To Our Shareholders

Toshiaki Higashihara
President & COO

Hiroaki Nakanishi
Chairman & CEO

In markets around the world, economic conditions are ever-changing. The economies are slowing in certain
emerging countries, while encouraging changes are being seen in others as governments focus on growth andgreater prosperity. In India, for example, hopes for economic growth are rising since the new administration came
to power, and in China, steps are being taken to stimulate internal demand as the country strives to sustain its
economic expansion. In response to these types of changes, which affect societies, regions, and people, we will
work together with our customers to identify their challenges and provide innovative solutions through Hitachi’s
Social Innovation Business. At the same time, we will continue to implement proactive management strategies thatfacilitate our transformation into a truly global company, while helping to drive the national growth strategy ofthe Japanese government.
In recent years, Hitachi has changed its basic management strategy from recovery to growth. Through our 2012
Mid-term Management Plan, launched in fiscal 2010, Hitachi successfully recovered from an operational crisis.
In May 2013, in our path toward new growth, we launched our 2015 Mid-term Management Plan. In fiscal 2013,
the first year of the current plan, Hitachi achieved record-high levels of operating income and EBIT, as well as
year-on-year increases in revenues, net income attributable to Hitachi, Ltd. stockholders, and total Hitachi, Ltd.
stockholders’ equity ratio (manufacturing, services & others). We also achieved year-on-year increases in our service
revenue ratio, which rose to 32%, and in our overseas revenue ratio, which reached 45%. As these figures illustrate,
we have been making steady progress. Nevertheless, amid ever-accelerating globalization, we have also begun to
identify a new series of challenges.
Fiscal 2014, the second year of the 2015 Mid-term Management Plan, will be critical in our continued efforts topromote further growth. Accordingly, we will promote measures to resolve the challenges we face and devise andimplement specific growth strategies for each business division.
Specifically, to accelerate global initiatives in our Social Innovation Business, we will strengthen our engineering
teams while allowing them to work more closely with sales teams in each country to formulate and propose
solutions to our customer’s business challenges. At the same time, we will strengthen our ability to fully support
the business operations of our customers by offering consultations for the supply of products, systems, and services.

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With regard to our products, we will strive to further enhance their competitiveness in global markets, in addition
to offering “product services” that provide operation and maintenance support throughout the entire productlifecycle. Through these and other measures, we will work to provide solutions that fully resolve the challenges
our customers face.
Regarding global business development, we have reaffirmed the importance of China and the United States as
high-priority regions. China, along with Europe, India and Asia, had been designated a high-priority region,
but the recent clarification of economic policies in the country has reaffirmed this status. The growing signs of
economic growth potential in the United States also led us to reaffirm that country’s status as a high-priority region.
Accordingly, we have been stepping up our initiatives in these two countries. In June 2014, Hitachi Group seniorexecutives convened in Beijing where they formulated a new growth strategy that we are now implementing. InApril 2014, we assigned a vice president and executive officer to the United States to act as head of our global IT
service business. We also established the position of global chief executive officer for our rail systems business in
the United Kingdom. These executives have commenced autonomous decentralized operations. In these ways,we are aggressively promoting the globalization of our management.
To ensure the steady development of global business, it is essential that we increase our ability to generate cash.
Towards that end, we will take steps to improve profitability and continue implementation of the Hitachi Smart
Transformation Project, our cost structure reform project. Taking an end-to-end perspective, we will reevaluatebusiness processes, from order receipt to design, manufacturing, sales, and service. In this way, we will enhancethe efficiency of our entire operation, thereby achieving further cost reductions and generating cash in the process.
To effectively advance these measures, it is essential that we optimize and nurture our global talent. We arecurrently establishing a global, Group-wide human resources management platform that will help us place the rightpeople in the right jobs and maximize the performance of our employees, wherever they may be.
We have also taken steps to strengthen our management system so that we can promote our growth strategies,
which is a top priority. In October 2013, we appointed nine “C-suite” officers, including a CFO and a CMO, andwe clarified the missions of our executive officers. Furthermore, in April 2014, we were appointed as Hitachi’sChairman & CEO and President & COO, respectively. In our new roles, we will continue to enhance Hitachi’s
management agility while steering the Group on a clear course towards solid and sustained growth. Furthermore,
we will stimulate growth in profits by allocating this newly created cash to strategic investments, thereby ensuring
a steady continuation of the current growth phase. Through these and other measures, we are confident that wecan meet the expectations of our shareholders.
Working together under this new management system, each and every member of the Hitachi Group will strive
to reach the targets of the 2015 Mid-term Management Plan and achieve further growth. Accordingly, as an important
shareholder of Hitachi, Ltd., we would like to ask you for your continued understanding and support.

July 2014

Hiroaki Nakanishi

Toshiaki Higashihara

Chairman & CEO

President & COO

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