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

The 154th Annual General Meeting of Shareholders of Hitachi, Ltd.
Matters subject to measures for electronic provision that are not provided in the paper-based documents
delivered to shareholders who have requested

Hitachi, Ltd.
Note: The contents are not provided in the paper-based documents delivered to shareholders who haverequested pursuant to the provisions of the Articles of Incorporation of the Company and the relevantlaws and regulations.

Contents(1) Five-year Summary of Asset and Results of Operation of Hitachi Group(2) Business Overview and Results of Hitachi Group - Results by Segment(3) Research and Development of Hitachi Group(4) Employees of Hitachi Group(5) Structures and Other Things to Ensure Adequacy of Business Operations (Internal Control System) andOperation of the Internal Control System(6) Fundamental Policy on the Conduct of Persons Influencing Decision on the Company’s Financial andBusiness Policies(7) Matters Concerning the Company’s Stock(8) Information on the Stock Acquisition Rights, etc.
(9) Policy on Determination of Distribution of Surplus, etc.
(10) Matters Concerning Accounting Auditor(11) Consolidated Statements of Comprehensive Income (Supplementary Information)(12) Consolidated Statements of Changes in Equity(13) Consolidated Statements of Cash Flows (Supplementary Information)(14) Notes to Consolidated Financial Statements(15) Unconsolidated Statement of Changes in Net Assets(16) Notes to Unconsolidated Financial Statements(17) Transcript of Accounting Auditors’ Audit Report on Consolidated Financial Statements(18) Transcript of Accounting Auditors’ Audit Report on Unconsolidated Financial Statements(19) Transcript of Audit Committee’s Audit Report

34

Contents

2023/05/16 21:13:17 / 22961354_株式会社日立製作所_招集通知(1) Five-year Summary of Assets and Results of Operation of Hitachi Group
1) Consolidated Basis(Billions of yen)
Fiscal Year

2018

2019

2020

2021

2022

9,480.6

8,767.2

8,729.1

10,264.6

10,881.1

754.9

661.8

495.1

738.2

748.1

-

-

609.1

855.3

884.6

Income Before Income Taxes

516.5

180.2

844.4

839.3

819.9

Net Income Attributable to Hitachi, Ltd.
Stockholders

222.5

87.5

501.6

583.4

649.1

9,626.5

9,930.0

11,852.8

13,887.5

12,501.4

Revenues
Adjusted Operating Income
Adjusted EBITA

Total Assets

Notes: 1. “Adjusting Operating Income” is presented as revenues less cost of sales as well as selling, general and administrative
expenses.
2. “Adjusted EBITA” is representing the operating income, adding back the amortization of intangible assets, etc. recognizing
upon business combinations, and adding or deducting shares of profits (losses) of investments accounted for using the equity
method.

2) Unconsolidated Basis(Billions of yen)
Fiscal Year

2018

2019

2020

2021

2022

1,927.2

1,793.2

1,678.2

1,623.4

1,631.3

Operating Income

93.0

108.0

39.0

113.9

88.0

Ordinary Income

304.0

355.4

305.4

365.0

354.7

Net Income

174.0

119.4

705.5

516.1

987.9

Total Assets

3,934.1

4,004.4

4,982.6

5,815.6

5,940.4

Revenues

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 and 2022 have been calculated in accordance with this standard.
2. Net income reached a new record high due mainly to the increase in extraordinary income resulting from the sale of shares inlisted group companies.

35

Five-year Summary of Assets and Results of Operation of Hitachi Group2023/05/16 21:13:17 / 22961354_株式会社日立製作所_招集通知(2) 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, IoT andanalytics with the Lumada business at the core toprovide sophisticated digital solutions creating value
from data.

Adjusted EBITA
Revenues

2,389.0 billion yen
Year over year 111%

Adjusted EBITA
Margin293.7 billion yen
Year over year 104%

12.3%

Year over year -0.8 points

ROIC

8.3%
Year over year -2.3 points

Sales and profits increased mainly due to the impact of foreign exchange rates and the expansion of the Lumada
business. GlobalLogic, which continues to grow at a high rate, recorded revenues of 184% (154% in U.S. dollars) of theprevious fiscal year (from July 2021, when the acquisition was completed, to March 2022) and Adjusted EBITA Margin of
21.8%.

[Measures Taken]
To respond to global DX demand, Hitachi has strived
to provide digital solutions to the issues and needs of society
and customers through a range of collaborative creation
activities. Based on the robust growth foundations of theLumada business combining the digital engineering of
GlobalLogic with Hitachi's highly reliable system integrationand other qualities, Hitachi has worked to enhance andexpand sites to develop and provide services globally as well
as develop by strengthening its hiring and development
programs. Hitachi is also accelerating the creation of synergy
Co-creation project with GlobalLogic
at Lumada Innnovation Hub Tokyo

spanning the business fields of the entire Group.

36

DSS

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

Green Energy & Mobility
To realize a sustainable and decarbonized society, Hitachi is promoting to provide
the GX Solutions, including power grids combining IT and OT, clean energy
systems including renewable and nuclear energy, and eco-friendly railway
systems. Hitachi is also working to solve the issues faced by society andcustomers with the provision of cutting-edge solutions, including improved*1
convenience in transportation systems using MaaS, and the optimized operation*2and management of energy-related facilities through EFaaS.
*1

MaaS (Mobility as a Service) : A service integrating search, reservation, payment and other functions by optimally combining multiple means of public transportation andmobility services.

*2 EFaaS (Energy & Facility Management as a Service) : A service providing integrated support for the efficient operation and management of facilities.

Adjusted EBITA
Revenues

2,492.5 billion yen
Year over year 122%

Adjusted EBITA
Margin132.7 billion yen
Year over year 144%

5.3%
Year over year +0.8 points

ROIC

3.2%
Year over year +1.2 points

Sales and profits increased mainly due to the impact of foreign exchange and the steady performance of Hitachi Energy
and the railway systems business. At Hitachi Energy, sales and profits increased mainly due to the steady growth in orders
received, improvement of profitability and impact of foreign exchange, despite the impact of soaring component prices.

[Measures Taken]
Leveraging the One Hitachi structure based on
coordination with the digital business, Hitachi has strived toprovide services and solutions combining IT, OT andproducts.
In the energy business, Hitachi developed “Lumada
Inspection Insights,” a digital solution to inspect, monitor andoptimize key facilities such as power transmission networks.
Hitachi also launched carbon neutrality solutions that help
reduce CO2 emissions.
In the railway business, Hitachi has contributed theSubstation equipment for the offshore
energy environment

expansion of clean and highly convenient transportation
through smart mobility solutions and the provision of storage
battery-integrated hybrid rolling stock.

Smart mobility in Genoa, Italy

37

GEM

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

Connective Industries
Embracing "Connected" (connecting equipment and facilities) as a
keyword, Hitachi is seamlessly connecting highly competitive
products digitally and providing this as a solution in the fields ofindustrial systems including robotics SI, building systems, smart lifeand ecofriendly systems including home appliances and air
conditioners, measurement and analytical systems, and healthcare.

Adjusted EBITA
Revenues

2,975.2 billion yen
Year over year 108%

ROIC

Adjusted EBITA
Margin312.1 billion yen
Year over year 121%

10.5%
Year over year +1.1 points

10.8%
Year over year +1.4 points

Sales and profits increased mainly in the measurement and analytical systems business, which increased sales insemiconductor manufacturing equipment, clinical chemistry and immunochemistry analyzers, etc., and building systems
business, which expanded the building services business and received the impact of foreign exchange.

[Measures Taken]
Hitachi has focused on the expansion of total seamless*1*2

solutions and recurring business . Hitachi has also
accelerated the roll-out of Lumada Solutions utilizing digitaltechnologies based on collaborative creation with customers.
In North America, Hitachi has reinforced business structure
aimed at expanding total seamless solutions by acquiring
companies to strengthen the marking business in the productand to reinforce the system integration business in OT and
IT.
*1

*2

Solution connecting across the gaps among businesses and companies tosolve issues and offer solutions that achieve overall optimization withleveraging the strengths gained by maintaining a combination of products,
OT and IT

Operating in three groups: Urban, Advanced Technology andIndustry

Ongoing and cyclical services including after-sales service

38

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

Automotive Systems
To develop a sustainable mobility-based society that is friendly to theglobal environment and people, Hitachi provides high-efficiency
powertrain systems, advanced chassis, autonomous driving andadvanced driver-assistance systems for automobiles, as well as
systems for motorcycles with one of the highest market shares in theworld.

Adjusted EBITA
Revenues

1,920.0 billion yen
Year over year 120%

Adjusted EBITA
Margin73.4 billion yen
Year over year 118%

3.8%
Year over year -0.1 points

ROIC

4.0%
Year over year +0.5 points

Despite continued semiconductor shortages and supply chain disruptions in China, sales and profits increased due to theimpact of foreign exchange and a gradual recovery in production by automakers.

[Measures Taken]
Hitachi has contributed to improve corporate value forcustomers in response to the CASE (Connected,
Autonomous, Shared & Service, Electric) trends of theautomotive industry, through initiatives to commercialize
cybersecurity solutions for connected cars,* the developmentof all-round sensing systems for autonomous driving, nextgeneration chassis systems and the expanded supply ofelectric drive systems.
Hitachi decided a partial transfer of shares in Hitachi
Astemo. Hitachi Astemo will aim to achieve further growthwith a new joint partner.
*

A system that monitors cyber attacks in real-time and keeps damage to a minimum
in automobiles that connect to the Internet and are able to receive a range ofservices including software updates

39

Automotive Systems

Electric axle for electric vehicles

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

Hitachi Construction
Machinery
Revenues

475.1 billion yen
Year over year 46%

Hitachi Construction Machinery provides Hydraulic Excavators, Wheel Loaders, Mining
Machinery, Maintenance and Services and Construction Solutions and Mine Management
Systems, etc.

Adjusted EBITA
Adjusted EBITA Margin43.2 billion yen
Year over year 43%

9.1%
Year over year -0.7 points

On August 23, 2022, the partial sale of Hitachi Construction Machinery shares was completed, and the company became
an equity-method affiliate of the Company, resulting in a decrease in both sales and profits.

Hitachi Metals
Revenues

847.7 billion yen
Year over year 90%

Hitachi Metals provides Specialty Steel Products, Functional Components and Equipment,
Magnetic Materials and Power Electronics Materials, Wires, Cables and Related Products,
etc.

Adjusted EBITA
Adjusted EBITA Margin

43.0 billion yen
Year over year 140%

5.1%
Year over year +1.8 points

Despite price slides caused by a rise in raw material prices and the impact of foreign exchange, sales declined as the saleof Hitachi Metals shares was completed on January 5, 2023 and Hitachi Metals is not an affiliate of the Company. On theother hand, profit increased mainly due to cost reduction measures.

Others
Revenues

Main products and services in this segment are Optical Disk Drives and Property
Management, etc.

473.0 billion yen
Year over year 104%

Adjusted EBITA
Adjusted EBITA Margin40

Hitachi Construction Machinery、Hitachi Metals、Others

15.5 billion yen
Year over year 66%

3.3%
Year over year -1.9 points

2023/05/16 21:13:17 / 22961354_株式会社日立製作所_招集通知(3) Research and Development (R&D) of Hitachi Group
With an R&D mission, “Strengthen initiatives tocreate innovation with digital contributing to global businessgrowth,” Hitachi creates innovation to resolve issues ofsociety and customers. Specifically, through co-creation by
Lumada, Hitachi achieves DX driven by the customer
experience through creation of scenarios for customer
growth. Hitachi is also engaged in research aimed at therealization of the expansion of the use of hydrogen fuel,overcoming of intractable diseases and age-related diseases
and large-scale quantum computers contributing to theresolution of social issues, as future disruptive technologies
by back-casting from 2050.

Silicon quantum computer(Note)Part of this research was supported by the Japan
Science and Technology Agency (JST)” Moon Shot
Type R&D Project” (Grant No.JPMJMS2065).

Expenses on R&D during Fiscal 2022 amounted to 316.2 billion yen. In order to achieve the goals of the 2024
Med-term Management Plan, Hitachi continues to devort to create innovation by expanding investments in advanced
research and corporate venturing investments for co-creation with start-up companies.

R&D Expenses Trends

R&D Expenses by Segment
Others3.5

Hitachi Metals

Corporate Items

26.7

9.1

HitachiConstruction
Machinery

9.5(3.4%)

Digital Systems &Services

300

52.7

Research andDevelopment
Expenses
Total

Automotive
Systems(Billions of yen)(Billions of yen)

316.2

76.4

Green
Energy &Mobility

293.7(3.4%)
293.5(3.1%)
317.3

316.2(2.9%)

3.0

200

2.0

100

1.0

0

0.0

53.3
2018
2019
2020
2021
2022 (FY)
Note: The number in parentheses is the percentage of R&D expenses
to total revenues.

Connective
Industries

84.6

41

Research and Development of Hitachi Group

323.1

(%)

(3.4%)

2023/05/16 21:13:17 / 22961354_株式会社日立製作所_招集通知(4) Employees of Hitachi Group (As of March 31, 2023)
Hitachi formulated “2024 Human Resources Strategy,”
whose mission is contribution to business through diverse
talents, equitable opportunity and inclusive organization.
Implementing the human resources strategy aligned withbusiness strategy contributes to further business growth of
Hitachi.
Hitachi held a briefing conference on "2024 Human
Resources Strategy." Please check the website for details.
https://www.hitachi.com/IR-e/library/presentation/webcast/221012.htm

Number of employees in the Hitachi Group is 322,525 (including 28,672 employees on a non-consolidated basis) asof March 31, 2023.
Number of Employees by Segments
OthersCorporate Items

12,044

3,283

Automotive Systems

64,372

Number of Employees in Japan and Overseas

Number of
employees

Digital Systems &Services

100,763

Overseas

188,763

Total

Connective
Industries

81,883

322,525(28,672)(consolidated)

Green Energy &Mobility

60,180Notes: 1. The figure in parentheses is the number of employees on a nonconsolidated basis.
2. As a result of the partial sale of Hitachi Construction Machinery Co.,
Ltd. shares and the sale of Hitachi Metals, Ltd. shares, there are no
employees belonging to the Hitachi Construction Machinery segment
and Hitachi Metals segment.

42

Employees of Hitachi Group

Number of
employees
in Japan andOverseasJapan

133,7622023/05/16 21:13:17 / 22961354_株式会社日立製作所_招集通知(5) Structures and Other Things to Ensure Adequacy of Business Operations (Internal Control System) andOperation of the Internal Control System
1) Summary of resolution of Board of Directors on enhancing the internal control systema. The following measures shall be taken to ensure the effectiveness of audits by the Audit Committee.
(i)When necessary, the Board of Directors may appoint one or more director(s), who does not serve
concurrently as an executive officer, as a director 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
with the duties of each Committee and the Board of Directors.

(ii)

In order to ensure the independence of the Office personnel from 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 to orders and instructions of Executive Officers, and the Audit Committee shall be informed inadvance of planned transfers of the Office personnel.

(iii)

Executive Officers and employees shall report without delay to the members of the Audit Committee
significant matters affecting the Company and its subsidiaries, results of internal audits, and theimplementation status of reporting under the internal reporting system. It shall be provided for in the company
regulation that reporters using the internal reporting system common to the Hitachi Group shall not receive
disadvantageous treatment for reason of having made a report, and the secretariat of the system shallthoroughly administer this provision.

(iv)

The Office shall be in charge of payment for the expenses incurred in connection with the execution of theduties of the Audit Committee members and other administrative duties, and shall promptly process thepayment for the expense or debt except in the case where the expense or debt of the claim is clearly found to
be unnecessary to the execution of the duties of them.

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

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

Such fundamental policies as the emphasis of the social responsibilities of business enterprises shall beshared with the subsidiaries of the Company.

(ii)

Each subsidiary of the Company shall develop systems to ensure the appropriateness of operations
corresponding to its size and other characteristics, basic framework of which is similar to ones employed in
the Company. In order to ensure development of such systems in each subsidiary, directors and auditors shallbe sent from the Company to its subsidiary, and regular audits shall be conducted for the subsidiary.

(iii)

A reporting system to Directors shall be established to ensure that the execution of duties by Executive
Officers of the Company is in compliance with laws, regulations, and the Articles of Incorporation.

(iv)

Information pertaining to the execution of duties by Executive Officers of the Company 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 with respect to various
risks. Efforts shall be made to identify possible new risks through such things as progress reports on business
operations and, should it become necessary to respond to a new risk, an Executive Officer responsible forresponding thereto shall be appointed promptly.

(vi)

Efficient performance of duties of the Executive Officers of the Company, and Directors and Executive
Officers of the subsidiaries shall be ensured through the following business management systems.
- The Senior Executive Committee shall be established in order to deliberate on 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 in order to operate business in a planned and efficient manner.

43

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

2023/05/16 21:13:17 / 22961354_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 monitor and identify the status of
their business operations and to facilitate improvements.
- The Audit Committee shall receive the audit plans of the accounting auditors in advance, and the priorapproval of the Audit Committee shall be required with respect to the fees to be paid to the accounting
auditors.
- Documented business processes for matters to be reflected in financial reports shall be executed at theCompany and its subsidiaries, and internal and external auditors shall examine said processes in order toensure the reliability of financial reports.
- A structure for the adequate and efficient conduct of business operations common to the Hitachi Group
companies shall be established.
(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, the internal reporting system common to the Hitachi Groupshall be established and education on legal and regulatory compliance shall be provided.
- Various policies and rules on compliance with laws shall be established, aiming to 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 report on important issues and the progress inmeasures for operations to the Company through the Company’s Senior Executive Committee, medium-termbusiness plans and the budget system.
(ix)

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

2) Summary of status of operation of the internal control system
Audit Committee- A standing committee member has been appointed to grasp information in a timely and accurate manner
through attendance to important internal meetings, such as the Senior Executive Committee, and promote
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 in such plans, if necessary, and closely coordinate with the accounting
auditor and the Internal Auditing Office through exchanging information and opinions on a regular basis.

Board of Directors Office- In order to assist with the duties of each Committee and the Board of Directors, the Office is staffed with 16
employees (as of March 31, 2023) who exclusively serve the Office and are not subject to orders andinstructions of Executive Officers. Nine of them are allocated as the full-time auditors auditing the governanceand risk management, etc. in each sector of Digital Systems & Services, Green Energy & Mobility andConnective Industries, and Automotive Systems business.
Senior Executive Committee- The Senior Executive Committee meets twice a month, in principle, to deliberate on specific important mattersconcerning the Company or its subsidiaries and the annual business plan.
- The Senior Executive Committee makes efforts to identify potential signal of new risks through such means as
progress reports on 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 the mediumterm business plan and annual budget, and manages business performance based on these plans.
Establishment of Internal Regulations and Training, etc.
- With respect to risks related to compliance, information security, environment, disasters, quality, andinvestment activities, etc., the Company establishes and amends regulations and guidelines, conducts
training, and prepares and distributes manuals to ensure risk management.

44

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

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

Whistleblowing System- The Company has established and operates the whistleblowing system common to the Hitachi Group.
- The Company has also established and operates a reporting system to directors for suspicion of illegal acts,
etc. of Executive Officers of the Company.
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 for the Company and its
subsidiaries to the Audit Committee members without delay.

45

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

2023/05/16 21:13:17 / 22961354_株式会社日立製作所_招集通知[Reference] Corporate Governance System and Internal Control System
The Company is a company with Nominating Committee, etc. under the Companies Act, aiming to establish aframework for quick business operation and to realize highly transparent management by separating responsibilities for
management oversight and those for execution of business operations.
The Board of Directors, which is responsible for the oversight of management, determines basic policies for
management, etc. and also monitor business executions by executive officers while significantly delegating authorities to
executive officers.

General Meetingof Shareholders
Appointment
Appointment / OversightSenior Executive Committee

Board of Directors

President
Nominating Committee

Executive Officers

Compensation Committee
Report

Audit

Audit Committee

ReportInternal Auditing Office

Each department

Audit
ReportAccounting Auditors

46【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

2023/05/16 21:13:17 / 22961354_株式会社日立製作所_招集通知(6) Fundamental Policy on the Conduct of Persons Influencing Decision on the Company’s Financial andBusiness Policies
The Group invests a great deal of business resources in fundamental research and in the 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.

47

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

2023/05/16 21:13:17 / 22961354_株式会社日立製作所_招集通知(7) Matters Concerning the Company’s Stock (As of March 31, 2023)
1)
2)

Authorized

2,000,000,000 shares

Issued938,083,077 shares

Note: On December 14, 2022, the Company canceled 30,488,800 treasury shares.

3)

Number of Shares per Unit

4)

10 Largest Shareholders

100 shares

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
Nippon Life Insurance Company
Hitachi Employees’ Shareholding Association
SSBTC CLIENT OMNIBUS ACCOUNT
NATS CUMCOSTATE STREET BANK WEST CLIENT – TREATY 505234
JP MORGAN CHASE BANK 385632

Share Ownership(Shares)
170,613,800
62,533,350
24,766,482
24,582,891
20,000,099
19,674,086
19,566,283
17,331,942
17,147,487
14,748,517

Shareholding Ratio
(%)
18.20
6.67
2.64
2.62
2.13
2.10
2.09
1.85
1.83
1.57

Notes: 1. NATS CUMCO is the nominee name of the depositary bank, Citibank, N.A., for the aggregate of the Company's
American Depositary Receipts (ADRs) holders.
2. Treasury stock (510,830 shares) is not included in the calculation of "Shareholding Ratio."

5)

Shareholders Composition
Status of shares
Foreign corporations,etc.

Financial
Class of Government
Financial instruments
Other
Individuals
shareholders
andinstitution business institution
and others
Nonmunicipality
Individuals
operator
individuals

Total

Number ofshareholders

217,678

3

179

66

Share
ownership(units)110 3,186,976

250,814

Ownership
percentage ofshares (%)

0.00

34.06

2.68

2,234

1,139

117,951 4,324,784

1.26

46.21

151

213,906

Number ofsharesless thanone
unit (shares)-

1,570 1,476,105 9,358,310 2,252,077

0.02

15.77

100.00-Note: Of 510,830 shares of treasury stock, 5,108 units are included in the “Individuals and others” column, while 30 shares areincluded in the “Number of shares less than one unit” column.

6)

Shares Issued to the Executive Officers, etc. of the Company as Compensation
The Company issued 251,900 of new shares to 35 Executive Officers of the Company, 72,100 of newshares to 34 Corporate Officers (the executive positions next to Executive Officers) of the Company and 13,000 of
new shares to 5 Executives of the Group companies, respectively, as restricted stock compensation plan andrestricted stock unit compensation plan, the medium- and long-term incentive compensation on June 15, 2022.

7)

Other Significant Matters concerning the Company’s Stock
Acquisition of treasury stock (Market purchase at Tokyo Stock Exchange)
Treasury stock acquired pursuant to the resolution at the Bord of Directors Meeting held on April 28, 2022
- Type and number of shares acquired: Common stock of 29,983,800 shares- Total purchase price for acquisition of shares: 199,999,720,349 yen- Period of acquisition: From May 11, 2022 to November 30, 2022

48

Matters Concerning the Company’s Stock2023/05/16 21:13:17 / 22961354_株式会社日立製作所_招集通知(8) Information on the Stock Acquisition Rights, etc.
Stock Acquisition Rights Held by Senior Managements (As of March 31, 2023)
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)

Common stock 124,720
sharesCommon stock 137,400
sharesCommon stock 136,900
shares¥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)

13 Executive Officers of
the Company
6,236 of stock acquisitionrights(Note 3)14 Executive Officers of
the Company
6,870 of stock acquisitionrights(Note 3)19 Executive Officers of
the Company
6,845 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 thedate on which he/she ceases to be an Executive Officer, a Director or a 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 growthrate of TOPIX (Tokyo Stock Price Index) for the same period (the “TSR/TOPIX Growth Rate Ratio”), in
accordance with the stock price conditions:a. In case the TSR/TOPIX Growth Rate Ratio is 120% or more
All the stock acquisition rights allotted (the “Allotted Rights”) may be exercised.
b. In case 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 the TSR/TOPIX Growth
Rate Ratio (*).
*Number of stock acquisition
Number of
TSR/TOPIX=×{(× 1.25) – 0.5}
rights exercisable
Allotted Rights
Growth Rate Ratio
Any fraction less than one stock acquisition right will be rounded down.
c. In case 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.

(9) Policy on Determination of Distribution of Surplus etc.
The Company views the return of profits to shareholders through enhancing corporate value from mid- to longterm 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 of its shares depending on factors such as capital needs and thebusiness environment.
In accordance with mid- 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.

49

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

2023/05/16 21:13:17 / 22961354_株式会社日立製作所_招集通知(10) Matters Concerning Accounting Auditor
1)

Name of accounting auditor

2)

Fees to accounting auditor in Fiscal 2022

Ernst & Young ShinNihon LLC(Millions of yen)AmountCategory

Fees foraudit services*

Fees fornon-audit services

Total

Fees etc. by the Company and its subsidiaries

1,371

62

1,433

579

46

625

Fees etc. by the Company

Notes: 1. The column marked with * includes fees for audits under the Financial Instruments and Exchange Act.
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.

3)

Description of non-audit services
The Company commissioned various consulting services and assurance services (except auditing) to
Ernst & Young ShinNihon LLC and paid fees.

4)

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.

5)

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.

50

Matters Concerning Accounting Auditor