2024/05/20 19:12:52 / 23092450_株式会社日立製作所_招集通知

Business Report(from April 1, 2023 to March 31, 2024)

Business Overview and Results of Hitachi Group
Business Results

In Fiscal 2023, although the global economy showed a gradual recovery, the business environment remained
uncertain due to rising geopolitical risks in various regions as well as inflation and currency fluctuations. Under suchenvironment, despite the impact of business restructuring, Hitachi recorded revenues of 9,728.7 billion yen and Adjusted
EBITA of 918.1 billion yen, due mainly to the organic business growth resulting from the expansion of the Lumada
business and the solid performance of the power grid and railway systems businesses, as well as the impact of foreignexchange. Adjusted EBITA Margin was 9.4%, an increase of 1.3 percentage points from the previous fiscal year. Net
income attributable to Hitachi, Ltd. stockholders was 589.8 billion yen.
Regarding funds, core free cash flow* was 571.4 billion yen, a new record high, due to improving cash
generation capabilities by enhancement of cash flow management.
As Hitachi has improved its profitability and ability to generate cash it increased the amount of its annual
dividend 35 yen to 180 yen (with an interim dividend of 80 yen and a year-end dividend of 100 yen) and repurchased its
own shares of approximately 100.0 billion yen.
*Core free cash flows are cash flows presented as free cash flows excluding cash flows from M&A and asset sales, etc.

Actions in Fiscal 2023 and Aims

In the current fiscal year as the second year of the “2024 Mid-term Management Plan”, Hitachi chiefly pursued
the following initiatives and accelerated the shift to growth mode.
‒ Further Growth of Social Innovation Business in Response to*1
Rising DX and GX Demand
While the global market continued to experience growing
DX and GX demand, Hitachi worked as One Hitachi to strengthen
the cycle of value co-creation with customers under Lumada byunderstanding customers' management issues, then designing andimplementing solutions to those issues, and implementing operationand maintenance while tackling solutions to the next issues. As aresult, Lumada business revenues reached 2,334 billion yen, an
increase of 19% from the previous fiscal year.
Orders received by Hitachi were still solid. In Japan,
Hitachi received an order for the next-generation nationwide load
dispatching system and contributes to stable electricity supply by*2
sharing the nationwide power supply and demand adjustment
systems. Overseas, Hitachi Energy Ltd secured its largest multi-year
framework agreement to support TenneT with six North Sea
offshore wind connections in partnership with Petrofac. In therailway systems business, Hitachi Rail Ltd. has received an orderfrom Trenitalia S.p.A in Italy for high-speed railways worth
approximately 140.0 billion yen.
*1

DX: Digital transformation, GX: green transformation*2

Lumada business revenues(Billions of yen)

2,334

1,960
215

(+19%)

284
553

466
630
649

719

FY2022

FY2023

Digital engineering
Connected products
Notes:

778

System integration
Managed services

1. Lumada business revenues in the three segments of Digital
Systems & Services, Green Energy Mobility and Connective
Industries.
2. Number in parentheses is the growth rate from the previous
fiscal year.

Excluding Okinawa area

‒ Global Reorganization for Further Strengthening the Lumada BusinessTo strengthen the collaborative creation cycle with Lumada and accelerate the creation of synergies with the OT(control and operational technology), Hitachi has conducted reorganization globally. Hitachi Digital Services LLC wasestablished by spinning off the digital solutions business from Hitachi Vantara LLC. As an integrator of OT and IT, the newcompany will work with Hitachi Vantara LLC and GlobalLogic Inc. as well as Hitachi’s business in the OT area, including
energy, transportation, and industry, to drive the global growth of the Lumada business as One Hitachi. In addition, theCompany's IT product business, which has been responsible for business development, R&D, and production of data
infrastructure such as storage, was spun off to establish Hitachi Vantara, Ltd. Hitachi has established an integrated
manufacturing, sales, and service operation structure with the new company and Hitachi Vantara LLC.
‒ Accelerating the initiatives for utilizing Generative AI
In order to actively utilize generative AI as a growth engine for the Lumada business, Hitachi is accelerating
efforts, including initiatives to establish its organizations and structure, increase use cases, and address risks. For detailsof AI-related initiatives, please refer to "Acceleration of Social Innovation through AI Transformation" below.

12

Business Results

2024/05/20 19:12:52 / 23092450_株式会社日立製作所_招集通知

Consolidated Financial Results for Fiscal 2023 (Billions of yen)
Revenues

Adjusted EBITA

9,728.7
Year over year

Adjusted EBITA Margin

Net income attributable to
Hitachi, Ltd. stockholders

9.4%

589.8

918.1

-11％

Year over year

+4％

Year over year

+1.3

Year over year

ROIC

8.7%

-9％

Year over year

+1.1

Notes: 1. The consolidated financial statements of the Company have been prepared in conformity with the International Financial Reporting Standards (IFRS).
2. Adjusted EBITA = Adjusted operating income + Acquisition-related amortization + Share of profits (losses) of investments accounted for using the equity method.
3. ROIC = ("NOPAT" + Share of profits (losses) of investments accounted for using the equity method) / "Invested Capital" × 100
NOPAT (Net Operating Profit after Tax) = Adjusted Operating Income × (1 - Tax burden rate)
Invested Capital = Interest-bearing debt + Total equity

Financial Results by Segment
Digital Systems & Services

Green Energy & Mobility

Automotive Systems

OthersConnective Industries

Revenues

Adjusted EBITA (Adjusted EBITA Margin)(Billions of yen)(Billions of yen)

507.7

350

(5%)

300

1,164.3(11%)

2,598.6

333.4

Revenues

200

3,057.9 9,728.7

150

12.0

(10.5%)

10.0

199.1

8.0

(6.5%)

6.0(4.4%)

3,052.3

4.0

100

(29%)

50
0
Notes: 1. Revenues by segment include intersegment transactions.
2. The number in parentheses in “Revenues” is the percentage of each segment’s revenues to total revenues.
3. The number in parentheses in “Adjusted EBITA (Adjusted EBITA Margin)” is Adjusted EBITA Margin.

13

Business Results

14.0

320.6

(12.8%)

250

(25%)

Total

(30%)

(%)

50.6

(1.3%)

6.7

2.0
0.0

2024/05/20 19:12:52 / 23092450_株式会社日立製作所_招集通知

Business Overview and Results of Hitachi Group - Results by Segment

Digital Systems & Services
To realize a sustainable society, Hitachi is utilizing advanced digital technologies
including AI and analytics with the Lumada business at the core to provide
sophisticated digital solutions that create value from data.

Revenues

Adjusted EBITA

Adjusted EBITA MarginROIC

2,598.6 billion yen

333.4 billion yen

12.8%

8.8%

Year over year

+9%

Year over year

+14%

Year over year

+0.5 points

Year over year

+0.5 points

Sales and profits increased mainly due to the impact of the expansion of the Lumada business and foreign exchange. GlobalLogic, which
continues to grow at a high rate, increased sales revenue of 23% (15% in U.S. dollars) from the previous fiscal year and recorded
Adjusted EBITA Margin of 19.6%.

Action in Fiscal 2023
Leveraging a wealth of digital human resources andadvanced technologies, Hitachi worked to provide a variety ofsolutions to solve social and customer problems. To further expand
its global business, GlobalLogic, a growth engine, continues toexpand its service development and delivery bases and humanresources to maintain high business growth. In order to further
accelerate the creation of synergies through combining IT, OT, andProducts, which is one of the strengths of the Hitachi Group, Hitachi
also reorganized Hitachi Vantara globally. Hitachi is also actively
investing in innovative technologies supporting business growth.
Hitachi is engaged in a wide range of collaborative activities withcustomers and partners in Japan and overseas to create innovations
using rapidly evolving generative AI.
.

14

DSS

Creating innovation by leveraging rapidly evolving generative AI

2024/05/20 19:12:52 / 23092450_株式会社日立製作所_招集通知

Green Energy & Mobility
To help realize a sustainable decarbonized society, Hitachi is providing solutions,*
including HVDC systems, that support energy conversion, clean energy systems
including nuclear and renewable energy systems, energy management services
that utilize digital technology to optimize overall energy use, environmentallyfriendly railway systems solutions, and digital asset management systems forenergy and railway systems.
*High-voltage direct-current transmission

Revenues

Adjusted EBITA

Adjusted EBITA MarginROIC

3,052.3 billion yen

199.1 billion yen

6.5%

5.1%

Year over year

+24%

Year over year

+22%

Year over year

-0.1 points

Year over year

+1.9 points

Sales and profits increased due to solid growth in the power grid and the railway systems business. Adjusted EBITA Margin was samelevel as the previous fiscal year, due mainly to the PMI related costs associated with the acquisition of power grids business.
(Note) Since the Fiscal 2023, a portion of the businesses previously included in the Green Energy & Mobility segment has been transferred and includedin Others. Figures shown above, including the numbers of the previous fiscal year, are presented on the basis of the new classification.

Actions in Fiscal 2023
Hitachi promoted the enhancement of services and solutions
by leveraging synergies within the Hitachi Group, such as
collaboration between the business in this segment and the digitalbusiness.
In the energy field, orders such as HVDC systems foroffshore

wind

power

generation

increased.

Hitachiisalsoestablishing technologies and models for energy management

Energy management utilizing digital technology

systems that digitally connect multiple locations.
In the railway systems field, Hitachi strengthened its efforts
in digital asset management for rolling stock and infrastructure. In
Europe and North America, Hitachi is contributing to the conversion
to public transportation with a low negative impact on environment
through utilizing digital technologies, such as expanding metropolitan
railway lines with fully automated operations.
In addition, to improve operational efficiency, Hitachi has*

begun to take initiatives for using Worksite-Augmenting Metaverse ,which features use of worksite data-collection technology andgenerative AI.
*Technology to reproduce social infrastructure and construction/manufacturing sites on a virtual
space (metaverse).

UK train maintenance utilizing Hitachi’s digital asset management

15

GEM

2024/05/20 19:12:52 / 23092450_株式会社日立製作所_招集通知

Connective Industries
Hitachi creates new customer value and sustainable society by digitally andseamlessly connecting highly competitive products and providing them assolutions in the fields of Urban (building systems, home appliances and air
conditioners), Advanced Technology (measurement and analysis systems,
healthcare equipment), and Industry (industry & distribution solutions, water &environment solutions, industrial machinery).

Revenues

Adjusted EBITA

Adjusted EBITA MarginROIC

3,057.9 billion yen

320.6 billion yen

10.5%

10.5%

Year over year

+3%

Year over year

+3%

Year over year

±0.0 points

Year over year

-0.3 points

Sales and profits increased mainly in the building systems business, resulting from expansion of the building services business, and in theindustrial products business as well as the impact of foreign exchange.
Actions in Fiscal 2023
Through the collaborative creation cycle with customers in*1

Lumada, Hitachi has expanded total seamless solutions from theIndustry field to the Urban and Healthcare fields, and strengthened*2

its recurring business .
In addition, to accelerate global growth, Hitachi has
expanded total seamless solutions in the Industry field, with thecentral role played by J.R. Automation Technologies, LLC. andFlexware Innovation, Inc., North American companies Hitachiacquired. Further, Hitachi has focused on deepening collaborative
creation by utilizing bases closer to customers in the semiconductor
manufacturing equipment business and on strengthening its
molecular diagnostics business and particle therapy systems
business mainly in North America in the Healthcare field.
*1 Solution connecting across the gaps among businesses and companies to solve issues and offer
solutions that achieve overall optimization by leveraging the strengths gained by maintaining a
combination of products, OT, and IT*2 Ongoing and cyclical services that include after-sales service

16

CI

Operating in three groups:
Urban, Advanced Technology and Industry

2024/05/20 19:12:52 / 23092450_株式会社日立製作所_招集通知

Automotive Systems

Revenues

1,164.3 billion yen
Year over year -39%

The Automotive Systems business provides high-efficiency power train systems, advanced
chassis, autonomous driving, and advanced driver-assistance systems and integrated
electronic control platform, supporting progress in software-defined vehicles (SDV) and also
provides systems for motorcycles.

Adjusted EBITA
Adjusted EBITA Margin50.6 billion yen
Year over year -31%

4.4%
Year over year +0.6 points

On October 16, 2023, the partial transfer of shares of Hitachi Astemo, Ltd. was completed, and the company became an
equity-method affiliate of the Company, resulting in a decrease in both sales and profits.

Others

Revenues

Other products and services including Property Management are provided in this segment.

507.7 billion yen
Year over year +2%

Adjusted EBITA
Adjusted EBITA Margin

6.7 billion yen
Year over year ＋21.9 billion yen

1.3%
Year over year +4.4 points(Note) Since the Fiscal 2023, a portion of the businesses previously included in the Green Energy & Mobility segment has been transferred and includedin Others. Figures shown above, including the numbers of the previous fiscal year, are presented on the basis of the new classification.

17

Automotive Systems、Others

2024/05/20 19:12:52 / 23092450_株式会社日立製作所_招集通知

Five-year Summary of Assets and Results of Operation of Hitachi Group
Consolidated Basis(Billions of yen)
Fiscal Year

2019

2020

2021

2022

2023

Revenues
Adjusted Operating Income
Adjusted EBITA
Income Before Income Taxes
Net Income Attributable to Hitachi, Ltd.
Stockholders
Total Assets

8,767.2
661.8
180.2

8,729.1
495.1
609.1
844.4

10,264.6
738.2
855.3
839.3

10,881.1
748.1
884.6
819.9

9,728.7
755.8
918.1
825.8

87.5

501.6

583.4

649.1

589.8

9,930.0

11,852.8

13,887.5

12,501.4

12,221.2

2019

2020

2021

2022

2023

1,793.2
108.0
355.4
119.4
4,004.4

1,678.2
39.0
305.4
705.5
4,982.6

1,623.4
113.9
365.0
516.1
5,815.6

1,631.3
88.0
354.7
987.9
5,940.4

1,756.9
147.7
401.0
581.5
6,095.4

Unconsolidated Basis(Billions of yen)
Fiscal Year

Revenues
Operating Income
Ordinary Income
Net Income
Total Assets

Notes: 1. From Fiscal 2021, the Company adopted the “Accounting Standard for Revenue Recognition” (ASBJ Statement No.29,
March 31, 2020), etc. and the figures for Fiscal 2021, 2022 and 2023 have been calculated in accordance with this standard.
2. In Fiscal 2023, the revenues and operating income increased from the previous fiscal year and ordinary income reached a
new record high, due mainly to the solid performance in the Digital Systems & Services business. Net Income decreased due
to a decrease of extraordinary income resulting from the sale of shares.

18

Five-year Summary of Assets and Results of Operation of Hitachi Group2024/05/20 19:12:52 / 23092450_株式会社日立製作所_招集通知

Overseas Revenues Trends(Billions of yen)

12,00010,881.1

10,264.6
8,767.2

9,000
6,000

0

2019

2020

2021

5,955.3(61%)

6,762.9(62%)

6,077.5(59%)

4,574.3(52%)

4,238.1
(48%)

3,000

9,728.7

8,729.1

2022

2023

Revenues by Market

22%
Asia

2,151.5 Billion yen

Overseas Revenues

Japan Revenues

5,955.3 Billion yen (61%)

3,773.3 Billion yen

16%
North America

1,582.9 Billion yen

16%

7%

Europe1,550.8 Billion yen

39%

Other Areas

669.9 Billion yen

Note: In “Overseas Revenues Trends,” the blue parts show overseas revenues and the red parts show domestic revenues. The number inparenthesis is the percentage of overseas revenues to total revenues.

19

Sales revenue by region(FY)2024/05/20 19:12:52 / 23092450_株式会社日立製作所_招集通知

Course of Actions for Hitachi Group
Since its foundation, Hitachi's mission has been to "Contribute to society through the development of superior,original technology and products." The Company has solved the challenges facing society by developing technologies andproducts that support social infrastructure.
Under the 2024 Mid-term Management Plan, Hitachi also aims to support people's quality of life with data andtechnology that foster a sustainable society. Establishing Digital, Green and Innovation as the three pillars, Hitachi focuseson the following measures to fulfill its vision for society through global growth under the unifying banner of One Hitachi.

‒ Strengthening and Expanding the Data-driven Cycle of Value Co-creation with Customers in Lumada
Hitachi is strengthening the cycle of value co-creationwithcustomersinLumadabyunderstanding

customers'

management issues, then designing and implementing solutions tothose issues, and implementing operation and maintenance whileworking to create solutions to the next issue. Riding the growing
demand for DX and GX as a tailwind, Hitachi works to create androll out Lumada solutions by working with every business in the
Hitachi Group including energy, transportation, and industry andutilizing cutting-edge technologies such as generative AI.

‒ Promoting Environmental Management and Strengthening Human CapitalThrough the Social Innovation Business, Hitachi works to strike a balance between solving environmental
issues and improving people's quality of life.
For initiatives aimed at decarbonization, Hitachi has set goals of achieving carbon neutrality at its business sites
by Fiscal 2030, and across the entire value chain by Fiscal 2050. Hitachi is making progress in reducing CO2 emissions at
a pace that exceeds its targets. In addition to further promoting reductions, Hitachi is also helping customers reduce their
CO2 emissions by providing solutions with its environmentally friendly products.
In addition, to achieve further growth through the utilization of diverse human resources, Hitachi is working toincrease the percentages of female and non-Japanese executive-level staff, to acquire and develop digital humanresources, etc., and to improve employee engagement to foster a growth mindset as One Hitachi.
‒ Creating Innovation for Growth
Hitachi has advanced the creation of innovation for global business growth and works to expand corporate
venturing investments to collaborate with startups, in addition to R&D investments including cutting-edge research. Hitachi
will achieve sustainable growth that continues to future generations by exploring the issues faced by society andcustomers, and devising innovations aimed at solving them.
To generate stable cash even in an unstable business environment that is difficult to foresee, Hitachi strives togrow its business through these efforts and also works to improve asset efficiency through ongoing business restructuring.
While enhancing the ability to generate cash, Hitachi will also provide stable returns to shareholders, making theinvestments necessary for growth in a swift but carefully selected manner.

20

Course of Actions for Hitachi Group2024/05/20 19:12:52 / 23092450_株式会社日立製作所_招集通知

Acceleration of Social Innovation through AI Transformation
Hitachi believes that AI is a driving force forinnovation that improves society. Hitachi further
accelerates the Social Innovation Business through ‟AItransformation” that significantly improves businessproductivity and creates new business opportunities
through active utilization of rapidly evolving Generative AI.
What is Generative AI?
Generative AI is artificial intelligence that caninterpret a huge amount of data and generate various
contents such as images, texts, sounds, and programcode. Typical examples include ChatGPT, an AI that cangenerate text.
Establishment of Organization for Promoting Group-wide AI Transformation

Hitachi has worked with customers on more than 100 projects utilizing AI and data analytics every year, led by theLumada Data Science Lab. established in 2020. Hitachi is working to utilize AI in a group-wide manner with its great
advantage that Hitachi has GlobalLogic Inc. headquartered in Silicon Valley, the U.S., which is the forefront of innovation.
Hitachi quickly responded to the emergence of generative AI and has established an organization for promoting
group-wide AI transformation in both providing value to customers and transforming internal business processes.
May 2023: Establishment of Generative AI Center
Hitachi established a new organization called ‟Generative AI Center”
to promote the responsible and effective use of generative AI.
Data scientists and AI researchers who have knowledge ofgenerative AI and specialists in the various fields of in-house operations
brings together in the center. It offers consulting and other services tosupport cutting-edge use cases and value creation of generative AI.
Please check the website for details
https://www.hitachi.com/New/cnews/month/2023/05/230515.html

Discussion by data scientists

December 2023: Assignment of Chief AI Transformation Officer
Hitachi created the position of ‟Chief AI Transformation Officer” in each of the three sectors: Digital Systems &Services, Green Energy & Mobility, and Connective Industries.
As the promoters leading the implementation of the AI transformation, they are responsible for the coordination andpenetration of the group-wide strategy within each sector. In addition, they also facilitate the seamless sharing ofvalidation results, technologies, and know-how, accumulating best practices and prompting the creation of synergies withdiverse knowledge to accelerate group-wide projects aimed at transforming internal processes through generative AI.

21

Acceleration of Social Innovation through AI Transformation

2024/05/20 19:12:52 / 23092450_株式会社日立製作所_招集通知

Expansion of the AI Ecosystem through Partnerships: Acceleration of DX through Collaboration with NVIDIAIn March 2024, Hitachi announced it is collaborating on
generative AI with U.S. semiconductor giant NVIDIA Corporation.
The two companies accelerate social innovation through DX by
combining Hitachi's leadership and digital solutions in operational
technology (OT) and NVIDIA's expertise in generative AI.
Hitachi will further expand our AI ecosystem with advanced
partners, including this collaboration.
Please check the website for details
https://www.hitachi.com/New/cnews/month/2024/03/240319.html

Examples of collaboration with NVIDIA
・Development of solutions to optimize facilities andbusiness processes in the energy and transportation
fields through advanced simulation in virtual spaces
・Creation of new AI solutions through integration of
Hitachi's Lumada solution library with NVIDIA's
platforms
・Provision of AI infrastructure products that integrate
NVIDIA's AI technologies and image processing
semiconductors with Hitachi Vantara's storage

Use Case (1): Railway Metaverse Evolving Vehicle Design, Maintenance and service

Hitachi developed the Worksite-Augmenting Metaverse
technology that enables to reproduce railway vehicles and tracks ina virtual space (metaverse) by using generative AI, thereby
permitting optimal design and safe operation of rolling stock andaccurate maintenance of tracks.
For example, operation and maintenance information can be
added to a 3D model of a railway track reproduced in the
metaverse, and its status can be indicated by color or other means.
This technology improves safety and efficiency with support for onsite maintenance operations, fully remote maintenance, andReproduce a track with the status displayed colors inassistance in training to learn in what circumstances repairs are
the metaverse
needed, among others.
Please check the website for details
https://www.hitachi.com/rd/sc/story/mv/index.html
Use Case (2): Internal Process Reform with Generative AI

Within the Group, Hitachi is promoting the use of generative AI in various operations of more than 250,000
employees and thereby accumulating know-how that will lead to productivity improvement. For example, Hitachi isreforming its internal process with the following initiatives.
・Improving productivity in software development, such as code generation, testing efficiency, and responsibility
considerations when applying generative AI・Speeding up customer service operations by integrating past inquiries and operational manuals with generative AI
Hitachi is continuing internal trials and applying them to collaborative creation activities with its customers.
Addressing Risks Involved in Use of AI

While the use of AI as a source of innovation has many advantages, it also entails various risks, including information
leakage, copyright and privacy violations, and false information.
Hitachi established Principles guiding the ethical use of AI with a view toward the human-centered development of AI
and its societal implementation in 2021, in addition to continuing its existing privacy protection efforts. Hitachi is also
promoting the use of generative AI while appropriately managing risks, such as creating guidelines for its use, with theleading role played by the Generative AI Center.
Please check the website for details
https://www.hitachi.com/New/cnews/month/2021/02/210222.html

22Acceleration of Social Innovation through AI Transformation

2024/05/20 19:12:52 / 23092450_株式会社日立製作所_招集通知

Borrowings and Financing Activities of Hitachi Group
Major Borrowings (As of March 31, 2024)

Name of Company

Creditor

The Company

Balance of Borrowings

Japan Bank for International Cooperation

184.7 billion yen

Note: In addition to the figures shown above, the Company owes long-term borrowings by means of syndicated loan agreements of
438.2 billion yen.
Major Financing Activities

The Company issued unsecured bonds in December 2023, procuring a total of 90.0 billion yen to use to refinance of short-term
funding for repaying the 18th Series Unsecured Straight Bonds and expenditures of the construction and refurbishment of “Kyōsō-tō”,
energy saving building, in the Central Research Laboratory.

Capital Investment of Hitachi Group
During Fiscal 2023, the Hitachi Group carried out capital investment of 315.8 billion yen for further global business expansion.
Despite the total investment decreased from the preceding fiscal year, mainly due to the effect of business reorganization, the percentage
of capital investment to total revenues was 3.2%, which was the same level as Fiscal 2022.
Capital Investment by Segment

Capital Investment Trend(Billions of yen)

OthersDigital Systems &Services
Automotive
Systems

Connective
Industries

500

5.0

(4.6%)(4.1%)

67.8
CapitalInvestment

315.8(3.8%)(3.2%)

399.6
359.8

300

Total

63.8

(%)

400

21.0
51.2

(Billions of yen)

388.7

349.7

4.0
(3.2%)
315.8

3.0

200

2.0

100

1.0

114.9
0

Green
Energy &Mobility

2019

2020

2021

2022

2023

Note: The number in parentheses is the percentage of capital
investment to total revenues.

23

Borrowings and Financing Activity of Hitachi Group、Capital Investment of Hitachi Group

(FY)

0.0

2024/05/20 19:12:52 / 23092450_株式会社日立製作所_招集通知

Research and Development (R&D) of Hitachi Group
With the R&D mission, “Strengthen initiatives to create
innovation with digital and green contributing to global businessgrowth,” Hitachi creates innovation to resolve issues of society andcustomers. Specifically, through creation of scenarios for customer
growth by Lumada co-creation, Hitachi achieves DX and GX driven
by the customer experience value. Hitachi has developed WorksiteAugmenting Metaverse using generative AI and distributed control
technology for renewable energy. Hitachi is also engaged inresearch aimed at the realization of the mass production ofhydrogen, radiation/cell and gene therapy and large-scale quantum
computers, etc., as future disruptive technologies contributing to theresolution of social issues.
Inside of a railway vehicle reproduced by metaverse

R&D expenses during Fiscal 2023 amounted to 290.1 billion yen. In order to achieve the goals of the 2024 Mid-termManagement Plan, Hitachi continues to be devorted to inovating by increasing its investments in advanced research and corporate
venture capital investments for co-creation with start-up companies.

R&D Expenses by Segment
OthersR&D Expenses Trends

3.0(Billions of yen)

Digital Systems &Services

25.9

Automotive
Systems

50.6

300

290.1
91.0

(3.4%)

293.7

293.5

(3.1%)

316.2

317.3

3.5

(3.0%)(2.9%)

290.1

3.0
2.5
2.0

200

1.5
100

65.2

1.0
0.5

Green Energy &Mobility

0

2019

2020

2021

2022

2023

(FY)

0.0

Note: The number in parentheses is the percentage of R&D expenses
to total revenues.

24

Research and Development of Hitachi Group

(%)(3.4%)

54.1

Research andDevelopment
Expenses
Total

Connective
Industries(Billions of yen)

Corporate Items &Eliminations

2024/05/20 19:12:52 / 23092450_株式会社日立製作所_招集通知

Employees of Hitachi Group
Hitachi formulated “2024 Human Resources Strategy,” whose
mission is contribution to business through diverse talents, equitable
opportunity and inclusive organization. Implementing the humanresources strategy aligned with business strategy contributes tofurther business growth of Hitachi.
Please review a briefing session held in 2022 and Hitachi
Sustainability Report for the details of "2024 Human Resources
Strategy."
https://www.hitachi.com/IR-e/library/presentation/webcast/221012.html
https://www.hitachi.com/sustainability/download/index.html

Number of Employees in the Hitachi Group

268,655 (including 28,111 employees on a non-consolidated basis)
Number of Employees by Segments
Corporate Items

Others

11,589Connective
Industries

Number of Employees in Japan and Overseas

3,315
Japan

113,737

Digital Systems &Services

81,514

Number of 106,839
employees

Number of
employees
in Japan andOverseas

Total

268,655(consolidated)(28,111)

Green Energy &Mobility

Overseas

154,918

65,398Notes: 1. The number of employees is as of March 31, 2024.
2. The figure in parentheses is the number of employees on a
non-consolidated basis.
3. There are no employees belonging to the Automotive
Systems segment since Hitachi Astemo, Ltd. is no longer a
consolidated subsidiary of the Company as a result of apartial transfer of shares of Hitachi Astemo, Ltd.

25

Employees of Hitachi Group2024/05/20 19:12:52 / 23092450_株式会社日立製作所_招集通知

Major Facilities and Major Group Companies of Hitachi Group (As of March 31, 2024)
The Company’s facilities are located in Japan and Hitachi group companies are located all over the world, including Japan.
The Company’s major facilities and group companies are shown below.

3

4
4

4

7

Hitachi, Ltd.
Group Companies (Segment)
Digital Systems & Services
Green Energy & Mobility
Connective Industries
OthersNote: The circles show the number and location of the Company and major group companies.

The Company
Location
Head Office

Tokyo (Chiyoda-ku)

R&D

Tokyo (Kokubunji), Ibaraki (Hitachi), Saitama (Hatoyama), Kanagawa (Totsuka-ku, Yokohama)

Manufacturing,
Design andEngineering

Tokyo (Adachi-ku, Shinagawa-ku, Chiyoda-ku, Minato-ku), Ibaraki (Hitachi, Hitachinaka),
Kanagawa (Saiwai-ku, Kawasaki; Hadano; Totsuka-ku, Yokohama), Yamaguchi (Kudamatsu)
Tokyo (Shinagawa-ku, Chiyoda-ku, Minato-ku)
Hokkaido Area Operation (Chuo-ku, Sapporo), Tohoku Area Operation (Aoba-ku, Sendai),

Sales and

Kanto Area Operation (Taito-ku), Hokuriku Area Operation (Toyama),

Area Operations

Chubu Area Operation (Nakamura-ku, Nagoya), Kansai Area Operation (Kita-ku, Osaka),
Chugoku Area Operation (Naka-ku, Hiroshima), Shikoku Area Operation (Takamatsu),
Kyushu Area Operation (Sawara-ku, Fukuoka)

26

Major Facilities of Hitachi Group2024/05/20 19:12:52 / 23092450_株式会社日立製作所_招集通知Group Companies
Name of Company

Location

Ratio of
Voting Rights(%)

Hitachi Information & Telecommunication Engineering, Ltd.

Nishi-ku, Yokohama,
Kanagawa

100.0

Hitachi Channel Solutions, Corp.

Shinagawa-ku, Tokyo

100.0

Hitachi Solutions, Ltd.

Shinagawa-ku, Tokyo

100.0

Hitachi Systems, Ltd.

Shinagawa-ku, Tokyo

100.0

GlobalLogic Worldwide Holdings, Inc.

U.S.A.

100.0

Hitachi Computer Products (America), Inc.

U.S.A.

100.0

Hitachi Digital LLC

U.S.A.

100.0

Hitachi Digital Services LLC

U.S.A.

100.0

Hitachi Payment Services Private Limited

India

100.0

Hitachi Vantara LLC

U.S.A.

100.0

Hitachi-GE Nuclear Energy, Ltd.

Hitachi, Ibaraki

80.0

Hitachi Plant Construction, Ltd.

Toshima-ku, Tokyo

100.0

Hitachi Power Semiconductor Device, Ltd.

Hitachi, Ibaraki

100.0

Hitachi Power Solutions Co., Ltd.

Hitachi, Ibaraki

100.0

Hitachi Energy Ltd

Switzerland

100.0

Hitachi Rail Ltd.

U.K.

100.0

Hitachi Building Systems Co., Ltd.

Chiyoda-ku, Tokyo

100.0

Hitachi Global Life Solutions, Inc.

Minato-ku, Tokyo

100.0

Hitachi High-Tech Corporation

Minato-ku, Tokyo

100.0

Hitachi Industrial Equipment Systems Co., Ltd.

Chiyoda-ku, Tokyo

100.0

Hitachi Industrial Products, Ltd.

Chiyoda-ku, Tokyo

100.0

Hitachi Industry & Control Solutions, Ltd.

Taito-ku, Tokyo

100.0

Hitachi Plant Services Co., Ltd.

Toshima-ku, Tokyo

100.0

Hitachi Elevator (China) Co., Ltd.

China

70.0

Hitachi Global Air Power US, LLC

U.S.A.

100.0

Hitachi Industrial Holdings Americas, Inc.

U.S.A.

100.0

JR Technology Group, LLC

U.S.A.

100.0

Segment■■■

DigitalSystems &Services

Green
Energy &Mobility

Connective
Industries

27

Major Hitachi Group Companies

2024/05/20 19:12:52 / 23092450_株式会社日立製作所_招集通知

Segment■

Name of Company

Location

Ratio of
Voting Rights(%)

Hitachi Real Estate Partners, Ltd.

Chiyoda-ku, Tokyo

100.0

Hitachi America, Ltd.

U.S.A.

100.0

Hitachi Asia Ltd.

Singapore100.0

Hitachi (China), Ltd.

China

100.0

Hitachi Europe Ltd.

U.K.

100.0

Hitachi India Pvt. Ltd.

India

100.0

Others

Notes: 1. The total number of consolidated subsidiaries is 573.
2. The number of equity-method affiliates is 369. The major equity-method affiliates are Hitachi Kokusai Electric Inc., Arcerik
Hitachi Home Appliances B.V., Johnson Controls-Hitachi Air Conditioning Holding (UK) Ltd, Hitachi Astemo, Ltd. and Hitachi
Construction Machinery Co., Ltd.
3. Hitachi Digital Services LLC was established on November 1, 2023 and succeeded the digital solutions business of Hitachi
Vantara LLC.
4. Hitachi Power Semiconductor Device, Ltd. has ceased to be a group company of the Company as a result of the share transfer
on May 2, 2024.
5. Hitachi Astemo, Ltd. and Hitachi Astemo Americas, Inc. were converted into equity-method affiliates from consolidated
subsidiaries as a result of the partial transfer of shares of Hitachi Astemo, Ltd. on October 16, 2023.
6. Ratio of voting rights includes indirect ownership.

28

Major Hitachi Group Companies

2024/05/20 19:12:52 / 23092450_株式会社日立製作所_招集通知

Directors and Executive Officers
Directors

Name, Position and Responsibilities, etc. (As of March 31, 2024)
Name

Position

Committee Membership

Other Principal Positions Held

Katsumi Ihara

Independent
Director

Chair of the Board of Directors
Nominating Committee (Chair)
Audit Committee
Compensation Committee-

Ravi Venkatesan

Independent
Director-

Board Chair, Global Energy Alliance for People and Planet, LLC (USA)
Trustee, The Rockefeller Foundation (USA)
Venture Partner, Unitus Ventures LLC. (India)

Cynthia Carroll

Independent
Director

Nominating Committee

Ikuro Sugawara

Independent
Director

Audit Committee

Joe Harlan

Independent
Director

Compensation Committee

Louise Pentland

Independent
Director

Takatoshi Yamamoto

Independent
Director

Compensation Committee(Chair)Outside Director, Murata Manufacturing Co., Ltd.

Hiroaki Yoshihara

Independent
Director

Nominating Committee
Audit Committee (Chair)Outside Director, HOYA CORPORATION

Helmuth Ludwig

Independent
Director

Audit Committee

Professor of Practice in Strategy and Entrepreneurship, Cox
School of Business, Southern Methodist University (USA)Senior Advisor, Bridgepoint, LLC (USA)Keiji Kojima

Director

Compensation Committee-

Mitsuaki Nishiyama

Director

Audit Committee-

Toshiaki Higashihara

Executive
Chairman

Nominating Committee-

Director, Baker Hughes Company (USA)*
Director, Pembina Pipeline Corporation (Canada)*
Director, Glencore plc (Switzerland)*Outside Director, Toyota Motor Corporation
Outside Director, FUJIFILM Holdings Corporation-

Director, Experian plc (Ireland/UK)*
Executive Vice President and Chief Counsel, Disney Park,
Experiences and Products, The Walt Disney Company (USA)

Notes: 1. Mr. Hiroaki Yoshihara, Director (Audit Committee (Chair)), has considerable knowledge of finance and accounting based on
his long experience at the KPMG Group with businesses related to accounting, etc. Mr. Mitsuaki Nishiyama, Director (Audit
Committee), has considerable knowledge of finance and accounting based on his long experience as a chief of accounting
and finance department of the Company as well as an Executive Officer in charge of accounting and finance department.
2. The Company has appointed Director Mitsuaki Nishiyama as a standing committee member of the Audit Committee. The
Company strives to improve the audit and supervisory functions of the Audit Committee by appointing a standing committee
member and creating a system where the Audit Committee can discuss and make its decisions based on its coordination
with the internal auditing division and others, along with its timely understanding of accurate information through attendanceof important internal meetings, etc. and information-sharing with other committee members.
3. All of the Independent Directors of the Company have been reported as independent directors to the Japanese stock
exchanges where the Company is listed.
4. The positions with * in “Other Principal Positions Held” are positions in each of the foreign corporations that are similar tooutside director under the Companies Act.
5. The Company engages in transactions, including the sale and purchase of products and services, with Toyota Motor
Corporation, FUJIFILM Holdings Corporation, Murata Manufacturing Co., Ltd. and HOYA CORPORATION. The volume oftransactions with each of the companies and corporations is negligible in comparison to the total business volume of theCompany and to the total business volume of the corresponding entity (less than 1% of either party's consolidated
revenues).

General Intent of Limited Liability Agreement with Directors
The Company has entered into a limited liability agreement as stipulated in Article 427, Paragraph 1 of theCompanies Act with each of the Directors (excluding Directors concurrently serving as Executive Officers). The generalintent of the agreement is to limit the liability of Directors to the aggregate amount of each item stipulated under Article
425, Paragraph 1 of the Companies Act.

29

Directors and Executive Officers

2024/05/20 19:12:52 / 23092450_株式会社日立製作所_招集通知

Major Activities of Independent Directors
Each Independent Director attended the Board meetings and relevant committee meetings, stated opinions andmade proposals proactively, conducted analyses from various perspectives, and discussed matters openly and effectively.
Attendance

Activities and duties of the Independent Directors
related to their expected role

Katsumi Ihara

Board of Directors meetings:
9 out of 9 days
Nominating Committee:
10 out of 10 days
Audit Committee:
15 out of 15 days
Compensation Committee:
7 out of 7 days

Mr. Ihara stated his opinions and made proposals regarding thegeneral management of the Group such as management policies
and business strategies from a business management viewpoint
based on his rich corporate management experience and insightgained through his involvement in the management of major
companies conducting diverse businesses globally. He also led
discussions at meetings of the Board of Directors and theNominating Committee as the chairperson of both bodies.

Ravi Venkatesan

Board of Directors meetings:
9 out of 9 days

Cynthia Carroll

Board of Directors meetings:
9 out of 9 days
Nominating Committee:
10 out of 10 days

Ikuro Sugawara

Board of Directors meetings:
7 out of 7 days
Audit Committee:
15 out of 15 days

Joe Harlan

Board of Directors meetings:
9 out of 9 days
Compensation Committee:
7 out of 7 days

Louise Pentland

Board of Directors meetings:
9 out of 9 days

Takatoshi Yamamoto

Board of Directors meetings:
9 out of 9 days
Compensation Committee:
7 out of 7 days

Hiroaki Yoshihara

Board of Directors meetings:
9 out of 9 days
Nominating Committee:
10 out of 10 days
Audit Committee:
15 out of 15 days

Helmuth Ludwig

Board of Directors meetings:
9 out of 9 days
Audit Committee:
15 out of 15 days

Mr. Venkatesan stated his opinions and made proposals
regarding the general management of the Group such as
management policies and business strategies from a global
viewpoint based on his rich experience and insight in the area ofdigital business and emerging markets.
Ms. Carroll stated her opinions and made proposals regarding thegeneral management of the Group such as management policies
and business strategies from a global viewpoint as well as ahuman capital management perspective including diversity &inclusion based on her rich experience and insight as the top
executive of major global companies.
Mr. Sugawara stated his opinions and made proposals regarding
the general management of the Group such as management
policies and business strategies from a corporate growth andgovernance viewpoint based on his rich experience and insight insuch areas as public administration.
Mr. Harlan stated his opinions and made proposals regarding thegeneral management of the Group such as management policies
and business strategies from a global business management
viewpoint based on his rich corporate management experienceand insight gained through his involvement in the management ofmajor companies conducting diverse businesses globally.
Ms. Pentland stated her opinions and made proposals regarding
the general management of the Group such as management
policies and business strategies from a global viewpoint as well
as a compliance and risk management perspective based on her
rich experience and insight as a chief legal officer at major global
companies.
Mr. Yamamoto stated his opinions and made proposals regarding
the general management of the Group such as management
policies and business strategies from investors' viewpoints
focusing on issues related to IR, information disclosure andcorporate value based on his rich experience and insight in thearea of corporate analysis and global corporate management. He
also led discussions as the chairperson of the Compensation
Committee.
Mr. Yoshihara stated his opinions and made proposals regarding
the general management of the Group such as management
policies and business strategies mainly from the viewpoints ofimproving business results and risk management based on his
rich experience and insight in the area of global corporate
management and accounting. He also led discussions as thechairperson of the Audit Committee.
Mr. Ludwig stated his opinions and made proposals regarding thegeneral management of the Group such as management policies
and business strategies from a global viewpoint based on his richexperience and insight in the area of global corporate
management and digital business.

Name

Note: Attendance at Board of Directors meetings and committee meetings is based on the days when meetings were held during
each member’s term of office.

30

Directors and Executive Officers

2024/05/20 19:12:52 / 23092450_株式会社日立製作所_招集通知

Executive Officers

Name, Position and Responsibilities, etc. (As of March 31, 2024)
Name

Position

Responsibilities

Other Principal Positions Held

*Toshiaki Higashihara Executive Officer

General-*Keiji Kojima

President

Overall management-*Masakazu Aoki

Executive Vice President Assistant to the President (business forand Executive Officer
industrial digital, water & environment
business, industrial products business,
industrial equipment systems business,building systems business, smart life &
ecofriendly systems business,measurement and analysis systems
business and healthcare business)-

Executive Vice President Assistant to the President (financeand Executive Officer
strategies, corporate pension system,
investment strategies, investor relations
strategies, cost structure reform, risk
management, corporate auditing andcorporate export regulation)-

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

Executive Vice President Assistant to the President (cloudand Executive Officer
services platforms business, digitalengineering business, business forfinancial institutions, business forgovernment, public corporation andsocial infrastructure systems, defense
systems business, social innovation
business promotion and digitalstrategies)-

Jun AbeSenior Vice President
and Executive Officer

Cloud services platforms business-

LorenaDellagiovanna

Senior Vice President
and Executive Officer

Sustainability strategies, environmental
strategies and diversity, equity &inclusion strategies-

Katsuya Nagano

Senior Vice President
and Executive Officer

Business for government, public
corporation and social infrastructure
systems, and defense systems
business,
Assistant to Executive Vice President(Digital Systems & Services (Japan))-Senior Vice President
and Executive Officer

Human capital strategies, diversity,
equity & inclusion strategies, corporate
communications strategies and safety
and health management-*Masahiko Hasegawa

Senior Vice President
and Executive Officer

Marketing & sales and regional
strategies-

Claudio Facchin

Senior Vice President
and Executive Officer

Power grids business

Giuseppe Marino

Senior Vice President
and Executive Officer

Railway systems business

Mamoru Morita

Senior Vice President
and Executive Officer

Management strategies

Atsuhiro Aketa

Vice President andExecutive Officer

Regional strategies (China)*Yoshihiko Kawamura*Alistair Dormer*Toshiaki Tokunaga*Hidenobu Nakahata

31

Directors and Executive Officers

Director, Hitachi Rail Ltd.
Chairman, Hitachi (China), Ltd.

2024/05/20 19:12:52 / 23092450_株式会社日立製作所_招集通知

Name

Position

Responsibilities

Other Principal Positions Held

Noriharu Amiya

Vice President andExecutive Officer

Railway systems business-Takashi Iizumi

Vice President andExecutive Officer

Healthcare business and measurement President and Director,
and analysis systems business
Hitachi High-Tech
Corporation

Hitoshi Ito

Vice President andExecutive Officer

Government & external relations-

Yasunori Inada

Vice President andExecutive Officer

Nuclear energy business-

Tatsuro Ueda

Vice President andExecutive Officer

Business for financial institutions-

Kenji Urase

Vice President andExecutive Officer

Energy business-

Tomomi Kato

Vice President andExecutive Officer

Finance strategies and corporate
pension system-

Tadashi Kume

Vice President andExecutive Officer

Supply chain management(manufacturing strategy and quality
assurance), environmental strategies
and safety and health management-

Kohei Kodama

Vice President andExecutive Officer

Legal matters, risk management andcorporate auditing-

Takashi Saito

Vice President andExecutive Officer

Marketing & sales strategies (businessfor connective industries)-

Kenichi Tanaka

Vice President andExecutive Officer

Human capital strategies

Jun Taniguchi

Vice President andExecutive Officer

Digital strategies and digitalengineering business

CEO, Hitachi Digital LLC

Kojin Nakakita

Vice President andExecutive Officer

Regional strategies (APAC)

Chairman, Hitachi Asia Ltd.
Chairman, Hitachi India Pvt.
Ltd.

Hideshi Nakatsu

Vice President andExecutive Officer

Water & environment business

Itaru Nishizawa

Vice President andExecutive Officer

Research & development

Seiichiro Nukui

Vice President andExecutive Officer

Information technology strategies

Andrew BarrVice President andExecutive Officer

Regional strategies (EMEA)

Yoshinori Hosoya

Vice President andExecutive Officer

Cloud services platforms business

Chie Mashima

Vice President andExecutive Officer

Marketing & sales strategies (businessfor digital systems & services) andsocial innovation business promotion

Shinya Mitsudomi

Vice President andExecutive Officer

Urban business strategies and building President and Director,
systems business
Hitachi Building Systems,
Co., Ltd.

Masashi Murayama

Vice President andExecutive Officer

Cost structure reform and information
security management

Kazunobu Morita

Vice President andExecutive Officer

Business for industrial digital

Takashi Yoda

Vice President andExecutive Officer

Marketing & sales strategies (businessfor energy)-

President, Hitachi Europe
Ltd.

Notes: 1. Executive Officers marked with * are Representative Executive Officers.
2. Executive Officer Toshiaki Higashihara and President Keiji Kojima concurrently hold Director positions.

32

Directors and Executive Officers--

2024/05/20 19:12:52 / 23092450_株式会社日立製作所_招集通知

New Executive Officers
The Company changed its Executive Officers as of April 1, 2024 as follows.
Name

Position

Responsibilities*Toshiaki Higashihara

Executive Officer

General*Keiji Kojima

President

Overall management*Jun Abe

Executive Vice President and Assistant to the President (business for industrial digital, water
Executive Officer& environment business, industrial products business, industrial
equipment systems business, building systems business, smart
life & ecofriendly systems business, measurement and analysis
systems business and healthcare business)*Brice Koch**

Executive Vice President and Assistant to the President (management strategies, regional
Executive Officer
strategies, investment strategies, risk management, corporate
export regulation, cost structure reform and information security
management)*Alistair Dormer

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

Executive Vice President and Assistant to the President (growth strategies, cloud services
Executive Officer
platform business, digital engineering business, business forfinancial institutions, business for government, public
corporation and social infrastructure systems, defense systems
business, social innovation business promotion and digitalstrategies)

Tatsuro Ueda

Senior Vice President andExecutive Officer

Business for financial institutions,
Assistant to Executive Vice President (Digital Systems &Services (APAC))*Tomomi Kato

Senior Vice President andExecutive Officer

Finance strategies, corporate pension system, investment
strategies, investor relations strategies and risk management**Shashank SamantSenior Vice President andExecutive Officer

Regional strategies (Americas)

LorenaDellagiovanna

Senior Vice President andExecutive Officer

Sustainability strategies, environmental strategies, humancapital strategies, safety and health management and diversity,
equity & inclusion strategies

Katsuya Nagano

Senior Vice President andExecutive Officer

Business for government, public corporation and social
infrastructure systems and defense systems business,
Assistant to Executive Vice President (Digital Systems &Services (Japan))

Hidenobu Nakahata

Senior Vice President andExecutive Officer

Legal matters, risk management, corporate auditing,government & external relations and corporate communications
strategies*Masahiko Hasegawa

Senior Vice President andExecutive Officer

Marketing & sales strategies

Claudio Facchin

Senior Vice President andExecutive Officer

Power grids business

Giuseppe Marino

Senior Vice President andExecutive Officer

Railway systems business

Atsuhiro Aketa

Vice President and Executive Regional strategies (China)
Officer

Noriharu Amiya

Vice President and Executive Urban business strategies and building systems business
Officer

Takashi Iizumi

Vice President and Executive Healthcare business and measurement and analysis systems
Officerbusiness

Yasunori Inada

Vice President and Executive Nuclear energy business
Officer**Yoshiaki Kagata

Vice President and Executive Cost structure reform and information security management
Officer

33

Directors and Executive Officers

2024/05/20 19:12:52 / 23092450_株式会社日立製作所_招集通知

Name

Position

Responsibilities

Tadashi Kume

Vice President and Executive Supply chain management (manufacturing strategy and quality
Officer
assurance) and safety and health management

Takashi Saito

Vice President and Executive Marketing & sales strategies (business for connective
Officerindustries)

Jun Taniguchi

Vice President and Executive Digital strategies
Officer

Kojin Nakakita

Vice President and Executive Regional strategies (APAC)
Officer

Hideshi Nakatsu

Vice President and Executive Water & environment business
Officer

Itaru Nishizawa

Vice President and Executive Research & development
Officer

Seiichiro Nukui

Vice President and Executive Information technology strategies
OfficerAndrew BarrVice President and Executive Regional strategies (EMEA)
Officer**Nitesh Banga

Vice President and Executive Digital engineering business
Officer**Hirohide Hirai

Vice President and Executive Government & external relations
Officer

Yoshinori Hosoya

Vice President and Executive Cloud services platforms business
Officer

Chie Mashima

Vice President and Executive Marketing & sales strategies (business for digital systems &Officer
services) and social innovation business promotion**Yuto Matsumura

Vice President and Executive Legal matters
Officer

Kazunobu Morita

Vice President and Executive Business for industrial digital
Officer

Takashi Yoda

Vice President and Executive Marketing & sales strategies (business for energy) and energy
Officerbusiness

Notes: 1. Executive Officers marked with * are Representative Executive Officers.
2. Executive Officers marked with** are newly appointed.

Content of Directors' and Officers' Liability Insurance Agreement(i) Insured People Covered- The Company's Directors, Executive Officers, Corporate Officers (the executive positions just below Executive
Officers) and employees who work as officers at the company to which they are assigned.
- Some of the Company’s domestic subsidiaries' directors, corporate auditors, executive officers and employees(including employees who work as officers at the company to which they are assigned).
(ii) Outline of the Insurance Agreement
The agreement compensates insured people for damages and litigation costs, etc. incurred as a result of any
damage claims due to an act or omission carried out by the insured person as an executive of a company. However, theCompany has taken measures to ensure that the appropriateness of the officers’ execution of their duties is not impairedby excluding compensation for intentional negligence in the fulfillment of their duties, the illegal acquisition of private
benefits or other benefits and damages resulting from criminal acts. The entire cost of the insurance agreement is borneby the Company or its subsidiaries that hold the insurance agreement.

34

Directors and Executive Officers

2024/05/20 19:12:52 / 23092450_株式会社日立製作所_招集通知

Compensation for Directors and Executive Officers

Regarding the compensation for Directors and Executive Officers, the Company’s Compensation Committee
determines the Policy for Determining Individual Compensation of Directors and Executive Officers (the "Compensation
Policy") as well as the amount of compensation, etc. of each Director and Executive Officer as follows.
Compensation Policy[Method of Determination of Policy]
The Company’s Compensation Committee sets forth the Policy for Determining Individual Compensation of
Directors and Executive Officer pursuant to the applicable provisions of the Companies Act.
[Basic Policy]
Compensation for Directors and Executive Officers shall be determined in accordance with the following key policy.
- Compensation shall be commensurate with the roles and responsibilities of each Director and Executive
Officer.
- Compensation for Directors shall be such that it enables them to exercise the functions of supervision ofmanagement effectively.
- Compensation for Executive Officers shall be reflected by considering the following factors;(Alignment with the 2024 Mid-Term Management Plan)
In the Short-term incentive compensation and Long-term incentive compensation, set performance
metrics toward the Mid-term Management Plan as Key Performance Indicators (“KPIs”) to encourage
executives to achieve them.
(Establishment of compensation program and corporate performance program that foster a growth mindset)
Pursue an optimal balance between short and medium- to long-term performance with respect to“growth”, “improving profitability” and “cash generation”, aiming for improved short-term performance andmedium- to long-term growth in corporate value.
Establish a compensation program that significantly rewards performance by setting stretch goals andcommensurate compensation levels.
(Setting indicators to promote sustainable management)
Develop specific indicators and goals related to "Environment,” “Business with Integrity” and “Qualityof life” under its sustainability strategy, and encourage their implementation.
(Expansion of stock compensation that rewards growth in corporate value over the medium- to long-term)
Expand stock compensation to better align with medium- to long-term corporate value.
- Competitive compensation levels with a global perspective
Ensure competitive compensation levels to attract and retain key executives in the global market,
regardless of their residence or origin, who can lead the management of a global organization.
- Compensation benchmarking with objectivity and transparency
Reference to the benchmarks in the US and European markets in addition to the benchmarks in theJapanese market for analysis and level-setting from multiple perspectives.
- Transparency and objectivity through enhanced compensation disclosure and shareholder engagement
Endeavor to gain investors' understanding and support through sufficient disclosure of thecompensation program with a global perspective and ongoing shareholder engagement, and continuously
improve the program based on the insights gained through the engagement.

35

Compensation for Directors and Executive Officers

2024/05/20 19:12:52 / 23092450_株式会社日立製作所_招集通知[Compensation Structure](i) Matters relating to Directors
Compensation for Directors consists of basic remuneration and stock compensation as fixed pay. The basic
amount of basic remuneration and stock compensation is set based on the ratio of 3:1 as the standard.
The method of determination of each type of compensation is as follows.
Basic remuneration- The amount of basic remuneration is decided by adjusting a basic amount to reflect full-time or part-timestatus, committee membership and position, and attendance of meetings, etc.
Stock compensation- A restricted stock compensation unit will be granted as an incentive to offer management supervision andadvice with an awareness of medium- and long-term improvements in corporate value. The units will become
vested at the end of three fiscal years after granting, and common stocks or cash for the vested units will bedelivered.
- The stock compensation described above is granted from the Directors to be elected at the 155th Annual
General Meeting of Shareholders.
If it is found that a director has engaged in misconduct during his/her term of office, compensation for Directorsthat has already been paid shall be returned to the Company. A Director concurrently serving as an Executive Officer is
not paid compensation as a Director.
(ii) Matters relating to Executive Officers
Compensation for Executive Officers consists of basic remuneration as fixed pay and short-term incentive
compensation and medium- and long-term incentive compensation as variable pay. The basic amount of basic
remuneration, short-term incentive compensation, and medium- and long-term incentive compensation is set based on theratio of 1:1.2:2.0 as the standard, taking into account the composition of executive compensation for major global
companies including the U.S. and European companies, in order to improve corporate value through the growth of global
businesses. The higher the position an Executive Officer holds, the higher the proportion of variable pay is set to total
annual compensation.
The method of determination of each type of compensation is as follows.
Basic remuneration- The amount of basic remuneration is decided by adjusting a basic amount set in accordance with the relevant
position to reflect the results of an assessment.
Short-term incentive compensation- The amount of short-term incentive compensation is decided within the range of 0 to 200% of a basic amount
set according to the relevant position by adjusting that amount to reflect financial results and individual
performance. Evaluation items and proportion of evaluation item are as shown in the following table.
Proportion of evaluation item
Executive officers
Evaluation items
President
Executive officers
in charge of(CEO)in charge of businesscorporate affairs
Corporate
70％
30%
40％
Financialperformance
Division
30%－－
Individual goals

10%

20%

40%

Sustainability measurement

20％

20%

20％

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

36

Compensation for Directors and Executive Officers

2024/05/20 19:12:52 / 23092450_株式会社日立製作所_招集通知

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

Condition

The grant
ratio toLTI target

Grant date of Restricted
Stock

Restricted Stock
Compensation

Incumbency condition

30%

Every fiscal year

Stock price condition

70%

After the end of the threefiscal years beginning with thebase fiscal year

Performance-linked
Restricted Stock
Compensation

Conditions forachievement of Mid-termManagement Plan targets

ROIC

10%

Sustainability
targets

10%

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

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

37

Compensation for Directors and Executive Officers

2024/05/20 19:12:52 / 23092450_株式会社日立製作所_招集通知

Total Amount of Compensation to and the Number of Directors and Executive Officers in Fiscal 2023
Total amount of each type(Millions of yen)
Total amount of
Variable pay
Number ofcompensation,
Category
personsetc.
Medium- andFixed pay
Short-term
Others(Millions of yen)long-term
incentive
incentivecompensationcompensation
Directors
60
60
2(excluding Independent－－－
Directors)
Independent Directors
418
418
9
－
－
－
Executive Officers
5,743
1,812
2,022
1,908
35
－
Total
6,222
2,291
2,022
1,908
46
－
Notes: 1. The number of Directors indicated excludes two Directors who serve or served concurrently as Executive Officers.
2. Fixed pay and short-term incentive compensation consist of monetary compensation, and medium- and long-term incentive
compensation consists of non-monetary compensation and monetary compensation.

Performance Indicators Used to Calculate Performance-linked Compensation
Regarding the short-term incentive compensation, "Company performance" was evaluated referring toConsolidated revenues, Revenues of Lumada business, Adjusted EBITA margin, Earnings per Share and Core free cash
flows in order to measure the level of achievement of consolidated financial forecasts disclosed to stakeholders, including
shareholders and investors. "Division performance" was evaluated referring to Revenues, Revenues of Lumada business,
Adjusted EBITA margin and Core free cash flows in each division, among other indicators, to measure the level ofachievement of targets under the Mid-term Management Plan and the annual budgets for each division.
Please refer to "Business Overview and Results of Hitachi Group" in this report regarding the business results in
Fiscal 2023.
The results of Performance Indicators for each medium- and long-term incentive compensation are as follows.
Name

The First Stock Acquisition Rights of Hitachi, Ltd.
The Second Stock Acquisition Rights of Hitachi, Ltd.
The Third Stock Acquisition Rights of Hitachi, Ltd.
Restricted Stocks issued in May 2019
Restricted Stocks issued in May 2020
Restricted Stocks issued in June 2021
Restricted Stocks issued in June 2022
Performance-linked Restricted Stock Compensation
granted in April 2023

Term

The result of
Performance
Indicators

TSR/TOPIX Growth Rate Ratio

From April 1, 2016 to March 29, 2019
From March 31, 2017 to March 31, 2020
From March 30, 2018 to March 31, 2021
From April 1, 2019 to March 31, 2022
From April 1, 2020 to March 31, 2023
From April 1, 2021 to March 31, 2024
From April 1, 2022 to March 31, 2024 (Note)
From April 1, 2023 to March 31, 2024 (Note)

125.8%
121.6%
120.5%
146.7%
167.2%
205.8%
163.6%
137.2%

Global Competitive Comparison

From April 1, 2023 to March 31, 2024 (Note)

100%ilePerformance Indicators

TSR/TOPIX Growth Rate Ratio

TSR/TOPIX Growth Rate Ratio

Note: These are calculated to determine the number of shares to be lifted from transfer restriction under RS compensation or thenumber of shares to be issued under Performance-linked RS compensation to be held by individuals who retired from Executive
Officers, Directors or Corporate officers of the Company on March 31, 2024.

Reasons Why the Compensation Committee Judged that the Respective Amount of Compensation, etc. of Each
Director and Executive Officer in Fiscal 2023 was in Line with the Compensation Policy
The Compensation Committee judged that the respective amount of compensation, etc. of each Director andExecutive Officer was in line with the Compensation Policy, because it determined the "Compensation Structure" which isa specific criteria, based on the "Basic Policy," and determined the specific amount of compensation in accordance withthe "Compensation Structure."

38

Compensation for Directors and Executive Officers

2024/05/20 19:12:52 / 23092450_株式会社日立製作所_招集通知

Corporate Governance System and Internal Control System
The Company is a company with a Nominating Committee, etc. under the Companies Act, aiming to establish aframework for the speedy implementation of its business operations and to realize highly transparent management byseparating the responsibilities for management oversight and for the execution of business operations.
The Board of Directors, which is responsible for overseeing management, determines basic policies for management,
etc. and also monitor the Executive Officers execution of business while significantly delegating authority to the Executive
Officers.

General Meetingof Shareholders
Appointment

Oversight

Execution
Appointment / Oversight

Board of Directors

Senior Executive Committee
President

Nominating Committee

Executive Officers
Compensation Committee
Audit

ReportAudit Committee
ReportInternal
Auditing Office

Each department
Audit

ReportAccounting Auditors

39【ご参考】コーポレートガバナンス体制と内部統制システムについて

Audit2024/05/20 19:12:52 / 23092450_株式会社日立製作所_招集通知

Structures and Other Measures to Ensure the Adequacy of Business Operations (Internal Control Systems) and Operation of the Internal Control System
Summary of the resolution of the Board of Directors on the enhancement of the internal control systema. The following measures shall be taken to ensure the effectiveness of the audits by the Audit Committee.
(i)When necessary, the Board of Directors may appoint one or more directors, who are not concurrently serving
as executive officers, to be director(s) responsible for assisting with the duties of the Audit Committee. In
addition, the Board of Directors Office (the “Office”) shall be established specifically to assist the Board of
Directors and each committee with their duties.

(ii)

To ensure the Office personnel are independent from the Executive Officers and the effect of instructions by
the Audit Committee, the Office is staffed with personnel who work only for the Office and are not subject tothe orders or instructions of Executive Officers, and the Audit Committee shall be informed in advance ofplanned transfers of Office personnel.

(iii)

Executive Officers and employees shall report significant matters affecting the Company and its subsidiaries,
the results of internal audits and the implementation status of reporting under the internal reporting system
without delay to the members of the Audit Committee. It shall be provided for in the company regulation thatreporters using the common internal reporting system of the Hitachi Group shall not be treateddisadvantageously due to their submission of a report, and the system's administrative organization shallensure this provision is thoroughly implemented.

(iv)

The Office shall be responsible for paying for the expenses incurred in connection with the Audit Committee
members' execution of their duties and other administrative duties, and shall promptly process payments forthese expenses or debts except in cases where the expense or debt claimed is clearly found to beunnecessary for the execution of the Audit Committee members' duties.

(v)

Standing Committee member(s) shall be appointed to the Audit Committee, and the activity plans of the Audit
Committee shall be prepared in coordination with the audit plans of the Internal Auditing Office.

b. The following measures shall be taken to ensure the adequacy of the operations within the Company and the
Hitachi Group.
(i)

Fundamental policies that emphasize the social responsibilities of business enterprises shall be shared withthe subsidiaries of the Company.

(ii)

Each subsidiary of the Company shall develop systems to ensure the appropriateness of its operations
appropriate for its size and other characteristics, the basic framework of which will be similar to the ones
employed by the Company. To ensure each subsidiary's development of such systems, directors and auditors
shall be sent by the Company to the subsidiaries, and regular audits of the subsidiaries shall be conducted.

(iii)

A system for reporting matters to Directors shall be established to ensure that the Executive Officers of theCompany execute their duties in compliance with laws, regulations and the Articles of Incorporation.

(iv)

Information pertaining to the Company's Executive Officers' execution of their duties shall be prepared andmaintained in accordance with internal rules.

(v)

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 regarding various risks.
Efforts shall be made to identify possible new risks through measures such as progress reports on business
operations and, should it become necessary, an Executive Officer will be appointed promptly to be
responsible for responding to a new risk.

(vi)

The efficiency of the Company's Executive Officers, and the subsidiaries' Directors and Executive Officers'
performance of their duties shall be ensured through the following business management systems.
- The Senior Executive Committee shall be established to deliberate on and facilitate the formulation ofdecisions 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 to operate business in a planned and efficient manner.

40

Structures and Other Things to Ensure Adequacy of Business Operations (Internal Control System) and Operation of the Internal Control System

2024/05/20 19:12:52 / 23092450_株式会社日立製作所_招集通知- Internal audits of the Company and its subsidiaries shall be conducted to identify and monitor the status of
their business operations and to facilitate improvements.
- The Audit Committee shall receive the accounting auditors' audit plans in advance, and the prior approval of
the Audit Committee shall be required regarding the fees to be paid to the accounting auditors.
- Documented business processes for matters to be reflected in financial reports shall be executed by theCompany and its subsidiaries, and internal and external auditors shall examine these processes to ensure thereliability of financial reports.
- A structure for the adequate and efficient conduct of the common business operations of the Hitachi Group
companies shall be established.
(vii)

Continuous maintenance of a legal and regulatory compliance structure shall be ensured through thefollowing business management systems.
- Internal audits shall be conducted and various committees shall be established for legal and regulatorycompliance activities. Furthermore, a Hitachi Group common internal reporting system shall be establishedand education regarding legal and regulatory compliance shall be provided.
- Various policies and rules on compliance with laws shall be established, aiming to ensure that the employees
are aware of the internal control systems overall and that the systems are effective.

(viii) A system shall be established in which the subsidiaries submit reports on important issues and the progressof measures regarding operations to the Company through the Company’s Senior Executive Committee,
medium-term business plans and the budget system.
(ix)

The policy on transactions within the Hitachi Group is to trade fairly based on market prices.

Summary of status of operation of the internal control system

Audit Committee- A standing committee member has been appointed to understand information in a timely and accurate
manner by attending important internal meetings, such as meetings of the Senior Executive Committee, andpromote information-sharing with other Committee members.
- The Audit Committee receives reports on audit plans of the accounting auditor and the Internal Auditing Officein advance and proposes changes to these plans, if necessary, and closely coordinates with the accounting
auditor and the Internal Auditing Office by exchanging information and opinions on a regular basis.

Board of Directors Office- To assist with the duties of each Committee and the Board of Directors, the Office is staffed with 15
employees (as of March 31, 2024) who exclusively serve the Office and are not subject to the orders or
instructions of Executive Officers. Eight of the Office's employees are allocated as full-time auditors auditing
governance and risk management, etc. in the Digital Systems & Services, Green Energy & Mobility andConnective Industries.
Senior Executive Committee- The Senior Executive Committee meets twice a month, in principle, to deliberate specific important mattersconcerning the Company or its subsidiaries and the annual business plan.
- The Senior Executive Committee makes efforts to identify potential signs of new risks through means such as
progress reports on the business operations of the Company and its subsidiaries on a regular basis.
Business Performance Management- The Company has formulated business strategies, measures to be taken and financial targets as its mediumterm business plan and annual budget, and manages business performance based on these plans.
Establishment of Internal Regulations and Training, etc.
- Regarding risks related to compliance, information security, the environment, disasters, quality, investment
activities, etc., the Company establishes and amends regulations and guidelines, conducts training andprepares and distributes manuals to ensure risk management.

41

Structures and Other Things to Ensure Adequacy of Business Operations (Internal Control System) and Operation of the Internal Control System

2024/05/20 19:12:52 / 23092450_株式会社日立製作所_招集通知

Whistleblowing System- The Company has established and operates the Hitachi Group common whistleblowing system.
- The Company has also established and operates a system for reporting suspicions of illegal acts, etc. by the
Executive Officers to the Directors.
Internal Audit- The Internal Auditing Office has conducted internal audits of the Company and its subsidiaries to monitor andimprove their business operations, as well as to confirm the status of their compliance and prevent illegal acts.
- The Internal Auditing Office has reported the results of its internal auditing of the Company and its
subsidiaries to the Audit Committee members without delay.

42

Structures and Other Things to Ensure Adequacy of Business Operations (Internal Control System) and Operation of the Internal Control System

2024/05/20 19:12:52 / 23092450_株式会社日立製作所_招集通知

Fundamental Policy on the Conduct of People Influencing Decisions on the Company’s Financial and Business Policies
The Group invests a great deal of business resources in fundamental research and in the development of marketleading products and businesses that will bear fruit in the future, and realizing the benefits from these management
policies requires that they be continued for a set period of time. For this purpose, the Company keeps its shareholders andinvestors well informed of not just the business results for each period but also of the Company’s business policies forcreating value in the future.
While the Company recognizes the importance of its revitalization of business activities and performance that canbe brought about through a change in management control, it also recognizes the necessity of determining the impact oncompany value and the interests of all shareholders of the buying activities and buyout proposals of parties attempting toacquire a large share of stock of the Company or a Group company by duly examining the business description, futurebusiness plans, past investment activities, and other necessary aspects of such a party.
There is no party that is currently attempting to acquire a large share of the Company’s stocks nor is there a
specific threat, neither does the Company intend to implement specified so-called anti-takeover measures 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 topurchase a large share of the Company’s stock. In particular, together with outside experts, the Company will evaluate thebuyout proposal of the party and hold negotiations with the buyer, and if the Company deems that said buyout will not
maintain the Company’s value and is not in the best interest of the shareholders, then the Company will quickly determine
the necessity, content, etc., of specific countermeasures and prepare to implement them. The same response will also betaken in the event a party attempts to acquire a large percentage of the shares of a Group company.

43

Fundamental Policy on the Conduct of Persons Influencing Decision on the Company's Financial and Business Policies

2024/05/20 19:12:52 / 23092450_株式会社日立製作所_招集通知

Matters Concerning Accounting Auditor
Name of accounting auditor

Ernst & Young ShinNihon LLC
Fees to accounting auditor in Fiscal 2023

(Millions of yen)AmountCategory

Fees foraudit services (Note 1)

Fees fornon-audit services

Total

Fees, etc. by the Company and its subsidiaries

1,019

50

1,069

574

49

623

Fees, etc. by the Company

Notes: 1. The fees for audits under the Financial Instruments and Exchange Act are included.
2. The Audit Committee of the Company has given the consent with regard to the fees, etc. to accounting auditor, in
accordance with Article 399, Paragraph 1 of the Companies Act, after having obtained necessary information and examined
the status of the execution of duties by the accounting auditor, content of the audit plan, and grounds for calculating theestimated amount of fees, etc.
Description of non-audit services

The Company commissioned various consulting services and assurance services (except auditing) to
Ernst & Young ShinNihon LLC and paid fees.
Subsidiaries whose financial statements are audited by certified public accountants, etc. other than the Company’s accounting
auditors

Of the major subsidiaries of the Company (listed in “Major Facilities and Major Group Companies ofHitachi Group”), overseas subsidiaries have certified public accountants (“CPA”) or auditing firms, etc. of the
network firms that Ernst & Young ShinNihon LLC belongs audit their financial statements.
Removal and non-retention policy on accounting auditors

In the event the Audit Committee determines that the causes provided for in each item of Paragraph 1 of
Article 340 of the Companies Act apply to an accounting auditor and the accounting auditor needs to be removed
immediately, the Audit Committee shall remove the accounting auditor by unanimity. Should this occur, the Audit
Committee member selected by the Audit Committee shall give a report on the removal of the accounting auditor
and the reason therefor at the first general meeting of shareholders to be convened after the said removal.
Besides the case above, it is determined that an accounting auditor should be replaced for such reason
as the difficulty of ensuring an adequate performance of duties by the accounting auditor, the Audit Committee
shall determine the contents of the agenda item on the non-retention of the accounting auditor to be submitted to
the general meeting of shareholders.

44

Matters Concerning Accounting Auditor

2024/05/20 19:12:52 / 23092450_株式会社日立製作所_招集通知

Matters Concerning the Company’s Stock (As of March 31, 2024)
Authorized

2,000,000,000 shares

Issued927,167,877 shares

Note: On October 18, 2023, the Company canceled 11,073,400 treasury shares.
Number of Shares per Unit

100 shares

10 Largest Shareholders

Name
The Master Trust Bank of Japan, Ltd. (Trust Account)
Custody Bank of Japan, Ltd. (Trust Account)
STATE STREET BANK AND TRUST COMPANY 505223
GOVERNMENT OF NORWAY
NATS CUMCO
Nippon Life Insurance Company
SSBTC CLIENT OMNIBUS ACCOUNTSTATE STREET BANK WEST CLIENT – TREATY 505234
Hitachi Employees’ Shareholding Association
JP MORGAN CHASE BANK 385632

Share Ownership(Shares)
155,658,700
57,317,377
22,663,806
21,161,670
20,721,566
20,000,099
19,936,868
18,317,987
17,568,674
15,303,016

Shareholding Ratio
(%)
16.80
6.19
2.45
2.28
2.24
2.16
2.15
1.98
1.90
1.65

Notes: 1. NATS CUMCO is the nominee name of the depositary bank, Citibank, N.A., for the aggregation of the Company's
American Depositary Receipts (ADRs) holders.
2. Treasury stock (546,173 shares) is not included in the calculation of the shareholding ratio.
Shareholders Composition

Status of shares
Foreign corporations,
Financial
Class of Government
etc.
Financial instruments
Other
Individuals
shareholders
andinstitution business institution
and others
Nonmunicipality
Individuals
operator
individuals

Total

Number ofshareholders

2

162

62

201,834

Shareownership(units)

92 2,912,162

147,230

Ownership
percentage ofshares (%)

0.00

31.48

1.59

2,144

1,300

122,176 4,724,150

1.32

51.07

147

198,017

Number ofsharesless than
one unit(shares)-

1,232 1,342,859 9,249,901 2,177,777

0.01

14.52

100.00-Note: Of the 546,173 shares of treasury stock, 5,461 units are included in the “Individuals and others” column, while 73 sharesare included in the “Number of shares less than one unit” column.
Shares Issued to the Executive Officers, etc. of the Company as Compensation

The Company issued 116,500 new shares to 37 Executive Officers of the Company, 38,400 new sharesto 38 Corporate Officers (the executive positions just below Executive Officers) of the Company and 3,300 newshares to 5 Executives of Group companies, respectively, through restricted stock compensation plans andrestricted stock unit compensation plans as the medium- and long-term incentive compensation on May 31, 2023.
Other Significant Matters concerning the Company’s Stock

Acquisition of treasury stock (Market purchase on the Tokyo Stock Exchange)
Treasury stock acquired pursuant to the resolution at the Bord of Directors Meeting held on April 27, 2023
- Type and number of shares acquired: 11,073,400 shares of common stock- Total purchase price for the acquisition of shares: 99,999,418,727 yen- Period of acquisition: May 23, 2023 to October 2, 2023

45

Matters Concerning the Company’s Stock2024/05/20 19:12:52 / 23092450_株式会社日立製作所_招集通知

Information on the Stock Acquisition Rights, etc. (As of March 31, 2024)
Stock Acquisition Rights Held by Senior Managements
Name of stock acquisition rights(Date of resolution)
Class and number of shares to beissued upon exercise of stockacquisition rights
Amount to be paid in upon
exercise of stock acquisitionrightsExercise period of stockacquisition rights
Conditions for the exercise ofstock acquisition rights
Stock acquisition rights held bysenior managements

The First Stock
Acquisition Rights ofHitachi, Ltd.
(June 29, 2016)

The Second Stock
Acquisition Rights ofHitachi, Ltd.
(April 6, 2017)

The Third Stock
Acquisition Rights ofHitachi, Ltd.
(April 11, 2018)

113,200 shares ofcommon stock

127,200 shares ofcommon stock

131,020 shares ofcommon stock¥1 per share¥1 per share¥1 per share

From July 15, 2016 toJuly 14, 2046

From April 27, 2017 toApril 26, 2047

From April 27, 2018 toApril 26, 2048

(Note 1, 2)(Note 1, 2)(Note 1, 2)

11 Executive Officers of
the Company
5,660 of stock acquisitionrights(Note 3)12 Executive Officers of
the Company
6,360 of stock acquisitionrights(Note 3)18 Executive Officers of
the Company
6,551 of stock acquisitionrights(Note 3)

Notes: 1. A holder of stock acquisition rights may exercise all the stock acquisition rights together only within 10 days (in case the last
day is not a business day, the following business day) from the day immediately following the date on which he/she ceases
to be an Executive Officer, Director or Corporate Officer of the Company.
2. The number of stock acquisition rights which a holder of stock acquisition rights may exercise shall be determined based on
the ratio of (i) the total shareholder return for shares of Hitachi for three years from the beginning of the fiscal year in which
the date of allotment of the stock acquisition rights falls to (ii) the growth rate of TOPIX (Tokyo Stock Price Index) for thesame period (the “TSR/TOPIX Growth Rate Ratio”), in accordance with the stock price conditions:a. If the TSR/TOPIX Growth Rate Ratio is 120% or more
All the stock acquisition rights allotted (the “Allotted Rights”) may be exercised.
b. If the TSR/TOPIX Growth Rate Ratio is 80% or more but less than 120%
Only a part of the Allotted Rights may be exercised according to the degree of achievement of the TSR/TOPIX
Growth Rate Ratio.**Number of stock acquisitionrights exercisable=

Number of
Allotted Rights

×{(

TSR/TOPIX Growth
Rate Ratio

× 1.25) – 0.5}

Any fraction less than one stock acquisition right will be rounded down.
c. If the TSR/TOPIX Growth Rate Ratio is less than 80%
No Allotted Rights may be exercised.
3. The number of Executive Officers includes two Executive Officers who concurrently serve as Directors.

Policy on the Determination of Distribution of Surplus, etc.
The Company views the return of profits to shareholders through enhancing corporate value from the med- tolong-term perspective, and paying dividends and repurchase of its shares as an important managerial issue.
The policy of the Company regarding dividends is to aim for stable payment of dividends while also securing
funds necessary for investment, and the dividends are determined by comprehensively taking into account factors such as
financial performance trends, the financial situation, and the dividend payout ratio.
The Company flexibly conducts repurchase shares of its shares depending on factors such as capital needs andthe business environment.
In accordance its med- to long-term management strategy, the Company utilizes undistributed profits in areas
such as M&A, research and development, and capital expenditure, in order to secure competitiveness and aim for growthof the business as global enterprise.

46

Information on the stock acquisition rights, etc、Policy on Determination of Distribution of Surplus etc.