2024/05/20 19:10:39 / 23092450_株式会社日立製作所_招集通知[Translation]

THE

155

th

Notice of Annual
General Meetingof Shareholders
Date and Time：

Friday, June 21, 2024
at 10:00 a.m.

Location：

Tokyo Dome City Hall
(East side of Tokyo Dome Hotel)
3-61, Koraku 1-chome, Bunkyo-ku, Tokyo

Matter to Be
Resolved： ItemElection of 12 Directors due to expirationof the term of office of all Directors

We will live-stream the General Meeting of Shareholders
to make it viewable on the internet. Please refer to page 3
for details.

(Securities Identification Code : 6501)

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

June 3, 2024
(Commencement date of measures for electronic provision:
May 31, 2024)

Notice of the Annual General Meeting of Shareholders

Dear Shareholders:
6-6, Marunouchi 1-chome, Chiyoda-ku, Tokyo

Hitachi, Ltd.
President & CEOa n d D i r e c t o r

Keiji Kojima
Notice of the 155th Annual General Meeting of Shareholders
The 155th Annual General Meeting of Shareholders of Hitachi, Ltd. is to beheld as follows:
Since its establishment, Hitachi has operated under the Mission “Contribute tosociety through the development of superior, original technology and products.”
In accordance with this Mission, Hitachi has resolved issues facing society
through the development of technologies and products that support social
infrastructures.
In the 2024 Mid-term Management Plan, ending in Fiscal 2024, Hitachi aims torealize a sustainable society through data and technology, with “Digital”, “Green”, and“Innovation” as the pillars of growth.
Even in a rapidly changing and unpredictable business environment, Hitachi
continues to make further contributions to society in order to achieve the Mid-termManagement Plan and sustainable growth in the future. We appreciate yourcontinued understanding and support.

Date and Time Friday, June 21, 2024 at 10:00 a.m. (Reception Start: 9:00 a.m.)

Location

3-61, Koraku 1-chome, Bunkyo-ku, Tokyo

Tokyo Dome City Hall (East side of Tokyo Dome Hotel)
Reporting
MatterAgendaReport on the Business Report, Financial Statements, and Consolidated
Financial Statements for the 155th Business Term (from April 1, 2023 to March
31, 2024), and the results of the audit on the Consolidated Financial Statements
by the Accounting Auditors and the Audit Committee

Matter to Be
Item Election of 12 Directors due to expiration of the term of office of all Directors
Resolved● In the case that the Business Report, Consolidated Financial Statements, Financial Statements or Reference Documentation for the Annual General Meeting of
Shareholders need to be modified, the Company will post such modification on its website as below.

https://www.hitachi.com/smeet-e/index.html

1Annual General2024/05/20 19:12:52 / 23092450_株式会社日立製作所_招集通知

Live Streaming of the General Meeting of Shareholders
We will live-stream the 155th Annual General Meeting of Shareholders (the “Meeting”) to make it viewable on
the internet as detailed below.
To protect the privacy of the shareholders present at the Meeting, the webcast will only show the areas of thevenue around the chairperson and executives; however, the camera may capture some shareholders in cases
where it cannot be avoided. Thank you in advance for your understanding.

1

Time and date of streaming
From 10:00 a.m. to the end of the Meeting on Friday, June 21, 2024
*The live stream web page will be accessible starting around 9:50 a.m., 10 minutes before the start of the Meeting.

Viewing Information

2

1. Viewing site: https://www.soukai-portal.net
2. Login ID and Password: Please enter your login ID and password indicated on the voting slip (voting-right exercisingform) .
3. How to watch: After logging in, please follow the on-screen instructions (Japanese Only).
4. For inquiries about ID and/or password, please contact
Shareholder registry administrator: Tokyo Securities Transfer Agent Co., Ltd.
TEL: 0120-88-0768 (toll-free) (Japanese Only)(Business hours: Between 9:00 a.m. and 5:00 p.m. (except Saturday and Sunday))

Precautions regarding the live stream● Viewing the live stream is not considered attendance at the Meeting prescribed in the Companies Act, and you will not be able toask questions or exercise your voting rights on the Meeting day. Please send us your voting slip or exercise your voting rights on
the internet in advance.
● The live stream may be cancelled due to unavoidable circumstances.
● Note that any problem with the device used to watch the Meeting, internet connection, or other conditions may prevent you fromviewing or cause audio or visual problems.
● The viewer will bear any expense for viewing such as internet services.

Questions regarding the Meeting are accepted on the website.
We accept your questions regarding the Meeting on our website below. We will answer some questions in which shareholders aresupposed to be interested at the Meeting. Please note that the questions which are not answered at the Meeting will not be answered
after that. Please follow the guidance provided by the Shareholders’ Meeting Portal for your use (Japanese Only).

Accepted period

to 5:20 p.m. on Friday, June 14, 2024

URL

https://www.soukai-portal.net

Please access the website with your login ID and password indicated on the voting slip.

2

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

Reference Documentation

Item

Election of 12 Directors due to the expiration of the term of office of all Directors
Due to expiration of the term of office of all of the Directors at the close of the Meeting, it is proposed that 12 Directors

be elected. The Company has nominated the following 12 Director candidates (including nine Independent Directors*) to share
their global and diverse viewpoints with the Company’s management as well as to realize the continued growth of the social
innovation business and reinforce the Company’s management supervision functions.
* The "Independent Directors" in this notice are the Directors who fulfill the qualification requirements for outside directors stated in the
Companies Act of Japan and also meet the independence criteria defined by the Company and the criteria provided by the Japanesestock exchanges where the Company is listed, unless otherwise stated.

The nominees
Name

No

Current Position and Responsibilities at the Company

1

Katsumi Ihara

RE

OD

ID

Independent Director Chair of the Board of Directors■ Nominating Committee (Chair) ■ Audit Committee■ Compensation Committee

2

Ravi Venkatesan

RE

OD

ID

Independent Director

3

Ikuro Sugawara

RE

OD

ID

Independent Director■ Audit Committee

4Isabelle Deschamps

NEW

OD

ID

-

5

Joe Harlan

RE

OD

ID

Independent Director■ Compensation Committee

6

Louise Pentland

RE

OD

ID

Independent Director

7

Takatoshi Yamamoto

RE

OD

ID

Independent Director■ Compensation Committee (Chair)

8

Hiroaki Yoshihara

RE

OD

ID

Independent Director■ Nominating Committee

9

Helmuth Ludwig

RE

OD

ID

Independent Director■ Audit Committee

10

Keiji Kojima

RE

Representative Executive Officer, President & CEO and Director■ Compensation Committee

11

Mitsuaki Nishiyama

RE

Director■ Audit Committee

12

Toshiaki Higashihara

RE

Executive Chairman, Representative Executive Officer and Director■ Nominating Committee

NEW: Newly selected nomineeRE: Re-selected nominee

OD: Outside Director nominee according to provisions of Companies Act of JapanID: Independent Director according to the provisions of the Japanese stock exchanges where the Company is listed3

item3 リスト

■ Audit Committee (Chair)

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Board of Directors Composition
In the case that the matters of the Meeting are resolved, the composition of the Board of Directors are as follows.

Independence(ratio of Independent
Directors)

Independent
Directors
9 people75%

Female2 people

Non-Japanese
5 people

16.7%

41.7%
Diversity(ratio of non-Japaneseand Female directors)

Germany
1 personUK
1 personJapan

7 peopleUSA
1 person
Canada1 personDiversity(country of origin)India
1 person

Matters Considered by the Nominating Committee in Nominating a Director Candidate
Size of the Board
Given the need for diversity of the Board views and efficiency of the Board, the number of directors shall be no more than 20.
The Nominating Committee shall consider the optimal size of the Board following the policy described above in deciding the mattersrelating to a proposal concerning election and removal of directors to be submitted to the General Meeting of Shareholders.
Composition of the Board
In nominating a director candidate, the Nominating Committee shall consider:
1. diversity in the experience and expertise, etc. possessed by the director candidates, the composition ratio between independent
directors and other directors (directors concurrently serving as executive officers and non-executive directors from within the HitachiGroup), and other such matters in order to ensure the effectiveness of the management supervision and decision-making functions of
the Board;
2. that to maintain the continuity of the Board, new candidates do not constitute all or almost all of the nominees; and3. the period of time since the candidate's assumption of office as the Company's director and the candidate's age to keep bringing fresh
ideas and viewpoints regularly to the Board.
In principle, a person will not be nominated as a director candidate after his or her 75th birthday. However, in special circumstances, aperson over 75 years old may be nominated as a director candidate if the Nominating Committee approves. Also, in principle, theNominating Committee will not nominate a person as an independent director candidate if a person has reached 10 years of total tenure.
However, in special circumstances, a person with the total tenure of 10 years or more may be nominated as an independent director
candidate, but even in this case, a person with the total tenure of 12 years or more can no longer be nominated as an independent
director candidate.
Qualification for Directors
In nominating a director candidate, the Nominating Committee shall consider that:
1. such nominee has the highest personal and professional ethics, integrity and insight; and2. such independent director nominee has distinguished records of leadership or experience at policy making levels in business, law,administration, accounting or education, etc., in addition to satisfying the criteria for independency as provided in this Guideline.
Criteria for Independency of Directors
The Nominating Committee considers director to be independent unless:
1. his or her immediate family member* is, or has been within the last three years, a director or an executive officer of the Company or
any of its subsidiaries;
2. he or she is currently an executive director, an executive officer or an employee of a company that has made payments to, or received
payments from, the Company for property or services in an amount which, in any of the last three fiscal years, exceeds 2% of any of
the companies' consolidated gross revenues;
3. he or she has received during any of the last three fiscal years more than 10 million yen in direct compensation for his or her service asa specialist in law, accounting or tax, or as a consultant from the Company, other than director compensations; or
4. he or she serves as an executive officer or director of a not-for-profit organization, and the Company's discretionary charitable
contributions to the organization in any of the last three fiscal years are more than 10 million yen and 2% of that organization's annual
gross revenues.
* An "immediate family member" includes a person's spouse, parents, children, siblings, grand-parents, grand-children, mothers andfathers-in-law, sons and daughters-in-law, spouses of siblings, grand-parents-in-law, grand-children-in-law, and brothers and sisters-inlaw.
Source: Corporate Governance Guidelines of Hitachi, Ltd. (Article 2 to 5)
https://www.hitachi.com/IR-e/corporate/governance/guidelines.html

4

BOD Composition

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Katsumi Ihara (Date of Birth: Sept. 24, 1950)

RE

OD

Position and Responsibilities at the Company

Term of office as Independent Director

Share Ownership

Independent Director
Chair of the Board of Directors
Chair of the Nominating Committee
Member of the Audit Committee
Member of the Compensation
Committee

Six years

1,400

ID

Brief Biography

Attendance in Fiscal 2023
Board of Directors meetings
9 out of 9 days (100%)
Nominating Committee
10 out of 10 days (100%)
Audit Committee
15 out of 15 days (100%)Compensation Committee
7 out of 7 days (100%)No2

5/19816/20054/20096/20096/20106/20114/20156/20166/2018Joined Sony Corporation
Executive Deputy President, Representative Corporate Executive Officer, Member of the Board, Sony Corporation
Executive Deputy President, Corporate Executive, Sony Corporation
Executive Vice President, Representative Director, Sony Financial Holdings Inc.
President, Representative Director, Sony Financial Holdings Inc.
President, Representative Director, Sony Life Insurance Co., Ltd.
Chairman, Director, Sony Life Insurance Co., Ltd. (retired in June 2017)
Chairman, Director, Sony Financial Holdings Inc. (retired in June 2017)
Director, Hitachi, Ltd. (currently in office)Reason for nomination as Independent Director and expected roles
Mr. Ihara has rich experience and insight in the area of global corporate management gained through the involvement in the
management of major companies conducting diverse businesses globally. He was nominated to be as an independent director
because he is expected to leverage this experience and insight to reinforce the supervisory and decision making functional aspects of
the Company’s Board of Directors by providing opinions and proposals regarding the general management of the Company andsupervising the Executive Officers and other’s execution of their duties from an independent perspective.

Ravi Venkatesan (Date of Birth: Jan. 12, 1963)

RE

OD

Position and Responsibilities at the Company

Term of office as Independent Director

Share Ownership

Independent Director

Three years 11 months

600

ID

Brief Biography

Attendance in Fiscal 2023
Board of Directors meetings
9 out of 9 days (100%)

7/19991/20044/20114/20138/20159/20187/202010/2022Chairman of the Board of Directors, Cummins India Ltd. (India) (retired in March 2004)
Chairman, Microsoft India Pvt. Ltd. (India) (retired in September 2011)
Independent Director, Infosys Ltd. (India) (retired in May 2018, served as Co-Chairman from April 2017 to August 2017)
Venture Partner, Unitus Ventures LLC. (India) (currently in office)
Chairman (Non-Executive), Bank of Baroda (India) (retired in August 2018)
Special Representative for Young People & Innovation, UNICEF (retired in September 2023)
Director, Hitachi, Ltd. (currently in office)
Board Chair, Global Energy Alliance for People and Planet, LLC (USA) (currently in office)

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

Reason for nomination as Independent Director and expected roles
Mr. Venkatesan has rich experience and insight in the area of global corporate management, digital business and emerging markets.
He was nominated to be as an independent director because he is expected to leverage this experience and insight to reinforce thesupervisory and decision making functional aspects of the Company’s Board of Directors by providing opinions and proposals
regarding the general management of the Company from a global viewpoint and supervising the Executive Officers and others’
execution of their duties from an independent perspective.

5

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Ikuro Sugawara (Date of Birth: Mar. 6, 1957)

RE

OD

Position and Responsibilities at the Company

Term of office as Independent Director

Share Ownership

Independent Director
Member of the Audit Committee

Two years

700

ID

Brief Biography
4/19817/2010Attendance in Fiscal 2023
Board of Directors meetings
9 out of 9 days (100%)
Audit Committee
15 out of 15 days (100%)9/20126/20137/20158/2017
6/2022Joined Ministry of International Trade and Industry of Japan
Director-General of the Industrial Science and Technology Policy andEnvironment Bureau, Ministry of Economy, Trade and Industry of Japan (“METI”)
Director-General of the Manufacturing Industries Bureau, METI
Director-General of the Economic and Industrial Policy Bureau, METI
Vice-Minister of Economy, Trade and Industry of Japan
Special Advisor to the Cabinet of Japan (retired in June 2018)
Director, Hitachi, Ltd. (currently in office)

Other Principal Positions Held
Outside Director, Toyota Motor Corporation
Outside Director, FUJIFILM Holdings Corporation

Reason for nomination as Independent Director and expected roles
Mr. Sugawara has rich experience and insight in the area of public administration, etc. gained through leading positions atgovernment agencies. He was nominated to be as an independent director because he is expected to leverage this experience andinsight to reinforce the supervisory and decision making functional aspects of the Company’s Board of Directors by providing opinions
and proposals regarding the general management of the Company and supervising the Executive Officers and others’ execution of
their duties from an independent perspective.

No

4

Isabelle Deschamps (Date of Birth: June 11, 1970)

NEW

OD

Position and Responsibilities at the Company

Term of office as Independent Director

Share Ownership

-

-

0

ID

Brief Biography
5/19932/2003
11/2009
10/20121/20171/20189/2018
10/2021Admitted an Attorney-at-Law at Quebec Bar (Canada)
Head of Legal and Company Secretary, Nestle UK Ltd (UK)
Admitted as a Solicitor (UK)
Senior Vice President, General Counsel Global Categories and Intellectual Property, Unilever PLC (UK)
Executive Vice President, General Counsel Europe and Global E-Commerce, Digital and Privacy, Unilever PLC (UK)
Executive Vice President, General Counsel Europe and Global Foods & Refreshments, Unilever N.V. (Netherlands)
Member of Executive Committee, Group General Counsel, AkzoNobel N.V. (Netherlands)
Member of Executive Committee, Chief Legal, Governance & Corporate Affairs Officer, Rio Tinto plc (UK) (currently in
office)Other Principal Positions Held
Member of Executive Committee, Chief Legal, Governance & Corporate Affairs Officer, Rio Tinto plc (UK)

Reason for nomination as Independent Director and expected roles
Ms. Deschamps has rich experience and insight in the area of corporate legal matters and corporate governance, having served as
the chief legal officer of major global companies, etc. She was nominated to be as an independent director because she is expected
to leverage this experience and insight to reinforce the supervisory and decision making functional aspects of the Company’s Board of
Directors by providing opinions and proposals regarding the general management of the Company from a global viewpoint andsupervising the Executive Officers and others’ execution of their duties from an independent perspective.

6

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Joe Harlan (Date of Birth: May 5, 1959)

RE

OD

Position and Responsibilities at the Company

Term of office as Independent Director

Share Ownership

Independent Director
Member of the Compensation
Committee

Six years

1,500

ID

Brief Biography

Attendance in Fiscal 2023
Board of Directors meetings
9 out of 9 days (100%)Compensation Committee
7 out of 7 days (100%)

9/19999/2001
11/2002
10/2004
10/2009
9/20119/2012
10/2014
10/2015
6/2018Vice President and Chief Financial Officer, Lighting Business, General Electric Company (USA)Vice President, Corporate Financial Planning and Analysis, 3M Company (USA)President and Chief Executive Officer, Sumitomo 3M Ltd.
Executive Vice President, Electro and Communications Business, 3M Company (USA)
Executive Vice President, Consumer and Office Business, 3M Company (USA)
Executive Vice President, Performance Materials, The Dow Chemical Company (USA)
Executive Vice President, Chemicals, Energy and Performance Materials, The Dow Chemical Company (USA)
Chief Commercial Officer and Vice Chairman, Market Business, The Dow Chemical Company (USA)Vice Chairman and Chief Commercial Officer, The Dow Chemical Company (USA) (retired in August 2017)
Director, Hitachi, Ltd. (currently in office)Reason for nomination as Independent Director and expected roles
Mr. Harlan has rich experience and insight in the area of global corporate management gained through his involvement inmanagement at major companies conducting diverse businesses globally. He was nominated to be an independent director because
he is expected to leverage this experience and insight to reinforce the supervisory and decision making functional aspects of theCompany’s Board of Directors by providing opinions and proposals regarding the general management of the Company from a global
viewpoint and supervising the Executive Officers and others’ execution of their duties from an independent perspective.

No

6

Louise Pentland (Date of Birth: Apr. 11, 1972)

RE

OD

Position and Responsibilities at the Company

Term of office as Independent Director

Share Ownership

Independent Director

Nine years

1,300

ID

Brief Biography

Attendance in Fiscal 2023
Board of Directors meetings
9 out of 9 days (100%)

8/19977/20019/20077/20086/20092/20114/20156/20157/20159/2016
1/20229/2023

Admitted as a Solicitor (UK)
Senior Legal Counsel, Nokia Networks, Nokia Corporation (Finland)
Vice President, Acting Chief Legal Officer and Head of IP Legal, Nokia Corporation (Finland)
Senior Vice President and Chief Legal Officer, Nokia Corporation (Finland)
Admitted to New York State Bar Association
Executive Vice President and Chief Legal Officer, Nokia Corporation (Finland) (retired in May 2014)
General Counsel, PayPal, eBay Inc. (USA)
Director, Hitachi, Ltd. (currently in office)Senior Vice President and Chief Legal Officer, PayPal Holdings, Inc. (USA)
Executive Vice President, Chief Business Affairs and Legal Officer, PayPal Holdings, Inc. (USA)
Executive Vice President and Senior Advisor, PayPal Holdings, Inc. (USA) (retired in July 2022)
Executive Vice President and Chief Counsel, Disney Park, Experiences and Products, The Walt Disney Company (USA)(currently in office)

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

Reason for nomination as Independent Director and expected roles
Ms. Pentland has deep insight into corporate legal matters and corporate governance gained through her rich experience as the chief
legal officer of major global companies. She was nominated to be an independent director because she is expected to leverage thisexperience and insight to reinforce the supervisory and decision making functional aspects of the Company’s Board of Directors byproviding opinions and proposals regarding the general management of the Company from a global viewpoint and supervising the
Executive Officers and others’ execution of their duties from an independent perspective.

7

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Takatoshi Yamamoto (Date of Birth: Oct. 20, 1952)

RE

OD

Position and Responsibilities at the Company

Term of office as Independent Director

Share Ownership

Independent Director
Chair of the Compensation Committee

Eight years

14,900ID

Brief Biography

Board of Directors meetings
9 out of 9 days (100%)

4/1975
4/198912/1995
6/19997/20056/20096/20116/2016Compensation Committee
7 out of 7 days (100%)

Other Principal Positions Held

Attendance in Fiscal 2023

Joined Nomura Research Institute, Ltd.
Joined Morgan Stanley Japan Limited
Managing Director, Morgan Stanley Japan Limited
Managing Director and Vice Chairman, Tokyo Branch, Morgan Stanley Japan Limited
Managing Director and Vice Chairman, UBS Securities Japan Co., Ltd.
Managing Director, CASIO COMPUTER CO., LTD.
Advisor, CASIO COMPUTER CO., LTD. (retired in June 2012)
Director, Hitachi, Ltd. (currently in office)Outside Director, Murata Manufacturing Co., Ltd.

Reason for nomination as Independent Director and expected roles
Mr. Yamamoto has broad range of insight in business and management gained through his experience in the area of corporate
analysis and global corporate management. He was nominated to be an independent director because he is expected to leverage thisexperience and insight to reinforce the supervisory and decision making functional aspects of the Company’s Board of Directors byproviding opinions and proposals regarding the general management of the Company and supervising the Executive Officers andothers’ execution of their duties from an independent perspective.

No

8

Hiroaki Yoshihara (Date of Birth: Feb. 9, 1957)

RE

OD

Position and Responsibilities at the Company

Term of office as Independent Director

Share Ownership

Independent Director
Member of the Nominating Committee
Chair of the Audit Committee

Ten years

3,600

ID

Brief Biography
11/1978
7/1996
10/1997
10/20036/2014
Attendance in Fiscal 2023
Board of Directors meetings
9 out of 9 days (100%)
Nominating Committee
10 out of 10 days (100%)
Audit Committee
15 out of 15 days (100%)

Joined Peat Marwick Mitchell & Co.
National Managing Partner, the Pacific Rim Practice, KPMG LLPBoard Member, KPMG LLP
Vice Chairman and Global Managing Partner, KPMG International (retired in April 2007)
Director, Hitachi, Ltd. (currently in office)

Other Principal Positions Held
Outside Director, HOYA CORPORATION

Reason for nomination as Independent Director and expected roles
Mr. Yoshihara has rich experience and insight in the area of global corporate management and accounting. He was nominated to be
an independent director because he is expected to leverage this experience and insight to reinforce the supervisory and decision
making functional aspects of the Company’s Board of Directors by providing opinions and proposals regarding the generalmanagement of the Company from a global viewpoint and supervising the Executive Officers and others’ execution of their duties
from an independent perspective.

8

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2024/05/20 19:12:52 / 23092450_株式会社日立製作所_招集通知No9Helmuth Ludwig (Date of Birth: Sept. 19, 1962)

RE

OD

Position and Responsibilities at the Company

Term of office as Independent Director

Share Ownership

Independent Director
Member of the Audit Committee

Three years 11 months

5,400

ID

Brief Biography
6/20018/20028/2007
10/2010
10/2011
10/2014
Attendance in Fiscal 2023
Board of Directors meetings
9 out of 9 days (100%)
Audit Committee
15 out of 15 days (100%)

10/2016
1/20207/2020President, Software and System House Division, Siemens AG (Germany)
President, Systems Engineering Division, Automation and Drives Group, Siemens AG (Germany)
President, Siemens PLM Software, Inc. (USA)Global Head of Communications, Industry Automation, Siemens Corp. (USA)President and CEO, Industry Sector, North America, Siemens Industry, Inc. (USA)
Executive Vice President and Chief Digital Officer, Digital Factory Division, Product Lifecycle Management, Siemens Corp.
(USA)
Chief Information Officer, Siemens AG (Germany) (retired in December 2019)
Professor of Practice in Strategy and Entrepreneurship, Cox School of Business, Southern Methodist University (USA)(currently in office)Director, Hitachi, Ltd. (currently in office)

Other Principal Positions Held
Professor of Practice in Strategy and Entrepreneurship, Cox School of Business, Southern Methodist University (USA)Senior Advisor, Bridgepoint, LLC (USA)

Reason for nomination as Independent Director and expected roles
Mr. Ludwig has rich experience and insight in the area of global corporate management and digital business. He was nominated to be
an independent director because he is expected to leverage this experience and insight to reinforce the supervisory and decision
making functional aspects of the Company’s Board of Directors by providing opinions and proposals regarding the generalmanagement of the Company from a global viewpoint and supervising the Executive Officers and others’ execution from an
independent perspective.

No

10

Keiji Kojima (Date of Birth: Oct. 9, 1956)

RE

Position and Responsibilities at the Company

Share Ownership

Representative Executive Officer,
President & CEO and Director
Member of the Compensation Committee

113,900

Brief Biography

Attendance in Fiscal 2023
Board of Directors meetings
9 out of 9 days (100%)Compensation Committee
7 out of 7 days (100%)

4/19824/20114/20124/20164/20186/20214/2022Joined Hitachi, Ltd.
General Manager, Hitachi Research Laboratory
Vice President and Executive Officer
Senior Vice President and Executive Officer
Representative Executive Officer, Executive Vice President
Representative Executive Officer, President & COO and Director, Hitachi, Ltd.
Representative Executive Officer, President & CEO and Director, Hitachi, Ltd. (currently in office)Reason for nomination as Director and expected roles
Mr. Kojima has rich experience and a proven performance record, having been engaged in R&D and business management in thedigital business both at the Company and at Group companies as well as in the global promotion of Lumada business. He has been
engaged in the management of the Company as President & COO since June 2021 and as President & CEO since April 2022. Mr.
Kojima was nominated to be a director because he is expected to continue to promote information sharing and draw on his richexperience and performance record to reinforce the decision-making function of the Board of Directors as a member of the Board.

9

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Mitsuaki Nishiyama (Date of Birth: Sep. 25, 1956)
Position and Responsibilities at the Company

Share Ownership

Director
Member of the Audit Committee

26,660RE

Brief Biography

Attendance in Fiscal 2023
Board of Directors meetings
7 out of 7 days (100%)
Audit Committee
9 out of 9 days (100%)

4/19794/20084/20116/20124/20137/20134/20144/20154/20164/20206/20201/20234/20236/2023Joined Hitachi, Ltd.
General Manager, Finance Department Ⅰ
Executive Officer, Hitachi Cable, Ltd.
Executive Officer, Board Director, Hitachi Cable, Ltd.
Vice President and Executive Officer, Board Director, Hitachi Cable, Ltd.
Vice President and Managing Officer, Hitachi Metals, Ltd. (currently Proterial, Ltd.)
Vice President and Executive Officer, Hitachi Metals, Ltd. (retired in March 2015)
Vice President and Executive Officer, Hitachi, Ltd.
Representative Executive Officer, Senior Vice President and Executive Officer, Hitachi, Ltd.
Representative Executive Officer, Chairperson and CEO, Hitachi Metals, Ltd.
Representative Executive Officer, Chairperson, President and CEO, Hitachi Metals, Ltd.
Representative Executive Officer, Chairperson, President and CEO, and Director, Hitachi Metals, Ltd.
Representative Director, Executive Chairman, Proterial, Ltd. (retired in March 2023)
Associate, Hitachi, Ltd.
Director, Hitachi, Ltd. (currently in office)Reason for nomination as Director and expected roles
Mr. Nishiyama has rich experience and a proven performance record, having been engaged in operations in areas such asaccounting and financial affairs and in management at both the Company and Group companies, etc. Mr. Nishiyama was nominatedto be a director because he is expected to reinforce the supervisory functions of the Company's Board of Directors by supervising the
Executive Officers and others’ execution of their duties based on his rich experience and proven performance record.

No

12

Toshiaki Higashihara (Date of Birth: Feb. 16, 1955)
Position and Responsibilities at the Company

Share Ownership

Executive Chairman, Representative
Executive Officer and Director
Member of the Nominating Committee

208,200

RE

Brief Biography

Attendance in Fiscal 2023
Board of Directors meetings
9 out of 9 days (100%)
Nominating Committee
10 out of 10 days (100%)

4/19774/20074/20084/20106/20104/20114/20134/20146/20144/20165/20216/20214/2022Joined Hitachi, Ltd.
Vice President and Executive Officer
President, Hitachi Power Europe GmbH
Representative Executive Officer, President and Chief Executive Officer, Hitachi Plant Technologies, Ltd.
President and Representative Director, Hitachi Plant Technologies, Ltd.
Vice President and Executive Officer, Hitachi, Ltd.
Senior Vice President and Executive Officer, Hitachi, Ltd.
Representative Executive Officer and President & COO, Hitachi, Ltd.
Representative Executive Officer, President & COO and Director, Hitachi, Ltd.
Representative Executive Officer, President & CEO and Director, Hitachi, Ltd.
Representative Executive Officer, Executive Chairman, President & CEO and Director, Hitachi, Ltd.
Representative Executive Officer, Executive Chairman & CEO and Director, Hitachi, Ltd.
Executive Chairman, Representative Executive Officer and Director, Hitachi, Ltd. (currently in office)Reason for nomination as Director and expected roles
Mr. Higashihara has rich experience and a proven performance record, having been engaged in business management in a broad
range of fields, including the social infrastructure business and the power systems business, both at the Company and at Group
companies, as well as in the promotion of the Group’s global business development. He has been engaged in the management of theCompany as President since April 2014, as Executive Chairman and President since May 2021 and as Executive Chairman sinceJune 2021. He has been serving as Executive Chairman and Director since April 2022. Mr. Higashihara was nominated to be adirector because he is expected to continue to promote information sharing and draw on his rich experience and performance record
to reinforce the decision-making function of the Board of Directors as a member of the Board.

10

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Notes:
1.

Attendance at Board of Directors meetings and committee meetings is based on the number of days when meetings were held
during each member’s term of office.
2. Messrs. Katsumi Ihara, Ravi Venkatesan, Ikuro Sugawara, Joe Harlan, Takatoshi Yamamoto, Hiroaki Yoshihara and Helmuth
Ludwig and Mses. Isabelle Deschamps and Louise Pentland are nominees who fulfill the qualification requirements to beoutside director nominees as provided for in Article 2, Paragraph 3, Item 7 of the Enforcement Regulations of the Companies
Act. The Company has reported all of them as independent directors to the Japanese stock exchanges where the Company islisted.
3. The Company maintains a limited liability agreement (hereinafter the “Agreement”) with Messrs. Katsumi Ihara, Ravi
Venkatesan, Ikuro Sugawara, Joe Harlan, Takatoshi Yamamoto, Hiroaki Yoshihara, Helmuth Ludwig and Mitsuaki Nishiyama
and Ms. Louise Pentland. The general intent of the Agreement is to limit the liability of Directors provided for in Article 423,
Paragraph 1 of the Companies Act to the aggregate amount of each item stipulated under Article 425, Paragraph 1 of theCompanies Act. The Agreement will be renewed should the aforementioned individuals be re-elected at the Meeting. In theevent Ms. Isabelle Deschamps is elected as a director, the Company will newly enter into the same agreement with her.
4. The Company currently has a Directors' and Officers' Liability Insurance Agreement, which is stipulated in Article 430-3,
Paragraph 1 of the Companies Act, nominating each of its director candidates other than Ms. Isabelle Deschamps as an insured
person with an insurance company. The content of the Insurance Agreement is stated in “Directors and Executive Officers Contents of Directors’ and Officers’ Liability Insurance Agreement” in the Business Report. Upon the election of the directors,
each director other than Ms. Isabelle Deschamps will continue to be insured under the insurance agreement and Ms. Isabelle
Deschamps will newly become an insured person under the insurance agreement. The Company plans to renew the agreementwith the same terms and conditions during the tenure of each director.
5. Mr. Hiroaki Yoshihara served as Non-Executive Director (a similar position to outside director under the Companies Act) at theCompany’s overseas subsidiaries from September 2008 to March 2012.
6. In the event this agenda item is approved, the members and the chair of the committees are expected to be as follows:
Nominating Committee: Katsumi Ihara (chair), Hiroaki Yoshihara, Toshiaki Higashihara
Audit Committee: Hiroaki Yoshihara (chair), Katsumi Ihara, Ikuro Sugawara, Helmuth Ludwig, Mitsuaki Nishiyama
Compensation Committee : Takatoshi Yamamoto (chair), Katsumi Ihara, Joe Harlan, Keiji Kojima
7. The Company has no transactions with Unitus Ventures LLC., where Mr. Ravi Venkatesan is currently serving as VenturePartner, with Rio Tinto plc, where Ms. Isabelle Deschamps is currently serving as Member of Executive Committee, Chief Legal,
Governance & Corporate Affairs Officer, with The Walt Disney Company, where Ms. Louise Pentland is currently serving as
Executive Vice President and Chief Counsel, Disney Park, Experiences and Products, with Southern Methodist University,where Mr. Helmuth Ludwig is currently serving as Professor of Practice, and with Bridgepoint, LLC, where Mr. Helmuth Ludwig
is currently serving as Senior Advisor.
8. The Company has no transactions whose volume is more than 1% of the Company’s consolidated revenues or each company’s
respective consolidated revenues with AkzoNobel N.V., where Ms. Isabelle Deschamps had served as Member of Executive
Committee, Group General Counsel (retired in September 2021), with PayPal Holdings, Inc., where Ms. Louise Pentland had
served as Executive Vice President and Senior Advisor (retired in July 2022), and with Siemens AG, where Mr. Helmuth Ludwig
had served as Chief Information Officer (retired in December 2019).
9. The Company has no contractual relationship with Mses. Isabelle Deschamps and Louise Pentland and in relation to legal andother professional services, etc. Mr. Hiroaki Yoshihara had served as Vice Chairman and Global Managing Partner of KPMGInternational until April 2007. However, the Accounting Auditors of the Company do not belong to the KPMG Group. In addition,
the Company has no contractual relationship with Mr. Yoshihara in relation to accounting and other professional services or
consulting services, etc.
10. The positions with * in “Other Principal Positions Held” of each nominee are similar positions in each of the foreign corporations
to outside director under the Companies Act.

11

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

Business Overview and Results of Hitachi Group
Business Results

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

Actions in Fiscal 2023 and Aims

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

DX: Digital transformation, GX: green transformation*2

Lumada business revenues(Billions of yen)

2,334

1,960
215

(+19%)

284
553

466
630
649

719

FY2022

FY2023

Digital engineering
Connected products
Notes:

778

System integration
Managed services

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

Excluding Okinawa area

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

12

Business Results

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

Adjusted EBITA

9,728.7
Year over year

Adjusted EBITA Margin

Net income attributable to
Hitachi, Ltd. stockholders

9.4%

589.8

918.1

-11％

Year over year

+4％

Year over year

+1.3

Year over year

ROIC

8.7%

-9％

Year over year

+1.1

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

Financial Results by Segment
Digital Systems & Services

Green Energy & Mobility

Automotive Systems

OthersConnective Industries

Revenues

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

507.7

350

(5%)

300

1,164.3(11%)

2,598.6

333.4

Revenues

200

3,057.9 9,728.7

150

12.0

(10.5%)

10.0

199.1

8.0

(6.5%)

6.0(4.4%)

3,052.3

4.0

100

(29%)

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

13

Business Results

14.0

320.6

(12.8%)

250

(25%)

Total

(30%)

(%)

50.6

(1.3%)

6.7

2.0
0.0

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

Business Overview and Results of Hitachi Group - Results by Segment

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

Revenues

Adjusted EBITA

Adjusted EBITA MarginROIC

2,598.6 billion yen

333.4 billion yen

12.8%

8.8%

Year over year

+9%

Year over year

+14%

Year over year

+0.5 points

Year over year

+0.5 points

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

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

14

DSS

Creating innovation by leveraging rapidly evolving generative AI

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

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

Revenues

Adjusted EBITA

Adjusted EBITA MarginROIC

3,052.3 billion yen

199.1 billion yen

6.5%

5.1%

Year over year

+24%

Year over year

+22%

Year over year

-0.1 points

Year over year

+1.9 points

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

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

wind

power

generation

increased.

Hitachiisalsoestablishing technologies and models for energy management

Energy management utilizing digital technology

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

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

UK train maintenance utilizing Hitachi’s digital asset management

15

GEM

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

Revenues

Adjusted EBITA

Adjusted EBITA MarginROIC

3,057.9 billion yen

320.6 billion yen

10.5%

10.5%

Year over year

+3%

Year over year

+3%

Year over year

±0.0 points

Year over year

-0.3 points

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

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

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

16

CI

Operating in three groups:
Urban, Advanced Technology and Industry

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

Automotive Systems

Revenues

1,164.3 billion yen
Year over year -39%

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

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

4.4%
Year over year +0.6 points

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

Others

Revenues

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

507.7 billion yen
Year over year +2%

Adjusted EBITA
Adjusted EBITA Margin

6.7 billion yen
Year over year ＋21.9 billion yen

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

17

Automotive Systems、Others

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

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

2019

2020

2021

2022

2023

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

8,767.2
661.8
180.2

8,729.1
495.1
609.1
844.4

10,264.6
738.2
855.3
839.3

10,881.1
748.1
884.6
819.9

9,728.7
755.8
918.1
825.8

87.5

501.6

583.4

649.1

589.8

9,930.0

11,852.8

13,887.5

12,501.4

12,221.2

2019

2020

2021

2022

2023

1,793.2
108.0
355.4
119.4
4,004.4

1,678.2
39.0
305.4
705.5
4,982.6

1,623.4
113.9
365.0
516.1
5,815.6

1,631.3
88.0
354.7
987.9
5,940.4

1,756.9
147.7
401.0
581.5
6,095.4

Unconsolidated Basis(Billions of yen)
Fiscal Year

Revenues
Operating Income
Ordinary Income
Net Income
Total Assets

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

18

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

Overseas Revenues Trends(Billions of yen)

12,00010,881.1

10,264.6
8,767.2

9,000
6,000

0

2019

2020

2021

5,955.3(61%)

6,762.9(62%)

6,077.5(59%)

4,574.3(52%)

4,238.1
(48%)

3,000

9,728.7

8,729.1

2022

2023

Revenues by Market

22%
Asia

2,151.5 Billion yen

Overseas Revenues

Japan Revenues

5,955.3 Billion yen (61%)

3,773.3 Billion yen

16%
North America

1,582.9 Billion yen

16%

7%

Europe1,550.8 Billion yen

39%

Other Areas

669.9 Billion yen

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

19

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

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

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

customers'

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

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

20

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

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

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

Discussion by data scientists

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

21

Acceleration of Social Innovation through AI Transformation

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

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

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

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

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

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

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

22Acceleration of Social Innovation through AI Transformation

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

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

Name of Company

Creditor

The Company

Balance of Borrowings

Japan Bank for International Cooperation

184.7 billion yen

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

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

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

Capital Investment Trend(Billions of yen)

OthersDigital Systems &Services
Automotive
Systems

Connective
Industries

500

5.0

(4.6%)(4.1%)

67.8
CapitalInvestment

315.8(3.8%)(3.2%)

399.6
359.8

300

Total

63.8

(%)

400

21.0
51.2

(Billions of yen)

388.7

349.7

4.0
(3.2%)
315.8

3.0

200

2.0

100

1.0

114.9
0

Green
Energy &Mobility

2019

2020

2021

2022

2023

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

23

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

(FY)

0.0

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

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

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

R&D Expenses by Segment
OthersR&D Expenses Trends

3.0(Billions of yen)

Digital Systems &Services

25.9

Automotive
Systems

50.6

300

290.1
91.0

(3.4%)

293.7

293.5

(3.1%)

316.2

317.3

3.5

(3.0%)(2.9%)

290.1

3.0
2.5
2.0

200

1.5
100

65.2

1.0
0.5

Green Energy &Mobility

0

2019

2020

2021

2022

2023

(FY)

0.0

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

24

Research and Development of Hitachi Group

(%)(3.4%)

54.1

Research andDevelopment
Expenses
Total

Connective
Industries(Billions of yen)

Corporate Items &Eliminations

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

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

Number of Employees in the Hitachi Group

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

Others

11,589Connective
Industries

Number of Employees in Japan and Overseas

3,315
Japan

113,737

Digital Systems &Services

81,514

Number of 106,839
employees

Number of
employees
in Japan andOverseas

Total

268,655(consolidated)(28,111)

Green Energy &Mobility

Overseas

154,918

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

25

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

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

3

4
4

4

7

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

The Company
Location
Head Office

Tokyo (Chiyoda-ku)

R&D

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

Manufacturing,
Design andEngineering

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

Sales and

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

Area Operations

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

26

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

Location

Ratio of
Voting Rights(%)

Hitachi Information & Telecommunication Engineering, Ltd.

Nishi-ku, Yokohama,
Kanagawa

100.0

Hitachi Channel Solutions, Corp.

Shinagawa-ku, Tokyo

100.0

Hitachi Solutions, Ltd.

Shinagawa-ku, Tokyo

100.0

Hitachi Systems, Ltd.

Shinagawa-ku, Tokyo

100.0

GlobalLogic Worldwide Holdings, Inc.

U.S.A.

100.0

Hitachi Computer Products (America), Inc.

U.S.A.

100.0

Hitachi Digital LLC

U.S.A.

100.0

Hitachi Digital Services LLC

U.S.A.

100.0

Hitachi Payment Services Private Limited

India

100.0

Hitachi Vantara LLC

U.S.A.

100.0

Hitachi-GE Nuclear Energy, Ltd.

Hitachi, Ibaraki

80.0

Hitachi Plant Construction, Ltd.

Toshima-ku, Tokyo

100.0

Hitachi Power Semiconductor Device, Ltd.

Hitachi, Ibaraki

100.0

Hitachi Power Solutions Co., Ltd.

Hitachi, Ibaraki

100.0

Hitachi Energy Ltd

Switzerland

100.0

Hitachi Rail Ltd.

U.K.

100.0

Hitachi Building Systems Co., Ltd.

Chiyoda-ku, Tokyo

100.0

Hitachi Global Life Solutions, Inc.

Minato-ku, Tokyo

100.0

Hitachi High-Tech Corporation

Minato-ku, Tokyo

100.0

Hitachi Industrial Equipment Systems Co., Ltd.

Chiyoda-ku, Tokyo

100.0

Hitachi Industrial Products, Ltd.

Chiyoda-ku, Tokyo

100.0

Hitachi Industry & Control Solutions, Ltd.

Taito-ku, Tokyo

100.0

Hitachi Plant Services Co., Ltd.

Toshima-ku, Tokyo

100.0

Hitachi Elevator (China) Co., Ltd.

China

70.0

Hitachi Global Air Power US, LLC

U.S.A.

100.0

Hitachi Industrial Holdings Americas, Inc.

U.S.A.

100.0

JR Technology Group, LLC

U.S.A.

100.0

Segment■■■

DigitalSystems &Services

Green
Energy &Mobility

Connective
Industries

27

Major Hitachi Group Companies

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

Segment■

Name of Company

Location

Ratio of
Voting Rights(%)

Hitachi Real Estate Partners, Ltd.

Chiyoda-ku, Tokyo

100.0

Hitachi America, Ltd.

U.S.A.

100.0

Hitachi Asia Ltd.

Singapore100.0

Hitachi (China), Ltd.

China

100.0

Hitachi Europe Ltd.

U.K.

100.0

Hitachi India Pvt. Ltd.

India

100.0

Others

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

28

Major Hitachi Group Companies

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

Directors and Executive Officers
Directors

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

Position

Committee Membership

Other Principal Positions Held

Katsumi Ihara

Independent
Director

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

Ravi Venkatesan

Independent
Director-

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

Cynthia Carroll

Independent
Director

Nominating Committee

Ikuro Sugawara

Independent
Director

Audit Committee

Joe Harlan

Independent
Director

Compensation Committee

Louise Pentland

Independent
Director

Takatoshi Yamamoto

Independent
Director

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

Hiroaki Yoshihara

Independent
Director

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

Helmuth Ludwig

Independent
Director

Audit Committee

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

Director

Compensation Committee-

Mitsuaki Nishiyama

Director

Audit Committee-

Toshiaki Higashihara

Executive
Chairman

Nominating Committee-

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

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

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

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

29

Directors and Executive Officers

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

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

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

Katsumi Ihara

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

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

Ravi Venkatesan

Board of Directors meetings:
9 out of 9 days

Cynthia Carroll

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

Ikuro Sugawara

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

Joe Harlan

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

Louise Pentland

Board of Directors meetings:
9 out of 9 days

Takatoshi Yamamoto

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

Hiroaki Yoshihara

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

Helmuth Ludwig

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

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

Name

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

30

Directors and Executive Officers

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Executive Officers

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

Position

Responsibilities

Other Principal Positions Held

*Toshiaki Higashihara Executive Officer

General-*Keiji Kojima

President

Overall management-*Masakazu Aoki

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

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

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

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

Jun AbeSenior Vice President
and Executive Officer

Cloud services platforms business-

LorenaDellagiovanna

Senior Vice President
and Executive Officer

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

Katsuya Nagano

Senior Vice President
and Executive Officer

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

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

Senior Vice President
and Executive Officer

Marketing & sales and regional
strategies-

Claudio Facchin

Senior Vice President
and Executive Officer

Power grids business

Giuseppe Marino

Senior Vice President
and Executive Officer

Railway systems business

Mamoru Morita

Senior Vice President
and Executive Officer

Management strategies

Atsuhiro Aketa

Vice President andExecutive Officer

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

31

Directors and Executive Officers

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

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

Name

Position

Responsibilities

Other Principal Positions Held

Noriharu Amiya

Vice President andExecutive Officer

Railway systems business-Takashi Iizumi

Vice President andExecutive Officer

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

Hitoshi Ito

Vice President andExecutive Officer

Government & external relations-

Yasunori Inada

Vice President andExecutive Officer

Nuclear energy business-

Tatsuro Ueda

Vice President andExecutive Officer

Business for financial institutions-

Kenji Urase

Vice President andExecutive Officer

Energy business-

Tomomi Kato

Vice President andExecutive Officer

Finance strategies and corporate
pension system-

Tadashi Kume

Vice President andExecutive Officer

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

Kohei Kodama

Vice President andExecutive Officer

Legal matters, risk management andcorporate auditing-

Takashi Saito

Vice President andExecutive Officer

Marketing & sales strategies (businessfor connective industries)-

Kenichi Tanaka

Vice President andExecutive Officer

Human capital strategies

Jun Taniguchi

Vice President andExecutive Officer

Digital strategies and digitalengineering business

CEO, Hitachi Digital LLC

Kojin Nakakita

Vice President andExecutive Officer

Regional strategies (APAC)

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

Hideshi Nakatsu

Vice President andExecutive Officer

Water & environment business

Itaru Nishizawa

Vice President andExecutive Officer

Research & development

Seiichiro Nukui

Vice President andExecutive Officer

Information technology strategies

Andrew BarrVice President andExecutive Officer

Regional strategies (EMEA)

Yoshinori Hosoya

Vice President andExecutive Officer

Cloud services platforms business

Chie Mashima

Vice President andExecutive Officer

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

Shinya Mitsudomi

Vice President andExecutive Officer

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

Masashi Murayama

Vice President andExecutive Officer

Cost structure reform and information
security management

Kazunobu Morita

Vice President andExecutive Officer

Business for industrial digital

Takashi Yoda

Vice President andExecutive Officer

Marketing & sales strategies (businessfor energy)-

President, Hitachi Europe
Ltd.

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

32

Directors and Executive Officers--

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

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

Position

Responsibilities*Toshiaki Higashihara

Executive Officer

General*Keiji Kojima

President

Overall management*Jun Abe

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

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

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

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

Tatsuro Ueda

Senior Vice President andExecutive Officer

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

Senior Vice President andExecutive Officer

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

Regional strategies (Americas)

LorenaDellagiovanna

Senior Vice President andExecutive Officer

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

Katsuya Nagano

Senior Vice President andExecutive Officer

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

Hidenobu Nakahata

Senior Vice President andExecutive Officer

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

Senior Vice President andExecutive Officer

Marketing & sales strategies

Claudio Facchin

Senior Vice President andExecutive Officer

Power grids business

Giuseppe Marino

Senior Vice President andExecutive Officer

Railway systems business

Atsuhiro Aketa

Vice President and Executive Regional strategies (China)
Officer

Noriharu Amiya

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

Takashi Iizumi

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

Yasunori Inada

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

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

33

Directors and Executive Officers

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Name

Position

Responsibilities

Tadashi Kume

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

Takashi Saito

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

Jun Taniguchi

Vice President and Executive Digital strategies
Officer

Kojin Nakakita

Vice President and Executive Regional strategies (APAC)
Officer

Hideshi Nakatsu

Vice President and Executive Water & environment business
Officer

Itaru Nishizawa

Vice President and Executive Research & development
Officer

Seiichiro Nukui

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

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

Vice President and Executive Government & external relations
Officer

Yoshinori Hosoya

Vice President and Executive Cloud services platforms business
Officer

Chie Mashima

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

Vice President and Executive Legal matters
Officer

Kazunobu Morita

Vice President and Executive Business for industrial digital
Officer

Takashi Yoda

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

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

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

34

Directors and Executive Officers

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Compensation for Directors and Executive Officers

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

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Compensation for Directors and Executive Officers

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

10%

20%

40%

Sustainability measurement

20％

20%

20％

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

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Compensation for Directors and Executive Officers

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

Condition

The grant
ratio toLTI target

Grant date of Restricted
Stock

Restricted Stock
Compensation

Incumbency condition

30%

Every fiscal year

Stock price condition

70%

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

Performance-linked
Restricted Stock
Compensation

Conditions forachievement of Mid-termManagement Plan targets

ROIC

10%

Sustainability
targets

10%

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

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

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Compensation for Directors and Executive Officers

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

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

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

Term

The result of
Performance
Indicators

TSR/TOPIX Growth Rate Ratio

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

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

Global Competitive Comparison

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

100%ilePerformance Indicators

TSR/TOPIX Growth Rate Ratio

TSR/TOPIX Growth Rate Ratio

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

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

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Compensation for Directors and Executive Officers

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

General Meetingof Shareholders
Appointment

Oversight

Execution
Appointment / Oversight

Board of Directors

Senior Executive Committee
President

Nominating Committee

Executive Officers
Compensation Committee
Audit

ReportAudit Committee
ReportInternal
Auditing Office

Each department
Audit

ReportAccounting Auditors

39【ご参考】コーポレートガバナンス体制と内部統制システムについて

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

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

(ii)

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

(iii)

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

(iv)

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

(v)

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

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

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

(ii)

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

(iii)

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

(iv)

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

(v)

A structure shall be established in which each relevant department shall establish regulations and guidelines,
conduct training, prepare and distribute manuals and carry out other such measures regarding various risks.
Efforts shall be made to identify possible new risks through measures such as progress reports on business
operations and, should it become necessary, an Executive Officer will be appointed promptly to be
responsible for responding to a new risk.

(vi)

The efficiency of the Company's Executive Officers, and the subsidiaries' Directors and Executive Officers'
performance of their duties shall be ensured through the following business management systems.
- The Senior Executive Committee shall be established to deliberate on and facilitate the formulation ofdecisions based on due consideration of diverse factors regarding important issues that affect the Company
and/or the Hitachi Group.
- Based on the management policy, medium-term business plans and annual budgets, on which performance
management is based, shall be prepared to operate business in a planned and efficient manner.

40

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

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

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

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

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

Summary of status of operation of the internal control system

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

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

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

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

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

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

43

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

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Matters Concerning Accounting Auditor
Name of accounting auditor

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

(Millions of yen)AmountCategory

Fees foraudit services (Note 1)

Fees fornon-audit services

Total

Fees, etc. by the Company and its subsidiaries

1,019

50

1,069

574

49

623

Fees, etc. by the Company

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

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

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

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

44

Matters Concerning Accounting Auditor

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

2,000,000,000 shares

Issued927,167,877 shares

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

100 shares

10 Largest Shareholders

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

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

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

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

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

Total

Number ofshareholders

2

162

62

201,834

Shareownership(units)

92 2,912,162

147,230

Ownership
percentage ofshares (%)

0.00

31.48

1.59

2,144

1,300

122,176 4,724,150

1.32

51.07

147

198,017

Number ofsharesless than
one unit(shares)-

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

0.01

14.52

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

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

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

45

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

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

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

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

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

113,200 shares ofcommon stock

127,200 shares ofcommon stock

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

From July 15, 2016 toJuly 14, 2046

From April 27, 2017 toApril 26, 2047

From April 27, 2018 toApril 26, 2048

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

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

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

Number of
Allotted Rights

×{(

TSR/TOPIX Growth
Rate Ratio

× 1.25) – 0.5}

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

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

46

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

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

Consolidated Financial Statements
Consolidated Statement of Financial Position
Fiscal 2022 (Reference)(As of March 31, 2023)

Fiscal 2023
(As of March 31, 2024)(Millions of yen)
(Assets)
Current assets
Cash and cash equivalents
Trade receivables and contract assets
Inventories
Investments in securities and other financial assets
Other current assets
Non-current assets
Investments accounted for using the equity method
Investments in securities and other financial assets
Property, plant and equipment
Goodwill
Other intangible assets
Other non-current assets
Total assets

5,928,535
833,2832,874,987
1,646,188
346,916
227,161
6,572,879
478,620496,8971,700,471
2,165,350
1,244,688
486,853
12,501,414

5,854,597
705,367
2,991,316
1,510,647
331,280
315,9876,366,687
816,434
320,101
1,221,842
2,371,678
1,178,750
457,882
12,221,284(Liabilities)
Current liabilities
Short-term debt
Current portion of long-term debt
Other financial liabilities
Trade payables
Accrued expenses
Contract liabilities
Other current liabilities
Non-current liabilities
Long-term debt
Retirement and severance benefits
Other non-current liabilities
Total liabilities

5,166,178
777,650
141,861
263,748
1,548,497
720,961
1,241,366
472,095
1,999,669
1,293,837
323,264
382,568
7,165,847

4,802,600
37,827
187,486
266,245
1,399,699
697,471
1,658,435
555,437
1,559,081
954,709
246,231
358,141
6,361,681(Equity)
Hitachi, Ltd. stockholders’ equity
Common stock
Capital surplus
Retained earnings
Accumulated other comprehensive income
Treasury stock, at costNon-controlling interests
Total equity
Total liabilities and equity

4,942,854
462,817
3,637,184
846,392(3,539)392,713
5,335,567
12,501,414

5,703,705
463,417
4,084,729
1,160,550(4,991)
155,898
5,859,603
12,221,284

47

2. Consolidated Statements of Financial Position

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

Consolidated Statement of Profit or Loss
Years ended March 312023 (Reference)

2024(Millions of yen)
Revenues
Cost of sales

10,881,150(8,192,063)

9,728,716(7,146,629)

Gross profit

2,689,087(1,940,943)
302,196(245,016)
7,878(20,417)

2,582,087(1,826,271)
116,653(97,184)
17,388(10,015)

52,84775,284

845,632
25,652(51,313)857,942
38,781(70,922)

Income taxes

819,971(116,101)

825,801(199,053)

Net income

703,870

626,748

Net income attributable to:
Hitachi, Ltd. stockholders
Non-controlling interests

649,124
54,746589,896
36,852

Selling, general and administrative expenses
Other income
Other expenses
Financial income
Financial expenses
Share of profits (losses) of investments accounted for using
the equity method
Earnings before interest and taxes (EBIT)Interest income
Interest charges
Income before income taxes

48

3. Consolidated Statements of Profit or Loss

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

Consolidated Statement of Comprehensive Income (Supplementary Information)
Years ended March 31
2023

2024

(Millions of yen)
Net income
Other comprehensive income (OCI)
Items not to be reclassified into net income
Net changes in financial assets measured at fair value through OCI
Remeasurements of defined benefit plans
Share of OCI of investments accounted for using the equity method
Total items not to be reclassified into net income
Items that can be reclassified into net income
Foreign currency translation adjustments
Net changes in cash flow hedges
Share of OCI of investments accounted for using the equity method
Total items that can be reclassified into net income
Other comprehensive income (OCI)
Comprehensive income
Comprehensive income attributable to:
Hitachi, Ltd. stockholders
Non-controlling interests49

4. Consolidated Statements of Comprehensive Income

703,870

626,748

21,48440,202
1,511

45,156
13,872
1,437

63,19760,465

232,360
7,265
14,595354,395
14,91522,025254,220
317,417
1,021,287

391,335
451,800
1,078,548

905,819
115,468

1,013,811
64,737

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

Consolidated Statement of Changes in Equity (April 1, 2023 to March 31, 2024)(Millions of yen)
Commonstock
Balance at beginning of year

462,817

Capitalsurplus

Accumulated
othercomprehensive
incomeRetainedearnings-

3,637,184

846,392

Reclassified into retained
earnings

110,653(110,653)

Net income

589,896

Treasurystock, atcost(3,539)

Total
Hitachi, Ltd.
stockholders’equityNoncontrollinginterests

Total equity

4,942,854

392,713

5,335,567

Changes in equity

Other comprehensive
income-423,915

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

589,896

36,852626,748

423,915

27,885451,800(144,461)

Dividends to noncontrolling interests-

Acquisition of treasury
stock(144,461)(30,580)(30,580)(100,458)(100,458)(100,458)

Sales of treasury stock

(151)

213

62

62

Cancellation of treasurystock(98,793)

98,793

-

-

1,200

1,200

-

-

Issuance of new shares

600

600

Transfer to capital surplus
from retained earnings

105,689(105,689)

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

Total changes in equity

600-

447,545

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

524,036

Balance at end of year

463,417-

4,084,729

1,160,550(4,991)

5,703,705

155,898

5,859,603

50

2. Consolidated Statements of Changes in Equity

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

Consolidated Statement of Cash Flows (Supplementary Information)
Years ended March 31
2023

2024
(Millions of yen)

Cash flows from operating activities
Net income
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization
Impairment losses
Income taxes
Share of (profits) losses of investments accounted for using the equity method
Financial income and expenses
Net (gain) loss on business reorganization and others(Gain) loss on sale of property, plant and equipment
Change in trade receivables and contract assets
Change in inventories
Change in trade payables
Change in accrued expenses
Change in retirement and severance benefits
Other
SubtotalInterest received
Dividends received
Interest paid
Income taxes paid
Net cash provided by (used in) operating activities
Cash flows from investing activities
Purchase of property, plant and equipment
Purchase of intangible assets
Proceeds from sale of property, plant and equipment, and intangible assets
Purchase of investments in securities and other financial assets(including investments in subsidiaries and investments accounted for using theequity method)
Proceeds from sale of investments in securities and other financial assets(including investments in subsidiaries and investments accounted for using theequity method)Other
Net cash provided by (used in) investing activities
Free cash flows
Cash flows from financing activities
Change in short-term debt, net
Proceeds from long-term debt
Payments on long-term debt
Proceeds from payments from non-controlling interests
Dividends paid to Hitachi, Ltd. stockholders
Dividends paid to non-controlling interests
Acquisition of common stock for treasury
Proceeds from sales of treasury stock
Purchase of shares of consolidated subsidiaries from non-controlling interests
Other
Net cash provided by (used in) financing activities
Effect of exchange rate changes on cash and cash equivalents
Change in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year51

5. Consolidated Statements of Cash Flows

703,870

626,748526,310
129,894
116,101(52,847)
18,204(297,351)(2,465)(60,673)(244,346)
43,96436,82649,93528,182995,604
25,675
26,419(49,770)(170,883)
827,045

451,525
29,668199,053(75,284)
21,824(97,048)(17,857)
40,206(88,320)
7,327
54,016(5,193)(34,598)
1,112,067
38,65529,963(69,165)(154,908)
956,612(252,638)(157,947)
55,580(232,874)(152,271)
45,048(106,069)(70,622)616,317265,693(4,180)151,063
978,108

13,483(131,543)
825,069(277,685)
80,062(288,795)
310(129,005)(52,217)(200,212)
164(274,687)(901)(1,142,966)
29,314(135,544)(550,170)
105,130(301,507)
487(144,343)(32,345)(100,458)
62(1,763)(1,024,907)
71,922(127,916)

968,827
833,283

833,283
705,3672024/05/20 19:12:52 / 23092450_株式会社日立製作所_招集通知

Notes to Consolidated Financial Statements(Notes on Important Matters for Basis of Presentation of Consolidated Financial Statements)
1. Basis of presentation
The consolidated financial statements presented herein, under Article 120, Paragraph 1 of the Regulations ofCompanies’ Financial Statements, have been prepared in conformity with International Financial ReportingStandards (hereinafter “IFRS”). However, under the second sentence of the above provision, some descriptions
and notes required under IFRS are omitted.
2.

Scope of consolidation and application of equity method
The number of consolidated subsidiaries is 573 and the number of equity-method affiliates is 369.

3.

Accounting standard for income and expenses
The Company recognizes revenue in accordance with the following five-step approach.
Step 1: Identify the contract(s) with a customer
Step 2: Identify the performance obligations in the contract
Step 3: Determine the transaction price
Step 4: Allocate the transaction price to the performance obligations in the contract
Step 5: Recognize revenue when (or as) the Company satisfies a performance obligation
The Company offers multiple solutions to meet its customers’ needs which may involve the delivery or
performance of multiple elements, such as goods or services. When the Company enters into multiple contracts
for providing the goods or services, related contracts are combined based on interdependencies between eachcontract’s consideration and the time the Company entered into such contracts, and the transaction price isallocated to each performance obligation on the basis of the relative stand-alone selling prices of each distinct
goods or services for the purpose of recognizing revenue.
In estimating the stand-alone selling price, the Company considers various factors such as market conditions,entity-specific factors and information about the customer or situation of customer.
The transaction price is the amount of consideration to which the Company expects to be entitled in exchange fortransferring promised goods or services to a customer. Variable consideration, such as discounts and rebates, isincluded in the transaction price only to the extent that it is highly probable that a significant reversal in theamount of cumulative revenue recognized will not occur when the uncertainty associated with the variableconsideration is subsequently resolved. The promised amount of consideration does not include a significant
financing component.
For a performance obligation satisfied over time, the Company measures its progress towards complete
satisfaction of that performance obligation based on the costs incurred or the period of services being provided inconsideration of the nature of the goods and services for the purpose of recognizing revenue. When the
Company cannot reasonably measure the progress, revenue is recognized only to the extent of the costs
incurred.
The Company recognizes the incremental costs of obtaining a contract with a customer and the costs directly
related to fulfilling a contract as an asset if those costs are expected to be recovered, and those assets areamortized based on the methods used to recognize revenue of the goods or services to which the assets relate.
The Company recognizes the incremental costs of obtaining a contract as an expense when incurred if theamortization period of the asset is less than one year.
Revenue recognition under long-term projects requires significant assumptions about the estimated total cost,estimated total selling price, risk associated with the contract, and other factors. These estimates are subject tovariance of uncertain economic conditions in the future and may vary due to a variety of reasons beyond ourcontrol. The Company reviews these estimates on an ongoing basis and reflects them in accounting practices.

52

3. Notes to Consolidated Financial Statements、Notes on Important Matters for Basis of Presentation(Basis of presentation)、Notes on
Important Matters for Basis of Presentation(Scope of consolidation and application of equity method)、Notes on Important Matters for Basisof Presentation(Revenue Recognition)

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

4.

Financial assets
The Company has adopted IFRS 9 “Financial Instruments”.
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
of principal 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.
Financial assets measured at fair value through other comprehensive income
The Company holds certain equity instruments with the purpose of expanding its revenue base bymaintaining and strengthening business relations with the investees. These equity instruments are classified
as Financial assets measured at fair value through other comprehensive income by designation. They are
initially and subsequently measured at fair value, and the changes in fair value are recognized in OCI. The
cumulative amount of OCI is recognized in equity as AOCI. Dividends on equity instruments designated asfair value through other comprehensive income are recognized in profit or loss, except where they are
considered to be a return of the investment.
Financial assets measured at fair value through profit or loss
Equity instruments not designated as Financial assets measured at fair value through other comprehensive
income and debt instruments not classified as financial assets measured at amortized cost are classified as
Financial assets measured at fair value through profit or loss. These instruments are subsequently measured
at fair value and the changes in fair value are recognized in profit or loss.
Impairment of financial assets
The Company evaluates allowance for doubtful receivables depending on whether the credit risk has
increased significantly since initial recognition, if the credit risk has increased significantly since initialrecognition, the allowance for doubtful receivables is measured at the amount equal to the lifetime expectedcredit losses on the financial assets, if the credit risk has not increased significantly since initial recognition,
the allowance for doubtful receivables is measured at the amount equal to 12-month expected credit losses.
However, for trade receivables, contract assets, and lease receivables, allowance for doubtful receivables isalways measured at the amount equal to the lifetime expected credit losses. Whether credit risk has
increased significantly is determined based on changes in the risk of default and changes in expected credit
losses are recognized in profit or loss as impairment losses.

5.

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, andgenerally by the moving average method for raw materials. Net realizable value is the estimated selling price inthe ordinary course of business less the estimated costs of completion and the estimated costs necessary to sell.

6.

Property, plant and equipment, Goodwill and Other intangible assets
Property, plant and equipment
Property, plant and equipment are measured using the cost model and stated at the cost less accumulated
depreciation and accumulated impairment losses. Each asset is depreciated mainly using the straight-line
method over its estimated useful lives. Right-of-use asset is depreciated from the commencement date of thelease to the earlier of the end of the useful life of the underlying asset or the end of the lease term on astraight-line basis.
Goodwill and Other intangible assets
Other intangible assets with finite useful lives are measured using the cost model and stated at the cost lessaccumulated amortization and accumulated impairment losses. Each asset is amortized mainly using thestraight-line method over its estimated useful lives.
Goodwill and Other intangible assets with indefinite useful lives are stated at the cost less accumulated
impairment losses.
Impairment losses
For each non-financial asset, the Company reviews the carrying amount and tests for impairment when there
are events or 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. Irrespectiveof any indicators of impairment, the Company tests Goodwill and Other intangible assets with indefinite-lives
for impairment annually by estimating the recoverable amount of each CGU (or group of CGUs) to whichsuch assets are allocated.

53

Notes on Important Matters for Basis of Presentation(Financial assets)、Notes on Important Matters for Basis of Presentation(Inventories)、
Notes on Important Matters for Basis of Presentation(P.P.& E. and intangible assets)

2024/05/20 19:12:52 / 23092450_株式会社日立製作所_招集通知7.

Accounting methods for retirement and severance benefits
The Company and certain subsidiaries have defined benefit pension plans, severance lump-sum payment plansand defined contribution pension plans to provide retirement and severance benefits to employees.
(1) Defined Benefit Plans
Defined benefit plans include defined benefit pension plans and severance lump-sum payment plans. The
present value of defined benefit obligations and retirement benefit costs are measured based on the
projected unit credit method. The present value of defined benefit obligations and the fair value of plan assets
are remeasured as of the end of reporting period. Actuarial differences arising during the year and changes infair value of plan assets (excluding interest 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, isrecognized immediately in profit or loss when such an amendment occurs.
The present value of defined benefit obligations less the fair value of plan assets is presented as the net
amount of defined benefit liability or asset in non-current liabilities or assets. When a defined benefit plan has
a surplus, the net defined benefit asset is limited to the asset ceiling, which is the present value of any
economic benefits available in the form of refunds from the plan or reductions in future contributions to theplan.
(2) Defined Contribution Plans
Defined contribution pension plans are post-employment benefit plans in which the employer pays a certain
amount of premiums to a third-party asset manager but has no legal or constructive obligation to pay inexcess of such contributions. Contributions to the defined contribution plans are recognized in profit or loss inthe period when the service is provided by the employees.
Since the Company and a consolidated subsidiary of the Company introduced a risk-sharing corporate
pension plan on April 1, 2019, for current employees participating in the defined benefit pension planmanaged by the Hitachi Pension Fund, the same has been promoted to the other subsidiaries that participate
in pension plan managed by the Hitachi Pension Fund. On April 1, 2023, all the subsidiaries participating in
the Hitachi Pension Fund have completed changing their pension plans from defined benefit pension plan torisk-sharing corporate pension plan for current employees.
Under this plan, a risk reserve contribution is determined in advance in accordance with the rules governing
the plan, and the pension benefits are adjusted annually based on the financial position of the plan tomaintain balanced finance.
In terms of the corresponding accounting treatments for retirement benefits, risk-sharing corporate pension
plans, for which an entity accepts contribution obligations to the extent stipulated in the rules but has nofurther obligations to make any additional contributions, are classified as defined contribution plans. Since thisrisk-sharing corporate pension plan, which the Company and the consolidated subsidiaries have introduced,
imposes no additional contribution obligations, it is classified as defined contribution plan.

(Notes on Accounting Estimates)
1. Allowance for doubtful receivables (The ending balance of Allowance for doubtful receivables of 115,354 million
yen from trade receivables and contract assets, and 1,709 million yen from other receivables)
Calculation methods for Allowance for doubtful receivables are described in the note 4 in the "Notes on Important
Matters for Basis of Presentation of Consolidated Financial Statements".
Expected credit losses are measured by taking the probability weighted average of the discounted present
values of differences between the total amount of the contractual cash flows and the total amount of cash flows
expected to be received in the future from the financial assets. If one or more events occur, such as overdue
payments, extended payment terms, negative evaluation by third party credit rating agencies, and/or adeterioration in financial position and operating results, including capital deficit, the financial assets areindividually assessed as credit-impaired financial assets and expected credit losses are measured based mainly
on historical credit loss experience, future collectible amounts and other factors. The expected credit losses on
the financial assets that are not credit-impaired are measured through collective assessment based mainly on
provision rates depending on historical credit loss experience adjusted by the current and future economic
situation and other factors, if necessary.
Expected credit losses are determined based on the best estimates and judgements but may be affected bydeterioration of customers’ financial conditions in the future or by variance of uncertain economic conditions in
the future.
2. Impairment of Property, Plant and Equipment, Goodwill and Other Intangible Assets (Impairment losses of(28,180) million yen)
The calculation method used in determining impairment of property, plant and equipment, goodwill and otherintangible assets are described in note 6 in the “Notes on Important Matters for Basis of Presentation ofConsolidated Financial Statements”. The Company measures the recoverable amount of an asset or a CGU (ora group of CGUs) as the higher of fair value less costs of disposal and value in use. In measuring fair values, theCompany and its subsidiaries primarily use the income approach (present value technique) based on theestimated 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. Value in use is calculated by the estimated future
cash flows based on business plans approved by management, discounted at the discount rate which is derived
from the weighted average cost of capital. The business plan used is based on external information, reflects
historical experiences, and generally has a maximum of five years. Estimated cash flows beyond the period
covered by the business plan are calculated using the estimated growth rate not exceeding the long-term
average growth rate of the market to which the asset belongs. Although a certain amount of negative impact due
to the business environment is included in current business plans, these plans may be affected by risks related
to market or economic environment, and actual result may differ from the estimates. In addition, the discount rateused to calculate the value in use is affected by stock market trends and fluctuations in interest rates.
The group of CGUs to which a significant proportion of goodwill was allocated were the power grids business in54

Notes on Important Matters for Basis of Presentation(Retirement and Severance Benefits)、Notes on Accounting Estimates(Allowance for
doubtful receivables)、Notes on Accounting Estimates(Impairment of Non-Financial Assets - P.P.& E. and Intangible Assets)、Notes on
Accounting Estimates(Impairment of Non-Financial Assets - Goodwill)、Notes on Accounting Estimates(Retirement and Severance Benefits)、Notes
on Accounting Estimates(Revenue Recognition)、Notes on Accounting Estimates(Income Taxes)

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

3.

4.

5.

the Green Energy & Mobility segment as of March 31, 2024. The recoverable amount used in the annual
impairment test of goodwill of the power grids business was calculated based on the value in use and in
calculation of the value in use, estimated future cash flows was discounted at the discount rate derived from theweighted average cost of capital. Estimated future cash flows was based on business plan for five years andbeyond the period covered by the business plan were calculated taking into account growth rate. The significant
assumptions were revenue growth rates and gross profit ratios which reflected past experience and external
information. The growth rate was set taking into account indices such as long-term inflation rate announced by
an external research organization. Impairment losses related to the goodwill were not recognized in the fiscal
year ended March 31, 2024.
The carrying amount of goodwill allocated to the power grids business was 623,034 million yen as of March 31,
2024.
The Company considers it unlikely for the carrying amount of each CGU (or group of CGUs), together withallocated goodwill, would exceed the respective recoverable amounts of the CGU (or group of CGUs) even if the
primary assumptions used for the impairment test changed within a reasonable range.
Employee Retirement Benefits (The ending balance of Retirement and severance benefits of 246,231 million
yen)Calculation methods for employee retirement benefits are described in the note 7 in the “Notes on Important
Matters for Basis of Presentation of Consolidated Financial Statements”.
The measurement of a significant amount of employee retirement benefit costs is derived from actuarial
valuations containing a number of actuarial assumptions including mortality, withdrawal and retirement rates,changes in wages and the discount rate. The Company and its subsidiaries make judgements regarding theactuarial assumptions used by taking into account various factors including personnel demographics, market
conditions and expected trends in interest rates. Actuarial assumptions are determined based on the best
estimates and judgements but may be affected by variance of uncertain economic conditions in the future or byamendments or issuance of related laws.
Long-term projects (The ending balance of Provisions for expected losses on construction contracts of 97,921
million yen)
The Company is engaged in long-term projects to provide goods and services according to customers’
specifications over a specified period of time, and revenue is recognized mainly based on the pattern of the costaccrual (the progress of the project mostly based on the cost incurred relative to the estimated total cost) andprovisions for expected losses on construction contracts are recognized based on future estimated losses when
there is a possibility of incurring losses in the future. For long-term projects, the total estimated revenue iscalculated to the extent that is highly probable that a significant reversal in the amount of cumulative revenue
recognized will not occur when uncertainty associated with the total estimated revenue is subsequently resolved.
In addition, the total estimated costs are estimated considering contract risks and other factors. The Company
regularly reviews these estimates and reflects them in its accounting treatment.
Deferred tax assets (The ending balance of Deferred tax assets of 285,337 million yen)
Deferred tax assets are recognized to the extent that it is probable that future taxable income will be available
against which unused tax loss carryforwards, unused tax credits and future deductible temporary differences canbe utilized. A certain amount of negative impact due to the business environment is included in future taxable
income. 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 ofdeferred 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. The Company carries out an assessmentof the scheduled reversals of deferred tax liabilities and projected future taxable income, including the executionof certain available tax strategies if needed. Based on these factors, the Company considers it is more likely than
not it will realize the benefits of these deductible differences as of March 31, 2024. However, the times andamounts of taxable income occurrence may be affected by variance of uncertain economic conditions in the
future, and the actual times and amounts may differ from the estimates.
The Company has applied the temporary exception to recognizing and disclosing information about deferred tax
assets and liabilities related to income taxes arising from tax law enacted or substantively enacted to implement
the Pillar Two model rules published by the Organization for Economic Co-operation and Development(hereinafter “the Pillar Two income taxes”) in accordance with IAS 12 "Income taxes" amended on May 23, 2023.
As a result of applying the temporary exception, the Company does not recognize deferred tax assets andliabilities related to the Pillar Two income taxes.

55

Notes on Important Matters for Basis of Presentation(Retirement and Severance Benefits)、Notes on Accounting Estimates(Allowance for
doubtful receivables)、Notes on Accounting Estimates(Impairment of Non-Financial Assets - P.P.& E. and Intangible Assets)、Notes on
Accounting Estimates(Impairment of Non-Financial Assets - Goodwill)、Notes on Accounting Estimates(Retirement and Severance Benefits)、Notes
on Accounting Estimates(Revenue Recognition)、Notes on Accounting Estimates(Income Taxes)

2024/05/20 19:12:52 / 23092450_株式会社日立製作所_招集通知(Notes to Consolidated Statement of Financial Position)
1. The components of Trade receivables and contract assets: Accounts receivable of 1,975,770 million yen,Contract assets of 930,743 million yen, and Others of 84,803 million yen.
Trade receivables and contract assets are stated as net of the allowance for doubtful receivables. Others include
electronically recorded monetary claims and notes receivable.
2. Accumulated other comprehensive income: Foreign currency translation adjustments of 984,432 million yen,remeasurements of defined benefit plans of 103,039 million yen, net changes in financial assets measured at fairvalue through other comprehensive income of 50,378 million yen, and net changes in cash flow hedges of
22,701 million yen.
3. Collateralized assets: Trade receivables and contract assets of 310 million yen, investments in securities andother financial assets of 311 million yen, and property, plant and equipment of 9,088 million yen.
Secured debts: 7,142 million yen.
4. Allowance deducted directly from assets: 115,354 million yen from trade receivables and contract assets, and
1,709 million yen from other receivables.
5. Property, plant and equipment include buildings and structures of 423,749 million yen and machinery of 240,090
million yen.
Accumulated depreciation and impairment losses of property, plant and equipment are (2,474,652) million yen.
Other intangible assets include software of 183,728 million yen.
6. Guarantees: 10,725 million yen(Notes to Consolidated Statement of Profit or Loss)
1. Other income
Other income of 116,653 million yen mainly consists of net gain or loss on business reorganization and others of
97,048 million yen. It includes a gain on the sale of shares of Hitachi Astemo, Ltd. in the amount of 121,642
million yen.
2. Other expenses
Other expenses of (97,184) million yen mainly consists of impairment losses on property, plant and equipment
and other intangible assets of (28,180) million yen.
3. Income taxes
Income taxes of (199,053) million yen includes current tax expense of (254,207) million yen and deferred tax
expense of 55,154 million yen.
(Notes to Consolidated Statement of Changes in Equity)
1. Class and number of issued shares and treasury stocks at end of year
(1) Issued shares
Common stock
927,167,877 shares(2) Treasury stocks Common stock
546,173 shares
2. Cash dividends
Total amount of cash dividends
144,461 million yen
3. Class and number of shares to be issued upon exercise of stock acquisition rights at end of year
Common stock
387,620 shares

56

BS Note 1：Trade Receivables and Contract Assets、BS Note 2：OCI、BS Note 3：Collateralized assets、BS Note 4：Allowance deducted directlyfrom assets、BS Note 5：P.P.& E. and intangible assets、BS Note 6：Guarantees、PL Note 1-2：Other Income and Expenses、PL Note 3：Other
Income and Expenses、Notes to Consolidated Statement of Changes in Equity

2024/05/20 19:12:52 / 23092450_株式会社日立製作所_招集通知(Notes on Revenue Recognition)
1. Disaggregation of revenue
The Company derives revenues primarily from contracts with customers.
The disaggregation of revenue attributable to each reportable segment and geographic area for the fiscal year
ended March 31, 2024 are as follows.
(Millions of yen)

Japan

North

Asia

America

Europe

Other
Areas

Overseas
Revenues
Subtotal

Total
Revenues

Digital Systems & Services

1,731,209

227,920

344,412

235,460

59,658867,450

2,598,659

Green Energy & Mobility

426,098

466,546

665,049

1,009,260

485,349

2,626,204

3,052,302

Connective Industries

1,519,738

1,030,523

267,199

204,838

35,662

1,538,222

3,057,960

Automotive Systems

273,069

395,538

305,639

100,80389,335891,315

1,164,384

Others427,956

60,131

7,029

9,751

2,929

79,840507,796

Subtotal

4,378,070

2,180,658

1,589,328

1,560,112

672,933

6,003,031

10,381,101

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

Total

3,773,383

2,151,544

1,582,916

1,550,878

669,995

5,955,333

9,728,716

The Digital Systems & Services segment consists of Front Business, IT Services and Services & Platforms, forwhich revenue amounted to 1,111,193 million yen, 969,816 million yen and 983,456 million yen for the year
ended March 31, 2024 (including intersegment transactions). Front Business and IT Services are operated
mainly in Japan, and Services & Platforms is operated mainly in Japan, North America and Europe.
The Company’s revenues include revenue recognized based on the pattern of the cost accrual arising from longterm projects. Of the revenue recognized during the fiscal year ended March 31, 2024, the amount of revenue
recognized based on the pattern of the cost accrual arising from long-term projects was 2,255,703 million yen.

57

Notes on Revenue Recognition

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

2.

3.

Information about satisfaction of performance obligations
The following is information about satisfaction of performance obligations related to major goods and services ofeach reportable segment.
(Digital Systems & Services)
Front Business and IT Services primarily provide goods and services such as system integration, consulting
and cloud service. Services & Platforms primarily provides IT products and software.
These long-term projects in system integration, consulting and cloud service businesses provide goods andservices according to customers’ specifications over a specified period of time, and revenue is recognized
mainly based on the pattern of the cost accrual (the progress of the project mostly based on the cost incurred
relative to the estimated total cost) or the passage of time as performance obligations are satisfied over time.
Many of the contracts require payments based on milestones, and in some cases, payments are made before
performance obligations are satisfied.
In IT products and software businesses, revenue is recognized when control over the goods is transferred tocustomers as performance obligations are satisfied at the point in time upon the completion or upon deliveryof the goods. Mostly, payment terms stipulate that the consideration is received within one year after the
performance obligation is satisfied, and there are no significant transactions in which payment terms include
deferred payments, etc.
(Green Energy & Mobility and Connective Industries)
The Green Energy & Mobility segment includes revenue from businesses such as energy solutions andrailway systems. The energy solutions business is operated mainly in Asia, North America and Europe. The
railway systems business is operated mainly in Europe. The Connective Industries segment includes revenue
from businesses such as building systems, smart life & ecofriendly systems, measurement and analyticalsystems, and industry & distribution solutions. The building systems business is operated mainly in China, thesmart life & ecofriendly systems business is operated mainly in Japan, the measurement and analyticalsystems business is operated mainly in Japan, Asia, North America and Europe, and the industry &distribution solutions business is operated mainly in Japan.
Long-term projects related to contracts such as construction in these segments involve manufacturing andproviding goods based on customers’ specifications over a specified period of time. As performanceobligations are satisfied over time, revenue is recognized mainly based on the pattern of the cost accrual (theprogress of the project mostly based on the cost incurred relative to the estimated total cost). In addition,these segments provide certain services promised in the contracts such as maintenance throughout the
duration of the contract and recognize revenue over time based on the passage of time. Many of thecontracts require payments based on milestones, and, in some cases, payments are made before
performance obligations are satisfied.
Further, in the sale of elevators, home appliances, measurement and analytical systems, industrial
equipment, etc. included in the Connective Industries segment, revenue is recognized when control over the
goods is transferred to customers as performance obligations are satisfied at the point in time upon thecompletion or upon delivery of the goods. Mostly, payment terms stipulate that the consideration is received
within one year after the performance obligation is satisfied, and there are no significant transactions in which
payment terms include deferred payments, etc.
(Automotive Systems)
In the Automotive Systems segment, performance obligations are generally satisfied at a point in time uponcompletion or upon delivery of the goods, and revenue is recognized when control over goods is transferred
to customers. Mostly, payment terms stipulate that the consideration is received within one year after the
performance obligation is satisfied, and there are no significant transactions in which payment terms include
deferred payments, etc.
Information about contract balances
The following table shows the beginning and ending balances of Trade receivables, Contract assets andContract liabilities from contracts with customers for the fiscal year ended March 31, 2024.
(Millions of yen)
April 1, 2023

March 31, 2024

Trade receivables

2,072,238

2,063,056

Contract assets

849,402

971,988

Contract liabilities

1,314,799

1,739,770

Of the revenue recognized during the fiscal year ended March 31, 2024, the amount included in Contract
liabilities at the beginning of the fiscal year was 800,909 million yen. And the amount related to performanceobligations satisfied in the past periods was not material.

58

Notes on Revenue Recognition

2024/05/20 19:12:52 / 23092450_株式会社日立製作所_招集通知4.

Transaction price allocated to remaining performance obligations
The following table shows the balance of unsatisfied performance obligations by reportable segment for the fiscal
year ended March 31, 2024.
(Millions of yen)Intersegment
transactions

5.

Balance of unsatisfied
performance obligations

Digital Systems & Services

69,825

1,446,972

Green Energy & Mobility

50,743

10,189,630

Connective Industries

107,453

2,019,113

Segments of the Company and its subsidiaries that have contracts under which revenue is recognized over along period of time are primarily the Digital Systems & Services segment, Green Energy & Mobility segment andConnective Industries segment.
The estimated timing of unsatisfied performance obligations at the fiscal year ended March 31, 2024 is asfollows.
Approximately 90% of the balance of unsatisfied performance obligations of the Digital Systems & Services
segment was expected to be satisfied within three years and approximately 10% after three years but no morethan five years.
Approximately 60% of the balance of unsatisfied performance obligations of the Green Energy & Mobility
segment was expected to be satisfied within three years and approximately 20% after three years but no morethan five years.
Approximately 90% of the balance of unsatisfied performance obligations of the Connective Industries segment
was expected to be satisfied within three years.
The remaining segments have contracts whose initial expected terms are generally one year or less.
Accordingly, related information is excluded from this disclosure in accordance with the practical expedient.
Assets recognized from the costs incurred for obtaining or fulfilling contracts with customers
The Company and its subsidiaries recognize the costs incurred for obtaining or fulfilling contracts with customers
as an asset to the extent those costs are expected to be recovered. Such costs recognized as an asset as ofMarch 31, 2024 were not material.

59

Notes on Revenue Recognition

2024/05/20 19:12:52 / 23092450_株式会社日立製作所_招集通知(Notes on Financial Instruments)
1. Status of Financial Instruments
The Company and its subsidiaries, in an endeavor to optimize the capital efficiency of their business activities
through efficient management of operating funds, include highly liquid short-term investments, which mature
within three months of the date of acquisition and pose very little risk of fluctuation in value, in “cash equivalents”
as immediately available financial resources.
Customer credit risk regarding receivables is managed based mainly on the current economic conditions,inherent risks, the financial position of the relevant customer and the past record.
Investments in securities and other financial assets mainly comprise equity financial instruments, which aremanaged by constantly monitoring the fair value.
Short-term debt and long-term debt are mainly used to fund business operations and capital expenditures.
2.

Fair Value, etc. of Financial Instruments(1) Fair Value Measurements
The following methods and assumptions are used to measure the fair value of financial assets and liabilities.
Cash and cash equivalents, Trade receivables, Short-term loans receivable, Other accounts receivable,
Short-term debt, Other accounts payable and Trade payables
The carrying amount approximates the fair value because of the short maturity of these instruments.
Investments in securities and other financial assets and Other financial liabilities
The fair value of lease receivables is based on the present value of lease payments receivable calculated
for each group of years to maturity using discount rates that reflect the time to maturity and credit risk.
Investment securities with quoted market prices are estimated using the quoted share prices. In theabsence of an active market for investment securities, quoted prices for similar investment securities,
quoted prices associated with transactions that are not distressed for identical or similar investment
securities or other relevant information including market interest rate curves, referenced credit spreads ordefault rates, are used to determine fair value. If significant inputs of fair value measurement areunobservable, the Company uses price information provided by financial institutions to evaluate suchinvestments. The information provided is corroborated by the income approach using its own valuation
model, or 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 the interest rate applicable to an additional loan of the same type.
Derivative assets and derivative liabilities are measured at fair value based on quoted prices associatedwith transactions that are not 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 and other available information.
Long-term debt
The fair value of long-term debt is estimated based on quoted market prices or the present value of future
cash flows using the market interest rates applicable to the same contractual terms.
(2) Financial Instruments Measured at Amortized Cost
The carrying amounts and estimated fair values of the financial instruments measured at amortized cost as ofMarch 31, 2024 is as follows.
The fair value estimated for financial assets and liabilities measured at amortized cost is classified in Level 2of the fair value hierarchy.

Carrying amounts(Millions of yen)
Fair Values

AssetsInvestments in securities and otherfinancial assets
Lease receivables
27,414
28,810Debt securities
46,486
46,162Long-term loans receivable
8,840
8,840
Liabilities
Long-term debt [1]Bonds
220,000
218,586
Long-term debt
679,355
677,633[1] Long-term debt is included in Current portion of long-term debt and Long-term debt in the consolidated
statement of financial position.

(3) Financial Instruments Measured at Fair Value
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 as follows:
Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets
Level 2: Valuations measured by direct or indirect observable inputs other than Level 1
Level 3: Valuations measured by significant unobservable inputs
When several inputs are used for a fair value measurement, the level is determined based on the input that issignificant with the lowest level in the fair value measurement as a whole.
Transfers between levels are deemed at the beginning of each quarter period.

60

Notes on Financial Instruments、Note on Per Share Information

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

The following table presents the assets and liabilities that are measured at fair value on a recurring basis as ofMarch 31, 2024.
(Millions of yen)Class of financial instruments
Financial assets measured at fair value through profit orloss:
Investments in securities and other financial assets
Equity securities
Debt securities
Derivatives
Financial assets measured at fair value through othercomprehensive income:Investments in securities and other financial assets
Equity securities
Total financial assets at fair value
Financial liabilities measured at fair value through profit
or loss:
Other financial liabilities
Derivatives
Total financial liabilities at fair value

Level 1

Level 2

Level 3

Total

510
10,523-

5,648
132,41035,404
2,901
2,171

35,914
19,072
134,581

58,92969,962138,058

105,910
146,386

164,839
354,406-

64,65964,659-64,65964,659The following table presents the changes in Level 3 instruments measured on a recurring basis for the year
ended March 31, 2024.
(Millions of yen)
Equitysecurities

Level 3 financial assets
Balance at beginning of year
Gain (loss) in profit or loss [1]Gain in OCI [2]Purchases
Sales and redemption
Acquisitions and divestitures
Other
Balance at end of year
Unrealized gain (loss) relating tofinancial assets held at end of year [3]

[1]
[2]
[3]

Debt
securities

Derivatives

Total

132,797
512
4,375
10,408(8,176)(2,170)3,568
141,314

4,959
(47)
39
(746)
(14)
(1,290)
2,901

2,095
76
2,171

137,756
465
4,375
12,542(8,922)(2,184)
2,354
146,386

480

(7)

-

473

Gain (loss) in profit or loss related to Financial assets measured at fair value through profit or loss is
included in Financial income and Financial expenses in the consolidated statement of profit or loss.
Gain in OCI related to Financial assets measured at fair value through other comprehensive income isincluded in Net changes in financial assets measured at fair value through OCI in the consolidated
statement of comprehensive income.
Unrealized gain (loss) relating to Financial assets measured at fair value through profit or loss held at theend of year is included in Financial income and Financial expenses in the consolidated statement of profit
or loss.
Fair values are measured by the finance departments in accordance with the Company’s policies andprocedures. Valuation models are determined so that they reflect each financial instrument’s nature,
characteristics and risks most appropriately. The finance departments continually examine changes inimportant inputs that could affect the fair value. In case the fair value of a financial instrument was significantly
impaired, administrators review and approve the impairment loss.

(Note on Per Share Information)
Hitachi, Ltd. stockholders’ equity per share
Net income attributable to Hitachi, Ltd. stockholders per share

61

Notes on Financial Instruments、Note on Per Share Information

6,155.38 yen
634.57 yen

2024/05/20 19:12:52 / 23092450_株式会社日立製作所_招集通知(Notes on Major Subsequent Events)
1. Repurchase of Shares of Common Stock
The Board of Directors decided to repurchase shares of its own common stock pursuant to Article 459,
Paragraph 1 of the Companies Act of Japan and Article 32 of the Company’s Articles of Incorporation, as follows.
(a) Reason for repurchase
The Company views the return of profits to shareholders through enhancing corporate value from mid- andlong-term perspective and paying dividends continuously as an important managerial issue. The Company
decided to repurchase its own shares this time, taking into consideration its financial condition and theprogress of the asset sales.
(b) Outline of the Repurchase(i) Class of shares to be repurchased
Common stock of the Company(ii) Aggregate number of shares to be repurchased
Up to 21 million shares(*)(2.27% of the number of outstanding shares (excluding treasury stocks))(*)Aggregate number of shares to be repurchased will be 105 million shares after the effective date (July
1, 2024) of the Share Split that described below 2.
(iii) Aggregate amount of repurchase
Up to 200.0 billion yen(iv) Period of the repurchase
From April 30, 2024 to March 31, 2025(v) Method of repurchase
Expected open market purchase through the Tokyo Stock Exchange
2. Share Split and Partial Amendment of Articles of Incorporation
The Company decided on April 26, 2024 to implement a share split and partially amend its Articles ofIncorporation.
(a) Purpose of share split
The Company will conduct a share split in order to create a more investor-friendly environment and expand its
investor base by reducing the amount per investment unit of the Company’s shares.
(b) Overview of share split(i) Method of share split
The Company will conduct a share split into 5 shares for every one common share held by shareholders
recorded in the latest register of shareholders as of June 30, 2024.
(ii) Number of shares to be increased by share split(*)
927,167,877 shares
Total number of issued shares before the share split
Number of shares to be increased by this share split
3,708,671,508 shares
Total number of issued shares after the share split
4,635,839,385 shares
Total number of shares authorized to be issued after the share split
10,000,000,000 shares(*) The number of shares shown above is calculated based on the total number of shares outstanding asof March 31, 2024, and may change by the record date of the share split.
(c) Schedule
Date of public notice of the record date June 14, 2024 (scheduled)
Record dateJune 30, 2024 (scheduled)
Effective dateJuly 1, 2024 (scheduled)(d) Amendment of the total shares authorized to be issued by the Company
The total number of shares authorized to be issued by the Company will be amended to 10,000,000,000
shares as of July 1, 2024.
(e) Impact on per share information
Per share information assuming that the share split was performed at the beginning of this fiscal year is asfollows.
Hitachi, Ltd. stockholders' equity per share
1,231.08 yen
Net income attributable to Hitachi, Ltd. stockholders per share
126.91 yen(f) Others
There will be no change in the amount of stated capital as a result of the share split.
As the share split will take effect on July 1, 2024, the year-end dividend for the fiscal year ending March 31,
2024, which has a dividend record date of March 31, 2024, will be paid based on the shares before the share
split.

62

Notes on Major Subsequent Events

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

Unconsolidated Financial Statements
Unconsolidated Balance Sheet
Fiscal 2022 (Reference)
Fiscal 2023
(As of March 31, 2023)(As of March 31, 2024)(Millions of yen)
(Assets)
Current assets

1,020,191

1,687,949

Cash32,91625,403

Trade receivables and contract assets

591,333

667,498

Finished goods

15,493

13,179Semi-finished goods

14,954

13,518Raw materials

32,34430,314Work in process

62,80566,762

Advances paid

26,26632,201

Short-term loan receivables

75,124572,849

Others177,759

279,809(8,807)(13,587)

4,920,307

4,407,538

192,605

187,066

Buildings

95,95091,956Structures

5,358

5,380

Machinery

6,744

7,299

Vehicles123

141

Tools and equipment

41,546

46,409Land

23,43020,894

Lease assets

14,982

12,943

Construction in progress

4,467

2,041

96,93897,748

Allowance for doubtful receivables
Fixed assets
Tangible fixed assets

Intangible fixed assets
Patents

41

31

Software91,57992,730

Right of using facilities

207

140

Lease assets

54

78

Others

5,055

4,767

4,630,763

4,122,722

Affiliated companies’ common stock

3,849,069

3,837,689

Other securities of affiliated companies

18,592

26,848Investments and others

Investments in affiliated companies

33,12632,253

Investments in securities

244,72276,666Long-term loan receivables

362,011

34

-

6,361

Deferred tax assets

58,624103,253

Others64,75340,322

Prepaid pension costs

Allowance for doubtful receivables
Total assets

63

4. Unconsolidated Balance Sheets

(137)

(706)

5,940,498

6,095,488

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

Fiscal 2022 (Reference)
Fiscal 2023
(As of March 31, 2023)(As of March 31, 2024)(Millions of yen)
(Liabilities)
Current liabilities

1,474,485

1,450,411

Electronically recorded obligations

10,613

12,462

Trade accounts payable

262,665

276,563

Short-term debt

132,730

69,016

Current portion of debentures

30,000-Current portion of long-term debt

11,000107,501

Lease liabilities

4,261

4,437

Other accounts payable

22,393

71,624

Accrued expenses

181,803

181,294

Contract liabilities

104,486

118,774

Deposits received

674,680

574,026

Provision for product warranties
Provision for loss on construction contracts
Others69

79

37,27233,318

2,507

1,313

Non-current liabilities

1,129,374

1,030,880

Debentures

130,000

220,000

Long-term debt

750,378

547,484

Lease liabilities

12,718

9,973

Accrued pension liability

75,212

66,959Provision for loss on business of affiliated companies

139,422

165,953

Asset retirement obligations

10,88910,469Others

10,754

10,041

Total liabilities

2,603,860

2,481,292

3,216,044

3,553,986

Common stock462,817463,417

Capital surplus

254,133

181,383

Capital reserve

180,783

181,383

Others73,349-2,502,632

2,914,176

2,502,632

2,914,176(Net assets)
Stockholders’ equity

Retained Earnings
OthersReserve for advanced depreciation of fixed assets
Retained earnings carried forward
Treasury stock

927

835

2,501,705

2,913,340(3,539)(4,991)

Valuation and translation adjustments

119,359

59,059Unrealized holding gains on securities

103,379

28,537

Deferred profit or loss on hedges

15,98030,521

Subscription rights to shares

1,233

1,149

Total net assets

3,336,637

3,614,195

Total liabilities and net assets

5,940,498

6,095,488

64

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

Unconsolidated Statement of Operations
Years ended March 312023 (Reference)

2024(Millions of yen)
Revenues

1,631,338

1,756,937

Cost of sales

1,173,314

1,218,045

Gross profit on sales

458,023

538,892

Selling, general and administrative expenses

369,999

391,179

Operating income

88,023

147,712

Other income

312,820

324,571

Interest income and dividends

292,812295,671

Others

20,00828,89946,12571,282

Interest expenses

14,185

21,499Others31,93949,782

Ordinary income

354,719

401,001

Extraordinary gain

Other expenses

701,451

278,191

Gain on sale of investments in securities

12,640

153,330

Gain on sale of affiliated companies’ common stock

687,447

110,135

1,363

14,726

Gain on sale of real property
Extraordinary loss

23,69047,105

Impairment loss on affiliated companies’ common stock

9,556

37,229Loss on impairment of assets

12,091

9,001

1,908

873

Impairment loss on investments in capital of affiliatedcompanies
Impairment loss on investments in securities
Income before income taxes

134-

1,032,480

632,088

76,45581,541

Income taxes
Current
Deferred(31,922)(31,023)Net Income

987,946

581,570

65

5. Unconsolidated Statements of Operations

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

Unconsolidated Statement of Changes in Net Assets (April 1, 2023 to March 31, 2024)(Millions of yen)
Stockholders’ equity
Capital surplus

Retained earnings
OthersCommonstock

Balance at beginning of year

Capitalreserve

462,817

180,783

600

600

Reserve for
Total capital advanced
surplusdepreciationof
fixed assets

Others73,349254,133

927

Retainedearnings
carriedforward

Total retained
earnings

2,501,705

2,502,632

Treasurystock(3,539)Total
stockholders’equity3,216,044

Change during year
Issuance of new shares

600

Reversal of reserve foradvanced depreciation of
fixed assets

1,200
(91)

91

-

-

Distribution of surplus(144,461)(144,461)(144,461)

Net income

581,570

581,570

581,570

Acquisition of treasury
stock(100,458)(100,458)

Disposition of treasury
stock

(120)

(120)

213

92

Cancellation of treasurystock(98,793)(98,793)

98,793-

Transfer to capital surplus
from retained earnings

25,56425,564(25,564)(25,564)-(Net) Change in items
other than stockholders’equity during year
Total change during year
Balance at end of year

600

600

(73,349)(72,749)(91)

411,634

411,543(1,452)337,942

463,417

181,383-

181,383835

2,913,340

2,914,176(4,991)

3,553,986

Valuation and translation adjustments

Balance at beginning of year

Unrealized
holding gains
on securities

Deferred
profitor loss onhedges103,379

15,980

Total
Subscription
valuationrights toandsharestranslation
adjustments
119,359

1,233

Total net
assets3,336,637

Change during year
Issuance of new shares

1,200

Reversal of reserve foradvanced depreciation of
fixed assets-

Distribution of surplus(144,461)

Net income

581,570

Acquisition of treasury
stock
Disposition of treasury
stock
Cancellation of treasury
stock
Transfer to capital surplus
from retained earnings(100,458)92-(Net) Change in items
other than stockholders’equity during year

(74,841)

14,540(60,300)

Total change during year

(74,841)

14,540(60,300)(83)

277,557

Balance at end of year

28,53730,52159,0591,149

3,614,195

(83)

66

6. Unconsolidated Statement of Changes in Net Assets(60,384)2024/05/20 19:12:52 / 23092450_株式会社日立製作所_招集通知

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

67

7. Notes to Unconsolidated Financial Statements(Notes on Important Accounting
Policy)1. Inventories、(Notes on Important Accounting Policy)2. Securities、(Notes on Important Accounting Policy)3. Derivatives、(Notes on
Important Accounting Policy)4. Depreciation of tangible fixed assets (excluding lease assets)、(Notes on Important Accounting Policy)5.
Depreciation of intangible fixed assets (excluding lease assets)、(Notes on Important Accounting Policy)6. Depreciation of lease assets、(Notes on Important Accounting Policy)7. Allowances and Provisions Allowance for doubtful receivables:、(Notes on Important Accounting
Policy)7. Allowances and Provisions Provision for product warranties:、(Notes on Important Accounting Policy)7. Allowances and Provisions
Provision Provision for loss on construction contracts:、(Notes on Important Accounting Policy)7. Allowances and Provisions Provision

2024/05/20 19:12:52 / 23092450_株式会社日立製作所_招集通知8.

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

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

(Change in Presentation)
Unconsolidated Balance Sheet“Current portion of long-term debt” is separately disclosed from “Short-term debt” of “Current liabilities” due to theincrease of the materiality in this fiscal year.

68(Notes on Important Accounting Policy)8. Accounting standard for income and expenses、(Notes on Important Accounting Policy)9. Hedge
accounting、(Notes on Important Accounting Policy)10. Application of tax effect accounting for the transition from the consolidated taxation
system to the group tax sharing system、(Notes on Change in Presentation)

2024/05/20 19:12:52 / 23092450_株式会社日立製作所_招集通知(Notes on Accounting Estimates)
1. Valuation of Affiliated companies’ common stock and Investments in affiliated companies(1) Amounts recorded in the financial statements of this fiscal year
The ending balance of Affiliated companies’ common stock and Investments in affiliated companies, withoutmarket value: 3,839,056 million yen(2) Information that contributes to understanding of accounting estimates
Affiliated companies’ common stock without market value is evaluated by considering possibility of recovery
based on the performance according to the business plan of those companies if the real value of the stock
has declined significantly as compared to the purchase price. A part of affiliated companies’ common stock isevaluated based on the real value which includes the excess earning power calculated by enterprise value
measurement at the time of the acquisition of the Company concerned. Necessity of impairing the excess
earning power is determined by the possibility of achieving the future business plan.
Business plans are estimated based on revenue growth rate and gross margin ratio, and other factors. In
addition, although a certain amount of negative impact due to the business environment is included in current
business plans, these plans may be affected by risks related to market or economic environment, and actual
result may differ from the estimates.
Significant changes in primary assumptions of the business plan could result in the real value being less thanthe purchase price.
2. Loss on impairment of Fixed Assets(1) Amounts recorded in the financial statements of this fiscal year
The ending balance of Tangible fixed assets: 187,066 million yen
The ending balance of Intangible fixed assets (excluding selling, leasing, or otherwise marketing software):80,682 million yen(2) Information that contributes to understanding of accounting estimates
This note is omitted as the same content is stated in ‘6. Property, plant and equipment, Goodwill and Other
intangible assets’ under ‘Notes on Important Matters for Basis of Presentation of Consolidated Financial
Statements’ in the Notes to Consolidated Financial Statements.
3. Provision for loss on business of affiliated companies(1) Amounts recorded in the financial statements of this fiscal year
The ending balance of Provision for loss on business of affiliated companies: 165,953 million yen(2) Information that contributes to understanding of accounting estimates
This note is omitted as the same content is stated in ‘7. Allowances and Provisions’ under ‘Notes on
Important Accounting Policy’ in the Notes to Unconsolidated Financial Statements.
4. Accrued pension liability(1) Amounts recorded in the financial statements of this fiscal year
The ending balance of Prepaid pension costs: 6,361 million yen
The ending balance of Accrued pension liability: 66,959 million yen(2) Information that contributes to understanding of accounting estimates
This note is omitted as the same content is stated in ‘7. Allowances and Provisions’ under ‘Notes on
Important Accounting Policy’ in the Notes to Unconsolidated Financial Statements and ‘3. Employee
Retirement Benefits’ under ‘Notes on Accounting Estimates’ in the Notes to Consolidated Financial
Statements.
5. Provision for loss on construction contracts(1) Amounts recorded in the financial statements of this fiscal year
The ending balance of Provision for loss on construction contracts: 33,318 million yen(2) Information that contributes to understanding of accounting estimates
This note is omitted as the same content is stated in ‘7. Allowances and Provisions’ under ‘Notes on
Important Accounting Policy’ in the Notes to Unconsolidated Financial Statements and ‘4. Long-term
projects’ under ‘Notes on Accounting Estimates’ in the Notes to Consolidated Financial Statements.
6. Deferred tax assets(1) Amounts recorded in the financial statements of this fiscal year
The ending balance of Deferred tax assets:103,253 million yen(2) Information that contributes to understanding of accounting estimates
This note is omitted as the same content is stated in ‘5. Deferred tax assets’ under ‘Notes on Accounting
Estimates’ in the Notes to Consolidated Financial Statements.

69(Notes on Accounting Estimate)2024/05/20 19:12:52 / 23092450_株式会社日立製作所_招集通知(Notes to Unconsolidated Balance Sheet)
1. Collateralized assets(Millions of yen)

2.

3.

Type of asset
Year-end book value
Description
Affiliated companies’ common
46
Collaterals for borrowings by affiliated companies
stock
Investments in securities
6
Collaterals for borrowings by investees
Long-term loan receivables
32
Collaterals for borrowings by affiliated companies
Total
84
Accumulated depreciation of tangible fixed assets
Buildings
137,588 million yen
Structures
23,876 million yen
Machinery
81,765 million yen
Vehicles
918 million yen
Tools and equipment
144,355 million yen
Lease assets
10,159 million yen
Guarantees
The Company guarantees financial guarantees from financial institutions concerning subsidiaries' order received,
etc. as follows.
(Millions of yen)
Guarantee

4.

Year-end balance
Hitachi Energy Ltd
840,694
Hitachi Rail STS S.p.A.
322,443
Hitachi Rail Ltd.
60,422
Hitachi Energy Canada Inc.
4,720
Kawasaki Railcar Manufacturing Co., Ltd.
1,600
Others
3,788
Total
1,233,669
In addition to the foregoing, the Company has entered into an agreement with each of the following overseas
affiliated companies on maintaining their finances in a sound condition, etc., mainly to enhance their credit inorder to support their financing activities:
Hitachi America Capital, Ltd., Hitachi International (Holland) B.V., Hitachi International Treasury Ltd.,
Hitachi (China) Finance Co., Ltd. and Hitachi Power Europe GmbH
Short-term receivables from affiliated companies
944,065 million yen
Long-term receivables from affiliated companies
9,484 million yen
Short-term payables to affiliated companies
826,405 million yen
Long-term payables to affiliated companies
4,935 million yen

70(Notes to Unconsolidated Balance Sheet)1. Collateralized assets、(Notes to Unconsolidated Balance Sheet)2. Accumulated depreciation of
tangible fixed assets、(Notes to Unconsolidated Balance Sheet)3 Guarantees、(Notes to Unconsolidated Balance Sheet)4. Receivables fromaffiliated companies

2024/05/20 19:12:52 / 23092450_株式会社日立製作所_招集通知(Notes to Unconsolidated Statement of Operations)
1. Loss on impairment of assets(1) Summary of the major assets or asset groups for which impairment loss was recognizedClassification
Description
Category
Location
Software relating toAssets to be held
Softwarestorage infrastructure
and usedmanagement services
Software relating toAssets to be held
Softwareservice business forand usedfinancial institutions
Software relating toAssets to be held
Software, etc.
service business forand used
medical institutions(2) Reason to recognize impairment loss
The Company recognized the impairment loss for assets to be held and used since amounts invested in theabove assets are expected to be irrecoverable due to decline in their profitability.
(3) Amounts of impairment loss
Buildings
59 million yen
Structures
5 million yen
Machinery
1,068 million yen
Vehicles1 million yen
Tools and equipment
384 million yen
Software6.971 million yen
Others
510 million yen
Total
9,001 million yen(4) Method of grouping assets
Although the grouping of assets is principally based on business divisions or places of business, some assets
and asset groups are grouped as a separate unit that generates cash flows independently of other asset
groups.
(5) Calculation of recoverable amounts
For assets to be held and used, calculation is based on the higher of net sales price and value in use, andnet sales price is calculated by deducting the estimated cost of disposal from real estate appraisal value.
2. Revenues from affiliated companies
400,758 million yen
Purchases from affiliated companies
787,547 million yen
Non-operating transactions with affiliated companies
157,024 million yen

71(Notes to Unconsolidated Statement of Operations)1. Loss on impairment of assets、(Notes to Unconsolidated Statement of Operations)2. Sales
to affiliated companies

2024/05/20 19:12:52 / 23092450_株式会社日立製作所_招集通知(Note to Unconsolidated Statement of Changes in Net Assets)
Matters related to Class and Number of Treasury Stock(Shares)Class

Number of shares
Increase during year Decrease during year
11,139,272
11,103,929

At beginning of year
At end of year
Common stock
510,830
546,173
Summary of Reason for Change
The increase during this fiscal year by 11,139,272 shares is due to the repurchase of 11,073,400 shares of its own
common stock pursuant to Article 459, Paragraph 1 of the Companies Act of Japan and Article 32 of Hitachi's
Articles of Incorporation, which was approved at the Board of Directors meeting held on April 27, 2023, and thepurchase of 46,472 shares from less-than-one unit shareholders at their request, and the acquisition of 19,400
shares without consideration in accordance with the restricted stock compensation plan. The decrease during thisfiscal year by 11,103,929 shares is due to the cancellation of 11,073,400 shares of its treasury shares pursuant to
Article 178 of the Companies Act of Japan, and the disposition of 29,720 shares as a result of the exercise of stockacquisition rights, and the sale of 809 shares to less-than-one unit shareholders at their request.

(Note on Revenue Recognition)
Information about the basis to understand revenue is omitted as the same content is stated in ‘8. Accounting
standard for income and expenses’ under ‘Notes on Important Accounting Policy’ in the Notes on
Unconsolidated Financial Statements and ‘3. Accounting standard for income and expenses’ under ‘Notes on
Important Matters for Basis of Presentation of Consolidated Financial Statements’ in the Notes to Consolidated
Financial Statements.
Information about disaggregation of revenue and to understand the amount of revenue in the current and thefollowing fiscal years are omitted as the same content is stated in ‘Note on Revenue Recognition’ in the Notes
to Consolidated Financial Statements. Of the revenue recognized during the fiscal year ended on March 31,
2024, the amount of revenue recognized based on the pattern of the cost accrual arising from long-term project
was 444,089 million yen.
(Note on Accounting for Deferred Taxes)
The major causes of deferred tax assets are accrued pension liability and accrued bonuses to employees.

72(Note to Unconsolidated Statement of Changes in Net Assets)、(Note on Revenue Recognition)、(Note on Accounting for Deferred Taxes)

2024/05/20 19:12:52 / 23092450_株式会社日立製作所_招集通知(Note on Transactions with Related Parties)(Millions of yen)
Name of company
etc.

Relationship with the
Description ofTransaction
Year-end
Attribute
Classification
related parties
transaction
amountbalance
Sale of the Group's
Underwriting of
Subsidiary Hitachi America, Ltd. Direct: 100.0%
75,685products *capital increase
Hitachi Energy
Short-term loan
Subsidiary
Indirect: 100.0% Loan
Loan (Note 1)
42,912
363,384
Finance Ltd
receivables
Hitachi America
Loan
Short-term loan
Subsidiary
Indirect: 100.0% *
192,290
192,290
Capital, Ltd.
(Note 1) (Note 2)
receivables
Hitachi International
Deposits paid
Other current
Subsidiary
Direct: 100.0% *95,61095,610(Holland) B.V.
(Note 1) (Note 2)
assetsSale of the Group's
Borrowing
Short-term
Subsidiary Hitachi (China), Ltd. Direct: 100.0%
67,697
67,697products *(Note 1) (Note 2)
debt
Deposits received
Hitachi High-TechSale of the
Deposits
Subsidiary
Direct: 100.0%
3,196
115,492(Note 1) (Note 2)
Corporation
Company's products *received(Note 3)
Manufacturing, sale
Deposits received
Hitachi Global Life
Deposits
Subsidiary
Direct: 100.0% and maintenance of(627)
70,573(Note 1) (Note 2)
Solutions, Inc.
received
the Group's products * (Note 3)
Outsourcing of theCompany's softwaredevelopment,
Deposits received
Deposits
outsourcing of
Subsidiary Hitachi Systems, Ltd. Direct: 100.0%(12,560)
62,116(Note 1) (Note 2)
received
maintenance of the(Note 3)Company's
telecommunications
equipment *Subsidiary Hitachi Energy Ltd

Subsidiary

Affiliate

Hitachi Rail STS
S.p.A.

Hitachi Astemo, Ltd.

% of voting
rights held

Direct: 100.0% *Indirect: 100.0%

Direct:Manufacturing, sale,engineering andmaintenance of theGroup's products *Purchase of Hitachi
40.0% Astemo, Ltd.'s
products *Guarantees

840,694--

Guarantees

322,443--

Transfer of sharesof Hitachi Astemo,Ltd. (Note 4)
Transfer priceProfits--

112,090
77,080* The Company’s Directors, Executive Officers or employees concurrently hold position of directors or officers at thesubsidiary and the affiliate.
Notes: 1. The interest rate was determined with due consideration to market interest rates. The transaction amountindicates the change from the balance at the beginning of the fiscal year.
2. These are transactions made based on the pooling system wherein the funds of the Company and affiliatedcompanies to be loaned to affiliated companies who have financing needs through the Company or overseas
financial subsidiaries.
3. The transaction amount includes interest received and paid.
4. The Company transferred a part of shares of Hitachi Astemo, Ltd. to Hitachi Astemo, Ltd. in association withthe acquisition of treasury stocks by itself. The transfer price was determined with due consideration to thevaluation amount presented by an independent third party.
(Note on Per Share Information)
Net assets per share
3,899.16 yen
Net income per share
625.36 yen

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

2024/05/20 19:12:52 / 23092450_株式会社日立製作所_招集通知(Notes on Major Subsequent Events)
1. Repurchase of Shares of Common Stock
The Board of Directors decided to repurchase shares of its own common stock pursuant to Article 459,
Paragraph 1 of the Companies Act of Japan and Article 32 of the Company’s Articles of Incorporation, as
follows.
(a) Reason for repurchase
The Company views the return of profits to shareholders through enhancing corporate value from mid- andlong-term perspective and paying dividends continuously as an important managerial issue. The Company
decided to repurchase its own shares this time, taking into consideration its financial condition and theprogress of the asset sales.
(b) Outline of the Repurchase(i) Class of shares to be repurchased
Common stock of the Company(ii) Aggregate number of shares to be repurchased
Up to 21 million shares(*)(2.27% of the number of outstanding shares (excluding treasury stocks))(*)Aggregate number of shares to be repurchased will be 105 million shares after the effective date (July
1, 2024) of the Share Split that described below 2.
(iii) Aggregate amount of repurchase
Up to 200.0 billion yen(iv) Period of the repurchase
From April 30, 2024 to March 31, 2025(v) Method of repurchase
Expected open market purchase through the Tokyo Stock Exchange
2. Share Split and Partial Amendment of Articles of Incorporation
The Company decided on April 26, 2024 to implement a share split and partially amend its Articles ofIncorporation.
(a) Purpose of share split
The Company will conduct a share split in order to create a more investor-friendly environment and expand
its investor base by reducing the amount per investment unit of the Company’s shares.
(b) Overview of share split(i) Method of share split
The Company will conduct a share split into 5 shares for every one common share held by shareholders
recorded in the latest register of shareholders as of June 30, 2024.
(ii) Number of shares to be increased by share split(*)
927,167,877 shares
Total number of issued shares before the share split
Number of shares to be increased by this share split
3,708,671,508 shares
Total number of issued shares after the share split
4,635,839,385 shares
Total number of shares authorized to be issued after the share split
10,000,000,000 shares(*) The number of shares shown above is calculated based on the total number of shares outstanding asof March 31, 2024, and may change by the record date of the share split.
(c) Schedule
Date of public notice of the record date June 14, 2024 (scheduled)
Record dateJune 30, 2024 (scheduled)
Effective dateJuly 1, 2024 (scheduled)(d) Amendment of the total shares authorized to be issued by the Company
The total number of shares authorized to be issued by the Company will be amended to 10,000,000,000
shares as of July 1, 2024.
(e) Impact on per share information
Per share information assuming that the share split was performed at the beginning of this fiscal year is asfollows.
Net assets per share
779.83 yen
Net income per share
125.07 yen(f) Others
There will be no change in the amount of stated capital as a result of the share split.
As the share split will take effect on July 1, 2024, the year-end dividend for the fiscal year ending March 31,
2024, which has a dividend record date of March 31, 2024, will be paid based on the shares before theshare split.

74(Note on Major Subsequent Events)

2024/05/20 19:12:52 / 23092450_株式会社日立製作所_招集通知Transcript of Accounting Auditors’ Audit Report on Consolidated Financial Statements

Independent Auditor’s Report
May 9, 2024

Mr. Keiji Kojima, President & CEO
Hitachi, Ltd.
Ernst & Young ShinNihon LLC
Tokyo, Japan
Koji Fujima
Designated Engagement Partner
Certified Public Accountant
Teruyasu Omote
Designated Engagement Partner
Certified Public Accountant
Shinya Yoshida
Designated Engagement Partner
Certified Public Accountant
OpinionPursuant to Article 444, Paragraph 4 of the Companies Act, we have audited the accompanying consolidated
financial statements, which comprise the consolidated statement of financial position, the consolidated statement of
profit or loss, the consolidated statement of changes in equity, and the notes to the consolidated financial statementsof Hitachi, Ltd. and its consolidated subsidiaries (the Group) applicable to the fiscal year from April 1, 2023 to March
31, 2024.
In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, theconsolidated financial position and results of operations of the Group applicable to the fiscal year ended March 31,
2024, in accordance with International Financial Reporting Standards (IFRSs) (however, certain disclosures areomitted pursuant to the second sentence of Article 120, Paragraph 1 of the Regulations on Corporate Accounting).
Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in Japan. Our
responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of theConsolidated Financial Statements section of our report. We are independent of the Group in accordance with the
ethical requirements that are relevant to our audit of the consolidated financial statements in Japan, and we havefulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence
we have obtained is sufficient and appropriate to provide a basis for our opinion.
Other Information
The other information comprises the information included in the Group’s business report and its
supplementary schedules. Management is responsible for preparation and disclosure of the other information. The
Audit Committee is responsible for overseeing the Group’s reporting process of the other information.
Our opinion on the consolidated financial statements does not cover the other information and we do not
express any form of assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to read the otherinformation and, in doing so, consider whether the other information is materially inconsistent with the consolidated
financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this otherinformation, we are required to report that fact.
We have nothing to report in this regard.

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8. Transcript of Accounting Auditors’ Audit Report on Consolidated Financial Statements

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Responsibilities of Management and the Audit Committee for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of these consolidated financial
statements in accordance with IFRSs (however, certain disclosures are omitted pursuant to the second sentence ofArticle 120, Paragraph 1 of the Regulations on Corporate Accounting) and for such internal 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.
In preparing the consolidated financial statements, management is responsible for assessing the Group’s
ability to continue as a going concern and disclosing, as required by IFRSs (however, certain disclosures are omitted
pursuant to the second sentence of Article 120, Paragraph 1 of the Regulations on Corporate Accounting), mattersrelated to going concern.
The Audit Committee is responsible for overseeing the Group’s financial reporting process.
Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as awhole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Misstatements can arise from fraud or error and are considered material if, individually or in theaggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis ofthese consolidated financial statements.
As part of an audit in accordance with auditing standards generally accepted in Japan, we exercise
professional judgment and maintain professional skepticism throughout the audit. We also:- Identify and assess the risks of material misstatement of the consolidated financial statements, whether
due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion.
- Consider internal control relevant to the audit in order to design audit procedures that are appropriate in
the circumstances for our risk assessments, while the purpose of the audit of the consolidated financial
statements is not expressing an opinion on the effectiveness of the Group’s internal control.
- Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimatesand related disclosures made by management.
- Conclude on the appropriateness of management’s use of the going concern basis of accounting and,based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions
that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that amaterial uncertainty exists, we are required to draw attention in our auditor’s report to the related
disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our
opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report.
However, future events or conditions may cause the Group to cease to continue as a going concern.
- Evaluate the overall presentation, structure and content of the consolidated financial statements, including
the disclosures, and whether the consolidated financial statements represent the underlying transactions
and events in a manner that achieves fair presentation in accordance with IFRSs (however, certain
disclosures are omitted pursuant to the second sentence of Article 120, Paragraph 1 of the Regulations on
Corporate Accounting).
- Obtain sufficient appropriate audit evidence regarding the financial information of the entities or businessactivities within the Group to express an opinion on the consolidated financial statements. We areresponsible for the direction, supervision and performance of the group audit. We remain solely
responsible for our audit opinion.
We communicate with the Audit Committee regarding, among other matters, the planned scope and timing of
the audit and significant audit findings, including any significant deficiencies in internal control that we identify during
our audit.
We also provide the Audit Committee with a statement that we have complied with the ethical requirements
regarding independence that are relevant to our audit of the consolidated financial statements in Japan, and tocommunicate with them all relationships and other matters that may reasonably be thought to bear on our
independence, and where applicable, actions taken to eliminate threats or safeguards applied to reduce threats toan acceptable level.

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8. Transcript of Accounting Auditors’ Audit Report on Consolidated Financial Statements

2024/05/20 19:12:52 / 23092450_株式会社日立製作所_招集通知Interest Required to Be Disclosed by the Certified Public Accountants Act of Japan
Our firm and its designated engagement partners do not have any interest in the Group which is required tobe disclosed pursuant to the provisions of the Certified Public Accountants Act of Japan.
(Note)
This is an English translation of the Japanese language Independent Auditor’s Report issued by Ernst &Young ShinNihon LLC in connection with the audit of the consolidated financial statements of the Company,
prepared in Japanese, for the fiscal year ended March 31, 2024. Ernst & Young ShinNihon LLC has not audited theEnglish language version of the consolidated financial statements for the above-mentioned year.

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8. Transcript of Accounting Auditors’ Audit Report on Consolidated Financial Statements

2024/05/20 19:12:52 / 23092450_株式会社日立製作所_招集通知Transcript of Accounting Auditors’ Audit Report on Unconsolidated Financial Statements

Independent Auditor’s Report
May 9, 2024

Mr. Keiji Kojima, President & CEO
Hitachi, Ltd.
Ernst & Young ShinNihon LLC
Tokyo, Japan
Koji Fujima
Designated Engagement Partner
Certified Public Accountant
Teruyasu Omote
Designated Engagement Partner
Certified Public Accountant
Shinya Yoshida
Designated Engagement Partner
Certified Public Accountant

OpinionPursuant to Article 436, Paragraph 2, Item 1 of the Companies Act, we have audited the accompanying
financial statements, which comprise the balance sheet, the statement of operations, the statement of changes in
net assets, the notes to the financial statements, and its supplementary schedules of Hitachi, Ltd. (the Company)
applicable to the 155th fiscal year from April 1, 2023 to March 31, 2024.
In our opinion, the accompanying financial statements present fairly, in all material respects, the financial
position and results of operations of the Company applicable to the fiscal year ended March 31, 2024, in accordancewith accounting principles generally accepted in Japan.
Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in Japan. Our
responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the
Financial Statements section of our report. We are independent of the Company in accordance with the ethicalrequirements that are relevant to our audit of the financial statements in Japan, and we have fulfilled our otherethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained
is sufficient and appropriate to provide a basis for our opinion.
Other Information
The other information comprises the information included in the Company’s business report and its
supplementary schedules. Management is responsible for preparation and disclosure of the other information. The
Audit Committee is responsible for overseeing the Company’s reporting process of the other information.
Our opinion on the financial statements does not cover the other information and we do not express any formof assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and,in doing so, consider whether the other information is materially inconsistent with the financial statements or our
knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this otherinformation, we are required to report that fact.
We have nothing to report in this regard.

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6. Transcript of Accounting Auditors’ Audit Report on Unconsolidated Financial Statements

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Responsibilities of Management and the Audit Committee for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements inaccordance with accounting principles generally accepted in Japan, and for such internal control as management
determines is necessary to enable the preparation of financial statements that are free from material misstatement,
whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing the Company’s ability tocontinue as a going concern and disclosing, as required by accounting principles generally accepted in Japan,
matters related to going concern.
The Audit Committee is responsible for overseeing the Company’s financial reporting process.
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole arefree from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes ouropinion. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate,
they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial
statements.
As part of an audit in accordance with auditing standards generally accepted in Japan, we exercise
professional judgment and maintain professional skepticism throughout the audit. We also:- Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or
error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is
sufficient and appropriate to provide a basis for our opinion.
- Consider internal control relevant to the audit in order to design audit procedures that are appropriate in
the circumstances for our risk assessments, while the purpose of the audit of the financial statements is
not expressing an opinion on the effectiveness of the Company’s internal control.
- Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimatesand related disclosures made by management.
- Conclude on the appropriateness of management’s use of the going concern basis of accounting and,based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions
that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude
that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related
disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our
conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However,
future events or conditions may cause the Company to cease to continue as a going concern.
- Evaluate the overall presentation, structure and content of the financial statements, including thedisclosures, and whether the financial statements represent the underlying transactions and events in amanner that achieves fair presentation in accordance with accounting principles generally accepted inJapan.
We communicate with the Audit Committee regarding, among other matters, the planned scope and timing of
the audit and significant audit findings, including any significant deficiencies in internal control that we identify during
our audit.
We also provide the Audit Committee with a statement that we have complied with the ethical requirements
regarding independence that are relevant to our audit of the financial statements in Japan, and to communicate withthem all relationships and other matters that may reasonably be thought to bear on our independence, and whereapplicable, actions taken to eliminate threats or safeguards applied to reduce threats to an acceptable level.
Interest Required to Be Disclosed by the Certified Public Accountants Act of Japan
Our firm and its designated engagement partners do not have any interest in the Company which is required
to be disclosed pursuant to the provisions of the Certified Public Accountants Act of Japan.
(Note)
This is an English translation of the Japanese language Independent Auditor’s Report issued by Ernst &Young ShinNihon LLC in connection with the audit of the unconsolidated financial statements of the Company,
prepared in Japanese, for the fiscal year ended March 31, 2024. Ernst & Young ShinNihon LLC has not audited theEnglish language version of the unconsolidated financial statements for the above-mentioned year.

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6. Transcript of Accounting Auditors’ Audit Report on Unconsolidated Financial Statements

2024/05/20 19:12:52 / 23092450_株式会社日立製作所_招集通知Transcript of Audit Committee’s Audit Report
AUDIT REPORT
We, the Audit Committee of the Company, audited the performance by Directors and Executive Officers of theirduties during the 155th business term (from April 1, 2023 to March 31, 2024). We hereby report as follows on the method
and results thereof:
1. Method of Audit
1) We received periodical reports, obtained required explanations, and clarified opinions regarding the state of
implementation and operation of the contents of the resolutions of the Board of Directors concerning the matters aslisted in Article 416, Paragraph 1, Item 1 (ro) and (ho) of the Companies Act, and the status of the systems (internal
control systems) established thereunder.
2) In accordance with the audit policy, assignment of audit duties, etc., as determined by the Audit Committee, and, in
collaboration with the relevant departments, we attended important meetings, received reports or heard from the
Directors, Executive Officers, etc. on matters concerning the execution of their duties, requested explanations asnecessary, inspected important decision documents, etc., and made investigation into the state of activities andproperty at the head office and principal business offices of the Company.
3) As regards subsidiaries, we sought to communicate and exchange information with the Directors, Auditors, andothers of the subsidiaries, received reports on their business operations, requested explanations as necessary, andconduct interviews and other tasks for their Head Offices and principal business offices by visiting to the offices orusing the Internet, etc.
4) We examined the contents of the fundamental policy on the conduct of persons influencing decision on the
Company’s financial and business policies set forth in the business report giving due consideration to such things as
the circumstances of deliberations by the Board of Directors and others.
5) Further, we monitored and examined whether the Accounting Auditors maintained their independence andperformed their auditing duties adequately, as well as received reports from the Accounting Auditors on theperformance status of their duties and requested explanations as necessary.
6) We also received a notice from the Accounting Auditors to the effect that “structures for ensuring that duties areappropriately performed” (matters stipulated in each item under Article 131 of the Regulations of Companies’
Financial Statements) were being developed pursuant to the “Quality Management Standards for
Auditing” (Business Accounting Council) and requested explanations as necessary.
We examined the business report and its supplementary schedules, the unconsolidated financial statements(the unconsolidated balance sheet, the unconsolidated statement of operations, the unconsolidated statement ofchanges in net assets, and the notes to unconsolidated financial statements) and their supplementary schedules, aswell as consolidated financial statements (the consolidated statements of financial position, the consolidated statements
of profit or loss, the consolidated statement of changes in equity, and the notes to consolidated financial statements) for
this business term in accordance with the foregoing method.
2. Results of Audit(1) Results of Audit on Business Report etc.
We are of the opinion:
1) that the business report and its supplementary schedules fairly present the state of the Company in accordance withthe laws, regulations and the Articles of Incorporation;2) that, in connection with the performance by Directors and Executive Officers of their duties, no dishonest act ormaterial fact of violation of laws, regulations or the Articles of Incorporation exists;
3) that the contents of the resolution by the Board of Directors concerning internal control systems are appropriate.
Further, there is nothing to note with respect to the performance by Directors and Executive Officers of their duties
and description of the business report related to said internal control systems;4) that the fundamental policy on the conduct of persons influencing decision on the Company’s financial and business
policies set forth in the business report are appropriate.
(2) Results of Audit on Unconsolidated Financial Statements and Their Supplementary Schedules
We are of the opinion that the method and results of the audit made by the Company’s Accounting Auditors,
Ernst & Young ShinNihon LLC are appropriate.
(3) Results of Audit on Consolidated Financial Statements
We are of the opinion that the method and results of the audit made by the Company’s Accounting Auditors,
Ernst & Young ShinNihon LLC are appropriate.
May 9, 2024
Audit Committee, Hitachi, Ltd.
Hiroaki Yoshihara
Katsumi Ihara
Ikuro Sugawara
Helmuth Ludwig
Mitsuaki Nishiyama (Standing)Note: Messrs. Katsumi Ihara, Ikuro Sugawara, Hiroaki Yoshihara and Helmuth Ludwig are outside Directors pursuant to Article 2, Item
15 and Article 400, Paragraph 3 of the Companies Act.

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7. Transcript of Audit Committee’s Audit Report on Unconsolidated Financial Statements