2023/05/16 21:13:17 / 22961354_株式会社日立製作所_招集通知

Business Report (from April 1, 2022 to March 31, 2023)(1) Business Overview and Results of Hitachi Group
Business Results
The Hitachi Group secured revenues of 10,881.1 billion yen, mainly due to the expansion of the Lumada
business, solid performance in the power grid and railway systems businesses, higher revenues from Hitachi Astemo, Ltd.
as a result of the recovery in production volume by automakers and the impact of foreign exchange, despite the severebusiness environment owing from semiconductor shortage and soaring materials and energy prices. Adjusted EBITA was
884.6 billion yen and Adjusted EBITA Margin was 8.1%. Net income attributable to Hitachi, Ltd. stockholders was 649.1
billion yen, a new record high for the third consecutive year, mainly due to the gains on business reorganization resulting
from the sale of shares of listed group companies.
Regarding funds, core free cash flow* of 416.4 billion yen was secured.
As the Hitachi Group has maintained the profitability and ability to generate cash even under the difficult
business environment, the Group increased the amount of its annual dividend 20 yen to 145 yen (with an interim dividendof 70 yen and a year-end dividend of 75 yen) and repurchased its own shares of approximately 200.0 billion yen.
*Core free cash flows are cash flows presented as free cash flows excluding cash flows from M&A and asset sales, etc.

Measures Taken and Aims
In the current fiscal year, as the first year of the “2024 Mid-term Management Plan,” seeking global growth withthe three pillars, “Digital,” “Green” and “Innovation,” Hitachi chiefly pursued the following initiatives and move ahead withthe shift to growth mode.
‒ Global Growth of the Digital Business in Response to Rising
DX and GX* Demand
To accelerate digital business in the global market
experiencing growing DX demand in the field of social infrastructure,
Hitachi established Hitachi Digital LLC in North America. Hitachi
Digital has played a central role in advancing a digital strategy
spanning the Hitachi Group with Lumada and other solutions, and in
response to rising GX demand, Hitachi Energy Ltd, Hitachi Rail Ltd.
and other Group entities have secured expanded orders.
In addition, GlobalLogic Inc., which continues to grow,has also set up a site in Japan and is applying its development
techniques to Hitachi's projects in Japan. In anticipation of further
growth, GlobalLogic acquired digital engineering companies inRomania and Uruguay in order to establish a presence in Europe
and Latin America and to acquire new customers and humanresources.
*DX: Digital transformation, GX: Green transformation

Lumada business revenues(Billions of yen)

1,960(+42%)

1,378
119
366

215
466
630

388
505
FY2021
Digital engineering
Connected products
Notes:

649
FY2022
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.

‒ Global Risk Management Supporting Growth
Amid ongoing uncertainty in the business environment, Hitachi has developed a system to centrally monitor
global risk information and proactively respond to risks in response to risks that increase with business growth. We strive
to ascertain the risks that could impact the Hitachi Group, including soaring prices of goods, geopolitical risks and largescale disaster risks, and after quickly identifying priority risks, Hitachi tries to respond ahead of the rapidly changing
business environment.
‒ Reorganization of the Automotive Systems BusinessTo achieve the sustainable growth and enhanced corporate value of Hitachi Astemo, Ltd. in the automobile andmotorcycle industry undergoing a period of dramatic change, Hitachi decided to implement a partial transfer of shares in
the company. Through this transaction, Hitachi Astemo will become an equity-method affiliate of Hitachi. Hitachi willcontinue the collaboration with the growing Hitachi Astemo gaining a new joint partner, particularly in the areas ofelectrification and autonomous driving, enabling each company to grow together.

11

Business Results

2023/05/16 21:13:17 / 22961354_株式会社日立製作所_招集通知

Consolidated Financial Results for Fiscal 2022 (Billions of yen)

Revenues

Adjusted EBITA[Adjusted EBITA Margin]

10,881.1
Year over year 106％ROIC

Net income attributable to
Hitachi, Ltd. stockholders

884.6[8.1%]
Year over year 103％
[Year over year -0.2]

649.1

7.6%

Year over year 111％

Year over year -0.1

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[Reference] Financial Results by Segment
Revenues
Hitachi
Metals847.7

Others475.1(4%)

Automotive
Systems

1,920.0(17%)

Adjusted EBITA (Adjusted EBITA Margin)(Billions of yen)
350

473.0
(4%)

Digital Systems &Services(7%)

HitachiConstruction
Machinery(Billions of yen)300

2,389.0(21%)

10,881.1

312.1

293.7

(10.5%)

250

Revenues
Total(12.3%)(9.1%)

200

Green
Energy &Mobility

150

2,492.5

(21%)

100

Connective
Industries

50

2,975.2

(26%)

132.7
(5.3%)

0.0

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.

12

Business Results

Digital Systems & Services
Green Energy & Mobility
Connective Industries
Automotive Systems
Hitachi Construction Machinery
Hitachi Metals
Others

(%)
14.0
12.0
10.0
8.0
6.0

(5.1%)(3.8%)(3.3%)

73.4 43.2 43.0
15.5

4.0
2.0
0.0

2023/05/16 21:13:17 / 22961354_株式会社日立製作所_招集通知[Refference]
Overseas Revenues Trends(Billions of yen)

10,0009,480.6

8,000

10,881.1

10,264.6
8,767.2

8,729.1

6,000
4,000

4,816.0
(51%)

2,000

4,574.3(52%)

4,238.1(48%)

6,762.9(62%)

6,077.5
(59%)

0

2018

2019

2020

2021

2022

(FY)

Revenues by Market
North
America

Europe1,877.9

1,535.9

Billion yen(17%)

Billion yen
(14%)

Japan

4,118.2
Asia

Billion yen(38%)

2,635.1
Billion yen
(24%)

713.8

Billion yen(7%)

Japan Revenues

Overseas Revenues

4,118.2 Billion yen (38%)
Notes:

Other
Ares

6,762.9 Billion yen (62%)

1. 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.
2. The number in parenthesis in “Revenues by Market” is the percentage of revenues in each market to total revenues.

13

Sales revenue by region

2023/05/16 21:13:17 / 22961354_株式会社日立製作所_招集通知(2) Course of Actions for Hitachi Group
Since its establishment, Hitachi has operated under the Mission “Contribute to society through the developmentof 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, Hitachi aims to "support people's quality of life with data andtechnology that fosters a sustainable society." Establishing “Digital,” “Green” and “Innovation” as the three pillars, Hitachi
focuses on the following measures to realize such society through global growth with 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 whiletackling solutions to the next issues. Riding the growing demand for
DX and GX as a tailwind, Hitachi expands Lumada solutions withevery business in the Hitachi Group including energy, transportationand industry.

‒ Aspiring to be an Innovator in Solving Environmental Issues
Through the Social Innovation Business based on collaborative creation with stakeholders, Hitachi works toboth solving environmental issues and improving people's quality of life.
Initiatives aimed at decarbonization in particular have picked up speed, Hitachi aims to achieve carbon
neutrality at its business sites by Fiscal 2030, and across the entire value chain by Fiscal 2050 as its long-term
environmental targets in “Hitachi Environmental Innovation 2050”. Hitachi is making progress in reducing CO2 emissions
faster than the target and aims to further reducing CO2 emissions reducing energy consumption and the use of renewableenergy. Hitachi also helps customers reduce their CO2 emissions by providing solutions driven by Hitachi's efficient,environmentally-conscious products.
‒ Creating Innovation for Growth
Hitachi aims to advance the creation of innovation for global business growth, to expand R&D investments
including cutting-edge research, and to also extend corporate venturing investments to collaborate with startup companies.
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.
With this approach, Hitachi seeks business growth while tackling cost restructuring by promoting rationalizationthat includes site consolidation, thus ensuring its ability to generate cash in a stable fashion even in an uncertain
management environment due to soaring resources price and ongoing global inflation. While enhancing the ability togenerate cash, Hitachi also makes the investments necessary for growth in a swift but carefully selected manner,providing stable returns to shareholders.

14

Course of Actions for Hitachi Group2023/05/16 21:13:17 / 22961354_株式会社日立製作所_招集通知

Hitachi's Initiatives for ESG (Environment, Society, Governance)
To realize the sustainable society aimed in the “2024 Mid-term Management Plan,” Hitachi is pursuing various
ESG initiatives.

Omika Green Network: Collaboration for Decarbonization Capable of Growth from a Regional Perspective
Hitachi is working to develop the Omika Green Network led
by the Omika Works located in Hitachi, Ibaraki prefecture.
Applying the technologies and expertise gained throughdemonstration activities related to decarbonization conducted at the
Omika Works to the local community, suppliers and otherstakeholders, Hitachi aims to achieve carbon neutrality, which is acommon issue among all stakeholders, and Hitachi's businessgrowth.
<Please check the website for details>
https://www.hitachi.com/products/it/control_sys/ogn/

Diversity, Equity and Inclusion (DEI)
As one of its targets to achieve further growth through theuse of diverse human capital, Hitachi will increase the percentagesof female and non-Japanese executive-level staff (executive andcorporate officers) to 30% respectively by Fiscal 2030.
In April 2023, one new female executive officer was
appointed, bringing the ratio of female executives to 11.4%. In
addition, one new executive officer and two new corporate officers
who are non-Japanese were appointed, bringing the ratio of nonJapanese executives to a record high 20.3%.
Going forward, Hitachi is accelerating these initiatives tomeet its targets.

Female20.3%

Non-Japanese

10.1%

11.6%

8
7 persons
persons
June 2021

®

16

11.4%
9

persons

April 2023

Recognized as a Grand Prize Company in the Corporate Governance of the Year 2022 Awards
To date, Hitachi has made efforts to develop and strengthen
its corporate governance system by thoroughly separating
management supervision and execution functions through a highly
diverse Board of Directors, by establishing a structure enabling
swift business execution, and by continued reorganization ofbusiness portfolio.
These efforts were recognized with Hitachi being
designated as a Grand Prize Company in the Corporate
Governance of the Year 2022 awards organized by the Japan
Association of Corporate Directors from 1,800 companies listed in
the Prime Market in the Tokyo Stock Exchange.

15

Hitachi's Initiatives for ESG (Environment, Society, Governance)

persons

2023/05/16 21:13:17 / 22961354_株式会社日立製作所_招集通知(3) Borrowings and Financing Activity of Hitachi Group
Major Borrowings (As of March 31, 2023)
Name of Company

Creditor

The Company

Balance of Borrowings

Japan Bank for International Cooperation

162.9 billion yen

Mizuho Bank, Ltd.

30.0 billion yen

MUFG Bank, Ltd.

20.0 billion yen

Note: In addition to the figures shown above, the Company owes 484.4 billion yen of long-term borrowings by means of syndicatedloan agreements.

Major Financing Activities
There is no material financing by issuance of stock and corporate bonds, etc. in Fiscal 2022.

(4) Capital Investment of Hitachi Group
During Fiscal 2022, the Hitachi Group carried out capital investment of 349.7 billion yen for further global
business expansion. However, the total investment decreased 38.9 billion yen from the preceding fiscal year, mainly due
to strictly-selected capital investment in the Automotive Systems business and the effect of conversion of Hitachi
Construction Machinery into an equity-method affiliate and sale of Hitachi Metals.
Capital Investment by Segment
OthersCapital Investment Trend

Corporate Items &Eliminations

12.9

21.1
20.1

29.8

Automotive
Systems

66.6

CapitalInvestment
Total

349.7

(% )

(Billions of yen)
500

Digital Systems &Services

400

64.9

Hitachi Metals

HitachiConstruction
Machinery(Billions of yen)

(4.4%)
414.7

300

Green
Energy &Mobility

72.5

Connective
Industries

5.0(4.6%)(4.1%)
399.6(3.8%)

359.8

388.7

4.0

(3.2%)
349.7

200

2.0

100

1.0

0

0.0

2018
2019
2020
2021
2022 (FY)
Note: The number in parentheses is the percentage of capital
investment to total revenues.

61.2

3.0

16

Borrowings and Financing Activity of Hitachi Group、Capital Investment of Hitachi Group2023/05/16 21:13:17 / 22961354_株式会社日立製作所_招集通知(5) Major Facilities and Major Group Companies of Hitachi Group (As of March 31, 2023)
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.

×4
×7
×2

×3

×4

×3

Hitachi, Ltd.

Group Companies (Segment)
Digital Systems & Services

Green Energy & Mobility

Automotive Systems

OthersConnective Industries

Note: 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)

17

Major Facilities of Hitachi Group2023/05/16 21:13:17 / 22961354_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 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 Industrial Holdings Americas, Inc.

U.S.A.

100.0

JR Technology Group, LLC

U.S.A.

100.0

Sullair, LLC

U.S.A.

100.0

Segment■■■

DigitalSystems &Services

Green
Energy &Mobility

Connective
Industries

18

Major Hitachi Group Companies

2023/05/16 21:13:17 / 22961354_株式会社日立製作所_招集通知

Location

Ratio of
Voting Rights(%)

Hitachi Astemo, Ltd.

Hitachinaka, Ibaraki

66.6

Hitachi Astemo Americas, Inc.

U.S.A.

100.0

Hitachi-LG Data Storage, Inc.

Minato-ku, Tokyo

51.0

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

Segment■■

Automotive
Systems

OthersName of Company

Notes: 1. The total number of consolidated subsidiaries is 696.
2. The number of equity-method affiliates is 267. The major equity-method affiliates are Hitachi Kokusai Electric Inc., Arcerik
Hitachi Home Appliances B.V., Johnson Controls-Hitachi Air Conditioning Holding (UK) Ltd, and Hitachi Construction MachineryCo., Ltd.
3. Sullair, LLC changed its name to Hitachi Global Air Power US, LLC on April 12, 2023.
4. Hitachi Construction Machinery Co., Ltd. was converted into an equity-method affiliate from a consolidated subsidiary as aresult of the partial share transfer on August 23, 2022.
5. Hitachi Metals, Ltd. (currently Proterial, Ltd.) has ceased to be a group company of the Company as a result of the sharetransfer on January 5, 2023.
6. Ratio of voting rights includes indirect ownership.

19

Major Hitachi Group Companies

2023/05/16 21:13:17 / 22961354_株式会社日立製作所_招集通知(6) Directors and Executive Officers
1) Directors
Name, Position and Responsibilities, etc. (As of March 31, 2023)
Name

Position

Committee Membership

Other Principal Positions Held

Katsumi Ihara

Independent
Director

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

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

Ravi Venkatesan

Independent
Director
Independent
Director

Nominating Committee

Director, Baker Hughes Company (USA)*
Director, Pembina Pipeline Corporation (Canada)*
Director, Glencore plc (Switzerland)*Ikuro Sugawara

Independent
Director

Audit Committee

Outside Director, Toyota Motor Corporation
Outside Director, FUJIFILM Holdings Corporation

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

Chairperson of the Board, Circor International, Inc. (USA)*
Professor of Practice in Strategy and Entrepreneurship, Cox
School of Business, Southern Methodist University (USA)Senior Advisor, Bridgepoint, LLC (USA)

Cynthia Carroll-

Director, Experian plc (Ireland/UK)*

Keiji Kojima

Director

Compensation Committee-

Hideaki Seki

Director

Audit Committee-

Toshiaki Higashihara

Executive
Chairman

Nominating Committee-

Notes: 1. Mr. Hiroaki Yoshihara, Director (Audit Committee (Chair)), has considerable knowledge of finance and accounting based on
his long experience at KPMG Group with businesses related to accounting, etc.
2. The Company has appointed Director Hideaki Seki 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
coordination with the internal auditing division and others, along with a timely grasp of accurate information throughattendance to important internal meetings, etc. and information-sharing with other Committee members.
3. All of 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 similar positions in each of the foreign corporations to outside
director under the Companies Act.
5. The Company has transactions, including the sales of products and services and purchase of products and services, with
Toyota Motor Corporation, FUJIFILM Holdings Corporation, Murata Manufacturing Co., Ltd. and HOYA CORPORATION.
The volume of transactions with each of the companies and corporations is negligible in comparison to the total businessvolume of the Company 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 stipulated in Article 427, Paragraph 1 of theCompanies Act with each of Directors (excluding Director concurrently serving as an Executive Officer). 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.

20

Directors and Executive Officers

2023/05/16 21:13:17 / 22961354_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 openly and effectively.
Attendance

Activities and duties performed by Independent Directors
regarding their expected role

Katsumi Ihara

Board of Directors meetings:
9 out of 9 days
Nominating Committee:
8 out of 8 days
Audit Committee:
14 out of 15 days
Compensation Committee:
8 out of 8 days

Mr. Ihara stated his opinions and made proposals with respect togeneral 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 the involvement in management at major
companies conducting diversified businesses globally. He also
led discussion as Chairperson at the Board meetings and theNominating Committee respectively.

Ravi Venkatesan

Board of Directors meetings:
9 out of 9 days

Cynthia Carroll

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

Ikuro Sugawara

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

Mr. Venkatesan stated his opinions and made proposals withrespect to general management of the Group such as
management policies and business strategies mainly focusing on
digital business from a global viewpoint based on his richexperience and insight in the area of digital business andemerging markets.
Ms. Carroll stated her opinions and made proposals with respect
to general management of the Group such as management
policies and business strategies from a global viewpoint as well
as a perspective of human capital management 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 withrespect to general management of the Group such as
management policies and business strategies based on his richexperience and insight in such areas as public administration.

Joe Harlan

Board of Directors meetings:
9 out of 9 days
Compensation Committee:
8 out of 8 days

Louise Pentland

Board of Directors meetings:
9 out of 9 days

Takatoshi Yamamoto

Board of Directors meetings:
9 out of 9 days
Audit Committee:
6 out of 6 days
Compensation Committee:
8 out of 8 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

Name

Mr. Harlan stated his opinions and made proposals with respect
to general management of the Group such as management
policies and business strategies from a global business
management viewpoint based on his rich corporate management
experience and insight gained through the involvement inmanagement at major companies conducting diversified
businesses globally.
Ms. Pentland stated her opinions and made proposals withrespect to general management of the Group such as
management policies and business strategies from global
viewpoint as well as a perspective of a compliance and risk
management viewpoint based on her rich experience and insightas chief legal officer at major global companies.
Mr. Yamamoto stated his opinions and made proposals withrespect to general management of the Group such as
management policies and business strategies from investor's
viewpoints focusing on the one regarding IR/information
disclosure and corporate value based on his rich experience andinsight in the area of corporate analysis and global corporate
management. He also led discussion as Chairperson at theCompensation Committee.
Mr. Yoshihara stated his opinions and made proposals withrespect to general management of the Group such as
management policies and business strategies mainly fromviewpoints of improving business results and risk management
based on his rich experience and insight in the area of global
corporate management and accounting. He also led discussion
as Chairperson at the Audit Committee.
Mr. Ludwig stated his opinions and made proposals with respect
to general management of the Group such as management
policies and business strategies mainly focusing on the digitalbusiness from a global viewpoint based on his rich experienceand insight in the area of global corporate management anddigital business.

Note: “Attendance” at Board of Directors meetings and the committees meetings is based on the days held each meetings during
each member’s term of office.

21

Directors and Executive Officers

2023/05/16 21:13:17 / 22961354_株式会社日立製作所_招集通知2) Executive Officers
Name, Position and Responsibilities, etc. (As of March 31, 2023)
Name

Position

Responsibilities

Other Principal Positions Held

*Toshiaki Higashihara Executive Officer

General-*Keiji Kojima

President

Overall management, innovation
strategies-*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 analytical 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)-*Yoshihiko Kawamura*Alistair Dormer

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

Executive Vice President Assistant to the President (business forand Executive Officer
financial institutions, business forgovernment, public corporation andsocial infrastructure systems, defense
systems business, services & platforms
business, social innovation businesspromotion and digital strategies)-

Jun AbeSenior Vice President
and Executive Officer

Services & platforms business-

Katsuya Nagano

Senior Vice President
and Executive Officer

Business for government, public
corporation and social
infrastructure systems, and defense
systems business-

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

Mamoru Morita

Senior Vice President
and Executive Officer

Management strategies

Noriharu Amiya

Vice President andExecutive Officer

Railway systems businessTakashi Iizumi

Vice President andExecutive Officer

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

Hitoshi Ito

Vice President andExecutive Officer

Government & external relations

Tatsuro Ueda

Vice President andExecutive Officer

Business for financial institutions

Kenji Urase

Vice President andExecutive Officer

Energy business*Hidenobu Nakahata

22

Directors and Executive Officers--

2023/05/16 21:13:17 / 22961354_株式会社日立製作所_招集通知

Name

Position

Responsibilities

Other Principal Positions Held

Tomomi Kato

Vice President andExecutive Officer

Finance strategies and corporate
pension system

Tadashi Kume

Vice President andExecutive Officer

Nuclear energy business

Kohei Kodama

Vice President andExecutive Officer

Legal matters, risk management andcorporate auditing-

Takashi Saito

Vice President andExecutive Officer

Marketing & sales strategies (businessfor connective industries)-

Norihiro Suzuki

Vice President andExecutive Officer

Research & development

Kenichi Tanaka

Vice President andExecutive Officer

Human capital strategies

Jun Taniguchi

Vice President andExecutive Officer

Digital strategies and services &platforms business

LorenaDellagiovanna

Vice President andExecutive Officer

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

Kojin Nakakita

Vice President andExecutive Officer

Regional strategies (APAC)

Hideshi Nakatsu

Vice President andExecutive Officer

Water & environment businessSeiichiro Nukui

Vice President andExecutive Officer

Information technology strategies

Andrew BarrVice President andExecutive Officer

Railway systems business

Tatsuro Hoshino

Vice President andExecutive Officer

Marketing & sales strategies (businessfor digital systems & services)-

Kentaro Masai

Vice President andExecutive Officer

Supply chain management(manufacturing strategies and quality
assurance) and safety and healthmanagement-

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

Regional strategies (China)-

CEO, Hitachi Digital LLC

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

Chairman, Hitachi (China), Ltd.

Notes: 1. The Executive Officers marked with * are the Representative Executive Officers.
2. The Executive Officer, Toshiaki Higashihara and the President, Keiji Kojima concurrently hold the position of Director.

23

Directors and Executive Officers

2023/05/16 21:13:17 / 22961354_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, 2023 as follows.
Name

Position

Responsibilities*Toshiaki Higashihara

Executive Officer

General*Keiji Kojima

President

Overall management*Masakazu Aoki

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 andanalytical systems business and healthcare business)*Yoshihiko Kawamura

Executive Vice President and Assistant to the President (finance strategies, corporate
Executive Officer
pension system, investment strategies, investor relations
strategies, cost structure reform, risk management, corporate
auditing and corporate export regulation)*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 (cloud services platforms business,
Executive Officer
digital engineering business, business for financial institutions,business for government, public corporation and social
infrastructure systems, defense systems business, social
innovation business promotion and digital strategies)

Jun AbeSenior Vice President andExecutive Officer

Cloud services platforms business

LorenaDellagiovanna

Senior Vice President andExecutive Officer

Sustainability strategies, environmental strategies 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*Hidenobu Nakahata

Senior Vice President andExecutive Officer

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

Senior Vice President andExecutive Officer

Marketing & sales and regional strategies

Claudio Facchin

Senior Vice President andExecutive Officer

Power grids business**Giuseppe Marino

Senior Vice President andExecutive Officer

Railway systems business

Mamoru Morita

Senior Vice President andExecutive Officer

Management strategies**Atsuhiro Aketa

Vice President and Executive Regional strategies (China)
Officer

Noriharu Amiya

Vice President and Executive Railway systems business
Officer

Takashi Iizumi

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

Hitoshi Ito

Vice President and Executive Government & external relations
Officer**Yasunori Inada

Vice President and Executive Nuclear energy business
Officer

Tatsuro Ueda

Vice President and Executive Business for financial institutions
Officer

Kenji Urase

Vice President and Executive Energy business
Officer

Tomomi Kato

Vice President and Executive Finance strategies and corporate pension system
Officer

Tadashi Kume

Vice President and Executive Supply chain management (manufacturing strategies andOfficerquality assurance), environmental strategies and safety andhealth management24

Directors and Executive Officers

2023/05/16 21:13:17 / 22961354_株式会社日立製作所_招集通知

Name

Position

Responsibilities

Kohei Kodama

Vice President and Executive Legal matters, risk management and corporate auditing
Officer

Takashi Saito

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

Kenichi Tanaka

Vice President and Executive Human capital strategies
Officer

Jun Taniguchi

Vice President and Executive Digital strategies and digital engineering business
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**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

Shinya Mitsudomi

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

Masashi Murayama

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

Kazunobu Morita

Vice President and Executive Business for industrial digital
Officer

Takashi Yoda

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

Notes: 1. The Executive Officers marked with * are the Representative Executive Officers.
2. The Executive Officers marked with** are newly appointed.
3. The Executive Officer, Chie Mashima’s name in the family register is Chie Aihara.

3) Contents of Directors' and Officers' Liability Insurance Agreement(i) Coverage of Insured Persons
The Company's Directors, Executive Officers and employees who work as officers at the company to which they
are assigned, and some 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 damages, litigation costs, etc. incurred by an insured person as a result of a claim
for damages due to an act or omission of the insured person as an executive of a company. However, the Company hastaken measures to ensure that the appropriateness of the execution of duties by officers is not impaired by excluding
compensation for intentional negligence of duties, illegal acquisition of private benefits or benefits, and damages resulting
from criminal acts. The entire insurance costs are beard by the Company or its subsidiaries holding the insurance
agreement.

25

Directors and Executive Officers

2023/05/16 21:13:17 / 22961354_株式会社日立製作所_招集通知4) 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 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 roles and responsibilities of each Director and Executive Officer.
- Compensation for Directors shall be such that it enables them to exercise 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 Indicator (“KPI”) 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 about "growth,""improving profitability" and "cash generation", aiming for improvement of short-term performance andmedium to long-term growth in corporate value.
Establish a compensation program that significantly rewards performance by setting stretched goals
and commensurate compensation levels.
(Setting indicators to promote sustainable management)
Develop specific indicators and goals related to "Environments,” “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 global market, regardlessof their residence or origin, who lead global management of 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.

[Compensation Structure](i) Matters relating to Directors
Compensation for Directors is basic remuneration as fixed pay. The amount of basic remuneration is decided byadjusting a basic amount to reflect full-time or part-time status, committee membership and position, and travel from placeof residence, etc. 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 & 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 the ratio of 1:1.2:2.0 as thestandard, 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
position Executive Officers holds, the higher proportion of variable pay is set to the 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.

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Compensation for Directors and Executive Officers

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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％
Financial
Performance
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 flaw 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 flaw in order tomeasure the level of achievement of targets under the Mid-term Management Plan and the annual
budgets for divisions.
- The amount of the individual goals linked component varies according to the evaluation of the level ofachievement of individual target 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 about materiality which is established on the sustainability strategy.
Medium- and Long-term incentive compensation- The target amount (Medium- and Long-term incentive compensation target ( “LTI target”)) are decided basedon the positions of Executive Officers, and the shares of Restricted Stock ("RS”) compensation withincumbency 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 enterprise 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 Med-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, andrestriction on transfer will be lifted upon retirement. Performance-linked RS compensation compromises ofcompensation with stock price condition and with conditions for achievement of Mid-term Management Plan
targets.
In stock compensation with stock price condition, Performance Share Units (“PSUs”) equivalent to 70%of the LTI target are granted, and 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 and with the stock price growth rates of comparable
companies in global competition as determined by the Compensation Committee for the three fiscal years
beginning at the beginning of the fiscal year to which the PSUs are granted.
In stock compensation with conditions for 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-term Management
Plan covering the fiscal year when the PSUs are granted are achieved.
- If it is deemed to be inappropriate to grant the shares of restricted stock due to laws and regulations in the
country of residence, etc., 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.

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Compensation for Directors and Executive Officers

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If it is found that an executive officer has been engaged in misconduct during his/her term of office, compensation
for Executive Officers that has been already 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 long-term incentive compensation. One third of vested restricted stock units are delivered in the form of sharesof common stock 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.
Total Amount of Compensation to and the Number of Directors and Executive Officers in Fiscal 2022
Total amount of each type(Millions of yen)
Total amount of
Variable pay
Number ofcompensation,
Category
personsetc.
Medium- andShort-term
Fixed pay
Others(Millions of yen)long-term
incentive
incentivecompensationcompensation
Directors
60
60
1(excluding Independent－－－
Directors)
Independent Directors
420
420
11
－
－
－
Executive Officers
4,850
1,726
1,694
1,429
33
－
Total
5,331
2,207
1,694
1,429
45
－
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, adjusted operating income, EBIT, and net income attributable to Hitachi, Ltd. stockholders 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 Adjusted EBITA and Core free cash flaws in eachdivision, among other indicators, to measure the level of achievement of targets under the Mid-term Management Plan andthe annual budgets for divisions.
Please refer to "Business Overview and Results of Hitachi Group" in this report regarding the business results in
Fiscal 2022.
The TSR/TOPIX Growth Rate Ratios defined in conditions for exercising stock option as stock-based
compensation (stock acquisition rights) and in conditions for lifting transfer restrictions of restricted stock issued as
medium- to 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

Term

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, 2023 (Note)
From April 1, 2022 to March 31, 2023 (Note)

TSR/ TOPIX
Growth Rate Ratio

125.8%
121.6%
120.5%
146.7%
167.2%
149.1%
117.6%

Note: The ratios are calculated to determine the number of shares whose transfer restricted are lifted for persons who retired from
Executive Officers, Directors or Corporate Officers on March 31, 2023.

Reasons Why the Compensation Committee Judged that the Respective Amount of Compensation, etc. of Each
Director and Executive Officer in Fiscal 2022 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."

28

Compensation for Directors and Executive Officers