(Translation)

Annual Securities Report(The 146th Business Term)
From April 1, 2014 to March 31, 2015

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

Hitachi, Ltd.

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

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

Director, Kanto Local Finance Bureau[Filing Date]

June 25, 2015

[Fiscal Year]

The 146th Business Term (from April 1, 2014 to March 31, 2015)[Company Name]

Kabushiki Kaisha Hitachi Seisakusho[Company Name in English] Hitachi, Ltd.
[Title and Name ofToshiaki Higashihara, President & COO

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

03-3258-1111[Contact Person]

Taro Kaiho, Manager, Legal Division[Contact Address]

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

03-3258-1111[Contact Person]

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

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

This is an English translation of the Annual Securities Report filed with the Director of the Kanto Local Finance Bureau
via Electronic Disclosure for Investors’ NETwork (“EDINET”) pursuant to the Financial Instruments and Exchange Act ofJapan.
Certain information in “Part I. Information on the Company - II. Business Overview - 4. Risk Factors - Risks Related to
Our American Depositary Shares” is only included in this English translation of the Annual Securities Report for ADSs
holders and not included in the original report.
Certain information in “Part I. Information on the Company - V. Financial Information” in this document incorporates
financial statements prepared in conformity with the International Financial Report Standards (“IFRS”) as issued by theInternational Accounting Standards Board and independent auditor’s report instead of the English translation of the Annual
Securities Report.
The translation of the Internal Control Report, the Independent Auditors’ Report and the Confirmation Letter for theoriginal Annual Securities Report are included at the end of this document.
In this document, the terms “we,” “us,” “our” and “Hitachi” refer to Hitachi, Ltd. and consolidated subsidiaries or, as thecontext may require, Hitachi, Ltd. on a non-consolidated basis and the term “the Company” refers to Hitachi, Ltd. on a nonconsolidated basis.
Unless otherwise stated, in this document, where we present information in millions or hundreds of millions of yen, we
have truncated amounts of less than one million or one hundred million, as the case may be. Accordingly, the total of figures
presented in columns or otherwise may not equal the total of the individual items. We have rounded all percentages to thenearest percent, one-tenth of one percent or one-hundredth of one percent, as the case may be.
References in this document to the “Financial Instruments and Exchange Act” are to the Financial Instruments andExchange Act of Japan and other laws and regulations amending and/or supplementing the Financial Instruments andExchange Act of Japan.
References in this document to the “Companies Act” are to the Companies Act of Japan and other laws and regulations
amending and/or supplementing the Companies Act of Japan.

Contents
Part I Information on the Company ................................................................................................................... 1
I. Overview of the Company ......................................................................................................................... 1
1. Key Financial Data............................................................................................................................ 1
2. History............................................................................................................................................... 4
3. Description of Business .................................................................................................................... 6
4. Information on Affiliates ................................................................................................................... 8
5. Employees ....................................................................................................................................... 16
II. Business Overview ................................................................................................................................. 17
1. Summary of Business Results ......................................................................................................... 17
2. Production, Orders Received and Sales .......................................................................................... 17
3. Challenges Facing Hitachi Group. .................................................................................................. 17
4. Risk Factors .................................................................................................................................... 18
5. Material Agreements, etc. ............................................................................................................... 25
6. Research and Development ............................................................................................................. 25
7. Analyses of Consolidated Financial Condition, Operating Results and Cash Flows ...................... 27
III. Property, Plants and Equipment ............................................................................................................ 35
1. Summary of Capital Investment, etc. .............................................................................................. 35
2. Major Property, Plants and Equipment ........................................................................................... 36
3. Plans for Capital Investment, Disposals of Property, Plants and Equipment, etc. .......................... 40
IV. Information on the Company ................................................................................................................ 41
1. Information on the Company’s Stock, etc. ...................................................................................... 41(1) Total number of shares, etc. ........................................................................................................ 41(2) Information on the stock acquisition rights, etc.......................................................................... 41(3) Information on moving strike convertible bonds, etc. ................................................................ 41(4) Information on shareholder right plans....................................................................................... 41(5) Changes in the total number of issued shares and the amount of common stock and other ....... 41(6) Shareholders composition........................................................................................................... 42(7) Major shareholders ..................................................................................................................... 42(8) Information on voting rights ....................................................................................................... 43(9) Details of stock option plans ...................................................................................................... 44
2. Information on Acquisition, etc. of Treasury Stock ........................................................................ 44
3. Dividend Policy .............................................................................................................................. 45
4. Changes in Share Prices .................................................................................................................. 46
5. Directors and Senior Management .................................................................................................. 47
6. Corporate Governance, etc. ............................................................................................................. 57
V. Financial Information ............................................................................................................................. 67
VI. Stock-Related Administration for the Company ................................................................................... 68
VII. Reference Information on the Company ............................................................................................. 69
Part II Information on Guarantors, etc. for the Company ................................................................................ 70[Consolidated Financial Statements]................................................................................................................. F-1
Consolidated Financial Statements. .......................................................................................................... F-2
Reports of Independent Registered Public Accounting Firm .................................................................. F-79
[Internal Control Report (Translation)] ............................................................................................................. A-1[Independent Auditors’ Report (Translation)] ................................................................................................. A-3[Confirmation Letter (Translation)] .................................................................................................................. A-6

Part I

Information on the Company

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

Fiscal year

(Millions of yen, unless otherwise stated)
IFRS
Transition
145th
146th
Date
business term business term
April 1, 2013 March 2014 March 2015－
9,666,446
9,774,930

Year end
Revenues
Income from continuing－
678,498
518,994
operations, before income taxes
Net income attributable to－413,877
217,482
Hitachi, Ltd. stockholders
Comprehensive income
attributable to Hitachi, Ltd.
－665,372
337,578
stockholders
Total Hitachi, Ltd.
2,058,708
2,668,657
2,942,281
stockholders’ equity
3,157,567
3,868,831
4,296,342
Total equity
Total assets
9,777,007
11,098,191
12,433,727
Total Hitachi, Ltd.
stockholders’ equity per share
426.18552.62609.35(yen)
Earnings per share attributable
to Hitachi, Ltd. stockholders,
－
85.69
45.04
basic (yen)Earnings per share attributable
to Hitachi, Ltd. stockholders,
－
85.66
45.00
diluted (yen)Total Hitachi, Ltd.
21.1
24.0
23.7
stockholders’ equity ratio (%)
Return on equity (%)
－
17.5
7.8
Price earnings ratio (times)
－
8.9
18.3
Net cash provided by operating－
306,777
451,825
activities
Net cash used in investing－(550,179)(612,545)
activities
Net cash provided by financing－
228,840
233,206
activities
Cash and cash equivalents at
523,357
560,657
701,703end of year
Number of employees
329,703
323,919
336,670[Average number of part-time[48,432][48,592]
employees, etc.](Notes) 1. Our consolidated financial statements have been prepared in conformity with IFRS since the146th business term.
2. Revenues do not include the consumption tax, etc.

-1-

Fiscal year

(Millions of yen, unless otherwise stated)
U.S. GAAP
142nd
143rd
144th
145th
146th
business term business term business term business term business term
March 2011 March 2012 March 2013 March 2014 March 2015
9,315,807
9,665,883
9,041,071
9,563,791
9,761,970

Year end
Revenues
Income from continuing
432,201
557,730
344,537
573,691
535,612
operations, before income taxes
Net income attributable to238,869
347,179
175,326
264,975
241,301
Hitachi, Ltd. stockholders
Comprehensive income
228,459
392,581420,680
769,178
525,081
Total Hitachi, Ltd.
1,439,865
1,771,782
2,082,560
2,651,241
2,930,309
stockholders’ equity
2,441,389
2,773,995
3,179,287
3,852,464
4,274,313
Total equity
Total assets
9,185,629
9,418,526
9,809,230
11,016,899
12,395,379
Total Hitachi, Ltd.
stockholders’ equity per share
318.73382.26431.13549.02606.87(yen)
Net income attributable to
Hitachi, Ltd. stockholders per
52.89
76.81
37.28
54.86
49.97
share, basic (yen)Net income attributable to
Hitachi, Ltd. stockholders per
49.38
71.86
36.29
54.85
49.93
share, diluted (yen)Total Hitachi, Ltd.
15.7
18.8
21.2
24.1
23.6
stockholders’ equity ratio (%)
Return on equity (%)
17.5
21.6
9.1
11.2
8.6
Price earnings ratio (times)
8.2
6.9
14.6
13.9
16.5
Net cash provided by operating
841,554447,155
583,508
439,406
447,348
activities
Net cash used in investing(260,346)(195,584)(553,457)(491,363)(610,255)
activities
Net cash provided by (used in)(584,176)(167,838)(180,445)
32,968250,335
financing activities
Cash and cash equivalents at
554,810619,577
527,632
558,217709,531
end of year
Number of employees
361,745
323,540
326,240
320,725
333,150[Average number of part-time[44,353][46,182][48,535][48,391][48,548]
employees, etc.](Notes) 1. Our consolidated financial statements had been prepared in conformity with accounting
principles generally accepted in the United States until the 145th business term. The figures forthe 146th business term in the above table are unaudited financial information pursuant to the
Financial Instruments and Exchange Act.
2. Revenues do not include the consumption tax, etc.
3. Effective from the 142nd business term, the Company has adopted the provisions of the
Accounting Standards Codification (“ASC”) 860 “Transfers and Servicing” of the U.S. Financial
Accounting Standards Board as amended by Accounting Standards Update 2009-16 “Accounting
for Transfers of Financial Assets” and the provisions of ASC 810 “Consolidation,” as amended
by Accounting Standards Update 2009-17 “Improvements to Financial Reporting by Enterprises
involved with Variable Interest Entities.”
4. Effective from the 146th business term, a part of the thermal power generation systems businessis classified as a discontinued operation in accordance with the provision of ASC 205-20,“Presentation of Financial Statements - Discontinued Operations,” which was not transferred to
MITSUBISHI HITACHI POWER SYSTEMS, LTD. for the business integration in the thermal
power generation systems with Mitsubishi Heavy Industries, Co., Ltd. The results of the
discontinued operation are reported separately from continuing operations. In line with thisclassification, “Revenues” and “Income from continuing operations, before income taxes” for the145th business term are reclassified.
-2-

(2) Financial data etc. of the Company
Fiscal year
Year end(Millions of yen, unless otherwise stated)
142nd
143rd
144th
145th
146th
business term business term business term business term business term
March 2011 March 2012 March 2013 March 2014 March 2015
1,795,306
1,870,475
1,911,529
2,070,147
1,842,126
127,564
48,92376,05017,887(300)
64,276
254,549
57,681
57,85685,262
409,129427,775
458,790458,790458,790

Revenues
Ordinary income (loss)
Net income
Common stock
Number of issued shares
4,520,144
4,637,785
4,833,463
4,833,463
4,833,463(thousands of shares)
Total net assets
941,041
1,212,199
1,298,882
1,373,336
1,399,885
Total assets
3,146,337
3,331,589
3,423,417
3,570,087
3,749,326
Net assets per share (yen)208.30261.52268.89284.39289.92
Dividends per share (yen)
8
8
10
10.5
12
[Of the above, interim
[5]
[3]
[5]
[5]
[6]
dividends per share (yen) ]Net income per share, basic
14.23
56.31
12.27
11.98
17.66
(yen)
Net income per share, diluted
13.32
52.70
11.94
－
－
(yen)
Stockholders’ equity ratio (%)
29.9
36.4
37.9
38.5
37.3
Return on equity (%)
7.0
23.6
4.6
4.3
6.1
Price earnings ratio (times)
30.4
9.4
44.3
63.6
46.6
Dividend payout ratio (%)
56.2
14.2
81.5
87.6
68.0
Number of employees[Average number of part-time
32,92632,90833,66533,50031,375
employees, etc.](Notes) 1. Revenues do not include the consumption tax, etc.
2. Interim dividends per share for the 142nd business term include a commemorative dividend of ¥2
for the Company’s centennial anniversary.
3. “Net income per share, diluted” is not stated for the 145th and 146th business terms since there isno dilutive shares.
4. Average number of part-time employees, etc. is not stated since it was less than 10% of thenumber of employees.

-3-2. History
Month/Year
1910
February, 1920
February, 1921
May, 1935
May, 1937
April, 1939
September, 1940
April, 1942
September, 1943
March, 1944
December, 1944
April, 1947
May, 1949
February, 1950
May, 1955
October, 1956
November, 1956
June, 1957
February, 1959
October, 1959
June, 1960
August, 1960
February, 1961
August, 1961
August, 1962
February, 1963
April, 1963
February, 1966
February, 1968
February, 1969
April, 1969
August, 1969
December, 1969
May, 1970
September, 1970
April, 1971
June, 1971
February, 1973
June, 1974
November, 1974
June, 1982
April, 1985
February, 1989
February, 1991
August, 1991

HistoryFounded as a repair shop at Hitachi copper mine of Kuhara Mining Company
Incorporated as Hitachi, Ltd. with the Hitachi and Kameido Works
Acquired the Kasado shipyard from Nippon Kisen Co., Ltd. and established Kasado
Works
Equity participation in Kyousei Reiki Kogyo K.K. (later changed its name to Hitachi
Plant Engineering & Construction Co., Ltd.)
Merged Kokusan Industries, Ltd. and established 7 factories, including Totsuka Works
Established Taga Works, spun off Hitachi Research Laboratory from Hitachi Works
Established Mito Works
Established Central Research Laboratory
Merged Riken Vacuum Industry and established Mobara Works
Spun off Shimizu Works from Kameari Works
Spun off Tochigi Works from Taga Works
Established Hinode Shokai Co., Ltd. (currently Hitachi High-Technologies Corporation)
Established Higashi-Nippon Senikikai KK (currently Hitachi Medical Corporation)
Established Nitto Transport KK. (currently Hitachi Transport System, Ltd.)
Established Hitachi Sales Corporation
Spun off Hitachi Metals Industries, Ltd. (currently Hitachi Metals, Ltd.) and Hitachi
Cable, Ltd.
Established Hitachi Kiden Kogyo, Ltd.
Spun off Kokubu Works from Hitachi Works
Established Yokohama Works
Established Hitachi New York, Ltd. (currently Hitachi America, Ltd.)
Equity participation in Nippon Business Consultant Co., Ltd. (later changed its name to
Hitachi Information Systems, Ltd.)
Established Hitachi Geppan Corp. (later changed its name to Hitachi Credit
Corporation)
Spun off Naka Works from Taga Works;
Equity participation in Maxell Electric Industrial Co., Ltd. (currently Hitachi Maxell,
Ltd.)
Established Katsuta Works
Established Kanagawa Works
Spun off Narashino Works from Kameido Works
Spun off Hitachi Chemical Company, Ltd.
Established Mechanical Engineering Research Laboratory
Spun off Sawa Works from Taga Works, spun off Tokai Works from Yokohama Works,
and spun off Odawara Works from Kanagawa Works
Established Software Works
Established Ome Works
Established Omika Works
Spun off Hitachi Construction Machinery Co., Ltd.
Established Takasaki Works
Established Hitachi Software Engineering Co., Ltd.
Acquired Asahi Works from Hitachi Denshi, Ltd.
Established Production Engineering Research Laboratory
Established Systems Development Laboratory
Established Tsuchiura Works
Relocated Kameido Works and renamed to Nakajo Works
Established Hitachi Europe Ltd.
Established Advanced Research Laboratory
Established Hitachi Asia Pte. Ltd. (currently Hitachi Asia Ltd.)
Integrated Sawa Works into Automotive Products Division
Integrated Katsuta Works into Materials Process Technology Division; integrated
Totsuka Works into Information & Telecommunication Division; integrated Naka Works
into Instruments Division-4-Month/Year
February, 1992
August, 1992
February, 1993
August, 1993
August, 1994
October, 1994
February, 1995

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

April, 2002

October, 2002

January, 2003
April, 2003

June, 2003
October, 2004
April, 2006

December, 2006
July, 2007
March, 2009

History
Integrated Yokohama Works and Tokai Works into AV Products Division
Changed operation unit of home appliances, computers and electronic devices
businesses from factory to business division
Integrated Semiconductor Technology Development Center, Musashi Works andTakasaki Works into Semiconductor Division
Integrated Shimizu Works into Air Conditioning Division, integrated Nakajo Works andNarashino Works into Industrial Equipment Division
Integrated Consumer Products Group and Image & Information Media Division andrenamed to Consumer Products & Information Media Systems Group
Established Hitachi (China), Ltd.
Reorganized business groups as Power & Industrial Systems Group, Consumer Products& Information Media Systems Group, Information Systems Group and Electronics
Components Group; integrated a part of R&D division and sales division into thebusiness groups
Merged Hitachi Sales Corporation
Reorganized business groups into de facto companies to independently operate eachbusiness group
Merged Hitachi Credit Corporation with Hitachi Leasing Corp. and changed its name to
Hitachi Capital Corporation
Split Instruments Group and Semiconductor Manufacturing Equipment Group via
company split and reorganized as Hitachi High-Technologies Corporation;
Split Industrial Machinery Systems Division via company split and reorganized as
Hitachi Industries Co., Ltd.
Split Home Appliance Group via company split and reorganized as Hitachi Home &Life Solutions, Inc.;
Split Industrial Equipment Group via company split and reorganized as Hitachi
Industrial Equipment Systems Co., Ltd.
Split Display Group via company split and established Hitachi Displays, Ltd.;
Split Telecommunication Equipment Division via company split and reorganized as
Hitachi Communication Technologies, Ltd.;
Turned Unisia Jecs Corporation (later changed its name to Hitachi Unisia Automotive,Ltd.) into a wholly owned subsidiary via share exchange
Acquired HDDs business from IBM Corp., and commenced operations as Hitachi
Global Storage Technologies Netherlands B.V.
Split semiconductor business, centering on system LSIs, via company split andestablished Renesas Technology Corp. (later merged with NEC Electronics Corporationand changed its name to Renesas Electronics Corporation, and later ceased to be an
equity-method affiliate of the Company due to a decrease in the Company’s ownership
percentage of voting rights)
Adopted committee system as the Company’s corporate governance structure
Merged TOKICO, Ltd. and Hitachi Unisia Automotive, Ltd.;
Split Mechatronics System Division, centering on ATMs, via company split andestablished Hitachi-Omron Terminal Solutions, Corp.
Split Social & industrial infrastructure business via company split and integrated with
Hitachi Plant Engineering & Construction Co., Ltd., Hitachi Kiden Kogyo, Ltd. andHitachi Industries Co., Ltd. and reorganized as Hitachi Plant Technologies, Ltd.;
Merged Hitachi Home & Life Solutions, Inc. with Hitachi Air Conditioning Systems
Co., Ltd. and changed its name to Hitachi Appliances, Inc.
Turned Clarion Co., Ltd. into a consolidated subsidiary via tender offer
Split nuclear power systems business via company split and reorganized as Hitachi-GE
Nuclear Energy, Ltd.
Turned Hitachi Koki Co., Ltd. into a consolidated subsidiary via tender offer;
Turned Hitachi Kokusai Electric Inc. into a consolidated subsidiary via tender offer-5-

Month/Year
July, 2009

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

April, 2013
July, 2013
February, 2014
March, 2014
April, 2015

History
Merged Hitachi Communication Technologies, Ltd.;
Split Automotive Systems Group via company split and established Hitachi Automotive
Systems, Ltd.;
Split Consumer Business Group via company split and established Hitachi Consumer
Electronics Co., Ltd.
Reorganized business groups into in-house companies with independent accounting topromote quick business operation
Turned Hitachi Information Systems, Ltd., Hitachi Software Engineering Co., Ltd. andHitachi Systems & Services, Ltd. into wholly owned subsidiaries
Turned Hitachi Plant Technologies, Ltd. and Hitachi Maxell, Ltd. into wholly owned
subsidiaries via share exchanges (later turned Hitachi Maxell, Ltd. into an equitymethod affiliate of the Company via selling its shares)
Merged Hitachi Software Engineering Co., Ltd. with Hitachi Systems & Services, Ltd.
and changed its name to Hitachi Solutions, Ltd.
Merged Hitachi Electronics Services Co., Ltd. with Hitachi Information Systems, Ltd.
and changed its name to Hitachi Systems, Ltd.
Transferred HDDs business to Western Digital Corporation via share sale of Viviti
Technologies Ltd., a holding company for Hitachi Global Storage Technologies Inc., etc.
Transferred small and medium-sized displays business via share sale of Hitachi
Displays, Ltd.
Merged Hitachi Plant Technologies, Ltd.
Merged Hitachi Metals, Ltd. with Hitachi Cable, Ltd.
Split thermal power generating systems business via company split and transferred to
MITSUBISHI HITACHI POWER SYSTEMS, LTD.
Turned Hitachi Medical Corporation into a wholly owned subsidiary via share exchange
Reorganized Central Research Laboratory, Hitachi Research Laboratory, Yokohama
Research Laboratory, Design Division and overseas R&D facilities into Global Center
for Social Innovation, Center for Technology Innovation and Center for Exploratory
Research to establish global R&D structure from the customers’ perspective

3. Description of Business
The Hitachi Group, which is comprised of the Company and 1,257 affiliates (1,008 consolidated
subsidiaries and 249 equity-method associates and joint ventures. Consolidated trust accounts are notincluded in the number of consolidated subsidiaries.), engages in a broad range of business activities, fromproduct development and manufacturing to sales and services, in 10 segments of Information &Telecommunication Systems, Power Systems, Social Infrastructure & Industrial Systems, Electronic
Systems & Equipment, Construction Machinery, High Functional Materials & Components, Automotive
Systems, Smart Life & Ecofriendly Systems, Others (Logistics and Other services) and Financial Services.
Effective from April 1, 2014, a company, which was previously included in the Information &Telecommunication Systems segment, has been included in the Social Infrastructure & Industrial Systems
segment, and some companies, which were previously included in the Digital Media & Consumer
Products segment, have been included in the Others (Logistics and Other services) segment. As a result,
the Company changed the name of the “Digital Media & Consumer Products” segment to the “Smart Life
& Ecofriendly Systems” segment.
Major business outline for each segment and the positioning of principal affiliated companies aredescribed as follows. The Company mainly engages in manufacturing and sales of products and providing
services in the segments of Information & Telecommunication Systems, Power Systems, and Social
Infrastructure & Industrial Systems.

-6-

(As of March 31, 2015)
Main products and services
Information & Telecommunication
Systems
Systems Integration, Consulting, Cloud
Services, Servers, Storage, Software,
Telecommunications & Network, ATMs

Power Systems
Thermal, Nuclear and Renewable
Energy Power Generation Systems,
Transmission & Distribution Systems
Social Infrastructure & Industrial Systems
Industrial Machinery and Plants,
Elevators, Escalators, Railway Systems

Electronic Systems & Equipment
Semiconductor Manufacturing
Equipment, Test and Measurement
Equipment, Advanced Industrial
Products, Medical Electronics
Equipment, Power Tools
Construction Machinery
Hydraulic Excavators, Wheel Loaders,Mining Machinery
High Functional Materials & Components
Semiconductor and Display RelatedMaterials, Circuit Boards and Materials,
Automotive Parts (Molded Plastics,etc.), Energy Storage Devices, Specialty
Steels, Magnetic Materials andComponents, High Grade Casting
Components and Materials, Wires andCablesAutomotive Systems
Engine Management Systems, ElectricPowertrain Systems, Drive Control
Systems, Car Information Systems
Smart Life & Ecofriendly Systems
Air-Conditioning Equipment, Room Air
Conditioners, Refrigerators, Washing
Machines
Others (Logistics and Other services)
Logistics, Optical Disk Drives, Property
Management

Positioning of principal affiliated companies
Manufacturing
Sales and services[Consolidated subsidiaries][Consolidated subsidiaries]
Hitachi Solutions, Ltd.
Hitachi Information & Telecommunication
Hitachi Systems, Ltd.
Engineering, Ltd.
Hitachi Consulting Corporation
Hitachi-Omron Terminal Solutions, Corp.
Hitachi Data Systems Corporation
Hitachi Computer Products (America), Inc.
Hitachi Information & Telecommunication
Hitachi Computer Products (Europe) S.A.S.
Systems Global Holding Corporation
Hitachi Financial Equipment System (ShenZhen) Co., Ltd.
[Consolidated subsidiaries][Consolidated subsidiaries]
Hitachi Power Solutions Co., Ltd.
Hitachi-GE Nuclear Energy, Ltd.
Horizon Nuclear Power Limited[Equity-method associates]
MITSUBISHI HITACHI POWER
SYSTEMS, LTD.
[Consolidated subsidiaries][Consolidated subsidiaries]
Hitachi Building Systems Co., Ltd.
Hitachi Industrial Equipment Systems Co.,
Hitachi Industry & Control Solutions, Ltd.
Ltd.
Hitachi Plant Construction, Ltd.
Hitachi Elevator (China) Co., Ltd.
Hitachi Rail Europe Ltd.
[Equity-method associates]
Mitsubishi-Hitachi Metals Machinery, Inc.
[Consolidated subsidiaries]
Hitachi High-Technologies Corporation
Hitachi Koki Co., Ltd.
Hitachi Kokusai Electric Inc.
Hitachi Medical Corporation[Consolidated subsidiaries]
Hitachi Construction Machinery Co., Ltd.
[Consolidated subsidiaries]
Hitachi Chemical Company, Ltd.
Hitachi Metals, Ltd.

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

[Consolidated subsidiaries]
Hitachi Consumer Marketing, Inc.

[Consolidated subsidiaries]
Hitachi Life, Ltd.
Hitachi Transport System, Ltd.
Hitachi Urban Investment, Ltd.
Hitachi America, Ltd.
Hitachi Asia Ltd.
Hitachi (China), Ltd.
Hitachi Europe Ltd.
Hitachi India Pvt. Ltd.
Financial Services[Consolidated subsidiaries]
Leasing, Loan Guarantees
Hitachi Capital Corporation(Note) Hitachi America, Ltd., Hitachi Asia Ltd., Hitachi (China), Ltd., Hitachi Europe Ltd. and Hitachi India Pvt. Ltd. are the Hitachi Group’s
regional supervising company for Americas, Asia, China, Europe and India, and they sell the Hitachi Group’s products.
[Consolidated subsidiaries]
Hitachi-LG Data Storage, Inc.

-7-

4. Information on Affiliates(1) Consolidated subsidiaries

Company nameLocation

Commonstock

Ownership
percentage ofPrincipal businessvoting rights(As of March 31, 2015)
Relationship(%)

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

Information &1,350 Telecommunication
Systems

Hitachi-Omron
Terminal Solutions,Corp.

Shinagawaku, Tokyo

Information &8,500 Telecommunication
Systems

Hitachi Solutions, Ltd.

Shinagawaku, Tokyo

Information &38,758 Telecommunication
Systems

Hitachi Systems, Ltd.

Shinagawaku, Tokyo

Information &19,162 Telecommunication
Systems

Hitachi Computer
Products (America),
Inc.

Oklahoma,
U.S.A.

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

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

Company nameLocation

Commonstock

Ownership
percentage ofPrincipal business voting rights(As of March 31, 2015)
Relationship(%)

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

Ardon,
France(Thousands ofEuro)**Hitachi
Consulting
Corporation

Texas,U.S.A.

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

California,
U.S.A.

(Thousands of
US dollars)

Hitachi Financial
Equipment System Shenzhen,(Shen Zhen) Co.,
China
Ltd.

Information &Telecommunication
15,245 Systems

100.0

Information &Telecommunication
778,948 Systems[100.0]100.0

Information &Telecommunication
531,651 Systems[100.0]100.0

Information &Telecommunication
3,480 Systems[100.0]100.0

Information &Telecommunication
894,154 Systems

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

California,
U.S.A.

Hitachi-GE
Nuclear Energy,
Ltd.

Hitachi,
Ibaraki

5,000 Power Systems

80.0

Hitachi Power
Hitachi,Solutions Co., Ltd. Ibaraki

4,000 Power Systems

[9.6]
100.0

(Thousands of
US dollars)-9-

The Company supplies
parts for computer
peripherals. The
Company’s Directors,
Executive Officers or
employees
concurrently holdposition of directors orofficers.
The Company
outsources consulting
services. The
Company’s Directors,
Executive Officers or
employees
concurrently holdposition of directors orofficers.
Sales company for theCompany’s storage,
etc. The Company’s
Directors, Executive
Officers or employees
concurrently holdposition of directors orofficers.
Manufacturing andsales company in China
for the Hitachi Group’s
information products
such as ATMs.
Holding company for
Hitachi Consulting
Corporation and
Hitachi Data Systems
Corporation, etc. The
Company’s Directors,
Executive Officers or
employees
concurrently holdposition of directors orofficers.
The Company delivers
nuclear power
generation equipment,
etc. The Company’s
Directors, Executive
Officers or employees
concurrently holdposition of directors orofficers.
The Company
purchases power plantparts, and outsources
maintenance of power
generation equipment
and control equipment,
etc. The Company’s
Directors, Executive
Officers or employees
concurrently holdposition of directors orofficers.

Company nameLocation

Commonstock

Ownership
percentage ofPrincipal businessvoting rights(As of March 31, 2015)
Relationship(%)**Horizon Nuclear Gloucester,Power Limited
U.K.

(Thousands ofSterling pounds)

720,000

Power Systems

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

Social5,105 Infrastructure &Industrial Systems

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

Social
10,000 Infrastructure &Industrial Systems

Hitachi Industry& Control
Solutions, Ltd.

Social3,000 Infrastructure &Industrial Systems

Hitachi,
Ibaraki

Hitachi Plant
Toshima-ku,
Construction, Ltd. Tokyo

Hitachi Elevator(China) Co., Ltd.

Guangzhou,
China

Social3,000 Infrastructure &Industrial Systems

SocialInfrastructure &64,880 Industrial Systems(Thousands of
US dollars)-10-

Nuclear power
production company in
the U.K. The[100.0] Company’s Directors,
100.0 Executive Officers or
employees concurrently
hold position of
directors or officers.
Design, manufacturing,sales, installation andmaintenance of theelevators and escalators
the Company
100.0 developed. The
Company’s Directors,
Executive Officers or
employees concurrently
hold position of
directors or officers.
The Company
purchases industrial
equipment. The
Company’s Directors,
100.0
Executive Officers or
employees concurrently
hold position of
directors or officers.
The Company
outsources
development of
information control
systems, etc. The
100.0
Company’s Directors,
Executive Officers or
employees concurrently
hold position of
directors or officers.
Construction of theCompany’s power andindustrial plants, etc.
The Company’s
100.0 Directors, Executive
Officers or employees
concurrently holdposition of directors orofficers.
Sales, installation andmaintenance, etc. of the
Hitachi Group’s
elevators and escalators[70.0] in China. The
70.0 Company’s Directors,
Executive Officers or
employees concurrently
hold position of
directors or officers.

Company nameLocation

Commonstock

Ownership
percentage ofPrincipal businessvoting rights(As of March 31, 2015)
Relationship(%)

SocialInfrastructure &83,910 Industrial Systems[100.0]
100.0

7,938

Electronic Systems& Equipment

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

17,813

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

Chiyoda-ku,
Tokyo

10,058

Electronic Systems& Equipment

[0.0]
52.3

Hitachi Medical
Corporation

Chiyoda-ku,
Tokyo

13,884

Electronic Systems& Equipment

100.0

**
*HitachiConstruction
Machinery Co.,Ltd.

Bunkyo-ku,
Tokyo81,576

Construction
Machinery

[0.6]
51.5

Hitachi RailEurope Ltd.

London,U.K.

*Hitachi HighTechnologies
Corporation

Minato-ku,
Tokyo*Hitachi Chemical Chiyoda-ku,
Company, Ltd.
Tokyo

(Thousands ofSterling pounds)

High Functional
15,454 Materials &Components

-11-

[0.1]
51.4

Sales, engineering andmaintenance of theCompany’s rail systems
products. The
Company’s Directors,
Executive Officers or
employees concurrently
hold position of directors
or officers.
The Company sells andpurchases informationequipment and powerrelated parts through thiscompany. The
Company’s Directors,
Executive Officers or
employees concurrently
hold position of directors
or officers.
The Company’s
Directors, Executive
Officers or employees
concurrently holdposition of directors orofficers.
The Company purchases
electronic equipment andparts, etc. The
Company’s Directors,
Executive Officers or
employees concurrently
hold position of directors
or officers.
The Company supplies
parts for medical
equipment. The
Company’s Directors,
Executive Officers or
employees concurrently
hold position of directors
or officers.
The Company’s
Directors, Executive
Officers or employees
concurrently holdposition of directors orofficers.
The Company purchases
electronic materials andparts, energy storage
devices and systems, etc.
The Company’s
Directors, Executive
Officers or employees
concurrently holdposition of directors orofficers.

Company nameLocation

Commonstock

Ownership
percentage ofPrincipal businessvoting rights(As of March 31, 2015)
Relationship(%)*Hitachi Metals,
Ltd.

Minato-ku,
TokyoHigh Functional
26,283 Materials &Components*Clarion Co., Ltd.

Chuo-ku,
Saitama,
Saitama

20,346

Automotive
Systems

64.0

HitachiAutomotive
Systems, Ltd.

Hitachinaka,Ibaraki

15,000Automotive
Systems

100.0

HitachiAutomotive
Systems
Americas, Inc.

Kentucky,
U.S.A.

Automotive
Systems[100.0]
100.0

HitachiAppliances, Inc.

Minato-ku,
Tokyo

Smart Life &20,000 Ecofriendly
Systems

100.0

Hitachi Consumer Minato-ku,
Marketing, Inc.
Tokyo

Smart Life &3,000 Ecofriendly
Systems

100.0

Smart Life &Ecofriendly
2,472,000 Systems[80.1]
80.1

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

(Thousands of
US dollars)

86,278(Thousands ofThai Baht)

[0.5]
54.0

Hitachi-LG Data
Storage, Inc.

Minato-ku,
Tokyo

5,460

Others (Logistics
and Other services)

51.0

Hitachi Life, Ltd.

Hitachi,
Ibaraki

1,000

Others (Logistics
and Other services)[21.8]
100.0-12-

The Company purchases
specialty steels, etc. The
Company’s Directors,
Executive Officers or
employees concurrently
hold position of
directors or officers.
The Company supplies
parts for car navigation
systems, etc.
The Company purchases
parts for railway
vehicles, etc. The
Company’s Directors,
Executive Officers or
employees concurrently
hold position of
directors or officers.
Manufacturing and sales
company in North
America for the HitachiGroup’s automotive
systems products.
The Company purchases
electronic parts, etc. The
Company’s Directors,
Executive Officers or
employees concurrently
hold position of
directors or officers.
Sales company for the
Hitachi Group’s home
appliances in Japan.
Manufacturing and sales
company for the HitachiGroup’s refrigerators
and washing machines,
etc. in Thailand.
Development,
manufacturing and sales
company for the HitachiGroup’s optical disk
drives. The Company’s
Directors, Executive
Officers or employees
concurrently holdposition of directors orofficers.
The Company
outsources managementof welfare facilities, etc.
The Company’s
Directors, Executive
Officers or employees
concurrently holdposition of directors orofficers.

Company nameLocation

Commonstock

Ownership
percentage ofPrincipal businessvoting rights(As of March 31, 2015)
Relationship(%)*Hitachi Transport Koto-ku,
System, Ltd.
Tokyo

16,802Others (Logistics
and Other services)

Hitachi Urban
Investment, Ltd.

2,000

Others (Logistics
and Other services)

Chiyoda-ku,
Tokyo**Hitachi America, New York,Ltd.
U.S.A.

Hitachi Asia Ltd.

Singapore

Hitachi (China),Ltd.

Beijing,
China(Thousands of
US dollars)

2,286,446

Others (Logistics
and Other services)(Thousands of
Others (Logistics
Singapore dollars)

150,250(Thousands of
US dollars)

226,380

and Other services)

Others (Logistics
and Other services)-13-

The Company
outsources
transportation andstorage of products.
[5.7] The Company’s
59.0 Directors, Executive
Officers or employees
concurrently holdposition of directors orofficers.
The Company
outsourcesmanagement of welfare
facilities, etc. The
100.0 Company’s Directors,
Executive Officers or
employees concurrently
hold position of
directors or officers.
The Hitachi Group’s
regional supervising
company in Americas,
and sells the HitachiGroup’s plant,
industrial machinery,
100.0 digital media-related
products, etc. The
Company’s Directors,
Executive Officers or
employees concurrently
hold position of
directors or officers.
The Hitachi Group’s
regional supervising
company for Asia, andsells the HitachiGroup’s plants,
industrial machinery,
100.0 air-conditioning
equipment, etc. The
Company’s Directors,
Executive Officers or
employees concurrently
hold position of
directors or officers.
The Hitachi Group’s
regional supervising
company for China,
and sells the HitachiGroup’s plant,
industrial machinery,
digital media and
100.0
information-related
products, etc. The
Company’s Directors,
Executive Officers or
employees concurrently
hold position of
directors or officers.

(As of March 31, 2015)
Company nameLocation

Commonstock

Ownership
percentageofPrincipal businessvoting rights

Relationship(%)

Hitachi Europe
Ltd.

Maidenhead,
U.K.

Hitachi India Pvt. New Delhi,
Ltd.
India

*Hitachi Capital
Corporation

Minato-ku,
Tokyo

Others- 966 companies－(Thousands ofSterling pounds)

251,141(Thousands ofIndian rupee)

344,000

Others (Logistics
and Other services)

Others (Logistics
and Other services)

9,983 Financial Services－－

The Hitachi Group’s
regional supervising
company for Europe,and sells the HitachiGroup’s plants,
information-related
products, digital
100.0
media-related products,
etc. The Company’s
Directors, Executive
Officers or employees
concurrently holdposition of directors orofficers.
The Hitachi Group’s
regional supervising
company for India, andsells the HitachiGroup’s digital media[100.0] related products, etc.
100.0 The Company’s
Directors, Executive
Officers or employees
concurrently holdposition of directors orofficers.
Leases manufacturing
equipment, industrial
equipment, officeequipment, etc. to theCompany, and engages
in leasing and credit[2.1] sales of the Company’s
60.6 business equipment,
etc. The Company’s
Directors, Executive
Officers or employees
concurrently holdposition of directors orofficers.
－－(Notes) 1. The unit of amounts and currency shown in the “Common stock” column are in millions of yen,unless otherwise specified.
2. Companies with two asterisks (**) in the “Company name” column are specified subsidiaries.
3. Companies with one asterisk (*) in the “Company name” column submit Securities Registration
Statement or Annual Securities Report.
4. The name of segment in which the companies classified is shown in the “Principal business”
column.
5. The amounts in brackets in upper row of the “Ownership percentage of voting rights” column
represent the percentage of voting rights owned indirectly by subsidiaries, of the total ownership
percentage.
6. Companies with negative net worth are shown below, along with the amount of liabilities inexcess of assets.
Hitachi Vehicle Energy, Ltd.
¥43,531 million
Hitachi Power Europe GmbH¥30,279 million
Hitachi Consumer Electronics Co., Ltd.
¥11,515 million
Hitachi High-Tech Instruments Co., Ltd.
¥10,782 million-14-(2) Equity-method associates and joint ventures

Company nameLocation

Commonstock

Ownership
percentage ofPrincipal business voting rights(As of March 31, 2015)
Relationship(%)

MITSUBISHI
Nishi-ku,
HITACHI
Yokohama,
POWER
Kanagawa
SYSTEMS, LTD.

MitsubishiHitachi Metals
Machinery, Inc.

Minato-ku,
Tokyo

Others- 247 companies－

100,000 Power Systems

Social9,100 Infrastructure &Industrial Systems

－

－

35.0

34.3

－

The Company supplies
equipments for thermal
power generation
system. The Company’s
Directors, Executive
Officers or employees
concurrently holdposition of directors orofficers.
The Company’s
Directors, Executive
Officers or employees
concurrently holdposition of directors orofficers.
－(Notes) 1. The unit of amounts and currency shown in the “Common stock” column are in millions of yen.
2. The name of segment in which the companies classified is shown in the “Principal business”
column.
3. Companies with negative net worth are shown below, along with the amount of liabilities inexcess of assets.
Agility Trains East (Holdings) Limited¥71,893 million
Agility Trains West (Holdings) Limited¥68,627 million
GE-Hitachi Nuclear Energy Holdings, LLC ¥12,215 million-15-

5. Employees(1) Consolidated basis(As of March 31, 2015)
Name of segment
Number of employees
Information & Telecommunication
76,438Systems[13,873]
10,613
Power Systems[3,351]Social Infrastructure & Industrial
54,809Systems[7,802]
24,253
Electronic Systems & Equipment[99]
20,353
Construction Machinery[－]
High Functional Materials &48,963Components[－]
31,865
Automotive Systems[－]
22,200Smart Life & Ecofriendly Systems[－]
Others (Logistics and Other
39,654
services)[3,520]
4,792
Financial Services
[－]
2,730
Corporate (Head Office and others)[2,730]336,670
Total[31,375](Notes) 1. In addition to those listed above, the average number of part-time employees for the fiscal year was
48,592.
2. The number in brackets in the lower row of the “Number of Employees” column is the number of
employees of the Company included in each of the numbers in the upper row.
(2) The Company
Number of employees
Average age
Average length of service
31,37541.0
18.4 years(Note) Average annual salary includes bonuses and extra wages.

(As of March 31, 2015)
Average annual salary¥8,612,460(3) Relationship with labor union
The Company’s labor union, Hitachi Workers Union, is a member of the Japanese Electrical Electronic& Information Union.
The relationship between management and labor unions in the Hitachi Group is stable and smooth.

-16-II. Business Overview
1. Summary of Business Results
See “7. Analyses of Consolidated Financial Condition, Operating Results and Cash Flows.”
2. Production, Orders Received and Sales
The Hitachi Group does not present production and orders received in amount or volume terms for eachsegment since it produces and sells a wide variety of products, there are variety of specifications in samekinds of products and certain products are mass-produced.
Regarding sales, see “7. Analyses of Consolidated Financial Condition, Operating Results and Cash
Flows.”
3. Challenges Facing Hitachi Group(1) Business and Financial Condition
While the forecast of the world economy still remains uncertain, the Hitachi Group will promote thefollowing measures in order to realize growth as a major global player by expanding our Social
Innovation Business under the “2015 Mid-term Management Plan.”-

In order to accelerate the global development of our social innovation business by accurately seizing
business opportunities in growth sectors and customer needs by region, we will establish a structure
under which overseas regional bases proactively conduct business operations.

-

We will establish a system for providing optimal solutions in a timely manner from the Hitachi Group’s
wide range of products and services in response to challenges faced by customers by strengthening oursales, planning and engineering functions for customers.

-

We will continuously strive to optimize our business portfolio from the perspective of the growthpotential and competitiveness of businesses, by carrying out reorganization as necessary, including
partnerships with other companies, withdrawals and disposal by sale.

-We will secure funds for the growth of the Hitachi Group and establish a robust management base while
continuing to work on increasing profitability through cost structure reform and strengthening our cashgenerating capabilities.

-

By strengthening research and development that realizes solutions based on the challenges faced bycustomers at R&D bases in Japan and overseas, we will further reinforce the role of R&D in bolstering
the Hitachi Group’s profitability.

-

We will improve the environment where the diverse human resources, including female and foreign
employees, demonstrate their utmost performance, as well as foster a corporate culture that encourages
our employees to act independently and continue growing.

-

By providing our customers with high-quality and safe products and services, we will further gain thereliability in the Hitachi Group from society, and increase the value of the Hitachi brand.

-

We will intensify our focus on “Basics and Ethics” worldwide based on a firm commitment to eliminate
misconduct within the Hitachi Group, and continuously strive to contribute to the environment and thecommunities.

(2) Fundamental Policy on the Conduct of Persons Influencing Decision on the Company’s Financial andBusiness Policies
The Group invests a great deal of business resources in fundamental research and in the developmentof market-leading 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 and investors well informed of not just the business results for eachperiod but also of the Company’s business policies for creating value in the future.
The Company does not deny the significance of the vitalization of business activities and performancethat can be brought about through a change in management control, but it recognizes the necessity ofdetermining the impact on company value and the interests of all shareholders of the buying activities
and buyout proposals of parties attempting to acquire a large share of stock of the Company or a Group
company by duly examining the business description, future business plans, past investment activities,
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 isthere a specific threat, neither does the Company intend to implement specified so-called anti-takeover-17-

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 to purchase a large share of the Company’s
stock. In particular, together with outside experts, the Company will evaluate the buyout proposal of theparty and hold negotiations with the buyer, and if the Company deems that said buyout will not maintainthe Company’s value and is not in the best interest of the shareholders, then the Company will quickly
determine the necessity, content, etc., of specific countermeasures and prepare to implement them. The
same response will also be taken in the event a party attempts to acquire a large percentage of the sharesof a Group company.
4. Risk Factors
We conduct business on a global scale across a broad range of business areas and utilize sophisticated,
specialized technologies to carry out our operations. Therefore, we are exposed to risks attributable to theeconomic environment, risks inherent in individual industrial sectors and business lines and risks related toour operations. Investment in our securities also involves risks. The following risks are based on theassumption we consider reasonable as of the filing date of this report.
Risks Related to Operations
Economic Trends
Our business is influenced by conditions in the global and domestic economies. During the year ended
March 31, 2015, the U.S. economy continued to recover and European economy showed signs of recovery.
However, the growth of Chinese economy continuously showed signs of slowing and emerging countries
experienced slowdown in their economic growth due to a decline in the price of raw materials such as
crude oil. The global economic recovery may also be harmed by sovereign debt crisis in Europe, which
could cause instability of global capital markets, as well as sharp deceleration in economic growth inChina with more acute credit crunch. The Japanese economy has also improved. However, there is no
assurance that such recovery trend will continue. There is also no assurance that such trend of yen
depreciation against foreign currency, such as the U.S. dollar and the euro, will continue. If Japanese yen
begins to appreciate in the future, such strong yen may negatively affect corporate earnings and exports.
If the recent gradual recovery in the global and domestic economic conditions is halted or reversed, sucheconomic conditions could adversely affect our financial condition, results of operations and cash flows.
Currency Exchange Rates Fluctuations
Since we conduct business in many foreign countries, the portion of our assets and liabilities
denominated in various currencies is exposed to risks from fluctuations in foreign currency exchange rates.
In addition, we sell products, provide services and purchase raw materials and components in local
currencies, principally the U.S. dollar and the euro. Therefore, fluctuations in foreign currency exchange
rates may result in lower revenues or higher costs in yen to us and thus affect our financial results, which
are reported in Japanese yen. Our price competitiveness, and thus our financial results, may be harmed if
we seek to increase prices in local currencies to compensate for lower revenues or to increase prices in yen
to absorb the higher cost. While we take measures to reduce the risks from fluctuations in foreign currency
exchange rates, such measures may only delay or temporarily mitigate the adverse impact of such
fluctuations and may not be effective.
Access to Liquidity and Long-term Financing
Our primary sources of funds are cash flows from operations, borrowings from banks and otherinstitutional lenders, and funding from capital markets, such as offerings of commercial paper and otherdebt securities, as well as equity securities. We need liquid funds to pay our operating expenses, theprincipal of and interest on our debt and dividends on our capital stock. We also need long-term financing
to fund, among other things, capital expenditures and research and development expenses. We currently
believe our cash flows from operations, borrowings from banks and other institutional lenders and funding
from the capital markets can provide sufficient funding for our operations and other liquidity needs.
However, a global economic downturn could adversely affect our cash flows from operations, businessresults and financial condition and may adversely affect our credit ratings. If our ratings are downgraded,
our ability to obtain additional financing on terms we consider favorable may be negatively affected.
-18-

Our reliance on banks and institutional lenders exposes us to risks related to rising interest rates, and we
may need to increase our reliance on external sources of funding. An increased reliance on debt
instruments may adversely affect our credit ratings, which might affect our ability to successfully obtain
additional financing on terms we consider favorable. The inability to successfully obtain such financing
may increase our financing costs, and therefore could adversely affect our financial condition and resultsof operations.
Furthermore, failure of one or more of our major lenders or a decision by one or more of them to change
the terms and conditions of their loans or to stop lending to us could have an adverse effect on our accessto funding.
Marketable Securities Risks
We invest in marketable securities to maintain or promote our business or other relationships with othercompanies. These marketable securities are exposed to the risk of declining stock market prices. Suchdeclines may require that we write down equity securities that we hold. This may have an adverse effecton our financial condition and results of operations. Further, contractual and other obligations may require
us to maintain our holdings of these securities despite declining share prices and this may lead to material
losses.
Rapid Technological Innovation
New technologies are rapidly emerging in the segments in which we conduct business, with the pace oftechnological innovation. The development of new and advanced technologies, the continuous, timely andcost-effective incorporation of such technologies into products and services and the effective marketing ofsuch products and services are indispensable to remaining competitive. While introducing such products
and services requires a significant commitment to research and development, there can be no assurance
that our research and development will be successful. Failure in our endeavors to develop and incorporatesuch advanced technologies into products and services in a timely manner, or to achieve market
acceptance for such products and services, may negatively affect our business, financial condition andresults of operations.
Estimates, Fluctuations in Cost and Cancellation of Long-term Contracts
We enter into a substantial number of long-term contracts, particularly in connection with theconstruction of infrastructure systems. When the outcome of a construction can be estimated reliably, we
recognize revenue and expenses by reference to the stage of completion of the contract activity. In thiscase, we recognize revenue in an amount equal to estimated total revenue from the arrangement multipliedby the percentage that costs incurred to date bear to estimated total costs at completion based upon themost recently available information. When the outcome of a construction cannot be estimated reliably, we
recognize revenue only to the extent of contract costs incurred that it is probable will be recoverable, andrecognize contract costs as expenses in the period in which such costs are incurred. The revenue
recognition for such long-term contracts requires us to make significant assumptions about estimates of
total contract costs, remaining costs to completion, total contract revenues, contract risks and other factors.
We charge any anticipated losses on fixed price contracts to operations when we are able to estimate suchlosses. While we employ our best judgment based on available information, there can be no assurance thatthese estimates will, ultimately, prove to be correct. We regularly review these estimates and adjust themas we deem necessary. Fluctuations in costs can occur for a variety of reasons, many of which are beyond
our control. In addition, we or our counterparties may cancel these contracts. These factors would require
us to revise our initial assumptions regarding a particular contract, and may adversely affect our business,financial condition and results of operations.
Credit Risks Arising from Business Transactions
We make transactions with diverse customers and suppliers in Japan and other countries. We sell our
products to certain customers on credit and pay in advance for products or services provided by certain
suppliers. While we take measures to manage counterparty credit risk, such as regularly monitoring credit
conditions of such customers or suppliers and setting a limit on transaction amount according to their
credit conditions, credit deterioration or failure of one or more of them could adversely affect our financial
condition, results of operations and cash flows.

-19-

Material and Component Procurement
Our manufacturing operations rely on external suppliers for supplies of materials, parts, components andservices of adequate quality and quantity, delivered in a timely manner at a reasonable price. External
suppliers may not have sufficient capacity to meet all of our needs during periods of excess demand.
Shortages of materials, parts, components and services may cause a sharp rise in their prices. In addition,
prices of certain raw materials, parts and components which we purchase in local currencies, principally
the U.S. dollar and the euro, could be adversely affected by fluctuations in foreign currency exchange rates.
Increases in the market price of petroleum and other materials, such as copper, steel, synthetic resins, rare
metals and rare-earth minerals, can increase our production costs and may adversely affect our results ofoperations. Conversely, decreases in commodity prices, such as for raw materials, parts and components,
can result in write-downs of inventory.
If natural disasters disrupt the operations of our suppliers and damage supply chains, it may adversely
affect our production. Although we generally maintain multiple sources of supply and work closely with
our suppliers to avoid supply-related problems, such problems, including shortages and delays, may
continue to occur, which could materially harm our business, financial condition and results of operations.
Supply and Demand Balance
Oversupply in the markets in which we compete may lead to declines in sales prices, revenues andprofitability. In addition, adjustment to demand may force us to dispose of excess supply or obsolete
equipment or reduce production, which can result in losses. For example, the imbalance between supply
and demand in construction machinery, automotive equipment and semiconductor manufacturing
equipment industries and a resultant deterioration in market conditions could negatively affect ourbusinesses.
Intense Competition
We are subject to intense competition in many of the markets in which we operate, and this may
adversely affect our results of operations. The industrial sectors and business lines in which we areengaged are experiencing increasingly intense competition. We compete with diverse competitors ranging
from huge global corporations to specialized companies. Competitors are increasingly manufacturing
products, including sophisticated electronic products, in low-cost jurisdictions. Low-cost manufacturing
and the globalization of world markets have accelerated the commoditization of certain products, which
has resulted in increasingly intense price competition for many of our products. Products which are facing
intense price competition or decreases in prices include computer-related products and home appliances.
To succeed in this competitive environment, we believe that our products and services must be pricecompetitive. The commoditization of such products affects our ability to set prices for our products. If weare unable to charge comparable prices to those of our competitors, our competitiveness and overallprofitability may be harmed. On the other hand, charging comparable prices to those of our competitors
may require us to sell products at a loss. Our products must also be competitive in terms of engineeringsophistication, quality and brand value. We must introduce our products and services to the markets in atimely manner. There can be no assurance that the products or services that we offer will be competitive.
The failure of such products or services to be competitive may negatively affect our business results.
Our Strategy to Strengthen Our Social Innovation BusinessOur business strategy seeks to build our business portfolio and achieve a stable and profitable businessstructure mainly by strengthening our Social Innovation Business, which supplies advanced social
infrastructure supported by information and communication technology. We plan to devote significant
resources including capital expenditures and R&Ds and are making investments in mergers andacquisitions and in new projects to strengthen our Social Innovation Business. To implement this strategy,
we have incurred and may continue to incur considerable expenses. Our efforts to implement this strategy
may be unsuccessful or less successful than we currently anticipate. Even if these efforts are successful,there is no assurance that we will be able to increase profitability, and even if profitability is achieved, we
may be unable to sustain or increase it on a quarterly or annual basis.

-20-

Acquisitions, Joint Ventures and Strategic Alliances
In every operating sector, we depend to some degree on acquisitions of other companies, joint venturesand strategic alliances with outside partners to design and develop key new technologies and products, tostrengthen competitiveness by scaling up and to expand into new regions through acquiring local bases or
distribution channels. Such transactions are inherently risky because of the difficulties in integrating
operations, technologies, products and personnel and achieving return of the investment. Integration issues
are complex, time-consuming and expensive and, without proper planning and implementation, could
adversely affect our business. Decisions made by or the performance of alliance partners that we cannot
control or adverse business trends may also negatively affect the success of our alliances. We may incur
significant acquisition, administrative and other costs in connection with these transactions, including
costs related to integration or restructuring of acquired businesses. There can be no assurance that thesetransactions will be beneficial to our business or financial condition. Even assuming these transactions are
beneficial, there can be no assurance that we will be able to successfully integrate acquired businesses orachieve all or any of the initial objectives of these transactions.
Restructuring of Our BusinessOur business strategy seeks to build our business portfolio and achieve a stable and profitable businessstructure in part by: closing unprofitable operations;divesting our subsidiaries and affiliated companies;

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

Our restructuring efforts may not be implemented in a timely manner or at all, including due togovernmental regulations, employment issues or a lack of demand in the M&A market for businesses wemay seek to sell. In addition, we have a number of listed subsidiaries and from time to time the interests ofthese listed subsidiaries’ shareholders may conflict with our interests. Such conflicts of interest may resultin difficulties in timely implementing group-wide policies, including mergers, company splits and othersimilar transactions to which the listed subsidiaries are parties. Restructuring efforts may also bring about
unintended consequences, such as negative customer or employee perceptions, and have caused and may
continue to cause us to incur significant expenses and other costs, including additional impairment losses
on our fixed assets and intangible assets, write-offs of inventory and losses on the disposal of fixed assets
and losses related to the sale of securities.
Current and future restructuring efforts may be unsuccessful or less successful than we presently
anticipate and may adversely affect our financial condition and results of operations.
Cost Reduction Measures
We implement “the Hitachi Smart Transformation Project,” which promotes cost reductions bythoroughly overhauling our cost structure across the Group including procurement, production andadministrative operations. We seek to improve our management efficiency and stabilize earnings throughthe Project. The Project may be less successful than we currently anticipate. Even if the Project issuccessful, there is no assurance that we will be able to increase profitability, and even if profitability isachieved, we may be unable to sustain or increase it on a quarterly or annual basis.
Our Overseas Growth Strategies
We seek to expand our business, including our Social Innovation Business, in overseas markets as partof our business strategy. Through such overseas expansion, we aim to increase our revenues, reduce ourcosts and improve profitability. In many of these markets, we face barriers in the form of long-standing
relationships between our potential customers and their local suppliers. In addition, various factors inforeign countries where we operate may adversely affect our overseas business activities. These factors
include: changes in regulations relating to investments, exports, tariffs, antitrust, anti-bribery, consumer andbusiness taxation, intellectual property, foreign trade and exchange controls, environmental andrecycling requirements;differences in commercial and business customs such as contract terms and conditions;labor relations;
-21-



public sentiment against Japan and local residents’ sentiment against us; andother political and social factors as well as economic trends and currency exchange rate fluctuations.

Because of these factors, there can be no assurance that we will be able to achieve the aims of ouroverseas growth strategy. This may adversely affect our business growth prospects and results ofoperations.
Intellectual Property
We depend in part on proprietary technology and our ability to obtain patents, licenses, trademarks andother forms of intellectual property rights covering our products, product design, manufacturing processes
and software-based services in Japan and other countries. The fact that we hold such intellectual property
rights does not ensure that they will provide a competitive advantage to us. Various parties may challenge,
invalidate or circumvent our patents, trademarks and other intellectual property rights. There can be noassurance that claims allowed on any future patents will be sufficiently broad to protect our technology.
Effective patent, copyright and trade secret protection may be unavailable or limited in some of themarkets in which we operate, and our trade secrets may be vulnerable to disclosure or misappropriation by
employees, contractors and other persons.
We design many of our products to include software or other intellectual property licenses from third
parties. Competitors may not make their protected technology available to us, or may make it available tous only on unfavorable terms and conditions. There can be no assurance that we will be able to maintain alicense for such intellectual property if obtained, for economic or other reasons, or that such intellectual
property will give us the commercial advantages that we desire.
From time to time, we are sued or receive notices regarding patent and other intellectual property claims.
Whether or not these claims have merit, they may require significant resources to defend against and may
divert management attention from our business and operations and result in harm to our reputation. In
addition, a successful infringement claim and our inability to obtain the license for the infringed
technology or substitute similar non-infringing technology may adversely affect our business.
Litigation and Regulatory Investigations
We face risks of litigation and regulatory investigation and actions in connection with our operations.
Lawsuits, including regulatory actions, may seek recovery of large, indeterminate amounts or otherwise
limit our operations, and their existence and magnitude may remain unknown for substantial periods oftime.
In the past several years, we have been the subject of several investigations of alleged antitrust
violations in relation to certain product markets in Japan, Europe and North America, etc. which may havesignificant effects on our financial condition or profitability. See “Consolidated Financial Statements－
Notes to Consolidated Financial Statements－(29) Commitments and Contingencies.”
Relevant authorities in the above markets in which we operate continue to investigate us and may
initiate similar investigations in the same or other markets in the future. These investigations may result insignificant penalties in multiple jurisdictions, and we may become involved in disputes with private parties
seeking compensation for damages resulting from the relevant violations. Such substantial legal liability or
regulatory action could have a material adverse effect on our business, results of operations, financial
condition, cash flows, reputation and credibility.
In addition, our business activities are subject to various governmental regulations in countries where we
operate, which include investment approvals, export regulations, tariffs, antitrust, anti-bribery, intellectual
property, consumer and business taxation, foreign trade and exchange controls, and environmental andrecycling requirements. These regulations limit, and other new or amended regulations may further limit,
our business activities or increase operating costs. In addition, the enforcement of such regulations,
including the imposition of fines or surcharges for violation of such regulations, may adversely affect our
results of operations, financial condition, cash flows, reputation and credibility.
Product Quality and Liability
We increasingly provide products and services utilizing sophisticated technologies, including but notlimited to components of power stations. Reliance on external suppliers reduces our control over quality
assurance. The occurrence of defects in our products and services could negatively affect our reputation
for quality of products and services, expose us to liability for damages caused by such defects andnegatively affect our ability to sell certain products. A significant product defect could materially andadversely affect our results of operations, financial condition and future business prospects.

-22-Worsening of Business Performance of Equity-Method Associates and Joint Ventures
We use the equity-method to account for a number of associates and joint ventures. If one or more ofsuch associates or joint ventures, accounted for using the equity-method, records a loss during a given
period, we must record that loss in a manner proportionate to our ownership interest in our consolidated
financial statements. In addition, if the carrying amount of our equity-method investments in associates orjoint ventures is below the recoverable amount of the investments, we could be required to record an
impairment loss.
Significant Disasters and Similar Events
We have many facilities, including our research and development facilities, manufacturing facilities andour headquarters in Japan. Historically, Japan has experienced numerous natural disasters such as
earthquakes, tsunamis and typhoons. Natural disasters in the future may have a significantly adverse affecton an array of our corporate activities, from production to sales. We also have overseas facilities in Asia,
the U.S. and Europe, which are also subject to similar natural disasters. Natural disasters in each of theareas may cause damage on certain of our plants and offices and the operations of our suppliers andcustomers. Such significant natural disasters may directly damage or destroy our facilities, which could
disrupt our operations, delay new production and shipments of existing inventory or result in costly repairs,
replacements or other costs, all of which would result in significant losses. Furthermore, even if suchsignificant natural disasters do not directly affect our facilities, they could result in disruptions in
distribution channels or supply chains. The spread of infectious diseases and geopolitical and social
instability, such as terrorism, crime, civil disturbance and conflict, etc., may also disrupt our operations,render our employees unable to work, reduce consumer demand for our products or disrupt our supply anddistribution channels. In addition, we are not insured against all potential losses, and even losses that
insurance covers may not be fully covered and may be subject to challenges of or delays in payment.
Direct and indirect disruption of our operations as a result of natural disasters or other events could have anegative impact on our operating activities, results of operations and financial condition.
Dependence on Information Systems
With the increased importance of information systems to our operating activities, disruptions in such
systems due to computer viruses and other factors could have a negative impact on our operating activities,
results of operations and financial condition.
Management of Confidential Information
We maintain and manage personal information obtained from our customers, as well as confidential
information relating to our technology, research and development, or R&D, production, marketing andbusiness operations and those of our customers and clients, in various forms. Although we have
implemented controls to protect the confidentiality of such information, there can be no assurance thatsuch controls will be effective. Unauthorized disclosures of such information could subject us tocomplaints or lawsuits for damages or could otherwise have a negative impact on our business, financial
condition, results of operations, reputation and credibility.
Employee Retirement Benefits
We have a significant amount of employee retirement benefit costs that we derive from actuarial
valuations based on a number of assumptions. Inherent in these valuations are key assumptions used inestimating pension costs including mortality, withdrawal and retirement rates, changes in wages and thediscount rate. We are required to make judgments regarding the key assumptions by taking into accountvarious factors including personnel demographics, market conditions and expected trends in interest rates.
Although management believes that its key assumptions are reasonable in light of the various underlying
factors, there can be no assurance that the key assumptions will correspond to actual results. If our key
assumptions differ from actual results, the consequent deviation of actual pension costs from estimatedcosts may have a material adverse effect on our financial condition and results of operations. A decrease in
the discount rate may result in an increase in the amount of projected benefit obligations. In addition, we
may change these key assumptions, such as the discount rate. Changes in key assumptions may also have amaterial adverse effect on our financial condition and results of operations.

-23-

Dependence on Specially Skilled Personnel
We believe we can continue to remain competitive only if we can maintain and secure additional people
who are highly skilled in connection with our operations. However, the number of skilled personnel islimited and the competition for attracting and maintaining such personnel is intense. We cannot ensure that
we will be able to successfully attract new or maintain our current skilled personnel.
Risks Related to Our American Depositary Shares
Rights of ADS holders
The rights of shareholders under Japanese law to take actions, including voting their shares, receiving
dividends and distributions, bringing derivative actions, examining our accounting books and records andexercising appraisal rights are available only to shareholders of record. Because the depositary, through its
custodian agents, is the record holder of the shares underlying the American Depositary Shares, or ADSs,
only the depositary can exercise those rights in connection with the deposited shares. The depositary will
make efforts to vote the shares underlying ADSs in accordance with the instructions of ADS holders andwill pay dividends and distributions collected from us as and to the extent provided in the deposit
agreement. However, ADS holders will not be able to bring derivative actions, examine our accounting
books and records, or exercise appraisal rights through the depositary.
We are incorporated in Japan with limited liability. A significant portion of our assets are located outside
the United States. As a result, it may be more difficult for investors to enforce against us judgments
obtained in U.S. courts predicated upon the civil liability provisions of the federal securities laws of theUnited States or judgments obtained in other courts outside Japan. There is doubt as to the enforceability
in Japanese courts, in original actions or in actions for enforcement of judgments of U.S. courts, of civil
liabilities predicated solely upon the federal securities laws of the United States.
Unit Share System
The Companies Act allows companies to establish a “unit” of shares for the purpose of exercising voting
rights at the general meetings of shareholders. Under our articles of incorporation, one unit of our shares iscomposed of 1,000 shares, equivalent to 100 ADSs. Each unit of our shares has one vote. A holder who
owns shares or ADSs in other than multiples of 1,000 or 100, respectively, will own less than a whole unit
(i.e., for the portion constituting fewer than 1,000 shares, or fewer than 100 ADSs). Our articles ofincorporation, in accordance with the Companies Act, impose significant restrictions on the rights ofholders of shares constituting less than a whole unit, which include restrictions on the right to vote, toattend a shareholders meeting and to bring derivative actions. In addition, less than whole unit sharescannot be traded on Japanese stock markets. Under the unit share system, holders of our sharesconstituting less than one unit have the right to require us to purchase their shares and the right to require
us to sell them additional shares to create a whole unit of 1,000 shares. However, holders of our ADSs areunable to withdraw underlying shares representing less than one unit and, as a practical matter, are unable
to require us to purchase those underlying shares. The unit share system, however, does not affect thetransferability of ADSs, which may be transferred in lots of any number of whole ADSs.
Dilution of Your Shares by Issuances of Additional Shares
We may issue additional shares in the future within the unissued portion of our authorized share capitaland sell shares held as treasury stock, generally without shareholder vote unless the subscription or saleprice is significantly lower than the market price. Issuances and sales of our shares in the future may be at
prices below the prevailing market prices and may be dilutive.
Foreign Exchange Fluctuations
Market prices for our ADSs may fall if the value of the yen declines against the U.S. dollar. In addition,
the amount of cash dividends or other cash payments made to holders of ADSs will decline if the value ofthe yen declines against the dollar.

-24-

5. Material Agreements, etc.
Cross License Agreement

Hitachi, Ltd.
(The Company)

underContract
Country Item
contract
description
Cross license
International Business U.S.A. Information
handlingof patents
Machines Corp.
systems

Hitachi, Ltd.
(The Company)

Hewlett-Packard Co. U.S.A.

All products Cross licenseand services of patents

Hitachi, Ltd.
(The Company)

EMC Corporation

U.S.A.

Information Cross license
handlingof patents
systems

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

GE-Hitachi Nuclear
Energy Americas
LLC

U.S.A.

Nuclearreactorsystems

Party

Party

Contract period
From January 1, 2008 to
the expiration of thepatent under contracts
From March 31, 2010 tothe expiration of patents
applied on or before
December 31, 2014
From January 1, 2003 to
the expiration of patents
applied on or before
December 31, 2002

Cross license From October 30, 1991 toof patents and June 30, 2023
technology

6. Research and Development
The Hitachi Group (the Company and consolidated subsidiaries) is conducting business in a broad rangeof fields, from information and telecommunications systems to financial services. The Hitachi Group
places priority on allocating R&D resources on core businesses of the Hitachi Group and make efforts forcontinuing business and development of new business. In order to strengthen the global competitiveness ofthe business, the Hitachi Group works in R&D activities to identify, share and resolve the customers’
problems, and is focusing on developing competitive products and services to lead globalization ofoperations. In addition, the Hitachi Group conducts advanced research to cultivate future core businesses.
The Hitachi Group also works to improve the efficiency of R&D through close coordination between the
R&D divisions of the Company and group companies. Furthermore, the Hitachi Group is actively
expanding collaborations with universities and other research institutions as well as with outside firms.
The Company has established a new R&D framework to accelerate global growth through the Social
Innovation Business. In order to support the global growth, it aims to promote R&D that can meet local
needs quickly by expanding R&D facilities and personnel in North America, Europe, China, Asia, India
and South America and accelerating locally-led R&D. As of April 1, 2015, the Company reorganized its
three corporate research laboratories in Japan, the Design Division and its overseas R&D facilities into the
Global Center for Social Innovation, which is a frontline organization that shares customers’ issues andpromotes “collaborative creation” developing new solutions along with customers, the Center forTechnology Innovation, which creates innovative products and supports development of new solutions bystrengthening and fusing technology platforms in focused area, and the Center for Exploratory Research,which carries out cutting-edge basic research from a long-term perspective. With this new R&D structure,
the Company aims to further promote R&D that will contribute to solving customers’ issues.
The Hitachi Group’s R&D expenditures for the fiscal year ended March 31, 2015 were ¥334.8 billion,
3.4% of revenues. A breakdown of R&D expenditures by segment is shown below.
Segment
Information & Telecommunication Systems
Power Systems
Social Infrastructure & Industrial Systems
Electronic Systems & Equipment
Construction Machinery
High Functional Materials & Components
Automotive Systems
Smart Life & Ecofriendly Systems
Others (Logistics and Other services)
Financial Services
Corporate Items
Total(Billions of yen)Amount
69.0
11.5
31.9
49.6
17.8
46.3
61.0
11.2
8.0
0.3
27.8
334.8
-25-

Notable achievements of R&D activities in the fiscal year ended March 31, 2015 are as follows.
-

Development of walkthrough-style finger vein authentication technology (Social Infrastructure &Industrial Systems segment)
We developed walkthrough-style finger vein authentication technology for the security gates oflarge-scale facilities, making it possible to accurately verifying individuals as they walk through thegate. We advanced our original finger vein authentication technology, a biometric authentication
method where near infrared lights permeate fingers to detect and authenticate finger vein patterns, byautomatically controlling the lighting to illuminate the fingers from optical positions regardless of theposition or orientation of fingers presented.

-

Development of an atomic-resolution holography electron microscope (Electronic Systems &Equipment segment)
We developed an atomic-resolution holography electron microscope accelerated at a 1.2-megavolt
which can visualize electromagnetic fields at an atomic-resolution level. We have installed sphericalaberration correctors in an ultra-high-voltage electron microscope to eliminate focus blurring by
developing more stable high-speed electron beams, an electron gun emitting electron beams withlong-term stability, and facility technologies to eliminate external disturbances, such as vibrations,noises, and ambient magnetic fields. As a result, the electron microscope achieved a resolution of 43
picometers, i.e., 43 trillions of a meter (research results performed with a grant from the Cabinet
Office’s Funding Program for World-Leading Innovative R&D on Science and Technology, throughthe Japan Society for the Promotion of Science).

-

Development of a new wearable sensor that measures “Organization Activation Level” correlated withcollective happiness (Electronic Systems & Equipment segment)
We developed a wearable sensor that gathers and analyzes data on human behavior, and measuresthe “organization activation level” which correlates with work productivity. The wearable sensor
quantifies collective happiness of a group through analyzing huge volumes of human behavior dataobtained and identifying distinctive patterns in physical movements that have strong correlations witha group’s happiness.

-

Development of a new semiconductor computer capable of operating at room temperature with highpower efficiency (Information & Telecommunication Systems segment)
We have developed a new semiconductor computer as trial production, which can instantaneously
solve combinatorial optimization problems to the extent of patterns of about the 500th power of 1
trillion with performance comparable to quantum computers. The new semiconductor computer canoperate at room temperature and realize reduction in power consumption due to its high power
efficiency. This development makes it possible to provide practical systems with compatibility withlarge scale in accordance with social issues to be solved.

-

Development of disaster resistant storage system technology that can recover information and achieve
continuous data availability even in time of wide-area disasters (Information & Telecommunication
Systems segment)
We have developed storage system technology that can back up the data in disaster areas andrealizes continuous availability of information service even when wide-area networks, such as theInternet, are disrupted by disasters and therefore cloud storage systems are unavailable from suchdisaster areas (results of research carried out together with Tohoku University and Hitachi Solutions
East Japan, Ltd. at the project of “Research and Development on Highly-functional and Highlyavailable Information Storage Technology” commissioned by the Ministry of Education, Culture,
Sports, Science and Technology).

-26-

7. Analyses of Consolidated Financial Condition, Operating Results and Cash Flows(1) Summary of Economic Environment and Business Strategy, etc.
1) Economic Environment
We conduct business operations such as manufacturing, marketing, and research and development
activities throughout the world. Therefore, the economic conditions in global markets where the Hitachi Group
conducts business, in particular Japan, Asia, North America and Europe, affect its results of operations.
During the year ended March 31, 2015, the U.S. economy continued to show the signs of recovery,
including improvement in the employment situation and solid consumer spending. In Europe, some countries
showed signs of economic recovery, although, in southern European countries, economy continued to besluggish due mainly to prolonged financial troubles and higher unemployment rate. Chinese economic growthcontinued to decelerate and declines in the prices of raw materials, such as crude oil, caused slowdown ineconomic growth in emerging countries. The Japanese economy was on a moderate recovery trend, due mainly
to the government’s implementation of national growth strategies, improvement in employment conditions anda rebound in corporate capital expenditures, despite sluggish consumer spending as the effect of consumption
tax rate increase among other factors.
We conduct business in many foreign countries, and a portion of our assets and liabilities denominated incurrencies other than the Japanese yen is exposed to risks from fluctuations in foreign currency exchange rates.
In addition, we export products and import components and raw materials in local currencies, principally the
U.S. dollar and the euro. Therefore, fluctuations in foreign currency exchange rates may affect our financial
results, which are reported in Japanese yen. The Japanese yen on average weakened against the U.S. dollar in
the year ended March 31, 2015. We employ forward exchange contracts and cross-currency swap agreements
to reduce the impact of foreign currency exchange rate fluctuations. In addition, to alleviate the adverse effects
of foreign currency exchange rate fluctuations, when we believe it is appropriate, we seek to manufacture
outside Japan and procure materials and parts locally.
2) Business Strategy
See “3. Challenges Facing Hitachi Group ‐ (1) Business and Financial Condition.”3) Business Reorganization
We continuously reorganize our business in order to further focus our business resources on the Social
Innovation Business. The important business reorganizations conducted in the year ended March 31, 2015 are
as follows:
In November 2014, Hitachi Metals, Ltd. acquired all shares of Waupaca Foundry Holdings, Inc., whichholds 100% stake of Waupaca Foundry, Inc. engaging in the iron casting business for transportation machineryin the North American market to strengthen its global iron casting business and achieve global growth in a
medium and long term.
In January 2015, the Company and Hitachi Appliances, Inc. entered into a definitive agreement withJohnson Controls Inc. to establish a joint venture in relation to air conditioning systems business to respond toa drastic change in the condition of the global air conditioning systems market and accelerate global growth bysynergy effect.
In February 2015, Hitachi Data Systems Corporation entered into an agreement to acquire Pentaho
Corporation, a U.S. big data analytics software developer and provider, to build a new infrastructure for theuse and utilization of big data compatible across diverse industries, and accelerate global development of theSocial Innovation Business. In May 2015, the acquisition was completed.
In February 2015, the Company entered into a binding agreement with Finmeccanica S.p.A. in Italy topurchase signaling systems and railway businesses of the Finmeccanica Group in order to strengthen our
position in signaling and traffic management systems business and expand turnkey operations business tofurther enhance Hitachi’s competitiveness in the global market.
(2) Changes in the year ended March 31, 2015
The Company’s consolidated financial statements have been prepared in conformity with IFRS since theyear ended March 31, 2015. The figures in the year ended March 31, 2014 are also based on IFRS.
Effective from April 1, 2014, a part of the thermal power generation systems business is classified as a
discontinued operation. In line with this classification, the figures in the year ended March 31, 2014 are also
reclassified.
Effective from April 1, 2014, a company, which was previously included in the Information &Telecommunication Systems segment, has been included in the Social Infrastructure & Industrial Systems
segment, and some companies, which were previously included in the Digital Media & Consumer Products
segment, have been included in the Others (Logistics and Other services) segment. As a result, the Company-27-

changed the name of the “Digital Media & Consumer Products” segment to the “Smart Life & Ecofriendly
Systems” segment. Figures for each segment, including figures for the year ended March 31, 2014 and for theyear ended March 31, 2015, reflect the new segmentation.
(3) Results of Operations
Year ended
March 31, 2014
(billions of yen)

Year ended
March 31, 2015
(billions of yen)

Year overyear change

Revenues

9,666.4

9,774.9

101%

EBIT (Note)

691.2

534.0

77%

Income from continuing operations,
678.4
518.9
76%
before income taxes
Net income attributable to Hitachi, Ltd.
413.8
217.4
53%
stockholders(Note) EBIT represents earnings before interest and taxes, which is presented as income from continuing
operations, before income taxes less interest income plus interest charges.
1) Analysis of Statement of Operations
Revenues increased 1% to ¥9,774.9 billion, as compared with the year ended March 31, 2014. This
increase was attributable to increased revenues in every segment, particularly the Information &Telecommunications Systems, Social Infrastructure & Industrial Systems and High Functional Materials &Component segments, except for the Power Systems and Others (Logistics and Other services) segments.
Cost of sales was ¥7,198.2 billion, which was almost the same as the year ended March 31, 2014, andthe ratio of cost of sales to revenues was 74%, which was the same level as the year ended March 31, 2014.
Gross profit increased 3% to ¥2,576.6 billion, as compared with the year ended March 31, 2014.
Selling, general and administrative expenses increased 3% to ¥1,935.3 billion, as compared with theyear ended March 31, 2014, and the ratio of selling, general and administrative expenses to revenues was
20%, which was the same level as the year ended March 31, 2014.
Other income decreased ¥199.1 billion to ¥9.4 billion and other expenses increased ¥3.2 billion to¥167.7 billion, as compared with the year ended March 31, 2014. The details are as follows.
Net loss on sales and disposal of fixed assets increased ¥9.7 billion to ¥16.8 billion, as compared withthe year ended March 31, 2014. This increase was due mainly to loss on disposal of fixed assets related tosoftware in the Information & Telecommunications Systems segment.
Impairment losses decreased ¥1.0 billion to ¥42.1 billion, as compared with the year ended March 31,
2014. The Power Systems segment recognized impairment losses for the transmission & distribution
equipment business.
Net loss on business reorganization and others in the year ended March 31, 2015 was ¥55.0 billion, as
compared with net gain of ¥198.0 billion in the year ended March 31, 2014 owing to the effects of theintegration of the thermal power generation systems business into MITSUBISHI HITACHI POWER
SYSTEMS, LTD.
Restructuring charges was ¥26.6 billion, which was almost the same as the year ended March 31,
2014. This mainly consisted of special termination benefits expensed for the voluntary early retirement
program to rationalize the domestic workforce at Hitachi Chemical Company, Ltd. in the High Functional
Materials & Components segment.
Expenses related to competition law and others decreased ¥50.9 billion to ¥25.8 billion, as comparedwith the year ended March 31, 2014, despite posting expenses in relation to settlements of certain losses
involving dispute with customers. This decrease was due mainly to the absence of expenses related to a plea
agreement with the United States Department of Justice regarding alleged violations of U.S. antitrust laws in
the Automotive Systems segment in the year ended March 31, 2014.
Financial income (excluding interest income) decreased ¥25.7 billion to ¥7.7 billion and financial
expenses (excluding interest charges) increased ¥1.3 billion to ¥3.2 billion, as compared with the year ended
March 31, 2014, respectively. This was due mainly to the loss on financial instruments measured at fairvalue through profit or loss (“FVTPL financial instruments”) and exchange loss in the year ended March 31,
2015, while net gain on FVTPL financial instruments and currency exchange gain were recorded in the year
ended March 31, 2014, respectively.
Share of profits of investments accounted for using the equity method increased ¥35.7 billion to¥46.6 billion due mainly to profits of investments in MITSUBISHI HITACHI POWER SYSTEMS, LTD.,as compared with the year ended March 31, 2014.
EBIT decreased ¥157.1 billion to ¥534.0 billion, as compared with the year ended March 31, 2014.
Interest income decreased ¥1.6 billion to ¥12.5 billion and interest charges increased ¥0.6 billion to¥27.5 billion, as compared with the year ended March 31, 2014, respectively.
-28-

Income from continuing operations, before income taxes decreased ¥159.5 billion to ¥518.9 billion,
as compared with the year ended March 31, 2014.
Income taxes decreased ¥24.4 billion to ¥122.0 billion, as compared with the year ended March 31,
2014, due mainly to deferred tax assets newly recognized in the year ended March 31, 2015.
Loss from discontinued operations increased ¥46.5 billion to ¥53.5 billion, as compared with the year
ended March 31, 2014.
Net income decreased ¥181.5 billion to ¥343.4 billion, as compared with the year ended March 31,
2014.
Net income attributable to non-controlling interests increased ¥14.8 billion to ¥125.9 billion, as
compared with the year ended March 31, 2014.
As a result of the foregoing, net income attributable to Hitachi, Ltd. stockholders decreased ¥196.3
billion to ¥217.4 billion, as compared with the year ended March 31, 2014.
2) Operations by Segment
The following is an overview of results of operations by segment. Revenues for each segment include
intersegment transactions. Segment profit is measured by EBIT.
(Information & Telecommunication Systems)
Revenues increased 5% to ¥2,034.0 billion, as compared with the year ended March 31, 2014, due
mainly to solid performances by system solutions business centered on public systems and financial systems
and higher revenues from storage solutions business as a result of the effects of foreign exchange rate
fluctuations. This increase was also attributable to the positive impact of the consolidation of Prizm Payment
Services Pvt. Ltd. in India and the establishment of Hitachi Systems Power Services, Ltd., both of which were
implemented in March 2014. However, the increase in revenues was partially offset by decreased revenues inthe telecommunications & network business owing to lower demand.
Segment profit decreased ¥8.9 billion to ¥106.0 billion, as compared with the year ended March 31, 2014.
This decrease was due mainly to significantly lower profits in the telecommunications & network business andposting of loss on sales and disposal of fixed assets and impairment loss, which was partially offset by theeffect of termination of unprofitable projects in the system solution business.
(Power Systems)
Revenues decreased 36% to ¥466.7 billion, as compared with the year ended March 31, 2014, due
mainly to the effect of the transfer of the thermal power generation systems business. This decrease waspartially offset by an increase in preventive maintenance services for nuclear power generation systems
business.
Segment profit decreased ¥174.7 billion to ¥3.8 billion, as compared with the year ended March 31, 2014,
due mainly to lower revenues. This decrease was also attributable to increased losses and posting impairment
losses on property, plant and equipment in the transmission & distribution business, and the absence of net
gain on business reorganization and others associated with the transfer of thermal power generation systems
business in the year ended March 31, 2014. However, the decreased profit was partially offset by posting ofshare of profits of investments accounted for using the equity method for MITSUBISHI HITACHI POWER
SYSTEMS, LTD.
(Social Infrastructure & Industrial Systems)
Revenues increased 6% to ¥1,599.5 billion, as compared with the year ended March 31, 2014. This wasdue mainly to higher sales in the elevators and escalators business mainly in China, the industrial equipment
business, and the railway systems business in the U.K.
Segment profit increased ¥28.5 billion to ¥106.5 billion, as compared with the year ended March 31,
2014. This increase was due mainly to higher profits in the elevators and escalators business and the industrial
equipment business associated with higher revenues, reduced effect of unprofitable overseas infrastructure
projects that occurred in the year ended March 31, 2014 and posting of net gain on business reorganization andothers related to Mitsubishi-Hitachi Metals Machinery, Inc.
(Electronic Systems & Equipment)
Revenues increased 1% to ¥1,131.6 billion, as compared with the year ended March 31, 2014. This
increase was attributable to higher revenues at Hitachi Kokusai Electric Inc., resulting primarily from higher
sales of semiconductor manufacturing equipment, and higher revenues at Hitachi Koki Co., Ltd., resulting
from higher sales in Asia and North America and the effect of foreign exchange rate fluctuations. On the other
hand, revenues at Hitachi High-Technologies Corporation decreased due mainly to winding down the LCDs
manufacturing equipment business and lower sales of advanced industrial products and of mobile phones in-29-the U.S., which was partially offset by higher sales of medical analysis systems and semiconductor
manufacturing equipment.
Segment profit increased ¥11.4 billion to ¥63.7 billion, as compared with the year ended March 31, 2014.
This increase was due mainly to increased revenues and the effects of business restructuring.
(Construction Machinery)
Revenues increased 2% to ¥815.7 billion, as compared with the year ended March 31, 2014. This
increase was due mainly to the positive impact of foreign exchange rate fluctuations and higher sales ofhydraulic excavators and other items in North America and Europe, partially offset by lower demand in China
and Southeast Asia.
Segment profit decreased ¥2.5 billion to ¥60.5 billion, as compared with the year ended March 31, 2014.
This decrease was due mainly to substantially lower sales in China and decline in profitability owing tochanges in product mix.
(High Functional Materials & Components)
Revenues increased 10% to ¥1,529.4 billion, as compared with the year ended March 31, 2014. This
increase was due mainly to the effects of the consolidation of Waupaca Foundry Holdings, Inc. by Hitachi
Metals, Ltd. and solid performances for automobile products for overseas including North America and China
and certain electronics-related materials.
Segment profit increased ¥19.7 billion to ¥123.9 billion, as compared with the year ended March 31,
2014. This increase was due mainly to higher revenues, posting gain on sale of shares of a consolidated
subsidiary by Hitachi Metals, Ltd., the effect of cost reduction and an increase in exchange gain, partially
offset by posting of restructuring charges associated with the voluntarily early retirement program
implemented by Hitachi Chemical Company, Ltd.
(Automotive Systems)
Revenues increased 5% to ¥936.9 billion, as compared with the year ended March 31, 2014. This
increase was attributable to robust demand in overseas automobile markets, such as North America and China.
Segment profit increased ¥31.5 billion to ¥35.0 billion, as compared with the year ended March 31, 2014,
due mainly to the increased revenues and a decrease in expenses related to competition law and others.
(Smart Life & Ecofriendly Systems)
Revenues increased 1% to ¥754.2 billion, as compared with the year ended March 31, 2014. This
increase was attributable to higher sales in overseas markets for the air-conditioning business and the home
appliance business, partially offset by the decreased sales due to the effects of the consumption tax rateincrease.
Segment profit increased ¥6.4 billion to ¥34.5 billion, as compared with the year ended March 31, 2014,
due mainly to the increase in revenues.
(Others (Logistics and Other services))
Revenues decreased 12% to ¥1,274.2 billion, as compared with the year ended March 31, 2014. Thisdecrease was attributable to the conversion of Hitachi Maxell, Ltd., which had been a consolidated subsidiary,
into an equity-method affiliate, which was partially offset by increased revenues at Hitachi Transport System,
Ltd. due mainly to launch of large-scale projects and the consolidation of domestic and overseas companies inthe year ended March 31, 2014.
Segment profit increased ¥28.2 billion to ¥51.0 billion, as compared with the year ended March 31, 2014,
despite lower revenues. This increase was due mainly to a decrease in expenses related to businessrestructuring and posting of gain on sales and disposal of fixed assets.
(Financial Services)
Revenues increased 4% to ¥356.2 billion, as compared with the year ended March 31, 2014. This
increase was due mainly to strong performance in the overseas business, particularly in Europe.
Segment profit increased ¥2.6 billion to ¥35.4 billion, as compared with the year ended March 31, 2014,
due mainly to the increase in revenues.

-30-3) Revenues by Geographic Area
The following is an overview of revenues attributed to geographic areas based on customer location.
Japan
Revenues in Japan were ¥5,220.3 billion, a decrease of 2% compared with the year ended March 31,
2014. This decrease was due mainly to the decrease in revenues in the Power Systems segment owing to theeffects of the integration of the thermal power generation systems business, and the decrease in revenues in
the Others (Logistics and Other services) segment owing to the conversion of Hitachi Maxell, Ltd. into an
equity-method affiliate, partially offset by the increases in revenues in the Information &Telecommunications Systems segment.
Overseas(Asia)
Revenues in Asia were ¥2,178.2 billion, an increase of 2% compared with the year ended March 31,
2014. This increase was due mainly to the increases in revenues in the Social Infrastructure & Industrial
Systems segment, which reported higher sales of elevators and escalators in China, and in the Information& Telecommunication Systems, High Functional Materials & Components and Smart Life & Ecofriendly
Systems segment, partially offset by the decreases in revenues in the Power Systems, Construction
Machinery and Others (Logistics and Other services) segments.
(North America)
Revenues in North America were ¥1,064.1 billion, an increase of 16% compared with the year
ended March 31, 2014. This increase was due mainly to the increase in revenues in the High Functional
Materials & Components segment as a result of the effects of the consolidation of Waupaca Foundry
Holdings, Inc. by Hitachi Metals, Ltd., and in the Information & Telecommunication Systems, Construction
Machinery and Automotive Systems segments, partially offset by the decreases in revenues in the Power
Systems and Others (Logistics and Other services) segments.
(Europe)
Revenues in Europe were ¥841.9 billion, an increase of 9% compared with the year ended March
31, 2014. This increase was due mainly to the increases in revenues in the Social Infrastructure & Industrial
Systems segment, which reported increased revenues from the railway systems business in the U.K., in theElectronic Systems & Equipment segment, which reported higher sales of semiconductor manufacturing
equipment and medical analysis systems at Hitachi High-Technologies Corporation, and in the Financial
Services segment, which reported increased revenues in the U.K.
(Other Areas)
Revenues in other areas were ¥470.2 billion, a decrease of 13% compared with the year ended
March 31, 2014. This decrease was due mainly to the decrease in revenues in the Power Systems segmentowing to the effects of the integration of the thermal power generation systems business, partially offset by
the increase in revenues in the Construction Machinery segment due to increased sales of mining
machinery in Africa and Australia, etc.
As a result of the foregoing, overseas revenues increased 5% to ¥4,554.5 billion, as compared with theyear ended March 31, 2014, and the ratio to total revenues was 47%, compared with 45% for the year ended
March 31, 2014.
(4) Summary of Financial Condition, etc.
1) Liquidity and Capital Resources
Our management considers maintaining an appropriate level of liquidity and securing adequate funds for
current and future business operations to be important financial objectives. Through efficient management ofworking capital and selective investment in new plants and equipment, we are working to optimize theefficiency of capital utilization throughout our business operations. We endeavor to improve our group cash
management by centralizing such management among us and our overseas financial subsidiaries. Our internalsources of funds include cash flows generated by operating activities and cash on hand. Our management also
considers short-term investments to be an immediately available source of funds. In addition, we raise funds
both in the capital markets and from Japanese and international commercial banks in response to our capitalrequirements. Our management’s policy is to finance capital expenditures primarily by internally generated
funds and to a lesser extent by funds raised through the issuance of debt and equity securities in domestic and-31-foreign capital markets. In order to flexibly access funding, we maintain our shelf registration with the
maximum outstanding balance of ¥300.0 billion and issued the straight bonds of ¥60.0 billion on December 13,
2013 for the purpose of repaying short-term debts (commercial paper) and meeting demand for funds for
growth of the Social Innovation Business.
We maintain commitment line agreements with a number of domestic banks under which we may
borrow in order to ensure efficient access to necessary funds. These commitment line agreements generally
provide for a one-year term, renewable upon mutual agreement between us and each of the lending banks, aswell as another commitment line agreement with a contract term of three years and two months ending in July
2016. These committed credit arrangements are, in general, subject to financial and other covenants andconditions both prior to and after drawdown, the most restrictive of which require maintenance of minimum
issuer rating or long-term debt ratings from Rating and Investment Information, Inc. (R&I) of BBB-. As of
March 31, 2015, our unused commitment lines totaled ¥524.7 billion, including these of ¥400.0 billion which
the Company maintained.
We receive debt ratings from Moody’s Japan K.K. (Moody’s), Standard & Poor’s Rating Japan (S&P), as
well as R&I. Our debt ratings as of March 31, 2015 were as follows.
Rating Company

Long-term

Short-term

Moody’s

A3

P-2

S&P

A-

A-2

R&I

A+

a-1

With our current ratings, we believe that our access to the global capital markets will remain sufficientfor our financing needs. We seek to improve our credit ratings in order to ensure financial flexibility for
liquidity and capital management, and to continue to maintain access to sufficient funding resources throughthe capital markets.
2) Cash Flows(Cash Flows from Operating Activities)
Net income in the year ended March 31, 2015 decreased ¥181.5 billion to ¥343.4 billion, as comparedwith the year ended March 31, 2014. Increase in trade receivables in the year ended March 31, 2015 decreased¥199.1 billion to ¥201.4 billion, as compared with the year ended March 31, 2014, due mainly to promoting
collection. Increase in inventories in the year ended March 31, 2015 increased ¥74.0 billion to ¥116.3 billion,
as compared with the year ended March 31, 2014. Decrease in trade payables was ¥18.0 billion in the year
ended March 31, 2015, compared with the increase in trade payables of ¥33.7 billion in the year ended March
31, 2014. As a result of the foregoing, the net cash provided by operating activities was ¥451.8 billion in theyear ended March 31, 2015, an increase of ¥145.0 billion compared with the year ended March 31, 2014.
(Cash Flows from Investing Activities)

A net sum of ¥568.6 billion in the year ended March 31, 2015 was recorded as investments related toproperty, plant and equipment, where the proceeds from sale of property, plant, equipment and intangible
assets, the proceeds from sale of leased assets and the collection of lease receivables were subtracted from theamount of the purchase of property, plant and equipment, the purchase of intangible assets and the purchase ofleased assets, a decrease of ¥39.0 billion from the year ended March 31, 2014. Purchase of investments insecurities and other financial assets (including investments in subsidiaries and investments accounted for using
the equity method) increased by ¥57.3 billion and amounted to ¥152.8 billion, due mainly to the acquisition
related to Waupaca Foundry Holdings, Inc. in the year ended March 31, 2015. Proceeds from sale ofinvestments in securities and other financial assets (including investments in subsidiaries and investments
accounted for using the equity method) decreased by ¥8.0 billion and amounted to ¥121.6 billion in the year
ended March 31, 2015. As a result of the foregoing, the net cash used in investing activities was ¥612.5 billion
in the year ended March 31, 2015, an increase of ¥62.3 billion compared with the year ended March 31, 2014.
(Cash Flows from Financing Activities)
Net increase in short-term debt in the year ended March 31, 2015 was ¥136.9 billion, whereas net
decrease of ¥66.2 billion was recorded in the year ended March 31, 2014. A net sum of ¥206.0 billion wasrecorded as proceeds related to long-term debt, where the payments on long-term debt were subtracted fromthe proceeds from long-term debt, a decrease of ¥192.2 billion from the year ended March 31, 2014. As aresult of the foregoing, the net cash provided by financing activities was ¥233.2 billion in the year ended
March 31, 2015, an increase of ¥4.3 billion from the year ended March 31, 2014.

-32-

As a result of the above items, as of March 31, 2015, cash and cash equivalents amounted to ¥701.7
billion, net increase of ¥141.0 billion from March 31, 2014. Free cash flows, the sum of cash flows fromoperating and investing activities, represented an outflow of ¥160.7 billion in the year ended March 31, 2015, a
decrease of ¥82.6 billion from the year ended March 31, 2014.
3) Assets, Liabilities and Equity
As of March 31, 2015, total assets amounted to ¥12,433.7 billion, an increase of ¥1,335.5 billion fromMarch 31, 2014. This increase was due primarily to increases in the value of assets denominated in foreign
currency owing to the depreciation of yen, the acquisition of Waupaca Foundry Holdings, Inc. and increases intrade receivables resulting from increased revenues. Cash and cash equivalents as of March 31, 2015 amounted
to ¥701.7 billion, an increase of ¥141.0 billion from the amount as of March 31, 2014.
As of March 31, 2015, total interest-bearing debt, the sum of short-term debt and long-term debt,
amounted to ¥3,557.3 billion, an increase of ¥523.3 billion from March 31, 2014. As of March 31, 2015, shortterm debt, consisting mainly of borrowings from banks and commercial paper, amounted to ¥977.7 billion, an
increase of ¥202.1 billion from March 31, 2014, due mainly to the issuance of commercial paper by theCompany. As of March 31, 2015, long-term debt (excluding current portion), consisting mainly of debentures,
debentures with stock acquisition rights, medium-term notes and loans principally from banks and insurancecompanies, amounted to ¥2,096.1 billion, an increase of ¥379.1 billion from March 31, 2014, due mainly toincreased demand for investment funds to achieve growth in the Social Innovation Business, funding for theacquisition of Waupaca Foundry Holdings Inc., and higher demand for funds in line with business expansion in
the Financial Services segment.
As of March 31, 2015, total Hitachi, Ltd. stockholders’ equity amounted to ¥2,942.2 billion, an increaseof ¥273.6 billion from March 31, 2014, due primarily to posting of net income attributable to Hitachi, Ltd.
stockholders and an increase in the accumulated other comprehensive income owing primarily to thedepreciation of yen. As a result, the ratio of total Hitachi, Ltd. stockholders’ equity to total assets as of March
31, 2015 was 23.7%, compared with 24.0% as of March 31, 2014.
Non-controlling interests as of March 31, 2015 was ¥1,354.0 billion, an increase of ¥153.8 billion fromMarch 31, 2014.
Total equity (the sum of total Hitachi, Ltd. stockholders’ equity and non-controlling interests) as ofMarch 31, 2015 was ¥4,296.3 billion, an increase of ¥427.5 billion from March 31, 2014. The ratio of interestbearing debt to total equity increased to 0.83, compared with 0.78 as of March 31, 2014.
(5) Important Accounting Policies and Estimates
The preparation of the consolidated financial statements in conformity with IFRS requires ourmanagement to make estimates and assumptions that affect the reported amounts of assets and liabilities anddisclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts ofrevenues and expenses during the reporting period. Management considers that certain accounting estimates tobe critical, and that their significance to the financial statements and the possibility that future events affecting
the estimate may differ significantly from management’s current assumptions could have a material impact on
the presentation of our financial condition, changes in financial condition or results of operations. First, theestimates require us to make assumptions about matters that are highly uncertain at the time the accounting
estimates are made. Second, there could be different estimates that we reasonably could have used for theaccounting estimate in the current period, or changes in the accounting estimate that are reasonably likely tooccur as time proceeds. Details of important accounting policies and estimates are described in “Note 3.
Overview of major accounting policies” under “(1) Notes to Consolidated Financial Statements” of “1.
Consolidated Financial Statements, etc.” in “V. Financial Information.”(6) Forward-Looking Statements
Certain statements found in “3. Challenges Facing Hitachi Group,” “4. Risks Factors” and “7. Analysesof Consolidated Financial Condition, Operating Results and Cash Flows” and other descriptions in this report
may constitute “forward-looking statements” as defined in the U.S. Private Securities Litigation Reform Act of1995. Such “forward-looking statements” reflect management’s current views with respect to certain future
events and financial performance and include any statement that does not directly relate to any historical or
current fact. Words such as “anticipate,” “believe,” “expect,” “estimate,” “forecast,” “intend,” “plan,”“project” and similar expressions which indicate future events and trends may identify “forward-looking
statements.” Such statements are based on currently available information and are subject to various risks anduncertainties that could cause actual results to differ materially from those projected or implied in the“forward-looking statements” and from historical trends. Certain “forward-looking statements” are based uponcurrent assumptions of future events which may not prove to be accurate. Undue reliance should not be placed
on “forward-looking statements,” as such statements speak only as of the date of this report.
-33-

Factors that could cause actual results to differ materially from those projected or implied in any “forwardlooking statement” and from historical trends include, but are not limited to:
•

•
•
•
•
•
•
•
•
•
•
•
•
•
•
•

•
•
•
•
•
•
•
•
•

economic conditions, including consumer spending and plant and equipment investment in Hitachi’smajor markets, particularly Japan, Asia, the United States and Europe, as well as levels of demand in the
major industrial sectors Hitachi serves, including, without limitation, the information, electronics,
automotive, construction and financial sectors;
exchange rate fluctuations of the yen against other currencies in which Hitachi makes significant sales orin which Hitachi’s assets and liabilities are denominated, particularly against the U.S. dollar and the euro;
uncertainty as to Hitachi’s ability to access, or access on favorable terms, liquidity or long-term financing;
uncertainty as to general market price levels for equity securities, declines in which may require Hitachi towrite down equity securities that it holds;
uncertainty as to Hitachi’s ability to continue to develop and market products that incorporate newtechnologies on a timely and cost-effective basis and to achieve market acceptance for such products;
the possibility of cost fluctuations during the lifetime of, or cancellation of, long-term contracts for which
Hitachi uses the percentage-of-completion method to recognize revenue from sales;credit conditions of Hitachi’s customers and suppliers;
fluctuations in the price of raw materials including, without limitation, petroleum and other materials, suchas copper, steel, aluminum, synthetic resins, rare metals and rare-earth minerals, or shortages of materials,
parts and components;
fluctuations in product demand and industry capacity;
uncertainty as to Hitachi’s ability to implement measures to reduce the potential negative impact offluctuations in product demand, exchange rates and/or price of raw materials or shortages of materials,
parts and components;
increased commoditization of and intensifying price competition for products;
uncertainty as to Hitachi’s ability to achieve the anticipated benefits of its strategy to strengthen its Social
Innovation Business;
uncertainty as to the success of acquisitions of other companies, joint ventures and strategic alliances andthe possibility of incurring related expenses;
uncertainty as to the success of restructuring efforts to improve management efficiency by divesting orotherwise exiting underperforming businesses and to strengthen competitiveness;
uncertainty as to the success of cost reduction measures;
general socioeconomic and political conditions and the regulatory and trade environment of countries
where Hitachi conducts business, particularly Japan, Asia, the United States and Europe, including,
without limitation, direct or indirect restrictions by other nations on imports and differences in commercial
and business customs including, without limitation, contract terms and conditions and labor relations;
uncertainty as to the success of alliances upon which Hitachi depends, some of which Hitachi may notcontrol, with other corporations in the design and development of certain key products;
uncertainty as to Hitachi’s access to, or ability to protect, certain intellectual property rights, particularly
those related to electronics and data processing technologies;
uncertainty as to the outcome of litigation, regulatory investigations and other legal proceedings of which
the Company, its subsidiaries or its equity-method associates and joint ventures have become or may
become parties;
the possibility of incurring expenses resulting from any defects in products or services of Hitachi;
the potential for significant losses on Hitachi’s investments in equity-method associates and joint ventures;the possibility of disruption of Hitachi’s operations by natural disasters such as earthquakes and tsunamis,the spread of infectious diseases, and geopolitical and social instability such as terrorism and conflict;uncertainty as to Hitachi’s ability to maintain the integrity of its information systems, as well as Hitachi’s
ability to protect its confidential information or that of its customers;
uncertainty as to the accuracy of key assumptions Hitachi uses to evaluate its significant employee
benefit-related costs; anduncertainty as to Hitachi’s ability to attract and retain skilled personnel.

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

-34-

III. Property, Plants and Equipment
1. Summary of Capital Investment, etc.
The Hitachi Group (the Company and consolidated subsidiaries) selectively invests in R&D and productfields expected to grow over the long term, and it also invests to streamline manufacturing process, etc.
and to improve the reliability of its products.
Capital investment (based on the amount recorded as tangible fixed assets and the investment property) in
the fiscal year ended March 31, 2015 was ¥850.9 billion. A breakdown of capital investment by segment is
as follows. Effective from April 1, 2014, a company, which was previously included in the Information &Telecommunication Systems segment, has been included in the Social Infrastructure & Industrial Systems
segment, and some companies, which were previously included in the Digital Media & Consumer
Products segment, have been included in the Others (Logistics and Other services) segment. As a result,
the Company changed the name of the “Digital Media & Consumer Products” segment to the “Smart Life
& Ecofriendly Systems” segment.
Segment

Change from
Capitalpreceding fiscal
investment(Billions of yen)year (%)

Information &Telecommunication
Systems

46.1

112

Power Systems

24.0

122

Social Infrastructure &Industrial Systems

36.0

98

Electronic Systems &Equipment

20.7

75

Construction Machinery

20.9

56

High Functional Materials& Components

76.2

116

Automotive Systems

77.4

101

18.0

103

52.2

77

494.4

104

Smart Life & Ecofriendly
Systems
Others (Logistics andOther services)
Financial Services

Main purpose of investment
Expansion and replacement of data centers,
streamline development and production of otherproducts
Facility for nuclear power generation system,
streamline development and production of otherproducts
Increase production of elevators and escalators,
manufacturing facilities for railway systems,
streamline development and production of otherproducts, antiseismic reinforcement
Streamline development and production of
products
Increase and streamline production of
construction machinery, antiseismic
reinforcement
Increase and streamline production of highgrade metal products, magnetic materials, highgrade functional components, wires and cables,
powder metal products, etc.
Increase production of automotive equipment,
etc.
Streamline development and production of
products
Transportation facilities,
system development facilities
Assets for leasing business (computers and otherinformation-related equipment, industrial
machinery and machine tools, vehicles andmedical equipment related to lease agreements)－

Subtotal
866.2
100
Corporate Items &(15.3)－－
Eliminations
Total
850.9
100
－
(Notes) 1. The figures in the above table include the amount of the tangible fixed assets leased under financelease transactions and the investment property, each of which is recorded as property, plant andequipment and other non-current assets, respectively.
2. These investments were mostly financed with the Hitachi Group’s own capital.

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2. Major Property, Plants and Equipment
The Hitachi Group (the Company and consolidated subsidiaries) engages in diverse business operationsin Japan and overseas. It discloses information on major property, plants and equipment represented inbreakdown by segment and major facilities of the Company and consolidated subsidiaries.
The situation at the end of the fiscal year under review is as follows.
(1) Breakdown by Segment(As of March 31, 2015)
Book value (Millions of yen)Tools,
Machineryfurniture
Other
and vehicles
andfixtures

Land[Area inthousandsof m2]

Buildings
andstructures

Information &Telecommunication
Systems

29,729[1,652]

81,834

26,624

51,52927,221

3,563

220,500

76,438

Power Systems

80,555[8,380]14,476

8,033

2,686

5,918

33,090144,758

10,613Social Infrastructure &Industrial Systems

27,415[3,644]

103,695

47,47815,378

9,877

16,062219,905

54,809

Electronic Systems &Equipment
Construction
MachineryHigh Functional
Materials &Components

35,225[1,869]59,817

21,57013,512

2,270

3,335

135,729

24,25352,995[7,979]95,96866,544

6,920

53,786

6,745

282,958

20,35379,281[16,559]

145,285

207,071

27,633

2,915

21,961

484,146

48,96353,889[5,967]65,265116,085

21,621

1,748

29,153

287,761

31,865

14,620[3,312]

27,25946,584

15,760676

3,311

108,210

22,20089,089[4,833]

132,987

33,83928,63927,6273,093

315,274

39,6541,120

268,097

4,792

121,433 2,467,338

333,940

Segment

Automotive Systems
Smart Life &Ecofriendly Systems
Others (Logistics andOther services)
Financial Services
Subtotal
Corporate Items &Eliminations
Total(Notes)116[13]462,914[54,206]

1,898

10,408

1,910

252,645

728,484584,236

185,588384,683(29,330)[1,135]29,168207

3,819(1,210)433,584[55,341]

757,652

584,443

189,407383,473

Constructionin progress

2,505

Total

Number of
employees

5,159

2,730

123,938 2,472,497

336,670

1. The “Book value - Other” column includes the amount of finance lease assets, etc.
2. The figures in the above table include ¥303,547 million of operating lease assets for leasing business, mainly owned
by Hitachi Capital Corporation.
3. The figures in the above table include ¥53,616 million of lease assets concerning finance lease transactions leased
from within the Hitachi Group, mainly from Hitachi Capital Corporation.
4. Except for the figures in the above table, there are operating lease assets leased, mainly machinery, etc. The annual
lease fee for such assets was ¥160,562 million.

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(2) The Company(As of March 31, 2015)
Book value (Millions of yen)
Details ofTools,
Land
Number of
Facility
Segment
major facilities [Area in Buildings Machinery furniture
Construction(Main location)
employees
and
and
Total
Other
and equipment thousands
andin progressstructures vehicles
2
fixturesof m ]
Systemdevelopment
Information &Information & facilities,
Telecommunication
Telecommuni- manufacturing
1,689
48,1342,445 24,894 2,078
1,189 80,431
13,123
Systems Company
facilities forcation[588](Shinagawa-ku,
servers,
Systems
Tokyo)
mainframes,
etc.
Research &OthersDevelopment(Logistics and
6,043
R&D facilities
14,328
7,193
3,390
24
63 31,044
2,902
Group
Other
[780]
(Kokubunji, Tokyo) services)
Manufacturing
Information & facilities for
Telecommuni- industrial
machinery andcationplants,Systems,
Infrastructure
3,646
switchboards
Power
10,9707,519
2,172 2,159
916 27,384
5,699
Systems Company[767]
Systems and and calculation(Hitachi, Ibaraki)
controlSocialInfrastructure equipment,& Industrial systemdevelopment
Systems
facilities
Manufacturing
facilities forPower Systems
10,096
Power
power
5,764
3,104
640
813
11 20,430
2,416Company[3,438]Systems
generating(Hitachi, Ibaraki)equipment, etc.
OthersSystemIT Services－(Logistics and
1,505
0 17,591－
625 19,722
432
development
Division (Chiyoda[－]Other
facilities
ku, Tokyo)
services)Rail Systems
SocialManufacturing
Company
Infrastructure facilities for
854
9,766
4,259
641
3
480 16,005
1,888(Kudamatsu,& Industrial railway[673]
Yamaguchi)
Systems
vehicles, etc.
Ibaraki Hospital
Medical63
CenterCorporate
11,242
29
997 1,107
2,464 15,906
1,413
facilities[52](Hitachi, Ibaraki)
Head Office
5,427(Chiyoda-ku,
Corporate
Other facilities
7,473
180
2,493
－
40 15,615
1,132[1,027]
Tokyo)
8,309
Area Operations
6,572
9
327
10
－ 15,229
1,358
Corporate
Other facilities[54](Osaka, Osaka)
Defense Systems
SocialSystem107
Company
Infrastructure
6,098
787
482
131
49 7,657
480
development[7](Yokohama,& Industrial
facilities
Kanagawa)
Systems-37-

(3) Domestic subsidiaries

Facility(Main location)

Segment

Hitachi Automotive
Systems, Ltd.
Automotive(Hitachinaka,
Systems
Ibaraki)High
Hitachi Metals,
Functional
Ltd., Yasugi Works
Materials &(Yasugi, Shimane)Components
HitachiConstruction
Machinery Co.,
Construction
Ltd., HitachinakaMachinery
Rinko Works(Hitachinaka,Ibaraki)
HitachiConstruction
Machinery Co.,
Construction
Ltd., Tsuchiura
Machinery
Works(Tsuchiura, Ibaraki)
Hitachi HighTechnologies
Corporation
Naka Area(Hitachinaka,Ibaraki)Electronic
Systems &Equipment(As of March 31, 2015)
Book value (Millions of yen)
Details ofTools,
Land
Number ofmajor facilities [Area in Buildings Machinery furniture
Construction
employees
and
and
Total
Other
and equipment thousands
andin progressstructures vehicles
2
fixturesof m ]
Manufacturing
facilities for
9,210
22,60832,476
5,245－
1,716 71,255
6,824
automotive[2,480]equipment
Manufacturing
facilities forhigh grade steel

8,096[1,104]

7,636

18,834

1,842

－

3,090

39,498

1,514

Manufacturing
facilities forconstruction
machinery

12,330[495]

17,546

5,421

192

－

23

35,514275

Manufacturing
facilities forconstruction
machinery

6,936[5,137]

8,701

15,595

1,428

－

904

33,566

3,086

Manufacturing
facilities forsemiconductor
manufacturing
equipment andtest andmeasurement
equipment, etc.

426
[125]

17,509

3,112

4,289

－

665

26,003

2,278

Hitachi Building
SocialSystems Co., Ltd.,Infrastructure
9,328
Other facilities
11,756590
1,625－
296 23,595
1,787
Head Office& Industrial[170](Chiyoda-ku,
Systems
Tokyo)
Hitachi Solutions, Information &12,396
Ltd., Head Office Telecommuni8,449－
369 596
137 21,948
2,274
Other facilities[17](Shinagawa-ku,
cationTokyo)
Systems
HitachiConstruction
Manufacturing
Machinery Co.,
1,998
Construction facilities for
8,610
8,710
77
－
67 19,464
228
Ltd., Hitachinaka
Machinery
construction
[214]
Works
machinery(Hitachinaka,Ibaraki)
Hitachi Chemical HighManufacturing
Company, Ltd.,
Functional
facilities for
891
8,448
7,575
988
34
476 18,414
965
Yamazaki Works
Materials &semiconductor[454](Hitachi, Ibaraki)
Components materials, etc.
Hitachi Chemical HighManufacturing
Company, Ltd.,
Functional
facilities for
4,154
7,029
6,093
578
25
242 18,123
1,452
Shimodate Works Materials &circuit board[658](Chikusei, Ibaraki) Components materials, etc.
(Note) Except for the figures in the above table, there are operating lease assets for leasing business, mainly owned by Hitachi
Capital Corporation.

-38-

(4) Overseas subsidiaries

Subsidiary(Main location)
Horizon Nuclear
Power Limited(Gloucester, U.K.)

Segment

Power
Systems(As of March 31, 2015)
Book value (Millions of yen)
Details ofTools,
Land
Number of
major
Buildings Machinery
Construction
furniturefacilities and [Area in
employees
and
and
Total
Other
and
in progressequipment thousands
structures vehicles
2
fixturesof m ]
Land for69,511
nuclear power
92
4
430
－
29,472 99,509
251[4,430]plant
Manufacturing
facilities for
413
17,11636,6783,439－
2,628 60,274
4,025
automotive[4,203]components
Manufacturing
facilities for
409
7,421
14,316
6,164
1
11,213 39,524
2,999
automotive[1,242]equipmentHigh
Waupaca Foundry,
Functional
Inc.
Materials &(Wisconsin, U.S.A.)
Components
Hitachi Automotive
Systems Americas, Automotive
Inc.
Systems(Kentucky, U.S.A.)
Hitachi Data
Information &Systems
Telecommuni- Other－－
20,645 11,150－
661 32,456
6,369
Corporation
cationfacilities[－](California, U.S.A.) Systems
Hitachi
Manufacturing
Construction
Construction facilities for－
Machinery (China)
8,352
6,180
765
－
4,315 19,612
2,165
Machinery
construction[－]
Co., Ltd.
machinery(Hefei, China)(Notes)1. The figures for Horizon Nuclear Power Limited and Hitachi Data Systems Corporation are presented inconsolidated basis of each company.
2. Except for the figures in the above table, there are operating lease assets for leasing business, mainly owned byoverseas subsidiaries of Hitachi Capital Corporation.

-39-

3. Plans for Capital Investment, Disposals of Property, Plants and Equipment, etc.
The Hitachi Group (the Company and consolidated subsidiaries) engages in diverse operations in Japanand overseas, and has not decided on specific plans to newly install or expand each of facilities as of theend of the fiscal year. For this reason, it discloses amounts of capital investment by segment.
The amount of capital investment for the fiscal year ending March 31, 2016 will be ¥910.0 billion (newinstallation and expansions, based on the amount recorded as tangible fixed assets and the investment
property), and a breakdown by segment is as follows. Effective from April 1, 2015, the Power Systems
segment has been integrated to the Social Infrastructure & Industrial Systems segment. Figures shown in
the table below are presented on the basis of the new segmentation.
Segment
Information &Telecommunication
Systems

Amount(Billions of yen)

Main purpose of investment

40.0

Expansion and replacement of data centers,
streamline development and production of other products

Social Infrastructure &Industrial Systems

65.0

Increase production of elevators and escalators,
manufacturing facilities for railway systems,
facility for nuclear power generation system,
streamline development and production of other productsElectronic Systems &Equipment

20.0

Streamline development and production of products

Construction Machinery

30.0

High Functional Materials& Components

90.0

Automotive Systems

60.0

Increase production of automotive equipment, etc.

Smart Life & Ecofriendly
Systems

10.0

Increase and streamline production of appliances,
streamline development and production of other products

Others (Logistics and Other
services)

60.0

Transportation facilities, R&D facilities,
system development facilities

Financial Services

540.0

Assets for leasing business

Subtotal
Corporate Items &Eliminations
Total

Increase and streamline production of construction
machinery, antiseismic reinforcement
Increase and streamline production of high grade metal
products, magnetic materials, high-grade functional
components, wires and cables, etc.

915.0

－

(5.0)

－

910.0

－

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

-40-

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

Common stock

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

Total

10,000,000,000

Class2) Issued shares
Number of shares
Number of sharesissued as of the end
issued as of theof fiscal year (shares) filing date (shares)(March 31, 2015)(June 25, 2015)

Class

Stock exchange on which
the Company is listed

Commonstock

4,833,463,387

4,833,463,387

Tokyo, Nagoya

Total

4,833,463,387

4,833,463,387－

Description
The number ofshares per one unitof shares is 1,000
shares.
－(2) Information on the stock acquisition rights, etc.
Not applicable.
(3) Information on moving strike convertible bonds, etc.
Not applicable.
(4) Information on shareholder right plans
Not applicable.
(5) Changes in the total number of issued shares and the amount of common stock and other

Date

Change in the Balance of the Change in Balance of Change in Balance ofcapitalcapitaltotal number total number of common
commonstock
reserve
reserveof issuedstock
issuedshares(Millions of (Millions of (Millions (Millions ofshares(shares)of yen)(shares)
yen)
yen)
yen)

From April 1, 2010 (Note)
2,012,599 4,520,144,964
319
to March 31, 2011
From April 1, 2011 (Note) 117,640,353 4,637,785,317
18,646to March 31, 2012
From April 1, 2012 (Note) 195,678,070 4,833,463,387
31,015to March 31, 2013
From April 1, 2013
－ 4,833,463,387－
to March 31, 2014
From April 1, 2014
－ 4,833,463,387－
to March 31, 2015
(Note) Changes due to conversion of stock acquisition rights into stocks.

-41-409,129319

127,096427,775

18,646

145,742458,790

31,015

176,757

458,790－

176,757

458,790－

176,757

(6) Shareholders composition(As of March 31, 2015)
Status of shares (one unit of stock: 1,000 shares)
Number of
Foreigncorporations,shares less
Financial
Class of Government Financial instruments Otheretc.
than one
Individuals Total
shareholders
and
unit
and
othersinstitution
business
institution
Nonmunicipality(shares)
operator
individuals Individuals
Number of
2
255
99
2,867
916
115 300,145
304,399－
shareholders
Shareownership
46 1,347,775 131,319
87,124 2,172,376
412 1,071,143 4,810,195 23,268,387(units)Ownership
percentage
0.00
28.02
2.73
1.81
45.16
0.01
22.27
100.00－of shares(%)(Notes) 1. Of 4,886,838 shares of treasury stock, 4,886 units are included in the “Individuals and others”
column, while 838 shares are included in the “Number of shares less than one unit” column.
2. Of the shares registered in the name of Japan Securities Depository Center, Incorporated (accountfor managing stocks whose shareholders have not transferred titles), 26 units are included in the“Other institution” column and 827 shares are included in the “Number of shares less than one
unit” column.
(7) Major shareholders(As of March 31, 2015)
Ownership
percentage to theSharetotal number ofOwnership
issued shares(shares)(%)

Name

Address

The Master Trust Bank of Japan,
Ltd. (Trust Account)
Japan Trustee Services Bank, Ltd.
(Trust Account)Hitachi Employees’ Shareholding
Association

301,833,000

6.24

221,101,215

4.57

99,966,384

2.07

93,265,195

1.93

NATS CUMCO(Standing proxy: Mizuho Bank,
Ltd.)
State Street Bank and Trust
Company 505225(Standing proxy: Mizuho Bank,Ltd.)
THE BANK OF NEW YORKMELLON SA/NV 10(Standing proxy: The Bank ofTokyo-Mitsubishi UFJ, Ltd.)The Dai-ichi Life Insurance
Company, Limited
State Street Bank West ClientTreaty 505234(Standing proxy: Mizuho Bank,
Ltd.)
State Street Bank and Trust
Company(Standing proxy: The Hongkong
and Shanghai Banking
Corporation Limited)

11-3, Hamamatsucho 2-chome,
Minato-ku, Tokyo
8-11, Harumi 1-chome, Chuo-ku,
Tokyo
6-6, Marunouchi 1-chome, Chiyodaku, Tokyo
6-6, Marunouchi 1-chome, Chiyodaku, Tokyo
C/O Citibank New York, 111 WallStreet, New York NY, U.S.A.
(16-13, Tsukishima 4-chome, Chuoku, Tokyo)
P.O. Box 351
Boston, Massachusetts 02101 U.S.A.
(16-13, Tsukishima 4-chome, Chuoku, Tokyo)
Rue Montoyerstraat 46, 1000
Brussels, Belgium(7-1, Marunouchi 2-chome, Chiyodaku, Tokyo)
13-1, Yurakucho 1-chome, Chiyodaku, Tokyo
1776 Heritage Drive, North Quincy,
MA 02171, U.S.A.
(16-13, Tsukishima 4-chome, Chuoku, Tokyo)
One Lincoln Street, Boston MA USA
02111(11-1, Nihombashi 3-chome, Chuoku, Tokyo)

84,223,880

1.74

78,072,703

1.62

74,820,713

1.55

71,361,222

1.48

64,907,327

1.34

58,732,405

1.22

Total

－

1,148,284,044

23.76

Nippon Life Insurance Company(Notes)1. NATS CUMCO is the nominee name of the depositary bank, Citibank, N.A., for the aggregate of
the Company’s American Depositary Receipts (ADRs) holders.
2. The number of shares held by The Dai-ichi Life Insurance Company, Limited includes its
contribution of 6,560,000 shares to the retirement allowance trust (the holder of said shares, as
listed in the Shareholders’ Register, is “Dai-ichi Life Insurance Account, Retirement Allowance
Trust, Mizuho Trust & Banking Co., Ltd.”).

-42-

3. The Company has received copies of reports on substantial shareholdings under the Financial
Instruments and Exchange Act. However, the information in the reports is not described in theabove table since the Company does not confirm the actual status of shareholdings as of the endof fiscal year. The major contents of the reports are as follows.
Holders
Date on which the duty to file report
Number of shares
Ownership percentage to the total
number of issued shares
Holders
Date on which the duty to file report
Number of shares
Ownership percentage to the total
number of issued shares
Holders
Date on which the duty to file report
Number of shares
Ownership percentage to the total
number of issued shares

Mitsubishi UFJ Trust and Banking Corporation and threeother persons
May 23, 2011
237,294,613 shares
5.24 %
BlackRock Japan Co. Ltd and nine other persons
March 31, 2014
255,857,172 shares
5.29%
Sumitomo Mitsui Trust Bank, Limited and two otherpersons
July 31, 2014
244,372,374 shares
5.06%(8) Information on voting rights
1) Issued sharesClassification

Number of shares (shares)

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

－

－

－

－

－

－

－

－

－

－

－

Common stock

5,052,000

Common stock

4,805,143,000

4,805,143－

Common stock

23,268,387－－

4,833,463,387－－

4,805,143－

Number of issued shares
Total number of voting rights(Note)(As of March 31, 2015)
Number of voting
Description
rights－The “Shares with full voting right (others)” column includes 26,000 shares registered in the name ofJapan Securities Depository Center, Incorporated (account for managing stocks whose shareholders
have not transferred titles) and 26 voting rights for those shares.

-43-2) Treasury stock, etc.

Name ofshareholder

Hitachi, Ltd.

(As of March 31, 2015)
Ownership
Number ofpercentage toshares held
Number of
the total
under the Total sharesshares held
under own name names of held (shares) number ofissued shares
others(shares)(%)(shares)

Address

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

4,886,000－

4,886,000

0.10

Aoyama Special
Steel Co., Ltd.
ISHIIDENKOSHA
Co., Ltd.
SAITATakinogawa 5-chome,
KOUGYOU CO., 5-3,
Kita-ku,TokyoLTD.
3268, Nagaoka,
Nitto Jidosha
Ibarakimachi,
Kiki K.K.
Higashiibaraki-gun, Ibaraki

10,000－10,000

0.00

1,000

－

1,000

0.00

88,000－88,0000.00

52,000－52,0000.00

Mizuho Co., Inc.

4-1, Koishikawa 5-chome,
Bunkyo-ku, Tokyo

15,000－15,000

0.00

Total

－

5,052,000－

5,052,000

0.10(9) Details of stock option plans
Not applicable.
2. Information on Acquisition, etc. of Treasury StockClass of shares
Acquisition of common stock under Article 155, Item 7 of the Companies Act and acquisition ofcommon stock under Article 155, Item 13 of the Companies Act(1) Acquisition of treasury stock resolved at the general meeting of shareholders
Not applicable.
(2) Acquisition of treasury stock resolved at the Board of Directors meetings
Not applicable.
(3) Details of acquisition of treasury stock not based on the resolutions of the general meeting ofshareholders or the Board of Directors meetings
Acquisition of stock less than one unit shares due to purchase requests from shareholders under
Article 192, Paragraph 1 of the Companies Act
Classification

Number of shares (shares)

Total amount (yen)Treasury stock acquired during the514,108
420,474,254
fiscal year ended March 31, 2015
Treasury stock acquired during the46,47238,431,438
current period (Note)(Note) The number of treasury stock acquired due to requests to purchase stock less than one unit sharesfrom June 1, 2015 to filing date is not included.
Acquisition of treasury stock due to purchase requests from shareholders dissenting the shareexchange with Hitachi Medical Corporation under Article 797, Paragraph 1 of the Companies Act
Classification

Number of shares (shares)

Treasury stock acquired during the
fiscal year ended March 31, 2015
Treasury stock acquired during thecurrent period-44-

Total amount (yen)1,000

688,000－－

Acquisition of treasury stock due to purchase requests from shareholders dissenting the absorptiontype company split that the Company succeeded the system solutions business in the social
infrastructure, financial, and government & public sectors in Hitachi Solutions, Ltd. under Article
797, Paragraph 1 of the Companies Act
Classification

Number of shares (shares)

Treasury stock acquired during the
fiscal year ended March 31, 2015
Treasury stock acquired during thecurrent period

Total amount (yen)
－

－

1,000

792,000(4) Status of the disposition and holding of acquired treasury stock
Fiscal year ended March 31, 2015
Classification
Acquired treasury stock which wasoffered to subscribers
Acquired treasury stock which wascanceled

Current period (Note)

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

－

－

－

－

－

－

－

－

－

－

－

Others (Acquired treasury stock which
was sold due to requests fromshareholders holding shares less than
one unit shares to sell additional
shares)35,69425,568,062

600

434,916

Total number of treasury stock held

4,886,838－

4,933,710－

Acquired treasury stock which wastransferred due to merger, shareexchange or company split(Note)The number of treasury stock which was sold due to requests from shareholders holding less than
one unit shares to sell additional shares from June 1, 2015 to the filing date and that of treasury stockacquired due to purchase requests from shareholders holding shares less than one unit shares from
June 1, 2015 to the filing date are not included.

3. Dividend Policy
The Company views enhancement of the long-term and overall interests of shareholders as an importantmanagement objective.
The industrial sector encompassing energy, information systems, social infrastructure and other primarybusinesses of the Company is undergoing rapid technological innovation and changes in market structure.
This makes vigorous upfront investment in R&D and plant and equipment essential for securing andmaintaining market competitiveness and improving profitability. Dividends are therefore decided based on
medium-to-long term business plans with an eye to ensuring the availability of internal funds forreinvestment and the stable growth of dividends, with appropriate consideration of a range of factors,
including the Company’s financial condition, results of operations and dividend payout ratio.
The Company provides in its Articles of Incorporation that distribution of surplus will be made toshareholders of record as of March 31 and September 30 of each year and that the company may makefurther distribution of surplus to shareholders of record as of another record date for the purpose of
distributing surplus. The company also provides in its Articles of Incorporation that the Company may
make distribution of surplus by resolution of its Board of Directors, without resolution at the General
Meeting of Shareholders.
The Company believes that the repurchase of its shares should be undertaken, when necessary, as part ofits policy on distribution to shareholders to complement the dividend payout. In addition, the Company
will repurchase its own shares in order to flexibly implement a capital strategy, including businessrestructuring, to maximize shareholder value so far as consistent with the dividend policy. Such action will
be taken by the Company after considering its future capital requirement under its business plans, market
conditions and other relevant factors.
Based on the above policy, annual dividends of ¥12.0 per share were paid for the fiscal year ended
March 31, 2015. At the Board of Directors meeting held on October 29, 2014, it was resolved to pay
interim dividends of ¥6.0 per share, resulting in the total amount of interim dividends of ¥28,973 million.
In addition, at the Board of Directors meeting held on May 14, 2015, it was resolved to pay year-end
dividends of ¥6.0 per share, resulting in the total amount of year-end dividends of ¥28,971 million.
-45-

4. Changes in Share Prices(1) Highest and lowest share prices in each of the recent five fiscal years
Fiscal year

142nd
143rd
144th
145th
146th
business term business term business term business term business term

Year end

March 2011

Highest(yen)
Lowest(yen)

March 2012

March 2013

March 2014

March 2015

523

547

578

877

939.9

313

360

401

508

660

January
2015

February
2015

March
2015

Highest
860.0
916.6
939.9
922.9
884.5
(yen)
Lowest
738.3
858.1
861.4
862.3
766.0
(yen)
(Note) The share prices are market prices on the first section of the Tokyo Stock Exchange.

845.0(2) Highest and lowest share prices in each of the recent six months
Month

October
2014

November
2014

December
2014

-46-

785.8

5. Directors and Senior Management
Men: 39 persons, Women: 2 persons(Women’s percentage to total number of Directors and Senior Management: 5%)
The Company is a company with Nominating Committee, etc. pursuant to the Companies Act. (See “ 6.
Corporate Governance, etc.－(1) Corporate governance－1) Outline of corporate organizations.”) Information

on its Directors and Executive Officers is as follows.
(1) Directors

Share
Date of Business experience, including experience Term of ownershipbirth
in Hitachi, and functions
office(shares)
4/2003 Representative Director,
President and CEO, Member ofthe Board, Marubeni
Nominating
Corporation
Committee
4/2008 Chairman, Member of the(Chair),Board, Marubeni Corporation
Nobuo
Dec. 5, 6/2011 Director, Hitachi, Ltd.
Member of
41,000(Note 1)
Katsumata
1942
Audit
4/2013
SeniorCorporate
Advisor,Committee andMember of the Board,
Compensation
Marubeni Corporation
Committee
6/2013 Senior Corporate Advisor,
Marubeni Corporation(Currently in office)10/1991 General Manager, Foil
Products, Alcan Inc.
1/1996 Managing Director, Aughinish
Alumina Ltd., Alcan Inc.
10/1998 President, Bauxite, Alumina
and Speciality Chemicals,
CynthiaNov. 13,(Note 1)
1,000
Alcan Inc.
Carroll
1956
1/2002 President & CEO, Primary
Metal Group, Alcan Inc.
3/2007 CEO, Anglo American plc.
(Retired in April 2013)
6/2013 Director, Hitachi, Ltd.
6/2002 President and Representative
Member of the Board, Toray
Industries, Inc.
6/2010 Chairman of the Board andRepresentative Member of theMember of
Board, Toray Industries, Inc.
Nominating
SadayukiMar.
22,
6/2013
Director, Hitachi, Ltd.
Committee and Sakakibara(Note 1)
24,0001943
6/2014 Chairman of the Board andCompensation
Member of the Board, Toray
Committee
Industries, Inc.
6/2015 Chief Senior Advisor and Chief
Senior Counselor, Toray
Industries, Inc.
(Currently in office)2/1993 Chief Technology Officer,
Motors, Drives and Appliances,
Emerson Electric Company
9/1994 President, US Electrical
Motors, Emerson ElectricCompany
7/1997 President, Mercury Marine
Division and Corporate Vice
President, Brunswick
Corporation
4/2000President and Chief Operating
GeorgeFeb. 23,
Officer,
Brunswick Corporation (Note 1)
10,000
Buckley1947
6/2000 Chairman and Chief Executive
Officer, Brunswick Corporation
12/2005 Chairman of the Board,
President and Chief Executive
Officer, 3M Company
2/2012 Executive Chairman of theBoard, 3M Company (Retired
in May 2012)
6/2012 Chairman, Arle Capital Partners
Limited (Currently in office)Director, Hitachi, Ltd.

Position Responsibility

Director

Director

Director

Director

Name

-47-

Position Responsibility

Director

NameLouisePentland

Director

Member of
Nominating
Committee andHarufumi
Audit
Mochizuki
Committee,
Compensation
Committee(Chair)Director

Philip Yeo

Share
Date of Business experience, including experience Term of ownershipbirth
in Hitachi, and functions
office(shares)
8/1997 Admitted as a Solicitor (UK)
7/2001 Senior Legal Counsel, Nokia
Networks, Nokia Corporation
1/2004 Vice President and Head of
Legal, Enterprise Solutions,Nokia Corporation
9/2007 Vice President, Acting Chief
Legal Officer and Head of IP
Legal, Nokia Corporation
7/2008
Senior Vice President and Chief
Apr. 11,
Legal
Officer, Nokia(Note 1)
0
1972
Corporation
6/2009 Admitted to New York StateBar Association
2/2011 Executive Vice President andChief Legal Officer, Nokia
Corporation (Retired in May,2014)
4/2015 General Counsel, PayPal, eBay
Inc. (Currently in office)6/2015 Director, Hitachi, Ltd.
7/2002 Director-General for Commerceand Distribution Policy,
Minister’s Secretariat, Ministryof Economy, Trade andIndustry of Japan (“METI”)
7/2003 Director-General, Small andMedium Enterprise Agency,
METI
7/2006 Director-General, Agency for
Natural Resources and Energy,
METI
7/2008 Vice-Minister of Economy,
Trade and Industry of Japan
Jul. 26,5,000
1949
8/2010 Special Advisor to the Cabinet (Note 1)of Japan (Retired in September
2011)
10/2010 Senior Adviser to the Board,
Nippon Life Insurance
Company (Retired in April
2013)
6/2012 Director, Hitachi, Ltd.
6/2013 President and Representative
Director, Tokyo Small andMedium Business Investment& Consultation Co., Ltd.
(Currently in office)6/1970 Joined Ministry of Defense of
Singapore
9/1979 Permanent Secretary, Ministryof Defense of Singapore
1/1986 Chairman, Economic
Development Board ofSingapore
2/2001 Chairman, Agency for Science,
Technology and Research ofSingapore
Oct. 29, 4/2007 Senior Advisor for Science and (Note 1)
25,0001946
Technology to the Ministry ofTrade & Industry, Singapore(Retired in September 2008)
Special Advisor in Economic
Development, Prime Minister’s
Office, Government ofSingapore (Retired in August
2011)
Chairman, SPRING Singapore(Currently in office)6/2012 Director, Hitachi, Ltd.
-48-

ShareBusiness experience, including
Term of ownershipexperience in Hitachi, and functions
office(shares)
11/1978 Joined Peat Marwick Mitchell& Co.
7/1996 National Managing Partner, thePacific Rim Practice, KPMG
LLP
Member of
HiroakiFeb.
9,
10/1997
The
Board Member, KPMG
(Note 1)
1,000
Director Audit
Yoshihara
1957
LLP
Committee
10/2003 Vice Chairman and Global
Managing Partner, KPMGInternational(Retired in April 2007)
6/2014 Director, Hitachi, Ltd.
4/1970 Joined Hitachi, Ltd.
4/2003 General Manager, Global
Business
6/2003 Vice President and Executive
Officer
4/2004 Senior Vice President andExecutive Officer
6/2005 Senior Vice President andExecutive Officer, Hitachi, Ltd.
Chairman and Chief Executive
Member of
Officer, Hitachi Global Storage
HiroakiMar.
14,
Director Nominating(Note 1) 117,000
Technologies, Inc.
Nakanishi
1946
Committee
4/2006 Executive Vice President andExecutive Officer, Hitachi, Ltd.
(Retired in December 2006)
4/2009 Executive Vice President andExecutive Officer, Hitachi, Ltd.
4/2010 President, Hitachi, Ltd.
6/2010 President and Director, Hitachi,
Ltd.
4/2014 Chairman & CEO and
Director, Hitachi, Ltd.
4/1977 Joined Hitachi, Ltd.
4/2006 Chief Operating Officer,
Information &Telecommunication Systems
4/2007 Vice President and Executive
Officer (Retired in March2008)
4/2008 President, Hitachi Power
Europe GmbH
4/2010 President and Chief Executive
Member of
Officer, Hitachi Plant
Feb. 16,
Director Compensation Toshiaki(Note 1)54,000Technologies, Ltd.
Higashihara
1955
Committee
6/2010 President and Representative
Director, Hitachi Plant
Technologies, Ltd.
4/2011 Vice President and Executive
Officer, Hitachi, Ltd.
4/2013 Senior Vice President andExecutive Officer, Hitachi, Ltd.
4/2014 President & COO, Hitachi, Ltd.
6/2014 President & COO and Director,
Hitachi, Ltd.
Position Responsibility

NameDate of
birth

-49-

Position Responsibility

Name

Audit
Director Committee(Chair)(Standing)

TakashiMiyoshiMember of
Director Audit
Committee(Standing)Nobuo
MochidaShareBusiness experience, including
Term of ownershipexperience in Hitachi, and functions
office(shares)
4/1970 Joined Hitachi, Ltd.
4/2003 General Manager, Finance
6/2003 Executive Officer
4/2004 Senior Vice President andExecutive Officer
6/2004 Senior Vice President,
Executive Officer and Director
4/2006 Executive Vice President,
Executive Officer and Director
4/2007 Director (Retired in June 2007)
6/2007 Chairman of the Board, Hitachi
Global Storage Technologies,
Inc.
Sep. 25,(Note 1)79,0004/2008
Executive
Vice President and1947
Executive Officer, Hitachi
Systems & Services, Ltd.
(Currently Hitachi Solutions,Ltd.)
6/2008 President, Chief Executive
Officer and Director, Hitachi
Systems & Services, Ltd.
4/2009 Executive Vice President andExecutive Officer, Hitachi, Ltd.
6/2009 Executive Vice President,
Executive Officer and Director,
Hitachi, Ltd.
4/2012 Director, Hitachi, Ltd.
4/1970 Joined Hitachi Metals, Ltd.
6/2006 President and Chief Executive
Officer and Director, Hitachi
Metals, Ltd.
4/2010 Executive Vice President andApr. 1,
Executive Officer, Hitachi, Ltd. (Note 1)
33,0001947(Retired in March 2014)
Chairman of the Board, Hitachi
Metals, Ltd.
4/2013 Director, Hitachi Metals, Ltd.
(Retired in June 2014)
6/2014 Director, Hitachi, Ltd.
390,000
Total
Date ofbirth(Notes) 1. The term of office of the Directors starts upon the election at the Annual General Meeting of
Shareholders on June 25, 2015 and expires at the close of the Annual General Meeting of
Shareholders for the fiscal year ending March 31, 2016.
2. Messrs. Nobuo Katsumata, Sadayuki Sakakibara, George Buckley, Harufumi Mochizuki, Philip Yeo
and Hiroaki Yoshihara and Mses. Cynthia Carroll and Louise Pentland are directors who fulfill thequalification requirements to be outside directors as provided for in Article 2, Item 15 of theCompanies Act.

-50-

(2) Executive Officers
Position
Representative
Executive
Officer
Chairman &CEO
Representative
Executive
OfficerPresident &COO

Representative
Executive
Officer
Executive Vice
President andExecutive
Officer

Representative
Executive
Officer
Executive Vice
President andExecutive
Officer

Representative
Executive
Officer
Executive Vice
President andExecutive
Officer
Representative
Executive
Officer
Executive Vice
President andExecutive
Officer

Responsibility
Generalmanagement

Name
HiroakiNakanishi

Share
Date ofBusiness experience, including
Term ofbirth experience in Hitachi, and functions office ownership(shares)
See “(1)
See “(1) Directors”
Directors”(Note 2)

117,000

Overall operations Toshiaki
See “(1)and energy
See “(1) Directors”
solutions business Higashihara Directors”(Note 2)54,000(Note 2)37,000(Note 2)27,000(Note 2)

24,000(Note 2)41,0004/1972 Joined Hitachi, Ltd.
10/2007 Executive Vice President,
Hitachi Global Storage
Technologies, Inc.
Cost structure
4/2009 Vice President andreform andExecutive Officer,
ShinjiroJun. 6,
information
Hitachi, Ltd.
Iwata
1948
technology
4/2011 Senior Vice President andstrategies
Executive Officer,
Hitachi, Ltd.
4/2013 Executive Vice President
and Executive Officer,
Hitachi, Ltd.
4/1976 Joined Hitachi, Ltd.
10/2009 Chief Marketing Officer,
Information &Telecommunication
Group, Information &Telecommunication
Marketing and
RyuichiFeb. 4,
Systems Company
sales
Kitayama
1952
4/2010 Vice President andExecutive Officer
4/2014 Senior Vice President andExecutive Officer
4/2015 Executive Vice President
and Executive Officer
4/1979 Joined Hitachi, Ltd.
10/2009 President & CEO,Information & Control
Systems Company
Information &11, 4/2010 Vice President andtelecommunication Yutaka Saito Dec.
1954
Executive Officer
systems business
4/2012 Senior Vice President andExecutive Officer
4/2014 Executive Vice President
and Executive Officer
4/1974 Joined Hitachi, Ltd.
5/2006 General Manager, Hitachi
Works, Power Systems
Power &
Jan.
22,
4/2007
Vice
President andinfrastructure
Koji Tanaka 1952
Executive Officer
systems business
4/2011 Executive Vice President
and Executive Officer-51-

Date ofBusiness experience, including
Term of Sharebirth experience in Hitachi, and functions office ownership(shares)
4/1975 Joined Hitachi, Ltd.
1/2006 General Manager,
Finance Department I
Representative
4/2007
Senior Vice President andExecutive
Executive
Officer
Finance andOfficerAug. 3,6/2007 Senior Vice President,(Note 2)56,000Executive Vice corporate pension Toyoaki
Nakamura 1952
Executive Officer andsystemPresident andDirector
Executive
6/2009Senior Vice President andOfficer
Executive Officer
4/2012 Executive Vice President
and Executive Officer
4/1980 Joined Hitachi, Ltd.
4/2010 Senior Manager, Strategy& Project Office,Representative
Supervisory Office for
Executive
Management Reforms
OfficerManagement
ToshikazuJan.
9,(Note 2)
11,000Executive Vice strategies
4/2011Vice
President andNishino1955
President andExecutive Officer
Executive
4/2013 Senior Vice President andOfficer
Executive Officer
4/2015 Executive Vice President
and Executive Officer
4/1980 Joined Hitachi, Ltd.
4/2007 Chief Strategy Officer
and General Manager,
Strategy Planning &Development Office,Information &Telecommunication
Systems
4/2009 Vice President andInformation &Senior Vice
Executive Officer
telecommunication Masahiro Nov. 23, 4/2012 President and CEO,President and(Note 2)
24,0501955
systems business Kitano
Executive
Hitachi Medical(platform business)
Officer
Corporation
6/2012 President and CEO, andDirector, Hitachi Medical
Corporation
4/2014 Senior Vice President andExecutive Officer,
Hitachi, Ltd.
Director, Hitachi Medical
Corporation (Retired in
March 2015)
Corporate
4/1978 Joined Hitachi, Ltd.
Representative communications
4/2001 General Manager, Legaland CSR, legal
Executive
Divisionmatters,
Officer
4/2007 Vice President andToshiakiNov.
3,
government &Senior Vice
(Note 2) 209,000
Executive Officer
1954
external relations, Kuzuoka
President and
4/2011 Senior Vice President andrisk management
Executive
Executive Officer
and corporate
Officer
auditing
4/1975 Joined Hitachi, Ltd.
10/2009 President & CEO,Defense Systems
Senior Vice
Infrastructure
Dec. 23,
Company
President andKunizo(Note 2)
17,000systems business Sakai
1952
Executive
4/2013 Vice President andOfficer
Executive Officer
4/2015 Senior Vice President andExecutive Officer
Position

Responsibility

Name

-52-

ShareDate ofBusiness experience, including
Term of ownershipbirth experience in Hitachi, and functions office (shares)
4/1979 Joined Hitachi, Ltd.
4/2008 President & Chief
Executive Officer,
Hitachi Information &Telecommunication
Systems Global Holding
Corporation
4/2009 Vice President andSenior Vice Information &Executive Officer,
Jan. 29,
President and telecommunication Kaichiro
Hitachi, Ltd.
(Note 2)43,000
Sakuma1954
Executive
systemsbusiness
4/2013President and Director,
Officer
Hitachi Solutions, Ltd.
(Currently in office)4/2014 Vice President andExecutive Officer,
Hitachi, Ltd.
4/2015 Senior Vice President
and Executive Officer,
Hitachi, Ltd.
4/1973 Joined Hitachi, Ltd.
4/2004 CIO, Urban Planningand Development
Systems, General
Manager of Sales
Division
4/2010 Vice President, Board
Director, Hitachi
Automotive Systems,
Ltd.
Senior Vice Infrastructurebusiness
Aug.
3,
President and systems
4/2011
Senior Vice President,
HiroshiSato15,000(urban planning
1950
Executive
Board
Director, Hitachi (Note 2)
and development
Officer
Automotive
Systems,
systems business)
Ltd.
4/2013 President and COO,
Representative Director,
Hitachi Automotive
Systems, Ltd. (Retired in
March 2015)
4/2015 Senior Vice President
and Executive Officer,
Hitachi, Ltd.
4/1977 Joined Hitachi, Ltd.
4/2012 Chief Operating Officer,
System Solutions
Business, Information &Information &Telecommunication
Senior Vice telecommunication
Systems Company,
May. 8,President and systems business Keiichi(Note 2)
19,000Information &1954(system solutions Shiotsuka
Executive
Telecommunicationand service
Officer
Systems Groupbusiness)
4/2013 Vice President andExecutive Officer
4/2015 Senior Vice President
and Executive Officer
4/1977 Joined Hitachi, Ltd.
4/2012 President and Director,
Vice
Hitachi Industrial
Jun. 23,
President and Industrial products Masakazu
Equipment Systems Co., (Note 2)
3,000
Aoki
business
1954
Executive
Ltd. (Currently in office)
Officer
10/2014 Vice President andExecutive Officer,
Hitachi, Ltd.
Position

Responsibility

Name

-53-

Position

Responsibility

Name

Vice President Social innovation Ryuichi
and Executive business promotion Otsuki
Officer

Vice President Supply chain
and Executive management(procurement)
Officer

Shinichiro
Omori

Power &
infrastructure
Vice President systems businessand Executive (sales operations)and energy
Officersolutions business(sales operations)

Kaoru
KawanoVice President Regional strategies Kenichi
and Executive (China)
KokuboOfficer
Vice President Research &and Executive development
Officer

Keiji
KojimaVice President
and Executive Marketing and sales Akira
Shimizu
Officer

Vice President Government &and Executive external relations
Officer

Yasuo
Tanabe&Vice President Information
Yoshitakaand Executive telecommunication
Tsuda
systemsbusiness
Officer(sales operations)

Share
Date ofBusiness experience, including
Term ofbirth experience in Hitachi, and functions office ownership(shares)
4/1981 Joined Hitachi, Ltd.
4/2014 Chief Strategy Officer
and General Manager ofGroup Business
Development Division,
Information &Mar. 15,(Note 2)
14,000
Telecommunication
1958
Systems Company,
Information &Telecommunication
Systems Group
4/2015 Vice President andExecutive Officer
4/1978 Joined Hitachi, Ltd.
9/2008 General Manager,
Feb. 6,
Corporate Procurement (Note 2)
23,0001956
Division
4/2012 Vice President andExecutive Officer
4/1977 Joined Hitachi, Ltd.
4/2011 General Manager,
Kansai Area Operation
Jun. 25,(Note 2)
24,0504/2012 Vice President and1952
Executive Officer
4/1979 Joined Hitachi, Ltd.
4/2011 President, Hitachi
Nov. 25,(China) Ltd.
1955
4/2014 Vice President andExecutive Officer
4/1982 Joined Hitachi, Ltd.
4/2011 General Manager,
Oct. 9,Hitachi ResearchLaboratory
1956
4/2012 Vice President andExecutive Officer
4/1979 Joined Hitachi, Ltd.
10/2012 General Manager,
Nov. 3,
International Strategy
1954
Division
4/2013 Vice President andExecutive Officer
4/1978 Joined Ministry ofInternational Trade andIndustry
8/2006 Deputy DirectorGeneral, Economic
Oct. 5,Affairs Bureau, Ministryof Foreign Affairs
1954(Retired in March 2010)
6/2010 Joined Hitachi, Ltd.
4/2011 Vice President andExecutive Officer,
Hitachi, Ltd.
4/1979 Joined Hitachi, Ltd.
4/2012 Chief Marketing Officer,
Information &Jul. 3,
Telecommunication
1955
Systems Company
4/2014 Vice President andExecutive Officer-54-(Note 2)

12,000(Note 2)

14,000(Note 2)6,000

(Note 2)

12,000(Note 2)42,000Position

Responsibility

Name

Vice President Infrastructurebusinessand Executive systems(railsystems
Officerbusiness)

AlistairDormerVice President Regional strategies John
and Executive (Americas)
Domme
Officer

Vice President
and Executive Human capital
Officer

Hidenobu
Nakahata

Cost structureand supply
Vice President reformmanagement Hiroshi
and Executive chain(MONOZUKURI Nakayama
Officerand quality
assurance)

Date ofBusiness experience, including
Term of Sharebirth experience in Hitachi, and functions office ownership(shares)
2/2001 Director of Business
Development, Alstom
Transport U.K. Ltd.
6/2003 Joined Hitachi EuropeLtd.
10/2009 Managing Director,
Hitachi Rail Europe Ltd.
Aug. 29, 9/2012 Executive Chairman and0
1963
CEO, Hitachi Rail Europe (Note 2)
Ltd. (Currently in office)4/2014 Global CEO of Rail
Systems business, Hitachi,
Ltd.
4/2015 Vice President andExecutive Officer,
Hitachi, Ltd.
9/2001 Vice President of Strategy& Product Engineering,
Storagenetworks, Inc.
3/2003 Joined Hitachi Data
Systems Corporation
5/2007 COO, Hitachi Data
Systems Corporation
7/2008 CEO, Hitachi Data
Systems Corporation(Currently in office)Dec. 27,2,000
4/2014 COO, Platform Systems (Note 2)
1961
Business, Information &Telecommunication
Systems Company,
Information &Telecommunication
Systems Group, Hitachi,
Ltd.
4/2015 Vice President andExecutive Officer,
Hitachi, Ltd.
4/1983 Joined Hitachi, Ltd.
General Manager,
Jan. 24, 10/2013 Deputy
12,000
Human
Capital Group(Note 2)1961
4/2014 Vice President andExecutive Officer
4/1977 Joined Hitachi, Ltd.
4/2011 President & CEO, Rail
Dec. 15,
Systems Company
42,000(Note 2)
1953
4/2012 Vice President andExecutive Officer

Vice President Power systems
and Executive business
Officer

KatsumiNagasawa

Oct. 18,
1956

Power systems(salesVice President business
operations)andand Executive energy solutions
Officerbusiness (sales
operations)

Isao
Narukawa

Sep. 8,1955-55-

4/1980 Joined Hitachi, Ltd.
4/2012 General Manager, Hitachi
Works, Power Systems(Note 2)Company
4/2014 Vice President andExecutive Officer
4/1978 Joined Hitachi, Ltd.
4/2013 General Manager, Chubu
Area Operation(Note 2)4/2015 Vice President andExecutive Officer

28,00021,000Date ofBusiness experience, including
Term of Sharebirth experience in Hitachi, and functions office ownership(shares)
4/1979 Joined Hitachi, Ltd.
4/2008 General Manager, Finance
Department I
4/2011 Executive Officer,
Hitachi Cable, Ltd.
(Currently Hitachi Metals,
Ltd.)
6/2012 Executive Officer, Board
Director,
Hitachi Cable, Ltd.
4/2013Vice
President andVice President Finance andSep. 25,
Executive Officer, Board (Note 2)
5,000
and Executive corporate pension Mitsuaki
Nishiyama
1956
Director, Hitachi Cable,
systemOfficerLtd.
7/2013 Vice President andManaging Officer,
Hitachi Metals, Ltd.
4/2014 Vice President andExecutive Officer,
Hitachi Metals, Ltd.
(Retired in March 2015)
4/2015 Vice President andExecutive Officer,
Hitachi, Ltd.
4/1982 Joined Hitachi, Ltd.
4/2011 Chief Strategy Officer,
Information &Vice President Healthcare
MasayaJan. 31,(Note 2)32,000
Telecommunicationand Executive business
Watanabe
1958
Systems Company
Officer
4/2012 Vice President andExecutive Officer
Total
986,100(Notes) 1. The “Responsibility” column describes matters delegated to each of the Executive Officers by the
Board of Directors.
2. The term of office of the Executive Officers expires on March 31, 2016.
Position

Responsibility

Name

-56-

6. Corporate Governance, etc.
(1) Corporate governance1) Outline of corporate organizations
The Company is a company with Nominating Committee, etc. under the Companies Act, aiming toestablish a framework for quick business operation and to realize highly transparent management byseparating responsibilities for management oversight and those for execution of business operations.
Board of Directors
The Board of Directors approves basic management policy for the Hitachi Group and supervises
the execution of the duties of executive officers and directors in order to sustainably enhance
corporate value and the shareholders’ common interests. The basic management policy includes
medium-term management plan and annual budget compilation. The Board of Directors focuses on
strategic issues related to the basic management policy as well as other items to be resolved that areprovided in laws, regulations, the Articles of Incorporation and Board of Directors Regulations. As ofJune 25, 2015, the Board of Directors was made up of 12 Directors, and eight of whom are outside
Directors and two concurrently serve as Executive Officers. Within the Board of Directors, there arethree statutory committees of the Nominating Committee, the Audit Committee and theCompensation Committee with outside Directors accounting for the majority of members of eachcommittee. The Board of Directors meetings were held 9 days during the fiscal year ended March 31,
2015, and the attendance rate of Directors at those meetings was 99%. The Nominating Committee
meetings were held 7 days, the Audit Committee meetings were held 14 days, and the Compensation
Committee meetings were held 7 days during the fiscal year ended March 31, 2015.
The Nominating Committee has the authority to determine particular proposals submitted to thegeneral meeting of shareholders for the election and dismissal of Directors, and consists of four
Directors, three of whom are outside Directors.
The Audit Committee has the authority to audit the execution of duties of Directors and Executive
Officers and to determine on proposals submitted to the general meeting of shareholders for theelection and dismissal of accounting auditors, and consists of five Directors, including three outside
Directors and two standing Audit Committee members. Mr. Takashi Miyoshi, the Chair of the Audit
Committee, has considerable knowledge of finance and accounting due to his long experience as theGeneral Manager of accounting and finance of the Company as well as Executive Officer responsible
for accounting and finance for many years.
The Compensation Committee has the authority to determine remuneration policies for Directors
and Executive Officers and remuneration for individuals based on them. The Compensation
Committee consists of four Directors, three of whom are outside Directors.
With regard to the number of Directors and their election, the Company stipulates in its Articles ofIncorporation that the Company shall have not more than twenty (20) Directors. With regard to theadoption of resolution for the election of Directors, the Company stipulates in its Articles ofIncorporation that the presence of shareholders representing one-third or more of the voting, that
resolutions for the election of Directors shall be approved by attending shareholders possessing onethird or more of all voting rights of the shareholders who are entitled to exercise their votes, and thatthe resolution shall not be made by cumulative voting.
The Company maintains a limited liability agreement (hereinafter referred to as “Agreement”)
stipulated in Article 427, Paragraph 1 of the Companies Act with each director (excluding Executive
Director, etc.) The general intent of the Agreement is to limit the liability of Directors to theaggregate amount stipulated in each item under Article 425, Paragraph 1 of the Companies Act.
Executive Officers
Executive Officers decide on matters delegated to them by the Board of Directors and execute theCompany’s business affairs within the scope of assignments determined by the Board of Directors.
As of June 25, 2015, the Company has 31 Executive Officers.
The Company stipulates in its Articles of Incorporation that the Company shall have not more thanforty (40) Executive Officers.

-57-

Senior Executive Committee
The Senior Executive Committee is a council to ensure that President deliberately decides onimportant managerial matters, which may affect the Company or the Hitachi Group business, throughdiscussing from diverse viewpoints. It consists of nine members as of June 25, 2015; Chairman &CEO, President & COO, six Executive Vice President and Executive Officers and one Senior Vice
President and Executive Officer.
2) Matters determined by resolution of the Board of Directors without resolution at the general meetingof shareholders pursuant to the provisions of the Articles of Incorporation
The Company stipulates in the Articles of Incorporation that it may, unless otherwise provided in
the applicable laws, determine on matters specified in each item of Article 459, Paragraph 1 of theCompanies Act by the resolution of the Board of Directors, without resolution at the general meetingof shareholders.
For the repurchase of the company’s own its shares (Article 459, Paragraph 1, Item 1 of theCompanies Act), the Board of Directors shall determine on the matter in order to enable timely
implementation of capital strategies.
Regarding reduction of capital reserve or earned surplus reserve (Article 459, Paragraph 1, Item
2 of the Companies Act), appropriation of surplus (excluding dividends of surplus and disposal of
the property of the Company) (Article 459, Paragraph 1, Item 3 of the Companies Act) anddividends of surplus (Article 459, Paragraph 1, Item 4 of the Companies Act), since the Company
was a company with committees as of the date of enforcement of the Companies Act, it was deemedthat its Articles of Incorporation had stipulations that the Board of Directors was able to decide theabove matters without resolution at the general meeting of shareholders and that it should not
stipulate that such matters shall be resolved at the resolution of the general meeting of shareholders,in accordance with Article 57 of the Act on Arrangement of Relevant Acts Incidental to Enforcementof the Companies Act (July 26, 2005, Act No. 87). Even after the enforcement of the Companies Act,
the Company has made it a rule to timely decide on these important business judgments by the
Board of Directors to enhance the shareholders’ common interests.
The Company has stipulated in its Articles of Incorporation that it may, by resolution of theBoard of Directors, exempt any Director (including former Director) and Executive Officer(including former Executive Officer) from liabilities as provided Article 423, Paragraph 1 of theCompanies Act to the extent as provided in laws or regulations.
3) Requirement for special resolution of the general meeting of shareholders
To enable to securely meet the quorum of the general meeting of shareholders under Article 309,
Paragraph 2 of the Companies Act, the Company stipulates in its Articles of Incorporation that any
resolution as provided in Article 309, Paragraph 2 of the Companies Act shall be adopted at a
general meeting of shareholders where shareholders representing one-third or more of the voting
rights of all the shareholders shall be present, by a majority of two-thirds or more of the voting
rights of the shareholders who are present in such meeting and are entitled to vote.
4) Internal control system and risk management system
Outlines of the internal control system and the risk management system of the Company are as
follows. In addition, these systems were resolved by the Board of Directors as the basic policy forinternal control system under the Companies Act.
i) The following measures shall be taken to ensure the effectiveness of audits by the Audit
Committee.
(a) When necessary, the Board of Directors may appoint one or more director(s), who does notserve concurrently as an executive officer, as a director responsible for assisting with theduties of the Audit Committee. In addition, the Board of Directors’ Office (the “Office”)
shall be established specifically to assist with the duties of each Committee and the Boardof Directors.
(b) In order to ensure the independence of the Office personnel from Executive Officers andthe effect of instructions by the Audit Committee, the Office is staffed with personnel who-58-

work only for the Office and are not subject to orders and instructions of Executive
Officers, and the Audit Committee shall be informed in advance of planned transfers of the
Office personnel.
(c) Executive Officers and employees shall report without delay to the members of the Audit
Committee significant matters affecting the Company and its subsidiaries, results of internal
audits, and the implementation status of reporting under the internal reporting system. It shallbe provided for in the company regulation that reporters using the internal reporting system,
which applies to the employees of the Company and its subsidiaries, shall not receive
disadvantageous treatment for reason of having made a report, and the secretariat of thesystem shall thoroughly administer this provision.
(d) The Office shall be in charge of payment for the expenses incurred in connection with theexecution of the duties of the Audit Committee members and other administrative duties,
and shall promptly process the payment for the expense or debt except in the case where
the expense or debt of the claim is clearly found to be unnecessary to the execution of theduties of them.
(e) Standing Committee member(s) shall be appointed to the Audit Committee, and activity
plans of the Audit Committee shall be prepared in coordination with the audit plans ofInternal Auditing Office.
ii) The following measures shall be effective to ensure the adequacy of business operations within
the Company and the Hitachi Group.
(a) Such fundamental policies as the emphasis of the social responsibilities of businessenterprises shall be shared with the subsidiaries of the Company.
(b) Each subsidiary of the Company shall develop systems to ensure the appropriateness ofoperations corresponding to its size and other characteristics, basic framework of which issimilar to ones employed in the Company. In order to ensure development of such systems
in each subsidiary, directors and auditors shall be sent from the Company to its subsidiary,
and regular audits shall be conducted for the subsidiary.
(c) A reporting system to Directors shall be established to ensure that the execution of duties
by Executive Officers of the Company is in compliance with laws, regulations, and the
Articles of Incorporation.
(d) Information pertaining to the execution of duties by Executive Officers of the Company
shall be prepared and maintained in accordance with internal rules.
(e) A structure shall be established in which each relevant department shall establish
regulations and guidelines, conduct training, prepare and distribute manuals, and carry out
other such measures with respect to various risks. Efforts shall be made to identify
possible new risks through such things as progress reports on business operations and,should it become necessary to respond to a new risk, an Executive Officer responsible forresponding thereto shall be appointed promptly.
(f) Efficient performance of duties of the Executive Officers of the Company, and Directors
and Executive Officers of the subsidiaries shall be ensured through the following business
management systems.
- The Senior Executive Committee shall be established in order to deliberate on andfacilitate the formulation of decisions based on due consideration of diverse factors
regarding important issues that affect the Company and/or the Hitachi Group.
- Based on the management policy, medium-term business plans and annual budgets, on
which performance management is based, shall be prepared in order to operate businessin a planned and efficient manner.
- Internal audits of the Company and its subsidiaries shall be conducted to monitor andidentify the status of their business operations and to facilitate improvements.
- The Audit Committee shall receive the audit plans of the accounting auditors in advance,
and the prior approval of the Audit Committee shall be required with respect to the fees-59-to be paid to the accounting auditors.
- Documented business processes for matters to be reflected in financial reports shall be
executed at the Company and its subsidiaries, and internal and external auditors shall
examine said processes in order to ensure the reliability of financial reports.
- A structure for the adequate and efficient conduct of business operations common to the
Hitachi Group companies shall be established.
(g) Continuous maintenance of a legal and regulatory compliance structure shall be ensured
through the following business management systems.
- Internal audits shall be conducted, and various committees shall be established for legal
and regulatory compliance activities. Furthermore, an internal reporting system for
employees of the Company and its subsidiaries shall be established and education on
legal and regulatory compliance shall be provided.
- Various policies and rules on compliance with laws shall be established, aiming to ensurethat the employees are aware of the internal control systems overall and that the systems
are effective.
(h) A system shall be established, in which the subsidiaries report on important issues and theprogress in measures for operations to the Company through the Company’s Senior
Executive Committee, medium-term business plans and the budget system.
(i) The policy on transactions within the Hitachi Group is to trade fairly based on market
prices.
5) Internal audit and audit by the Audit Committee(a) Internal audit
The Internal Auditing Office is in charge of internal audit within Hitachi Group and audits inhouse companies, corporate divisions of headquarters and subsidiaries and affiliates. The numberof staff of the Internal Auditing Office is 39 as of March 31, 2015.
The Internal Auditing Office monitors and assesses whether overall business operations,
including marketing, personnel management, labor management, compliance, procurementtransactions, production, environment, disaster prevention, export regulations, information
system, accounting and financing activities, and property management of Hitachi Group areproperly carried out pursuant to audit standards established by the Company, and points out items
required to be improved based on the results of auditing and follows up their improvements. The
Internal Auditing Office reports in advance its internal audit plan to the Audit Committee, andreports results of auditing to the President & COO and the Audit Committee. Furthermore,
relating to the internal control over financial reporting, the internal control division in theInternal Audit Office promotes to establish and maintain the internal control systems pursuant to
the Company’s guideline, assesses its effectiveness, and reports the results to the President &COO and the Audit Committee.
(b) Audit by the Audit Committee
The Audit Committee conducts audits for whether corporate administration by Directors andExecutive Officers are properly carried out under appropriate internal control systems.
The Audit Committee develops the audit policy and the audit plan, and periodically receives
reports or conducts hearing for execution of duties from Directors and Executive Officers. In
addition, the members of the Audit Committee, who are in charge of internal investigation,
investigate in-house companies of the Company and receive reports from subsidiaries in order tocheck whether business transaction and property management are properly carried out, and thenreport the results to the Audit Committee. Furthermore, such members of the Audit Committee
attend the important meetings including the budget meeting and the Senior Executive Committee,
inspect audit reports from internal audit divisions, and provide internal audit divisions with
instructions about divisions to be subject to auditing and items to be focused, if necessary.
The Audit Committee receives reports and explanations about the audit plan and results of
the audit from the accounting auditor, and based on the reports, verifies results of financial audits-60-

and internal control audits. In addition, the Audit Committee receives reports and explanations ofquality control systems of the accounting auditor. Furthermore, the Company makes it a rule toobtain the prior approval of the Audit Committee for remuneration to the accounting auditor.
6) Outside Directors(a) Qualification for the outside Directors and criteria for the independency
For electing an outside Director, the Nominating Committee of the Company considers, inaddition to the following criteria for the independency, whether the outside Director has thehighest personal and professional ethics, integrity and insight, and distinguished records ofleadership or experience at policy making levels in business, law, administration, accounting or
education, etc.
For the independency of an outside Director, the Company considers the outside director to
be independent unless:- his or her immediate family member* is, or has been within the last three years, an
executive director or an executive officer, of the Company or any of its subsidiaries;- he or she is currently an executive director, an executive officer or an employee of acompany that has made payments to, or received payments from, the Company forproperty or services in an amount which, in any of the last three fiscal years, exceeds 2%of any of the companies’ consolidated gross revenues;- he or she has received during any of the last three fiscal years more than ¥10 million in
direct compensation for his or her service as a specialist in law, accounting or tax, or as aconsultant from the Company, other than director compensations; or- he or she serves as an executive officer or director of a not-for-profit organization, and theCompany’s discretionary charitable contributions to the organization in any of the last
three fiscal years are more than ¥10 million and 2% of that organization’s annual grossrevenues.
* An “immediate family member” includes a person’s spouse, parents, children, siblings,
grand-parents, grand-children, mothers and fathers-in-law, sons and daughters-in-law,
spouses of siblings, grand-children-in-law, and brothers and sisters-in-law.
(b) Function of the outside Directors
Following the policy stated in “(a) Qualification for outside Directors and criteria for the
independency,” the Company has elected eight persons; Messrs. Nobuo Katsumata, Sadayuki
Sakakibara, George Buckley, Harufumi Mochizuki, Philip Yeo and Hiroaki Yoshihara and Mses.
Cynthia Carroll and Louise Pentland, as outside Directors under Article 2, Item 15 of theCompanies Act. Each outside Director is expected to enhance functions of the Company’s Boardof Directors through supervising execution of duties of Executive Officers and others from an
independent perspective, based on rich experiences and insights as top executive of major global
companies in the cases of Ms. Cynthia Carroll and Messrs. Nobuo Katsumata, Sadayuki
Sakakibara and George Buckley, based on deep insight into corporate legal matters and corporate
governance gained through her rich experience as the chief legal officer of major global
companies in the case of Ms. Louise Pentland, based on diverse experiences and insights in suchareas as public administration in the cases of Messrs. Harufumi Mochizuki and Philip Yeo andbased on rich experiences and insights in the area of global corporate management andaccounting in the case of Mr. Hiroaki Yoshihara.
(c) Supervising by the outside Directors
Outside Directors, comprising of majority of Directors, supervise execution of duties of
Executive Officers from an independent perspective. As described in the item “5) Internal audit
and audit by the Audit Committee” above, the Audit Committee, of which majority members areoutside Directors, receives reports and explanations about results of internal audits, accounting
audit and internal control audit, and verifies the matters reported or explained. In addition, theAudit Committee reports the results of its verification to the Board of Directors.

-61-

(d) Relationship between outside Directors and the Company
Each of outside Directors has no relationship with the Company regarding his or her
independency as described in “(a) Qualification for the outside Directors and criteria for the
independency.” In addition, there is no particular conflict of interest between each of outside
Directors and the Company.
The Company considers that all outside Directors are independent, and therefore has notified
them as independent directors to each of the Company’s listing stock exchanges in Japan.
In addition, the number of shares of the Company owned by each outside Director isdescribed in “5. Directors and Senior Management.”7) Status of accounting audit
Certified public accountants (CPAs) who executed accounting audit of the Company are as follows.
In addition, other CPAs and staff belonging to Ernst & Young ShinNihon LLC assisted execution of
accounting audit works as instructed by the three CPAs.
CPA having executed
accounting audit works

Audit corporation
to which CPA belongs

Koichi Tsuji

Ernst & Young ShinNihon LLC

Takahiro Saga

Ernst & Young ShinNihon LLC

Takuya Tanaka

Ernst & Young ShinNihon LLC

8) Compensation to Directors and Executive Officers(a) Policy on the determination of Compensation of Directors and Executive Officers[Method of Determination of Policy]
The Company’s Compensation Committee sets forth the policy on the determination of
the amount of compensation, etc. of each Director and Executive Officer pursuant toapplicable provisions of the Companies Act.
[Summary of Policy](i) Matters relating to both Directors and Executive Officers
Compensation will be commensurate with the ability required of, and the
responsibilities to be borne by, the Company’s Directors and Executive Officers, taking
into consideration compensation packages at other companies.
(ii) Matters relating to Directors
Compensation for Directors will consist of a monthly salary and a year-end
allowance.
- Monthly salary will be decided by making adjustments to basic salary thatreflect full-time or part-time status, committee membership and position,
travel from place of residence, etc.
- Year-end allowance will be a pre-determined amount equivalent to about
twenty percent of the Director’s annual income based on monthly salary,although this amount may be reduced depending on Company performance.
A Director concurrently serving as an Executive Officer will not be paidcompensation as a Director.
(iii) Matters relating to Executive Officers
Compensation for Executive Officers will consist of a monthly salary and aperformance-linked component.
- Monthly salary will be decided by adjusting a basic amount set in accordancewith the relevant position to reflect the results of an assessment.
- The performance-linked component will be set within a range equivalent toabout forty percent of the Executive Officer’s annual income, adjusted basedon Company and individual performance.

-62-

(iv) Miscellaneous
It was decided at the Compensation Committee meetings held on December 18,
2007 and March 26, 2008 that the compensation structure for Directors and Executive
Officers will be re-examined starting with the compensation for fiscal 2008 and that theretirement allowance will be abolished. The payment of retirement allowance toDirectors and Executive Officers due to the abolition of the retirement allowancesystem will be in an amount determined by the Compensation Committee at the time of
the retirement of a relevant Director or Executive Officer.
(b) Amount of compensation
Total amount of each type(Millions of yen)
Year-end
allowance andperformanceMonthly salarylinkedcomponent

Category

Total amount ofcompensation, etc.
(Millions of yen)

Directors(excluding outside
Directors)

127

114

13

6

Outside Directors

247

234

13

9

Executive Officers

1,946

1,329

616

29

2,322

1,678

644

44

Total

Number of
persons(Notes) 1. The number of Directors indicated excludes two Directors who concurrently serve as
Executive Officers.
2. The amount of compensation to Directors and outside Directors respectively includes themonthly salary for three Directors and two outside Directors, who retired due toexpiration of their term of office at the close of the 145th Annual General Meeting of
Shareholders held on June 20, 2014.
In addition, Directors or Executive Officers whose compensation from the Company and its
subsidiaries is not less than ¥100 million and the amount of their compensation are as follows:
Name

Company

Total amount of
Category compensation, etc.
(Millions of yen)

Total amount of each type(Millions of yen)
PerformanceMonthly salarylinked component

Executive
Hitachi, Ltd.
192
132
60
(The Company) Officer(Note 1)
Executive
Toshiaki
Hitachi, Ltd.
143
99
44
Higashihara (The Company) Officer(Note 1)
Hitachi East
Asia Ltd.
Junzo(Consolidated
Nakajima
Director
103
75
28
subsidiary)(Note 2)
(Note 3)(Notes) 1. Although concurrently serving as Director, Messrs. Hiroaki Nakanishi and Toshiaki
Higashihara do not receive compensation as Director.
2. Although concurrently served as Executive Officer of the Company for the fiscal year ended
March 31, 2015, Mr. Junzo Nakajima did not receive compensation as Executive Officer of
the Company.
3. The compensation paid in Hongkong dollar is converted into yen by average exchange rate
for each quarter of the fiscal year ended March 31, 2015.
HiroakiNakanishi-63-9) Information on shareholdings(a) Equity securities held for purposes other than pure investment
Number of stock names:
375 stock names
Total amount recorded in the balance sheet: ¥334,617 million(b) Stock name, number of shares, amount recorded in the balance sheet, and purpose of holding
regarding equity securities held for purposes other than pure investment(Fiscal year ended March 31, 2014)
Specified investment securities
Number of
Stock nameshares(shares)
Western Digital Corporation

Balance sheet
amount(Millions of yen)

12,500,000

Purpose of holding

and enhancing business
118,126 Maintaining
relationship

900,000

Received in relation to theetc. of Renesas
100,520 reorganization,
Technology Corp. which was anaffiliate of the Company
and enhancing business
10,854 Maintaining
transactions

Yungtay Engineering Co., Ltd.

31,817,168

and enhancing business
9,371 Maintaining
relationshipJapan Display Inc.

10,700,000

Renesas Electronics
Corporation
Central Japan Railway
Company

127,725,748

East Japan Railway Company

812,400

Received in relation to theof Hitachi Displays,
7,714 reorganization
Ltd. which was a subsidiary of theCompany
and enhancing business
6,179 Maintaining
transactions

Electric Power Development
Co., Ltd.

1,307,580

and enhancing business
3,811 Maintaining
transactions

Oclaro, Inc.

11,900,000

ShinMaywa Industries, Ltd.

4,000,337

Received as consideration for theof Oclaro, Inc. and
3,796 reorganization
Opnext, Inc. which was an affiliate of
the Company
Maintaining
3,768 transactions and enhancing business

NIPPON TELEGRAPH AND
TELEPHONECORPORATION

612,000

and enhancing business
3,438 Maintaining
transactions

Shin-Etsu Chemical Co., Ltd.

521,000

and enhancing business
3,072 Maintaining
transactions

The Chugoku Electric Power
Co., Inc.

1,812,622

and enhancing business
2,608 Maintaining
transactions

JX Holdings, Inc.

4,888,149and enhancing business
2,429 Maintaining
transactions

The Japan Steel Works, LTD.

5,050,000

and enhancing business
2,338 Maintaining
transactions

The Chiba Bank, Ltd.

3,269,000

and enhancing business
2,079 Maintaining
transactions

The Dai-ichi Life Insurance
Company, Limited

1,210,000

and enhancing business
1,815 Maintaining
transactions

JOYO BANK, Ltd.

2,956,000

and enhancing business
1,522 Maintaining
transactions

Chubu Electric Power Co., Inc.

1,200,254

and enhancing business
1,458 Maintaining
transactions-64-

Balance sheet
amount(Millions of yen)

Stock name

Number ofshares(shares)NKSJ Holdings, Inc.

500,000

NGK INSULATORS, LTD.

607,000

and enhancing business
1,326 Maintaining
transactions
and enhancing business
1,305 Maintaining
transactions

NIPPON EXPRESS CO., LTD.

2,541,000

and enhancing business
1,283 Maintaining
transactions

NOF Corporation

1,700,000

and enhancing business
1,269 Maintaining
transactions

Sapporo Holdings Limited

2,988,000

and enhancing business
1,213 Maintaining
transactions

Tokyo Tatemono Co., Ltd.

1,286,712

and enhancing business
1,138 Maintaining
transactions

Tohoku Electric Power Co.,Inc.

1,010,000

and enhancing business
1,074 Maintaining
transactions

Ono Pharmaceutical Co., Ltd.

120,000

and enhancing business
1,072 Maintaining
transactions

Kintetsu Corporation

2,842,913

and enhancing business
1,043 Maintaining
transactions

Toyo Machinery & Metal Co.,Ltd.
Kyushu Electric Power Co.
Inc.

1,810,331

1,037 Maintaining business relationship

Purpose of holding

and enhancing business
996 Maintaining
transactions
and enhancing businessShowa Denko K.K.
6,593,332
962 Maintaining
transactions(Note) Since the number of stock of which balance sheet amount exceeds 1% of the amount of theCompany’s common stock on the balance sheet is less than 30, the top 30 stocks in balance
sheet amount are listed.
790,000(Fiscal year ended March 31, 2015)
Specified investment securities
Stock name

Number ofshares(shares)

Balance sheet
amount(Millions of yen)

Purpose of holding

6,250,000

Received in relation to theetc. of Renesas
114,059 reorganization,
Technology Corp. which was anaffiliate of the Company
Maintaining
68,354 relationship and enhancing business

900,000

and enhancing business
19,570 Maintaining
transactions

Yungtay Engineering Co., Ltd.

31,817,168

and enhancing business
8,882 Maintaining
relationship

East Japan Railway Company

812,400

and enhancing business
7,831 Maintaining
transactions

Electric Power Development
Co., Ltd.

1,307,580

and enhancing business
5,295 Maintaining
transactions

ShinMaywa Industries, Ltd.

4,000,337

and enhancing business
5,100 Maintaining
transactions

NIPPON TELEGRAPH AND
TELEPHONECORPORATION

612,000

and enhancing business
4,526 Maintaining
transactions

Shin-Etsu Chemical Co., Ltd.

521,000

and enhancing business
4,089 Maintaining
transactions

Renesas Electronics
Corporation
Western Digital Corporation
Central Japan Railway
Company

127,725,748-65-

Balance sheet
amount(Millions of yen)

Stock name

Number ofshares(shares)

Seibu Holdings Inc.

1,286,900

and enhancing business
3,995 Maintaining
transactions

The Chiba Bank, Ltd.

3,269,000

and enhancing business
2,883 Maintaining
transactions

The Chugoku Electric Power
Co., Inc.

1,812,622

and enhancing business
2,838 Maintaining
transactions

Purpose of holding

Oclaro, Inc.

11,900,000

The Japan Steel Works, LTD.

5,050,000

Japan Display Inc.

5,474,400

JX Holdings, Inc.

4,888,149

Received as consideration for theof Oclaro, Inc. and
2,831 reorganization
Opnext, Inc. which was an affiliate of
the Company
Maintaining
2,550 transactions and enhancing business
Received in relation to theof Hitachi Displays,
2,364 reorganization
Ltd. which was a subsidiary of theCompany
and enhancing business
2,259 Maintaining
transactions

The Dai-ichi Life Insurance
Company, Limited
Sompo Japan Nipponkoa
Holdings, Inc.

1,210,000

and enhancing business
2,112 Maintaining
transactions

500,000

JOYO BANK, Ltd.

2,956,000

and enhancing business
1,867 Maintaining
transactions
and enhancing business
1,826 Maintaining
transactions

Chubu Electric Power Co., Inc.

1,200,254

and enhancing business
1,721 Maintaining
transactions

Ono Pharmaceutical Co., Ltd.

120,000

and enhancing business
1,629 Maintaining
transactions

NGK INSULATORS, LTD.

607,000

and enhancing business
1,556 Maintaining
transactions

NOF Corporation

1,700,000

and enhancing business
1,516 Maintaining
transactions

euglena Co., Ltd.

750,000

Sapporo Holdings Limited

2,988,000

Tohoku Electric Power Co.,Inc.

1,010,000

Maintaining and enhancing
1,482 cooperative relationship in the area of
R&D
and enhancing business
1,422 Maintaining
transactions
and enhancing business
1,379 Maintaining
transactionsWest Japan Railway Company

215,000

and enhancing business
1,355 Maintaining
transactions

2,842,913

and enhancing business
1,253 Maintaining
transactions

Kintetsu Corporationand enhancing business
1,238 Maintaining
transactions
and enhancing businessToho Gas Co., LTD.
1,524,471
1,068 Maintaining
transactions(Note) Since the number of stock of which balance sheet amount exceeds 1% of the amount of theCompany’s common stock on the balance sheet is less than 30, the top 30 stocks in balance
sheet amount are listed.
Tokyo Gas Co., Ltd.

1,638,000(c) Equity securities held for pure investment
None.

-66-

(2) Audit Fees
1) Fees to Certified Public Accountants
Fiscal year ended March 31, 2014
Category

Fiscal year ended March 31, 2015

Fees for audit
services(Millions of yen)

Fees for non-audit
services(Millions of yen)

Fees for audit
services(Millions of yen)

Fees for non-audit
services(Millions of yen)

The Company

629

25

554

35

Consolidated
subsidiaries

1,661

28

1,467

138

Total

2,290

53

2,021

173

2) Other fees
Audit fees paid by the Company and its consolidated subsidiaries to the Company’s accounting
auditor, Ernst & Young ShinNihon LLC Group (including Ernst & Young and its group firms which
belong to the same network as Ernst & Young ShinNihon LLC), were ¥3,460 million for the fiscal
year ended March 31, 2014, and ¥3,952 million for the fiscal year ended March 31, 2015,
respectively. These fees are mainly paid for audit services to its overseas consolidated subsidiaries.
3) Descriptions of non-audit services to the Company
Non-audit services to the Company in the fiscal year ended March 31, 2014 and the fiscal year
ended March 31, 2015 were various consulting services.
4) Policy on determination of audit fees
For determining the amount of audit fees, the Company conducts hearing of the audit plan andverify efficiency of audit services, including the number of days, hours for auditing, the number ofsubjects to be audited and the scope of audit, etc., and appropriateness of the estimate. The Company
also discusses with the accounting auditor taking into consideration the formation of auditors andaudit fees for the preceding fiscal year. In addition, the Audit Committee receives the audit plans of
the accounting auditors and the results of discussion between the auditors and Executive Officers of
the Company and approves the amount of the fees in advance of the Company’s decision.
V. Financial Information
Refer to the consolidated financial statements incorporated in this Annual Securities Report.

-67-VI. Stock-Related Administration for the Company
Fiscal year

From April 1 to March 31

Annual General
Meeting of
Shareholders

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

Record date

End of every fiscal year

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

Purchasing andselling fee

Free of charge

The Company’s method of public notice is through electronic public notice.
if the Company cannot use the above-mentioned method of public notice
Method of public notice However,
due to an accident or other inevitable reasons, Nihon Keizai Shimbun will be
adopted as its medium.
Special benefit for
None
Shareholders(Notes) 1. Under the Articles of Incorporation, distribution of surplus through dividend payment, if any, will
be made to shareholders of record as of March 31 and September 30 of each year. In addition, theCompany may make further distributions of surplus to shareholders of record as of anotherrecord date.
2. The Articles of Incorporation provide that a holder of shares representing less than one unit does
not have any other rights of a shareholder in respect of those shares, other than those specified in
the Articles of Incorporation. This includes:(1)
Rights under each item of Article 189, Paragraph 2 of the Companies Act;
(2)
Rights to be allotted rights to subscribe for free for new shares and stock acquisition rights
when such rights are granted to shareholders; or(3)
Rights stipulated in the Articles of Incorporation-68-VII. Reference Information on the Company
1. Information on a Parent Company, etc. of the Company
The Company has no parent company.
2. Other Reference Information
The Company filed the following documents during the period from the commencing date of the
fiscal year ended March 31, 2015 to the filing date of the Annual Securities Report.
(1)

Annual Securities Report and documents attached, and Confirmation
Letter(The 145th business term (from April 1, 2013 to March 31, 2014))

Filed with the Director of the
Kanto Local Finance Bureau
on June 20, 2014

(2)

Internal Control Report

Filed with the Director of the
Kanto Local Finance Bureau
on June 20, 2014(3)

Quarterly Report and Confirmation Letter(The First Quarter of the 146th business term (from April 1, 2014 toJune 30, 2014))

Filed with the Director of the
Kanto Local Finance Bureau
on August 8, 2014

(4)

Quarterly Report and Confirmation Letter(The Second Quarter of the 146th business term (from July 1, 2014
to September 30, 2014))

Filed with the Director of the
Kanto Local Finance Bureau
on November 12, 2014

(5)

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

Filed with the Director of the
Kanto Local Finance Bureau
on November 14, 2014

(6)

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

Filed with the Director of the
Kanto Local Finance Bureau
on February 4, 2015(7)

Quarterly Report and Confirmation Letter(The Third Quarter of the 146th business term (from October 1, 2014
to December 31, 2014))

Filed with the Director of the
Kanto Local Finance Bureau
on February 13, 2015(8)

Amended Shelf Registration Statement(Amended Shelf Registration Statement concerning the Shelf
Registration Statement filed on June 28, 2013)

Filed with the Director of the
Kanto Local Finance Bureau
on May 12, 2014
June 20, 2014
June 23, 2014
August 8, 2014
November 12, 2014
November 14, 2014
February 4, 2015 andFebruary 13, 2015-69-

Part II

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

-70-

Consolidated Financial Statements
Page
NumberConsolidated Financial Statements of Hitachi, Ltd. and Subsidiaries:
Consolidated Statements of Financial Position as ofMarch 31, 2015 and 2014, and April 1, 2013

F-2

Consolidated Statements of Profit or Loss andConsolidated Statements of Comprehensive Income for the years ended
March 31, 2015 and 2014

F-3

Consolidated Statements of Changes in Equity for the years ended
March 31, 2015 and 2014

F-4

Consolidated Statements of Cash Flows for the years ended
March 31, 2015 and 2014

F-5

Notes to Consolidated Financial Statements

F-6

Reports of Independent Registered Public Accounting Firm

F-1

F-79

Consolidated Financial Statements
Consolidated Statements of Financial Position
Millions of yen
As of March 31, 2015

As of March 31, 2014

As of April 1, 2013

701,7032,870,042
337,353
1,458,119
515,195
5,882,412

560,657
2,573,386
321,438
1,339,001
467,601
5,262,083

523,357
2,300,423
281,713
1,379,572
364,022
4,849,087

681,623

599,490

246,956

1,449,734
680,620
2,472,497
933,582
333,259
6,551,315
12,433,727

1,291,000
610,830
2,258,933
732,238
343,617
5,836,108
11,098,191

1,042,516
410,162
2,196,176
685,166
346,944
4,927,920
9,777,007

977,701
483,521296,425
1,426,523
759,191374,241
461,876
4,779,478

775,516
541,449
269,501
1,347,184
709,671296,265
360,858
4,300,444

685,316
286,430
285,168
1,241,036
729,081359,755
300,541
3,887,327

2,096,134
117,535
724,223420,015
3,357,907
8,137,385

1,717,020
99,742779,876
332,278
2,928,916
7,229,360

1,423,688
63,699937,853
306,8732,732,113
6,619,440

458,790
608,416
1,477,517
401,100(3,542)
2,942,281
1,354,061
4,296,342
12,433,727

458,790
617,496
1,277,970
317,547(3,146)
2,668,657
1,200,174
3,868,831
11,098,191

458,790622,946
907,970
70,567(1,565)2,058,708
1,098,859
3,157,567
9,777,007

AssetsCurrent assets
Cash and cash equivalents (note 25)
Trade receivables (notes 6, 7 and 25)
Lease receivables (notes 8 and 25)
Inventories (note 9)
Other current assets
Total current assets
Non-current assets
Investments accounted forusing the equity method (note 10)
Investments in securities andother financial assets (note 25)
Lease receivables (notes 8 and 25)
Property, plant and equipment (note 11)
Intangible assets (note 12)
Other non-current assets (note 13)
Total non-current assets
Total assets
Liabilities
Current liabilities
Short-term debt (note 25)
Current portion of long-term debt (notes 8 and 25)
Other financial liabilities (note 25)
Trade payables (note 14)
Accrued expenses
Advances received (note 7)
Other current liabilities (notes 15 and 29)
Total current liabilities
Non-current liabilities
Long-term debt (notes 8 and 25)
Other financial liabilities (note 25)
Retirement and severance benefits (note 16)
Other non-current liabilities (notes 13 and 15)
Total non-current liabilities
Total liabilities
EquityHitachi, Ltd. stockholders' equity
Common stock (note 17)
Capital surplus (note 17)
Retained earnings (notes 17 and 19)
Accumulated other comprehensive income (note 18)
Treasury stock, at cost (note 17)
Total Hitachi, Ltd. stockholders' equity
Non-controlling interests
Total equity
Total liabilities and equity

See accompanying notes to consolidated financial statements.

F-2

Consolidated Statements of Profit or Loss
Years ended March 31, 2015 and 2014

Millions of yen

Revenues
Cost of sales
Gross profit
Selling, general and administrative expenses
Other income (note 20)
Other expenses (note 20)
Financial income (note 21)
Financial expenses (note 21)
Share of profits of investments accounted for using the equity method (note 10)
EBIT (Earnings before interest and taxes)
Interest income
Interest charges
Income from continuing operations, before income taxes
Income taxes (note 13)
Income from continuing operations
Loss from discontinued operation (note 22)
Net income
Net income attributable to:
Hitachi, Ltd. stockholders
Non-controlling interests
Earnings per share from continuing operations,
attributable to Hitachi, Ltd. stockholders (note 23)
Basic
DilutedEarnings per share attributable to Hitachi, Ltd. stockholders (note 23)
Basic
Diluted2015
9,774,930(7,198,232)
2,576,698(1,935,373)
9,415(167,781)
7,727(3,284)46,657534,059
12,529(27,594)
518,994(122,075)
396,919(53,501)
343,418

2014
9,666,446(7,173,747)
2,492,699(1,887,901)
208,531(164,537)
33,446(1,931)
10,923
691,230
14,181(26,913)
678,498(146,540)
531,958(6,955)525,003

217,482
125,936

413,877
111,126

56.12
56.08

Yen
87.13
87.10

45.04
45.00

85.69
85.66

Consolidated Statements of Comprehensive Income
Years ended March 31, 2015 and 2014

Millions of yen
2015
343,418

2014
525,003

Remeasurements of defined benefit plans
Share of OCI of investments accounted for using the equity method
Total items not to be reclassified into net income

57,95727,0395,633
90,629102,732
64,206280
167,218

Items that can be reclassified into net income
Foreign currency translation adjustments
Net changes in cash flow hedges
Share of OCI of investments accounted for using the equity method
Total items that can be reclassified into net income

188,619(16,850)(74,604)
97,165

122,114(20,014)
26,093
128,193

187,794531,212295,411
820,414337,578
193,634

665,372
155,042

Net income
Other comprehensive income (OCI) (note 18)
Items not to be reclassified into net income
Net changes in financial assets measured at fair value through OCI

Other comprehensive income (OCI)
Comprehensive income
Comprehensive income attributable to:
Hitachi, Ltd. stockholders
Non-controlling interests

See accompanying notes to consolidated financial statements.

F-3

Consolidated Statements of Changes in Equity
Year ended March 31, 2015

Millions of yen
2015

Commonstock(note 17)
Balance at beginning of year

458,790

Accumulated
Total Hitachi,
TreasuryotherLtd.
comprehensive stock, at coststockholders'(note 17)
incomeequity(note 18)
1,277,970
317,547(3,146)
2,668,657

Retainedearnings(notes 17
and 19)

Capitalsurplus(note 17)
617,496

Noncontrollinginterests

Total equity

1,200,174

3,868,831

Changes in equity
Reclassified into retained earnings--

37,597(37,597)

-

-

-

-

Net income--

217,482--

217,482

125,936

343,418
187,794

Other comprehensive income

-

-

-

120,096-

120,096

67,698Dividends to Hitachi, Ltd. stockholders--(55,532)--(55,532)-(55,532)

Dividends to non-controlling interests

-

-

-

-

-

-

(32,578)(32,578)

Acquisition of treasury stock

-

-

-

-

(421)

(421)

-

(421)

Sales of treasury stock

-

3

-

-

25

28

-

28

Changes in non-controlling interests-(9,083)

-

1,054

-

(8,029)(7,169)(15,198)

Total changes in equity-(9,080)199,547

83,553(396)

273,624

153,887

427,511

Balance at end of year

458,790

608,416

1,477,517

401,100(3,542)

2,942,281

1,354,061

4,296,342

Year ended March 31, 2014

Millions of yen
2014

Balance at beginning of year
Changes in equity

Accumulated
Total Hitachi,
TreasuryotherLtd.
comprehensive stock, at coststockholders'(note 17)
incomeequity(note 18)
907,970
70,567(1,565)2,058,708

Retainedearnings(notes 17
and 19)

Capitalsurplus(note 17)

Commonstock(note 17)

Noncontrollinginterests

Total equity

1,098,859

3,157,567

458,790622,946

Reclassified into retained earnings
Net income

-

-

4,427
413,877(4,427)--

413,877

111,126

525,003

Other comprehensive income
Dividends to Hitachi, Ltd. stockholders
Dividends to non-controlling interests
Acquisition of treasury stock
Sales of treasury stock
Changes in non-controlling interests-

429(5,879)(48,304)-

251,495(88)(4,431)
2,850-

251,495(48,304)(4,431)
3,279(5,967)43,916(26,345)(27,382)

295,411(48,304)(26,345)(4,431)
3,279(33,349)

458,790(5,450)617,496

370,000
1,277,970

246,980
317,547(1,581)(3,146)609,949
2,668,657

101,315
1,200,174

711,264
3,868,831

Total changes in equity
Balance at end of year

See accompanying notes to consolidated financial statements.

F-4

Consolidated Statements of Cash Flows
Years ended March 31, 2015 and 2014

Millions of yen
2015

2014

343,418

525,003

481,02142,109121,467

455,343
43,116
146,543(46,589)7,897
55,016
16,355(201,423)(116,328)(19,724)(18,041)(65,602)
7,608
4,278
611,462
13,423
14,525(28,225)(159,360)
451,825(10,892)(11,939)(198,032)
4,597(400,550)(42,265)(80,315)
33,739(66,086)
84,150(56,702)425,710
14,58013,972(27,517)(119,968)
306,777(358,141)(128,808)(444,223)
32,52827,122302,899(391,598)(119,386)(432,871)
40,84035,634
259,697(152,842)(95,509)

121,616(12,696)(612,545)

129,677
23,337(550,179)

136,973
835,140(629,063)
3,171(55,443)(32,143)(421)
28(66,270)
777,069(378,741)
5,602(48,194)(25,882)(4,431)
16(25,232)(29,450)427(231)
233,206(879)
228,840

Effect of exchange rate changes on cash and cash equivalents
Net increase in cash and cash equivalents

68,560141,046

51,86237,300Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year

560,657
701,703523,357
560,657

Cash flows from operating activities:
Net income
Adjustments to reconcile net income to
net cash provided by operating activities
Depreciation and amortization
Impairment losses
Income taxes
Share of profits of investments accounted forusing the equity method
Financial income and expenses
Net (gain) loss on business reorganization and others
Losses on sale of property, plant and equipment
Increase in trade receivables
Increase in inventories
Increase in other assets
Increase (decrease) in trade payables
Decrease in retirement and severance benefits
Increase in other liabilities
Other
SubtotalInterest received
Dividends received
Interest paid
Income taxes paid
Net cash provided by operating activities
Cash flows from investing activities (note 24):
Purchase of property, plant and equipment
Purchase of intangible assets
Purchase of leased assets
Proceeds from sale of property, plant and equipment, and intangible assets
Proceeds from sale of leased assets
Collection of lease receivables
Purchase of investments in securities and other financial assets(including investments in subsidiaries andinvestments accounted for using the equity method)
Proceeds from sale of investments in securities and other financial assets(including investments in subsidiaries andinvestments accounted for using the equity method)Other
Net cash used in investing activities
Cash flows from financing activities (note 24):
Increase (decrease) in short-term debt, net
Proceeds from long-term debt
Payments on long-term debt
Proceeds from payments from non-controlling interests
Dividends paid to Hitachi, Ltd. stockholders
Dividends paid to non-controlling interests
Acquisition of common stock for treasury
Proceeds from sales of treasury stock
Purchase of shares of consolidated subsidiaries from
non-controlling interests
Proceeds from partial sales of shares of consolidated
subsidiaries to non-controlling interests
Other
Net cash provided by financing activities

See accompanying notes to consolidated financial statements.

F-5

Notes to Consolidated Financial Statements(1) Nature of Operations
Hitachi, Ltd. (the Company) is a corporation domiciled in Japan, whose shares are listed on the Tokyo Stock Exchange. The
accompanying consolidated financial statements comprise the Company, its subsidiaries and the Company’s interests inassociates and joint ventures. The Company’s and its subsidiaries’ businesses are global and diverse, and include
manufacturing and services in ten segments consisting of information and telecommunication systems, power systems,social infrastructure and industrial systems, electronic systems and equipment, construction machinery, high functional
materials and components, automotive systems, smart life and ecofriendly systems, others (logistics and other services) andfinancial services.
(2) Basis of Presentation
As the Company meets the requirements of a “Specified Company” pursuant to Article 1-2 of the Ordinance on
Terminology, Forms and Preparation Methods of Consolidated Financial Statements (Ordinance of the Ministry of Financeof Japan No. 28 of 1976), the consolidated financial statements of the Company have been prepared in accordance with
International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB), as
permitted by the provision of Article 93 of the Ordinance. The Company’s fiscal year begins on April 1 and ends on March
31 of the following calendar year. These are the Company’s first consolidated financial statements prepared in accordancewith IFRS. The date of transition to IFRS (the transition date) is April 1, 2013, and the Company applied IFRS 1 “First-time
Adoption of International Financial Reporting Standards” (IFRS 1). (See note 30.)
The Company’s consolidated financial statements have been prepared on a historical cost basis, except for derivative assets
and liabilities, financial assets and liabilities measured at fair value through profit or loss (FVTPL), financial assets
measured at fair value through other comprehensive income (FVTOCI) and assets and liabilities associated with defined
benefit plans.
The consolidated financial statements are presented in millions of Japanese yen, the functional currency of the Company.
Management of the Company has made a number of judgments, estimates and assumptions relating to the application of
accounting policies, reporting of revenues and expenses and assets and liabilities in the preparation of these consolidated
financial statements. Actual results could differ from those estimates.
Estimates and assumptions are continually evaluated. The effect of a change in accounting estimates, if any, is recognized in
the reporting period in which the change was made and in future periods.
The information regarding judgments used in applying accounting policies that could have a material effect on the
Company’s consolidated financial statements is included in the following notes:
・note 3. (a) Basis of Consolidation・note 3. (d) Financial Instruments and note 25. Financial Instruments and Related Disclosures
The information regarding uncertainties arising from assumptions and estimates that could result in material adjustments inthe subsequent consolidated financial statements is included in the following notes:
・note 3. (h) Impairment of Non-financial Assets
・note 3. (i) Retirement and Severance Benefits and note 16. Employee Benefits
・note 3. (j) Provisions, note 3. (k) Contingencies, note. 15. Provisions and note 29. Commitments and Contingencies
・note 3. (l) Revenue Recognition and note 7. Construction Contracts
・note 3. (m) Income Taxes and note 13. Deferred Taxes and Income Taxes(3) Summary of Significant Accounting Policies(a) Basis of Consolidation(i) Subsidiaries
Subsidiaries are entities controlled by the Company. Control is obtained when the Company has risks or rights tovariable returns from its involvement with the entity and has the ability to use its power over the entity to affectthe variable returns.
The Company consolidates all subsidiaries from the date on which the Company acquires control until the date on
which the Company loses control.

F-6Notes to Consolidated Financial Statements
Subsidiaries’ financial statements are adjusted, if necessary, when their accounting policies differ from those of
the Company.
Changes in ownership interests in subsidiaries without a loss of control are accounted for as equity transactions.
Changes in ownership interests in subsidiaries with a loss of control are accounted for by derecognizing assets
and liabilities, non-controlling interests, equity and accumulated other comprehensive income (AOCI)
attributable to the subsidiaries.
(ii)

Associates and Joint Ventures
Associates are entities over which the Company has the ability to exercise significant influence over theiroperational and financial policies, but which are not controlled by the Company.
Joint ventures are jointly controlled by more than one party, including the Company, and require unanimous
agreement of all parties in deciding operational and financial policies of the entity.
Investments in associates and joint ventures are accounted for using the equity method. The consolidated
financial statements of the Company include changes in profit or loss and other comprehensive income (OCI) of
these associates and joint ventures from the date on which the Company obtains significant influence or joint
control to the date on which it loses significant influence or joint control. The financial statements of theassociates and joint ventures are adjusted, if necessary, when their accounting policies differ from those of theCompany.

(iii) Structured Entities
The Company consolidates structured entities when it is exposed or has rights to variable returns from its
involvement with such entities and has the ability to affect those returns through its power over the entities. The
consolidated structured entities are primarily trusts for securitizations of trade receivables and lease receivables.
(b) Cash Equivalents
Cash equivalents are highly liquid investments with insignificant risk of changes in value, with original maturities ofthree months or less from the date of acquisition.
(c) Foreign Currency Translation
The consolidated financial statements are presented in Japanese yen, which is the Company’s functional currency.
(i)

Foreign Currency Transactions
Foreign currency transactions are converted into the functional currency of each company using the exchange rate
prevailing at the transaction date or a rate that approximates such rate. Monetary assets and liabilities
denominated in foreign currencies are converted into the functional currency using the exchange rate at the end of
the reporting period. Foreign exchange gains and losses resulting from the currency conversion and settlement arerecognized in profit or loss, except where gains and losses on assets or liabilities are recognized in OCI, foreignexchange effects relating to such assets or liabilities are also recognized in OCI, and presented in AOCI.

(ii)

Foreign Operations
Assets and liabilities of foreign entities are translated into Japanese yen using the exchange rate at the end of thereporting period, and revenue and expense items are translated using the average exchange rates during the period.
Gains or losses derived from translating foreign entities’ financial statements are recognized in OCI, andpresented in AOCI.

(d) Financial Instruments
The Company has adopted IFRS 9 “Financial Instruments” (IFRS 9) (issued in November 2009, amended in October2010).

F-7

Notes to Consolidated Financial Statements(i)

Non-derivative Financial Assets
The Company initially recognizes trade and other receivables on the date such receivables arise. All otherfinancial assets are initially recognized at the transaction date, on which the Company becomes a party to theagreement.
The Company derecognizes financial assets when contractual rights to cash flows from the financial assets expire
or when the contractual rights to receive cash flows from the financial assets are transferred in transactions where
the risks and economic rewards of owning the financial assets are substantially transferred. In transactions where
the risks and economic rewards of owning the financial assets are neither substantially transferred nor retained,
the Company continues to recognize the financial assets to the extent of its continuing involvement and only
derecognizes such financial assets when its control is transferred.
The classification and measurement model of non-derivative financial assets is summarized as follows:
Financial Assets Measured at Amortized Cost
Financial assets are subsequently measured at amortized cost when they meet the following requirements:
・The financial asset is held within a business model the objective of which is to hold the asset to collectcontractual cash flows.
・The contractual terms of the financial asset provide cash flows on specified dates that are solely payments ofprincipal and interest on the principal amount outstanding.
Financial assets measured at amortized cost are initially measured at fair value (including direct transaction costs).
The carrying amount of financial assets measured at amortized cost is subsequently measured using the effective
interest method. Interest accrued on financial assets measured at amortized cost is included in Interest income inthe consolidated statements of profit or loss.
FVTOCI Financial Assets
The Company holds certain equity instruments with the purpose of expanding its revenue base by maintaining
and strengthening business relations with the investees. These equity instruments are classified as FVTOCI
financial assets by designation. They are initially and subsequently measured at fair value, and the changes in fairvalue are recognized in OCI. The cumulative amount of OCI is recognized in equity as AOCI. Dividends onequity instruments designated as FVTOCI are recognized in profit or loss, except where they are considered to bea return of the investment.
FVTPL Financial Assets
Equity instruments not designated as FVTOCI financial assets and debt instruments not classified as financial
assets measured at amortized cost are classified as FVTPL financial assets. These instruments are subsequently
measured at fair value and the changes in fair value are recognized in profit or loss.
Impairment of Financial Assets Measured at Amortized Cost
On a regular basis, but no less frequently than at the end of each quarterly reporting period, the Company
evaluates financial assets measured at amortized cost for impairment. Impairment is deemed to have occurred
when there is an objective evidence of impairment after initial recognition and when the estimated future cash
flows from the financial assets falls below their respective carrying amounts. Objective evidence of impairment
includes historical credit loss experience, existence of overdue payments, extended payment terms, negativeevaluation by third party credit rating agencies, and deteriorated financial position and operating results, such as acapital deficit.
Impairment losses on debt securities are recognized when the carrying amount of the financial asset exceeds
either its estimated future cash flows discounted by the initial effective interest rate or its estimated fair value
using the observable market price, and measured as the difference.
Assessing impairment losses on trade receivables and other receivables requires a considerable amount of
judgment, involving historical experience and analysis, including the current creditworthiness of each customer.
The Company measures an impairment loss based on the credit loss ratio calculated taking into consideration
factors including historical experience or the estimate of collectible amount after assessing multiple potential

F-8

Notes to Consolidated Financial Statements
risks associated with the country in which a debtor conducts business or business environment including special
business customs particular to the region.
Impairment losses on debt instruments directly reduce the carrying amount of the assets, while the impairment
losses on trade receivables and other receivables indirectly reduce the carrying amount through the use of anallowance account. For trade receivables and other receivables, account balances are generally written off against
the allowance only after all means of collection have been exhausted and the potential for recovery is consideredremote. When subsequent events or circumstances decrease the amount of the impairment loss recognized, theimpairment loss is reversed through profit or loss.
(ii)

Non-derivative Financial Liabilities
The Company initially recognizes debt instruments on the date of issuance. All other financial liabilities are
initially recognized at the transaction date, on which the Company becomes a party to the agreement.
The Company derecognizes financial liabilities when extinguished, when the obligation in the contract isredeemed or the liability is discharged, cancelled or expires.
Non-derivative financial liabilities the Company holds include bonds, debts, trade payables and other financial
liabilities. They are initially measured at fair value (less direct transaction costs), and bonds and long-term debt
are subsequently measured at amortized cost using the effective interest method. Interest accrued on thesefinancial liabilities is included in Interest charges in the consolidated statements of profit or loss.

(iii) Derivatives and Hedge Accounting
The Company uses derivative instruments including forward exchange contracts, cross currency swaps andinterest rate swaps in order to hedge foreign currency exchange risks and interest rate risks. All derivatives aremeasured at fair value irrespective of the objective and intent of holding them.
The Company accounts for hedging derivatives as follows:・ Fair value hedge: a hedge of the fair value of a recognized asset or liability or of an unrecognized firm
commitment. The changes in fair value of the recognized assets or liabilities or unrecognized firm
commitments and the related derivatives are both recorded in profit or loss if the hedge is considered highly
effective.
・ Cash flow hedge: a hedge of a forecast transaction or of the variability of cash flows to be received or paid
related to a recognized asset or liability. The changes in fair value of the derivatives designated as cash flow
hedges are recorded in OCI if the hedge is considered highly effective. This treatment continues until profit orloss is affected by the variability of cash flows or the unrecognized firm commitment of the designatedhedged item, at which point changes in fair value of the derivative are recognized in profit or loss.
The Company follows the documentation requirements as prescribed by International Accounting Standards(IAS) 39 “Financial Instruments: Recognition and Measurement,” which includes the risk management objective
and strategy for undertaking various hedge transactions. In addition, a formal assessment is made at the hedge’s
inception and subsequently on a periodic basis, as to whether the derivative used in hedging activities is highly
effective in offsetting changes in fair values or cash flows the of hedged items. Hedge accounting is discontinued
if a hedge becomes ineffective.
(iv) Offsetting Financial Assets and Liabilities
Financial assets and liabilities are offset and reported as net amounts in the consolidated statements of financial
position, only when the Company currently has a legally enforceable right to set off the recognized amounts andintends to settle on a net basis or to realize the asset and settle the liability simultaneously.
(e) Inventories
Inventories are stated at the lower of cost or net realizable value. Cost is determined by the specific identification
method or by the moving average method for finished goods, semi-finished goods and work in process, and generally
by the moving average method for raw materials. Net realizable value is the estimated selling price in the ordinary
course of business less the estimated costs of completion and the estimated costs necessary to sell.

F-9Notes to Consolidated Financial Statements(f)

Property, Plant and Equipment
The Company uses the cost method to measure property, plant and equipment. They are stated at cost, less accumulated
depreciation and accumulated impairment losses. Acquisition cost includes direct costs of acquisition, costs of
dismantling, removing and restoration of the assets. Property, plant and equipment are principally depreciated using thestraight-line method over the following estimated useful lives for major classes of assets:
Buildings and structures
2 to 60 years
Machinery, equipment and vehicles
2 to 20 years
Tools, furniture and fixtures
2 to 20 years
Estimated useful lives and the method of depreciation are reviewed at the fiscal year end. Changes in estimated useful
lives or depreciation method are accounted for on a prospective basis as a change in accounting estimate.

(g) Goodwill and Other Intangible Assets(i) Goodwill
Goodwill is stated at cost less any accumulated impairment losses in the consolidated statements of financial
position.
(ii) Other Intangible Assets
The Company applies the cost model to intangible assets and states such assets at cost less accumulated
amortization and impairment losses.
Intangible assets with finite useful lives are amortized generally using the straight-line method over the following
estimated useful lives for major classes of assets:
Software for internal use
2 to 10 years
Software for sale
2 to 10 years
Other
2 to 20 years(h) Impairment of Non-Financial Assets
For each non-financial asset, the Company reviews the carrying amount and tests for impairment when there are eventsor circumstances indicating an asset’s carrying amount may not be recoverable. For an asset that does not generate cash
flows that are largely independent of the cash flows from other assets, the Company considers indicators of impairment
based on a cash generating unit (CGU) or a group of CGUs. Irrespective of any indicators of impairment, the Company
tests goodwill and intangible assets with indefinite-lives for impairment annually, mainly in the fourth quarter, by
estimating the recoverable amount of each CGU (or group of CGUs) to which such assets are allocated.
The Company measures the recoverable amount of an asset or a CGU (or a group of CGUs) as the higher of fair valueless costs of disposal and value in use. In measuring fair values, the Company and its subsidiaries primarily use theincome approach (present value technique) based on the estimated future cash flows expected to result from the use of
the asset and its eventual disposal or the market approach to derive reasonable estimates of values in orderly market
transactions, such as comparisons of similar public companies and the current gross value of the asset. The Company
consults with outside specialists, as appropriate, depending on the complexity of estimating fair values. Value in use iscalculated by the estimated future cash flows based on business plans approved by management, discounted at thediscount rate which is derived from the weighted average cost of capital. The business plan used is based on external
information, reflects historical experiences, and generally has a maximum of five years. Since the Company and its
subsidiaries are engaged in a wide range of business activities from development, production and sales of diverse
products and the provision of various services, appropriate external information for each business activity is used forevaluating value in use for each business. Estimated cash flows beyond the period covered by the business plan arecalculated using the estimated growth rate not exceeding the long-term average growth rate of the market to which theasset belongs.
If the carrying amount of the asset or the CGU (or the group of CGUs) exceeds its recoverable amount, an impairment
loss is recognized at the excess amount.
For an asset or a CGU (or a group of CGUs) other than goodwill, its recoverable amount is subsequently estimatedwhen there is a significant change in facts and circumstances and there is an indication that an impairment loss
previously recognized on the asset may no longer exist or has decreased. If the estimated recoverable amount exceeds

F-10Notes to Consolidated Financial Statements
the carrying amount, the impairment loss recognized previously is reversed to the extent of the carrying amount thatwould have been recorded, net of depreciation or amortization, if impairment had not been recognized previously.
(i)

Retirement and Severance Benefits
The Company and certain subsidiaries have defined benefit pension plans and severance lump-sum payment plans toprovide retirement and severance benefits to employees. The present value of defined benefit obligations and retirement
benefit costs are measured based on the projected unit credit method.
The present value of defined benefit obligations and the fair value of plan assets are remeasured as of the end ofreporting period. Actuarial differences arising during the year and changes in fair value of plan assets (excludinginterest income) are recognized in OCI and are not subsequently reclassified into profit or loss. Any prior service cost,which arises at the time of a plan amendment, is recognized immediately in profit or loss when such an amendment
occurs.
The present value of defined benefit obligations less the fair value of plan assets is presented as the net amount ofdefined benefit liability or asset in non-current liabilities or assets.

(j)

Provisions
The Company recognizes provisions when it has a present obligation (legal or constructive) as a result of past events, it
is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and theamount of obligation can be reliably estimated.
When the time to settle an obligation is expected to be long, and thus the time value of money is material, the amountof a provision is measured at the present value of the amount of expenditures expected to be required to settle theobligation.

(k) Contingencies
The Company discloses contingent liabilities in accordance with IAS 37 “Provisions, Contingent Liabilities andContingent Assets” if an obligation does not meet the recognition criteria of provisions prescribed above in (j)Provisions, excluding those where the possibility of an outflow of resources is remote.
The Company and its subsidiaries have financial guarantee contracts that require them to make payments tocompensate the holder for a loss it incurs if a specified debtor defaults on payment based on the terms of a debt
instrument.
(l)Revenue Recognition(i) Sale of Goods
Revenue from the sale of goods is recognized when all of the following conditions are met.
 The significant risks and rewards of ownership of the goods have been transferred to the customer
 The Company has neither continuing managerial involvement nor effective control over the goods sold
 The amount of revenue and the costs incurred or to be incurred in respect of the transaction can be measured
reliably It is probable that the economic benefits associated with the transaction will flow to the Company
Revenue from the sale of goods is recognized upon delivery of goods to the customer. Typical revenue is from thesale of information technology system products, software licenses, construction equipment, disk drives, airconditioners, high functional materials, cable products, automotive equipment, semiconductor manufacturing
equipment, test and measurement equipment, railway vehicles, medical devices, industrial machinery andequipment, elevators and escalators. Revenue from a software arrangement that requires significant production,
modification or customization of software is recognized using the percentage of completion method, provided
that there are reasonable and reliable estimates related to contract revenue, cost and the extent of progress toward
completion.
(ii)

Rendering of Services
Revenue from the rendering of services is recognized when all of the following conditions are met.
 The stage of completion of the transaction at the end of the reporting period can be measured reliably
 The amount of revenue and the costs incurred for the transaction at the end of the reporting period can bemeasured reliably

F-11Notes to Consolidated Financial Statements
 It is probable that the economic benefits associated with the transaction will flow to the Company
Service revenues from facility maintenance, facility operations, outsourcing, logistics and others are recognized
as services are provided. Revenue from long-term fixed price service contracts such as support or maintenancecontracts is recognized ratably over the contractual period. If historical data shows that service cost does not
accrue ratably over the contractual period and the service is rendered in proportion to the accrual of the cost forthe service, revenue is recognized based on the pattern of the cost accrual. Finance lease income is recognizedusing the effective interest method, and operating lease income is recognized on a straight-line basis over the termof the lease.
(iii) Construction Contracts
The operating cycles of construction contracts, such as infrastructure systems, are generally greater than one year.
Revenues from these long-term construction contracts are recognized using the percentage of completion method,
provided that the progress of the construction can be reliably estimated. Revenue under the percentage ofcompletion method is calculated by the latest estimate of the total selling price multiplied by the ratio of the cost
incurred to date to the estimated total cost of the construction. Any anticipated losses on fixed price contracts are
expensed in profit or loss when such losses are estimated. When the outcome of a construction contract cannot be
reliably estimated, revenue is recognized only to the extent of contract costs incurred when recoverability ishighly probable, and contract costs are recognized as an expense in the period in which they are incurred.
(iv) Multiple Element Transactions
The Company offers multiple solutions to meet its customers’ needs. Those solutions may involve the delivery or
performance of multiple elements, such as goods and services, and performance may occur at different points intime or over different periods of time. When one element is delivered prior to the other in an arrangement,
revenue is deferred until the last element is delivered, unless transactions are such that the delivered item has
value to the customer on a standalone basis, or delivery or performance of the undelivered item is considered
probable and substantially in the control of the Company if the arrangement includes a general right of return
relative to the delivered item.
If both described conditions above are met, each element in an arrangement is considered to be separately
identifiable, and consideration is allocated to the separately identifiable components of a single arrangement
based on the relative selling price of each component. The Company determines the relative selling price bytaking into account various factors such as an overall market conditions, including geographically or regionallyspecific market factors, competitors’ prices for similar items, profit objective and pricing practices.
(m) Income Taxes
Deferred tax assets and liabilities resulting from temporary differences and others are accounted for based on the asset
and liability approach. A deferred tax liability is not recognized for temporary differences arising from goodwill,
temporary differences arising from an asset or liability in a transaction other than a business combination, which at thetime of transaction affects neither accounting nor taxable income; and future taxable difference arising frominvestments in subsidiaries, associates and joint ventures where that the Company is able to control the timing ofreversal of the temporary difference while it is probable that the temporary difference will not reverse in the foreseeable
future. A deferred tax asset is recognized to the extent that it is probable that future taxable income will be available
against which unused tax losses, unused tax credits and future deductible temporary differences can be utilized. Current
tax and deferred tax on items recognized in OCI are also recognized in OCI.
Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years
in which those temporary differences are expected to be reversed. The effect on deferred tax assets and liabilities of achange in tax rates is recognized in profit or loss and OCI in the period that includes the enactment date.
(n) Consumption Tax
Consumption tax collected and remitted to taxing authorities is excluded from revenues, cost of sales and expenses in
the consolidated statements of profit or loss.
(o) Earnings per Share
Basic earnings per share (EPS) for net income attributable to Hitachi, Ltd. stockholders is calculated based on theweighted average number of ordinary shares outstanding during the period. Diluted EPS for net income attributable to
Hitachi, Ltd. stockholders is calculated based on the sum of weighted average number of ordinary shares outstanding
during the period and the conversion of securities with dilutive effects or the number of authorized shares.

F-12

Notes to Consolidated Financial Statements(p) Business Combinations
Business combinations are accounted for using the acquisition method. Consideration is measured as the sum of the fairvalue of the consideration transferred at acquisition date and the non-controlling interests in the acquiree. The
Company determines, on a transaction by transaction basis, whether to measure non-controlling interests at fair value
or by the appropriate share in the fair value of identifiable net assets of the acquiree. Acquisition related costs are
expensed in the period in which the costs are incurred.
(q) New Accounting Standards not yet Adopted by the Company
The following table lists the principal new accounting standards and interpretations issued or amended prior to theapproval date of the consolidated financial statements that are not yet adopted by the Company as of the reporting date.
The Company is currently evaluating the potential impact of adopting these new standards and amendments on its
financial position and business performance.
IFRSs

Title

IFRS 15

Revenue from Contracts
with Customers
Financial Instruments

IFRS 9Mandatory effective To be adopted bydate
the Company(Fiscal year beginning on
or after)January 1, 2017
January 1, 2018

F-13

To be
determined
To bedetermined

Description of new standards andamendments

Revised accounting standard forrevenue recognition and disclosure
Amendments for hedge accounting(amended in November 2013)
Amendments for the classificationand measurement of financial
instruments, and adoption of
expected credit loss impairment
model for financial assets(amended in July 2014)

Notes to Consolidated Financial Statements(4) Segment Information
Business Segments
The operating segments of the Company are the components for which separate financial information is available and whichis evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing
performance. The Company has aggregated certain operating segments into reportable segments for financial reporting
purposes so that financial statement users better understand the Company’s financial position and business performance.
The Company discloses its business in ten reportable segments corresponding to categories of activities classified primarily
by markets, products and services. The primary products and services included in each segment are as follows:
Information & Telecommunication Systems:
Systems integration, Consulting, Cloud services, Servers, Storage, Software, Telecommunication & network and ATMs
Power Systems:
Thermal, Nuclear and Renewable energy power generation systems and Transmission & distribution systems
Social Infrastructure & Industrial Systems:
Industrial machinery and plants, Elevators, Escalators and Railway systems
Electronic Systems & Equipment:
Semiconductor manufacturing equipment, Test and measurement equipment, Advanced industrial products, Medical
electronics equipment and Power tools
Construction Machinery:Hydraulic excavators, Wheel loaders and Mining machinery
High Functional Materials & Components:
Semiconductor and display related materials, Circuit boards and materials, Automotive parts (molded plastics, etc.), Energy
storage devices, Specialty steels, Magnetic materials and components, High grade casting components and materials andWires and cables
Automotive Systems:
Engine management systems, Electric power train systems, Drive control systems and Car information systems
Smart Life & Ecofriendly Systems:
Air-conditioning equipment, Room air conditioner, Refrigerators and Washing machines
Others (Logistics and Other services):
Logistics, Optical disk drives, Property management and others
Financial Services:
Leasing and Loan guarantees

F-14Notes to Consolidated Financial Statements
The following tables show business segment information for the years ended March 31, 2015 and 2014.
Revenues from Outside Customers

Information & Telecommunication Systems
Power Systems
Social Infrastructure & Industrial Systems
Electronic Systems & Equipment
Construction Machinery
High Functional Materials & Components
Automotive Systems
Smart Life & Ecofriendly Systems
Others (Logistics and Other services)
Financial Services
Subtotal
Corporate items
Total

Millions of yen
2015
2014
1,813,757
1,746,563
401,540
648,885
1,386,707
1,281,951
1,017,981
987,820
812,174
792,028
1,459,273
1,311,609
934,367
890,096
717,667
703,408
896,468
989,051
334,238
314,408
9,774,172
9,665,819
758
627
9,774,930
9,666,446

Revenues from Intersegment Transactions

Information & Telecommunication Systems
Power Systems
Social Infrastructure & Industrial Systems
Electronic Systems & Equipment
Construction Machinery
High Functional Materials & Components
Automotive Systems
Smart Life & Ecofriendly Systems
Others (Logistics and Other services)
Financial Services
Subtotal
Corporate items and Eliminations
Total

Millions of yen
2015
2014
220,265
197,405
65,17578,925
212,799
224,264
113,715
129,781
3,618
10,96070,16173,5102,567
2,330
36,60340,628377,783
465,901
22,05328,267
1,124,739
1,251,971(1,124,739)(1,251,971)-

Total Revenues

Information & Telecommunication Systems
Power Systems
Social Infrastructure & Industrial Systems
Electronic Systems & Equipment
Construction Machinery
High Functional Materials & Components
Automotive Systems
Smart Life & Ecofriendly Systems
Others (Logistics and Other services)
Financial Services
Subtotal
Corporate items and Eliminations
Total

Millions of yen
2015
2014
2,034,022
1,943,968
466,715
727,810
1,599,506
1,506,215
1,131,696
1,117,601
815,792
802,988
1,529,434
1,385,119
936,934
892,426
754,270744,036
1,274,251
1,454,952
356,291
342,675
10,898,911
10,917,790(1,123,981)(1,251,344)
9,774,930
9,666,446

F-15

Notes to Consolidated Financial Statements
Segment Profit (Loss)

Information & Telecommunication Systems
Power Systems
Social Infrastructure & Industrial Systems
Electronic Systems & Equipment
Construction Machinery
High Functional Materials & Components
Automotive Systems
Smart Life & Ecofriendly Systems
Others (Logistics and Other services)
Financial Services
Subtotal
Corporate items and Eliminations
Total
Interest income
Interest charges
Income from continuing operations,
before income taxes

Millions of yen
2015
2014
106,049
114,970
3,812
178,564
106,524
78,024
63,771
52,34360,59963,160123,943
104,151
35,0193,494
34,553
28,10851,01322,74235,43632,791
620,719678,347(86,660)
12,883534,059
691,230
12,52914,181(27,594)(26,913)518,994

678,498

Segment profit (loss) is measured by EBIT.
Intersegment transactions are generally recorded at the same prices used in transactions with third parties. Corporate items
include unallocated corporate expenses, such as expenditures for leading-edge R&D and others.
Total Assets

Information & Telecommunication Systems
Power Systems
Social Infrastructure & Industrial Systems
Electronic Systems & Equipment
Construction Machinery
High Functional Materials & Components
Automotive Systems
Smart Life & Ecofriendly Systems
Others (Logistics and Other services)
Financial Services
Subtotal
Corporate assets and Eliminations
Total

Millions of yen
As of March As of March
31, 2015
31, 2014
1,729,392
1,687,163
1,241,065
1,227,692
1,670,977
1,398,820
1,060,070
997,694
1,110,061
1,144,804
1,655,118
1,371,023
716,166
672,685
470,797447,038
1,919,373
1,758,456
2,953,614
2,595,680
14,526,633
13,301,055(2,092,906)(2,202,864)
12,433,727
11,098,191

Corporate assets mainly consist of cash and cash equivalents, investments in securities and other financial assets.

F-16

Notes to Consolidated Financial Statements
Investments Accounted for Using the Equity Method

Information & Telecommunication Systems
Power Systems
Social Infrastructure & Industrial Systems
Electronic Systems & Equipment
Construction Machinery
High Functional Materials & Components
Automotive Systems
Smart Life & Ecofriendly Systems
Others (Logistics and Other services)
Financial Services
Subtotal
Corporate items and Eliminations
Total

Millions of yen
As of March As of March
31, 2015
31, 2014
10,756
10,138473,311433,257
39,324
16,694525
332
31,602
23,05831,87939,025
6,753
5,685
23,79818,441
6,491
5,323
19,341
18,255643,780
570,208
37,84329,282
681,623
599,490

Depreciation and Amortization

Information & Telecommunication Systems
Power Systems
Social Infrastructure & Industrial Systems
Electronic Systems & Equipment
Construction Machinery
High Functional Materials & Components
Automotive Systems
Smart Life & Ecofriendly Systems
Others (Logistics and Other services)
Financial Services
Subtotal
Corporate items and Eliminations
Total

Millions of yen
2015
2014
97,98793,021
10,34017,592
31,82329,403
21,86019,60539,59638,98869,65860,532
42,17634,86520,934
22,53447,942
44,53994,85890,354477,174
451,433
3,847
3,910
481,021455,343

Depreciation consists of depreciation of property, plant and equipment and investment properties.
Impairment Losses

Information & Telecommunication Systems
Power Systems
Social Infrastructure & Industrial Systems
Electronic Systems & Equipment
Construction Machinery
High Functional Materials & Components
Automotive Systems
Smart Life & Ecofriendly Systems
Others (Logistics and Other services)
Financial Services
Total

Millions of yen
2015
2014
6,772
2,957
13,260
2,150
1,774
1,575
4,261
8,543
487
3,866
6,668
5,122
784
8,950
3,010
1,734
2,742
6,027
2,351
2,192
42,10943,116

Impairment losses mainly consist of impairment losses recognized on property, plant and equipment, investment properties
and intangible assets.

F-17

Notes to Consolidated Financial Statements
Share of Profits of Investments Accounted for Using the Equity Method
Millions of yen
2015
2014
Information & Telecommunication Systems
1,272
935
Power Systems
22,375101
Social Infrastructure & Industrial Systems
6,613
459
Electronic Systems & Equipment(27)
217
Construction Machinery
1,454
243
High Functional Materials & Components
4,436
4,173
Automotive Systems
943
1,346
Smart Life & Ecofriendly Systems
5,271
4,627
Others (Logistics and Other services)367
372
Financial Services
1,640
1,311
Subtotal
44,344
13,784
Corporate items and Eliminations
2,313(2,861)
Total
46,657
10,923
Capital Expenditures

Information & Telecommunication Systems
Power Systems
Social Infrastructure & Industrial Systems
Electronic Systems & Equipment
Construction Machinery
High Functional Materials & Components
Automotive Systems
Smart Life & Ecofriendly Systems
Others (Logistics and Other services)
Financial Services
Subtotal
Corporate items and Eliminations
Total

Millions of yen
2015
2014
116,340
107,738
31,37025,12644,26544,28526,04032,313
20,97635,945
81,10569,65989,393
83,871
19,912
25,10158,37471,025
137,610
128,015625,385
623,078
4,541
3,755
629,926
626,833

Capital expenditures represent additions to property, plant and equipment, investment properties and intangible assets.

F-18

Notes to Consolidated Financial Statements
Geographic Information
The following table shows revenues attributed to geographic areas based on the location of the customers for the years
ended March 31, 2015 and 2014.

Japan
Asia
North America
EuropeOther Areas
Overseas Revenues Subtotal
Total Revenues

Millions of yen
2015
2014
5,220,349
5,310,345
2,178,222
2,127,480
1,064,127
914,553
841,966
772,698
470,266
541,370
4,554,581
4,356,101
9,774,930
9,666,446

Revenues in China for the years ended March 31, 2015 and 2014 were ¥1,110,351 million and ¥1,081,991 million,
respectively. Revenues from outside customers attributable to any individual country and region other than Japan and China
were not material for the years ended March 31, 2015 and 2014.
The following table shows the balances of property, plant and equipment, investment properties and intangible assets foreach geographic area as of March 31, 2015 and 2014.
Millions of yen
As of March As of March
31, 2015
31, 2014
Japan
2,084,888
1,970,226
Asia
494,038
454,540
North America
451,788
230,169
Europe333,133
301,013
Other Areas
70,291
68,274
Subtotal
3,434,138
3,024,222
Corporate items and Eliminations
28,167
24,119Total
3,462,305
3,048,341
The balances of property, plant and equipment, investment properties and intangible assets in any individual country andregion other than Japan are not material as of March 31, 2015 and 2014.
Significant Customer Information
There is no concentration of revenues to a specific customer for the year ended March 31, 2015 and 2014.

F-19

Notes to Consolidated Financial Statements(5) Business Acquisitions and Divestitures

On February 7, 2015, Hitachi Data Systems Corporation (HDS), a subsidiary of the Company in the Information &Telecommunications Systems segment, signed a definitive agreement with the shareholders of Pentaho Corporation(Pentaho) to acquire all the shares of Pentaho, for enhancing big-data technologies and solutions. Pentaho integrates
data, develops technologies for big-data analysis and visualization, and delivers solutions and supports. On May 29,
2015, HDS acquired all the shares of Pentaho in accordance with the definitive agreement, and HDS obtained control
of Pentaho, and it became a wholly owned subsidiary.
The total acquisition price, paid in cash, was US$522 million (¥64.7 billion). Due to the short period of time since theacquisition date, the initial accounting for the business combination is incomplete and therefore the Company isunable to provide disclosures related to the amounts recognized as of the acquisition date for each major class ofassets acquired and liabilities assumed, and the amount of goodwill. On a pro forma basis, revenues and net income
attributable to Hitachi, Ltd. stockholders with an assumed acquisition date for Pentaho of April 1, 2014 would not
differ materially from the amounts reported in the consolidated financial statements for the year ended March 31,
2015.
On August 19, 2014, Hitachi Metals, Ltd. (Hitachi Metals), a subsidiary of the Company in the High Functional Materials &Components segment, in order to strengthen its global iron casting business on a medium and long term basis, signed adefinitive agreement with WF Global II B.V., an entity which was owned by private equity funds managed and controlled by
KPS Capital Partners, LP (KPS), to acquire all the shares of Waupaca Foundry Holdings, Inc. (Waupaca HD), which held a
100% stake in Waupaca Foundry, Inc. (Waupaca), engaged in the iron casting business for transportation machinery in the
North America market and headquartered in the U.S.A. On November 10, 2014 (the acquisition date), Hitachi Metals
acquired all the shares of Waupaca HD in accordance with the definitive agreement. Accordingly, Hitachi Metals obtained
control of Waupaca HD and it became a wholly owned subsidiary.
The following table summarizes the fair value of the consideration paid for Waupaca HD, the assets acquired and liabilities
assumed recognized as of the acquisition date.

Cash and cash equivalents
Trade receivables
Other current assets
Non-current assets (excluding intangible assets)
Intangible assets
Goodwill (not deductible for tax purposes)
Other intangible assets
Total

Millions of yen
888
26,446
12,13257,28070,99035,109202,845

Current liabilities
Non-current liabilities
Total

27,801
83,148110,949

Cash paid for acquisition

91,896

The goodwill mainly comprises excess earning power and expected synergies arising from the acquisition.
The results of operations of Waupaca HD for the period from the acquisition date to March 31, 2015 were not material.
On a pro forma basis, revenues and net income attributable to Hitachi, Ltd. stockholders using an assumed acquisition datefor Waupaca HD of April 1, 2014 would not differ materially from the amounts reported in the consolidated financial
statements for the year ended March 31, 2015.
On February 1, 2014, the effective date of the Company split for the business integration of its thermal power generation
systems business with Mitsubishi Heavy Industries, Ltd. (MHI), the Company transferred its business to the integrated
company which was established by MHI and renamed Mitsubishi Hitachi Power Systems, Ltd. (MHPS) in accordance withthe absorption-type company split agreement, executed on July 31, 2013 and subsequently amended on December 18, 2013.

F-20

Notes to Consolidated Financial Statements
The Company applied the loss of control and initial measurements of an investment accounted for using the equity method
to this transaction since the Company has 35% ownership interest in MHPS and subsequently accounts for the interest using
the equity method. Accordingly, the Company recognized a gain of ¥143,041 million, measured as the difference between
the carrying amount of transferred assets and liabilities and the fair value of its shares of MHPS. The fair value of MHPS
was determined using both a market approach and an income approach, which incorporate both observable inputs, such as
quoted market prices of comparable companies, and discounted cash flow using unobservable inputs, and thus represents a
Level 3 measurement. The gain is included in Other income in the Company’s consolidated statements of profit or loss forthe year ended March 31, 2014.
(6) Trade Receivables
The components of trade receivables are as follows:
Millions of yen
March 31, 2015 March 31, 2014 April 1, 2013
Accounts receivable
Notes receivable
Total

2,716,738
153,304
2,870,042

2,423,951
149,435
2,573,386

2,183,394
117,0292,300,423

Accounts receivable and notes receivable are stated net of the allowance for doubtful receivables.
(7) Construction Contracts
The costs incurred, profits recognized, advances received and retentions for construction contracts in progress as of March
31, 2015 and 2014 and April 1, 2013 are as follows:
Millions of yen
March 31, 2015 March 31, 2014 April 1, 2013
Total costs incurred and profits recognized
Advances received
Retentions

1,502,587
110,151947

1,686,850
79,932568

1,826,637
120,183
168

Gross amount due from and due to customers for contract work as of March 31, 2015 and 2014 and April 1, 2013, are as
follows:
Millions of yen
March 31, 2015 March 31, 2014 April 1, 2013
Gross amount due from customers forcontract work
Gross amount due to customers forcontract work338,236

311,495

324,992

136,446

103,874

139,551

Revenues recognized from construction contracts for the years ended March 31, 2015 and 2014 are ¥809,833 million and¥966,678 million, respectively.

F-21

Notes to Consolidated Financial Statements(8) Leases(a) Lessee
The Company and certain subsidiaries use leased facilities and equipment, including buildings, machinery andequipment and vehicles under finance lease or operating lease.
The following table shows the undiscounted amounts and present value of minimum lease payments under financeleases as of March 31, 2015 and 2014 and April 1, 2013.
Millions of yen
March 31, 2015
Minimum
lease
payments

March 31, 2014

Present valueof minimum
lease
payments

Minimum
lease
payments

April 1, 2013

Present valueof minimum
lease
payments

Minimum
lease
payments

Present valueof minimum
lease
payments

Within 1 year

12,541

11,58912,346

10,277

7,972

7,347

After 1 year but not
more than 5 years
More than 5 years

34,57132,29232,51628,124

20,464

19,072

7,533

6,430

9,007

7,966

4,984

4,577

Total

54,64550,31153,86946,36733,42030,996

Finance charges(4,334)(7,502)(2,424)Present value ofminimum lease
payments, total

50,311

46,36730,996

The following table shows the future minimum lease payments under non-cancelable operating leases as of March 31,
2015 and 2014 and April 1, 2013.
Millions of yen
March 31, 2015

March 31, 2014

April 1, 2013

35,602

38,62428,642

Within 1 year
After 1 year but not more than 5 years

89,64683,001

68,812More than 5 years

46,49253,67349,741

Total

171,740

175,298

147,195

Total operating lease expenses for the years ended March 31, 2015 and 2014 are as follows:

Operating lease expenses

2015
160,562

F-22

Millions of yen
2014
145,021

Notes to Consolidated Financial Statements(b) Lessor
The Company and certain subsidiaries lease certain assets such as manufacturing machinery and equipment underfinance and operating lease arrangements.
The following table shows the undiscounted amounts and present value of minimum lease payments receivable underfinance leases as of March 31, 2015 and 2014 and April 1, 2013.
Millions of yen
March 31, 2015

March 31, 2014
Gross
Present value
investmentof minimumin leaselease
payments
receivable

April 1, 2013
Gross
Present value
investmentof minimumin leaselease
payments
receivable

Gross
investment
in lease

Present valueof minimum
lease
payments
receivable

Within 1 year

360,315

308,037

342,133

289,063286,889

250,231After 1 year but not morethan 5 years
More than 5 years

648,122
109,078

570,002
119,214

588,414519,405

393,154339,256

98,533

98,38384,19180,413

1,117,515

997,253

1,029,080

906,851764,234

669,900

Total
Unearned income
Net investment in thelease
Unguaranteed
residual value
Present value ofminimum lease
payments receivable(86,402)(84,882)(63,256)

1,031,113

944,198

700,978(33,860)(37,347)(31,078)

997,253

906,851

669,900

The amounts of the allowance for uncollectable minimum lease payments receivable as of March 31, 2015 and 2014
and April 1, 2013 are ¥13,140 million, ¥11,930 million and ¥9,103 million, respectively.
The following table shows the future minimum lease payments receivable under non-cancelable operating leases as ofMarch 31, 2015 and 2014 and April 1, 2013.
Millions of yen
March 31, 2015

March 31, 2014

April 1, 2013

Within 1 year

53,732

48,60545,361After 1 year but not more than 5 years

66,74659,45253,865More than 5 years

1,572

1,708

1,971

122,050

109,765

101,197

Total

F-23

Notes to Consolidated Financial Statements(9) Inventories
The components of inventories are as follows:
Millions of yen
March 31, 2015 March 31, 2014 April 1, 2013
Finished goods
Semi-finished goods and work in process
Raw materials
Total

634,345562,645
261,129
1,458,119

570,886
523,031245,084
1,339,001

590,002530,967
258,603
1,379,572

For the years ended March 31, 2015 and 2014, the amounts of inventories expensed and included as cost of sales were
¥6,437,013 million and ¥6,357,261 million, respectively, and the write-downs of inventories were ¥20,738 million and¥23,184 million, respectively.
(10) Investments Accounted for Using the Equity Method
The aggregated carrying amounts of investments accounted for using the equity method that are not individually material asof March 31, 2015 and 2014 and April 1, 2013, and the summarized financial information for the years ended March 31,
2015 and 2014 are as follows:

Carrying amount of investments

March 31,2015
633,291

Associates
March 31,2014
564,360

April 1,
2013
221,948

March 31,
2015
48,332Millions of yen
Joint ventures
March 31,
April 1,
2014
2013
35,13025,008Millions of yen

Associates
Net income
Other comprehensive income (loss)
Total comprehensive income (loss)

2015
32,311
21,51453,825

Joint ventures
2014
4,584
16,071
20,6552015
14,346(90,485)(76,139)

2014
6,339
10,302
16,641

These amounts represent the Company’s share of ownership interests per ownership percentage.
As of March 31, 2015, the Company’s interests in certain joint ventures operating at a loss have the cumulative loss
exceeding the Company’s investments, and thus the negative amount of ¥98,363 million is recognized in other non-current
liabilities.

F-24

Notes to Consolidated Financial Statements(11) Property, Plant and Equipment
The following table shows the changes in the net carrying amounts of property, plant and equipment.
Millions of yen
Land

Buildings
andstructures

MachineryandvehiclesTools,
furnitureandfixtures

Other

Constructionin progress

Total

Net carrying amount
April 1, 2013

450,153

722,004

454,741

148,592

302,477

118,2092,196,176

Additions
Transfers between
accounts

4,449

12,08740,72820,830128,692

284,787

491,573

2,029

114,826

129,990

47,222

183(294,250)-

Sales and disposals
Depreciation
Impairment losses
Acquisitions anddivestitures
Currency translation
effectOther(6,162)(4,429)(12,047)(53,749)(7,406)(7,601)(112,616)(8,027)(6,350)(62,469)(2,477)(34,798)(97,456)(6)(5,880)(7,645)(72,838)(326,290)(29,990)(16,709)(49,695)(49,901)(3,502)

8,006(8,731)(120,532)

13,336(9,322)

14,932
1,316

23,18013,4384,804
13,20014,84822,043

6,227
2,832

77,32743,507433,345742,268

483,932

159,850

343,989

95,5492,258,933

2,325

8,702

40,70832,730136,940

255,774

477,179778(2,253)(5,604)

46,840(7,470)(58,682)(14,126)

131,471(7,071)(116,902)(10,080)

41,999(4,318)(72,315)(2,150)4,940(25,931)(100,177)-(226,028)(1,331)(1,838)(48,374)(348,076)(33,798)

March 31, 2014
Additions
Transfers between
accounts
Sales and disposals
Depreciation
Impairment losses
Acquisitions anddivestitures
Currency translation
effect
Other

1,868

24,40036,807

4,287

528

2,713

70,603

4,609(1,484)

20,493(4,773)31,040(5,462)

8,600
20,724

6,965
16,2195,877(6,778)77,584
18,446

March 31, 2015

433,584

757,652

584,443

189,407383,473

123,938

2,472,497

The amount of depreciation recognized is included in Cost of sales and Selling, general and administrative expenses in the
consolidated statements of profit or loss. Impairment losses are included in Other expenses of the consolidated statements ofprofit or loss.
Finance lease assets are included in Other in the table above, and their carrying amounts as of March 31, 2015 and 2014 andApril 1, 2013 were ¥79,926 million, ¥70,002 million and ¥58,923 million, respectively.

F-25

Notes to Consolidated Financial Statements
The following table shows the gross carrying amount and accumulated depreciation and impairment losses of property, plantand equipment.
Millions of yen
Land

Buildings
andstructures

MachineryandvehiclesTools,
furnitureand fixtures

April 1, 2013

472,711

1,913,066

2,529,422

962,364

1,744,663

119,081

7,741,307

March 31, 2014

456,518

1,867,372

2,311,888

949,742

1,662,395

101,894

7,349,809

March 31, 2015
Accumulated depreciationand impairment losses
April 1, 2013

456,319

1,905,337

2,448,847

993,613

1,571,316

131,800

7,507,232(22,558)(1,191,062)(2,074,681)(813,772)(1,442,186)(872)(5,545,131)

March 31, 2014

(23,173)(1,125,104)(1,827,956)(789,892)(1,318,406)(6,345)(5,090,876)

March 31, 2015

(22,735)(1,147,685)(1,864,404)(804,206)(1,187,843)(7,862)(5,034,735)

OtherConstructionin progress

Total

Gross carrying amount

Impairment Losses Recognized for the Year Ended March 31, 2015:
The Power Systems segment recognized impairment losses of ¥13,007 million, of which ¥10,134 million was attributable tothe lower than expected future revenue projected for its transmission and distribution systems business. The recoverable
amount of the CGU was principally determined on the basis of the fair value less costs of disposal, which was measured at¥5,729 million as of March 31, 2015. A market approach was used in measuring the fair value of the relevant assets. Thesefair value measurements were based on real estate appraisal value which includes adjustments to the values of properties incomparable transactions, or published market prices to reflect specific factors inherent in the asset subject to the appraisal,
and thus classified as Level 3 of fair value hierarchy.
The High Functional Materials & Components segment recognized impairment losses of ¥6,492 million, due to the lower
than expected future revenue projected for the part of its magnetic materials business and on idle assets and others of themagnetic materials business and of the wire and cable business.
The Electronic Systems & Equipment segment recognized impairment losses of ¥4,124 million, due to the lower than
expected future revenue projected for its land held for lease.
Impairment Losses Recognized for the Year Ended March 31, 2014:
The Automotive Systems segment recognized impairment losses of ¥8,870 million, of which ¥8,008 million was attributable
to the lower than expected future revenue projected for its battery businesses for automobiles because of changing market
trends. The recoverable amount of the CGU was principally determined on the basis of value in use, and was measured at¥3,914 million as of March 31, 2014. The discount rate used in measuring value in use was 9.2% (before tax).
The Electronic Systems & Equipment segment recognized impairment losses of ¥6,214 million, due to the lower than
expected future revenue projected for its medical equipment business because of severe market competition.
The High Functional Materials & Components segment recognized impairment losses of ¥5,103 million, due to the lower
profitability of its high-grade metal products and materials business because of the lower demand in the market.

F-26

Notes to Consolidated Financial Statements(12) Intangible Assets
The following table shows the changes in the net carrying amounts of goodwill and other intangible assets.
Millions of yen
Goodwill

Software forinternal use

Software forsale

Intangible
lease assets

Other

Total

Net carrying amount
April 1, 2013

282,934

128,863

38,46540,780

194,124

685,166

Internal developments
Purchases
Transfers between accounts
Amortization
Impairment losses
Disposals
Acquisitions and divestitures
Currency translation effect(6,758)30,187
20,753

3,489
11,43245,009(46,146)(2,053)(1,461)(1,639)
1,566

310
1,846
48,231(35,625)(43)
162

15,507(15,814)398
177,621
25,052(93,240)(26,530)(3,825)
(78)
1,108
8,974

81,42053,837(124,115)(12,636)(1,539)30,011
31,456-(7,661)(1,158)310(2,853)(11,362)

March 31, 2014

327,116

131,399

52,18841,182

180,353732,238

Internal developments
Purchases
Transfers between accounts
Amortization
Impairment losses
Disposals
Acquisitions and divestitures
Currency translation effect
Other

(637)
99,576
12,076-

2,051
12,20948,453(53,389)(3,495)
(76)
29
1,046
(1,693)333
829
40,294(37,904)
(27)
(202)
286
(5,475)

19,421(15,939)1
159

87,01327,294(88,747)(23,006)(1,604)(45)
72,466
4,614
5,433

89,39759,753(130,238)(5,763)(121)
171,869
18,023(1,576)

March 31, 2015

438,131

136,534

50,322

44,824

263,771933,582

Other

The amount of amortization recognized is included in Cost of sales and Selling, general and administrative expenses in the
consolidated statements of profit or loss. Impairment losses are included in Other expenses in the consolidated statements ofprofit or loss.
The following table shows the gross carrying amount and accumulated amortization and impairment losses of goodwill andother intangible assets.
Millions of yen
Goodwill

Software forinternal use

Software forsale

Intangible
lease assets

Other

Total

Gross carrying amount
April 1, 2013

283,474

569,378

421,984

303,670

396,865

1,975,371

March 31, 2014

330,251584,640

472,099

280,931367,5132,035,434

March 31, 2015
Accumulated
amortization andimpairment losses
April 1, 2013

441,266

627,149

502,194

264,399471,580

2,306,588(540)(440,515)(383,519)(262,890)(202,741)(1,290,205)

March 31, 2014

(3,135)(453,241)(419,911)(239,749)(187,160)(1,303,196)

March 31, 2015

(3,135)(490,615)(451,872)(219,575)(207,809)(1,373,006)

The Company writes off goodwill if it has been fully impaired.

F-27

Notes to Consolidated Financial Statements

Impairment Losses Recognized for the Year Ended March 31, 2015:
The Information & Telecommunication Systems segment recognized impairment losses of ¥4,340 million, due to a decreasein profitability of its service business provided for financial institutions.
Impairment Losses Recognized for the Year Ended March 31, 2014:
The Construction Machinery segment recognized impairment losses of ¥2,884 million on the software due to a change in
use of its administrative IT system.
The carrying amounts of intangible assets with indefinite useful lives as of March 31, 2015 and 2014 and April 1, 2013
amounted to ¥6,451 million, ¥6,696 million and ¥9,640 million, respectively. The main components of such assets are
acquired brands and trademarks. They are assessed to have indefinite useful lives because there is no foreseeable limit to theperiod over which such assets are expected to generate net cash inflows for the entity.
Expenditures on research activities aimed at obtaining a new scientific or technical knowledge or understanding areexpensed when incurred. Expenditures on development activities for a new or major improvement of production plan ordesign prior to the beginning of commercial production or use are capitalized as an internally generated intangible asset only
when such expenditures attributable to the intangible asset can be reliably measured, it is feasible for the Company tocomplete the development, and it is highly probable that the Company will obtain the future economic benefit. Otherwise,
the expenditures are recognized as an expense when incurred.
The carrying amounts of internally generated intangible assets (at the cost less accumulated amortization and impairment
losses) as of March 31, 2015 and 2014 and April 1, 2013 amounted to ¥182,742 million, ¥171,560 million and ¥144,119
million, respectively. These assets are mainly included in software for internal use or software for sale.
Research and development expenditures recognized as an expense for the years ended March 31, 2015 and 2014 were¥334,814 million and ¥354,487 million, respectively, and they are included in Cost of sales and Selling, general andadministrative expenses in the consolidated statements of profit or loss.
The Company tests goodwill acquired through business combination for impairment by comparing the carrying amount andthe recoverable amount per CGU (or group of CGUs).
As of March 31, 2015 and 2014 and April 1, 2013, the group of CGUs with a significant allocation of goodwill is theInformation & Telecommunication Systems segment, and the carrying amounts of goodwill allocated to the Information &Telecommunication Systems segment were ¥172,159 million, ¥148,175 million and ¥104,050 million, respectively. The
recoverable amount used for impairment test of goodwill of the Information & Telecommunication Systems segment for theyears ended March 31, 2015 and 2014 was the fair value less cost of disposal. The fair value was estimated by a
combination of prices of similar businesses, present value calculations and other inputs. Judgments and assumptions
required for future plans of relevant businesses were based on certain assumptions deemed reasonable at the time of estimate.
For the years ended March 31, 2015 and 2014, cash flows were projected over 5 years, the discount rates used were 5.55%
and 5.39%, respectively, and the growth rate used was 1.0% for both periods. These fair value measurements were classified
as level 3 of the fair value hierarchy based on the inputs used.
The Company considers it unlikely for the carrying amount of goodwill allocated to each CGU (or group of CGUs) would
exceed the recoverable amount even if the primary assumptions used for the impairment test changed within a reasonable
range.

F-28

Notes to Consolidated Financial Statements(13) Deferred Taxes and Income Taxes
The components of income taxes recognized in the consolidated statements of profit or loss and deferred taxes recognized in
the consolidated statements of comprehensive income are as follows:
Millions of yen
2014

2015
Income taxes
Current tax expense
Deferred tax expense
Temporary differences originated and reversed
Changes in realizability of deferred tax assets
Adjustments to deferred tax assets and liabilities for enactedchanges in tax laws and tax rates in Japan
Total
Deferred taxes recognized in OCI
Net changes in financial assets measured at fair value through
OCI
Remeasurements of defined benefit plans
Net changes in cash flow hedges
Total

144,281

131,605

41,270(68,685)

10,3441,327

5,209
122,075

3,264
146,540

22,16725,970(3,255)(1,556)
17,356

14,3101,992
42,272For the year ended March 31, 2015, the Company and its domestic Japanese subsidiaries were subject to a national corporate
tax of 25.5%, an inhabitant tax of between 17.3% and 20.7% of the national corporate tax and combined deductible businesstax and special local corporation tax between 3.8% and 10.1%, which in the aggregate resulted in a combined statutory
income tax rate of approximately 35.5%.
For the year ended March 31, 2014, the Company and its domestic Japanese subsidiaries were subject to a national corporate
tax of 28.1%, an inhabitant tax of between 17.3% and 20.7% of the national corporate tax and combined deductible businesstax and special local corporation tax between 3.8% and 10.1%, which in the aggregate resulted in a combined statutory
income tax rate of approximately 37.9%.
The Company and certain subsidiaries file consolidated income tax returns in certain jurisdictions.
On March 31, 2015, amendments to corporation tax law were enacted in Japan, resulting in lower corporate tax rates. Thosechanges became effective on April 1, 2015. As a result, the aggregate statutory income tax rate for domestic companies will
be approximately 33.0% for the year beginning on or after April 1, 2015 and 32.2% for the years beginning on or after April
1, 2016. The effect of those changes on the Company’s deferred tax balances amounted to ¥5,209 million of additional
expenses and is included in Income taxes.
On March 31, 2014, amendments to corporation tax law were enacted in Japan, resulting in lower corporate tax rates. Thosechanges became effective on April 1, 2014. As a result, the aggregated statutory income tax rate for domestic companies wasapproximately 35.5% for the year beginning on or after April 1, 2014. The effect of those changes on the Company’sdeferred tax balances amounted to ¥3,264 million of additional expenses and is included in Income taxes.

F-29

Notes to Consolidated Financial Statements
Reconciliations between the combined statutory income tax rate and the effective income tax rate are as follows:
Millions of yen
2015
2014
Combined statutory income tax rate
Share of profits of investments accounted for using the equity
methodChange in excess amounts over the tax basis of investments in
subsidiaries and investments accounted for using the equity
methodGain or loss on sale of investments in subsidiaries andinvestments accounted for using the equity method
Expenses not deductible for tax purposes
Enacted changes in tax laws and rates
Impairment of goodwill
Change in realizability of deferred tax assets
Difference in statutory tax rates of foreign subsidiaries
Other, net
Effective income tax rate

35.5％

37.9％

(3.2)

(0.6)

1.4

0.4

3.8
2.7
1.0
0.0
(13.2)
(4.7)
0.2
23.5％

(17.3)
4.2
0.5
0.4
0.2
(4.3)
0.2
21.6％

Changes in deferred tax assets and liabilities are as follows:

Deferred tax assets, net at beginning of year
Recognized in profit or loss
Recognized in OCI
Acquisitions, divestitures and others
Discontinued operation
Deferred tax assets, net at end of year

March 31, 2015
99,283
22,206(17,356)(19,543)
618
85,208Millions of yen
March 31, 2014
133,223(14,935)(42,272)
23,267
099,283Significant components of the deferred tax assets and liabilities are as follows:

Consolidated statements of financial position
March 31,
March 31,
April 1,
2015
2014
2013
Deferred tax assets
Retirement and severance benefits
Accrued expenses
Depreciation of property, plant andequipment
Net operating loss carryforwards
Other
Total deferred tax assets
Deferred tax liabilities
Deferred profit on sale of properties
Investments in securities
Tax purpose reserves regulated by
Japanese tax laws
Intangible assets
Other
Total deferred tax liabilities
Net deferred tax assets

Millions of yen
Consolidated statements ofprofit or loss
2015

2014

77,60689,30555,904
71,15459,855
61,774

10,842
15,745

12,971
4,754

17,426
18,333
169,981372,651

22,511
21,294
151,794
322,657

16,551
31,465
201,637
371,282(1,356)(7,356)34,90752,782

12,005(11,915)(59,886)(42,071)(11,089)(85,483)(13,176)(87,325)(15,622)(67,229)

(748)
8,716

839
9,335

(51,829)(47,768)(91,274)(287,443)
85,208(8,830)(31,253)(82,790)(223,374)
99,283(5,712)(30,147)(119,349)(238,059)
133,223(45,254)
4,331
2,379
(30,576)
22,206(128)
3,187
13,90327,136(14,935)F-30

Notes to Consolidated Financial Statements
Net deferred tax assets are included in the following accounts in the consolidated statements of financial position.
Millions of yen
March 31, 2015 March 31, 2014 April 1, 2013
Other non-current assets
Other non-current liabilities
Total

175,492(90,284)
85,208211,881(112,598)
99,283226,056(92,833)
133,223

Deferred tax liabilities are not recognized for excess amounts over the tax basis of investments in subsidiaries andinvestments accounted for using the equity method that are considered to be reinvested indefinitely, for such differences will
unlikely reverse in the foreseeable future. The temporary differences related to undistributed earnings of subsidiaries forwhich deferred tax liabilities are not recognized are ¥744,549 million and ¥551,318 million, respectively, as of March 31,
2015 and 2014.
In assessing the realizability of deferred tax assets, the Company considers whether it is more likely than not that some
portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon
the generation of future taxable income in specific tax jurisdictions during the periods in which these deductible differences
become deductible. Although realization is not assured, the Company carries out an assessment of the scheduled reversals ofdeferred tax liabilities and projected future taxable income, including the execution of certain available tax strategies if
needed. Based on these factors, the Company believes it is more likely than not it will realize the benefits of these deductible
differences as of March 31, 2015.
Deductible temporary differences and net operating loss carryforwards for unrecognized deferred tax assets are as follows:
Millions of yen
March 31, 2015 March 31, 2014 April 1, 2013
Deductible temporary differences
Net operating loss carryforwards
Total

2,296,620
833,673
3,130,293

2,512,403
690,361
3,202,764

2,747,178
656,1093,403,287

Net operating loss carryforwards for unrecognized deferred tax assets will expire as follows:
Millions of yen
March 31, 2015 March 31, 2014 April 1, 2013
Within 5 years
After 5 years but not more than 10 years
More than 10 years
Total

414,539
283,466
135,668
833,673F-31

346,148
266,081
78,132
690,361

436,081
133,237
86,791
656,109

Notes to Consolidated Financial Statements(14) Trade Payables
The components of trade payables are as follows:
Millions of yen
March 31, 2015 March 31, 2014 April 1, 2013
Accounts payable
Notes payable
Total

1,404,974
21,5491,426,523

1,331,903
15,281
1,347,184

1,225,282
15,754
1,241,036(15) Provisions
Changes in the balance and components of provisions for the year ended March 31, 2015 are as follows:

March 31, 2014

Asset retirement
obligations
20,188

Restructuringprovisions
2,410

Product warranty
provisions
44,858Millions of yen
Otherprovisions
80,642

Additions

617

25,9999,490

125,661

Utilized(180)(27,767)(13,645)(64,447)

606

-

225

215

599
21,830

112
754

3,149
44,077

6,319
148,390504

691

31,116

139,850

21,32663

12,961

8,540

Acquisitions and divestitures
Currency translation effects,
and others
March 31, 2015
Current
Non-current

Other provisions include provisions made for expenses including competition law and others. As information required by
IAS 37 could adversely affect the outcome of litigations and other disputes, the details of these provisions are not disclosed.
Asset Retirement Obligations
The Company and its subsidiaries recognize asset retirement obligations principally based on the estimated future
expenditures using historical experience when the Company and its subsidiaries have a legal or contractual obligation
associated with the retirement of tangible fixed assets used in normal operations, such as lease dilapidations of factory
facilities and premises.
Restructuring Provisions
Restructuring provision is recognized when the Company and its subsidiaries have a detailed formal plan for the
restructuring of the business or a part of business and have raised a valid expectation in those affected that it will carry out
the restructuring by starting to implement the plan or announcing its main features to those affected. The provision isrecognized based on the estimated amount of direct expenditures attributable to restructuring.
Product Warranty Provisions
The Company and its subsidiaries provide warranties for certain products and services. Product warranty provisions arerecognized by estimating future expenditures based principally on historical experience of warranty claims.

F-32

Notes to Consolidated Financial Statements(16) Employee Benefits(a) Retirement and Severance Benefits
The Company and certain subsidiaries have defined benefit pension plans and severance lump-sum payment plans, aswell as defined contribution pension plans to provide retirement and severance benefits to substantially all employees.
The principal defined benefit pension plan is a corporate pension plan based on the Japanese Defined Benefit Corporate
Pension Plan Act (the Act). Additionally, certain corporate pension plans adopt cash balance plans. Benefits under cash
balance plans are calculated per each plan participant with a notional account balance, based on the contribution credits
per salary level and interest credits based on market interest rate trends.
Pursuant to the Act, the Company has an obligation to make contributions to the Hitachi Corporate Pension Fund (theFund) that manages the corporate pension plans. The directors of the Fund are responsible for faithfully executing
operations in compliance with laws and regulations, and any orders issued by the Minister of Health, Labor andWelfare, and the director-generals of Regional Bureaus of Health and Welfare based on laws and regulations, as well as
the rules of the Fund and the resolution of the Board of Representatives. The Fund prohibits the directors from acts that
constitute conflicts of interests in the management and operation of the funds contributed for benefit payments (thecontributions). If breached, the board members are jointly and severally held responsible.
The Fund is legally independent from the Company. The Board of Representatives comprises an equal number ofrepresentatives selected by the company and certain subsidiaries and representatives from the employee side. The
proceedings of a Board of Representatives are decided by a majority vote of the members attending. In case of a tied
vote, the chairman has the power to decide, except for exceptionally significant matters.
The actual management of the contributions is conducted by trustees in accordance with rules approved by the Board ofRepresentatives. The Fund is responsible for managing the contributions to safely and efficiently manage thecontributions by establishing the basic management policy of the contributions and preparing the management
guidance in line with the policy submitted to the trustees.
The Company has future obligations to make contributions as defined by the Fund. The amount of contribution isperiodically reviewed to the extent allowed by law.
The severance lump-sum payment plans provide a lump-sum payment at the time of retirement, and the benefit iscalculated based on factors such as the salary level at retirement and the years of service. The Company and certain
subsidiaries have an obligation to pay benefits directly to beneficiaries.
Defined contribution plans require a fixed amount of contribution over a participation period, and plan participants
themselves are responsible for the management of plan assets. Benefits are paid by the trustee, and the Company andcertain subsidiaries’ responsibility is limited to making contributions.

F-33

Notes to Consolidated Financial Statements
Changes in the present value of defined benefit obligations and the fair value of plan assets for the years ended March
31, 2015 and 2014 are as follows:

March 31, 2015
Defined benefit obligations
At beginning of year
Service cost
Interest cost
Plan amendments
Actuarial losses
Benefits paid
Acquisitions and divestitures
Transfer to defined contribution pension plan
Settlements/curtailments
Currency translation effectAt end of year
Fair value of plan assets
At beginning of year
Interest income
Return on plan assets (excluding interest income)
Employers’ contributions
Employees’ contributions
Benefits paid
Acquisitions and divestitures
Transfer to defined contribution pension plan
Settlements/curtailments
Currency translation effectAt end of year
Effect of asset ceiling
Net liability amount recognized in the consolidated statementsof financial position

Millions of yen
March 31, 2014

2,258,736
80,66327,525
2,282
104,800(123,396)
25,320(1,782)(4,198)14,2232,384,173

2,345,349
84,901
26,577(519)
24,861(132,406)(96,567)(3,337)(3,388)13,2652,258,736

1,504,738
20,267
128,607
120,082304(88,373)
5,072
(881)
(1,135)
14,5201,703,201
4,385

1,418,655
18,925
103,302110,784268(99,291)(56,633)(335)(2,965)
12,0281,504,738
4,091

685,357

758,089

March 31, 2015
(85,260)(5,136)(14,404)

Millions of yen
March 31, 2014
(18,841)(2,341)(3,679)The components of actuarial gain or loss are as follows:

Arising from changes in financial assumptions
Arising from changes in demographic assumptions
Other

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

March 31, 2015
1.0

Discount rate

Percentage
March 31, 2014
1.2

If, at March 31, 2015, the discount rate rose by 0.5%, the defined benefit obligations would decrease by ¥137,236
million, and if the discount rate decreased by 0.5%, the defined benefit obligations would increase by ¥159,287 million.
The sensitivity analysis is based on an assumption that all other variables other than the one analyzed are held constant;in reality, changes in other assumptions may impact the outcome of the analysis.
The Fund’s plan asset management is based on the safe and efficient management of the contributions, diversified
investments and determination of the investment ratio that should be sustained over the long term. The Fund seeks tomaintain current value of assets sufficient for future obligations. A target rate of return is established to ensure a stable
long term rate of return on assets. A diversified investment strategy is carried out while a target asset allocation is

F-34

Notes to Consolidated Financial Statements
established to achieve the target rate of return. The target asset allocation is based on the expected rate of return by eachclass of asset, the standard deviation of the rate of return and the correlation coefficient among the assets. It is currently
approximately 25% in equity, 50% in public and corporate bonds, and 25% in hedge funds, private equity funds, life
insurance general accounts and other assets. If market values fluctuate exceeding certain levels, the investment ratio isadjusted to the target allocation ratio in order to control risks.
In selecting trustees or asset management companies, the Fund takes into account appropriate quantitative andqualitative evaluations. The Fund also presents its management policies to the trustees or asset management companies,
and periodically receives asset management reports.
The fair values of plan assets invested as of March 31, 2015 and 2014, and April 1, 2013 are as follows:
Millions of yen
With quoted market
price in an active
marketMarch 31, 2015
With no quoted market
price in an active
market27,963290

28,253

148,177
23,15929,407228,706

10,24965,48044,08558,412
138
146,504
1,128,294
21,043
1,474,495

158,426
65,48044,08558,412
23,297
146,504
1,128,294
50,4501,703,201

With quoted market
price in an active
marketMarch 31, 2014
With no quoted market
price in an active
market37,209473

37,682

199,940
25,357
20,658283,164

12,19070,57742,77755,07859
134,503889,528
16,3891,221,574

212,130
70,57742,77755,07825,416
134,503889,528
37,047
1,504,738

EquityGovernment bonds and municipal
debt securities
Corporate bonds and other debt securities
Hedge funds
Securitization products
Cash and cash equivalents
Life insurance general accounts
Commingled funds
Other
Total

Total

Millions of yen

EquityGovernment bonds and municipal
debt securities
Corporate bonds and other debt securities
Hedge funds
Securitization products
Cash and cash equivalents
Life insurance general accounts
Commingled funds
Other
Total

F-35

Total

Notes to Consolidated Financial Statements
Millions of yen
With quoted market
price in an active
marketApril 1, 2013
With no quoted market
price in an active
market33,990

6,012

40,002

185,063
36,73922,472
278,264

17,76064,48541,946
43,613
93
125,187825,745
15,5501,140,391

202,823
64,48541,946
43,61336,832
125,187825,745
38,022
1,418,655

EquityGovernment bonds and municipal
debt securities
Corporate bonds and other debt securities
Hedge funds
Securitization products
Cash and cash equivalents
Life insurance general accounts
Commingled funds
Other
Total

Total

As of March 31, 2015, investments in equity were allocated to approximately 40% in stocks listed in Japan and 60% instocks listed in foreign markets. As of March 31, 2014, investments in equity were approximately 25% in stocks listed
in Japan and 75% in stocks listed in foreign markets.
As of March 31, 2015, Japanese government bonds made up approximately 50% of the government bonds andmunicipal debt securities, the majority of which were Japanese national bonds. As of March 31, 2014, Japanese
government bonds made up approximately 65% of the government bonds and municipal debt securities, the majority ofwhich were Japanese national bonds. Foreign public bonds, as of March 31, 2015, took approximately 50%, themajority of which were foreign national bonds, and as of March 31, 2014, foreign public bonds took approximately
35%, the majority of which were foreign national bonds.
As of March 31, 2015, investments in corporate bonds and other debt securities were allocated to nearly 100% in
foreign corporate bonds and debt instruments. As of March 31, 2014, investments in corporate bonds and other debt
securities were allocated to approximately 15% in Japanese and 85% in foreign corporate bonds and debt instruments.
Hedge funds invested in are primarily in relative value strategy funds, event driven funds, equity long or short funds,
and macroeconomic and Commodity Trading Advisor (CTA) funds.
Commingled funds represent pooled institutional investments. As of March 31, 2015, commingled funds were allocatedto 30% in listed stocks, 40% in government bonds, 5% in corporate bonds and other debt securities, 10% in cash andcash equivalents and 15% in other assets. As of March 31, 2014, they were allocated to 35% in listed stocks, 45% ingovernment bonds, 10% in corporate bonds and other debt securities and 10% in other assets.
Funding by the Fund is conducted by taking into account various factors such as funded status, the limit of tax
deductions, and actuarial calculations. For the purpose of maintaining balanced finance into the future, the bylaws of
the Fund require recalculation of the contribution amounts at the end of fiscal year every five years. Basic assumptions(expected interest rates, mortality rates, withdrawal rate, etc.) are reviewed to recalculate the appropriate level ofcontribution.
The amount of contributions expected to be paid by the Company and its subsidiaries to the plan assets for the year
ending March 31, 2016 is ¥98,970 million.
The weighted average duration (expected average maturity) of defined benefit obligations as of March 31, 2015 and2014 were 13.3 years and 13.4 years, respectively.
Contributions made to defined contribution plans and expensed in profit or loss in the years ended March 31, 2015 and2014 were ¥25,997 million and ¥24,890 million, respectively.

F-36

Notes to Consolidated Financial Statements(b) Employee Benefit Expenses
The aggregated amounts of employee benefit expenses including salary recognized in the consolidated statements ofprofit or loss for the years ended March 31, 2015 and 2014 were ¥2,514,095 million and ¥2,507,173 million,
respectively.
(17) Equity(a) Common Stock
Number of shares
Total number ofauthorized shares

April 1, 2013
March 31, 2014
March 31, 2015

March 31, 2015

March 31, 2014

10,000,000,000

April 1, 2013

10,000,000,000

10,000,000,000

Issued shares outstanding(Number of shares)
4,833,463,387
4,833,463,387
4,833,463,387

Capital amount(Millions of yen)
458,790458,790458,790

Shares issued by the Company are non-par value common stock. The issued shares above include treasury stock. Thechanges in treasury stock for the years ended March 31, 2015 and 2014 are as follows:
Treasury stock(Number of shares)(Millions of yen)
1,565
2,899,151
4,431
5,599,271(2,850)(4,090,998)
3,146
4,407,424
421
515,108(25)(35,694)
3,542
4,886,838

April 1, 2013
Acquisition of treasury stock
Sales of treasury stock
March 31, 2014
Acquisition of treasury stock
Sales of treasury stock
March 31, 2015

The number of shares of the Company held by the Company’s associates as of March 31, 2015 was 167,000 shares, asof March 31, 2014 and April 1, 2013 were 172,000 shares.
(b) Surplus(i) Capital Surplus
The Japanese Company Law (JCL) mandates that at least half of paid-in capital be appropriated as common stockand the rest be appropriated as legal reserve within capital surplus.
The changes in capital surplus include the effect of changes in the Company’s ownership interest in its consolidated
subsidiaries. For the years ended March 31, 2015 and 2014, the major changes in capital surplus related to changes
in non-controlling interests relating the purchase of Kokusai Electric Korea Co., Ltd. by Hitachi Kokusai ElectricInc. and the purchase of Hitachi Vehicle Energy, Ltd. by the Company respectively. The purpose of both purchases
was to convert the respective subsidiaries into wholly owned subsidiaries.
(ii) Retained Earnings
The JCL requires that ten percent of retained earnings appropriated for dividends be retained until the total amountof earned reserves included in capital reserve and retained earnings reaches a quarter of the nominal value ofcommon stock. Earned reserves may be available for dividends by resolution at the shareholders’ meeting.

F-37

Notes to Consolidated Financial Statements(18) Accumulated Other Comprehensive Income (AOCI) and Other Comprehensive Income (OCI)
Components of AOCI, net of related tax effects, presented in the consolidated statements of changes in equity, and changes
in each component for the years ended March 31, 2015 and 2014 are as follows:
Millions of yen
2015

2014

Foreign currency translation adjustments
Balance at beginning of year
OCI, net of reclassification
Net transfer from non-controlling interests
Balance at end of year

105,211147,258
1,005
253,474

104,975
236
105,211

Remeasurements of defined benefit plans
Balance at beginning of year
OCI
Net transfer from non-controlling interests
Reclassified into retained earnings

59,737
26,44748(96)

59,737-

Balance at end of year

86,13659,737

Net changes in financial assets measured at FVTOCIBalance at beginning of year
OCI
Net transfer from (to) non-controlling interests
Reclassified into retained earnings
Balance at end of year

194,994
55,921
1(37,501)
213,415

99,772100,082(433)(4,427)
194,994

Net changes in cash flow hedges
Balance at beginning of year
OCI, net of reclassification
Net transfer from non-controlling interests
Balance at end of year

(42,395)(109,530)(151,925)(29,205)(13,299)
109(42,395)

Total AOCI
Balance at beginning of year
OCI, net of reclassification
Net transfer from (to) non-controlling interests
Reclassified into retained earnings
Balance at end of year

317,547
120,096
1,054(37,597)
401,100

251,495(88)(4,427)
317,547

F-38

70,567

Notes to Consolidated Financial Statements
The following shows a reconciliation of OCI, including non-controlling interests, to profit or loss items and deferred income
tax effect per components of OCI during the years ended March 31, 2015 and 2014.
Millions of yen
2015
Before tax

Tax effect

After tax

OCI arising during the year:
Foreign currency translation adjustments
Remeasurements of defined benefit plans
Net changes in financial assets measured at fair value FVTOCINet changes in cash flow hedges
Share of OCI of investments accounted for using the equity method
Total

189,844
23,78480,124(18,540)(91,128)
184,084

3,255(22,167)
1,955
22,287
5,330

189,844
27,03957,957(16,585)(68,841)
189,414

Reconciliation of OCI to profit or loss:
Foreign currency translation adjustments
Net changes in cash flow hedges
Share of OCI of investments accounted for using the equity method
Total(1,225)134(130)(1,221)

(399)
(399)

(1,225)(265)(130)(1,620)

OCI, net of reclassification adjustments:
Foreign currency translation adjustments
Remeasurements of defined benefit plans
Net changes in financial assets measured at FVTOCINet in changes in cash flow hedges
Share of OCI of investments accounted for using the equity method
Total

188,619
23,78480,124(18,406)(91,258)
182,863

3,255(22,167)
1,556
22,287
4,931

188,619
27,03957,957(16,850)(68,971)
187,794

OCI, net of reclassification adjustments, attributable tonon-controlling interests:
Foreign currency translation adjustments
Remeasurements of defined benefit plans
Net changes in financial assets measured at FVTOCINet changes in cash flow hedges
Total

60,328
5,984
2,277
(891)
67,698

OCI, net of reclassification adjustments, attributable to
Hitachi, Ltd. stockholders:Foreign currency translation adjustments
Remeasurements of defined benefit plans
Net changes in financial assets measured at FVTOCINet changes in cash flow hedges
Share of OCI of investments accounted for using the equity method
Total

128,291
21,05555,680(15,959)(68,971)
120,096

F-39

Notes to Consolidated Financial Statements
Millions of yen
2014
Before tax

Tax effect

After tax

OCI arising during the year:
Foreign currency translation adjustments
Remeasurements of defined benefit plans
Net changes in financial assets measured at FVTOCINet changes in cash flow hedges
Share of OCI of investments accounted for using the equity method
Total

127,740
78,516
128,702(13,006)
28,429350,381(14,310)(25,970)(3,722)(221)(44,223)

127,740
64,206
102,732(16,728)
28,208306,158

Reconciliation of OCI to profit or loss:
Foreign currency translation adjustments
Net changes in cash flow hedges
Share of OCI of investments accounted for using the equity method
Total(5,626)(5,016)(1,835)(12,477)

1,730
1,730

(5,626)(3,286)(1,835)(10,747)

OCI, net of reclassification adjustments:
Foreign currency translation adjustments
Remeasurements of defined benefit plans
Net changes in financial assets measured at FVTOCINet changes in cash flow hedges
Share of OCI of investments accounted for using the equity method
Total

122,11478,516
128,702(18,022)
26,594
337,904(14,310)(25,970)(1,992)(221)(42,493)

122,11464,206
102,732(20,014)
26,373
295,411

OCI, net of reclassification adjustments, attributable tonon-controlling interests:
Foreign currency translation adjustments
Remeasurements of defined benefit plans
Net changes in financial assets measured at FVTOCINet changes in cash flow hedges
Total

36,006
4,543
2,856
511
43,916

OCI, net of reclassification adjustments, attributable to
Hitachi, Ltd. stockholders:Foreign currency translation adjustments
Remeasurements of defined benefit plans
Net changes in financial assets measured at FVTOCINet changes in cash flow hedges
Share of OCI of investments accounted for using the equity method
Total

86,10859,66399,876(20,525)
26,373
251,495

F-40

Notes to Consolidated Financial Statements(19) Dividends
Dividends paid on common stock for the years ended March 31, 2015 and 2014 are as follows:

Decision

Cash dividends(millions of yen) Appropriation fromCashdividends
per share(yen)

Record date

Effective date

The Board of Directors
on October 29, 2014

28,973Retained earnings

6.0

September 30, 2014

November 26, 2014

The Board of Directors
on May 12, 2014

26,559Retained earnings

5.5

March 31, 2014

June 2, 2014

The Board of Directors
on October 29, 201324,151Retained earnings

5.0

September 30, 2013

November 26, 2013

The Board of Directors
on May 10, 201324,152Retained earnings

5.0

March 31, 2013

May 28, 2013

The dividend on common stock whose record date falls in the year ended March 31, 2015 and the effective date falls in thenext fiscal year are as follows:

Decision
The Board of Directors
on May 14, 2015

Cash dividends(millions of yen) Appropriation from28,971Retained earnings

F-41

Cash
dividends
per share(yen)

Record date

6.0

March 31, 2015

Effective dateJune 1, 2015

Notes to Consolidated Financial Statements(20) Other Income and Expenses
The main components of other income and expenses for the years ended March 31, 2015 and 2014 are as follows:2015(16,820)(42,109)(55,016)(26,680)(25,897)

Net loss on sales and disposal of fixed assets
Impairment losses
Net gain (loss) on business reorganization and others
Restructuring charges
Expenses related to competition law and others

Millions of yen
2014(7,062)(43,116)
198,032(26,649)(76,858)

Impairment losses are mainly recognized on property, plant and equipment, investment properties and intangible assets. Net
gain (loss) on business reorganization and others include gains and losses related to obtaining and losing control of investees
and gains and losses related to obtaining and losing significant influence over investees. Expenses related to competition law
and others include losses related to paying a fine in relation to competition law violations and settlements with customers.
Net gain (loss) on business reorganization and others for the year ended March 31, 2014 includes a gain of ¥143,041 million
from business integration with Mitsubishi Heavy Industries in the field of thermal power generation system.

(21) Financial Income and Expenses
Main components of financial income and expenses for the years ended March 31, 2015 and 2014 are as follows:

2015
Dividends received
Net gain (loss) on FVTPL financial instruments
Exchange gain (loss)

7,727
(475)
(2,604)

Millions of yen
2014
7,856
19,123
6,467

Dividends received for the years ended March 31, 2015 and 2014 are from FVTOCI financial assets.

F-42

Notes to Consolidated Financial Statements(22) Discontinued Operations
The Company classified the part of thermal power generation system business which was not transferred to Mitsubishi
Hitachi Power Systems, Ltd. for business integration in the thermal power generation systems business with Mitsubishi
Heavy Industries, Ltd. but was operated by the Company and certain subsidiaries as a discontinued operations in the
consolidated statements of profit or loss for the year ended March 31, 2015 as the projects are completed. The results ofoperations for the year ended March 31, 2014 are also reclassified as discontinued operations.
Profit or loss and cash flows from the discontinued operations for the years ended March 31, 2015 and 2014 are as follows:
Millions of yen
2014

2015
Profit or loss from discontinued operations
Revenues
Cost of sales and expenses
Loss from discontinued operations, before taxes
Income taxes

29,460(83,569)(54,109)608(53,501)

Loss from discontinued operations

Millions of yen
2014

2015
Cash flows from discontinued operations
Cash flows from operating activities
Cash flows from investing activities
Cash flows from financing activities(25,016)
1,565
24,614F-43

45,343(52,295)(6,952)(3)(6,955)(28,017)(1,180)27,876

Notes to Consolidated Financial Statements(23) Earnings Per Share (EPS) Information
The computations of net income attributable to Hitachi, Ltd. stockholders used to derive basic and diluted EPS are as
follows:
Number of shares
2014

2015
Weighted average number of shares on which basic
EPS is calculated
Effect of dilutive securities
Number of shares on which diluted EPS is
calculated

4,828,815,878-

4,829,823,720-

4,828,815,878

4,829,823,720
Millions of yen
2014

2015
Net income from continuing operations,
attributable to Hitachi, Ltd. stockholders
Basic
Effect of dilutive securities
Other
DilutedNet loss from discontinued operations,
attributable to Hitachi, Ltd. stockholders
Basic
Effect of dilutive securities
Other
Diluted
Net income attributable to Hitachi, Ltd. stockholders
Basic
Effect of dilutive securities
Other
Diluted

270,983

420,832(191)
270,792(137)
420,695(53,501)(6,955)(53,501)(6,955)

217,482

413,877(191)
217,291(137)
413,740
Yen

2015

2014

EPS from continuing operations, attributable
to Hitachi, Ltd. stockholders
Basic
DilutedEPS from discontinued operations, attributable
to Hitachi, Ltd. stockholders
Basic
Diluted

56.12
56.08

87.13
87.10

(11.08)(11.08)(1.44)(1.44)EPS attributable to Hitachi, Ltd. stockholders
Basic
Diluted

45.04
45.00

85.69
85.66

F-44

Notes to Consolidated Financial Statements(24) Supplementary Cash Flow Information
Non-cash investing and financing activities for the years ended March 31, 2015 and 2014 are as follows:
Millions of yen
2014

2015
Finance lease assets acquired and obligations incurred

6,502

F-45

6,012

Notes to Consolidated Financial Statements(25) Financial Instruments and Related Disclosures(a) Capital Management
The Company manages its capital under the policy of maintaining appropriate level of assets, liabilities and capital for
current and future business operations, as well as optimizing the efficiency of capital utilization throughout the business
operations.
The Company uses the total Hitachi, Ltd. stockholders’ equity ratio as an important indicator in capital management.
The target is set in the mid-term management plan and is regularly monitored. The total Hitachi, Ltd. stockholders’equity ratio as of March 31, 2015 and 2014 and April 1, 2013 were 23.7%, 24.0% and 21.1%, respectively.
The Company is not subject to any capital requirements except for the general rules such as the Japanese Company
Law.
(b) Financial Risks
The Company is engaged in business activities world-wide, and constantly exposed to various risks such as market
risks (mainly currency exchange risk and interest rate risk), credit risk and liquidity risk. The Company implements risk
management policies to avoid or mitigate these financial risks.
(i)Currency Exchange Risk
The Company and its subsidiaries hold assets and liabilities exposed to currency exchange risk. In order to hedge
this risk, the management uses forward exchange contracts or cross currency swaps.
For trade receivables and payables denominated in foreign currencies, the Company and its subsidiaries measure
the net future cash flows per currency on a monthly basis, and enter into forward exchange contracts using a
constant ratio with the purpose of fixing the future cash flows arising from receivables and payables andforecasted transactions denominated in foreign currencies. The terms of forward exchange contracts are largely
within one year. If necessary, the Company and its subsidiaries establish a risk control policy and a risk
management approach specific to each transaction by reviewing the business characteristics, the structure ofincome and expenditure, and conditions of the contract. The Company and its subsidiaries hedge the risk
exposure arising from specific transactions based on the risk control policy and the risk management approach.
To fix cash flows from long-term debt denominated in foreign currencies, the Company and its subsidiaries enter
into cross currency swap agreements with the same maturities as the underlying debt. The hedging relationshipbetween the forward exchange contracts or cross currency swaps and the underling hedged items is highly
effective in offsetting the impact from changes in foreign currency exchange rates.
The sensitivity analysis for currency exchange rates shown below indicates the impact on income fromcontinuing operations, before income taxes, in the Company’s consolidated statements of profit or loss, if theJapanese yen depreciated by 1% on the foreign-currency denominated financial instruments held by the Company
and its subsidiaries as of March 31, 2015 and 2014, while all other variables are held constant.

Impact on income from continuing
operations, before income taxes

Currency
US Dollar
Euro

F-46

2015
1,303
416

Millions of yen
2014
1,057
462

Notes to Consolidated Financial Statements(ii)Interest Rate Risk
The Company and its subsidiaries are exposed to interest rate risk related principally to long-term debt
obligations. In order to minimize this risk, the Company and its subsidiaries enter into interest rate swap
agreements to control fluctuation risk of cash flows. The interest rate swaps entered into are receive-variable,
pay-fixed interest rate swaps. Under the interest rate swaps, the Company and its subsidiaries receive variableinterest rate payments on long-term debt associated with medium-term notes (MTN) and make fixed interest rate
payments, thereby creating fixed interest rate long-term debt.
Certain financing subsidiaries raise funds by issuing long-term debt with a fixed interest rate and lending it atvariable interest rates, creating interest rate risk. In order to minimize this risk, interest rate swaps are used toconvert, in effect, the fixed rate to a variable rate to manage fluctuations in fair value resulting from interest raterisk. Under the interest rate swaps, certain financing subsidiaries receive fixed interest rate payments associatedwith long-term debt, including MTN, and make variable interest rate payments, thereby creating variable-ratelong-term debt. The hedging relationship between the interest rate swaps and the underlying hedged items ishighly effective in offsetting the impact from changes in cash flows and fair value resulting from interest rate risk.
The sensitivity analysis for interest rate shown below indicates the impact on income from continuing operations,
before income taxes, in the consolidated statements of profit or loss, if interest rates increased by 1% on thefinancial instruments (floating-interest financial assets and liabilities measured at amortized cost, FVTPL
financial assets and liabilities and derivatives) held by the Company and its subsidiaries as of March 31, 2015 and2014, while all other variables are held constant.
Millions of yen
2014

2015
Impact on income from continuing
operations, before income taxes(5,510)F-47(6,335)

Notes to Consolidated Financial Statements(iii) Credit Risk
Trade receivables, lease receivables and other receivables resulting from operating activities of the Company andits subsidiaries are exposed to credit risk of the customers. Investments in debt securities held for managing cash
surplus and equity instruments held for strategic purposes are exposed to credit risk of the issuers. Derivativetransactions entered into in order to lower market risks are exposed to credit risk of the counter party financial
institutions.
For credit risk of customers, the Company conducts periodic credit checks as appropriate for the products soldand the customers’ financial conditions and credit ratings. A credit limit is set according to the credit risk. For
cash surplus, investment is restricted to low risk debt securities, and derivative transactions are entered into withfinancial institutions with high credit rating only.
No significant concentration of credit risk is present in a particular region or a customer, as the Company and its
subsidiaries are engaged in diverse industries worldwide.
The maximum exposure to the credit risk equals the financial assets’ carrying amount after impairment in the
consolidated statements of financial position, if collateral held is not included. The maximum exposure to thecredit risk from guarantee obligations is disclosed in note 29.
The Company considers that trade receivables, lease receivables and other receivables neither past due nor
impaired as of the end of each fiscal year are all collectible.
The following table presents the aging of trade receivables, lease receivables and other receivables past due but
not impaired as of March 31, 2015 and 2014.

March 31, 2015
52,88528,26118,0195,750
104,915

Past due within 30 days
Past due between 31 and 90 days
Past due between 91 days and 1 year
Past due over 1 year
Total

Millions of yen
March 31, 2014
33,396
19,86815,4797,709
76,452

When trade receivables, lease receivables and other receivables are impaired, the Company reduces the receivablebalance through the use of an allowance account, instead of directly reducing the carrying amount. The changes
in the balance of allowance for doubtful receivables are as follows:
Millions of yen
Trade receivables

Lease receivables

Other financial
assets measured atamortized cost
8,000

At April 1, 2013
31,1709,103
Impairment loss
provision
6,305
2,034
445
Amounts written off(5,228 )(996 )(6,350 )Other*(1,051 )
1,789(118 )At March 31, 2014
31,196
11,9301,977
Impairment loss
provision
8,742
2,300
492
Amounts written off(6,269 )(686 )(538 )
Other*
1,544(404 )
325
At March 31, 2015
35,213
13,1402,256*Other includes the impact from business acquisitions and divestitures and currency translation effect.

Total
48,273
8,784(12,574 )620
45,103
11,534(7,493 )1,465
50,609As of March 31, 2015 and 2014 and April 1, 2013, the total balances of trade receivables, lease receivables andother receivables individually determined to be impaired were ¥93,590 million, ¥102,965 million and ¥119,185
million, respectively, and the allowance for doubtful receivables corresponding to such receivables was recordedin the amounts of ¥34,674 million, ¥30,086 million and ¥34,116 million, respectively.

F-48

Notes to Consolidated Financial Statements(iv) Liquidity Risk
Trade payables and financial liabilities, such as long-term debts, held by the Company and its subsidiaries are
exposed to liquidity risk. With respect to this risk, the Company and its subsidiaries try to optimize capitalefficiency through efficient management of working capital, and maintain cash control through a centralized cash
management system. They are also able to raise funds, as necessary, from capital markets through the issuance ofdebt and equity securities, and from commercial banks through borrowings and commitment lines. The total
unused commitment lines as of March 31, 2015 are disclosed in note 29.
Hitachi Capital Corporation and its subsidiaries provide loan guarantees for customers. In case of a default, they
will be held liable for the loan. The maximum exposure of these guarantees is the balance of the loan guarantees.
The balance of loan guarantees as of March 31, 2015 is disclosed in note 29.
The following tables present the maturities of non-derivative financial liabilities. Trade payables are not includedin the tables since the carrying amounts agree with the contractual cash flows and they all mature in less than one
year.
Millions of yen
Carrying
amountShort-term debt
Long-term debt
Lease payables
Bonds
Long-term debt

March 31, 2015
Within 1 year

Contractual
cash flows

977,701

980,088980,088

After 1 year
but not morethan 5 years-

50,311
797,510
1,731,834

54,646
838,022
1,768,225

12,073
175,742
316,889

35,040449,691
1,135,302

More than 5
years

7,533
212,589
316,034-

Millions of yen
Carrying
amountShort-term debt
Long-term debt
Lease payables
Bonds
Long-term debt

March 31, 2014
Within 1 year

Contractual
cash flows

775,516

776,589

776,589

After 1 year
but not morethan 5 years-

46,367640,460
1,571,642

53,870656,994
1,605,633

11,931
137,719396,225

32,933
388,442962,617More than 5
years

9,006
130,833
246,791-

The weighted average interest rate for short-term debt is 0.4%, and the weighted average interest rate for longterm debt is 1.3% with maturities ranging from 2015 to 2030. The details on each bond issued are provided below.

IssuerName of bond

The
CompanyThe
CompanyThe
CompanyThe
Company

Unsecureddebenture #14
Unsecureddebenture #15
Unsecureddebenture #16
Unsecureddebenture #17

Subsidiaries
Subsidiary
Total

Unsecureddebentures
Unsecuredconvertible
debenture

Millions of yen
March 31,2014

Security

Interest
rates(%)

MatureinIssuedMarch 31,
2015

2005

50,00050,000Unsecured

1.6

2015

2013

10,00010,000Unsecured

0.3

2018

2013

30,00030,000Unsecured

0.8

2023

2013
2006
2015

20,00020,000Unsecured

683,020525,971

Unsecured

1.4
0.1
3.0

2028
2015
2026

4,490
797,510

4,489
640,460

Unsecured

-

2019

2007

F-49

Notes to Consolidated Financial Statements
The following table shows the maturities of the main types of derivatives, expressed in gross amounts, even fornet settlement derivatives.
Millions of yen
Within 1 year
Forward exchange contracts
Cross currency swaps
Interest rate swaps

In
Out
In
Out
In
Out

5,357
4,726
2,283
12,296
164
286

March 31, 2015
After 1 year
More than 5
but not more
years
than 5 years
325
296
64,249
713
6,724
163
17,424
61
2,607
2,044

Total
5,978
69,6889,170
29,720225
4,937
Millions of yen

Within 1 year
Forward exchange contracts
Cross currency swaps
Interest rate swaps

In
Out
In
Out
In
Out

2,452
3,725
59
3,525
189
334

March 31, 2014
After 1 year
More than 5
but not more
years
than 5 years
3,874
42,974752
19,260
55
1,001
1,351
306

Total
6,326
46,699811
22,8401,190
1,991(c) Fair Value of Financial Instruments(i) Fair Value Measurements
The following methods and assumptions are used to measure the fair value of financial assets and liabilities.
Cash and cash equivalents, Short-term loans receivable, Short-term debt, Other payables and Trade
payablesThe carrying amount approximates the fair value because of the short maturity of these instruments.
Trade receivables
Fair value is measured by the present value of future cash flows discounted by risk-free rates after considering
early settlements, cancellation and the balance of doubtful accounts, for each type of receivable, class ofreceivable based on collection records and term of collection.
Lease receivables
Fair value is based on the present value of lease payments receivable based on years to maturity, using discountrates that reflect the time to maturity and credit risk.
Investments in securities and other financial assets
Investment securities with quoted market prices are estimated using the quoted share prices. In the absence of anactive market for investment securities, quoted prices for similar investment securities, quoted prices associatedwith transactions that are not distressed for identical or similar investment securities or other relevant information
including market interest rate curves, referenced credit spreads or default rates, are used to determine fair value. If
significant inputs of fair value measurement are unobservable, the Company uses price information provided byfinancial institutions to evaluate such investments. The information provided is corroborated by the income
approach using its own valuation model, or the market approach using comparisons with prices of similar
securities.
The fair value of long-term loans receivable is estimated based on the present value of future cash flows using theinterest rate applicable to an additional loan of the same type.
Derivative assets are measured at fair value based on quoted prices associated with transactions that are not

F-50

Notes to Consolidated Financial Statements
distressed, prices in inactive markets, or based on models using interest rate curves and forward and spot prices
for currencies and commodities. If significant inputs are unobservable, the Company mainly uses the income
approach or the market approach to corroborate relevant information provided by financial institutions.
Fair values of subordinated interests and beneficiary interests in trust that are retained in transactions oftransferring financial assets are estimated by discounting future cash flows based on economic assumptions
including expected rate of credit loss and discount rate since significant inputs for estimation of the fair value areunobservable.
Long-term debt
The fair value of long-term debt is estimated based on quoted market prices or the present value of future cash
flows using the market interest rates applicable to the same contractual terms.
Other financial liabilities
Derivative liabilities are measured at fair value based on quoted prices associated with transactions that are notdistressed, prices in inactive markets, or based on models using interest rate curves and forward and spot prices
for currencies and commodities. If significant inputs are unobservable, the Company uses mainly the income
approach or the market approach to corroborate relevant information provided by financial institutions.
Contract guarantee deposits are financial liabilities received from some customers and other parties as a credit
enhancement to trade and lease receivables, and normally returned after the underlying assets are fully collected.
The fair value of contract guarantee deposits is measured by discounting the sum of the principals over the timeto the contractual return dates, using the risk-free discount rate.
(ii)

Financial Instruments Measured at Amortized Cost
The carrying amounts and estimated fair values of the financial instruments measured at amortized cost are as
follows.
The fair value estimated for financial assets and liabilities measured at amortized cost is classified in Level 2 ofthe fair value hierarchy.

Millions of yen
March 31, 2015

March 31, 2014

April 1, 2013

Carrying
amounts

Estimated
fair values

Carrying
amounts

Estimated
fair values

Carrying
amounts

Estimated
fair values

AssetsTrade receivables[1]3,556,315

3,574,933

3,127,154

3,136,918

2,677,493

2,696,547

Lease receivables

1,017,973

1,050,232

932,268

957,091

691,875

704,119

Investments in securities andother financial assets[2]Debt securities

85,72585,75891,91991,94889,00689,807Long-term loans
receivable

85,48187,37953,29454,25456,767

58,176

Liabilities
Long-term debt[3]Lease obligations

50,31150,03546,367

46,12730,99630,983

Bonds

797,510805,668

640,460

646,350

533,269

539,942

1,731,834

1,747,654

1,571,642

1,585,081

1,145,853

1,152,476

36,88235,56731,55630,862

24,89624,426Long-term debt
Other financial liabilities
Contract guarantee deposits[1] Trade receivables included in Trade receivables and Investments in securities and other financial assets in the
consolidated statements of financial position.

F-51

Notes to Consolidated Financial Statements[2] Investments in securities and other financial assets included in Other current assets and Investments insecurities and other financial assets in the consolidated statements of financial position.
[3] Long-term debt included in Current portion of long-term debt and Long-term debt in the consolidated
statements of financial position.
(iii) Financial Instruments Measured at Fair Value in Consolidated Statements of Financial Position
Financial instruments measured at fair value on a recurring basis after the initial recognition are classified into
three levels of the fair value hierarchy based on the measurement inputs’ observability and materiality as follows:
Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets
Level 2: Valuations measured by direct or indirect observable inputs other than Level 1
Level 3: Valuations measured by significant unobservable inputs
When several inputs are used for a fair value measurement, the level is determined based on the input with thelowest level in the fair value measurement as a whole.
Transfers between levels are deemed at the beginning of each quarter period.
The following tables present the assets and liabilities that are measured at fair value on a recurring basis.
March 31, 2015
Class of financial instruments
FVTPL financial assets:
Investments in securities and otherfinancial assets[1]Equity securities

Millions of yen
Level 1

Level 2

Level 3

Total

2,624

-

1,799

4,423

12,665

7,807

57,29977,771-

15,478-15,478Investments in securities and otherfinancial assets[1]Equity securities

392,977

1,413

110,833

505,223

Total financial assets at fair value408,266

24,698

169,931602,895-

104,730-

104,730-

104,730-

104,730

Debt securities
Derivatives
FVTOCI financial assets:

FVTPL financial liabilities:
Other financial liabilities
Derivatives
Total financial liabilities at fair value

F-52

Notes to Consolidated Financial Statements

March 31, 2014
Class of financial instruments
FVTPL financial assets:
Investments in securities and otherfinancial assets[1]Equity securities

Millions of yen
Level 1

Level 2

Level 3

Total

7,870

-

1,601

9,471

10,773

7,278

82,006

100,057

-

8,417

-

8,417

Investments in securities and otherfinancial assets[1]Equity securities

396,0111,155

106,524

503,690

Total financial assets at fair value

414,654

16,850190,131621,635-

71,545-71,545-71,545-71,545

Debt securities
Derivatives
FVTOCI financial assets:

FVTPL financial liabilities:
Other financial liabilities
Derivatives
Total financial liabilities at fair value

April 1, 2013
Class of financial instruments
FVTPL financial assets:
Investments in securities and otherfinancial assets[1]Equity securities

Millions of yen
Level 1

Level 2

Level 3

Total

68,062-

11,837

79,899

3,521

5,083

107,378

115,982-

12,841-

12,841

Investments in securities and otherfinancial assets[1]Equity securities

220,156795

106,052

327,003

Total financial assets at fair value

291,739

18,719225,267

535,725-

61,002-61,002-61,002-61,002

Debt securities
Derivatives
FVTOCI financial assets:

FVTPL financial liabilities:
Other financial liabilities
Derivatives
Total financial liabilities at fair value[1] Investments in securities and other financial assets included in Other current assets and Investments insecurities and other financial assets in the consolidated statements of financial position.

F-53

Notes to Consolidated Financial Statements

The following tables present the changes in Level 3 instruments measured on a recurring basis for the years ended
March 31, 2015 and 2014.
Millions of yen

2015
Level 3 financial assets
Balance at beginning of year
Gain (loss) in profit or loss [1]Equity securities
108,125
303

Debt securities
82,006(1,202)

Total
190,131(899)

Gain in OCI [2]

2,544

-

2,544

Purchases

2,470

2,014

4,484

Sales and redemption(1,281)(25,947)(27,228)

Acquisitions and divestitures

215

(37)

178

Other

256

465

721

112,632

57,299169,931

3,501

13

3,514

Balance at end of year
Unrealized gain relating to financial assets
still held at end of year [4]Millions of yen

2014
Level 3 financial assets
Balance at beginning of year
Gain (loss) in profit or loss [1]Equity securities
117,889
3,696

Gain in OCI [2]Debt securities
107,378
(977)

Total
225,267
2,719

60

-

60

2,358

2,665

5,023

Sales and redemption(9,778)(26,798)(36,576)

Acquisitions and divestitures(1,082)(4,076)(5,158)Transfer from Level 3 [3](5,350)-(5,350)

332

3,814

4,146

108,125

82,006

190,131

629

401

1,030

Purchases

Other
Balance at end of year
Unrealized gain relating to financial assets
still held at end of year [4][1] Gain (loss) in profit or loss related to FVTPL financial assets are included in Financial income and Financial
expenses in the consolidated statements of profit or loss.
[2] Gain in OCI related to FVTOCI financial assets are included in Net changes from financial assets measured atfair value through OCI in the consolidated statements of comprehensive income.
[3] Transfer from Level 3 for the year ended March 31, 2014 is the result of an investee being listed on the stock
market.
[4] Unrealized gain related to financial assets still held at the end of year are included in Financial income andFinancial expenses in the consolidated statements of profit or loss, and Net changes from financial assets
measured at fair value through OCI in the consolidated statements of comprehensive income.

F-54

Notes to Consolidated Financial Statements

Valuation techniques and unobservable inputs used for measuring financial instruments categorized as Level 3 ona recurring basis as of March 31, 2015 and 2014 and April 1, 2013 are as follows:
March 31, 2015
Level 3 financial instruments
Subordinated interests and beneficiary interests
in trusts that are retained relating tosecuritization of financial assets

March 31, 2014
Level 3 financial instruments
Subordinated interests and beneficiary interests
in trusts that are retained relating tosecuritization of financial assets

April 1, 2013
Level 3 financial instruments
Subordinated interests and beneficiary interests
in trusts that are retained relating tosecuritization of financial assets

Fair value
43,391

Fair value
68,122

Fair value
84,688Valuationtechnique
DCF

Valuationtechnique
DCF

Valuationtechnique
DCF

Unobservable inputs

Millions of yen
Range

Discount rate

0.14-0.88%

Expected rate of credit loss ofthe entire transferred financial
assets

0.15-0.36%

Unobservable inputs

Millions of yen
Range

Discount rate

0.18-1.01%

Expected rate of credit loss ofthe entire transferred financial
assets

0.15-0.36%

Unobservable inputs

Millions of yen
Range

Discount rate

0.26-0.67%

Expected rate of credit loss ofthe entire transferred financial
assets

0.15-0.36%

The impact on the fair value is not material if different amounts are used as unobservable inputs in estimating thefair value of subordinated interests and beneficiary interests in trusts that are retained relating to securitization offinancial assets. Similarly, the effect of changing unobservable inputs to reasonably possible alternative
assumptions is not material.
Fair values are measured by the Finance Department of the Company and its subsidiaries, in accordance with theCompany’s policies and procedures. Valuation models are determined so that they reflect each financial
instrument’s nature, characteristics and risks most appropriately. The Finance Department continually examineschanges in important inputs that could affect the fair value. In case the fair value of a financial instrument wassignificantly impaired, the Department administrators review and approve the impairment loss.
Equity instruments held with the objective of maintaining and strengthening business relations with the issuers
are classified as FVTOCI financial assets. The following is a list of principal equity instruments designated as
FVTOCI and their fair values.
Millions of yen
March 31, 2015
Principal FVTOCI financial assets
Fair value
Renesas Electronics Corporation
114,059
Western Digital Corporation
68,354
Central Japan Railway Company
19,570JECC Corporation
19,011
Yungtay Engineering Co., Ltd.
13,336World Trade Center Building, Inc.
11,443
Nitto Denko Corporation
8,136
Honda Motor Co., Ltd.
7,923
East Japan Railway Company
7,851
Nippon Steel Kowa Real Estate Co., Ltd.
5,900

F-55

Notes to Consolidated Financial Statements

Millions of yen
March 31, 2014
Principal FVTOCI financial assets
Renesas Electronics Corporation
Western Digital Corporation
JECC Corporation
Yungtay Engineering Co., Ltd.
Central Japan Railway Company
World Trade Center Building, Inc.
Honda Motor Co., Ltd.
East Japan Railway Company
Digital Globe, Inc.
Nippon Steel Kowa Real Estate Co., Ltd.

Fair value
100,52059,06318,50914,064
10,854
10,560
7,360
6,195
5,971
5,900
Millions of yen

April 1, 2013
Principal FVTOCI financial assets
Western Digital Corporation
JECC Corporation
World Trade Center Building, Inc.
Yungtay Engineering Co., Ltd.
Central Japan Railway Company
Digital Globe, Inc.
Honda Motor Co., Ltd.
East Japan Railway Company
Nippon Steel Kowa Real Estate Co., Ltd
Nitto Denko Corporation

Fair value
59,122
17,505
10,560
9,023
8,928
8,196
7,191
6,288
5,900
5,644

See note 21 for dividends received from investment securities classified as FVTOCI financial assets.
Accumulated gains and losses on valuation of FVTOCI financial assets are reclassified into retained earnings
when derecognized during the fiscal year. The net gains reclassified, net of taxes, for the years ended March 31,
2015 and 2014 were ¥37,501 million and ¥4,427 million, respectively. These financial assets were derecognized
upon disposal of shares after reviewing particular business relations, or reclassified as investments in subsidiaries
or investments accounted for using the equity method.
The information on FVTOCI financial assets that were derecognized for the years ended March 31, 2015 and2014 is as follows:

Fair value at the time of derecognition
Accumulated gains at the time of derecognition

2015
84,83057,321Millions of yen
2014
13,4327,176(d) Derivatives and Hedging Activities(i) Fair Value Hedge
Changes in the fair value of recognized assets and liabilities, and of derivatives designated as a fair value hedgeof these assets and liabilities are recognized in profit or loss for the period in which the changes occur.
Derivatives designated as a fair value hedge include forward exchange contracts associated with operatingtransactions, cross currency swaps agreements and interest rate swaps associated with financing transactions.
(ii)

Cash Flow Hedge
Foreign Currency Risk
Changes in the fair value of forward exchange contracts designated as an effective cash flow hedge of forecasted
transactions are recognized in OCI. AOCI is subsequently reclassified into profit or loss when the hedged items
affect profit for the period.

F-56

Notes to Consolidated Financial Statements
Interest Rate Risk
Changes in the fair value of interest rate swaps designated as a hedge of the variability of cash flows associatedwith long-term debt are recognized in OCI. AOCI is subsequently reclassified to interest charges over the period
in which the interest on the debt affects profit or loss.
As of March 31, 2015, the period in which the cash flows from the hedged items are expected to occur and inwhich they are expected to affect profit or loss is between April 2015 and April 2022.
The fair values of the main types of derivatives designated as hedging instruments are as follows:

March 31, 2015
Asset
Liability
Fair value hedge
Forward exchange contracts
Cross currency swaps
Interest rate swaps
Total
Cash flow hedge
Forward exchange contracts
Cross currency swaps
Interest rate swaps
Total

Millions of yen
April 1, 2013
Asset
Liability

March 31, 2014
Asset
Liability

2,899
2,562
171
5,632

2,803
6,300
492
9,595

1,152
600
545
2,297

5,852
6,459
340
12,651

1,638
776
677
3,091

11,0346,303
730
18,067

2,115
6,594
54
8,763

59,36823,347
4,356
87,071

3,694
205
645
4,544

40,491
15,4391,604
57,534

5,546
3,253
2
8,801

24,3735,353
2,185
31,911

The fair values of derivative assets and liabilities not applying hedge accounting as of March 31, 2015 and 2014,
and April 1, 2013 were ¥978 million, ¥1,484 million and ¥597 million for derivative assets, and ¥7,679 million,¥1,343 million and ¥11,006 million for derivative liabilities, respectively.
The contract amounts and notional amounts of the main types of derivatives are as follows:

March 31, 2015
Forward exchange contracts
To sell foreign currencies
To buy foreign currencies
Cross currency swaps
To sell foreign currencies
To buy foreign currencies
Interest rate swaps
Option contracts

Millions of yen
March 31, 2014

458,334
154,300

322,104
118,42141,013379,398
644,529
5,768

45,612
255,963421,259
1,235

The following table, “Effective portion of derivatives designated as hedging instruments and related hedged items”
shows the effects of derivative instruments for fair value hedges in the consolidated statements of profit or loss
for the year ended March 31, 2015.

F-57

Notes to Consolidated Financial Statements
Effective Portion of Derivatives Designated as Hedging Instruments and Related Hedged Items

Hedging instruments

Derivatives
Forward exchange
contracts
Cross currency
swaps
Total

Millions of yen Hedged items
Millions of yen
Recognized instatement of financial
Recognized in
AmountRecognized in
Amountposition
profit or loss
recognizedprofit or loss
recognized
Financial expenses(7,928) Trade receivables and Financial expenses
8,076
trade payables
Financial expenses
2,047
Long-term debt
Financial expenses(2,009)(5,881)

Total

6,067

The amounts recognized in the consolidated statements of profit or loss and consolidated statements ofcomprehensive income for the year ended March 31, 2015, related to cash flow hedges are detailed in thefollowing tables:“Gain (loss) recognized in OCI, Effective portion of derivatives designated as hedging instruments,”“Gain (loss) reclassified from OCI into profit or loss, Effective portion of derivatives designated as hedging
instruments,” and“Gain (loss) on derivatives designated as cash flow hedging instruments, ineffective portion.”
Gain (Loss) Recognized in OCI, Effective Portion of Derivatives Designated as Hedging Instruments

Derivatives

Millions of yen

Forward exchange contracts
Cross currency swaps
Interest rate swaps
Option contracts(16,591)(5,904)(1,784)
(482)

Total

(24,761)

F-58

Notes to Consolidated Financial Statements
Gain (Loss) Reclassified from OCI into Profit or Loss, Effective Portion of Derivatives Designated as
Hedging Instruments

Derivatives
Forward exchange contracts
Cross currency swaps
Interest rate swaps
Option contracts

Recognized in profit or loss
Financial expenses
Financial expenses
Cost of sales and Interest charges
Financial expenses

Total

Millions of yen(3,639 )4,385(1,947 )482(719 )

Gain (Loss) on Derivatives Designated as Cash Flow Hedging Instruments, Ineffective Portion

Derivatives
Forward exchange contracts
Cross currency swaps
Interest rate swaps

Recognized in profit or loss
Financial expenses
Financial expenses
Cost of sales and Interest charges

Total

Millions of yen(8,121 )250(10 )(7,881 )The following table, “Effective portion of derivatives designated as hedging instruments and related hedged items”
shows the effects of derivative instruments for fair value hedges on the consolidated statements of profit or loss
for the year ended March 31, 2014.
Effective Portion of Derivatives Designated as Hedging Instruments and Related Hedged Items

Hedging instruments

Derivatives
Forward exchange
contracts
Cross currency
swaps
Total

Millions of yen Hedged items
Millions of yen
Recognized instatement of financial
Recognized in
AmountRecognized in
Amountposition
profit or loss
recognizedprofit or loss
recognized
Financial income(18,779) Trade receivables and Financial income
22,828trade payables
Financial income(1,051) Long-term debt
Financial income
1,139(19,830)

Total

23,967

The amounts recognized in the consolidated statements of profit or loss and consolidated statements ofcomprehensive income for the year ended March 31, 2014, related to cash flow hedges are detailed in thefollowing tables:“Gain (loss) recognized in OCI, Effective portion of derivatives designated as hedging instruments,”“Gain (loss) reclassified from OCI into profit or loss, Effective portion of derivatives designated as hedging
instruments,” and“Gain (loss) on derivatives designated as cash flow hedging instruments, ineffective portion.”

F-59

Notes to Consolidated Financial Statements
Gain (Loss) Recognized in OCI, Effective Portion of Derivatives Designated as Hedging Instruments

Derivatives

Millions of yen

Forward exchange contracts
Cross currency swaps
Interest rate swaps
Option contracts(20,098)(17,031)
2,935(1,311)

Total(35,505)

Gain (Loss) Reclassified from OCI into Profit or Loss, Effective Portion of Derivatives Designated as
Hedging Instruments

Derivatives
Forward exchange contracts
Cross currency swaps
Interest rate swaps
Option contracts

Recognized in profit or loss
Financial income
Financial income
Cost of sales and Interest charges
Financial income

Total

Millions of yen
1,750
3,898
(1,257 )
1,311
5,702

Gain (Loss) on Derivatives Designated as Cash Flow Hedging Instruments, Ineffective Portion

Derivatives
Forward exchange contracts
Cross currency swaps
Interest rate swaps

Recognized in profit or loss
Financial income
Financial income
Cost of sales and Interest charges

Total

Millions of yen
4,000(326 )
36
3,710

F-60

Notes to Consolidated Financial Statements(e) Securitization of Financial Assets
For the purpose of providing diversified and stable financing, the Company and certain subsidiaries securitize certain
financial assets, such as lease and trade receivables, through structured entities formed by third parties. These
structured entities procure funds by issuing commercial paper and other borrowings. These securitization transactions
are similar to those used by many financial institutions.
Basically, investors in these structured entities only have recourse to the assets owned by the entity, and not to otherassets held by the Company and its subsidiaries. The Company and certain subsidiaries do not provide non-contractual
support to structured entities and do not have implicit support arrangements with any of them. The majority of theirinvolvement with these structured entities related to securitization activities are financing of an entity, providing limited
credit enhancements, servicing the assets and receiving fees for services provided.
(i)Consolidated Structured Entities for Securitization Purposes
The assets and liabilities held by the consolidated structured entities for securitization purposes as of March 31,
2015 and 2014 and April 1, 2013 are as follows:

Cash and cash equivalents
Trade receivables
Lease receivables
Total current assets
Trade receivables
Lease receivables
Total non-current assets
Short-term debt
Current portion of long-term debt
Total current liabilities
Long-term debt
Total non-current liabilities

March 31, 2015
12,53013,53739,92965,996
103,753
84,403
188,156
53,60853,608151,564
151,564

March 31, 201412,33015,13337,07964,542
116,41269,406
185,818
49,89549,895
148,931
148,931

Millions of yen
April 1, 2013
7,036
17,8895,476
30,401
127,968
3,411
131,379
5,172
21,227
26,399102,898
102,898

Substantially, all of the assets held by the consolidated structured entities for securitization purposes can only be
used to settle obligations of these entities.
(ii)

Risks Associated with the Company’s Interests in Unconsolidated Structured Entities for Securitization
Purposes
The Company and certain subsidiaries use structured entities sponsored by financial institutions to securitize
certain financial assets, such as lease and trade receivables. These financial institutions operate those structured
entities as a part of their ordinary business. The amount of assets transferred by the Company and certain
subsidiaries is considerably small compared to the total assets of the structured entities sponsored by thesefinancial institutions that purchase a large amount of assets from entities other than the Company and certain
subsidiaries. The Company and certain subsidiaries have little relevance to the evaluation of exposures to therisks these structured entities hold.
With respect to securitization of certain assets, certain subsidiaries structure trusts upon investors’ requests andsell interests in the trusts to the investors and hold limited interests of these trusts.
In some cases, the Company and certain subsidiaries retain subordinated interests in the financial assets
transferred to structured entities, mainly to secure liquidity and provide limited credit enhancement, and/or
investors have recourse with a scope that is considerably limited. As of March 31, 2015 and 2014 and April 1,
2013, the amounts of the maximum exposures to losses associated with the Company’s interests in theunconsolidated structured entities for securitization were ¥105,202 million, ¥124,255 million, and ¥115,784
million, respectively, and these amounts are included in the balances of the subordinated interests and theobligations to purchase assets or the carrying amounts of the transferred assets that are not derecognized in their
entirety.

F-61

Notes to Consolidated Financial Statements(iii) Transfers of Financial Assets by Securitization
 Transfers of Financial Assets Derecognized in their Entirety
The Company and certain subsidiaries transferred lease and trade receivables to unconsolidated structured
entities and other entities. During the years ended March 31, 2015 and 2014, net losses from the transfers oflease and trade receivables that were derecognized in their entirety were ¥371 million and ¥269 million,
respectively.
The Company and certain subsidiaries retain servicing responsibilities for financial assets derecognized in their
entirety, but did not record a servicing asset or liability because the amounts of the cost to service thereceivables and the servicing income are not material.
As of March 31, 2015 and 2014, the maximum exposures to losses from continuing involvement with thefinancial assets derecognized in their entirety, which is the sum of subordinated interests and the obligations topurchase assets under limited conditions, are included in the maximum exposures to losses described in “Risks
associated with the Company’s interests in unconsolidated structured entities for securitization purposes.” Transfers of Financial Assets not Derecognized in their Entirety
The Company and certain subsidiaries do not derecognize financial assets when they retain substantially all
credit risks and economic value related to the transferred financial assets through holding subordinated interests.
As of March 31, 2015 and 2014, the carrying amounts of the financial assets that continue to be recognized intheir entirety and the related liabilities are as follows:

Trade receivables
Lease receivables
Total current assets
Lease receivables
Total non-current assets
Carrying amount of transferred financial assets
Short-term debt
Current portion of long-term debt
Total current liabilities
Long-term debt
Total non-current liabilities
Carrying amount of related liabilities

March 31, 2015
96,896
24,468
121,364
58,174
58,174
179,538
109,046
26,117135,163
48,88948,889184,052

Millions of yen
March 31, 2014
123,363
18,327
141,690
46,47946,479188,169
127,404
20,368
147,772
41,65741,657
189,429

As of March 31, 2015 and 2014, the fair values of the financial assets whose transferee has a recourse right only
to the transferred financial assets and the fair values of the related liabilities and their net positions are
summarized as follows:

Fair value of financial assets
Cash and cash equivalents related to collection oftransferred financial assets
Fair value of related liabilities
Net position

March 31, 2015
179,758

Millions of yen
March 31, 2014
186,021

27,244
180,742
26,26019,046
185,245
19,822

Substantially, all of the financial assets transferred to investors can only be used to settle the obligations of theinvestor.

F-62

Notes to Consolidated Financial Statements(26) Pledged Assets
As a general contractual term for long-term and short-term debt, banks may demand collateral and guarantees for present
and future obligations, and retain rights to offset the liabilities with bank deposits when repayment is overdue or any breachof contract occurs.
Per trustee agreements of secured bonds and particular secured or unsecured loan agreements, trustees or lenders generally
have the right to pre-approve profit distributions including dividend payments and new stock issues, as well as the right todemand additional collateral or mortgage.
The Company and its subsidiaries pledged a portion of their assets as collateral primarily for bank loans as follows:

Trade receivables
Inventories
Other current assets
Investments in securities and other financial assets
Land
Buildings and structures
Machinery and other property, plant and equipment
Total

March 31, 2015
10,168
14,849
1,628
877
2,167
6,124
30,60066,413

F-63

March 31, 2014
8,324
10,300
555
2,521
8,465
27,29457,459Millions of yen
April 1, 2013
7,704
12,817
535
2,054
5,452
25,73954,301

Notes to Consolidated Financial Statements(27) Principal Subsidiaries
The Company’s consolidated financial statements include the following subsidiaries listed below.

Information &Telecommunication Systems
Information &Telecommunication Systems
Information &Telecommunication Systems
Information &Telecommunication Systems
Information &Telecommunication Systems
Information &Telecommunication Systems
Information &Telecommunication Systems
Information &Telecommunication Systems
Information &Telecommunication Systems
Information &Telecommunication Systems
Power Systems

Hitachi Information & Telecommunication
Engineering, Ltd.
Hitachi-Omron Terminal Solutions, Corp.

Yokohama, Kanagawa

Ownership
percentage
of votingrights (%)
100.0

Shinagawa-ku, Tokyo

55.0

Hitachi Solutions, Ltd.

Shinagawa-ku, Tokyo

100.0

Hitachi Systems, Ltd.

Shinagawa-ku, Tokyo

100.0

Hitachi Computer Products (America), Inc.

100.0

Hitachi Financial Equipment System (Shen Zhen)
Co., Ltd.
Hitachi Information & Telecommunication
Systems Global Holding Corporation
Hitachi-GE Nuclear Energy, Ltd.

Oklahoma,
U.S.A.
Ardon,
FranceTexas,U.S.A.
California,
U.S.A.
Shenzhen,
China
California,
U.S.A.
Hitachi, Ibaraki

Power Systems

Hitachi Power Solutions Co., Ltd.

Hitachi, Ibaraki

100.0Power Systems

Horizon Nuclear Power Limited

100.0

Social Infrastructure &Industrial Systems
Social Infrastructure &Industrial Systems
Social Infrastructure &Industrial Systems
Social Infrastructure &Industrial Systems
Social Infrastructure &Industrial Systems
Social Infrastructure &Industrial Systems

Hitachi Building Systems Co., Ltd.

Gloucester,U.K.
Chiyoda-ku, Tokyo

Hitachi Industrial Equipment Systems Co., Ltd.

Chiyoda-ku, Tokyo

100.0

Hitachi Industry & Control Solutions, Ltd.

Hitachi, Ibaraki

100.0

Hitachi Plant Construction, Ltd.

Toshima-ku, Tokyo

100.0

Hitachi Elevator (China) Co., Ltd.

Guangzhou,
China
London,United Kingdom,

70.0

Reporting segment

Name of subsidiary

Hitachi Computer Products (Europe) S.A.S.
Hitachi Consulting Corporation
Hitachi Data Systems Corporation

Hitachi Rail Europe Ltd.

F-64

Business location

100.0
100.0
100.0
100.0
100.0
80.0

100.0

100.0

Notes to Consolidated Financial Statements

Electronic Systems &Equipment
Electronic Systems &Equipment
Electronic Systems &Equipment
Electronic Systems &Equipment
Construction Machinery

Hitachi High-Technologies Corporation

Minato-ku, Tokyo

Ownership
percentage
of votingrights (%)
51.8

Hitachi Koki Co., Ltd.

Minato-ku, Tokyo

51.2

Hitachi Kokusai Electric Inc.

Chiyoda-ku, Tokyo

52.3

Hitachi Medical Corporation

Chiyoda-ku, Tokyo

100.0

Hitachi Construction Machinery Co., Ltd.

Bunkyo-ku, Tokyo

51.5

High Functional Materials &Components
High Functional Materials &Components
Automotive Systems

Hitachi Chemical Company, Ltd.

Chiyoda-ku, Tokyo

51.4

Hitachi Metals, Ltd.

Minato-ku, Tokyo

54.0

Clarion, Co., Ltd.

Saitama, Saitama

64.0

Automotive Systems

Hitachi Automotive Systems, Ltd.

Hitachinaka, Ibaraki

100.0

Automotive Systems

Hitachi Automotive Systems Americas, Inc.

100.0

Smart Life & Ecofriendly
Systems
Smart Life & Ecofriendly
Systems
Smart Life & Ecofriendly
Systems
Others(Logistics and Other services)
Others(Logistics and Other services)
Others(Logistics and Other services)
Others(Logistics and Other services)
Others(Logistics and Other services)
Others(Logistics and Other services)
Others(Logistics and Other services)
Others(Logistics and Other services)
Others(Logistics and Other services)
Financial Services

Hitachi Appliances, Inc.

Kentucky,
U.S.A.
Minato-ku, Tokyo

Hitachi Consumer Marketing, Inc.

Minato-ku, Tokyo

100.0

Hitachi Consumer Products (Thailand), Ltd.

80.1

Hitachi-LG Data Storage, Inc.

Prachinburi,
ThailandMinato-ku, Tokyo

Hitachi Life, Ltd.

Hitachi, Ibaraki

100.0

Hitachi Transport System, Ltd.

Koto-ku, Tokyo

59.0

Hitachi Urban Investment, Ltd.

Chiyoda-ku, Tokyo

100.0

Hitachi America, Ltd.

New York,
U.S.A.
Singapore

100.0

Beijing,
China
Maidenhead,
U.K.
New Delhi,
India
Minato-ku, Tokyo

100.0

Reporting segment-

Name of subsidiary

Hitachi Asia Ltd.
Hitachi (China), Ltd.
Hitachi Europe Ltd.
Hitachi India Pvt. Ltd.
Hitachi Capital Corporation
Other 966 companies

F-65

Business location

100.0

51.0

100.0

-

100.0
100.0
60.6
-

Notes to Consolidated Financial Statements(28) Related Party Transactions(a) Related Party Transactions
The Company’s and its subsidiaries’ receivable and payable balances with associates and joint ventures are as follows:

With associates
Trade receivables
Short-term loans receivable [1]Long-term loans receivable [2]Deposits [3]Trade payables
Advances received
Other payables [4]March 31, 2015
80,244
14,541
12,195
6,713
38,194
15,964
7,994

Millions of yen
March 31, 2014
59,78921,235
12,055
10,903
21,2783,615
16,363

With joint ventures
Trade receivables
Other receivables [1]Trade payables

March 31, 2015
69,612
17,424
10,226

Millions of yen
March 31, 2014
51,19522,875
12,763[1] Included in Other current assets in the consolidated statements of financial position.
[2] Included in Investments in securities and other financial assets in the consolidated statements of financial position.
[3] Included in Short-term debt in the consolidated statements of financial position.
[4] Included in Other financial liabilities (current) in the consolidated statements of financial position.
The Company’s and its subsidiaries’ revenues and purchases transactions with associates and joint ventures are as
follows:

With associates
Revenues
Purchases

2015

With joint ventures
Revenues
Purchases

2015

242,637
94,372Millions of yen
2014
169,108
52,237

87,842
33,791Millions of yen
2014
85,605
43,111(b) Compensation for Directors and Executive Officers of the Company
Millions of yen
2014

2015
Monthly salary, year-end allowance andperformance-linked compensation

2,468

F-66

2,250

Notes to Consolidated Financial Statements(29) Commitments and Contingencies(a) Loan Commitments(i) Loan Commitments to Associates and Others
The Company and Hitachi Capital Corporation provide loan commitments to associates and others. The outstandingbalance of loan commitments as of March 31, 2015 is as follows:

Total commitments available
Less amount utilized
Balance available

Millions of yen
March 31, 2015
110,427
48,906
61,521Since some loan commitments require credit approval before execution, the amount of total commitments available
may not be necessarily utilized in full.
(ii) Commitments with Financial Institutions
The Company and certain subsidiaries have line of credit arrangements with banks in order to secure efficientfinancing for business operations. The total unused line of credit as of March 31, 2015 amounted to ¥524,705
million, primarily belonging to the Company. The Company has commitment line agreements with a number ofbanks and pays commitment fees as consideration. These commitment agreements generally provide a one year
term with renewal at the end of the term. The unused line of credit under these arrangements as of March 31, 2015
amounted to ¥200,000 million. The Company also maintains other commitment line agreements with several
financial institutions, with terms of 3 years and 2 months ending in July 2016. The unused line of credit under thesearrangements as of March 31, 2015 amounted to ¥200,000 million.
(b) Commitments for Acquisition of Assets
As of March 31, 2015, outstanding commitments made to purchase property, plant and equipment were ¥57,947
million.
(c) Guarantee Obligations
The Company and certain subsidiaries provide debt guarantees to their associates, joint ventures and third parties. As of
March 31, 2015, the balance of the guarantee obligations was ¥135,242 million. It consisted of guarantees to associatesof ¥41,095 million, to joint ventures of ¥66,088 million and to third parties of ¥28,059 million. The balance toassociates included a guarantee obligation of ¥30,504 million related to the partial collection of trade receivablestransferred due to the integration of the thermal power generation systems business.
Hitachi Capital Corporation and its subsidiaries provide guarantees to financial institutions for extending loans tocustomers making purchases with loans. As of March 31, 2015, the balance of loan guarantee obligations was ¥182,556
million. In providing these guarantees, they obtain collateral appropriate for the amount of the guarantees, and therefore,
the Company considers the risk of default to be low. The Company accrued ¥5,649 million as a liability for theseguarantees.
(d) Litigation
In December 2006, the Company and a subsidiary in Europe received requests for information from the European
Commission in respect of alleged antitrust violations relating to liquid crystal displays.
In November 2007, a subsidiary in the U.S.A. received a grand jury subpoena in connection with the investigation
conducted by the Antitrust Division of the U.S. Department of Justice in respect of alleged antitrust violations relating
to cathode ray tubes. In addition, in November 2007, two subsidiaries in Asia and in Europe received requests for
information from the European Commission. Furthermore, in November 2007, a subsidiary in Canada received
requests for information from the Canadian Competition Bureau.
In June 2009, a subsidiary in Japan received a grand jury subpoena in connection with the investigation conducted by
the Antitrust Division of the U.S. Department of Justice and received requests for information from the European
Commission in respect of alleged antitrust violations relating to optical disk drives. In November 2011, the subsidiary

F-67

Notes to Consolidated Financial Statements
in Japan paid a fine in relation to the investigation from the Antitrust Division of the U.S. Department of Justice. In
July 2012, the subsidiary in Japan received a statement of objections from the European Commission in respect ofalleged antitrust violations. Two subsidiaries in Japan and in Korea accrued an amount, which was considered to be areasonable estimate in respect of these claims.
In July 2011, a subsidiary and a former associate in Japan received a statement of objections from the European
Commission in respect of alleged antitrust violations relating to high-voltage power cables. In April 2014, theEuropean Commission ordered these companies to pay fines for infringement of EU antitrust rules. The subsidiary inJapan paid the fine in June 2014.
In July 2011, a subsidiary in the U.S.A. was investigated by and received a grand jury subpoena from the Antitrust
Division of the U.S. Department of Justice, the Company and a subsidiary in Europe received requests for informationfrom the European Commission, and a subsidiary in Canada received requests for information from the CanadianCompetition Bureau, all in respect of alleged antitrust violations relating to automotive equipment. In November 2013,a subsidiary in Japan, which had been also primarily responsible for responding to the investigation from the Antitrust
Division of the U.S. Department of Justice, paid a fine. The Company made provision for estimated loss on areasonable basis.
In June 2014, a subsidiary in Japan was investigated by the Japan Fair Trade Commission in respect of alleged
antitrust violations relating to capacitors. The subsidiaries in Europe, the U.S.A., and others are being investigated bycompetition authorities in each country or region, all in respect of alleged antitrust violations relating to capacitors.
The subsidiary in Japan made provision for estimated loss on a reasonable basis.
The Company, its subsidiaries and associates have cooperated with the competent authorities. Depending upon theoutcome of these matters, fines or surcharge payments, the amount of which is uncertain, may be imposed on them.
Also, in connection with pending and settled antitrust violations, civil disputes, including class action lawsuits,
involving the Company and some of these companies have arisen in a number of countries, including in the U.S.A.
and Canada. An amount, which was considered to be a reasonable estimate in respect of these claims, was accrued forthe potential losses in relation to certain of these civil disputes.
In August 2012, a subsidiary in Europe received a complaint filed by a customer in Europe seeking compensation forconsequential losses of EUR 1,058 million (¥137,955 million), additional costs and interest allegedly incurred by thedelay in the construction process of a power plant against, jointly and severally, the Company, the subsidiary inEurope, a consortium including the Company and the subsidiary in Europe, and two other companies. In addition, in
October 2013, the subsidiary in Europe received an additional complaint requesting compensation for consequential
losses of EUR 239 million (¥31,210 million). Although the Company, the subsidiary in Europe and the consortium
will vigorously defend themselves against this lawsuit, there can be no assurance that they will not be held liable forany amounts claimed.
In December 2013, the Company, a subsidiary in Europe and a consortium consisting of the Company and thesubsidiary in Europe, jointly and severally received a request from a customer in Europe to refer a dispute toarbitration seeking compensation for EUR 606 million (¥79,077 million) including consequential losses allegedly
incurred by the delay in the construction process of a power plant. As of December 31, 2014, the amount of a request
for compensation from the customer was changed to EUR 637 million (¥83,036 million). Although the Company, thesubsidiary in Europe, and the consortium consisting of the Company and the subsidiary in Europe, will vigorously
defend themselves against this claim, there can be no assurance that they will not be held liable for any amounts
claimed.
In November 2014, the Company received a compensation claim from a customer in Japan for the consequential loss
allegedly incurred by the delay in an operation system development. In March 2015, the dispute was settled, and theCompany recognized a loss in the amount of the settlement.
The Company and its subsidiaries execute a number of business reorganizations, including mergers, acquisitions anddivestitures. Contracts for these reorganizations include clauses for transaction price adjustments subsequent to thereorganizations. The Company had reasonably estimated a loss for the price adjustments in some businessreorganizations and accrued liabilities.
Depending upon the outcome of the above legal proceedings, there may be an adverse effect on the consolidated
financial position or results of operations. Currently the Company is unable to estimate the adverse effect, if any, ofmany of these proceedings. Accordingly, except as otherwise stated, no accrual for potential loss has been made. The

F-68

Notes to Consolidated Financial Statements
actual amount of fines, surcharge payments or any other payments resulting from these legal proceedings may bedifferent from the accrued amounts.
In addition to the above, the Company and its subsidiaries are subject to legal proceedings and claims which havearisen in the ordinary course of business and have not been finally adjudicated. These actions when ultimately
concluded and determined will not, in the opinion of management, have a material adverse effect on the consolidated
financial position or results of operations of the Company and subsidiaries.
(30) First-time Adoption of IFRSThe accompanying consolidated financial statements are the Company’s first consolidated financial statements prepared inaccordance with IFRS. The accounting policies applied in preparing the first IFRS financial statements are described in note3.
On the transition to IFRS, the Company’s opening consolidated statements of financial position was prepared in accordancewith IFRS 1 as of April 1, 2013, the transition date to IFRS, with required adjustments made to the consolidated balance
sheet as of April 1, 2013 which had been prepared in accordance with US GAAP. The effects of applying IFRS 1 areadjusted in retained earnings or AOCI at the transition date. The Company has applied the following transition elections, andthe effects of transition to IFRS are presented below.
(a) IFRS 1 Exemptions
IFRS 1 requires the retrospective application of IFRS for companies adopting IFRS for the first time, however certain
exemptions are available. The Company has applied the following exemptions permitted by IFRS 1.
 Business Combinations
The Company has elected not to apply IFRS 3 “Business Combinations” retrospectively to business combinations
which occurred prior to March 30, 2010. Therefore, the carrying amounts of goodwill from acquisitions prior to
March 30, 2010 are based on US GAAP.
 Foreign Currency Translation Adjustments
Cumulative foreign currency translation adjustments are deemed to be zero as of the transition date.
 Designation of Financial Instruments Recognized prior to Transition Date
The Company has elected to use facts and circumstances that existed as of the transition date in applying theclassification standard under IFRS 9 (issued in November 2009, amended in October 2010).
(b) IFRS 1 Mandatory Exceptions
IFRS 1 prohibits retrospective application of IFRS with respect to “accounting estimates,” “derecognition of financial
assets and liabilities,” and “hedge accounting.” The Company has accordingly applied the relevant IFRSs to thesetransactions prospectively from the transition date.

F-69

Notes to Consolidated Financial Statements(c) Reconciliation of IFRS and US GAAP and Related Notes(i) Reconciliation of Equity as of the Transition Date (April 1, 2013)
Millions of yen
US GAAP
AssetsCurrent assets
Cash and cash equivalents
Short-term investments
Note receivables
Trade receivables
Investments in leases
Current portion of financial
assets transferred toconsolidated securitization
entities
Inventories
Prepaid expenses and othercurrent assets
Total current assets
Investments and advances
including affiliated companies

Property, plant and equipment
Land
Buildings
Machinery and equipment
Construction in progress
Less accumulated
depreciation
Net property, plant andequipment
Intangible assets
Goodwill
Other intangible assets
Total intangible assets
Non-current portion offinancial assets transferred toconsolidated securitization
entities
Other assets
Total assets

Effect oftransition

IFRS

527,632
10,444
110,316
2,311,460
270,899(4,275)(10,444)(110,316)(11,037)
10,814523,357
2,300,423
281,713

23,365
1,437,399(23,365)(57,827)

1,379,572

498,623
5,190,138(134,601)(341,051)

364,022
4,849,087

781,984(781,984)--

246,956

246,956-

1,042,516
410,162

1,042,516
410,162

518,313
1,942,634
5,207,010
115,340(518,313)(1,942,634)(5,207,010)(115,340)-(5,503,333)

5,503,333-

2,279,964-(2,279,964)
2,196,176

2,196,176

290,387
415,009705,396-(290,387)(415,009)(705,396)
685,166

685,166

131,379
720,369
9,809,230(131,379)(373,425)
4,927,920(32,223)

346,944
4,927,920
9,777,007

F-70

AssetsCurrent assets
Cash and cash equivalents

Trade receivables
Lease receivables

Inventories
Other current assets
Total current assets
Non-current assets

Investments accounted forusing the equity method
Investments in securities andother financial assets
Lease receivables

Property, plant and equipment

Intangible assets

Other non-current assets
Total non-current assets
Total assets

Notes to Consolidated Financial Statements
Millions of yen
US GAAP
Liabilities
Current liabilities
Short-term debt
Current portion of long-term
debt
Current portion of nonrecourse borrowings ofconsolidated securitization
entities
Note payables
Trade payables
Accrued expenses
Income taxes
Advances received
Other current liabilities
Total current liabilities
Long-term debt
Non-current portion of nonrecourse borrowings ofconsolidated securitization
entities
Retirement and severance
benefits
Other liabilities
Total liabilities
EquityHitachi, Ltd. stockholders’equityCommon stock
Capital surplus
Retained earnings
Accumulate othercomprehensive loss
Treasury stock, at cost
Total Hitachi, Ltd. stockholders’equityNoncontrolling interests
Total equity
Total liabilities and equity

Effect oftransition

IFRS

673,850

11,466685,316

260,185

26,245

286,430

26,39915,462
1,219,402
924,591
56,278359,795
428,179
3,964,141(26,399)
285,168(15,462)
21,634(195,510)(56,278)(40)(127,638)(76,814)285,168
1,241,036
729,081359,755
300,541
3,887,327

1,306,747-

116,941
63,6991,423,688
63,699102,898(102,898)-

913,211
342,946
6,629,943

24,642(36,073)2,732,113(10,503)937,853
306,8732,732,113
6,619,440

458,790622,946
1,370,723(462,753)(368,334)(1,565)438,901-

2,082,560
1,096,727
3,179,287
9,809,230(23,852)
2,132(21,720)(32,223)

F-71

Liabilities
Current liabilities
Short-term debt
Current portion of long-term
debt

Other financial liabilities
Trade payables
Accrued expenses
Advances received
Other current liabilities
Total current liabilities
Non-current liabilities
Long-term debt
Other financial liabilities

Retirement and severance
benefits
Other non-current liabilities
Total non-current liabilities
Total liabilities
EquityHitachi, Ltd. stockholders’equity458,790
Common stock
622,946
Capital surplus
907,970
Retained earnings
Accumulate other70,567comprehensive income(1,565)
Treasury stock, at cost
Total Hitachi, Ltd. stockholders’2,058,708
equity1,098,859
Non-controlling interests
3,157,567 Total equity
9,777,007
Total liabilities and equity

Notes to Consolidated Financial Statements(ii)

Reconciliation of Equity as of March 31, 2014
Millions of yen
US GAAP
AssetsCurrent assets
Cash and cash equivalents
Short-term investments
Note receivables
Trade receivables
Investments in leases
Current portion of financial
assets transferred toconsolidated securitization
entities
Inventories
Prepaid expenses and othercurrent assets
Total current assets
Investments and advances
including affiliated companies

Property, plant and equipment
Land
Buildings
Machinery and equipment
Construction in progress
Less accumulated
depreciation
Net property, plant andequipment
Intangible assets
Goodwill
Other intangible assets
Total intangible assets
Non-current portion offinancial assets transferred toconsolidated securitization
entities
Other assets
Total assets

Effect oftransition

IFRS

558,217
9,172
143,675
2,654,260
262,9532,440(9,172)(143,675)(80,874)
58,485560,657
2,573,386
321,438

52,212
1,407,055(52,212)(68,054)

1,339,001

616,326
5,703,870(148,725)(441,787)

467,601
5,262,083

1,220,800(1,220,800)--

599,490

599,490-

1,291,000
610,830

1,291,000
610,830

492,383
1,900,779
4,901,505
94,972(492,383)(1,900,779)(4,901,505)(94,972)-(5,047,548)

5,047,548-

2,342,091-(2,342,091)
2,258,933

2,258,933

339,148
422,333
761,481-(339,148)(422,333)(761,481)
732,238

732,238

185,818
802,839
11,016,899(185,818)(459,222)
5,836,108
81,292

343,617
5,836,108
11,098,191

F-72

AssetsCurrent assets
Cash and cash equivalents

Trade receivables
Lease receivables

Inventories
Other current assets
Total current assets
Non-current assets

Investments accounted forusing the equity method
Investments in securities andother financial assets
Lease receivables

Property, plant and equipment

Intangible assets

Other non-current assets
Total non-current assets
Total assets

Notes to Consolidated Financial Statements
Millions of yen
US GAAP
Liabilities
Current liabilities
Short-term debt
Current portion of long-term
debt
Current portion of nonrecourse borrowings ofconsolidated securitization
entities
Note payables
Trade payables
Accrued expenses
Income taxes
Advances received
Other current liabilities
Total current liabilities
Long-term debt
Non-current portion of nonrecourse borrowings ofconsolidated securitization
entities
Retirement and severance
benefits
Other liabilities
Total liabilities
EquityHitachi, Ltd. stockholders’equityCommon stock
Capital surplus
Retained earnings
Accumulate othercomprehensive loss
Treasury stock, at cost
Total Hitachi, Ltd. stockholders’equityNoncontrolling interests
Total equity
Total liabilities and equity

Effect oftransition

IFRS

647,269

128,247775,516464,234

77,215541,449

49,89518,926
1,331,288
937,401
72,839298,483
470,430
4,290,765(49,895)
269,501(18,926)
15,896(227,730)(72,839)(2,218)(109,572)
9,679

269,501
1,347,184
709,671296,265
360,858
4,300,444

1,512,720-

204,300
99,742

1,717,020
99,742

148,931(148,931)-

749,913462,106
7,164,435

29,963(129,828)
2,928,916
64,925

458,790
617,468
1,587,394

28(309,424)(9,265)(3,146)

326,812-2,651,241
1,201,223
3,852,464
11,016,899

17,416(1,049)16,367
81,292

F-73

Liabilities
Current liabilities
Short-term debt
Current portion of long-term
debt

Other financial liabilities
Trade payables
Accrued expenses
Advances received
Other current liabilities
Total current liabilities
Non-current liabilities
Long-term debt
Other financial liabilities

Retirement and severance
benefits
Other non-current liabilities
Total non-current liabilities
Total liabilities
EquityHitachi, Ltd. stockholders’equity458,790
Common stock
617,496
Capital surplus
1,277,970
Retained earnings
Accumulate other317,547
comprehensive income(3,146)
Treasury stock, at cost
Total Hitachi, Ltd. stockholders’2,668,657
equity1,200,174
Non-controlling interests
3,868,831 Total equity
11,098,191
Total liabilities and equity
779,876
332,278
2,928,916
7,229,360

Notes to Consolidated Financial Statements(iii) Reconciliation of Profit or Loss and Comprehensive Income for the Year Ended March 31, 2014
Consolidated Statements of Profit or Loss
Millions of yen

9,616,202(7,083,363)
2,532,839

Effect oftransition
50,244(90,384)(40,140)(2,000,028)
532,811
8,154

112,127(532,811)
208,531(164,537)(8,154)

9,666,446 Revenues(7,173,747) Cost of sales
2,492,699
Gross profit
Selling, general and(1,887,901) administrative expenses
208,531 Other income(164,537) Other expenses-

8,686
183,110-(8,686)(183,110)
33,446(1,931)33,446 Financial income(1,931) Financial expenses(5,915)

5,915-(76,858)

76,858-(33,796)(28,284)(7,755)33,79628,284
7,755-

US GAAP
Revenues
Cost of sales
Gross profit
Selling, general andadministrative expenses
Operating profit
Dividend income
Equity in net earnings of affiliatedcompanies
Other income
Loss on sale of stock of anaffiliated company
Expenses related to competition
law and others
Impairment losses for long-lived
assetsRestructuring charges
Other deductions

Interest income
Interest charges
Income before income taxes
Income taxes

Net income
Net income attributable to
Hitachi, Ltd. stockholders
Net income attributable tononcontrolling interests

14,136(26,107)

10,923
691,23045(806)

568,182(204,152)

110,316
57,612-531,958

364,030(6,955)160,973

264,975

148,902

99,055

12,071

IFRS

Share of profits ofinvestments accounted for
10,923using the equity method
691,230
EBIT
14,181 Interest income(26,913) Interest charges
Income from continuing
operations, before income
678,498
taxes(146,540) Income taxes
Income from continuing
531,958
operations
Loss from discontinued(6,955) operations
525,003
Net income
Net income attributable to413,877
Hitachi, Ltd. stockholders
Net income attributable to111,126
non-controlling interests

-

87.13
87.10

Yen
87.13
87.10

54.86
54.85

30.83
30.81

Yen
85.69
85.66

Net income attributable to Hitachi,Ltd. stockholders per share
Basic
Diluted“Effect of transition” in the table includes the effect of discontinued operation.

F-74

Earnings per share fromcontinuing operations,
attributable to Hitachi, Ltd.
stockholders
Basic
DilutedEarnings per share
attributable to Hitachi, Ltd.
stockholders
Basic
DilutedNotes to Consolidated Financial Statements
Consolidated Statements of Comprehensive Income
Millions of yen

364,030

Effect oftransition
160,973

127,312(24,580)

129,499(65,293)

-

280

-

167,218

159,638(37,524)(11,301)(8,713)-26,093-

128,193405,148
769,178(109,737)
51,236US GAAPNet income
Other comprehensive income
arising during the year

Net unrealized holding gain on
available-for-sale securities
Pension liability adjustments

Foreign currency translation
adjustments
Cash flow hedges

Total other comprehensive income
arising during the year
Comprehensive income
Comprehensive income
attributable to Hitachi, Ltd.
stockholders
Comprehensive income
attributable tononcontrolling interests

IFRS
525,003

Net income
Other comprehensive income(OCI)
Items not to be reclassified
into net income
Net changes in financial
assets measured at fairvalue through OCI
102,732
Remeasurements of defined
64,206benefit plans
Share of OCI of investments
accounted for using theequity method
280
Total items not to be
167,218
reclassified into net income
Items that can be reclassified
into net income
Foreign currency translation
122,114adjustments
Net changes in Cash flow
(20,014)hedgesShare of OCI of investments
accounted for using theequity method
26,093
Total items that can be
128,193
reclassified into net income
Other comprehensive income
295,411(OCI)
820,414 Comprehensive income

625,387

39,985665,372

143,791

11,251

155,042

F-75

Comprehensive income
attributable to Hitachi, Ltd.
stockholders
Comprehensive income
attributable to noncontrolling interests

Notes to Consolidated Financial Statements(iv) Notes to Reconciliations of Equity and Profit or Loss
 Equity Instruments
IFRS requires all equity instruments to be measured at fair value whether they have active market or not. The
Company made an irrevocable election account for substantially all equity instruments as FVTOCI financial
assets and accordingly changes in the fair value of equity instruments are recognized in OCI. Subsequent gainor loss from disposal of these financial assets is also recognized in OCI.
Under US GAAP, equity instruments with no active market are measured at cost. Impairment loss is recognized
for financial assets with other-than-temporary declines in fair value for the excess of the cost over fair value.
Subsequent gains or losses from disposal of such financial assets are recognized in profit or loss.
As of March 31, 2014 and April 1, 2013, adjustments made to investments in securities and other financial
assets were ¥58,335 million and ¥58,191 million, respectively, and the net of tax adjustments after deferred tax
liabilities in the amount of ¥20,859 million and ¥21,976 million, respectively, were mainly included in OCI.
Financial income in the consolidated statements of profit or loss for the year ended March 31, 2014 decreasedby ¥28,040 million.
 Employee Benefits
IFRS requires actuarial differences from remeasurement of defined benefit corporate pension plans andseverance pay plans and changes in fair value of plan assets (excluding interest income) related to defined
benefit corporate pension plans and severance pay plan to be recognized in OCI. Prior service costs arisingfrom plan amendments are recognized immediately in profit or loss. Current service costs are recognized as
incurred in profit or loss, and the net interest cost, measured by multiplying the net defined benefit obligation orasset by the discount rate, is recognized in profit or loss.
US GAAP requires actuarial differences and prior service costs to be deferred in AOCI, and subsequently
amortized into profit or loss. Current service cost, interest cost and expected return on plan assets arerecognized in profit or loss.
Cost of sales and Selling general and administrative expenses in the consolidated statements of profit or loss forthe year ended March 31, 2014 decreased by ¥31,838 million and ¥24,839 million, respectively.
The amount of actuarial differences in AOCI under US GAAP as of the transition date has been reclassified into
retained earnings.
 Income Taxes
Under IFRS, with respect to unrealized gains and losses from intercompany transactions, the difference
between the carrying amount of asset sold and the selling price is recognized as a future deductible temporary
difference, based on the asset and liability approach, and after considering its realizability, a deferred tax asset
is recognized by the effective tax rate of the buyer.
Under US GAAP, the tax expense of the seller is deferred based on the deferral method.
IFRS requires subsequent changes to deferred tax assets and liabilities recognized on items previously
recognized in OCI to be recognized in OCI.
US GAAP requires subsequent changes, such as changes in tax rates and changes in realizability of deferred tax
assets, to be recognized in profit or loss, even for items previously recognized in OCI.
With respect to temporary differences on investments accounted for using the equity method, IFRS requires therecognition of deferred tax liabilities using the tax rates expected to apply at the time of reversal of therespective temporary differences, such as the rate applicable for dividends or the rate for disposals.
US GAAP requires the recognition of deferred tax liabilities using the tax rate applicable based on an

F-76

Notes to Consolidated Financial Statements
assumption that temporary difference will be reversed by disposal, even if the Company intends to hold theinvestments on an ongoing basis.
Transition adjustments related to income taxes at March 31, 2014 and April 1, 2013 are included in retained
earnings.
 Scope of Consolidation
Under IFRS, entities controlled by the parent company are consolidated. Control exists when a parent company
has the power to direct financial and operational policies of an entity with an objective of receiving benefits
from the entity’s results of operation.
Under US GAAP, entities are consolidated when apparent parent control over an entity, evidenced by voting
rights, is present. All variable interest entities for which the Company or any of its consolidated entities is theprimary beneficiary are consolidated as well.
 Derecognition of Investments Accounted for Using the Equity Method
For the year ended March 31, 2014, an investee of the Company had increased its capital through a third party
allotment, thereby decreasing the Company’s proportionate ownership interest in the investee. The Company
treated this as a disposal of an associate as the investee no longer met the requirements for the equity method
accounting.
Where an investment is no longer accounted for using the equity method and the investor still holds someshares of the investment, IFRS requires the remaining portion to be measured at fair value. The difference
between the selling amount and the fair value of the remaining portion and the carrying amount of theinvestment at the time of derecognition of investments under equity method is recognized in profit or loss.
Under US GAAP, the difference between the selling amount and the carrying amount of the shares sold isrecognized in profit or loss when derecognized as equity method. If the investor still holds some shares of theinvestment, the predecessor basis is carried over to the carrying amount of the remaining interests.
As a result of the above, Other income in the consolidated statements of profit or loss for the year ended March
31, 2014 increased by ¥41,467 million.
 Government Grants
IFRS requires government grants received on acquisition of assets to be recognized either as reducing thecarrying amount of the asset by the government grants received or as deferred revenues.
US GAAP has no specific requirement on recognition of government grants received on acquisition of assets,
and therefore government grants are not reflected in the carrying amount of the asset.
 Transition Effect on Retained Earnings

Employee benefits
Foreign currency translation adjustments
Income taxes
Derecognition of investments
accounted for using the equity method
Government grants
Other
Total

March 31, 2014
(417,631)(79,795)
192,904

Millions of yen
April 1, 2013
(491,426)(91,314)
155,633

41,467(32,037)(14,332)(309,424)(38,204)
2,558(462,753)

Reconciling items below result from changes in presentation in the consolidated statements of financial positionand have no impact on the consolidated statements of profit or loss and retained earnings.

F-77

Notes to Consolidated Financial Statements
Under US GAAP, deferred tax assets and liabilities are presented separately according to their current or noncurrent attributes in assets and liabilities. IFRS requires deferred tax assets and liabilities to be presented as noncurrent items, and all current deferred tax assets and liabilities have been reclassified as non-current assets andliabilities, accordingly.
Accounts receivable, accrued expenses, other non-current liabilities and other accounts are partially reclassified
based on the IFRS definition and recognition criteria.
(v)

Notes to Reconciliations of Consolidated Statements of Cash Flows
The differences between consolidated statements of cash flows based on IFRS and US GAAP are mainly causedby the difference in closing dates of some subsidiaries and receivables transferred that did not meet therequirements of derecognition of financial assets.

(31) Approval of Consolidated Financial Statements
The consolidated financial statements were approved on June 25, 2015 by Toshiaki Higashihara, President and COO of theCompany.

F-78

Report of Independent Auditors

To the Stockholders and Board of Directors ofHitachi, Ltd.
We have audited the accompanying consolidated financial statements of Hitachi, Ltd. and its consolidated subsidiaries,
which comprise the consolidated statement of financial position as at March 31, 2015, and the consolidated statements
of profit or loss, comprehensive income, changes in equity, and cash flows for the year then ended and notes to theconsolidated financial statements.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these consolidated financial statements inaccordance with International Financial Reporting Standards, and for designing and operating such internal control as
management determines is necessary to enable the preparation and fair presentation of the consolidated financial
statements that are free from material misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted
our audit in accordance with auditing standards generally accepted in Japan. Those standards require that we plan andperform the audit to obtain reasonable assurance about whether the consolidated financial statements are free frommaterial misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated
financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks ofmaterial misstatement of the consolidated financial statements, whether due to fraud or error. The purpose of an audit of
the consolidated financial statements is not to express an opinion on the effectiveness of the entity’s internal control, but
in making these risk assessments the auditor considers internal controls relevant to the entity’s preparation and fairpresentation of the consolidated financial statements in order to design audit procedures that are appropriate in thecircumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonablenessof accounting estimates made by management, as well as evaluating the overall presentation of the consolidated
financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit
opinion.
OpinionIn our opinion, the consolidated financial statements referred to above present fairly, in all material respects, theconsolidated financial position of Hitachi, Ltd. and its consolidated subsidiaries as at March 31, 2015, and theirconsolidated financial performance and cash flows for the year then ended in conformity with International Financial
Reporting Standards.
/s/ Ernst & Young ShinNihon LLC
June 25, 2015
Tokyo, Japan

F-79

(Translation)
Following is an English translation of the Internal Control Report filed under the Financial Instruments
and Exchange Act of Japan. We have made the assessment of internal control over financial reporting inaccordance with assessment standards for internal control over financial reporting generally accepted inJapan.
[Cover][Document Filed]Internal Control Report[Applicable Law]

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

Director, Kanto Local Finance Bureau[Filing Date]

June 25, 2015

[Company Name]

Kabushiki Kaisha Hitachi Seisakusho[Company Name in English] Hitachi, Ltd.
[Title and Name ofToshiaki Higashihara, President & COO

Representative][Name and title of CFO]

Toyoaki Nakamura, Executive Vice President and Executive Officer[Address of Head Office]6-6, Marunouchi 1-chome, Chiyoda-ku, Tokyo[Place Where Available forTokyo Stock Exchange, Inc.

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

1. Matters Related to Basic Framework of Internal Control over Financial Reporting
Mr. Toshiaki Higashihara, President & COO, and Mr. Toyoaki Nakamura, Executive Vice President
and Executive Officer, are responsible for establishing and maintaining internal control over financial
reporting of Hitachi, Ltd. (the “Company”) and have established and maintained internal control overfinancial reporting in accordance with the basic framework for internal control set forth in the “On the
Revision of the Standards and Practice Standards for Management Assessment and Audit concerning
Internal Control Over Financial Reporting (Council Opinions)” published by the Business Accounting
Council.
The internal control over financial reporting is designed to achieve its objectives to the extent
reasonable through the effective function and combination of its basic elements. Therefore, there is apossibility that internal control over financial reporting may not completely prevent or detect
misstatements.
2. Matters Related to Scope of Assessment, Record Date, and Assessment Procedure
We assessed the effectiveness of our internal control over financial reporting on the record date as ofMarch 31, 2015. We made this assessment in accordance with assessment standards for internal control
over financial reporting generally accepted in Japan.
In making this assessment, we evaluated internal control which may have a material effect on theentire financial reporting on a consolidated basis (“company-level controls”) and based on the result of
this assessment, we appropriately selected business processes to be evaluated, analyzed these selectedbusiness processes, identified key controls that may have a material impact on the reliability of our
financial reporting, and assessed the design and operation of these key controls. These procedures haveallowed us to evaluate the effectiveness of our internal controls.
We determined the required scope of assessment of internal control over financial reporting for theCompany, as well as its consolidated subsidiaries, equity-method associates and joint ventures, from theperspective of the materiality that may affect the reliability of our financial reporting. The materiality that
may affect the reliability of our financial reporting is determined taking into account the materiality ofquantitative and qualitative impacts. We confirmed that we had reasonably determined the scope ofassessment of internal controls over business processes in light of the results of assessment of companylevel controls conducted for the Company, its consolidated subsidiaries, equity-method associates and joint
ventures. We did not include a part of consolidated subsidiaries, equity-method associates and joint
ventures which do not have any quantitatively or qualitatively material impact on the consolidated
financial statements in the scope of assessment of company-level controls.
Regarding the scope of assessment of internal control over business processes, we accumulated
business units in descending order of total revenues (after elimination of intercompany transactions) forthe previous fiscal year, and those business units whose combined amount of revenues reaches
approximately 80% of total revenues on a consolidated basis were selected as “significant business units.”
In addition, some of our equity-method associates and joint ventures which have a significant effect to ourconsolidated financial statements were selected as “significant business units.” At the selected significant
business units, we included, in the scope of assessment, those business processes leading to revenues,
accounts receivables and inventories and those business processes relating to greater likelihood of material
misstatements and significant account involving estimates or forecasts as significant accounts that may
have a material impact on our business objectives. Further, not only at selected significant business units,
but also at other business units, we added to the scope of assessment, as business processes having greater
materiality considering their impact on the financial reporting, those business processes relating tobusinesses or operations dealing with high-risk transactions.
3. Matters Related to Results of Assessment
As a result of the assessment above, we concluded that our internal control over financial reporting
was effective as of March 31, 2015.
4. Supplementary Matters
None.
5. Special Notes
None.
A-2

TRANSLATION
Following is an English translation of the Independent Auditors’ Report filed under the Financial Instruments andExchange Act of Japan. This report is presented merely as supplemental information.
There are differences between an audit of internal control over financial reporting under the Financial Instruments andExchange Act and an audit of internal control over financial reporting conducted under the attestation standards establishedby the American Institute of Certified Public Accountants.
In an audit of internal control over financial reporting under the Financial Instruments and Exchange Act, the auditors
express an opinion on management’s report on internal control over financial reporting, and do not express an opinion on
the Company’s internal control over financial reporting taken as a whole.

Independent Auditors’ Report(filed under the Financial Instruments and Exchange Act of Japan)
June 25, 2015
Mr. Toshiaki Higashihara, President & COO
Hitachi, Ltd.

Ernst & Young ShinNihon LLC
Designated and Engagement Partner,
Certified Public Accountant:

Koichi Tsuji

Designated and Engagement Partner,
Certified Public Accountant:

Takahiro Saga

Designated and Engagement Partner,
Certified Public Accountant:

Takuya Tanaka[Audit of Financial Statements]
Pursuant to the Article 193-2, paragraph 1 of the Financial Instruments and Exchange Act, we have audited theconsolidated financial statements included in the Financial Section, namely, the consolidated statement offinancial position as at March 31, 2015 of Hitachi, Ltd. (the “Company”) and its consolidated subsidiaries, andthe related consolidated statements of profit or loss, comprehensive income, changes in equity and cash flows
for the year then ended, including notes to the consolidated financial statements.

Management’s Responsibility for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of these consolidated financial statementsin accordance with International Financial Reporting Standards pursuant to the provision of Article 93 of theRegulation for Terminology, Forms and Preparation of Consolidated Financial Statements, and for suchinternal control as management determines is necessary to enable the preparation of consolidated financial
statements that are free from material misstatement, whether due to fraud or error.

Auditors’ Responsibility
Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We
conducted our audit in accordance with auditing standards generally accepted in Japan. Those standards
require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated
financial statements are free from material misstatement.
A-3

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the
consolidated financial statements. The procedures selected depend on the auditors’ judgment, including theassessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud
or error. The purpose of an audit of the consolidated financial statements is not to express an opinion on theeffectiveness of the entity’s internal control, but in making these risk assessments, the auditor considers
internal controls relevant to the entity’s preparation and fair presentation of the consolidated financial
statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes
evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates
made by management, as well as evaluating the overall presentation of the consolidated financial statements.
We believe that the audit evidence we have obtained is sufficient an appropriate to provide a basis for our audit
opinion.

Audit Opinion
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects,
the consolidated financial position of the Company and its consolidated subsidiaries as at March 31, 2015, andthe results of their operations and their cash flows for the year then ended in conformity with International
Financial Reporting Standards.

[Audit of Internal Control]
Pursuant to the Article 193-2, Paragraph 2 of the Financial Instruments and Exchange Act, we have audited
management’s report on internal control over financial reporting of the Company and its consolidated
subsidiaries as of March 31, 2015.

Management’s Responsibility for the Report on Internal Control
The Company’s management is responsible for designing and operating effective internal control overfinancial reporting and for the preparation and fair presentation of its report on internal control in conformity
with assessment standards for internal control over financial reporting generally accepted in Japan. There is apossibility that misstatements may not be completely prevented or detected by internal control over financial
reporting.

Auditors’ Responsibility
Our responsibility is to express an opinion on management’s report on internal control based on our internal
control audit as independent position. We conducted our internal control audit in accordance with auditing
standards for internal control over financial reporting generally accepted in Japan. Those standards require thatwe plan and perform the audit to obtain reasonable assurance about whether management’s report on internal
control is free from material misstatement.
An internal control audit involves performing procedures to obtain audit evidence about the results of theassessment of internal control over financial reporting in management’s report on internal control. The
procedures selected depend on the auditors’ judgment, including the significance of effects on reliability offinancial reporting. An internal control audit includes examining representations on the scope, procedures andresults of the assessment of internal control over financial reporting made by management, as well as
evaluating the overall presentation of management’s report on internal control.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
audit opinion.

A-4

Audit Opinion
In our opinion, management’s report on internal control referred to above, which represents that the internal
control over financial reporting of the consolidated financial statements of the Company and its consolidated
subsidiaries as of March 31, 2015 is effectively maintained, presents fairly, in all material respects, the resultsof the assessment of internal control over financial reporting in conformity with assessment standards forinternal control over financial reporting generally accepted in Japan.

Interest
Our firm and the engagement partners do not have any interest in the Company for which disclosure isrequired under the provisions of the Certified Public Accountants Act.

(The above represents a translation, for convenience only, of the original report issued in the Japanese
language.)A-5

(Translation)
Following is an English translation of the Confirmation Letter filed under the Financial Instruments andExchange Act of Japan.
[Cover][Document Filed]

Confirmation Letter[Applicable Law]

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

Director, Kanto Local Finance Bureau[Filing Date]

June 25, 2015

[Company Name]

Kabushiki Kaisha Hitachi Seisakusho[Company Name in English] Hitachi, Ltd.
[Title and Name ofToshiaki Higashihara, President & COO

Representative][Name and title of CFO]

Toyoaki Nakamura, Executive Vice President and Executive Officer[Address of Head Office]6-6, Marunouchi 1-chome, Chiyoda-ku, Tokyo[Place Where Available forTokyo Stock Exchange, Inc.

Public Inspection](2-1, Nihombashi Kabutocho, Chuo-ku, Tokyo)
Nagoya Stock Exchange, Inc.
(8-20, Sakae 3-chome, Naka-ku, Nagoya)A-6

1. Matters Related to Adequacy of Statements Contained in the Annual Securities Report
Mr. Toshiaki Higashihara, President & COO, and Mr. Toyoaki Nakamura, Executive Vice President
and Executive Officer, confirmed that statements contained in the Annual Securities Report for the 146th
fiscal year (from April 1, 2014 to March 31, 2015) were adequate under the Financial Instruments andExchange Act.
2. Special Notes
None.

A-7