unit of stock: 100 shares)
Class ofshareholders

Foreign corporations,
Financialetc.
Government
Financial instruments
Other
Individuals
andinstitution
and others
business institution
Nonmunicipality
Individuals
operator
individuals

Total

Number ofsharesless than one
unit (shares)

Number ofshareholders

2

162

62

2,144

1,300

147

198,017

201,834-

Shareownership(units)

92 2,912,162

147,230

122,176

4,724,150

1,232

1,342,859

9,249,901

2,177,777

1.59

1.32

51.07

0.01

14.52

100.00-Ownership
percentageof shares
(%)

0.00

31.48

(Notes) 1. Of 546,173 shares of treasury stock, 5,461 units are included in the “Individuals and others” column,
while 73 shares are included in the “Number of shares less than one unit” column.
2. Of the shares registered in the name of Japan Securities Depository Center, Incorporated (account for
managing shares, the holders of which have not transferred titles), 53 units are included in the “Other
institution” column and 65 shares are included in the “Number of shares less than one unit” column.

84

(6) Major shareholders

Name

The Master Trust Bank of Japan, Ltd.
(Trust Account)
Custody Bank of Japan, Ltd.
(Trust Account)
State Street Bank and Trust
Company 505223(Standing proxy: Mizuho Bank, Ltd.)
GOVERMENT OF NORWAY(Standing proxy: Citibank, N.A.)

NATS CUMCO(Standing proxy: Mizuho Bank, Ltd.)

Address

Share
Ownership(shares)(As of March 31, 2024)
Ownership
percentage to thetotal number ofissued shares(excluding treasury
stock) (%)

8-1, Akasaka 1-chome, Minato-ku, Tokyo

155,658,700

16.80

8-12, Harumi 1-chome, Chuo-ku, Tokyo

57,317,377

6.19

P.O. Box 351, Boston, Massachusetts 02101
U.S.A.
(15-1, Konan 2-chome, Minato-ku, Tokyo)

22,663,806

2.45

21,161,670

2.28

20,721,566

2.24

Bankplassen 2,0107 Oslo 1 Oslo 0107 NO(27-30, Shinjuku 6-chome, Shinjuku-ku,
Tokyo)C/O Citibank, New York 111
Wall Street, New York, NY, U.S.A.
(15-1, Konan 2-chome, Minato-ku, Tokyo)

Nippon Life Insurance Company

6-6, Marunouchi 1-chome, Chiyoda- ku,Tokyo

20,000,099

2.16

SSBTC CLIENT OMNIBUS
ACCOUNT(Standing proxy: The Hongkong andShanghai Banking Corporation
Limited)One Congress Street, Suite 1, Boston,
Massachusetts(11-1, Nihombashi 3-chome, Chuo-ku,
Tokyo)

19,936,868

2.15

State Street Bank West Client -1776 Heritage Drive, North Quincy, MA

Treaty 505234(Standing Proxy: Mizuho Bank, Ltd.)

02171, U.S.A.
(15-1, Konan 2-chome, Minato-ku, Tokyo)

18,317,987

1.98

Hitachi Employees' Shareholding
Association

6-6, Marunouchi 1-chome, Chiyoda- ku,
Tokyo17,568,674

1.90

London, E14 5JP, United Kingdom(15-1, Konan 2-chome, Minato-ku, Tokyo)

15,303,016

1.65

-

368,649,763

39.78

JP Morgan Chase Bank 385632(Standing proxy: Mizuho Bank, Ltd.)

25 Bank Street, Canary Wharf,

Total(Notes) 1. NATS CUMCO is the nominee name of the depositary bank, Citibank, N.A., for the aggregate of theCompany’s American Depositary Receipts (ADRs) holders.
2. Some reports on substantial shareholdings regarding the Company under the Financial Instruments andExchange Act are available for public inspection. However, the information in the reports is not describedin the above table since the Company had not confirmed the actual status of shareholdings as of March
31, 2024. The main contents of the reports are as follows.
Holders
Date on which the duty to file report
Number of shares
Ownership percentage to the total
number of issued sharesBlackRock Japan Co. Ltd and nine other persons
September 15, 2023
68,635,088 shares
7.32%

85

Holders
Date on which the duty to file report
Number of shares
Ownership percentage to the total
number of issued shares

Sumitomo Mitsui Trust Asset Management Co., Ltd. andone other person
March 15, 2022
58,850,673 shares
6.08％(7) Information on voting rights
1) Issued shares(As of March 31, 2024)
Classification

Number of voting
rightsNumber of shares (shares)

Shares without voting rights
Shares with restricted voting rights (treasury
stock, etc.)
Shares with restricted voting rights (others)

Description

－

－

－

－

－

－

－

－

－

－

－

Shares with full voting rights (treasury stock,etc.)

Common stock

566,700

Shares with full voting rights (others)

Common stock

924,423,400

Shares less than one unit

Common stock

2,177,777－－

927,167,877－－

Number of issued shares
Total number of voting rights

9,244,234

9,244,234－－－(Note) The “Shares with full voting rights (others)” column includes 5,300 shares registered in the name of Japan
Securities Depository Center, Incorporated (account for managing shares, the holders of which have nottransferred titles) and 53 voting rights for those shares.
2) Treasury stock, etc.
(As of March 31, 2024)

Name ofshareholder

Address

Number ofshares held
under own name(shares)Number ofshares held
under thenames ofothers(shares)

Total shares
held (shares)

Ownership
percentage tothe total
number ofissued shares(%)

Hitachi, Ltd.

6-6, Marunouchi 1-chome,
Chiyoda-ku, Tokyo

546,100－

546,100

0.06

SAITA KOUGYOU
CO., LTD.

5-3, Takinogawa 5-chome, Kitaku, Tokyo

17,600－17,6000.00

Mizuho Co., Inc.

28-8, Honkomagome 2-chome,
Bunkyo-ku, Tokyo

3,000

－

3,000

0.00

－

566,700－

566,700

0.06

Total

86

2. Information on Acquisition, etc. of Treasury StockClass of shares
Acquisition of common stock under Article 155, Item 3, 7 and 13 of the Companies Act(1) Acquisition of treasury stock resolved at the general meeting of shareholders
Not applicable.
(2) Acquisition of treasury stock resolved at the Board of Directors meetings
Acquisition of common stock under Article 155, Item 3 of the Companies Act
Classification
Number of shares (shares)
Total amount (yen)Resolution details on Board of
Directors (April 27,2023) (Note)
20,000,000(maximum)
100,000,000,000(maximum)(Acquisition period From April 28,
2023 to March 31, 2024)
Treasury stock acquired before the－－fiscal year
Treasury stock acquired during the
11,073,400
99,999,418,727
fiscal year
Total number and total value of
8,926,600
581,273
remaining shares to be acquired by the
resolution
Unexercised rate as of the end of the
44.6
0.0
fiscal year (%)
Treasury stock acquired during the－－current period
Unexercised rate as of the filing date
44.6
0.0
(%)
(Note) The Board of Directors has resolved that the method of acquisition would be market purchase on the Tokyo
Stock Exchange.
Classification
Number of shares (shares)
Total amount (yen)Resolution details on Board of
Directors (April 26,2024) (Note 1, 2)
21,000,000(maximum)
200,000,000,000(maximum)(Acquisition period From April 30,
2024 to March 31, 2025)
Treasury stock acquired before the－－fiscal year
Treasury stock acquired during the－－
fiscal year
Total number and total value of
21,000,000
200,000,000,000
remaining shares to be acquired by the
resolution
Unexercised rate as of the end of the
100.0
100.0
fiscal year (%)
Treasury stock acquired during the710,400
10,915,978,498
current period (Note 3)
Unexercised rate as of the filing date
96.6
94.5
(%)
(Notes) 1. The Board of Directors has resolved that the method of acquisition would be market purchase on theTokyo Stock Exchange.
2. Number of shares (maximum) in resolution details on Board of Directors (April 26, 2024) will be 105
million shares, after the effective date of the share split (July 1, 2024).
3. The number of shares of treasury stock acquired from June 1, 2024 to the filing date is not included.
87

(3) Details of acquisition of treasury stock not based on the resolutions of the general meeting ofshareholders or the Board of Directors meetings
Acquisition of common stock under Article 155, Item 7 of the Companies Act (Note 1)
Classification
Number of shares (shares)
Total amount (yen)Treasury stock acquired during the46,472458,857,123
fiscal year ended March 31, 2024
Treasury stock acquired during the
5,461
76,864,860
current period (Note 2)(Notes) 1. Acquisition of stock less than one share unit due to purchase requests from shareholders under Article
192, Paragraph 1 of the Companies Act.
2. The number of shares treasury stock acquired due to requests to purchase stock of less than one shareunit from June 1, 2024 to the filing date is not included.
Acquisition of common stock under Article 155, Item 13 of the Companies Act (Note)
Classification
Number of shares (shares)
Total amount (yen)Treasury stock acquired during the
19,400fiscal year ended March 31, 2024
Treasury stock acquired during the42,600current period(Note) Acquisition without consideration of part of the common stock allotted to the Company’s Executive Officers
and Corporate Officers as restricted stock compensation (Article 27, Paragraph 1 of the Order for
Enforcement of the Companies Act).
(4) Status of the disposition and holding of acquired treasury stock
Classification
Acquired treasury stock which wasoffered to subscribers
Acquired treasury stock which wascanceled
Acquired treasury stock which wastransferred due to merger, shareexchange, share delivery or company
split

Fiscal year ended March 31, 2024
Current period (Note)
Number of shares Total disposition Number of shares Total disposition(shares)amount (yen)(shares)amount (yen)
-

-

-

-

11,073,400

98,793,774,248

-

-

-

-

-

-

Others (Acquired treasury stock
which was transferred upon theexercise of stock acquisition rights,
and which was sold due to requests
from shareholders holding less than
one share unit to sell additional
shares)30,529213,089,353

110,200

1,007,067,108

Total number of treasury stock held

546,173-

1,194,434-(Note) The following are not included: the number of shares of treasury stock which were transferred with theexercise of stock acquisition rights from June 1, 2024 to the filing date; the number of shares of treasury
stock which were sold due to requests from shareholders holding less than one share unit to sell additional
shares from June 1, 2024 to the filing date; the number of shares of treasury stock acquired due toresolutions at meeting of the Board of Directors held from June 1, 2024 to the filing date; and the number ofshares of treasury stock acquired due to purchase requests from shareholders holding stock less than one
share unit from June 1, 2024 to the filing date.

88

3. Dividend Policy
The Company views the return of profits to shareholders through enhancing corporate value from a
mid- to long-term perspective and paying dividends and repurchasing its shares as an important managerial
issue.
The policy of the Company regarding dividends is to aim for the stable payment of dividends while
also securing the funds necessary for investment dividends are determined by comprehensively taking into
account factors such as financial performance trends, the financial situation, and the dividend payout ratio.
The Company flexibly repurchases its shares depending on factors such as capital needs and thebusiness environment.
In accordance with its mid- to long-term management strategy, the Company utilize undistributed
profits in areas such as M&A, research and development, and capital expenditure, in order to securecompetitiveness and grow the business as a global enterprise.
Based on the above policy, annual dividends of 180.0 yen per share were paid for the fiscal year
ended March 31, 2024. It was resolved at the Board of Directors meeting held on October 27, 2023 to pay
interim dividends of 80.0 yen per share, resulting in total interim dividends of 74,144 million yen. In
addition, it was resolved at the Board of Directors meeting held on May 13, 2024 to pay year-end
dividends of 100.0 yen per share, resulting in total year-end dividends of 92,662 million yen.

89

4. Corporate Governance, etc.
(1) Corporate governance1) Basic policy about corporate governance
The Company considers the growth of profits for shareholders and investors from a long-term
perspective as an important managerial objective. As the Company and the Hitachi Group have a wide
range of stakeholders, from shareholders and investors to customers and clients, the Company realizes
that building good relationships with them forms an important part of its corporate value.
The Company is a Company with Nominating Committee, etc. under the Companies Act, aiming
to establish a framework for quick business operation and to realize highly transparent management byseparating responsibilities for management oversight and those for the execution of business
operations. The Company attempts to maintain an appropriate composition of the Board of Directors
aiming to ensure the effectiveness of its management oversight function in addition to reflect diverse
global perspectives in management. The Company has positioned the Corporate Governance
Guidelines as the basic framework of its corporate governance, including functions of the Board of
Directors.
In addition, the Company has positioned the Hitachi Group Code of Ethics and BusinessConduct as behavior disciplines to be shared among the Group to generate common values for the
Hitachi Group and promote understanding of the social responsibilities to be fulfilled by the Company.
Chart of Corporate Governance System of the Company

2) Outline of corporate organizations
Board of Directors
The Board of Directors approves the basic management policy for the Hitachi Group andsupervises the execution of the duties of Executive Officers and Directors in order to sustainably
enhance corporate value and shareholders’ common interests. The basic management policy includes
the medium-term management plan and annual budget compilation. The Board of Directors focuses on
strategic issues related to the basic management policy as well as other items to be resolved that areprovided in laws, regulations, the Articles of Incorporation and Board of Directors Regulations.
With regard to the number of Directors and their election, the Company stipulates in its Articles
of Incorporation that the Company shall have no more than 20 Directors. With regard to the adoptionof resolutions for the election of Directors, the Company stipulates in its Articles of Incorporation thatthe resolutions for the election of Directors shall be approved by attending shareholders possessing
one-third or more of all voting rights of the shareholders who are entitled to exercise their votes, andthat the resolution shall not be made by cumulative voting. The Board of Directors was made up of 12
Directors who were elected at the Annual General Meeting of Shareholders held on June 21, 2024, andnine of whom are Independent Directors* and two of whom concurrently serve as Executive Officers.
* The “Independent Directors” in this report are the directors who fulfill the qualification90requirements to be outside directors as provided by the Companies Act of Japan and also meet theindependence criteria defined by the Company and those as provided by Japanese stock exchanges
where the Company is listed, unless otherwise stated.
Within the Board of Directors, there are three statutory committees, the Nominating Committee,
the Audit Committee and the Compensation Committee with Independent Directors accounting for the
majority of members of each committee.
The Board of Directors meetings were held nine days during the fiscal year ended March 31,
2024 (fiscal 2023). The attendance record of each Director during fiscal 2023 is as follows.

Katsumi Ihara

Attendance / Number of days held
the Board of Directors meetings(Note 1)9 days / 9 days

Ravi Venkatesan

9 days / 9 days

100%

Cynthia Carroll

9 days / 9 days

100%

Ikuro Sugawara

9 days / 9 days

100%

Joe Harlan

9 days / 9 days

100%

Name

Attendance rate (Note 1)
100%

Louise Pentland

9 days / 9 days

100%

Takatoshi Yamamoto

9 days / 9 days

100%

Hiroaki Yoshihara

9 days / 9 days

100%

Helmuth Ludwig

9 days / 9 days

100%

Keiji Kojima

9 days / 9 days

100%

Mitsuaki Nishiyama (Note 2)

7 days / 7 days

100%

Toshiaki Higashihara

9 days / 9 days

100%

Hideaki Seki (Note 3)

2 days / 2 days

100%

(Notes) 1. Based on the number of days the Board of Directors met during each member’s term ofoffice.
2. Mr. Nishiyama was appointed on June 21, 2023.
3. Mr. Seki resigned on June 21, 2023.
During fiscal 2023, the Board of Directors received a report on the progress of the Mid-termManagement Plan 2024, including overall priority items and the progress in each sector, and confirmedthat it is consistent with the plan. The Board of Directors extensively discussed and deliberated how to
respond to risks, including cyber security and generative AI as well as management plans and businessstrategies. In addition to strategic discussions of basic management policies and discussions of risks,
the Board of Directors received reports on and discussed topics important to the executives which werediscussed at the Senior Executive Committee, an advisory council to the President, facilitating a sharedunderstanding with the executives. In order to promote more lively discussion, the Board of Directors
spends more time exchanging views on agenda items than explaining them.
As part of the above, the Company holds meetings of the Board of Directors, basically once a
year, in countries closely related to the Hitachi Group’s business. In September 2023, the Company
held the Board of Directors meeting in Stockholm, Sweden. At the meeting, Directors discussed issues
relevant to business strategy in Europe and environmental strategy. The Directors also attended
lectures by local experts and visited local subsidiaries. In addition, the Company held a Board of
Directors meeting at the Kyōsō-no-Mori R&D center, the R&D Group’s Kokubunji Site, which is oneof the Company’s research and development sites. Directors discussed research and development
strategy and innovation strategy at the meeting and attended lectures regarding research anddevelopment initiatives presented by employees.
Furthermore, the Company is working to improve the effectiveness of the Board of Directors byenhancing its opportunities to share information with Independent Directors through individual
meetings, site visits, and other activities. Online participation in the Hitachi Social Innovation Forum,
and attendance at the internal business conference and the research presentation meeting held at
research institutes, including online, and visits to Hitachi Origin Park provided opportunities for the
Independent Directors to increase their understanding of the business and engage in dialogue with91

senior management and front line employees.
The Company has established the Board of Directors Office to assist with the duties of eachCommittee and the Bord of Directors. The Office is staffed with employees who exclusively serve the
Office and are not subject to the orders or instructions of Executive Officers. Some of them areassigned to be full-time auditors auditing governance, risk management, etc. in the Digital Systems &Services, Green Energy & Mobility and Connective Industries sectors.
The Nominating Committee
The Nominating Committee has the authority to determine that particular proposals should besubmitted to the general meeting of shareholders for the election and dismissal of Directors. The
Nominating Committee consists of three Directors, two of whom are Independent Directors, after the
Board of Directors meeting held on June 21, 2024. The members of the committee are described in “(2)Directors and Senior Management - 1) Lists of directors and senior management - (a) Directors.”
The Nominating Committee meetings were held 10 days during fiscal 2023. The attendance
record of each member of the Nominating Committee during fiscal 2023 is as follows.

Katsumi Ihara

Attendance / Number of days held
the Nominating Committee (Note)
10 days / 10 days

Name

Attendance rate (Note)100%

Cynthia Carroll

10 days / 10 days

100%

Hiroaki Yoshihara

10 days / 10 days

100%

Toshiaki Higashihara

10 days / 10 days

100%

(Note) Based on the number of days the Nominating Committee met during each member’s term ofoffice.
During fiscal 2023, the Nominating Committee decided on the details of the proposal regarding
the election of Directors to be submitted to the general meeting of shareholders, discussed candidates tosucceed the CEO, and received and confirmed a preliminary report on the Executive Officer structure
for fiscal 2024. In addition, to develop management-level leadership candidates, the members of theNominating Committee held discussions and conducted one-on-one interviews with leadership
candidates.
The Audit Committee
The Audit Committee has the authority to audit the execution of duties of Directors andExecutive Officers and to determine proposals submitted to the general meeting of shareholders for theelection and dismissal of accounting auditors.
The members and activities of the Audit Committee are described in “(3) Audit - 1) Audit by the
Audit Committee.”
The Compensation Committee
The Compensation Committee has the authority to determine remuneration policies for Directors
and Executive Officers and remuneration for individuals based on those policies. The Compensation
Committee consists of four Directors, three of whom are Independent Directors, after the Board of
Directors meeting held on June 21, 2024. The members of the committee are described in “(2)Directors and Senior Management - 1) Lists of directors and senior management - (a) Directors.”
The Compensation Committee were held seven days during fiscal 2023. The attendance recordof each member of the Compensation Committee during fiscal 2023 is as follows.

Katsumi Ihara

Attendance / Number of days held
the Compensation Committee (Note)
7 days / 7 days

Name

Attendance rate (Note)100%

Joe Harlan

7 days / 7 days

100%

Takatoshi Yamamoto

7 days / 7 days

100%

Keiji Kojima

7 days / 7 days

100%

(Note) Based on the number of days the Compensation Committee met during each member’s term ofoffice.
92During fiscal 2023, based on policies for determining compensation for Directors and Executive
Officers, the Compensation Committee determined the amounts of remuneration for Directors andExecutive Officers individually including confirmation and review of the process and details of
performance and individual target evaluations regarding the assessment of fixed pay amounts and theshort-term incentive compensation paid to Executive Officers.
In addition, the Compensation Committee discussed whether the compensation system for theCompany’s Executive Officers which was amended in the previous fiscal year, functioned soundly as
an incentive to increase corporate value over the mid- to long-term, based on an analysis by a thirdparty organization outside of the Company. In particular, the Compensation Committee confirmed theappropriateness of the compensation levels based on a compensation benchmark analysis considering
each market in Japan, Europe and the U.S. and examined whether the new compensation system
functioned effectively from various angles, including the verification of the appropriateness of target
setting and evaluation.
Regarding the compensation paid to the Company’s Directors, based on a remuneration
benchmark analysis, the Compensation Committee discussed the compensation paid to the Directors of
the Company who are from various regions. As a result, the Compensation Committee decided to
introduce a new compensation system in Fiscal 2024 to further promote awareness of increasing
corporate value in the context of management supervision and advice. Specifically, the Compensation
Committee revised compensation levels to be sufficiently competitive in the global market, andintroduced stock compensation in order to further promote awareness of increasing corporate value inthe medium-to-long term and enhance the sharing of value with shareholders.
In its deliberations, the Compensation Committee considers changes in the business environment
and the opinions of shareholder and investors and obtains necessary information and advice from thirdparty organizations with global insight and experience.
Details of the compensation paid to Directors and Executive Officers of the Company aredescribed in “(4) Compensation to Directors and Executive Officers.”
Executive Officers
Executive Officers decide on matters delegated to them by the Board of Directors and execute
the Company’s business affairs within the scope of assignments determined by the Board of Directors.
As of June 21, 2024, the Company has 35 Executive Officers (See “(2) Directors and Senior
Management - 1) Lists of directors and senior management - (b) Executive Officers.”)
The Company stipulates in its Articles of Incorporation that the Company shall have no morethan 40 Executive Officers.
Senior Executive Committee
The Senior Executive Committee is a council to ensure that the President deliberately decides onimportant managerial matters, which may affect the business of the Company or the Hitachi Group,
through discussing from diverse viewpoints. It consists of nine regular attendees as of June 21, 2024;
President & CEO (Keiji Kojima), four Executive Vice President and Executive Officers (Jun Abe,
Brice Koch, Alistair Dormer and Toshiaki Tokunaga), four Senior Vice President and Executive
Officers (Tomomi Kato, Lorena Dellagiovanna, Hidenobu Nakahata and Masahiko Hasegawa) and one
Vice President and Executive Officer (Yuto Matsumura), and other attendees designated by the
President.
In April 2022, the Company established the Growth Strategy Meeting, the Risk Management
Meeting and the Human Resource Strategy Meeting within the Senior Executive Committee. The
Growth Strategy Meeting discusses and decides on matters related to the Hitachi Group’s management
strategy and accelerates the formulation of strategies necessary for its growth. The Risk Management
Meeting discusses and decides on important matters related to group-wide risks, and aims to realize asolid management foundation in coordination with growth strategies through a centralized and crosssectional understanding of risks. The Human Resource Strategy Meeting discusses and decides onmatters necessary to foster the Hitachi Group’s organization and culture as well as to secure anddevelop human resources, thereby supporting its continued growth through the enhancement of humancapital.
93Summary of a limited liability agreement and the directors’ and officers’ liability insurance agreement
The Company maintains a limited liability agreement stipulated in Article 427, Paragraph 1 of
the Companies Act with each director (excluding Director who concurrently serves as an Executive
Officer). The general intent of the agreement is to limit the liability of Directors to the aggregate
amount stipulated in each item under Article 425, Paragraph 1 of the Companies Act.
In addition, the Company maintains a directors’ and officers’ liability insurance agreement
stipulated in Article 430-3, Paragraph 1 of the Companies Act with an insurance company. The
coverage of insured persons and outline of the insurance agreement are as follows.
i) Coverage of insured persons
The Company’s Directors, Executive Officers, Corporate Officers (the executive positions justbelow Executive Officers), employees who work as officers at the company to which they are assigned
and some of the Company’s domestic subsidiaries’ directors, corporate auditors executive officers andemployees (including employees who work as officers at the company to which they are assigned).
ii) Outline of the insurance agreement
The agreement compensates insured people for damages and litigation costs, etc. incurred as aresult of any damage claims due to an act or omission carried out by the insured person as an executiveof a company. However, the Company has taken measures to ensure that the appropriateness of theofficers’ execution of their duties is not impaired by excluding compensation for intentional negligencein the fulfillment of their duties, the illegal acquisition of private benefits or other benefits and damages
resulting from criminal acts. The entire cost of the insurance agreement is borne by the Company or its
subsidiaries that hold the insurance agreement.
3) Matters determined by resolution of the Board of Directors without resolution at the general meeting ofshareholders pursuant to the provisions of the Articles of Incorporation
The Company stipulates in the Articles of Incorporation that it may, unless otherwise provided in
the applicable laws, determine on matters specified in each item of Article 459, Paragraph 1 of theCompanies Act by resolution of the Board of Directors, without a resolution at the general meeting ofshareholders.
For the repurchase of the company’s own shares (Article 459, Paragraph 1, Item 1 of theCompanies Act), the Board of Directors shall make decisions on the matter in order to enable timely
implementation of capital strategies.
Regarding a reduction of capital reserve or earned surplus reserve (Article 459, Paragraph 1,
Item 2 of the Companies Act), appropriation of surplus (excluding dividends of surplus and disposal of
the property of the Company) (Article 459, Paragraph 1, Item 3 of the Companies Act) and dividendsof surplus (Article 459, Paragraph 1, Item 4 of the Companies Act), since the Company was a company
with committees as of the date of enforcement of the Companies Act, it was deemed that its Articles ofIncorporation had stipulations that the Board of Directors was able to decide the above matters without
resolution at the general meeting of shareholders and that it should not stipulate that such matters shallbe resolved by the resolution of the general meeting of shareholders, in accordance with Article 57 of
the Act on Arrangement of Relevant Acts Incidental to Enforcement of the Companies Act (July 26,
2005, Act No. 87). Even after the enforcement of the Companies Act, the Company has made it a rule
to make these important business judgments in a timely manner at the meetings of the Board of
Directors to enhance the shareholders’ common interests.
The Company has stipulated in its Articles of Incorporation that it may, by resolution of theBoard of Directors, exempt any Director (including former Director) and Executive Officer (including
former Executive Officer) from liabilities as provided in Article 423, Paragraph 1 of the Companies
Act to the extent as provided in laws or regulations.
4) Requirement for special resolution of the general meeting of shareholders
To securely meet the quorum of the general meeting of shareholders under Article 309,
Paragraph 2 of the Companies Act, the Company stipulates in its Articles of Incorporation that any
resolution as provided in Article 309, Paragraph 2 of the Companies Act shall be adopted at a general
meeting of shareholders where shareholders representing one-third or more of the voting rights of all
94the shareholders shall be present, by a majority of two-thirds or more of the voting rights of theshareholders who are present at the meeting and who are entitled to vote.
5) Internal control system and risk management system
Outlines of the internal control system and the risk management system of the Company are as
follows. In addition, these systems were resolved by the Board of Directors as the basic policy forinternal control system under the Companies Act.
i) The following measures shall be taken to ensure the effectiveness of audits by the Audit Committee.
(a) When necessary, the Board of Directors may appoint one or more directors, who does not serve
concurrently as executive officers, to be director(s) responsible for assisting with the duties of
the Audit Committee. In addition, the Board of Directors Office (the “Office”) shall beestablished specifically to assist the Board of Directors and each committee with their duties.
(b) To ensure the Office personnel are independent from Executive Officers and the effect of
instructions by the Audit Committee, the Office is staffed with personnel who work only for the
Office and are not subject to orders and instructions of Executive Officers, and the Audit
Committee shall be informed in advance of planned transfers of the Office personnel.
(c) Executive Officers and employees shall report significant matters affecting the Company and its
subsidiaries, the results of internal audits and the implementation status of reporting under theinternal reporting system without delay to the members of the Audit Committee. It shall be
provided for in the company regulation that reporters using the common internal reporting
system of the Hitachi Group, shall not be treated disadvantageously due to their submission of areport, and the secretariat of the system’s administrative organization shall ensure the provision
is thoroughly implemented.
(d) The Office shall be responsible for paying for the expenses incurred in connection with the
Audit Committee members’ execution of their duties and other administrative duties, and shallpromptly process the payments for these expenses or debts except in the case where the expense
or debt of the claim is clearly found to be unnecessary to the Audit Committee members’
execution of their duties.
(e) Standing Committee member(s) shall be appointed to the Audit Committee, and activity plans of
the Audit Committee shall be prepared in coordination with the audit plans of Internal Auditing
Office.
ii) The following measures shall be taken to ensure the adequacy of the operations within the
Company and the Hitachi Group.
(a) Fundamental policies that emphasize the social responsibilities of business enterprises shall beshared with the subsidiaries of the Company.
(b) Each subsidiary of the Company shall develop systems to ensure the appropriateness of its
operations appropriate for its size and other characteristics, the basic framework of which will
be similar to ones employed by the Company. To ensure each subsidiary’s development of such
systems, directors and auditors shall be sent by the Company to the subsidiaries, and regular
audits shall of the subsidiaries be conducted.
(c) A system of reporting matters to Directors shall be established to ensure that the Executive
Officers of the Company execute their duties in compliance with laws, regulations, and the
Articles of Incorporation.
(d) Information pertaining to the Company’s Executive Officers’ execution of their duties shall be
prepared and maintained in accordance with internal rules.
(e) A structure shall be established in which each relevant department shall establish regulations andguidelines, conduct training, prepare and distribute manuals, and carry out other such measureswith respect to various risks. Efforts shall be made to identify possible new risks through suchthings as progress reports on business operations and, should it become necessary to respond to
a new risk, an Executive Officer responsible for responding thereto shall be appointed promptly.
(f) Efficient performance of duties of the Executive Officers of the Company, and Directors andExecutive Officers of the subsidiaries shall be ensured through the following business
management systems.
- The Senior Executive Committee shall be established in order to deliberate on and facilitate95

the formulation of decisions based on due consideration of diverse factors regarding
important issues that affect the Company and/or the Hitachi Group.
- Based on the management policy, medium-term business plans and annual budgets, on which
performance management is based, shall be prepared in order to operate business in a plannedand efficient manner.
- Internal audits of the Company and its subsidiaries shall be conducted to monitor and identify
the status of their business operations and to facilitate improvements.
- The Audit Committee shall receive the audit plans of the accounting auditors in advance, andthe prior approval of the Audit Committee shall be required with respect to the fees to be paid
to the accounting auditors.
- Documented business processes for matters to be reflected in financial reports shall be
executed at the Company and its subsidiaries, and internal and external auditors shall examine
said processes in order to ensure the reliability of financial reports.
- A structure for the adequate and efficient conduct of business operations common to the
Hitachi Group companies shall be established.
(g) Continuous maintenance of a legal and regulatory compliance structure shall be ensured throughthe following business management systems.
- Internal audits shall be conducted, and various committees shall be established for legal andregulatory compliance activities. Furthermore, an internal reporting system common for theGroup shall be established and education on legal and regulatory compliance shall be
provided.
- Various policies and rules on compliance with laws shall be established, aiming to ensure thatthe employees are aware of the internal control systems overall and that the systems are
effective.
(h) A system shall be established, in which the subsidiaries report on important issues and theprogress in measures for operations to the Company through the Company’s Senior Executive
Committee, medium-term business plans and the budget system.
(i) The policy on transactions within the Hitachi Group is to trade fairly based on market prices.
6) Fundamental Policy on the Conduct of Persons Influencing Decision on the Company’s Financial andBusiness Policies
We invest a great deal of business resources in fundamental research and in the development ofmarket-leading products and businesses that will bear fruit in the future, and realizing the benefits fromthese management policies requires that they be continued for a set period of time. For this purpose, theCompany keeps its shareholders and investors well informed of not just the business results for eachperiod but also of the Company’s business policies for creating value in the future.
The Company does not deny the significance of the vitalization of business activities andperformance that can be brought about through a change in management control, but it recognizes thenecessity of determining the impact on company value and the interests of all shareholders of the buying
activities and buyout proposals of parties attempting to acquire a large share of stock of the Company ora Group company by duly examining the business description, future business plans, past investment
activities, and other necessary aspects of such a party.
There is no party that is currently attempting to acquire a large share of the Company’s stocks nor
is there a specific threat, neither does the Company intend to implement specified so-called anti-takeovermeasures in advance of the appearance of such a party, but the Company does understand that it is oneof the natural duties bestowed upon it by the shareholders and investors to continuously monitor thestate of trading of the Company’s stock and then to immediately take what the Company deems to be thebest action in the event of the appearance of a party attempting to purchase a large share of theCompany’s stock. In particular, together with outside experts, the Company will evaluate the buyout
proposal of the party and hold negotiations with the buyer, and if the Company deems that said buyout
will not maintain the Company’s value and is not in the best interest of the shareholders, the Company
will quickly determine the necessity, content, etc., of specific countermeasures and prepare to implement
them. The same response will also be taken in the event a party attempts to acquire a large percentage ofthe shares of a Group company.

96

(2) Directors and Senior Management
1) Lists of directors and senior management
Men: 41 persons, Women: 4 persons(Women’s percentage to total number of Directors and Senior Management: 9%)
The Company is a Company with Nominating Committee, etc. pursuant to the Companies Act. The
information on its Directors and Executive Officers is as follows.
(a) Directors

Katsumi Ihara

Louise Pentland

Ravi Venkatesan

Ikuro Sugawara

Isabelle Deschamps

Joe Harlan

Takatoshi Yamamoto Hiroaki Yoshihara

Helmuth Ludwig

Keiji Kojima

Mitsuaki Nishiyama Toshiaki Higashihara
Position andResponsibility

Chairman of the
Board
Member of
Nominating
Committee(Chair), Audit
Committee andCompensation
Committee

Name

Katsumi Ihara

Date ofbirth

Business experience, including experiencein Hitachi, and functions

Term ofofficeShareownership(shares)

Sept. 24,1950

6/2005 Executive Deputy President,
Representative Corporate Executive
Officer, Member of the Board, Sony
Corporation
4/2009 Executive Deputy President, Corporate
Executive, Sony Corporation
6/2009 Executive Vice President, Representative
Director, Sony Financial Holdings Inc.
6/2010 President, Representative Director, SonyFinancial Holdings Inc.
6/2011 President, Representative Director, Sony
Life Insurance Co., Ltd.
4/2015 Chairman, Director, Sony Life InsuranceCo., Ltd. (retired in June 2017)
6/2016 Chairman, Director, Sony Financial
Holdings Inc. (retired in June 2017)
6/2018 Director, Hitachi, Ltd.

(Note 1)

1,400

97

Position andResponsibility

NameDate ofbirth

Director

Ravi Venkatesan

Jan. 12,1963

Director
Member of Audit
Committee

Ikuro Suagawara

Mar. 6,1957

Director

Isabelle
Deschamps

Jun. 11,1970

Business experience, including experiencein Hitachi, and functions
7/1999 Chairman of the Board of Directors,
Cummins India Ltd. (retired in March
2004)
1/2004 Chairman, Microsoft India Pvt. Ltd.
(retired in September 2011)
4/2011 Independent Director, Infosys Ltd. (retired
in May 2018, served as Co-Chairman from
April 2017 to August 2017)
4/2013 Venture Partner, Unitus Ventures LLC.
(currently in office)8/2015 Chairman (Non-Executive), Bank of
Baroda (retired in August 2018)
9/2018 Special Representative for Young People& Innovation, UNICEF (retired in
September 2023)
7/2020 Director, Hitachi, Ltd.
10/2022 Board Chair, Global Energy Alliance for
People and Planet, LLC
7/2010 Director-General of the Industrial Scienceand Technology Policy and Environment
Bureau, Ministry of Economy, Trade andIndustry of Japan (“METI”)
9/2012 Director-General of the Manufacturing
Industries Bureau, METI
6/2013 Director-General of the Economic andIndustrial Policy Bureau, METI
7/2015 Vice-Minister of Economy, Trade andIndustry of Japan
8/2017 Special Advisor to the Cabinet of Japan(retired in June 2018)6/2022 Director, Hitachi, Ltd.
5/1993 Admitted an Attorney-at -Law at Quebec
Bar (Canada)
2/2003 Head of Legal and Company Secertary,
Nestle UK Ltd
11/2009 Admitted as a Solicitor (UK)
10/2012 Senior Vice President, General Counsel
Global Categories and Intellectual
Property, Unilever PLC (UK)
1/2017 Executive Vice President, General Counsel
Europe and Global E-Commerce, Digitaland Privacy, Unilever PLC (UK)
1/2018 Executive Vice President, General Counsel
Europe and Global Foods & Refreshments,
Unilever N.V. (Netherlands)
9/2018 Member of Executive Committee, Group
General Counsel, AkzoNobel N.V.
10/2021 Member of Executive Committee, Chief
Legal, Governance & Corporate Affairs
Officer, Rio Tinto plc
6/2024 Director, Hitachi, Ltd.

98

Term ofofficeShareownership(shares)(Note 1)700(Note 1)700(Note 1)0

Position andResponsibility

NameDate ofbirth

Director
Member ofCompensation
Committee

Joe Harlan

May 5,
1959

Director

Louise Pentland

Apr. 11,1972

Director
Member ofCompensation
Committee(Chair)Takatoshi
Yamamoto

Oct. 20,1952

Director
Member of
Nominating
Committee andAudit Committee(Chair)Hiroaki Yoshihara

Feb. 9,1957

Business experience, including experiencein Hitachi, and functions
9/1999 Vice President and Chief Financial Officer,
Lighting Business, General ElectricCompany
9/2001 Vice President, Corporate Financial
Planning and Analysis, 3M Company
11/2002 President and Chief Executive Officer,
Sumitomo 3M Ltd.
10/2004 Executive Vice President, Electro andCommunications Business, 3M Company
10/2009 Executive Vice President, Consumer andOffice Business, 3M Company
9/2011 Executive Vice President, Performance
Materials, The Dow Chemical Company
9/2012 Executive Vice President, Chemicals,
Energy and Performance Materials, The
Dow Chemical Company
10/2014 Chief Commercial Officer and Vice
Chairman, Market Business, The Dow
Chemical Company
10/2015 Vice Chairman and Chief Commercial
Officer, The Dow Chemical Company(retired in August 2017)
6/2018 Director, Hitachi, Ltd.
8/1997 Admitted as a Solicitor (UK)
7/2001 Senior Legal Counsel, Nokia Networks,
Nokia Corporation
9/2007 Vice President, Acting Chief Legal Officer
and Head of IP Legal, Nokia Corporation
7/2008 Senior Vice President and Chief Legal
Officer, Nokia Corporation
6/2009 Admitted to New York State Bar
Association
2/2011 Executive Vice President and Chief Legal
Officer, Nokia Corporation (retired in May
2014)
4/2015 General Counsel, PayPal, eBay Inc.
6/2015 Director, Hitachi, Ltd.
7/2015 Senior Vice President and Chief Legal
Officer, PayPal Holdings, Inc.
9/2016 Executive Vice President, Chief Business
Affairs and Legal Officer, PayPal
Holdings, Inc.
1/2022 Executive Vice President and Senior
Advisor, PayPal Holdings, Inc. (retired inJuly 2022)
9/2023 Executive Vice President and Chief LegalCounsel, Disney Park, Experiences andProducts, The Walt Disney Company
12/1995 Managing Director, Morgan Stanley Japan
Limited6/1999 Managing Director and Vice Chairman,
Tokyo Branch, Morgan Stanley Japan
Limited7/2005 Managing Director and Vice Chairman,
UBS Securities Japan Co., Ltd.
6/2009 Managing Director, CASIO COMPUTER
CO., LTD.
6/2011 Advisor, CASIO COMPUTER CO., LTD.
(retired in June 2012)
6/2016 Director, Hitachi, Ltd.
11/1978 Joined Peat Marwick Mitchell & Co.
7/1996 National Managing Partner, the Pacific
Rim Practice, KPMG LLP
10/1997 The Board Member, KPMG LLP
10/2003 Vice Chairman and Global Managing
Partner, KPMG International (retired in
April 2007)
6/2014 Director, Hitachi, Ltd.

99

Term ofofficeShareownership(shares)(Note 1)1,600

(Note 1)1,300

(Note 1)

15,000(Note 1)

3,600

Position andResponsibility

NameDate ofbirth

Director
Member of
Audit Committee

Helmuth Ludwig

Sept. 19,1962

Director
Member ofCompensation
Committee

Keiji Kojima

Oct. 9,1956

Director
Member of Audit
Committee(Standing)

MitsuakiNishiyama

Sep. 25,
1956

Business experience, including experiencein Hitachi, and functions
6/2001 President, Software and System House
Division, Siemens AG (Germany)
8/2002 President, Systems Engineering Division,
Automation and Drives Group, Siemens
AG (Germany)
8/2007 President, Siemens PLM Software, Inc.
10/2010 Global Head of Communications, Industry
Automation, Siemens Corp. (USA)
10/2011 President and CEO, Industry Sector, North
America, Siemens Industry, Inc.
10/2014 Executive Vice President and Chief Digital
Officer, Digital Factory Division, Product
Lifecycle Management, Siemens Corp.
(USA)
10/2016 Chief Information Officer, Siemens AG(Germany) (retired in December 2019)
1/2020 Professor of Practice in Strategy and
Entrepreneurship, Cox School of Business,
Southern Methodist University (currently
in office)7/2020 Director, Hitachi, Ltd.
4/1982 Joined Hitachi, Ltd.
4/2011 General Manager, Hitachi ResearchLaboratory
4/2012 Vice President and Executive Officer
4/2016 Senior Vice President and Executive
Officer
4/2018 Representative Executive Officer,
Executive Vice President and Executive
Officer
6/2021 Representative Executive Officer,
President & COO and Director
4/2022 Representative Executive Officer,
President & CEO and Director
4/1979 Joined Hitachi, Ltd.
4/2008 General Manager, Finance Department Ⅰ
4/2011 Executive Officer, Hitachi Cable, Ltd.
6/2012 Executive Officer, Board Director, Hitachi
Cable, Ltd.
4/2013 Vice President and Executive Officer,
Board Director, Hitachi Cable, Ltd.
7/2013 Vice President and Managing Officer,
Hitachi Metals, Ltd. (currently Proterial,Ltd.)
4/2014 Vice President and Executive Officer,
Hitachi Metals, Ltd. (retired in March2015)
4/2015 Vice President and Executive Officer,
Hitachi, Ltd.
4/2016 Representative Executive Officer, SeniorVice President and Executive Officer,
Hitachi, Ltd.
4/2020 Representative Executive Officer,
Chairperson and CEO, Hitachi Metals, Ltd.
6/2020 Representative Executive Officer,
Chairperson, President and CEO, Hitachi
Metals, Ltd.
Representative Executive Officer,
Chairperson, President and CEO, andDirector, Hitachi Metals, Ltd.
1/2023 Representative Director, Executive
Chairman, Proterial, Ltd. (retired in March2023)
4/2023 Associate, Hitachi, Ltd.
6/2023 Director, Hitachi, Ltd.

100

Term ofofficeShareownership(shares)(Note 1)

5,500

(Note 1)

120,400(Note 1)

26,660Position andResponsibility

Executive
ChairmanMember of
Nominating
Committee(Notes)Name

ToshiakiHigashihara

Date ofbirthFeb. 16,
1955

Business experience, including experiencein Hitachi, and functions
4/1977 Joined Hitachi, Ltd.
4/2006 Chief Operating Officer, Information &Telecommunication Systems
4/2007 Vice President and Executive Officer
4/2008 President, Hitachi Power Europe GmbH
4/2010 Representative Executive Officer,
President and Chief Executive Officer,
Hitachi Plant Technologies, Ltd.
6/2010 President and Representative Director,
Hitachi Plant Technologies, Ltd.
4/2011 Vice President and Executive Officer,
Hitachi, Ltd.
4/2013 Senior Vice President and Executive
Officer, Hitachi, Ltd.
4/2014 Representative Executive Officer,
President & COO, Hitachi, Ltd.
6/2014 Representative Executive Officer,
President & COO and Director, Hitachi,
Ltd.
4/2016 Representative Executive Officer,
President & CEO and Director, Hitachi,Ltd.
5/2021 Representative Executive Officer,
Executive Chairman, President & CEO and
Director, Hitachi, Ltd.
6/2021 Representative Executive Officer,
Executive Chairman & CEO and Director,
Hitachi, Ltd.
4/2022 Executive Chairman, Representative
Executive Officer and Director, Hitachi,
Ltd.
Total

Term ofofficeShareownership(shares)(Note 1)

212,800

389,660

1. The term of office of the Directors starts upon the election at the Annual General Meeting of
Shareholders on June 21, 2024 and expires at the close of the Annual General Meeting of Shareholders
for the fiscal year ending March 31, 2025.
2. Messrs. Katsumi Ihara, Ravi Venkatesan, Ikuro Sugawara, Joe Harlan, Takatoshi Yamamoto, Hiroaki
Yoshihara and Helmuth Ludwig and Mses. Isabelle Deschamps and Louise Pentland are directors who
fulfill the qualification requirements to be outside directors as provided for in Article 2, Item 15 of theCompanies Act.

101

(b) Executive Officers
Position and Responsibility

Name

Representative Executive
Toshiaki
Officer, Executive
Higashihara
Chairman
GeneralRepresentative Executive
Keiji Kojima
Officer, President & CEO
Overall management
Representative Executive
Officer, Executive Vice
President and Executive
Officer
Assistant to the President(business for industrial
digital, water &environment business,
Jun Abeindustrial products business,
industrial equipment
systems business, building
systems business, smart life
& ecofriendly systems
business, measurement andanalysis systems businessand healthcare business)

Representative Executive
Officer, Executive Vice
President and Executive
Officer
Assistant to the President(management strategies,
regional strategies,
investment strategies, risk
management, corporate
export regulation, cost
structure reform andinformation security
management)

Brice Koch

Date ofbirth

Business experience, including
experience in Hitachi, and functions

Term ofofficeShareownership(shares)Feb. 16,1955

See “(a) Directors”(Note 2)

212,800

Oct. 9,1956

See “(a) Directors”(Note 2)

120,400(Note 2)

48,500(Note 2)

1,700

Jun. 14,
1961

May. 24,
1964

4/1984 Joined Hitachi, Ltd.
4/2016 Senior General Manager, Control
System Platform Division,
Services & Platforms Business
Unit
4/2018 Vice President and Executive
Officer
4/2021 Senior Vice President andExecutive Officer
4/2024 Executive Vice President andExecutive Officer

1/2007 North Asia President, ABB Ltd.
Chairman and President, ABB(China) Ltd.
1/2010 Executive Vice President, Headof Marketing and Customer
Solutions, Member of the Group
Executive Committee, ABB Ltd.
1/2014 CEO, OC Oerlikon ManagementAG
5/2017 Joined Hitachi, Ltd.
Executive Advisor to CEO,
Hitachi, Ltd.
4/2018 General Manager of Automotive
Systems Division, Hitachi, Ltd.
Representative Director,
President and CEO, Hitachi
Automotive Systems, Ltd.
(currently Hitachi Astemo, Ltd.)
4/2020 Representative Director,
President & CEO, Hitachi
Automotive Systems, Ltd.
7/2023 Chairman of the Board, Hitachi
Europe Ltd.
4/2024 Executive Vice President andExecutive Officer, Hitachi, Ltd.

102

Position and Responsibility

Representative Executive
Officer, Executive Vice
President and Executive
Officer
Assistant to the President(railway systems business,
nuclear energy business,
energy business, power
grids business)

Name

Alistair Dormer

Representative Executive
Officer, Executive Vice
President and Executive
Officer
Assistant to the President(growth strategies, cloudservices platforms business,digital engineering business,
Toshiakibusiness for financial
Tokunaga
institutions, business forgovernment, public
corporation and social
infrastructure systems,
defense systems business,social innovation businesspromotion and digitalstrategies)
Senior Vice President andExecutive Officer
Business for financial
Tatsuro Ueda
institutions;
Assistant to Executive Vice
President (Digital Systems& Services (APAC))
Representative Executive
Officer, Senior Vice
President and Executive
Officer
Financial strategies,
corporate pension system,
investment strategies,
investor relations strategies
and risk management

Tomomi Kato

Date ofbirthAug. 29,
1963

Mar. 15,
1967

Oct. 9,1964

Oct. 13,
1963

Business experience, including
experience in Hitachi, and functions
2/2001 Director of Business
Development, Alstom Transport
U.K. Ltd.
6/2003 Joined Hitachi Europe Ltd.
10/2009 Managing Director, Hitachi RailEurope Ltd.
9/2012 Executive Chairman and CEO,
Hitachi Rail Europe Ltd.
4/2014 Global CEO of Rail Systems
business, Hitachi, Ltd.
4/2015 Vice President and Executive
Officer, Hitachi, Ltd.
4/2016 Senior Vice President andExecutive Officer, Hitachi, Ltd.
4/2019 Executive Vice President andExecutive Officer, Hitachi, Ltd.
4/2021 Executive Vice President andExecutive Officer, Hitachi, Ltd.
Chairman of the Board, Hitachi
Europe Ltd.
4/2022 Chairman of the Board, Hitachi
Europe Ltd.
1/2023 Executive Vice President andExecutive Officer, Hitachi, Ltd.
4/1990 Joined Hitachi, Ltd.
4/2017 President, Hitachi Appliances,Inc.
4/2018 General Manager, Smart Life &Ecofriendly Systems Division,
Hitachi, Ltd.
4/2019 Vice President and Executive
Officer, Hitachi, Ltd.
4/2020 Senior Vice President andExecutive Officer, Hitachi, Ltd.
4/2021 Executive Vice President andExecutive Officer, Hitachi, Ltd.

4/1987 Joined Hitachi, Ltd.
4/2019 COO, Financial Institutions
Business Unit
4/2021 Vice President and Executive
Officer
4/2024 Senior Vice President andExecutive Officer
4/1986 Joined Hitachi, Ltd.
4/2018 General Manager of Financial
Strategy Division, FinanceGroup, and General Manager ofAsset Management Office,Investment Strategy Division
4/2022 Vice President and Executive
Officer
4/2024 Senior Vice President andExecutive Officer

103

Term ofofficeShareownership(shares)(Note 2)43,000(Note 2)63,500(Note 2)

21,200(Note 2)

19,200Position and Responsibility

Senior Vice President andExecutive Officer
Regional strategies(Americas)

Name

Shashank SamantSenior Vice President andExecutive Officer
Sustainability strategies,
Lorenaenvironmental strategies,
Dellagiovanna
human capital strategies,
safety and healthmanagement and diversity,
equity & inclusion strategies
Senior Vice President andExecutive Officer
Business for government,
public corporation andsocial infrastructure systems
Katsuya Nagano
and defense systems
business;
Assistant to Executive Vice
President (Digital Systems& Services (Japan))
Representative Executive
Officer, Senior Vice
President and Executive
Officer
Hidenobu
Legal matters, risk
Nakahata
management, corporate
auditing, government &external relations andcorporate communications
strategies

Date ofbirthAug. 12,1968

Apr. 15,
1969

Aug. 30,
1958

Jan. 24,
1961

Business experience, including
experience in Hitachi, and functions
2/1998 Director, WW Professional
Service, Verifone Business,
Hewlett-Packard Company
3/2000 President, Ness Technologies,
Inc.
7/2008 President, GlobalLogic
Worldwide Holdings, Inc.
4/2012 President & CEO, GlobalLogic
Worldwide Holdings. Inc.
4/2022 Executive Advisor of Digital
Systems & Services Division,
Hitachi, Ltd.
President & CEO, GlobalLogic
Inc.
10/2022 Executive Advisor of Digital
Systems & Services Division,
Hitachi, Ltd.
Chairman of the Board,
GlobalLogic Inc.
10/2023 Executive Advisor of Digital
Systems & Services Division,
Hitachi, Ltd.
Executive Chairman of theBoard, Hitachi Digital LLC
Chairman of the Board,
GlobalLogic Inc.
4/2024 Senior Vice President andExecutive Officer, Hitachi, Ltd.
10/1988 Joined Hitachi Europe GmbH
4/2020 Chief Diversity & Inclusion
Officer, Hitachi, Ltd.
(currently in office)4/2021 Vice President and Executive
Officer, Hitachi, Ltd.
4/2023 Senior Vice President andExecutive Officer, Hitachi, Ltd.
4/1983 Joined Hitachi, Ltd.
4/2016 General Manager of Social
Infrastructure Information
Systems Division, Information &Communication Technology
Business Division
4/2017 Vice President and Executive
Officer
4/2021 Senior Vice President andExecutive Officer
4/1983 Joined Hitachi, Ltd.
10/2013 Deputy General Manager,
Human Capital Group
4/2014 Vice President and Executive
Officer
4/2018 Senior Vice President andExecutive Officer

104

Term ofofficeShareownership(shares)(Note 2)0(Note 2)9,800

(Note 2)42,700(Note 2)60,300Position and Responsibility

NameDate ofbirth

Representative Executive
Officer, Senior Vice
Masahiko
President and Executive
Hasegawa
OfficerMarketing & sales strategies

Sept. 17,1964

Senior Vice President andExecutive Officer
Power grids business

Claudio Facchin

Jun. 26,
1965

Senior Vice President andExecutive Officer
Railway systems business

Giuseppe Marino

Apr. 5,
1964

Vice President andExecutive Officer
Regional strategies (China)

Atsuhiro Aketa

Apr. 8,
1965

Vice President andExecutive Officer
Urban business strategies
and building systems
business

Noriharu Amiya

Feb. 1,
1969

Vice President andExecutive Officer
Healthcare business andmeasurement and analysis
systems businessTakashi Iizumi

Oct. 14,
1960

Business experience, including
experience in Hitachi, and functions
4/1987 Joined Hitachi, Ltd.
4/2018 General Manager of Kansai Area
Operation
4/2020 Vice President and Executive
Officer
4/2022 Senior Vice President andExecutive Officer
1/2016 President, Power Grids business,
ABB Ltd.
7/2020 CEO, Hitachi ABB Power Grids
Ltd (currently Hitachi EnergyLtd) (currently in office)4/2021 Senior Vice President andExecutive Officer, Hitachi, Ltd.
9/2005 Vice President Operating Europe& Middle East, Ingersoll Rand
Security Technologies
11/2009 Senior Vice President & COO,
AnsaldoBreda S.p.A. (currently
Hitachi Rail STS S.p.A.)
11/2015 Senior Vice President & COO,
Hitachi Rail Italy S.p.A.
4/2018 Group COO Rolling Stock,
Hitachi Rail Europe Ltd.
(currently Hitachi Rail Ltd.)
4/2019 COO Rolling Stock, Railway
Systems Business Unit, Hitachi,
Lid.
10/2019 CEO, Ansaldo Energia S.p.A.
4/2023 Senior Vice President andExecutive Officer, Hitachi, Lid.
4/1988 Joined Hitachi, Ltd.
4/2022 CMO for Energy, Corporate
Sales & Marketing Group,
General Manager of Energy
Sales & Marketing Division
4/2023 Vice President and Executive
Officer
4/1992 Joined Hitachi, Ltd.
4/2018 COO and CDO (Chief
Digitalization Officer) of
Railway Systems Business Unit
10/2019 General Manager ofManagement Planning Office,Strategy Planning Division
4/2022 Vice President and Executive
Officer
4/1985 Joined Hitachi, Ltd.
4/2021 President of Hitachi High-Tech
Corporation (currently in office)4/2022 Vice President and Executive
Officer, Hitachi, Ltd.

105

Term ofofficeShareownership(shares)(Note 2)33,400(Note 2)

23,900(Note 2)

1,900

(Note 2)3,800

(Note 2)

16,100(Note 2)7,500

Position and Responsibility

Vice President andExecutive Officer
Nuclear energy business

Name

Yasunori Inada

Date ofbirth

Sep. 9,1966

Vice President andExecutive Officer
Yoshiaki Kagata
Cost structure reform andinformation security
management
Vice President andExecutive Officer
Supply chain management(manufacturing strategies
Tadashi Kumeand quality assurance),
environmental strategies
and safety and healthmanagement
Vice President andExecutive Officer
Marketing & sales strategies Takashi Saito(business for connective
industries)

Jan. 4,
1963

Vice President andExecutive Officer
Digital strategies

Jun Taniguchi

Dec 3,
1972

Vice President andKojin Nakakita
Executive Officer
Regional strategies (APAC)

Sept. 28,
1963

Vice President andExecutive Officer
Water & environment
business

May. 10,1967

Hideshi Nakatsu

Jan. 6,
1964

Business experience, including
experience in Hitachi, and functions
4/1992 Joined Hitachi, Ltd.
4/2017 General Manager of Nuclear
Engineering Procurement
Division, Hitachi-GE Nuclear
Energy, Ltd.
4/2019 Vice President and Director,
Hitachi Plant Construction, Ltd.
4/2020 President and Representative
Director, Hitachi Plant
Construction, Ltd.
4/2023 Vice President and Executive
Officer
4/1985 Joined Hitachi, Ltd.
4/2020 CPO, and General Manager ofValue Integration Division
4/2024 Vice President and Executive
Officer
4/1986 Joined Hitachi, Ltd.
4/2019 COO, Nuclear Energy Business
Unit
4/2020 Vice President and Executive
Officer

4/1987 Joined Hitachi, Ltd.
4/2020 General Manager of Kansai Area
Operation
4/2022 Vice President and Executive
Officer
4/1995 Joined Hitachi, Ltd.
4/2018 General Manager of Information
Control Systems Division 3,
Control System Platform
Division, Services & Platforms
Business Unit
4/2019 President of Hitachi Global Life
Solutions, Ltd.
4/2022 Vice President and Executive
Officer of Hitachi, Ltd.
10/1988 Joined Hitachi, Ltd.
4/2017 Chairman of Hitachi Asia Ltd.
(currently in office)6/2017 Chairman of Hitachi India Pvt.
Ltd. (currently in office)4/2019 Vice President and Executive
Officer, Hitachi, Ltd.
10/1997 Joined Hitachi Metals, Ltd.
4/2016 President and Representative
Director, Hitachi Plant Services
Co., Ltd. (Retired in March
2020)
4/2019 CEO, Water & Environment
Business Unit, Hitachi, Ltd.
4/2021 Vice President and Executive
Officer, Hitachi, Ltd.

106

Term ofofficeShareownership(shares)(Note 2)2,900

(Note 2)

15,000(Note 2)

27,300(Note 2)

15,400(Note 2)7,700

(Note 2)

31,900(Note 2)

20,700Position and Responsibility

NameDate ofbirth

Vice President andExecutive Officer
Research & development

Itaru Nishizawa

Jul. 2,
1967

Vice President andExecutive Officer
Information technology
strategies

Seiichiro Nukui

Jan. 3,
1965

Vice President andAndrew Barr
Executive Officer
Regional strategies (EMEA)

Jan. 9,1973

Vice President andExecutive Officer
Digital Engineeringbusiness

Mar. 41975

Nitesh Banga

Business experience, including
experience in Hitachi, and functions
4/1996 Joined Hitachi, Ltd.
4/2022 General Manager, Center for
Digital Services, Research &Development Group
4/2023 Vice President and Executive
Officer
4/1988 Joined Accenture, Ltd. (Japan)
2/2010 Vice President of Company
Executive, and General Mangerof Communication, Electric,
Media and High-tech Industry,Power & Industrial Equipment
Division, Accenture Ltd. (Japan)
4/2015 Joined Hitachi, Ltd.
Executive IT Strategist, Hitachi,
Ltd.
4/2017 Urban Mobility Project Leader,
Future Investment Division,
Hitachi, Ltd.
4/2019 Vice President and Executive
Officer, Hitachi, Ltd.
1/2002 Engineering Manager, Rolling
Stock, UK Government Strategic
Rail Authority
1/2005 Head of Maintenance Delivery[Rail Business], Hitachi Europe
1/2014 Ltd.
5/2016 COO, Hitachi Rail Europe Ltd.
CEO, Ansaldo STS S.p.A.
4/2019 (Currently Hitachi Rail STS
S.p.A.)
Vice President and Executive
Officer, Hitachi, Ltd.
1/2012 Head of Global Sales, Business
Platforms, Infosys Ltd.
7/2014 Vice President, Global Sales,
Infosys Ltd.
11/2016 Senior Vice President,
Productions and Platforms,
6/2018 Infosys Ltd.
10/2022 COO, GlobalLogic Inc.
4/2023 President & CEO, GlobalLogic
Inc.
Chief Growth Officer of Digital
Systems & Services Division,
4/2024 Hitachi, Ltd.
President & CEO, GlobalLogic
Inc.
Vice President and Executive
Officer, Hitachi, Ltd.

107

Term ofofficeShareownership(shares)(Note 2)

6,900

(Note 2)31,300(Note 2)

21,700(Note 2)4,000

Position and Responsibility

NameDate ofbirth

Vice President andExecutive Officer
Government & external
relations

Hirohide Hirai

Mar. 5,
1964

Vice President andExecutive Officer
Cloud services platformbusiness

Yoshinori Hosoya

Feb. 5,
1965

Vice President andExecutive Officer
Chie Mashima
Marketing & sales strategies(Name in the(business for digital systems
Family Register:& services) and social
Chie Aihara)
innovation businesspromotion

May. 20,
1966

Vice President andExecutive Officer
Legal matters

Yuto Matsumura

Vice President andExecutive Officer
Business for industrial
digitalKazunobu Morita

May. 12,
1966

Business experience, including
experience in Hitachi, and functions
4/1987 Joined Ministry of International
Trade and Industry (currently
Ministry of Economy, Trade andIndustry)
7/2020 Director-General for Commerceand Information Policy Bureau,
Ministry of Economy, Trade andIndustry
7/2021 Director-General for Industry
Policy Bureau, Ministry of
Economy, Trade and Industry
7/2022 Vice Minister for International
Affairs, Ministry of Economy,
Trade and Industry
7/2023 Special Advisor, Ministry of
Economy, Trade and Industry
Joined Hitachi, Ltd.
1/2024 Assistant to the President,
Hitachi, Ltd.
4/2024 Vice President and Executive
Officer, Hitachi, Ltd.
4/1988 Joined Hitachi, Ltd.
4/2021 COO, Social Infrastructure
Systems Business Unit
4/2023 Vice President and Executive
Officer
4/1989 Joined Hitachi, Ltd.
4/2022 General Manager of Social
Innovation Business Division,
Digital Systems & Services
Division
4/2023 Vice President and Executive
Officer
4/1998 Admitted an Attorney-at -Law
(Japan)Joined Mori Sogo Law Offices(currently Mori Hamada &Matsumoto)2/2003 Admitted to New York State Bar
1/2005 Partner, Mori Hamada &Matsumoto1/2015 Managing Partner, Mori Hamada& Matsumoto
4/2024 Vice President and Executive
Officer, Hitachi, Ltd.
4/1991 Joined Mitsubishi PetrochemicalCo., Ltd.
3/2004 Joined Hitachi, Ltd.
4/2019 CSO, Industry Business
Division, Hitachi, Ltd.
4/2021 Vice President and Executive
Officer, Hitachi, Ltd.

108

Term ofofficeShareownership(shares)(Note 2)900

(Note 2)

19,900(Note 2)

16,100(Note 2)900

(Note 2)

20,700Position and Responsibility

Name

Vice President andExecutive Officer
Marketing & sales strategies Takashi Yoda
(business for energy) andenergy business

Date ofbirth

Business experience, including
experience in Hitachi, and functions

Term ofofficeShareownership(shares)Aug. 22,1966

4/1990 Joined Hitachi, Ltd.
4/2018 General Manager of Energy
Business Co-Creation &Promotion Division, Power andEnergy Business Administration
Division
4/2019 Vice President and Executive
Officer(Note 2)31,500Total

1,004,500(Notes) 1. The “Position and Responsibility” column describes the positions and matters delegated to each of the
Executive Officers by the Board of Directors.
2. The term of office of the Executive Officers expires on March 31, 2025.

109

2) Independent Directors(a) Qualification for the Independent Directors and criteria for the independency
For electing an Independent Director, the Nominating Committee of the Company considers, inaddition to the following criteria for the independency, whether the Independent Director has thehighest personal and professional ethics, integrity and insight, and distinguished records of leadershipor experience at policy making levels in business, law, administration, accounting or education, etc.
For the independency of an Independent Director, the Company considers the Independent
director to be independent unless:- his or her immediate family member* is, or has been within the last three years, a director or an
executive officer, of the Company or any of its subsidiaries;- he or she is currently an executive director, an executive officer or an employee of a company
that has made payments to, or received payments from, the Company for property or services inan amount which, in any of the last three fiscal years, exceeds 2% of any of the companies’
consolidated gross revenues;- he or she has received during any of the last three fiscal years more than 10 million yen in
direct compensation for his or her service as a specialist in law, accounting or tax, or as aconsultant from the Company, other than director compensations; or- he or she serves as an executive officer or director of a not-for-profit organization, and theCompany’s discretionary charitable contributions to the organization in any of the last threefiscal years are more than 10 million yen and 2% of that organization’s annual gross revenues.
* An “immediate family member” includes a person’s spouse, parents, children, siblings, grandparents, grand-children, mothers and fathers-in-law, sons and daughters-in-law, spouses ofsiblings, grand-children-in-law, and brothers and sisters-in-law.
(b) Function of the Independent Directors
Following the policy stated in “(a) Qualification for Independent Directors and criteria for the
independency,” the Company has elected nine persons; Messrs. Katsumi Ihara, Ravi Venkatesan, Ikuro
Sugawara, Joe Harlan, Takatoshi Yamamoto, Hiroaki Yoshihara and Helmuth Ludwig and Mses.
Cynthia Carroll and Louise Pentland, as outside Directors under Article 2, Item 15 of the Companies
Act. The functions and roles expected to them are as follows:
Name

Katsumi Ihara

Ravi Venkatesan

Function and Role
Mr. Ihara has rich experience and insight in the area of global corporate
management gained through the involvement in management of major
companies conducting diverse businesses globally. He is expected toleverage this experience and insight to reinforce the supervisory anddecision making functional aspects of the Company’s Board of
Directors by providing opinions and proposals regarding the generalmanagement of the Company and supervising the Executive Officers
and others’ execution of their duties from an independent perspective.
Mr. Venkatesan has rich experience and insight in the area of global
corporate management, digital business and emerging markets. He is
expected to leverage this experience and insight to reinforce thesupervisory and decision making functional aspects of the Company’s
Board of Directors by providing opinions and proposals regarding thegeneral management of the Company from a global viewpoint andsupervising the Executive Officers and others’ execution of their duties
from an independent perspective.

110

Name

Ikuro Sugawara

Isabelle Deschamps

Joe Harlan

Louise Pentland

Takatoshi Yamamoto

Hiroaki Yoshihara

Function and Role
Mr. Sugawara has rich experience and insight in the area of public
administration, etc. gained through leading positions at government
agencies. He is expected to leverage this experience and insight toreinforce the supervisory and decision making functional aspects of theCompany’s Board of Directors by providing opinions and proposals
regarding the general management of the Company and supervising the
Executive Officers and others’ execution of their duties from an
independent perspective.
Ms. Deschamps has rich experience and insight in the area of corporate
legal matters and corporate governance, having served as the chief legal
officer of major global companies, etc. She is expected to leverage thisexperience and insight to reinforce the supervisory and making
functional aspects of the Company’s Board of Directors by providing
opinions and proposals regarding the general management of theCompany from a global viewpoint and supervising the Executive
Officers and other’s execution of their duties from an independent
perspective.
Mr. Harlan has rich experience and insight in the area of global
corporate management gained through the involvement in management
at major companies conducting diverse businesses globally. He is
expected to leverage this experience and insight to reinforce thesupervisory and decision making functional aspects of the Company’s
Board of Directors by providing opinions and proposals regarding thegeneral management of the Company from a global viewpoint andsupervising the Executive Officers and others’ execution of their duties
from an independent perspective.
Ms. Pentland has deep insight into corporate legal matters andcorporate governance gained through her rich experience as the chief
legal officer of major global companies. She is expected to leverage
this experience and insight to reinforce the supervisory and decision
making functional aspects of the Company’s Board of Directors byproviding opinions and proposals regarding the general management of
the Company from a global viewpoint and supervising the Executive
Officers and others’ execution of their duties from an independent
perspective.
Mr. Yamamoto has broad range of insight in business and management
gained through his experience in the area of corporate analysis andglobal corporate management. He is expected to leverage thisexperience and insight to reinforce the supervisory and decision making
functional aspects of the Company’s Board of Directors by providing
opinions and proposals regarding the general management of theCompany and supervising the Executive Officers and others’ executionof their duties from an independent perspective.
Mr. Yoshihara has rich experience and insight in the area of global
corporate management and accounting. He is expected to leverage thisexperience and insight to reinforce the supervisory and decision making
functional aspects of the Company’s Board of Directors by providing
opinions and proposals regarding the general management of theCompany from a global viewpoint and supervising the Executive
Officers and others’ execution of their duties from an independent
perspective.

111

Name

Helmuth Ludwig

Function and Role
Mr. Ludwig has rich experience and insight in the area of global
corporate management and digital business. He is expected to leverage
this experience and insight to reinforce the supervisory and decision
making functional aspects of the Company’s Board of Directors byproviding opinions and proposals regarding the general management of
the Company from a global viewpoint and supervising the Executive
Officers and others’ execution of their duties from an independent
perspective.

(c) Relationship between Independent Directors and the Company
Each of Independent Directors has no relationship with the Company regarding his or her
independency as described in “(a) Qualification for the Independent Directors and criteria for the
independency.” In addition, there is no particular conflict of interest between each of Independent
Directors and the Company.
The Company considers that all Independent Directors are independent, and therefore has notified
them as independent directors to each of the Company’s listing stock exchanges in Japan.
In addition, the number of shares of the Company owned by each Independent Director isdescribed in “1) Lists of directors and senior management.”(d) Supervising by the Independent Directors
Independent Directors, comprising of majority of Directors, supervise execution of duties of
Executive Officers from an independent perspective. As described in the item “(3) Audit,” the Audit
Committee, of which majority members are Independent Directors, receives reports and explanations
about results of internal audits, accounting audit and internal control audit, and verifies the mattersreported or explained. In addition, the Audit Committee reports the results of its verification to theBoard of Directors.

112

(3) Audit
1) Audit by the Audit Committee
The Audit Committee consists of five Directors, including four Independent Directors and one
standing Audit Committee member, after the Board of Directors meeting held on June 21, 2024. The
members of the committee are described in “(2) Directors and Senior Management - 1) Lists of directors
and senior management - (a) Directors.”
Mr. Hiroaki Yoshihara, the Chair of the Audit Committee, has considerable knowledge of financeand accounting based on his long experience at KPMG Group with businesses related to accounting, etc.
Mr. Mitsuaki Nishiyama, the standing Audit Committee member, has considerable knowledge of financeand accounting based on his long experience as chief of a finance and accounting department and as an
Executive Officer in charge of a finance and accounting department.
The Audit Committee strives to fulfill the Company’s responsibilities to its shareholders, conducting
audits to ensure the Directors and Executive Officers properly and validly carry out their administration of
the Company in accordance with the audit policy and the audit plan established by the Audit Committee.
The members of the Audit Committee, who are in charge of internal inspections, examine theBusiness Units of the Company and receive reports from subsidiaries in order to check whether business
transactions and property management are properly carried out. Furthermore, the standing Audit
Committee member attends important meetings including the budget meeting, the Senior Executive
Committee and the Disclosure Committee and keeps track of internal information.
The Hitachi Group promotes a tripartite audit system (including the audit by the Audit Committee,
the internal audit and the audit by accounting auditors), with the goals of maintaining a high level oftransparency and a proper degree of vigilance in the Hitachi Group as a whole and in each business andimproving the effectiveness of internal control. Specifically, the Audit Committee receives reports on theaudit plan and results of the audit by the internal audit division and provides instructions about key items,
if necessary. The Audit Committee receives reports and explanations about the audit plan and results of
the audit by the accounting auditor, and based on the reports, verifies the results of financial audits andinternal control audits. In addition, the Audit Committee receives reports and explanations about thequality control systems of the accounting auditor. Furthermore, the Company makes it a rule to obtain theprior approval of the Audit Committee for remuneration paid to the accounting auditor.
The attendance record of each member of the Audit Committee during fiscal 2023 is as follows.

Katsumi Ihara

Attendance / Number of days held the
Audit Committee (Note 1)
15 days / 15 days

Name

Attendance rate (Note 1)
100%

Ikuro Sugawara

15 days / 15 days

100%

Hiroaki Yoshihara

15 days / 15 days

100%

Helmuth Ludwig

15 days / 15 days

100%

Mitsuaki Nishiyama (Note 2)

9 days / 9 days

100%

Hideaki Seki (Note 3)

6 days / 6 days

100%

(Notes) 1. Based on the number of days the Audit Committee met during each member’s term of office.
2. Mr. Nishiyama was appointed on June 21, 2023.
3. Mr. Seki resigned on June 21, 2023.
During fiscal 2023, the Audit Committee engaged in a variety of activities to study priority matterssuch as strengthening a “tripartite audit”, facilitating information sharing as well as the auditing of theestablishment and operation of internal control systems from the perspective of risk management and thevalidity of the execution of duties. In addition, a standing committee member worked to obtain
information as needed in a timely and accurate manner, mainly by collaborating with the Internal
Auditing Office, among other departments, and attending important internal meetings such as the Senior
Executive Committee, and facilitated information sharing with other committee members.
2) Internal audit
The Internal Auditing Office is in charge of internal audits within the Hitachi Group and audits
business units, corporate divisions of headquarters and subsidiaries and affiliates. The number of staff ofthe Internal Auditing Office was 43 as of March 31, 2024.
The Internal Auditing Office monitors and assesses whether overall business operations, including
marketing, personnel management, labor management, compliance, procurement transactions,113

development, production and quality control, environment, disaster prevention, export regulations,information system, financing activities, and property management of the Hitachi Group are properly
carried out pursuant to audit standards established by the Company, and points out items required to be
improved based on the results of auditing and follows up their improvements. The Internal Auditing
Office reports in advance its internal audit plan to the Audit Committee, and reports the results of audits
to the President and the Audit Committee. Although the internal audit plan and the results of internal
audits are not directly reported to the Board of Directors, the member of the Audit Committee regularly
reports to the Board of Directors the fact that the Internal Audit Office reports these contents to the Audit
Committee and the details of discussions at the Audit Committee. Furthermore, relating to internal control
over financial reporting, the internal control division in the Internal Audit Office establishes andmaintains the internal control systems pursuant to the Company’s guidelines, assesses their effectiveness,and reports the results to the President and the Audit Committee.
3) Accounting audit(a) Name of accounting auditor
Ernst & Young ShinNihon LLC(b) Consecutive term of service of the certified public accountants
The Fukase accounting firm of certified public accountants carried out an accounting audit of theCompany in 1970. Subsequently, from 1971, accounting audits were conducted by Musashi Audit
Corporation, which was established by the Fukase certified public accountants and others, and thenfrom 1986 by Century Audit Corporation, into which Musashi Audit Corporation had been merged.
Starting from 2000, accounting audits were conducted by Ota Showa Century Audit Corporation, into
which Century Audit Corporation had been merged. Ota Showa Century Audit Corporation has beenrenamed Ernst & Young ShinNihon LLC, and this firm currently conducts the accounting audits of
the Company. Since 2003, when Ernst & Young (“EY”) has become the network firm partnering withthe accounting auditor, Hitachi Group companies, including overseas companies, have uniformily
selected EY as their accounting auditor on a global basis. This Company has been striving to ensurethat the accounting auditor performs its duties properly from an independent standpoint, maintaining aproper degree of tension with the Company through a mutual assessment between the Company’s
finance division and the internal audit division and the accounting auditor, and through the Audit
Committee’s strong cooperation with the accounting auditor and its examination of the selection andreappointment of the accounting auditor.
At Ernst & Young ShinNihon LLC, engagement partners are rotated and no engagement partners
are involved in accounting audits of the same company for more than seven consecutive fiscal years.
No lead engagement partner is involved in accounting audits of the same company for more than fiveconsecutive fiscal years. If an engagement partner is involved in accounting audits of the same
company for seven consecutive years, he or she will be involved in accounting audits of that company
only after an interval of five fiscal years. No lead engagement partner who is involved in accounting
audits of the same company for five consecutive fiscal years will be involved in accounting audits ofthat company again.
(c) Certified public accountants (CPAs) who executed accounting audit
Koji Fujima, Teruyasu Omote, Shinya Yoshida(d) Assistants for audit works
Forty-four CPAs and 95 staff belonging to Ernst & Young ShinNihon LLC assist in theexecution of accounting audit work as instructed by the three CPAs mentioned in (c).
(e) Policy and reason for the selection of accounting auditors
With a view to ensuring the appropriate execution of duties by accounting auditors, the Audit
Committee selects accounting auditors by considering such factors as quality control systems foraccounting auditors, implementation systems for auditing and the level of audit fees.
In addition, the Audit Committee has prepared the following policies with respect to “policies fordetermining the removal and non-reappointment of accounting auditors” set forth in Item 4 of Article
126 of the Ordinance for Enforcement of the Companies Act.
- In the event the Audit Committee determines that the causes provided for in each item of
Paragraph 1 of Article 340 of the Companies Act apply to an accounting auditor and theaccounting auditor needs to be dismissed immediately, the Audit Committee shall dismiss theaccounting auditor by unanimity. Should this occur, the Audit Committee member selected by
the Audit Committee shall give a report on the dismissal of the accounting auditor and the114reason therefor at the first general meeting of shareholders to be convened after the said
dismissal.
- Besides the case above, if it is determined that an accounting auditor should be replaced for suchreason as the difficulty of ensuring an adequate performance of the duties by the accounting
auditor, the Audit Committee shall determine the contents of the agenda item on the nonretention of the accounting auditor to be submitted to the general meeting of shareholders.
The Audit Committee comprehensively evaluated and examined Ernst & Young ShinNihon LLC
from the perspectives of its history, business size, past audit performance and efforts to facilitatecommunication with the Audit Committee and other internal divisions, among other factors. As aresult, the Audit Committee decided to select Ernst & Young ShinNihon LLC as the accounting
auditor since the Audit Committee judged that none of the abovementioned policies applies to Ernst& Young ShinNihon LLC and therefore that the adequate performance of its duties by Ernst & Young
ShinNihon LLC will continue to be secured.
(f) Evaluation of accounting auditor by the Audit Committee
The Audit Committee evaluated the appropriateness and relevance of the auditing conducted by
the accounting auditor from the perspectives of the effectiveness of initiatives to facilitatecommunication with the Audit Committee and senior management in particular, the details andimplementation of audit systems and auditing manuals and remuneration for auditing in accordancewith the evaluation criteria the Audit Committee formulated in advance. To evaluate the accounting
auditor, the Audit Committee gathered information on matters such as the independence of theaccounting auditor, audit systems and the implementation of audits and the quality of said audits fromthe Accounting Control Department and the Internal Auditing Office. The Audit Committee also
received reports from the accounting auditor regarding compliance with laws and regulations,
including the accounting auditor’s independence, methods for evaluating risks with respect to theacceptance and continuation of audit services, audit and inspection systems and quality control
systems, and detailed audit plans based on the accounting auditor’s evaluations of risks pertaining to
the Company, as well as the results of audits and details of and progress with plans for improving
business operations and auditing efficiency at the time of the completion of quarterly reviews andannual audits. Based on these reports, the Audit Committee concluded that the accounting auditor
conducted highly transparent audits and its activities were appropriate and relevant.
4) Audit Fees(a) Fees to accounting auditor
Fiscal year ended March 31, 2024
Category

Fees for audit
services(Millions of yen)

Fiscal year ended March 31, 2023

Fees for non-audit
services(Millions of yen)

Fees for audit
services(Millions of yen)

Fees for non-audit
services(Millions of yen)

The Company

574 (Note 1)

49

579 (Note 1)

46

Consolidated
subsidiaries

445 (Note 2)

1

792 (Note 1)

16

Total

1,019

50

1,371

62

(Notes) 1. The non-audit services were mainly various consulting services and assurance engagements.
2. The non-audit services were mainly assurance engagements.

115

(b) Audit fees (excluding the amount mentioned in (a)) to the Company’s accounting auditor, Ernst &Young ShinNihon LLC Group (including EY and its group firms which belong to the same network
as Ernst & Young ShinNihon LLC)
Fiscal year ended March 31, 2024
Category

Fees for audit
services(Millions of yen)

Fiscal year ended March 31, 2023

Fees for non-audit
services(Millions of yen)

Fees for audit
services(Millions of yen)

Fees for non-audit
services(Millions of yen)

The Company- (Note 1)

18- (Note 1)

79

Consolidated
subsidiaries

4,505 (Note 2)547

4,801 (Note 2)

594

4,505

565

4,801

673

Total

(Notes) 1. The non-audit services were mainly various consulting services.
2. The non-audit services were mainly various consulting services and assurance engagements.
(c) Policy on determination of audit fees
To determine the amount of audit fees, the Company conducts interviews about the audit planand verifies the efficiency of audit services, including the number of days and hours for auditing, thenumber of subjects to be audited and the scope of audits, in addition to the appropriateness of theestimate. The Company also holds discussions with the accounting auditor taking into consideration
the formation of auditors and audit fees for the preceding fiscal year. In addition, the Audit
Committee receives the audit plans of the accounting auditors and the results of discussions between
the auditors and Executive Officers of the Company and approves the amount of the fees in advanceof the Company’s decision.
(d) Reasons why the Audit Committee accepted the audit fees
The Audit Committee has obtained the necessary information and examined the status of theexecution of duties by the accounting auditor, the content of the audit plan, and grounds forcalculating the estimated amount of fees, etc. and concluded that these are reasonable. Therefore, theAudit Committee has given the consent with regard to the fees etc. to the accounting auditor, in
accordance with Article 399, Paragraph 1 of the Companies Act.

116

(4) Compensation to Directors and Executive Officers
1) Policy on the determination of Compensation of Directors and Executive Officers[Method of Determination of Policy]
The Company’s Compensation Committee sets forth the Policy for Determining Individual
Compensation of Directors and Executive Officer pursuant to the applicable provisions of theCompanies Act.
[Basic Policy]
Compensation for Directors and Executive Officers shall be determined in accordance with thefollowing key policy;- Compensation shall be commensurate with the roles and responsibilities of each Director andExecutive Officer.
- Compensation for Directors shall be such that it enables them to exercise the functions ofsupervision of management effectively.
- Compensation for Executive Officers shall be reflected by considering the following factors;(Alignment with the Mid-Term Management Plan 2024)
In the Short-term incentive compensation and Long-term incentive compensation, set
performance metrics toward the Mid-term Management Plan as Key Performance
Indicators(“KPIs”) to encourage executives to achieve them.
(Establishment of compensation program and corporate performance program that foster agrowth mindset)
Pursue an optimal balance between short and medium- to long-term performance withrespect to “growth,” “improving profitability” and “cash generation”, aiming for improved
short-term performance and medium to long-term growth in corporate value.
Establish a compensation program that significantly rewards performance by setting
stretch goals and commensurate compensation levels.
(Setting indicators to promote sustainable management)
Develop specific indicators and goals related to “Environment,” “Business with Integrity”
and “Quality of life” under its sustainability strategy, and encourage their implementation.
(Expansion of stock compensation that rewards growth in corporate value over the medium- tolong- term)
Expand stock compensation to better align with medium to long-term corporate value.
- Competitive compensation levels with a global perspective
Ensure competitive compensation levels to attract and retain key executives in the global
market, regardless of their residence or origin, who can lead the management of a globalorganization.
- Compensation benchmarking with objectivity and transparency
Reference to the benchmarks in the US and European markets in addition to thebenchmarks in the Japanese market for analysis and level-setting from multiple perspectives.
- Transparency and objectivity through enhanced compensation disclosure and shareholder
engagement
Endeavor to gain investors’ understanding and support through sufficient disclosure of
the compensation program with a global perspective and ongoing shareholder engagement, andcontinuously improve the program based on the insights gained through the engagement.
[Compensation Structure](i) Matters relating to Directors
Compensation for Directors consists of basic remuneration and stock compensation as fixed pay.
The basic amount of basic remuneration and stock compensation is set based on the ratio of 3:1 as thestandard. A Director concurrently serving as an Executive Officer is not paid compensation as a
Director.
The method of determination of each type of compensation is as follows.
Basic remuneration- The amount of basic remuneration is decided by adjusting a basic amount to reflect full-time or parttime status, committee membership and position, and attendance of meetings, etc.

117

Stock compensation
A restricted stock compensation unit will be granted as an incentive to offer management
supervision and advice with an awareness of medium- and long-term improvements in corporate
value. The units will become vested at the end of three fiscal years after granting, and common
stocks or cash for the vested units will be delivered.
- The stock compensation described above is granted from the Directors to be elected at the 155th
Annual General Meeting of Shareholders.
-(ii)Matters relating to Executive Officers

Compensation for Executive Officers consists of basic remuneration as fixed pay and short-term
incentive compensation and medium- and long-term incentive compensation as variable pay. For
President & CEO, the basic amount of basic remuneration, short-term incentive compensation, andmedium- and long-term incentive compensation is set based on the ratio of 1:1.2:2.0 as the standard,taking into account the composition of executive compensation for major global companies including
the U.S. and European companies, in order to improve corporate value through the growth of global
businesses. The higher the position an Executive Officers holds, the higher the proportion of variable
pay is set to the total annual compensation.
The method of determination of each type of compensation is as follows.
Basic remuneration- The amount of basic remuneration is decided by adjusting a basic amount set in accordance with therelevant position to reflect the results of an assessment.
Short-term incentive compensation- The amount of short-term incentive compensation is decided within the range of 0 to 200% of abasic amount set according to the relevant position by adjusting that amount to reflect financial
results and individual performance. Evaluation items and proportion of evaluation item are asshown in the following table.

118

Proportion of evaluation item
President(CEO)

Executive
officers
in charge ofbusiness

Executive officers
in charge ofcorporate affairs

Corporate

70%

30%

40%

Division

－

30%

－

Individual goals

10%

20%

40%

Sustainability
measurement

20%

20%

20%

Evaluation items

Financial
Performance- The amount of the financial performance linked component varies according to the evaluation of
corporate performance and division performance.
- Corporate performance is evaluated using consolidated revenues, profit index and cash flowin order to measure the level of achievement of consolidated financial forecasts disclosed to
stakeholders, including shareholders and investors.
- Division performance is evaluated using consolidated revenues, profit index and cash flow ineach division in order to measure the level of achievement of targets under the Mid-termManagement Plan and the annual budgets for each division.
- The amount of the individual goals linked component varies according to the evaluation of the level ofachievement of individual targets for each Executive Officer determined based on his/her
responsibility.
- The amount of the sustainability measurement linked component varies according to the degree ofachievement of the numerical goals for materiality which are established under the sustainability
strategy.

Medium- and Long-term incentive compensation- The target amount (Medium- and Long-term incentive compensation target ( “LTI target”)) is decided
based on the positions of Executive Officers, and the shares of Restricted Stock (“RS”) compensation
with an incumbency condition and Performance-linked Restricted Stock (“Performance-linked RS”)
compensation are granted in order to propel management from a long-term perspective and to provide
incentives to bring about a sustainable increase in corporate value by further promoting senior
management’s shared values with shareholders through the holding of shares during their term ofoffice. The conditions, the grant ratio to LTI target and grant date of RS and Performance-Linked RS
compensation are as follows;
Type of stockcompensation

Condition

The grant
ratio toLTI target

Restricted Stock
Compensation

Incumbency condition

30%

Every Fiscal Year

Stock price condition

70%

After the end of the threefiscal years beginningwith the base fiscal year

Performancelinked Restricted
Stock

Conditions forachievement of Midterm Management
Plan targets

ROIC

10%

Sustainability
targets

10%

Grant date ofRestricted Stock

After the end of the final
fiscal year of the Midterm Management Plan
period- In RS compensation, the shares of RS equivalent to 30% of the LTI target are granted and therestriction on the shares is lifted depending on the tenure of each executive over the three fiscal years
from the beginning of the fiscal year when the RS is granted.
119- In Performance-linked RS compensation, the shares of Performance-linked RS Compensation will be
granted depending on the degree of achievement of the evaluation KPI during a certain evaluation
period, and the restriction on transfer will be lifted upon retirement. Performance-linked RS
compensation compromises of compensation with a stock price condition and compensation withconditions related to the achievement of Mid-term Management Plan targets.
-In stock compensation with a stock price condition, Performance Share Units (“PSUs”)
equivalent to 70% of the LTI target are granted. The shares of restricted stock equivalent to
0 ~ 200% of the PSUs are granted in accordance with the results of comparing the Total
Shareholder Return growth rate of the Company stock with the TOPIX growth rate(“TSR/TOPIX Growth Rate Ratio”) and with the %ile rank of the Total Shareholder Return
growth rate of the Company among the global comparable companies determined by theCompensation Committee (“Global Competitive Comparison”). The evaluation period is thethree fiscal years beginning at the fiscal year to which the PSUs are granted. For Executive
Officers who retire before the end of the evaluation period, ex-post evaluation is conductedby subtracting the number of shares obtained by multiplying the ratio of their tenure to theevaluation period.
- In stock compensation with conditions related to the achievement of Mid-term Management
Plan targets, PSUs equivalent to 20% of the LTI target are granted. The shares of restricted
stock equivalent to the PSUs are granted when the target of ROIC and sustainability
indicators during the period of Mid-term Management Plan covering the fiscal year when
the PSUs are granted are achieved.
- If it is deemed inappropriate to grant shares of restricted stock due to laws and regulations in the
country of residence, etc., a cash award based on the value of the Company’s share price shall be
substituted for restricted stock.
- From Fiscal 2019, shares of restricted stock have been granted in place of the stock options as stockbased compensation the Company has granted until then. From Fiscal 2023, the medium- and longterm compensation described above is granted.

If it is found that an executive officer has engaged in misconduct during his/her term of office,compensation for Executive Officers that has already been paid shall be returned to the Company.
With regard to persons who are hired externally such as foreign persons, a compensation package
could be individually determined based on the level of compensation in a job market which isconsidered for compensation benchmarking while referring the above policy. The Company grants
restricted stock units to non-Japanese Executive Officers as medium- and long-term incentive
compensation. One third of vested restricted stock units are delivered in the form of common stocks of
the Company and cash each fiscal year over three years from the beginning of the fiscal year containing
the day on which restricted stock units are granted.
2) Amount of compensation
Total amount of each type(Millions of yen)
Category

Total amount ofcompensation,etc.
Fixed pay
(Millions of yen)

Variable pay

NumberofMedium- andOthers persons
Short-termlong-term
incentive
incentivecompensationcompensation

Directors(excluding
60
60
2
－
－
－
Independent
Directors)
Independent
418
418
9
－
－
－
Directors
Executive
5,808
1,812
2,087
1,908
35
－
Officers
Total
6,287
2,291
2,087
1,908
46
－
(Notes) 1. The number of Directors indicated excludes two Directors who serve or served concurrently120

as Executive Officers.
2. Fixed pay and short-term incentive compensation consist of monetary compensation, andmedium- and long-term incentive compensation consists of non-monetary compensation andmonetary compensation.
Performance indicators referred to in company performance evaluations for short-term incentive
compensation are as follows.
Fiscal year ended March 31, 2024
Indicators
TargetResults
Consolidated revenues (Note)
7,840 billions of yen
8,654.3 billions of yen
Revenues of Lumada business (Note)

2,280 billions of yen

2,334.0 billions of yen

Adjusted EBITA margin (Note)

10.2%

10.1%

Earnings per Share

533 yen

634 yen

310.0 billions of yen

571.4 billions of yen

Core free cash flows(Note) Excluding Hitachi Astemo

The results of Performance Indicators for each medium- and long-term incentive compensation
are as follows.
The result of
Performance
Name
Term
Performance
Indicators
Indicators
The First Stock Acquisition
From April 1, 2016125.8%
Rights of Hitachi, Ltd.
to March 29, 2019The Second Stock
TSR/TOPIX
From March 31, 2017121.6%
Acquisition Rights ofGrowth Rate
to March 31, 2020
Hitachi, Ltd.
Ratio
The Third Stock Acquisition
From March 30, 2018120.5%
Rights of Hitachi, Ltd.
to March 31, 2021
Restricted Stocks issued in
From April 1, 2019146.7%
May 2019
to March 31, 2022
Restricted Stocks issued in
From April 1, 2020
167.2%
TSR/TOPIX
May 2020
to March 31, 2023
Growth Rate
Restricted Stocks issued in
From April 1, 2021
Ratio
205.8%
June 2021
to March 31, 2024
Restricted Stocks issued in
From April 1, 2022
163.6%
June 2022
to March 31, 2024 (Note)
TSR/TOPIX
From April 1, 2023
137.2%
Growth Rate
Performance-linked
to March 31, 2024 (Note)
Ratio
Restricted Stock
Compensation granted in
GlobalFrom April 1, 2023
April 2023
100%ileCompetitive
to March 31, 2024 (Note)
Comparison(Note) These are calculated to determine the number of shares to be lifted from transfer restriction
under RS compensation or the number of shares to be issued under Performance-linked RS
compensation to be held by individuals who retired from Executive Officers, Directors or
Corporate officers of the Company on March 31, 2024.

121

In addition, Directors or Executive Officers whose compensation from the Company and its
subsidiaries is not less than ¥100 million and the amount of their compensation are as follows:
Total amount of each type (Millions of yen)
Variable pay
Total amount ofMedium andcompensation,
Name
Company
Category Fixed Short-termLong-term Others
etc.
incentivepay
incentive (Note 3) (Millions of yen)compensationcompensation(Note 1)
(Note 2)
Executive
Toshiaki
The Company
102
161
202
466
Officer
Higashihara(Note 4)
Executive
Keiji
The Company
150
231
226
607
Officer
Kojima(Note 4)
Executive
The Company
56
78
83
Officer
Masakazu Hitachi Global Life
Director
4
3
234
Solutions, Inc.
Aoki
Hitachi High-Tech
Chairman
4
3
Corporation
Executive
The Company
54
91
74
Officer
Yoshihiko
223
Kawamura Hitachi Astemo, Ltd.
Chairman
2(Note 5)
Executive
The Company
229
262
54
Officer
Alistair
878
DormerHitachi Europe Ltd. Chairman of
23
85
222
(Note 6)the Board
ToshiakiExecutive
The Company
66
90
93
250
Tokunaga
Officer
Executive
The Company
45
51
59
Officer
Jun Abe159
Hitachi Information
2
1& Telecommunicati- Director
on Engineering, Ltd.
Executive
The Company
198
111
111
Officer
Lorena426
Dellagiovan Hitachi Industrial-na32
Equipment Systems Director
Co., Ltd.
KatsuyaExecutive
The Company
48
62
59
169
NaganoOfficer
Hidenobu
Executive
The Company
48
59
59
167
Nakahata
Officer
Executive
The Company
44
59
53
Officer
Masahiko162
Hasegawa Hitachi High-Tech
Director
3
2
Corporation
Executive
The Company
66
65
141
OfficerClaudio
906
Facchin
Hitachi Energy Ltd
CEO
253
205
173
(Note 6)
Giuseppe
Hitachi Rail Ltd.
Director
86
135
48
51
322
Marino(Note 6)
MamoruExecutive
The Company
48
59
52
160
MoritaOfficer

122

Name

Noriharu
Amiya
TakashiIizumi
Hitoshi Ito
TatsuroUeda

Company

Category

The Company

Executive
Officer

34

37

31

-

Hitachi Power
Solutions Co., Ltd.

Director

1

0

-

-

3

4

2

-

32

39

24

-

36

39

31

-

34

40

36

-

The Company
Hitachi High-Tech
Corporation
The Company
The Company

Kohei
KodamaTakashi
Saito
KenichiTanakaExecutive
OfficerPresident
and Director
Executive
Officer
Executive
Officer

105

107
106
113

Hitachi Channel
Solutions, Corp.

Director

1

0

-

-

The Company

Executive
Officer

33

36

31

-

Director

1

0

-

-

Director

1

0

-

-

36

41

31

-

33

38

36

-

2

1

-

-

36

37

31

-

105

36

35

31

-

103

34

39

27

-

1

0

-

-

65

42

27

-

-

-

19

-

83

39

43

-

36

37

36

-

109

36

39

36

-

111

90

43

132

9

275

Hitachi Power
Kenji Urase Solutions Co., Ltd.
Hitachi Power
Semiconductor
Device, Ltd.
Tomomi
The Company
Kato
Tadashi
Kume

Total amount of each type (Millions of yen)
Variable pay
Total amount ofMedium andcompensation,
Fixed Short-termLong-term Others
etc.
incentivepay
incentive (Note 3) (Millions of yen)compensationcompensation(Note 1)
(Note 2)The Company
Hitachi Industrial
Products, Ltd.
The Company
The Company
The Company

Executive
Officer
Executive
Officer
Director
Executive
Officer
Executive
Officer
Executive
Officer

Hitachi Management
Director
Partner Corp.
Jun
Hitachi Digital LLCCEO
Taniguchi(Note 6)
Executive
The Company
Officer
Kojin
Nakakita
Hitachi Asia Ltd.
Chairman(Note 6)
HideshiExecutive
The Company
Nakatsu
Officer
Seiichiro
Executive
The Company
Nukui
Officer
Hitachi Europe Ltd.
Andrew Barr
President(Note 6)

104

109
111

103
135
186

123

Name

Chie
MashimaCompany

Category

The Company

Executive
Officer

33

38

26

-

Hitachi Systems,
Ltd.

Director

2

1

-

-

15

18

31

-

18

19

-

-

2

1

-

-

36

37

31

-

105

32

38

36

-

106

34

35

36

-

The Company
ShinyaMitsudomi
Masashi
Murayama
Kazunobu
MoritaTakashiYoda

Total amount of each type (Millions of yen)
Variable pay
Total amount ofMedium andcompensation,
Fixed Short-termLong-term Others
etc.
incentivepay
incentive (Note 3) (Millions of yen)compensationcompensation(Note 1)
(Note 2)

Hitachi Building
Systems Co., Ltd.
Hitachi Global Life
Solutions, Inc.
The Company
The Company
The Company

Executive
OfficerPresident
and Director
Director
Executive
Officer
Executive
Officer
Executive
Officer

101

107

108
Hitachi Power
Director
1
0
Solutions Co., Ltd.
(Notes) 1. Compensations from the Company and consolidated subsidiaries paid depending on financial results andindividual performance in the short term are collectively called incentive compensation.
2. Medium- and long-term incentive compensation is restricted stock compensation, performance-linked
restricted stock compensation, restricted stock units or cash award based on the value of the Company’s
share price.
3. The “Others” column shows the fringe benefit equivalent, etc.
4. Although concurrently serving as Director for the fiscal year ended March 31, 2024, Messrs. Toshiaki
Higashihara and Keiji Kojima did not receive compensation as Directors.
5. Hitachi Astemo, Ltd. ceased to be a consolidated subsidiary of the Company and became an equitymethod associate of the Company following the partial transfer of its shares on October 16, 2023.
6. The amount of the remuneration, etc. from foreign subsidiaries is shown as the yen equivalent.

3) Authorities, roles and activities of the Compensation Committee
The Compensation Committee, which was established under the Companies Act, includes
Independent Directors that represent a majority of committee members, holds the legal authority todetermine remuneration for Directors and Executive Officers, and strives to ensure the objectivity,transparency and fairness of the remuneration determination processes. The Compensation Committee
has the authority to determine remuneration policies and the details of remuneration (amount ofcompensation, etc.) of Directors and Executive Officers individually based on the policies. The
Committee judged that the respective amount of compensation, etc. for the current period of each
Director and Executive Officer was in line with the Compensation Policy because the Committee
confirms and reviews processes and details with respect to the assessment of fixed pay amounts,
evaluation of performance and individual targets related to short-term incentive compensation for
Executive Officer. The members and activities of the Compensation Committee are described in “(1)Corporate governance - 2) Outline of corporate organizations”.

124

(5) Information on shareholdings(a) Criteria for classification of investment securities
The Company classifies investment securities that it holds into two types. If investment securities
are held for the purpose of receiving benefits exclusively through stock price fluctuations or dividends,
those are classified as investment securities for pure investment and the rest of investment securities areclassified as investment securities owned for other purposes than pure investment.
(b) Investment securities held for purposes other than pure investment(i) Policy for shareholding and examination of the reasonableness of holding
Under the basic policy, the Company will not acquire and hold other companies’ shares except
for cases where acquiring or holding such shares is necessary in terms of transactions or business
relationships. The Company will seek to sell reducing shares that it already owns unless thesignificance and economic rationale of holding the shares are confirmed.
The Board of Directors verifies whether it is appropriate to hold shares for all stock the Company
owns every year. In making this verification, each individual stock is re-examined as to the purpose ofholding the shares and whether the benefits from holding the shares are in line with the target level ofcapital efficiency. As the result of the verification, the Company seeks to sell shares for whichsignificance of holding shares and economic rationale of holding the shares are not confirmed. Detailsof shares sold in the fiscal year ended March 31, 2024, are presented in (ii) below.
(ii) Number of stock names and balance sheet amount
Number ofstock names(stock names)

Total amount recordedin the balance sheet(millions of yen)

Unlisted stocks

122

20,445

Others35

45,889<Stock holding increased in the fiscal year ended March 31, 2024>
Number ofstock names(stock names)

Total purchase price forthe shares increased(millions of yen)

Reasons of increase
Purchasing for strengthening andUnlisted stocks

193

maintaining relationship for business andbusiness transactions

Others1

18

Increase due to dividend in kind

<Stock holding decreased in the fiscal year ended March 31, 2024>
Number ofstock names

Total selling price forthe shares decreased(stock names)(millions of yen)

Unlisted stocks

11

660

Others7

222,876125

(iii) The number and the amount recorded in the balance sheet, etc. of specified investment securities
Specified investment securities
Fiscal year ended Fiscal year ended
March 31, 2024 March 31, 2023
(Note 1)
(Note 1)
Stock name

Central Japan Railway
Company

DAIICHI SANKYOCOMPANY,
LIMITED

Number ofshares(shares)Number ofshares(shares)

Balance sheet
amount(Millions of yen)

Balance sheet
amount(Millions of yen)

4,500,000

900,000

16,767

14,229900,000

900,000

4,299

4,339

3,000,000

3,000,000

3,784

2,565

597,600

597,600

3,604

2,034

1,286,900

1,286,900

The Chiba Bank, Ltd.

Sapporo Holdings
Limited

Seibu Holdings Inc.
3,117

1,748

962,400－

Soracom, Inc.

Ono PharmaceuticalCo., Ltd.

West Japan Railway
Company

Electric Power
Development Co., Ltd.

2,091

－

600,000

600,000

1,472

1,658

430,000

215,000

1,348

1,173

523,280523,280

1,306

1,115

126

Purpose of holdings, thesummary of business allianceand reasons for increases(Note 2)

Holding
shares of
Hitachi, Ltd.

Maintaining and enhancing business
transactions of selling products andproviding services in Railway Systems
business (Note 4)No

Maintaining and enhancing business
transactions of selling products andproviding services in Industrial Digitalbusiness

No

Maintaining and enhancing business
transactions of selling products andproviding services in Financial
Information Systems business

No

Maintaining and enhancing business
transactions of selling products andproviding services in Industrial Digitalbusiness

Yes(Note 3)

Maintaining and enhancing business
transactions of selling products andproviding services in Railway Systems
business

No

Maintaining and enhancing business
transactions of selling products andproviding services in Social
Infrastructure Information Systems(Note 5)

No

Maintaining and enhancing business
transactions of selling products andproviding services in Industrial Digitalbusiness

Yes

Maintaining and enhancing business
transactions of selling products andproviding services in Railway Systems
business (Note 4)No

Maintaining and enhancing business
transactions of selling products andproviding services in Energy Business

YesFiscal year ended Fiscal year ended
March 31, 2024 March 31, 2023
(Note 1)
(Note 1)
Stock name

Number ofshares(shares)Number ofshares(shares)

Balance sheet
amount(Millions of yen)

Balance sheet
amount(Millions of yen)

400,000－

Kyoto Financial
Group, Inc.
1,104

－

830,320

830,320

1,061

843

206,574

206,574861

959

394,016

394,016726

694

528,351

508,030475

239

104,291

104,291

Seiko Electric Co., Ltd.

Keio Corporation

TOKYU
CORPORATIONTaragaon Regency
Hotel

Kintetsu Group
Holdings Co., Ltd.

464

444

550,275

550,275

The Keiyo Bank, Ltd.

Keihan Holdings Co.,Ltd.

TOMONY Holdings,
Inc.

Cybertrust Japan Co.,
Ltd.

419

311

121,927

121,927413

421

679,200

679,200

283

239

128,000

64,000

232

100

127

Purpose of holdings, thesummary of business allianceand reasons for increases(Note 2)

Holding
shares of
Hitachi, Ltd.

Maintaining and enhancing business
transactions of selling products andproviding services in Financial
Information Systems business(Notes 4, 7)No

Maintaining and enhancing business
transactions of selling products andproviding services in Social
Infrastructure Information Systems

Yes

Maintaining and enhancing business
transactions of selling products andproviding services in Railway Systems
business

Yes

Maintaining and enhancing business
transactions of selling products andproviding services in Railway Systems
business

Yes(Note 3)Acquired as a result of substituteperformance for past accounting
receivables in Industrial Digitalbusiness (Note 6)No

Maintaining and enhancing business
transactions of selling products andproviding services in Railway Systems
business

No

Maintaining and enhancing business
transactions of selling products andproviding services in Financial
Information Systems business

Yes

Maintaining and enhancing business
transactions of selling products andproviding services in Railway Systems
business

No

Maintaining and enhancing business
transactions of selling products andproviding services in Financial
Information Systems business

Yes(Note 3)

Maintaining and enhancing business
transactions of selling products andproviding services in Cloud Services
Platform Business (Note 4)No

Fiscal year ended Fiscal year ended
March 31, 2024 March 31, 2023
(Note 1)
(Note 1)
Stock name

Number ofshares(shares)Number ofshares(shares)

Balance sheet
amount(Millions of yen)

Balance sheet
amount(Millions of yen)

375,000

375,000

227

352

74,112

74,112

196

159

40,42540,425193

172

513,150

513,150

euglena Co., Ltd.

Aichi Financial Group,Inc.

Nippon Yakin Kogyo
Co., Ltd.

Tochigi Bank, Ltd.

Kita-Nippon Bank,Ltd.

THE SHIGA BANK，
LTD．

San ju San Financial
Group, Inc.

186

140

73,50073,500180

14540,00040,000167

10773,62373,623153

116

300,000

300,000

135

129

88,00088,00013497150,000

150,000

131

179

Daido Signal Co., Ltd.

THE TAIKO BANK，LTD．

INNORULES CO.,
LTD.

128

Purpose of holdings, thesummary of business allianceand reasons for increases(Note 2)

Holding
shares of
Hitachi, Ltd.

Maintaining and enhancing
cooperative relationship in the area of
R&D in Water & Environment
business

No

Maintaining and enhancing business
transactions of selling products andproviding services in Financial
Information Systems business

No

Maintaining and enhancing business
transactions of selling products andproviding services in Industrial Digitalbusiness

No

Maintaining and enhancing business
transactions of purchasing raw
materials and components, etc. in
Financial Information Systems
business

No

Maintaining and enhancing business
transactions of selling products andproviding services in Financial
Information Systems business

Yes

Maintaining and enhancing business
transactions of selling products andproviding services in Financial
Information Systems business

Yes

Maintaining and enhancing business
transactions of selling products andproviding services in Financial
Information Systems business

No

Maintaining and enhancing business
transactions of selling products andproviding services in Railway Systems
business

No

Maintaining and enhancing business
transactions of selling products andproviding services in Financial
Information Systems business

No

Maintaining and enhancing business
transactions of selling products andproviding services in Financial
Information Systems business

NoFiscal year ended Fiscal year ended
March 31, 2024 March 31, 2023
(Note 1)
(Note 1)
Stock nameSenshu Ikeda
Holdings, Inc.

THE DAITO BANK,LTD.

THE BANK OF
KOCHI, LTD.

Number ofshares(shares)Number ofshares(shares)

Balance sheet
amount(Millions of yen)

Balance sheet
amount(Millions of yen)

315,327

315,327124

73

110,000

110,000

84

70

69,90069,90073

47

30,00030,000

Tomato bank, Ltd.

Nishi-Nippon Railroad
Co., Ltd.

38

30

6,000

6,000

15

14

5,211

5,211

9

10

－

61,990,548－

118,618－

57,688,280－

39,458－3,125,000－

15,556－406,200

Procrea Holdings, Inc.

Renesas Electronics
Corporation

Mitsubishi HC CapitalInc.

Western Digital
Corporation

East Japan Railway
Company

－

2,979

129

Purpose of holdings, thesummary of business allianceand reasons for increases(Note 2)

Holding
shares of
Hitachi, Ltd.

Maintaining and enhancing business
transactions of selling products andproviding services in Financial
Information Systems business

No

Maintaining and enhancing business
transactions of selling products andproviding services in Financial
Information Systems business

No

Maintaining and enhancing business
transactions of selling products andproviding services in Financial
Information Systems business

No

Maintaining and enhancing business
transactions of selling products andproviding services in Financial
Information Systems business

No

Maintaining and enhancing business
transactions of selling products andproviding services in Social
Infrastructure Systems business

No

Maintaining and enhancing business
transactions of selling products andproviding services in Financial
Information Systems business

No

Acquired and held in relation to thereorganization, etc. of Renesas
Technology Corp. which was anaffiliate of the Company

No

Acquired and held in relation to thereorganization, etc. of Hitachi Capital
Corp. which was an affiliate of theCompanyNo

Acquired and held in relation to thereorganization, etc. of Hitachi Global
Storage Technologies, Inc. which wasa subsidiary of the Company

No

Held for maintaining and enhancing
business transactions of selling
products and providing services in
Railway Systems business

NoFiscal year ended Fiscal year ended
March 31, 2024 March 31, 2023
(Note 1)
(Note 1)
Stock name

Number ofshares(shares)Number ofshares(shares)

Balance sheet
amount(Millions of yen)

Balance sheet
amount(Millions of yen)－
The Bank of Kyoto,Ltd.

100,000－

625－

328,500－

590－

50,000Tosoh Corporation

ANA HOLDINGS
INC.

－

143

－

30,000Tokyo Kiraboshi
Financial Group, Inc.
78－

Purpose of holdings, thesummary of business allianceand reasons for increases(Note 2)

Holding
shares of
Hitachi, Ltd.

Held for maintaining and enhancing
business transactions of selling
products and providing services in
Financial Information Systems
business (Note 7)

No

Held for maintaining and enhancing
business transactions of selling
products and providing services inIndustrial Digital business

No

Held for maintaining and enhancing
business transactions of selling
products and providing services inIndustrial Digital business

No

Held maintaining and enhancing
business transactions of selling
products and providing services in
Financial Information Systems
business

Yes(Note 3)(Notes) 1. Since the number of issues which the Company owned as of March 31, 2023 and March 31, 2024 isless than 60, all of the stocks are listed.
2. Since it is hard to state the quantitative effects of holding the investment securities, such effects are
not described. The means of verifying the significance and relations of holding shares are describedin “(i) Policy for shareholding and examination of the reasonableness of holding."
3. The shareholding of major subsidiaries of the issuers of each stock is included.
4. The number of shares held by the Company increased due to the stock split.
5. The classification was changed to specified investment securities due to its new listing in the fiscal
year ended March 31, 2024.
6. The number of shares held by the Company increased due to the dividend in kind.
7. Kyoto Financial Group, Inc. stock was allotted in return for The Bank of Kyoto, Ltd. stock throughshare transfer.
(c) Investment securities held for pure investment
None.

130

V. Financial Information
Refer to the consolidated financial statements incorporated in this Annual Securities Report.
VI. Stock-Related Administration for the Company
Fiscal year

From April 1 to March 31

Annual General Meetingof Shareholders

To be held within three months from the following day of the end of every fiscal
year

Record date

End of every fiscal year

Record date for
distribution of surplus
Number of sharesconstituting one unit
Purchase and sale ofshares less than one unit
Handling officeTransfer agent

End of March and end of September
100 shares(Special account)
11, Kanda Nishikicho 3-chome, Chiyoda-ku, Tokyo
Main Office, Tokyo Securities Transfer Agent Co., Ltd.
(Special account)
Tokyo Securities Transfer Agent Co., Ltd.

Forward office-

Purchasing and selling fee

Free of charge

Method of public notice

The Company’s method of public notice is through electronic public notice.
However, if the Company cannot use the above-mentioned method of public
notice due to an accident or other inevitable reasons, Nihon Keizai Shimbun will
be adopted as its medium.

Special benefit for
None
Shareholders(Notes) 1. Under the Articles of Incorporation, distribution of surplus through dividend payment, if any, will bemade to shareholders of record as of March 31 and September 30 of each year. In addition, theCompany may make further distributions of surplus to shareholders of record as of another record
date.
2. The Articles of Incorporation provide that a holder of shares representing less than one unit does nothave any other rights of a shareholder in respect of those shares, other than those specified in the
Articles of Incorporation. This includes:(1) Rights under each item of Article 189, Paragraph 2 of the Companies Act;
(2) Rights to be allotted rights to subscribe for free for new shares and stock acquisition rights whensuch rights are granted to shareholders; or(3) Rights stipulated in the Articles of Incorporation

131VII. Reference Information on the Company
1. Information on a Parent Company, etc. of the Company
The Company has no parent company.
2. Other Reference Information
The Company filed the following documents during the period from the commencing date of the fiscal
year ended March 31, 2024 to the filing date of this Annual Securities Report.
(1) Annual Securities Report and documents attached, and Confirmation
Letter(The 154th business term (from April 1, 2022 to March 31, 2023))

Filed with the Director of the
Kanto Local Finance Bureau
on June 21, 2023

(2) Internal Control Report

Filed with the Director of the
Kanto Local Finance Bureau
on June 21, 2023

(3) Shelf Registration Statement (Straight Bonds) and documents attached

Filed with the Director of the
Kanto Local Finance Bureau
on June 23, 2023

(4) Quarterly Report and Confirmation Letter
The First Quarter of the 155th business term (from April 1, 2023 toJune 30, 2023)
The Second Quarter of the 155th business term (from July 1, 2023 to
September 30, 2023)
The Third Quarter of the 155th business term (from October 1, 2023 to
December 31, 2023)(5) Extraordinary Report
Extraordinary Report pursuant to Article 19, Paragraph 2, Item 9-2 of
the Cabinet Office Ordinance Concerning Disclosure of Corporate
Affairs, etc.

Filed with the Director of the
Kanto Local Finance Bureau
on August 8, 2023
Filed with the Director of the
Kanto Local Finance Bureau
on November 10, 2023
Filed with the Director of the
Kanto Local Finance Bureau
on February 9, 2024
Filed with the Director of the
Kanto Local Finance Bureau
on June 22, 2023

Extraordinary Report pursuant to Article 19, Paragraph 2, Item 7 of the Filed with the Director of the
Cabinet Office Ordinance Concerning Disclosure of Corporate Affairs, Kanto Local Finance Bureau
on October 27, 2023
etc.
Extraordinary Report pursuant to Article 19, Paragraph 2, Item 12 of the Filed with the Director of the
Cabinet Office Ordinance Concerning Disclosure of Corporate Affairs, Kanto Local Finance Bureau
on January 26, 2024
etc.
Extraordinary Report pursuant to Article 19, Paragraph 2, Item 9 of the Filed with the Director of the
Cabinet Office Ordinance Concerning Disclosure of Corporate Affairs, Kanto Local Finance Bureau
on January 31, 2024
etc.
(6) Amended Extraordinary Report
Amendment to Extraordinary Report filed on October 27, 2023

132

Filed with the Director of the
Kanto Local Finance Bureau
on January 26, 2024

(7) Report for Share Repurchase
Report for Share Repurchase pursuant to Article 24-6, Paragraph 1 ofFinancial Instruments and Exchange Act

Filed with the Director of the
Kanto Local Finance Bureau
on July 7, 2023
August 8, 2023
September 8, 2023
October 10, 2023
November 9, 2023
December 8, 2023
January 11, 2024
February 9, 2024
March 8, 2024
April 10, 2024
May 13, 2024 andJune 10, 2024

(8) Securities Registration Statement and documents attached

Filed with the Director of the
Kanto Local Finance Bureau
on April 26, 2024

(9) Amended Shelf Registration Statement(Amended Shelf Registration Statement concerning the Shelf
Registration Statement filed on June 23, 2023)

Filed with the Director of the
Kanto Local Finance Bureau
on September 28, 2023
October 27, 2023
November 16, 2023
January 26, 2024 andJanuary 31, 2024

(10) Shelf Registration Supplements and documents attached(Unsecured Straight Bounds, 21st Series)

Filed with the Director of the
Kanto Local Finance Bureau
on December 7, 2023
Shelf Registration Supplements and documents attached
Filed with the Director of the(Unsecured Straight Bonds, 22nd Series and Unsecured Straight Bonds Kanto Local Finance Bureau
23rd Series)
on December 7, 2023

133

Part II Information on Guarantors, etc. for the Company
Not applicable.

134Consolidated Financial Statements
Page
NumberConsolidated Financial Statements of Hitachi, Ltd. and Subsidiaries:
Consolidated Statement of Financial Position as ofMarch 31, 2024 and 2023

F-2

Consolidated Statement of Profit or Loss andConsolidated Statement of Comprehensive Income for the years ended
March 31, 2024 and 2023

F-3

Consolidated Statement of Changes in Equity for the years ended
March 31, 2024 and 2023

F-4

Consolidated Statement of Cash Flows for the years ended
March 31, 2024 and 2023

F-5

Notes to Consolidated Financial Statements

F-6

Reports of Independent Registered Public Accounting Firm

F-1

F-77

Consolidated Financial Statements
Consolidated Statement of Financial Position
Millions of yen
Note
AssetsCurrent assets
Cash and cash equivalents
Trade receivables and contract assets
Inventories
Investments in securities and other financial assets
Other current assets
Total current assets

25
6,20,25
7
11,25

Non-current assets
Investments accounted for using the equity method
Investments in securities and other financial assets
Property, plant and equipment
Goodwill
Other intangible assets
Other non-current assets
Total non-current assets
Total assets

5,8
11,25
9
10
10
12

Liabilities
Current liabilities
Short-term debt
Current portion of long-term debt
Other financial liabilities
Trade payables
Accrued expenses
Contract liabilities
Other current liabilities
Total current liabilities
Non-current liabilities
Long-term debt
Retirement and severance benefits
Other non-current liabilities
Total non-current liabilities
Total liabilities
EquityHitachi, Ltd. stockholders’ equity
Common stock
Capital surplus
Retained earnings
Accumulated other comprehensive income
Treasury stock, at cost
Total Hitachi, Ltd. stockholders’ equity

25
25
25
13
20
14

25
15
8,12,14,25

16,19
5,16,19,25
16,18
17
16

Non-controlling interests

5,25

March 31, 2024

March 31, 2023

705,367
2,991,316
1,510,647
331,280
315,987

833,2832,874,987
1,646,188
346,916
227,1615,854,597

5,928,535

816,434
320,101
1,221,842
2,371,678
1,178,750
457,882478,620496,8971,700,471
2,165,350
1,244,688
486,853

6,366,687

6,572,879

12,221,284

12,501,414

37,827
187,486
266,245
1,399,699
697,471
1,658,435
555,437

777,650
141,861
263,748
1,548,497
720,961
1,241,366
472,095

4,802,600

5,166,178

954,709
246,231
358,141

1,293,837
323,264
382,568

1,559,081

1,999,669

6,361,681

7,165,847

463,417
4,084,729
1,160,550(4,991)

462,817
3,637,184
846,392(3,539)5,703,705

4,942,854

155,898

392,713

Total equity

5,859,603

5,335,567

Total liabilities and equity

12,221,284

12,501,414

See accompanying notes to consolidated financial statements.

F-2

Consolidated Statement of Profit or Loss
Years ended March 31, 2024 and 2023

Millions of yen

Revenues
Cost of sales
Gross profit
Selling, general and administrative expenses
Other income
Other expenses
Financial income
Financial expenses
Share of profits (losses) of investments accounted for using the equity
methodEBIT (Earnings before interest and taxes)
Interest income
Interest charges
Income before income taxes
Income taxes
Net income
Net income attributable to:
Hitachi, Ltd. stockholders
Non-controlling interests
Earnings per share attributable to Hitachi, Ltd. stockholders
Basic
Diluted

Note
20

5,21
5,15,2122
22

2024
9,728,716(7,146,629)
2,582,087(1,826,271)
116,653(97,184)
17,388(10,015)2023
10,881,150(8,192,063)
2,689,087(1,940,943)
302,196(245,016)
7,878(20,417)8

75,284

52,847

857,942
38,781(70,922)825,801(199,053)
626,748845,632
25,652(51,313)819,971(116,101)
703,870

589,896
36,852649,124
54,746634.57633.75

Yen
684.55683.8912

23

Consolidated Statement of Comprehensive Income
Years ended March 31, 2024 and 2023

Millions of yen
Note

Net income
Other comprehensive income (OCI)
Items not to be reclassified into net income
Net changes in financial assets measured at fair value through OCI
Remeasurements of defined benefit plans
Share of OCI of investments accounted for using the equity method
Total items not to be reclassified into net income
Items that can be reclassified into net income
Foreign currency translation adjustments
Net changes in cash flow hedges
Share of OCI of investments accounted for using the equity method
Total items that can be reclassified into net income
Other comprehensive income (OCI)
Comprehensive income
Comprehensive income attributable to:
Hitachi, Ltd. stockholders
Non-controlling interests

See accompanying notes to consolidated financial statements.

F-3

2024
626,7482023
703,870

45,156
13,872
1,437
60,465

21,48440,202
1,511
63,197354,395
14,91522,025391,335

232,360
7,265
14,595254,220451,800
1,078,548

317,417
1,021,287

1,013,811
64,737905,819
115,468

17

Consolidated Statement of Changes in Equity

Year ended March 31, 2024

Millions of yen
2024

Commonstock(note 16)
Balance at beginning of year

Capitalsurplus(note 16)

Retainedearnings(notes 16
and 18)

Accumulated
othercomprehensive
income(note 17)

Treasurystock,
at cost(note 16)

Total
Hitachi, Ltd.
stockholders’equityNoncontrollinginterests(note 5)

Total equity

4,942,854

392,713

5,335,567

462,817-

3,637,184

846,392(3,539)Reclassified into retained earnings--

110,653(110,653)

-

-

-

-

Net income--

589,896--

589,896

36,852626,748

Other comprehensive income

-

-

-

423,915-423,915

27,885451,800

Dividends to Hitachi, Ltd. stockholders--(144,461)--(144,461)-(144,461)

Dividends to non-controlling interests

-

-

-

-

-

-

(30,580)(30,580)

Acquisition of treasury stock

-

-

-

-

(100,458)(100,458)-(100,458)

Sales of treasury stock

-

(151)

-

-

213

62

-

62

Cancellation of treasury stock-(98,793)--

98,793---Issuance of new shares (note 19)

600

600

-

-

-

1,200

-

1,200

Transfer to capital surplus fromretained earnings-

105,689(105,689)

-

-

-

-

-

Changes in non-controlling interests-(7,345)(2,854)896-(9,303)(270,972)(280,275)

Total changes in equity

600-

447,545

314,158(1,452)760,851(236,815)

524,036

Balance at end of year

463,417-

4,084,729

1,160,550(4,991)

5,703,705

155,898

5,859,603

Changes in equity

Year ended March 31, 2023

Millions of yen
2023
Total
Hitachi, Ltd.
stockholders’equityNoncontrollinginterests(note 5)

Total equity

4,341,836

1,013,441

5,355,277

Commonstock(note 16)

Capitalsurplus(notes 5
and 16)

Retainedearnings(notes 16
and 18)

Accumulated
othercomprehensive
income(note 17)461,731

46,1193,197,725

639,263(3,002)

Reclassified into retained earnings--

72,970(72,970)

-

-

-

-

Net income--

649,124--

649,124

54,746

703,870

Other comprehensive income

-

-

-

256,695-

256,695

60,722

317,417

Dividends to Hitachi, Ltd. stockholders--(129,148)--(129,148)-(129,148)

Dividends to non-controlling interests

-

-

-

-

-

-

(34,828)(34,828)

Acquisition of treasury stock

-

-

-

-

(200,212)(200,212)-(200,212)

Sales of treasury stock

-

(94)

-

-

258

164

-

164

Cancellation of treasury stock-(199,417)--

199,417---Issuance of new shares (note 19)

1,086

1,086

-

-

-

2,172

-

2,172

Transfer to capital surplus fromretained earnings-

153,487(153,487)

-

-

-

-

-

Balance at beginning of year

Treasurystock,
at cost(note 16)

Changes in equity-(1,181)-

23,404-22,223(701,368)(679,145)

Total changes in equity

Changes in non-controlling interests

1,086(46,119)

439,459

207,129(537)

601,018(620,728)(19,710)

Balance at end of year

462,817-

3,637,184

846,392(3,539)4,942,854

392,713

5,335,567

See accompanying notes to consolidated financial statements.

F-4

Consolidated Statement of Cash Flows
Years ended March 31, 2024 and 2023

Millions of yen
Note

2024

2023

626,748

703,870

451,525
29,668199,053(75,284)
21,824(97,048)(17,857)
40,206(88,320)
7,327
54,016(5,193)(34,598)
1,112,067
38,65529,963(69,165)(154,908)
956,612526,310
129,894
116,101(52,847)
18,204(297,351)(2,465)(60,673)(244,346)
43,96436,82649,93528,182995,604
25,675
26,419(49,770)(170,883)
827,045(232,874)(152,271)
45,048(252,638)(157,947)
55,580(70,622)(106,069)

265,693

616,317

13,483(131,543)(4,180)151,063(550,170)
105,130(301,507)
487(144,343)(32,345)(100,458)
62(1,763)(1,024,907)(277,685)
80,062(288,795)
310(129,005)(52,217)(200,212)
164(274,687)(901)(1,142,966)

Effect of exchange rate changes on cash and cash equivalents
Change in cash and cash equivalents

71,922(127,916)

29,314(135,544)

Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year

833,283
705,367

968,827
833,283

Cash flows from operating activities:
Net income
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization
Impairment losses
Income taxes
Share of (profits) losses of investments accounted for using the equity method
Financial income and expenses
Net (gain) loss on business reorganization and others(Gain) loss on sale of property, plant and equipment
Change in trade receivables and contract assets
Change in inventories
Change in trade payables
Change in accrued expenses
Change in retirement and severance benefits
Other
SubtotalInterest received
Dividends received
Interest paid
Income taxes paid
Net cash provided by (used in) operating activities

24

Cash flows from investing activities:
Purchase of property, plant and equipment
Purchase of intangible assets
Proceeds from sale of property, plant and equipment, and intangible assets
Purchase of investments in securities and other financial assets(including investments in subsidiaries and investments accounted for using the equity method)
Proceeds from sale of investments in securities and other financial assets(including investments in subsidiaries and investments accounted for using the equity method)Other
Net cash provided by (used in) investing activities
Cash flows from financing activities:
Change in short-term debt, net
Proceeds from long-term debt
Payments on long-term debt
Proceeds from payments from non-controlling interests
Dividends paid to Hitachi, Ltd. stockholders
Dividends paid to non-controlling interests
Acquisition of common stock for treasury
Proceeds from sales of treasury stock
Purchase of shares of consolidated subsidiaries from non-controlling interests
Other
Net cash provided by (used in) financing activities

See accompanying notes to consolidated financial statements.

F-5

24

Notes to Consolidated Financial Statements(1) Nature of Operations
Hitachi, Ltd. (the Company) is a corporation domiciled in Japan, whose shares are listed on the Tokyo Stock Exchange. The
accompanying consolidated financial statements comprise the Company, its subsidiaries and the Company’s interests in associates
and joint ventures. The Company’s and its subsidiaries’ businesses are global and diverse, and include manufacturing and services
in five segments consisting of Digital Systems & Services, Green Energy & Mobility, Connective Industries, Automotive Systems
and Others.
(2) Basis of Presentation
As the Company meets the requirements of a “Specified Company applying Designated International Financial ReportingStandards” pursuant to Article 1-2 of the Ordinance on Terminology, Forms and Preparation Methods of Consolidated Financial
Statements (Ordinance of the Ministry of Finance of Japan No. 28 of 1976), the consolidated financial statements of the Company
have been prepared in accordance with International Financial Reporting Standards (IFRS) issued by the International AccountingStandards Board (IASB), as permitted by the provision of Article 93 of the Ordinance. The Company’s fiscal year begins on April 1
and ends on March 31 of the following calendar year.
The Company’s consolidated financial statements have been prepared on a historical cost basis, except for derivative assets andliabilities, financial assets and liabilities measured at fair value through profit or loss, financial assets measured at fair value throughother comprehensive income and assets and liabilities associated with defined benefit plans.
The consolidated financial statements are presented in millions of Japanese yen, the functional currency of the Company.
Management of the Company has made a number of judgments, estimates and assumptions relating to the application of accounting
policies, reporting of revenues and expenses and assets and liabilities in the preparation of these consolidated financial statements.
Actual results could differ from those estimates.
Estimates and assumptions are continually evaluated. The effect of a change in accounting estimates, if any, is recognized in thereporting period in which the change was made and in future periods.
The information regarding judgments used in applying accounting policies that could have a material effect on the Company’s
consolidated financial statements is included in the following notes:
・note 3. (a) Basis of Consolidation・note 3. (d) Financial Instruments and note 25. Financial Instruments and Related Disclosures
The information regarding uncertainties arising from assumptions and estimates that could result in material adjustments in thesubsequent consolidated financial statements is included in the following notes:
・note 3. (d) Financial Instruments and note 25. Financial Instruments and Related Disclosures・note 3. (j) Impairment of Non-financial Assets, note 9. Property, Plant and Equipment and note 10. Goodwill and Other
Intangible Assets
・note 3. (k) Retirement and Severance Benefits and note 15. Employee Benefits
・note 3. (l) Provisions, note 3. (n) Revenue Recognition, note 14. Provisions and note 20. Revenues
・note 3. (o) Income Taxes and note 12. Deferred Taxes and Income Taxes

F-6

Notes to Consolidated Financial Statements(3) Summary of Material Accounting Policies(a) Basis of Consolidation(i) Subsidiaries
Subsidiaries are entities controlled by the Company. Control is obtained when the Company has risks or rights to variable
returns from its involvement with the entity and has the ability to use its power over the entity to affect the variable returns.
The Company consolidates all subsidiaries from the date on which the Company acquires control until the date on which theCompany loses control.
Subsidiaries’ financial statements are adjusted as necessary if their accounting policies differ from those of the Company.
Changes in ownership interests in subsidiaries without a loss of control are accounted for as equity transactions. Changes inownership interests in subsidiaries with a loss of control are accounted for by derecognizing assets and liabilities, noncontrolling interests, equity and accumulated other comprehensive income (AOCI) attributable to the subsidiaries.
(ii) Associates and Joint Ventures
Associates are entities over whose operational and financial policies the Company has the ability to exercise significant
influence but which are not controlled by the Company.
Joint ventures are jointly controlled by more than one party, including the Company, and require unanimous agreement of allparties in deciding operational and financial policies of the entity.
Investments in associates and joint ventures are accounted for using the equity method. The consolidated financial statementsof the Company include changes in profit or loss and other comprehensive income (OCI) of these associates and joint
ventures from the date on which the Company obtains significant influence or joint control to the date on which it loses
significant influence or joint control. The financial statements of the associates and joint ventures are adjusted as necessary if
their accounting policies differ from those of the Company.
(iii) Structured Entities
The Company consolidates structured entities in case it is exposed or has rights to variable returns from its involvement withsuch entities and has the ability to affect those returns through its power over the entities.
(b) Cash Equivalents
Cash equivalents are highly liquid investments with insignificant risk of changes in value, with original maturities of threemonths or less from the date of acquisition.
(c) Foreign Currency Translation
The consolidated financial statements are presented in Japanese yen, which is the Company’s functional currency.
(i) Foreign Currency Transactions
Foreign currency transactions are converted into the functional currency of each company using the exchange rate prevailingat the transaction date or a rate that approximates such rate. Monetary assets and liabilities denominated in foreign currencies
are converted into the functional currency using the exchange rate at the end of the reporting period. Foreign exchange gains
and losses resulting from the currency conversion and settlement are recognized in profit or loss, except where gains andlosses on assets or liabilities are recognized in OCI, foreign exchange effects relating to such assets or liabilities are also
recognized in OCI, and presented in AOCI.
(ii) Foreign Operations
Assets and liabilities of foreign entities are translated into Japanese yen using the exchange rate at the end of the reporting
period, and revenue and expense items are translated using the average exchange rates during the period. Gains or losses
derived from translating foreign entities’ financial statements are recognized in OCI, and presented in AOCI.

F-7

Notes to Consolidated Financial Statements(d) Financial Instruments(i) Non-derivative Financial Assets
The Company initially recognizes trade and other receivables on the date such receivables arise. All other financial assets are
initially recognized at the transaction date, on which the Company becomes a party to the agreement.
The Company derecognizes financial assets when contractual rights to cash flows from the financial assets expire or when thecontractual rights to receive cash flows from the financial assets are transferred in transactions where the risks and economic
rewards of owning the financial assets are substantially transferred. In transactions where the risks and economic rewards ofowning the financial assets are neither substantially transferred nor retained, the Company continues to recognize the financial
assets to the extent of its continuing involvement and derecognizes such financial assets only if its control is transferred.
The classification and measurement model of non-derivative financial assets is summarized as follows:
Financial Assets Measured at Amortized Cost
Financial assets are subsequently measured at amortized cost in case they meet the following requirements:
・The financial asset is held within a business model with the objective of collecting contractual cash flows.
・The contractual terms of the financial asset provide cash flows on specified dates that are solely payments of principal andinterest on the principal amount outstanding.
Financial assets measured at amortized cost are initially measured at fair value (including direct transaction costs). The
carrying amount of financial assets measured at amortized cost is subsequently measured using the effective interest method.
Interest accrued on financial assets measured at amortized cost is included in Interest income in the consolidated statement of
profit or loss.
Financial assets measured at fair value through other comprehensive income
The Company holds certain equity instruments with the purpose of expanding its revenue base by maintaining andstrengthening business relations with the investees. These equity instruments are classified as Financial assets measured at fairvalue through other comprehensive income by designation. They are initially and subsequently measured at fair value(including direct transaction costs), and the changes in fair value are recognized in OCI. The cumulative amount of OCI isrecognized in equity as AOCI. Dividends on equity instruments designated as fair value through other comprehensive income
are recognized in profit or loss, except where they are considered to be a return of the investment.
Financial assets measured at fair value through profit or loss
Equity instruments not designated as Financial assets measured at fair value through other comprehensive income and debt
instruments not classified as financial assets measured at amortized cost are classified as Financial assets measured at fairvalue through profit or loss. These instruments are subsequently measured at fair value (including direct transaction costs) andthe changes in fair value are recognized in profit or loss.
Impairment of Financial Assets
On a regular basis, but no less frequently than at the end of each quarterly reporting period, the Company evaluates theallowance for doubtful receivables based on expected credit losses on trade receivables, contract assets, and other receivables
depending on whether the credit risk has increased significantly since initial recognition.
If the credit risk has increased significantly since initial recognition, the allowance for doubtful receivables is measured at theamount equal to the lifetime expected credit losses on the financial assets. If the credit risk has not increased significantly
since initial recognition, the allowance for doubtful receivables is measured at the amount equal to 12-month expected credit
losses. However, for trade receivables, contract assets, and lease receivables, allowance for doubtful receivables is always
measured at the amount equal to the lifetime expected credit losses.
Whether credit risk has increased significantly is determined based on changes in the risk of default. Default is defined as thestate in which a critical problem with debtor’s payment of contractual cash flows has been identified and there are no
reasonable expectations of recovering the financial asset in its entirety or a portion. To determine whether there have been any
changes in the risk of default, external credit ratings, past due information and other factors are mainly taken into
consideration.

F-8

Notes to Consolidated Financial Statements

Expected credit losses are measured by taking the probability weighted average of the discounted present values ofdifferences between the total amount of the contractual cash flows and the total amount of cash flows expected to be received
in the future from the financial assets. If one or more events occur, such as overdue payments, extended payment terms,
negative evaluation by third party credit rating agencies, and/or a deterioration in financial position and operating results,
including capital deficit, the financial assets are individually assessed as credit-impaired financial assets and expected credit
losses are measured based mainly on historical credit loss experience, future collectible amounts and other factors. The
expected credit losses on the financial assets that are not credit-impaired are measured through collective assessment based
mainly on provision rates depending on historical credit loss experience adjusted by the current and future economic situationand other factors, if necessary.
For the expected credit losses on trade receivables, contract assets, and other receivables, the allowances for doubtfulreceivables are recorded instead of directly reducing the carrying amounts. Changes in expected credit losses are recognizedin profit or loss as impairment losses and are included in Selling, general and administrative expenses in the consolidated
statement of profit or loss. For financial assets, after all means of collection have been exhausted and the potential forrecovery is considered remote, it is determined that there are no longer any reasonable expectations of recovering the financial
assets in their entirety or a portion and the carrying amounts are generally written off.
(ii) Non-derivative Financial Liabilities
The Company initially recognizes debt instruments on the date of issuance. All other financial liabilities are initiallyrecognized at the transaction date, on which the Company becomes a party to the agreement.
The Company derecognizes financial liabilities if extinguished, or if the obligation in the contract is redeemed or the liability
is discharged, cancelled or expires.
Non-derivative financial liabilities the Company holds include bonds, debts, trade payables and other financial liabilities.
They are initially measured at fair value (less direct transaction costs), and bonds and long-term debt are subsequently
measured at amortized cost using the effective interest method. Interest accrued on these financial liabilities is included inInterest charges in the consolidated statement of profit or loss.
(iii) Derivatives and Hedge Accounting
The Company uses derivative instruments including forward exchange contracts, cross currency swaps and interest rate swaps
in order to hedge foreign currency exchange risks and interest rate risks. All derivatives are measured at fair value irrespectiveof the objective and intent of holding them.
The Company accounts for hedging derivatives as follows:・Fair value hedge: a hedge of the fair value of a recognized asset or liability or of an unrecognized firm commitment. Thechanges in fair value of the recognized assets or liabilities or unrecognized firm commitments and the related derivatives
are both recorded in profit or loss if the hedge is considered effective.
・Cash flow hedge: a hedge of a forecast transaction or of the variability of cash flows to be received or paid related to arecognized asset or liability. The changes in fair value of the derivatives designated as cash flow hedges are recorded inother comprehensive income (OCI) if the hedge is considered effective. This treatment continues until profit or loss isaffected by the variability of cash flows or the unrecognized firm commitment of the designated hedged item, whenchanges in fair value of the derivative are recognized in profit or loss. If a non-financial asset or a non-financial liability isrecognized due to a hedged forecast transaction, the changes in the fair value of the derivative recognized in OCI are
included directly in the acquisition cost or other carrying amount of the asset or liability when the asset or liability isrecognized.
The Company follows the documentation requirements as prescribed by IFRS 9 “Financial Instruments”, which includes therisk management objective and strategy for undertaking various hedge transactions. In addition, a formal assessment is madeat the hedge’s inception and subsequently on a periodic basis, as to whether the derivative used in hedging activities iseffective in offsetting changes in fair values or cash flows of the hedged items. Hedge accounting is discontinued if a hedge
becomes ineffective.

F-9

Notes to Consolidated Financial Statements(iv) Offsetting Financial Assets and Liabilities
Financial assets and liabilities are offset and reported as net amounts in the consolidated statement of financial position, only
if the Company currently has a legally enforceable right to set off the recognized amounts and intends to settle on a net basis
or to realize the asset and settle the liability simultaneously.
(e) Put Options of Non-controlling Interests
The Company and its subsidiaries recognize put options on shares of subsidiaries held by non-controlling interests as financial
liabilities at the present value of the exercise price. The Company derecognizes the non-controlling interests and recognizes thedifference between the present value and non-controlling interests in capital surplus.
(f) Inventories
Inventories are stated at the lower of cost or net realizable value. Cost is determined by the specific identification method or by
the moving average method for finished goods, semi-finished goods and work in process, and generally by the moving averagemethod for raw materials. Net realizable value is the estimated selling price in the ordinary course of business less the estimatedcosts of completion and the estimated costs necessary to sell.
(g) Property, Plant and Equipment
Property, plant and equipment are measured using the cost model and stated at cost less accumulated depreciation andaccumulated impairment losses. Acquisition cost includes direct costs of acquisition, costs of dismantling, removing andrestoration of the assets. Each asset is depreciated mainly using the straight-line method over the following estimated useful lives
for major classes of assets:
Buildings and structures
Machinery, equipment and vehicles
Tools, furniture and fixtures
Right-of-use assets

2 to 60 years
2 to 17 years
2 to 20 years
2 to 30 years

Estimated useful lives and the method of depreciation are reviewed at the fiscal year end. Changes in estimated useful lives ordepreciation method are accounted for on a prospective basis as a change in accounting estimate.
(h) Goodwill and Other Intangible Assets
Other intangible assets with finite useful lives are measured using the cost model and stated at cost less accumulated amortizationand impairment losses. Each asset is amortized mainly using the straight-line method over the following estimated useful lives
for major classes of assets:
Software for internal use
Software for sale
Other

2 to 10 years
2 to 10 years
2 to 20 years

Goodwill and Other intangible assets with indefinite useful lives are stated at cost less accumulated impairment losses.

F-10Notes to Consolidated Financial Statements(i) Leases(i) Lessee
The Company and certain subsidiaries lease facilities, mainly buildings, machines, and vehicles, and recognize a right-of-use
asset, a right to use the underlying asset, and a lease liability, an obligation to make lease payments, and recognize lease costs
as depreciation charges for right-of-use assets and interest expenses on lease liabilities. Lease payments for short-term leases
with a lease term of 12 months or less are recognized in profit or loss on a straight-line basis.
Right-of-use asset
A lessee shall apply a cost model to measure the right‑of‑use asset, and shall present the corresponding amount in Property,
Plant and Equipment or Other intangible assets as the amount of the right‑of‑use asset at cost at the commencement date of
the lease less any accumulated depreciation and any accumulated impairment losses. The right-of-use asset at cost includes
the amount of the initial measurement of the lease liability and the initial direct cost incurred by the lessee. The lessee shalldepreciate the right-of-use asset from the commencement date of the lease to the earlier of the end of the useful life of theunderlying asset or the end of the lease term on a straight-line basis. Changes in the useful life or the lease term are accounted
for on a prospective basis as a change in accounting estimate.
Lease liability
The lease liability is measured at the present value of lease payments that are not paid at the commencement date of the lease,
discounted using the interest rate implicit in the lease or the lessee’s incremental borrowing rate, and is included in the
Current portion of long-term debt or Long-term debt. Interest expense on the lease liability in each period during the leaseterm that produce a constant periodic rate of interest on the remaining balance of the lease liability is recognized in profit orloss over the lease term and is included in Interest charges in the consolidated statement of profit or loss.
(ii) Lessor
The Company and certain subsidiaries, as lessors, lease facilities, mainly buildings, machines, and equipment, whereby
substantially all the risks and rewards incidental to the ownership of items of property, plant and equipment are transferred to
the lessee. Therefore, such leases are classified as finance leases with the recognition of the underlying asset discontinued andthe present value of the total amount of lease payments is used to recognize and measure the net investment in the lease.
If substantially all the risks and rewards incidental to the ownership remain with the lessor in a lease, it is classified as an
operating lease, and the underlying asset is continuously recognized, and lease income is recognized over the lease term on astraight-line basis.

F-11

Notes to Consolidated Financial Statements(j) Impairment of Non-Financial Assets
For each non-financial asset, the Company reviews the carrying amount and tests for impairment if there are events orcircumstances indicating an asset’s carrying amount may not be recoverable. For an asset that does not generate cash flows thatare largely independent of the cash flows from other assets, the Company considers indicators of impairment based on a cash
generating unit (CGU) or a group of CGUs. Irrespective of any indicators of impairment, the Company tests intangible assets
with indefinite useful lives and goodwill for impairment annually, mainly in the fourth quarter, by estimating the recoverable
amount of each CGU (or group of CGUs) to which such assets are allocated.
The Company measures the recoverable amount of an asset or a CGU (or a group of CGUs) as the higher of fair value less costsof disposal and value in use. In measuring fair values, the Company and its subsidiaries primarily use the income approach(present value technique) based on the estimated future cash flows expected to result from the use of the asset and its eventual
disposal or the market approach to derive reasonable estimates of values in orderly market transactions, such as comparisons ofsimilar public companies and the current gross value of the asset. The Company consults with outside specialists, as appropriate,
depending on the complexity of estimating fair values. Value in use is calculated by the estimated future cash flows based on
business plans approved by management, discounted at the discount rate which is derived from the weighted average cost ofcapital. The business plan used is based on external information, reflects historical experiences, and generally has a maximum of
five years. Since the Company and its subsidiaries are engaged in a wide range of business activities from development,
production and sales of diverse products and the provision of various services, appropriate external information for each businessactivity is used for evaluating value in use for each business. Estimated cash flows beyond the period covered by the businessplan are calculated using the estimated growth rate not exceeding the long-term average growth rate of the market to which theasset belongs. Although a certain amount of negative impact due to the business environment is included in current businessplans, these plans may be affected by risks related to market or economic environment, and actual result may differ from theestimates. In addition, the discount rate used to calculate the value in use is affected by stock market trends and fluctuations ininterest rates.
If the carrying amount of the asset or the CGU (or the group of CGUs) exceeds its recoverable amount, an impairment loss isrecognized at the excess amount.
For an asset or a CGU (or a group of CGUs) other than goodwill, its recoverable amount is subsequently estimated if there is asignificant change in facts and circumstances and there is an indication that an impairment loss previously recognized on theasset may no longer exist or has decreased. If the estimated recoverable amount exceeds the carrying amount, the impairment
loss recognized previously is reversed to the extent of the carrying amount that would have been recorded, net of depreciation oramortization, if impairment had not been recognized previously.
(k) Retirement and Severance Benefits
The Company and certain subsidiaries have defined benefit pension plans, severance lump-sum payment plans and defined
contribution plans to provide retirement and severance benefits to employees.
(i) Defined Benefit Plans
Defined benefit plans include defined benefit pension plans and severance lump-sum payment plans. The present value of
defined benefit obligations and retirement benefit costs are measured based on the projected unit credit method. The present
value of defined benefit obligations and the fair value of plan assets are remeasured as of the end of reporting period.
Actuarial differences arising during the year and changes in fair value of plan assets (excluding interest income) arerecognized in OCI and are not subsequently reclassified into profit or loss. Any prior service cost, which arises at the time of aplan amendment, is recognized immediately in profit or loss when such an amendment occurs. The present value of defined
benefit obligations less the fair value of plan assets is presented as the net amount of defined benefit liability or asset in noncurrent liabilities or assets. When a defined benefit plan has a surplus, the net defined benefit asset is limited to the asset
ceiling, which is the present value of any economic benefits available in the form of refunds from the plan or reductions infuture contributions to the plan.
The measurement of a significant amount of employee retirement benefit costs is derived from actuarial valuations containing
a number of actuarial assumptions including mortality, withdrawal and retirement rates, changes in wages and the discountrate. The Company and its subsidiaries make judgments regarding the actuarial assumptions used by taking into accountvarious factors including personnel demographics, market conditions and expected trends in interest rates. Actuarial
assumptions are determined based on the best estimates and judgments, but may be affected by variance of uncertain
economic conditions in the future or by amendments or issuance of related laws.

F-12

Notes to Consolidated Financial Statements(ii) Defined Contribution Plans
Defined contribution pension plans are post-employment benefit plans in which the employer pays a certain amount ofpremiums to the third-party asset manager but has no legal or constructive obligation to pay in excess of such contributions.
Contributions to the defined contribution plans are recognized in profit or loss in the period when the service is provided by
the employees.
(l) Provisions
The Company recognizes provisions if it has a present obligation (legal or constructive) as a result of past events, it is probablethat an outflow of resources embodying economic benefits will be required to settle the obligation, and the amount of obligation
can be reliably estimated. Provisions may be affected by unexpected events or changes in circumstances, and actual payments
may differ from the estimates.
In case that the time to settle an obligation is expected to be long, and thus the time value of money is material, the amount of aprovision is measured at the present value of the amount of expenditures expected to be required to settle the obligation.
(m) Contingencies
The Company discloses contingent liabilities in accordance with International Accounting Standards (IAS) 37 “Provisions,Contingent Liabilities and Contingent Assets” if an obligation does not meet the recognition criteria of provisions prescribedabove in (l) Provisions, excluding those where the possibility of an outflow of resources is remote.
The Company and its subsidiaries have financial guarantee contracts that require them to make payments to compensate theholder for a loss it incurs if a specified debtor defaults on payment based on the terms of a debt instrument.
(n) Revenue Recognition
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 offers multiple solutions 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 each contract’s consideration and the time the Company
entered into such contracts, and the transaction price is allocated 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-specificfactors 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 for transferringpromised goods or services to a customer. Variable consideration, such as discounts and rebates, 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 is subsequently resolved. The promised amount ofconsideration 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 in consideration of the nature of thegoods 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.
The Company recognizes the incremental costs of obtaining a contract with a customer and the costs directly related to fulfillinga contract as an asset if those costs are expected to be recovered, and those assets are amortized based on the methods used torecognize revenue of the goods or services to which the assets relate. The Company recognizes the incremental costs of obtaining
a contract as an expense when incurred if the amortization period of the asset is less than one year.

F-13

Notes to Consolidated Financial Statements
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 to variance of uncertain economic
conditions in the future and may vary due to a variety of reasons beyond our control. The Company reviews these estimates on
an ongoing basis and reflects them in accounting practices.
(o) Income Taxes
Deferred tax assets and liabilities resulting from temporary differences and others are accounted for based on a liability method.
Deferred tax assets and liabilities are not recognized for temporary differences arising from goodwill, temporary differences
arising from an asset or liability in a transaction other than a business combination, which at the time of transaction affects
neither accounting nor taxable income and does not give rise to equal taxable and deductible temporary differences, and futuretaxable difference arising from investments in subsidiaries, associates and joint ventures where that the Company is able tocontrol the timing of reversal of the temporary difference while it is probable that the temporary difference will not reverse in theforeseeable future. Deferred tax assets are recognized to the extent that it is probable that future taxable income will be available
against which unused tax loss carryforwards, unused tax credits and future deductible temporary differences can be utilized. A
certain amount of negative impact due to the business environment is included in estimates of future taxable income. The timing
and amounts of taxable income may be affected by fluctuations due to uncertain economic conditions in the future, and the actual
timing and amounts may differ from the estimates. Current tax and deferred tax on items recognized in OCI are also recognizedin OCI.
Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in whichthose temporary differences are expected to be reversed. The effect on deferred tax assets and liabilities of a change in tax rates
is recognized in profit or loss and OCI in the period that includes the enactment date.
The Company has applied the exception to recognizing and disclosing information about deferred tax assets and liabilities related
to income taxes arising from tax law enacted or substantively enacted to implement the Pillar Two model rules published by theOrganization for Economic Co-operation and Development in accordance with IAS 12 “Income taxes”.
(p) Earnings per Share
Basic earnings per share (EPS) for net income attributable to Hitachi, Ltd. stockholders is calculated based on the weighted
average number of ordinary shares outstanding during the period. Diluted EPS for net income attributable to Hitachi, Ltd.
stockholders is calculated based on the sum of weighted average number of ordinary shares outstanding during the period and theconversion of securities with dilutive effects or the number of authorized shares.
(q) Business Combinations
Business combinations are accounted for using the acquisition method. The Company determines, on a transaction by transaction
basis, whether to measure non-controlling interests at fair value or by the appropriate share in the fair value of identifiable net
assets of the acquiree. Acquisition related costs are expensed in the period in which the costs are incurred.
(r) New Accounting Standards not yet Adopted by the Company
The following table lists the principal new accounting standards and interpretations issued or amended prior to the approval dateof the consolidated financial statements that are not yet adopted by the Company as of the reporting date. The Company is
examining the impact of adopting this standard on its consolidated financial statements.

IFRSs

Title

IFRS 18

Presentation andDisclosure in Financial
Statements

Mandatory effective
date(Fiscal year beginningon or after)
January 1, 2027

F-14

To be adopted by theCompany(Fiscal year beginningon)

Description of new standards andamendments

April 1, 2027

New standard replacing IAS 1,
the current accounting standard
for presentation and disclosure offinancial statements

Notes to Consolidated Financial Statements(4) Segment Information
Business Segments
The operating segments of the Company are the components for which separate financial information is available and which isevaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance.
The Company discloses its business in five reportable segments, corresponding to categories of activities classified primarily by thesimilarities for the nature of markets, products and services, and economic characteristics. Several operating segments areaggregated into Green Energy & Mobility and Connective Industries for financial reporting purposes so that users of the financial
statements better understand the Company’s financial position and business performance. The Company aggregates operating
segments based on the similarities of economic characteristics mainly using the segment profit (loss) margin ratio of operating
segments. The primary products and services included in each segment are as follows:
Digital Systems & Services:
Digital solutions (System integration, Consulting, Cloud services), IT products (Storage, Servers), Software, and ATMs
Green Energy & Mobility:
Energy solutions (Power grids, Renewable energy, Nuclear), and Railway systems
Connective Industries:
Building systems (Elevators, Escalators), Smart life & ecofriendly systems (Home appliances, Air conditioners), Measurement andanalytical systems (Semiconductor manufacturing equipment, Clinical analyzers), Industry & distribution solutions, Water &environment solutions, and Industrial machinery
Automotive Systems:
Powertrain, Chassis, Advanced driver assistance, and Motorcycle systems
Others:Property management and others
Effective from April 1, 2023, a portion of the business previously included in the Green Energy & Mobility segment has beentransferred to Business Management Reinforcement Division, and included in Others. Figures for the year ended March 31, 2023
have been restated on the basis of the reclassification.
In August 2022, the Company sold a certain number of shares of Hitachi Construction Machinery Co., Ltd. (Hitachi Construction
Machinery). As a result, Hitachi Construction Machinery and its subsidiaries, which were included in the Hitachi Construction
Machinery segment, became equity-method associates of the Company. In January 2023, the Company sold all shares of Hitachi
Metals, Ltd. (currently Proterial, Ltd.). As a result, Hitachi Metals, Ltd. was deconsolidated. In October 2023, the Company sold acertain number of shares of Hitachi Astemo, Ltd. (Hitachi Astemo). As a result, Hitachi Astemo and its subsidiaries, which were
included in the Automotive Systems segment, became equity-method associates of the Company.
Accordingly, the Hitachi Construction Machinery segment, the Hitachi Metals segment and the Automotive Systems segment
ceased to be business segments, but the segment figures for the years ended March 31, 2024 and 2023 are disclosed individually toenhance fair disclosure.
The Company includes its share of profits (losses) of investments accounted for using the equity method of Hitachi Construction
Machinery and its subsidiaries after the transfer of shares from the second quarter of the fiscal year ended March 31, 2023, and its
share of profits (losses) of investments accounted for using the equity method of Hitachi Astemo and its subsidiaries after thetransfer of shares from the third quarter of the fiscal year ended March 31, 2024, respectively, in Corporate items & Eliminations.

F-15

Notes to Consolidated Financial Statements
The following tables show business segment information for the years ended March 31, 2024 and 2023.
Millions of yen
March 31, 2024
Segment
Green Energy
Connective& Mobility
Industries

Digital Systems& Services
Revenues
Revenues from External Customers
Revenues from Intersegment Transactions
Total Revenues
Segment Profit (Loss)
Total Assets
Other items
Depreciation and Amortization
Impairment Losses
Share of Profits (Losses) of Investments
Accounted for Using the Equity Method
Investments Accounted for Using theEquity Method
Goodwill
Capital Expenditures

Automotive
Systems

2,432,182
166,4772,598,659
333,433
3,480,331

2,980,675
71,627
3,052,302
199,184
4,719,717

2,857,211
200,749
3,057,960
320,6813,800,781

1,160,008
4,376
1,164,384
50,694-131,461
19,133

138,930
1,860

81,3285,021

58,350
1,636

2,353

17,06619,194497

49,496104,383

175,255-

1,433,628
126,057

690,034
168,337

248,016
78,08061,533
Millions of yen

March 31, 2024
Segment
HitachiConstruction
Machinery
Revenues
Revenues from External Customers
Revenues from Intersegment Transactions
Total Revenues
Segment Profit (Loss)
Total Assets
Other items
Depreciation and Amortization
Impairment Losses
Share of Profits (Losses) of Investments
Accounted for Using the Equity Method
Investments Accounted for Using theEquity Method
Goodwill
Capital Expenditures

Hitachi
MetalsOthersSubtotal

Corporate
items &
Eliminations

Total

-

-

267,395
240,401
507,796
6,780
1,908,227

9,697,471
683,630
10,381,101
910,772
13,909,056

31,245(683,630)(652,385)
7,412(1,687,772)

9,728,716
9,728,716
918,184
12,221,284--

32,6082,018

442,677
29,668

8,848-

451,525
29,668--563

39,67335,61175,284

-

-

4,626

333,760

482,674

816,434--

36,876

2,371,678
470,883(2,575)2,371,678
468,308

F-16

Notes to Consolidated Financial Statements
Millions of yen
March 31, 2023
Segment
Green Energy
Connective& Mobility
Industries

Digital Systems& Services
Revenues
Revenues from External Customers
Revenues from Intersegment Transactions
Total Revenues
Segment Profit (Loss)
Total Assets
Other items
Depreciation and Amortization
Impairment Losses
Share of Profits (Losses) of Investments
Accounted for Using the Equity Method
Investments Accounted for Using theEquity Method
Goodwill
Capital Expenditures

Automotive
Systems

2,217,973
171,1222,389,095
293,729
3,140,933

2,409,601
60,3182,469,919
163,505
3,762,723

2,759,660
215,6122,975,272
312,183
3,552,848

1,915,254
4,813
1,920,067
73,447
1,687,076

129,741
52,163

117,859
49,58478,5303,502

105,040
24,1602,597

10,16819,855706

51,99787,484

162,248

11,406

1,269,171
132,754589,011
118,147

220,688
75,451

86,48087,916
Millions of yen

March 31, 2023
Segment
Subtotal

Corporate
items &
Eliminations

Total

261,234
234,384495,618(15,215)
2,147,020

10,863,478
709,333
11,572,811
913,929
14,290,600

17,672(709,333)(691,661)(29,323)(1,789,186)

10,881,150
10,881,150
884,606
12,501,414

27,90374

32,251
318

516,988
129,894

9,322-

526,310
129,894

1,171

1,265

121

35,883

16,964

52,847

-

-

4,536

317,671

160,949

478,620

32,372

20,76333,1802,165,350
500,583

7,459

2,165,350
508,042

HitachiConstruction
Machinery
Revenues
Revenues from External Customers
Revenues from Intersegment Transactions
Total Revenues
Segment Profit (Loss)
Total Assets
Other items
Depreciation and Amortization
Impairment Losses
Share of Profits (Losses) of Investments
Accounted for Using the Equity Method
Investments Accounted for Using theEquity Method
Goodwill
Capital Expenditures

Hitachi
MetalsOthers474,168946
475,11443,226-

825,588
22,138
847,726
43,054-25,66493

Segment profit (loss) is measured by Adjusted EBITA. Adjusted EBITA is defined as Adjusted Earnings before Interest, Taxes andAmortization. Adjusted EBITA represents profit (loss) calculated by deducting selling, general and administrative expenses fromgross profit, adding back amortization of intangible assets, etc. recognized upon business combinations, and adding or deducting
share of profits (losses) of investments accounted for using the equity method.
Intersegment transactions are generally recorded at the same prices used in arm’s length transactions. Corporate items include
corporate expenses not allocated to individual business segments, such as expenditures for advanced R&D, a part of net gain (loss)
on share of profits (losses) of investments accounted for using the equity method, and others.
Corporate assets mainly consist of investments in securities and other financial assets.
Depreciation consists of that of property, plant and equipment and investment properties.
Impairment losses mainly consist of those recognized on property, plant and equipment, goodwill and other intangible assets.
Capital expenditures represent additions to property, plant and equipment, investment properties and other intangible assets.

F-17

Notes to Consolidated Financial Statements
Adjustments to income before income taxes from segment profit (loss) are as follows.
Millions of yen
2024
Segment Profit (Loss)
Amortization of Intangible assets, etc.
recognized upon business combinations
Other income
Other expenses
Financial income
Financial expenses
EBIT (Earnings before interest and taxes)
Interest income
Interest charges
Income before income taxes

F-18

2023
918,184884,606(87,084)(83,615)

116,653(97,184)
17,388(10,015)
857,942
38,781(70,922)825,801

302,196(245,016)
7,878(20,417)845,632
25,652(51,313)819,971

Notes to Consolidated Financial Statements
Geographic Information
The following table shows revenues attributed to geographic areas based on the location of the customers for the years ended March
31, 2024 and 2023.
Millions of yen
2024

2023

Japan

3,773,383

4,118,244

Asia
North America
EuropeOther Areas

2,151,544
1,582,916
1,550,878
669,995

2,635,114
1,877,992
1,535,948
713,852

Overseas Revenues Subtotal

5,955,333

6,762,906

Total Revenues

9,728,716

10,881,150

Revenues in China for the years ended March 31, 2024 and 2023 were 1,154,781 million yen and 1,345,223 million yen,respectively. Revenues in the U.S.A. for the years ended March 31, 2024 and 2023 were 1,426,930 million yen and 1,732,535
million yen, respectively. Revenues from external customers attributable to any individual country and region other than Japan,
China and the U.S.A. were not material for the years ended March 31, 2024 and 2023.
The following table shows the balances of property, plant and equipment, investment properties, goodwill and other intangible
assets for each geographic area as of March 31, 2024 and 2023.
Millions of yen
March 31, 2024

March 31, 2023

Japan
Asia
North America
EuropeOther Areas

723,713296,175
2,069,604
1,606,086
91,206

1,097,816
520,213
1,896,359
1,501,367
137,077

Subtotal
Corporate items and Eliminations

4,786,784
19,0505,152,832(5,606)

Total

4,805,834

5,147,226

The balances of property, plant and equipment, investment properties, goodwill and other intangible assets in the U.S.A. as ofMarch 31, 2024 and 2023 were 2,058,257 million yen and 1,886,723 million yen, respectively. The balances of property, plant andequipment, investment properties, goodwill and other intangible assets in the Swiss Confederation as of March 31, 2024 and 2023
were 1,223,641 million yen and 1,065,498 million yen, respectively. The balances of property, plant and equipment, investment
properties, goodwill and other intangible assets in any individual country and region other than Japan, the U.S.A. and the Swiss
Confederation were not material as of March 31, 2024 and 2023.
Significant Customer Information
There was no concentration of revenues from a specific customer for the years ended March 31, 2024 and 2023.

F-19

Notes to Consolidated Financial Statements(5) Business Acquisitions and Divestitures
The following are the main Business Acquisitions and Divestitures for the year ended March 31, 2024, including the period up to
the approval date of the consolidated financial statements.
(a) Acquisition of Thales’ ground transportation systems business
On August 3, 2021, Hitachi Rail Ltd.(hereinafter “Hitachi Rail”), a consolidated subsidiary of the Company in the Green
Energy & Mobility segment, signed an agreement with Thales S.A.(hereinafter “Thales”) to acquire the ground transportation
systems business in order to expand the rail signalling systems business globally. Based on the agreement, Hitachi Rail invested
100% in CENTELEC UK LIMITED (hereinafter “CENTELEC”), which was carved out from Thales, and the acquisition wascompleted on May 31, 2024. As a result, CENTELEC became a subsidiary of the Company.
The consideration for the acquisition of CENTELEC was 2,009 million euro (304,990 million yen). Acquisition related costs
included in Other expenses in the consolidated statement of profit or loss for the years ended March 31, 2024 and 2023 were2,876 million yen and 2,544 million yen, respectively. Furthermore, approximately 3,000 million yen is expected to be recorded
as acquisition related costs for the year ending March 31, 2025. In addition to this acquisition, Hitachi Rail repaid 143 million
euro (24,210 million yen) of certain loans owed by CENTELEC from Thales.
Due to a time constraint between the acquisition date and the approval date of the consolidated financial statements, the initialaccounting treatment for the acquisition of CENTELEC has not been completed. Accordingly, no disclosure has been made to
the amount of assets acquired and liabilities assumed that were recognized at the date of acquisition, or the balances of
goodwill. The consideration may vary due to transaction price adjustment.
(b) Sale of shares of Hitachi Astemo, Ltd. (hereinafter “Hitachi Astemo”)
On March 30, 2023, the Company entered into the following two agreements regarding the transfer of a part of the shares ofHitachi Astemo, a consolidated subsidiary of the Company in the Automotive Systems segment, 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 stocks held by the Company, using a portion of the funds raised through theissuance of Class shares(ii) Agreement for investment in kind and share transfer with Honda including that Hitachi Astemo issues common stocks to
Honda in exchange for Honda to invest the shares of Hitachi Astemo Electric Motor Systems, Ltd. in kind and the Company
transfers a part of shares of Hitachi Astemo’s common stocks to Honda
On October 16, 2023, the series of transactions was completed. The Company’s consideration was 157,807 million yen.
As a result of the series of transactions, the Company’s ownership ratio of shares of Hitachi Astemo decreased from 66.6% to40%, and Hitachi Astemo turned into an equity-method associate of the Company.
A gain on the sale of Hitachi Astemo shares in the amount of 121,642 million yen was recognized in Other income in the
consolidated statement of profit or loss for the year ended March 31, 2024. The gain of 121,642 million yen included a gain of
77,792 million yen recognized due to fair value revaluation of the remaining Hitachi Astemo shares.
Furthermore, changes in non-controlling interests in the consolidated statement of changes in equity include derecognition of
non-controlling interest in Hitachi Astemo as a result of its deconsolidation.

F-20

Notes to Consolidated Financial Statements
The following table shows the assets, liabilities, and equity of Hitachi Astemo as of March 31, 2023.
Millions of yen
138,491
341,914
284,449
39,75723,301
827,912
11,406
12,196555,360
86,480125,397
68,325859,164
1,687,076

Cash and cash equivalents
Trade receivables and contract assets
Inventories
Investments in securities and other financial assets
Other current assets
Total current assets
Investments accounted for using the equity method
Investments in securities and other financial assets
Property, plant and equipment
Goodwill
Other intangible assets
Other non-current assets
Total non-current assets
Total assets
Short-term debt
Current portion of long-term debt
Other financial liabilities
Trade payables
Accrued expenses
Contract liabilities
Other current liabilities
Total current liabilities
Long-term debt
Retirement and severance benefits
Other non-current liabilities
Total non-current liabilities
Total liabilities

186,00228,54738,796
267,933
111,110676
30,900663,964
279,680
31,045
14,249324,974
988,938

Total Hitachi, Ltd. stockholders’ equity
Non-controlling interests
Total equity
Total liabilities and equity

437,640
260,498
698,138
1,687,076

The table above included intercompany liabilities as follows.
March 31, 2023
Short-term debt
Accrued expenses
Long-term debt

181,165
12,154
43,178F-21

Notes to Consolidated Financial Statements
The following are the main Business Acquisitions and Divestitures for the year ended March 31, 2023.
(a) Sale of all shares of Hitachi Transport System, Ltd. (hereinafter “Hitachi Transport System”)
On April 28, 2022, the Company entered into an agreement regarding the following three points, etc. for the common stocks of
Hitachi Transport System (hereinafter “Hitachi Transport System Shares”), an equity-method associate of the Company inCorporate items of segment information, with HTSK Co., Ltd. (hereinafter “Offeror”), a wholly owned subsidiary of HTSK
Holdings Co., Ltd. (hereinafter “Offeror Parent”), all equity interests which are currently owned by HTSK Investment L.P.,
which is indirectly held and operated by Kohlberg Kravis Roberts & Co. L.P.
(i) Offeror will launch a tender offer (hereinafter “Tender Offer”) for Hitachi Transport System Shares and the Company will
not tender any of its shares of Hitachi Transport System (hereinafter “Shares to Be Sold by the Company”) in Tender Offer.
(ii) The Company will sell Shares to Be Sold by the Company in accordance with the share repurchase to be conducted by
Hitachi Transport System.
(iii) The Company obtains 10.0 billion yen worth of Offeror Parent’s shares with voting rights (equivalent to 10% of the total
voting rights).
Offeror commenced Tender Offer on October 28, 2022, and Tender Offer was completed on November 29, 2022.
On March 1, 2023, the Company sold Shares to Be Sold by the Company in accordance with the share repurchase to be
conducted by Hitachi Transport System. The Company’s consideration was 221,983 million yen.
As a result of the transaction, Hitachi Transport System ceased to be an equity-method associate. A gain on the sale of Hitachi
Transport System Shares in the amount of 140,293 million yen was recognized in Other income in the consolidated statement of
profit or loss for the year ended March 31, 2023.
On April 1, 2023, Hitachi Transport System changed its name to LOGISTEED, Ltd.
(b) Sale of all shares of Hitachi Metals, Ltd. (hereinafter “Hitachi Metals”)
On April 28, 2021, the Company entered into an agreement regarding the following four points for the common stocks of
Hitachi Metals (hereinafter “Hitachi Metals Shares”), a consolidated subsidiary of the Company in the Hitachi Metals segment,with K. K. BCJ-52 (hereinafter “Tender Offeror”), a wholly owned company of G.K. BCJ-51, the outstanding shares of which
are indirectly owned by investment funds which Bain Capital Private Equity, LP and its group provide with investment advice.
(i) Tender Offeror will launch a tender offer (hereinafter “Tender Offer”) for Hitachi Metals Shares, when conditions for thecommencement of Tender Offer are satisfied, and the Company will not apply for Tender Offer with regard to all of the
Hitachi Metals Shares held by the Company (hereinafter “Shares to Be Sold by the Company”).
(ii) In the event Tender Offer is enacted and Tender Offeror is unable to acquire all of the Hitachi Metals Shares (excluding
treasury stock held by Hitachi Metals and Shares to Be Sold by the Company) in Tender Offer, Tender Offeror and theCompany will request convening of a general meeting of shareholders on the matter of items required for implementationof share consolidation (hereinafter “Share Consolidation”) on Hitachi Metals and exercise approval right for the proposal.
(iii) As promptly as practically possible after Tender Offeror and the Company become holders of all shares of Hitachi Metals(excluding treasury stock held by Hitachi Metals) as a result of Share Consolidation, capital reduction and other measures(hereinafter “Capital Reduction”) will be performed for Hitachi Metals in order to secure distributable amount required for
acquisition of treasury stock by Hitachi Metals (hereinafter “Share Repurchase”).
(iv) Immediately after Capital Reduction takes effect, Shares to Be Sold by the Company will be transferred to Hitachi Metals
as a result of Share Repurchase.
Tender Offeror commenced Tender Offer on September 27, 2022, and Tender Offer was completed on October 25, 2022.
Following the completion of Tender Offer, the above related transactions, such as Share Consolidation of Hitachi Metals shares,
took place and Shares to Be Sold by the Company were transferred on January 5, 2023. The Company’s consideration was
382,042 million yen.
As a result of the transaction was settled, the Company’s ownership ratio of Hitachi Metals Shares decreased from 53.4% to 0%,
and Hitachi Metals was deconsolidated. A gain on the sale of Hitachi Metals Shares in the amount of 95,324 million yen wasrecognized in Other income in the consolidated statement of profit or loss for the year ended March 31, 2023.
Furthermore, changes in non-controlling interests in the consolidated statement of changes in equity include derecognition of
non-controlling interest in Hitachi Metals as a result of its deconsolidation.
On January 4, 2023, Hitachi Metals changed its name to Proterial, Ltd.

F-22

Notes to Consolidated Financial Statements
The following table shows the assets, liabilities, and equity of Hitachi Metals as of March 31, 2022.
Millions of yen
100,936
187,264
227,615
44,821
9,028
569,664
11,612
9,885
334,603
95,276
23,61027,375502,361
1,072,025

Cash and cash equivalents
Trade receivables and contract assets
Inventories
Investments in securities and other financial assets
Other current assets
Total current assets
Investments accounted for using the equity method
Investments in securities and other financial assets
Property, plant and equipment
Goodwill
Other intangible assets
Other non-current assets
Total non-current assets
Total assets
Short-term debt
Current portion of long-term debt
Other financial liabilities
Trade payables
Accrued expenses
Contract liabilities
Other current liabilities
Total current liabilities
Long-term debt
Retirement and severance benefits
Other non-current liabilities
Total non-current liabilities
Total liabilities

100,316
21,907
26,121200,659
41,161
787
3,849
394,800
74,686
63,775
3,045
141,506
536,306

Total Hitachi, Ltd. stockholders’ equity
Non-controlling interests
Total equity
Total liabilities and equity

284,484
251,235
535,719
1,072,025(c) Additional acquisition of shares of Hitachi Energy Ltd (hereinafter “Hitachi Energy”)
On September 30, 2022, the Company signed an agreement with ABB Ltd (hereinafter “ABB”) to acquire 19.9% of the sharesof Hitachi Energy, a consolidated subsidiary of the Company in the Green Energy & Mobility segment, owned by ABB by
exercising call options, owned by the Company.
As a result of additional acquisition of shares on December 28, 2022, the Company’s ownership ratio of shares of Hitachi
Energy increased from 80.1% to 100% and Hitachi Energy has become a wholly owned subsidiary of the Company. The
consideration was 1,679 million U.S. dollars (243,200 million yen).
The Company derecognized the non-controlling interests and recognized the difference between the consideration and noncontrolling interest in capital surplus.

F-23

Notes to Consolidated Financial Statements(d) Sale of shares of Hitachi Construction Machinery Co., Ltd. (hereinafter “Hitachi Construction Machinery”)
On January 14, 2022, the Company entered into an agreement regarding the transfer of a part of the shares of Hitachi
Construction Machinery, a consolidated subsidiary of the Company in the Hitachi Construction Machinery segment, with HCJI
Holdings G.K., a special purpose company which is jointly invested by HCJ Holdings Ltd., a special purpose company wholly
owned by a fund that Japan Industrial Partners, Inc. manages, operates, and provides information, and Citrus Investment LLC, aspecial purpose company wholly owned by ITOCHU Corporation. In accordance with this agreement, a certain number ofshares of Hitachi Construction Machinery common stocks owned by the Company were transferred to HCJI Holdings G.K., on
August 23, 2022.
As a result of this transfer of shares, the Company’s ownership ratio of shares of Hitachi Construction Machinery decreased
from 51.4% to 25.4%, and Hitachi Construction Machinery turned into an equity-method associate of the Company. The
Company’s consideration was 182,457 million yen.
A gain on the sale of Hitachi Construction Machinery shares in the amount of 39,211 million yen was recognized in Other
income in the consolidated statement of profit or loss for the year ended March 31, 2023.
Furthermore, changes in non-controlling interests in the consolidated statement of changes in equity include derecognition of
non-controlling interest in Hitachi Construction Machinery as a result of its deconsolidation.
The following table shows the assets, liabilities, and equity of Hitachi Construction Machinery as of March 31, 2022.
Millions of yen
87,583
237,792368,267
62,193
8,421
764,256
26,662
63,197442,904
55,36758,967
29,321
676,418
1,440,674

Cash and cash equivalents
Trade receivables and contract assets
Inventories
Investments in securities and other financial assets
Other current assets
Total current assets
Investments accounted for using the equity method
Investments in securities and other financial assets
Property, plant and equipment
Goodwill
Other intangible assets
Other non-current assets
Total non-current assets
Total assets
Short-term debt
Current portion of long-term debt
Other financial liabilities
Trade payables
Accrued expenses
Contract liabilities
Other current liabilities
Total current liabilities
Long-term debt
Retirement and severance benefits
Other non-current liabilities
Total non-current liabilities
Total liabilities

103,320
81,731
51,239144,531
37,965
9,967
24,893453,646
229,487
17,62250,607
297,716
751,362

Total Hitachi, Ltd. stockholders’ equity
Non-controlling interests
Total equity
Total liabilities and equity

318,069
371,243689,3121,440,674

F-24

Notes to Consolidated Financial Statements(6) Trade Receivables and Contract Assets
The components of trade receivables and contract assets are as follows:
Millions of yen
March 31, 2024
Accounts receivable

March 31, 2023

1,975,770

1,972,168

Contract assets

930,743804,500

Others

84,80398,319Total

2,991,316

2,874,987

Trade receivables and contract assets are stated as net of the allowance for doubtful receivables.
Others include electronically recorded monetary claims and notes receivable.
(7) Inventories
The components of inventories are as follows:
Millions of yen
March 31, 2024

March 31, 2023

Finished goods

439,220

469,770

Semi-finished goods and work in process

597,357

592,860

Raw materials

474,070

583,558

1,510,647

1,646,188

Total

For the years ended March 31, 2024 and 2023, the amounts of inventories expensed and included as cost of sales were 5,053,376
million yen and 6,560,038 million yen, respectively, and the write-downs of inventories were 31,954 million yen and 60,278
million yen, respectively.
(8) Investments Accounted for Using the Equity Method
The aggregated carrying amounts of investments accounted for using the equity method as of March 31, 2024 and 2023, and theCompany and certain subsidiaries’ share of total comprehensive income of equity-method associates and joint ventures for theyears ended March 31, 2024 and 2023 are as follows:
Millions of yen
Associates
Carrying amount of investments

Joint ventures

March 31, 2024

March 31, 2023

March 31, 2024

March 31, 2023

727,644396,626

88,79081,994As of March 31, 2024 and 2023, the Company and certain subsidiaries’ interests in certain joint ventures operating at a loss havethe cumulative loss exceeding the Company and certain subsidiaries’ investments, and thus the negative amounts of 1,128 million
yen and 1,126 million yen, respectively, were recognized in Other non-current liabilities.
Millions of yen
Associates
2024

Joint ventures
2023

2024

2023

Net income

58,251

40,911Other comprehensive income

22,195(5,857)

17,033
1,267

11,936
21,963

Total comprehensive income

80,44635,05418,30033,899F-25

Notes to Consolidated Financial Statements(9) Property, Plant and Equipment
The following table shows the changes in the net carrying amounts of property, plant and equipment.
Millions of yen
Tools,
furnitureandfixtures

Right-of-use
assetsOther

Constructionin progress

Total

Land

Buildings Machineryandandstructures
vehicles

256,392

723,067

679,334

183,821

312,420

148,474

175,3932,478,901

376

7,000

29,963

19,573

98,585

3,270

190,979

349,746

178

42,212

116,644

37,064(4,163)

7,319(199,254)-

Net carrying amountMarch 31, 2022
Additions
Transfers between
accounts
Sales and disposals
Depreciation
Impairment losses
Acquisitions anddivestitures
Currency translation effect
Other
March 31, 2023
Additions(4,536)(9,584)(4,366)(2,641)(7,020)(11,355)(3,305)(42,807)-(50,060)(135,592)(66,387)(91,971)(12,794)-(356,804)(788)(7,643)(9,618)(1,339)

(371)

(50)

(1,846)(21,655)(113,663)(202,652)(209,118)(25,091)(73,035)(142,155)(33,616)(799,330)

2,868

15,55925,234

3,838

6,992

(428)

4,028

58,091

466

4,891

914

9,230

1,495

20,051(2,718)34,329141,293522,790493,395

158,068

242,932

12,332

129,661

1,700,471

933

5,748

18,736

14,72285,375

2,443

187,721315,678

Transfers between
accounts

3,801

49,23373,17531,069(230)

586(157,634)-

Sales and disposals(4,531)(3,272)(6,084)(2,339)(4,200)(81)(2,157)(22,664)-(39,433)(92,092)(56,206)(86,476)(4,181)-(278,388)

Impairment losses(103)(2,055)(2,384)

(812)

(209)

(16)

(620)

(6,199)Acquisitions anddivestitures(53,398)(128,697)(278,826)(26,522)(26,077)(6)(65,613)(579,139)

Currency translation effect

4,573

20,03437,457

8,645

15,295(2,135)

9,941

93,810Other(4,119)

(599)

(905)

6,288

(1,514)

4,226(5,104)(1,727)

March 31, 2024

88,449423,749

242,472

132,913

224,896

13,16896,195

1,221,842

Depreciation

The amount of depreciation recognized is included in Cost of sales and Selling, general and administrative expenses in the
consolidated statement of profit or loss. Impairment losses are included in Other expenses in the consolidated statement of profit
or loss.

F-26

Notes to Consolidated Financial Statements
The following table shows the gross carrying amounts and accumulated depreciation and impairment losses of property, plant andequipment.
Millions of yen
Tools,
furnitureandfixtures

Right-of-use
assetsOther

Constructionin progress

Total

Land

Buildings Machineryandandstructures
vehiclesMarch 31, 2022

329,445

1,852,873

3,024,650

1,001,685

657,010

246,691

353,891

7,466,245

March 31, 2023

210,288

1,302,106

2,186,968

865,630

526,665

26,543

313,586

5,431,786

March 31, 2024

92,229999,856

1,092,588

657,139

519,870

29,237

305,575

3,696,494

March 31, 2022

(73,053) (1,129,806) (2,345,316)(817,864)(344,590)(98,217)(178,498) (4,987,344)

March 31, 2023

(68,995)(779,316) (1,693,573)(707,562)(283,733)(14,211)(183,925) (3,731,315)

March 31, 2024

(3,780)(576,107)(524,226)(294,974)(16,069)(209,380) (2,474,652)

Gross carrying amount

Accumulated depreciationand impairment losses(850,116)

Impairment Losses Recognized for the Year Ended March 31, 2024:
The Connective Industries segment recognized impairment losses of 2,641 million yen, mainly attributable to the lower than
expected future revenue on business assets of machineries in the Healthcare business.
Impairment Losses Recognized for the Year Ended March 31, 2023:
The Green Energy & Mobility segment recognized impairment losses of 11,292 million yen, mainly attributable to the lower than
expected future revenue at the factory of rolling stocks in the U.K., recognizing impairment losses of 5,834 million yen on
Buildings and structures, 4,548 million yen on Machinery and vehicles and 190 million yen on Land, respectively.

F-27

Notes to Consolidated Financial Statements(10) Goodwill and Other Intangible Assets
The following table shows the changes in the net carrying amounts of Goodwill and Other intangible assets.
Millions of yen
Other intangible assets
Software for Software for Customer
Goodwill
Technology
internal use
sale
relationships

Other

Total

2,153,706

154,808

49,558711,653

117,172

223,937

1,257,128(84,126)(87,966)
183,736-

24,833
4,167
56,620(51,787)(10,886)(1,696)(20,229)2,522
492

10,51586
15,141(21,052)(6,164)
(30)
(322)
1,707
11

(45,687)(15,534)
53,253-(15,703)(6,426)
10,105-88,57330,112(71,761)(33,669)(6,694)(1,865)(14,927)
12,139
1,716

123,92134,365(167,898)(23,744)(3,591)(57,438)
79,726
2,219

2,165,350

158,844

49,450703,685

105,148

227,561

1,244,688(64,493)275,040(4,219)20,908
3,378
34,952(49,283)(8,072)(1,338)(41,423)
5,808
1,442

12,658252
18,586(20,426)(5,638)
(442)
(25)
5,624
(1,527)(45,185)(61,800)
79,085-(15,992)
1,742
12,852-

88,40526,650(53,538)(40,348)(7,233)(1,995)(45,867)
22,861(1,009)

121,971
30,280(171,234)(20,943)(3,775)(147,373)
126,230(1,094)

2,371,678

125,216

58,512

675,785

103,750

215,487

1,178,750

Net carrying amountMarch 31, 2022
Internal developments
Purchases
Transfers between accounts
Amortization
Impairment losses
Disposals
Acquisitions and divestitures
Currency translation effect
Other
March 31, 2023
Internal developments
Purchases
Transfers between accounts
Amortization
Impairment losses
Disposals
Acquisitions and divestitures
Currency translation effect
Other
March 31, 2024

The amount of amortization recognized is included in Cost of sales and Selling, general and administrative expenses in the
consolidated statement of profit or loss. Impairment losses are included in Other expenses in the consolidated statement of profit
or loss.

F-28

Notes to Consolidated Financial Statements
The following table shows the gross carrying amount and accumulated amortization and impairment losses of goodwill and otherintangible assets.
Millions of yen
Other intangible assets
Software for Software for Customer
Goodwill
Technology
internal use
sale
relationships

Other

Total

March 31, 2022

2,210,512

696,925

602,142801,610

149,743

636,4712,886,891

March 31, 2023

2,229,739

699,414621,620

815,503

145,470

524,418

2,806,425

March 31, 2024

2,420,134

668,350

652,857

825,438

153,967

531,825

2,832,437

March 31, 2022

(56,806)(542,117)(552,584)(89,957)(32,571)(412,534) (1,629,763)

March 31, 2023

(64,389)(540,570)(572,170)(111,818)(40,322)(296,857) (1,561,737)

March 31, 2024

(48,456)(543,134)(594,345)(149,653)(50,217)(316,338) (1,653,687)

Gross carrying amount

Accumulated amortization andimpairment losses

The Company writes off goodwill from gross carrying amount and impairment losses if it has been fully impaired.
Impairment Losses Recognized for the Year Ended March 31, 2024:
The Digital Systems & Services segment recognized impairment losses of 18,449 million yen, mainly due to the lower than
expected future revenue on software for internal use and sale as a result of changes in market trends.
Impairment Losses Recognized for the Year Ended March 31, 2023:
The Digital Systems & Services segment recognized impairment losses of 52,036 million yen, mainly consisting of the effect ofrepositioning the ERP on-premise business as a non-focal area, recognizing impairment losses of 31,917 million yen on goodwill,
and the lower than expected future revenue recognizing impairment losses of 9,599 million yen on software for internal use, and6,164 million yen on software for sale as a result of changes in market trends, respectively.
The Green Energy & Mobility segment recognized impairment losses of 38,411 million yen, mainly consisting of 38,394 million
yen in impairment losses on goodwill in the power grids business in the second quarter of fiscal year 2022 due to the rise indiscount rate following the significant rise in interest rates, etc. The recoverable amount was determined on the basis of value in
use, which was measured at 10,600 million U.S. dollars (1,534,986 million yen) as of September 30, 2022, the date on which
impairment losses were recognized. The calculation of the value in use, estimated future cash flows was discounted at the discountrate (before tax) of 13.2% derived from the weighted average cost of capital. Estimated future cash flows was based on businessplan for five years and beyond the period covered by the business plan were calculated taking into account growth rate of 2.8%.
The significant assumptions were revenue growth rates and gross profit ratios which reflected past experience and external
information. The growth rate was set taking into account long-term inflation rate announced by an external research organizationand the impact of interest rates incorporated in the discount rate at the time of the annual impairment test of the goodwill.
Expenditures on research activities aimed at obtaining new scientific or technical knowledge or understanding are expensed whenincurred. Expenditures on development activities for a new or major improvement of production plan or design prior to thebeginning of commercial production or use are capitalized as an internally generated intangible asset only when such expenditures
attributable to the intangible asset can be reliably measured, it is feasible for the Company to complete the development, and it ishighly probable that the Company will obtain the future economic benefit. Otherwise, the expenditures are recognized as an
expense when incurred.
The carrying amounts of internally generated other intangible assets (at cost less accumulated amortization and impairment losses)
as of March 31, 2024 and 2023 amounted to 262,555 million yen and 286,839 million yen, respectively. These assets are mainly
included in software for internal use or software for sale.
Research and development expenditures recognized as an expense for the years ended March 31, 2024 and 2023 were 290,145
million yen and 316,280 million yen, respectively, and they are included in Cost of sales and Selling, general and administrative
expenses in the consolidated statement of profit or loss.

F-29

Notes to Consolidated Financial Statements
The Company tests goodwill acquired through business combinations for impairment by comparing the carrying amount and therecoverable amount per CGU (or group of CGUs).
The following are the group of CGUs with a significant proportion of goodwill allocated for the year ended March 31, 2024.
As of March 31, 2024, the group of CGUs with a significant proportion of goodwill allocated was the power grids business in theGreen Energy & Mobility segment, and the carrying amount of goodwill allocated to the power grids business was 623,034
million yen. The recoverable amount used in the impairment test of goodwill of the power grids business was calculated based on
the value in use and in calculation of the value in use, estimated future cash flows was discounted at the discount rate (before tax)of 13.1% derived from the weighted average cost of capital. Estimated future cash flows was based on business plan for five years
and beyond the period covered by the business plan were calculated taking into account growth rate of 3.0%. The key assumptions
were revenue growth rates and gross profit ratios which reflected past experience and external information. The growth rate was
set taking into account various indices such as long-term inflation rate announced by an external research organization.
As of March 31, 2024, the group of CGUs with a significant proportion of goodwill allocated was the Services & Platforms
business in the Digital Systems & Services segment, and the carrying amount of goodwill allocated to the Services & Platforms
business was 1,397,890 million yen. The recoverable amount used in the impairment test of goodwill of the Services & Platforms
business was calculated based on the fair value less costs of disposal. The fair value less costs of disposal was calculated by themarket approach based on EV/EBITDA valuation multiples of similar companies that were comparable to the Services &Platforms business. The fair value hierarchy classification was level 3 measured by unobservable inputs.
The following are the group of CGUs with a significant proportion of goodwill allocated for the year ended March 31, 2023.
As of March 31, 2023, the group of CGUs with a significant proportion of goodwill allocated was the power grids business in theGreen Energy & Mobility segment, and the carrying amount of goodwill allocated to the power grids business was 524,951
million yen. Impairment losses on the goodwill of Hitachi Energy were recognized in the second quarter of fiscal year 2022.
Details of the impairment losses are described in Impairment Losses Recognized for the Year Ended March 31 2023 above.
Furthermore, the Company performed the annual impairment test of the goodwill of the power grids business in the fourth quarterof fiscal year 2022. The recoverable amount used in the annual impairment test of goodwill of the power grids business wascalculated based on the value in use and in calculation of the value in use, estimated future cash flows was discounted at thediscount rate (before tax) of 13.2% derived from the weighted average cost of capital. Estimated future cash flows was based on
business plan for five years and beyond the period covered by the business plan were calculated taking into account growth rate of
2.9%. The key assumptions were revenue growth rates and gross profit ratios which reflected past experience and external
information. The growth rate was set taking into account long-term inflation rate announced by an external research organizationand the impact of interest rates incorporated in the discount rate at the time of the annual impairment test of the goodwill.
Additional impairment losses were not recognized as the result of the annual impairment test.
As of March 31, 2023, the group of CGUs with a significant proportion of goodwill allocated was the Services & Platforms
business unit in the Digital Systems & Services segment, and the carrying amount of goodwill allocated to the Services &Platforms business unit was 1,238,239 million yen. The recoverable amount used in the impairment test of goodwill of theServices & Platforms business unit was calculated based on the value in use and in calculation of the value in use, estimated future
cash flows was discounted at the discount rate (before tax) of 11.1% derived from the weighted average cost of capital. Estimatedfuture cash flows was based on business plan for eight years and beyond the period covered by the business plan were calculated
taking into account growth rate of 2.9%. The key assumptions were revenue growth rates and EBIT ratios which reflected pastexperience and external information. The Company considered that it is appropriate to reflect the medium- to long-term growthrate, which is specific to main business of the Services & Platforms business unit, to business plan and set the period of thebusiness plan for eight years.
The Company considers it unlikely for the carrying amount of each CGU (or group of CGUs), together with allocated goodwill,
would exceed the respective recoverable amounts of the CGU (or group of CGUs) even if the key assumptions used for the
impairment test changed within a reasonable range.

F-30

Notes to Consolidated Financial Statements(11) Leases(a) Lessee
The Company and certain subsidiaries use leased facilities and equipment, including buildings, machinery and equipment andvehicles.
The following table shows the carrying amount of right-of-use assets at the end of March 31, 2024 and 2023 by class ofunderlying asset.
Millions of yen
Class of underlying asset
Buildings
andstructures

Tools,
furnitureandfixtures

Machineryandvehicles

Land

Total

Other

March 31, 2023

179,878

22,20016,813

22,4682,001

243,360

March 31, 2024

168,457

27,79817,186

11,192604

225,237

The following table shows the expenses relating to leases and cash outflow for the years ended March 31, 2024 and 2023.
Millions of yen
2024

2023

Depreciation for right-of-use assets
Buildings and structures

68,82374,229Machinery and vehicles

9,895

9,449

Tools, furniture and fixtures

6,950

6,928

Land

787

1,328

Other

306

284

86,761

92,218

Total
Interest charges on lease liabilities

5,483

5,151

Expense relating to short-term leases, etc.

21,05926,192

Expenses relating to leases

113,303

123,561
Millions of yen

2024
Total cash outflow for leases

2023
118,607

Additions of right-of-use assets for the years ended March 31, 2024 and 2023 are disclosed in note 9.
Maturity analysis of lease liabilities at the end of March 31, 2024 and 2023 are disclosed in note 25.

F-31

128,590

Notes to Consolidated Financial Statements(b) Lessor
The Company and certain subsidiaries lease certain assets such as buildings, machines, and equipment under finance andoperating lease arrangements.
The following table shows lease income for the years ended March 31, 2024 and 2023.
Millions of yen
2024

2023

Lease income from finance leases

399

718

Lease income from operating leases

251

32,460Total lease income

650

33,178

A significant component of lease income from finance leases represents finance income on the net investment in the lease.
(i) Finance leases
The following table shows the maturity analysis of the finance lease payments receivable as of March 31, 2024 and 2023.
Millions of yen
March 31, 2024

March 31, 2023

Undiscounted lease payments to be received
Within 1 year

13,755

10,055After 1 year but not more than 5 years

11,52910,090More than 5 years

4,909

6,225

Total

30,193

26,370

Unearned finance income relating to the lease payments receivable(2,338)(3,087)

Net investment in finance leases

27,85523,283(ii) Operating leases
The following table shows the maturity analysis of the undiscounted operating lease payments to be received as of March 31,
2024 and 2023.
Millions of yen
March 31, 2024

March 31, 2023

Within 1 year

175

198

After 1 year but not more than 5 years

67

24

More than 5 years

-

-

242

222

Total

F-32

Notes to Consolidated Financial Statements(12) Deferred Taxes and Income Taxes
The components of income taxes recognized in the consolidated statement of profit or loss and deferred taxes recognized in the
consolidated statement of comprehensive income are as follows:
Millions of yen
2024

2023

Income taxes
Current tax expense

254,207

280,420(46,690)(76,126)

Deferred tax expense
Temporary differences originated and reversed
Changes in realizability of deferred tax assets
Total(8,464)(88,193)

199,053

116,101

19,60913,528Deferred taxes recognized in OCI
Net changes in financial assets measured at fair value through
OCI
Remeasurements of defined benefit plans

910(23,224)

Net changes in cash flow hedges

5,973

3,899

Foreign currency translation adjustments(2,587)(2,782)

Total

23,905(8,579)The Company and its Japanese subsidiaries were subject to a national corporate tax, an inhabitant tax and business tax, for theyears ended March 31, 2024 and 2023, which in the aggregate resulted in a combined statutory income tax rate of approximately
30.5%.
The Company and a part of Japanese subsidiaries has applied a group tax sharing system from the year ended March 31, 2023. A
part of foreign subsidiaries file consolidated income tax returns in certain jurisdictions.
As a result of the reevaluation of a realizability of deferred tax assets in line with an improvement of long-term forecast related tofuture taxable income of the Company and its Japanese subsidiaries which apply the group tax sharing system, for the year ended
March 31, 2023, the Company and its Japanese subsidiaries recognized deferred tax assets on a part of deductible temporary
differences which had previously been unrecognized.
Tax laws have been enacted or substantively enacted to implement the Pillar Two model rules published by the Organisation for
Economic Co-operation and Development in certain countries and regions in which the Company is engaged in business activities.
Revenues amounted to 9,728,716 million yen for the year ended March 31, 2024, and revenues for the year ending March 31,
2025 are thus expected to exceed the 750 million euro threshold for the Pillar Two model rule. Therefore, the Company has
performed an assessment of the potential exposure to global minimum income taxes arising from tax laws enacted or substantively
enacted to implement the Pillar Two model rules published by the Organisation for Economic Co-operation and Development(hereinafter “the Pillar Two income taxes”).
The assessment of the potential exposure to the Pillar Two model rules is based on the most recent tax filings of subsidiaries andcountry-by-country report and is performed by taking into account special factors and the impact of business combinations.
Based on this assessment, the Pillar Two income taxes may be imposed in certain countries in which the Company is engaged inbusiness activities, however, the Company considers the impact on the Company’s financial position and business performance
will not be material.

F-33

Notes to Consolidated Financial Statements
Reconciliations between the combined statutory income tax rate and the effective income tax rate are as follows:
2024
Combined statutory income tax rate
Share of (profits) losses of investments accounted for using the equity
methodChange in excess amounts over the tax basis of investments in

2023
30.5%

30.5%

(2.8)

(2.0)

0.6

0.9

(4.7)

(9.4)

1.1
(1.0)
(3.2)
3.6

1.2
3.1
(9.1)
(3.1)
2.1

24.1%

14.2%

subsidiaries and investments accounted for using the equity method
Gain or loss on sale of investments in subsidiaries and investments
accounted for using the equity method
Expenses not deductible for tax purposes
Impairment of goodwill
Change in realizability of deferred tax assets
Difference in statutory tax rates of foreign subsidiaries
Other, net
Effective income tax rate

Changes in deferred tax assets and liabilities are as follows:
Millions of yen
March 31, 2024

March 31, 2023

Deferred tax assets, net at beginning of year

116,387(44,897)

Recognized in profit or loss
Recognized in OCI
Acquisitions, divestitures and others

55,154(23,905)
25,574

164,319
8,579(11,614)

Deferred tax assets, net at end of year

173,210116,387

F-34

Notes to Consolidated Financial Statements
Significant components of the deferred tax assets and liabilities are as follows:
Millions of yen
Consolidated statement offinancial position
March 31,2024

March 31,2023

Consolidated statement of
profit or loss
2024

2023

Deferred tax assets
Retirement and severance benefits
Accrued expenses
Depreciation of property, plant and

49,403
187,635

65,082
180,488(5,421)
9,873

45,642
43,833equipment
Net operating loss carryforwards
Net intercompany profits on

10,02912,253

1,526

2,290

41,712

62,981

7,162(4,478)inventories, P.P.E. and others
Deferred revenues
Other29,137

23,955

5,844

3,221

27,915
163,040

22,917
127,464

2,254
25,695

4,379
20,669Total deferred tax assets

508,871495,140

46,933

115,556

Deferred tax liabilities
Accelerated depreciation of P.P.E.
Investments in securities
Intangible assets
Other

(853)
(79,932)(193,214)(61,662)(1,489)(102,897)(196,534)(77,833)

81(2,285)
13,564(3,139)90
33,423
19,114(3,864)

Total deferred tax liabilities(335,661)(378,753)

8,221

48,763Net deferred tax assets

173,210116,387

55,154

164,319

From the beginning of the fiscal year ended March 31, 2024, the Company has adopted amendments to IAS12 “Income
Taxes” (Deferred Tax related to Assets and Liabilities arising from a Single Transaction).
The Company applied this standard retrospectively and modified the amount of the fiscal year ended March 31, 2023.
The impact on the consolidated financial statements was not material except for the note to significant components of the deferred
tax assets and liabilities.

F-35

Notes to Consolidated Financial Statements
Net deferred tax assets are included in the following accounts in the consolidated statement of financial position.

Other non-current assets
Other non-current liabilities
Total

March 31, 2024
285,337(112,127)

Millions of yen
March 31, 2023
271,567(155,180)

173,210116,387

Deferred tax liabilities are not recognized for excess amounts over the tax basis of investments in subsidiaries and investments
accounted for using the equity method that are considered to be reinvested indefinitely, for such differences will unlikely reversein the foreseeable future. The temporary differences related to undistributed earnings of subsidiaries for which deferred tax
liabilities are not recognized were 1,055,601 million yen and 849,240 million yen, respectively, as of March 31, 2024 and 2023.
In assessing the realizability of deferred tax assets, the Company considers whether it is more likely than not that some portion or
all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generationof future taxable income in specific tax jurisdictions during the periods in which these deductible differences become deductible.
Although realization is not assured, the Company carries out an assessment of the scheduled reversals of deferred tax liabilities
and projected future taxable income, including the execution of certain available tax strategies if needed. Based on these factors,
the Company considers it is more likely than not it will realize the benefits of these deductible differences as of March 31, 2024.
Deductible temporary differences and net operating loss carryforwards for unrecognized deferred tax assets are as follows:
Millions of yen
March 31, 2024

March 31, 2023

Deductible temporary differences

761,522

1,012,587

Net operating loss carryforwards

423,982

623,273

1,185,504

1,635,860

Total

Net operating loss carryforwards for unrecognized deferred tax assets will expire as follows:
Millions of yen
March 31, 2024

March 31, 2023

Within 5 years

52,754

119,265

After 5 years but not more than 10 years

31,464

201,007

More than 10 years or do not expire

339,764

303,001

Total

423,982

623,273

F-36

Notes to Consolidated Financial Statements(13) Trade Payables
The components of trade payables are as follows:
Millions of yen
March 31, 2024

March 31, 2023

1,343,234

1,463,971

Others56,46584,526

Total

1,399,699

1,548,497

Accounts payable

Others include electronically recorded monetary claims and notes payable.
(14) Provisions
Changes in the balance and components of provisions for the year ended March 31, 2024 are as follows:
Millions of yen

March 31, 2023

Provisions for
Provisions related
Asset retirement
Product warranty expected losses on
to restructuring
obligations
provisions
construction(structural reform)
contracts
30,043
7,922
71,34094,952

Other
provisions
130,456

Additions

1,030

19,443

26,83358,042

57,075

Utilized(2,171)(18,630)(17,320)(58,928)(55,864)

Acquisitions and divestitures

(900)

(808)

(9,438)-(4,312)Currency translation effects,
and others

(211)

567

6,231

3,855

7,626

27,791

8,494

77,64697,921

134,981

631

8,241

69,85496,607

121,692

27,160

253

7,792

1,314

13,289March 31, 2024
Current
Non-current

Asset Retirement Obligations
The Company and its subsidiaries recognize asset retirement obligations principally based on the estimated future expendituresusing historical experience when the Company and its subsidiaries have a legal or contractual obligation associated with theretirement of tangible fixed assets used in normal operations, such as lease dilapidations of factory facilities and premises.
Provisions Related to Restructuring (Structural Reform)
Provision related to restructuring (structural reform) is recognized when the Company and its subsidiaries have a detailed formal
plan for the restructuring of the business or a part of business and have raised a valid expectation in those affected that it will carryout the restructuring by starting to implement the plan or announcing its main features to those affected. The provision isrecognized based on the estimated amount of direct expenditures attributable to restructuring.
Provisions related to restructuring (structural reform) mainly include special termination benefits for restructuring (structuralreform).
Product Warranty Provisions
The Company and its subsidiaries provide warranties for certain products and services. Product warranty provisions arerecognized by estimating future expenditures based principally on historical experience of warranty claims.
Provisions for Expected Losses on Construction Contracts
Provisions for expected losses on construction contracts are recognized based on future estimated losses as the Company and its
subsidiaries fulfill long-term project requirements.

F-37

Notes to Consolidated Financial Statements(15) Employee Benefits(a) Retirement and Severance Benefits
The Company and certain subsidiaries have defined benefit pension plans and severance lump-sum payment plans, as well as
defined contribution pension plans to provide retirement and severance benefits to substantially all employees.
The principal defined benefit pension plan is a corporate pension plan based on the Japanese Defined Benefit Corporate
Pension Plan Act (the Act). Additionally, certain corporate pension plans adopt cash balance plans. Benefits under cash
balance plans are calculated per each plan participant with a notional account balance, based on the contribution credits per
salary level and interest credits based on market interest rate trends.
Pursuant to the Act, the Company has an obligation to make contributions to the Hitachi Pension Fund (the Fund) thatmanages the corporate pension plans. The directors of the Fund are responsible for faithfully executing operations incompliance with laws and regulations, and any orders issued by the Minister of Health, Labor and Welfare, and the directorgenerals of Regional Bureaus of Health and Welfare based on laws and regulations, as well as the rules of the Fund and theresolution of the Board of Representatives. The Fund prohibits the directors from acts that constitute conflicts of interests inthe management and operation of the funds contributed for benefit payments (the contributions). If breached, the board
members are jointly and severally held responsible.
The Fund is legally independent from the Company. The Board of Representatives comprises an equal number ofrepresentatives selected by the company and certain subsidiaries and representatives from the employee side. The proceedingsof a Board of Representatives are decided by a majority vote of the members attending. In case of a tied vote, the chairman has
the power to decide, except for exceptionally significant matters.
The actual management of the contributions is conducted by trustees in accordance with rules approved by the Board ofRepresentatives. The Fund is responsible for managing the contributions to safely and efficiently manage the contributions by
establishing the basic management policy of the contributions and preparing the management guidance in line with the policy
submitted to the trustees.
The Company has future obligations to make contributions as defined by the Fund. The amount of contribution is periodicallyreviewed to the extent allowed by law.
Risk-sharing corporate pension plans determine a risk reserve contribution in advance in accordance with the rules governing
the plan, and the pension benefits are adjusted annually based on the financial position of the plan to maintain balanced
finance.
The risk-sharing corporate pension plan introduced by the Company and its subsidiaries is a mechanism in which management
and labor unions share risks. At the time of the transfer to this system, the employer bears certain risks by making fixed
contributions, including contributions to the risk-sharing corporate pension plan, in accordance with agreements between
management and labor unions. In the event of a financial imbalance, the plan participants also bear certain risks by adjusting
benefits. Under the defined benefit pension plan, employers were required to make additional contributions in the event of afunding shortfall. The risk-sharing corporate pension plan, however, measures the risks that may arise in the future, and sets
contributions to the risk-sharing corporate pension plan within the scope of the agreement between management and labor
unions in advance to balance contributions. The amount equivalent to the contributions made to risk-sharing corporate pension
plan determined based on the level of the fiscal deterioration risk, which is calculated at the time of transfer, shall becontributed to the plan on a straight-line basis over five years from the date of transfer, and no additional contributions are
required.

F-38

Notes to Consolidated Financial Statements
In terms of the corresponding accounting treatment for retirement benefits, risk-sharing corporate pension plans, for which anentity accepts contribution obligations to the extent stipulated in the rules but has no further obligations to make any additional
contributions, are classified as defined contribution plans. The risk-sharing corporate pension plans managed by the Hitachi
Pension Fund impose no additional contribution obligations, so the risk-sharing corporate pension plans are also classified as
defined contribution plans.
Since the Company and a consolidated subsidiary of the Company introduced a risk-sharing corporate pension plan on April 1,
2019, for current employees participating in the defined benefit pension plan managed by the Hitachi Pension Fund, the samehas been promoted to the other subsidiaries that participate in pension plan managed by the Hitachi Pension Fund. On April 1,
2022, almost all the subsidiaries participating in the Hitachi Pension Fund had completed changing their pension plans fromdefined benefit pension plan to risk-sharing corporate pension plan for current employees. Therefore, the difference between
the defined benefit obligations related to the portion transferred to the revised plan and the amount of assets transferred to therevised plan corresponding to the decrease in defined benefit obligations, 51,185 million yen, was recognized as a settlement
loss in Other expenses in the consolidated statement of profit or loss for the fiscal year ended March 31, 2023. In addition, inthe consolidated statement of financial position for the fiscal year ended March 31, 2023, Other non-current assets decreasedby 49,334 million yen, and Retirement and severance benefits increased by 1,851 million yen, respectively. Excluding thesettlement loss in above, the impacts of changing pension plans on profit or loss for the fiscal year ended March 31, 2023 were
not material. On April 1, 2023, all the subsidiaries participating in the Hitachi Pension Fund have completed changing theirpension plans from defined benefit pension plan to risk-sharing corporate pension plan for current employees. However, theimpacts on the consolidated financial statements for the fiscal year ended March 31, 2024 are not material.
The severance lump-sum payment plans provide a lump-sum payment at the time of retirement, and the benefit is calculated
based on factors such as the salary level at retirement and the years of service. The Company and certain subsidiaries have an
obligation to pay benefits directly to beneficiaries.
Defined contribution plans require companies to make contributions over a participation period, and plan participants
themselves are responsible for the management of plan assets. Benefits are paid by the trustee, and the Company and certain
subsidiaries’ responsibility is limited to making contributions.

F-39

Notes to Consolidated Financial Statements
Changes in the present value of defined benefit obligations and the fair value of plan assets for the years ended March 31,
2024 and 2023 are as follows:
Millions of yen
March 31, 2024

March 31, 2023

1,053,570

1,879,432

Service cost

25,16633,847

Interest cost

12,367

10,629Plan amendments(2,086)(85)

Actuarial losses(955)(32,352)

Benefits paid

(73,436)(89,487)

Acquisitions and divestitures(42,103)(272,034)(10)(3,114)

Defined benefit obligations
At beginning of year

Transfer to defined contribution pension plan
Settlements/curtailments(1,538)(3,901)

Effect of shift to risk-sharing corporate pension plan

(5,780)(498,477)

Currency translation effect30,84029,112At end of year

996,035

1,053,570

At beginning of year

800,064

1,598,966

Interest income

10,032

7,845

Return on plan assets (excluding interest income)

62,714(15,176)

Employers’ contributions

10,176

14,265

Employees’ contributions

4,440

3,580

Benefits paid

(55,105)(66,084)

Acquisitions and divestitures(9,985)(208,104)

-

(830)

Settlements/curtailments(2,287)(3,886)

Effect of shift to risk-sharing corporate pension plan

(6,960)(549,662)

Currency translation effect29,415

19,150Fair value of plan assets

Transfer to defined contribution pension plan

At end of year

842,504

800,064

Effect of asset ceiling

58,5108,186

Net liability amount recognized in the consolidated statementof financial position

212,041

261,692

Changes in the effect of asset ceiling are as follows:
Millions of yen
March 31, 2024

March 31, 2023

At beginning of year

8,186

8,692

Interest income

242

111

Remeasurements
Changes in the effect of asset ceiling

48,773(1,365)Currency translation effect

1,309

748

At end of year

58,510

8,186

F-40

Notes to Consolidated Financial Statements
The components of actuarial gain or loss are as follows:
Millions of yen
March 31, 2024

March 31, 2023

Arising from changes in financial assumptions

1,337

35,015

Arising from changes in demographic assumptions

(143)

140

Other

(239)

(2,803)

The Company and certain subsidiaries remeasure the defined benefit obligations and plan assets at the end of the fiscal year.
The discount rates used in actuarial calculation of defined benefit obligations are as follows:
Percentage
March 31, 2024
Discount rate

1.2

March 31, 2023
1.2

If, at March 31, 2024, the discount rate rose by 0.5%, the defined benefit obligations would decrease by 42,006 million yen,
and if the discount rate decreased by 0.5%, the defined benefit obligations would increase by 46,881 million yen.
The sensitivity analysis is based on an assumption that all other variables other than the one analyzed are held constant; inreality, changes in other assumptions may impact the outcome of the analysis.
The Fund’s plan asset management is based on the safe and efficient management of the contributions, diversified investments
and determination of the investment ratio that should be sustained over the long term. The Fund seeks to maintain current
value of assets sufficient for future obligations. A target rate of return is established to ensure a stable long term rate of returnon assets. A diversified investment strategy is carried out while a target asset allocation is established to achieve the target rateof return. The target asset allocation is based on the expected rate of return by each class of asset, the standard deviation of therate of return and the correlation coefficient among the assets. If market values fluctuate exceeding certain levels, theinvestment ratio is adjusted to the target allocation ratio in order to control risks.
In selecting trustees or asset management companies, the Fund takes into account appropriate quantitative and qualitativeevaluations. The Fund also presents its management policies to the trustees or asset management companies, and periodicallyreceives asset management reports.

F-41

Notes to Consolidated Financial Statements
The fair values of plan assets invested as of March 31, 2024 and 2023 are as follows:
Millions of yen
March 31, 2024
With quoted market
price in an active
marketWith no quoted
market pricein an active market

1,643

-

1,643

3,367

218

3,585

-

6,785

6,785

Hedge funds-

32,52632,526

Securitization products-

14,762

14,762

22,827-

22,827-

117,539

117,539

EquityGovernment bonds and municipal
debt securities
Corporate bonds and other debt securities

Cash and cash equivalents
Life insurance general accounts
Commingled funds

Total

-

596,252596,252

Other

1,063

45,522

46,585

Total

28,900813,604

842,504
Millions of yen

March 31, 2023
With quoted market
price in an active
marketWith no quoted
market pricein an active market

1,178

168

1,346

3,203

200

3,403

-

5,783

5,783

Hedge funds-

23,42623,426

Securitization products-

13,963

13,96330,694-30,694-79,72079,720EquityGovernment bonds and municipal
debt securities
Corporate bonds and other debt securities

Cash and cash equivalents
Life insurance general accounts
Commingled funds

Total

-

604,746604,746

Other

3,085

33,89836,983

Total

38,160761,904

800,064

As of March 31, 2024, investments in equity were allocated to 100% in stocks listed in foreign markets. As of March 31,
2023, investments in equity were allocated to approximately 10% in stocks listed in Japan and 90% in stocks listed in foreign
markets.
As of March 31, 2023, Japanese government bonds made up approximately 2% of the government bonds and municipal debt
securities, the majority of which were Japanese national bonds. Foreign public bonds, as of March 31, 2024, took 100%, themajority of which were foreign national bonds, and as of March 31, 2023, foreign public bonds took approximately 98%, themajority of which were foreign national bonds.
As of March 31, 2024 and 2023, investments in corporate bonds and other debt securities were allocated to 100% in foreign
corporate bonds and debt instruments.
Hedge funds primarily consist of investments in relative value strategy funds, event driven funds, equity long or short funds,
and macroeconomic and Commodity Trading Advisor (CTA) funds.
Securitization products primarily consist of investments in equity of Japanese real estate funds, and debt and equity ofcollateralized loan obligations (CLO).

F-42

Notes to Consolidated Financial Statements
Commingled funds represent pooled institutional investments. As of March 31, 2024 and 2023, commingled funds wereallocated to 30% in listed stocks, 40% in government bonds, 10% in corporate bonds and other debt securities, 10% in cash
and cash equivalents and 10% in other assets.
Funding by the Fund is conducted by taking into account various factors such as funded status and actuarial calculations. For
the purpose of maintaining balanced finance into the future, the bylaws of the Fund require recalculation of the contribution
amounts at the end of fiscal year every five years. Basic assumptions (expected interest rates, mortality rates, withdrawal rate,etc.) are reviewed to recalculate the appropriate level of contribution.
The amount of contributions expected to be paid by the Company and its subsidiaries to the plan assets for the year ending
March 31, 2025 is 11,335 million yen.
The weighted average duration (expected average maturity) of defined benefit obligations as of March 31, 2024 and 2023
were 10.0 years and 9.8 years, respectively.
Contributions made to defined contribution plans and expensed in profit or loss in the years ended March 31, 2024 and 2023
were 42,718 million yen and 44,087 million yen, respectively.
In addition, contributions made to the risk-sharing corporate pension plan and expensed in profit or loss in the years ended
March 31, 2024 and 2023 were 37,778 million yen and 39,629 million yen, respectively. The amount of the contributions to
the risk-sharing corporate pension plan expected to be paid by the Company and its subsidiaries for the year ending March 31,
2025 is 4,117 million yen.
(b) Employee Benefit Expenses
The aggregated amounts of employee benefit expenses including salary recognized in the consolidated statement of profit orloss for the years ended March 31, 2024 and 2023 were 2,868,049 million yen and 2,937,094 million yen, respectively.

F-43

Notes to Consolidated Financial Statements(16) Equity(a) Common Stock
Number of shares
March 31, 2024
Total number of authorized shares

March 31, 2023

2,000,000,000
Issued shares outstanding(Number of shares)

2,000,000,000
Capital amount(Millions of yen)March 31, 2022

968,234,877

461,731

March 31, 2023

938,083,077

462,817

March 31, 2024

927,167,877

463,417

Note: For the year ended March 31, 2023, the Company issued new shares as restricted stock compensation, and the total
number of issued shares increased by 337,000 shares on June 15, 2022, meanwhile the Company cancelled treasury
stock, and the total number of issued shares decreased by 30,488,800 shares on December 14, 2022 to 938,083,077
shares.
For the year ended March 31, 2024, the Company issued new shares as restricted stock compensation, and the total
number of issued shares increased by 158,200 shares on May 31, 2023, meanwhile the Company cancelled treasury
stock, and the total number of issued shares decreased by 11,073,400 shares on October 18, 2023 to 927,167,877 shares.
Shares issued by the Company are non-par value common stock. The issued shares above include treasury stock. The changes
in treasury stock for the years ended March 31, 2024 and 2023 are as follows:
Treasury stock(Number of shares)
March 31, 2022
Acquisition of treasury stock
Sales of treasury stock
Cancellation of treasury stock
March 31, 2023
Acquisition of treasury stock
Sales of treasury stock
Cancellation of treasury stock
March 31, 2024

(Millions of yen)

998,7213,002

30,084,761

200,212(83,852)(258)(30,488,800)(199,417)

510,830

3,539

11,139,272

100,458(30,529)(213)(11,073,400)(98,793)546,173

4,991

The number of shares of the Company held by the Company’s associates as of March 31, 2024 and 2023 were 31,100 shares.
(b) Surplus(i) Capital Surplus
The Companies Act of Japan mandates that at least half of paid-in capital be appropriated as common stock and the rest be
appropriated as legal reserve within capital surplus.
The changes in capital surplus include the effect of changes in the Company’s ownership interest in its consolidated
subsidiaries and cancellation of treasury stock. For the years ended March 31, 2024 and 2023, the changes in capital surplus
were mainly the decrease due to the cancellation of treasury stock.
In the event that the balance of capital surplus at the end of a period is negative, the Company transfers from retained
earnings to ensure a capital surplus is maintained.

F-44

Notes to Consolidated Financial Statements(ii) Retained Earnings
The Companies Act of Japan requires that ten percent of retained earnings appropriated for dividends be retained until the
total amount of earned reserves included in capital reserve and retained earnings reaches a quarter of the nominal value ofcommon stock. Earned reserves may be available for dividends by resolution at the shareholders’ meeting.
(17) Accumulated Other Comprehensive Income (AOCI) and Other Comprehensive Income (OCI)
Components of AOCI, net of related tax effects, presented in the consolidated statement of changes in equity, and changes in eachcomponent for the years ended March 31, 2024 and 2023 are as follows:
Millions of yen
2024

2023

Foreign currency translation adjustments
Balance at beginning of year

635,260

444,651

OCI, net of reclassification

349,404

166,238

Net transfer of non-controlling interests(232)

24,371

984,432

635,260

Balance at beginning of year

87,967

105,675

OCI

12,647

38,254

Net transfer of non-controlling interests

2,707

41

Reclassified into retained earnings(282)(56,003)

103,039

87,967

Balance at beginning of year

115,355

110,109

OCI

45,38922,2605(47)

Balance at end of year
Remeasurements of defined benefit plans

Balance at end of year
Net changes in financial assets measured at fair value through OCI

Net transfer of non-controlling interests
Reclassified into retained earnings(110,371)(16,967)

50,378115,355

Balance at beginning of year

7,810

(21,172)

OCI, net of reclassification

16,47529,943(2)-

Others(1,582)(961)

Balance at end of year

22,701

7,810

Balance at beginning of year

846,392

639,263

OCI, net of reclassification

423,915

256,695

Balance at end of year
Net changes in cash flow hedges

Net transfer of non-controlling interests

Total AOCI

Net transfer of non-controlling interests
Reclassified into retained earnings
OthersBalance at end of year

F-45

2,478

24,365(110,653)(72,970)(1,582)(961)

1,160,550

846,392

Notes to Consolidated Financial Statements
The following shows a reconciliation of OCI, including non-controlling interests, to profit or loss items and deferred income tax
effect per components of OCI during the years ended March 31, 2024 and 2023.
Millions of yen
2024
Before tax

Tax effect

After tax

OCI arising during the year:
Foreign currency translation adjustments

460,465(37)

460,428

Remeasurements of defined benefit plans

14,782(910)

13,872

Net changes in financial assets measured at fair value through OCI

64,765(19,609)45,156

Net changes in cash flow hedges

18,847(5,294)

13,553

Share of OCI of investments accounted for using the equity method

24,941(1,280)23,661

Total

583,800(27,130)

556,670(108,657)

2,624(106,033)

Net changes in cash flow hedges

2,041

(679)

1,362

Share of OCI of investments accounted for using the equity method

(199)

-

(199)

(106,815)

1,945(104,870)

Foreign currency translation adjustments

351,808

2,587

354,395

Remeasurements of defined benefit plans

14,782(910)

13,872

Net changes in financial assets measured at fair value through OCI

64,765(19,609)45,156

Net changes in cash flow hedges

20,888(5,973)

14,915

Share of OCI of investments accounted for using the equity method

24,742(1,280)23,462

Total

476,985(25,185)

451,800

Reconciliation of OCI to profit or loss:
Foreign currency translation adjustments

Total
OCI, net of reclassification adjustments:

OCI, net of reclassification adjustments, attributable tonon-controlling interests:
Foreign currency translation adjustments

25,471Remeasurements of defined benefit plans

1,320

Net changes in financial assets measured at fair value through OCI

1,109

Net changes in cash flow hedges

(15)

Total

27,885

OCI, net of reclassification adjustments, attributable to
Hitachi, Ltd. stockholders:Foreign currency translation adjustments

328,924

Remeasurements of defined benefit plans

12,552

Net changes in financial assets measured at fair value through OCI

44,047

Net changes in cash flow hedges

14,930Share of OCI of investments accounted for using the equity method

23,462

Total

423,915

F-46

Notes to Consolidated Financial Statements

Millions of yen
2023
Before tax

Tax effect

After tax

OCI arising during the year:
Foreign currency translation adjustments

308,396(2,276)306,120

Remeasurements of defined benefit plans

16,97823,22440,202

Net changes in financial assets measured at fair value through OCI

35,012(13,528)

21,484

Net changes in cash flow hedges(4,584)

6(4,578)

Share of OCI of investments accounted for using the equity method

27,996(6,747)

21,249

Total

383,798

679

384,477

Reconciliation of OCI to profit or loss:
Foreign currency translation adjustments(78,818)

5,058(73,760)

Net changes in cash flow hedges

15,748(3,905)

11,843

Share of OCI of investments accounted for using the equity method(5,150)7(5,143)

Total(68,220)

1,160(67,060)

Foreign currency translation adjustments

229,5782,782

232,360

Remeasurements of defined benefit plans

16,97823,22440,202

Net changes in financial assets measured at fair value through OCI

35,012(13,528)

21,484

Net changes in cash flow hedges

11,164(3,899)7,265

Share of OCI of investments accounted for using the equity method

22,846(6,740)

16,106

Total

315,578

1,839

317,417

OCI, net of reclassification adjustments:

OCI, net of reclassification adjustments, attributable tonon-controlling interests:
Foreign currency translation adjustments

58,178Remeasurements of defined benefit plans

2,627

Net changes in financial assets measured at fair value through OCI
Net changes in cash flow hedges

56
(139)

Total

60,722

OCI, net of reclassification adjustments, attributable to
Hitachi, Ltd. stockholders:Foreign currency translation adjustments

174,182

Remeasurements of defined benefit plans

37,575

Net changes in financial assets measured at fair value through OCI

21,428Net changes in cash flow hedges

7,404

Share of OCI of investments accounted for using the equity method

16,106

Total

256,695

F-47

Notes to Consolidated Financial Statements(18) Dividends
Dividends paid on the Company’s common stock for the years ended March 31, 2024 and 2023 are as follows:
Cash dividends(millions of yen)

Appropriation from

Cash dividends
per share (yen)The Board of Directors
on October 27, 2023

74,144Retained earnings

The Board of Directors
on May 12, 2023

70,317The Board of Directors
on October 28, 2022
The Board of Directors
on May 13, 2022

Decision

Record date

Effective date

80.0

September 30, 2023

November 27, 2023

Retained earnings

75.0

March 31, 2023

June 2, 2023

66,277Retained earnings

70.0

September 30, 2022

November 29, 2022

62,870Retained earnings

65.0

March 31, 2022

June 2, 2022

The dividends on the Company’s common stock whose record date falls in the year ended March 31, 2024 and the effective datefalls in the next fiscal year is as follows:

Decision
The Board of Directors
on May 13, 2024

Cash dividends(millions of yen)

Appropriation from

Cash dividends
per share (yen)92,662Retained earnings

100.0

F-48

Record date

Effective date

March 31, 2024

June 4, 2024

Notes to Consolidated Financial Statements(19) Stock-based Compensation
The Company introduced a restricted stock compensation plan as stock-based compensation in place of the stock option plan andgrants shares of restricted stock in place of the existing stock options as stock-based compensation from the year ended March 31,
2020, and the Company introduced a restricted stock unit compensation plan and grants restricted stock units from the year ended
March 31, 2021. In addition, the Company introduced a performance-linked restricted stock unit compensation plan in place of apart of the restricted stock compensation plan and grants performance-linked restricted stock units from the year ended March 31,
2024.
Stock-based compensation expenses recognized for the years ended March 31, 2024 and 2023 were 2,260 million yen and 1,699
million yen, respectively.
(a) Restricted stock compensation plan
In accordance with the restricted stock compensation plan (hereinafter “Plan”) to be introduced by the Company, Executive
Officers and Corporate Officers of the Company and a part of Officers of any of its subsidiaries (hereinafter “Eligible
Persons”) will receive shares of common stock to be newly issued or disposed by the Company by making contributions in
kind of the monetary compensation claims which are granted in order to allot the shares of restricted stock to the Eligible
Persons. In addition, with respect to the issuance or disposition of shares of common stock of the Company under the Plan, theCompany and each Eligible Person executes an agreement on allotment of restricted stock (hereinafter “Allotment
Agreement”).
Outline of the Allotment Agreement(i) Transfer restriction period
From the payment date relating to the issuance or disposition of the shares of restricted stock to the date on which the
Eligible Person ceases to be an Executive Officer, Director or Corporate Officer of the Company or Officer of any of its
subsidiaries.
(ii) Acquisition by the Company without consideration
If certain events set out in the Allotment Agreement occur, the Company will acquire the shares without any consideration
promptly on or after a date notified to Eligible Persons. The Company will also acquire the shares for which the transfer
restrictions are definitely not lifted at the time of such determination, without any consideration.
The outlines of issuance for the years ended March 31, 2024 and 2023 are as follows.
March 31, 2024

March 31, 2023

Issuance date

May 31, 2023

June 15, 2022

Number of shares

103,800 shares

303,000 shares

7,586 yen

6,448 yen

Issue price per share [1] [2][1] The issue price for the year ended March 31, 2024 is the closing price per share for the Company’s common stock on April
26, 2023 (preceding business day of the date upon the decision by the President regarding the issuance of new shares) in thePrime Market of the Tokyo Stock Exchange, Inc.
[2] The issue price for the year ended March 31, 2023 is the closing price per share for the Company’s common stock on May
10, 2022 (preceding business day of the date upon the decision by the President regarding the issuance of new shares) in thePrime Market of the Tokyo Stock Exchange, Inc.
(b) Performance-linked restricted stock unit (hereinafter “PSU”) compensation plan
In accordance with the PSU plan to be introduced by the Company, Executive Officers and Corporate Officers of the Company
and a part of Officers of any of its subsidiaries (hereinafter “Eligible Persons”) will be granted PSUs corresponding to thenumber of shares of the Company’s common stock (hereinafter “Shares to be Delivered”) set in advance for each Eligible
Person. The PSUs will become vested depending on the degree of achievement of the evaluation KPI during a certain
evaluation period and the shares of restricted stock will be delivered. PSU comprises of compensation with stock pricecondition and with conditions for achievement of Mid-term Management Plan targets. The detailed conditions for vesting
Shares to be Delivered corresponding to each type of PSU are as follows.

F-49

Notes to Consolidated Financial Statements
Conditions for vesting Shares to be Delivered(i) In stock compensation with a stock price condition, the shares of restricted stock equivalent to 0 ~ 200% of the PSUs are
granted in accordance with the results of comparing the Total Shareholder Return growth rate of the Company stock with
the TOPIX growth rate and with the stock price growth rates of comparable companies in global competition as determinedby the Compensation Committee for the three fiscal years beginning at the beginning of the fiscal year to which the PSUs
are granted.
(ii) In stock compensation with conditions for achievement of Mid-term Management Plan targets, the shares of restricted
stock equivalent to the PSUs are granted when the target of ROIC and sustainability indicators during the period of Midterm Management Plan covering the fiscal year when the PSUs are granted are achieved.
The Eligible Persons will receive shares of restricted stock to be newly issued or disposed by the Company by making
contributions in kind of the monetary compensation claims which are granted after the end of each fiscal year in order to allot
the shares of restricted stock to the Eligible Persons.
(c) Restricted stock unit (hereinafter “RSU”) compensation plan
In accordance with the RSU plan to be introduced by the Company, the Company’s non-Japanese Executive Officers andCorporate Officers (hereinafter “Eligible Persons”) will be granted RSUs corresponding to the number of shares of theCompany’s common stock (hereinafter “Shares to be Delivered”) set in advance for each Eligible Person, and over three fiscal
years after granting, one-third of the RSUs will become vested after the end of each fiscal year and the Shares to be Delivered
and cash for the vested RSUs will be delivered.
The Eligible Persons will receive shares of common stock to be newly issued or disposed by the Company by making
contributions in kind of the monetary compensation claims which are granted after the end of each fiscal year in order to allot
the Shares to be Delivered to the Eligible Persons.
If the Eligible Persons retire due to expiration of their term of office, death or other legitimate reasons recognized by theCompany’s Compensation Committee, they will receive the Shares to be Delivered and cash corresponding to the portion of
RSUs granted reflecting the period from the granting date until such retirement.
(d) Stock option plan
Under the Company’s stock option plan, Executive Officers and Corporate Officers are granted the right to purchase shares ofcommon stock of the Company (hereinafter “Stock Acquisition Rights”).
Details of the Company’s stock option plan for the years ended March 31, 2024 and 2023 are as follows.
Fiscal Year of Issuance and Name

Grant Date

Exercise period

April 11, 2018

From April 27, 2018
to April 26, 2048

April 6, 2017

From April 27, 2017
to April 26, 2047

June 29, 2016

From July 15, 2016
to July 14, 2046

Year ended March 31, 2019
The Third Stock Acquisition Rights of Hitachi, Ltd.
Year ended March 31, 2018
The Second Stock Acquisition Rights of Hitachi, Ltd.
Year ended March 31, 2017
The First Stock Acquisition Rights of Hitachi, Ltd.

Conditions for the exercise of Stock Acquisition Rights(i) During the above exercise period, a holder of Stock Acquisition Rights may exercise all the Stock Acquisition Rights
determined in accordance with the provisions of paragraph (ii) or (iii) below in a lump sum only within ten days (in casethe last day is not a business day, the following business day) from the day immediately following the date on which
he/she ceases to be an Executive Officer, a Director or a Corporate Officer of the Company.
(ii) The number of Stock Acquisition Rights that a holder of Stock Acquisition Rights may exercise, shall be determinedbased on the ratio of the total shareholder return (hereinafter “TSR”) for shares of the Company for three years from the
beginning of the fiscal year in which the date of allotment of the Stock Acquisition Rights falls (hereinafter “Waiting
Period”) to the growth rate of TOPIX (Tokyo Stock Price Index) for the same period (hereinafter “TSR/TOPIX Growth
Rate Ratio”): market condition.

F-50

Notes to Consolidated Financial Statements(iii) The number of Stock Acquisition Rights, that a holder of Stock Acquisition Rights who has left his/her position in the
Company before the end of the Waiting Period (hereinafter “Resignee”) may exercise, shall be determined by reducing
the number of Stock Acquisition Rights allotted to him/her in proportion to the term of office of the Resignee in the
Waiting Period, and applying the TSR/TOPIX Growth Rate Ratio for the period from the beginning of the fiscal year inwhich the date of allotment of the Stock Acquisition Rights falls to the time of resignation in accordance with theprovision of paragraph (ii) above.
A summary of stock option activity for the years ended March 31, 2024 and 2023 is as follows. The number of stock options istranslated into their equivalent number of shares (20 shares per stock option).

Outstanding at beginning of year

2024
Weighted average
Number of shares
exercise price(shares)(yen)
417,3401Granted-2023
Weighted average
Number of shares
exercise price(shares)(yen)
499,000
1

-

-

-

-

-

-

-

(29,720)

1(81,660)

1

-

-

-

-

Outstanding at end of year

387,6201

417,340

1

Exercisable at end of year

-

-

-

-

Forfeited [1]Exercised
Expired[1] Including the Stock Acquisition Rights which became non-exercisable because of the market condition.
The weighted average share prices at the date of exercise for the years ended March 31, 2024 and 2023 were 7,300.0 yen and
5,849.0 yen.
The range of exercise price as of March 31, 2024 and 2023 was 1 yen. The weighted average remaining contractual lives ofstock options outstanding as of March 31, 2024 and 2023 were 23.2 years and 24.2 years, respectively.

F-51

Notes to Consolidated Financial Statements(20) Revenues(a) Disaggregation of revenue
The Company derives revenues primarily from contracts with customers.
The disaggregation of revenue attributable to each reportable segment and geographic area for the fiscal years ended March 31,
2024 and 2023 is as follows.
Effective from April 1, 2023, the Company reclassified its reportable segments. Accordingly, figures for the year ended March
31, 2023 have been restated on the basis of the reclassification. Details of the reclassification are described in note 4.
Millions of yen
2024
Overseas
Revenues
Subtotal

Total
Revenues

59,658867,450

2,598,659

1,009,260

485,349

2,626,204

3,052,302

267,199

204,838

35,662

1,538,222

3,057,960

395,538

305,639

100,80389,335891,315

1,164,384

-

-

-

-

-

-

-

-

-

-

-

-

-

-

Others427,956

60,131

7,029

9,751

2,929

79,840507,796

Subtotal

4,378,070

2,180,658

1,589,328

1,560,112

672,933

6,003,031

10,381,101

Corporate items & Eliminations(604,687)(29,114)(6,412)(9,234)(2,938)(47,698)(652,385)

Total

3,773,383

2,151,544

1,582,916

1,550,878

669,995

5,955,333

9,728,716

Japan

Asia

North
America

Europe

Other
Areas

Digital Systems & Services

1,731,209

227,920

344,412

235,460

Green Energy & Mobility

426,098

466,546

665,049

Connective Industries

1,519,738

1,030,523

Automotive Systems

273,069

Hitachi Construction Machinery
Hitachi Metals

Millions of yen
2023
Overseas
Revenues
Subtotal

Total
Revenues

53,102

833,887

2,389,095

829,338

346,127

2,045,094

2,469,919

259,907

201,80337,8691,494,330

2,975,272

699,256455,255

161,012

118,770

1,434,293

1,920,067

80,64083,04094,67180,460136,303

394,474

475,114

Hitachi Metals

323,193

181,280

283,606

41,547

18,100524,533

847,726

Others411,560

65,676

6,121

8,141

4,120

84,058495,618

Subtotal

4,762,142

2,671,097

1,880,534

1,544,647

714,391

6,810,669

11,572,811

Corporate items & Eliminations(643,898)(35,983)(2,542)(8,699)(539)(47,763)(691,661)

Total

4,118,244

2,635,114

1,877,992

1,535,948

713,852

6,762,906

10,881,150

Japan

Asia

North
America

Europe

Other
Areas

Digital Systems & Services

1,555,208

236,443

321,996

222,346

Green Energy & Mobility

424,825

410,651

458,978

Connective Industries

1,480,942

994,751

Automotive Systems

485,774

Hitachi Construction Machinery

The Digital Systems & Services segment consists of Front Business, IT Services, and Services & Platforms, for which revenue
amounted to 1,111,193 million yen, 969,816 million yen and 983,456 million yen for the year ended March 31, 2024 and982,541 million yen, 886,508 million yen and 950,040 million yen for the year ended March 31, 2023, respectively (includingintersegment transactions). Front Business and IT Services are operated mainly in Japan, and Services & Platforms is operated
mainly in Japan, North America and Europe.

F-52

Notes to Consolidated Financial Statements
The Company’s revenues include revenue recognized based on the pattern of the cost accrual arising from long-term projects.
Of the revenue recognized during the fiscal years ended March 31, 2024 and 2023, the amount of revenue recognized based on
the pattern of the cost accrual arising from long-term projects was 2,255,703 million yen and 1,805,588 million yen,respectively.
(b) Information about satisfaction of performance obligations
The following is information about satisfaction of performance obligations related to major goods and services of eachreportable segment.
(Digital Systems & Services)
Front Business and IT Services primarily provide goods and services such as system integration, consulting and cloudservice. Services & Platforms primarily provides IT products and software.
These long-term projects in system integration, consulting and cloud service businesses provide goods and services according
to customers’ specifications over a specified period of time, and revenue is recognized mainly based on the pattern of the costaccrual (the progress of the project mostly based on the cost incurred relative to the estimated total cost) or the passage oftime as performance obligations are satisfied over time. Many of the contracts require payments based on milestones, and insome cases, payments are made before performance obligations are satisfied.
In IT products and software businesses, revenue is recognized when control over the goods is transferred to customers as
performance obligations are satisfied at the point in time upon the completion or upon delivery of the goods. Mostly,
payment terms stipulate that the consideration is received within one year after the performance obligation is satisfied, andthere are no significant transactions in which payment terms include deferred payments, etc.
(Green Energy & Mobility and Connective Industries)
The Green Energy & Mobility segment includes revenue from businesses such as energy solutions and railway systems. Theenergy solutions business is operated mainly in Asia, North America, and Europe. The railway systems business is operated
mainly in Europe. The Connective Industries segment includes revenue from businesses such as building systems, smart life
& ecofriendly systems, measurement and analytical systems, and industry & distribution solutions. The building systems
business is operated mainly in China, the smart life & ecofriendly systems business is operated mainly in Japan, themeasurement and analytical systems business is operated mainly in Japan, Asia, North America, and Europe, and the industry& distribution solutions business is operated mainly in Japan.
Long-term projects related to contracts such as construction in these segments involve manufacturing and providing goods
based on customers’ specifications over a specified period of time. As performance obligations are satisfied over time,revenue is recognized mainly based on the pattern of the cost accrual (the progress of the project mostly based on the cost
incurred relative to the estimated total cost). In addition, these segments provide certain services promised in the contracts
such as maintenance throughout the duration of the contract, and recognize revenue over time based on the passage of time.
Many of the contracts require payments based on milestones, and, in some cases, payments are made before performanceobligations are satisfied.
Further, in the sale of elevators, home appliances, measurement and analytical systems, industrial equipment, etc. included in
the Connective Industries segment, revenue is recognized when control over the goods is transferred to customers as
performance obligations are satisfied at the point in time upon the completion or upon delivery of the goods. Mostly,
payment terms stipulate that the consideration is received within one year after the performance obligation is satisfied, andthere are no significant transactions in which payment terms include deferred payments, etc.
(Automotive Systems)
In the Automotive Systems segment, performance obligations are generally satisfied at a point in time upon completion or
upon delivery of the goods, and revenue is recognized when control over goods is transferred to customers. Mostly, payment
terms stipulate that the consideration is received within one year after the performance obligation is satisfied, and there are no
significant transactions in which payment terms include deferred payments, etc.

F-53

Notes to Consolidated Financial Statements(c) Information about contract balances
The following table shows the beginning and ending balances of Trade receivables, Contract assets and Contract liabilities fromcontracts with customers for the fiscal years ended March 31, 2024 and 2023.
Millions of yen
2024
March 31, 2024
Trade receivables

2023
April 1, 2023

2,063,056

2,072,238

March 31, 2023

April 1, 2022

2,072,238

2,381,832

Contract assets

971,988

849,402849,402665,627

Contract liabilities

1,739,770

1,314,799

1,314,799

1,150,592

Of the revenue recognized during the fiscal years ended March 31, 2024 and 2023, the amount included in Contract liabilities atthe beginning of the fiscal years was 800,909 million yen and 745,452 million yen, respectively. And the amount related toperformance obligations satisfied in the past periods was not material.
(d) Transaction price allocated to remaining performance obligations
The following table shows the balance of unsatisfied performance obligations by reportable segment for the fiscal years ended
March 31, 2024 and 2023.
Millions of yen
March 31, 2024
Intersegment
transactions

March 31, 2023

Balance of unsatisfied
performance obligations

Intersegment
transactions

Balance of unsatisfied
performance obligations

Digital Systems & Services

69,825

1,446,972

52,481

1,253,318

Green Energy & Mobility

50,743

10,189,630

45,801

7,517,839

Connective Industries

107,453

2,019,113

106,653

1,825,227

Segments of the Company and its subsidiaries that have contracts under which revenue is recognized over a long period of time
are primarily the Digital Systems & Services segment, Green Energy & Mobility segment and Connective Industries segment.
The estimated timing of unsatisfied performance obligations at the fiscal year ended March 31, 2024 is as follows.
Approximately 90% of the balance of unsatisfied performance obligations of the Digital Systems & Services segment was
expected to be satisfied within three years and approximately 10% after three years but no more than five years.
Approximately 60% of the balance of unsatisfied performance obligations of the Green Energy & Mobility segment was
expected to be satisfied within three years and approximately 20% after three years but no more than five years.
Approximately 90% of the balance of unsatisfied performance obligations of the Connective Industries segment was expected tobe satisfied within three years.
The estimated timing of unsatisfied performance obligations at the fiscal year ended March 31, 2023 is as follows.
Approximately 90% of the balance of unsatisfied performance obligations of the Digital Systems & Services segment was
expected to be satisfied within three years and approximately 10% after three years but no more than five years.
Approximately 60% of the balance of unsatisfied performance obligations of the Green Energy & Mobility segment was
expected to be satisfied within three years and approximately 40% after three years but no more than five years.
Approximately 90% of the balance of unsatisfied performance obligations of the Connective Industries segment was expected tobe satisfied within three years.
The remaining segments have contracts whose initial expected terms are generally one year or less. Accordingly, related
information is excluded from this disclosure in accordance with the practical expedient.
(e) Assets recognized from the costs incurred for obtaining or fulfilling contracts with customers
The Company and its subsidiaries recognize the costs incurred for obtaining or fulfilling contracts with customers as an asset tothe extent those costs are expected to be recovered. Such costs recognized as an asset as of March 31, 2024 and 2023 were notmaterial.

F-54

Notes to Consolidated Financial Statements(21) Other Income and Expenses
The main components of other income and expenses for the years ended March 31, 2024 and 2023 are as follows:
Millions of yen
2024

2023

Net gain (loss) on sales and disposals of fixed assets

17,0562,285

Impairment losses(29,668)(129,894)

Net gain (loss) on business reorganization and others

97,048297,351

Special termination benefits(19,443)(9,323)

Impairment losses are mainly recognized on property, plant and equipment, goodwill and other intangible assets. Net gain (loss)
on business reorganization and others includes gains and losses related to obtaining and losing control of investees and gains andlosses related to obtaining and losing significant influence over investees.
Impairment losses for the years ended March 31 2023 include 52,163 million yen in the Digital Systems & Services segment and
49,584 million yen in the Green Energy & Mobility segment. Details are described in note 9 and note 10.
Restructuring charges (structural reform expenses) included in Other expenses for the years ended March 31, 2024 and 2023 were49,111 million yen and 139,217 million yen, respectively. Restructuring charges (structural reform expenses) include impairment
losses and special termination benefits.
In addition, the settlement loss of 51,185 million yen recognized for the years ended March 31, 2023 due to the change to the risksharing corporate pension plan introduced by subsidiaries on April 1, 2022, is included in Other expenses for the years ended
March 31, 2023. Details of this transaction are described in note 15.
(22) Financial Income and Expenses
The main components of financial income and expenses for the years ended March 31, 2024 and 2023 are as follows:
Millions of yen
2024

2023

Dividends received

9,875

7,878

Exchange gain (loss)

7,068(11,911)

Dividends received for the years ended March 31, 2024 and 2023 are from financial assets measured at fair value through othercomprehensive income.

F-55

Notes to Consolidated Financial Statements(23) Earnings Per Share (EPS) Information
The calculations of basic and diluted EPS attributable to Hitachi, Ltd. stockholders are as follows:
Number of shares
2024
Weighted average number of shares on which basic EPS is calculated

2023

929,605,301

948,247,986

Stock options

387,620

417,340

Restricted stock

784,832

493,790

Effect of dilutive securities

Restricted stock units
Number of shares on which diluted EPS is calculated

24,4055,419

930,802,158

949,164,535
Millions of yen

2024

2023

Net income attributable to Hitachi, Ltd. stockholders
Basic
Effect of dilutive securities
Diluted589,896649,124--

589,896649,124
Yen

2024

2023

EPS attributable to Hitachi, Ltd. stockholders
Basic634.57684.55

Diluted633.75683.89F-56

Notes to Consolidated Financial Statements(24) Supplementary Cash Flow Information(a) Liabilities from financing activities
Changes in liabilities from financing activities for the years ended March 31, 2024 and 2023 are as follows:
Millions of yen
Short-term debt

Bonds

Long-term
borrowings

Lease liability

Total

March 31, 2022

1,234,119

357,548

1,207,825

327,220

3,126,712

Cash flows(277,685)(108,918)

2,583(102,398)(486,418)---

98,92598,925(205,217)(89,787)(230,229)(76,455)(601,688)

26,433

1,157

42,815

5,412

75,817

March 31, 2023

777,650

160,000

1,022,994

252,704

2,213,348

Cash flows(550,170)

60,000(158,829)(97,548)(746,547)

Non-cash changes
Finance lease liability incurred
Acquisitions and divestitures
Currency translation effect and others

Non-cash changes
Finance lease liability incurred
Acquisitions and divestitures
Currency translation effect and others
March 31, 2024

-

-

-

85,52885,528(249,991)-(243,994)(12,953)(506,938)

60,338-59,184

15,109134,631

37,827220,000

679,355

242,840

1,180,022(b) Income taxes paid
The cash flows regarding the sale of shares of Hitachi Metals and Hitachi Transport System after deducting the withholding
tax on deemed dividend for the year ended March 31, 2023, were recognized as Proceeds from sale of investments insecurities and other financial assets (including investments in subsidiaries and investments accounted for using the equity
method) in cash flows from investing activities.
Income taxes paid including the withholding tax was 284,265 million yen for the year ended March 31, 2023.

F-57

Notes to Consolidated Financial Statements(25) Financial Instruments and Related Disclosures(a) Capital Management
The Company manages its capital under the policy of maintaining appropriate level of assets, liabilities and capital for current
and future business operations, as well as optimizing the efficiency of capital utilization throughout the business operations.
The Company uses the total Hitachi, Ltd. stockholders’ equity ratio as an important indicator in capital management and it isregularly monitored. The total Hitachi, Ltd. stockholders’ equity ratio as of March 31, 2024 and 2023 were 46.7% and 39.5%,
respectively.
The Company is not subject to any capital requirements except for the general rules such as the Japanese Company Law.
(b) Financial Risks
The Company is engaged in business activities world-wide, and constantly exposed to various risks such as market risks(mainly currency exchange risk and interest rate risk), credit risk and liquidity risk. The Company implements risk
management policies to avoid or mitigate these financial risks.
(i) Currency Exchange Risk
The Company and its subsidiaries hold assets and liabilities exposed to currency exchange risk. In order to hedge this risk,
the management uses forward exchange contracts or cross currency swaps.
For trade receivables and payables denominated in foreign currencies, the Company and its subsidiaries measure the future
cash flows per currency on a monthly basis, and enter into forward exchange contracts using a constant ratio with the
purpose of fixing the future cash flows arising from receivables and payables and forecasted transactions denominated inforeign currencies. The terms of forward exchange contracts are largely within one year. If necessary, the Company and its
subsidiaries establish a risk control policy and a risk management approach specific to each transaction by reviewing thebusiness characteristics, the structure of income and expenditure, and conditions of the contract. The Company and its
subsidiaries hedge the risk exposure arising from specific transactions based on the risk control policy and the risk
management approach.
To fix cash flows from long-term debt denominated in foreign currencies, the Company and its subsidiaries enter into crosscurrency swap agreements with the same maturities as the underlying debt. The hedging relationship between the forward
exchange contracts or cross currency swaps and the underlying hedged items is highly effective in offsetting the impact
from changes in foreign currency exchange rates.
The sensitivity analysis for currency exchange rates shown below indicates the impact on income before income taxes, in
the Company’s consolidated statement of profit or loss, if the Japanese yen depreciated by 1% on the foreign-currencydenominated financial instruments held by the Company and its subsidiaries as of March 31, 2024 and 2023, while all othervariables are held constant.
Millions of yen
Currency
Impact on income before income taxes

US Dollar
Euro

F-58

2024

2023
2,336

2,447

52

16

Notes to Consolidated Financial Statements(ii) Interest Rate Risk
The Company and its subsidiaries are exposed to interest rate risk related principally to long-term debt obligations. In orderto minimize this risk, the Company and its subsidiaries enter into interest rate swap agreements to control fluctuation risk ofcash flows. The interest rate swaps entered into are mainly receive-variable, pay-fixed interest rate swaps. Under theinterest rate swaps, the Company and its subsidiaries receive variable interest rate payments on long-term debt and makefixed interest rate payments, thereby creating fixed interest rate long-term debt.
Certain financing subsidiaries raise funds by issuing long-term debt with a fixed interest rate and lending it at variableinterest rates, creating interest rate risk. In order to minimize this risk, interest rate swaps are used to convert, in effect, thefixed rate to a variable rate to manage fluctuations in fair value resulting from interest rate risk. The hedging relationshipbetween the interest rate swaps and the underlying hedged items is highly effective in offsetting the impact from changes incash flows and fair value resulting from interest rate risk.
The sensitivity analysis for interest rate shown below indicates the impact on income before income taxes, in the
consolidated statement of profit or loss, if interest rates increased by 1% on the financial instruments (floating-interest
financial assets and liabilities measured at amortized cost, financial assets and liabilities measured at fair value throughprofit or loss and derivatives) held by the Company and its subsidiaries as of March 31, 2024 and 2023, while all othervariables are held constant.
Millions of yen
2024
Impact on income before income taxes

2023(2,736)(5,662)(iii) Credit Risk
Trade receivables and contract assets, and other receivables resulting from operating activities of the Company and its
subsidiaries are exposed to credit risk of the customers. Investments in debt securities held for managing cash surplus andequity instruments held for strategic purposes are exposed to credit risk of the issuers. Derivative transactions entered into
in order to lower market risks are exposed to credit risk of the counter-party financial institutions.
For credit risk of customers, the Company conducts periodic credit checks as appropriate for the products sold and thecustomers’ financial conditions and credit ratings. A credit limit is set according to the credit risk. For cash surplus,
investment is restricted to low risk debt securities, and derivative transactions are entered into with financial institutions
with high credit rating only.
No significant concentration of credit risk is present in a particular region or a customer, as the Company and its
subsidiaries are engaged in diverse industries worldwide.

F-59

Notes to Consolidated Financial Statements
The changes in the balance of allowance for doubtful receivables for trade receivables, contract assets and otherreceivables, and the changes in the gross carrying amounts of trade receivables and contract assets, and other receivables
corresponding to the allowance for doubtful receivables for the years ended March 31, 2024 and 2023 are as follows. Other
receivables mainly consist of lease receivables and financial assets measured at amortized cost such as short-term loans
receivable, other accounts receivable, debt securities measured at amortized cost and long-term loans receivable.
Millions of yen
Trade receivables and contract
assetsAllowance for doubtful receivables
Collective
assessment

Individual
assessment

March 31, 2022

28,960Change, net

5,091

Credit-impairment [1]Write-off [2]Gross carrying amount

Total

Collective
assessment

Individual
assessment

Total

51,98580,9453,021,093

107,311

3,128,404

6,930

12,021

321,035

2,716

323,751

(350)

350

-

(2,226)2,226-(2,182)(2,274)(4,456)(50,896)(2,520)(53,416)

Other [3](3,219)(1,450)(4,669)(390,525)(2,733)(393,258)

March 31, 2023

28,30055,541

83,841

2,898,481

107,000

3,005,481

Change, net

3,631

28,15831,789389,4317,847

397,278

Credit-impairment [1](4,405)

4,405-(21,304)

21,304-

Write-off [2](4,085)(1,959)(6,044)(7,533)(6,125)(13,658)

451

5,317

5,768

(244,619)

5,916(238,703)

23,892

91,462

115,354

3,014,456

135,9423,150,398

Other [3]March 31, 2024

Millions of yen
Allowance for doubtful receivables
Other receivables

Collective
assessment

Individual
assessment

March 31, 2022

292

4,733

Change, net

77

Credit-impairment [1]-Write-off [2]Gross carrying amountCollective
assessment

Individual
assessment

5,025

418,932

9,136

428,068

567

644

38,6501,462

40,112

-

-

(137)

137

-

(1)

(1,296)(1,297)(3,557)(1,398)(4,955)

Other [3]21

(2,592)(2,571)(85,440)(6,970)(92,410)

March 31, 2023

389

1,412

1,801

368,448

2,367

370,815

Change, net

84

(286)

(202)

29,287(421)

28,866

(122)

122

-

(355)

355

-

Credit-impairment [1]

Total

Total

Write-off [2]

(1)

(4)

(5)

(1,381)(11)(1,392)Other [3]

23

92

115

(29,764)

115(29,649)

March 31, 2024

373

1,336

1,709

366,235

2,405

368,640[1] The Company measures the allowance for doubtful receivables relating to credit-impaired financial assets based on
individual assessment and, therefore, transfers them from collective assessment.
[2] The Company generally writes off and derecognizes the corresponding carrying amount when it has no reasonable
expectations of recovering the financial asset in its entirety or a portion.
[3] Other mainly includes the impact of acquisitions and divestitures and currency translation effect.
The maximum exposure to the credit risk equals the financial assets’ carrying amount, net of allowance for doubtfulreceivables, in the consolidated statement of financial position, if collateral held is not included. The maximum exposure to
the credit risk from loan commitments is disclosed in note 29. The maximum exposure to the credit risk from guarantee
obligations is disclosed in note 29.

F-60

Notes to Consolidated Financial Statements(iv) Liquidity Risk
Trade payables and financial liabilities, such as long-term debts, held by the Company and its subsidiaries are exposed toliquidity risk. With respect to this risk, the Company and its subsidiaries try to optimize capital efficiency through efficientmanagement of working capital, and maintain cash control through a centralized cash management system. They are alsoable to raise funds, as necessary, from capital markets through the issuance of debt and equity securities, and fromcommercial banks through borrowings and commitment lines. The total unused commitment lines as of March 31, 2024 aredisclosed in note 29.
The following tables present the maturities of non-derivative financial liabilities. Trade payables are not included in thetables since the carrying amounts agree with the contractual cash flows and they all mature in less than one year.
Millions of yen
March 31, 2024
Contractual
cash flows

Within 1 year

After 1 year
but not morethan 5 years

37,82738,05138,051--

Lease liabilities

242,840

257,076

79,559140,850

36,667

Bonds

220,000

231,072

1,479

55,852

173,741

Long-term borrowings

679,355

709,884

124,916

564,885

20,083Carrying
amountShort-term debt

More than 5
yearsLong-term debt

Millions of yen
March 31, 2023
Contractual
cash flows

Within 1 year

After 1 year
but not morethan 5 years

777,650

778,586

778,586--

Lease liabilities

252,704

265,01780,785

149,329

34,903

Bonds

160,000

163,843

30,811

22,236

110,796

1,022,994

1,063,672

45,657

940,611

77,404

Carrying
amountShort-term debt

More than 5
yearsLong-term debt

Long-term borrowings

The weighted average interest rate for short-term debt is 7.5%, and the weighted average interest rate for long-termborrowings is 2.2% with maturities ranging from 2024 to 2039.

F-61

Notes to Consolidated Financial Statements
The details on each bond issued are provided below.
Millions of yen
MatureinIssuerName of bondIssuedMarch 31,2024

The Company

Unsecureddebenture #16

2013

-

30,000 Unsecured

0.8

2023

The Company

Unsecureddebenture #17

2013

20,00020,000 Unsecured

1.4

2028

The Company

Unsecureddebenture #19

2020

20,00020,000 Unsecured

0.2

2027

The Company

Unsecureddebenture #20

2020

90,00090,000 Unsecured

0.3

2030

The Company

Unsecureddebenture #21

2023

10,000- Unsecured

0.6

2028

2023

30,000- Unsecured

0.9

2030

2023

50,000- Unsecured

1.2

2033

The Company
The Company

Unsecureddebenture #22
Unsecureddebenture #23

Total

March 31,2023

Interest
rates(%)

220,000

Security

160,000

The following table shows the maturities of the main types of derivatives, expressed in gross amounts, even though they are
net settlement derivatives.
Millions of yen
March 31, 2024

Forward exchange contracts
Cross currency swaps
Interest rate swaps
Option contracts

Within 1 year

After 1 year
but not morethan 5 years

More than 5
years

In

45,636

8,188

89

53,913

Out

39,09014,908755

54,753

In

57,347684-

58,031

Out

9,562

89

-

9,651

In

440

18,985-

19,425

Out

-

-

-

-

In

-

2,171

-

2,171

Out

-

-

-

-

Total

Millions of yen
March 31, 2023

Forward exchange contracts
Cross currency swaps
Interest rate swaps
Option contracts

Within 1 year

After 1 year
but not morethan 5 years

In

21,367

4,806-

26,173

Out

24,765

13,775-38,540In

6,031

24,531-

30,562

Out

9,251

495

-

9,746

In

128

19,702-

19,830

Out

8

-

-

8

In

-

-

-

-

Out

-

-

-

-

F-62

More than 5
years

Total

Notes to Consolidated Financial Statements(c) Fair Value of Financial Instruments(i) Fair Value Measurements
The following methods and assumptions are used to measure the fair value of financial assets and liabilities.
Cash and cash equivalents, Trade receivables, Short-term loans receivable, Other accounts receivable, Short-term
debt, Other accounts payable and Trade payables
The carrying amount approximates the fair value because of the short maturity of these instruments.
Investments in securities and other financial assets
The fair value of lease receivables is based on the present value of lease payments receivable calculated for each group ofyears to maturity using discount rates that reflect the time to maturity and credit risk.
Investment securities with quoted market prices are estimated using the quoted share prices. In the absence of an active
market for investment securities, quoted prices for similar investment securities, quoted prices associated with transactions
that are not distressed for identical or similar investment securities or other relevant information including market interest
rate curves, referenced credit spreads or default rates, are used to determine fair value. If significant inputs of fair value
measurement are unobservable, the Company uses price information provided by financial institutions to evaluate suchinvestments. The information provided is corroborated by the income approach using its own valuation model, or themarket approach using comparisons with prices of similar securities.
The fair value of long-term loans receivable is estimated based on the present value of future cash flows using the interest
rate applicable to an additional loan of the same type.
Derivative assets are measured at fair value based on quoted prices associated with transactions that are not distressed,
prices in inactive markets, or based on models using interest rate curves and forward and spot prices for currencies andcommodities. If significant inputs are unobservable, the Company mainly uses the income approach or the market approachto corroborate relevant information provided by financial institutions and other available information.
Long-term debt
The fair value of long-term debt is estimated based on quoted market prices or the present value of future cash flows using
the market interest rates applicable to the same contractual terms.
Other financial liabilities
Derivative liabilities are measured at fair value based on quoted prices associated with transactions that are not distressed,
prices in inactive markets, or based on models using interest rate curves and forward and spot prices for currencies andcommodities. If significant inputs are unobservable, the Company uses mainly the income approach or the market approachto corroborate relevant information provided by financial institutions and other available information.

F-63

Notes to Consolidated Financial Statements(ii) Financial Instruments Measured at Amortized Cost
The carrying amounts and estimated fair values of the financial instruments measured at amortized cost as of March 31,
2024 and 2023 are as follows.
The fair value estimated for financial assets and liabilities measured at amortized cost is classified in Level 2 of the fairvalue hierarchy.
Millions of yen
March 31, 2024
Carrying amounts

March 31, 2023

Estimated
fair values

Carrying amounts

Estimated
fair values

AssetsInvestments in securities and otherfinancial assets
Lease receivables

27,414

28,81022,85822,858Debt securities

46,486

46,162

46,72946,729Long-term loans receivable

8,840

8,840

385

385

Bonds

220,000

218,586

160,000

159,250

Long-term borrowings

679,355

677,633

1,022,994

1,022,130

Liabilities
Long-term debt [1][1] Long-term debt is included in Current portion of long-term debt and Long-term debt in the consolidated statement offinancial position.
(iii) Financial Instruments Measured at Fair Value
Financial instruments measured at fair value on a recurring basis after the initial recognition are classified into three levelsof the fair value hierarchy based on the measurement inputs’ observability as follows:
Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets
Level 2: Valuations measured by direct or indirect observable inputs other than Level 1
Level 3: Valuations measured by significant unobservable inputs
When several inputs are used for a fair value measurement, the level is determined based on the input that is significant
with the lowest level in the fair value measurement as a whole.
Transfers between levels are deemed at the beginning of each quarter period.

F-64Notes to Consolidated Financial Statements
The following tables present the assets and liabilities that are measured at fair value on a recurring basis as of March 31,
2024 and 2023.
March 31, 2024
Class of financial instruments

Millions of yen
Level 1

Level 2

Level 3

Total

Financial assets measured at fair value
through profit or loss:
Investments in securities and otherfinancial assets
Equity securities

510-

35,404

Debt securities

10,523

5,648

2,901

19,072-

132,410

2,171

134,581

58,929-105,910

164,839

69,962138,058

146,386

354,406-

64,659-64,659-64,659-64,659Derivatives

35,914

Financial assets measured at fair value
through other comprehensive income:Investments in securities and otherfinancial assets
Equity securities
Total financial assets at fair value
Financial liabilities measured at fair value
through profit or loss:
Other financial liabilities
Derivatives
Total financial liabilities at fair value
March 31, 2023
Class of financial instruments

Millions of yen
Level 1

Level 2

Level 3

Total

Financial assets measured at fair value
through profit or loss:
Investments in securities and otherfinancial assets
Equity securities

335-

28,352

28,687

Debt securities

8,684

4,145

4,959

17,788-78,327-78,327234,175-

104,445

338,620

243,194

82,472

137,756

463,422-

49,385-49,385-49,385-49,385Derivatives
Financial assets measured at fair value
through other comprehensive income:Investments in securities and otherfinancial assets
Equity securities
Total financial assets at fair value
Financial liabilities measured at fair value
through profit or loss:
Other financial liabilities
Derivatives
Total financial liabilities at fair value

F-65Notes to Consolidated Financial Statements
The following tables present the changes in Level 3 instruments measured on a recurring basis for the years ended March
31, 2024 and 2023.
March 31, 2024
Level 3 financial assets
Balance at beginning of year
Gain (loss) in profit or loss [1]Gain in OCI [2]Purchases
Sales and redemption
Acquisitions and divestitures
Other
Balance at end of year

Millions of yen
Equitysecurities

Debt
securities

Derivatives

Total

132,797
512
4,375
10,408(8,176)(2,170)3,568
141,314

4,959
(47)
39
(746)
(14)
(1,290)
2,901

2,095
76
2,171

137,756
465
4,375
12,542(8,922)(2,184)
2,354
146,386

480

(7)

-

473

Unrealized gain (loss) relating tofinancial assets held at end of year [3]March 31, 2023
Level 3 financial assets
Balance at beginning of year
Gain in profit or loss [1]Loss in OCI [2]Purchases
Sales and redemption
Acquisitions and divestitures
Other
Balance at end of year

Millions of yen
Equitysecurities

Debt
securities

Derivatives

Total

123,632
777(1,213)33,762(13,513)(13,964)
3,316
132,797

5,686
96
529
(521)
(846)
15
4,959

-

129,318873(1,213)34,291(14,034)(14,810)3,331
137,756

766

96

-

862

Unrealized gain relating tofinancial assets held at end of year [3][1] Gain (loss) in profit or loss related to Financial assets measured at fair value through profit or loss is included in
Financial income and Financial expenses in the consolidated statement of profit or loss.
[2] Gain (loss) in OCI related to Financial assets measured at fair value through other comprehensive income is included in
Net changes in financial assets measured at fair value through OCI in the consolidated statement of comprehensive
income.
[3] Unrealized gain (loss) relating to Financial assets measured at fair value through profit or loss held at the end of year isincluded in Financial income and Financial expenses in the consolidated statement of profit or loss.
Fair values are measured by the finance departments in accordance with the Company’s policies and procedures. Valuation
models are determined so that they reflect each financial instrument’s nature, characteristics and risks most appropriately.
The finance departments continually examine changes in important inputs that could affect the fair value. In case the fairvalue of a financial instrument was significantly impaired, administrators review and approve the impairment loss.

F-66

Notes to Consolidated Financial Statements(ⅳ) Other
Equity instruments held with the objective of maintaining and strengthening business relations with the issuers areclassified as Financial assets measured at fair value through other comprehensive income. The following is a list ofprincipal equity instruments designated as fair value through other comprehensive income and their fair values.
March 31, 2024
Principal Financial assets measured at fair value
through other comprehensive income
JECC Corporation

Millions of yen
Fair value
22,298Central Japan Railway Company

16,767

Nippon Steel Kowa Real Estate Co., Ltd.

10,265LOGISTEED Holdings, Ltd.

9,993

Nippon Tochi-Tatemono Co., Ltd.

5,643

Invivoscribe, Inc.

4,845

Daiichi Sankyo Co., Ltd.

4,299

The Chiba Bank, Ltd.

3,784

Japan Nuclear Fuel, Ltd.

3,667

Sapporo Holdings, Ltd.

3,628

March 31, 2023
Principal Financial assets measured at fair value
through other comprehensive income
Renesas Electronics Corporation

Millions of yen
Fair value
118,619

Mitsubishi HC Capital Inc.

39,459JECC Corporation

22,298Western Digital Corporation

15,556

Central Japan Railway Company

14,229Nippon Steel Kowa Real Estate Co., Ltd.

9,810

Honda Motor Co., Ltd.

7,020

Nippon Tochi-Tatemono Co., Ltd.

5,438

Invivoscribe, Inc.

5,341

Daiichi Sankyo Co., Ltd.

4,340

See note 22 for dividends received from investment securities classified as Financial assets measured at fair value throughother comprehensive income.
Accumulated gains and losses on valuation of Financial assets measured at fair value through other comprehensive income
are reclassified into retained earnings when derecognized during the fiscal year. The net gains reclassified, net of taxes, forthe years ended March 31, 2024 and 2023 were 110,371 million yen and 16,967 million yen, respectively. These financial
assets were derecognized upon disposal of shares after reviewing particular business relations, or acquisitions anddivestitures.
The information on Financial assets measured at fair value through other comprehensive income that were derecognized forthe years ended March 31, 2024 and 2023 is as follows:
Millions of yen
2024

2023

Fair value at the time of derecognition

246,758

111,441

Accumulated gains at the time of derecognition

148,808

23,754

F-67

Notes to Consolidated Financial Statements(d) Derivatives and Hedging Activities(i) Fair Value Hedge
Changes in the fair value of recognized assets and liabilities, and of derivatives designated as a fair value hedge of theseassets and liabilities are recognized in profit or loss for the period in which the changes occur. Derivatives designated as afair value hedge include forward exchange contracts associated with operating transactions, cross currency swaps
agreements and interest rate swaps associated with financing transactions.
(ii) Cash Flow Hedge
Foreign Currency Risk
A portion determined as an effective hedge with respect to changes in the fair value of forward exchange contracts
designated as an effective cash flow hedge of forecasted foreign-currency-denominated transactions are recognized in OCI.
AOCI is subsequently reclassified into profit or loss when the hedged items affect profit or loss for the period. If a nonfinancial asset or a non-financial liability is recognized due to a hedged forecast transaction, the changes in the fair value ofthe derivative recognized in OCI are included directly in the acquisition cost or other carrying amount of the asset or
liability at which point the asset or liability is recognized.
Interest Rate Risk
A portion determined as an effective hedge with respect to changes in the fair value of interest rate swaps designated as ahedge of the variability of cash flows associated with long-term debt are recognized in OCI. AOCI is subsequently
reclassified to interest charges over the period in which the interest on the debt affects profit or loss.
When applying hedge accounting, the Company assesses hedge effectiveness through a qualitative assessment of whether
the critical terms of the hedged item and the hedging instrument match or are closely aligned and whether changes in thefair value or cash flows of the hedging instrument offset changes in the fair value or cash flows of the hedged item in order
to confirm that an economic relationship exists between the hedged item and the hedging instrument. The Company also
sets appropriate hedge ratios based on the economic relationship between the hedged item and the hedging instrument andthe Company’s risk management policies. For the years ended March 31, 2024 and 2023, hedge ineffectiveness recognizedin profit or loss were not material.
The notional amounts and carrying amounts of hedging instruments as of March 31, 2024 and 2023 are as follows. The
carrying amount of hedging instruments is included in Investments in securities and other financial assets and Other
financial liabilities or Other non-current liabilities in the consolidated statement of financial position.
March 31, 2024
Hedging instruments

Millions of yen
Notional amount

Carrying amountMore than 1 year

AssetsLiabilities

Fair value hedge
Foreign currency risk

515,005

5,964

39,357642

Interest rate risk

46,45815,141

515-

511,52253,51722,713

6,638

196,833

196,833

18,910-1,269,818

271,455

81,495

7,280

Cash flow hedge
Foreign currency risk
Interest rate risk
Total
March 31, 2023
Hedging instruments

Millions of yen
Notional amount

Carrying amountMore than 1 year

AssetsLiabilities

Fair value hedge
Foreign currency risk

196,38876,30325,192

553

Interest rate risk

41,12027,7671,048-

Foreign currency risk

234,313

31,136

8,375

5,561

Interest rate risk

173,589

173,589

18,765-645,410

308,795

53,3806,114

Cash flow hedge

Total

F-68

Notes to Consolidated Financial Statements
The carrying amounts of hedged items related to fair value hedges as of March 31, 2024 and 2023 are as follows.
March 31, 2024

Millions of yen

Hedged items related tofair value hedges

Carrying amount

Recognized in statement offinancial position

AssetsLiabilities

Trade receivables and contract assets,
Foreign currency risk

Investments in securities and other financial assets,

344,572

170,433

46,458-391,030

170,433

Current portion of long-term debt and Trade payables
Interest rate risk

Investments in securities and other financial assets

Total
March 31, 2023

Millions of yen

Hedged items related tofair value hedges

Carrying amount

Recognized in statement offinancial position

AssetsLiabilities

Trade receivables and contract assets,
Foreign currency risk

Investments in securities and other financial assets,
Trade payables and Long-term debt

58,872

137,516

Interest rate risk

Investments in securities and other financial assets

41,120-99,992

137,516Total

For the years ended March 31, 2024 and 2023, changes in the fair value of hedging instruments and hedged items related tofair value hedges and the accumulated amount of fair value hedge adjustments on hedged items included in the carrying
amount of the hedged items were not material.
For the years ended March 31, 2024 and 2023, changes in the fair value of hedging instruments related to cash flow hedges
recorded in Accumulated other comprehensive income are as follows.
Millions of yen

April 1,
2023

Changes in fairAmount directly
value of hedging
included in
instruments
carrying amount ofrecognized in otherhedged assets orcomprehensive
liabilities
incomeAmountreclassified to
profit or loss
[1]

March 31,2024

Foreign currency risk

(3,682)

18,702(2,220)2,041

14,841

Interest rate risk

18,765145--

18,910Total

15,083

18,847(2,220)2,041

33,751Millions of yen

April 1,
2022

Foreign currency risk

Changes in fairAmount directly
value of hedging
included in
instruments
carrying amount ofrecognized in otherhedged assets orcomprehensive
liabilities
incomeAmountreclassified to
profit or loss
[1]

March 31,2023

Interest rate risk

(7,939)13,180(10,150)
5,566(1,322)-

15,72919(3,682)
18,765

Total

5,241

(4,584)(1,322)

15,74815,083F-69

Notes to Consolidated Financial Statements[1] In the consolidated statement of profit or loss, the amount reclassified to profit or loss is included mainly in Revenues
and Financial expenses for hedges of foreign currency risk and mainly in Interest charges for hedges of interest raterisk.
(e) Securitization of Financial Assets
For the purpose of providing diversified and stable financing, the Company and certain subsidiaries securitize certain financial
assets, and transfer trade and lease receivables through certain third-party financial institutions or structured entities formed bythese financial institutions. The Company does not consolidate such structured entities used for securitization purposes since it
has been determined that they are not controlled by the Company.
These unconsolidated structured entities used for securitization purposes are operated in the ordinary course of business of thefinancial institutions, and they procure funds by issuing commercial paper and other borrowings. Basically, investors in thesestructured entities only have recourse to the assets owned by the entity itself, but not to any other assets held by the Company
or its subsidiaries. The amount of assets transferred by the Company and certain subsidiaries is considerably small comparedto the total assets of the structured entities sponsored by the financial institutions that purchase a large amount of assets fromentities other than the Company and certain subsidiaries. The Company and certain subsidiaries have only limited exposure to
the risks borne by these structured entities. The majority of the involvement with these structured entities used for
securitization purposes by the Company and certain subsidiaries concerns the servicing of assets. The Company and certain
subsidiaries do not provide any non-contractual support to the structured entities and have not made any implicit support
arrangements with them.
For the securitizations of financial assets by the Company and certain subsidiaries, which resulted in derecognizing thefinancial assets in their entirety, the Company and certain subsidiaries retain no significant continuing involvement. For othersecuritizations of financial assets, the Company and certain subsidiaries do not derecognize the financial assets in their entirety
when they retain substantially all credit risks and economic value related to the transferred financial assets through holding
subordinated interests, and the carrying amounts of these financial assets are not material.
(26) Pledged Assets
As a general contractual term for long-term and short-term debt, banks may demand collateral and guarantees for present andfuture obligations, and retain rights to offset the liabilities with bank deposits when repayment is overdue or any breach of contract
occurs.
Per trustee agreements of secured bonds and particular secured or unsecured loan agreements, trustees or lenders generally havethe right to pre-approve profit distributions including dividend payments and new stock issues, as well as the right to demand
additional collateral or mortgage.
The Company and its subsidiaries pledged a portion of their assets as collateral primarily for bank loans as follows:
Millions of yen
March 31, 2024
Trade receivables and contract assets

March 31, 2023
310

Investments in securities and other financial assets

349

311

319

2,167

2,002

Buildings and structures3

2

Machinery and vehicles

6,918

-

Total

9,709

2,672

Land

F-70

Notes to Consolidated Financial Statements(27) Principal Subsidiaries
The Company’s consolidated financial statements include the following subsidiaries listed below.
(As of March 31, 2024)
Reporting segment

Name of subsidiaryBusiness location

Ownership
percentage
of votingrights (%)

Digital Systems & Services

Hitachi Information & Telecommunication
Engineering, Ltd.

Yokohama, Kanagawa

100.0

Digital Systems & Services

Hitachi Channel Solutions, Corp.

Shinagawa-ku, Tokyo

100.0

Digital Systems & Services

Hitachi Solutions, Ltd.

Shinagawa-ku, Tokyo

100.0

Digital Systems & Services

Hitachi Systems, Ltd.

Shinagawa-ku, Tokyo

100.0

Digital Systems & Services

GlobalLogic Worldwide Holdings, Inc.

California,

100.0

Digital Systems & Services

Hitachi Computer Products (America), Inc.

Digital Systems & Services

Hitachi Digital LLC

California,
U.S.A.

100.0

Digital Systems & Services

Hitachi Digital Services LLC

California,
U.S.A.

100.0

Digital Systems & Services

Hitachi Payment Services Private Limited

Chennai,
India

100.0

Digital Systems & Services

Hitachi Vantara LLC

California,
U.S.A.

100.0

Green Energy & Mobility

Hitachi-GE Nuclear Energy, Ltd.

Hitachi, Ibaraki

80.0Green Energy & Mobility

Hitachi Plant Construction, Ltd.

Toshima-ku, Tokyo

100.0

Green Energy & Mobility

Hitachi Power Semiconductor Device, Ltd.

Hitachi, Ibaraki

100.0Green Energy & Mobility

Hitachi Power Solutions Co., Ltd.

Hitachi, Ibaraki

100.0Green Energy & Mobility

Hitachi Energy Ltd

Zurich,Switzerland

100.0Green Energy & Mobility

Hitachi Rail Ltd.

London,
U.K.

100.0

Connective Industries

Hitachi Building Systems Co., Ltd.

Chiyoda-ku, Tokyo

100.0

Connective Industries

Hitachi Global Life Solutions, Inc.

Minato-ku, Tokyo

100.0

Connective Industries

Hitachi High-Tech Corporation

Minato-ku, Tokyo

100.0

Connective Industries

Hitachi Industrial Equipment Systems Co., Ltd.

Chiyoda-ku, Tokyo

100.0

Connective Industries

Hitachi Industrial Products, Ltd.

Chiyoda-ku, Tokyo

100.0

Connective Industries

Hitachi Industry & Control Solutions, Ltd.

Taito-ku, Tokyo

100.0

U.S.A.
Oklahoma,

100.0

U.S.A.

F-71

Notes to Consolidated Financial Statements(As of March 31, 2024)
Reporting segment

Name of subsidiaryBusiness location

Ownership
percentage
of votingrights (%)

Connective Industries

Hitachi Plant Services Co., Ltd.

Toshima-ku, Tokyo

100.0

Connective Industries

Hitachi Elevator (China) Co., Ltd.

Guangzhou,
China

70.0

Connective Industries

Hitachi Global Air Power US, LLC

Indiana,
U.S.A.

100.0

Connective Industries

Hitachi Industrial Holdings Americas, Inc.

Illinois,
U.S.A.

100.0

Connective Industries

JR Technology Group, LLC

Michigan,
U.S.A.

100.0

OthersHitachi Real Estate Partners, Ltd.

Chiyoda-ku, Tokyo

100.0

OthersHitachi America, Ltd.

California,

100.0

OthersHitachi Asia Ltd.

Singapore

100.0

OthersHitachi (China), Ltd.

Beijing,
China

100.0

OthersHitachi Europe Ltd.

Stoke Poges,
U.K.

100.0

OthersHitachi India Pvt. Ltd.

New Delhi,
India

100.0

U.S.A.

-

Other 540 companies

F-72

-

-

Notes to Consolidated Financial Statements(28) Related Party Transactions(a) Related Party Transactions
The Company’s and its subsidiaries’ receivable and payable balances with associates and joint ventures are as follows:
Millions of yen
With associates

March 31, 2024

March 31, 2023

Trade receivables and contract assets

75,562

39,762

Trade payables

37,12840,398Contract liabilities

38,201

20,078Millions of yen

With joint ventures

March 31, 2024

Trade receivables and contract assets

70,882

March 31, 2023
59,742

Revenue and purchase transactions of the Company and its subsidiaries with associates and joint ventures are as follows:

With associates

Millions of yen
2023

2024

Revenues

163,852

164,164

Purchases

183,023

270,287

With joint ventures

Millions of yen
2023

2024

Revenues

81,15676,980Purchases

8,754

9,534

(b) Compensation for Directors and Executive Officers of the Company
Millions of yen
2023

2024
Basic remuneration, year-end allowance andperformance-linked compensation

3,780

3,687

Medium and long-term incentive compensation

1,888

1,279

Total

5,668

4,967

F-73

Notes to Consolidated Financial Statements(29) Commitments and Contingencies(a) Loan Commitments(i) Loan Commitments to Associates and Others
The Company provides loan commitments to associates and others. The outstanding balance of loan commitments as ofMarch 31, 2024 is as follows:
Millions of yen
March 31, 2024
Total commitments available

130

Less amount utilized-

Balance available

130

Since some loan commitments require credit approval before execution, the amount of total commitments available may
not be necessarily utilized in full.
(ii) Commitments with Financial Institutions
The Company has line of credit arrangements with banks in order to secure efficient financing for business operations. The
total unused line of credit as of March 31, 2024 amounted to 505,000 million yen. The Company has commitment line
agreements with a number of banks and pays commitment fees as consideration. These commitment agreements generally
provide a one year term with renewal at the end of the term. The unused line of credit under these arrangements as ofMarch 31, 2024 amounted to 305,000 million yen. The Company also maintains other commitment line agreements withseveral financial institutions, with terms of three years ending in July 2025. The unused line of credit under thesearrangements as of March 31, 2024 amounted to 200,000 million yen.
(b) Commitments for Acquisition of Assets
As of March 31, 2024, outstanding commitments made to purchase property, plant and equipment were 20,702 million yen.
(c) Guarantee Obligations
The Company and certain subsidiaries provide debt guarantees to third parties. As of March 31, 2024, the balance of theguarantee obligations was 10,725 million yen.
(d) Litigation
In November 2017, a subsidiary in Japan received a complaint that was filed against three companies, namely a construction
company of a condominium complex, the subsidiary and a secondary subcontractor, by a contractee in Japan seeking
approximately 45.9 billion yen in compensation for expenses allegedly incurred arising from concerns over partial deficienciesof piling work during the construction phases of the condominium complex, which the subsidiary contracted as the primary
subcontractor. The compensation claim against these three companies was amended to approximately 51.0 billion yen in July
2018 and to approximately 50.5 billion yen in September 2022 by the contractee.
In relation to the aforementioned lawsuit, in April 2018, the subsidiary in Japan received a complaint that was filed against thesubsidiary and the secondary subcontractor, by the construction company of the condominium complex seeking approximately
49.6 billion yen in compensation for expenses allegedly incurred arising from the aforementioned lawsuit. In July 2018, thecompensation claim against these two companies was amended to approximately 54.8 billion yen by the construction companyof the condominium complex. Although the subsidiary in Japan will address these claims and explain its position, there can be
no assurance that it will not be held liable for any amounts claimed.
In December 2017, a subsidiary in Europe received a complaint filed by a customer in Europe seeking compensation forconsequential losses of 263 million euro (42,940 million yen) and interest allegedly incurred by performance defects of apower plant. As of March 31, 2024, the amount of compensation claimed by the customer was changed to 270 million euro
(44,081 million yen). Although the subsidiary in Europe will vigorously defend itself against this lawsuit, there can be noassurance that it will not be held liable for any amounts claimed.

F-74

Notes to Consolidated Financial Statements
The Company and its subsidiaries execute a number of business reorganizations, including mergers, acquisitions anddivestitures. Contracts for these reorganizations include clauses for transaction price adjustments subsequent to thereorganizations. There is a possibility products or services provided by the Company and its subsidiaries contain defects. As
the result of price adjustments, or in compensation for defects in products or services etc. there is a possibility that theCompany pays for any amounts.
Depending upon the outcome of the above legal proceedings, there may be an adverse effect on the consolidated financial
position or results of operations. Currently, the Company is unable to estimate the adverse effect, if any, of many of theseproceedings. The actual amount of fines, surcharge payments or any other payments resulting from these legal proceedings
may be different from the accrued amounts.
In addition to the above, the Company and its subsidiaries are subject to legal proceedings and claims which have arisen in theordinary course of business and have not been finally adjudicated. These actions when ultimately concluded and determined
will not, in the opinion of management, have a material adverse effect on the consolidated financial statements of theCompany and subsidiaries.
(30) Subsequent Events(a) 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 theCompanies Act of Japan and Article 32 of the Company’s Articles of Incorporation, as follows.
(i) Reason for repurchase
The Company views the return of profits to shareholders through enhancing corporate value from mid- and long-term
perspective and paying dividends continuously as an important managerial issue. The Company has decided to repurchaseits own shares this time, taking into consideration its financial condition and the progress of the asset sales.
(ii) Outline of the Repurchase1) Class of shares to be repurchased
Common stock of the Company
2) Aggregate number of shares to be repurchased
Up to 21 million shares(*)(2.27% of the number of outstanding shares (excluding treasury stocks))(*)Aggregate number of shares to be repurchased will be 105 million shares after the effective date (July 1, 2024) of the
Share Split that described below (b).
3) Aggregate amount of repurchase
Up to 200 billion yen
4) Period of the repurchase
From April 30, 2024 to March 31, 2025
5) Method of repurchase
Expected open market purchase through the Tokyo Stock Exchange

F-75Notes to Consolidated Financial Statements(b) Share Split and Partial Amendment of Articles of Incorporation
The Company has decided on April 26, 2024 to implement a share split and partially amend its Articles of Incorporation.
(i) Purpose of share split
The Company will conduct a share split in order to create a more investor-friendly environment and expand its investor
base by reducing the amount per investment unit of the Company’s shares.
(ii) Overview of share split
1) Method of share split
The Company will conduct a share split into 5 shares for every one common share held by shareholders recorded in thelatest register of shareholders as of June 30, 2024.
2) Number of shares to be increased by share split(*)
Total number of issued shares before the share split
Number of shares to be increased by this share split
Total number of issued shares after the share split
Total number of shares authorized to be issued after the share split

927,167,877 shares
3,708,671,508 shares
4,635,839,385 shares
10,000,000,000 shares(*) The number of shares shown above is calculated based on the total number of shares outstanding as of March 31,
2024, and may change by the record date of the share split.
(iii) Schedule
Date of public notice of the record date
Record date
Effective dateJune 14, 2024
June 30, 2024
July 1, 2024(iv) Amendment of the total shares authorized to be issued by the Company
The total number of shares authorized to be issued by the Company will be amended to 10,000,000,000 shares as of July
1, 2024.
(v) Impact on per share information
Assuming that the share split was performed at the beginning of the fiscal year ended March 31, 2023, per share
information for the fiscal year ended March 31, 2024 and 2023 are as follows.

Hitachi, Ltd. stockholders' equity per share

2024

2023

1,231.08 yen

1,054.39 yen

Basic EPS attributable to Hitachi, Ltd. stockholders

126.91 yen

136.91 yen

Diluted EPS attributable to Hitachi, Ltd. stockholders

126.75 yen

136.78 yen(vi) Others
There will be no change in the amount of stated capital as a result of the share split.
As the share split will take effect on July 1, 2024, the year-end dividend for the fiscal year ending March 31, 2024, which
has a dividend record date of March 31, 2024, will be paid based on the shares before the share split.
(31) Approval of Consolidated Financial Statements
The consolidated financial statements were approved on June 21, 2024 by Keiji Kojima, President and CEO of the Company.

F-76

Independent Auditor’s Report
To the Stockholders and Board of Directors ofHitachi, Ltd.

The Audit of the Consolidated Financial Statements
OpinionWe have audited the accompanying consolidated financial statements of Hitachi, Ltd. and its subsidiaries (theGroup), which comprise the consolidated statement of financial position as at March 31, 2024, and the consolidated
statements of profit or loss, comprehensive income, changes in equity, and cash flows for the year then ended, andnotes to the consolidated financial statements.
In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, theconsolidated financial position of the Group as at March 31, 2024, and its consolidated financial performance andits consolidated cash flows for the year then ended in accordance with International Financial Reporting Standards(IFRSs).
Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in Japan. Our responsibilities
under those standards are further described in the Auditor’s Responsibilities for the Audit of the Consolidated
Financial Statements section of our report. We are independent of the Group in accordance with the ethicalrequirements that are relevant to our audit of the consolidated financial statements in Japan, and we have fulfilled
our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of theconsolidated financial statements of the current period. These matters were addressed in the context of the audit of
the consolidated financial statements as a whole, and in forming the auditor’s opinion thereon, and we do notprovide a separate opinion on these matters.
Measurement of recoverable amount of group of cash-generating units containing goodwill related to the power
grids business
Description of Key Audit Matter
Hitachi, Ltd. (the Company) recognized goodwill in the amount of 623,034 million yen related to the power grids
business (See Note (10) Goodwill and Other Intangible Assets). Such goodwill represents 26% of total goodwill
and 5% of total assets of the Group. The Company performed an annual impairment test on the group of cashgenerating units containing the goodwill for the year ended March 31, 2024.
The Company measured the recoverable amount based on value in use in the impairment test of the group of cashgenerating units containing the goodwill. Value in use is determined using discounted future cash flows and isaffected by estimates of future cash flows and the discount rate. Future cash flows are estimated based on the fiveyear business plan and the growth rate beyond the period covered by the business plan is taken into consideration.
Key assumptions used for the business plan are revenue growth rates and gross profit ratios. The following growthrate beyond the period covered by the business plan and the discount rate were used by the Company.

F-77

Growth rate beyond the period covered by the businessplan
Discount rate (before taxes)

3.0%
13.1%

Management judgements on status of orders and the feasibility of measures such as revising sales prices are
required to estimate the revenue growth rates and gross profit ratios. In addition, the growth rate beyond the period
covered by the business plan is determined based primarily on the long-term inflation rate forecast released by an
external research institution. Management judgements on selection of appropriate models and input data arenecessary to estimate the growth rate beyond the period covered by the business plan and the discount rate.
We determined that the measurement of the recoverable amount is a key audit matter because of the significance ofthe balance of goodwill and the significant impact on the consolidated financial statements from the management
judgements related to the key assumptions.

Auditor’s Response
We primarily performed the following procedures regarding the measurement of each recoverable amount of thegroup of cash-generating units containing the goodwill.
・We obtained an understanding of the business plan by examining related business planning materials.
・We assessed the effectiveness of the business planning process by comparing the business plan from the priorfiscal year with the corresponding operating results and the business plan at the time of the impairment test.
・We made inquiries of management about status of orders and measures to achieve the business plan such asrevising selling prices, and compared revenue growth rates and gross profit ratios with actual operating results
and available external data such as market research reports related to market growth rates.
・We involved valuation specialists from a network firm in assessing the valuation method of value in use, thegrowth rate beyond the period covered by the business plan and the discount rate. We assessed theappropriateness of models and input data utilized in the calculation regarding the growth rate beyond the period
covered by the business plan and the discount rate. Further, we made inquiries of management about the growthrate beyond the period covered by the business plan, and assessed the level of growth rate beyond the period
covered by the business plan.
・We made inquiries of management about the risks reflected in the discount rate and assessed their consistency
with the risks reflected in future cash flows.
・ We performed sensitivity analyses assuming reasonably possible changes in key assumptions, assessing theeffect on the recoverable amount.
Estimation of total cost of long-term projects
Description of Key Audit MatterPrimarily in Digital Systems & Services segment, Green Energy & Mobility segment and Connective Industries
segment, the Group has long-term projects involving the manufacture and provision of goods in accordance withcustomer specifications that are completed over specified periods of time to customers in a broad range of businessareas across the world.
The Group recognizes revenues from long-term projects in the amount of 2,255,703 million yen by measuring the
progress of the project mostly based on the cost incurred relative to the estimated total cost to satisfy theperformance obligations (See Note (20) Revenues, (a) Disaggregation of revenue, (b) Information about satisfactionof performance obligations). Such revenues represent 23% of total revenues of the Group. Furthermore, the Group
recognizes provisions for expected losses on construction contracts in the amount of 97,921 million yen based on
the estimated amount of losses associated with fulfilling the project requirements (See Note (14) Provisions).
Estimations of total cost of long-term projects affect the corresponding amounts of revenues and provisions. Eachof the Group’s long-term projects is distinct in terms of customer requirements, such as detailed specifications andscheduling, and therefore estimations of total cost depend on management judgement. Estimations of total cost are
particularly complex in relation to large-scale projects.
We determined that the estimation of total cost of long-term projects is a key audit matter because auditing
estimations of total cost of long-term projects requires consideration of various factors affecting such estimations
corresponding to each project as a result of the nature of the Group’s long-term projects.

F-78

Auditor’s Response
We obtained an understanding of the project management systems utilized by the Group as well as its processes for
estimating total cost, and tested the relevant internal controls, including the approval of initial and revised operating
budgets that serve as the basis of estimating total cost.
We selected samples of long-term projects, such as those projects whose total contract value exceeded certain
materiality thresholds and projects subject to various qualitative risks, including delays in the progress of the
project, and, on a quarterly basis, performed selected procedures from the following considering the status of eachproject:
・ We obtained an understanding of the significant factors influencing the estimates related to customer
specifications on goods and the timing of delivery and the effects of estimation uncertainty inherent in thosesignificant factors influencing the estimates by examining contracts and project management materials andmaking inquiries of management and compared specific line items in the estimated total cost with corresponding
quotations from suppliers.
・We assessed the management’s judgements on the necessity of revising estimates of total cost considering thestatus of each project based on inquiries of management and by examining project management materials.
・We assessed the effectiveness of the processes for estimating total cost by comparing initial and previous period
estimates with the actual total cost for completed projects and previous period estimates with the latest estimatesfor projects in progress.
・ We additionally made separate inquiries to project managers for projects that were considered particularly
significant to corroborate management explanations of their status.
Other Information
The other information comprises the information included in the annual report (Yukashoken Hokokusho) that
contains audited consolidated financial statements but does not include the consolidated financial statements,
financial statements and our auditor’s report thereon. Management is responsible for preparation and disclosure of
the other information. The Audit Committee is responsible for overseeing the Group’s reporting process of theother information.
Our opinion on the consolidated financial statements does not cover the other information and we do not express
any form of assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to read the otherinformation and, in doing so, consider whether the other information is materially inconsistent with theconsolidated financial statements or our knowledge obtained in the audit or otherwise appears to be materially
misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this otherinformation, we are required to report that fact.
We have nothing to report in this regard.

F-79

Responsibilities of Management and the Audit Committee for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of these consolidated financial statements inaccordance with IFRSs, and for such internal control as management determines is necessary to enable thepreparation of consolidated financial statements that are free from material misstatement, whether due to fraud or
error.
In preparing the consolidated financial statements, management is responsible for assessing the Group’s ability tocontinue as a going concern and disclosing, as required by IFRSs, matters related to going concern.
The Audit Committee is responsible for overseeing the Group’s financial reporting process.
Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole
are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes ouropinion. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate,
they could reasonably be expected to influence the economic decisions of users taken on the basis of these
consolidated financial statements.
As part of an audit in accordance with auditing standards generally accepted in Japan, we exercise professional
judgment and maintain professional skepticism throughout the audit. We also:・Identify and assess the risks of material misstatement of the consolidated financial statements, whether due tofraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is
sufficient and appropriate to provide a basis for our opinion.
・ Consider internal control relevant to the audit in order to design audit procedures that are appropriate in thecircumstances for our risk assessments, while the purpose of the audit of the consolidated financial statements is
not expressing an opinion on the effectiveness of the Group’s internal control.
・ Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates andrelated disclosures made by management.
・Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on theaudit evidence obtained, whether a material uncertainty exists related to events or conditions that may castsignificant doubt on the Group’s ability to continue as a going concern. If we conclude that a material
uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the
consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions
are based on the audit evidence obtained up to the date of our auditor’s report. However, future events orconditions may cause the Group to cease to continue as a going concern.
・Evaluate the overall presentation, structure and content of the consolidated financial statements, including thedisclosures, and whether the consolidated financial statements represent the underlying transactions and eventsin a manner that achieves fair presentation in accordance with IFRSs.
・ Obtain sufficient appropriate audit evidence regarding the financial information of the entities or businessactivities within the Group to express an opinion on the consolidated financial statements. We are responsible
for the direction, supervision and performance of the group audit. We remain solely responsible for our audit
opinion.
We communicate with the Audit Committee regarding, among other matters, the planned scope and timing of theaudit and significant audit findings, including any significant deficiencies in internal control that we identify during
our audit.
We also provide the Audit Committee with a statement that we have complied with the ethical requirements
regarding independence that are relevant to our audit of the consolidated financial statements in Japan, and tocommunicate with them all relationships and other matters that may reasonably be thought to bear on our
independence, and where applicable, actions taken to eliminate threats or safeguards applied to reduce threats to an
acceptable level.
From the matters communicated with the Audit Committee, we determine those matters that were of mostsignificance in the audit of the consolidated financial statements of the current period and are therefore the key
audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure
about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicatedin our report because the adverse consequences of doing so would reasonably be expected to outweigh the public
interest benefits of such communication.

F-80

Fee-related Information
The fees for the audits of the financial statements of Hitachi, Ltd. and its subsidiaries and other services provided by
us and other EY member firms for the year ended March 31, 2024 are presented in paragraph (3) titled “Audit” inSection 4 “Corporate Governance, etc.” included in Item IV “Information on the Company” in Part I of the annual
report (Yukashoken Hokokusho) for the year ended March 31, 2024 of the Group.
Interest Required to Be Disclosed by the Certified Public Accountants Act of Japan
Our firm and its designated engagement partners do not have any interest in the Group which is required to bedisclosed pursuant to the provisions of the Certified Public Accountants Act of Japan.
Ernst & Young ShinNihon LLC
Tokyo, Japan
June 21, 2024

/s/ Koji Fujima
Designated Engagement Partner
Certified Public Accountant/s/ Teruyasu Omote
Designated Engagement Partner
Certified Public Accountant/s/ Shinya Yoshida
Designated Engagement Partner
Certified Public Accountant

F-81

(Translation)
Following is an English translation of the Internal Control Report filed under the Financial Instruments andExchange Act of Japan. We have made the assessment of internal control over financial reporting in accordancewith assessment standards for internal control over financial reporting generally accepted in Japan.
[Cover][Document Filed]Internal Control Report[Applicable Law]

Article 24-4-4, Paragraph 1 of the Financial Instruments and Exchange Act ofJapan[Filed with]

Director, Kanto Local Finance Bureau[Filing Date]

June 21, 2024

[Company Name]

Kabushiki Kaisha Hitachi Seisakusho[Company Name in English]

Hitachi, Ltd.

[Name and title of

Keiji Kojima, President & CEO

Representative][Name and title of CFO]

Tomomi Kato, Senior Vice President and Executive Officer[Address of Head Office]6-6, Marunouchi 1-chome, Chiyoda-ku, Tokyo[Place Where Available forTokyo Stock Exchange, Inc.

Public Inspection](2-1, Nihombashi Kabutocho, Chuo-ku, Tokyo)
Nagoya Stock Exchange, Inc.
(8-20, Sakae 3-chome, Naka-ku, Nagoya)A-1

1. Matters Related to Basic Framework of Internal Control over Financial Reporting
Mr. Keiji Kojima, President & CEO, and Mr. Tomomi Kato, Senior Vice President and Executive Officer,
are responsible for establishing and maintaining internal control over financial reporting of Hitachi, Ltd. (the“Company”) and have established and maintained internal control over financial reporting in accordance with thebasic framework for internal control set forth in the “On the Revision of the Standards and Practice Standards forManagement Assessment and Audit concerning Internal Control Over Financial Reporting (Council Opinions)”
published by the Business Accounting Council.
The internal control over financial reporting is designed to achieve its objectives to the extent reasonablethrough the effective function and combination of its basic elements. Therefore, there is a possibility that internal
control over financial reporting may not completely prevent or detect misstatements.
2. Matters Related to Scope of Assessment, Record Date, and Assessment Procedure
We assessed the effectiveness of our internal control over financial reporting on the record date as of March
31, 2024. We made this assessment in accordance with assessment standards for internal control over financial
reporting generally accepted in Japan.
In making this assessment, we evaluated internal control which may have a material effect on the entire
financial reporting on a consolidated basis (“company-level controls”) and based on the result of this assessment,
we appropriately selected business processes to be evaluated, analyzed these selected business processes,
identified key controls that may have a material impact on the reliability of our financial reporting, and assessed
the design and operation of these key controls. These procedures have allowed us to evaluate the effectiveness of
our internal controls.
We determined the required scope of assessment of internal control over financial reporting for theCompany, as well as its consolidated subsidiaries, equity-method associates and joint ventures, from theperspective of the materiality that may affect the reliability of our financial reporting. The materiality that may
affect the reliability of our financial reporting is determined taking into account the materiality of quantitativeand qualitative impacts. We confirmed that we had reasonably determined the scope of assessment of internal
controls over business processes in light of the results of assessment of company-level controls conducted for theCompany, its consolidated subsidiaries, equity-method associates and joint ventures. We did not include a part ofconsolidated subsidiaries, equity-method associates and joint ventures which do not have any quantitatively or
qualitatively material impact on the consolidated financial statements in the scope of assessment of companylevel controls.
Regarding the scope of assessment of internal control over business processes, we accumulated business
units in descending order of total revenues (after elimination of intercompany transactions) for the previous fiscal
year, and those business units whose combined amount of revenues reaches approximately 70% of total revenues
on a consolidated basis were selected as “significant business units.” In addition, some of our equity-method
associates and joint ventures which have a significant effect to our consolidated financial statements wereselected as “significant business units.” At the selected significant business units, we included, in the scope ofassessment, those business processes leading to revenues, accounts receivables and inventories and thosebusiness processes relating to greater likelihood of material misstatements and significant account involving
estimates or forecasts as significant accounts that may have a material impact on our business objectives. Further,not only at selected significant business units, but also at other business units, we added to the scope ofassessment, as business processes having greater materiality considering their impact on the financial reporting,those business processes relating to businesses or operations dealing with high-risk transactions.
3. Matters Related to Results of Assessment
As a result of the assessment above, we concluded that our internal control over financial reporting was
effective as of March 31, 2024.
4. Supplementary Matters
None.
5. Special Notes
None.

A-2

TRANSLATION
Following is an English translation of the Independent Auditor’s Report filed under the Financial Instruments
and Exchange Act of Japan. This report is presented merely as supplemental information.
There are differences between an audit of internal control over financial reporting under the Financial
Instruments and Exchange Act and an audit of internal control over financial reporting under the attestation
standards established by the American Institute of Certified Public Accountants.
In an audit of internal control over financial reporting under the Financial Instruments and Exchange Act, theauditors express an opinion on management’s report on internal control over financial reporting, and do not
express an opinion on the Company’s internal control over financial reporting taken as a whole.

Independent Auditor’s Report(filed under the Financial Instruments and Exchange Act of Japan)
June 21, 2024
Mr. Keiji Kojima, President & CEO
Hitachi, Ltd.

Ernst & Young ShinNihon LLC
Tokyo, Japan
Designated Engagement Partner,
Certified Public Accountant:

Koji Fujima

Designated Engagement Partner,
Certified Public Accountant:

Teruyasu Omote

Designated Engagement Partner,
Certified Public Accountant:

Shinya Yoshida[Financial Statements Audit]
OpinionPursuant to Article 193-2, Section 1 of the Financial Instruments and Exchange Act of Japan, we have audited theaccompanying consolidated financial statements, which comprise the consolidated statement of financial position,
the consolidated statement of profit or loss, the consolidated statement of comprehensive income, the consolidated
statement of changes in equity, the consolidated statement of cash flows and the notes to the consolidated financial
statements of Hitachi, Ltd. and its consolidated subsidiaries (the Group) applicable to the fiscal year from April 1,
2023 to March 31, 2024.
In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, theconsolidated financial position, results of operations and cash flows of the Group applicable to the fiscal year ended
March 31, 2024, in accordance with International Financial Reporting Standards (IFRSs) under Article 93 of theRegulation on Terminology, Forms, and Preparation Methods of Consolidated Financial Statements.

A-3

Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in Japan. Our responsibilities
under those standards are further described in the Auditor’s Responsibilities for the Audit of the Consolidated
Financial Statements section of our report. We are independent of the Group in accordance with the ethicalrequirements that are relevant to our audit of the consolidated financial statements in Japan, and we have fulfilled
our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of theconsolidated financial statements of the current period. These matters were addressed in the context of the audit of
the consolidated financial statements as a whole, and in forming the auditor’s opinion thereon, and we do notprovide a separate opinion on these matters.

Measurement of recoverable amount of group of cash-generating units containing goodwill related to the power
grids business
Description of Key Audit Matter
Hitachi, Ltd. (the Company) recognized goodwill in the amount of 623,034 million yen related to the power grids
business (See Note (10) Goodwill and Other Intangible Assets). Such goodwill represents 26% of total goodwill
and 5% of total assets of the Group. The Company performed an annual impairment test on the group of cashgenerating units containing the goodwill for the year ended March 31, 2024.
The Company measured the recoverable amount based on value in use in the impairment test of the group of cashgenerating units containing the goodwill. Value in use is determined using discounted future cash flows and isaffected by estimates of future cash flows and the discount rate. Future cash flows are estimated based on the fiveyear business plan and the growth rate beyond the period covered by the business plan is taken into consideration.
Key assumptions used for the business plan are revenue growth rates and gross profit ratios. The following growthrate beyond the period covered by the business plan and the discount rate were used by the Company.
Growth rate beyond the period covered by thebusiness plan
Discount rate (before taxes)

3.0%
13.1%

Management judgements on status of orders and the feasibility of measures such as revising sales prices are
required to estimate the revenue growth rates and gross profit ratios. In addition, the growth rate beyond the period
covered by the business plan is determined based primarily on the long-term inflation rate forecast released by an
external research institution. Management judgements on selection of appropriate models and input data arenecessary to estimate the growth rate beyond the period covered by the business plan and the discount rate.
We determined that the measurement of the recoverable amount is a key audit matter because of the significance ofthe balance of goodwill and the significant impact on the consolidated financial statements from the management
judgements related to the key assumptions.

A-4

Auditor’s Response
We primarily performed the following procedures regarding the measurement of each recoverable amount of thegroup of cash-generating units containing the goodwill.
・We obtained an understanding of the business plan by examining related business planning materials.
・We assessed the effectiveness of the business planning process by comparing the business plan from the priorfiscal year with the corresponding operating results and the business plan at the time of the impairment test.
・We made inquiries of management about status of orders and measures to achieve the business plan such asrevising selling prices, and compared revenue growth rates and gross profit ratios with actual operating results
and available external data such as market research reports related to market growth rates.
・We involved valuation specialists from a network firm in assessing the valuation method of value in use, thegrowth rate beyond the period covered by the business plan and the discount rate. We assessed theappropriateness of models and input data utilized in the calculation regarding the growth rate beyond the period
covered by the business plan and the discount rate. Further, we made inquiries of management about the growthrate beyond the period covered by the business plan, and assessed the level of growth rate beyond the period
covered by the business plan.
・We made inquiries of management about the risks reflected in the discount rate and assessed their consistency
with the risks reflected in future cash flows.
・We performed sensitivity analyses assuming reasonably possible changes in key assumptions, assessing theeffect on the recoverable amount.
Estimation of total cost of long-term projects
Description of Key Audit MatterPrimarily in Digital Systems & Services segment, Green Energy & Mobility segment and Connective Industries
segment, the Group has long-term projects involving the manufacture and provision of goods in accordance withcustomer specifications that are completed over specified periods of time to customers in a broad range of businessareas across the world.
The Group recognizes revenues from long-term projects in the amount of 2,255,703 million yen by measuring the
progress of the project mostly based on the cost incurred relative to the estimated total cost to satisfy theperformance obligations (See Note (20) Revenues, (a) Disaggregation of revenue, (b) Information about satisfactionof performance obligations). Such revenues represent 23% of total revenues of the Group. Furthermore, the Group
recognizes provisions for expected losses on construction contracts in the amount of 97,921 million yen based on
the estimated amount of losses associated with fulfilling the project requirements (See Note (14) Provisions).
Estimations of total cost of long-term projects affect the corresponding amounts of revenues and provisions. Eachof the Group’s long-term projects is distinct in terms of customer requirements, such as detailed specifications andscheduling, and therefore estimations of total cost depend on management judgement. Estimations of total cost are
particularly complex in relation to large-scale projects.
We determined that the estimation of total cost of long-term projects is a key audit matter because auditing
estimations of total cost of long-term projects requires consideration of various factors affecting such estimations
corresponding to each project as a result of the nature of the Group’s long-term projects.

A-5

Auditor’s Response
We obtained an understanding of the project management systems utilized by the Group as well as its processes for
estimating total cost, and tested the relevant internal controls, including the approval of initial and revised operating
budgets that serve as the basis of estimating total cost.
We selected samples of long-term projects, such as those projects whose total contract value exceeded certain
materiality thresholds and projects subject to various qualitative risks, including delays in the progress of the
project, and, on a quarterly basis, performed selected procedures from the following considering the status of eachproject:
・We obtained an understanding of the significant factors influencing the estimates related to customer
specifications on goods and the timing of delivery and the effects of estimation uncertainty inherent in thosesignificant factors influencing the estimates by examining contracts and project management materials andmaking inquiries of management and compared specific line items in the estimated total cost with corresponding
quotations from suppliers.
・We assessed the management’s judgements on the necessity of revising estimates of total cost considering thestatus of each project based on inquiries of management and by examining project management materials.
・We assessed the effectiveness of the processes for estimating total cost by comparing initial and previous period
estimates with the actual total cost for completed projects and previous period estimates with the latest estimatesfor projects in progress.
・We additionally made separate inquiries to project managers for projects that were considered particularly
significant to corroborate management explanations of their status.
Other Information
The other information comprises the information included in the annual report (Yukashoken Hokokusho) that
contains audited consolidated financial statements but does not include the consolidated financial statements,
financial statements and our audit report thereon. Management is responsible for preparation and disclosure of theother information. The Audit Committee is responsible for overseeing the Group’s reporting process of the otherinformation.
Our opinion on the consolidated financial statements does not cover the other information and we do not express
any form of assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to read the otherinformation and, in doing so, consider whether the other information is materially inconsistent with theconsolidated financial statements or our knowledge obtained in the audit or otherwise appears to be materially
misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this otherinformation, we are required to report that fact.
We have nothing to report in this regard.
Responsibilities of Management and the Audit Committee for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of these consolidated financial statements inaccordance with IFRSs and for such internal control as management determines is necessary to enable thepreparation of consolidated financial statements that are free from material misstatement, whether due to fraud or
error.
In preparing the consolidated financial statements, management is responsible for assessing the Group’s ability tocontinue as a going concern and disclosing matters related to going concern, as required by IFRSs.
The Audit Committee is responsible for overseeing the Group’s financial reporting process.

A-6

Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole
are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes ouropinion. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate,
they could reasonably be expected to influence the economic decisions of users taken on the basis of these
consolidated financial statements.
As part of an audit in accordance with auditing standards generally accepted in Japan, we exercise professional
judgment and maintain professional skepticism throughout the audit. We also:・Identify and assess the risks of material misstatement of the consolidated financial statements, whether due tofraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is
sufficient and appropriate to provide a basis for our opinion.
・Consider internal control relevant to the audit in order to design audit procedures that are appropriate in thecircumstances for our risk assessments, while the purpose of the audit of the consolidated financial statements is
not expressing an opinion on the effectiveness of the Group’s internal control.
・Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates andrelated disclosures made by management.
・Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on theaudit evidence obtained, whether a material uncertainty exists related to events or conditions that may castsignificant doubt on the Group’s ability to continue as a going concern. If we conclude that a material
uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the
consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions
are based on the audit evidence obtained up to the date of our auditor’s report. However, future events orconditions may cause the Group to cease to continue as a going concern.
・Evaluate the overall presentation, structure and content of the consolidated financial statements, including thedisclosures, and whether the consolidated financial statements represent the underlying transactions and eventsin a manner that achieves fair presentation in accordance with IFRSs.
・Obtain sufficient appropriate audit evidence regarding the financial information of the entities or businessactivities within the Group to express an opinion on the consolidated financial statements. We are responsible
for the direction, supervision and performance of the group audit. We remain solely responsible for our audit
opinion.
We communicate with the Audit Committee regarding, among other matters, the planned scope and timing of theaudit and significant audit findings, including any significant deficiencies in internal control that we identify during
our audit.
We also provide the Audit Committee with a statement that we have complied with the ethical requirements
regarding independence that are relevant to our audit of the consolidated financial statements in Japan, and tocommunicate with them all relationships and other matters that may reasonably be thought to bear on our
independence, and where applicable, actions taken to eliminate threats or safeguards applied to reduce threats to an
acceptable level.
From the matters communicated with the Audit Committee, we determine those matters that were of mostsignificance in the audit of the consolidated financial statements of the current period and are therefore the key
audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure
about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicatedin our report because the adverse consequences of doing so would reasonably be expected to outweigh the public
interest benefits of such communication.

A-7

[Internal Control Audit]
OpinionPursuant to Article 193-2, Section 2 of the Financial Instruments and Exchange Act of Japan, we have audited theaccompanying Management’s Report on Internal Control Over Financial Reporting for the financial statements as
at March 31, 2024 of Hitachi, Ltd. and its consolidated subsidiaries ("Management's Report").
In our opinion, Management's Report referred to above, which represents that the internal control over financial
reporting as at March 31, 2024 of Hitachi, Ltd. and its consolidated subsidiaries (the Group) is effective, presents
fairly, in all material respects, the result of management's assessment of internal control over financial reporting inaccordance with standards for assessment of internal control over financial reporting generally accepted in Japan.
Basis for Opinion
We conducted our internal control audit in accordance with auditing standards on internal control over financial
reporting generally accepted in Japan. Our responsibilities under those standards are further described in the
Auditor’s Responsibilities for the Audit of Internal Control section of our report. We are independent of the Groupin accordance with the ethical requirements that are relevant to our audit of the financial statements in Japan, andwe have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Responsibilities of Management and the Audit Committee for the Management’s ReportManagement is responsible for designing and operating internal control over financial reporting, and for the
preparation and fair presentation of Management's Report in accordance with standards for assessment of internal
control over financial reporting generally accepted in Japan.
The Audit Committee is responsible for monitoring and verifying the design and operation of internal control overfinancial reporting.
Internal control over financial reporting may not prevent or detect misstatements completely.
Auditor’s Responsibilities for the Audit of Internal Control
Our objectives are to obtain reasonable assurance about whether Management's Report is free from material
misstatement, and to issue an auditor’s report that includes our opinion from an independent standpoint.
As part of an audit in accordance with auditing standards on internal control generally accepted in Japan, we
exercise professional judgment and maintain professional skepticism throughout the audit. We also:・Perform audit procedures to obtain audit evidence relating to the result of management's assessment of internal
control over financial reporting in Management's Report. The design and performance of audit procedures forinternal control audits is based on our judgement in consideration of the materiality of the effect on the reliabilityof financial reporting.
・Consider the overall presentation of Management's Report with regards to the scope, procedures, and result of theassessment of internal control over financial reporting including descriptions by management.
・Obtain sufficient appropriate audit evidence regarding the result of management's assessment of internal control
over financial reporting in Management's Report. We are responsible for the direction, supervision, andperformance of the audit of Management's Report.
We communicate with the Audit Committee regarding, among other matters, the planned scope and timing of theinternal control audit, the results of the internal control audit, any significant deficiencies in internal control that we
identify, and the results of corrective measures for such significant deficiencies.
We also provide the Audit Committee with a statement that we have complied with the ethical requirements
regarding independence that are relevant to our audit of the consolidated financial statements in Japan, and tocommunicate with them all relationships and other matters that may reasonably be thought to bear on our
independence, and where applicable, actions taken to eliminate threats or safeguards applied to reduce threats to an
acceptable level.

Fee-related Information
The fees for the audits of the financial statements of Hitachi, Ltd. and its subsidiaries and other services provided by
us and other EY member firms for the year ended March 31, 2024 are presented in paragraph (3) titled “Audit” inSection 4 “Corporate Governance, etc.” included in Item IV “Information on the Company” in Part I of the annual
report (Yukashoken Hokokusho) for the year ended March 31, 2024 of the Group.

A-8

Interest Required to Be Disclosed by the Certified Public Accountants Act of Japan
Our firm and its designated engagement partners do not have any interest in the Group which is required to bedisclosed pursuant to the provisions of the Certified Public Accountants Act of Japan.

(The above represents a translation, for convenience only, of the original report issued in the Japanese language.)A-9(Translation)
Following is an English translation of the Confirmation Letter filed under the Financial Instruments andExchange Act of Japan.
[Cover][Document Filed]

Confirmation Letter[Applicable Law]

Article 24-4-2, Paragraph 1 of the Financial Instruments and Exchange Act ofJapan[Filed with]

Director, Kanto Local Finance Bureau[Filing Date]

June 21, 2024

[Company Name]

Kabushiki Kaisha Hitachi Seisakusho[Company Name in English]

Hitachi, Ltd.

[Name and title of

Keiji Kojima, President & CEO

Representative][Name and title of CFO]

Tomomi Kato, Senior Vice President and Executive Officer[Address of Head Office]6-6, Marunouchi 1-chome, Chiyoda-ku, Tokyo[Place Where Available forTokyo Stock Exchange, Inc.

Public Inspection](2-1, Nihombashi Kabutocho, Chuo-ku, Tokyo)
Nagoya Stock Exchange, Inc.
(8-20, Sakae 3-chome, Naka-ku, Nagoya)

A-10

1. Matters Related to Adequacy of Statements Contained in the Annual Securities Report
Mr. Keiji Kojima, President & CEO, and Mr. Tomomi Kato, Senior Vice President and Executive Officer,
confirmed that statements contained in the Annual Securities Report for the 155th fiscal year (from April 1,
2023 to March 31, 2024) were adequate under the Financial Instruments and Exchange Act.
2. Special Notes
None.

A-11