[Translation]

Annual Securities Report(The 143rd Business Term)
From April 1, 2011 to March 31, 2012

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 ofJapan[Filed to]

Director, Kanto Local Finance Bureau[Filing Date]

June 22, 2012

[Fiscal Year]

The 143rd Business Term (from April 1, 2011 to March 31, 2012)[Company Name]

Kabushiki Kaisha Hitachi Seisakusho[Company Name in English] Hitachi, Ltd.
[Position and Name of

Hiroaki Nakanishi, President

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

03-3258-1111[Contact Person]

Taro Kaiho, Manager, Legal Division[Contact Address]

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

03-3258-1111[Contact Person]

Taro Kaiho, Manager, Legal Division[Place Where Available forTokyo Stock Exchange, Inc.

Public Inspection](2-1, Nihombashi Kabutocho, Chuo-ku, Tokyo)
Osaka Securities Exchange Co., Ltd.
(8-16, Kitahama 1-chome, Chuo-ku, Osaka)
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 Bureau
via Electronic Disclosure for Investors’ NETwork (“EDINET”) pursuant to the Financial Instruments and Exchange Act ofJapan.
Certain information in “Part I. Information on the Company - II. Business Overview - 4. 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 not included 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 accounting principles generally accepted in the United States andindependent auditor’s report instead of the English translation of the Annual Securities Report.
The translation of the Internal Control Report and the Confirmation Letter for the original Annual Securities Report areincluded at the end of this document.
In this document, the terms “we,” “us,” “our” and “Hitachi” refer to Hitachi, Ltd. and our 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
have truncated amounts of less than one million or one hundred million, as the case may be. Accordingly, the total of figures
presented in columns or otherwise may not equal the total of the individual items. We have rounded all percentages to thenearest percent, one-tenth 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 andExchange Act of Japan and other laws and regulations amending and/or supplementing the Financial Instruments andExchange 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.

Contents
Part I Information on the Company ................................................................................................................... 1
I. Overview of the Company ......................................................................................................................... 1
1. Key Financial Data............................................................................................................................ 1
2. History............................................................................................................................................... 4
3. Description of Business .................................................................................................................... 6
4. Information on Affiliates ................................................................................................................... 8
5. Employees ....................................................................................................................................... 17
II. Business Overview ................................................................................................................................. 18
1. Summary of Business Results ......................................................................................................... 18
2. Production, Orders Received and Sales .......................................................................................... 18
3. Challenges Facing Hitachi Group. .................................................................................................. 18
4. Risk Factors .................................................................................................................................... 19
5. Material Agreements, etc. ............................................................................................................... 27
6. Research and Development ............................................................................................................. 28
7. Analyses of Consolidated Financial Position, Operating Results and Cash Flows ......................... 30
III. Property, Plants and Equipment ............................................................................................................ 43
1. Summary of Capital Investment, etc. .............................................................................................. 43
2. Major Property, Plants and Equipment ........................................................................................... 44
3. Plans for Capital Investment, Disposals of Property, Plants and Equipment, etc. .......................... 48
IV. Information on the Company ................................................................................................................ 49
1. Information on the Company’s Stock, etc. ...................................................................................... 49(1) Total number of shares, etc. ........................................................................................................ 49(2) Information on the stock acquisition rights, etc.......................................................................... 49(3) Information on moving strike convertible bonds, etc. ................................................................ 53(4) Information on shareholder right plans....................................................................................... 54(5) Changes in the total number of issued shares and the amount of common stock and other ....... 54(6) Shareholders composition........................................................................................................... 54(7) Major shareholders ..................................................................................................................... 55(8) Information on voting rights ....................................................................................................... 56(9) Details of stock option plans ...................................................................................................... 57
2. Information on Acquisition, etc. of Treasury Stock ........................................................................ 57
3. Dividend Policy .............................................................................................................................. 59
4. Changes in Share Prices .................................................................................................................. 59
5. Directors and Senior Management .................................................................................................. 60
6. Corporate Governance, etc. ............................................................................................................. 69
V. Financial Information ............................................................................................................................. 80
VI. Stock-Related Administration for the Company ................................................................................... 81
VII. Reference Information on the Company ............................................................................................. 82
Part II Information on Guarantors, etc. for the Company ................................................................................ 83[Consolidated Financial Statements]................................................................................................................. F-1
Reports of Independent Registered Public Accounting Firm. ................................................................... F-2
Consolidated Financial Statements of Hitachi, Ltd. and Subsidiaries. ..................................................... F-4[Internal Control Report] .................................................................................................................................. A-1[Confirmation Letter] ........................................................................................................................................ A-3

Part I

Information on the Company

I. Overview of the Company
1. Key Financial Data
(1) Consolidated financial data, etc.
Fiscal year

(Millions of yen, unless otherwise stated)
139th
140th
141st
142nd
143rd
business term business term business term business term business term
March 2008 March 2009 March 2010 March 2011 March 2012
11,226,735
10,000,369
8,968,546
9,315,807
9,665,883

Year end
Revenues
Income (loss) before income
324,782(289,871)
63,580432,201
557,730
taxes
Net income (loss) attributable(58,125)(787,337)(106,961)
238,869
347,179
to Hitachi, Ltd.
Total comprehensive income－－－
228,459
392,581
Total Hitachi, Ltd.
2,170,612
1,049,951
1,284,658
1,439,865
1,771,782
stockholders’ equity
3,313,120
2,179,352
2,267,845
2,441,389
2,773,995
Total equity
Total assets
10,530,847
9,403,709
8,964,464
9,185,629
9,418,526
Total Hitachi, Ltd.
stockholders’ equity per share
652.95315.86287.13318.73382.26(yen)
Net income (loss) attributable
to Hitachi, Ltd. per share, basic(17.48)(236.86)(29.20)
52.89
76.81
(yen)
Net income (loss) attributable
to Hitachi, Ltd. per share,(17.77)(236.87)(29.20)49.38
71.86
diluted (yen)Total Hitachi, Ltd.
20.6
11.2
14.3
15.7
18.8
stockholders’ equity ratio (%)
Return on equity (%)
－
－
－
17.5
21.6
Price earnings ratio (times)
－
－
－
8.2
6.9
Net cash provided by operating
791,837
558,947
798,299
841,554447,155
activities[(637,618)]
Net cash used in investing(550,008)(530,595)(260,346)(195,584)
activities(689,316)[(185,556)]
Net cash provided by (used in)
284,388(502,344)(584,176)(167,838)
financing activities(133,858)
Cash and cash equivalents at
560,960
807,926
577,584
554,810619,577end of year
Number of employees
347,810
361,796359,746
361,745
323,540[Average number of part-time[40,692][42,097][39,562][44,353][46,182]
employees, etc.](Notes) 1. Our consolidated financial statements have been prepared in conformity with accounting
principles generally accepted in the United States.
2. Revenues do not include the consumption tax, etc.
3. Effective from the 141st business term, the Company has adopted the provisions of the
Accounting Standards Codification (hereinafter “ASC”) 810 “Consolidation” of the U.S.
Financial Accounting Standards Board concerning noncontrolling interests of subsidiaries. As aresult, minority interests previously presented separately from liabilities and equity on the
consolidated balance sheets are included as noncontrolling interests in equity. In line with thischange, in the table above, total equity including noncontrolling interests are presented as “Total
equity,” and the item presented as “Total equity” up to the Annual Securities Report for the 140th
business term is presented as “Total Hitachi, Ltd. stockholders’ equity.”-1-4. Effective from the 141st business term, in line with the adoption of the provisions of ASC 810,
the presentation of cash flows related to the acquisition and sale of shares in a subsidiary, which
does not result in changes in the scope of consolidation of the Company or its consolidated
subsidiaries, has been changed from “Cash flows from investing activities” to “Cash flows fromfinancing activities,” and amounts from the preceding fiscal years have been restated. For the139th business term, the amounts before the restatement are presented in brackets in the upperrows since we have not received the Auditor’s Report based on the Financial Instruments andExchange Act of Japan.
5. The amount of “Total assets” for the 141st business term is restated in accordance with theprovisions of ASC 805 “Business Combinations,” since evaluation of fair values related to thebusiness combinations implemented in March 2010 was completed during the 142nd businessterm. In line with this change, the amount of “Total Hitachi, Ltd. stockholders’ equity ratio” isalso restated.
6. Effective from the 142nd business term, the Company has adopted the provisions of ASC 860“Transfers and Servicing” of the U.S. Financial Accounting Standards Board as amended by
Accounting Standards Update 2009-16 “Accounting for Transfers of Financial Assets” and theprovisions of ASC 810 “Consolidation,” as amended by Accounting Standards Update 2009-17“Improvements to Financial Reporting by Enterprises involved with Variable Interest Entities.”-2-(2) Financial data etc. of the Company
Fiscal year
Year end(Millions of yen, unless otherwise stated)
139th
140th
141st
142nd
143rd
business term business term business term business term business term
March 2008 March 2009 March 2010 March 2011 March 2012
2,807,269
2,610,055
1,938,810
1,795,306
1,870,475(45,987)
204,71459,204
127,564
48,923(127,863)(294,584)(35,120)
64,276
254,549
282,033
282,033
408,810409,129427,775

Revenues
Ordinary income (loss)
Net income (loss)
Common stock
Number of issued shares
3,368,126
3,368,126
4,518,132
4,520,144
4,637,785(thousands of shares)
Total net assets
997,066
664,526
887,684
941,041
1,212,199
Total assets
3,659,968
3,673,706
3,327,698
3,146,337
3,331,589
Net assets per share (yen)299.92199.90198.40208.30261.52
Dividends per share (yen)
6
3
－
8
8
[Of the above, interim
[3]
[3]
[－]
[5]
[3]
dividends per share] (yen)Net income (loss) per share,(38.46)(88.62)(9.59)
14.23
56.31
basic (yen)Net income per share, diluted
－
－
－
13.32
52.70
(yen)
Stockholders’ equity ratio (%)
27.2
18.1
26.7
29.9
36.4
Return on equity (%)
－
－
－
7.0
23.6
Price earnings ratio (times)
－
－
－
30.4
9.4
Dividend payout ratio (%)
－
－
－
56.2
14.2
Number of employees
31,065[Average number of part-time
37,14337,28332,92632,908[3,162]
employees, etc.](Notes) 1. Revenues do not include the consumption tax, etc.
2. Interim dividends per share for the 142nd business term include a commemorative dividend of ¥2
for the Company’s centennial anniversary.
3. “Net income per share, diluted” is not stated for the 139th, 140th and 141st business terms since
net loss per share is recorded.
4. Average number of part-time employees, etc. is not stated for the 139th, 140th, 142nd and 143rd
business terms since it was less than 10% of the number of employees.

-3-2. History
Month/Year
1910
February, 1920
February, 1921
May, 1935
May, 1937
April, 1939
September, 1940
April, 1942
September, 1943
March, 1944
December, 1944
April, 1947
May, 1949
February, 1950
May, 1955
October, 1956
November, 1956
June, 1957
February, 1959
October, 1959
June, 1960
August, 1960
February, 1961
August, 1961
August, 1962
February, 1963
April, 1963
February, 1966
February, 1968
February, 1969
April, 1969
August, 1969
December, 1969
May, 1970
September, 1970
April, 1971
June, 1971
February, 1973
June, 1974
November, 1974

HistoryFounded as a repair shop at Hitachi copper mine of Kuhara Mining Company
Incorporated as Hitachi, Ltd. with the Hitachi and Kameido Works
Acquired the Kasado shipyard from Nippon Kisen Co., Ltd. and established Kasado
Works
Equity participation in Kyousei Reiki Kogyo K.K. (later changed its name to Hitachi
Plant Engineering & Construction Co., Ltd.)
Merged Kokusan Industries, Ltd. and established 7 factories, including Totsuka Works
Established Taga Works, spun off Hitachi Research Laboratory from Hitachi Works
Established Mito Works
Established Central Research Laboratory
Merged Riken Vacuum Industry and established Mobara Works
Spun off Shimizu Works from Kameari Works
Spun off Tochigi Works from Taga Works
Established Hinode Shokai Co., Ltd. (currently Hitachi High-Technologies Corporation)
Established Higashi-Nippon Senikikai KK (currently Hitachi Medical Corporation)
Established Nitto Transport KK. (currently Hitachi Transport System, Ltd.)
Established Hitachi Sales Corporation
Spun off Hitachi Metals Industries, Ltd. (currently Hitachi Metals, Ltd.) and Hitachi
Cable, Ltd.
Established Hitachi Kiden Kogyo, Ltd.
Spun off Kokubu Works from Hitachi Works
Established Yokohama Works
Established Hitachi New York, Ltd. (currently Hitachi America, Ltd.)
Equity participation in Nippon Business Consultant Co., Ltd. (later changed its name to
Hitachi Information Systems, Ltd.)
Established Hitachi Geppam Corp. (later changed its name to Hitachi Credit
Corporation)
Spun off Naka Works from Taga Works;
Equity participation in Maxell Electric Industrial Co., Ltd. (currently Hitachi Maxell,
Ltd.)
Established Katsuta Works
Established Kanagawa Works
Spun off Narashino Works from Kameido Works
Spun off Hitachi Chemical Co., Ltd.
Established Mechanical Engineering Research Laboratory
Spun off Sawa Works from Taga Works, spun off Tokai Works from Yokohama Works,
and spun off Odawara Works from Kanagawa Works
Established Software Works
Established Ome Works
Established Omika Works
Spun off Hitachi Construction Machinery Co., Ltd.
Established Takasaki Works
Established Hitachi Software Engineering Co., Ltd.
Acquired Asahi Works from Hitachi Denshi, Ltd.
Established Production Engineering Research Laboratory
Established Systems Development Laboratory
Established Tsuchiura Works
Relocated Kameido Works and renamed to Nakajo Works-4-

Month/Year
June, 1982
April, 1985
February, 1989
February, 1991
August, 1991
February, 1992
August, 1992
February, 1993
August, 1993
August, 1994
October, 1994
February, 1995

April, 1995
April, 1999
October, 2000
October, 2001

April, 2002

October, 2002

January, 2003
April, 2003
June, 2003
October, 2004

History
Established Hitachi Europe Ltd.
Established Advanced Research Laboratory
Established Hitachi Asia Pte. Ltd. (currently Hitachi Asia Ltd.)
Integrated Sawa Works into Automotive Products Division
Integrated Katsuta Works into Materials Process Technology Division; integrated
Totsuka Works into Information & Telecommunication Division; integrated Naka Works
into Instruments Division
Integrated Yokohama Works and Tokai Works into AV Products Division
Changed operation unit of home appliances, computers and electronic devices
businesses from factory to business division
Integrated Semiconductor Technology Development Center, Musashi Works andTakasaki Works into Semiconductor Division
Integrated Shimizu Works into Air Conditioning Division, integrated Nakajo Works andNarashino Works into Industrial Equipment Division
Integrated Consumer Products Group and Image & Information Media Division andrenamed to Consumer Products & Information Media Systems Group
Established Hitachi (China), Ltd.
Reorganized business groups as Power & Industrial Systems Group, Consumer Products& Information Media Systems Group, Information Systems Group and Electronics
Components Group; integrated a part of R&D division and sales division into thebusiness groups
Merged Hitachi Sales Corporation
Reorganized business groups into de facto companies to independently operate eachbusiness group
Merged Hitachi Credit Corporation with Hitachi Leasing Corp. and changed its name to
Hitachi Capital Corporation
Split Instruments Group and Semiconductor Manufacturing Equipment Group via
company split and reorganized as Hitachi High-Technologies Corporation;
Split Industrial Machinery Systems Division via company split and reorganized as
Hitachi Industries Co., Ltd.
Split Home Appliance Group via company split and reorganized as Hitachi Home &Life Solutions, Inc.;
Split Industrial Equipment Group via company split and reorganized as Hitachi
Industrial Equipment Systems Co., Ltd.
Split Display Group via company split and established Hitachi Displays, Ltd.;
Split Telecommunication Equipment Division via company split and reorganized as
Hitachi Communication Technologies, Ltd.;
Turned Unisia Jecs Corporation (later changed its name to Hitachi Unisia Automotive,Ltd.) into a wholly owned subsidiary via share exchange
Acquired HDDs business from IBM Corp., and commenced operations as Hitachi
Global Storage Technologies Netherlands B.V.
Split semiconductor business, centering on system LSIs, via company split andestablished Renesas Technology Corp. (later merged with NEC Electronics Corporationand changed its name to Renesas Electronics Corporation)
Adopted committee system as the Company’s corporate governance structure
Merged TOKICO, Ltd. and Hitachi Unisia Automotive, Ltd.;
Split Mechatronics System Division, centering on ATMs, via company split andestablished Hitachi-Omron Terminal Solutions, Corp.

-5-

Month/Year
April, 2006

December, 2006
July, 2007
March, 2009
July, 2009

October, 2009
February, 2010
April, 2010
October, 2010
November, 2011
March, 2012

History
Split Social & industrial infrastructure business via company split and integrated with
Hitachi Plant Engineering & Construction Co., Ltd., Hitachi Kiden Kogyo, Ltd. andHitachi Industries Co., Ltd. and reorganized as Hitachi Plant Technologies, Ltd.;
Merged Hitachi Home & Life Solutions, Inc. with Hitachi Air Conditioning Systems
Co., Ltd. and changed its name to Hitachi Appliances, Inc.
Turned Clarion Co., Ltd. into a consolidated subsidiary via tender offer
Split nuclear power systems business via company split and reorganized as Hitachi-GE
Nuclear Energy, Ltd.
Turned Hitachi Koki Co., Ltd. into a consolidated subsidiary via tender offer;
Turned Hitachi Kokusai Electric Inc. into a consolidated subsidiary via tender offer
Merged Hitachi Communication Technologies, Ltd.;
Split Automotive Systems Group via company split and established Hitachi Automotive
Systems, Ltd.;
Split Consumer Business Group via company split and established Hitachi Consumer
Electronics Co., Ltd.
Reorganized business groups into in-house companies with independent accounting topromote quick business operation
Turned Hitachi Information Systems, Ltd., Hitachi Software Engineering Co, Ltd. andHitachi Systems & Services, Ltd. into wholly owned subsidiaries
Turned Hitachi Plant Technologies, Ltd. and Hitachi Maxell, Ltd. into wholly owned
subsidiaries via share exchanges
Merged Hitachi Software Engineering Co., Ltd. with Hitachi Systems & Services, Ltd.
and changed its name to Hitachi Solutions, Ltd.
Merged Hitachi Electronics Services Co., Ltd. with Hitachi Information Systems, Ltd.
and changed its name to Hitachi Systems, Ltd.
Transferred HDDs business to Western Digital Corporation via share sale of Viviti
Technologies Ltd., a holding company for Hitachi Global Storage Technologies Inc., etc.
Transferred small and medium-sized displays business via share sale of Hitachi
Displays, Ltd.

3. Description of Business
The Company’s consolidated financial statements have been prepared in conformity with accounting
principles generally accepted in the United States, and affiliates are disclosed based on the definitions of
those accounting principles. The same applies to “II. Business Overview” and “III. Equipment andFacilities.”
The Hitachi Group, which is comprised of the Company and 1,122 affiliates (939 consolidated
subsidiaries (including variable interest entities) and 183 equity-method affiliates, while consolidated trust
accounts are not included in the number of consolidated subsidiaries), engages in a broad range ofbusiness activities, from product development and manufacturing to sales and services, in 11 segments ofInformation & Telecommunication Systems, Power Systems, Social Infrastructure & Industrial Systems,
Electronic Systems & Equipment, Construction Machinery, High Functional Materials & Components,
Automotive Systems, Components & Devices, Digital Media & Consumer Products, Financial Services,and Others. Effective from April 1, 2011, the battery business for automotive applications, which waspreviously included in the Components & Devices segment, has been included in the Automotive Systems
segment.
Major business outline for each segment and the positioning of principal affiliated companies aredescribed as follows. The Company mainly engages in manufacturing and sales of products and providing
services in the segments of Information & Telecommunication Systems, Power Systems, and Social
Infrastructure & Industrial Systems.

-6-

(As of March 31, 2012)
Main products and services
Information & Telecommunication
Systems
Systems Integration, Outsourcing
Services, Software, Disk Array
Subsystems, Servers, Mainframes,
Telecommunications Equipment, ATMs

Power Systems
Thermal, Nuclear, Hydroelectric andWind Power Generation Systems

Social Infrastructure & Industrial Systems
Industrial Machinery and Plants,
Elevators, Escalators, Railway Systems

Electronic Systems & Equipment
Semiconductor and LCDs
Manufacturing Equipment, Test and
Measurement Equipment, Medical
Electronics Equipment, Power Tools,
Electronic Parts Manufacturing
Systems
Construction Machinery
Hydraulic Excavators, Wheel Loaders,Mining Dump Trucks
High Functional Materials & Components
Wires and Cables, Copper Products,
Semiconductor and Display RelatedMaterials, Circuit Boards and Materials,
Specialty Steels, Magnetic Materials
and Components, High Grade Casting
Components and Materials
Automotive Systems
Engine Management Systems, ElectricPowertrain Systems, Drive Control
Systems, Car Information Systems
Components & Devices
Information Storage Media, Batteries
Digital Media & Consumer Products
Optical Disk Drives, Flat-Panel TVs,LCD Projectors, Room Air
Conditioners, Refrigerators, Washing
Machines, Air-Conditioning Equipment
Financial Services
Leasing, Loan Guarantees
Others
Logistics, Property Management

Positioning of principal affiliated companies
Manufacturing
Sales and services[Consolidated subsidiaries][Consolidated subsidiaries]
Hitachi Information & Control Solutions,
Hitachi-Omron Terminal Solutions, Corp.
Ltd.
Hitachi Computer Products (America), Inc.
Hitachi Solutions, Ltd.
Hitachi Computer Products (Europe) S.A.S.
Hitachi Systems, Ltd.
Hitachi Consulting Corporation
Hitachi Data Systems Corporation
Hitachi Information & Telecommunication
Systems Global Holding Corporation[Consolidated subsidiaries][Consolidated subsidiaries]
Hitachi Engineering & Services Co., Ltd.
Babcock-Hitachi Kabushiki Kaisha
Hitachi Power Europe GmbH
Hitachi-GE Nuclear Energy, Ltd.
Hitachi Power Systems America, Ltd.
[Equity-method affiliates]
Japan AE power Systems Corporation[Consolidated subsidiaries][Consolidated subsidiaries]
Hitachi Building Systems Co., Ltd.
Hitachi Industrial Equipment Systems Co.,
Hitachi Plant Technologies, Ltd.
Ltd.
Hitachi Elevator (China) Co., Ltd.
[Consolidated subsidiaries]
Hitachi High-Technologies Corporation
Hitachi Koki Co., Ltd.
Hitachi Kokusai Electric Inc.
Hitachi Medical Corporation
Hitachi Via Mechanics, Ltd.
[Consolidated subsidiaries]
Hitachi Construction Machinery Co., Ltd.
[Consolidated subsidiaries]
Hitachi Cable, Ltd.
Hitachi Chemical Co., Ltd.
Hitachi Metals, Ltd.

[Consolidated subsidiaries]
Clarion Co., Ltd.
Hitachi Automotive Systems, Ltd.
Hitachi Automotive Systems Americas, Inc.
[Consolidated subsidiaries]
Hitachi Maxell, Ltd.
Hitachi Maxell Energy, Ltd.
[Consolidated subsidiaries]
Hitachi Appliances, Inc.
Hitachi Consumer Electronics Co., Ltd.
Hitachi Media Electronics Co., Ltd.
Hitachi Consumer Products (Thailand), Ltd.

[Consolidated subsidiaries]
Hitachi-LG Data Storage, Inc.

[Consolidated subsidiaries]
Hitachi Capital Corporation[Consolidated subsidiaries]
Chuo Shoji, Ltd.
Hitachi Life, Ltd.
Hitachi Transport System, Ltd.
Hitachi America, Ltd.
Hitachi Asia Ltd.
Hitachi (China), Ltd.
Hitachi Europe Ltd.
Hitachi India Pvt. Ltd.
(Notes) 1. Hitachi America, Ltd., Hitachi Asia Ltd., Hitachi (China), Ltd., Hitachi Europe Ltd. and Hitachi India Pvt. Ltd. are the HitachiGroup’s regional supervising company for the U.S., Asia, China, Europe and India, and they sell the Hitachi Group’s products.
2. Hitachi Displays, Ltd., Hitachi Display Device (Suzhou) Co., Ltd., a consolidated subsidiary of Hitachi Displays, Ltd., andViviti Technologies Ltd., which were classified in the Components & Devices segment, ceased to be consolidated subsidiaries of
the Company in March 2012 due to selling their shares.
3. Chuo Shoji, Ltd. changed its name to Hitachi Urban Investment, Ltd. as of April 1, 2012.

-7-

4. Information on Affiliates(1) Consolidated subsidiaries

Company nameLocation

Commonstock

Ownership
percentage ofPrincipal businessvoting rights(As of March 31, 2012)
Relationship(%)

HitachiInformation &Hitachi,Control Solutions, Ibaraki
Ltd.

Information &2,270 Telecommunication
Systems

Hitachi-Omron
Terminal
Solutions, Corp.

Shinagawaku, Tokyo

Information &8,500 Telecommunication
Systems

Hitachi Solutions, ShinagawaLtd.
ku, Tokyo

Information &38,372 Telecommunication
Systems

Hitachi Systems,
Ltd.

Information &19,162 Telecommunication
Systems

Shinagawaku, Tokyo

Hitachi Computer
Oklahoma,
Products
U.S.A.
(America), Inc.

Information &Telecommunication
14,000 Systems(Thousands of
US dollars)-8-

The Company
outsources
development of
information control
systems, etc. The
100.0
Company’s Directors,
Executive Officers or
employees concurrently
hold position of
directors or officers.
The Company
purchases ATMs andother informationequipment. The
55.0 Company’s Directors,
Executive Officers or
employees concurrently
hold position of
directors or officers.
The Company
outsources
development of
information systems
and software, etc. The
100.0
Company’s Directors,
Executive Officers or
employees concurrently
hold position of
directors or officers.
The Company
outsources calculation,
development ofsoftware, installationand maintenance of
telecommunication
100.0 equipment andcomputers. The
Company’s Directors,
Executive Officers or
employees concurrently
hold position of
directors or officers.
The Company supplies
parts for computer
peripherals. The[100.0] Company’s Directors,
100.0 Executive Officers or
employees concurrently
hold position of
directors or officers.

Company nameLocation

Commonstock

Ownership
percentage ofPrincipal business voting rights(As of March 31, 2012)
Relationship(%)

Hitachi Computer
Products (Europe)
S.A.S.

Information &Telecommunication
15,245 Systems

Ardon,
France(Thousands ofEuro)

Hitachi Consulting Texas,
Corporation
U.S.A.

(Thousands of
US dollars)**Hitachi Data
Systems
Corporation

California,
U.S.A.

(Thousands of
US dollars)**Hitachi
Information &Telecommunication
Systems Global
Holding
Corporation

California,
U.S.A.

(Thousands of
US dollars)

Babcock-Hitachi
Kabushiki Kaisha

Chiyoda-ku,
Tokyo

5,000 Power Systems

HitachiEngineering &Services Co., Ltd.

Hitachi,
Ibaraki

1,950 Power Systems

Information &Telecommunication
415,599 Systems

Information &Telecommunication
531,651 Systems

Information &Telecommunication
599,380 Systems-9-

The Company supplies
parts for computer
peripherals. The
100.0 Company’s Directors,
Executive Officers or
employees concurrently
hold position of
directors or officers.
The Company
outsources consulting
services. The[99.5] Company’s Directors,
99.5 Executive Officers or
employees concurrently
hold position of
directors or officers.
Sales company for theCompany’s disk array
subsystems, etc. The[100.0] Company’s Directors,
100.0 Executive Officers or
employees concurrently
hold position of
directors or officers.
Holding company for
Hitachi Consulting
Corporation and
Hitachi Data Systems
Corporation. The
100.0
Company’s Directors,
Executive Officers or
employees concurrently
hold position of
directors or officers.
The Company
purchases boilers,
environment-related
equipment, etc. The
100.0 Company’s Directors,
Executive Officers or
employees concurrently
hold position of
directors or officers.
The Company
purchases power plantparts, and outsources
maintenance of power
generation equipment
and control equipment,
100.0
etc. The Company’s
Directors, Executive
Officers or employees
concurrently holdposition of directors orofficers.

Company nameLocation

Commonstock

Ownership
percentage ofPrincipal businessvoting rights(As of March 31, 2012)
Relationship(%)

Hitachi-GE
Nuclear Energy,
Ltd.

Hitachi,
Ibaraki

Hitachi Power
Europe GmbH

Duisburg,Germany

Hitachi PowerNew Jersey,
Systems America,
U.S.A.
Ltd.

5,000 Power Systems(Thousands ofEURO)

Power Systems(Thousands of
US dollars)

Power Systems

182,000

10,000

Hitachi Building Chiyoda-ku,
Systems Co., Ltd. Tokyo

Social5,105 Infrastructure &Industrial Systems

Hitachi Industrial
Chiyoda-ku,
Equipment
Tokyo
Systems Co., Ltd.

Social
10,000 Infrastructure &Industrial Systems

Hitachi Plant
Technologies,
Ltd.

Social
12,000 Infrastructure &Industrial Systems

Toshima-ku,
Tokyo

-10-

The Company delivers
nuclear power
generation equipment,
etc. The Company’s
80.0 Directors, Executive
Officers or employees
concurrently holdposition of directors orofficers.
The Company delivers
thermal power
generation equipment,
etc. The Company’s[40.0]
Directors, Executive
100.0
Officers or employees
concurrently holdposition of directors orofficers.
The Company delivers
thermal power
generation equipment,
etc. The Company’s[100.0]
Directors, Executive
100.0
Officers or employees
concurrently holdposition of directors orofficers.
Sales, installation andmaintenance of theCompany’s elevatorsand escalators. The
100.0 Company’s Directors,
Executive Officers or
employees concurrently
hold position of
directors or officers.
The Company
purchases motors,
pumps and otherindustrial equipment.
The Company’s
100.0
Directors, Executive
Officers or employees
concurrently holdposition of directors orofficers.
The Company
purchases pumps,
cranes and otherindustrial equipment,
and outsources plant
100.0 construction. The
Company’s Directors,
Executive Officers or
employees concurrently
hold position of
directors or officers.

Company nameLocation

Commonstock

Ownership
percentage ofPrincipal businessvoting rights(As of March 31, 2012)
Relationship(%)

SocialInfrastructure &538,806 Industrial Systems[70.0]
70.0

7,938Electronic Systems& Equipment

51.8*Hitachi Koki Co., Minato-ku,
Ltd.
Tokyo

17,813

Electronic Systems& Equipment[10.9]
51.2*Hitachi Kokusai
Electric Inc.

Chiyoda-ku,
Tokyo

10,058

Electronic Systems& Equipment

[0.0]
52.4

*Hitachi Medical
Corporation

Chiyoda-ku,
Tokyo

13,884

Electronic Systems& Equipment

[0.0]
63.2

Hitachi Via
Mechanics, Ltd.

Ebina,
Kanagawa

2,900Electronic Systems& Equipment

100.0

**
*HitachiConstruction
Machinery Co.,Ltd.

Bunkyo-ku,
Tokyo81,576

Construction
Machinery

[0.6]
51.7

Hitachi Elevator(China) Co., Ltd.

Guangzhou,
China*Hitachi HighTechnologies
Corporation

Minato-ku,
Tokyo(Thousands of
yuan)

-11-

Manufacturing, sales,
installation andmaintenance of theCompany’s elevatorsand escalators in China.
The Company’s
Directors, Executive
Officers or employees
concurrently holdposition of directors orofficers.
The Company sells
information equipment,
etc. and purchases partsfor informationequipment and powerrelated parts throughthis company. The
Company’s Directors,
Executive Officers or
employees concurrently
hold position of
directors or officers.
The Company’s
Directors, Executive
Officers or employees
concurrently holdposition of directors orofficers.
The Company
purchases electronicequipment and parts,
etc. The Company’s
Directors, Executive
Officers or employees
concurrently holdposition of directors orofficers.
The Company supplies
parts for medical
equipment. The
Company’s Directors,
Executive Officers or
employees concurrently
hold position of
directors or officers.
The Company’s
Directors, Executive
Officers or employees
concurrently holdposition of directors orofficers.
The Company’s
Directors, Executive
Officers or employees
concurrently holdposition of directors orofficers.

Company nameLocation

Commonstock

Ownership
percentage ofPrincipal businessvoting rights(As of March 31, 2012)
Relationship(%)

High Functional
25,948 Materials &Components

[0.1]
52.8

*Hitachi Chemical ShinjukuCo., Ltd.
ku, Tokyo

High Functional
15,454 Materials &Components

[0.1]
51.4

*Hitachi Metals,
Ltd.

Minato-ku,
TokyoHigh Functional
26,283 Materials &Components

[0.6]
55.7

*Clarion Co., Ltd.

Chuo-ku,
Saitama,
Saitama

26,100Automotive
Systems

64.0

HitachiAutomotive
Systems, Ltd.

Hitachinaka,Ibaraki

15,000Automotive
Systems

100.0

HitachiAutomotive
Systems
Americas, Inc.

Kentucky,
U.S.A.

Automotive
Systems[100.0]
100.0

Hitachi Maxell,
Ltd.

Ibaraki,Osaka

Components &Devices

100.0*Hitachi Cable,
Ltd.

Chiyoda-ku,
Tokyo(Thousands of
US dollars)

86,278

12,202-12-

The Company
purchases wires andcables, etc. The
Company’s Directors,
Executive Officers or
employees concurrently
hold position of
directors or officers.
The Company
purchases electronicmaterials, organic
chemical materials, etc.
The Company’s
Directors, Executive
Officers or employees
concurrently holdposition of directors orofficers.
The Company
purchases specialty
steels, etc. The
Company’s Directors,
Executive Officers or
employees concurrently
hold position of
directors or officers.
The Company supplies
parts for car navigation
systems, etc. The
Company’s Directors,
Executive Officers or
employees concurrently
hold position of
directors or officers.
The Company
purchases parts forrailway vehicles, etc.
The Company’s
Directors, Executive
Officers or employees
concurrently holdposition of directors orofficers.
Manufacturing andsales company in North
America for the HitachiGroup’s automotive
systems products.
The Company
purchases computer
tapes and otherinformation storage
media, etc. The
Company’s Directors,
Executive Officers or
employees concurrently
hold position of
directors or officers.

Company nameLocation

Commonstock

Ownership
percentage ofPrincipal businessvoting rights(As of March 31, 2012)
Relationship(%)

Hitachi Maxell
Energy, Ltd.

Oyamazakicho, Kyoto

1,000

Components &Devices

100.0

HitachiAppliances, Inc.

Minato-ku,
Tokyo

Digital Media &20,000 Consumer
Products

100.0

Hitachi Consumer
Chiyoda-ku,
Electronics Co.,
Tokyo
Ltd.

Digital Media &1,000 Consumer
Products

100.0

Hitachi-LG Data
Storage, Inc.

Minato-ku,
Tokyo

Digital Media &1,500 Consumer
Products

51.0

Hitachi MediaElectronics Co.,Ltd.

Oshu, Iwate

Digital Media &500 Consumer
Products

100.0

Digital Media &Consumer
2,472,000 Products

80.1

Hitachi Consumer
Prachinburi,
Products
Thailand(Thailand), Ltd.

(Thousands ofThai Baht)-13-

The Company’s
Directors, Executive
Officers or employees
concurrently holdposition of directors orofficers.
The Company
purchases electronicparts, etc. The
Company’s Directors,
Executive Officers or
employees concurrently
hold position of
directors or officers.
Development,
manufacturing andsales company for the
Hitachi Group’s visualrelated equipment, etc.
The Company’s
Directors, Executive
Officers or employees
concurrently holdposition of directors orofficers.
Development and sales
company for the
Hitachi Group’s opticaldisk drives. The
Company’s Directors,
Executive Officers or
employees concurrently
hold position of
directors or officers.
Development,
manufacturing andsales company for the
Hitachi Group’s opticaldisk drives equipment
and TV parts, etc. The
Company’s Directors,
Executive Officers or
employees concurrently
hold position of
directors or officers.
Manufacturing andsales company for the
Hitachi Group’s
refrigerators andwashing machines, etc.
in Thailand.

Company nameLocation

Commonstock

Ownership
percentage ofPrincipal businessvoting rights(As of March 31, 2012)
Relationship(%)*Hitachi Capital
Corporation

Minato-ku,
Tokyo9,983 Financial Services

Chuo Shoji, Ltd.

Chiyoda-ku,
Tokyo

2,000 Others

Hitachi Life, Ltd.

Hitachi,
Ibaraki

1,000 Others*Hitachi Transport Koto-ku,
System, Ltd.
Tokyo

16,802 Others**Hitachi America, New York,Ltd.
U.S.A.

(Thousands of
US dollars)

2,328,558

Others-14-

Leases manufacturing
equipment, industrial
equipment, officeequipment, etc. to theCompany, and engages
in leasing and credit[2.1] sales of the Company’s
60.7 business equipment,
etc. The Company’s
Directors, Executive
Officers or employees
concurrently holdposition of directors orofficers.
The Company
outsourcesmanagement of welfare
facilities, etc. The
100.0 Company’s Directors,
Executive Officers or
employees concurrently
hold position of
directors or officers.
The Company
outsourcesmanagement of welfare
facilities, etc. The[21.8]
Company’s Directors,
100.0
Executive Officers or
employees concurrently
hold position of
directors or officers.
The Company
outsources
transportation andstorage of products.
[5.7] The Company’s
59.0 Directors, Executive
Officers or employees
concurrently holdposition of directors orofficers.
The Hitachi Group’s
regional supervising
company in Americas,
and sells the HitachiGroup’s plant,
industrial machinery,
100.0 digital media-related
products, etc. The
Company’s Directors,
Executive Officers or
employees concurrently
hold position of
directors or officers.

Company nameLocation

Commonstock

Ownership
percentage ofPrincipal businessvoting rights(As of March 31, 2012)
Relationship(%)

Hitachi Asia Ltd.

Singapore

Hitachi (China),Ltd.

Beijing,
China

Hitachi Europe
Ltd.

Maidenhead,
U.K.

Hitachi India Pvt. New Delhi,
Ltd.
India

Others- 893 companies－

The Hitachi Group’s
regional supervising
company for Asia, andsells the HitachiGroup’s plants,
industrial machinery,
100.0 digital media-related
products, etc. The
Company’s Directors,
Executive Officers or
employees concurrently
hold position of
directors or officers.
The Hitachi Group’s
regional supervising
company for China,
and sells the HitachiGroup’s plant,
industrial machinery,
digital media and
100.0
information-related
products, etc. The
Company’s Directors,
Executive Officers or
employees concurrently
hold position of
directors or officers.
The Hitachi Group’s
regional supervising
company for Europe,and sells the HitachiGroup’s plants,
computer-related
products, digital media100.0
related products, etc.
The Company’s
Directors, Executive
Officers or employees
concurrently holdposition of directors orofficers.
The Hitachi Group’s
regional supervising
company for India, andsells the HitachiGroup’s digital media[100.0] related products, etc.
100.0 The Company’s
Directors, Executive
Officers or employees
concurrently holdposition of directors orofficers.

(Thousands ofSingapore dollars) Others

67,000(Thousands ofyuan)

Others(Thousands ofSterling pounds)

Others(Thousands ofIndian rupee)

Others1,684,893

133,485

308,969

－

－

-15-

－

－

(Notes)

1. The unit of amounts and currency shown in the “Common stock” column are in millions of yen,unless otherwise specified.
2. Companies with two asterisks (**) in the “Company name” column are specified subsidiaries.
3. Companies with one asterisk (*) in the “Company name” column submit Securities Registration
Statement or Annual Securities Report.
4. The name of segment in which the companies classified is shown in the “Principal business”
column.
5. The amounts in brackets in upper row of the “Ownership percentage of voting rights” column
represent the percentage of voting rights owned indirectly by subsidiaries, of the total ownership
percentage.
6. Companies with negative net worth are shown below, along with the amount of liabilities inexcess of assets.
Hitachi Power Europe GmbH¥32,568 million
Hitachi Vehicle Energy, Ltd.
¥21,943 million
Hitachi Plasma Display Limited¥118,095 million(2) Equity-method affiliates

Company nameLocation

Commonstock

Ownership
percentage ofPrincipal business voting rights(As of March 31, 2012)
Relationship(%)

Japan AE power
Systems
Corporation*Renesas
Electronics
Corporation

Others- 181 companies(Notes)Minato-ku,
Tokyo

10 Power Systems

50.0

Chiyoda-ku,
Tokyo

Semiconductor
development,
153,255 design,
manufacture, sales
and services.

30.6

－

－

－

－

The Company
purchases facilities andequipment for powertransmission anddistribution. The
Company’s Directors,
Executive Officers or
employees concurrently
hold position of
directors or officers.
This company
outsources R&D for
semiconductors to theCompany. The
Company’s Directors,
Executive Officers or
employees concurrently
hold position of
directors or officers.
－

1. The unit of amounts and currency shown in the “Common stock” column are in millions of yen.
2. Companies with an asterisk (*) in the “Company name” column submit Securities Registration
Statement or Annual Securities Report.
3. The name of segment in which Japan AE Power Systems Corporation classified is shown in the“Principal business” column.
4. On April 1, 2012, the joint venture relationship in the power transmission and distribution
business of Japan AE Power Systems Corporation has been dissolved and such business has beensucceeded by the three companies, which were the parties in the joint venture agreement.

-16-

5. Employees(1) Consolidated basis(As of March 31, 2012)
Name of segment
Number of employees
Information & Telecommunication
73,334
Systems[15,015]
17,235
Power Systems[4,710]Social Infrastructure & Industrial
41,136
Systems[5,748]25,878
Electronic Systems & Equipment[－]
20,571
Construction Machinery[－]
High Functional Materials &47,468Components[－]
28,125
Automotive Systems
[－]
3,998
Components & Devices[－]
25,042
Digital Media & Consumer Products
[12]
4,060
Financial Services[－]
33,473
Others[4,203]3,220
Corporate (Head Office and others)[3,220]323,540
Total[32,908](Notes) 1. In addition to those listed above, the average number of part-time employees for the fiscal year was
46,182.
2. 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.
3. The total number of employees decreased by 38,205 persons during the fiscal year ended March 31,
2012 due primarily to sales of HDDs business and small and medium-sized displays business.
(2) The Company(As of March 31, 2012)
Number of employees
Average age
Average length of service Average annual salary
32,90840.0
17.9 years¥8,002,940(Note) Average annual salary includes bonuses and extra wages.
(3) Relationship with labor union
In the Hitachi Group, labor union is organized by each company. The Company’s labor union, Hitachi
Workers Union, is a member of the Japanese Electrical Electronic & Information Union.
The relationship between management and labor unions is stable and smooth.

-17-II. Business Overview
1. Summary of Business Results
See “7. Analyses of Consolidated Financial Position, Operating Results and Cash Flows.”
2. Production, Orders Received and Sales
The Hitachi Group does not present production and orders received in amount or volume terms for eachsegment since it produces and sells a wide variety of products, there are variety of specifications in samekinds of products and certain products are mass-produced.
Regarding sales, see “7. Analyses of Consolidated Financial Position, Operating Results and Cash
Flows.”
3. Challenges Facing Hitachi Group(1) Business and Financial Position
In our future business environment, the recovery of global economy show signs of slowdown affectedby sovereign debt crisis in some countries in Europe, and the capital investment and individual
consumption doesn’t seem to rapidly recover. In addition, uncertainty of the market environment increases
owing to the fluctuations of exchange rate and the price of oil and raw materials. On the other hand, theglobal demand for maintenance and update of social infrastructure and the reduction of environmental
burdens is increasing, and its market is anticipated to continuously grow in the future.
In such situation, we aim to establish a stable and profitable business structure through the strengtheningof the Social Innovation Business that provides highly sophisticated social infrastructure utilizing
information and telecommunication systems technology, improving the management efficiency to stabilize
profitability, and promoting global growth strategies. Furthermore, we will promote measures directed atrecovering from the Great East Japan Earthquake. At the same time, we will utilize such experience tocontribute to the development of social infrastructures worldwide.
Strengthening Our Social Innovation Business
Our Social Innovation Business mainly relates to the Information & Telecommunication Systems, Power
Systems, Social Infrastructure & Industrial Systems and Construction Machinery segments, including
businesses that integrate information and communication technology and social infrastructure, and theHigh Functional Materials & Components segment. We believe our Social Innovation Business will takeadvantage of our knowledge, experience and customer confidence, and exploit synergies across our
information and telecommunication systems and social infrastructure businesses. In addition, whennecessary and appropriate, we believe we can leverage our ability to build environmental systems bydrawing on our advanced environmental technologies and experience. For example, in order to react themarket’s needs which is various and rapidly changing, we have restructured the Hitachi Group’s
management organizations. In addition, we focus additional attention on generating synergies and address
issues that have group-wide implications, such as the adoption of a uniform advanced IT platform andcoordinating production engineering, procurement and our brand to help in-house companies and groupcompanies strengthen competitiveness by establishing Social Innovation Business Project Division, etc.
Furthermore, we will focus our business resources, including capital expenditures and R&D investments,
on our Social Innovation Business.
Improving the Management Efficiency to Stabilize Profitability
In order to stabilize profitability by improving the management efficiency, we continue to implement avariety of measures to reduce costs, including reorganizing our operation and production bases, reducing
material procurement costs and centralize of indirect operations. For example, we are executing “theHitachi Smart Transformation Project” promoting cost reductions by thoroughly overhauling our cost
structure across the Group including procurement, production and administrative operations. In addition,
we will continue to strengthen the financial position by implementing measures such as inventory
management, reduction of working capital and reduction and efficiency of total assets.

-18-

Promotion of the Global Growth Strategies
In order to achieve global growth, we will develop a detailed strategy in each region via local leadershipby strengthening our local corporate functions, including business planning and external relations. We will
also work to cultivate and recruit human capital that can be utilized globally, throughout the Hitachi Group.
In addition, we have established a position of Chief Executive Officer for Asia Pacific and will increase
the investment in China and ASEAN countries, including Myanmar, Thailand, Indonesia and Vietnam, forwhich high levels of growth are expected.
(2) Fundamental Policy on the Conduct of Persons Influencing Decision on the Company’s Financial andBusiness Policies
The Group invests 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 and performancethat can be brought about through a change in management control, but it recognizes the necessity ofdetermining the impact on company value and the interests of all shareholders of the buying activities andbuyout proposals of parties attempting to acquire a large share of stock of the Company or a Group
company by duly examining the business description, future business plans, past investment activities, andother 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 isthere 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 one of
the natural duties bestowed upon it by the shareholders and investors to continuously monitor the state of
trading of the Company’s stock and then to immediately take what the Company deems to be the best
action in the event of the appearance of a party attempting to purchase a large share of the Company’s
stock. In particular, together with outside experts, the Company will evaluate the buyout proposal of theparty and hold negotiations with the buyer, and if the Company deems that said buyout will not maintainthe Company’s value and is not in the best interest of the shareholders, then 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 of the shares ofa Group company.
4. Risk Factors
We conduct business on a global scale across a broad range of business areas and utilize sophisticated,
specialized technologies to carry out our operations. Therefore, we are exposed to risks attributable to theeconomic environment, risks inherent in individual industrial sectors and business lines and risks related toour operations. Investment in our securities also involves risks. The following risks are based on theassumption we consider reasonable as of the filing date of this report.
Risks Related to Operations
Economic Trends
Our business environment is influenced by conditions in the domestic and global economies. During theyear ended March 31, 2012, the recovery of the global economy showed signs of slowing resulting fromsovereign debt crisis in Greece and other parts of Europe. In Japan, the yen’s persisted strength against
currencies such as the U.S. dollar and the euro has negatively affected and may continue to negatively
affect corporate earnings and exports. Unemployment in Japan has remained at a relatively high level
since early 2009, and chronic unemployment could negatively affect consumer spending and economic
activity. Although, in terms of real GDP, the Japanese economy grew by 1.2%, or an annualized 4.7%, inthe quarter ended March 31, 2012, such factors could diminish economic growth or result in a return to thecontractions of recent years. The global economic recovery may also be harmed by sovereign debt crisis in
Greece and other parts of Europe, which could cause instability of global capital markets and a further
weakening of the euro against the yen, as well as the potential inability of emerging markets, including
China, to maintain economic growth.
-19-

If the recent gradual recovery in global economic conditions is halted or reversed, our revenues may
decrease, with a resultant adverse impact on our profitability.
Currency Exchange Rates Fluctuations
Since we conduct business in many foreign countries, the portion of our assets and liabilities
denominated in various currencies is exposed to risks from fluctuations in foreign currency exchange rates.
In addition, we sell products and purchase raw materials in local currencies, principally the U.S. dollar andthe euro. Therefore, fluctuations in foreign currency exchange rates may result in lower revenues or higher
costs in yen to us and thus affect our financial results, which are reported in Japanese yen. Our pricecompetitiveness, and thus our financial results, may be harmed if we seek to increase prices in local
currencies to compensate for lower revenues or to increase prices in yen to absorb the higher cost. While
we take measures to reduce the risks from fluctuations in foreign currency exchange rates, such measures
may only delay or temporarily mitigate the adverse impact of such fluctuations and may not be effective.
Access to Liquidity and Long-term Financing
Our 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 otherdebt securities, as well as equity securities. We need liquid funds to pay our operating expenses, theprincipal of and interest on our debt and dividends on our capital stock. We also need long-term financing
to fund, among other things, capital expenditures and research and development expenses. We currently
believe our cash flows from operations, borrowings from banks and other institutional lenders and funding
from the capital markets can provide sufficient funding for our operations and other liquidity needs.
However, a return to a global economic downturn could adversely affect our cash flows from operations,business results and financial condition and may adversely affect our credit ratings. If our ratings aredowngraded, our ability to obtain additional financing on terms we consider favorable may be negatively
affected.
Our reliance on banks and institutional lenders exposes us to risks related to rising interest rates, and we
may need to increase our reliance on external sources of funding. An increased reliance on debt
instruments may adversely affect our credit ratings, which might affect our ability to successfully obtain
additional financing on terms we consider favorable. The inability to successfully obtain such financing
may increase our financing costs, and therefore could adversely affect our financial condition and resultsof operations.
Furthermore, failure of one or more of our major lenders or a decision by one or more of them to change
the terms and conditions of their loans or to stop lending to us could have an adverse effect on our accessto funding.
Marketable Securities Risks
We invest in marketable securities to maintain or promote our business or other relationships with othercompanies. These marketable securities are exposed to the risk of declining stock market prices. Suchdeclines may require that we write down equity securities that we hold. This may have an adverse effecton our financial condition and results of operations. Further, contractual and other obligations may require
us to maintain our holdings of these securities despite declining share prices and this may lead to material
losses.
Worsening of Business Performance of Equity Method Affiliates
We have a number of equity method affiliates. If one or more of these equity method affiliates records aloss during a given period, we must record that loss in a manner proportionate to our ownership interest in
our consolidated financial statements. For example, we recognized equity in net loss of affiliatedcompanies in the year ended March 31, 2012, primarily owing to significant net losses recorded byRenesas Electronics Corporation, our equity method affiliate. In addition, a decline in the fair value of ourinvestments in our equity method affiliates below the carrying amount of the investments that is deemedother than temporary could require us to record an impairment loss.

-20-

Intense Competition
We are subject to intense competition in many of the markets in which we operate, and this may
adversely affect our results of operations.
The industrial sectors and business lines in which we are engaged are experiencing increasingly intensecompetition. We compete with diverse competitors ranging from huge global corporations to specializedcompanies. Competitors are increasingly manufacturing products, including sophisticated electronic
products, in low-cost jurisdictions. Low-cost manufacturing and the globalization of world markets haveaccelerated the commoditization of certain products, which has resulted in increasingly intense pricecompetition for many of our products. Products which are facing intense price competition or decreases inprices include computer-related products, such as disk array subsystems and optical disk drives,semiconductors, digital media products, such as flat-panel TVs, and home appliances. To succeed in thiscompetitive environment, we believe that our products and services must be price competitive. The
commoditization of such products affects our ability to set prices for our products. If we are unable tocharge comparable prices to those of our competitors, our competitiveness and overall profitability may beharmed. On the other hand, charging comparable prices to those of our competitors may require us to sell
products at a loss. Our products must also be competitive in terms of engineering sophistication, quality
and brand value. We must introduce our products and services to the markets in a timely manner. Therecan be no assurance that the products or services that we offer will be competitive. The failure of suchproducts or services to be competitive may negatively affect our business results.
Rapid Technological Innovation
New technologies are rapidly emerging in the segments in which we do business, with the pace oftechnological innovation being especially notable in the fields of information systems, electronics anddigital media. The development of new and advanced technologies, the continuous, timely and costeffective incorporation of such technologies into products and services and the effective marketing of suchproducts and services are indispensable to remaining competitive. While introducing such products andservices requires a significant commitment to research and development, there can be no assurance that
our research and development will be successful. Failure in our endeavors to develop and incorporate such
advanced technologies into products and services in a timely manner, or to achieve market acceptance forsuch products and services, may negatively affect our business, financial condition and results ofoperations.
Estimates, Fluctuations in Cost and Cancellation of Long-term Contracts
We enter into a substantial number of long-term contracts, particularly in connection with theconstruction of nuclear, thermal and hydroelectric power plants. We use the percentage-of-completion
method to recognize revenue from sales of tangible products under these long-term contracts. Under thepercentage-of-completion method, we recognize revenue from a sale in an amount equal to estimated total
revenue from the arrangement multiplied by the percentage that costs incurred to date bear to estimatedtotal costs at completion based upon the most recently available information. The use of the percentage-ofcompletion method requires us to make significant assumptions about estimates of total contract costs,
remaining costs to completion, total contract revenues, contract risks and other factors. We charge any
anticipated losses on fixed price contracts to operations when we are able to estimate such losses. While
we employ our best judgment based on available information, there can be no assurance that theseestimates will, ultimately, prove to be correct. We regularly review these estimates and adjust them as wedeem necessary. Fluctuations in costs can occur for a variety of reasons, many of which are beyond ourcontrol. In addition, we or our counterparties may cancel these contracts, which would require us to revise
our initial assumptions regarding a particular contract, and may adversely affect our business, financial
condition and results of operations.
Material and Component Procurement
Our manufacturing operations rely on third parties for supplies of materials, parts, components andservices of adequate quality and quantity, delivered in a timely manner at a reasonable price. External
suppliers may have other customers and may not have sufficient capacity to meet all of our needs during
periods of excess demand. Shortages of materials, parts, components and services may cause a sharp risein their prices. Prices of certain raw materials, parts and components that we purchase, such as petroleum-21-

products, copper, aluminum and semiconductor memory chips, are highly volatile. Increases in the price of
petroleum and other materials, such as copper, steel, synthetic resins, rare metals and rare-earth minerals,
can increase our production costs and may adversely affect our results of operations. Conversely,
decreases in commodity prices, such as for raw materials, parts and components, can result in write-downsof inventory. If natural disasters disrupt the operations of our suppliers and damage supply chains, it may
adversely affect our production. Although we generally maintain multiple sources of supply and work
closely with our suppliers to avoid supply-related problems, such problems, including shortages anddelays, may continue to occur, which could materially harm our business, financial condition and results ofoperations.
Supply and Demand Balance
Oversupply in the markets in which we compete may lead to declines in sales prices, revenues andprofits. In addition, adjustment to demand may force us to dispose of excess supply or obsolete equipment
or reduce production, which can result in losses. For example, the imbalance between supply and demandin the semiconductor industry and the LCD industry and a resultant deterioration in market conditions
could negatively affect the business results of our semiconductor and LCD manufacturing equipment
business and our semiconductor and display-related product business.
Our Strategy to Strengthen Our Social Innovation BusinessOur business strategy seeks to build our business portfolio and achieve a stable and profitable businessstructure mainly by strengthening our Social Innovation Business, which supplies advanced social
infrastructure supported by information and communication technology. We plan to devote significant
resources to strengthen our Social Innovation Business, which we believe will allow us to exploit
synergies across our information and telecommunication systems and social infrastructure businesses. To
implement this strategy, we have incurred and may continue to incur considerable expenses. Our strategy
to strengthen our Social Innovation Business is predicated on our ability to coordinate our operations
across group companies and segments, foster closer group ties and establish closer capital relationships
among our group companies. Our efforts to implement this strategy may be unsuccessful or less successful
than we currently anticipate. Even if these efforts are successful, there is no assurance that we will be able
to increase profitability, and even if profitability is achieved, we may be unable to sustain or increase it on
a quarterly or annual basis.
Restructuring of Our BusinessOur business strategy seeks to build our business portfolio and achieve a stable and profitable businessstructure in part by: closing unprofitable operations;divesting our subsidiaries and affiliated companies;

reorganizing production bases and sales networks;selling select assets; and

reducing our sales channels, fixed costs and procurement costs.

Our 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 wemay seek to sell. In addition, we have a number of listed subsidiaries and from time to time the interests ofthese listed subsidiaries’ shareholders may conflict with our interests. Such conflicts of interest may resultin difficulties in timely implementing group-wide policies, including mergers, company splits and othersimilar transactions to which the listed subsidiaries are parties. Restructuring efforts may also bring about
unintended consequences, such as negative customer or employee perceptions, and have caused and may
continue to cause us to incur significant expenses and other costs, including additional impairment losses
on our long-lived assets and intangible assets, write-offs of inventory and losses on the disposal of fixed
assets and losses related to the sale of securities.
Current and future restructuring efforts may be unsuccessful or less successful than we presently-22-

anticipate and may adversely affect our financial condition and results of operations.
Cost Reduction Measures
We implemented “the Hitachi Smart Transformation Project”, which promotes cost reductions bythoroughly overhauling our cost structure across the Group including procurement, production andadministrative operations. We seek to improve our management efficiency and stabilize earnings throughthe Project. The Project may be unsuccessful or less successful than we currently anticipate. Even if the
Project is successful, there is no assurance that we will be able to increase profitability, and even if
profitability is achieved, we may be unable to sustain or increase it on a quarterly or annual basis.
Our Overseas Growth Strategies
We seek to expand our business, including our Social Innovation Business, in overseas markets as partof our business strategy. Through such overseas expansion, we aim to increase our revenues, reduce ourcosts and improve profitability. In many of these markets, we face barriers in the form of long-standing
relationships between our potential customers and their local suppliers. In addition, various factors inforeign countries where we operate may adversely affect our 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, environmental andrecycling requirements;differences in commercial and business customs such as contract terms and conditions;labor relations;public sentiment against Japan; andother political and social factors as well as economic trends and currency exchange rate fluctuations.

Because of these factors, there can be no assurance that we will be able to achieve all or any of theinitial aims of our overseas growth strategy. This may adversely affect our business growth prospects andresults of operations.
Acquisitions, Joint Ventures and Strategic Alliances
In every operating sector, we depend to some degree on acquisitions of other companies, joint venturesand strategic alliances with outside partners to design and develop key new technologies and products andto strengthen competitiveness. For example, integration of our affiliate, Renesas Technology, with NEC
Electronics to form Renesas Electronics, the acquisition of BlueArc Corporation, an American network
storage business company, consolidation of Aloka Co., Ltd. (currently Hitachi Aloka Medical, Ltd.) by
Hitachi Medical Corporation and consolidation of Vantec Corporation by Hitachi Transport System, Ltd.
Such transactions are inherently risky because of the difficulties in integrating operations, technologies,
products and personnel. Integration issues are complex, time-consuming and expensive and, without
proper planning and implementation, could adversely affect our business. Decisions made by or the
performance of alliance partners that we cannot control or adverse business trends may also negatively
affect the success of our alliances. We may incur significant acquisition, administrative and other costs inconnection with these transactions, including costs related to integration or restructuring of acquired
businesses. There can be no assurance that these transactions will be beneficial to our business or financial
condition. Even assuming these transactions are beneficial, there can be no assurance that we will be able
to successfully integrate acquired businesses or achieve all or any of the initial objectives of thesetransactions.
Intellectual Property
We depend in part on proprietary technology and our ability to obtain patents, licenses, trademarks andother forms of intellectual property rights covering our products, product design and manufacturing
processes in Japan and other countries. The fact that we hold such intellectual property rights does not-23-

ensure that they will provide a competitive advantage to us. Various parties may challenge, invalidate or
circumvent our patents, trademarks and other intellectual property rights. There can be no assurance thatclaims allowed on any future patents will be sufficiently broad to protect our technology. Effective patent,
copyright and trade secret protection may be unavailable or limited in some of the markets in which we
operate, and our trade secrets may be vulnerable to disclosure or misappropriation by employees,
contractors and other persons.
We design many of our products to include software or other intellectual property licenses from third
parties. Competitors may not make their protected technology available to us, or may make it available tous only on unfavorable terms and conditions. There can be no assurance that we will be able to maintain alicense for such intellectual property if obtained, for economic or other reasons, or that such intellectual
property will give us the commercial advantages that we desire.
From time to time, we are sued or receive notices regarding patent and other intellectual property claims.
Whether or not these claims have merit, they may require significant resources to defend against and may
divert management attention from our business and operations and result in harm to our reputation. In
addition, a successful infringement claim and our inability to obtain the license for the infringed
technology or substitute similar non-infringing technology may adversely affect our business.
Litigation and Regulatory Investigations
We face risks of litigation and regulatory investigation and actions in connection with our operations.
Lawsuits, including regulatory actions, may seek recovery of large, indeterminate amounts or otherwise
limit our operations, and their existence and magnitude may remain unknown for substantial periods oftime.
For example, in the past several years, we have been the subject of investigations of alleged antitrust
violations in Japan, Europe and North America. In December 2006, we and one of our European
subsidiaries received requests for information from the European Commission in respect of alleged
antitrust violations relating to LCDs. In November 2007, one of our subsidiaries in the U.S. received a
grand jury subpoena in connection with an investigation conducted by the Antitrust Division of the U.S.
Department of Justice in respect of alleged antitrust violations relating to cathode ray tubes, or CRTs. In
addition, in November 2007, subsidiaries of ours in Asia and Europe, received requests for informationfrom the European Commission in respect of alleged antitrust violations relating to CRTs. Further, inNovember 2007, one of our Canadian subsidiaries received requests for information from the CanadianCompetition Bureau in respect of alleged antitrust violations relating to CRTs. In July 2011, one of ourJapanese subsidiaries and one of our Japanese affiliated companies received statements of objections fromthe European Commission in respect of alleged antitrust violations relating to high-voltage power cables.
Also in July 2011, one of our Japanese subsidiaries was investigated by the Fair Trade Commission ofJapan, one of our subsidiaries in the U.S. was investigated by and received a grand jury subpoena from the
Antitrust Division of the U.S. Department of Justice, we and one of our European subsidiaries received
requests for information from the European Commission, and one of our Canadian subsidiaries received
requests for information from the Canadian Competition Bureau, all in respect of alleged antitrust
violations relating to automotive equipment.
Relevant authorities in the markets in which we operate continue to investigate us and may initiate
similar investigations in the future. These investigations may result in significant penalties in multiple
jurisdictions, and we may become involved in disputes with private parties seeking compensation fordamages resulting from the relevant violations. Such substantial legal liability or regulatory action could
have a material adverse effect on our business, results of operations, financial condition, cash flows,
reputation and credibility.
In addition, our business activities are subject to various governmental regulations in countries where we
operate, which include investment approvals, export regulations, tariffs, antitrust, anti-bribery, intellectual
property, consumer and business taxation, foreign trade and exchange controls, and environmental andrecycling requirements. These regulations limit, and other new or amended regulations may further limit,
our business activities or increase operating costs. In addition, the enforcement of such regulations,
including the imposition of fines or surcharges for violation of such regulations, may adversely affect our
results of operations, financial condition, cash flows, reputation and credibility.
Product Quality and Liability
We increasingly provide products and services utilizing sophisticated technologies, including but notlimited to components of nuclear power stations. Reliance on external suppliers reduces our control over-24-

quality assurance. There is a risk that defects may occur in our products and services. The occurrence ofsuch defects could negatively affect our reputation for quality products, expose us to liability for damages
caused by such defects and negatively affect our ability to sell certain products. A significant productdefect could materially and adversely affect our results of operations, financial condition and futurebusiness prospects.
Risks of Natural Disasters and Similar Events
Portions of our facilities, including our research and development facilities, manufacturing facilities andour headquarters, are located in Japan. Historically, Japan has experienced numerous natural disasters suchas earthquakes, tsunamis and typhoons. The Great East Japan Earthquake in March 2011 had asignificantly adverse affect on an array of our corporate activities, from production to sales. We also haveoverseas facilities in Asia, the U.S. and Europe, which are also subject to similar events including the
October 2011 flooding in Thailand. As a result of such flooding, we suffered damage to certain of ourplants and offices in Thailand. The operations of our suppliers and customers were also adversely affectedby the floods. Such significant natural disasters may directly damage or destroy our facilities, which could
disrupt our 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 suchsignificant natural disasters do not directly affect our facilities, they could result in disruptions in
distribution channels or supply chains. The spread of infectious diseases, such as a new flu virus, may also
disrupt our operations, render our employees unable to work, reduce consumer demand for our products or
disrupt our supply and distribution channels. In addition, we are not insured against all potential losses,
and even losses that insurance covers may not be fully covered and may be subject to challenges of ordelays in payment. Direct and indirect disruption of our operations as a result of natural disasters or otherevents has had, and may continue to have, a negative impact on our operating activities, results ofoperations and financial condition.
Dependence on Information Systems
With the increased importance of information systems to our operating activities, disruptions in such
systems due to computer viruses and other factors could have a negative impact on our operating activities,
results of operations and financial condition.
Management of Confidential Information
We maintain and manage personal information obtained from our customers, as well as confidential
information relating to our technology, research and development, or R&D, production, marketing andbusiness operations and those of our customers and clients, in various forms. Although we have
implemented controls to protect the confidentiality of such information, there can be no assurance thatsuch controls will be effective. Unauthorized disclosures of such information could subject us tocomplaints or lawsuits for damages or could otherwise have a negative impact on our business, financial
condition, results of operations, reputation and credibility.
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 key assumptions used inestimating pension costs including mortality, withdrawal and retirement rates, changes in wages, thediscount rate and expected return on plan assets. We are required to make judgments regarding the key
assumptions by taking into account various factors including personnel demographics, market conditions
and expected trends in interest rates. Although management believes that its key assumptions arereasonable in light of the various underlying factors, there can be no assurance that the key assumptions
will correspond to actual results. If our key assumptions differ from actual results, the consequentdeviation of actual pension costs from estimated costs may have a material adverse effect on our financial
condition and results of operations. A decrease in the discount rate may result in an increase in the amountof the actuarial loss which we amortize into income over the service lives of employees. In addition, we
may change these key assumptions, such as the discount rate or the expected return on plan assets.
Changes in key assumptions may also have a material adverse effect on our financial condition and resultsof operations.
-25-

Dependence on Specially Skilled Personnel
We believe we can continue to remain competitive only if we can maintain and secure additional people
who are highly skilled in the fields of management and technology. However, the number of skilled
personnel is limited and the competition for attracting and maintaining such personnel is intense. We
cannot ensure that we will be able to successfully attract new or maintain our current skilled personnel.
Risks Related to Our 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 our accounting books and records andexercising 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 andwill pay dividends and distributions collected from us as and to the extent provided in the deposit
agreement. However, ADS holders will not be able to bring derivative actions, examine our accounting
books and records, or exercise appraisal rights through the depositary.
We are incorporated in Japan with limited liability. A significant portion of our assets are located 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 laws of theUnited States or judgments obtained in other courts outside Japan. There is doubt as to the enforceability
in Japanese courts, in original actions or in actions for enforcement of 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 our articles of incorporation, one unit of our shares iscomposed of 1,000 shares, equivalent to 100 ADSs. Each unit of our shares has one vote. A holder who
owns shares or ADSs in other than multiples of 1,000 or 100, respectively, will own less than a whole unit
(i.e., for the portion constituting fewer than 1,000 shares, or fewer than 100 ADSs). Our articles ofincorporation, in accordance with the Companies Act, impose significant restrictions on the rights ofholders of shares constituting less than a whole unit, which include restrictions on the right to vote, toattend a shareholders meeting and to bring derivative actions. In addition, less than whole unit sharescannot be traded on Japanese stock markets. Under the unit share system, holders of our sharesconstituting less than one unit have the right to require us to purchase their shares and the right to require
us to sell them additional shares to create a whole unit of 1,000 shares. However, holders of our ADSs areunable to withdraw underlying shares representing less than one unit and, as a practical matter, are unable
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 Your Shares by Issuances of Additional Shares
We may issue additional shares in the future within the unissued portion of our authorized share capitaland sell shares held as treasury stock, generally without shareholder vote unless the subscription or saleprice is significantly lower than the market price. Issuances and sales of our shares in the future may be at
prices below the prevailing market prices and may be dilutive.
Foreign Exchange Fluctuations
Market prices for our 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 ofthe yen declines against the dollar.

-26-

5. Material Agreements, etc.
(1) As Licensee
LicenseeLicensor

Hitachi, Ltd.
(The Company)

General ElectricCompanyCountry

Item undercontract

U.S.A.

Gas turbines

Contract
description
License oftechnology(Note 1)

Contract period
From March 31,
2006 to March 30,
2016

Babcock-Hitachi
License of
From January 1,
Kabushiki Kaisha
Siemens AG
Germany Boilers
technology
1998 to December(Consolidated(Note 2)31, 2013
subsidiary)(Notes) 1. A lump-sum payment has been made, and a certain percentage of sales of the item is paid asroyalties.
2. A certain percentage based on the specifications of the item is paid as royalties.
(2) Cross License Agreement
Party

Party

Country

Item undercontract

Hitachi, Ltd.
(The Company)

International Business
Machines Corp.

U.S.A.

Information
handling
systems

Hitachi, Ltd.
(The Company)

Hewlett-Packard Co.

U.S.A.

All products
and services

Hitachi, Ltd.
(The Company)

EMC Corporation

U.S.A.

Information
handling
systems

Hitachi-GE
Nuclear Energy,
Ltd.
(Consolidated
subsidiary)

GE-Hitachi Nuclear
Energy Americas LLC

U.S.A.

Nuclearreactorsystems

LicenseeCountry

Contract
description

Contract period

From January 1,
2008 to the
Cross license of
expiration of thepatents
patent undercontracts
From March 31,
2010 to the
expiration of
Cross license ofpatents applied on
patentsor before
December 31,
2014
From January 1,
2003 to the
expiration of
Cross license ofpatents applied on
patentsor before
December 31,
2002
Cross license of From October 30,
patents and1991 to April 30,
technology
2016(3) As Licensor
Licensor

Contract
description

Contract period

From August 10,
2007 to theRare earth
Magnequench Limited Barbados
expiration of themagnets
patents undercontracts
A lump-sum payment has been received, and royalties are received in installments until the end of
the contract period.

Hitachi Metals,
Ltd.
(Consolidated
subsidiary)(Note)

Item undercontract

License ofpatents(Note)-27-

6. Research and Development
The Hitachi Group (the Company and consolidated subsidiaries) is conducting research anddevelopment activities in a broad range of fields, from information and telecommunications systems tofinancial services. The Hitachi Group places priority on allocating R&D resources on core businesses of
the Group and make efforts for selecting R&D themes carefully and commercializing them quickly.
Currently, in order to strengthen the global competitiveness of the Social Innovation Business, the Groupis focusing on R&D activities to develop technologies combining social infrastructure with informationand telecommunications systems, products and services to promote environmental operations and highfunctional materials. In addition, the Hitachi Group conducts advanced research to cultivate future corebusinesses.
The Hitachi Group also works to improve the efficiency of R&D through close coordination between the
Company’s corporate research laboratories, development divisions at business departments and factories,
and research laboratories of group companies. Furthermore, the Hitachi Group is actively expanding
collaborations with universities and other research institutions as well as with outside firms.
The Company has established a new R&D framework to accelerate global growth through the Social
Innovation Business. In order to support the global growth, it aims to promote R&D that can meet local
needs quickly by expanding R&D facilities and personnel in China, Europe, the Americas, Asia and India
and accelerating locally-led R&D. Three corporate research laboratories aim to promote integration oftechnologies from basic research to applied research, to create synergies by consolidating R&D in thesocial infrastructure field, and to combine enhanced efficiency in information technology research with
manufacturing.
The Hitachi Group’s R&D expenditures for the fiscal year ended March 31, 2012 were ¥412.5 billion,
4.3% of revenues. A breakdown of R&D expenditures by segment is shown below.
Segment
Information & Telecommunication
Systems
Power Systems
Social Infrastructure & Industrial
Systems
Electronic Systems & Equipment
Construction Machinery
High Functional Materials &Components
Automotive Systems
Components & Devices
Digital Media & Consumer Products
Financial Services
OthersCorporate Items
Total(Billions of yen)Amount
87.9
16.5
22.5
47.3
16.4
46.1
52.8
70.1
23.6
0.3
4.5
24.0
412.5

Notable achievements of R&D activities in the fiscal year ended March 31, 2012 are as follows.
-

Heat radiation technology for power modules which can develop smaller inverters for electric andhybrid automobiles (Automotive Systems segment)
Power modules are the key components to electric and hybrid automobiles. We developed newtechnologies adopting an original water cooled system, which directly sends heat radiated frominverters into coolant and change heat radiation structure of power semiconductor devices from oneside to both-sides of them. This technology is anticipated to improve a cooling performance of power
modules and downsize inverters for automobiles.

-28-

-

Technologies for eco-friendly combustion of the next-generation coal fired power generations (Power
Systems segment)
For Carbon Dioxide Capture and Storage and Integrated Coal Gasification Combined Cycle (CCSICGCC), we devised technologies that can reduce nitrogen oxide emissions without diluents
regardless of the concentration of hydrogen, a main ingredient of fuel. Such achievement could be
realized by a combination of a technology to safely and rapidly mix air and fuel and a technology torealize the stable combustion (This is an achievement of research and development activities entrusted
by the New Energy and Industrial Technology Development Organization (NEDO) ).

-Digital watermark technologies which can restrain pirated copies of animations (Information &Telecommunication Systems segment)
We developed embedded digital watermark technologies for securing animation data. If someone
plays pirated copies of the original animation, warning messages embedded in an original animation isdisplayed on the screen utilizing aliasing effects caused by illegally copying with the reduced data size.

-

Ultrasonic flaw detection test system which can display three dimensional images of internal part ofmetals in short time (Power Systems segment)
We succeeded to develop technologies for ultrasonic flaw detection test systems to search internal
flaws of metals by using reflection of ultrasonic beam. This technology can dramatically shorten thetime that takes to display internal part of metals in three dimensional images and make it possible tofind more imperceptible flaws by using more microscopic and powerful ultrasonic beam.

-

Integrated railway systems simulator to globally promote railway systems business (Social
Infrastructure & Industrial Systems segment)
We developed an integrated railway systems simulator, which can evaluate and analyze overall
railway systems including energy supply measure for railway systems and services which could differ
according to countries and lines, passing through electrified and non-electrified zones and interactions
and coordinated control between multiple railway sub-systems such as rolling stock, signaling, traffic
control and power-feed equipment. We anticipate that this integrated railway systems simulator
enables to provide customers with optimal proposals which meet the needs of local railway operatorsand match construction and maintenance plans for railway networks in diverse countries.

-29-

7. Analyses of Consolidated Financial Position, Operating Results and Cash Flows(1) Summary of Business Results, etc.
Economic Environment
We conduct business operations such as manufacturing, marketing, and research and development
activities throughout the world. Therefore, the economic conditions in global markets where the Hitachi Group
conducts business, in particular Japan, Asia, the Americas, and Europe, affect its results of operations. In theyear ended March 31, 2012, the world economy showed slowed recovery due primarily to sovereign debt
crises in some European countries and the impact of floods in Thailand which worsened in October 2011.
Although the U.S. economy continued to moderately recover, the European economy was sluggish. The
Chinese economy, which has developed at a higher rate of economic growth, experienced moderate domestic
demand and decreased export due to monetary tightening policy of Chinese government. In addition, otheremerging nations’ economies were stagnant, due mainly to decreased export and rising inflation. The Japanese
economy gradually recovered in the latter half of the year ended March 31, 2012 as a result of increases inpublic investment, capital investment in the private sector and housing investment for post-quake
reconstruction.
We conduct business in many foreign countries, and a portion of our assets and liabilities denominated incurrencies other than the Japanese yen is exposed to risks from fluctuations in foreign currency exchange rates.
In addition, we export products and import components and raw materials in local currencies, principally the
U.S. dollar and the euro. Therefore, fluctuations in foreign currency exchange rates may affect our financial
results, which are reported in Japanese yen. The Japanese yen on average strengthened against the U.S. dollar
and the euro during the years ended March 31, 2012. We employ forward exchange contracts and crosscurrency swap agreements to reduce the impact of foreign currency exchange rate fluctuations. In addition, toalleviate the adverse effects of foreign currency exchange rate fluctuations, when we believe it is appropriate,
we seek to manufacture outside Japan and procure materials and parts locally.
Business Strategy
We aim to achieve sustainable growth and establish a stable and profitable business structure byenhancing our competitiveness through promotion of our Social Innovation Business. Our Social Innovation
Business mainly relates to the Information & Telecommunication Systems, Power Systems, Social
Infrastructure & Industrial Systems and Construction Machinery segments, including businesses that integrate
information and communication technology and social infrastructure, and the High Functional Materials &Components segment. We believe our Social Innovation Business will take advantage of our knowledge,
experience and customer confidence, and exploit synergies across our information and telecommunication
systems and social infrastructure businesses. In addition, when necessary and appropriate, we believe we canleverage our ability to build environmental systems by drawing on our advanced environmental technologies
and experience. We aim to expand our Social Innovation Business globally, particularly in emerging countries
and regions, by strengthening local leadership and by developing business strategy precisely responsive to
local needs. Furthermore, we focus our business resources, including capital expenditures and R&D
investments, on our Social Innovation Business. We also work to cultivate, recruit and promote human capitalthat can be utilized globally on a consolidated group-wide basis in order to facilitate the acceleration of ourglobal business operations.
In order to enhance our competitiveness, we continue to strengthen our financial position, such as
through optimization or integration of manufacturing bases throughout our consolidated group including a
number of subsidiaries and affiliates, through highly effective asseting management and reduction of interestbearing debt, and by thoroughly overhauling our cost structure including procurement costs and administrative
operations.
In addition, in order to accelerate the promotion of our Social Innovation Business, we have restructured
the Hitachi Group’s management organizations and our headquarters will take the lead on consolidated groupwide matters and integration of highly related businesses that are conducted by diverse divisions or in-housecompanies.

-30-

Business Reorganization
We continuously reorganize our business in order to further focus our business resources on the Social
Innovation Business. The important business reorganizations conducted in the year ended March 31, 2012 are
as follows:
In March 2012, we sold all shares of Viviti Technologies Ltd., the holding company of Hitachi Global
Storage Technologies, Inc., which manufactures and sells HDDs, to Western Digital Corporation. The sale
resulted in Viviti Technologies ceasing to be our subsidiary.
In March 2012, we sold all shares of Hitachi Displays, Ltd., a subsidiary engaged in our small- andmedium-sized LCD panel business. The sale resulted in Hitachi Displays ceasing to be our subsidiary.
Results of Operations
Effective from April 1, 2011, the battery business for automotive applications, which was previously
included in the Components & Devices segment, has been included in the Automotive Systems segment.
Figures for each segment, including figures for the year ended March 31, 2011, reflect the new segmentation.
Summary
In the year ended March 31, 2012, total revenues increased 4% compared with the year ended March 31,
2011. Income before income taxes for the year ended March 31, 2012 increased ¥125.5 billion to ¥557.7
billion, as compared with the year ended March 31, 2011. This increase was due primarily to recording a net
gain on securities. In the year ended March 31, 2012, net income attributable to Hitachi, Ltd. was ¥347.1
billion, an increase of ¥108.3 billion compared with the year ended March 31, 2011.
Analysis of Statement of Operations
Our total revenues in the year ended March 31, 2012 increased 4% to ¥9,665.8 billion compared withthe year ended March 31, 2011. This increase was due primarily to increases in revenues in the Information &Telecommunication Systems, Automotive Systems and Others segments. An increase in revenues in the
Information & Telecommunication Systems segment was mainly due to increase in services business, and anincrease in revenues in the Automotive Systems segment was due to worldwide recovery of demand forautomobiles. An increase in revenues in the Others segment was mainly the result of higher revenues at Hitachi
Transport System, Ltd. owing to the effect of making Vantec Corporation a consolidated subsidiary in April
2011. This increase was partially offset by decreases in revenues in the Components & Devices, Digital Media& Consumer Products and Financial Services segments due mainly to decreases in demand. Our overseas
revenues increased 2% to ¥4,131.4 billion in the year ended March 31, 2012, compared with the year ended
March 31, 2011. This increase was due primarily to increased revenues in the Information &Telecommunication Systems segment owing to higher revenue from our storage solutions business mainly in
the U.S. market, and to increase in revenues in the Automotive Systems segment owing mainly to improved
demand for automotive equipment in overseas markets, in particular in the United States and emerging
economies.
Our cost of sales in the year ended March 31, 2012 was ¥7,278.9 billion, an increase of 4% comparedwith the year ended March 31, 2011. The ratio of cost of sales to total revenues was 75%, approximately thesame as in the year ended March 31, 2011.
Our selling, general and administrative expenses in the year ended March 31, 2012 increased 4% to¥1,974.6 billion compared with the year ended March 31, 2011. The ratio of selling, general and administrative
expenses to total revenues was 20%, approximately the same as in the year ended March 31, 2011.
Impairment losses for long-lived assets decreased ¥3.3 billion to a total of ¥31.8 billion in the year
ended March 31, 2012, as compared with the year ended March 31, 2011. The High Functional Materials &Components segment recorded an impairment loss of ¥19.4 billion due primarily to restructuring of its
semiconductor packaging materials business suffered by a decrease in demand of the market and integrating
manufacturing facilities for electronics and IT devices. In addition, the Information & Telecommunication
Systems segment recorded an impairment loss of ¥4.5 billion due primarily to restructuring of micro devices
business as a result of lower-than-expected future income. The fair value estimates used to determine theselosses were based primarily on discounted future cash flows.

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Restructuring charges in the year ended March 31, 2012 increased ¥17.3 billion to ¥23.0 billion, as
compared with the year ended March 31, 2011. The increase was due primarily to increases in special and onetime termination benefits. In the year ended March 31, 2012, special and one-time termination benefits was¥22.9 billion, which mainly consisted of special termination benefits expensed for restructuring in order torationalize the workforce of LCDs business in the Components & Devices segment and to reorganize wires,
cables and other relevant business, which has encountered severe deterioration in the business environment, inthe High Functional Materials & Components segment.
Interest income decreased ¥0.6 billion to ¥12.6 billion, as compared with the year ended March 31, 2011.
Dividend income increased ¥1.3 billion to ¥5.5 billion, as compared with the year ended March 31,
2011.
Other income, including net gain on securities and net gain on sale and disposal of rental assets andother property, increased ¥159.1 billion to ¥228.9 billion, as compared with the year ended March 31, 2011.
The increase was due primarily to an increase in a net gain on securities. In the year ended March 31, 2012, net
gain on securities was ¥209.7 billion, an increase of ¥148.6 billion compared with the year ended March 31,
2011. This increase in net gain on securities consisted mainly of a gain from the sales of shares of Viviti
Technologies Ltd. and Hitachi Displays, Ltd. Net gain on sale and disposal of rental assets and otherproperty increased to ¥19.1 billion, compared with a net loss on sale and disposal of rental assets andother property of ¥3.1 billion in the year ended March 31, 2011.
Interest charges increased ¥3.2 billion to ¥28.1 billion, as compared with the year ended March 31, 2011.
Other deductions decreased ¥10.5 billion to ¥3.0 billion, as compared with the year ended March 31,
2011.
Equity in net loss of affiliated companies decreased ¥4.5 billion to ¥15.5 billion in the year ended March
31, 2012, as compared with the year ended March 31, 2011. This was due primarily to a decrease in the loss
resulting from our interest in Renesas Electronics Corporation, our equity method affiliate in thesemiconductor industry.
As a result of the foregoing, income before income taxes increased ¥125.5 billion to ¥557.7 billion, as
compared with the year ended March 31, 2011.
Income taxes increased ¥15.8 billion to ¥144.9 billion, as compared with the year ended March 31, 2011.
The increase was due primarily to revisions of Japanese taxation for corporations.
Net income increased ¥109.6 billion to ¥412.8 billion in the year ended March 31, 2012, as comparedwith the year ended March 31, 2011.
In the year ended March 31, 2012, net income attributable to noncontrolling interests was ¥65.6 billion,
an increase of ¥1.3 billion compared with the year ended March 31, 2011.
As a result of foregoing, net income attributable to Hitachi, Ltd. increased ¥108.3 billion to ¥347.1
billion.
Operations by Segment
The following is an overview of results of operations by segment. Revenues for each segment include
intersegment transactions.
(Information & Telecommunication Systems)
Revenues in the year ended March 31, 2012 were ¥1,764.2 billion, a 7% increase compared with the year
ended March 31, 2011. The increase was due primarily to increased revenues from our domestic services
business and increased revenues from software and services related to storage solutions and consulting-32-

business in the overseas market. Revenues from hardware business were approximately the same as the year
ended March 31, 2011.
Segment profit increased 3% compared with the year ended March 31, 2011, to ¥101.7 billion. This
increase was due primarily to improvement in profitability of our hardware business owing to an increase in
the number of projects with higher profitability in our telecommunication networks business. By contrast,
profits from our services business were approximately the same as in the year ended March 31, 2011 owing todeterioration in its profitability, despite higher sales.
(Power Systems)
Revenues in the year ended March 31, 2012 were ¥832.4 billion, a 2% increase compared with the year
ended March 31, 2011. The increase was due primarily to higher sales of thermal power generation systems inthe domestic market and increased revenues from preventative maintenance services. This increase waspartially offset by lower sales of nuclear power generation systems in the aftermath of the Great East Japan
Earthquake.
Segment loss was ¥33.9 billion in the year ended March 31, 2012, a decrease of ¥56.0 billion comparedwith the year ended March 31, 2011. This return to a segment loss was due primarily to additional costs owing
to defects in boiler materials and delays in progress in an overseas project for coal-fired power systems and to
the effects of the Great East Japan Earthquake.
(Social Infrastructure & Industrial Systems)
Revenues in the year ended March 31, 2012 were ¥1,204.9 billion, a 4% increase compared with the year
ended March 31, 2011. The increase was due primarily to increased revenue from plant-related equipment andconstruction owing to alleviation of the effects of the Great East Japan Earthquake and an increase in air
conditioning system projects. The increase was also attributable to higher revenue from elevators andescalators in the overseas markets, particularly in China.
Segment profit increased 23% compared with the year ended March 31, 2011, to ¥49.1 billion. The
increase was due primarily to increased revenues from plant-related equipment and construction and elevatorsand escalators. This increase was also attributable to cost reduction.
(Electronic Systems & Equipment)
Revenues in the year ended March 31, 2012 were ¥1,101.7billion, a 2% increase compared with the year
ended March 31, 2011. The increase was due primarily to higher sales at Hitachi Medical Corporation
resulting from consolidating Aloka Co., Ltd. (currently Hitachi Aloka Medical, Ltd.) in January 2011. The
increase was partially offset by declined revenues from electronic parts manufacturing equipment.
Segment profit increased 34% compared with the year ended March 31, 2011, to ¥49.9 billion. The
increase was due primarily to higher earnings at Hitachi Kokusai Electric Inc. resulting from businessrestructuring and to higher earnings at Hitachi Koki Co., Ltd. and Hitachi Medical Corporation, despite adecrease in profit of electronic parts manufacturing equipment due to decreased revenues.
(Construction Machinery)
Revenues in the year ended March 31, 2012 were ¥798.7 billion, a 6% increase compared with the year
ended March 31, 2011. The increase was due primarily to increased revenues in the domestic market owing to
demand from post-quake reconstruction. The increase was also attributable to higher sales from mining
machinery and services and parts in resource-rich nations, mainly in Australia, and to increased revenues in the
U.S. market, mainly in the lease industries. This increase was partially offset by decreased revenues in China
due to lower demand for hydraulic excavators.
Segment profit increased 28% compared with the year ended March 31, 2011, to ¥63.1 billion. The
increase was due primarily to improvement in profitability owing to increased sales of highly profitable
services and parts, revision of sales prices, and cost reduction.
(High Functional Materials & Components)
Revenues in the year ended March 31, 2012 were ¥1,437.1 billion, a 2% increase compared with the year
ended March 31, 2011. The increase was due primarily to increased revenues at Hitachi Metals, Ltd. owing tohigher sales of automotive-related materials. The increase was also attributable to higher revenues at Hitachi-33-

Cable, Ltd. mainly resulting from a change of fiscal year-end for some of its overseas subsidiaries. This
increase was partially offset by lower sales at Hitachi Chemical Co., Ltd. due to lower demand forsemiconductor- and LCD-related products and the impact of the Great East Japan Earthquake and floods inThailand.
Segment profit decreased 9% compared with the year ended March 31, 2011, to ¥77.0 billion. The
decrease was due primarily to decrease in profit at Hitachi Chemical owing to the decreased revenues and theimpact of the Great East Japan Earthquake and floods in Thailand. This decrease was partially offset by
improvement in profitability at Hitachi Metals due to increased revenues and by higher earnings at Hitachi
Cable due to increased revenues and its restructuring effort.
(Automotive Systems)
Revenues in the year ended March 31, 2012 were ¥811.5 billion, a 10% increase compared with the year
ended March 31, 2011. The increase was due primarily to an upturn in demand for automotive equipment
reflecting a recovery in automobile production in Japan and strong demand for automotive equipment in the
U.S. and emerging economies, despite the lasting effects of the Great East Japan Earthquake felt at the
beginning of the year.
Segment profit increased 56% compared with the year ended March 31, 2011, to ¥37.0 billion. The
increase was due primarily to improvement in profitability owing to an increase in the level of production
activity in response to rising demand for automotive equipment and cost reduction.
(Components & Devices)
Revenues in the year ended March 31, 2012 were ¥768.0 billion, a 5% decrease compared with the year
ended March 31, 2011. The decrease was due primarily to lower revenues from HDDs owing to a decrease in
shipment volume, resulting from difficulties with procurement of parts stemming from the floods in Thailand
and the Great East Japan Earthquake, and to the effects of the appreciation of the Japanese yen. The decrease
was also attributable to lower revenues from our LCDs business due mainly to the effects of the Great East
Japan Earthquake and the floods in Thailand.
Segment profit decreased 20% compared with the year ended March 31, 2011, to ¥39.4 billion. The
decrease was due primarily to deterioration in profitability of our HDDs business owing to lower sales.
(Digital Media & Consumer Products)
Revenues in the year ended March 31, 2012 were ¥858.8 billion, a 10% decrease compared with the year
ended March 31, 2011. The decrease was due primarily to decreased revenues from our optical disk drives
business owing mainly to the effect of floods in Thailand and declining sales price levels. The decrease wasalso attributable to decreased revenues from our flat-panel TVs business resulting from lower demand anddeclining sales price levels. This decrease was partially offset by increased revenues from air-conditioning
equipment in the domestic market, owing to demand generated by capital investment and post-quake
reconstruction, and those in overseas markets, mainly China and Taiwan.
Segment loss in the year ended March 31, 2012 was ¥10.9 billion, a decrease of ¥25.8 billion ascompared with the year ended March 31, 2011. This return to a segment loss was due primarily to significant
deterioration in profitability owing to lower sales from flat-panel TVs and optical disk drives. The return was
also attributable to posting losses for refrigerators, due mainly to rising price levels for raw materials, lower
sales prices and the effect of floods in Thailand, and losses for room air conditioners owing to rising pricelevels for raw materials.
(Financial Services)
Revenues in the year ended March 31, 2012 were ¥353.2 billion, a 5% decrease compared with the year
ended March 31, 2011. The decrease was due primarily to lower revenues from finance services business fordomestic corporations at Hitachi Capital Corporation. The decrease was partially offset by higher revenues
from the overseas business, in particular in Asia except Japan, at Hitachi Capital.
Segment profit increased 112% compared with the year ended March 31, 2011, to ¥30.2 billion. The
increase was due primarily to reduced financing and credit costs.

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(Others)
Revenues in the year ended March 31, 2012 were ¥951.6 billion, a 24% increase compared with the year
ended March 31, 2011. The increase was due primarily to higher revenues at Hitachi Transport System, Ltd.
owing to the effect of making Vantec Corporation a consolidated subsidiary in April 2011 and healthy growthin sales in third-party logistics solutions. As a result, segment profit increased 15% compared with the year
ended March 31, 2011, to ¥33.2 billion.
Revenues by Geographic Area
The following is an overview of revenues attributed to geographic areas based on customer location.
(Japan)
Revenues in Japan in the year ended March 31, 2012 were ¥5,534.4 billion, a 5% increase comparedwith the year ended March 31, 2011. The increase was due primarily to increased revenues in the Information& Telecommunication Systems, Power Systems and Construction Machinery segments. The increase was also
attributable to increased revenues in the Others segment, resulting from higher revenues at Hitachi Transport
System, Ltd. owing to the effect of making Vantec Corporation a consolidated subsidiary in April 2011 and tohealthy growth in sales in third-party logistics solutions. The increase was partially offset by lower revenues in
the Components & Devices segment due primarily to the effect of the Great East Japan Earthquake and floodsin Thailand, and decreased revenues in the Digital Media & Consumer Products and Financial Services
segments.
(Asia)
Revenues in Asia in the year ended March 31, 2012 were ¥2,000.9 billion, a 4% decrease compared withthe year ended March 31, 2011. The decrease was due primarily to decreased revenues in the Construction
Machinery, Components & Devices and Digital Media & Consumer Products segments. The decreased
revenues in the Construction Machinery segment resulted from lower demand in China for hydraulic excavators.
The decreased revenues in the Components & Devices segment mainly resulted from the effect of the floods inThailand on our HDDs business. The decreased revenues in the Digital Media & Consumer Products segment
resulted from lower sales of optical disk drive-related products. The decrease was partially offset by higher
revenues mainly from elevators and escalators in the Social Infrastructure & Industrial Systems segment andincreased revenues in the Automotive Systems segment.
(North America)
Revenues in North America in the year ended March 31, 2012 were ¥869.0 billion, an 11% increase
compared with the year ended March 31, 2011. The increase was due primarily to increased revenues in the
Information & Telecommunication Systems segment due primarily to higher sales for our storage solutions
business. The increase was also attributable to increased revenues in the Electronic Systems & Equipment
segment, in particular higher sales at Hitachi High-Technologies Corporation, and increased revenues in theConstruction Machinery segment reflecting higher demand in the leasing industry.
(Europe)
Revenues in Europe in the year ended March 31, 2012 were ¥761.1 billion, which was almost the samelevel as in the year ended March 31, 2011. Revenues in the Electronic Systems & Equipment segment
increased due primarily to the higher revenues at Hitachi High-Technologies Corporation and Hitachi Medical
Corporation. Revenues in the Construction Machinery segment also increased, particularly in Russia. However,this increase was offset by lower sales from coal-fired power systems due primarily to delays in progress of acertain project.
(Other Areas)
Revenues in other areas in the year ended March 31, 2012 increased 16% to ¥500.2 billion due primarily
to increased revenues in the Power Systems segment, in particular from coal-fired power generation systems inSouth Africa. The increase was also attributable to higher revenues in the Construction Machinery segment,
mainly in Australia and Turkey.

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(2) Summary of Financial Position, etc.
Liquidity and Capital Resources
Our management considers maintaining an appropriate level of liquidity and securing adequate funds for
current and future business operations to be important financial objectives. Through efficient management ofworking capital and selective investment in new plants and equipment, we are working to optimize theefficiency of capital utilization throughout our business operations. We endeavor to improve our group cash
management by centralizing such management among us and our overseas financial subsidiaries. Our internalsources of funds include cash flows generated by operating activities and cash on hand. Our management also
considers short-term investments to be an immediately available source of funds. In addition, we raise funds
both in the capital markets and from Japanese and international commercial banks in response to our capitalrequirements. Our management’s policy is to finance capital expenditures primarily by internally generated
funds and to a lesser extent by funds raised through the issuance of debt and equity securities in domestic andforeign capital markets. In order to flexibly access funding, we maintain our shelf registration with the
maximum outstanding balance of ¥300.0 billion.
As of March 31, 2012, we maintained commitment line agreements with a number of domestic banks
under which we may borrow in order to ensure efficient access to necessary funds. These commitment line
agreements generally provide for a one-year term, renewable upon mutual agreement between us and each of
the lending banks, although we also maintained another commitment line agreement that will end in May 2013.
These committed credit arrangements are, in general, subject to financial and other covenants and conditions
both prior to and after drawdown, the most restrictive of which require maintenance of minimum issuer rating
or long-term debt ratings from R&I of BBB or BBB-. As of March 31, 2012, our unused commitment lines
totaled ¥506.1 billion, including these of ¥106.1 billion which our certain subsidiaries maintained.
Our debt ratings affect our ability to obtain short- and long-term financing. Our current debt ratings(long-term/short-term) are: A3/P-2 by Moody’s; BBB+/A-2 by S&P and A+/a-1 by R&I. With our current
ratings, we believe that our access to the global capital markets will remain sufficient for our financing needs.
We seek to improve our credit ratings in order to ensure financial flexibility for liquidity and capitalmanagement, and to continue to maintain access to sufficient funding resources through the capital markets.
Cash Flows(Cash Flows from Operating Activities)
Net income amounted to ¥412.8 billion in the year ended March 31, 2012, an increase of ¥109.6 billion
compared to the year ended March 31, 2011, due mainly to an increase in net gain on securities. Trade
receivables increased by ¥259.2 billion in the year ended March 31, 2012 as compared to a decrease of ¥121.6
billion in the year ended March 31, 2011, due in part to the effects of the Great East Japan Earthquake andcollateral events which caused delays in product shipment and delivery. An increase in payables of ¥47.5
billion in the year ended March 31, 2011 changed to an increase of ¥119.1 billion in the year ended March 31,
2012. As a result, the net cash provided by operating activities in the year ended March 31, 2012 decreased by¥394.3 billion to ¥447.1 billion.
(Cash Flows from Investing Activities)
A net sum of ¥403.3 billion in the year ended March 31, 2012 was recorded as investment related toproperty, plant and equipment, where the collection of investments in leases, the proceeds from disposal ofproperty, plant and equipment and the proceeds from disposal of tangible assets and software to be leased weresubtracted from the amount of the capital expenditures, the purchase of intangible assets and the purchase of
tangible assets and software to be leased, an increase of ¥118.5 billion from the year ended March 31, 2011. In
addition, purchase of investments in securities and shares of newly consolidated subsidiaries increased by¥28.8 billion and amounted to ¥151.4 billion as a result of stock acquisition of Vantec Corporation and a
network storage business entity in the U.S. Proceeds from sale of investments in securities and shares of
consolidated subsidiaries resulting in deconsolidation increased by ¥183.0 billion and amounted to ¥331.0
billion owing to share transfer of Viviti Technologies Ltd. As a result, net cash used in investing activities inthe year ended March 31, 2012 was ¥195.5 billion, a decrease of ¥64.7 billion from the year ended March 31,
2011.
(Cash Flows from Financing Activities)
Net increase in short-term debt in the year ended March 31, 2012 was ¥70.1 billion due in part to theissuance of commercial paper in response to increased working capital. A net sum of ¥155.8 billion wasrecorded as payments related to long-term debt, where the proceeds from long-term debt were subtracted from-36-

the payments on long-term debt, a decrease of ¥455.1 billion from the year ended March 31, 2011. As a result,net cash used in financing activities in the year ended March 31, 2012 was ¥167.8 billion, a decrease of ¥416.3
billion from the year ended March 31, 2011.
As a result of the above items, in the year ended March 31, 2012, cash and cash equivalents increased¥64.7 billion, to ¥619.5 billion from the year ended March 31, 2011. Free cash flows, the sum of cash flows
from operating and investing activities, represented an inflow of ¥251.5 billion in the year ended March 31,
2012, a decrease of ¥329.6 billion compared with the year ended March 31, 2011.
Assets, Liabilities and Equity
As of March 31, 2012, our total assets amounted to ¥9,418.5 billion, an increase of ¥232.8 billion fromMarch 31, 2011. The increase was due primarily to an increase in trade accounts receivables as a result of
increased revenues and an increase in investments and advances resulting from acquiring shares of Western
Digital Corporation as part of the consideration for selling our HDDs business to Western Digital Corporation.
The increase was also attributable to an increase in inventories in response to strong demand in construction
machinery. Our total cash and cash equivalents and short-term investments as of March 31, 2012 amounted to¥631.1 billion, an increase of ¥59.7 billion from the level as of March 31, 2011.
As of March 31, 2012, our total interest-bearing debt, which represents the sum of short-term debt, longterm debt and non-recourse borrowings of consolidated securitization entities, amounted to ¥2,396.4 billion, adecrease of ¥125.0 billion from March 31, 2011. This decrease was due primarily to the decrease of nonrecourse borrowings of consolidated securitization entities. As of March 31, 2012, short-term debt, consisting
mainly of borrowings from banks and commercial paper, amounted to ¥531.4 billion, an increase of ¥58.8
billion from March 31, 2011, due primarily to an increase of working capital, partially offset by repayment ofshort-term debt with the consideration received for the sale of our HDDs business. As of March 31, 2012, longterm debt (excluding current portion), consisting mainly of debentures, debentures with stock acquisition rights,
medium-term notes and loans principally from banks and insurance companies, amounted to ¥1,248.8 billion,a decrease of ¥51.4 billion from March 31, 2011, due primarily to a part of long-term debt becoming current
liability and conversion of the Company’s bonds with stock acquisition rights into stocks.
As of March 31, 2012, noncontrolling interests amounted to ¥1,002.2 billion, an increase of ¥0.6 billion
from March 31, 2011.
As of March 31, 2012, total Hitachi, Ltd. stockholders’ equity amounted to ¥1,771.7 billion, an increaseof ¥331.9 billion from March 31, 2011. As a result, ratio of total Hitachi, Ltd. stockholders’ equity to total
assets as of March 31, 2012 was 18.8%, compared with 15.7% as of March 31, 2011. Ratio of interest-bearing
debt to total equity (the sum of total Hitachi, Ltd. stockholders’ equity and noncontrolling interests) decreased
to 0.86, compared with 1.03 as of March 31, 2011.
(3) Important Accounting Policies and Estimates
The preparation of our consolidated financial statements in conformity with U.S. GAAP requires ourmanagement to make estimates and assumptions that affect the reported amounts of assets and liabilities anddisclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts ofrevenues and expenses during the reporting period. Certain accounting estimates are particularly sensitive
because of their significance to the financial statements and because of the possibility that future eventsaffecting the estimate may differ significantly from management’s current assumptions. Management considers
the accounting estimates discussed in this section to be critical accounting estimates for two reasons. First, theestimates require us to make assumptions about matters that are highly uncertain at the time the accounting
estimate is made. Second, different estimates that we reasonably could have used for the accounting estimate
in the current period, or changes in the accounting estimate that are reasonably likely to occur from period toperiod, could have a material impact on the presentation of our financial condition, changes in financial
condition or results of operations. Management believes the following represent our critical accounting
policies.
Revenue Recognition for Sales under Long-term Construction Arrangements
We use the percentage-of-completion method to recognize revenue from sales of tangible products underlong-term construction type arrangements, in connection with the construction of nuclear, thermal andhydroelectric power plants and customization of software. Under the percentage-of-completion method, we
recognize revenue from a sale in an amount equal to estimated total revenue from the arrangement multiplied-37-

by the percentage that costs incurred to date bear to estimated total costs at completion based upon the mostrecently available information. The use of the percentage-of-completion method requires us to makesignificant assumptions about estimates of total contract costs, remaining costs to completion, total contract
revenues, contract risks and other factors. 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. We make provisions for contingencies in the period in which they become known to us
under the specific terms and conditions of the relevant contract and are estimable by us.
Impairment of Long-Lived Assets
We review the carrying value of our long-lived assets held and used whenever events or changes incircumstances indicate that the carrying value of the assets may not be recoverable. Such events or changes
include, but are not limited to:changes in production due to trends of supply and demand in the markets;rapid changes in selling prices of products or purchasing prices of materials and components;

unexpected technological innovation causing obsolescence of present products; and

unpredictable changes in business assumptions, which cause revision of business plans that result inchanges in the extent or manner in which we use long-lived assets.

We perform an initial impairment review using estimates of undiscounted future cash flows. If thecarrying value of the asset is greater than our estimates of undiscounted cash flows, an impairment charge isrecorded for the amount by which the carrying value of the asset exceeds its estimated fair value. In estimating,
we use available quoted market prices and present value techniques, if appropriate, based on the estimatedfuture cash flow expected to result from the use of the assets and their eventual disposition.
Although management believes that the estimates of future cash flows and fair value are reasonable,changes in estimates resulting in lower future cash flows and fair value due to unforeseen changes in businessassumptions could negatively affect the valuations of long-lived assets.
For the year ended March 31, 2012, we recognized ¥31.8 billion of impairment losses for long-lived assets,
mainly relating to semiconductor package material businesses in the High Functional Materials & Components
segment and a micro devices business in the Information & Telecommunication Systems segment.
Goodwill and Intangible Assets
We do not amortize goodwill and other intangible assets with indefinite useful lives but we test them for
impairment in accordance with Accounting Standards Codification, or ASC 350, “Intangibles—Goodwill andOther,” on an annual basis, normally in the fourth quarter after our annual forecasts have been determined, ormore frequently if events occur or circumstances change in a manner that would more likely than not reduce
the fair value of these assets below their respective carrying values. Such an event might include the current
global economic and financial market crisis. An impairment of these assets is recorded if their calculated fairvalues are less than their carrying amounts.
We determine the fair value of our reporting units mainly using an income approach (i.e., present value
technique). When determining such fair value, we may, however, also use the fair value of that unit based on acomparison of comparable publicly traded companies or based on that unit’s stand-alone market capitalization.
Depending on the complexity, we consult with external experts when appropriate.
The determination requires estimates based on quoted market prices, prices of comparable businesses,
present value or other valuation techniques, or a combination thereof, requiring management to makesubjective judgments and assumptions, including assumptions about future operating results for the relevantbusiness unit and discount rates.
In estimating future cash flows, we base the forecasted operational results on currently available
assumptions considered by management to be reasonable. However, actual results may differ materially fromthose projected, including due to:
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

economic trends in Japan, North America, Asia and other major markets where we do business;

supply in excess of demand leading to a decline in selling prices or production volumes;

intense price competition or decreases in prices;a sharp rise in the purchasing prices of material and components; andcurrency exchange rate fluctuations.

We base our discount rate assumptions for purposes of estimating the fair value of our reporting units on
our cost of capital and liabilities. Stock market trends and changes in interest rates affect these assumptions.
Although management believes that the estimates of future cash flows and fair value are reasonable, changes
in estimates resulting in lower future cash flows and fair value due to unforeseen changes in the businessenvironment could result in additional goodwill impairment charges.
While our businesses are diverse, the number of reporting units to which goodwill has been allocated islimited. Therefore, a decrease in our market capitalization will not necessarily have a proportional or direct
effect on the carrying value of goodwill.
As of March 31, 2012, our carrying amount of goodwill was ¥214.7 billion. The majority of goodwill
consists of the Information & Telecommunication Systems segment (¥79.9 billion) and the High Functional
Materials & Components segment (¥58.9 billion).
The carrying amount of goodwill of the Information & Telecommunication Systems segment at March 31,
2012 mainly relates to our information and telecommunication business. Our information andtelecommunication business is sensitive to customers’ motivation to invest in information-technology systems
affected by macro-economic conditions. We may be required to record an impairment in goodwill in thissegment if any economic downturn is expected to be prolonged beyond current estimates of our management.
The carrying amount of goodwill of the High Functional Materials & Components segment at March 31,
2012 mainly relates to our metals business. The metals business is sensitive to increases in materials prices andproduct demand. We may need to recognize an impairment loss for goodwill in this segment if there is asustained increase in materials prices or an unforeseen decrease in demand.
In order to evaluate the sensitivity of the fair value calculations on the goodwill impairment analysis, weapplied a hypothetical and approximate 10% decrease to the fair value of each reporting unit. As a result of oursensitivity analysis, as of March 31, 2012, we do not have any reporting units that are at risk that the carrying
amount of the reporting unit would reasonably likely exceed its fair value.
Deferred Tax Assets
In assessing the realizability of deferred tax assets, management considers whether it is more likely than
not that we will not realize a portion or all of our deferred tax assets. The ultimate realization of our deferred
tax assets is dependent on whether we are able to generate sufficient future taxable income in specific tax
jurisdictions during the periods in which temporary differences become deductible. Management hasscheduled the expected future reversals of the temporary differences and projected future taxable income,including the execution of certain available tax strategies if appropriate, in making this assessment. Actual
results may differ materially from forecasted operating results, which are the basis for projecting future taxable
income, and may be subject to adjustment because of factors such as economic trends in major markets where
we do business, trends of supply and demand in the markets, prices of products and services, purchasing prices
of materials and components, currency exchange rate fluctuations and rapid technological innovation. As aresult, the differences could negatively affect the amount of deferred tax assets and valuation allowances. The
realizability of deferred tax assets is assessed for each taxable unit in each taxable jurisdiction, and the resultsof the assessment may differ from unit to unit due to different products or jurisdictions even if they operate thesame kind of business. Based on these factors, management believes that it is more likely than not that we willrealize the benefits of these temporary differences, net of the existing valuation allowance as of March 31,
2012. However, the amount of deferred tax assets may be different if we do not realize estimated future taxable
income during the carry forward periods as originally expected.

-39-Retirement Benefits
We have a significant amount of accrued employee retirement benefit costs that are developed from
actuarial valuations. Inherent in these valuations are key assumptions in estimating pension costs including
mortality, withdrawal, retirement, changes in compensation, discount rates and expected return on plan assets.
We are required to make key assumptions by taking into account various factors including personnel
demographics, current market conditions and expected trends in interest rates. We determine the discount rates
by looking at available information about rates implicit in the return on high-quality fixed-income governmentand corporate bonds. Accordingly, the discount rate is likely to change from period to period based on theseratings. A decrease in the discount rate results in an increase in actuarial pension benefit obligations. Increases
and decreases in the pension benefit obligation affect the amount of the actuarial gain or loss that is amortized
into income over the service lives of employees. Changes in the key assumptions may have a material effect on
our financial position and results of operations. Management believes that estimation of the key assumptions isreasonable in light of the various underlying factors.
The table below shows the sensitivity to a change in discount rates and the expected rate of return on plan
assets to pre-tax income and projected benefit obligation (PBO), holding all other assumptions constant.
Effect on pre-tax
Effect on PBO
income for theas of March 31,
year ending
2012
March 31, 2013
(Millions of yen)
Discount rates:
0.5% decrease .........................................................................................
0.5% increase ..........................................................................................
Expected rate of return on plan asset:
0.5% decrease .........................................................................................
0.5% increase ..........................................................................................

(8,013)
8,064

164,227(151,489)(6,486)
6,486-

The objective of our investment policy is to ensure a stable return from the plans’ investments over thelong term, which allows our and our subsidiaries’ pension funds to meet their future obligations, and we andcertain of our subsidiaries attempt to maintain the pension funds in sound condition.
Allowance for Doubtful Accounts
We estimate the collectability of our trade receivables as well as of our investments in leases to measure
our incurred losses (that is those amounts with regard to which collection is not probable based on current
information). Assessing the ultimate realization of these receivables, based on historical experience andanalyses, including the current creditworthiness of each customer, requires a considerable amount of judgment.
Each company in our consolidated group considers factors which are relevant to its business and circumstances,including business practices that are unique to the respective country or region in which it operates. Suchfactors which have been present on a historical basis and have contributed to losses at our subsidiaries in thepast include: historical credit loss experience; existence of overdue payments; extended payment terms;
negative evaluation by third-party credit rating agencies; excessive debt; and evaluation of deteriorating
financial position and operating results. Specifically, we consider probability of credit losses if overdue
payments exist or if extended payment terms are subsequently granted. However, we also consider the otherfactors noted above in determining probability of credit losses when outstanding balances are current but otherfactors indicate significant doubt about customers’ ability to make future payments in full. In addition, we
perform a retrospective review of the assumptions relied upon in establishing allowances for doubtfulreceivables, including comparisons of such assumptions to actual collections experience in order to adjust ourloss estimation methods to reduce the difference between estimated losses and actual subsequent charge-offs.
Our policies require that we refrain from writing off overdue receivables until after exhaustive collection
efforts have been undertaken. Account balances are generally written off against the allowance only after allmeans of collection have been exhausted and the potential for recovery is considered remote. Write-offs
generally occur only when a debtor enters bankruptcy or liquidation because collection efforts normallycontinue until that point. In addition, in Japan and certain other countries where we operate, tax deductions foruncollectible receivables are only allowed upon the debtor’s bankruptcy, liquidation or when legal proceedings-40-

are concluded. This policy, which is driven by business practices and income tax regulations, results inpotentially long collection and write-off cycles.
We have recorded changes in required reserves in recent periods and may record them in the future due tothe market environment and financial condition of customers. Any deterioration in customers’ financial
positions or in their credit ratings, or increases in levels or amounts of delinquency may adversely affect net
income.
Investments in Securities
We hold various investments in securities and equity-method investments.
A decline in the fair value of equity securities classified as available-for-sale, cost-method or equitymethod investments below their carrying value that is deemed other than temporary results in a write-down of
the carrying value to the fair value as a new cost basis. The amount of the write-down is included in earnings.
Fair value is determined based on quoted market prices, projected discounted cash flows or other valuation
techniques as appropriate and maximizing the use of observable inputs. Management periodically reviews each
equity security classified as an available-for-sale, cost-method and equity-method investment for possible
impairment based on criteria such as the extent to which the carrying value exceeds fair value, the length oftime the fair value has been below the carrying value and the financial condition and near-term specificprospects of the issuer.
Whether a decline in fair value of debt securities classified as available-for-sale or held-to-maturity below
carrying value that is deemed other than temporary is recognized in earnings depends on whether we intend tosell the impaired debt security or it is more likely than not that we will be required to sell the security before
recovery. If we do not intend to sell the security and it is not more likely than not that we will be required tosell the security before recovery, the component of the other-than-temporary impairment related to the credit
loss is recognized in earnings and the component of the other-than-temporary impairment related to otherfactors is recognized in other comprehensive income (loss). Management periodically reviews each debt
security classified as available-for-sale or held-to-maturity for the existence of impairment that is other than
temporary based on criteria such as whether there is intent to sell the impaired debt security, it is more likely
than not that the impaired debt security will be required to be sold before recovery, or the holder is notexpected to recover the entire amortized cost basis of the security for any other reason.
A decline in market prices or a change in the financial condition of an issuer could negatively affect thefair value of an investment in a security.
(4) Forward-Looking Statements
Certain statements found in “4. Risks Factors” and “7. Analyses of Consolidated Financial Position,
Operating Results and Cash Flows” and other descriptions in this report may constitute “forward-looking
statements” as defined 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 performanceand include 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.” Such statements are basedon 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 “forward-looking statements” and from
historical trends. Certain “forward-looking statements” are based upon current assumptions of future events
which may not prove to be accurate. Undue reliance should not be placed on “forward-looking statements,” assuch statements speak only as of the date of this report.

-41-

Factors that could cause actual results to differ materially from those projected or implied in any “forwardlooking 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, particularly Japan, Asia, the United States and Europe, as well as levels of demand in the
major industrial sectors Hitachi serves, including, without limitation, the information, electronics,
automotive, construction and financial sectors;
exchange rate fluctuations of the yen against other currencies in which Hitachi makes significant sales orin which Hitachi’s assets and liabilities are denominated, particularly against the U.S. dollar and the euro;
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 towrite down equity securities that it holds;
the potential for significant losses on Hitachi’s investments in equity method affiliates;
increased commoditization of information technology products and digital media-related products andintensifying price competition for such products, particularly in the Digital Media & Consumer Products
segments;
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 such products;
rapid technological innovation;
the possibility of cost fluctuations during the lifetime of, or cancellation of, long-term contracts for which
Hitachi uses the percentage-of-completion method to recognize revenue from sales;
fluctuations in the price of raw materials including, without limitation, petroleum and other materials, suchas copper, steel, aluminum, synthetic resins, rare metals and rare-earth minerals, or shortages of materials,
parts and components;
fluctuations in product demand and industry capacity;
uncertainty as to Hitachi’s ability to implement measures to reduce the potential negative impact offluctuations in product demand, exchange rates and/or price of raw materials or shortages of materials,
parts and components;
uncertainty as to Hitachi’s ability to achieve the anticipated benefits of its strategy to strengthen its Social
Innovation Business;
uncertainty as to the success of restructuring efforts to improve management efficiency by divesting orotherwise exiting underperforming businesses and to strengthen competitiveness;
uncertainty as to the success of cost reduction measures;
general socioeconomic and political conditions and the regulatory and trade environment of countries
where Hitachi conducts business, particularly Japan, Asia, the United States and Europe, including,
without limitation, direct or indirect restrictions by other nations on imports and differences in commercial
and business customs including, without limitation, contract terms and conditions and labor relations;
uncertainty as to the success of alliances upon which Hitachi depends, some of which Hitachi may notcontrol, with other corporations in the design and development of certain key products;
uncertainty as to Hitachi’s access to, or ability to protect, certain intellectual property rights, particularly
those related to electronics and data processing technologies;
uncertainty as to the outcome of litigation, regulatory investigations and other legal proceedings of which
the Company, its subsidiaries or its equity method affiliates have become or may become parties;
the possibility of incurring expenses resulting from any defects in products or services of Hitachi;
the possibility of disruption of Hitachi’s operations by earthquakes, tsunamis or other natural disasters;
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 the accuracy of key assumptions Hitachi uses to evaluate its significant employee
benefit-related costs; anduncertainty as to Hitachi’s ability to attract and retain skilled personnel.

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

-42-III. Property, Plants and Equipment
1. Summary of Capital Investment, etc.
The Hitachi Group (the Company and consolidated subsidiaries) selectively invests in R&D and productfields expected to grow over the long term, and it also invests to streamline manufacturing process, etc.
and to improve the reliability of its products.
Capital investment (based on the amount recorded as tangible fixed assets) in the fiscal year ended
March 31, 2012 was ¥649.2 billion. A breakdown of capital investment by segment is as follows. Effectivefrom April 1, 2011, the battery business for automotive applications, which was previously included in the
Components & Devices segment, has been included in the Automotive Systems segment and figures foreach segment and change from the preceding fiscal year are presented on the basis of the new
segmentation.
Segment

Change from
Capital investment preceding
fiscal(Billions of yen)year (%)

Main purpose of investment
Correspondence to the Great East Japan
Earthquake, expand data centers,
streamline development and productionof other products
Correspondence to the Great East Japan
Earthquake, streamline development andproduction of products
Increase production of elevators andescalators, streamline development andproduction of other products
Streamline development and productionof products
Increase and streamline production of
construction machinery
Increase and streamline production ofhigh grade metal products, magnetic
materials/components and automotive
related materials/components, etc.
Increase production of automotive
equipment, etc.
HDDs manufacturing equipment,
streamline production of small andmedium-sized LCDs
Increase production of air conditioning
equipment, streamline development andproduction of other products

Information &Telecommunication
Systems

50.6

170.9

Power Systems

27.3

258.8

Social Infrastructure &Industrial Systems

24.2

134.9

Electronic Systems &Equipment

22.3

168.0

Construction Machinery

65.0

178.0

High Functional Materials& Components

67.8

111.7

Automotive Systems

38.3

208.1

Components & Devices

44.7

80.6

Digital Media & Consumer
Products

20.4

138.9

Financial Services

256.2

90.7

Assets for leasing business

Others

40.6

119.9

Real estate for renting, etc.

Subtotal
658.1
114.7
－
Eliminations & Corporate
(8.9)
－
－
Items
Total
649.2
116.6
－
(Notes) 1. The above table includes ¥271.9 billion investment in lease assets. It is mainly for computers andother information-related equipment, industrial machinery and machine tools, vehicles andmedical equipment related to lease agreements under the Financial Services segment.
2. The figures in the above table include the amount of the tangible fixed assets leased under nontransferable finance lease transactions.
3. These investments were mostly financed with the Hitachi Group’s own capital.

-43-

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.
The situation at the end of the fiscal year under review is as follows.
(1) Breakdown by Segment(As of March 31, 2012)
Segment

Book value (Millions of yen)
Land
[Area
in Lease assets
Machineryand
Buildings
Othersthousands
equipmentof m2]

Total

Number of
employees

Information &Telecommunication
Systems

66,185

48,13933,944[1,832]

8,571

15,357

172,196

73,334

Power Systems

40,834

33,12515,012[4,724]

13,257

11,179113,407

17,23568,83343,50429,871[3,612]

10,927

6,679

159,814

41,13653,82825,257

67,374
123,344

SocialInfrastructure &Industrial Systems
Electronic Systems& Equipment
Construction
MachineryHigh Functional
Materials &Components
Automotive
Systems
Components &Devices
Digital Media &Consumer Products

879

2,428

129,092

25,87898,72446,700[2,288]67,016[10,519]

3,076

15,852

252,042

20,571

149,501

93,606[13,340]

2,219

19,635388,305

47,46847,914545
11,672 150,382
28,125[5,381]40,00733
10,9278,512
661
60,1403,998[1,074]
18,7191,041
28,56647,164
3,367
98,85725,042[4,091]
121
9,079
Financial Services
666
188,362229 198,457
4,060
[12]
110,463
17,944
Others143,724
29,844
11,642 313,617
33,473[4,128]503,373
67,571
Subtotal
642,346724,318
98,701 2,036,309 320,320[51,002]
Eliminations &(39,280)(1,960)26,7172,714
1,038 (10,771)
3,220[1,187]
Corporate Items
464,093
65,611
Total
669,063
727,032
99,739 2,025,538 323,540[52,188](Notes) 1. The “Others” column represents the total amount of vehicles and construction in progress.
2. The figures in the above table include ¥242,222 million of operating lease assets for leasing
business, mainly owned by Hitachi Capital Corporation.
3. The figures in the above table include ¥52,619 million of lease assets concerning non-transfer
ownership finance lease transactions leased from within the Hitachi Group, mainly from Hitachi
Capital Corporation.
4. Except for the figures in the above table, there are operating lease assets leased, mainly machinery,etc. The annual lease fee for such assets was ¥136,219 million.
38,06552,186-44-

(2) The Company

Facility(Main location)
Information &Telecommunication
Systems Company(Shinagawa-ku,
Tokyo)
Power Systems
Company(Hitachi, Ibaraki)
Research &Development Group(Kokubunji, Tokyo)
Area Operations(Osaka, Osaka)Urban Planning andDevelopment
Systems Company(Hitachinaka,Ibaraki)Segment

Systemdevelopment
Information & facilities,
Telecommuni- manufacturing
cation Systems facilities forservers,
mainframes, etc.
Manufacturing
facilities forPower Systems
power generating
equipment, etc.

18,487

2,006
[746]

15,933

18,872

3,473[3,629]952

5,292 44,524

3,993

3,084 12,807 68,238

13,421

R&D facilities

15,900

5,218

6,089
[815]

520

2,824 30,552

3,295

Corporate

Other facilities

8,146

478

8,423
[87]

16

－ 17,065

1,497

SocialManufacturing
Infrastructure & facilities for
Industrial
elevators andSystems
escalators

9,573

5,747

89
[528]

1,327

293 17,031

1,491

Other facilities

6,944

2,110

5,549
[1,051]

174

235 15,014

1,674

Systemdevelopment
facilities

3,598

10,143－[－]－849 14,591

713

Medical facilities

10,431

1,029

10
[49]

1,366

802 13,641

1,325

6,814

2,909

635
[206]

2,398

464 13,222

2,679

7,186

3,997

862
[693]

32

383 12,462

1,774

Information
Technology Division Others(Chiyoda-ku, Tokyo)
Ibaraki HospitalCenterCorporate(Hitachi, Ibaraki)Transportation
Systems Company(Kudamatsu,
Yamaguchi)

31,853

OthersHead Office
Corporate(Chiyoda-ku, Tokyo)

Information &Control Systems
Company(Hitachi, Ibaraki)(As of March 31, 2012)
Book value (Millions of yen)
Details ofLand
Number of
Machinery [Area in Lease
major facilities
employees
andBuildings
OthersTotal
and equipment
assetsequipment thousands
2of m ]

Manufacturing
Information &facilities for
Telecommuniswitchboards andcation Systems,
calculation
Power Systems
controland Social
equipment,
Infrastructure &systemIndustrial
development
Systems
facilities
SocialManufacturing
Infrastructure & facilities for
Industrial
railway vehicles,
Systemsetc.

-45-

(3) Domestic subsidiaries(As of March 31, 2012)
Facility(Main location)

Segment

Details of major
facilities andequipment

Hitachi Automotive
Manufacturing
Systems, Ltd.
Automotive
facilities for(Hitachinaka,
Systems
automotive
Ibaraki)equipment
HitachiConstruction
Manufacturing
Machinery Co.,
Construction facilities forLtd., Tsuchiura
Machinery
constructionWorksmachinery(Tsuchiura, Ibaraki)
High
Manufacturing
Hitachi Metals,
Functional
facilities for highLtd., Yasugi Works
Materials &grade steel(Yasugi, Shimane)Components
HitachiConstruction
Manufacturing
Machinery Co.,
Construction facilities forLtd., HitachinakaMachinery
construction
Rinko Works
machinery(Hitachinaka,Ibaraki)
Hitachi Solutions,
Information &Ltd., Head OfficeTelecommunic Other facilities(Shinagawa-ku,
ation Systems
Tokyo)
Hitachi Building
SocialSystems Co., Ltd.,Infrastructure
Other facilities
Head Office& Industrial(Chiyoda-ku,
Systems
Tokyo)High
Manufacturing
Hitachi Cable, Ltd.,
Functional
facilities for wires,
Hitaka Works
Materials &cables(Hitachi, Ibaraki)
Components
Hitachi Chemical HighManufacturingCo., Ltd.,
Functional
facilities for
Shimodate Works Materials &circuit board(Chikusei, Ibaraki) Components materials, etc.
Manufacturing
facilities for
Hitachi Highsemiconductor
Technologies
Electronic
manufacturing
Corporation
Systems &equipment andNaka Area
Equipment
test and(Hitachinaka,
measurement
Ibaraki)equipment, etc.
Hitachi Chemical HighManufacturingCo., Ltd.,
Functional
facilities for
Yamazaki Works
Materials &semiconductor(Hitachi, Ibaraki)
Components materials

Buildings

Book value (Millions of yen)
Land
Machinery [Area in
Lease
and
Othersassetsequipment thousands
2of m ]

Total

Number of
employees

16,632

21,766

7,492[2,528]3

1,413

47,309

6,052

9,251

16,806

7,562[5,534]－

3,387

37,007

2,514

7,891

14,972

8,162[1,109]－654

31,6791,574

11,441

3,823

11,042
[483]

－

803

27,111

301

10,140627

12,602
[17]

1,038

312

24,7192,465

10,354

1,819

10,959
[170]

－

392

23,524

1,439

11,598

3,793

4,809
[1,056]－

380

20,582

1,712

8,318

6,496

4,392
[743]

19

323

19,5501,589

13,036

4,729

619
[121]

－

145

18,530

2,206

6,726

6,371

788
[485]

11

1,299

15,196

1,086(Note) Except for the figures in the above table, there are ¥180,018 million of operating lease assets for leasing
business, mainly owned by Hitachi Capital Corporation.

-46-

(4) Overseas subsidiaries(As of March 31, 2012)
Facility(Main location)
Telco Construction
Equipment
Company Limited(Bangalore, India)
Hitachi Data
Systems
Corporation(California, U.S.A.)

Segment

Details of major
facilities andequipment

Total

Number of
employees－

2,128 14,937

1,877

－

－ 14,260

5,324

Construction
Machinery

Manufacturing
facilities forconstruction
machinery

5,703

6,548

Information &Telecommunication Systems

Other facilities－

14,260

3,117

9,323

377
[2,561]－

1,192 14,009

2,075

3,434

6,046

280
[1,231]－

3,811 13,571

2,170

4,737

5,428

－
[－]

－

1,308

2,200

Manufacturing
Hitachi Metals
High Functional
facilities for
America, Ltd.
Materials &automobile(New York, U.S.A.) Components
components, etc.
Hitachi Automotive
Manufacturing
Systems Americas, Automotive
facilities for
Inc.
Systems
automotive(Kentucky, U.S.A.)
equipment
Hitachi
Manufacturing
Construction
Construction
facilities for
Machinery (China)
Machinery
construction
Co., Ltd.
machinery(Hefei, China)(Notes)Buildings

Book value (Millions of yen)
Land
Machinery [Area in
Lease
and
Othersassetsequipment thousands
2of m ]

558[1,141]－[－]

11,473

1. The figures for Hitachi Data Systems Corporation and Hitachi Metals America, Ltd. arepresented in consolidated basis of each company.
2. Except for the figures in the above table, there are ¥56,741 million of operating lease assets forleasing business.

-47-

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 theend of the fiscal year. For this reason, it discloses amounts of capital investment by segment.
The amount of capital investment for the fiscal year ending March 31, 2013 will be ¥772.0 billion (newinstallation and expansions, based on the amount recorded as tangible fixed assets), and a breakdown by
segment is as follows. Effective from April 1, 2012, the Components & Devices segment is abolished andbusinesses which were classified in the segment are reclassified in the Others segment. Figures shown
below is presented on the basis of the new segmentation.
Segment

Amount(Billions of yen)

Main purpose of investment

Information &Telecommunication
Systems

49.0

Power Systems

26.0

Social Infrastructure &Industrial Systems

43.0Electronic Systems &Equipment

31.0

Construction Machinery

93.0

High Functional Materials& Components

94.0

Automotive Systems

54.0

Increase production of automotive equipment, etc.

Digital Media & Consumer
Products

20.0

Corresponding to the floods in Thailand,
streamline development and production of products

Financial Services

315.0

Assets for leasing business

Others52.0

Antiseismic reinforcement of welfare facilities

Subtotal
Eliminations & Corporate
Items
Total

Antiseismic reinforcement, expand data centers,
streamline development and production of other products
Antiseismic reinforcement, streamline development andproduction of products
Antiseismic reinforcement, increase production ofelevators and escalators, streamline development andproduction of other products
Streamline development and production of products
Increase and streamline production of construction
machinery
Increase production of high grade metal products,
magnetic materials/components, resins and circuit board
materials, etc.

777.0

－

(5.0)

－

772.0

－

(Notes) 1. The figures in the above table include ¥330.0 billion of planned investment in assets for leasing
business.
2. The figures in the above table include the amount of the fixed assets leased under non-transferable
finance lease transactions.
3. These planned investments are expected to be mostly financed with the Hitachi Group’s own
capital.
4. There are no plans to dispose or sell principal facilities, with the exception of disposing and selling
facilities due to routine upgrading.

-48-

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

Common stock

Total number of shares authorized to
be issued (shares)
10,000,000,000

Total

10,000,000,000

Class2) Issued shares
Number of shares
Number of sharesissued as of the end
issued as of theof fiscal year (shares) filing date (shares)(March 31, 2012)(June 22, 2012)

Class
Commonstock
Total(Note) 1.
2.

Stock exchange on which
the Company is listed

Description

The number ofshares per one unit
4,637,785,317
4,637,807,397
Tokyo, Osaka, Nagoyaof shares is 1,000
shares.
4,637,785,317
4,637,807,397－－
The number of shares under the “Number of shares issued as of the filing date” column does
not include shares issued through the exercise of stock acquisition rights from June 1, 2012 to
the filing date.
The Company delisted its American Depositary Shares from the New York Stock Exchange on
April 27, 2012 and its common stock from the Fukuoka Stock Exchange and Sapporo Securities
Exchange on May 18, 2012, respectively.

(2) Information on the stock acquisition rights, etc.
The Company issues bonds with stock acquisition rights in accordance with the Companies Act.
Name of bonds
with stockacquisition rights

Hitachi, Ltd.
130% call option
attached
unsecuredconvertible bond
type-bonds withstock acquisitionrights (8th series)(with inter-bondpari passu clause)(Note 1)

Balance of the bonds with stockacquisition rights
Number of the stock acquisition rights
Number of the stock acquisition rights
held by the Company
Class of shares subject to the stockacquisition rights
Number of shares subject to the stockacquisition rights (Note 2)
Amount to be paid upon exercise of thestock acquisition rights (Notes 3, 4)
Exercise period of the stock acquisitionrights (Note 5)
Issue price for shares issued through theexercise of the stock acquisition rights
and the amount capitalized as common
stock (Notes 4, 6)
Terms and conditions for exercising thestock acquisition rights
Matters related to transfer of the stockacquisition rights
Matters related to contributions of bonds
upon exercise of the stock acquisitionrights in lieu of cash payment
Matters related to the grant of stockacquisition rights accompanying
reorganization acts-49-

As of the end of
fiscal year
(March 31, 2012)¥62,068 million

As of the end of month
preceding the filing date
(May 31, 2012)¥62,061 million

62,06862,061－－

Common stock

Common stock

195,798,107 shares

195,776,025 shares¥317 per share
From January 4, 2010
to December 10,
2014
Issue price: ¥317
Amount capitalized
as common stock:¥159(Note 7)¥317 per share(Note 7)(Note 8)(Note 8)(Note 9)(Note 9)(Note 10)(Note 10)

From January 4, 2010
to December 10, 2014
Issue price: ¥317
Amount capitalized ascommon stock: ¥159

(Note)

1.
2.

3.
4.

Referred to as the “Bonds with Stock Acquisition Rights,” of which the bonds are referred to as
the “Bonds” and of which the stock acquisition rights are referred to as the “Stock Acquisition
Rights.”The number of the shares of the Company’s common stock to be delivered by the Company
upon request to exercise the Stock Acquisition Rights shall be the number of which theaggregate amount of the Bonds to which the Stock Acquisition Rights relating to the exercise
request are attached divided by the applicable conversion price as of the date of such exercise
request (the price to be used in calculating the number of shares of the Company’s common
stock to be delivered upon the exercise of each Stock Acquisition Right; provided, however, incase of note 10, the “conversion price” shall mean the price used in calculating the number ofshares of the common stock of the succeeding company, etc. to be delivered upon the exerciseof the Succeeded Stock Acquisition Rights as defined below 10 (1)), with any fraction less than
one share resulting from such calculation, if any, being rounded down, and no cash adjustment
will be made in respect thereof.
Upon the exercise of each Stock Acquisition Right, the Bond to which such Stock Acquisition
Right is attached shall be contributed and the value of such Bond shall be an amount equal tothe amount to be paid for such Bond.
The conversion price relating to the Bonds with Stock Acquisition Rights shall be initially 317
yen; provided, however, that the Conversion Price may be adjusted or reduced as below.
(1) (i)If there is or might be a change in the number of the shares of the Company’scommon stock due to any of the events set forth in (ii) below after the issue ofthe Bonds with Stock Acquisition Rights, the Company shall adjust theConversion Price using the following formula (the “Conversion Price
Adjustment Formula”).

Conversion priceafter adjustment

=

(ii)

Conversion pricebefore adjustment

×

Number of existing
issued shares+

Number of Shares tobe delivered×

Amount to be
paid per share

Current market price

Number of existing issued shares + Number of shares to be delivered

If any of the following events occur, the Conversion Price shall be adjusted inaccordance with the Conversion Price Adjustment Formula and such adjusted
conversion price will be applied to respective event as provided in the following
each provision:(a) In the event of an offer to subscribe for shares of the Company’s common
stock with an amount to be paid that is less than the current market price (asdefined in (2)(iii) below; the same applies hereinafter) (excluding offers for up
to 1,090,000,000 shares of new shares to be issued by way of a public offer for
subscription and up to 60,000,000 shares of new shares to be issued by way of
a third-party allotment, each pursuant to a decision by the President and Chief
Executive Officer of the Company made on 16 November 2009 pursuant toauthority granted to him by a resolution of the Board of Directors of theCompany at its meeting held on 29 October 2009):
The Conversion Price after adjustment will apply on and after the day
immediately following the payment date (or, if there is a payment period forthe offer for subscription, the last day of such payment period; the same
applies hereinafter); provided, however, that if a record date for granting theright to receive allotment of shares to the shareholders of the Company’scommon stock has been established, the Conversion Price after adjustment
will apply on and after the day immediately following such record date.
(b) In the event of a stock split or a gratis allotment of shares of the Company’scommon stock:
The Conversion Price after adjustment will apply, in the case of a stock
split, on and after the day immediately following the record date for suchstock split or, in the case of a gratis allotment, the day immediately following
the effective date thereof; provided, however, that if, for the gratis allotmentof shares of the Company’s common stock, a record date for granting theright to receive allotment of shares to the shareholders of the Company’scommon stock has been established, the Conversion Price after adjustment
will apply on and after the day immediately following such record date.
(c) In the case of an issuance of shares with put option, callable shares or callable
stock acquisition rights (including those attached to bonds with stockacquisition rights) with provisions for delivery of shares of the Company’scommon stock at a price less than the current market price, or stock acquisitionrights (including those attached to bonds with stock acquisition rights) upon
the exercise of which shares of the Company’s common stock will be delivered
to the holders thereof at a price less than the current market price (collectively,
the “Shares with Put Option, etc.”):The Conversion Price after adjustment will be calculated by regarding all of
the put options, the call provisions or the stock acquisition rights (including-50-

those attached to bonds with stock acquisition rights) as having been
exercised or applied under the initial terms and conditions thereof, and will
be applied on and after the day immediately following the payment date (or,in the case of the stock acquisition rights or bonds with stock acquisitionrights, the allotment date); provided, however, that if a record date for
granting the right to receive allotment of shares to the shareholders of theCompany’s common stock has been established, the Conversion Price after
adjustment will apply on and after the day immediately following suchrecord date.
(d) Notwithstanding the provisions set forth in (ii)(a) to (c) above, if shares of theCompany’s common stock or the Shares with Put Option, etc. are to be allottedto the shareholders of the Company’s common stock and the record date forthe allotment is a day preceding the day on which the allotment is approved ata meeting of shareholders, the board of directors meeting or by any other organof the Company or on which the allotment is determined by the Executive
Officer, then the Conversion Price after adjustment will apply on and after the
day immediately following the date of such approval or determination;
provided, however, that in such case, shares of the Company’s common stock
will be delivered on or after the date of such approval or determination to theholders of the Bonds with Stock Acquisition Rights who have made a request
to exercise the Stock Acquisition Rights during the period from the day
immediately following the record date to the date of the approval or
determination (the “Holders of Stock Acquisition Rights”) by means of thecalculation described below. In such case, shares will be delivered to theHolders of Stock Acquisition Rights who made the exercise request by
crediting the proprietary column of the transfer account book of a book-entry
transfer institution or account management institution designated by theHolder of Stock Acquisition Rights with the increase of the number of thebook-entry shares after such request comes into effect.
Number of shares=

Number of the shares delivered at
the conversion price before
adjustment during such period
Conversion price after adjustment(Conversion price before adjustment –Conversion price after adjustment

×

Any fraction less than one share resulting from such calculation will be
rounded down and no cash adjustment will be made in respect thereof.
(2) The Conversion Price shall be adjusted pursuant to the following provisions.
(i)To the extent that the difference between the Conversion Price after
adjustment calculated by using the Conversion Price Adjustment Formulaand the Conversion Price before adjustment is less than one yen, theConversion Price shall not be adjusted; provided, however, that if any event
subsequently occurs that requires another adjustment of the Conversion
Price and the Conversion Price is calculated, in lieu of the Conversion Price
before adjustment indicated in the Conversion Price Adjustment Formula,
the Conversion Price before adjustment minus such difference shall be used.
(ii) In the calculation using the Conversion Price Adjustment Formula, figures inyen shall be calculated to the nearest second decimal place and rounded to
the nearest first decimal place.
(iii) The “current market price” used in the Conversion Price Adjustment
Formula shall be the average price (not counting days on which there is no
closing price) of the daily closing prices (including quotation prices) of theshares of the Company’s common stock in regular trading on the Tokyo
Stock Exchange, Inc. during 30 trading days commencing on the 45th
trading day preceding the day on which the Conversion Price after
adjustment is applied (in the case of (1)(ii)(d) above, the relevant recorddate). In calculating such average, figures in yen shall be calculated to thenearest second decimal place and rounded to the nearest first decimal place.
(iv) The “number of already issued shares” used in the Conversion Price
Adjustment Formula shall be the number of the issued shares of theCompany’s common stock as of the record date if a record date for granting
the right to receive allotment of shares to the shareholders of the Company’scommon stock has been established, or if there is no such record date, thecorresponding day one month prior to the relevant day on which theConversion Price after adjustment is applied, minus the number of the sharesof the Company’s common stock held by the Company as of such date, plus
the number of shares of the Company’s common stock that have not yet
been delivered from among the shares of the Company’s common stock
deemed as the number of shares to be delivered pursuant to (3) above or (5)below before adjustment of the Conversion Price. If shares of theCompany’s common stock are to be split, the number of shares to be-51-

delivered to be used in the Conversion Price Adjustment Formula will notinclude the number of shares of the Company’s common stock to be allottedto the shares of the Company’s common stock held by the Company as of
the relevant record date.
(3) In addition to the provisions of (1) or (2), if the adjustment of the Conversion Price isrequired in the following cases, the Company will, after consultation with a bondadministrator, make necessary adjustment to the Conversion Price:(i)where carrying out consolidations of shares, decreases in the amount ofstated capital or reserves, mergers (excluding a merger whereby theCompany is extinguished), share exchanges or corporate splits;(ii) in addition to (i) of this item, where an event occurs that will lead to or mightlead to a change in number of the issued shares of the Company’s common
stock;(iii) where carrying out a gratis allotment of other classes of shares to theshareholders of the Company’s common stock; or(iv) where two or more events requiring the adjustment of the Conversion Priceoccur consecutively and, in identifying the current market price used to
calculate the Conversion Price after adjustment pursuant to one of the events,
it is necessary to consider the effect of the other reason.
(4) In certain cases provided for in the Terms and Conditions for Bonds with Stock
Acquisition Rights such as reorganization acts, the Conversion Price will be reduced,
during the Conversion Price reduction period (as defined in the Terms and Conditionsof Bonds with Stock Acquisition Rights), to the Conversion Price determined inaccordance with the provisions of the Terms and Conditions for Bonds with Stock
Acquisition Rights (in which case, the maximum deducted Conversion Price will be¥238).
5. Holders of Stock Acquisition Rights may not exercise the Stock Acquisition Rights and request
the Company to deliver the shares of the Company’s common stock during the following
periods:(i)
on a record date of the shares of the Company’s common stock or its
immediately preceding business day (meaning any day other than any day
on which the book-entry transfer institution is closed; the same applies
hereinafter),(ii) on a business day immediately preceding the date of interest payment for theBonds,(iii) on days the book-entry transfer institution deems necessary,(iv) if the Bonds are redeemed on or before December 10, 2014 pursuant to theprovisions of the Terms and Conditions for Bonds with Stock Acquisition
Rights, on or after a business day immediately preceding the date ofprincipal payment for such redemption,(v) if the Bonds lose the benefit of term, on or after the date the Bonds lose thebenefit of term, or(vi) if stock acquisition rights of a succeeding company, etc. are granted during
reorganization acts and it is necessary to suspend requests to exercise theStock Acquisition Rights, the period for which the Company suspends
request to exercise the Stock Acquisition Rights (such period will not exceed
one month) or any other period for which necessary information has been
notified in advance in writing to the bond administrator and for which public
notice of necessary information has been given one month before thecommencement of such period.
6. The increases in common stock for shares issued by the Company upon request to exercise theStock Acquisition Rights shall be the limit for increase in common stock, etc. calculated
pursuant to Article 17 of the Regulations of Companies’ Financial Statement multiplied by 0.5,
with any fraction less than ¥1 resulting from such calculation, if any, being rounded up. The
increases in capital reserve for shares issued by the Company upon such request shall be theamount that is subtracted the increases in common stock from the limit for increase in common
stock, etc.
7. Requests for any Stock Acquisition Right may not be partially exercised.
8. For the Bonds with the Stock Acquisition Rights, neither the Stock Acquisition Rights nor theBonds may not be separately transferred pursuant to Article 254, Paragraphs 2 and 3 of theCompanies Act.
9. Upon the exercise of each Stock Acquisition Right, the Bond to which such Stock Acquisition
Right is attached shall be contributed and the value of such Bond shall be an amount equal tothe amount to be paid for such Bond.
10. Succession of the Bonds with Stock Acquisition Rights by a succeeding company, etc. in caseof the Company’s reorganization acts
(1) In case of its business restructuring, provided, however, that the common stock of a
succeeding company, etc. is delivered to its shareholders and redemption before
maturity date takes place, the Company shall deliver Stock Acquisition Rights of thesucceeding company, etc. (the “Succeeded Stock Acquisition Rights”) described in (2)below to Holders of unexercised Stock Acquisition Rights immediately prior to the-52-effective date of reorganization acts. In this case, the Stock Acquisition Rights shalllapse and obligation related to Bonds shall be taken over the succeeding company, etc.,(the “Succeeded Bonds”) on the effective date of reorganization acts. At the same time,
the Succeeded Stock Acquisition Rights shall become effective as stock acquisitionrights attached to Succeeded Bonds and Holders of Stock Acquisition Rights shallbecome holders of the Succeeded Stock Acquisition Rights. In addition, provisions
related to Stock Acquisition Rights in the guidance of the Stock Acquisition Rights
shall mutatis mutandis apply to the Succeeded Stock Acquisition Rights.
(2) Matters of the Succeeded Stock Acquisition Rights are as follows.
(i)
Number of the Succeeded Stock Acquisition Rights
The number of the Succeeded Stock Acquisition Rights shall be equal to that of
the unexercised Stock Acquisition Rights immediately prior to the effective dateof reorganization acts.
(ii) Class of shares subject to the Succeeded Stock Acquisition Rights
Common stock of a succeeding company, etc.
(iii) Method of calculation of the number of shares subject to the Succeeded
Stock Acquisition Rights
The number of the shares of the Company’s common stock to be delivered by
the Company upon request to exercise the Stock Acquisition Rights shall be thenumber of which the aggregate amount of the bonds to which the Succeeded
Stock Acquisition Rights relating to the exercise request are attached divided by
the conversion price defined in (iv), with any fraction less than one shareresulting from such calculation, if any, being rounded down, and no cash
adjustment will be made in respect thereof.
(iv) Conversion price relating to the bonds with the Succeeded Stock Acquisition
Rights
The conversion price relating to the bonds with the Succeeded Stock Acquisition
Rights is provided as the economic value gained by the Holders of Stock
Acquisition Rights through the exercise of the Succeeded Stock Acquisition
Rights immediately after the effective date of reorganization acts, which is equal
to that gained by the Holders of Stock Acquisition Rights through the exercise of
the Stock Acquisition Rights immediately prior to the effective date ofreorganization acts, provided, however, that the conversion price relating to thebonds with the Succeeded Stock Acquisition Rights may be adjusted or reduced
as provided in Note 4.
(v) The property to be contributed upon the exercise of the Succeeded Stock
Acquisition Rights and its value
Upon the exercise of each Succeeded Stock Acquisition Right, the Succeeded
Bond to which such Succeeded Stock Acquisition Right is attached shall becontributed and the value of such Succeeded Bond shall be an amount equal tothe amount to be paid for such Bond.
(vi) Exercise period of the Succeeded Stock Acquisition Rights
From the effective date of reorganization acts (if the Company suspends request
to exercise the Stock Acquisition Rights in accordance with Note 5 (vi), the later
day either the effective date of reorganization acts or the following bankbusiness day of the end of the period for which the Company suspends such
request) to the end of the Exercise period of the Stock Acquisition Rights(vii) The increase in common stock and capital reserve in case of issuance ofshares through the exercise of the Succeeded Stock Acquisition Rights
The increases in common stock for shares issued by the Company upon request
to exercise the Succeeded Stock Acquisition Rights shall be the limit forincrease in common stock, etc. calculated pursuant to Article 17 of theRegulations of Companies’ Financial Statement multiplied by 0.5, with any
fraction less than ¥1 resulting from such calculation, if any, being rounded up.
The increases in capital reserve for shares issued by the Company upon such
request shall be the amount that is subtracted the increases in common stockfrom the limit for increase in common stock, etc.
(viii) Other terms and conditions for exercising the Succeeded Stock Acquisition
RightsRequests for any Succeeded Stock Acquisition Right may not be partiallyexercised.
(ix) Call attached to the Succeeded Stock Acquisition Rights
The Succeeded Stock Acquisition Rights shall not be subject to Call.
(3) Information on moving strike convertible bonds, etc.
Not applicable.

-53-

(4) Information on shareholder right plans
Not applicable.
(5) Changes in the total number of issued shares and the amount of common stock and other
Change in the Balance of the Change in Balance of Change in Balance ofcapitaltotal number total number common
commoncapitalof issued
reserveof issued
stock
stock
reservesharesshares(Millions of (Millions of (Millions (Millions ofof yen)(shares)(shares)
yen)
yen)
yen)

Date
From April 1, 2007
to March 31, 2008
From April 1, 2008
to March 31, 2009

－ 3,368,126,056－

282,033－

270,763－ 3,368,126,056－

282,033－

270,763－ 3,368,126,056－

282,033 (270,763)－

December 14, 2009 (Note 2) 1,090,000,000 4,458,126,056

120,161

402,195

120,161

120,1616,614

408,809

6,614

126,776

July 31, 2009

(Note 1)

December 25, 2009 (Note 3)

60,000,000 4,518,126,056

From April 1, 2009 (Note 4)
6,309 4,518,132,365
1408,8101
126,777
to March 31, 2010
From April 1, 2010 (Note 4)
2,012,599 4,520,144,964
319
409,129319
127,096
to March 31, 2011
From April 1, 2011 (Note 4) 117,640,353 4,637,785,317
18,646
427,775
18,646
145,742
to March 31, 2012
(Notes) 1. The capital reserve was reduced to zero and the reduced amount was transferred to “Others”
under “Capital surplus,” pursuant to Article 448, Paragraph 1 of the Companies Act.
2. Changes due to issuance of new shares by way of onerous offering (a public offering conductedin Japan and an offering conducted overseas).
Offer price: ¥230 per share
Issue price: ¥220.48 per share
Amount capitalized as common stock: ¥110.24 per share
3. Changes due to issuance of new shares by way of onerous third-party allotment (an issuance of
new shares by way of third-party allotment related to secondary offering by way of overallotment).
Issue price: ¥220.48 per share
Amount capitalized as common stock: ¥110.24 per share
Shares allocated to: Nomura Securities Co., Ltd.
4. Changes due to conversion of stock acquisition rights into stocks.
5. As a result of conversion of stock acquisition rights into stocks during the period from April 1,2012 to May 31, 2012, the number of issued shares, the mount of common stock and the amountof capital reserve increased 22,080 shares, ¥3.5 million and ¥3.5 million respectively.
(6) Shareholders composition(As of March 31, 2012)
Status of shares (one unit of stock: 1,000 shares)
Number of
Foreigncorporations,shares less
Financial
Class of Governmentetc.
than one
Individuals
Other
instruments
Financialshareholders
Total
and
unit
and
othersinstitution
business
institution
Nonmunicipality(shares)
operator
individuals Individuals
Number of
2
188
85
2,870
777
125 322,657
326,704－
shareholders
Shareownership
46 1,452,630
79,754
95,773 1,752,149
510 1,229,141 4,610,003 27,782,317(units)Ownership
percentage
0.00
31.51
1.73
2.08
38.01
0.01
26.66
100.00－of shares(%)(Notes) 1. Of 2,620,165 shares of treasury stock, 2,620 units are included in the “Individuals and others”
column, while 165 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 (accountfor managing stocks whose shareholders have not transferred titles), 26 units are included in the“Other institution” column and 827 shares are included in the “Number of shares less than one
unit” column.

-54-

(7) Major shareholders

Name
The Master Trust Bank of Japan,
Ltd. (Trust Account)
Japan Trustee Services Bank, Ltd.
(Trust Account)
SSBT OD05 OMNIBUS
ACCOUNT - TREATY CLIENTS(Standing proxy: The Hongkong
and Shanghai Banking
Corporation Limited)
Hitachi Employees’ Shareholding
Association
State Street Bank and Trust
Company 505224(Standing proxy: Mizuho
Corporate Bank, Ltd.)NATS CUMCO(Standing proxy: Mizuho
Corporate Bank, Ltd.)

Address
11-3, Hamamatsucho 2-chome,
Minato-ku, Tokyo
8-11, Harumi 1-chome, Chuo-ku,
Tokyo
338 Pitt Street Sydney Nsw 2000
Australia(11-1, Nihombashi 3-chome, Chuoku, Tokyo)

Japan Trustee Services Bank, Ltd.
(Trust Account 9)
State Street Bank and Trust
Company 505225(Standing proxy: Mizuho
Corporate Bank, Ltd.)The Dai-Ichi Life Insurance
Company, Limited

6-6, Marunouchi 1-chome, Chiyodaku, Tokyo
P.O. Box 351
Boston, Massachusetts 02101 U.S.A.
(16-13, Tsukishima 4-chome, Chuoku, Tokyo)
C/O Citibank New York, 111
Wall Street, New York NY, U.S.A.
(16-13, Tsukishima 4-chome, Chuoku, Tokyo)
6-6, Marunouchi 1-chome, Chiyodaku, Tokyo
8-11, Harumi 1-chome, Chuo-ku,
Tokyo
P.O. Box 351
Boston, Massachusetts 02101 U.S.A.
(16-13, Tsukishima 4-chome, Chuoku, Tokyo)
13-1, Yurakucho 1-chome, Chiyodaku, Tokyo

Total

－

Nippon Life Insurance Company(Notes)(As of March 31, 2012)
Ownership
percentage to theSharetotal number ofOwnership
issued shares(shares)(%)
323,956,000

6.99

305,019,000

6.58

132,503,040

2.86

128,736,384

2.78

127,684,667

2.75

118,573,210

2.56

98,173,195

2.12

96,838,000

2.09

81,076,611

1.75

71,361,222

1.54

1,483,921,329

32.00

1. NATS CUMCO is the nominee name of the depositary bank, Citibank, N.A., for the aggregate of
the Company’s American Depositary Receipts (ADRs) holders.
2. The number of shares held by The Dai-Ichi Life Insurance Company, Limited includes its
contribution of 6,560,000 shares to the retirement allowance trust (the holder of said shares, as
listed in the Shareholders’ Register, is “Dai-Ichi Life Insurance Account, Retirement Allowance
Trust, Mizuho Trust & Banking Co., Ltd.”).
3. The Company has received copies of reports on substantial shareholdings under the Financial
Instruments and Exchange Act. However, the information in the reports is not described in theabove table since the Company does not confirm the actual status of shareholdings as of the endof fiscal year. The major contents of the reports are as follows.
Holders
The Sumitomo Trust and Banking Co., Ltd and three other persons
Date on which the duty May 13, 2011
to file report
Number of shares
233,881,697 shares
Ownership percentage tothe total number of
5.17%
issued shares(Note) The Company received from Sumitomo Mitsui Trust Bank, Limited (to which The Sumitomo
Trust and Banking Co., Ltd changed its name according to a merger) and two other persons a
copy of the amendment reporting that the number of shares and the ownership percentage tototal number of issued shares increased to 272,215,611 shares and 6.02% respectively. The dateon which the duty to file the amendment is April 13, 2012.

-55-

Holders
Mitsubishi UFJ Trust and Banking Corporation, and three other persons
Date on which the duty May 23, 2011
to file report
Number of shares
237,294,613 shares
Ownership percentage tothe total number of
5.24%
issued shares(8) Information on voting rights
1) Issued sharesClassification

Number of shares (shares)

Shares without voting right
Shares with restricted voting
right (treasury stock, etc.)
Shares with restricted voting
right (others)
Shares with full voting right(treasury stock, etc.)
Shares with full voting right(others)
Shares less than one unit

－

－

－

－

－

－

－

－

－

－

－

Common stock

2,914,000

Common stock

4,607,089,000

4,607,089－

Common stock

27,782,317－－

4,637,785,317－－

4,607,089－

Number of issued shares
Total number of voting rights(Note)(As of March 31, 2012)
Number of voting
Description
rights－The “Shares with full voting right (others)” column includes 26,000 shares registered in the name ofJapan Securities Depository Center, Incorporated (account for managing stocks whose shareholders
have not transferred titles) and 26 voting rights for those shares.

2) Treasury stock, etc.

Name ofshareholder

Hitachi, Ltd.
Aoyama Special
Steel Co., Ltd.
ISHIIDENKOSHA
Co., Ltd.
SAITAKOUGYOU CO.,
LTD.
NIKKO
SHOKAI CO.,LTD.

Address

6-6, Marunouchi 1-chome,
Chiyoda-ku, Tokyo
9-11, Shinkawa 2-chome,
Chuo-ku, Tokyo
1-11, Oroshishinmachi 3chome, Higashi-ku,
Niigata-shi, Niigata

2,620,000－

2,620,000

0.06

10,000－10,000

0.00

1,000

－

1,000

0.00

5-3, Takinogawa 5-chome,
Kita-ku, Tokyo

88,000－88,000

0.00

5,000

－

5,000

0.00

52,000－52,0000.00

123,000－

123,000

0.00

15,000－15,0000.00

2,914,000－

2,914,000

0.06

Mizuho Co., Inc.

9-5, Minami-Shinagawa 4chome, Shinagawa-ku,
Tokyo
3268, Nagaoka,
Ibarakimachi,
Higashiibaraki-gun, Ibaraki
15-1, Konan 2-chome,
Minato-ku, Tokyo
4-1, Koishikawa 5-chome,
Bunkyo-ku, Tokyo

Total

－

Nitto Jidosha
Kiki K.K.
Hitachi Koki Co.,Ltd.

(As of March 31, 2012)
Ownership
Number ofpercentage toshares held
Number of
the total
under the Total sharesshares held
under own name names of held (shares) number ofissued shares
others(shares)(%)(shares)-56-

(9) Details of stock option plans
Not applicable.
2. Information on Acquisition, etc. of Treasury StockClass of shares
Acquisition of common stock less than one unit shares due to purchase requests from shareholders under
Article 155, Item 7 of the Companies Act and acquisition of common stock under Article 155, Item 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
Not applicable.
(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 stock less than one unit shares due to purchase requests from shareholders under
Article 192, Paragraph 1 of the Companies Act
Classification

Number of shares (shares)

Total amount (yen)Treasury stock acquired during the281,695
125,685,180
fiscal year ended March 31, 2012
Treasury stock acquired during the32,691
16,927,074
current period (Note)(Note) The number of treasury stock acquired due to requests to purchase stock less than one unit sharesfrom June 1, 2012 to filing date is not included.
Acquisition of treasury stock due to purchase requests from shareholders dissenting from the merger
with Hitachi T&D, Ltd. under Article 797, Paragraph 1 of the Companies Act
Classification

Number of shares (shares)

Treasury stock acquired during the
fiscal year ended March 31, 2012
Treasury stock acquired during thecurrent period (Note)-57-

Total amount (yen)
－

－

4,141

1,681,246

(4) Status of the disposition and holding of acquired treasury stock
Fiscal year ended March 31, 2012
Classification
Acquired treasury stock which wasoffered to subscribers
Acquired treasury stock which wascanceled

Current period (Note)

Number of Total disposition Number of Total disposition
shares (shares) amount (yen) shares (shares) amount (yen)
－

－

－

－

－

－

－

－

－

－

－

－

Others (Acquired treasury stock which
was sold due to requests fromshareholders holding shares less than
one unit shares to sell additional
shares)82,53347,742,638

1,664

949,199

Total number of treasury stock held

2,620,165－

2,655,333－

Acquired treasury stock which wastransferred due to merger, shareexchange or company split(Note)The number of treasury stock which was sold due to requests from shareholders holding less than
one unit shares to sell additional shares from June 1, 2012 to the filing date and that of treasury stockacquired due to purchase requests from shareholders holding shares less than one unit shares from
June 1, 2012 to the filing date are not included. .

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3. Dividend Policy
The Company views enhancement of the long-term and overall interests of shareholders as an importantmanagement objective.
The industrial sector encompassing energy, information systems, social infrastracture and other primarybusinesses of the Company is undergoing rapid technological innovation and changes in market structure.
This makes vigorous upfront investment in R&D and plant and equipment essential for securing andmaintaining market competitiveness and improving profitability. Dividends are therefore decided based on
medium-to-long term business plans with an eye to ensuring the availability of internal funds forreinvestment and the stable growth of dividends, with appropriate consideration of a range of factors,
including the Company’s financial condition, results of operations and dividend payout ratio.
The Company provides in its Articles of Incorporation that distribution of surplus will be made toshareholders of record as of March 31 and September 30 of each year and that the company may makefurther distribution of surplus to shareholders of record as of another record date for the purpose of
distributing surplus. The company also provides in its Articles of Incorporation that the Company may
make distribution of surplus by resolution of its Board of Directors, without resolution at the General
Meeting of Shareholders.
The Company believes that the repurchase of its shares should be undertaken, when necessary, as part ofits policy on distribution to shareholders to complement the dividend payout. In addition, the Company
will repurchase its own shares on an ongoing basis in order to flexibly implement a capital strategy,
including business restructuring, to maximize shareholder value so far as consistent with the dividend
policy. Such action will be taken by the Company after considering its future capital requirement under its
business plans, market conditions and other relevant factors.
Based on the above policy, annual dividends of ¥8 per share were paid for the fiscal year ended March
31, 2012. At the Board of Directors meeting held on November 1, 2011, it was resolved to pay interim
dividends of ¥3 per share, resulting in the total amount of interim dividends of ¥13,553 million. In addition,at the Board of Directors meeting held on May 10, 2012, it was resolved to pay year-end dividends of ¥5
per share, resulting in the total amount of year-end dividends of ¥23,175 million.
4. Changes in Share Prices(1) Highest and lowest share prices in each of the recent five fiscal years
Fiscal year

139th
140th
141st
142nd
143rd
business term business term business term business term business term

Year end

March 2008

Highest(yen)
Lowest(yen)

March 2009

March 2010

March 2011

March 2012

947

843

404

523

547

569

230

227

313

360

January2012

February
2012

March
2012

Highest
442
435
438
441
479
(yen)
Lowest
360
392
400
406
398
(yen)
(Note) The share prices are market prices on the first section of the Tokyo Stock Exchange.

547(2) Highest and lowest share prices in each of the recent six months
Month

October2011

November
2011

December
2011

-59-

454

5. Directors and Senior Management
The Company has adopted the Committee System pursuant to the Companies Act. Information on its
Directors and Executive Officers is as follows.
(1) Directors
Position Responsibility

NameDate of
birth

Share
Business experience, including
Term of ownershipexperience in Hitachi, and functions
office(shares)
4/1962 Joined Hitachi, Ltd.
6/1992 General Manager, HitachiWorks
6/1995 Director
6/1997 Executive Managing Director
4/1999 Executive Vice President andRepresentative Director
4/2003 Director (Retired in June 2007)

6/2003 Chairman of the Board andRepresentative Executive
Officer, Hitachi Software
Engineering Co., Ltd.
(Currently Hitachi Solutions,Ltd.)
6/2005 Chairman of the Board, Hitachi
Chairman Nominating
Plant Engineering &TakashiDec. 19,(Note 1)
Committeeof theConstruction Co., Ltd.
Kawamura
1939(Chair)Board(Currently Hitachi Plant
Technologies, Ltd.)
6/2006 Chairman of the Board, Hitachi
Software Engineering Co., Ltd.
6/2007 Chairman of the Board, Hitachi
Maxell, Ltd.
4/2009 Chairman, President and Chief
Executive Officer, Hitachi, Ltd.
6/2009 Chairman, President, Chief
Executive Officer and Director,
Hitachi, Ltd.
4/2010 Chairman and Director,
Hitachi, Ltd.
4/2011 Chairman of the Board,
Hitachi, Ltd.
12/1991 Vice Governor of Ishikawa
Prefecture
7/1994 Director-General, Minister’s
Secretariat, Ministry of Labour
Member of
6/1995 Director-General, Women’s
Nominating
Bureau, Ministry of Labour
1,(Note 1)
Director Committee and Yoshie Ota Sep.
7/1998 Chairman, Japan Institute of
1942
Audit
Workers’ Evolution
Committee
7/2005 Advisor, Japan Institute ofWorkers’ Evolution (Retired in
March 2010)
6/2007 Director, Hitachi, Ltd.
3/1997 President (CEO) and
Representative Director, Showa
Denko K.K.
1/2005 Chairman of the Board andMember ofRepresentative Director, Showa
Nominating
Jan. 18,
Denko K.K.
Director Committee and Mitsuo(Note 1)
Ohashi
1936
Compensation
3/2007 Chairman of the Board, Showa
Committee
Denko K.K.
6/2007 Director, Hitachi, Ltd.
3/2010 Advisor, Showa Denko K.K.
(Currently in office)-60-

183,720

28,00038,000ShareBusiness experience, including
Term of ownershipexperience in Hitachi, and functions
office(shares)
4/2003 Representative Director,
President and CEO, Member ofthe Board, Marubeni
Member of
Corporation
Nobuo
Dec.
5,
Compensation Katsumata(Note 1)
12,0001942
4/2008Chairman, Member of theCommittee
Board, Marubeni Corporation(Currently in office)6/2011 Director, Hitachi, Ltd.
2/1993 Chief Technology Officer,
Motors, Drives and Appliances,
Emerson Electric Company
9/1994 President, US Electrical
Motors, Emerson ElectricCompany
7/1997 President, Mercury Marine
Division and Corporate Vice
President, Brunswick
Corporation
GeorgeFeb. 23, 4/2000 President and Chief Operating (Note 1)
0
Buckley
1947
Officer, Brunswick Corporation
6/2000 Chairman and Chief Executive
Officer, Brunswick Corporation
12/2005 Chairman of the Board,
President and Chief Executive
Officer, 3M Company
2/2012 Executive Chairman of theBoard, 3M Company (Retired
in May 2012)
6/2012 Director, Hitachi, Ltd.
7/2002 Director-General for Commerceand Distribution Policy,
Minister’s Secretariat, Ministryof Economy, Trade andIndustry of Japan (“METI”)
7/2003 Director-General, Small andMedium Enterprise Agency,
METI
Member of
7/2006 Director-General, Agency for
Nominating
Natural Resources and Energy,
Harufumi
Jul. 26,
Committee and(Note 1)
0
METI
1949
Mochizuki
Audit
7/2008 Vice-Minister of Economy,
Committee
Trade and Industry of Japan
8/2010 Special Advisor to the Cabinetof Japan (Retired in September
2011)
10/2010 Senior Adviser to the Board,
Nippon Life Insurance
Company (currently in office)6/2012 Director, Hitachi, Ltd.
4/1963 Member of the Tokyo Bar
Association
7/1971 Partner, Mori Sogo Law Offices
Member ofAudit
of the Japan
Jan. 5, 4/2002 President
46,750Committee and Tohru
Federation of Bar Associations (Note 1)
Motobayashi
1938
Compensation(Retired in March 2004)
Committee
6/2006 Director, Hitachi, Ltd.
4/2008 Partner, Ihara and Motobayashi(Currently in office)Position Responsibility

Director

Director

Director

Director

Name

Date of
birth

-61-

Position Responsibility

Name

Director

Philip Yeo

Member of
Director Audit
Committee

Michijiro
KikawaDirector

StephenGomersallCompensation Hiroaki
Director Committee
Nakanishi(Chair)Date ofbirth

Business experience, including
experience in Hitachi, and functions
6/1970 Joined Ministry of Defense of
Singapore
9/1979 Permanent Secretary, Ministryof Defense of Singapore
1/1986 Chairman, Economic
Development Board ofSingapore
2/2001 Chairman, Agency for Science,
Technology and Research ofSingapore
4/2007 Senior Advisor for Science andTechnology to the Ministry ofOct. 29,
Trade & Industry, Singapore
1946(Retired in September 2008)
Special Advisor in Economic
Development, Prime
Minister’s Office, Governmentof Singapore (Retired inAugust 2011)
Chairman, SPRING Singapore(currently in office)9/2011 Chairman, Singbridge
International Pte Ltd (currently
in office)6/2012 Director, Hitachi, Ltd.
4/2006 Representative Executive
Officer, President, Chief
Executive Officer andDirector, Hitachi Construction
Aug. 2,
Machinery Co., Ltd.
1947
4/2012 Director, Hitachi Construction
Machinery Co., Ltd. (currently
in office)6/2012 Director, Hitachi, Ltd.
9/1970 Joined U.K. Foreign andCommonwealth Office7/1999 British Ambassador to Japan(Retired in July 2004)
10/2004 Joined Hitachi, Ltd.
Jan. 17, 11/2005 Chairman of the Board, Hitachi
1948
Europe Ltd. (Currently in
office)10/2006 Senior Vice President andExecutive Officer, Hitachi, Ltd.
(Retired in March 2011)
6/2011 Director, Hitachi, Ltd.
4/1970 Joined Hitachi, Ltd.
4/2003 General Manager, Global
Business
6/2003 Vice President and Executive
Officer
4/2004 Senior Vice President andExecutive Officer
6/2005 Senior Vice President andExecutive Officer, Hitachi, Ltd.
Mar. 14,Chairman and Chief Executive
1946
Officer, Hitachi Global Storage
Technologies, Inc.
4/2006 Executive Vice President andExecutive Officer, Hitachi, Ltd.
(Retired in December 2006)
4/2009 Executive Vice President andExecutive Officer, Hitachi, Ltd.
4/2010 President, Hitachi, Ltd.
6/2010 President and Director, Hitachi,
Ltd.
-62-

Share
Term of ownershipoffice(shares)(Note 1)0(Note 1)0(Note 1)9,000

(Note 1)88,000ShareBusiness experience, including
Term of ownershipexperience in Hitachi, and functions
office(shares)
4/1970 Joined Hitachi, Ltd.
4/2003 General Manager, Legal andCorporate Communications andGeneral Manager, Corporate
Auditing
6/2003 Vice President and Executive
Officer
4/2004 Senior Vice President andExecutive Officer
4/2006
Executive
Vice President andTakashiJan. 27,
Executive Officer (Retired in
Director(Note 1)70,000Hatchoji
1947
March 2007)
6/2007 President and Director, Hitachi
Research Institute, Ltd.
4/2009 Executive Vice President andExecutive Officer, Hitachi, Ltd.
(Retired in March 2011)
4/2011 Chairman of the Board, Hitachi
America, Ltd. (Currently in
office)6/2011 Director, Hitachi, Ltd.
4/1970 Joined Hitachi, Ltd.
4/2003 General Manager, Finance
6/2003 Executive Officer
4/2004 Senior Vice President andExecutive Officer
6/2004 Senior Vice President,
Executive Officer and Director
4/2006 Executive Vice President,
Executive Officer and Director
4/2007 Director (Retired in June 2007)
6/2007 Chairman of the Board, Hitachi
Global Storage Technologies,
Audit
Inc.
TakashiSep.
25,
Committee(Note 1)70,000
Director (Chair)
4/2008
Executive
Vice President andMiyoshi
1947
Executive
Officer,
Hitachi(Standing)
Systems & Services, Ltd.
(Currently Hitachi Solutions,Ltd.)
6/2008 President, Chief Executive
Officer and Director, Hitachi
Systems & Services, Ltd.
4/2009 Executive Vice President andExecutive Officer, Hitachi, Ltd.
6/2009 Executive Vice President,
Executive Officer and Director,
Hitachi, Ltd.
4/2012 Director, Hitachi, Ltd.
545,470
Total(Notes) 1. The term of office of the Directors starts upon the election at the Ordinary General Meeting of
Shareholders on June 22, 2012 and expires at the close of the Ordinary General Meeting of
Shareholders for the fiscal year ending March 31, 2013.
2. Ms. Yoshie Ota, Messrs. Mitsuo Ohashi, Nobuo Katsumata, George Buckley, Harufumi Mochizuki,
Tohru Motobayashi and Philip Yeo are directors who fulfill the qualification requirements to beoutside directors as provided for in Article 2, Item 15 of the Companies Act.
Position Responsibility

NameDate of
birth

-63-

(2) Executive Officers
Position

Responsibility

Name

Share
Date ofBusiness experience, including
Term of ownershipbirth experience in Hitachi, and functions office(shares)

Representative
Overall
Executive
management
OfficerPresident

HiroakiSee “(1)Nakanishi Directors” See “(1) Directors”

Representative
Executive
Officer
Executive Vice
President andExecutive
Officer

Research &development,
environmental
strategies andmedical systems
business

ShigeruAzuhataNov. 21,1949

Representative
Executive
Officer
Executive Vice
President andExecutive
Officer

Power systems
business andinfrastructure
systems business

Koji
TanakaJan. 22,1952

Representative
Executive
Officer
Executive Vice
President andExecutive
Officer

Information &telecommunication Junzo
systems business Nakajima
and information
technology

Representative
Executive
Officer
Executive Vice
President andExecutive
OfficerManagement
Aug. 3,Strategies, finance Toyoaki
Nakamura 1952and corporate
pension system

High functional&
Representative materials
components,
Executive
quality assurance,
Officer
Executive Vice production
President and engineering,battery systems
Executive
business andOfficer
automotive
systems business

Nobuo
MochidaFeb. 8,1949

Apr. 1,
1947-64-(Note 2)

4/1975 Joined Hitachi, Ltd.
4/2005 General Manager, Hitachi
Research Laboratory
1/2008 General Manager,
Environmental Strategy
Office(Note 2)4/2009 Vice President andExecutive Officer
4/2011 Senior Vice President andExecutive Officer
4/2012 Executive Vice President
and Executive Officer
4/1974 Joined Hitachi, Ltd.
5/2006 General Manager, Hitachi
Works, Power Systems
4/2007 Vice President and(Note 2)
Executive Officer
4/2011 Executive Vice President
and Executive Officer
5/1972 Joined Hitachi, Ltd.
4/2005 Chief Operating Officer,
Information &Telecommunication
Systems(Note 2)4/2006 Vice President andExecutive Officer
4/2009 Senior Vice President andExecutive Officer
4/2011 Executive Vice President
and Executive Officer
4/1975 Joined Hitachi, Ltd.
1/2006 General Manager,
Finance Department I
4/2007 Senior Vice President andExecutive Officer
6/2007 Senior Vice President,(Note 2)
Executive Officer andDirector
6/2009 Senior Vice President andExecutive Officer
4/2012 Executive Vice President
and Executive Officer
4/1970 Joined Hitachi Metals,
Ltd.
6/2006 President and Chief
Executive Officer andDirector, Hitachi Metals,
Ltd.
(Note 2)4/2010 Executive Vice President
and Executive Officer,
Hitachi, Ltd.
Chairman of the Board,
Hitachi Metals, Ltd.
(Currently in office)88,00049,00035,00036,00038,00021,000Position

Responsibility

Name

Executive Vice Hitachi group
President and global business
Executive(Asia Pacific)
Officer

KazuhiroMori

Senior Vice
President andExecutive
Officer

Information &telecommunication Shinjiro
systems business Iwata

Senior Vice
President andExecutive
Officer

Cost structure
Makotoreform andconsumer business Ebata

Senior Vice
President andExecutive
Officer

Human capital,
legal and corporate
communications,
government &Toshiakiexternal relations, Kuzuoka
corporate brandand corporate
auditing

Share
Date ofBusiness experience, including
Term of ownershipbirth experience in Hitachi, and functions office(shares)
4/1969 Joined Hitachi, Ltd.
2/1999 General Manager, Chubu
Area Operation
6/2003 Executive Officer
Oct. 7,4/2004 Vice President and(Note 2)54,0001946
Executive Officer
4/2006 Senior Vice President andExecutive Officer
1/2007 Executive Vice President
and Executive Officer
4/1972 Joined Hitachi, Ltd.
10/2007 Executive Vice President,
Hitachi Global Storage
Technologies, Inc.
Jun. 6,4/2009 Vice President and(Note 2)31,0001948
Executive Officer,
Hitachi, Ltd.
4/2011 Senior Vice President andExecutive Officer,
Hitachi, Ltd.
4/1970 Joined Hitachi, Ltd.
4/2000 General Manager,
Procurement Division
2/2002 General Manager, GroupManagement Office6/2003 Executive Officer
4/2004 Vice President andExecutive Officer
Feb. 23,
44,000(Retiredin March 2008) (Note 2)
1947
4/2008 Deputy Chairman,
Hitachi Europe Ltd.
7/2009 Vice President andExecutive Officer,
Hitachi, Ltd.
4/2011 Senior Vice President andExecutive Officer,
Hitachi, Ltd.
4/1978 Joined Hitachi, Ltd.
4/2001 General Manager, Legal
Division
Nov. 3,4/2007 Vice President and(Note 2) 170,000
1954
Executive Officer
4/2011 Senior Vice President andExecutive Officer

4/1979 Joined Hitachi, Ltd.
10/2009 President & CEO,Infrastructure
Senior Vice
Information & Control
Dec. 11,
President and systems business Yutaka
Systems Company(Note 2)Saito
1954
and medical
Executive
4/2010 Vice President andExecutive Officer
systems business
Officer
4/2012 Senior Vice President andExecutive Officer
4/1975 Joined Hitachi, Ltd.
10/2009 Deputy General Manager,
Representative
Power Systems Sales
Sales operations,Executive
Management Division,
Hitachi group
OfficerJan. 11,
Power Systems Company (Note 2)
global business and Masahide
Senior Vice
Tanigaki
1951
4/2010 Vice President andPresident and corporate export
Executive Officer
regulation
Executive
Officer
4/2012 Senior Vice President andExecutive Officer-65-

18,00026,400ShareDate ofBusiness experience, including
Term of ownershipbirth experience in Hitachi, and functions office(shares)
4/1978 Joined Hitachi, Ltd.
4/2007 President andInfrastructure
Representative Director,
Vice President systems business Toshio
Dec. 2,
Hitachi Building Systems (Note 2)
7,000
and Executive (urban planning
Ikemura1953
Co., Ltd.
and development
Officer
4/2011 Vice President andsystems business)
Executive Officer,
Hitachi, Ltd.
4/1978 Joined Hitachi, Ltd.
systems
10/2009 General Manager, Hitachi
Vice President Power
TatsuroDec. 23,andWorks, Power Systems(Note 2)20,000and Executive business
Ishizuka
1955
business
Company
Officerincubation
4/2011 Vice President andExecutive Officer
4/1978 Joined Hitachi, Ltd.
9/2008 General Manager,
Vice President
Shinichiro
Feb.
6,
Corporate Procurement(Note 2)
17,000and Executive Procurement
Omori
1956
Division
Officer
4/2012 Vice President andExecutive Officer
4/1977 Joined Hitachi, Ltd.
Vice President Sales operations
Kaoru
Jun. 25, 4/2011 General Manager, Kansai (Note 2)
18,050and Executive (Kansai Area)
Area Operation
Kawano1952
Officer
4/2012 Vice President andExecutive Officer
Joined Hitachi, Ltd.
4/1974operations
Vice President Sales
GeneralManager,
12/2008
power systems Yoshifumi Mar. 10,
18,000and Executive andChugoku Area Operation (Note 2)
Kanda
1952
business(sales
Officer
Vice
President
and4/2011
operations)Executive Officer
4/1976 Joined Hitachi, Ltd.
10/2009 Chief Marketing Officer,
Information &Vice President Hitachi group
Telecommunication
RyuichiFeb.
4,21,000and Executive global businessGroup, Information &(Note 2)
Kitayama
1952
Telecommunication(China)Officer
Systems Company
4/2010 Vice President andExecutive Officer
Joined Hitachi, Ltd.
4/1976
operations
Vice President Sales
GeneralManager, Chubu
4/2010strategies) Kazuhiro Dec. 6,
25,350and Executive (market
Area
Operation(Note 2)
Kurihara
1952
and medical
Officer
Vice
President
and4/2011systems business
Executive Officer
4/1982 Joined Hitachi, Ltd.
Vice President Research &4/2011 General Manager, Hitachi
Keiji
Oct. 9,and Executive development
3,000
Research Laboratory(Note 2)
Kojima1956
Officer
4/2012 Vice President andExecutive Officer
4/1979 Joined Hitachi, Ltd.
4/2008 President & Chief
Executive Officer,
Information &Hitachi Information &Vice President telecommunication KaichiroJan.
29,
Telecommunication
31,000and Executive systems business Sakuma
1954
Systems Global Holding (Note 2)(platform systems
Officer
Corporation
business)
4/2009 Vice President andExecutive Officer,
Hitachi, Ltd.
Position

Responsibility

Name

-66-

Position

Vice President
and Executive
Officer

Vice President
and Executive
Officer

Vice President
and Executive
Officer

Vice President
and Executive
Officer

Vice President
and Executive
Officer

Vice President
and Executive
Officer

Share
Date ofBusiness experience, including
Term of ownershipbirth experience in Hitachi, and functions office(shares)
4/1978 Joined Ministry ofInternational Trade andIndustry
8/2006 Deputy Director-General,
Economic Affairs Bureau,
Ministry of Foreign
Government & Yasuo
Oct. 5,5,000
Affairs (Retired in March (Note 2)
external relations Tanabe
1954
2010)
6/2010 Joined Hitachi, Ltd.
4/2011 Vice President andExecutive Officer,
Hitachi, Ltd.
Infrastructure
4/1977 Joined Hitachi, Ltd.
systems business Hiroshi& CEO, Rail
Dec. 15, 4/2011 President(transportation
25,000Company
Systems(Note 2)
Nakayama
1953
systems
4/2012 Vice President andExecutive Officer
business)
4/1980 Joined Hitachi, Ltd.
4/2010 Senior Manager, Strategy& Project Office,Management
ToshikazuJan. 9,(Note 2)
8,000
Supervisory Office forstrategies
Nishino1955
Management Reforms
4/2011 Vice President andExecutive Officer
4/1975 Joined Hitachi, Ltd.
7/2007 President andPower systems
Representative Director,
business (nuclear Masaharu
Feb.
20,
Hitachi-GE Nuclear(Note 2)29,000power systems
Hanyu
1951
Energy, Ltd.
business
4/2011 Vice President andpromotion)
Executive Officer,
Hitachi, Ltd.
4/1977 Joined Hitachi, Ltd.
4/2006 Chief Operating Officer,
Information &Telecommunication
Systems
4/2007 Vice President andExecutive Officer(Retired in March 2008)
4/2008 President, Hitachi Power
Europe GmbHInfrastructure
ToshiakiFeb. 16, 4/2010 President and Chief(Note 2)30,000systems business Higashihara 1955
Executive Officer,
Hitachi Plant
Technologies, Ltd.
6/2010 President andRepresentative Director,
Hitachi Plant
Technologies, Ltd.
(Currently in office)4/2011 Vice President andExecutive Officer,
Hitachi, Ltd.
4/1976 Joined Hitachi, Ltd.
4/2010 General Manager,
Corporate Administration
Naoki
Oct. 30,
Division, Human Capital (Note 2)
Human capital
23,000Mitarai
1952
Group
4/2011 Vice President andExecutive Officer
Responsibility

Name

-67-

ShareDate ofBusiness experience, including
Term of ownershipbirth experience in Hitachi, and functions office(shares)
4/1976 Joined Hitachi, Ltd.
10/2009 Chief Operating Officer,
System Solutions
Information &Business, Information &Vice President telecommunication Yoshihiko Aug. 1,
Telecommunication(Note 2)
16,000and Executive systems business Mogami
1953Group, Information &(system solutions
Officer
Telecommunication
business)
Systems Company
4/2010 Vice President andExecutive Officer
4/1982 Joined Hitachi, Ltd.
4/2011 Chief Strategy Officer,
Information &Vice President Information &MasayaJan.
31,(Note 2)
10,000
Telecommunicationand Executive telecommunication Watanabe
1958
systems business
Systems Company
Officer
4/2012 Vice President andExecutive Officer
Total
916,800(Notes) 1. The “Responsibility” column describes 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, 2013.
Position

Responsibility

Name

-68-

6. Corporate Governance, etc.
(1) Corporate governance1) Outline of corporate organizations
The Company has adopted the Committee System under the Companies Act, aiming to establish aframework for quick business operation and to realize highly transparent management by separating
responsibilities for management oversight and those for execution of business operations.
Board of Directors
The Board of Directors approves basic management policy for the Hitachi Group and supervise theexecution of the duties of executive officers and directors in order to sustainably enhance corporate
value and the shareholders’ common interests. The basic management policy includes 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 are provided in laws,
regulations, the Articles of Incorporation and Board of Directors Regulations. As of June 22, 2012,
the Board of Directors was made up of 13 Directors, and seven of whom are outside Directors andone concurrently serves as an Executive Officer. The Chairman of the Board does not concurrently
serve as an Executive Officer. Within the Board of Directors, there are three statutory committees of
the Nominating Committee, the Audit Committee and the Compensation Committee with outside
Directors accounting for the majority of members of each committee. The Board of Directors
meetings were held 9 days during the fiscal year ended March 31, 2012, and the attendance rate of
Directors at those meetings was 98%. The Nominating Committee was held 5 days, the Audit
Committee was held 12 days, and the Compensation Committee was held 5 days during the fiscal
year ended March 31, 2012.
The Nominating Committee has the authority to determine particular proposals submitted to thegeneral meeting of shareholders for the election and dismissal of Directors, and consists of four
Directors, three of whom are outside Directors.
The Audit Committee has the authority to audit the execution of duties of Directors and Executive
Officers and to determine on proposals submitted to the general meeting of shareholders for theelection and dismissal of accounting auditors, and consists of five Directors, including three outside
Directors and one standing Audit Committee member. Mr. Takashi Miyoshi, the Chair of the Audit
Committee, has considerable knowledge of finance and accounting due to his long experience as theGeneral Manager of the Finance Department I of the Company and the Executive Officer in chargeof accounting and financing of the Company for many years.
The Compensation Committee has the authority to determine remuneration policies for Directors
and Executive Officers and remuneration for individuals based on them. The Compensation
Committee consists of four Directors, three of whom are outside Directors.
With regard to the number of Directors and their election, the Company stipulates in its Articles ofIncorporation that the Company shall have not more than twenty (20) Directors. With regard to theadoption of resolution for the election of Directors, the Company stipulates in its Articles ofIncorporation that the presence of shareholders representing one-third or more of the voting, that
resolutions for the election of Directors shall be approved by attending shareholders possessing onethird or more of all voting rights of the shareholders who are entitled to exercise their votes, and thatthe resolution shall not be made by cumulative voting.
Executive Officers
Executive Officers decide on matters delegated to them by the Board of Directors and execute theCompany’s business affairs within the scope of assignments determined by the Board of Directors.
As of June 22, 2012, the Company has 29 Executive Officers.
The Company stipulates in its Articles of Incorporation that the Company shall have not more thanforty (40) Executive Officers.

-69-Senior Executive Committee
The Senior Executive Committee is a council to ensure that President deliberately decides onimportant managerial matters, which may affect the Company or the Hitachi Group business, throughdiscussing from diverse viewpoints. It consists of 9 members as of June 22, 2012; President, five
Executive Vice President and Executive Officers and three Senior Vice President and Executive
Officers.
2) Matters determined by resolution of the Board of Directors without resolution at the general meetingof shareholders 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 the resolution of the Board of Directors, without resolution at the general meetingof shareholders.
For the repurchase of the company’s own its shares (Article 459, Paragraph 1, Item 1 of theCompanies Act), the Board of Directors shall determine on the matter in order to enable timely
implementation of capital strategies.
Regarding 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) anddividends of 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 deemedthat its Articles of Incorporation had stipulations that the Board of Directors was able to decide theabove matters without resolution at the general meeting of shareholders and that it should not
stipulate that such matters shall be resolved at the resolution of the general meeting of shareholders,in accordance with Article 57 of the Act on Arrangement of Relevant Acts Incidental to Enforcementof 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 timely decide on these important business judgments by 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 Article 423, Paragraph 1 of theCompanies Act to the extent as provided in laws or regulations.
3) Requirement for special resolution of the general meeting of shareholders
To enable 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 the shareholders shall be present, by a majority of two-thirds or more of the voting
rights of the shareholders who are present in such meeting and are entitled to vote.
4) 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.
(a) When necessary, the Board of Directors may appoint one or more director(s), who does notserve concurrently as an executive officer, as a director responsible for assisting with theduties of the Audit Committee. In addition, the Board of Directors Office (the “Office”)
shall be established specifically to assist with the duties of each Committee and the Board of
Directors and staffed with personnel who are not subject to orders and instructions of
Executive Officers.
(b) In order to ensure the independence of the Office personnel from Executive Officers, theAudit Committee shall be informed in advance of planned transfers of the Office personnel.
(c) Executive Officers and employees shall report without delay to the members of the Audit
-70-

(d)

(e)
(f)
(g)

(h)

(i)

(j)

Committee significant matters affecting the whole Company, results of internal audits, andthe implementation status of reporting under the internal reporting system.
In order to ensure the effectiveness of audits by the Audit Committee, 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.
A reporting system to Directors shall be established to ensure that the execution of duties by
Executive Officers is in compliance with laws, regulations, and the Articles of Incorporation.
Information pertaining to the execution of duties by Executive Officers shall be preparedand maintained in accordance with internal rules.
A structure shall be established in which each relevant department shall establish
regulations and guidelines, conduct training, prepare and distribute manuals, and carry out
other such measures with respect to various risks. Efforts shall be made to identify possible
new risks through such things 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.
Efficient performance of duties shall be ensured through the following business
management systems.
- The Senior Executive Committee shall be established in order to deliberate on andfacilitate 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 operatebusiness in a planned and efficient manner.
- Internal audits shall be conducted by Internal Auditing Office to monitor and identify
the status of business operations and to facilitate improvements.
- The Audit Committee shall receive the audit plans of the accounting auditors inadvance, and the prior approval of the Audit Committee shall be required with respect
to the fees to be paid to and non-audit services to be requested of the accounting
auditors.
- Documented business processes shall be executed, and internal and external auditors
shall examine said processes in order to ensure the reliability of financial reports.
Continuous maintenance of a legal and regulatory compliance structure shall be ensured
through the following business management systems.
- Internal audits shall be conducted, and various committees shall be established forlegal and regulatory compliance activities. Furthermore, an internal reporting systemshall be established and education on legal and regulatory compliance shall be
provided.
- Various corporate rules and regulations shall be established, and efforts shall be madeto ensure that the employees are aware of the internal control systems overall and thatthe systems are effective.
The following measures shall be effective to ensure the adequacy of business operations
within the Hitachi Group.
- Such fundamental policies as the emphasis of the social responsibilities of businessenterprises shall be shared with the Group companies.
- A group-wide policy for compliance with applicable laws and regulations shall beestablished as necessary.
- Internal audits of Company departments and Group companies shall be conductedperiodically, and Directors and Corporate Auditors shall be sent from the Company toGroup companies. Each company shall execute documented business processes onmatters that should be reflected in financial reports, and Corporate Auditors andothers shall examine said processes.
- A structure for the adequate and efficient conduct of business operations common toGroup companies shall be established.
- The policy on transactions within the Hitachi Group is to trade fairly based on market
prices.
-71-5) Internal audit and audit by the Audit Committee(a) Internal audit
The Internal Auditing Office is in charge of internal audit within Hitachi Group and audits inhouse companies, corporate divisions of headquarters and subsidiaries and affiliates. The numberof staff of the Internal Auditing Office is 36 as of March 31, 2012.
The Internal Auditing Office monitors and assesses whether overall business operations,
including marketing, personnel management, labor management, procurement transactions,production, information system, accounting and financing activities, and property managementof 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 theirimprovements. The Internal Auditing Office reports in advance its internal audit plan to the Audit
Committee, and reports results of auditing to the President and the Audit Committee.
Furthermore, relating to the internal control over financial reporting, the internal control divisionin the Internal Audit Office promotes to establish and maintain the internal control systems
pursuant to the Company’s guideline, assesses its effectiveness, and reports the results to the
President and the Audit Committee.
In addition, each division in charge of compliance, information security, environment andexport regulations investigates and evaluates compliance with related laws and regulations, andinstructs improvements if necessary.
(b) Audit by the Audit Committee
The Audit Committee conducts audits for whether corporate administration by Directors andExecutive Officers are properly carried out under appropriate internal control systems.
The Audit Committee develops the audit policy and the audit plan, and periodically receives
reports or conducts hearing for execution of duties from Directors and Executive Officers. In
addition, the standing members of the Audit Committee investigate major facilities and receive
reports from subsidiaries in order to check whether business transaction and property
management are properly carried out, and then report the results to the Audit Committee.
Furthermore, the standing members of the Audit Committee attend the important meetings
including the budget meeting, inspect documents submitted to the Senior Executive Committee
and audit reports from internal audit divisions, and provide internal audit divisions with
instructions about divisions to be subject to auditing and items to be focused, if necessary.
The Audit Committee receives reports and explanations about the audit plan and results of
the audit from the accounting auditor, and based on the reports, verifies results of financial audits
and internal control audits. In addition, the Audit Committee receives reports and explanations ofquality control systems of the accounting auditor. Furthermore, the Company makes it a rule toobtain the prior approval of the Audit Committee for remuneration to the accounting auditor andnon-audit services to be provided by the accounting auditor.
6) Outside Directors(a) Qualification for the outside Directors and criteria for the independency
For electing an outside Director, the Nominating Committee of the Company considers, inaddition to the following criteria for the independency, whether the outside Director has thehighest personal and professional ethics, integrity and insight, and distinguished records ofleadership or experience at policy making levels in business, law, administration, accounting or
education, etc.
For the independency of an outside Director, the Company considers the outside director to
be independent unless:- his or her immediate family member* is, or has been within the last three years, an
executive 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 acompany that has made payments to, or received payments from, the Company forproperty or services in an amount which, in any of the last three fiscal years, exceeds
2% of any of the companies’ consolidated gross revenues;-72-

- he or she has received during any of the last three fiscal years more than ¥10 million
in direct compensation for his or her service as a specialist in law, accounting or tax,
or as a consultant 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 the Company’s discretionary charitable contributions to the organization in anyof the last three fiscal years are more than ¥10 million and 2% of that organization’sannual gross revenues.
* An “immediate family member” includes a person’s spouse, parents, children,
siblings, grand-parents, grand-children, mothers and fathers-in-law, sons anddaughters-in-law, spouses of siblings, grand-children-in-law, and brothers and sistersin-law.
(b) Function of the outside Directors
Following the policy stated in “(a) Qualification for outside Directors and criteria for the
independency,” the Company has elected seven persons; Ms. Yoshie Ota and Messrs. Mitsuo
Ohashi, Nobuo Katsumata, George Buckley, Harufumi Mochizuki, Tohru Motobayashi andPhilip Yeo, as outside Directors under Article 2, Item 15 of the Companies Act. Each outside
Director is enhancing functions of the Company’s Board of Directors through supervising
execution of duties of Executive Officers and others from an independent perspective, based ondiverse experiences and insights in such areas as public administration in the cases of Ms. Yoshie
Ota and Messrs. Harufumi Mochizuki and Philip Yeo, based on rich experiences and insights as
top executive of major global companies in the cases of Messrs. Mitsuo Ohashi, Nobuo
Katsumata and George Buckley, and based on rich experiences and insights as a legal expert inthe case of Mr. Tohru Motobayashi.
(c) Supervising by the outside Directors
Outside Directors, comprising of majority of Directors, supervise execution of duties of
Executive Officers from an independent perspective. As described in the item “5) Internal audit
and audit by the Audit Committee” above, the Audit Committee, of which majority members areoutside Directors, receives reports and explanations about results of internal audits, accounting
audit and internal control audit, and verifies the matters reported or explained. In addition, theAudit Committee reports the results of its verification to the Board of Directors.
(d) Relationship between outside Directors and the Company
Each of outside Directors has no relationship with the Company regarding his or her
independency as described in “(a) Qualification for the outside Directors and criteria for the
independency.” In addition, there is no particular conflict of interest between each of outside
Directors and the Company. Furthermore, Ihara and Motobayashi Law Office, of which Mr.
Tohru Motobayashi is a partner, is not a legal counsel to the Company, and there is no contractual
relationship between Mr. Tohru Motobayashi and the Company in relation to legal services.
The Company considers that all outside Directors are independent, and therefore has notified
all seven outside Directors as independent directors to each of the Company’s listing stock
exchanges in Japan.
The Company maintains a limited liability agreement (hereinafter referred to as“Agreement”) stipulated in Article 427, Paragraph 1 of the Companies Act with Ms. Yoshie Ota
and Messrs. Mitsuo Ohashi, Nobuo Katsumata, George Buckley, Harufumi Mochizuki, Tohru
Motobayashi and Philip Yeo. The general intent of the Agreement is to limit the liability ofoutside Directors to the aggregate amount of the sums stipulated in each item under Article 425,
Paragraph 1 of the Companies Act.
In addition, the number of shares of the Company owned by each outside Director isdescribed in “5. Directors and Senior Management.”-73-7) Status of accounting audit
Certified public accountants (CPAs) who executed accounting audit of the Company are as follows.
In addition, other CPAs and staff belonging to Ernst & Young ShinNihon LLC assisted execution of
accounting audit works as instructed by the three CPAs.
CPA having executed
accounting audit woks

Audit corporation
to which CPA belongs

Koichi Tsuji

Ernst & Young ShinNihon LLC

Takashi Ouchida

Ernst & Young ShinNihon LLC

Takahiro Saga

Ernst & Young ShinNihon LLC

8) Compensation to Directors and Executive Officers(a) 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 on the determination of
the amount of compensation, etc. of each Director and Executive Officer pursuant toapplicable provisions of the Companies Act concerning companies with the Committee
System.
[Summary of Policy](i) Matters relating to both Directors and Executive Officers
Compensation will be commensurate with the ability required of, and the
responsibilities to be borne by, the Company’s Directors and Executive Officers, taking
into consideration compensation packages at other companies.
(ii) Matters relating to Directors
Compensation for Directors will consist of a monthly salary and a year-end
allowance.
- Monthly salary will be decided by making adjustments to basic salary thatreflect full-time or part-time status, committee membership and position,
travel from place of residence, etc.
- Year-end allowance will be a pre-determined amount equivalent to about
twenty percent of the Director’s annual income based on monthly salary,although this amount may be reduced depending on Company performance.
A Director concurrently serving as an Executive Officer will not be paidcompensation as a Director.
(iii) Matters relating to Executive Officers
Compensation for Executive Officers will consist of a monthly salary and aperformance-linked component.
- Monthly salary will be decided by adjusting a basic amount set in accordancewith the relevant position to reflect the results of an assessment.
- The performance-linked component will be set within a range equivalent toabout thirty percent of the Executive Officer’s annual income, adjusted basedon Company and individual performance.
(iv) Miscellaneous
It was decided at the Compensation Committee meetings held on December 18,
2007 and March 26, 2008 that the compensation structure for Directors and Executive
Officers will be re-examined starting with the compensation for fiscal 2008 and that theretirement allowance will be abolished. The payment of retirement allowance toDirectors and Executive Officers due to the abolition of the retirement allowancesystem will be in an amount determined by the Compensation Committee at the time of
the retirement of a relevant Director or Executive Officer.

-74-

(b) Amount of compensation
Total amount of each type(Millions of yen)
Year-end
allowance andperformanceMonthly salarylinkedcomponent

Category

Total amount ofcompensation, etc.
(Millions of yen)

Directors(excluding outside
Directors)

232

203

28

7

Outside Directors

85

78

6

6

Executive Officers

1,740

1,174

566

29

2,058

1,456

601

42

Total

Number of
persons(Notes) 1. The number of Directors indicated excludes the two Directors who concurrently serve as
Executive Officers.
2. The amount of compensation to Directors includes the monthly salary of the two
Directors, who retired due to expiration of their term of office at the close of the 142ndOrdinary General Meeting of Shareholders held on June 24, 2011, and one Director, who
retired as of September 30, 2011, for their term of office of the fiscal year ended March
31, 2012.
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:

Name

Company

Category

Total amount of each type(Millions of yen)
Total amount ofcompensation,
Year-endetc.
allowance andMonthly(Millions of yen) salaryperformancelinked component

Hiroaki
Hitachi, Ltd.
Executive
173
122
51
Nakanishi(The Company) Officer (Note)(Note)
Although concurrently serving as Director, Mr. Hiroaki Nakanishi does not receive
compensation as Director.

-75-9) Information on shareholdings(a) Equity securities held for purposes other than pure investment
Number of stock names:
412 stock names
Total amount recorded in the balance sheet: ¥195,450 million(b) Stock name, number of shares, amount recorded in the balance sheet, and purpose of holding
regarding equity securities held for purposes other than pure investment(Fiscal year ended March 31, 2011)
Specified investment securities
Balance sheet
amount(Millions of yen)

Stock name

Number ofshares(shares)

Central Japan Railway
Company

9,000

and enhancing business
5,931 Maintaining
transactions

Yungtay Engineering Co., Ltd.

31,817,168

and enhancing business
4,154 Maintaining
relationship

East Japan Railway Company

790,000

and enhancing business
3,653 Maintaining
transactions

Electric Power Development
Co., Ltd.

1,307,580

and enhancing business
3,350 Maintaining
transactions

The Japan Steel Works, LTD.

5,050,000

and enhancing business
3,287 Maintaining
transactions

JX Holdings, Inc.

4,888,149and enhancing business
2,737 Maintaining
transactions

NIPPON TELEGRAPH AND
TELEPHONECORPORATION

612,000

and enhancing business
2,285 Maintaining
transactions

Chubu Electric Power Co., Inc.

1,200,254

and enhancing business
2,220 Maintaining
transactions

The Chugoku Electric Power
Co., Inc.

1,312,622

and enhancing business
2,018 Maintaining
transactions

Shin-Etsu Chemical Co., Ltd.

471,000

and enhancing business
1,947 Maintaining
transactions

NGK INSULATORS, LTD.

1,214,483

and enhancing business
1,805 Maintaining
transactions

The Chiba Bank, Ltd.

3,269,000

and enhancing business
1,523 Maintaining
transactions

The Dai-ichi Life Insurance
Company, Limited

12,100and enhancing business
1,518 Maintaining
transactions

Tohoku Electric Power Co.,Inc.

1,010,000

and enhancing business
1,419 Maintaining
transactions

ShinMaywa Industries, Ltd.

4,000,337

and enhancing business
1,404 Maintaining
transactions

Kyushu Electric Power Co.
Inc.

790,000

and enhancing business
1,283 Maintaining
transactions

6,593,332

and enhancing business
1,101 Maintaining
transactions

Showa Denko K.K.

-76-

Purpose of holdingStock name

Number ofshares(shares)NKSJ Holdings, Inc.

2,000,000

Hokuriku Electric Power
Company

Balance sheet
amount(Millions of yen)

Purpose of holding

and enhancing business
1,086 Maintaining
transactions

and enhancing business
1,085 Maintaining
transactions
and enhancing business
JOYO BANK, Ltd.
2,956,000
966 Maintaining
transactions
and enhancing business
Sapporo Holdings Limited
2,988,000
926 Maintaining
transactions
NIPPON CHEMI-CON
and enhancing business
2,000,000
832 Maintaining
CORPORATION
transactions
TOYO ELECTRIC MFG. CO.
and enhancing business
2,100,000
829 MaintainingLTD.
relationshipand enhancing business
Panasonic Corporation
770,000
814 Maintaining
transactions
and enhancing business
Kintetsu Corporation
2,842,913
759 Maintaining
transactions
and enhancing business
WOWOW INC.
5,260
729 Maintaining
transactions
and enhancing business
Seiko Electric Company, Ltd.
1,630,320
725 Maintaining
transactions
IBJ Leasing Company,
and enhancing business
360,000
720 Maintaining
Limitedtransactions
The Kansai Electric Powerand enhancing business
390,000
706 Maintaining
Co., Inc.
transactions
and enhancing business
TDK Corporation
143,000
702 Maintaining
transactions(Note) Since the number of stock of which balance sheet amount exceeds 1% of the amount of theCompany’s common stock on the balance sheet is less than 30, the top 30 stocks in balance
sheet amount are listed.
576,000-77-

(Fiscal year ended March 31, 2012)
Specified investment securities
Balance sheet
amount(Millions of yen)

Stock name

Number ofshares(shares)

Western Digital Corporation

25,000,000

and enhancing business
85,046 Maintaining
relationship

9,000

Central Japan Railway
Company

Purpose of holding

Yungtay Engineering Co., Ltd.

31,817,168

East Japan Railway Company

790,000

Electric Power Development
Co., Ltd.

1,307,580

The Japan Steel Works, LTD.

5,050,000

The Chugoku Electric Power
Co., Inc.

1,812,622

JX Holdings, Inc.

4,888,149and enhancing business
6,138 Maintaining
transactions
and enhancing business
4,179 Maintaining
relationshipand enhancing business
4,115 Maintaining
transactions
and enhancing business
2,934 Maintaining
transactions
and enhancing business
2,863 Maintaining
transactions
and enhancing business
2,786 Maintaining
transactions
and enhancing business
2,507 Maintaining
transactions

NIPPON TELEGRAPH AND
TELEPHONECORPORATION

612,000

and enhancing business
2,298 Maintaining
transactions

Shin-Etsu Chemical Co., Ltd.

471,000

and enhancing business
2,251 Maintaining
transactions

Chubu Electric Power Co.,Inc.

1,200,254

and enhancing business
1,793 Maintaining
transactions

The Chiba Bank, Ltd.

3,269,000

and enhancing business
1,726 Maintaining
transactions

ShinMaywa Industries, Ltd.

4,000,337

and enhancing business
1,648 Maintaining
transactions

NGK INSULATORS, LTD.

1,214,483

and enhancing business
1,434 Maintaining
transactions

The Dai-ichi Life Insurance
Company, Limited

12,100and enhancing business
1,383 Maintaining
transactions

Showa Denko K.K.

6,593,332

and enhancing business
1,239 Maintaining
transactions

JOYO BANK, Ltd.

2,956,000

and enhancing business
1,120 Maintaining
transactions

Tohoku Electric Power Co.,Inc.

1,010,000

and enhancing business
953 Maintaining
transactions

5,260

and enhancing business
944 Maintaining
transactions

790,000

and enhancing business
931 Maintaining
transactions

WOWOW INC.
Kyushu Electric Power Co.
Inc.

-78-

Balance sheet
amount(Millions ofyen)

Stock name

Number ofshares(shares)NKSJ Holdings, Inc.

500,000

and enhancing business
925 Maintaining
transactions

Sapporo Holdings Limited

2,988,000

and enhancing business
914 Maintaining
transactions

Kintetsu Corporation

2,842,913

and enhancing business
895 Maintaining
transactions

Hokuriku Electric Power
Company

Purpose of holding

and enhancing business
861 Maintaining
transactions
and enhancing business
Seiko Electric Company, Ltd.
1,630,320
831 Maintaining
transactions
IBJ Leasing Company,
and enhancing business
360,000
771 Maintaining
Limitedtransactions
and enhancing business
TOHO GAS CO., LTD.
1,524,471
743 Maintaining
transactions
and enhancing businessWest Japan Railway Company
215,000
714 Maintaining
transactions
TOYO ELECTRIC MFG. CO.
and enhancing business
2,100,000
686 MaintainingLTD.
relationshipand enhancing business
NOF Corporation
1,700,000
685 Maintaining
transactions(Note) Since the number of stock of which balance sheet amount exceeds 1% of the amount of theCompany’s common stock on the balance sheet is less than 30, the top 30 stocks in balance
sheet amount are listed.
576,000(c) Equity securities held for pure investment
None.

-79-

(2) Audit Fees
1) Fees to Certified Public Accountants
Fiscal year ended March 31, 2011
Category

Fiscal year ended March 31, 2012

Fees for audit
services(Millions of yen)

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

485

35

500

126

Consolidated
subsidiaries

1,448

37

1,525

33

Total

1,933

72

2,025

159

2) Other fees
Audit fees paid by the Company and its consolidated subsidiaries to the Company’s accounting
auditor, Ernst & Young ShinNihon LLC Group (including Ernst & Young and its group firms which
belong to the same network as Ernst & Young ShinNihon LLC), were ¥2,673 million for the fiscal
year ended March 31, 2011, and ¥2,956 million for the fiscal year ended March 31, 2012,
respectively. These fees are mainly paid for audit services to its overseas consolidated subsidiaries.
3) Descriptions of non-audit services to the Company
Non-audit services to the Company in the fiscal year ended March 31, 2011 and the fiscal year
ended March 31, 2012 were various advisory services.
4) Policy on determination of audit fees
For determining the amount of audit fees, the Company conducts hearing of the audit plan andverify efficiency of audit services, including the number of days, hours for auditing, the number ofsubjects to be audited and the scope of audit, etc., and appropriateness of the estimate. The Company
also discusses with the accounting auditor taking into consideration the formation of auditors andaudit fees for the preceding fiscal year. In addition, the Audit Committee receives the audit plans of
the accounting auditors and the results of discussion between the auditors and Executive Officers of
the Company and approves the amount of the fees in advance of the Company’s decision.
V. Financial Information
Refer to the consolidated financial statements incorporated in this Annual Securities Report.

-80-VI. Stock-Related Administration for the Company
Fiscal year

From April 1 to March 31

Ordinary General
Meeting of
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 End of March and end of September
Number of shares
1,000 sharesconstituting one unit
Purchase and sale ofshares less than one unit
(Special account)Handling office
Nippon Building 4th Floor, 6-2, Otemachi 2-chome, Chiyoda-ku, Tokyo
Main Office, Tokyo Securities Transfer Agent Co., Ltd.
(Special account)
Transfer agent
Tokyo Securities Transfer Agent Co., Ltd.
Forward office-

Purchasing andselling fee

Free of charge

The Company’s method of public notice is through electronic public notice.
if the Company cannot use the above-mentioned method of public notice
Method of public notice However,
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 Company’s articles of incorporation, distribution of surplus through dividend payment,
if any, will be made to shareholders of record as of March 31 and September 30 of each year. In
addition, the Company may make further distributions of surplus to shareholders of record as ofanother record date.
2. The Company’s articles of incorporation provide that a holder of shares representing less than
one unit does not have any other rights of a shareholder in respect of those shares, other thanthose 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
when such rights are granted to shareholders; or(3)
Rights stipulated in the Company’s Articles of Incorporation-81-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, 2012 to the filing date of the Annual Securities Report.
(1)

Annual Securities Report and documents attached, and Confirmation
Letter(The 142nd business term (from April 1, 2010 to March 31, 2011))

Filed with the Director of
the Kanto Local Finance
Bureau onJune 24, 2011

(2)

Internal Control Report

Filed with the Director of
the Kanto Local Finance
Bureau onJune 24, 2011

(3)

Amendment to Annual Securities Report and Confirmation Letter(Amendment to Annual Securities Report (The 141st business term(from April 1, 2009 to March 31, 2010)))

Filed with the Director of
the Kanto Local Finance
Bureau onJune 24, 2011

(4)

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 onJune 27, 2011

(5)

Shelf Registration Statement (Debentures) and Documents Attached(6)

Quarterly Report and Confirmation Letter(The First Quarter of the 143rd business term (from April 1, 2011 toJune 30, 2011))

Filed with the Director of
the Kanto Local Finance
Bureau on
July 15, 2011
Filed with the Director of
the Kanto Local Finance
Bureau on August 8, 2011

(7)

Quarterly Report and Confirmation Letter(The Second Quarter of the 143rd business term (from July 1, 2011
to September 30, 2011))(8)

Extraordinary Report(pursuant to Article 19, Paragraph 2, Item 12 of the Cabinet Office
Ordinance Concerning Disclosure of Corporate Affairs, etc.)(9)Extraordinary Report(pursuant to Article 19, Paragraph 2, Item 9 of the Cabinet Office
Ordinance Concerning Disclosure of Corporate Affairs, etc.)(10)

Quarterly Report and Confirmation Letter(The Third Quarter of the 143rd business term (from October 1, 2011
to December 31, 2011))

Filed with the Director of
the Kanto Local Finance
Bureau on February 13,
2012

(11)

Extraordinary Report(pursuant to Article 19, Paragraph 2, Items 3, 12 and 19 of the
Cabinet Office Ordinance Concerning Disclosure of Corporate
Affairs, etc.)

Filed with the Director of
the Kanto Local Finance
Bureau on
March 9, 2012(12)

Amended Shelf Registration Statement(Amended Shelf Registration Statement concerning the Shelf
Registration Statement (5) above)

Filed with the Director of
the Kanto Local Finance
Bureau on
August 8, 2011
November 14, 2011
January 17, 2012
February 3, 2012
February 13, 2012
March 9, 2012-82-

Filed with the Director of
the Kanto Local Finance
Bureau on November 14,
2011
Filed with the Director of
the Kanto Local Finance
Bureau on January 17,
2012
Filed with the Director of
the Kanto Local Finance
Bureau on February 3,
2012Part II

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

-83-Consolidated Financial Statements
Page
NumberReports of Independent Registered Public Accounting Firm

F-2

Consolidated Financial Statements of Hitachi, Ltd. and Subsidiaries:
Consolidated Balance Sheets as of March 31, 2012 and 2011

F-4

Consolidated Statements of Operations for the years ended
March 31, 2012, 2011 and 2010

F-6

Consolidated Statements of Equity for the years ended
March 31, 2012, 2011 and 2010

F-7

Consolidated Statements of Cash Flows for the years ended
March 31, 2012, 2011 and 2010

F-10

Notes to Consolidated Financial Statements

F-12

F-1

Report of Independent Registered Public Accounting Firm
To the Stockholders and Board of Directors ofHitachi, Ltd.:We have audited the accompanying consolidated balance sheets of Hitachi, Ltd. and subsidiaries (the “Company”) as of March
31, 2012 and 2011, and the related consolidated statements of operations, equity, and cash flows for each of the three years in the
period ended March 31, 2012. These financial statements are the responsibility of the Company’s management. Our
responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States).
Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosuresin the financial statements. An audit also includes assessing the accounting principles used and significant estimates made bymanagement, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonablebasis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial positionof Hitachi, Ltd. and subsidiaries at March 31, 2012 and 2011, and the consolidated results of their operations and their cash flows
for each of the three years in the period ended March 31, 2012, in conformity with U.S. generally accepted accounting principles.
As discussed in Note 2 (y), the Company changed its method of accounting for transfers of financial assets and consolidation ofvariable interest entities as a result of the adoption of the amendments to the Accounting Standards Codification resulting fromAccounting Standards Update (ASU) 2009-16, “Accounting for Transfers of Financial Assets” and ASU 2009-17, “Improvements
to Financial Reporting by Enterprises Involved with Variable Interest Entities” effective April 1, 2010.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States),
Hitachi, Ltd. and subsidiaries’ internal control over financial reporting as of March 31, 2012, based on criteria established inInternal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission andour report dated June 22, 2012 expressed an unqualified opinion thereon.
/s/ Ernst & Young ShinNihon LLC
Tokyo, Japan
June 22, 2012

F-2

Report of Independent Registered Public Accounting Firm
To the Stockholders and Board of Directors ofHitachi, Ltd.:We have audited Hitachi, Ltd. and subsidiaries’ internal control over financial reporting as of March 31, 2012, based on criteria
established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway
Commission (the COSO criteria). Hitachi, Ltd. and subsidiaries’ management is responsible for maintaining effective internal
control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in
the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an
opinion on the company’s internal control over financial reporting based on our audit.
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States).
Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control
over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal
control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating
effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary inthe circumstances. We believe that our audit provides a reasonable basis for our opinion.
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding thereliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles. A company’s internal control over financial reporting includes those policies and proceduresthat (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted accounting principles, and that receipts andexpenditures of the company are being made only in accordance with authorizations of management and directors of thecompany; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use ordisposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
In our opinion, Hitachi, Ltd. and subsidiaries maintained, in all material respects, effective internal control over financial reporting
as of March 31, 2012, based on the COSO criteria.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), theaccompanying consolidated balance sheets of Hitachi, Ltd. and subsidiaries as of March 31, 2012 and 2011, and the related
consolidated statements of operations, equity, and cash flows for each of the three years in the period ended March 31, 2012, andour report dated June 22, 2012 expressed an unqualified opinion thereon.
/s/ Ernst & Young ShinNihon LLC
Tokyo, Japan
June 22, 2012

F-3

HITACHI, LTD.
AND SUBSIDIARIES
Consolidated Balance Sheets
March 31, 2012 and 2011

Assets2012

Current assets:
Cash and cash equivalents (note 6)
Short-term investments (note 3)
Trade receivables:
Notes (notes 6, 17 and 28)
Accounts (notes 6 and 28)
Allowance for doubtful receivables (note 28)
Net trade receivables
Investments in leases (notes 5, 6 and 28)
Current portion of financial assets transferred
to consolidated securitization entities (notes 6 and 28)
Inventories (note 4)
Prepaid expenses and other current assets (notes 6 and 8)
Total current assets
Investments and advances,including affiliated companies (notes 3 and 6)
Property, plant and equipment (note 5):Land
Buildings
Machinery and equipment
Construction in progress
Less accumulated depreciation
Net property, plant and equipment
Intangible assets (note 7):
Goodwill
Other intangible assets
Total intangible assets
Financial assets transferred
to consolidated securitization entities (notes 6 and 28)
Other assets (notes 5, 6, 8, 10 and 28)
Total assets

See accompanying notes to consolidated financial statements.
F-4

Yen (millions)2011

619,577
11,562554,810
16,598

119,1622,255,490(31,182)
2,343,470

101,524
2,026,158(36,763)
2,090,919

235,744

228,346

86,071
1,413,252
452,510
5,162,186

183,559
1,341,768
484,029
4,900,029

744,493

614,145464,093
1,847,292
5,109,865
90,687
7,511,937
5,486,399
2,025,538

471,155
1,909,825
5,528,889
53,558
7,963,427
5,852,157
2,111,270

214,707395,255
609,962

171,500
356,518
528,018

205,411
670,936
9,418,526

304,160
728,0079,185,629

HITACHI, LTD.
AND SUBSIDIARIES
Consolidated Balance Sheets (continued)
March 31, 2012 and 2011

Yen (millions)
2012
2011

Liabilities and Equity
Current liabilities:
Short-term debt (note 9)
Current portion of long-term debt (notes 5, 6 and 9)
Current portion of non-recourse borrowingsof consolidated securitization entities (note 6)
Trade payables:
Notes
Accounts
Accrued expenses (notes 10 and 17)
Income taxes (note 8)
Advances received
Other current liabilities (notes 6 and 8)
Total current liabilities
Long-term debt (notes 5, 6 and 9)
Non-recourse borrowings of consolidated
securitization entities (note 6)
Retirement and severance benefits (note 10)
Other liabilities (note 8)
Total liabilities

531,446
384,110472,588338,218

97,004

190,868

24,0251,301,759
896,096
75,217362,895
438,321
4,110,873

20,4301,236,758
933,918
73,514
395,605
426,925
4,088,824

1,248,851

1,300,311

135,043
890,977
258,787
6,644,531

219,566
891,815
243,724
6,744,240

427,775
600,243
1,242,110(496,896)(1,450)1,771,782
1,002,213
2,773,995

409,129
603,133
922,036(493,062)(1,371)
1,439,865
1,001,524
2,441,389

9,418,526

9,185,629

Commitments and contingencies (note 17)
Equity:Common stock
4,637,785,317 and 4,520,144,964 shares issued as ofMarch 31, 2012 and 2011, respectively (notes 9 and 11)
Capital surplus (notes 9, 11 and 12)
Legal reserve and retained earnings (notes 6 and 13)
Accumulated other comprehensive loss (notes 6 and 15)
Treasury stock, at cost (note 14)
Total Hitachi, Ltd. stockholders’ equity
Noncontrolling interests
Total equity
Total liabilities and equity

See accompanying notes to consolidated financial statements.
F-5

HITACHI, LTD.
AND SUBSIDIARIES
Consolidated Statements of Operations
Years ended March 31, 2012, 2011 and 2010

Revenues:
Product sales
Financial and other services
Total revenues
Cost of sales:
Product sales
Financial and other services
Total cost of sales
Selling, general and administrative expenses

2012

Yen (millions)
2011

2010

8,528,292
1,137,591
9,665,883

8,376,287
939,520
9,315,807

8,044,971
923,575
8,968,546(6,447,009) (6,292,555) (6,185,937)(674,878)(663,318)(831,962)(7,278,971) (6,967,433) (6,849,255)(1,974,632) (1,903,866) (1,917,132)

Impairment losses for long-lived assets (note 18)
Restructuring charges (note 19)
Interest income
Dividend income
Gains on sales of stock by affiliated companies
Other income (note 20)
Interest charges
Other deductions (note 20)
Equity in net loss of affiliated companies
Income before income taxes(31,841)(23,097)
12,653
5,551
228,906(28,141)(3,010)(15,571)557,730(35,170)(5,757)
13,267
4,240
69,730(24,878)(13,597)(20,142)432,201(25,196)(25,154)
12,017
5,799
183
186
(26,252)(21,976)(58,186)
63,580

Income taxes (note 8)
Net income (loss)(144,922)
412,808(129,075)
303,126(147,971)(84,391)

Less net income attributable to noncontrolling interests
Net income (loss) attributable to Hitachi, Ltd.

65,629347,179

64,257
238,869

22,570(106,961)

76.81
71.86

Yen
52.89
49.38

(29.20)(29.20)Net income (loss) attributable to Hitachi, Ltd. stockholders per
share (note 21):
Basic
DilutedSee accompanying notes to consolidated financial statements.

F-6

HITACHI, LTD.
AND SUBSIDIARIES
Consolidated Statements of Equity
Years ended March 31, 2012, 2011 and 20102012

Common stock (notes 9 and 11):
Balance at beginning of year
Change in common stock:
Issuance of common stock
Conversion of convertible bonds
Total change in common stock
Balance at end of year
Capital surplus (notes 9, 11 and 12):
Balance at beginning of year
Change in capital surplus:
Issuance of common stock
Conversion of convertible bonds
Equity transactions and other
Sales of treasury stock
Total change in capital surplus
Balance at end of year
Legal reserve and retained earnings (notes 6 and 13):
Balance at beginning of year
Change in legal reserve and retained earnings:
Effect on retained earnings due to consolidation of securitization
entities upon initial adoption of the amended provisions of ASC 810
Net income (loss)
Dividends to Hitachi, Ltd. stockholders
Total change in legal reserve and retained earnings
Balance at end of year
Accumulated other comprehensive loss (notes 6 and 15):
Balance at beginning of year
Change in accumulated other comprehensive loss:
Effect on accumulated other comprehensive loss due to consolidation of
securitization entities upon initial adoption of the amended provisionsof ASC 810
Equity transactions and other
Other comprehensive income (loss), net of reclassification adjustments
Total change in accumulated other comprehensive loss
Balance at end of year
Treasury stock, at cost (note 14):
Balance at beginning of year
Change in treasury stock, at cost:
Acquisition of treasury stock
Sales of treasury stock
Total change in treasury stock, at cost
Balance at end of year

See accompanying notes to consolidated financial statements.

F-7

Yen (millions)
2011

2010

409,129

408,810282,033

18,646
18,646
427,775

319
319
409,129

126,7761
126,777
408,810603,133

620,577

560,066

18,646(21,527)(9 )(2,890)600,243319(8,229)(9,534)(17,444)
603,133

125,6441(64,998)(136)
60,511
620,577

922,036

713,479

820,440

347,179(27,105)
320,074
1,242,110(7,732)
238,869(22,580)
208,557
922,036(106,961)(106,961)
713,479(493,062)(432,057)(586,351)

210(4,044)(3,834)(496,896)(2,977)(191)(57,837)(61,005)(493,062)(14,132)
168,426
154,294(432,057)(1,371)(26,151)(26,237)

(126)
47
(79)
(1,450)(183)
24,96324,780(1,371)

(115)
201
86
(26,151)

HITACHI, LTD.
AND SUBSIDIARIES
Consolidated Statements of Equity (continued)
Years ended March 31, 2012, 2011 and 2010

Total Hitachi, Ltd. stockholders’ equity:
Balance at beginning of year
Change in total Hitachi, Ltd. stockholders’ equity:
Effect on retained earnings due to consolidation of securitization
entities upon initial adoption of the amended provisions of ASC 810
Effect on accumulated other comprehensive loss due to consolidation of
securitization entities upon initial adoption of the amended provisionsof ASC 810
Issuance of common stock
Conversion of convertible bonds
Equity transactions and other
Net income (loss)
Other comprehensive income (loss), net of reclassification adjustments
Dividends to Hitachi, Ltd. stockholders
Acquisition of treasury stock
Sales of treasury stock
Total change in total Hitachi, Ltd. stockholders’ equity
Balance at end of year

Noncontrolling interests (notes 6 and 12):
Balance at beginning of year
Change in noncontrolling interests:
Effect on retained earnings due to consolidation of securitization
entities upon initial adoption of the amended provisions of ASC 810
Effect on accumulated other comprehensive loss due to consolidation of
securitization entities upon initial adoption of the amended provisionsof ASC 810
Equity transactions and other
Net income
Other comprehensive income (loss), net of reclassification adjustments
Dividends to noncontrolling interests
Total change in noncontrolling interests
Balance at end of year
Total equity:
Balance at beginning of year
Change in total equity:
Effect on retained earnings due to consolidation of securitization
entities upon initial adoption of the amended provisions of ASC 810
Effect on accumulated other comprehensive loss due to consolidation of
securitization entities upon initial adoption of the amended provisionsof ASC 810
Issuance of common stock
Conversion of convertible bonds
Equity transactions and other
Net income (loss)
Other comprehensive income (loss), net of reclassification adjustments
Dividends to Hitachi, Ltd. stockholders
Dividends to noncontrolling interests
Acquisition of treasury stock
Sales of treasury stock
Total change in total equity
Balance at end of year

See accompanying notes to consolidated financial statements.
F-8

2012

Yen (millions)
2011

2010

1,439,865

1,284,658

1,049,951-(7,732)-37,292(21,317)347,179(4,044)(27,105)(126)38
331,917
1,771,782(2,977)638(8,420)238,869(57,837)(22,580)(183)
15,429155,207
1,439,865

252,4202(79,130)(106,961)
168,426(115)
65
234,707
1,284,658

1,001,524

983,187

1,129,401-(5,225)-(26,464)
65,629(16,183)(22,293)689
1,002,213(1,985)(1,696)64,257(16,830)(20,184)
18,3371,001,524(174,675)
22,57030,509(24,618)(146,214)
983,187

2,441,389

2,267,845

2,179,352-(12,957)-

37,292(47,781)
412,808(20,227)(27,105)(22,293)(126)
38332,606
2,773,995(4,962)
638(10,116)
303,126(74,667)(22,580)(20,184)(183)
15,429173,5442,441,389

252,4202(253,805)(84,391)
198,935(24,618)(115)
65
88,493
2,267,845

HITACHI, LTD.
AND SUBSIDIARIES
Consolidated Statements of Equity (continued)
Years ended March 31, 2012, 2011 and 2010

Comprehensive income attributable to Hitachi, Ltd. (note 15):
Net income (loss) attributable to Hitachi, Ltd.
Other comprehensive income (loss) attributable to Hitachi, Ltd. arisingduring the year:
Foreign currency translation adjustments
Pension liability adjustments
Net unrealized holding gain (loss) on available-for-sale securities
Cash flow hedges
Total other comprehensive income (loss) attributable to Hitachi,Ltd. arising during the year
Comprehensive income attributable to Hitachi, Ltd.
Comprehensive income attributable to noncontrolling interests (note 15):
Net income attributable to noncontrolling interests
Other comprehensive income (loss) attributable to noncontrolling interests
arising during the year:
Foreign currency translation adjustments
Pension liability adjustments
Net unrealized holding gain (loss) on available-for-sale securities
Cash flow hedges
Total other comprehensive income (loss) attributable tononcontrolling interests arising during the year
Comprehensive income attributable to noncontrolling interests
Total comprehensive income (note 15):
Net income (loss)
Other comprehensive income (loss) arising during the year:
Foreign currency translation adjustments
Pension liability adjustments
Net unrealized holding gain (loss) on available-for-sale securities
Cash flow hedges
Total other comprehensive income (loss) arising during the year
Total comprehensive income

See accompanying notes to consolidated financial statements.

F-9

2012

Yen (millions)
2011

2010

347,179

238,869(106,961)

31,603(37,895)
3,574(1,326)(69,194)
15,852(5,728)
1,233

4,289
141,761
23,209(833)(4,044)343.135(57,837)
181,032

168,426
61,46565,62964,257

22,570(8,141)(6,254)(612)(1,176)(18,185)
224
376
755

2,618
22,262
5,467
162(16,183)
49,446(16,830)
47,42730,50953,079412,808

303,126(84,391)

23,462(44,149)
2,962(2,502)(20,227)
392,581(87,379)
16,076(5,352)
1,988(74,667)
228,459

6,907
164,023
28,676(671)
198,935
114,544HITACHI, LTD.
AND SUBSIDIARIES
Consolidated Statements of Cash Flows
Years ended March 31, 2012, 2011 and 2010

Cash flows from operating activities (note 23):
Net income (loss)
Adjustments to reconcile net income (loss) to net cash provided
by operating activities:
Depreciation
Amortization
Impairment losses for long-lived assets
Deferred income taxes
Equity in net loss of affiliated companies
Gain on sale of investments in securities and other
Impairment of investments in securities(Gain) loss on disposal of rental assets and other property(Increase) decrease in receivables(Increase) decrease in inventories
Decrease in prepaid expenses and other current assets
Increase in payables
Increase (decrease) in accrued expenses and retirement and severance
benefits
Increase in accrued income taxes
Decrease in other liabilities
Net change in lease receivables related to the Company’s and its
subsidiaries’ products
Other
Net cash provided by operating activities
Cash flows from investing activities (note 23):
Capital expenditures
Purchase of intangible assets
Purchase of tangible assets and software to be leased
Proceeds from disposal of property, plant and equipment
Proceeds from disposal of tangible assets and software to be leased
Collection of investments in leases
Purchase of investments in securities and shares of newly consolidated
subsidiaries
Proceeds from sale of investments in securities and shares of consolidated
subsidiaries resulting in deconsolidation
Refund of deposit received for sale of investment in affiliated company
Other
Net cash used in investing activities

See accompanying notes to consolidated financial statements.

F-10

2012

Yen (millions)
2011

2010

412,808

303,126(84,391)

360,358
119,308
31,841
21,50915,571(228,115)
15,096(18,627)(259,211)(162,594)
987
119,177

382,732
115,037
35,1703,952
20,142(72,987)
11,407
4,387
121,606(171,275)
1,964
47,512441,697
116,065
25,19660,44058,186(6,061)
9,585
22,670(138,785)
205,848
8,687
62,295(18,430)
7,103(13,812)22,871
3,066(26,118)

69,724
17,249(83,519)

27,012
17,174447,155

19,523
19,439841,554(17,935)
31,348798,299(337,502)(106,042)(269,350)
47,697
17,447
244,446(254,460)(95,500)(268,446)
27,427
19,866286,356(286,259)(85,092)(271,341)
20,821
22,672
172,327(151,413)(122,555)(156,989)

331,00728,126(195,584)

147,941(43,550)
42,575(260,346)

27,41025,856(530,595)

HITACHI, LTD.
AND SUBSIDIARIES
Consolidated Statements of Cash Flows (continued)
Years ended March 31, 2012, 2011 and 20102012

Yen (millions)
2011

2010

70,105
388,991(544,841)
736(27,018)(22,206)(126)
38

75,535
179,324(790,328)
415(22,466)(19,575)(183)
52(551,044)
656,768(565,212)
252,420504(134)(24,852)(115)
65

Cash flows from financing activities (note 23):
Increase (decrease) in short-term debt, net
Proceeds from long-term debt
Payments on long-term debt
Proceeds from issuance of common stock
Proceeds from sale of common stock by subsidiaries
Dividends paid to Hitachi, Ltd. stockholders
Dividends paid to noncontrolling interests
Acquisition of common stock for treasury
Proceeds from sales of treasury stock
Purchase of shares of consolidated subsidiaries from noncontrolling interest
holders
Proceeds from sale of shares of consolidated subsidiaries to noncontrollinginterest holders
Other
Net cash used in financing activities(39,230)(3,043)(261,113)

6,188
(475)
(167,838)

229(4,136)（584,176）

1,886(11,517)（502,344）

Effect of consolidation of securitization entities upon initial adoption of theamended provisions of ASC 810 (note 6)
Effect of exchange rate changes on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year

(18,966)
64,767554,810619,577

12,030(31,836)(22,774)
577,584
554,810

4,298(230,342)
807,926
577,584

See accompanying notes to consolidated financial statements.

F-11

HITACHI, LTD.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements(1)

Nature of Operations
Hitachi, Ltd. (the Company) is a Japanese corporation, whose principal office is located in Japan. The
Company’s and its subsidiaries’ businesses are diverse, and include information and telecommunication
systems, power systems, social infrastructure and industrial systems, electronic systems and equipment,
construction machinery, high functional materials and components, automotive systems, components anddevices, digital media and consumer products, financial services, and others including logistics services.

(2)

Basis of Presentation and Summary of Significant Accounting Policies(a) Basis of Presentation
The Company and its domestic subsidiaries keep their books of account in accordance with the financial
accounting standards of Japan, and its foreign subsidiaries in accordance with those of the countries of their
domicile.
The consolidated financial statements presented herein have been prepared to reflect the adjustments which
are necessary to conform to accounting principles generally accepted in the United States of America.
Management of the Company has made a number of estimates and assumptions relating to the reporting ofassets and liabilities and the disclosure of contingent assets and liabilities to prepare these financial
statements. Actual results could differ from those estimates.
(b) Principles of Consolidation
The consolidated financial statements include the accounts of the Company, its majority-owned
subsidiaries and all variable interest entities (VIEs) for which the Company or any of its consolidated
entities is the primary beneficiary. The definition of a VIE is included in Accounting Standards
Codification (ASC) 810, “Consolidation.” This guidance addresses how a business enterprise should
evaluate whether it has a controlling financial interest in an entity through means other than voting rights
and accordingly should consolidate the entity. The consolidated financial statements include accounts ofcertain subsidiaries whose closing dates differ from March 31 by 93 days or less to either comply withlocal statutory requirements or facilitate timely reporting. There have been no significant transactions,which would materially affect the Company’s financial position and results of operations, with such
subsidiaries during the period from their closing dates to March 31. Intercompany accounts and significant
intercompany transactions have been eliminated in consolidation.
Investments in corporate joint ventures and affiliated companies, where the Company has the ability to
exercise significant influence over operational and financial policies generally by holding 20 - 50%
ownership, are accounted for under the equity method. Investments where the Company does not havesignificant influence are accounted for under the cost method.
(c) Cash Equivalents
The Company considers all highly liquid investments with insignificant risk of changes in value whichhave original maturities of three months or less when purchased to be cash equivalents.

F-12(Continued)

HITACHI, LTD.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements(d) Allowance for Doubtful Receivables
Allowance for doubtful receivables, including both trade receivables as well as investments in leases, isthe Company’s and subsidiaries’ best estimate of the amount of our incurred losses (that is those amounts
with regards to which collection is not probable based on current information). Assessing the ultimate
realization of these receivables, based on historical experience and analyses, including the current
creditworthiness of each customer, requires a considerable amount of judgment. Each company in ourconsolidated group considers factors which are relevant to its business and circumstances, including
business practices that are unique to the respective country or region in which it operates within thecontext of our group policy. Such factors which have been present on a historical basis and havecontributed to losses at our subsidiaries in the past include: historical credit loss experience; existence of
overdue payments; extended payment terms; negative evaluation by third-party credit rating agencies;
excessive debt; and evaluation of deteriorating financial position and operating results. Account balances
are generally written off against the allowance only after all means of collection have been exhausted andthe potential for recovery is considered remote. Write-offs generally occur only when a debtor entersbankruptcy or liquidation because at that time collection efforts will have been exhausted. This policy
results in potentially long collection cycles.
(e) Foreign Currency Translation
Foreign currency financial statements have been translated in accordance with ASC 830, “Foreign
Currency Matters.” Under this guidance, the assets and liabilities of the Company’s subsidiaries locatedoutside Japan are translated into Japanese yen at the rates of exchange in effect at the balance sheet date.
Income and expense items are translated at the average exchange rates prevailing during the year. Gains
and losses resulting from foreign currency transactions are included in other income (deductions), andthose resulting from translation of financial statements are excluded from the consolidated statements ofoperations and included in accumulated other comprehensive loss.
(f) Investments in Securities and Affiliated Companies
Equity securities that do not have readily determinable fair values, except for equity-method investments,
are accounted for under the cost method. The Company classifies investments in equity securities thathave readily determinable fair values and all investments in debt securities in three categories:
held-to-maturity securities, trading securities and available-for-sale securities.
Held-to-maturity securities are debt securities that the Company has the positive intent and ability to holdto maturity. Trading securities are debt and equity securities that are bought and held principally for the
purpose of selling them in the near term. Available-for-sale securities are debt and equity securities notclassified as either held-to-maturity securities or trading securities.
Held-to-maturity securities are reported at amortized cost. Trading securities are reported at fair value,with unrealized gains and losses included in earnings. Available-for-sale securities are reported at fairvalue, with unrealized gains and losses excluded from earnings and reported in accumulated othercomprehensive loss.
On a periodic basis, but no less frequently than at the end of each quarter period, the Company evaluatesavailable-for-sale securities, held-to-maturity securities and cost-method investments for possible
impairment. If the fair value of any available-for-sale security, held-to-maturity security or cost-method
investment is less than the cost basis or the amortized cost basis, the Company assesses whether the
F-13(Continued)

HITACHI, LTD.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements

impairment is temporary or other-than-temporary. Fair value is determined based on quoted market prices,
projected discounted cash flows or other valuation techniques as appropriate. For certain cost-method
investments for which it is not practicable to estimate the fair value, if an event or change in circumstances
has occurred that may have a significant adverse effect on the fair value of the investment, the Company
estimates the fair value of such investments.
Factors considered in determining whether an impairment of an equity security classified asavailable-for-sale or a cost-method investment is temporary or other-than-temporary include: the length oftime and extent to which the fair value of the investment has been less than cost, the financial conditionand near-term prospects of the issuer, and the intent and ability to retain the investment in the issuer for aperiod of time sufficient to allow for any anticipated recovery in fair value. A decline in fair value of anequity security classified as an available-for-sale security or cost-method investment below its cost basisthat is deemed to be other-than-temporary results in a write-down of the cost basis to fair value as a new
cost basis and the amount of the write-down is included in earnings. The new cost basis of the investment
is not adjusted for subsequent recoveries in fair value.
Factors considered in assessing whether an impairment of a debt security classified as either
available-for-sale or held-to-maturity is temporary or other-than-temporary include: whether there is intent
to sell the impaired debt security, it is more likely than not that the impaired debt security will be required
to be sold before recovery, or the holder is not expected to recover the entire amortized cost basis of the
security for any other reason. If the best estimate of the present value of cash flows expected to becollected is less than the amortized cost basis of the security, such a difference represents the credit loss
component of the impairment. If an other-than-temporary impairment has occurred, the amount of theother-than-temporary impairment recognized in earnings depends on whether the Company intends to sell
the security or it is more likely than not that the Company will be required to sell the security before
recovery of its amortized cost basis less any current-period credit loss. If the Company does not intend tosell the security and it is not more likely than not that the Company will be required to sell the security
before recovery of its amortized cost basis less any current-period loss, the component of theother-than-temporary impairment related to the credit loss is recognized in earnings and the component of
the other-than-temporary impairment related to other factors is recognized in accumulated othercomprehensive loss. The previous amortized cost basis less the other-than-temporary impairment
recognized in earnings becomes the new amortized cost basis of the investment. That new amortized costbasis is not adjusted for subsequent recoveries in fair value. However, the new amortized cost basis isadjusted for accretion and amortization as if the debt security had been purchased on the date of theother-than temporary impairment at an amortized cost basis equal to the previous amortized cost basis lessthe other-than-temporary impairment recognized in earnings.
On a periodic basis, but no less frequently than at the end of each quarter period, the Company evaluates
the carrying amount of its ownership interests in equity-method investees for possible impairment. Factors
considered in assessing whether an indication of other-than-temporary impairment exists include theachievement of business plan objectives and milestones including cash flow projections and the results ofplanned financing activities, the financial condition and prospects of each investee company, the fair valueof the ownership interest relative to the carrying amount of the investment, the period of time during
which the fair value of the ownership interest has been below the carrying amount of the investment andother relevant factors. Impairment to be recognized is measured based on the amount by which the
F-14(Continued)

HITACHI, LTD.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements

carrying amount of the investment exceeds the fair value of the investment. Fair value is determined basedon quoted market prices, projected discounted cash flows or other valuation techniques as appropriate.
The cost of a security sold or the amount reclassified out of accumulated other comprehensive loss into
earnings is determined by the average cost method.
(g) Securitizations
The Company and certain subsidiaries have a number of securitization programs. Under those programs,
certain financial assets such as lease receivables, trade receivables and others are sold to Special Purpose
Entities (SPEs) which are mainly funded through the issuance of asset-backed securities to investors.
When a transfer of financial assets is eligible to be accounted for as a sale under ASC 860, “Transfers andServicing,” the transferred financial assets are derecognized. The Company and its subsidiaries recognize
a gain or loss for the difference between the fair value of assets obtained and liabilities incurred in the saleand the carrying amount of the transferred financial assets when the transaction is consummated. Initially
recorded at fair value in the period of securitizations, the amount of retained interests that cancontractually be prepaid or otherwise settled in such a way that the holder would not recover all of its
recorded interests is subsequently remeasured at fair value as of the balance sheet date in the same manner
as available-for-sale securities.
Fair values are based on the present value of estimated future cash flows which take into consideration
various factors such as expected credit loss and others.
(h) Inventories
Inventories are stated at the lower of cost or market. Cost is determined by the specific identification
method for job order inventories and generally by the average cost method for raw materials and otherinventories.
(i) Property, Plant and Equipment
Property, plant and equipment are stated at cost. Property, plant and equipment are principally depreciatedusing the declining-balance method, except for some assets which are depreciated using the straight-line
method, mainly over the following estimated useful lives:
Buildings
Buildings and building equipment
Structures
Machinery and equipment
Machinery
VehiclesTools, furniture and fixtures

3 to 50 years
7 to 60 years
4 to 15 years
4 to 7 years
2 to 20 years(j) Goodwill and Other Intangible Assets
The Company tests goodwill and indefinite-lived intangible assets for impairment at least annually. The
Company performs its annual impairment test mainly during the fourth quarter after the annual forecastingprocess is completed. Furthermore, goodwill is reviewed for impairment whenever events or changes incircumstances indicate that the carrying value may not be recoverable. The impairment test consists of two
steps. In the first step, the Company compares the fair value of each reporting unit to its carrying value. The
F-15(Continued)

HITACHI, LTD.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements

Company has certain operating segments and, in identifying the reporting unit for the purpose of testing
goodwill for impairment, considers disaggregating those operating segments into economically dissimilar
components based on specific facts and circumstances, especially the level at which performance of theoperating segments are reviewed, how many businesses are included in the operating segments, and theeconomic similarity of those businesses. In assigning goodwill to reporting units, the Company considers
which reporting units are expected to benefit from the synergies of the combination in a manner similar to
how the amount of goodwill is recognized in a business combination. The Company determines the fairvalue of its reporting units mainly using an income approach (i.e., present value technique). When
determining such fair value, the Company may, however, also use the fair value of that unit based on acomparison of comparable publicly traded companies or based on that unit’s stand-alone market
capitalization. If the carrying value of the net assets assigned to the reporting unit exceeds the fair value ofthe reporting unit, then the Company performs the second step of the impairment test in order to determine
the implied fair value of the reporting unit’s goodwill. If the carrying value of a reporting unit’s goodwill
exceeds its implied fair value, the Company records an impairment loss equal to the difference. Intangible
assets with finite useful lives are amortized over their respective estimated useful lives on either astraight-line basis or the method that reflects the pattern in which the economic benefits of the intangible
assets are consumed or otherwise used up. The principal estimated useful lives are as follows:
Software
Software for internal use
PatentsOther

2 to 9 years
3 to 10 years
4 to 8 years
3 to 25 years(k) Capitalized Software Costs
Costs incurred for computer software developed or obtained for internal use are capitalized and amortizedon a straight-line basis over their estimated useful lives in accordance with ASC 350, “Intangibles –Goodwill and Other.” In addition, the Company and its subsidiaries develop certain computer software to
be sold where related costs are capitalized after establishment of technological feasibility in accordancewith ASC 985, “Software.” The annual amortization of such capitalized costs is the greater of the amountcomputed using the ratio of each software’s current year gross revenues to the total of current andanticipated future gross revenues or the straight-line method over the remaining estimated economic life ofeach software product.
(l) Impairment of Long-Lived Assets
The Company reviews the carrying value of long-lived assets or a related group of assets to be held andused, including intangible assets with finite useful lives, for impairment whenever events or circumstances
occur that indicate that the carrying value of the assets may not be recoverable. The assets are considered
to be impaired when estimated undiscounted cash flows expected to result from the use of the assets andtheir eventual disposition is less than their carrying values. The impairment losses are measured as theamount by which the carrying value of the asset or asset group exceeds the fair value. In determining thefair value, the Company uses available quoted market prices and present value techniques, if appropriate,based on the estimated future cash flows expected to result from the use of the assets and their eventual
disposition.

F-16(Continued)

HITACHI, LTD.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements(m) Retirement and Severance Benefits
The Company accounts for retirement and severance benefits in accordance with ASC 715,
“Compensation – Retirement Benefits.” Actuarial gains and losses and prior service benefit and cost
included in accumulated other comprehensive loss are amortized using the straight-line method over the
average remaining service period of active employees.
(n) Environmental Liabilities
The cost for environmental remediation liabilities is accrued when it is probable that the Company will
incur environmental assessments or cleanup costs and the amounts can be reasonably estimated. The costfor liabilities is estimated based on the circumstances, the available information and current law, and theliabilities are not discounted to their present values.
(o) Derivative Financial Instruments
The Company accounts for derivative financial instruments in accordance with ASC 815, “Derivatives
and Hedging.” This guidance requires that all derivative financial instruments, such as forward exchange
and interest rate swap contracts, be recognized in the financial statements as either assets or liabilities andmeasured at fair value regardless of the purpose or intent for holding them.
The Company designates and accounts for hedging derivatives as follows:• “Fair value” hedge: a hedge of the fair value of a recognized asset or liability or of an unrecognizedfirm commitment. The changes in fair value of the recognized assets or liabilities or unrecognized firm
commitments and the related derivatives are both recorded in earnings if the hedge is considered highly
effective.
• “Cash flow” hedge: a hedge of a forecasted transaction or of the variability of cash flows to be received
or paid related to a recognized asset or liability. The changes in the fair value of the derivatives
designated as cash flow hedges are recorded as other comprehensive income (loss) if the hedge isconsidered highly effective. This treatment is continued until earnings are affected by the variability incash flows or the unrecognized firm commitment of the designated hedged item, at which point changes
in fair value of the derivative are recognized in income (loss).
• “Foreign currency” hedge: a hedge of foreign-currency fair value or cash flow. The changes in fairvalue of the recognized assets or liabilities or unrecognized firm commitments and the derivatives arerecorded as either earnings or other comprehensive income (loss) if the hedge is considered highly
effective. Recognition as earnings or other comprehensive income (loss) is dependent on the treatmentof foreign currency hedges as either fair value or cash flow hedges.
The Company follows the documentation requirements as prescribed by the guidance, which includes risk
management objective and strategy for undertaking various hedge transactions. In addition, a formal
assessment is made at the hedge’s inception and periodically on an ongoing basis, as to whether thederivative used in hedging activities is highly effective in offsetting changes in fair values or cash flows ofhedged items. Hedge accounting is discontinued for ineffective hedges, if any. Subsequent changes in thefair value of derivatives related to discontinued hedges are recognized in earnings immediately.

F-17(Continued)

HITACHI, LTD.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements

The Company classifies cash flows from derivatives as cash flows from operating activities in the
consolidated statements of cash flows.
(p) Revenue Recognition
The Company recognizes revenue when persuasive evidence of an arrangement exists, delivery has
occurred or services have been rendered, the sales price is fixed or determinable, and collectibility isreasonably assured.
The Company offers multiple solutions to meet its customers’ needs. Those solutions may involve thedelivery or performance of multiple elements, such as products, services, or rights to use assets, andperformance may occur at different points in time or over different periods of time. When one element isdelivered prior to the other in an arrangement, revenue is deferred until the delivery of the last element,
unless transactions are such that the delivered item has value to the customer on a standalone basis, delivery
or performance of the undelivered item is considered probable and substantially in the control of theCompany if the arrangement includes a general right of return relative to the delivered item. If bothconditions described above are met, each element in an arrangement is considered a separate unit ofaccounting, and the arrangement consideration is allocated to the separate units of accounting based on therelative selling price method. Under the relative selling price method, vender specific objective evidence(VSOE) should be used if it exists. However, when VSOE does not exist, third-party evidence (TPE) should
be used. If neither VSOE nor TPE exists for all elements in a multiple element arrangement, thearrangement consideration is allocated to the separate units of accounting based on the best estimate ofselling price. The Company determines the best estimate of selling price for multiple elements byconsidering various factors including, but not limited to, overall market conditions, including geographic orregional specific market factors, competitor prices for similar items, profit objective and pricing practices.
In multiple element arrangements that include software that is more than incidental to the products orservices as a whole and does not function together to deliver the tangible product’s essential functionality,
the Company allocates revenue for each element based on its relative fair value, as evidenced by VSOE.
When VSOE of the delivered elements are unable to be established, the Company uses the residual method.
Product Sales:
Revenue from sales of products is recognized when title and risk of loss have been transferred to thecustomer depending upon the terms of the contract or arrangement with the customer. The Company’s
policy is not to accept product returns unless the products are defective. The conditions of delivery aregoverned by the terms of the contract or customer arrangement and those not meeting the predetermined
specification are not recorded as revenue. When the final payment is subject to customer acceptance, aportion of revenue for the amount of the final payment is deferred until an enforceable claim has become
effective. Product warranties are offered on the Company’s and certain subsidiaries’ products and awarranty accrual is established when sales are recognized based on estimated future costs of repair andreplacement principally using historical experience of warranty claims. Revenue from separately priced
extended warranty and product maintenance contracts is deferred and recognized in income on astraight-line basis over the contract period except in those circumstances in which sufficient historicalevidence indicates that the costs of performing services under the contract are incurred on other than astraight-line basis.
Price protection is provided to retailers of the Company’s consumer products business and others to
F-18(Continued)

HITACHI, LTD.
AND SUBSIDIARIES
Notes to Consolidated Financial Statementscompensate the customer retailers for a decline in the product’s value due mainly to competition. Priceprotection granted to the customers is classified as a reduction of revenue in the consolidated statements ofoperations. In addition, it is the Company’s policy to accrue reasonably and reliably estimated priceadjustments at the later of the date at which the related sales are recognized, or the date at which priceprotection is offered. The estimate is made based primarily upon historical experience or agreement on theadjustment rate and the number of units that are subject to such adjustment (e.g., units in distribution
channels).
Product revenues which are recognized upon delivery, installation or acceptance by the customer include
information technology system products, construction equipment, displays, disk drives, televisions, airconditioners, batteries, magnetic tapes, high functional materials, cable products, automotive equipment,
semiconductor manufacturing equipment, test and measurement equipment, railway vehicles, medical
electronic devices, industrial machinery and equipment, elevators and escalators.
Revenue from sales of tangible products under long-term construction type arrangements, in connection
with the construction of nuclear, thermal and hydroelectric power plants, are recognized under thepercentage-of-completion method. Under the percentage-of-completion method, revenue is recognized as apercentage of estimated total revenue that incurred costs to date bear to estimated total costs after giving
effect to estimates of costs to complete based upon the most recent information. Any anticipated losses on
fixed price contracts are charged to operations when such losses can be estimated. Provisions are made forcontingencies in the period in which they become known pursuant to specific contract terms and conditions
and are estimable. When reasonably dependable estimates of contract revenues and costs and the extent ofprogress toward completion do not exist, the completed-contract method of accounting is applied. A
contract is complete when either acceptance by the customer is given or compliance with performance
specifications is achieved, whichever is appropriate under the relevant contractual terms.
The Company recognizes software revenue in accordance with the provisions of ASC 985, “Software.”
Revenue from software consists primarily of software licensing, customized software development and postcontract customer support. Revenues from software license arrangements are recognized upon delivery of
the software if evidence of the arrangement exists, pricing is fixed or determinable and collectibility isreasonably assured. Revenue from a software arrangement that requires significant production, modificationor customization of software is recognized using the percentage-of-completion method provided thatreasonably dependable estimates related to contract revenue, cost and the extent of progress toward
completion exist. Otherwise, the completed-contract method is applied. Customization of software isconsidered substantially completed when an acceptance by the customer occurs. Revenue from postcontract customer support is amortized over the period of the post contract customer support. Consulting
and training services revenues are recognized when the services are rendered.
Service Revenues:
Service revenues from maintenance and distribution services are recognized upon completion of service
delivery. Revenue from time-based service contracts is recognized as services are rendered. Revenue fromlong-term fixed price service contracts such as support or maintenance contracts is recognized ratably overthe contractual period. If historical data shows that the accrual of service cost is not fixed and the service isrendered in proportion to the accrual of the cost for the service, revenue is recognized based on the patternof the cost accrual. Finance lease income is recognized at level rates of return over the term of the leases.
Operating lease income is recognized on a straight-line basis over the term of the lease.
F-19(Continued)

HITACHI, LTD.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements(q) Shipping and Handling Costs
Shipping and handling costs are expensed as incurred and included in selling, general and administrative
expenses.
(r) Advertising
Advertising costs are expensed as incurred.
(s) Research and Development Costs
Research and development costs are expensed as incurred. Costs incurred in connection with thedevelopment of software products for sale or lease to others are accounted for in accordance with ASC
985, “Software.” Development costs incurred in the research and development of new software products
and enhancements to existing products are expensed as incurred until technological feasibility has been
established.
(t) Income Taxes
Deferred income taxes are accounted for under the asset and liability method in accordance with ASC 740,
“Income Taxes.” Deferred tax assets and liabilities are recognized for the future tax consequences
attributable to differences between the financial statement carrying amounts of existing assets andliabilities and their respective tax bases and operating losses and tax credit carryforwards. Under thismethod, deferred tax assets and liabilities are measured using enacted tax rates expected to apply totaxable income in the years in which those temporary differences are expected to be recovered or settled.
Under ASC 740, the effect on deferred tax assets and liabilities of a change in tax rates is recognized inincome in the period that includes the enactment date. Valuation allowances are established to reducedeferred tax assets to their net realizable value if it is more likely than not that some portion or all of thedeferred tax assets will not be realized.
Tax positions that are more likely than not to be sustained upon examination by tax authorities arerecognized in the financial statements in accordance with the provisions of ASC 740. Tax positions thatmeet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit thatis greater than 50 percent likely of being realized upon ultimate settlement with tax authorities. Interest
accrued related to unrecognized tax benefits and penalties are included in income taxes in the consolidated
statements of operations.
(u) Consumption Tax
Consumption tax collected and remitted to taxing authorities is excluded from revenues, cost of sales andexpenses in the consolidated statements of operations.
(v) Net Income Attributable to Hitachi, Ltd. Stockholders Per Share
Net income attributable to Hitachi, Ltd. stockholders per share is computed in accordance with ASC 260,
“Earnings Per Share.” This guidance requires a dual presentation of basic and diluted net income
attributable to Hitachi, Ltd. stockholders per share amounts on the face of the statements of operations.
Under this guidance, basic net income attributable to Hitachi, Ltd. stockholders per share is computed based
upon the weighted average number of shares of common stock outstanding during each year. Diluted net
income attributable to Hitachi, Ltd. stockholders per share reflects the potential dilution that could occur if
securities or other contracts to issue common stock were exercised or converted into common stock or
resulted in the issuance of common stock that then shared in the earnings of the Company.
F-20(Continued)

HITACHI, LTD.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements(w)

Guarantees
The Company recognizes, at the inception of the guarantee, a liability for the fair value of the obligation
undertaken in issuing the guarantee in accordance with ASC 460, “Guarantees.”(x)

Subsequent Events
The Company has evaluated up to June 22, 2012, the date on which its consolidated financial statements
were available to be issued in accordance with the provisions of ASC855, "Subsequent Events."(y)Accounting Changes
The Company adopted the provisions of ASC 860, “Transfers and Servicing” amended by AccountingStandards Update (ASU) 2009-16, “Accounting for Transfers of Financial Assets” on April 1, 2010. These
provisions remove the concept of a qualifying special-purpose entity and remove the exception from theapplication of variable interest accounting to qualifying special-purpose entities. These provisions modify
the financial-components approach used to account for transfers of financial assets, limit thecircumstances in which a transferor derecognizes a portion or component of a financial asset when thetransferor has not transferred the original financial asset to an entity and/or when the transferor has
continuing involvement with the financial asset, and establish the “participating interests” conditions forreporting a transfer. The provisions also require enhanced disclosures to provide financial statement users
with greater transparency about transfers of financial assets and a transferor’s continuing involvement.
The Company adopted the provisions of ASC 810, “Consolidation” amended by ASU 2009-17,“Improvements to Financial Reporting by Enterprises Involved with Variable Interest Entities” on April 1,
2010. These provisions establish how a company determines when an entity that is insufficiently
capitalized or is not controlled through voting or similar rights should be consolidated. The determinationof whether a company is required to consolidate an entity is based on qualitative information such as anentity’s purpose and design and a company’s ability to direct the activities of the entity that mostsignificantly impact the entity’s economic performance. The provisions also require enhanced disclosuresthat will provide users of financial statements with more transparent information about an enterprise’s
involvement in a variable interest entity.
The effect of the adoption of the provisions amended by ASU 2009-16 and ASU 2009-17 is presented innote 6.
The Company adopted the provisions of ASC 605-25, “Revenue Recognition – Multiple Element
Arrangements,” amended by Accounting Standards Update (ASU) 2009-13, “Multiple-Deliverable
Revenue Arrangements.” on April 1, 2011. The provisions supersede certain provisions regarding multiple
element arrangements in ASC 605-25. The provisions require an entity to allocate arrangement
consideration at the inception of an arrangement to all of its deliverables based on their relative selling
prices (the relative selling price method) following an established selling price hierarchy for determining
the selling price of a deliverable, and eliminating the use of the residual method for multiple element
arrangements subject to ASC 605-25. The provisions require both ongoing disclosures regarding an entity’s
multiple-deliverable revenue arrangements as well as certain transitional disclosures during periods after
adoption. Entities may elect to adopt the provisions through either prospective application for revenue
arrangements entered into, or materially modified, after the effective date or through retrospective
application to all revenue arrangements for all periods presented.
F-21(Continued)

HITACHI, LTD.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements

The Company adopted the provisions of ASC 985, “Software,” amended by ASU 2009-14, “Certain
Revenue Arrangements That Include Software Elements.” on April 1, 2011. The provisions affect how
entities account for revenue arrangements that contain both tangible products and software elements.
Previously, arrangements containing both tangible products and software were accounted for based on theprovisions regarding revenue recognition included in ASC 985, “Software,” if the software is consideredmore than incidental to the product or service. The provisions change revenue recognition for tangible
products containing software elements and non-software elements that function together to deliver thetangible product’s essential functionality by eliminating them from the scope of ASC 985. An entity mustselect the same transition method and same period for the adoption for both this guidance and the revisions
to the multiple-deliverable revenue arrangements guidance required by ASU 2009-13.
For revenue arrangements entered into or materially modified after April 1, 2011, the Company recognizes
revenue based on the new provisions. Most of the Company’s multiple element arrangements comprise adeliverable such as information technology system products, machinery and equipment, installation ofsoftware, service including maintenance and others. The Company had recognized revenue for eachelement when VSOE or TPE was established. If VSOE or TPE of any undelivered item was not established,revenue from the entire arrangements was deferred until the delivery of the last element. Under the newprovisions, for non-software elements such as machinery or equipment, if VSOE or TPE is not established,arrangement consideration is allocated to each separate element based on the best estimate of the selling
price and the Company recognizes revenue for each separate element. The effect of the adoption of theseprovisions is not material to our financial statements.

F-22(Continued)

HITACHI, LTD.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements(3)

Investments in Securities and Affiliated Companies
Short-term investments as of March 31, 2012 and 2011 are as follows:
Yen (millions)
2012
2011
Investments in securities:
Available-for-sale securities
Government debt securities
Corporate debt securities
Other securities
Held-to-maturity securities

4,452
6,954
84
72
11,562

2,907
11,0412,610
40
16,598Investments and advances, including affiliated companies as of March 31, 2012 and 2011 are as follows:
Yen (millions)
2012
2011
Investments in securities:
Available-for-sale securities
Equity securities
Government debt securities
Corporate debt securities
Other securities
Held-to-maturity securities
Cost-method investments
Investments in affiliated companies
Advances and other

220,491
329
24,7327,467
321
56,174
309,733
125,246744,493F-23

145,816325
27,0396,697
355
48,144316,443
69,326614,145(Continued)

HITACHI, LTD.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements

The following tables are summaries of the amortized cost basis, gross unrealized holding gains, grossunrealized holding losses and aggregate fair value of available-for-sale securities by the consolidatedbalance sheet classifications as of March 31, 2012 and 2011.

Amortized
cost basis
Short-term investments:
Government debt securities
Corporate debt securities
Other securities
Investments and advances:
Equity securities
Government debt securities
Corporate debt securities
Other securities

Investments and advances:
Equity securities
Government debt securities
Corporate debt securities
Other securities

Aggregate
fair value

4,452
6,481
83
11,016

490
1
491

17
17

4,452
6,954
84
11,490155,908
311
23,201
7,379
186,799
197,81565,89918
1,679
133
67,72968,220

1,316
148
45
1,509
1,526

220,491
329
24,732
7,467
253,019
264,509

Amortized
cost basis
Short-term investments:
Government debt securities
Corporate debt securities
Other securities

Yen (millions)
2012
Gross
Gross
gains
lossesYen (millions)
2011
Gross
Gross
gains
lossesAggregate
fair value

2,907
10,7982,608
16,313

252
2
254

9
9

2,907
11,041
2,610
16,55884,856311
25,8186,684
117,669
133,982

63,39014
1,640
99
65,14365,397

2,430
419
86
2,935
2,944

145,816325
27,0396,697
179,877
196,435

F-24(Continued)

HITACHI, LTD.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements

The following tables are summaries of gross unrealized holding losses on available-for-sale securities
and the fair value of the related securities, aggregated by investment category and length of time that
individual securities have been in a continuous unrealized loss position, as of March 31, 2012 and 2011.
Yen (millions)2012
Less than 12 months
12 months or longer
Aggregate
Gross
Aggregate
Grossfair value
lossesfair value
lossesShort-term investments:
Corporate debt securities
Investments and advances:
Equity securities
Corporate debt securities
Other securities

2,847

9

1,691

8

5,509
7,227
12,736
15,583

535
118
653
662

3,832
2,770
202
6,804
8,495

781
30
45
856
864

Yen (millions)
2011
Less than 12 months
12 months or longer
Aggregate
Gross
Aggregate
Grossfair value
lossesfair value
lossesShort-term investments:
Corporate debt securities
Investments and advances:
Equity securities
Corporate debt securities
Other securities

5,691

9

-

-

9,378
8,355
100
17,833
23,524

1,183
306
40
1,529
1,538

4,381
4,933
215
9,529
9,529

1,247
113
46
1,406
1,406

Equity securities consist primarily of stocks issued by Japanese and the U.S. listed companies.
Government debt securities consist primarily of Japan treasury bonds. Corporate debt securities consist
primarily of structured bonds. Other securities consist primarily of investment funds.

F-25(Continued)

HITACHI, LTD.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements

The following table represents the purchases, proceeds from the sale, gross realized gains on the sale,and gross realized losses on the sale of available-for-sale securities for the years ended March 31, 2012,2011 and 2010.
Yen (millions)
2012
2011
24,641
26,4905,288
11,646
2,224
3,556
280
385

Purchases
Proceeds from the sale
Gross realized gains on the sale
Gross realized losses on the sale2010
59,038
5,890
1,124
56

The contractual maturities of debt securities and other securities classified as investments and advancesin the consolidated balance sheet as of March 31, 2012 are as follows:
Held-tomaturity
Due within five years
Due after five years through ten years
Due after ten years

321
321

Yen (millions)
Availablefor-sale16,026
2,716
13,78632,528

Total
16,347
2,716
13,78632,849

Expected redemptions may differ from contractual maturities because some of these securities are
redeemable at the option of the issuers.
The aggregate carrying amounts of cost-method investments which were not evaluated for impairment
as of March 31, 2012 and 2011 were ¥56,166 million and ¥43,797 million, respectively, mainly because
it was not practicable to estimate the fair value of the investments due to lack of a market price anddifficulty in estimating fair value without incurring excessive cost and the Company did not identify any
events or changes in circumstances that might have had a significant adverse effect on their fair value.
The aggregate fair values of investments in affiliated companies, for which quoted market prices wereavailable, as of March 31, 2012 and 2011, were ¥88,532 million and ¥104,427 million, respectively. The
aggregate carrying amounts of such investments as of March 31, 2012 and 2011 were ¥79,939 millionand ¥99,299 million, respectively.
As of March 31, 2012 and 2011, cumulative recognition of other-than-temporary declines in values ofinvestments in certain affiliated companies resulted in the difference of ¥18,280 million and ¥17,837
million, respectively, between the carrying amount of the investment and the amount of underlying
equity in net assets. In addition, as of March 31, 2012 and 2011, the carrying value of the investments inaffiliated companies exceeded the Company's equity in the underlying net assets of such affiliatedcompanies by ¥101,565 million and ¥111,917 million, respectively. The excess is attributed first tocertain fair value adjustments on a net-of-tax basis at the time of the initial and subsequent investmentsin those companies with the remaining portion considered as equity-method goodwill.

F-26(Continued)

HITACHI, LTD.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements

For the year ended March 31, 2012 and 2011, there were no affiliated companies accounted for by theequity method which were material to be disclosed separately. Summarized combined financial
information relating to affiliated companies accounted for by the equity method as of and for the year
ended March 31, 2012 and 2011 is as follows:
Yen (millions)2012
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities

2011

1,512,351
1,021,152
2,533,503
1,380,640
470,953
1,851,593

1,305,406
835,964
2,141,370
1,145,724
334,298
1,480,022

Yen (millions)
2012
Revenues
Gross profit
Net loss attributable to affiliated companies

2,061,144
463,136(73,204 )2011
2,208,543
588,095(69,878)

Summarized financial information relating to Renesas Technology Corp. (Renesas), Casio Hitachi
Mobile Communications Co., Ltd. (CHMC) and other affiliated companies accounted for by the equity
method for the year ended March 31, 2010 is as follows:

F-27(Continued)

HITACHI, LTD.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements

Revenues
Cost of sales
Gross profit (loss)
Selling, general and administrative expenses
Impairment losses for long-lived assets
Restructuring charges
Other deductions (net)
Loss before income taxes
Income taxes
Net loss
Less net loss attributable to noncontrolling interests
Net loss attributable to affiliated companies
Percentage of ownership in equity investees
Equity in net loss of affiliated companies,
before consolidating and reconciling adjustments
Consolidation and reconciling adjustments
Equity in net earning (loss) of affiliatedcompanies

RenesasYen (millions)
2010
CHMC
Others599,791(555,990)
43,801(108,003)(4,551)(202)(12,603)(81,558)(4,991)(86,549)(183)(86,366)
55.0%

99,623
1,170,893
1,870,307(110,381) (1,007,203 ) (1,673,574)(10,758)
163,690
196,733(14,448)(176,368 )(298,819)(12)(25,218)(4,150)(29,368)(29,368)(51,729 )(167,463)
49.0%(47,501)(96)(14,390)(1)(47,597)(14,391)

Total

3,802

(58,186)

On April 1, 2003, Renesas, which focused on system LSI (Large Scale Integration) operations, wasincorporated through a corporate split procedure, where the semiconductor and integrated circuits
operations of the Company and Mitsubishi Electric Corporation were spun-off and contributed to a newcompany. Although the Company had owned 55.0% of the voting stock of Renesas since its foundation,
the Company accounted for the investment under the equity method of accounting as Mitsubishi Electric
Corp. had substantive participating rights under the joint venture agreement. Renesas increased its
capital by ¥71,700 million during the years ended March 31, 2010. Renesas Electronics Corporation wasestablished on April 1, 2010 when Renesas was combined with NEC Electronics Corporation. As aresult, the Company received a 30.6% interest in Renesas Electronics Corporation and accounts for theinvestment under the equity method of accounting.
On April 1, 2004, CHMC, which focused on mobile phone design, production and sales, wasincorporated. The Company had owned 49.0% of the voting stock of CHMC since its foundation andaccounted for the investment under the equity method of accounting. CHMC increased its capital by¥44,000 million during the year ended March 31, 2010. On June 1, 2010, CHMC was merged into NEC
CASIO Mobile Communications, Ltd. Consequently, the Company received a 16.7% interest in NEC
CASIO Mobile Communications, Ltd. and accounts for the investment under the cost method of
accounting. NEC CASIO Mobile Communications, Ltd. increased its capital by allocating new shares toshareholders other than the Company in June 2010, and as a result, the Company’s interest in NEC
CASIO Mobile Communications, Ltd. decreased to 9.3%.

F-28(Continued)

HITACHI, LTD.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements

The balances and transactions with affiliated companies accounted for by the equity method are as
follows:
Yen (millions)
2012
2011
Trade receivables
Investments in leases
Trade payables

107,844
6,295
27,9602012

Revenues
Purchases

338,814
128,675

F-29

77,484
12,15821,543
Yen (millions)2011
315,533
131,6862010
373,889
226,012(Continued)

HITACHI, LTD.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements(4)

Inventories
Inventories as of March 31, 2012 and 2011 are summarized as follows:
Yen (millions)
2011
2012
Finished goods
Work in process
Raw materials(5)538,634
606,228
268,390
1,413,252

533,724
566,127
241,917
1,341,768

LeasesThe Company and certain subsidiaries are lessors of certain assets such as manufacturing machinery andequipment under financing and operating lease arrangements with terms ranging mainly from 3 to 6 years,
some of which are transacted with affiliated companies.
The amount of leased assets at cost under operating leases and accumulated depreciation as of March 31,
2012 amounted to ¥2,014,463 million and ¥1,730,312 million, respectively. The leased assets are
depreciated using the straight-line method over their estimated useful lives.
The following table shows the future minimum lease receivables of financing and non-cancelable operatingleases as of March 31, 2012 and the future minimum lease receivables of financing leases as of March 31,
2011:
Yen (millions)2012
Financing OperatingleasesleasesYears ending March 31
2013
2014
2015
2016
2017
Thereafter
Total minimum payments to be received
Unguaranteed residual values
Amount representing executory costs
Unearned income
Allowance for doubtful receivables
Net investment in financing leases
Less current portion of net investment in financing leases, included ininvestments in leases and current portion of financial assets transferred
to consolidated securitization entities
Long-term net investment in financing leases, included in other assets andfinancial assets transferred to consolidated securitization entities
F-30

333,750
204,969
112,21761,65632,42093,623
838,635
40,612(78,372)(57,544)(7,680)735,651

37,53422,051
13,561
7,252
3,190
1,495
85,083

302,770
432,881(Continued)

HITACHI, LTD.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements

Yen (millions)2011
FinancingleasesTotal minimum payments to be received
Unguaranteed residual values
Amount representing executory costs
Unearned income
Allowance for doubtful receivables
Net investment in financing leases
Less current portion of net investment in financing leases, included ininvestments in leases and current portion of financial assets transferred
to consolidated securitization entities
Long-term net investment in financing leases, included in other assets andfinancial assets transferred to consolidated securitization entities

956,128
52,036(67,396)(67,631)(6,136)
867,001
337,935
529,066

The Company and certain subsidiaries lease certain buildings, manufacturing machinery and equipmentused in their operations. The amount of leased assets at cost under capital leases as of March 31, 2012
and 2011 amounted to ¥25,641 million and ¥40,952 million, respectively, and accumulated depreciation
as of March 31, 2012 and 2011 amounted to ¥11,995 million and ¥18,225 million, respectively.
Amortization of assets under capital leases is included in depreciation expense.
The following table shows the future minimum lease payments of capital and non-cancelable operatingleases as of March 31, 2012:
Yen (millions)
CapitalOperatingleasesleasesYears ending March 31
2013
2014
2015
2016
2017
Thereafter
Total minimum lease payments
Amount representing executory costs
Amount representing interest
Present value of net minimum lease payments
Less current portion of capital lease obligations
Long-term capital lease obligations

F-31

8,472
6,627
4,262
2,816
2,103
4,247
28,527(45)(2,197)26,285
7,930
18,355

17,43013,638
11,762
7,934
5,962
25,15881,884(Continued)

HITACHI, LTD.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements(6) Securitizations
The Company and certain subsidiaries securitize certain financial assets, such as lease, trade andmortgage loans receivable, and arrange other forms of asset-backed financing for the purpose ofproviding diversified and stable fund raising as part of their ongoing securitization activities. Historically,
they have used Hitachi-supported and third-party Special Purpose Entities (SPEs) to execute
securitization transactions funded with commercial paper and other borrowings. These securitizationtransactions are similar to those used by many financial institutions.
Investors in these entities only have recourse to the assets owned by the entity and not to their generalcredit, unless noted below. The Company and certain subsidiaries do not provide non-contractual support
to SPEs and do not have implicit support arrangements with any SPEs. The majority of their involvementwith SPEs related to the securitization activities are assisting in the formation and financing of an entity,
providing limited credit enhancements, servicing the assets and receiving fees for services provided.
A portion of these lease, trade and mortgage loans receivable is transferred to SPEs sponsored byfinancial institutions, which operate those SPEs as a part of their businesses. Accordingly, the amount ofassets transferred by the Company and its subsidiaries is considerably small compared to the total assetsof the SPEs sponsored by these financial institutions that purchase a large amount of assets from entities
other than the Company and its subsidiaries. In certain transactions, investors have recourse with a scopethat is considerably limited.
The transferred assets have similar risks and characteristics to the Company’s and certain subsidiaries’
receivables recorded on the consolidated balance sheets. Accordingly, the performance, such ascollections or expected credit loss, of these transferred assets has been similar to the receivables recordedon the consolidated balance sheets for the Company and certain subsidiaries; however, the blended
performance of the pools of transferred assets reflects the eligibility screening requirements that theCompany and certain subsidiaries apply to determine which receivables are selected for transfer.
Therefore, the blended performance may differ from receivables recorded on the consolidated balance
sheets.
Most of the transactions transferring lease and mortgage loans receivable utilize securitization trusts. In
those transactions, certain subsidiaries initially transfer the receivables to trusts that had satisfied theconditions of Qualifying SPEs (QSPEs), which under guidance in effect through March 31, 2010 were
excluded from the scope of consolidation provisions, and receive the beneficial interests in trusts
originated from the transferred assets. Subsequently, the subsidiaries transfer the interests to and receive
cash as consideration from SPEs that are not former QSPEs, as a part of securitization arrangements.

F-32(Continued)

HITACHI, LTD.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements

The remaining financial assets, consisting mainly of trade receivables, were transferred to former QSPEs
established by certain of the Company’s subsidiaries in the Cayman Islands. In those transactions, theCompany and certain subsidiaries received cash as consideration from the former QSPEs that were
funded through the issuance of asset-backed securities or other borrowings from investors that weresecured by the transferred assets. The Company and certain subsidiaries retained subordinated interests inthe transferred assets relating to these transactions, or otherwise investors had recourse with considerably
limited scope. Furthermore, the Company and certain subsidiaries retained servicing responsibility, andcertain of the Company’s subsidiaries provided credit facilities to the former QSPEs in accordance withthe service agency business contracts from which temporary payments on behalf of the former QSPEs
were made. As of March 31, 2010, the Company and its subsidiaries had three QSPEs with outstandingbalances of transferred receivables and the total amount of their assets was ¥117,159 million. Since theCompany and its subsidiaries terminated the transactions with the former QSPEs by March 31, 2011,
there are no outstanding balances of transferred receivables to the former QSPEs as of March 31, 2011.
The Company and its subsidiaries did not hold any of the voting shares issued by those former QSPEs,and none of the directors of those former QSPEs were executives or employees of the Company or its
subsidiaries. Additionally, the former QSPEs also purchased receivables from third-party customers.
In accordance with the new consolidation provisions effective April 1, 2010, the Company and certain
subsidiaries are deemed to have a controlling financial interest and are the primary beneficiary of an SPE
if it has both the power to direct the activities of the SPE that most significantly impact the SPE’s
economic performance and the obligation to absorb losses or the right to receive benefits that could
potentially be significant to the SPE. As a result of adoption of these provisions, the Company
consolidated former QSPEs that were unconsolidated prior to April 1, 2010 using the carrying amountsof the SPEs’ assets and liabilities as of April 1, 2010.

F-33(Continued)

HITACHI, LTD.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements

The incremental impact of adoption of these provisions on the Company’s consolidated balance sheet asof April 1, 2010 is set forth in the following table. A net reduction of total equity of ¥17,919 million was
principally relating to the reversal of previously recognized gains on sales of financial assets as acumulative effect adjustment.

Cash and cash equivalents
Current portion of financial assets transferred to consolidated securitization
entities
Prepaid expenses and other current assets
Investments and advances, including affiliated companies
Financial assets transferred to consolidated securitization entities
Other assets
Total assets

Yen (millions)Net
increase (decrease)
12,030339,875(33,283)(117,370)
457,104
12,202
670,558

Current portion of long-term debt
Current portion of non-recourse borrowings of consolidated securitization
entities
Other current liabilities
Long-term debt
Non-recourse borrowings of consolidated securitization entities
Total liabilities(4,898)347,367(55,163)(2,081)
403,252
688,477

Legal reserve and retained earnings
Accumulated other comprehensive loss
Noncontrolling interests
Total equity(7,732)(2,977)(7,210)(17,919)

Consolidated SPEs
The Company consolidated SPEs mainly because the Company has both the power to direct the activitiesof the SPEs that most significantly impact the SPEs’ economic performance and the obligation to absorb
losses or the right to receive benefits that could potentially be significant to the SPEs. The consolidated
SPEs are mainly trusts for the securitizations of lease receivables and mortgage loans receivable.

F-34(Continued)

HITACHI, LTD.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements

The tables below summarize the assets and liabilities of the consolidated SPEs as of March 31, 2012 and2011 by type of transferred financial assets that those SPEs hold:Cash and cash equivalents
Current portion of financial assets transferred toconsolidated securitization entities
Financial assets transferred to consolidated
securitization entities

Lease
receivables
4,760

Current portion of non-recourse borrowings ofconsolidated securitization entities：
Loans, mainly from banks
Beneficial interests in trusts

Non-recourse borrowings ofconsolidated securitization entities:
Loans, mainly from banks
Beneficial interests in trusts

F-35

Yen (millions)2012
Mortgageloans
receivable
Others
2,837
1,087

Total
8,684

67,026

10,401

8,644

86,071

51,570151,826

2,015

205,411

42,20732,67274,87913,92813,928

8,197
8,197

42,20754,79797,004

3,943
4,117
8,060

126,008
126,008

975
975

3,943
131,100
135,043(Continued)

HITACHI, LTD.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements

Cash and cash equivalents
Current portion of financial assets transferred toconsolidated securitization entities
Financial assets transferred to consolidated
securitization entities
Current portion of non-recourse borrowings ofconsolidated securitization entities：
Loans, mainly from banks
Beneficial interests in trusts

Lease
receivables
4,091

Yen (millions)
2011
Mortgageloans
receivable
Others
3,263
1,059

Total
8,413

109,589

11,23662,734

183,559

123,970

175,506

4,684

304,160

75,53955,396130,935

34,17834,17816,512
9,243
25,75592,051
98,817
190,868

51,35934,05385,412

131,196
131,196

2,958
2,958

51,359168,207219,566

Non-recourse borrowings ofconsolidated securitization entities:
Loans, mainly from banks
Beneficial interests in trusts

The aggregate annual maturities of non-recourse borrowings of consolidated securitization entities after
March 31, 2013 are as follows:
Yen (millions)Years ending March 31
2014
2015
2016
2017
Thereafter

26,35816,81014,005
11,84866,022135,043

The assets and liabilities of the consolidated SPEs on the table above exclude intercompany balances thatare eliminated in consolidation. Substantially, all of the assets of the consolidated SPEs can only be used
to settle obligations of those SPEs.

F-36(Continued)

HITACHI, LTD.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements

Transfers to unconsolidated entities
The following information is related to financial assets transferred to unconsolidated entities andaccounted for as sales. Those financial assets are transferred mainly to SPEs sponsored by financial
institutions.
Securitizations of lease receivables:
Hitachi Capital Corporation and certain other subsidiaries sold lease receivables to unconsolidated SPEsand other entities. Net gains recognized on the sale of these lease receivables for the years ended March
31, 2012, 2011 and 2010 were ¥6,853 million, ¥8,500 million and ¥10,017 million, respectively. The
subsidiaries retained servicing responsibilities, but did not record a servicing asset or liability because thecost to service the receivables approximated the servicing income.
The table below summarizes cash flows received from and paid to the SPEs and other entities during theyears ended March 31, 2012, 2011 and 2010:
Yen (millions)
2011
2010
2012
Proceeds from transfer of lease receivables
Servicing fees received
Purchases of delinquent or ineligible assets

116,507-

120,197-

167,48372(60,983)

The amounts of the initial fair value of the subordinated interests for the years ended March 31, 2012 and2011 were ¥18,061 million and ¥18,403 million, respectively. The subordinated interests relating tosecuritizations of lease receivables are initially classified as Level 3 assets within the fair value hierarchy.
The initial fair value of the subordinated interests is determined based on economic assumptions
including weighted-average life, expected credit risks, and discount rates.
Key economic assumptions used in measuring the initial fair value of the subordinated interests resulting
from securitizations of lease receivables completed during the years ended March 31, 2012 and 2011 are
as follows:
2012
4.1
0.02-0.03%
0.50-0.70%

Weighted average life (in years)
Expected credit loss
Discount rate

F-37

2011
4.2
0.03-0.05%
0.38-0.80%(Continued)

HITACHI, LTD.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements

Quantitative information about delinquencies, net credit losses, and components of lease receivables
subject to transfer and other assets managed together as of and for the years ended March 31, 2012 and2011 is as follows:
Yen (millions)2012
Principal
amount of
Total
receivables
principal 90 days or
amount of more past Net credit
receivables
loss
due
Total assets managed or transferred:
Lease receivables
955,565
412
588
Assets transferred(219,914)
Assets held in portfolio
735,651
Yen (millions)2011
Principal
amount of
Total
receivables
principal 90 days or
amount of more past Net credit
receivables
loss
due
Total assets managed or transferred:
Lease receivables
Assets transferred
Assets held in portfolio

1,025,462(158,461)
867,001

140

1,128

As of March 31, 2012 and 2011, the amounts of the maximum exposures to losses were ¥60,723 millionand ¥32,194 million, respectively. They mainly consist of the subordinated interests and the obligations
to purchase assets with a scope that is considerably limited relating to these securitizations of leasereceivables. As of March 31, 2012 and 2011, the amounts of the subordinated interests measured at fairvalue relating to these securitizations of lease receivables were ¥36,329 million and ¥18,941 million,
respectively.
Key economic assumptions used in measuring the fair value of the subordinated interests relating tosecuritizations of lease receivables as of March 31, 2012 and 2011 are as follows:
2012
3.7
0.02%
0.50-0.59%

Weighted average life (in years)
Expected credit loss
Discount rate

F-38

2011
3.5
0.03%
0.70-0.80%(Continued)

HITACHI, LTD.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements

The sensitivities of the current fair value of the Company’s interests to an immediate 10 and 20 percent
adverse change in the assumptions as of March 31, 2012 and 2011 are as follows:
Yen (millions)
2011
2012
Expected credit loss:
Impact on fair value of 10% adverse change
(62)
(60)
Impact on fair value of 20% adverse change
(125)
(121)
Discount rate:
Impact on fair value of 10% adverse change
(53)
(47)
Impact on fair value of 20% adverse change
(106)
(94)
These securitizations were designed to transfer the lease receivables through trusts that satisfied theconditions of former QSPEs. These trusts were not consolidated for the year ended March 31, 2010.
Since almost all of those trusts were consolidated upon the adoption of the new consolidation provisions,the lease receivables transferred to the consolidated trusts were recognized on the Company’s
consolidated balance sheet and classified as financial assets transferred to consolidated securitization
entities on April 1, 2010.
Securitizations of trade receivables:
The Company and certain subsidiaries sold trade receivables mainly to unconsolidated SPEs and otherentities. During the years ended March 31, 2012, 2011 and 2010, proceeds from the transfer of tradereceivables were ¥593,001 million, ¥521,335 million and ¥737,820 million, respectively, and net gains
and losses recognized on those transfers were a net loss of ¥158 million, a net gain of ¥140 million and a
net loss of ¥1,853 million, respectively. The Company and certain subsidiaries retained servicing
responsibilities, but did not record a servicing asset or liability because the cost to service the receivables
approximated the servicing income.
The amount of the initial fair value of the subordinated interests for the year ended March 31, 2012 was¥29,095 million. The subordinated interests relating to securitizations of trade receivables are initiallyclassified as Level 3 assets within the fair value hierarchy. The initial fair value of the subordinatedinterests is determined based on economic assumptions including weighted-average life, expected credit
risks, discount rates, and prepayment rates.
Key economic assumptions used in measuring the initial fair value of the subordinated interests resulting
from securitizations of trade receivables completed during the year ended March 31, 2012 are as follows:
2012
5.6
0.15-0.48%
1.40-1.57%
4.98-12.24%

Weighted average life (in years)
Expected credit loss
Discount rate
Prepayment rate

F-39

(Continued)

HITACHI, LTD.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements

Quantitative information about delinquencies, net credit loss, and components of trade receivables
subject to transfer and other assets managed together as of and for the years ended March 31, 2012 and2011 is as follows:
Yen (millions)2012
Principal
amount of
Total
receivables
principal 90 days or
amount of more past Net credit
receivables
loss
due
Total assets managed or transferred:
Trade receivables
844,698
2,450
965
Assets transferred(233,881)
Assets held in portfolio
610,817
Yen (millions)2011
Principal
amount of
Total
receivables
principal 90 days or
amount of more past Net credit
receivables
loss
due
Total assets managed or transferred:
Trade receivables
Assets transferred
Assets held in portfolio

733,090(232,374)
500,716

2,698

1,025

As of March 31, 2012 and 2011, the amounts of the maximum exposures to losses were ¥45,797 millionand ¥36,067 million, respectively. They mainly consist of the subordinated interests and obligations topurchase assets with a scope that is considerably limited relating to these securitizations of tradereceivables. As of March 31, 2012 and 2011, the amounts of the subordinated interests relating to thesesecuritizations of trade receivables were ¥31,295 million and ¥16,337 million, respectively.
Key economic assumptions used in measuring the fair value of the subordinated interests relating tosecuritizations of trade receivables as of March 31, 2012 are as follows:
2012
6.0
0.15-0.40%
1.43%
6.52-12.38%

Weighted average life (in years)
Expected credit loss
Discount rate
Prepayment rate

F-40

(Continued)

HITACHI, LTD.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements

The sensitivity of the current fair value of the Company’s interests to an immediate 10 and 20 percent
adverse change in the assumptions as of March 31, 2012 is as follows:
Yen (millions)2012
Expected credit loss:
Impact on fair value of 10% adverse change(321)
Impact on fair value of 20% adverse change(643)
Discount rate:
Impact on fair value of 10% adverse change(47)
Impact on fair value of 20% adverse change(95)
Prepayment rate:
Impact on fair value of 10% adverse change(649)
Impact on fair value of 20% adverse change(1,298)The sensitivities presented in this note are hypothetical and should be used with caution. As the figuresindicate, changes in fair value based on a 10 percent variation in assumptions generally cannot be
extrapolated because the relationship of the change in assumption to the change in fair value may not belinear. Also, in the above tables, the effect of a variation in a particular assumption of the fair value of theinterest is calculated without changing any other assumption; in reality, changes in one factor may resultin changes in another, which might magnify or counteract the sensitivities.
A portion of these trade receivables was transferred to former QSPEs, which were established by certainof the Company’s subsidiaries, through March 31, 2011. During the years ended March 31, 2011,
proceeds from the transfer of trade receivables to the former QSPEs and net losses recognized on thosetransfers were immaterial and there is no outstanding balance of transferred receivables in these former
QSPEs as of March 31, 2011. During the year ended March 31, 2010, the proceed from the transfer of
trade receivables to the former QSPEs was ¥362,147 million, and the net loss recognized on that transfer
was ¥616 million.

F-41(Continued)

HITACHI, LTD.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements(7)

Goodwill and Other Intangible Assets
Intangible assets other than goodwill acquired during the years ended March 31, 2012, 2011 and 2010
amounted to ¥152,076 million, ¥143,156 million and ¥177,585 million, respectively, and related
amortization expense during the years ended March 31, 2012, 2011 and 2010 amounted to ¥119,308
million, ¥115,037 million and ¥116,065 million, respectively.
The main component of intangible assets subject to amortization was capitalized software. Amortizationof capitalized costs for software to be sold, leased or otherwise marketed is charged to cost of sales. The
amounts charged during the years ended March 31, 2012, 2011 and 2010 were ¥43,935 million, ¥38,899
million and ¥40,128 million, respectively.
Intangible assets other than goodwill as of March 31, 2012 and 2011 are as follows:

Gross carrying
amountAmortized intangible assets:
Software
Software for internal use
Patents
Other
Indefinite-lived
intangible assets

Yen (millions)2012
Accumulated Net carrying Gross carrying
amortization
amountamount2011
Accumulated Net carrying
amortization
amount774,641
520,971
79,108
213,866
1,588,586

637,462
397,742
70,670101,407
1,207,281

137,179
123,229
8,438
112,459
381,305

727,016
512,515
100,080
181,362
1,520,973

612,361
377,550
84,459106,422
1,180,792

114,655
134,965
15,621
74,940340,181

13,950-13,95016,337-

16,337

The following table shows the estimated aggregate amortization expense of intangible assets for the next
five years.
Years ending March 31

Yen (millions)

2013
2014
2015
2016
2017

88,301
68,377
46,63827,312
14,422

F-42(Continued)

HITACHI, LTD.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements

The changes in the carrying amount of goodwill by reportable segment for the years ended March 31,
2012 and 2011 are as follows:
Yen (millions)2012
Information &Telecommunication Construction
Systems
Machinery

Balance at beginning of year
Acquisition
Divestiture
Impairment loss
Translation adjustment
and other
Balance at end of year

High
Other
Functional
Materials & Components Reportable
Components & Devices Segments

42,41835,872-

34,147-58,5201,913(1,316)

9,099(8,559)-27,31620,921(540)

Total
171,500
58,706(8,559)(1,856)

1,633
79,923(4,251)
29,896(210)
58,907(540)-(1,716)45,981(5,084)
214,707

Yen (millions)
2011
Information &Telecommunication Construction
Systems
Machinery

Balance at beginning of year
Acquisition
Impairment loss
Translation adjustment
and other
Balance at end of year

High
Other
Functional
Materials & Components Reportable
Components & Devices Segments

37,443
9,211-

37,967-56,675
1,849-

10,294-23,207
9,931(4,833)

Total
165,586
20,991(4,833)(4,236)42,418(3,820)34,147(4)
58,520(1,195)
9,099

(989)
27,316(10,244)
171,500

The Company considers goodwill that has been fully impaired to be written-off. The company had
accumulated impairment loss of ¥540 million related to the goodwill balances in the Other Reportable
Segments as of March 31, 2012, and did not have any accumulated impairment losses related to the
goodwill balances as of March 31, 2011.
The main components of goodwill acquired during the year ended March 31, 2012 were related to theacquisition of BlueArc Corporation in the Information & Tele-communication Systems segment and theacquisition of Vantec Corporation in the Other Reportable Segments to make them subsidiaries.

F-43(Continued)

HITACHI, LTD.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements(8)

Income Taxes
Components of income (loss) before income taxes and income taxes attributable to continuing operations
are as follows:

Income before income taxes
Income taxes:
Current tax expense
Deferred tax expense (benefit)

Income before income taxes
Income taxes:
Current tax expense
Deferred tax expense (benefit)

Income (loss) before income taxes
Income taxes:
Current tax expense
Deferred tax expense (benefit)

F-44

Domestic

Yen (millions)2012
Foreign

Total

448,626

109,104

557,730

77,743
22,263100,006

45,670(754)
44,916

123,41321,509144,922

Domestic

Yen (millions)2011
Foreign

Total

270,001

162,200

432,201

75,97914,51190,49049,144(10,559)
38,585125,123
3,952
129,075

Domestic

Yen (millions)2010
Foreign

Total(16,083)

79,66363,58060,42863,493
123,921

27,103(3,053)24,05087,53160,440147,971(Continued)

HITACHI, LTD.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements

Significant components of income tax expense (benefit) attributable to continuing operations and othercomprehensive income (loss), net of reclassification adjustments, for the years ended March 31, 2012,2011 and 2010 are as follows:
Yen (millions)
2012
2011
2010
Continuing operations:
Current tax expense
123,413 125,123
87,531
Deferred tax expense (benefit) (exclusive of theeffects of other components listed below)
40,846(4,653)(19,350)
Adjustments of deferred tax assets and liabilities for
7,695
enacted changes in tax laws and rates in Japan
8,605
79,790Change in valuation allowance(27,032)
144,922 129,075
147,971
Other comprehensive income (loss),
net of reclassification adjustments:
Pension liability adjustments(10,079)
16,11925,738Net unrealized holding gain on
available-for-sale securities
1,018(4,740)11,692647
720
Cash flow hedges(1,372)(10,433)
12,02638,150134,489 141,101
186,121
The Company and its domestic subsidiaries are subject to a national corporate tax of 30%, an inhabitant
tax of between 17.3% and 20.7% of the national corporate tax and a combined deductible business tax andspecial local corporation tax between 3.8% and 10.1%, which in the aggregate resulted in a combined
statutory income tax rate of approximately 40.6% for the years ended March 31, 2012, 2011 and 2010.
The Company and certain subsidiaries have adopted the consolidated taxation systems. Under the
consolidated taxation system in Japan, the Company and certain Japanese subsidiaries consolidated, forJapanese tax purpose, all wholly owned domestic subsidiaries.
On December 2, 2011, amendments to corporation tax law and the special taxation measures law for Great
East Japan Earthquake disaster reconstruction were enacted in Japan, resulting in the lower corporate tax
rates. Those changes become effective on April 1, 2012. As a result, the aggregated statutory income tax
rate for domestic companies will be approximately 37.9% for the period between April 1, 2012 throughMarch 31, 2015 and approximately 35.5% for the years beginning on or after April 1, 2015. The effect of
those changes on the Company’s deferred tax balances amounted to ¥7,695 million of additional expense
recognized in the Consolidated Statements of Operations for the year ended March 31, 2012.

F-45(Continued)

HITACHI, LTD.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements

Reconciliations between the combined statutory income tax rate and the effective income tax rate as apercentage of income (loss) before income taxes are as follows:

Combined statutory income tax rate
Equity in net loss of affiliated companies
Impairment of investments in affiliated companies
Change in excess amounts over the tax basis ofinvestments in subsidiaries and affiliated companies
Tax expenses (benefits) on sale of investments
in subsidiaries and affiliated companies
Expenses not deductible for tax purposes
Enacted changes in tax laws and rates in Japan
Impairment of goodwill
Change in valuation allowance
Difference in statutory tax rates of foreign subsidiaries
Other, net
Effective income tax rate

F-46

2012

2011

2010

40.6%
1.1
0.0

40.6%
1.9
0.0

40.6%
37.1
9.7

2.1

(4.2)

(0.9)

(14.8)
4.7
1.4
0.1
(4.8)
(5.2)
0.8%
26.0%

(5.6)
3.3
0.4
2.0
(8.8)
0.3%
29.9%

(0.0)
35.6
4.6
125.5
(20.8)
1.3%
232.7%(Continued)

HITACHI, LTD.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements

The tax effects of temporary differences and carryforwards that give rise to significant portions of thedeferred tax assets and liabilities as of March 31, 2012 and 2011 are presented below:
Yen (millions)
2011
2012
Total gross deferred tax assets:
Retirement and severance benefits
Accrued expenses
Property, plant and equipment, due to differences in
depreciation
Investment in securities
Net operating loss carryforwards
Other
Valuation allowance
Total gross deferred tax liabilities:
Deferred profit on sale of properties
Tax purpose reserves regulated by Japanese tax laws
Other
Net deferred tax asset

374,981
260,777

399,611
301,603

49,29930,607251,356
162,448
1,129,468(881,028)
248,440

62,03049,556295,487
218,621
1,326,908(1,050,979)
275,929(23,689)(7,011)(100,230)(130,930)
117,510(25,547)(6,588)(92,595)(124,730)
151,199

Components of deferred tax assets as of March 31, 2012 and 2011 are reflected in the accompanying
consolidated balance sheets under the following captions:
Yen (millions)
2011
2012
Prepaid expenses and other current assets
Other assets
Other current liabilities
Other liabilities
Net deferred tax asset

123,475
104,303(8,671)(101,597)
117,510130,733
130,862(8,526)(101,870)
151,199

A valuation allowance was recorded against deferred tax assets for deductible temporary differences, net
operating loss carryforwards and tax credit carryforwards, taking into account the tax laws of various
jurisdictions in which the Company and its subsidiaries operate. The net changes in the total valuation
allowance for the years ended March 31, 2012 and 2011 were a decrease of ¥169,951 million and¥25,869 million, respectively.

F-47(Continued)

HITACHI, LTD.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements

In assessing the realizability of deferred tax assets, management of the Company considers whether it ismore 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 generation of future taxable income in specific tax
jurisdictions during the periods in which these deductible differences become deductible. Althoughrealization is not assured, management considered the scheduled reversals of deferred tax liabilities andprojected future taxable income, including the execution of certain available tax strategies if needed, inmaking this assessment. Based on these factors, management believes it is more likely than not theCompany will realize the benefits of these deductible differences, net of the existing valuation allowance
as of March 31, 2012.
As of March 31, 2012, the Company and various subsidiaries have operating loss carryforwards of¥690,317 million which are available to offset future taxable income, if any. Operating loss
carryforwards of ¥430,017 million expire by March 31, 2017, ¥183,140 million expire by March 31,
2022, and ¥77,160 million expire in various years thereafter or do not expire.
Deferred tax liabilities have not been recognized for excess amounts over the tax basis of investments inforeign subsidiaries that are considered to be reinvested indefinitely, because such differences will notreverse in the foreseeable future and those undistributed earnings, if remitted, generally would not resultin material additional Japanese income taxes because of non-taxable dividends from foreign subsidiaries.
Determination of such liabilities is not practicable.

F-48(Continued)

HITACHI, LTD.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements(9)

Short-term and Long-term Debt
The components of short-term debt as of March 31, 2012 and 2011 are summarized as follows:
Yen (millions)
2011
2012
Borrowings, mainly from banks
Commercial paper
Borrowings from affiliates

404,846
116,534
10,066
531,446

395,856
66,105
10,627472,588

The weighted average interest rates on short-term debt outstanding as of March 31, 2012 and 2011 were0.4% and 0.3%, respectively.
The components of long-term debt as of March 31, 2012 and 2011 are summarized as follows:
Yen (millions)
2011
2012
Unsecured notes and debentures:Due 2013, interest 0.72% debentureDue 2015, interest 1.56% debentureDue 2012–2022, interest 0.38–3.75%, issued bysubsidiaries
Unsecured convertible debentures:Due 2014, interest 0.1% debentureDue 2019, zero coupon, issued by a subsidiary
Loans, principally from banks and insurance companies:
Secured by various assets and mortgages on property,
plant and equipment, maturing 2012–2016,
interest 2.59–7.20%
Unsecured, maturing 2012–2028, interest 0.25–7.00%
Capital lease obligations
Less current portion

F-49

80,00049,98980,00049,989385,506

363,233

62,0684,495

99,36020,105

18,667
1,005,951
26,285
1,632,961
384,110
1,248,851

19,041
970,483
36,318
1,638,529
338,218
1,300,311(Continued)

HITACHI, LTD.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements

The aggregate annual maturities of long-term debt after March 31, 2013 are as follows:
Yen (millions)Years ending March 31
2014
2015
2016
2017
Thereafter

261,264474,584
149,706
206,968
156,329
1,248,851

As is customary in Japan, both short-term and long-term bank loans are made under general agreementsthat provide that securities and guarantees for present and future indebtedness will be given upon requestof the bank, and that the bank shall have the right, as the obligations become due, or in the event of theirdefault, to offset cash deposits against such obligations.
Generally, the mortgage debenture trust agreements and certain secured and unsecured loan agreements
provide, among other things, that the lenders or trustees shall have the right to have any distribution of
earnings, including the payment of dividends and the issuance of additional capital stock, submitted tothem for prior approval and also grant them the right to request additional securities or mortgages onproperty, plant and equipment.
In December 2009, the Company issued ¥100,000 million convertible bonds due 2014. The bondholders
are entitled to stock acquisition rights effective from January 4, 2010 to December 10, 2014. The initialconversion price is ¥317 per share. Aside from the standard antidilution provisions, the conversion priceshall be reduced for a certain period before the early redemption triggered upon the occurrence of acorporate event or delisting event. The reduction of the conversion price will be based on the premium
which is based on the Company’s common stock price and the effective date of the reduction. The
reduced price will range from ¥238 to ¥317. When each of the closing prices of the shares of theCompany’s common stock at the Tokyo Stock Exchange on 20 continuous trading days are 130% ormore of the conversion price of the bonds applicable on those trading days, the Company has the option
to redeem all the remaining bonds on a specified redemption date after January 3, 2013 at a rate of ¥100
per ¥100 of each bond. The Company was not required to bifurcate any of the embedded featurescontained in these bonds for accounting purposes.

F-50(Continued)

HITACHI, LTD.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements

In September 2007, Hitachi Metals Ltd. (the issuer), a subsidiary of the Company, issued ¥20,000 million
Euroyen zero coupon convertible bonds due 2019 (“the Bonds”). The bondholders are entitled to stockacquisition rights effective from September 27, 2007 to August 30, 2019 and the initial conversion priceis ¥2,042 per share. The closing price of the shares on August 28, 2007, as reported by Tokyo Stock
Exchange, was ¥1,344 per share. The stock acquisition rights may be exercised by the holder of theBonds during any particular calendar quarter only if the closing price of the shares for any 20 trading
days in a period of 30 consecutive trading days ending on the last trading day of the immediately
preceding calendar quarter is more than 120% of the conversion price. The Bonds also contain otherembedded features, none of which were required to be bifurcated, such as the issuer’s call option, theissuer’s cash-settlement option, and the investors’ put option. By giving notice to the bondholders on orafter September 13, 2014, the issuer may acquire from all bondholders all of the relevant bonds under the
cash-settlement option, and upon reacquiring the Bonds, the issuer is required to pay the bondholders
cash equal to 100% of the principal amount and deliver common shares of the issuer with a fair value
equivalent to the fair value of the stock acquisition rights. As for the put option, the bondholders areentitled, at their option, to require the issuer to redeem the Bonds at a redemption price of 100% of theprincipal amount on September 13, 2011 and September 11, 2015.

F-51(Continued)

HITACHI, LTD.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements(10)

Retirement and Severance Benefits(a) Defined benefit plans
The Company and its subsidiaries have a number of contributory funded defined benefit pension plans
and unfunded lump-sum payment plans to provide retirement and severance benefits to substantially all
employees. The Company and certain subsidiaries adopted cash balance plans, and certain subsidiaries
amended certain of their defined benefit plans to cash balance plans during the years ended March 31,
2012, 2011 and 2010.
Under the cash balance plans, each employee has a notional account which represents pension benefits.
The balance in the notional account is based on principal credits, which are accumulated as employees
render services, and interest credits, which are determined based on the market interest rates.
Under unfunded lump-sum payment plans, employees are entitled to lump-sum payments based on theirearnings and the length of service at retirement or termination of employment for reasons other thandismissal for cause.
Net periodic benefit cost for the funded benefit pension plans and the unfunded lump-sum payment plans
for the years ended March 31, 2012, 2011 and 2010 consists of the following components:
2012
Service cost
Interest cost
Expected return on plan assets for the period
Amortization of prior service benefit
Amortization of actuarial loss
Transfer to defined contribution pension plan
Curtailments (gain) loss
Settlements loss
Employees’ contributions
Net periodic benefit cost

72,21951,812(36,353)(23,759)
93,033
(250)
(53)
48
(159)
156,538

Yen (millions)
2011
2010
71,88154,036(35,741)(23,614)89,549
1,806
1,082
(162)
158,837

71,77755,352(33,564)(22,005)
96,399
39
(227)
603
(164)
168,210The estimated prior service cost and actuarial loss for the defined benefit pension plans that will beamortized from accumulated other comprehensive income (loss) into net periodic benefit cost during theyear ending March 31, 2013 are as follows:
Yen (millions)(22,090)
94,810Prior service benefit
Actuarial loss

F-52

(Continued)

HITACHI, LTD.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements

Reconciliations of beginning and ending balances of the benefit obligation and the fair value of plan
assets of the contributory funded defined benefit pension plans and the benefit obligation of unfunded
lump-sum payment plans are as follows:
Yen (millions)
2011
2012
Change in benefit obligation:
Benefit obligation at beginning of year
2,188,485 2,193,449
Service cost
72,21971,881
Interest cost
51,81254,036
Plan amendments
3,799
993
Actuarial loss
98,79624,422
Benefits paid
(146,576) (144,528)
Acquisitions and divestitures(39,303)3,329
Transfer to defined contribution pension plan
(16,815)(9,355)Curtailments
(410)
644
Settlements(159)(6,386)
Foreign currency exchange rate changes(1,506)
Benefit obligation at end of year
2,210,342 2,188,485
Change in plan assets:
Fair value of plan assets at beginning of year
Actual return on plan assets
Employers’ contributions
Employees’ cash contributions
Benefits paid
Acquisitions and divestitures
Transfer to defined contribution pension plan
Settlements
Foreign currency exchange rate changes
Fair value of plan assets at end of year

1,275,725 1,269,133
6,534
3,539
149,727
110,439
155
162(104,967) (106,084)(27,864)
4,944(1,120)(1,547)(204)(4,861)(778)
1,297,208 1,275,725

Funded status(913,134)(912,760)

Amounts recognized in the consolidated balance sheets as of March 31, 2012 and 2011 are as follows:
Yen (millions)
2011
2012
Other assets
Accrued expenses
Retirement and severance benefits

7,708(29,865)(890,977)(913,134)

F-53

9,785
(30,730)(891,815)(912,760)(Continued)

HITACHI, LTD.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements

Amounts recognized in accumulated other comprehensive loss as of March 31, 2012 and 2011 consist of:Yen (millions)
2011
2012
Prior service benefit
Actuarial loss

(97,660)
639,436
541,776(129,918)
618,905
488,987

The Company and all subsidiaries use their year-end as a measurement date. Weighted-averageassumptions used to determine the year-end benefit obligations are as follows:

Discount rate
Rate of compensation increase

2012

2011

2.1%
2.4%

2.4%
2.6%

Weighted-average assumptions used to determine the net periodic pension cost for the years ended March
31, 2012, 2011 and 2010 are as follows:

Discount rate
Expected long-term return on plan assets
Rate of compensation increase

2012

2011

2010

2.4%
2.9%
2.6%

2.5%
2.9%
2.6%

2.6%
3.0%
2.7%

The expected long-term rate of return on plan assets is developed for each asset class, and is determinedprimarily on historical returns on the plan assets and other factors.
The accumulated benefit obligation was ¥2,125,048 million as of March 31, 2012 and ¥2,102,801 million
as of March 31, 2011.
Information for pension plans with accumulated benefit obligations in excess of plan assets and pension
plans with projected benefit obligations in excess of plan assets is as follows:
Yen (millions)
2011
2012
Plans with accumulated benefit obligations in excess of plan assets:
Accumulated benefit obligations
Plan assets

1,998,786
1,153,159

1,874,847
1,028,469

Plans with projected benefit obligations in excess of plan assets:
Projected benefit obligations
Plan assets

2,170,296
1,249,454

2,004,552
1,082,007

F-54(Continued)

HITACHI, LTD.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements

The objective of the Company’s investment policy is to ensure a stable return from the plans’
investments over the long term, which allows the Company’s and certain subsidiaries’ pension funds tomeet their future obligations, and the Company and certain subsidiaries attempt to maintain the pension
funds in sound condition. In order to achieve the above objective, a target rate of return is established,taking into consideration the composition of participants, level of funded status, the Company’s andcertain subsidiaries’ capacity to absorb risks and the current economic environment. Also, a target asset
allocation is established to achieve a target rate of return, based on the expected rate of return by each
asset class, the standard deviation of the rate of return and the correlation coefficient among the assets.
The investments are diversified. Under the current target asset allocation, approximately 25 percent ofplan assets are invested in equity securities and approximately 45 percent are invested in domestic andforeign government bonds and corporate bonds. The remaining 30 percent are invested in other assets,such as hedge funds, private equity funds and life insurance company general accounts. The Company
and certain subsidiaries reduced the ratio of equity securities during the year ended March 31, 2012 inorder to reduce the risks resulting from volatility in the equity markets. Rebalancing will occur if markets
fluctuate in excess of certain levels. The Company and certain subsidiaries periodically review actual
returns on assets, economic environments and their capacity to absorb risk and realign the target asset
allocation if necessary.
The Company and certain subsidiaries prioritize the use of observable inputs in markets over the use ofunobservable inputs when measuring fair value as follows:
Level 1
Quoted prices for identical assets in active markets.
Level 2
Quoted prices for similar assets in active markets; quoted prices associated with transactions that are notdistressed for identical or similar assets in markets that are not active; or, valuations whose significant
inputs are derived from or corroborated by observable market data.
Level 3
Valuations using inputs that are not observable.

F-55(Continued)

HITACHI, LTD.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements

The following table presents the plan assets that are measured at fair value as of March 31, 2012 and2011.

Equity securities (a)Government and municipal debt securities (b)Corporate and other debt securities (c)Hedge funds (d)Securitization products (e)Cash and cash equivalents
Life insurance company general accounts (f)Commingled funds (g)Other

Equity securities (a)Government and municipal debt securities (b)Corporate and other debt securities (c)Hedge funds (d)Securitization products (e)Cash and cash equivalents
Life insurance company general accounts (f)Commingled funds (g)
Other

Total
86,248161,360
69,70553,87137,79825,048
119,771
702,652
40,755
1,297,208

Yen (millions)2012
Fair Value Measurements
Level 1
Level 2
Level 384,2292,019
149,770
11,59038,482
31,223
11,41242,45937,79825,048
119,771
666,198
36,45432,901
4,851
3,003
291,948854,323
150,937

Total
112,808
118,165
62,14855,35934,08725,457
116,558
703,279
47,864
1,275,725

Yen (millions)
2011
Fair Value Measurements
Level 1
Level 2
Level 3
108,8883,920
113,182
4,983
31,04831,10013,01442,34534,08725,457
116,558
666,127
37,152
37,2406,974
3,650
284,767
842,624
148,334(a) Approximately 75 percent of equity securities are invested in Japan-listed stocks as of March 31, 2012
and 2011, respectively. Approximately 25 percent of equity securities are invested in stocks listed
overseas as of March 31, 2012 and 2011, respectively. Equity securities are primarily valued atquoted market prices.
(b) Approximately 70 percent and 80 percent of government and municipal debt securities are invested inbonds issued in Japan and primarily consist of Japanese government bonds as of March 31, 2012 and2011. Approximately 30 percent and 20 percent of government and municipal debt securities areinvested in bonds issued in overseas markets and primarily consist of foreign government bonds as ofMarch 31, 2012 and 2011. Government and municipal debt securities are primarily valued at prices
provided by the securities industry, the industrial associations in each country, or prices which arecalculated on the basis of market interest rates.
F-56(Continued)

HITACHI, LTD.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements(c) Approximately 20 percent and 25 percent of corporate and other debt securities are invested in bonds
issued in Japan as of March 31, 2012 and 2011, respectively. Approximately 80 percent and 75
percent of corporate and other debt securities are invested in bonds issued in overseas markets as ofMarch 31, 2012 and 2011, respectively. Corporate and other debt securities are mainly valued atprices provided by the securities industry, the industrial associations in each country, or prices which
are calculated on the basis of market interest rates. If these values are not available, corporate andother debt securities are valued at theoretical prices, taking into consideration the interest rates ofgovernment bonds of the related countries, swap interest rates and credit risks.
(d) Hedge funds are invested primarily in relative value strategy funds, event driven funds, equity
long/short funds, and macroeconomic and Commodity Trading Advisor (CTA) funds. Hedge funds
are valued using the Net Asset Value (NAV) provided by the administrator of the fund. The NAV isbased on the value of the underlying assets owned by the fund, minus its liabilities, and then divided
by the number of units outstanding.
(e) Securitization products are invested primarily in collateralized loan obligations. These investments arevalued at prices provided by financial institutions. The Company corroborates the prices, taking into
consideration primarily the market values of the underlying loans, the market values of similar debt
securities, and the future expected default rates and recovery rates of the collateralized loans.
(f) Life insurance company general accounts are valued at conversion value at the end of the period.
(g) Commingled funds represent pooled institutional investments. Approximately 30 percent and 35
percent of commingled funds are invested in listed stocks as of March 31, 2012 and 2011,
respectively, 40 percent in government and municipal debt securities as of March 31, 2012 and 2011,10 percent in corporate and other debt securities as of March 31, 2012 and 2011, and 20 percent and15 percent in other assets as of March 31, 2012 and 2011, respectively. Commingled funds are valued
at their NAV provided by the administrators of the funds, which are based on the value of theunderlying assets owned by the funds, divided by the number of units outstanding.

F-57(Continued)

HITACHI, LTD.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements

The following table presents the reconciliation of the beginning and ending balances of Level 3 assets forthe year ended March 31, 2012 and 2011.
Yen (millions)
2012
Actualreturn on Realized
plan assets gain or loss
Purchases, Transfers
on planBeginning still heldbalance atsales, and in and/or
at theassetsMarch 31, reporting sold during settlements, out ofthe period
2011
net
Level 3
date
Corporate and other debt
securities
Hedge funds
Securitization products
Commingled funds
Other

Foreigncurrency
exchange

Endingbalance at
March 31,
2012

-

(413)
(243)
(194)
(310)
(32)
(1,192)

31,22342,45937,79836,454
3,003
150,937

Actualreturn on Realized
plan assets gain or loss
Purchases, Transfers
on planBeginning still heldbalance atsales, and in and/or
assetsat theMarch 31, reporting sold during settlements, out ofthe period
2010
net
Level 3date

Foreigncurrency
exchange

Endingbalance at
March 31,
2011

(169)
(30)
(25)
(162)
(7)
(393)

31,10042,34534,087
37,152
3,650
148,334

31,10042,34534,087
37,152
3,650
148,334

(163)
(937)
(1,742)(1,810)(29)(4,681)

24
(353)
39
(295)
364
(221)

675
1,647
5,608
1,717
(950)
8,697

Yen (millions)
2011

Corporate and other debt
securities
Hedge funds
Securitization products
Commingled funds
Other

19,49349,38629,26237,482
4,922
140,545

197
2,082
7,283
(3,485)
(463)
5,614

F-58

12
(370)
1,090
(375)
537
894

11,434(8,723)(3,452)
3,660(1,339)
1,580

133
(71)
32
94

(Continued)

HITACHI, LTD.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements

The Company and its subsidiaries expect to contribute ¥82,441 million to their defined benefit plans forthe year ending March 31, 2013.
The following benefit payments, which reflect expected future service, as appropriate, are expected to bepaid.
Yen (millions)Years ending March 31
2013
2014
2015
2016
2017
2018-2022

137,558
113,933
119,100
120,884
121,193613,703(b) Defined contribution plans
The Company and certain subsidiaries have a number of defined contribution plans. The amounts of cost
recognized for the Company’s and certain subsidiaries’ contributions to the plans for the years ended
March 31, 2012, 2011 and 2010 were ¥20,188 million, ¥18,593 million and ¥18,758 million,
respectively.

F-59(Continued)

HITACHI, LTD.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements(11) Common Stock
The Company has authorized issuance of 10 billion shares of common stock.
The number of issued shares and the amount of common stock for the years ended March 31, 2012, 2011
and 2010 are as follows:
Yen(millions)Issued shares
AmountBalance as of March 31, 2009
Issuance of common stock
Conversion of convertible bonds

3,368,126,056
1,150,000,000
6,309

282,033
126,776
1

Balance as of March 31, 2010
Conversion of convertible bonds

4,518,132,365
2,012,599

408,810319

Balance as of March 31, 2011
Conversion of convertible bonds

4,520,144,964
117,640,353

409,129
18,646

Balance as of March 31, 2012

4,637,785,317

427,775

The issuance of common stock for the year ended March 31, 2010 and the conversion of convertible bonds
into common stock for the years ended March 31, 2012, 2011 and 2010 were accounted for in accordancewith the provisions of the Japanese Company Law by crediting one-half of the issue price or theconversion price to each of the common stock accounts and the capital surplus accounts.

F-60(Continued)

HITACHI, LTD.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements(12) Capital Surplus
The changes in capital surplus include the effect of changes in the Company’s ownership interest in its
consolidated subsidiaries. The net income (loss) attributable to Hitachi, Ltd. and transfers from (to)noncontrolling interests for the years ended March 31, 2012, 2011 and 2010 are as follows:
Yen(millions)
2011
2010
2012
Net income (loss) attributable to Hitachi, Ltd.
Transfers from (to) the noncontrolling interests
Decrease in capital surplus for purchase of listed
subsidiaries’ ownership interests to convert theminto wholly owned subsidiaries
Other
Net transfers from (to) noncontrolling interests
Change from net income (loss) attributable to Hitachi, Ltd.
and transfers from (to) noncontrolling interests

347,179

238,869(106,961)(18,822)(2,705)(21,527)(6,713)(1,516)(8,229)(58,175)(6,823)(64,998)

325,652

230,640(171,959)

For the year ended March 31, 2012, the purchase of listed subsidiaries’ ownership interests is related to thepurchase of the noncontrolling interests of Shin-Kobe Electric Machinery Co., Ltd. by Hitachi ChemicalCo., Ltd. and Hitachi Business Solution Co., Ltd. by Hitachi Solutions, Ltd. for the purpose of convertingthem into wholly owned subsidiaries.
For the years ended March 31, 2011 and 2010, the purchase of listed subsidiaries’ ownership interests is
related to the purchase of the noncontrolling interests of Hitachi Information Systems, Ltd., Hitachi
Software Engineering Co., Ltd., Hitachi Systems & Services, Ltd., Hitachi Plant Technologies, Ltd. andHitachi Maxell, Ltd. for the purpose of converting them into wholly owned subsidiaries. As a result,
Hitachi Information Systems, Ltd., Hitachi Software Engineering Co., Ltd. and Hitachi Systems &Services, Ltd. had been converted into wholly owned subsidiaries during the year ended March 31, 2010,
and Hitachi Plant Technologies, Ltd. and Hitachi Maxell, Ltd. had been converted into wholly owned
subsidiaries during the year ended March 31, 2011. On October 1, 2011 when Hitachi Information
Systems, Ltd. was merged into Hitachi Electronics Services Co., Ltd., Hitachi Systems, Ltd. wasestablished. On October 1, 2010 when Hitachi Systems & Services, Ltd., was merged into Hitachi
Software Engineering Co., Ltd., Hitachi Solutions, Ltd. was established.
The total decreases in noncontrolling interests during the years ended March 31, 2012, 2011 and 2010
resulting from these equity transactions were ¥21,232 million, ¥8,667 million and ¥193,880 million,
respectively.

F-61(Continued)

HITACHI, LTD.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements(13) Legal Reserve and Retained Earnings, and Dividends
The Japanese Company Law (JCL) provides that earnings in an amount equal to 10 percent ofappropriations of retained earnings to be paid as dividends should be appropriated as a capital surplus or alegal reserve until the total of capital surplus and legal reserve equals 25 percent of stated common stock.
In addition to transfer from capital surplus to stated common stock, either capital surplus or legal reserve
may be available for dividends by resolution of the shareholders’ meeting.
Dividends during the years ended March 31, 2012 and 2011 represent dividends declared during those
years. For the year ended March 31, 2010, the Company did not pay any dividends. On May 10, 2012, theBoard of Directors approved a cash dividend for the second half of the year ended March 31, 2012 of ¥5.0
per share, aggregating ¥23,175 million. No provision has been made in the accompanying consolidated
financial statements for this cash dividend.
Cash dividends per share for the years ended March 31, 2012 and 2011 were ¥8.0 based on dividends
declared with respect to earnings for the periods.
(14) Treasury Stock
The JCL allows a company to acquire treasury stock upon shareholders’ approval to the extent thatsufficient distributable funds are available. If the Board of Directors’ authority is stated in the articles ofincorporation, a company is allowed to acquire treasury stock not upon shareholders’ approval but Boardof Directors’ approval. Acquisition of treasury stock is allowed under the Company’s articles ofincorporation.
Pursuant to the provisions of the JCL, shareholders may request the company to acquire their shares
representing less than a minimum trading lot as shares less than a minimum trading lot cannot be publicly
traded and such a shareholder holding less than a minimum trading lot cannot exercise a voting right andother shareholder’s rights except as provided in the JCL or the articles of incorporation. The JCL also
states that a shareholder holding shares less than a minimum trading lot may request the company to sell
its treasury stock, if any, to the shareholder up to a minimum trading lot if entitled under the articles ofincorporation. Sale of treasury stock is allowed under the Company’s articles of incorporation.

F-62(Continued)

HITACHI, LTD.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements

The changes in treasury stock for the years ended March 31, 2012, 2011 and 2010 are summarized asfollows:
Yen (millions)SharesAmountBalance as of March 31, 2009
Acquisition for treasury
Sales of treasury stock

43,973,964
376,025(335,738)

26,237
115(201)

Balance as of March 31, 2010
Acquisition for treasury
Sales of treasury stock

44,014,251
456,705(41,926,879)

26,151
183(24,963)

Balance as of March 31, 2011
Acquisition for treasury
Sales of treasury stock

2,544,077
281,695(82,533)

1,371
126
(47)

Balance as of March 31, 2012

2,743,239

1,450

Sales of treasury stock for the year ended March 31, 2011 includes exchange of treasury stock tononcontrolling interest holders in order to convert Hitachi Plant Technologies, Ltd. and Hitachi Maxell,
Ltd. to wholly owned subsidiaries.

F-63(Continued)

HITACHI, LTD.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements(15) Accumulated Other Comprehensive Loss
Accumulated other comprehensive loss, net of related tax effects, displayed in the consolidated statementsof equity is classified as follows:
Yen (millions)
2011
2010
2012
Foreign currency translation adjustments:
Balance at beginning of year
(252,206) (182,783) (179,737)
Other comprehensive income (loss),
net of reclassification adjustments
31,603(69,194)
4,289
(229)
(7,335)
Net transfer from (to) noncontrolling interests(12)
Balance at end of year
(220,615) (252,206) (182,783)
Pension liability adjustments:
Balance at beginning of year
(256,566) (272,410) (405,082)
Other comprehensive income (loss),
net of reclassification adjustments(37,895)
15,852
141,761(8)(9,089)Net transfer from (to) noncontrolling interests
209
Balance at end of year
(294,252) (256,566) (272,410)
Net unrealized holding gain on available-for-sale securities:
Balance at beginning of year
16,90525,56412Effect of consolidation of securitization entities upon
initial adoption of the amended provisions of ASC 810(2,977)
Other comprehensive income (loss),
net of reclassification adjustments
3,574(5,728)23,20946
2,343
Net transfer from (to) noncontrolling interests
12
16,90525,564
Balance at end of year
20,491
Cash flow hedges:
Balance at beginning of year
(1,195)(2,428)(1,544)
Other comprehensive income (loss),
net of reclassification adjustments(1,326)
1,233
(833)
(51)
Net transfer from (to) noncontrolling interests
1(1,195)(2,428)
Balance at end of year
(2,520)Total accumulated other comprehensive loss:
Balance at beginning of year
(493,062) (432,057) (586,351)
Effect of consolidation of securitization entities upon
initial adoption of the amended provisions of ASC 810(2,977)
Other comprehensive income (loss),
net of reclassification adjustments(4,044)(57,837)
168,426(191)(14,132)
Net transfer from (to) noncontrolling interests
210
Balance at end of year
(496,896) (493,062) (432,057)

F-64(Continued)

HITACHI, LTD.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements

The following is a summary of reclassification adjustments by each classification of other comprehensive
income (loss) arising during the years ended March 31, 2012, 2011 and 2010 and the amounts of income tax
expense or benefit allocated to each component of other comprehensive income (loss), including
reclassification adjustments. The amounts include amounts attributable to noncontrolling interests.
Yen (millions)2012
Before-tax Tax benefit Net-of-tax(expense)amountamountOther comprehensive loss arising during the year:
Foreign currency translation adjustments
Pension liability adjustments
Net unrealized holding gain on available-for-salesecurities
Cash flow hedges
Reclassification adjustments for realized net loss
included in net income:
Foreign currency translation adjustments
Pension liability adjustments
Net unrealized holding gain on available-for-salesecurities
Cash flow hedges
Other comprehensive loss, net of reclassification
adjustments:
Foreign currency translation adjustments
Pension liability adjustments
Net unrealized holding gain on available-for-salesecurities
Cash flow hedges

F-65(20,065)(129,071)

38,520(20,065)(90,551)(996)(3,039)(153,171)963
734
40,217(33)(2,305)(112,954)

43,52776,099(29,697)

43,527
46,402

4,980(999)
123,607(1,985)802(30,880)

2,995
(197)
92,72723,462(52,972)

8,823

23,462(44,149)

3,984(4,038)(29,564)(1,022)
1,536
9,337

2,962
(2,502)(20,227)(Continued)

HITACHI, LTD.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements

Yen (millions)2011
Before-tax Tax benefit Net-of-tax
amount(expense)amountOther comprehensive loss arising during the year:
Foreign currency translation adjustments
Pension liability adjustments
Net unrealized holding gain on available-for-salesecurities
Cash flow hedges
Reclassification adjustments for realized net loss
included in net income:
Foreign currency translation adjustments
Pension liability adjustments
Net unrealized holding gain on available-for-salesecurities
Cash flow hedges
Other comprehensive loss, net of reclassification
adjustments:
Foreign currency translation adjustments
Pension liability adjustments
Net unrealized holding gain on available-for-salesecurities
Cash flow hedges

F-66(90,643)(55,048)

26,580(90,643)(28,468)(10,045)74(155,662)

4,833
(177)
31,236(5,212)(103)(124,426)

3,264
78,505(33,961)

3,264
44,544(244)
2,550
84,075104(459)(34,316)

(140)
2,091
49,759(87,379)
23,457(7,381)(87,379)
16,076(10,289)
2,624(71,587)

4,937
(636)
(3,080)(5,352)
1,988(74,667)(Continued)

HITACHI, LTD.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements

Yen (millions)2010
Before-tax Tax benefit Net-of-tax
amount(expense)amountOther comprehensive income arising during the year:
Foreign currency translation adjustments
Pension liability adjustments
Net unrealized holding gain on available-for-salesecurities
Cash flow hedges
Reclassification adjustments for realized net loss
included in net loss:
Foreign currency translation adjustments
Pension liability adjustments
Net unrealized holding gain on available-for-salesecurities
Cash flow hedges
Other comprehensive income, net of reclassification
adjustments:
Foreign currency translation adjustments
Pension liability adjustments
Net unrealized holding gain on available-for-salesecurities
Cash flow hedges

F-67

8,487
116,184

3,979

8,487
120,163

40,295(308)
164,658(11,758)(1,173)(8,952)28,537(1,481)
155,706(1,580)73,776(29,916)(1,580)43,860236
258
72,690(97)
552(29,461)139
810
43,229

6,907
189,960(25,937)

6,907
164,023

40,531(50)
237,348(11,855)(621)(38,413)28,676(671)
198,935(Continued)

HITACHI, LTD.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements(16) Pledged Assets
As of March 31, 2012, the Company and certain subsidiaries pledged a portion of their assets as
collateral primarily for bank loans as follows:
Yen (millions)
Cash and cash equivalents
Short-term investments
Accounts receivables
Inventories
Investments and advances
Land
Buildings
Machinery and equipment
Other assets

969
32
6,948
14,126
470
1,736
3,770
7,914
11
35,976

In addition to the above, prepaid expenses and other current assets as of March 31, 2012 and 2011
include restricted cash of ¥2,630 million and ¥2,661 million, respectively, as a compensating balance forshort-term borrowing arrangements.

F-68(Continued)

HITACHI, LTD.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements(17) Commitments and Contingencies
The Company and its operating subsidiaries are contingently liable for loan guarantees to its affiliates
and others in the amount of approximately ¥46,547 million as of March 31, 2012.
Hitachi Capital Corporation (HCC) and certain other financial subsidiaries provide guarantees tofinancial institutions for extending loans to customers of the subsidiaries. As of March 31, 2012, theundiscounted maximum potential future payments under such guarantees amounted to ¥340,793
million. For providing these guarantees, the subsidiaries obtain collateral appropriate for the amount of
the guarantees, and therefore, the Company considers the risk to be low. The Company accrued¥12,398 million as an obligation to stand ready to perform over the term of the guarantees in the eventthe customer cannot make scheduled payments.
The Company and HCC provide loan commitments to affiliates and others.
The outstanding balance of loan commitments as of March 31, 2012 is as follows:
Yen (millions)
Total commitment available
Less amount utilized
Balance available

10,969724
10,245The amount of total commitment available in the table above includes lines of credits which require an
additional credit approval prior to funding, and it may not be fully utilized.
The Company and certain subsidiaries have line of credit arrangements with banks in order to secure afinancing source for business operations. The unused lines of credit as of March 31, 2012 amounted to¥506,162 million, primarily related to unused lines of credit belonging to the Company. The Company
maintains commitment line agreements with a number of banks and pays commitment fees as consideration.
These commitment agreements generally provide a one-year term, and are subject to renewal at the end of theterm. The unused availability under these agreements as of March 31, 2012 amounted to ¥200,000 million.
The Company also maintains another commitment line agreement, whose three years and two months term
ends in May 2013, with financing companies. The unused availability under this agreement as of March 31,
2012 amounted to ¥200,000 million.
As of March 31, 2012, outstanding commitments for the purchase of property, plant and equipment
were approximately ¥32,466 million.

F-69(Continued)

HITACHI, LTD.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
It is a common practice in Japan for companies, in the ordinary course of business, to receive
promissory notes in the settlement of trade accounts receivable and to subsequently discount such notes
to banks or to transfer them by endorsement to suppliers in the settlement of accounts payable. As of
March 31, 2012 and 2011, the Company and subsidiaries were contingently liable for trade notes
discounted and endorsed in the following amounts:
Yen (millions)
2011
2012

Notes discounted
Notes endorsed

3,937
2,800
6,737

3,593
1,851
5,444

A certain subsidiary is contingently liable for the transfer of export receivables with recourse. As of
March 31, 2012, the amount of transfer of export receivables with recourse was ¥5,566 million.
The Company and its subsidiaries provide warranties for certain of their products. The accrued productwarranty costs are based primarily on historical experience of actual warranty claims. The changes in
accrued product warranty costs for the years ended March 31, 2012, 2011 and 2010 are summarized asfollows:

Balance at beginning of year
Expense recognized upon issuance of warranties
Usage
Acquisitions and divestitures
Other, including effect of foreign currency translation
Balance at end of year

2012

Yen (millions)2011

55,32916,281(18,792)(10,007)(1,455)41,35656,957
20,755(19,219)410(3,574)55,3292010
60,44920,806(21,696)0(2,602)
56,957On June 15, 2006, Hamaoka Nuclear Power Station No. 5 of Chubu Electric Power Co., Inc. shut down
due to turbine damage. As a precautionary measure, on July 5, 2006, Shika Nuclear Power Station No.
2 of Hokuriku Electric Power Company, which uses the same type of turbines, was shut down for an
examination of the turbines and the examination revealed damage to the turbine vanes. The Company
accrued a provision for the repair costs.
In September 2008, Chubu Electric Power Co., Inc. filed a lawsuit against the Company. Chubu
Electric Power Co., Inc. sought compensation for consequential losses of ¥41,800 million mostly
composed of the additional costs to switch to thermal power arising from the shutdown at Hamaoka
Nuclear Power Station No.5. The lawsuit was settled in October 2011, and the Company paid asettlement in November 2011. The Company recognized a loss relating to such settlement for the year
ended March 31, 2012. However, such loss has no material effect on the Company’s results ofoperations.

F-70(Continued)

HITACHI, LTD.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
In May 2009, Hokuriku Electric Power Company filed a lawsuit against the Company. Hokuriku
Electric Power Company seeks compensation for consequential losses of ¥33,701 million mostly
composed of the additional costs to switch to thermal power arising from the shutdown at Shika
Nuclear Power Station No.2. The lawsuit was settled in February 2012, and the Company paid asettlement in March 2012. The Company recognized a loss relating to such settlement for the year
ended March 31, 2012. However, such loss has no material effect on the Company’s results ofoperations.
In January 2007, the European Commission ordered the Company and one of its affiliated companies
to pay a fine for infringement of EC antitrust rules regarding alleged antitrust violations for the gas
insulated switchgear equipment used at substations. In April 2007, the Company lodged an appeal with
the Court of First Instance of the European Communities (currently the General Court of the European
Union) requesting the court to annul the decision of the European Commission. In July 2011, the Court
rejected the appeal. The Company and the affiliated company paid that fine in September 2011.
In December 2006, the Company and a subsidiary in Europe received requests for information from theEuropean Commission, and a former subsidiary in Japan received a grand jury subpoena in connection
with the investigation conducted by the Antitrust Division of the U.S. Department of Justice, all in
respect of alleged antitrust violations relating to liquid crystal displays. The former Japanese subsidiarypaid the fine in relation to the investigation by the Antitrust Division of the U.S. Department of Justicein June 2009.
In June 2007, the Company received requests for information from the European Commission in
respect of alleged antitrust violations relating to dynamic random access memories. In May 2010, theEuropean Commission ordered the Company to pay a fine for infringement of EC antitrust rules. The
Company paid that fine in August 2010.
In November 2007, a subsidiary of the Company in the U.S. received a grand jury subpoena inconnection with the investigation conducted by the Antitrust Division of the U.S. Department of Justicein respect of alleged antitrust violations relating to cathode ray tubes. In addition, in November 2007,
two subsidiaries in Asia and in Europe received requests for information from the European
Commission. Furthermore, in November 2007, a subsidiary in Canada received requests for
information from the Canadian Competition Bureau.
In June 2009, a subsidiary of the Company in Japan received a grand jury subpoena in connection with
the investigation conducted by the Antitrust Division of the U.S. Department of Justice and received
requests for information from the European Commission, and a subsidiary of the Company in Korea
was investigated in Singapore by the Competition Commission of Singapore, all in respect of alleged
antitrust violations relating to optical disk drives. In September 2011, the Korean subsidiary received anotice of discontinuation of the investigation from the Competition Commission of Singapore. In
October 2011, the Japanese subsidiary agreed to pay a fine in relation to the investigation from the
Antitrust Division of the U.S. Department of Justice and in November 2011, it paid that fine.

F-71(Continued)

HITACHI, LTD.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
In July 2011, a subsidiary and an affiliated company of the Company in Japan received a statement ofobjections from the European Commission in respect of alleged antitrust violations relating tohigh-voltage power cables. These companies accrued the reasonably estimated amount for the loss.
In July 2011, a subsidiary of the Company in Japan was investigated by the Fair Trade Commission ofJapan, a subsidiary in the U.S. was investigated by and received a grand jury subpoena from the
Antitrust Division of the U.S. Department of Justice, the Company and a subsidiary in Europe received
requests for information from the European Commission, and a subsidiary in Canada received requests
for information from the Canadian Competition Bureau, all in respect of alleged antitrust violations
relating to automotive equipment.
The Company and these companies (including a former subsidiary) have cooperated with thecompetent authorities in connection with the above matters. Depending upon the outcome of thesematters, fines or surcharge payments, the amount of which is uncertain, may be imposed on them. In
addition, subsequent to these actions by the competent authorities, civil disputes, including class action
lawsuits, involving the Company and some of these companies (including a former subsidiary) havearisen in a number of countries, including in the U.S. and Canada. A reasonably estimated amount was
accrued for the potential losses in relation to certain of these civil disputes.
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 these proceedings. Accordingly, except as otherwise stated, noaccrual for potential loss has been made. The actual amount of fines, surcharge payments or any otherpayments resulting from these legal proceedings may be different from the accrued amounts.
In addition to the above, the Company and certain subsidiaries are subject to several legal proceedings
and claims which have arisen in the ordinary course of business and have not been finally adjudicated.
These actions when ultimately concluded and determined will not, in the opinion of management, havea material adverse effect on the consolidated financial position or results of operations of the Company
and subsidiaries.

F-72(Continued)

HITACHI, LTD.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements(18) Impairment Losses for Long-Lived Assets
For the year ended March 31, 2012, the majority of the impairment losses were recorded on property,
plant and equipment located in Japan. The High Functional Materials & Components segment
recognized a loss of ¥19,483 million, primarily due to restructuring of its semiconductor package
material businesses as a result of a recent decrease in demand of the market and integrating
manufacturing facilities for electronics and IT devices business. The Information &Telecommunication Systems segment recognized a loss of ¥4,596 million primarily due torestructuring of its micro devices business as a result of lower-than-expected future income. The fairvalue estimates used to determine these losses were based primarily on discounted future cash flows.
For the year ended March 31, 2011, the majority of the impairment losses were recorded on property,
plant and equipment located in Japan. The Components & Devices segment recognized a loss of¥16,561 million, primarily due to its business manufacturing batteries for electronic products for which
the Company has recognized losses for consecutive periods and projected lower-than-expected future
income because of a reduction of production, and its liquid crystal display components business which
was projected to have lower production as a result of a recent decrease in demand of the market. The
High Functional Materials & Components segment recognized a loss of ¥10,956 million primarily due
to its automotive related materials businesses whose profitabilities deteriorated because of the Great
East Japan Earthquake on March 11, 2011. The fair value estimates used to determine these losses werebased primarily on discounted future cash flows.
For the year ended March 31, 2010, the majority of the impairment losses were recorded on property,
plant and equipment located in Japan. The Components & Devices segment recognized a loss of¥18,611 million, primarily due to 1) its battery business for which the Company has recognized losses
for consecutive periods and lower-than-expected future income because of a reduction of production,2) its liquid crystal display panel business which was projected to have lower production as a result of a
recent decrease in demand of the market, and 3) a part of its record media products business whose
profitability has deteriorated because of severe market conditions accompanied by falling prices. The
fair value estimates used to determine these losses were based primarily on discounted future cash
flows.

F-73(Continued)

HITACHI, LTD.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements(19) Restructuring Charges
Certain losses incurred in the reorganization of the Company’s operations are considered restructuring
charges. Components and related amounts of the restructuring charges, before the related tax effects,
for the years ended March 31, 2012, 2011 and 2010 are as follows:
2012
Special and one-time termination benefits
Loss on fixed assets

22,99998
23,097

Yen (millions)
2011
5,653
104
5,757

2010
24,191
963
25,154The Company and certain subsidiaries provided special termination benefits to those employees
voluntarily leaving the companies, and certain subsidiaries provided one-time termination benefits dueto the subsidiaries’ liquidations. The accrued special termination benefits were recognized at the timevoluntary termination was offered and benefits were accepted by the employees. The accrued one-timetermination benefits were recognized at the time the subsidiaries communicated the plan to theiremployees. An analysis of the accrued special and one-time termination benefits for the years ended
March 31, 2012, 2011 and 2010 is as follows:

Balance at beginning of the year
New charges
Cash payments
Divestitures
Foreign currency exchange rate changes
Balance at end of the year

2012

Yen (millions)
2011

3,358
22,999(12,690)(6,233)
53
7,487

8,170
5,653
(10,374)
(91)
3,358

2010
7,543
24,191(23,548)
(16)
8,170

The following represents the significant restructuring activities for the year ended March 31, 2012 byreportable segment:
1. The Components & Devices segment restructured in order to rationalize the workforce of its liquid
crystal display business. The accrued special termination benefits expensed during the year ended
March 31, 2012 amounted to ¥7,094 million. The liabilities for special termination benefits
amounting to ¥92 million as of March 31, 2012 will be paid by March 31, 2013. Total restructuring
charges during the year ended March 31, 2012 consisted only of special termination benefits.
2. The High Functional Materials & Components segment restructured in order to reorganize its wires,
cables and other relevant products business, which has encountered severe deterioration in thebusiness environment. The accrued special termination benefits expensed during the year ended
March 31, 2012 amounted to ¥6,665 million. The liabilities for special termination benefits
amounting to ¥372 million as of March 31, 2012 will be paid by March 31, 2013. Total restructuring
charges during the year ended March 31, 2012 amounted to ¥6,706 million.
F-74(Continued)

HITACHI, LTD.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements

3. The Electronic Systems & Equipment segment restructured in order to reorganize its LCDs
manufacturing equipment and electronic parts manufacturing system businesses to reduce costs andimprove profitability. The accrued special termination benefits expensed during the year ended
March 31, 2012 amounted to ¥4,892 million. The liabilities for special termination benefits
amounting to ¥3,958 million as of March 31, 2012 will be paid by March 31, 2013. Total
restructuring charges during the year ended March 31, 2012 amounted to ¥4,912 million.
4. The Digital Media & Consumer Products segment restructured in order to reorganize its TV business,
which has encountered severe deterioration in the business environment. The accrued special
termination benefits expensed during the year ended March 31, 2012 amounted to ¥3,085 million.
The liabilities for special termination benefits amounting to ¥2,005 million as of March 31, 2012 will
be paid by March 31, 2013. Total restructuring charges during the year ended March 31, 2012
consisted only of special termination benefits.
The restructuring charges for the year ended March 31, 2011 mainly consist of special termination
benefits for the early-terminated employees of subsidiaries for the purpose of reducing costs andimproving profitability in the Components & Devices segment.
The following represents the significant restructuring activities for the year ended March 31, 2010 byreportable segment:
1. The Automotive Systems segment restructured in order to reorganize the automotive products
business, which encountered severe deterioration in the market. The accrued special termination
benefits expensed and paid during the year ended March 31, 2010 amounted to ¥7,731 million. Total
restructuring charges during the year ended March 31, 2010 consisted only of special termination
benefits.
2. The High Functional Materials & Components segment restructured in order to reorganize its
high-grade metal products and materials business to reduce costs and improve profitability. The
accrued special termination benefits expensed during the year ended March 31, 2010 amounted to¥4,010 million. The liabilities for special termination benefits amounting to ¥787 million as ofMarch 31, 2010 were paid by March 31, 2011. Total restructuring charges during the year ended
March 31, 2010 amounted to ¥4,426 million.
3. The Components & Devices segment restructured in order to reorganize the liquid crystal display
business, which included several subsidiaries’ liquidations. The accrued special and one-timetermination benefits expensed during the year ended March 31, 2010 amounted to ¥4,144 million.
The liabilities for special and one-time termination benefits amounting to ¥3,054 million as of March
31, 2010 were paid by March 31, 2011. Total restructuring charges during the year ended March 31,
2010 amounted to ¥4,182 million.

F-75(Continued)

HITACHI, LTD.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements(20) Other Income and Other Deductions
The following items are included in other income or other deductions for the years ended March 31,
2012, 2011 and 2010.
Yen (millions)
2011
2010
2012

Net gain (loss) on securities
Net gain (loss) on sale and disposal of rental assets
and other property
Exchange gain (loss)

209,725

61,046(1,220)19,181(2,360)(3,161)(9,508)(20,202)
186

The net gain on securities for the year ended March 31, 2012 includes gains of ¥223,143 million on
deconsolidation of certain subsidiaries.
The net gain on sale and disposal of rental assets and other property for the year ended March 31, 2012
includes the impact of gains on insurance claims related to property, plant and equipment damaged dueto the Great East Japan Earthquake.
The major component of net gain on securities for the year ended March 31, 2011 was related to a saleof shares of IPS Alpha Technology, Ltd., a former affiliated company accounted for by the equity
method.
Other income for the year ended March 31, 2011 includes a gain of ¥8,684 million on a bargain purchaserelated to the acquisition of Aloka Co., Ltd. (Aloka), subsequently renamed Hitachi Aloka Medical, Ltd.
Refer to note 29 for the nature and financial effect of the acquisition of Aloka.

F-76(Continued)

HITACHI, LTD.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements(21) Net Income Per Share Information
The reconciliations of the numbers and the amounts used in the basic and diluted net income (loss)
attributable to Hitachi, Ltd. stockholders per share computations are as follows:
Number of shares
2011
2010
2012
Weighted average number of shares on
which basic net income (loss) per share is
calculated
4,520,117,309
Effect of dilutive securities:
Unsecured convertible bonds (due 2014) 310,772,267
Number of shares on which diluted net
income (loss) per share is calculated
4,830,889,576
2012
Net income (loss) attributable to Hitachi, Ltd.
stockholders
Effect of dilutive securities:
Unsecured convertible bonds (due 2014)
Other
Net income (loss) attributable to Hitachi, Ltd.
stockholders on which diluted net income(loss) per share is calculated

4,515,932,415

3,662,578,076

315,249,850-

4,831,182,265

3,662,578,076

Yen (millions)
2011

2010

347,179

238,869(106,961)

62
(74)

72
(368)

(0)

347,167

238,573(106,961)

Yen
Net income (loss) attributable to Hitachi, Ltd.
stockholders per share:
Basic
Diluted

76.81
71.86

52.89
49.38

(29.20)(29.20)The net loss attributable to Hitachi, Ltd. stockholders per share computations for the year ended March
31, 2010 exclude all convertible bonds because their effect would have been antidilutive.

F-77(Continued)

HITACHI, LTD.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements(22) Supplementary Income and Expense Information

2012

Shipping and handling costs
Advertising expense
Maintenance and repairs
Rent
Research and development expense

147,551
30,21082,838136,219
412,514

Yen (millions)
2010
2011

140,240
31,17080,878
131,533
395,180

124,019
28,87772,065142,077
372,470(23) Supplementary Cash Flow Information
2012

Cash paid during the year for:
Interest
Income taxes
Noncash investing and financial activities:
Capitalized lease assets
Conversion of convertible bonds
issued by the Company

Yen (millions)
2010
2011

28,129116,31025,457122,057

26,706
61,155

5,783

13,807

5,956

37,292638

2The payments for the purchase and the proceeds from the sale of securities classified asavailable-for-sale disclosed in note 3 are included in purchase of investments in securities and shares of
newly consolidated subsidiaries and proceeds from sale of investments in securities and shares of
consolidated subsidiaries resulting in deconsolidation on the consolidated statements of cash flows.
(24) Concentrations of Credit Risk
The Company and its subsidiaries generally do not have significant concentrations of credit risk to any
counterparties nor any regions because they are diversified and spread globally.

F-78(Continued)

HITACHI, LTD.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements(25) Derivative Instruments and Hedging Activities
Overall risk profile
The major manufacturing bases of the Company and its subsidiaries are located in Japan and Asia. The
selling bases are located globally, and the Company and its subsidiaries generated approximately 45% of
their sales from overseas for the year ended March 31, 2012. These overseas sales are mainly denominatedin the U.S. dollar or Euro. As a result, the Company and its subsidiaries are exposed to market risks fromchanges in foreign currency exchange rates.
The Company’s financing subsidiaries in the U.K., the U.S. and Singapore issue variable rate medium-term
notes mainly through the Euro markets to finance their overseas long-term operating capital. As a result, theCompany and its subsidiaries are exposed to market risks from changes in foreign currency exchange rates
and interest rates.
The Company and its subsidiaries are also exposed to credit-related losses in the event of non-performanceby counterparties to derivative financial instruments, but it is not expected that any counterparties will failto meet their obligations because most of the counterparties are internationally recognized financial
institutions that are rated A or higher and contracts are diversified into a number of major financial
institutions.
The Company and its subsidiaries have an insignificant amount of derivative instruments containing
credit-risk-related contingent features, such as provisions that require the Company’s debt to maintain an
investment grade credit rating from each of the major credit rating agencies.
Risk management policy
The Company and its subsidiaries assess foreign currency exchange rate risk and interest rate risk bycontinually monitoring changes in these exposures and by evaluating hedging opportunities. It is theCompany’s principal policy that the Company and its subsidiaries do not enter into derivative financial
instruments for speculation purposes.
Foreign currency exchange rate risk management
The Company and its subsidiaries have assets and liabilities which are exposed to foreign currency
exchange rate risk and, as a result, they enter into forward exchange contracts and cross currency swap
agreements for the purpose of hedging these risk exposures.
In order to fix the future net cash flows principally from trade receivables and payables recognized, which
are denominated in foreign currencies, the Company and its subsidiaries on a monthly basis measure thevolume and due date of future net cash flows by currency. In accordance with the Company’s policy, acertain portion of measured net cash flows is covered using forward exchange contracts, which principally
mature within one year.
The Company and its subsidiaries enter into cross currency swap agreements with the same maturities as
underlying debt to fix cash flows from long-term debt denominated in foreign currencies. The hedging
relationship between the derivative financial instrument and its hedged item is highly effective in achieving
offsetting changes in foreign currency exchange rates.
F-79(Continued)

HITACHI, LTD.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
Interest rate risk management
The Company’s and certain subsidiaries’ exposure to interest rate risk is related principally to long-term
debt obligations. Management believes it is prudent to minimize the variability caused by interest rate risk.
To meet this objective, the Company and certain subsidiaries principally enter into interest rate swaps tomanage fluctuations in cash flows. The interest rate swaps entered into are receive-variable, pay-fixedinterest rate swaps. Under the interest rate swaps, the Company and certain subsidiaries receive variableinterest rate payments on long-term debt associated with medium-term notes and make fixed interest rate
payments, thereby creating fixed interest rate long-term debt.
Certain financing subsidiaries mainly finance a portion of their operations using long-term debt with a fixedinterest rate and lend funds at variable interest rates. Therefore, such companies are exposed to interest raterisk. Management believes it is prudent to minimize the variability caused by interest rate risk. To meet thisobjective, certain financing subsidiaries principally enter into interest rate swaps converting the fixed rate toa variable rate to manage fluctuations in fair value resulting from interest rate risk. Under the interest rate
swaps, certain financing subsidiaries receive fixed interest rate payments associated with long-term debt,
including medium-term notes, and make variable interest rate payments, thereby creating variable-ratelong-term debt.
The hedging relationship between the interest rate swaps and its hedged item is highly effective inachieving offsetting changes in cash flows and fair value resulting from interest rate risk.
Fair value hedge
Changes in the fair value of both recognized assets and liabilities, and derivative financial instruments
designated as fair value hedges of these assets and liabilities are recognized in other income (deductions).
Derivative financial instruments designated as fair value hedges include forward exchange contracts
associated with operating transactions, cross currency swap agreements and interest rate swaps associatedwith financing transactions.
Cash flow hedge
Foreign currency exposure:
Changes in the fair value of forward exchange contracts designated and qualifying as cash flow hedges offorecasted transactions are reported in accumulated other comprehensive income (AOCI). These amounts
are reclassified into earnings in the same period as the hedged items affect earnings.
It is expected that a net loss of approximately ¥515 million recorded in AOCI relating to existing forward
exchange contracts will be reclassified into other income or other deductions during the year ending March
31, 2013.
As of March 31, 2012, the maximum length of time over which the Company and its subsidiaries are
hedging their exposure to the variability in future cash flows associated with foreign currency forecasted
transactions is approximately 60 months.

F-80(Continued)

HITACHI, LTD.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
Interest rate exposure:
Changes in fair values of interest rate swaps designated as hedging instruments for the variability of cash
flows associated with long-term debt obligations are reported in AOCI. These amounts subsequently arereclassified into interest charges as a yield adjustment in the same period in which the hedged debt
obligations affect earnings.
It is expected that a net loss of approximately ¥303 million recorded in AOCI related to interest rate swaps
will be reclassified into interest charges as a yield adjustment of the hedged debt obligations during the year
ending March 31, 2013.
The contract or notional amounts of derivative financial instruments held as of March 31, 2012 and 2011
are summarized as follows:
Yen (millions)
2011
2012
Forward exchange contracts:
To sell foreign currencies
To buy foreign currencies
Cross currency swap agreements:
To sell foreign currencies
To buy foreign currencies
Interest rate swaps
Option contracts

F-81

175,505
102,684

228,088
122,653

109,794
135,345
345,143
3,205

96,712
100,586
280,951
7,221(Continued)

HITACHI, LTD.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements

The following tables, “Effective portion of derivatives designated as hedging instruments and related
hedged items” and “Ineffective portion and amount excluded from effectiveness test,” show the effects ofderivative instruments for fair value hedges on the consolidated statement of operations for the year ended
March 31, 2012:
Effective portion of derivatives designated as hedging instruments and related hedged items
Hedging instruments
Derivatives
Location
Forward exchange
Other income
contracts
Cross currency swap Interest charges
agreements

Related hedged items
Yen(millions)(302)(2,556)

Items
Accounts receivable andaccounts payable
Long-term debt

Location
Other income

Yen(millions)249

Interest charges

2,531(2,858)2,780

Ineffective portion and amount excluded from effectiveness test
Derivatives
Forward exchange contracts
Cross currency swap agreements
Interest rate swaps

Location
Other income
Other income
Interest charges

F-82

Yen (millions)
1,150
(20)
36
1,166

(Continued)

HITACHI, LTD.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements

The following tables, “Effective portion of derivatives designated as hedging instruments and related
hedged items” and “Ineffective portion and amount excluded from effectiveness test,” show the effects ofderivative instruments for fair value hedges on the consolidated statement of operations for the year ended
March 31, 2011:
Effective portion of derivatives designated as hedging instruments and related hedged items
Hedging instruments
Derivatives
Location
Forward exchange
Other income
contracts
Cross currency swap Interest charges
agreements

Related hedged items
Yen(millions)
8,955
2,693

Items
Accounts receivable andaccounts payable
Long-term debt

Location
Other income

Yen(millions)(8,576)

Interest charges(3,010)11,648(11,586)

Ineffective portion and amount excluded from effectiveness test
Derivatives
Forward exchange contracts
Cross currency swap agreements
Interest rate swaps

Location
Other income
Other income
Interest charges

F-83

Yen (millions)
(682)
1,412
54
784

(Continued)

HITACHI, LTD.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements

The following tables, “Effective portion of derivatives designated as hedging instruments and related
hedged items” and “Ineffective portion and amount excluded from effectiveness test,” show the effects ofderivative instruments for fair value hedges on the consolidated statement of operations for the year ended
March 31, 2010:
Effective portion of derivatives designated as hedging instruments and related hedged items
Hedging instruments
Derivatives
Location
Forward exchange
Other income
contracts
Cross currency swap Interest charges
agreements

Related hedged items
Yen(millions)
5,871(6,368)

Items
Accounts receivable andaccounts payable
Long-term debt

Location
Other income

Yen(millions)(5,877)

Interest charges

6,514

(497)

637

Ineffective portion and amount excluded from effectiveness test
Derivatives
Forward exchange contracts
Cross currency swap agreements
Interest rate swaps

Location
Other income
Other income
Interest charges

F-84

Yen (millions)
(175)
3,206
580
3,611

(Continued)

HITACHI, LTD.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements

The following tables, “Gain (loss) recognized in OCI, Effective portion of derivatives designated as hedging
instruments,” “Gain (loss) reclassified from AOCI into consolidated statement of operations, Effective
portion of derivatives designated as hedging instruments” and “Loss on derivatives designated as cash flow
hedging instruments, Ineffective portion and amount excluded from effectiveness test” show the effect ofderivative instruments for cash flow hedges on the consolidated statement of operations for the year ended
March 31, 2012:
Gain (loss) recognized in OCI
Effective portion of derivatives designated as hedging instruments
Derivatives
Forward exchange contracts
Cross currency swap agreements
Interest rate swaps
Option contracts

Yen (millions)(2,531)
105
948
819
(659)

Gain (loss) reclassified from AOCI into consolidated statement of operations
Effective portion of derivatives designated as hedging instruments
Derivatives
Forward exchange contracts
Cross currency swap agreements
Interest rate swaps
Option contracts

Location
Other income
Other income
Interest charges
Other income

Yen (millions)122(9,506)(535)(878)(10,797)

Loss on derivatives designated as cash flow hedging instruments
Ineffective portion and amount excluded from effectiveness test
Derivatives
Forward exchange contracts
Cross currency swap agreements
Interest rate swaps

Location
Other income
Other income
Interest charges

F-85

Yen (millions)
(113)
(43)
(120)
(276)

(Continued)

HITACHI, LTD.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements

The following tables, “Gain (loss) recognized in OCI, Effective portion of derivatives designated as hedging
instruments,” “Gain (loss) reclassified from AOCI into consolidated statement of operations, Effective
portion of derivatives designated as hedging instruments” and “Gain on derivatives designated as cash flow
hedging instruments, Ineffective portion and amount excluded from effectiveness test” show the effect ofderivative instruments for cash flow hedges on the consolidated statement of operations for the year ended
March 31, 2011:
Gain (loss) recognized in OCI
Effective portion of derivatives designated as hedging instruments
Derivatives
Forward exchange contracts
Cross currency swap agreements
Interest rate swaps
Option contracts

Yen (millions)
(220)
(153)
1,879
781
2,287

Gain (loss) reclassified from AOCI into consolidated statement of operations
Effective portion of derivatives designated as hedging instruments
Derivatives
Forward exchange contracts
Cross currency swap agreements
Interest rate swaps
Option contracts

Location
Other income
Other income
Interest charges
Other income

Yen (millions)166(4,174)(173)(701)(4,882)Gain on derivatives designated as cash flow hedging instruments
Ineffective portion and amount excluded from effectiveness test
Derivatives
Forward exchange contracts
Cross currency swap agreements
Interest rate swaps

Location
Other income
Other income
Interest charges

F-86

Yen (millions)
269
66
67
402

(Continued)

HITACHI, LTD.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements

The following tables, “Gain (loss) recognized in OCI, Effective portion of derivatives designated as hedging
instruments,” “Gain (loss) reclassified from AOCI into consolidated statement of operations, Effective
portion of derivatives designated as hedging instruments” and “Gain (loss) on derivatives designated as cash
flow hedging instruments, Ineffective portion and amount excluded from effectiveness test” show the effectof derivative instruments for cash flow hedges on the consolidated statement of operations for the year
ended March 31, 2010:
Gain (loss) recognized in OCI
Effective portion of derivatives designated as hedging instruments
Derivatives
Forward exchange contracts
Cross currency swap agreements
Interest rate swaps
Option contracts

Yen (millions)
1,323
2,435
(2,469)639
1,928

Gain (loss) reclassified from AOCI into consolidated statement of operations
Effective portion of derivatives designated as hedging instruments
Derivatives
Forward exchange contracts
Cross currency swap agreements
Interest rate swaps
Option contracts

Location
Other income
Other income
Interest charges
Other income

Yen (millions)(1,007)(7,536)
1,756(634)(7,421)Gain (loss) on derivatives designated as cash flow hedging instruments
Ineffective portion and amount excluded from effectiveness test
Derivatives
Forward exchange contracts
Cross currency swap agreements
Interest rate swaps

Location
Other income
Other income
Interest charges

F-87

Yen (millions)245(3,378)589(2,544)(Continued)

HITACHI, LTD.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements(26) Fair Value of Financial Instruments
The following methods and assumptions are used to estimate the fair values of financial instruments:
Long-term debt and Non-recourse borrowings of consolidated securitization entities
The fair value of long-term debt and non-recourse borrowings of consolidated securitization entities are
estimated based on quoted market prices or the present value of future cash flows using the Company’s
and its subsidiaries’ market interest rates for the same contractual terms.
Cash and cash equivalents, Trade receivables, Short-term debt and Trade payables
The carrying amount approximates the fair value because of the short maturity of these instruments.
Financial assets transferred to consolidated securitization entities
For the portion related to transferred mortgage loans receivable, the fair value is estimated based on thepresent value of future cash flows.
Investments in securities, Subordinated interests resulting from securitization and Derivatives
Refer to note 27 for the methods and assumptions used to estimate the fair values.

F-88(Continued)

HITACHI, LTD.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements

The carrying amounts and estimated fair values of the financial instruments as of March 31, 2012 and 2011
are as follows:
Yen (millions)
2012
2011
Estimated
Carrying
Estimated
Carrying
fair values
amounts
fair values
amounts
Investments in securities:
Short-term investments
11,562
11,562
16,598
16,598Investments and advances
253,340
253,340
180,232
180,232
Financial assets transferred toconsolidated securitization entities:
162,227
172,041
186,742
196,543
Derivatives(Effective portion in other current assets):
Forward exchange contracts
1,849
1,849
1,508
1,508
Cross currency swap agreements
5,271
5,271
10,363
10,363
Interest rate swaps
12
12Option contracts
6
6
28
28
Derivatives(Ineffective portion in other current assets):
Forward exchange contracts
232
232
563
563
Cross currency swap agreements
479
479
1,084
1,084
Interest rate swaps
Option contracts
Derivatives(Effective portion in other assets):
Forward exchange contracts
16
16
111
111
Cross currency swap agreements
1,421
1,421
5,805
5,805
Interest rate swaps
864
864
1,092
1,092
Option contracts
15
15
66
66
Derivatives(Ineffective portion in other assets):
Forward exchange contracts
13
13
Cross currency swap agreements
713
713
1,437
1,437
Interest rate swaps
Option contracts
Subordinated interests resulting fromsecuritization:
Other current assets
1,253
1,253
255
255
Advances and other
65,06065,06033,81133,811

F-89(Continued)

HITACHI, LTD.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements

Yen (millions)2012
Estimated
Carrying
fair values
amounts
Long-term debt
Non-recourse borrowings of consolidated
securitization entities:
Derivatives(Effective portion in other current liabilities):
Forward exchange contracts
Cross currency swap agreements
Interest rate swaps
Option contracts
Derivatives(Ineffective portion in other current liabilities):
Forward exchange contracts
Cross currency swap agreements
Interest rate swaps
Option contracts
Derivatives(Effective portion in other liabilities):
Forward exchange contracts
Cross currency swap agreements
Interest rate swaps
Option contracts
Derivatives(Ineffective portion in other liabilities):
Forward exchange contracts
Cross currency swap agreements
Interest rate swaps
Option contracts

2011
Carrying
Estimatedamounts
fair values(1,632,961)(1,691,886)(1,638,529)(1,696,722)(232,047)(234,851)(410,434)(413,519)(11,090)(2,512)(650)(34)(11,090)(2,512)(650)(34)(3,813)
(268)
(323)
(5)

(3,813)
(268)
(323)
(5)

(990)
(34)
(54)
-

(990)
(34)
(54)
-

(547)
(8)
(13)
-

(547)
(8)
(13)
-

(72)
(1,568)(2,261)-(72)(1,568)(2,261)
-

(86)
(305)
(2,915)
-

(86)
(305)
(2,915)-(12)(2,578)
(123)
-

(12)
(2,578)(123)-(2,625)(80)-(2,625)(80)-

It is not practicable to estimate the fair value of investments in unlisted stock because of the lack of amarket price and difficulty in estimating fair value without incurring excessive cost. The carrying amountsof these investments as of March 31, 2012 and 2011 totaled ¥56,174 million and ¥48,144 million,
respectively.
As of March 31, 2012, the estimated fair values of the financial assets transferred to consolidated
securitization entities and the non-recourse borrowings of consolidated securitization entities are included in
Level 3 of the fair value hierarchy and the estimated fair values of the long-term debts are included in Level
2 of the fair value hierarchy.

F-90(Continued)

HITACHI, LTD.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements(27) Fair Value
ASC 820 establishes a fair value hierarchy that prioritizes the use of observable inputs in markets over theuse of unobservable inputs when measuring fair value as follows:
Level 1
Quoted prices for identical assets or liabilities in active markets.
Level 2
Quoted prices for similar assets or liabilities in active markets; quoted prices associated with transactions thatare not distressed for identical or similar assets or liabilities in markets that are not active; or valuations
whose significant inputs are derived from or corroborated by observable market data.
Level 3
Valuations using inputs that are not observable.
Investments in debt and equity securities
Investment securities of which quoted market prices are available to determine their fair value are includedin Level 1. Level 1 securities include available-for-sale securities such as listed stocks on exchange markets,
debt securities such as Japan treasury bonds and U.S. treasury bonds and exchange traded funds.
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 ordefault rates, are used to determine fair value. These investments are included in Level 2. Level 2 securities
include short-term investments and available-for-sale securities such as listed stocks traded over-the-counter,
investment funds and debt securities traded over-the-counter.
In infrequent circumstances, the significant inputs of fair value for investment securities are unobservableand such investment are included in Level 3. The Company uses price information provided by financial
institutions to evaluate these investments while corroborating the information mainly with prices estimatedusing an income approach based on its own valuation models or a market approach such as comparison withprices of similar securities. Level 3 securities include available-for-sale securities such as subordinateddebentures and structured bonds with little market activity.
Derivatives
Closing prices are used for derivatives included in Level 1, which are traded on active markets. The
majority of derivatives are traded on over-the-counter markets, which the Company does not deem torepresent active markets. Derivative assets and liabilities for which fair value is based on quoted prices
associated with transactions that are not distressed, in markets that are not active, or based on models using
interest rate curves and forward and spot prices for currencies and commodities are included in Level 2.
Derivatives included in Level 2 primarily consist of interest rate swaps, cross-currency swaps and foreign
currency and commodity forward and option contracts. In infrequent circumstances, the significant inputs offair value are unobservable and the Company mainly uses an income or market approach to corroborate
relevant information provided by financial institutions. These derivatives are included in Level 3.

F-91(Continued)

HITACHI, LTD.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements

Subordinated interests resulting from securitization
When fair value is determined using observable inputs, including prices of recent transactions in markets
that are not distressed, subordinated interests are included in Level 2. When significant inputs are notobservable, fair value is determined based on economic assumptions used in measuring the fair value of thesubordinated interests, including weighted-average life, expected credit risks, and discount rates, and thesubordinated interests are included in Level 3.
The Company uses its own valuation models to evaluate these investments categorized within Level 3 andperiodically reviews the appropriateness of consistent application of the models as well as updating of the
inputs in consideration of recent changes in economic conditons. The Company also analyses that thesensitivity in the valuation of these investments does not have material adverse effects on the consolidated
financial statements.

F-92(Continued)

HITACHI, LTD.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements

The following tables present the assets and liabilities that are measured at fair value on a recurring basis andthe fair value hierarchy classification as of March 31, 2012 and 2011. The carrying values on the
consolidated balance sheets are recorded by the fair value of these assets and liabilities.

Total
Assets:Investments in securities
Equity securities
Government debt securities
Corporate debt securities
Other
Derivatives
Subordinated interests resulting
from securitization
Liabilities:
Derivatives

220,491
4,781
31,686
7,551
10,891

219,748
4,776
7,192
-

743
5
7,422
359
10,891

24,264-

66,313
341,713

231,716

19,42066,31390,577(21,978 )-(21,978 )-Total
Assets:Investments in securities
Equity securities
Government debt securities
Corporate debt securities
Other
Derivatives
Subordinated interests resulting
from securitization
Liabilities:
Derivatives

Yen (millions)2012
Fair value hierarchy classification
Level 1
Level 2
Level 3

Yen (millions)
2011
Fair value hierarchy classification
Level 1
Level 2
Level 3

145,816
3,232
38,0809,307
22,057145,069
3,219
6,434
-

747
13
5,154
2,873
22,05732,926-

34,066
252,558

154,72230,84434,066
66,992(10,988 )-(10,988 )-F-93(Continued)

HITACHI, LTD.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements

The following table presents the changes in Level 3 instruments measured on a recurring basis for the year
ended March 31, 2012.
Yen (millons)
Subordinatedinterests
resultingCorporatefrom
debt
securitization
Total
securities
Balance at beginning of year
32,926
34,066
66,992
Purchases
6,829
44,75951,588
Sales(1,492)(1,492)
Settlements(13,859)(13,111 )(26,970)
Total gains or losses (realized/unrealized)(1,127)
220(907)
Included in earnings (a)Included in other comprehensive loss
987
379
1,366
Balance at end of year
24,264
66,31390,577
The amount of total gains or losses for the period includedin earnings attributable to the change in unrealized gains orlosses relating to assets still held at the reporting date
(1,089)(1,089)(a) Level 3 gains and losses (realized and unrealized) included in earnings for the year ended March 31,
2012 are reported in other income (deductions) for corporate debt securities and are reported inrevenue for subordinated interests resulting from securitization.
The following table presents the changes in Level 3 instruments measured on a recurring basis for the year
ended March 31, 2011.
Yen (millons)
Subordinatedinterests
Corporate
resultingdebt
fromsecurities
securitization
Total
Balance at beginning of year
28,933
115,417
144,350
Effect of consolidation of securitization entities upon
initial adoption of the amended provisions of ASC810 (a)(113,651 )(113,651)
Purchases, sales, issuances and settlements, net
2,046
32,30034,346
Total gains or losses (realized/unrealized)
Included in earnings (b)546546Included in other comprehensive loss
1,401
1,401
Balance at end of year
32,926
34,066
66,992
The amount of total gains or losses for the period includedin earnings attributable to the change in unrealized gains orlosses relating to assets still held at the reporting date(a) A portion of subordinated interests resulting from securitization was eliminated because of theconsolidation of securitization entities.
(b) Level 3 gains and losses (realized and unrealized) included in earnings for the year ended March 31,
2011 are reported in other income (deductions) for corporate debt securities and are reported inrevenue for subordinated interests resulting from securitization.
F-94(Continued)

HITACHI, LTD.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements

Assets that are measured at fair value during the period on a non-recurring basis because they are deemed to
be impaired are not included in the above tables.
The Company writes down the carrying amount of equity-method and cost-method investments on the
consolidated balance sheets when the Company deems the decline of fair value to be other-than-temporary.
The fair value of the equity-method investments which are listed on an active market is included in Level 1.
The fair value of equity-method investments determined using an income approach, based on discounted
cash flows using unobservable inputs is included in Level 3. Also, a weighted-average fair value determinedusing both a market approach and an income approach, which incorporate both observable inputs, such as
quoted market prices of comparable companies, and discounted cash flow using unobservable inputs, isincluded in Level 3. The Company calculates discounted cash flows of these equity-method investments
based on business forecasts, market trends, and assumptions of projected business plans. The Company uses
both a market approach and an income approach to determine the fair value of the cost-method investments.
The fair value based on observable inputs such as quoted market prices of similar investments is included in
Level 2. The fair value primarily based on discounted cash flows using unobservable inputs based on
business forecasts, market trends, and assumptions of projected business plans is included in Level 3.
The Company also writes down the carrying amount of long-lived assets on the consolidated balance sheets
mainly when the Company deems the carrying amount of certain long-lived assets is not recoverable andexceeds its fair value. The Company mainly uses an income approach or a market approach to calculate thefair value of long-lived assets. These measurements are included in Level 3 since they are based primarily
on discounted cash flows using unobservable inputs based on business forecasts, market trends, andassumptions of projected business plans.

F-95(Continued)

HITACHI, LTD.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements

The following table presents the assets measured at fair value on a non-recurring basis and the gains orlosses recognized for the year ended March 31, 2012.
Yen (millions)2012
Total gains
Fair value hierarchy classification
Level 3
(losses)Level 1
Level 2Equity-method investments (a)5,752
19,345(7,504 )Cost-method investments
2,474(2,138 )Long-lived assets (b)Information & Telecommunication
Systems segment
2,465(4,596 )Electronic Systems & Equipment
Segment
1,022(2,651 )Construction Machinery segment
8,126(1,625 )High Functional Materials &Components segment
4,241(19,483 )
Other
2,343
(3,486 )
Total
5,752
40,016(41,483 )(a) The carrying value as of March 31, 2012 is not equal to the fair value at the time of impairment
because of equity method adjustments subsequent to impairment.
(b) The carrying value as of March 31, 2012 is not equal to the fair value at the time of impairment
because of depreciation expense subsequent to impairment.

F-96(Continued)

HITACHI, LTD.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements

The following table presents the significant unobservable inputs used in the fair value measurements on a
non-recurring basis categorized within Level 3 for the three months ended March 31, 2012. These inputs areshown in a form of ranges of rates in the table.
2012
Yen (millions) Valuation
Unobservable
Range
Fair value
technique
input(Weighted average)
Long-lived assets
Information &2,446 Market
Adjustment
77.0% (77.0%)
Telecommunication
approach rate (a)Systems segment
Electronic Systems &175 Income
Discount rate
10.0% (10.0%)
Equipment Segment
approach
216 Market
Adjustment
71.0% (71.0%)
approach rate (a)Construction
6,397 Income
Discount rate
13.3% (13.3%)
Machinery segment
approach Growth rate
4.5% (4.5%)
High Functional
1,492 Income
Discount rate
4.5% (4.5%)
Materials &approach
Components segment
Other
650 Income
Discount rate
2.0% (2.0%)
approach
804 Market
Adjustment
60.0% - 88.0% (71.7%)
approach rate (a)(a) The Company and its domestic subsidiaries measure the fair value of land based on appraised value
which includes adjustments to prices of land in comparable transactions, or published market prices
to reflect specific factors inherent in the land subject to the appraisal. These adjustments arereferred to as adjustment rates.
Level 3 non-recurring fair value measurement of long-lived assets for the three months ended March 31,
2012 in the amount of ¥5,226 million consists of individually insignificant items which utilize a number ofdifferent unobservable inputs not subject to meaningful aggregation.Therefore, such amount is notpresented in the table above.

F-97(Continued)

HITACHI, LTD.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
The following table presents the assets measured at fair value on a non-recurring basis and the gains orlosses recognized for the year ended March 31, 2011.

Equity-method investments (a)Cost-method investments
Long-lived assets (b)High Functional Materials &Components segment
Components & Devices segment
Other
Total

Yen (millions)
2011
Fair value hierarchy classification
Level 1
Level 2
Level 3
1,712
8,066
1,712

-

7,755
18,046
1,716
35,583

Total gains(losses)(4,741 )(3,180 )(10,956 )(16,561 )(7,653 )(43,091 )(a) The carrying value as of March 31, 2011 is not equal to the fair value at the time of impairment
because of equity method adjustments subsequent to impairment.
(b) The carrying value as of March 31, 2011 is not equal to the fair value at the time of impairment
because of depreciation expense subsequent to impairment.

F-98(Continued)

HITACHI, LTD.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements(28) Financing Receivables and Allowance for Doubtful Receivables
The Company classifies financing receivables aggregated and categorized as finance leases, installment loans,mortgage loans, and other, based on the nature of risks and characteristics as described below.
Financing receivables from equipment leases, installment arrangements, mortgage loans, and other receivables witha contractual maturity of one year or more are subject to disclosure as reported in this note. Trade receivables fromsale of products or services that have contractual maturities of one year or less are excluded from this note. Financelease receivables are recorded based on the total minimum payments to be received and unguaranteed residual
values less executory costs and unearned income. Installment loans, mortgage loans and other financing
receivables are reported on the amortized cost basis.
Finance leases are receivables from lease arrangements, including products manufactured by the Company andcertain of its subsidiaries, such as information technology equipment, manufacturing machinery and equipment andconstruction machinery, typically secured by underlying assets. The primary locations of finance leases are Japan,
United States, United Kingdom and China mainland. The lease term ranges mainly from three to six years. The
non-specific allowance for doubtful receivables is collectively determined on the basis of past collection
experience, consideration of current economic conditions and changes in our customer collection trends as well asother factors that may affect the customers’ ability to pay.
Installment loans represent receivables from arrangements with customers and dealers to provide financing
primarily for products manufactured by the Company and certain of its subsidiaries, such as manufacturingmachinery. Installment loans are typically secured by underlying assets. The primary locations of installment loans
are Japan, United States, United Kingdom and China mainland. The loan term is generally less than three years.
The non-specific allowance is collectively determined on the basis of past collection experience, consideration ofcurrent economic conditions and changes in our customer collection trends as well as other factors that may affectthe customers’ ability to pay.
Mortgage loans are financing receivables from residential loan arrangements for individuals. Mortgage loans areusually arranged with collateral. The location of mortgage loans is Japan; more than fifty percent of mortgage loans
are arranged for employees of the Company and its domestic subsidiaries. The term of mortgage loans is usuallyless than 30 years. The non-specific allowance is collectively determined on the basis of past collection experience,
consideration of current economic conditions and changes in our customer collection trends as well as other factorsthat may affect the customers’ ability to pay.
Other financing receivables are the financing service receivables provided by the subsidiaries in the financial
services segment such as factoring, loan servicing, and other forms of commercial financing. The contractual
maturities associated with those services generally range over one to three years. The non-specific allowance iscollectively determined on the basis of past collection experience, consideration of current economic conditions
and changes in our customer collection trends as well as other factors that may affect the customers’ ability to pay.
In addition, common to all financing receivables, the Company and its subsidiaries individually evaluate
collectability of financing receivables either by discounted cash flow analyses when they determine principal andinterest of a financing receivable cannot be collected or by estimating the fair value of related collateral whenapplicable and further estimating the allowance for doubtful receivables. The Company and its subsidiaries haveproprietary credit quality indicators appropriate to the unique characteristics of their operations and the nature of
F-99(Continued)

HITACHI, LTD.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements

their financing receivable portfolios. Based on such indicators as the duration of overdue payments, the unpaid
amounts, the existence of extended payment terms, evaluation by third-party credit agencies, and the degree of
debtors’ excessive debt, the Company and its subsidiaries classify and monitor their financial receivables into two
categories: the individually evaluated receivables, and the collectively evaluated receivables.
Interest income for long-term financing receivables is recognized on the accrual basis.
As of March 31, 2012 and March 31, 2011, financing receivables include past due receivables in the amount of¥14,426 million and ¥9,714 million, respectively. Of these amounts, financing receivables past due 90 days or more
and still accruing interest amounted to ¥2,918 million and ¥2,846 million, respectively.
The following table presents allowance for doubtful receivables and recorded investment in financing receivables
as of March 31, 2012, and changes in the allowance for the year ended March 31, 2012.

FinanceleasesInstallment
loans

Yen (millions)
Mortgage
loans

Other

Total

Allowance for doubtfulreceivables
Balance, March 31, 2011
Provision
Recovery and otherWrite off
Balance, March 31, 2012
Applicable to amounts;
Individually evaluated for
impairment
Applicable to amounts;
Collectively evaluated for
impairment

6,136
5,633
(3,381)
(708)
7,680

2,420
1,511
(881 )(1,138)
1,912

231
157
(178 )
210

7,842
3,443
(2,443 )(2,333 )6,509

16,62910,744(6,883)(4,179)16,311

2,942

603

78

4,498

8,121

4,738

1,309

132

2,011

8,190

743,331

154,794

192,143

217,376

1,307,644

7,861

957

185

8,702

17,705735,470

153,837

191,958

208,674

1,289,939

Financing receivables
Balance, March 31, 2012
Applicable to amounts;
Individually evaluated for
impairment
Applicable to amounts;
Collectively evaluated for
impairment

F-100(Continued)

HITACHI, LTD.
AND SUBSIDIARIES

Notes to Consolidated Financial Statements

The following table presents allowance for doubtful receivables and recorded investment in financing receivables
as of March 31, 2011, and changes in the allowance for the three months ended March 31, 2011.

FinanceleasesInstallment
loans

Yen (millions)
Mortgage
loans

Other

Total

Allowance for doubtfulreceivables

Balance, January 1, 2011
Provision
Recovery and otherWrite off
Balance, March 31, 2011
Applicable to amounts;
Individually evaluated for
impairment
Applicable to amounts;
Collectively evaluated for
impairment

5,156
1,531
(340)
(211)
6,136

2,426
293
(70 )
(229 )
2,420

176
102
(47 )
231

5,940
3,709
(1,073 )(734 )
7,842

13,698
5,635(1,530)(1,174)
16,629

1,620

906

88

5,082

7,696

4,516

1,514

143

2,760

8,933

873,137

126,957

218,222217,515

1,435,831

4,515

1,252

1,113

9,718

16,598868,622

125,705

217,109

207,797

1,419,233

Financing receivables
Balance, March 31, 2011
Applicable to amounts;
Individually evaluated for
impairment
Applicable to amounts;
Collectively evaluated for
impairment

In addition, as of March 31, 2012 and March 31, 2011, the amount of impaired loans relating to receivables whicharose from sales of products or services are ¥42,729 million and ¥43,628 million, respectively.

F-101(Continued)

HITACHI, LTD.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements(29) Acquisitions and Divestitures
On September 2, 2011 Hitachi Data Systems Corporation (HDS), a subsidiary of the Company in the
Information & Telecommunication Systems segment, purchased additional shares of BlueArc Corporation(BlueArc) for ¥42,923 million, resulting in a 97.8% increase of HDS ownership from 2.2% to 100%.
Accordingly, HDS obtained control of BlueArc and it became a wholly owned subsidiary effective
September 2, 2011 (the acquisition date).
BlueArc operates a network storage business. HDS made the acquisition to increase its competitiveness inthe storage solution business through creating synergy in a field of file storage.
The following table summarizes the consideration paid for BlueArc, the assets acquired and liabilities
assumed and recognized as of the acquisition date.
Current assets
Non-current assets (excluding intangible assets)
Intangible assets
Goodwill (not deductible for tax purposes)
Other intangible assets
Current liabilities
Non-current liabilities
Previously acquired equity interest measured atfair value
Cash paid for acquisition

Yen (millions)
1,499
4,749
33,002
11,01450,264(1,400)(5,059)(6,459)(882)(42,923)(43,805)

The following table shows the acquired intangible assets subject to amortization.

Yen (millions)
The acquired intangible assets subject toamortization
Existing technology
Customer relationships
In-process research and development
Trade name

7,166
2,874
771
203
11,014

F-102

Weighted averageamortization
period (year)552
2(Continued)

HITACHI, LTD.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements

The Company recognized a gain of ¥747 million as a result of remeasuring its equity interest in BlueArc
held before the business combination at the acquisition date fair value. The gain is included in other incomein the Company’s consolidated statement of operations for the year ended March 31, 2012.
The fair value of the equity interest held before the business combination in BlueArc, a private entity, wasestimated by applying the income approach. This fair value measurement is based on significant inputs thatare not observable in the market and thus this fair value is included in Level 3. Key inputs include business
forecasts, market trends, assumptions of projected business plans and adjustments because of the lack ofcontrol that market participants would consider when estimating the fair value of BlueArc.
The results of operations of BlueArc for the period from the acquisition date to March 31, 2012 were notmaterial.
On a pro forma basis, revenue, net income attributable to Hitachi, Ltd. and the per share information of theCompany with assumed acquisition date for BlueArc of April 1, 2010 would not differ materially from theamounts reported in the accompanying consolidated financial statements as of and for the years ended
March 31, 2012 and 2011.
On March 9, 2011, Hitachi Transport System, Ltd. (Hitachi Transport System), a subsidiary of theCompany included in the Others category of segment information, announced its decision to purchaseshares of Vantec Corporation (Vantec), through a tender offer to make Vantec its subsidiary. The
tender offer price was ¥233,500 per share, which was determined by taking into consideration themarket price of Vantec’s common stock, Vantec’s financial condition, future earnings prospects and avaluation of Vantec stock conducted by a third party appraiser. The price included a premium of
approximately 93% over the average share price of Vantec’s common stock traded on the First Sectionof the Tokyo Stock Exchange for the three month period ended March 8, 2011. As a result, Hitachi
Transport System purchased 209,550 shares in the tender offer, for ¥48,930 million in the period fromMarch 10, 2011 through April 19, 2011, resulting in an acquisition of 90.12% of the voting rights.
Accordingly, Hitachi Transport System obtained control of Vantec and it became a consolidated
subsidiary effective April 26, 2011, the settlement date of the tender offer (the acquisition date).
Vantec operates warehousing and transportation related business. Hitachi Transport System made theacquisition to realize synergy in the system logistics and global business and improve the enterprisevalue of Hitachi Transport System and Vantec.

F-103(Continued)

HITACHI, LTD.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements

The following table summarizes the consideration paid for Vantec, the assets acquired and liabilities
assumed and recognized as of the acquisition, as well as the fair value as of the acquisition date of thenoncontrolling interest in Vantec.
Current assets
Non-current assets (excluding intangible assets)
Intangible assets
Goodwill (not deductible for tax purposes)
Other intangible assets
Current liabilities
Non-current liabilities
Cash paid for acquisition
Fair value of noncontrolling interests

Yen (millions)
35,551
28,09014,837
29,197
107,675(31,493)(23,630)(55,123)(48,930)(3,622)(52,552)

The following table shows the acquired intangible assets subject to amortization.

The acquired intangible assets subject toamortization
Customer relationships

Yen (millions)

Weighted averageamortization
period (year)

29,197

17

The fair value of the noncontrolling interest in Vantec, a listed entity, was determined by quoted market
price and included in Level 1.
The results of operations of Vantec for the period from the acquisition date to March 31, 2012 were notmaterial.
On a pro forma basis, revenue, net income attributable to Hitachi, Ltd. and the per share information of theCompany with assumed acquisition date for Vantec of April 1, 2010 would not differ materially from theamounts reported in the accompanying consolidated financial statements as of and for the years ended
March 31, 2012 and 2011.
On November 8, 2010, Hitachi Medical Corporation (Hitachi Medical), a subsidiary of the Company
in the Electronic Systems & Equipment segment, announced its decision to purchase additional sharesof Aloka Co., Ltd. (Aloka), through a tender offer to make Aloka its subsidiary. The tender offer pricewas ¥1,075 per share, which was determined by comprehensively taking into consideration the market
price of Aloka’s common stock, Aloka’s financial condition, future earnings prospects and a valuationof Aloka stock conducted by a third party appraiser.
F-104(Continued)

HITACHI, LTD.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements

As a result, Hitachi Medical purchased 23,157,518 shares in the tender offer, for ¥24,894 million in the
period from November 9, 2010 through December 27, 2010, resulting in a 84.65% increase of Hitachi
Medical’s ownership from 12.79% to 97.45%. Accordingly, Hitachi Medical obtained control of Aloka
and it became a consolidated subsidiary effective January 5, 2011, the settlement date of the tender
offer (the acquisition date). Further, Hitachi Medical converted Aloka into its wholly owned subsidiarythrough a share exchange effective March 3, 2011, and Aloka was subsequently renamed Hitachi
Aloka Medical, Ltd. effective April 1, 2011.
Aloka manufactures and sells medical instruments, general-purpose analysis devices and medical
analysis devices. Hitachi Medical made the acquisition to strengthen its diagnostic ultrasound device
businesses and increase its corporate value.
This business combination was accounted for as a bargain purchase because the consideration paid for
Aloka was less than the fair value of Aloka’s net assets.
The following table summarizes the consideration paid for Aloka, the assets acquired and liabilities
assumed and recognized as of the acquisition, as well as the fair value as of the acquisition date of thenoncontrolling interest in Aloka.
Yen (millions)
Current assets
43,346
Non-current assets (excluding intangible assets)
9,585
Intangible assets
1,811
54,742Current liabilities(13,740)
Non-current liabilities(2,987)(16,727)
Gain on the bargain purchase(8,684)Previously acquired equity interest measured atfair value(3,699)Cash paid for acquisition(24,894)
Fair value of noncontrolling interests(738)(29,331)
The acquired intangible assets include patents and brands.
The Company recognized a gain of ¥1,224 million as a result of remeasuring its equity interest in Aloka
held before the business combination at the acquisition date fair value. The gain is included in otherincome in the Company’s consolidated statement of operations for the year ended March 31, 2011.
The fair value of both the equity interest held before the business combination and the fair value of thenoncontrolling interest in Aloka, a listed entity, were determined by quoted market price and included in
Level 1.
The results of operations of Aloka for the period from the acquisition date to March 31, 2011 were notmaterial.
F-105(Continued)

HITACHI, LTD.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements

On a pro forma basis, revenue, net income (loss) attributable to Hitachi, Ltd. and the per share
information of the Company with assumed acquisition dates for Aloka of April 1, 2010 and 2009
would not differ materially from the amounts reported in the accompanying consolidated financial
statements as of and for the years ended March 31, 2011 and 2010.
On March 30, 2010, Hitachi Construction Machinery Co., Ltd. (Hitachi Construction Machinery), a
subsidiary of the Company in the Construction Machinery segment, agreed with Tata Motors Limited
to purchase an additional 20% interest in Telco Construction Equipment Co., Ltd. (Telcon). As a result,
Hitachi Construction Machinery purchased a total of 20,000,000 shares for ¥23,704 million on March 30,
2010, resulting in the percentage of Hitachi Construction Machinery’s ownership interests in Telcon
increasing from 40.0% to 60.0%. Accordingly, Hitachi Construction Machinery obtained control over
Telcon and it became a consolidated subsidiary effective March 30, 2010 (the acquisition date).
Telcon manufactures and sells major construction machinery including hydraulic excavators, backhoe
loaders and wheel loaders. Hitachi Construction Machinery decided to purchase an additional 20% interest
to obtain a strong lead in the India market, which is expected to grow significantly.
The following table summarizes the consideration paid for Telcon, the assets acquired and liabilities
assumed and recognized as of the acquisition, as well as the fair value as of the acquisition date of thenoncontrolling interest in Telcon.
Yen (millions)
Current assets
29,741
Non-current assets (excluding intangible assets)
16,912Intangible assets
Goodwill (not deductible for tax purposes)
32,98137,370
Other intangible assets
117,004
Current liabilities(35,105)
Non-current liabilities(14,095)(49,200)
Previously acquired equity interest measured atfair value(22,050)
Cash paid for acquisition(23,704)
Fair value of noncontrolling interests(22,050)(67,804)

F-106(Continued)

HITACHI, LTD.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements

The following table shows the acquired intangible assets subject to amortization and not subject toamortization.
Weighted averageamortization
Yen (millions)period (year)
The acquired intangible assets subject toamortization
Customer contracts and relationships
19,50925
4,339
15
Dealer network
3,056
6
Technical know-how
1,027
5
Favorable lease agreements
27,931
The acquired intangible assets not subject toamortization
9,439
Brands37,370
The Company recognized a gain of ¥14,923 million as a result of remeasuring to fair value its 40% equity
interest in Telcon held before the business combination. The gain is included in other deductions in the
Company’s consolidated statement of operations for the year ended March 31, 2010.
The fair value of both the equity interest held before the business combination and the noncontrollinginterest in Telcon, a private entity, were estimated by applying the income approach. These fair value
measurements are based on significant inputs that are not observable in the market and thus represent
Level 3 measurements. Key inputs include business forecasts, market trends, assumptions of projectedbusiness plans and adjustments because of the lack of control that market participants would consider
when estimating the fair value of the noncontrolling interest in Telcon.
The results of operations of Telcon for the period from the acquisition date to March 31, 2010 were notmaterial.
On a pro forma basis, revenue, net loss attributable to Hitachi, Ltd and the per share information of theCompany with assumed acquisition date for Telcon of April 1, 2009 would not differ materially from theamounts reported in the accompanying consolidated financial statement as of and for the year ended
March 31, 2010.
The Company completed the sale of its LCDs business in the Components & Devices segment on March 30,
2012 by transferring all of its shares in Hitachi Displays, Ltd. (Hitachi Displays) to Japan Display Inc. in acash and stock transaction. The Company also completed the sale of its hard disk drives business in the
Components & Devices segment on March 8, 2012 by transferring all of its shares in Viviti Technologies,
Ltd. (Viviti), a holding company of Hitachi Global Storage Technologies (subsequently renamed HGST) to
Western Digital Corporation in a cash and stock transaction. As a result, the Company deconsolidated both
Hitachi Displays and Viviti during the year ended March 31, 2012.

F-107(Continued)

HITACHI, LTD.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements(30) Segment Information
Business Segments
The operating segments of the Company are the components for which separate financial information isavailable and for which segment profit or loss amounts are evaluated regularly by the chief operating
decision maker in deciding how to allocate resources and in assessing performance. The Company hasaggregated certain operating segments into reportable segments for reporting purpose, since suchaggregation helps financial statement users better understand the Company’s performance.
The reportable segments correspond to categories of activities classified primarily by markets, products andservices.
The Company discloses its business in eleven reportable segments: Information & Telecommunication
Systems, Power Systems, Social Infrastructure & Industrial Systems, Electronic Systems & Equipment,
Construction Machinery, High Functional Materials & Components, Automotive Systems, Components &Devices, Digital Media & Consumer Products, Financial Services, and Others.
The primary products and services included in each segment are as follows:
Information & Telecommunication Systems:
Systems integration, Outsourcing services, Software, Disk array subsystems, Servers, Mainframes,
Telecommunication equipment and ATMs
Power Systems:
Thermal power generation systems, Nuclear power generation systems, Hydroelectric power generation
systems and Wind power generation systems
Social Infrastructure & Industrial Systems:
Industrial machinery and plants, Elevators, Escalators and Railway systems
Electronic Systems & Equipment:
Semiconductor and LCDs manufacturing equipment, Test and measurement equipment, Medical electronics
equipment, Power tools and Electronic parts manufacturing system
Construction Machinery:Hydraulic excavators, Wheel loaders and Mining dump trucks
High Functional Materials & Components:
Wires and cables, Copper products, Semiconductor and display related materials, Circuit boards andmaterials, Specialty steels, Magnetic materials and components and High grade casting components andmaterials

F-108(Continued)

HITACHI, LTD.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements

Automotive Systems:
Engine management systems, Electric powertrain systems, Drive control systems and Car information
systems
Components & Devices:
Hard disk drives, LCDs, Information storage media and Batteries
Digital Media & Consumer Products:
Optical disk drives, Flat-panel TVs, LCD projectors, Room air conditioners, Refrigerators, Washingmachines and Air-conditioning equipment
Financial Services:
Leasing and Loan guarantees
Others:
Logistics, Property management and others
In March 2012, Hard disk drives and LCDs businesses in the Components & Devices segment were
deconsolidated due to the sale of all shares of Viviti Technologies Ltd. and Hitachi Displays, Ltd.
Accordingly, the assets of Hard disk drives and LCDs businesses are excluded from the Components &Devices segment assets as of March 31, 2012.
Effective April 1, 2011, due to a change in management reporting, the Battery business for automotive
applications, which was previously included in the Components & Devices segment, has been included in
the Automotive Systems segment. The corresponding data for the years ended March 31, 2011 and 2010
have been restated to conform with the change.
The following tables show business segment information for the years ended March 31, 2012, 2011 and2010, and as of March 31, 2012, 2011 and 2010.

F-109(Continued)

HITACHI, LTD.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements

Revenues from Outside Customers

Information & Telecommunication Systems
Power Systems
Social Infrastructure & Industrial Systems
Electronic Systems & Equipment
Construction Machinery
High Functional Materials & Components
Automotive Systems
Components & Devices
Digital Media & Consumer Products
Financial Services
OthersSubtotal
Corporate items
Total

2012

Yen (millions)
2011

2010

1,573,961
753,023
991,839
973,383
794,841
1,353,781
808,031
677,941
787,305
309,972
640,472
9,664,549
1,334
9,665,883

1,475,588
737,560
932,299
942,305
746,166
1,329,234
733,910
743,980882,834
325,341465,871
9,315,088
719
9,315,807

1,522,457
805,007
1,044,208
868,449
578,129
1,176,292
633,399
690,062
863,091
327,072
457,315
8,965,481
3,065
8,968,546

Revenues from Intersegment Transactions
2012
Information & Telecommunication Systems
Power Systems
Social Infrastructure & Industrial Systems
Electronic Systems & Equipment
Construction Machinery
High Functional Materials & Components
Automotive Systems
Components & Devices
Digital Media & Consumer Products
Financial Services
OthersSubtotal
Eliminations and Corporate items
Total

190,286
79,385
213,136
128,401
3,944
83,405
3,552
90,12471,54043,232311,216
1,218,221(1,218,221)
-

F-110

Yen (millions)2011
176,452
75,647
224,637
137,050
5,221
78,9193,991
64,25568,76247,640301,592
1,184,166(1,184,166)-

2010
183,130
77,128206,017130,183
5,507
73,035
5,429
62,554
66,167
92,578306,350
1,208,078(1,208,078)-(Continued)

HITACHI, LTD.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements

Total Revenues
2012
Information & Telecommunication Systems
Power Systems
Social Infrastructure & Industrial Systems
Electronic Systems & Equipment
Construction Machinery
High Functional Materials & Components
Automotive Systems
Components & Devices
Digital Media & Consumer Products
Financial Services
OthersSubtotal
Eliminations and Corporate items
Total

1,764,247
832,408
1,204,975
1,101,784
798,785
1,437,186
811,583
768,065
858,845
353,204
951,688
10,882,770(1,216,887)
9,665,883

F-111

Yen (millions)2011
1,652,040
813,207
1,156,936
1,079,355
751,387
1,408,153
737,901
808,235
951,596372,981
767,463
10,499,254(1,183,447)
9,315,807

2010
1,705,587
882,135
1,250,225
998,632
583,636
1,249,327
638,828752,616929,258
419,650
763,665
10,173,559(1,205,013)
8,968,546(Continued)

HITACHI, LTD.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements

Segment Profit (Loss)2012

Yen (millions)
2011

2010

Information & Telecommunication Systems
Power Systems
Social Infrastructure & Industrial Systems
Electronic Systems & Equipment
Construction Machinery
High Functional Materials & Components
Automotive Systems
Components & Devices
Digital Media & Consumer Products
Financial Services
OthersSubtotal
Eliminations and Corporate items
Total Segment profit

101,732(33,986)
49,181
49,995
63,12977,00737,04939,481(10,947)
30,222
33,240436,103(23,823)
412,280

98,641
22,022
39,95237,28449,19284,506
23,79149,435
14,94914,25528,930462,957(18,449)444,508

94,592
22,07542,086(5,218)17,64944,412(10,994)
6,657(7,206)
8,518
19,423
231,994(29,835)
202,159

Impairment losses for long-lived assets
Restructuring charges
Interest income
Dividends income
Gains on sales of stock by subsidiaries oraffiliated companies
Other income
Interest charges
Other deductions
Equity in net loss of affiliated companies
Income before income taxes(31,841)(23,097)
12,653
5,551(35,170)(5,757)
13,267
4,240(25,196)(25,154)
12,017
5,799

228,906(28,141)(3,010)(15,571)557,730

69,730(24,878)(13,597)(20,142)432,201183
186(26,252)(21,976)(58,186)
63,580Intersegment transactions are recorded at the same prices used in transactions with third parties. Corporate
items include unallocated corporate expenses, such as leading edge R&D expenditures, and others.

F-112(Continued)

HITACHI, LTD.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements

Total Assets
2012
Information & Telecommunication Systems
Power Systems
Social Infrastructure & Industrial Systems
Electronic Systems & Equipment
Construction Machinery
High Functional Materials & Components
Automotive Systems
Components & Devices
Digital Media & Consumer Products
Financial Services
OthersSubtotal
Eliminations and Corporate assets
Total

1,345,392
955,809
1,091,740
903,283
1,140,332
1,285,970
516,123
162,924444,9311,950,672
1,508,926
11,306,102(1,887,576)
9,418,526

Yen (millions)2011
1,289,099
919,676
1,033,110
867,741
1,000,793
1,267,001
452,359
591,621434,397
1,937,643
1,344,356
11,137,796(1,952,167)
9,185,629

2010
1,261,016
1,067,072
971,743
820,700
927,482
1,264,372
460,063584,218
521,591
1,789,409
1,374,882
11,042,548(2,078,084)
8,964,464

Corporate assets consist of cash and cash equivalents and investments and advances.
Depreciation & Amortization

Information & Telecommunication Systems
Power Systems
Social Infrastructure & Industrial Systems
Electronic Systems & Equipment
Construction Machinery
High Functional Materials & Components
Automotive Systems
Components & Devices
Digital Media & Consumer Products
Financial Services
OthersSubtotal
Eliminations and Corporate items
Total

F-113

2012

Yen (millions)
2011

2010

79,37919,492
27,454
17,89842,562
69,096
31,06746,427
25,83974,97242,337476,523
3,143
479,666

76,082
20,23927,941
19,15442,60675,371
32,82555,927
27,14975,076
37,590489,960
7,809
497,769

80,58924,38632,383
21,59841,80785,092
41,91564,952
34,567
81,04942,954551,292
6,470
557,762(Continued)

HITACHI, LTD.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements

Impairment Losses for Long-Lived Assets
2012
Information & Telecommunication Systems
Power Systems
Social Infrastructure & Industrial Systems
Electronic Systems & Equipment
Construction Machinery
High Functional Materials & Components
Automotive Systems
Components & Devices
Digital Media & Consumer Products
Financial Services
OthersSubtotal
Eliminations and Corporate items
Total

4,596
35
994
2,651
1,625
19,483
1,042
161
668
586
31,841
31,841

Yen (millions)
2011
473
767
4,605
3
10,956
1,270
15,482951
368
295
35,17035,170

2010
353
136
715
624
119
2,117
6,581
12,205845
1,501
25,19625,196

Capital Investment for Long-Lived Assets
2012
Information & Telecommunication Systems
Power Systems
Social Infrastructure & Industrial Systems
Electronic Systems & Equipment
Construction Machinery
High Functional Materials & Components
Automotive Systems
Components & Devices
Digital Media & Consumer Products
Financial Services
OthersSubtotal
Eliminations and Corporate items
Total

104,673
29,22932,66529,70571,391
71,52046,11645,79923,868
303,565
52,610811,141(9,831)
801,310

Yen (millions)
2011
79,907
12,16324,72920,874
40,68966,79522,74059,022
19,487330,292
43,952
720,650(20,621)700,0292010
65,976
34,70432,005
15,72873,87455,03820,07440,427
20,399351,298
34,768744,291(20,380)
723,911

Capital investment represents the additions to property, plant and equipment and other intangible assets
including tangible assets and software to be leased on an accrual basis.

F-114(Continued)

HITACHI, LTD.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements

Geographic Information
Revenues
The following table shows revenues which are attributed to geographic areas based on the location of thecustomers for the years ended March 31, 2012, 2011 and 2010.
Yen (millions)
2011
2010
2012
Japan
Outside Japan
Asia
North America
EuropeOther Areas
Subtotal
Total

5,534,462

5,269,259

5,313,790

2,000,989
869,014
761,125500,293
4,131,421
9,665,883

2,073,756
781,139760,011431,642
4,046,548
9,315,807

1,699,071
729,698
824,697401,290
3,654,756
8,968,546

Other than in Japan and China mainland, the Company does not conduct business in any individual country
and region in which its revenues in that country exceed 10% of the consolidated total revenues. Revenues in
China mainland for the years ended March 31, 2012, 2011 and 2010 were ¥1,073,487 million, ¥1,188,555
million and ¥991,653 million, respectively.
Long-Lived Assets including Goodwill
The following table shows long-lived assets such as property, plant and equipment and intangible assets
including goodwill for each geographic area as of March 31, 2012, 2011 and 2010.

Japan
Asia
North America
EuropeOther Areas
Subtotal
Eliminations and Corporate items
Total

2012

Yen (millions)
2011

2010

2,001,531
303,430
170,793
106,524
25,442
2,607,720
27,7802,635,500

1,979,405
341,884
158,684
112,350
16,651
2,608,974
30,314
2,639,288

2,088,846
343,493
157,113111,105
15,7172,716,274
21,5802,737,854

Other than in Japan, the Company does not conduct business in any individual country and region in which
its long-lived assets in that country exceed 10% of the consolidated balance of long-lived assets.
There are no revenues to a single major outside customer for the years ended March 31, 2012, 2011 and
2010.
F-115

(Continued)

[Cover][Document Filed]Internal Control Report[Applicable Law]

Article 24-4-4, Paragraph 1 of the Financial Instruments and Exchange Act ofJapan[Filed to]

Director, Kanto Local Finance Bureau[Filing Date]

June 22, 2012

[Company Name]

Kabushiki Kaisha Hitachi Seisakusho[Company Name in English] Hitachi, Ltd.
[Position and Name of

Hiroaki Nakanishi, President

Representative][Name and title of CFO]

Toyoaki Nakamura, Executive 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)
Osaka Securities Exchange Co., Ltd.
(8-16, Kitahama 1-chome, Chuo-ku, Osaka)
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
We prepared this Internal Control Report in accordance with the terms, form and procedures requiredin the management’s report on internal control over financial reporting in the United States pursuant to
Section 18 of the Cabinet Office Ordinance on the system for ensuring adequacy of the financial reportingand other information (the “Cabinet Office Ordinance on the Internal Control”).
Our management is responsible for establishing and maintaining adequate internal control overfinancial reporting. Internal control over financial reporting is defined in Rule 13a-15(f) or 15d-15(f)promulgated under the Securities Exchange Act of 1934 as a process designed by, or under the supervisionof, our principal executive and principal financial officers and effected by our Board of Directors,
management and other personnel, to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles and includes those policies and procedures that: pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect thetransaction and dispositions of our assets;
 provide reasonable assurance that transactions are recorded as necessary to permit preparation offinancial statements in accordance with generally accepted accounting principles, and that ourreceipts and expenditures are being made only in accordance with authorizations of ourmanagement and directors; and provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition,use or disposition of our assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect
misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that
controls may become inadequate because of changes in conditions, or that the degree of compliance withthe policies or procedures may deteriorate.
2. Matters Related to Scope of Assessment, Record Date, and Assessment Procedure
Our management assessed the effectiveness of our internal control over financial reporting as ofMarch 31, 2012. In making this assessment, our management used the criteria set forth by the Committeeof Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control-Integrated
Framework.
3. Matters Related to Results of Assessment
Based on its assessment, our management concluded that, as of March 31, 2012, our internal control
over financial reporting was effective based on those criteria.
4. Supplementary Matters
Following is significant differences in case Section 18 of the Cabinet Office Ordinance on the Internal
Control is not applied when preparing the Internal Control Report.
(1) In case we do not apply Section 18 of the Cabinet Office Ordinance on the Internal Control, the scopeof assessment includes financial statements and disclosures which materially affects on the reliabilityof financial statements. In the management’s report on internal control over financial reporting
required in the U.S., the scope of assessment of internal control is only the consolidated financial
statements as stated in the “Part I Information on the Company - V. Financial Information” of theAnnual Securities Report.
(2) In case we do not apply Section 18 of the Cabinet Office Ordinance on the Internal Control, the scopeof assessment includes the equity-method affiliates. The management’s report on internal control overfinancial reporting required in the U.S. does not include the equity-method affiliates in the scope ofassessment of internal control.
5. Special Notes
We prepared this Internal Control Report in accordance with the terms, form and procedures requiredin the management’s report on internal control over financial reporting in the U.S. since we register our
American Depositary Shares (“ADSs”) to the U.S. Securities and Exchange Commission (“SEC”). On
April 27, 2012, we applied to the SEC for termination of registration of our ADSs. We anticipate that theregistration will be terminated on July 26, 2012.
A-2

[Cover][Document Filed]

Confirmation Letter[Applicable Law]

Article 24-4-2, Paragraph 1 of the Financial Instruments and Exchange Act ofJapan[Filed to]

Director, Kanto Local Finance Bureau[Filing Date]

June 22, 2012

[Company Name]

Kabushiki Kaisha Hitachi Seisakusho[Company Name in English] Hitachi, Ltd.
[Position and Name of

Hiroaki Nakanishi, President

Representative][Name and title of CFO]

Toyoaki Nakamura, Executive 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)
Osaka Securities Exchange Co., Ltd.
(8-16, Kitahama 1-chome, Chuo-ku, Osaka)
Nagoya Stock Exchange, Inc.
(8-20, Sakae 3-chome, Naka-ku, Nagoya)A-3

1. Matters Related to Adequacy of Statements Contained in the Annual Securities Report
Mr. Hiroaki Nakanishi, President, and Mr. Toyoaki Nakamura, Executive Vice President andExecutive Officer, confirmed that statements contained in the Annual Securities Report for the 143rd fiscal
year (from April 1, 2011 to March 31, 2012) were adequate under the Financial Instruments and ExchangeAct.
2. Special Notes
None.

A-4