Edgar Filing: HITACHI LTD

Category

Amount

Total fees by the Company and its subsidiaries

Audit fees by the Company and its subsidiaries under Article 2, paragraph 1 of the Certified Public Accountants Law

Audit fees by the Company (*)

Form 6-K

FORM 6-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16 OF

THE SECURITIES EXCHANGE ACT OF 1934

For the month of June 2005

Commission File Number 1-8320

Hitachi, Ltd.

(Translation of registrant’s name into English)

6-6, Marunouchi 1-chome, Chiyoda-ku, Tokyo 100-8280, Japan

(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F X Form 40-F

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):

Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes No X

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-

This report on Form 6-K contains the following:

1.	Translation of the Notice of the 136th Ordinary General Meeting of Shareholders.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


	Hitachi, Ltd.
	(Registrant)

Date: June 3, 2005	By	/s/ Takashi Hatchoji
		Takashi Hatchoji
		Senior Vice President and Executive Officer

(Translation)

Hitachi, Ltd.

6-6, Marunouchi 1-chome

Chiyoda-ku, Tokyo

June 1, 2005

Notice of the 136th Ordinary General Meeting of Shareholders

Dear Shareholders:

You are cordially invited to attend the 136th Ordinary General Meeting of Shareholders of Hitachi, Ltd. (the “Company”) to be held as follows:


1. Date		Friday, June 24, 2005 at 10:00 a.m.

2. Location		Higashi-Ochanomizu Building

		29, Kanda-Awajicho 2-chome, Chiyoda-ku, Tokyo

3. Agenda

Reporting Matters

(1)

Report on the Business Report, the Statement of Operations and the Appropriation of Retained Earnings for the 136th Business Term (from April 1, 2004 to March 31, 2005) and the Balance Sheet as of March 31, 2005

(2)

Report on the Consolidated Balance Sheet as of March 31, 2005, the Consolidated Statement of Operations for the 136th Business Term (from April 1, 2004 to March 31, 2005), and the results of the audit on the Consolidated Financial Statements by the Accounting Auditors and the Audit Committee

Matters to Be Resolved


Item No. 1		Amendment to the Articles of Incorporation

Item No. 2		Election of 14 Directors due to expiration of the term of office of all Directors

Item No. 3		Issuance of stock acquisition rights for the purpose of granting stock options

Very truly yours,

Etsuhiko Shoyama

President and Chief Executive Officer

The Business Report, the Balance Sheet, the Statement of Operations, the Appropriation of Retained Earnings, the Transcripts of Audit Reports, the Consolidated Balance Sheet and the Consolidated Statement of Operations to be provided along with the Notice of the General Meeting of Shareholders, reference information regarding exercise of right to vote on resolutions and the substance of agenda Items No. 1 and 3 are included in the following pages. The Transcripts of Audit Reports on the Consolidated Financial Statements are also included in the following pages.


Total number of voting rights		3,293,616 (As of March 31, 2005)

Matters to Be Resolved

Item No. 1 Amendment to the Articles of Incorporation

It is hereby proposed that the provision of the public notices be amended to introduce electronic public notices pursuant to the “Law to Amend Part of the Commercial Code, etc. for introducing Electronic Public Notice Systems” (2004 Law No. 87), which permits companies to post public notices on their respective web sites. It is also proposed that the Board of Directors elect a Board member to convene and preside over meetings of the Board of Directors, instead of electing one Director as a Chairman of the Board, and that a corporate purpose be added.

The substance of the proposition to be submitted by the Board of Directors with regard to the amendment to the Articles of Incorporation and the reasons therefor are set forth below.


Currently in Force		Proposed Amendment (underlined)		Reason for Amendment
Article 2. (Corporate purpose)		Article 2. (Corporate purpose)		The Company intends to add the business set forth under the Health Care Insurance Law in the corporate purpose so that hospitals which the Company operates can enter the business.
The purpose of the Company shall be to carry on the following businesses:		The purpose of the Company shall be to carry on the following businesses:
1. to 20. (omitted)		1. to 20. (omitted)
21.	Home health care support business under the Health Care Insurance Law and the operation of health care and nursing facilities.	21.	Home health care service business, home health care support business and the operation of health care and nursing facilities under the Health Care Insurance Law.
22.	Any and all businesses related to the foregoing items.	22.	Any and all businesses related to the foregoing items.

Article 5. (Method of giving public notices)		Article 5. (Method of giving public notices)		The Company intends to introduce electronic public notices pursuant to the Commercial Code as amended, which permits electronic public notices.
The public notices of the Company shall be given by publication in the Mainichi Shimbun and the Nihon Keizai Shimbun, both published in Tokyo.		The public notices of the Company shall be given by electronic public notices; provided, however, if the Company cannot give public notice by electronic public notices because of accidents or any other inevitable cause, the public notices shall be given by publication in the Nihon Keizai Shimbun.
Article 21. (Chairman of the Board) By resolution of the Board of Directors, a Chairman of the Board shall be selected.		Article 21. (Director to convene and preside over meetings of the Board of Directors)		The Company intends to substitute the provision of Director to convene and preside over the meetings of the Board of Directors for the provision of Chairman of the Board.
		By resolution of the Board of Directors, a Director who convenes and presides over meetings of the Board of Directors shall be selected.

Item No. 2 Election of 14 Directors due to expiration of the term of office of all Directors

Due to expiration at the close of this Meeting of the term of office of all the present Directors, it is proposed that 14 Directors be elected. The Company does not adopt cumulative voting in the election of Directors in accordance with the provision of the Articles of Incorporation of the Company.

All nominees listed below have agreed to take office as Directors assuming that they are elected at this Meeting.

No.

Name

(Date of Birth)

Principal Occupation

Brief Biography

Share
Ownership

Conflict
of
Interest

Etsuhiko Shoyama

(Mar. 9, 1936)

Representative Executive Officer
President, Chief Executive Officer and Director,
Hitachi, Ltd.

4/1959

Joined Hitachi, Ltd.

6/1991

Director

108,000

None

6/1993

Executive Managing Director

6/1995

Senior Executive Managing Director

6/1997

Executive Vice-President and Representative Director

4/1999

President and Representative Director

6/2003

Representative Executive Officer, President, Chief Executive Officer and Director

Yoshiki Yagi

(Feb. 27, 1938)

Director, Hitachi, Ltd.
(Standing member of Audit Committee)

4/1960

Joined Hitachi, Ltd.

102,000

None

6/1991

Director

6/1993

Executive Managing Director

6/1997

Senior Executive Managing Director

4/1999

Executive Vice President and Representative Director

6/2003

Representative Executive Officer, Executive Vice President, Executive Officer and Director

4/2004

Director

Kotaro Muneoka

(Oct. 30, 1940)

Director, Hitachi, Ltd.
(Standing member of Audit Committee)

4/1964

Joined Hitachi, Ltd.

58,000

None

4/1999

Senior Vice President and Director

4/2001

Director

6/2001

Corporate Auditor

6/2003

Director

Takashi Miyoshi

(Sep. 25, 1947)

Senior Vice President, Executive Officer and Director, Hitachi, Ltd.

4/1970

Joined Hitachi, Ltd.

31,000

None

4/2003

General Manager, Finance

6/2003

Executive Officer

4/2004

Senior Vice President and Executive Officer

6/2004

Senior Vice President, Executive Officer and Director

Ginko Sato

(Jul. 6, 1934)

Honorary President, Japan Association for the Advancement of Working Women

Director, Hitachi, Ltd.

4/1958

Joined Ministry of Labour (currently Ministry of Health, Labour and Welfare)

26,000

None

6/1985

Ministerial Councillor, Ministry of Labour

1/1986

Director-General, Women’s Bureau, Ministry of Labour

7/1990

Assistant Minister of Labour

10/1991

Ambassador Extraordinary and Plenipotentiary of Japan to Kenya

7/1995

Commissioner, Securities and Exchange Surveillance Commission

7/1998

Chairperson, Securities and Exchange Surveillance Commission

8/2001

President, Japan Association for the Advancement of Working Women

6/2003

Director, Hitachi, Ltd.

4/2005

Honorary President, Japan Association for the Advancement of Working Women

No.

Name

(Date of Birth)

Principal Occupation

Brief Biography

Share
Ownership

Conflict

Interest

Hiromichi Seya

(Oct. 7, 1930)

Senior Corporate Advisor, Asahi Glass Company, Limited (“Asahi Glass”)

Director, Hitachi, Ltd.

4/1954

Joined Asahi Glass

3/1985

Director

9,000

None

3/1987

Managing Director

3/1988

Representative Director

Executive Vice President

3/1990

Representative Director

Senior Executive Vice President

3/1992

Representative Director

President

6/1998

Representative Director

Chairman & CEO

6/2002

Representative Director

Chairman of the Board

6/2003

Director, Hitachi, Ltd.

3/2004

Senior Corporate Advisor, Asahi Glass

Akira Chihaya

(Mar. 6, 1935)

Representative Director and Chairman of the Board, NIPPON STEEL CORPORATION (“NSC”) Representative Director and President, Tekko Kaikan Co., Ltd.

Director, Hitachi, Ltd.

4/1957

Joined Yawata Iron & Steel Co., Ltd. (currently NSC)

4,000

Note (1)

6/1987

Director

6/1991

Managing Director

6/1995

Representative Director and Executive Vice President

4/1998

Representative Director and President

4/2003

Representative Director and Chairman of the Board

6/2003

Director, Hitachi, Ltd.

Toshiro Nishimura

(Apr. 10, 1933)

Attorney at Law

Director, Hitachi, Ltd.

4/1961

Member of the First Tokyo Bar Association

20,000

None

5/1966

Senior Partner of Nishimura & Partners

6/2003

Director, Hitachi, Ltd.

1/2004

Founder, Senior Counsel, Nishimura & Partners

Isao Uchigasaki

(Jan. 2, 1939)

Chairman of the Board, Hitachi Chemical Co., Ltd. (“Hitachi Chemical”)

Hitachi Group Executive Officer and Director, Hitachi, Ltd.

4/1962

Joined Hitachi, Ltd.

12,000

None

4/1963

Joined Hitachi Chemical

6/1991

Board Director

6/1993

Executive Managing Director

6/1997

President and Representative Director

4/2003

Chairman of the Board and Representative Director

6/2003

Chairman of the Board

4/2004

Hitachi Group Executive Officer, Hitachi, Ltd.

6/2004

Hitachi Group Executive Officer and Director, Hitachi, Ltd.

Takashi Kawamura

(Dec. 19, 1939)

Chairman of the Board and Representative Executive Officer, Hitachi Software Engineering Co., Ltd. (“Hitachi Software Engineering”)

Director, Hitachi, Ltd.

4/1962

Joined Hitachi, Ltd.

67,000

Note (2)

6/1995

Director

6/1997

Executive Managing Director

4/1999

Executive Vice President and Representative Director

4/2003

Director

6/2003

Chairman of the Board and Representative Executive Officer, Hitachi Software Engineering

No.

Name

(Date of Birth)

Principal Occupation

Brief Biography

Share
Ownership

Conflict

Interest

Yoshiro Kuwata

(Sep. 1, 1936)

Chairman of the Board and Representative Executive Officer, Hitachi High-Technologies Corporation (“Hitachi High-Technologies”)

Director, Hitachi, Ltd.

6/1961

Joined Hitachi, Ltd.

6/1993

Director

61,700

Note (3)

6/1995

Executive Managing Director

6/1997

Senior Executive Managing Director

4/1999

Executive Vice President and Representative Director

6/2003

Representative Executive Officer, Executive Vice President, Executive Officer and Director

Chairman of the Board and Representative Executive Officer, Hitachi High-Technologies

4/2004

Director

Hiroshi Kuwahara

(Nov. 23, 1935)

Chairman of the Board and Representative Executive Officer, Hitachi Maxell, Ltd. (“Hitachi Maxell”)

Director, Hitachi, Ltd.

4/1960

Joined Hitachi, Ltd.

33,600

Note

(4)

6/1989

Director

6/1991

Executive Managing Director

6/1993

Senior Executive Managing Director

6/1995

Executive Vice-President and Representative Director

6/1999

Vice Chairman of the Board and Representative Director

1/2001

Executive member of Council for Science & Technology Policy, Cabinet Office

Director

1/2003

Vice Chairman of the Board and Representative Director

4/2003

Director

6/2003

Chairman of the Board and Representative Executive Officer, Hitachi Maxell

Masayoshi Hanabusa

(Oct. 10, 1934)

Chairman of the Board, Hitachi Capital Corporation (“Hitachi Capital”)

Director, Hitachi, Ltd.

4/1957

Joined Hitachi Sales Corporation

12,050

None

8/1960

Joined Hitachi Credit Corporation (currently Hitachi Capital)

6/1977

Director

6/1983

Executive Managing Director

6/1987

Senior Executive Managing Director

6/1991

President and Representative Director

6/2001

Chairman of the Board and Representative Director

6/2003

Chairman of the Board

Director, Hitachi, Ltd.

Ryuichi Seguchi

(Nov. 19, 1933)

Chairman of the Board, Hitachi Construction Machinery Co., Ltd. (“Hitachi Construction Machinery”)

4/1956

Joined Hitachi, Ltd.

10,000

None

10/1970

Joined Hitachi Construction Machinery

6/1981

Board Director

6/1983

Executive Managing Director

6/1989

Senior Executive Managing Director

6/1993

Executive Vice President

6/1997

President, Chief Executive Officer and Representative Director

4/2003

Chairman of the Board and Representative Director

6/2003

Chairman of the Board and Representative Executive Officer

4/2005

Chairman of the Board


Notes:		(1)		Both NSC, for which Mr. Akira Chihaya serves as Representative Director and Chairman of the Board, and the Company conduct businesses in the area of power and industrial systems. Additionally, the Company has continuous transactions with NSC, including purchases of steel products of NSC through trading firms and sales of control systems and electric machinery to NSC. The amount of such transactions is negligible, in comparison to the whole business scale of both companies. The Company has no special interest in Tekko Kaikan Co., Ltd., for which Mr. Chihaya serves as Representative Director and President.


		(2)		Both Hitachi Software Engineering, for which Mr. Takashi Kawamura serves as Representative Executive Officer, and the Company conduct businesses in the area of information & telecommunication systems. Additionally, the Company has continuous transactions with Hitachi Software Engineering, including purchases of software from Hitachi Software Engineering and sales of computers and components for computers to Hitachi Software Engineering. The two companies also have dealings with each other in the form of loans under the Hitachi Group’s centralized cash management system.
		(3)		Both Hitachi High-Technologies, for which Mr. Yoshiro Kuwata serves as Representative Executive Officer, and the Company conduct businesses in the areas of sales of information systems and medical equipment, etc. Additionally, the Company has continuous transactions with Hitachi High-Technologies, including purchases of information system equipment and liquid crystal related components from Hitachi High-Technologies and sales of information system equipment and software to Hitachi High-Technologies. The two companies also have dealings with each other in the form of loans under the Hitachi Group’s centralized cash management system.
		(4)		Both Hitachi Maxell, for which Mr. Hiroshi Kuwahara serves as Representative Executive Officer, and the Company conduct businesses in the area of digital media related products. Additionally, the Company has continuous transactions with Hitachi Maxell, including purchases of various types of information storage media from Hitachi Maxell and sales of components for computers to Hitachi Maxell. The two companies also have dealings with each other in the form of loans under the Hitachi Group’s centralized cash management system.
		(5)		Ms. Ginko Sato, Mr. Hiromichi Seya, Mr. Akira Chihaya and Mr. Toshiro Nishimura are nominees who fulfill the qualification requirements to be outside directors as provided for in Article 188.2.7-2 of the Commercial Code of Japan.

Item No. 3 Issuance of stock acquisition rights for the purpose of granting stock options

To afford incentives to and raise the morale of the Directors, Executive Officers and employees to contribute to increasing the value of the Company, it is hereby proposed that the Company issue the stock acquisition rights without any consideration for the purpose of granting stock options pursuant to Article 280-20 and Article 280-21 of the Commercial Code of Japan.

The substance of the proposition to be submitted by the Board of Directors with regard to the issuance of stock acquisition rights is set forth below:

1. Qualified persons to be allocated the stock acquisition rights (the “Rights”)

Directors, Executive Officers and employees of the Company

2. Class and number of shares to be issued upon exercise of the Rights

Not more than 1,500,000 shares of the Company’s common stock (the “Common Stock”) in total.

In the event that the Company splits or consolidates its Common Stock, the number of shares to be issued upon exercise of the Rights shall be adjusted according to the following formula.

Number of

shares after

adjustment

Number of shares

before adjustment

Ratio of stock split or consolidation

Any fraction less than one share derived in consequence of adjustment shall be rounded down to the nearest one share.

3. Total number of the Rights to be issued

Not more than 1,500 Rights in total. The number of shares to be issued upon exercise of each Right shall be 1,000, which shall be adjusted in accordance with the preceding provision.

4. Issue price of the Rights

No consideration shall be paid.

5. Amount to be paid upon exercise of the Rights

The amount to be paid per share upon exercise of the Rights (the “Exercise Price”) shall be 1.05 times of the market price (the “Market Price”), which is not lower of either (i) the average of the closing price (including indication of any bid or offer) of a Common Stock on the Tokyo Stock Exchange on each of the thirty consecutive trading days commencing on the forty-fifth trading day preceding the issue date (excluding the number of days on which no closing price is quoted) or (ii) the closing price of the issue date (or if no closing price is quoted on the issue date, the latest closing price before the issue date shall be applied). Any fraction less than one yen shall be rounded up to the nearest one yen.

In the event that the Company issues new shares or reissues its own shares at price less than the Market Price (excluding the issue of shares resulting from the exercise of the stock acquisition rights) after the issue date, the Exercise Price will be subject to adjustment in accordance with the following formula, and any fraction less than one yen derived in consequence of adjustment shall be rounded up to the nearest one yen.

Number

of shares

already

issued

Number of

new shares

to be issued

Amount

to be paid

per share

Exercise

Price after

adjustment

Exercise

Price before

adjustment

Market Price per share

before issue

Number of

shares already

issued

Number of new

shares to be

issued

In the above formula, the number of its own shares held by the Company shall be excluded from the number of shares already issued. In the case of the reissue of its own shares, “Number of new shares to be issued” means “Number of its own shares to be reissued” and “Market Price per share before issue” means “Market Price per share before reissue.”

Upon stock split or consolidation of Common Stocks, the Exercise Price will be subject to adjustment in accordance with the following formula, and any fraction less than one yen derived in consequence of adjustment shall be rounded up to the nearest one yen.


Exercise Price after adjustment	=	Exercise Price before adjustment	×	1

				Ratio of stock split or consolidation

6. Period during which the Rights may be exercised

The Rights will be exercisable within a three-year period following one year from the issue date.

7. Conditions for exercise of the Rights

(1)

In the event a person holding the Rights loses the position of Director, Executive Officer or employee of the Company, such person may exercise the Rights only within the succeeding six months of such event. In the event of the death of the person, the Rights expire immediately.

(2)

Other terms of exercising the Rights shall be subject to the provisions in granting agreement between the Company and each qualified person.

8. Cancellation of the Rights

The Company may acquire and cancel the Rights at any time without consideration.

9. Restriction on the transfer of the Rights

The approval by the Board of Directors of the Company shall be required for transfer of the Rights.

Reporting Matters

1. Business Report (from April 1, 2004 to March 31, 2005)

(1) Business Overview of Hitachi Group

Business Results

The Japanese economy was solid during the first half of the year under review but leveled off in the latter half as investment in digital product sectors came full cycle.

Against this economic backdrop, consolidated revenues rose 5% from the preceding year, to JPY9,027.0 billion. Operating income increased 51%, to JPY279.0 billion, owing to a strong performance by High Functional Materials & Components and good showings by construction machinery and other business sectors in Power & Industrial Systems. Income before income taxes and minority interests came to JPY264.5 billion, up 12% from the preceding year, and net income to JPY51.4 billion, up 224%.

Measures Taken

During the year under review, the Company on October 1, 2004 moved to ensure solid growth in the automotive products business by merging TOKICO LTD. (“TOKICO”) and Hitachi Unisia Automotive, Ltd., group companies operating in the engine system and drive control system sectors, into the Company. In addition, the Company, together with two other group companies, Shin-Kobe Electric Machinery Co., Ltd. and Hitachi Maxell, Ltd., established Hitachi Vehicle Energy, Ltd. as a joint-venture company for developing and manufacturing rechargeable lithium-ion batteries for hybrid electric vehicles and other applications.

The Company also responded to growing demand for flat panel TVs by joining Toshiba Corporation and Matsushita Electric Industrial Co., Ltd. in establishing IPS Alpha Technology, Ltd., a joint venture company focused on manufacture and marketing of liquid crystal display (“LCD”) panels, and also by in April 2005 making Fujitsu Hitachi Plasma Display Limited (“FHP”) a subsidiary of the Company through the acquisition of some of FHP’s stock previously held by Fujitsu Limited. Automatic teller machine (“ATM”) and other information equipment operations were consolidated with those of Omron Corporation (“Omron”) under a new company, Hitachi-Omron Terminal Solutions, Corp., established between the Company and Omron on October 1, 2004.

The Hitachi Group also stepped up its effort to become a “truly local company” in each geographical region of its operations. In October 2004, a former British Ambassador to Japan was appointed to represent the Hitachi Group in its relationship with the European community and customers in the region. In February 2005, the Company’s executive officers in charge of Hitachi group global business in North America and China were stationed in the United States and China to serve as the chiefs of the respective regional administration companies. Through such measures, the Hitachi Group continues to strengthen its ability to move forcefully ahead with locally led business development geared to the needs and priorities of each region. During October and November 2004, the “Hitachi Exhibition – China 2004” was held in Beijing, Shanghai and Guangzhou and succeeded in winning broad recognition of the Hitachi Group’s advanced capabilities and overall strength.

With consideration to the revised Japanese Patent Law that went into effect in April 2005, the Company made changes to its invention reward program in order to deepen employee understanding of the program’s purpose and promote still more vigorous research and development activities. The improved system is expected to add further impetus to the development of advanced technologies and help Hitachi maintain and improve its long-standing reputation as technology-oriented company.

Business Results by Industry Segment

[Revenues and Operating Income by Industry Segment]

(Billions of yen)


Industry Segment	Revenues						Operating Income
Industry Segment	Fiscal 2003(A)		Fiscal 2004(B)		(B)/(A)		Fiscal 2003(A)		Fiscal 2004(B)		(B)/(A)
Information & Telecommunication Systems	2,314.5		2,268.3		98	%	69.9		67.7		97	%
Electronic Devices	1,312.3		1,320.1		101	%	30.4		37.0		122	%
Power & Industrial Systems	2,297.9		2,515.3		109	%	33.9		73.6		217	%
Digital Media & Consumer Products	1,226.9		1,280.3		104	%	6.9		8.6		125	%
High Functional Materials & Components	1,297.0		1,504.3		116	%	46.7		87.5		187	%
Logistics, Services & Others	1,256.2		1,248.2		99	%	0.5		9.8		1,840	%
Financial Services	550.9		529.6		96	%	22.3		31.0		139	%
Subtotal	10,256.1		10,666.5		104	%	210.9		315.5		150	%
Eliminations & Corporate Items	(1,623.6	)	(1,639.4	)	—	%	(26.0	)	(364	)	—	%

Total	8,632.4		9,027.0		105	%	184.8		279.0		151	%


Notes:	(1)	The consolidated figures of the Company have been prepared in conformity with accounting principles generally accepted in the United States, while revenues and operating income by industry segment have been prepared in conformity with accounting principles generally accepted in Japan.
	(2)	Restructuring charges etc. are included as part of other income or other deductions in conformity with accounting principles generally accepted in Japan, while they are included as part of operating income (loss) under accounting principles generally accepted in the United States.
	(3)	Revenues by industry segment include intersegment transactions.
	(4)	The businesses of each segment are set out in “(2) Main Products and Services of Hitachi Group.”

[Information & Telecommunication Systems]

Revenues decreased 2% from the preceding year despite good results posted by outsourcing services, owing mainly to price declines experienced by servers, hard disk drives and related products. Although hard disk drives generated considerably more profit than in the preceding year, the gain was more than wiped out by lower profit levels in the software and services sector. Operating income therefore fell 3% from the preceding year, to JPY67.7 billion.

[Electronic Devices]

While liquid crystal displays turned stagnant in the second half owing to an abrupt market downturn, Hitachi High-Technologies Corporation made strong advances in semiconductor and liquid crystal product manufacturing equipment. Revenues increased 1% and operating income rose 22%, to JPY37.0 billion.

[Power & Industrial Systems]

Revenues rose 9% from the preceding year mainly because of the merger of TOKICO and the acquisition of Guangzhou Hitachi Elevator Co., Ltd., which conducts manufacture and services operations in elevators and escalators business, to make it a subsidiary. Operating income rose 117%, to JPY73.6 billion, due particularly to the strong performance of Hitachi Construction Machinery Co., Ltd.

[Digital Media & Consumer Products]

As a result of advances made by plasma TVs and LCD projectors, and the fact that white goods maintained year-earlier levels, revenues increased 4% and operating income rose 25%, to JPY8.6 billion.

[High Functional Materials & Components]

Brisk revenues in the automotive and electronic sectors buoyed results in companies in this segment. Revenues increased 16% and operating income rose 87%, to JPY87.5 billion.

[Logistics, Services & Others]

Revenues declined 1% from the preceding year. However, good showings by Hitachi Transport System, Ltd. and other companies boosted operating income to JPY9.8 billion, considerably higher than in the preceding year.

[Financial Services]

Revenues fell 4% from the preceding year. Operating income rose 39%, to JPY31.0 billion, mainly because of a profit posted in connection with the change of the pension system at Hitachi Capital Corporation.

Relationship with Subsidiaries and Affiliates

During the year under review, the Company acquired part of shares of Guangzhou Hitachi Elevator Co., Ltd., which became a consolidated subsidiary of the Company accordingly. On April 1, 2004, NEOMAX Co., Ltd. (former Sumitomo Special Metals Co., Ltd.) became a consolidated subsidiary of Hitachi Metals, Ltd. On October 1, 2004, the Company transferred all shares of Hitachi Printing Solutions, Ltd., which had been a consolidated subsidiary of the Company, to Ricoh Company, Ltd.

On November 15, 2004, Elpida Memory, Inc., an equity-method affiliate of the Company, listed its shares on the Tokyo Stock Exchange.

[Major Consolidated Subsidiaries of Hitachi, Ltd. (As of March 31, 2005)]

[Information & Telecommunication Systems]

- Hitachi Communication Technologies, Ltd.

- Hitachi Electronics Services Co., Ltd.

- Hitachi Information Systems, Ltd.

- Hitachi-Omron Terminal Solutions, Corp.

- Hitachi Software Engineering Co., Ltd.

- Hitachi Systems & Services, Ltd.

- Hitachi Computer Products (America), Inc.

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

- Hitachi Data Systems Holding Corp.

- Hitachi Global Storage Technologies Netherlands B.V.

[Electronic Devices]

- Hitachi Displays, Ltd.

- Hitachi High-Technologies Corporation

- Hitachi Medical Corporation

- Hitachi Electronic Devices (USA), Inc.

- Hitachi Semiconductor Singapore Pte. Ltd.

[Power & Industrial Systems]

- Babcock-Hitachi Kabushiki Kaisha

- Hitachi Air Conditioning Systems Co., Ltd.

- Hitachi Building Systems Co., Ltd.

- Hitachi Construction Machinery Co., Ltd.

- Hitachi Engineering Co., Ltd.

- Hitachi Engineering & Services Co., Ltd.

- Hitachi Industrial Equipment Systems Co., Ltd.

- Hitachi Industries Co., Ltd.

- Hitachi Kiden Kogyo, Ltd.

- Hitachi Plant Engineering & Construction Co., Ltd.

- Hitachi Via Mechanics, Ltd.

- Japan Servo Co., Ltd.

- Guangzhou Hitachi Elevator Co., Ltd.

- Hitachi Automotive Products (USA), Inc.

[Digital Media & Consumer Products]

- Hitachi Home & Life Solutions, Inc.

- Hitachi Maxell, Ltd.

- Hitachi Media Electronics Co., Ltd.

- Hitachi Home Electronics (America), Inc.

- Shanghai Hitachi Household Appliances Co., Ltd.

[High Functional Materials & Components]

- Hitachi Cable, Ltd.

- Hitachi Chemical Co., Ltd.

- Hitachi Metals, Ltd.

[Logistics, Services & Others]

- Chuo Shoji, Ltd.

- Hitachi Life Corporation

- Hitachi Mobile Co., Ltd.

- Hitachi Transport System, Ltd.

- Nikkyo Create, Ltd.

- Hitachi America, Ltd.

- Hitachi Asia Ltd.

- Hitachi (China), Ltd.

- Hitachi Europe Ltd.

[Financial Services]

- Hitachi Capital Corporation

- Hitachi Insurance Services, Ltd.


Notes:	(1)	The total number of consolidated subsidiaries (including variable interest entities) pursuant to Article 2.1.25 of the Enforcement Regulations of the Commercial Code of Japan is 985 as of March 31, 2005.
	(2)	The number of equity-method affiliates is 167. The major equity-method affiliates are Casio Hitachi Mobile Communications Co., Ltd., Elpida Memory, Inc., Fujitsu Hitachi Plasma Display Limited, Hitachi Koki Co., Ltd., Hitachi Kokusai Electric Inc. and Renesas Technology Corp. (“Renesas”).
	(3)	Renesas is accounted for under the equity method by the Company as major decisions require consensus between the Company and Mitsubishi Electric Corporation in accordance with the joint venture agreement, although the Company owns more than 50% of voting rights of Renesas.
	(4)	Hitachi-Omron Terminal Solutions, Corp. was incorporated through corporate split to acquire the information equipment businesses such as ATMs operated by the Company and Omron on October 1, 2004.
	(5)	Hitachi Semiconductor Singapore Pte. Ltd. made a change in corporate name from Hitachi Nippon Steel Semiconductor Singapore Pte. Ltd. on October 28, 2004.

(2) Main Products and Services of Hitachi Group (Fiscal 2004)


Industry Segment	Main Products and Services	Percentage to Total Revenues
Information & Telecommunication Systems	Systems Integration, Outsourcing Services, Software, Hard Disk Drives, Disk Array Subsystems, Servers, Mainframes, Personal Computers, Telecommunications Equipment, ATMs	21%

Electronic Devices	Liquid Crystal Displays, Semiconductor Manufacturing Equipment, Test and Measurement Equipment, Medical Electronics Equipment, Semiconductors	12%

Power & Industrial Systems	Nuclear Power Plants, Thermal Power Plants, Hydroelectric Power Plants, Industrial Machinery and Plants, Automotive Products, Construction Machinery, Elevators, Escalators, Railway Vehicles, Air-Conditioning Equipment	24%

Digital Media & Consumer Products	Optical Disk Drives, Televisions, LCD Projectors, Mobile Phones, Room Air Conditioners, Refrigerators, Washing Machines, Information Storage Media, Batteries	12%

High Functional Materials & Components	Wires and Cables, Copper Products, Semiconductor Materials, Circuit Boards and Materials, Organic and Inorganic Chemical Products, Synthetic Resin Products, LCD Materials, Specialty Steels, Magnetic Materials, Malleable Cast-Iron Products, Forged and Cast-Steel Products	14%

Logistics, Services & Others	General Trading, Logistics, Property Management	12%

Financial Services	Leasing, Loan Guarantees, Insurance Services	5%

(3) Capital Investment of Hitachi Group

Investment in new plant and equipment came to JPY959.5 billion, an increase of JPY143.0 billion from the preceding year. The total excluding investment in leasing assets and the like was JPY382.1 billion. This amount was accounted for chiefly by investment in hard disk drive manufacturing and development facilities, facilities for increasing LCD production, and facilities for increasing production of automotive equipment and components. A breakdown of capital investment by industry segment is shown below.


	(Billions of yen)

Industry Segment	Amount
Information & Telecommunication Systems	103.0
Electronic Devices	47.0
Power & Industrial Systems	98.3
Digital Media & Consumer Products	38.4
High Functional Materials & Components	75.5
Logistics, Services & Others	31.1
Financial Services	591.3
Subtotal	984.8
Eliminations & Corporate Items	(25.2	)

Total	959.5

Note:

The figures above include JPY577.4 billion of investment in assets to be leased. This mainly includes the investment relating to leasing business in the Financial Services segment.

(4) Research and Development of Hitachi Group

Expenditures on research and development during the year amounted to JPY388.6 billion, which is equivalent to 4.3% of consolidated revenues. While the Hitachi Group is focusing R&D resources on main businesses such as hard disk drives and storage solutions, it is also forcefully pursuing leading-edge research aimed at finding and cultivating new technologies to support the Hitachi Group’s future core businesses. Notable achievements included the development of the world’s smallest sensor net terminal, which is capable of using sensors to gather information regarding human movement, temperature and moisture change in real time and transmitting it over a wireless network. The technology is expected to find diverse applications in fields such as building security, healthcare, and logistics. A breakdown of R&D expenditures by industry segment is shown below.


		(Billions of yen)

Industry Segment		Amount
Information & Telecommunication Systems		164.7
Electronic Devices		47.3
Power & Industrial Systems		78.5
Digital Media & Consumer Products		32.1
High Functional Materials & Components		43.3
Logistics, Services & Others		5.3
Financial Services		2.3
Corporate Items		14.6

Total		388.6

(5) Capital Raising Activity of Hitachi Group

By means of syndicated loan agreements, the Company financed a total of JPY170.0 billion to be used as funds for, among other purposes, redeeming the company’s 7th issue of unsecured convertible bonds that were due for redemption in September 2004. On October 19, 2004, the Company issued JPY100.0 billion in bonds with stock acquisition rights by private offering to raise funds for upfront investment, including investment in facilities and R&D for maintaining the medium-to-long term growth of the Hitachi Group. On June 4, 2004, Hitachi Construction Machinery Co., Ltd. issued 20 million new shares of stock (issue price of JPY1,273 per share) by public offering.

Main Sources of Borrowings of the Company


	(As of March 31, 2005)

Creditor	Balance of Borrowings	Shares Owned by Creditor
Nippon Life Insurance Company	10.0 billion yen	100,630,195 shares
The Dai-Ichi Mutual Life Insurance Company	10.0 billion yen	75,992,222 shares
Meiji Yasuda Life Insurance Company	10.0 billion yen	49,492,818 shares
Sumitomo Life Insurance Company	10.0 billion yen	5,456,000 shares

Note:

In addition to the figures shown above, the Company owes JPY170.0 billion of borrowings by means of syndicated loan agreements.

(6) Problems Facing Hitachi Group

Management’s assessment of the future business environment is that the Japanese economy can be expected to experience a slowdown in exports and investment in new plant and equipment and that difficult circumstances are likely to continue for sometime to follow.

However, the Hitachi Group will not be deterred by this harsh outlook for fiscal 2005, the final year of the current medium-term management plan, the “i.e.Hitachi Plan II,” and is firmly committed to improving profitability through implementation of measures for coping with business risks and profit depressing factors and still more intense and effective cost cutting efforts. In addition, the following key measures will be pursued for ensuring the medium-to-long term growth and development of the Hitachi Group.

The Hitachi Group Headquarters established during the year under review to coordinate Group management will play a central role in ensuring that cost reduction and other concrete benefits are realized through centralization of operations common to the whole Group, as well as in building a strong business portfolio that exploits the strengths of the Hitachi Group to the utmost.

Systems for promoting the Hitachi Group’s global strategies will be upgraded with focus on the North American, European, Chinese and other Asian markets to reinforce the ability of local regions to formulate regional strategies, including strategies in response to market trends and various risks.

Efforts will be made to further leading-edge R&D for creating future core businesses of the Hitachi Group, to reinforce fundamental technologies for improving productivity and quality and lowering costs, and to pass down hands-on skills and techniques in manufacturing quality.

In order to ensure fair presentation of financial statements, the ongoing Hitachi Group-wide initiative to rebuild internal control systems by, for example, upgrading existing internal systems and committing work procedures to writing, will be pursued in greater depth, and activities will be undertaken to thoroughly instill a strong awareness of the importance of corporate social responsibility (CSR) throughout the Hitachi Group both in Japan and overseas. Group-wide measures will also be taken to enhance protection of personal information.

Priority will be placed on maximizing corporate value from the long-term perspective by further reinforcing corporate governance, and, for enabling defensive action should outside threats to corporate value arise, measures that make possible a fair and unbiased response will be examined for introduction, also keeping legal and other regulatory reforms in mind.

(7) Five-year Summary

Consolidated Basis


				(Billions of yen)

Fiscal Year	2000	2001	2002	2003	2004
Revenues	8,416.9	7,993.7	8,191.7	8,632.4	9,027.0
Operating Income	342.3	-117.4	152.9	184.8	279.0
Income Before Income Taxes and Minority Interests	323.6	-586.0	96.8	237.1	264.5
Net Income	104.3	-483.8	27.8	15.8	51.4
Net Income per Share (Basic) (yen)	31.27	-144.95	8.31	4.81	15.53
Net Income per Share (Diluted) (yen)	30.32	—	8.19	4.75	15.15
Total Assets	11,246.6	9,915.6	10,179.3	9,590.3	9,736.2


Notes:	(1	)	The consolidated figures shown above have been prepared in conformity with accounting principles generally accepted in the United States.
	(2	)	Restructuring charges etc. are included as part of other income or other deductions in conformity with accounting principles generally accepted in Japan, while they are included as part of operating income (loss) under accounting principles generally accepted in the United States.
	(3	)	In fiscal 2001, the semiconductor, display, telecommunications equipment and electronics related product businesses experienced a severe decline in demand and markedly weaker prices. In addition, other reductions were incurred owing mainly to the special termination benefits under an early retirement benefit system. In combination, these factors produced a large amount of loss.
	(4	)	In fiscal 2002, the Company posted net income, reversing a net loss, due to the restructuring measures taken in the preceding fiscal year.
	(5	)	In fiscal 2003, income before income taxes and minority interests increased sharply due mainly to the improvement of operating income and gain on sale of investments in securities.

Unconsolidated Basis


				(Billions of yen)

Fiscal Year	2000	2001	2002	2003	2004
Orders Received	3,812.6	3,193.5	2,984.8	2,369.9	2,495.8
Revenues	4,015.8	3,522.2	3,112.4	2,488.8	2,597.4
Operating Income	98.5	-84.7	53.7	7.5	-5.6
Ordinary Income	56.0	-81.6	52.0	20.1	22.2
Net Income	40.1	-252.6	28.2	40.1	10.3
Net Income per Share (Basic) (yen)	12.02	-75.68	8.38	12.14	3.12
Net Income per Share (Diluted) (yen)	12.01	—	—	12.14	3.12
Total Assets	4,119.2	3,923.1	3,825.0	3,708.3	3,752.5


Notes:	(1)	In fiscal 2001, the semiconductor, display and telecommunications equipment businesses experienced a severe decline in demand and markedly weaker prices. In addition, extraordinary losses were incurred owing mainly to the special termination benefits under an early retirement benefit system. In combination, these factors produced a large amount of loss.
	(2)	In fiscal 2002, revenues decreased from the preceding fiscal year, including due to transfer of several businesses to the subsidiaries, while income increased from the preceding fiscal year.
	(3)	In fiscal 2003, revenues decreased sharply from the preceding fiscal year due primarily to the corporate split of system LSI and other semiconductor operations and hard disk drive business from the Company.
	(4)	In fiscal 2004, the Company posted an operating loss due to deterioration in profitability of its main business sectors. Net income substantially decreased from the preceding fiscal year due to posting an extraordinary loss, which includes impairment loss on shares of an affiliated company engaging in plasma display panel operations and restructuring charges relating to digital media product business in Japan.
	(5)	Net income per share is calculated for fiscal 2000 based on total number of shares issued at year-end, for fiscal 2001 based on total number of shares issued at year-end less number of treasury stocks, and since fiscal 2002 based on total average number of shares issued less average number of treasury stocks during the fiscal year.

(8) Directors and Executive Officers (As of March 31, 2005)

Directors


Name	Position	Committee Membership	Principal Position outside the Company
Tsutomu Kanai	Chairman of the Board	Chairman of Nominating Committee Chairman of Compensation Committee	—

Etsuhiko Shoyama	Director	Nominating Committee Compensation Committee	—

Yoshiki Yagi	Director	Chairman of Audit Committee	—

Kotaro Muneoka	Director	Audit Committee	—

*Takashi Miyoshi	Director	—	—

Ginko Sato	Director	Nominating Committee Audit Committee	President, Japan Association for the Advancement of Working Women

Hiromichi Seya	Director	Nominating Committee Audit Committee Compensation Committee	Senior Corporate Advisor, Asahi Glass Company, Limited

Akira Chihaya	Director	Compensation Committee	Representative Director and Chairman of the Board, NIPPON STEEL CORPORATION

Toshiro Nishimura	Director	Nominating Committee Audit Committee Compensation Committee	Attorney at Law

*Isao Uchigasaki	Director	—	Chairman of the Board, Hitachi Chemical Co., Ltd.

Takashi Kawamura	Director	—	Chairman of the Board and Representative Executive Officer, Hitachi Software Engineering Co., Ltd.

Yoshiro Kuwata	Director	—	Chairman of the Board and Representative Executive Officer, Hitachi High-Technologies Corporation

Hiroshi Kuwahara	Director	—	Chairman of the Board and Representative Executive Officer, Hitachi Maxell, Ltd.

Masayoshi Hanabusa	Director	—	Chairman of the Board, Hitachi Capital Corporation


Notes:	(1	)	The Directors marked with * were newly elected and assumed their positions at the 135th Ordinary General Meeting of Shareholders on June 24, 2004.
	(2	)	Mr. Shigemichi Matsuka retired due to expiration of his term of office at the close of the 135th Ordinary General Meeting of Shareholders on June 24, 2004.
	(3	)	Directors, Ms. Ginko Sato, Mr. Hiromichi Seya, Mr. Akira Chihaya and Mr. Toshiro Nishimura are outside Directors who fulfill the qualification requirements as provided for in Article 188.2.7-2 of the Commercial Code of Japan.

Executive Officers


Name	Position	Responsibilities
*Etsuhiko Shoyama	Representative Executive Officer President and Chief Executive Officer	Overall management

Katsukuni Hisano	Representative Executive Officer Executive Vice President and Executive Officer	Automotive systems business

Isao Ono	Representative Executive Officer Executive Vice President and Executive Officer	Sales operations, information & telecommunication systems business and digital media business

Michiharu Nakamura	Representative Executive Officer Executive Vice President and Executive Officer	Research & development, business incubation and corporate export regulation

Masaharu Sumikawa	Representative Executive Officer Executive Vice President and Executive Officer	Power & industrial systems business and production engineering

Kazuo Furukawa	Senior Vice President and Executive Officer	Information & telecommunication systems business

Hiroaki Nakanishi	Senior Vice President and Executive Officer	Hitachi group global business (North America)

Takashi Hatchoji	Senior Vice President and Executive Officer	Hitachi group legal and corporate communications, corporate auditing and human resources

*Takashi Miyoshi	Senior Vice President and Executive Officer	Finance and corporate pension system

Takuya Tajima	Senior Vice President and Executive Officer	Sales operations

Shigeharu Mano	Vice President and Executive Officer	Power systems business

Kazuhiro Mori	Vice President and Executive Officer	Industrial systems business

Yoshito Tsunoda	Vice President and Executive Officer	Urban planning and development systems business

Manabu Shinomoto	Vice President and Executive Officer	Platform and network systems business

Kazuhiro Tachibana	Vice President and Executive Officer	Digital media business

Taiji Hasegawa	Vice President and Executive Officer	Automotive systems business

Junzo Kawakami	Vice President and Executive Officer	Automotive systems business (suspensions and brakes)

Minoru Tsukada	Vice President and Executive Officer	Hitachi group global business (China)

Makoto Ebata	Vice President and Executive Officer	Hitachi group strategy and Hitachi group global business

Iwao Hara	Vice President and Executive Officer	Human resources

Shozo Saito	Vice President and Executive Officer	Power systems engineering

Yasuo Sakuta	Executive Officer	Intellectual property

Takao Suzuki	Executive Officer	Sales operations (Chugoku area)

Koichiro Nishikawa	Executive Officer	Business development

Masahiro Hayashi	Executive Officer	Sales operations (Kansai area)

*Isao Uchigasaki	Hitachi Group Executive Officer	Hitachi group overall strategy


Notes:	(1	)	Mr. Kazuhiro Tachibana and Mr. Isao Uchigasaki were newly elected as Vice President and Executive Officer and Hitachi Group Executive Officer, respectively, at the Board of Directors meeting on March 11, 2004 and assumed their positions on April 1, 2004.
	(2	)	Mr. Junzo Kawakami was newly elected as Vice President and Executive Officer at the Board of Directors meeting on June 24, 2004 and assumed the position on October 1, 2004.
	(3	)	Mr. Masaharu Sumikawa became an Executive Vice President and Executive Officer from an Executive Officer on October 1, 2004. Mr. Takuya Tajima became a Senior Vice President and Executive Officer from a Vice President and Executive Officer on October 1, 2004. Mr. Shozo Saito became a Vice President and Executive Officer from an Executive Officer on October 1, 2004.
	(4	)	The responsibilities of some Executive Officers were changed on February 1, 2005 as follows: the responsibilities of Mr. Hiroaki Nakanishi were changed to Hitachi group global business (North America) from Hitachi group global business and business development; the responsibilities of Mr. Minoru Tsukada were changed to Hitachi group global business (China) from sales operations (Kansai area); the responsibilities of Mr. Masahiro Hayashi were changed to sales operations (Kansai area) from system solutions business; and Hitachi group global business was added to the responsibilities of Mr. Makoto Ebata.
	(5	)	The Executive Officers marked with * concurrently hold the position of Director.

The Company changed management members, effective April 1, 2005. New Executive Officers are as follows:

Executive Officers (As of April 1, 2005)


Name	Position	Responsibilities
Etsuhiko Shoyama	Representative Executive Officer President and Chief Executive Officer	Overall management

Isao Ono	Representative Executive Officer Executive Vice President and Executive Officer	Sales operations and information & telecommunication systems business

Michiharu Nakamura	Representative Executive Officer Executive Vice President and Executive Officer	Research & development and business incubation

Masaharu Sumikawa	Representative Executive Officer Executive Vice President and Executive Officer	Power & industrial systems business, automotive systems business and production engineering

Kazuo Furukawa	Representative Executive Officer Executive Vice President and Executive Officer	Information & telecommunication systems business, digital media business, Hitachi group global business, corporate export regulation and business development

Hiroaki Nakanishi	Senior Vice President and Executive Officer	Hitachi group global business (North America)

Takashi Hatchoji	Senior Vice President and Executive Officer	Hitachi group legal and corporate communications, corporate auditing and human resources

Takashi Miyoshi	Senior Vice President and Executive Officer	Finance and corporate pension system

Takuya Tajima	Senior Vice President and Executive Officer	Sales operations

Shigeharu Mano	Vice President and Executive Officer	Power systems business

Kazuhiro Mori	Vice President and Executive Officer	Industrial systems business

Kunihiko Ohnuma	Vice President and Executive Officer	Urban planning and development systems business

Manabu Shinomoto	Vice President and Executive Officer	System solutions business and platform and network systems business

Kazuhiro Tachibana	Vice President and Executive Officer	Digital media business

Taiji Hasegawa	Vice President and Executive Officer	Automotive systems business

Junzo Kawakami	Vice President and Executive Officer	Automotive systems business (suspensions and brakes)

Minoru Tsukada	Vice President and Executive Officer	Hitachi group global business (China)

Masahiro Hayashi	Vice President and Executive Officer	Sales operations (Kansai area)

Makoto Ebata	Vice President and Executive Officer	Hitachi group strategy and Hitachi group global business

Iwao Hara	Vice President and Executive Officer	Human resources

Shozo Saito	Vice President and Executive Officer	Power systems engineering

Yasuo Sakuta	Executive Officer	Intellectual property

Takao Suzuki	Executive Officer	Sales operations (Chugoku area)

Koichiro Nishikawa	Executive Officer	Business development

Isao Uchigasaki	Hitachi Group Executive Officer	Hitachi group overall strategy

(9) Compensation for Directors and Executive Officers

Policy on the Determination of Compensation of Directors and Executive Officers

(a) Matters relating to both Directors and Executive Officers

Compensation will be commensurate with the ability required of, and the responsibilities to be borne by, the Company’s Directors and Executive Officers, taking into consideration compensation packages at other companies.

(b) Matters relating to Directors

Compensation for Directors will consist of a monthly salary, a year-end allowance and a retirement allowance.

Monthly salary will be decided by making adjustments to basic salary that reflect full-time or part-time status, committee membership and position.

Year-end allowance will be a pre-determined amount equivalent to about twenty percent of the Director’s annual income based on monthly salary, although this amount may be reduced depending on Company performance.

Retirement allowance will be an amount payable on retirement that is determined based on monthly salary and years of service (total years of service in the case of a Director who has served multiple terms as a Director) (the “Director’s Basic Retirement Amount”).

A Director concurrently serving as an Executive Officer will not be paid compensation as a Director.

Compensation for Executive Officers will consist of a monthly salary, a performance-linked component and a retirement allowance.

Monthly salary will be decided by adjusting a basic amount set in accordance with the relevant position to reflect the results of an assessment.

The performance-linked component will be set within a range equivalent to about thirty percent of the Executive Officer’s annual income, adjusted based on Company and individual performance.

Retirement allowance will be an amount payable on retirement. The amount will be determined by adding to an amount set in accordance with the position held at retirement, an amount based on the monthly salary of previous positions held over the course of the person’s career and years of service in such positions (total years in each position, in the event of multiple periods in the same position) (the “Executive Officer’s Basic Retirement Amount”).

(d) Miscellaneous

In accordance with a resolution of the 134th Ordinary General Meeting of Shareholders of the Company held on June 25, 2003, the amount of retirement allowance for a Director or Executive Officer who was a Director or Corporate Auditor prior to the close of the Meeting will include an allowance corresponding to the person’s period of service as a Director or Corporate Auditor before the adoption of the Committee System.

Retirement allowance may, through an assessment, be supplemented for distinguished service by an amount equivalent to up to thirty percent of the Director’s Basic Retirement Amount or Executive Officer’s Basic Retirement Amount. Depending on the circumstances, each such Basic Retirement Amount may also be reduced.

In addition to the above, stock options may be granted as an incentive to increase corporate value.

Amount of Compensation Paid to Directors and Executive Officers in Fiscal 2004

(a) Amount paid to Directors and Executive Officers in office after adoption of the Committee System


	Remuneration				Year-end Allowance and Performance-linked Component				Retirement Allowance
	Number		Amount paid (millions of yen)		Number		Amount paid (millions of yen)		Number		Amount paid (millions of yen)
Directors (Outside Directors)	12 (4	)	233 (60	)	10 (4	)	41 (6	)	1 (—	)	7 (—	)
Executive Officers	26		618		30		292		4		177

Total	38		851		40		334		5		184


Notes:	(1)	The number of Directors who received remuneration and year-end allowance excludes three Directors who serve concurrently as Executive Officers.
	(2)	The number of Executive Officers who received performance-linked component includes seven Executive Officers who retired in the preceding year.
	(3)	All of the Executive Officers who received retirement allowance are Executive Officers who retired in the preceding year.
	(4)	Figures of Directors include those of outside Directors.

(b) Amount paid to Directors and Corporate Auditors in office before adoption of the Committee System


	Bonus		Retirement Allowance
	Number	Amount paid (millions of yen)	Number	Amount paid (millions of yen)
Directors	6	22	2	123
Corporate Auditors	—	—	1	20

Total	6	22	3	144

Note:

The bonus was paid to Directors who were in office during the period April 1, 2003 to June 25, 2003.

(10) Employees of Hitachi Group (As of March 31, 2005)


Industry Segment	Number of Employees		Change from the end of the preceding year
Information & Telecommunication Systems	90,173		+466
Electronic Devices	25,943		+806
Power & Industrial Systems	84,602		+8,178
Digital Media & Consumer Products	31,302		-119
High Functional Materials & Components	55,032		+6,507
Logistics, Services & Others	28,706		+422
Financial Services	4,084		-72
Corporate	3,230		+8

Total (the Company)	323,072 (38,537	)	+16,196 (+3,824	)


Notes:	(1	)	The total number of employees of Hitachi Group including part-time employees was 347,424.
	(2	)	Figures in the parentheses represent the figures for the Company. The total number of employees of the Company including part-time employees was 41,069.

(11) Major Facilities of Hitachi Group (As of March 31, 2005)

Major Facilities of the Company


		Location
Head Office		Tokyo (Chiyoda-ku)

R&D		Tokyo (Chiyoda-ku, Kokubunji), Ibaraki (Hitachi, Hitachinaka), Saitama (Hatoyama), Kanagawa (Yokohama, Kawasaki)

Manufacturing, Design and Engineering		Tokyo (Chiyoda-ku, Koto-ku, Shinagawa-ku, Ome), Ibaraki (Hitachi, Hitachinaka), Saitama (Kawagoe), Kanagawa (Yokohama, Atsugi, Ebina, Odawara, Kawasaki, Hadano), Aichi (Toyokawa), Yamaguchi (Kudamatsu)

Sales and Area Operations		Tokyo (Chiyoda-ku, Koto-ku, Shinagawa-ku), Hokkaido Area Operation (Sapporo), Tohoku Area Operation (Sendai), Kanto Area Operation (Tokyo), Yokohama Area Operation (Yokohama), Hokuriku Area Operation (Toyama), Chubu Area Operation (Nagoya), Kansai Area Operation (Osaka), Chugoku Area Operation (Hiroshima), Shikoku Area Operation (Takamatsu), Kyushu Area Operation (Fukuoka)

Note:

The Company moved its Head Office to Marunouchi, Chiyoda-ku, Tokyo on September 27, 2004.

Locations of the Company’s Major Consolidated Subsidiaries


Name		Location
Babcock-Hitachi Kabushiki Kaisha		Minato-ku, Tokyo
Chuo Shoji, Ltd.		Chiyoda-ku, Tokyo
Hitachi Air Conditioning Systems Co., Ltd.		Minato-ku, Tokyo
Hitachi Building Systems Co., Ltd.		Chiyoda-ku, Tokyo
Hitachi Cable, Ltd.		Chiyoda-ku, Tokyo
Hitachi Capital Corporation		Minato-ku, Tokyo
Hitachi Chemical Co., Ltd.		Shinjuku-ku, Tokyo
Hitachi Communication Technologies, Ltd.		Shinagawa-ku, Tokyo
Hitachi Construction Machinery Co., Ltd.		Bunkyo-ku, Tokyo
Hitachi Displays, Ltd.		Mobara, Chiba
Hitachi Electronics Services Co., Ltd.		Yokohama, Kanagawa
Hitachi Engineering Co., Ltd.		Hitachi, Ibaraki
Hitachi Engineering & Services Co., Ltd.		Hitachi, Ibaraki
Hitachi High-Technologies Corporation		Minato-ku, Tokyo
Hitachi Home & Life Solutions, Inc.		Minato-ku, Tokyo
Hitachi Industrial Equipment Systems Co., Ltd.		Chiyoda-ku, Tokyo
Hitachi Industries Co., Ltd.		Adachi-ku, Tokyo
Hitachi Information Systems, Ltd.		Shibuya-ku, Tokyo
Hitachi Insurance Services, Ltd.		Chiyoda-ku, Tokyo
Hitachi Kiden Kogyo, Ltd.		Amagasaki, Hyogo
Hitachi Life Corporation		Hitachi, Ibaraki
Hitachi Maxell, Ltd.		Ibaraki, Osaka
Hitachi Media Electronics Co., Ltd.		Mizusawa, Iwate
Hitachi Medical Corporation		Chiyoda-ku, Tokyo
Hitachi Metals, Ltd.		Minato-ku, Tokyo
Hitachi Mobile Co., Ltd.		Shinagawa-ku, Tokyo
Hitachi-Omron Terminal Solutions, Corp.		Shinagawa-ku, Tokyo
Hitachi Plant Engineering & Construction Co., Ltd.		Chiyoda-ku, Tokyo
Hitachi Software Engineering Co., Ltd.		Yokohama, Kanagawa
Hitachi Systems & Services, Ltd.		Minato-ku, Tokyo
Hitachi Transport System, Ltd.		Koto-ku, Tokyo
Hitachi Via Mechanics, Ltd.		Ebina, Kanagawa
Japan Servo Co., Ltd.		Chiyoda-ku, Tokyo
Nikkyo Create, Ltd.		Chiyoda-ku, Tokyo
Guangzhou Hitachi Elevator Co., Ltd.		China
Hitachi America, Ltd.		U.S.A.
Hitachi Asia Ltd.		Singapore
Hitachi Automotive Products (USA), Inc.		U.S.A.
Hitachi (China), Ltd.		China
Hitachi Computer Products (America), Inc.		U.S.A.
Hitachi Computer Products (Europe) S.A.S.		France
*Hitachi Data Systems Holding Corp.		U.S.A.
Hitachi Electronic Devices (USA), Inc.		U.S.A.
Hitachi Europe Ltd.		U.K.
*Hitachi Global Storage Technologies Netherlands B.V.		Netherlands
Hitachi Home Electronics (America), Inc.		U.S.A.
Hitachi Semiconductor Singapore Pte. Ltd.		Singapore
Shanghai Hitachi Household Appliances Co., Ltd.		China

Note:

The companies marked with * are holding companies; their major operating companies are located in the United States.

(12) Summary of Resolution of Board of Directors on Performance of Functions of Audit Committee

(a)

Board of Directors Office (the “Office”) shall be established as an organization devoted solely to supporting each Committee, including the Audit Committee, as well as the Board of Directors. The Office shall be staffed by three or more employees not subject to instructions or orders of Executive Officers. The Corporate Auditing and Legal & Corporate Communications departments shall also provide support to the Board of Directors and each Committee.

(b)

In order to ensure the independence of the Office personnel from the Executive Officers, the Audit Committee shall be informed in advance of planned transfers of the Office personnel and may request the Executive Officer in charge of human resources management to alter such plans, when necessary.

(c)

An Executive Officer or employee shall report without delay to Audit Committee members in connection with matters prescribed by law and the matters set forth below:

the content of an Executive Officer’s decision regarding an important matter that will affect the Company as a whole,

the result of an internal audit conducted by the responsible departments, and

the status of reporting under the internal report system maintained by the Executive Officers.

(d)

Records regarding decisions of an Executive Officer shall be prepared and preserved in accordance with the Company’s regulations.

(e)

Each relevant department shall establish regulations and guidelines, conduct training, prepare and distribute manuals, and carry out other such measures with respect to risks associated with legal issues and compliance thereof, the environment, disasters, product quality, export control and other pertinent matters. When it becomes necessary to respond to a new risk, an Executive Officer shall be promptly appointed to deal with the issue. A system enabling employees to report directly to the Directors shall be established.

(f)

The business management system set forth below is to be used to continuously monitor risks arising in the course of business and to facilitate the efficient execution by Executive Officers of their responsibilities.

The Senior Executive Committee comprising principal Executive Officers shall deliberate on important issues that affect the Company as a whole to facilitate the formulation of decisions based on the due consideration of the diverse factors coloring such issues.

In order to boost market competitiveness through the committed pursuit of profitability and by setting clearly defined goals, numerical targets shall be set for the Company as a whole and each business group and incorporated into the fiscal budget. The targets shall be used as the reference base for performance management.

Internal audits shall be conducted to monitor and identify the status of business operations and to facilitate improvements. In order to ensure strict compliance with its regulatory requirements, the Company has put in place a number of committees.

The Audit Committee shall receive the audit plans of the accounting auditors in advance to facilitate the monitoring of the accounting auditors and ensure that these auditors are not influenced by Executive Officers. The prior approval of the Audit Committee shall be required with respect to the fees to the accounting auditors and non-audit services.

(13) Fees to the Company’s Accounting Auditors (Fiscal 2004)

(Millions of yen)

Note:

The column marked with * includes fees for audits under applicable securities exchange laws.

(14) Common Stock (As of March 31, 2005)


Authorized		10,000,000,000 shares
Issued		3,368,126,056 shares
Capital Stock		JPY282,033,991,613
Number of Shares per Unit		1,000 shares

Issued in Fiscal 2004

Number of Shares

Issued (shares)

Capital Stock Increased

(yen)

Issued on Conversion of Convertible Bonds

1,180

1,000,640

The Company did not cancel any of its own shares in fiscal 2004.

Shareholders Composition


Class of Shareholders	Number of Shareholders	Number of Shares Owned (shares)	Ownership (%)
Financial Institution and Securities Firm	483	939,684,401	27.90
Individual	428,569	1,066,529,626	31.67
Foreign Investor	1,067	1,228,531,088	36.47
Other	4,034	133,310,623	3.96
Government and Municipality	4	70,318	0.00

Total	434,157	3,368,126,056	100.00

10 Largest Shareholders


	Shareholder’s Equity in the Company		The Company’s Equity in Shareholder Concerned
Name	Number of Shares Owned	Ownership	Number of Shares Owned	Ownership
	shares	%	shares	%
NATS CUMCO	216,030,050	6.41	—	—
The Master Trust Bank of Japan, Ltd.	194,452,000	5.77	—	—
Japan Trustee Services Bank, Ltd.	172,379,000	5.12	—	—
The Chase Manhattan Bank, N.A. London	149,190,746	4.43	—	—
State Street Bank and Trust Company	146,737,849	4.36	—	—
Nippon Life Insurance Company	100,630,195	2.99	—	—
Hitachi Employees’ Shareholding Association	91,625,952	2.72	—	—
The Dai-Ichi Mutual Life Insurance Company	75,992,222	2.26	—	—
Trust & Custody Services Bank, Ltd.	59,499,000	1.77	—	—
Meiji Yasuda Life Insurance Company	49,492,818	1.47	—	—

Note:

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.

Acquisition, Disposition and Possession by the Company of Its Own Shares in Fiscal 2004

Acquisition

Class

Number of Shares

(shares)

Aggregate Acquisition

Prices (yen)

Common Stock

12,381,894

8,136,707,283

Note:

During fiscal 2004, the Company did not purchase any of its own shares pursuant to the resolution on the acquisition of its own shares at the 134th Ordinary General Meeting of Shareholders or resolution of the Board of Directors under Article 7 of the Company’s Articles of Incorporation.

Disposition

Class

Number of Shares

(shares)

Aggregate Disposition

Prices (yen)

Common Stock

45,942,645

34,071,235,302

Possession (As of March 31, 2005)

Class

Number of Shares

(shares)

Common Stock

36,549,222

(15) Stock Acquisition Rights

Issued Stock Acquisition Rights (As of March 31, 2005)


Category	Stock Acquisition Rights as Stock Options	Stock Acquisition Rights as Bonds with Stock Acquisition Rights
Number of Stock Acquisition Rights Issued	1,963	20,000

Class and Number of Shares to Be Issued upon Exercise of Stock Acquisition Rights	1,963,000 shares of the Company’s common stock (The number of shares to be issued upon exercise of each stock acquisition right shall be 1,000.)	99,108,026 shares of the Company’s common stock

Issue Price of Stock Acquisition Rights	No consideration	No consideration


Notes:	(1)	The number of stock acquisition rights as stock options and number of shares to be issued upon exercise of stock acquisition rights excludes expired stock acquisition rights pursuant to the conditions for exercise of stock acquisition rights.
	(2)	The number of shares to be issued upon exercise of stock acquisition rights which were issued as bonds with stock acquisition rights is calculated based on the conversion price as of March 31, 2005.
	(3)	In addition to the stock acquisition rights shown above, the Company issues subscription rights for the purpose of granting stock options pursuant to Article 280-19.1 of the former Commercial Code of Japan. The number of shares to be issued upon exercise of these subscription rights is 728,000 shares of the Company’s common stock.

Stock Acquisition Rights Issued to Persons Other Than Shareholders with Special Favorable Conditions in Fiscal 2004


Name of Stock Acquisition Rights	Hitachi, Ltd. 2nd Stock Acquisition Rights	Hitachi, Ltd. 3rd Stock Acquisition Rights
Issue Date of Stock Acquisition Rights	July 29, 2004	October 1, 2004

Number of Stock Acquisition Rights Issued	1,237	41

Class and Number of Shares to Be Issued upon Exercise of Stock Acquisition Rights	1,237,000 shares of the Company’s common stock (The number of shares to be issued upon exercise of each stock acquisition right shall be 1,000.)	41,000 shares of the Company’s common stock (The number of shares to be issued upon exercise of each stock acquisition right shall be 1,000.)

Issue Price of Stock Acquisition Rights	No consideration	No consideration

Amount to Be Paid upon Exercise of Stock Acquisition Rights	JPY782 per share	JPY705 per share

Period during Which Stock Acquisition Rights May Be Exercised	From July 30, 2005 to July 29, 2008	From October 2, 2005 to October 1, 2008

Conditions for Exercise of Stock Acquisition Rights	(1) In the event a person holding the stock acquisition rights loses the position of Director, Executive Officer or employee of the Company, such person may exercise the stock acquisition rights only within the succeeding six months of such event. In the event of the death of the person, the stock acquisition rights expire immediately.
Conditions for Exercise of Stock Acquisition Rights	(2) Other terms of exercising the stock acquisition rights shall be subject to the provisions in granting agreement between the Company and each qualified person.

Cancellation of Stock Acquisition Rights	The Company may acquire and cancel the stock acquisition rights at any time without consideration.

Special Favorable Conditions	The Company issued the stock acquisition rights without any consideration for granting stock options.

Note:

The issues of the stock acquisition rights shown above were resolved at the Board of Directors meetings on July 29, 2004 and September 24, 2004, respectively, in accordance with the resolution at the 135th Ordinary General Meeting of Shareholders on June 24, 2004.

Directors and Executive Officers to Whom Stock Acquisition Rights Were Allocated


Name		Number of Stock Acquisition Rights
Tsutomu Kanai		30
Etsuhiko Shoyama		30
Yoshiki Yagi		30
Kotaro Muneoka		30
Takashi Miyoshi		30
Ginko Sato		30
Hiromichi Seya		30
Akira Chihaya		30
Toshiro Nishimura		30
Isao Uchigasaki		30
Takashi Kawamura		30
Yoshiro Kuwata		30
Hiroshi Kuwahara		30
Masayoshi Hanabusa		30
Katsukuni Hisano		25
Isao Ono		25
Michiharu Nakamura		25
Kazuo Furukawa		20
Hiroaki Nakanishi		20
Takashi Hatchoji		20
Takuya Tajima		15
Shigeharu Mano		15
Kazuhiro Mori		15
Yoshito Tsunoda		15
Manabu Shinomoto		15
Kazuhiro Tachibana		15
Taiji Hasegawa		15
Minoru Tsukada		15
Makoto Ebata		15
Iwao Hara		15
Masaharu Sumikawa		12
Shozo Saito		12
Yasuo Sakuta		12
Takao Suzuki		12
Koichiro Nishikawa		12
Masahiro Hayashi		12
Junzo Kawakami		8

Certain Employees etc. to Whom Stock Acquisition Rights Were Allocated (10 Largest)


Name		Number of Stock Acquisition Rights
Keisuke Ogawa		15
Toshihiko Odaka		15
Yoshiharu Obata		15
Fumiyuki Kobayashi		15
Akira Tonomura		15
Jun Naruse		15
Hiroyuki Fukuyama		15
Masahiro Maeda		15
Yuzo Inakazu		10
Yoshiyuki Imoto		10

Stock Acquisition Rights Issued to Certain Employees etc.


Category	Number of Stock Acquisition Rights	Class and Number of Shares to Be Issued upon Exercise of Stock Acquisition Rights	Number of Person
Employees of the Company	493	493,000 shares of the Company’s common stock	48

Directors and Executive Officers of the Company’s Affiliated Companies	—	—	—

Corporate Auditors and Audit Committee Members of the Company’s Affiliated Companies	—	—	—

Employees of the Company’s Affiliated Companies	—	—	—

2. Consolidated Balance Sheets


	Fiscal 2004 (As of March 31, 2005)		Fiscal 2003 (As of March 31, 2004)
	(Millions of yen)
(Assets)
Current assets	5,338,835		5,219,942
Cash and cash equivalents	708,715		764,396
Short-term investments	146,568		177,949
Trade receivables
Notes	132,572		142,802
Accounts	2,065,194		2,043,727
Investment in leases	526,759		451,753
Inventories	1,198,955		1,123,406
Other current assets	560,072		515,909
Investments and advances	894,851		908,962
Property, plant and equipment	2,357,931		2,232,862
Land	436,308		419,846
Buildings	1,740,057		1,690,096
Machinery and equipment	5,222,157		4,899,239
Construction in progress	57,291		49,011
Less accumulated depreciation	(5,097,882	)	(4,825,330	)
Other assets	1,144,630		1,228,556
Total assets	9,736,247		9,590,322

(Liabilities)
Current liabilities	4,064,546		3,911,054
Short-term debt	676,611		623,816
Current installments of long-term debt	506,863		559,647
Trade payables
Notes	62,855		67,581
Accounts	1,246,401		1,220,033
Accrued expenses	843,022		797,935
Income taxes	61,789		78,438
Advances received	247,586		216,544
Other current liabilities	419,419		347,060
Long-term debt	1,319,032		1,314,102
Retirement and severance benefits	1,033,005		1,273,509
Other liabilities	90,781		124,710
Total liabilities	6,507,364		6,623,375
(Minority interests)
Minority interests	921,052		798,816
(Stockholders’ equity)
Common stock	282,033		282,032
Capital surplus	565,360		551,690
Legal reserve and retained earnings	1,779,198		1,760,435
Legal reserve	110,214		109,163
Retained earnings	1,668,984		1,651,272
Accumulated other comprehensive loss	(301,524	)	(393,864	)
Treasury stock, at cost	(17,236	)	(32,162	)
Total stockholders’ equity	2,307,831		2,168,131
Total liabilities, minority interests and stockholders’ equity	9,736,247		9,590,322

Notes:

(1)

Basis of presentation

The consolidated financial statements presented herein, under Article 179.1 of the Enforcement Regulations of the Commercial Code of Japan, have been prepared in a manner which is necessary to conform them with accounting principles generally accepted in the United States of America. However, under the above provision, some descriptions and notes required under the accounting principles generally accepted in the United States of America are omitted.

(2)

Inventories

Finished goods, semi-finished goods and work-in-process: Lower of cost or market. Cost is determined by the specific identification method or the moving average method. Raw materials: Lower of cost or market. Cost is generally determined by the moving average method.

(3)

Investments in securities

The Company accounts for investments in securities in accordance with Statement of Financial Accounting Standards (SFAS) No. 115, “Accounting for Certain Investments in Debt and Equity Securities.”

Held-to-maturity securities: Amortized cost.

Trading securities: Fair value, with unrealized gains and losses included in earnings. Cost is determined by the moving average method.

Available-for-sale securities: Fair value, with unrealized gains and losses reported in other comprehensive income. Cost is determined by the moving average method.

(4)

Depreciation of fixed assets

Property, plant and equipment: Principally depreciated by the declining-balance method, except for some assets which are depreciated by the straight-line method.

Selling, leasing, or otherwise marketing software: Depreciated based on expected gross revenues ratably.

Software for internal use: Capitalized and amortized on a straight-line basis over their estimated useful lives.

(5)

The Company accounts for retirement and severance benefits in accordance with SFAS No. 87, “Employers’ Accounting for Pensions.” Unrecognized transition assets, unrecognized prior service benefit and cost, and unrecognized actual gains and losses are amortized using the straight-line method over the average remaining service period of active employees.

(6)

Consumption tax is accounted for based on the tax segregated method, under which consumption tax is excluded from presentation of revenues, cost of sales and expenses.

(7)

Goodwill and other intangible assets

The Company accounts for goodwill and other intangible assets in accordance with SFAS No. 142, “Goodwill and Other Intangible Assets.” Goodwill and intangible assets with indefinite useful lives are no longer amortized, but instead are tested for impairment at least annually in accordance with the provisions of this statement.

Intangible assets with finite useful lives are amortized over their respective estimated useful lives and are tested for impairment in accordance with SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets.”

(8)

The doubtful amount deducted from monetary receivables is JPY54,375 million.

(9)

Deferred tax assets included in “other current assets” and “other assets” are JPY295,532 million and JPY460,721 million, respectively. Deferred tax liabilities included in “other current liabilities” and “other liabilities” are JPY3,011 million and JPY25,754 million, respectively.

(10)

Accumulated other comprehensive loss of JPY301,524 million includes: loss on foreign currency exchange adjustments of JPY90,904 million, loss on minimum pension liability adjustments of JPY242,672 million, net unrealized holding gain on available-for-sale securities of JPY32,996 million and net losses on derivatives of JPY944 million.

(11)

Collateralized assets: Cash and cash equivalents of JPY117 million, short-term investments of JPY247 million, other current assets of JPY1,833 million, investments and advances of JPY112 million, land of JPY7,437 million, buildings of JPY9,053 million and machinery and equipment of JPY5,910 million.

In addition to the above, common stocks of subsidiaries with fair market value of JPY1,614 million are collateralized.


(12)	Notes discounted	JPY4,853 million
	Notes endorsed	JPY6,644 million
	Guarantees	JPY579,762 million

3. Consolidated Statements of Operations


	Years ended March 31
	2005	2004
	(Millions of yen)
Revenues	9,027,043	8,632,450
Cost of sales	6,961,270	6,710,154

Gross profit	2,065,773	1,922,296
Selling, general and administrative expenses	1,786,718	1,737,433

Operating income	279,055	184,863
Other income	86,408	161,170
Interest income	13,413	12,808
Dividends income	5,971	6,352
Other	67,024	142,010
Other deductions	100,957	108,884
Interest charges	29,057	30,855
Impairment losses for long-lived assets	26,797	26,085
Restructuring charges	33,307	28,613
Other	11,796	23,331

Income before income taxes and minority interests	264,506	237,149
Income taxes	149,990	198,655

Income before minority interests	114,516	38,494
Minority interests	63,020	22,618

Net income	51,496	15,876

Notes:

(1)

Income taxes of JPY149,990 million includes current tax expense of JPY104,680 million and deferred tax expense of JPY45,310 million.

(2)

Net income per share JPY15.53

4. Consolidated Statements of Cash Flows (Supplementary Information)


	Years ended March 31
	2005		2004
	(Millions of yen)
1. Cash flows from operating activities
Net income	51,496		15,876
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation	425,080		436,053
Deferred income taxes	45,310		77,056
Loss on disposal of rental assets and other property	15,202		13,274
(Increase) Decrease in receivables	103,246		(187,545	)
Increase in inventories	(95,191	)	(67,026	)
Increase (Decrease) in payables	(53,785	)	145,234
Other	73,998		170,481

Net cash provided by operating activities	565,356		603,403

2. Cash flows from investing activities
Decrease in short-term investments	47,179		10,035
Capital expenditures	(368,896	)	(289,753	)
Purchase of rental assets, net	(443,570	)	(384,197	)
Proceeds from sale of investments and subsidiaries’ common stock, net	51,221		190,716
Collection of investment in leases	301,614		340,376
Other	(114,536	)	(134,590	)

Net cash used in investing activities	(526,988	)	(267,413	)

3. Cash flows from financing activities
Decrease in interest-bearing debt	(39,166	)	(320,477	)
Dividends paid to stockholders	(34,815	)	(19,961	)
Dividends paid to minority stockholders of subsidiaries	(16,671	)	(13,714	)
Other	(8,777	)	(20,283	)

Net cash used in financing activities	(99,429	)	(374,435	)

4. Effect of exchange rate changes on cash and cash equivalents	5,380		(25,330	)

5. Net decrease in cash and cash equivalents	(55,681	)	(63,775	)

6. Cash and cash equivalents at beginning of year	764,396		828,171

7. Cash and cash equivalents at end of year	708,715		764,396

Note:

In this fiscal year, the Company classified the effect of net change in inventory-related receivables from financial services as “Cash flows from operating activities” in place of “Cash flows from investing activities.” The reclassification has also been made to the presentation of the prior year’s consolidated statement of cash flows.

5. Unconsolidated Balance Sheets


	Fiscal 2004 (As of March 31, 2005)		Fiscal 2003 (As of March 31, 2004)
	(Millions of yen)
(ASSETS)
CURRENT ASSETS	1,860,523		1,909,420
Cash	195,463		265,201
Notes receivable	8,500		10,936
Accounts receivable	654,044		585,880
Marketable securities	6,218		3,319
Money held in trust	64,592		82,902
Finished goods	41,035		37,523
Semi-finished goods	52,387		52,343
Raw materials	34,766		36,610
Work in process	154,685		167,920
Advances paid	36,121		34,068
Short-term loan receivables	356,508		370,390
Deferred tax assets	109,698		86,903
Others	154,268		182,020
Allowance for doubtful receivables	(7,768	)	(6,600	)
FIXED ASSETS	1,891,998		1,798,964
Tangible fixed assets	333,804		291,048
Buildings	124,920		114,145
Structures	13,129		11,507
Machinery	95,377		62,666
Vehicles	244		193
Tools and equipment	55,791		56,736
Land	41,232		43,840
Construction in progress	3,107		1,958
Intangible fixed assets	185,575		153,039
Software	101,523		106,753
Railway and public utility installation	705		729
Others	83,346		45,556
Investments and others	1,372,618		1,354,876
Investments in affiliated companies	1,072,717		1,048,965
Other marketable securities of affiliated companies	287		—
Investments in securities	162,794		145,334
Long-term loan receivables	7,551		5,606
Deferred tax assets	96,883		123,516
Others	32,393		31,816
Allowance for doubtful receivables	(10	)	(361	)

TOTAL ASSETS	3,752,522		3,708,385


	Fiscal 2004 (As of March 31, 2005)		Fiscal 2003 (As of March 31, 2004)
	(Millions of yen)
(LIABILITIES)

CURRENT LIABILITIES	1,776,593		1,819,420
Trade accounts payable	619,376		624,281
Short-term debt	26,331		21,641
Commercial paper	30,000		20,000
Current installments of debentures	200,000		218,470
Other accounts payable	58,971		57,695
Accrued expenses	191,164		152,135
Advances received from customers	143,222		148,711
Deposits received	473,112		557,928
Warranty reserve	17,392		8,668
Reserve for exhibition at The 2005 World Exposition, Aichi, Japan	2,685		—
Others	14,338		9,888
FIXED LIABILITIES	610,272		515,584
Debentures	190,000		280,000
Long-term debt	224,533		54,428
Accrued pension liability	158,539		127,372
Reserve for loss on repurchasing computers	12,949		21,260
Reserve for exhibition at The 2005 World Exposition, Aichi, Japan	—		1,790
Others	24,250		30,734
TOTAL LIABILITIES	2,386,866		2,335,005

(STOCKHOLDERS’ EQUITY)

CAPITAL STOCK	282,033		282,032
CAPITAL SURPLUS	281,644		268,756
Capital reserve	268,709		268,708
Others	12,934		47
Gain on disposition of treasury stock	12,934		47
RETAINED EARNINGS	784,484		823,768
Earned surplus reserve	70,438		70,438
Voluntary reserve	684,491		684,444
Reserve for software program development	25,708		30,610
Reserve for special depreciation	792		1,843
Reserve for advanced depreciation of fixed assets	304		—
Special reserve	657,685		651,990
Unappropriated retained earnings	29,554		68,885

UNREALIZED HOLDING GAINS ON SECURITIES	36,607		30,983
TREASURY STOCK	(19,114	)	(32,162	)
TOTAL STOCKHOLDERS’ EQUITY	1,365,655		1,373,379

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	3,752,522		3,708,385

Notes:


(1)	Inventories
	Finished goods, semi-finished goods and work in process: Lower of cost or market. Cost is determined by the specific identification method or the moving average method.
	Raw materials: Lower of cost or market. Cost is determined by the moving average method.
(2)	Securities and money held in trust
	Investments in affiliated companies are stated at cost. Cost is determined by the moving average method. Other securities which had readily determinable fair values are stated at fair value. The difference between acquisition cost and carrying cost of other securities is recognized in “Unrealized Holding Gains On Securities.” The cost of other securities sold is computed based on a moving average method. Other securities which did not have readily determinable fair values are stated at cost determined by the moving average method.
	Money held in trust is stated at fair value.
(3)	Depreciation of tangible fixed assets
	Buildings: Straight-line method.
	Other tangible fixed assets: Declining-balance method.
	Accumulated depreciation of tangible fixed assets: JPY976,082 million
(4)	Depreciation of intangible fixed assets
	Selling, leasing, or otherwise marketing software: Depreciated based on expected gross revenues ratably.
	Other intangible fixed assets: Straight-line method.
(5)	Accrued pension liability is provided for employees’ retirement and severance benefits. Such liability is determined based on projected benefit obligation and expected plan assets as of March 31, 2005.
	Unrecognized net asset of JPY34,771 million at transition is amortized by the straight-line method over 5 years. Unrecognized net assets at transition transferred on October 1, 2004, when the Company merged Hitachi Unisia Automotive, Ltd., are amortized by straight-line method over 15 years.
	Prior service cost is amortized by the straight-line method over the estimated average remaining service years of employees.
	Unrecognized actual gain or loss is amortized by the straight-line method over the estimated average remaining service years of employees from the next fiscal year.
(6)	Reserve for exhibition at The 2005 World Exposition, Aichi, Japan is based on Article 43 of the Enforcement Regulations of the Commercial Code of Japan.
(7)	Consumption tax is accounted for based on the tax segregated method, under which consumption tax is excluded from presentation of sales, cost of sales and expenses.
(8)	Short-term receivables from affiliated companies	JPY730,422 million
	Long-term receivables from affiliated companies	JPY9,127 million
	Short-term payables to affiliated companies	JPY952,619 million
	Long-term payables to affiliated companies	JPY2,300 million
(9)	The difference between acquisition cost and carrying cost of other securities in “Total Stockholders’ Equity,” under Article 124.3 of the Enforcement Regulations of the Commercial Code of Japan, amounted to JPY38,723 million.
(10)	Rights to subscribe for new shares of the Company under Article 280-19.1 of the former Commercial Code of Japan


Class	Number of shares to be issued	Issue price per share	Issue period
Common Stock	184,000 shares	JPY1,451	7/27/2001 — 7/26/2005
Common Stock	544,000 shares	JPY1,270	8/4/2002 — 8/3/2006


(11)		In addition to the capitalized fixed assets, as significant equipment, the Company utilizes application software and computer manufacturing equipment under the lease arrangements.
(12)		Guarantees JPY49,115 million
(13)		The Company adopted the “Accounting Standard on Impairment of Fixed Assets” (Business Accounting Council, August 9, 2002) and the Guideline for Applying the Accounting Standard No. 6, “Guideline for Applying Accounting Standard on Impairment of Fixed Assets” (Accounting Standards Board of Japan, October 31, 2003) in fiscal 2004. Consequently, net income before income taxes for fiscal 2004 decreased by JPY19,882 million.

6. Unconsolidated Statements of Operations


	Years ended March 31
	2005		2004
	(Millions of yen)
Revenues	2,597,496		2,488,873
Cost of sales	2,096,204		1,999,740

Gross profit on sales	501,292		489,132

Selling, general and administrative expenses	506,986		481,584

Operating income and loss	(5,694	)	7,548

Non-operating income	87,863		61,569
Interest and dividends	77,422		52,641
Others	10,441		8,927
Non-operating expenses	59,886		48,934
Interest	11,007		12,089
Others	48,878		36,844

Ordinary income	22,282		20,183

Extraordinary gain	63,140		68,891
Gain on sale of affiliated companies’ common stock	41,874		—
Gain on sale of investments in securities	11,895		—
Gain on sale of land	9,369		7,029
Gain on sale of affiliated companies’ common stock and investments in securities	—		61,861
Extraordinary loss	66,140		10,155
Extraordinary loss on restructuring charges	46,258		—
Loss on impairment of assets	19,882		—
Impairment loss on investments and securities	—		10,155

Net income before income taxes	19,281		78,918
Income taxes
Current	(6,961	)	(61,207	)
Deferred	15,898		100,014

Net income	10,344		40,111
Unappropriared retained earnings at the beginning of the period	37,348		37,695
Interim dividends paid	18,138		9,894
Transferred retained earnings associated with corporate split	—		972

Unappropriated retained earnings at the end of the period	29,554		68,885

Notes:

(1)

Extraordinary loss on restructuring charges of JPY46,258 million relates mainly to an impairment loss on shares held in Fujitsu Hitachi Plasma Display Limited, an affiliated company engaging in plasma display panel operations, and expenses associated with the implementation of measures such as business reorganization, realignment and streamlining to restructure digital media operations in Japan. The figure consists of JPY36,856 million of loss on restructuring of affiliated companies and JPY7,564 million of special termination benefits, etc.

(2)

Loss on impairment of assets

(i)

Summary of long-lived assets or group of long-lived assets which recognized impairment loss


Use	Category	Location
Long-lived assets to be held and used	Land, buildings, software, etc.	Suminoe-ku, Osaka Ebina, Kanagawa Other
Long-lived assets to be sold	Land, building, machinery, tools and equipment	Tsuzuki-ku, Yokohama Iwaki, Fukushima Suminoe-ku, Osaka
Long-lived assets to be abandoned	Land, building, machinery, tools and equipment	Totsuka-ku, Yokohama Kokubu, Kagoshima

(ii)

Reason to recognize loss on impairment of assets

The Company recognized the impairment loss because: irrecoverable amounts for entity-wide long-lived assets that are now designated for leasing are estimated; market price of long-lived assets to be abandoned and long-lived assets to be sold declines; irrecoverable amounts for investments in some long-lived assets to be held and used are estimated due to declining of profitability.

(iii)

Amount of impairment loss


Buildings		JPY6,535 million
Machinery		JPY191 million
Tools and equipment		JPY616 million
Land		JPY11,740 million
Software		JPY703 million
Other		JPY94 million
Total		JPY19,882 million

(iv)

Method of grouping long-lived assets

Grouping of assets are principally based on either division or place of business.

(v)

Calculation method of recoverable amounts

Calculation of recoverable amounts for long-lived assets to be held and used is based on net sales price or value in use, whichever higher, and the discount rate for calculating value in use ranges from 3.5% to 6.5%. Calculation of recoverable amounts for long-lived assets to be abandoned and long-lived assets to be sold is based on net sales price.


(3)	Sales to affiliated companies	JPY881,688 million
	Purchases from affiliated companies	JPY1,590,920 million
	Non-operating transactions with affiliated companies	JPY117,222 million
(4)	Net income per share	JPY3.12

7. Appropriation of Retained Earnings

Appropriation of Retained Earnings


		Yen
Unappropriated retained earnings at the end of the period		29,554,751,659
Reversal of reserve for software program development		5,427,624,794
Reversal of reserve for special depreciation		258,237,366
Reversal of reserve for advanced depreciation of fixed assets		304,787,158
Reversal of special reserve		20,000,000,000
Total		55,545,400,977
Unappropriated retained earnings disposed of:
Cash dividends (JPY5.50 per share)		18,323,672,587
Unappropriated retained earnings carried forward to the following period		37,221,728,390

Notes:

(1)	The amount of cash dividends is calculated after deducting 36,549,222 shares of treasury stock.

(2)	Reserve for software program development, reserve for special depreciation and reserve for advanced depreciation of fixed assets are made in accordance with the Special Taxation Measurement Law.

Policy and Reasons of Appropriation of Retained Earnings

The Company’s dividend policy is to ensure the stable growth of dividends and to ensure the availability of sufficient internal funds for capital investment and R&D that are essential for maintaining competitiveness and improving profitability based on the Company’s medium- and long-term business plans. The Company believes that the repurchase of its shares should be undertaken, when necessary, as part of its policy on distribution to shareholders to complement the dividend payout. Such action will be taken by the Company based on a consideration of market conditions, its future capital requirement and other relevant factors.

For the 136th business term, the Company decided to pay the year-end dividend of 5.5 yen per share, taking into account various factors including its financial position, profit level and payout ratio, etc. The Company considers that it has enough funds for the planned capital investment and R&D in its focusing businesses and that the equity ratio keeps targeted level, although net income on unconsolidated basis sharply declined from the preceding year.

The Company paid the interim dividend of 5.5 yen per share on December 7, 2004.

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

INDEPENDENT AUDITORS’ REPORT

May 18, 2005

To	Mr. Etsuhiko Shoyama, President and Chief Executive Officer

Hitachi, Ltd.

Ernst & Young ShinNihon

Shitei Shain

Gyomu Shikko Shain CPA Hideo Doi

Shitei Shain

Gyomu Shikko Shain CPA Yoshikazu Aoyagi

Shitei Shain

Gyomu Shikko Shain CPA Naomitsu Hirayama

We have audited the consolidated balance sheet and the consolidated statement of operations of Hitachi, Ltd. for the 136th business year ended March 31, 2005 for the purpose of reporting under Article 21-32, paragraph 2 of the Law for Special Exceptions to the Commercial Code Concerning Audit, etc. of Kabushiki-Kaisha. Management of the Company is responsible for preparing such consolidated financial statements and our responsibility is to express our opinion thereon from an independent standpoint.

Our audit was conducted in accordance with auditing standards generally accepted in Japan. The auditing standards require us to obtain reasonable assurance whether any material misstatement exists in the consolidated financial statements or not. Our audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements. Our audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall consolidated financial statement presentation. We consider that as a result of our audit, we have obtained reasonable basis for expressing our opinion. The auditing procedures also include those considered necessary for the subsidiaries.

In our opinion, the above consolidated financial statements fairly present the financial position and the results of operations of the Company and its consolidated subsidiaries in conformity with related laws, regulations and the Articles of Incorporation of the Company.

We have no interest in the Company which should be disclosed pursuant to the provision of the Certified Public Accountants Law.

9. Transcript of Audit Committee’s Audit Report on Consolidated Financial Statements

AUDIT REPORT ON CONSOLIDATED FINANCIAL STATEMENTS

We, the Audit Committee of the Company, audited the consolidated balance sheet and the consolidated statement of operations of the Company (hereinafter referred to as the “Consolidated Financial Statements”) during the 136th business term from April 1, 2004 to March 31, 2005. As a result, we hereby report as follows:

1. Method of Audit in Outline

We monitored and examined, in accordance with the audit policy, assignment of audit duties, etc., as determined by the Audit Committee, the Consolidated Financial Statements, by receiving reports or hearing from the Executive Officers, etc. and from the Company’s Accounting Auditors.

2. Result of Audit

We are of the opinion that the method and results of the audit made by the Company’s Accounting Auditors, Ernst & Young ShinNihon, are appropriate.

May 19, 2005


		Audit Committee, Hitachi, Ltd.
		Yoshiki Yagi (Standing)
		Kotaro Muneoka (Standing)
		Ginko Sato
		Hiromichi Seya
		Toshiro Nishimura

Note:

Ms. Ginko Sato, Mr. Hiromichi Seya and Mr. Toshiro Nishimura are outside Directors who fulfill the qualification requirements as provided for in the proviso clause of Article 21-8.4 of the the Law for Special Exceptions to the Commercial Code Concerning Audit, etc. of Kabushiki-Kaisha (hereinafter referred to as the “Special Exceptions Law”)

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

INDEPENDENT AUDITORS’ REPORT

May 18, 2005

To	Mr. Etsuhiko Shoyama, President and Chief Executive Officer

Hitachi, Ltd.

Ernst & Young ShinNihon

Shitei Shain

Gyomu Shikko Shain CPA Hideo Doi

Shitei Shain

Gyomu Shikko Shain CPA Yoshikazu Aoyagi

Shitei Shain

Gyomu Shikko Shain CPA Naomitsu Hirayama

We have audited the balance sheet, the statement of operations, the business report, the statement of proposed appropriation of retained earnings, and the related schedules of Hitachi, Ltd. for the 136th business year ended March 31, 2005 for the purpose of reporting under Article 21-26, paragraph 4 of the Law for Special Exceptions to the Commercial Code Concerning Audit, etc. of Kabushiki-Kaisha. With respect to the aforementioned business report and the supporting schedules, our audit was limited to those matters based on the accounting records of the Company and subsidiaries. Management of the Company is responsible for preparing such financial statements and their supporting schedules and our responsibility is to express our opinions thereon from an independent standpoint.

Our audit was conducted in accordance with auditing standards generally accepted in Japan. The auditing standards require us to obtain reasonable assurance whether any material misstatement exists in the financial statements and their supporting schedules or not. Our audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We consider that as a result of our audit, we have obtained reasonable basis for expressing our opinions. The auditing procedures also include those considered necessary for the subsidiaries.

In our opinion,

(1)

the balance sheet and the statement of operations fairly present the financial position and the results of operations of the Company in conformity with related laws, regulations and the Articles of Incorporation of the Company; as stated in the note 13 to the balance sheet as of March 31, 2005, the Company adopted the “Accounting Standard on Impairment of Fixed Assets” (Business Accounting Council, August 9, 2002) and the Guideline for Applying the Accounting Standard No. 6, “Guideline for Applying Accounting Standard on Impairment of Fixed Assets” (Accounting Standards Board of Japan, October 31, 2003) from this fiscal year; this change is appropriate, as an adoption of the above Accounting Standard is permitted from the fiscal year ended March 31, 2004,

(2)

the business report, as far as the accounting data included such report are concerned, presents fairly the status of the Company in conformity with related laws, regulations and the Articles of Incorporation of the Company,

(3)

the statement of proposed appropriation of retained earnings has been prepared in conformity with related laws, regulations and the Articles of Incorporation of the Company, and

(4)

the supporting schedules, as far as the accounting data included in such schedules are concerned, have nothing to be pointed out pursuant to the provisions of the Commercial Code.

We have no interest in the Company which should be disclosed pursuant to the provision of the Certified Public Accountants Law.

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

AUDIT REPORT

We, the Audit Committee of the Company, audited the performance by Directors and Executive Officers of their duties during the 136th business term from April 1, 2004 to March 31, 2005. As a result, we hereby report as follows:

1. Method of Audit in Outline

We monitored and examined the contents of the resolutions of the Board of Directors concerning the matters as listed in Article 21-7, paragraph 1, item 2 of the “Law Concerning Special Exceptions to the Commercial Code Concerning Audit, etc. of Kabushiki-Kaisha” (hereinafter referred to as the “Special Exceptions Law”) and Article 193 of the Enforcement Regulations of the Commercial Code of Japan and the system in general concerning the internal control of the Company established thereunder, and in accordance with the audit policy, assignment of audit duties, etc., as determined by the Audit Committee and in collaboration with the relevant departments, attended important meetings, received reports or heard from the Directors, Executive Officers, etc. on matters concerning the execution of their duties, inspected important decision documents, etc., made investigation into the state of activities and property at the head office and principal business offices of the Company, and received reports or heard from the subsidiaries on their business operations and made investigation into the state of their activities and property when necessary. In addition, we received from the Company’s Accounting Auditors reports on and accounts of their audit and examined the financial statements and the supporting schedules based on such reports and accounts.

With respect to competitive transactions by Directors or Executive Officers, transactions involving conflicting interests between Directors or Executive Officers and the Company, gratuitous offering of proprietary profits by the Company, transactions not customary in nature between the Company and its subsidiaries or shareholders, acquisition and disposition by the Company of its shares, etc., we, in addition to the aforementioned method of audit, required Directors or Executive Officers, etc. to render reports on and made a full investigation into the state of any transaction in question, whenever necessary.

2. Results of Audit

We are of the opinion:

(1)	that the contents of the resolutions of the Board of Directors concerning the matters as listed in Article 21-7, paragraph 1, item 2 of the Special Exceptions Law and Article 193 of the Enforcement Regulations of the Commercial Code of Japan are appropriate;

(2)	that the method and results of the audit made by the Company’s Accounting Auditors, Ernst & Young ShinNihon are proper;

(3)	that the business report fairly presents the state of the Company in accordance with the law, regulations and the Articles of Incorporation;

(4)	that the proposition relating to the appropriation of retained earnings has nothing to be pointed out in the light of the state of property of the Company and other circumstances;

(5)	that the supporting schedules fairly present the matters to be stated therein and contain nothing to be pointed out; and

(6)	that in connection with the performance by Directors or Executive Officers of their duties, including the subsidiaries’ affairs, no dishonest act or material fact of violation of laws, regulations or the Articles of Incorporation exists.

With respect to competitive transactions by Directors or Executive Officers, transactions involving conflicting interests between Directors or Executive Officers and the Company, gratuitous offering of proprietary profits by the Company, transactions not customary in nature between the Company and its subsidiaries or shareholders, acquisition and disposition by the Company of its shares, etc., we find no breach by Directors and Executive Officers of their duties.

May 19, 2005


		Audit Committee, Hitachi, Ltd.
		Yoshiki Yagi (Standing)
		Kotaro Muneoka (Standing)
		Ginko Sato
		Hiromichi Seya
		Toshiro Nishimura

Note:

(Supplementary Information on Consolidated Basis)

Percentage to Total Revenues and Operating Income by Industry Segment


	Year ended March 31, 2005
	Revenues		Operating Income
Information & Telecommunication Systems	21	%	21	%
Electronic Devices	12		12
Power & Industrial Systems	24		23
Digital Media & Consumer Products	12		3
High Functional Materials & Components	14		28
Logistics, Services & Others	12		3
Financial Services	5		10

Total	100	%	100	%

Note:

The calculation of the percentage to total revenues and operating income by industry segment is on the basis including intersegment transactions and excluding corporate items and eliminations.

Revenues by Market


	Years ended March 31
	2004(A)	2005(B)			(B) / (A)
	(Billions of yen)		Percentage to total
Domestic revenues	5,654.8	5,749.6	64	%	102	%
Overseas revenues
Asia	1,212.8	1,406.8	15		116
North America	873.2	901.8	10		103
Europe	655.8	709.7	8		108
Other Areas	235.6	258.9	3		110
Subtotal	2,977.5	3,277.4	36		110

Total	8,632.4	9,027.0	100		105

Five-Year Summary


	Years ended March 31
	2001		2002		2003		2004		2005
	(Billions of yen)
Overseas revenues	2,625.6		2,549.1		2,645.2		2,977.5		3,277.4
Percentage to total revenues	31	%	32	%	32	%	34	%	36	%
Capital investment (excluding leasing assets)	541.1		414.1		328.4		296.1		382.1
Capital investment (leasing assets)	429.9		442.1		459.0		520.3		577.4
R&D expenditure	435.5		415.4		377.1		371.8		388.6
Stockholders’ equity per share (yen)	857		690		551		657		693
Return on equity	3.6	%	-18.7	%	1.3	%	0.8	%	2.3	%

Note:

The calculation of the return on equity is based on the average of the stockholders’ equity at the beginning and at the end of each fiscal year.

(Translation)

Hitachi, Ltd.

VOTING RIGHT CARD

I hereby exercise my voting right as indicated below in respect of the proposals put forward at the 136th Ordinary General Meeting of Shareholders of Hitachi, Ltd. to be held on June 24, 2005. In the event of any continuation or adjournment of the General Meeting, my voting right shall be exercised in accordance with my intentions as signified by my entries herein.

Date: June , 2005

Registered seal

Number of voting rights held*

*	A shareholder is entitled to one voting right per 1,000 shares.


Notes:	-	The absence of a “FOR” or “AGAINST” indication in respect of any proposal will be treated by Hitachi, Ltd. as an affirmative vote.
	-	With respect to Item No. 2, if you wish to disapprove any of the nominees, please mark “FOR” and write the nominee’s number assigned to the person concerned in the parentheses provided. The nominees’ numbers are provided in the Agenda in the Notice of the Ordinary General Meeting of Shareholders.

DETACH HERE

Please read the following before filling the Voting Right Card.

1.	If you wish to attend the General Meeting of Shareholders, please bring the Voting Right Card with you on the day and present it at the entrance to the meeting hall.

2.	If you do not wish to attend the General Meeting of Shareholders, please circle “FOR” or “AGAINST” in the column of each item, affix your seal in the space provided, detach and mail the card so as to be received by Hitachi, Ltd. on or before June 23, 2005.

Reference number of shareholder

Number of shares held

Number of shares in the share-register

Number of shares in the beneficiaries’ record