6-K 1 d6k.txt 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 May 2003 Commission File Number 1-8320 ------ Hitachi, Ltd. ------------- (Translation of registrant's name into English) 6, Kanda-Surugadai 4-chome, Chiyoda-ku, Tokyo 101-8010, 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. Press release dated May 29, 2003 regarding acquisition of own shares from a subsidiary. 2. Press release dated May 30, 2003 regarding purchase of own shares. 3. Translation of the Notice of Holding the 134th 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 July 1, 2003 By /s/ Takashi Hatchoji ------------- -------------------------------------- Takashi Hatchoji Vice President and Executive Officer FOR IMMEDIATE RELEASE Contacts: Atsushi Konno Hitachi, Ltd. +81-3-3258-2056 atsushi_konno@hdq.hitachi.co.jp Hitachi to Acquire Its Own Shares from a Subsidiary Tokyo, May 29, 2003 --- Hitachi, Ltd. (NYSE:HIT / TSE:6501) announced that, pursuant to the provisions of Article 211-3 of the Commercial Code of Japan, it will acquire its own shares from a subsidiary as follows: 1. Name of subsidiary: Hitachi Unisia Automotive, Ltd. 2. Reason for acquisition: Upon the exchange of shares between Hitachi, Ltd. and Hitachi Unisia Automotive, Ltd. (Hitachi Unisia) on October 1, 2002, shares of Hitachi, Ltd. were allocated to shares of Hitachi Unisia held by such company. Hitachi, Ltd. will purchase such shares in conformity with the Commercial Code of Japan. 3. Details of acquisition: -Class of shares to be acquired: Common stock of Hitachi, Ltd. -Number of shares to be acquired: Up to 18,000 shares -Acquisition amount: Up to 9 million yen Hitachi, Ltd. will execute the purchase without delay. - ### - FOR IMMEDIATE RELEASE Contacts: Yoshiaki Segawa Hitachi, Ltd. +81-3-3258-2056 yoshiaki_segawa@hdq.hitachi.co.jp Purchase of Own Shares Tokyo, May 30, 2003 --- Hitachi, Ltd. (NYSE:HIT / TSE:6501) announced that, pursuant to the provisions of Article 210 of the Commercial Code of Japan, it purchased its own shares at the market as follows: 1. Class of shares purchased: Common stock of Hitachi, Ltd. 2. Aggregate number of shares purchased: 66,338,000 shares 3. Aggregate purchase amount: 29,934,896,000 yen 4. Period of purchase: May 1, 2003 through May 30, 2003 5. Method: Purchase at Tokyo Stock Exchange Reference Details of the resolution that was approved at the Ordinary General Meeting of Shareholders held on June 26, 2002 are as follows: (1) Class of shares to be acquired: Common stock of Hitachi, Ltd. (2) Aggregate number of shares to be acquired: Up to 300 million shares (3) Aggregate acquisition amount: Up to 300 billion yen Acquisition executed pursuant to the above resolution through May 30, 2003 (1) Aggregate number of shares acquired: 66,338,000 shares (2) Aggregate acquisition amount: 29,934,896,000 yen - ### - (Translation) Hitachi, Ltd. 6, Kanda-Surugadai 4-chome Chiyoda-ku, Tokyo May 31, 2003 To Our Shareholders Re: Notice of Holding the 134th Ordinary General Meeting of Shareholders ------------------------------------------------------------------------ Dear Sir/Madam: This is to inform you that the 134th Ordinary General Meeting of Shareholders of Hitachi, Ltd. (the "Company") will be held as follows: 1. Date Wednesday, June 25, 2003 at 10:00 a.m. 2. Location The Conference Room in Higashi-Ochanomizu Building 29, Kanda-Awajicho 2-chome, Chiyoda-ku, Tokyo 3. Agenda Reporting Matter Report on the Business Report and the Statement of Income for the 134th Business Term (from April 1, 2002 to March 31, 2003) and the Balance Sheet as of March 31, 2003 Matters to be resolved Item No. 1 Approval of the Plan for Appropriation of Retained Earnings for the 134th Business Term (from April 1, 2002 to March 31, 2003) Item No. 2 Authorization of the acquisition of its own shares Item No. 3 Amendment to the Articles of Incorporation Item No. 4 Election of 13 Directors due to expiration of the term of office of all Directors Item No. 5 Issuance of stock acquisition rights for the purpose of granting stock options Item No. 6 Grant of retirement allowances to the retiring Directors and Corporate Auditors Very truly yours, Etsuhiko Shoyama President and Director The Business Report, the Balance Sheet, the Statement of Income, the Plan for Appropriation of Retained Earnings, the Transcripts of Accounting Auditors' Audit Report and the Board of Corporate Auditors' Audit Report to be provided along with the Notice of Holding the General Meeting of Shareholders, reference information regarding exercise of right to vote on resolutions and the substance of agenda Item No. 2, 3 and 5 are included in the following pages. 1 Aggregate number of voting rights owned by shareholders 3,327,021 (As of March 31, 2003) Matters to be resolved Item No. 1 Approval of the Plan for Appropriation of Retained Earnings for the 134th Business Term (from April 1, 2002 to March 31, 2003) The Board of Directors hereby proposes the following plan in light of the Company's business results, future business operations and financial position. The year-end dividend of 3 yen per share, which is the same amount as the interim dividend, is proposed.

Plan for Appropriation of Retained Earnings -------------------------------------------------------------------------------------------- Yen Unappropriated retained earnings at the end of the period 54,640,456,216 Reversal of Reserve for software program development 1,529,366,094 Total 56,169,822,310 Unappropriated retained earnings disposed of: Cash dividends (JPY 3.00 per share) 10,094,724,627 Bonuses payable to Directors 200,000,000 Reserve for special depreciation 179,108,693 Special reserve 8,000,000,000 Unappropriated retained earnings carried forward to the following period 37,695,988,990 --------------------------------------------------------------------------------------------

Notes: (1) An interim dividend of JPY 3.00 per share was paid on December 3, 2002. (2) The amount of cash dividends is calculated after deducting 3,216,077 shares of treasury stock. (3) Reserve for software program development and Reserve for special depreciation are made in accordance with the Special Taxation Measurement Law. Item No. 2 Authorization of the acquisition of its own shares It is hereby proposed that in order to enable management to implement its capital policy with agility, the Company shall be authorized to acquire its own common stocks, not exceeding 300,000,000 shares, for the aggregate acquisition prices not exceeding JPY150,000 million during the period from the close of this Ordinary General Meeting of Shareholders to the close of the next Ordinary General Meeting of Shareholders, pursuant to the provisions of Article 210 of the Commercial Code of Japan. 2 Item No. 3 Amendment to the Articles of Incorporation Upon the enforcement of the "Law to Amend Part of the Commercial Code, etc." (2002 Law No. 44) of Japan as of April 1, 2003, a system of companies which adopt the Committee System has become available as a new option of corporate organization. This is a new corporate system that allows a company to establish within its board of directors nominating, audit and compensation committees, a majority of the members of each of which must be outside directors, and to have executive officers responsible for execution of business of the company. Under the new system, the board of directors can delegate the power of deciding business operations to executive officers to a large extent, while it focuses on the functions of decision-making of fundamental management policies and supervision of execution of business. Such company is not allowed to have corporate auditors and instead, the audit committee is responsible for auditing functions. With the aim of clearing the way for much speedier management with the strict separation of execution of business and supervision thereof and simultaneously materializing fair and highly transparent management, the Company intends to adopt the Committee System. For that purpose, as well as to follow the Commercial Code as amended, the Company hereby proposes that required amendment be made to the Articles of Incorporation, as described below: 1. Amendment relating to adoption of the Committee System The provision to apply statutory provisions concerning a company which adopts the Committee System will be instituted in the Articles of Incorporation (Proposed Article 3). Upon adoption of the Committee System, the Board of Directors will be authorized to determine dividends in principle and remuneration and retirement allowances for Directors and Executive Officers will be determined by the Compensation Committee. The term of office of Directors will be one year and consequently, the proposition for the election of Directors will be submitted annually to the ordinary General Meeting of Shareholders. As a result of such adoption of the Committee System, only the Chairman of the Board will be a Director with specific title (Proposed Article 20) and the title of President will be redefined as a title attached to an Executive Officer (Proposed Article 28). The number of Directors will be reduced from not more than 40 to not more than 20 (Proposed Article 17). As such company is not allowed to have Corporate Auditors, the provisions of Section 3 of the existing Articles of Incorporation that will become inapplicable will be deleted, while the provisions of the committees to be established as new corporate organs (Proposed Article 24 and Article 25) and the provisions of Executive Officers (Proposed Section 3) will be instituted. In order to enable Directors and Executive Officers to fully enact their expected roles in performing their duties, the provisions to exempt Directors and Executive Officers, by the resolution of the Board of Directors, from liabilities to the Company to the extent as provided for in laws or regulations will be rearranged and the provision to allow the Company to enter into an agreement to limit liabilities of any outside Director to the Company to a specified amount will be instituted (Proposed Article 22 and Article 29). The existing provisions applicable to the Directors and Corporate Auditors prior to the adoption of the Committee System will be moved to the Supplementary Provisions to maintain the effect thereof. The Board of Corporate Auditors with the unanimity of all Corporate Auditors has consented to the submission of this proposition for such amendment. 2. Other amendment The provision will be amended to introduce a system of further purchase of less-than-one-unit shares (Proposed Article 7). Since the head office will be moved, the provision will be amended to allow the Company to convene a General Meeting of Shareholders in a ward, or ku of Tokyo for flexibility in fixing the place of such meeting (Proposed Article 12). 3

------------------------------------------------------------------------------------------------------------------------------------ Currently in Force Proposed Amendment (underlined) Reason for Amendment ------------------------------------------------------------------------------------------------------------------------------------ (to be established) Article 3. (Provision of company which Pursuant to the Commercial Code as - --------------------------- amended, the Company intends to institute adopts the Committee System) a provision in the Articles of ---------------------------- Incorporation to subject itself to the The Company shall subject special exceptions for a company which ------------------------- adopts the Committee System. itself to the special exceptions -------------------------------- as provided for in Chapter II, ------------------------------ Section 4 of the Law for ------------------------ Special Exceptions to the -------------------------- Commercial Code Concerning -------------------------- Audit, etc. of Kabushiki-Kaisha ------------------------------- (the "Special Exceptions Law") ------------------------------ of Japan. --------- ------------------------------------------------------------------------------------------------------------------------------------ Article 3 to Article 5. Article 4 to Article 6. The Company intends to change the (provisions omitted) - - numbering of these Articles by increasing (provisions omitted) one number each. ------------------------------------------------------------------------------------------------------------------------------------ Article 6. (Number of shares to constitute Article 7. (Number of shares to constitute Pursuant to the establishment of a system one unit and nonissuance of - of further purchase of less-than-one- share certificates evidencing one unit, etc.) unit shares by the Commercial Code as less-than-one-unit shares) --- amended,the Company intends to introduce The number of shares to The number of shares to such system to allow the Company to sell constitute one unit of shares constitute one unit of shares its own shares upon request from any of the Company shall be 1,000 of the Company shall be 1,000 holder of less-than-one-unit shares. shares. shares. The Company shall not issue The Company shall not issue share certificates evidencing share certificates evidencing less-than-one-unit shares. less-than-one-unit shares. Any shareholder (including -------------------------- beneficiary; the same applies ----------------------------- hereinafter) who holds ---------------------- less-than-one-unit shares of ---------------------------- the Company shall be entitled ----------------------------- to request the Company to sell ------------------------------ the number of shares that will, ------------------------------- together with such less-than- ----------------------------- one-unit shares, constitute a ----------------------------- full unit of shares. -------------------- ------------------------------------------------------------------------------------------------------------------------------------ Article 7. (Transfer agent) Article 8. (Transfer agent) Pursuant to the establishment of a system The Company shall have a - to invalidate share certificates by the transfer agent in respect of The Company shall have a Commercial Code as amended, the Company shares. transfer agent in respect of intends to clearly specify the place to The share register and the shares. keep the register of loss of share beneficiaries' record of the The share register, the certificates of the Company in the Company shall be kept at the beneficiaries' record and the Articles of Incorporation. business office of the transfer ------- agent. register of loss of share The transfer agent mentioned in ------------------------- the first paragraph shall certificates of the Company handle for the Company the ------------ registration of the transfer of shall be kept at the business shares and other business office of the transfer agent. relating to shares. The transfer agent mentioned in The provisions of the foregoing the first paragraph shall paragraphs shall apply with handle for the Company the respect to debentures. registration of the transfer of shares and other business relating to shares. The provisions of the foregoing paragraphs shall apply with respect to debentures. ------------------------------------------------------------------------------------------------------------------------------------ Article 8. (Share Handling Regulations) Article 9. (Share Handling Regulations) Since it will be stipulated in Article 7, In addition to what is provided - as amended, of the Articles of in laws, regulations or these In addition to what is provided Incorporation that the term shareholder Articles of Incorporation, the in laws, regulations or these shall include beneficiary, the Company denominations of share Articles of Incorporation, the intends to delete the description of certificates of the Company and denominations of share beneficiary from this Article and also registration of the transfer of certificates of the Company and authorize the Executive Officer appointed shares of the Company, registration of the transfer of by the Board of Directors to establish registration of rights of shares of the Company, the Share Handling Regulations. pledges, declaration of registration of rights of property in trust, notices from pledges, declaration of shareholders (including property in trust, notices from beneficiaries hereinafter), shareholders, reissue of share reissue of share certificates, certificates, handling of handling of exercise of voting exercise of voting rights and rights and other rights of other rights of shareholders by shareholders by electromagnetic electromagnetic methods and methods and other matters other matters relating to the relating to the handling of handling of shares shall be shares shall be governed by the governed by the Share Handling Share Handling Regulations Regulations established by the established by the Board of --- Directors. Executive Officer authorized by ------------------------------- the Board of Directors. ----------------------- ------------------------------------------------------------------------------------------------------------------------------------

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------------------------------------------------------------------------------------------------------------------------------------ Currently in Force Proposed Amendment (underlined) Reason for Amendment ------------------------------------------------------------------------------------------------------------------------------------ Article 9. Article 10. The Company intends to change -- the numbering of this Article (provision omitted) (provision omitted) by increasing one number. ------------------------------------------------------------------------------------------------------------------------------------ Article 10. (Record date and closing of share Article 11. (Record date) Since the Company does not use register) -- the system of closing of the share register, the Company The Company shall treat the The Company shall treat the shareholders intends to delete paragraph 3. shareholders as of the date of as of the date of the closing of accounts the closing of accounts for each for each business term as shareholders business term as shareholders entitled to exercise the rights of entitled to exercise the rights of shareholders at the ordinary General shareholders at the ordinary Meeting of Shareholders for such business General Meeting of Shareholders term. for such business term. In addition to the preceding In addition to the preceding paragraph, paragraph, if it is deemed if it is deemed necessary, the Company necessary, the Company may, by may, by giving public notice in advance, giving public notice in advance, by resolution of the Board of Directors, by resolution of the Board of treat the shareholders or pledgees as of Directors, treat the shareholders a certain date and hour as the or pledgees as of a certain date shareholders or pledgees entitled to and hour as the shareholders or exercise their rights. pledgees entitled to exercise their rights. If necessary, in the case mentioned in any of the preceding paragraphs, any alteration of the entries or records in the share register may be suspended for a certain period by giving public notice in advance, by resolution of the Board of Directors. ------------------------------------------------------------------------------------------------------------------------------------ Article 11. (Convening) Article 12. (Convening) Upon the adoption of the -- Committee System, the Company An ordinary General Meeting of An ordinary General Meeting of intends to change the convener Shareholders shall be convened in Shareholders shall be convened within of a General Meeting of June of each year and an ----- Shareholders from the extraordinary General Meeting of three months next following the date of President and Director to the Shareholders shall be convened --------------------------------------- President and Chief Executive whenever necessary by the closing of accounts of each year and an Officer and allow for President and Director. If the -------------------------------- flexibility in fixing the date President and Director is extraordinary General Meeting of and place to convene a General prevented from discharging his Shareholders shall be convened whenever Meeting of Shareholders. duties, such meeting shall be necessary, in a ward, or ku of Tokyo by convened by another Representative ---------------------------- Director in the order previously the President and Chief Executive fixed by the Board of Directors. --------------------------------- Officer in accordance with the ------------------------------ resolution of the Board of Directors. If ------------------------------------ the President and Chief Executive --------------------------------- Officer is prevented from discharging ------- his duties, such meeting shall be convened by another Executive Officer in ----------------- the order previously fixed by the Board of Directors. ------------------------------------------------------------------------------------------------------------------------------------ Article 12. (Chairmanship) Article 13. (Chairmanship) Upon the adoption of the -- Committee System, the Company Chairmanship of a General Meeting Chairmanship of a General Meeting of intends to change the of Shareholders shall be assumed Shareholders shall be assumed by the chairmanship of a General by the President and Director. If --- Meeting of Shareholders from the President and Director is President and Chief Executive Officer. the President and Director to prevented from discharging his ------------------------------------- the President and Chief duties, then another Director If the President and Chief Executive Executive Officer. shall act as such chairman in the --------------------------------- order previously fixed by the Officer is prevented from discharging Board of Directors. ------- his duties, then another person shall ------ act as such chairman in the order previously fixed by the Board of Directors. ------------------------------------------------------------------------------------------------------------------------------------ Article 13 to Article 14. Article 14 to Article 15. The Company intends to change -- -- the numbering of these (provisions omitted) (provisions omitted) Articles by increasing one number each. ------------------------------------------------------------------------------------------------------------------------------------

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------------------------------------------------------------------------------------------------------------------------------------ Currently in Force Proposed Amendment (underlined) Reason for Amendment ------------------------------------------------------------------------------------------------------------------------------------ Article 15. (Minutes) Article 16. (Minutes) Under the Committee System, -- Executive Officers present at a With respect to the proceedings With respect to the proceedings at a General Meeting of Shareholders at a General Meeting of General Meeting of Shareholders, are required to affix their Shareholders, minutes shall be minutes shall be prepared entering signatures to the minutes. Hence, prepared entering or recording or recording therein the general the Company intends to make therein the general proceedings proceedings and the resultant required amendment to that effect. and the resultant actions taken actions taken thereat, and such thereat, and such minutes shall minutes shall be kept at the Company be kept at the Company after after the chairman, the Directors the chairman and the Directors - present have affixed their names and the Executive Officers present and seals or their electronic -------------------------- signatures thereto. have affixed their names and seals or their electronic signatures thereto. ------------------------------------------------------------------------------------------------------------------------------------ Section 2. Directors and Board of Section 2. Directors, Board of Directors and Upon the adoption of the Committee Directors - --- System, the Company intends to Committees change the title of this section ---------- and establish provisions concerning the Committees. ------------------------------------------------------------------------------------------------------------------------------------ Article 16. (Number) Article 17. (Number) Upon the adoption of the Committee -- System, the Company intends to The Company shall have not more The Company shall have not more decrease the maximum limit of the than 40 Directors. than 20 Directors. number of Directors. -- ------------------------------------------------------------------------------------------------------------------------------------ Article 17. Article 18. The Company intends to change the -- numbering of this Article by (provisions omitted) (provisions omitted) increasing one number. ------------------------------------------------------------------- ---------------------------------------------------------------- Article 18. (Term of office) Article 19. (Term of office) The Commercial Code as amended The term of office of Directors -- provides that the term of office shall expire at the close of The term of office of Directors of directors under the Committee the ordinary General Meeting of shall expire at the close of the System shall be one year. Hence, Shareholders relating to the ordinary General Meeting of the Company intends to make last closing of accounts within Shareholders relating to the last amendment to this Article to that two years after their closing of accounts within one year effect. assumption of office; provided, -------- however, that the term of after their assumption of office; office of those Directors who provided, however, that the term of have newly assumed office office of those Directors who while the other Directors are have newly assumed office while the still in office shall be for other Directors are still in office the remaining balance of the shall be for the remaining balance term of office of the other of the term of office of the other Directors presently in office. Directors presently in office. ------------------------------------------------------------------------------------------------------------------------------------ Article 19. (Representative Directors) Since a company which adopts the Representative Directors shall (to be deleted) Committee System is not subject to be selected by resolution of the provisions concerning the Board of Directors. Representative Directors, the Company intends to delete this provision. ------------------------------------------------------------------- ---------------------------------------------------------------- Article 20. (Chairman of the Board, Vice Article 20. (Chairman of the Board) Upon the adoption of the Committee Chairman of the Board and By resolution of the Board of System, the Company intends to President) Directors, a Chairman of the Board alter the management system and By resolution of the Board of ----------------------- abolish the titles of Directors Directors, a President and shall be selected. except a Chairman of the Board. Director shall be selected ----------------- and for reasons of the Company's operation, a Chairman of the Board and a Vice Chairman of the Board may be selected; provided that the President and Director must be a Representative Director. ------------------------------------------------------------------------------------------------------------------------------------

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------------------------------------------------------------------------------------------------------------------------------------ Currently in Force Proposed Amendment (underlined) Reason for Amendment ------------------------------------------------------------------------------------------------------------------------------------ Article 21. (Executive Vice Presidents, (to be deleted) Upon the adoption of the Committee System, Senior Vice Presidents and the Company intends to alter the Executive Managing Directors) management system and abolish the titles For reasons of its operation, of Directors except a Chairman of the the Company may have one or Board. more Executive Vice Presidents and Directors, Senior Vice Presidents and Directors, and Executive Managing Directors, respectively, by resolution of the Board of Directors. ------------------------------------------------------------------------------------------------------------------------------------ Article 22. (Convening of meeting of the Article 21. (Convening of meeting of the Since a company which adopts the Committee Board of Directors) -- System is not allowed to have corporate Notice for convening a meeting Board of Directors) auditors, the Company intends to delete of the Board of Directors Notice for convening a meeting the description of the Corporate Auditors. shall be dispatched to each of the Board of Directors Director and each Corporate shall be dispatched to each Auditor one week prior to the Director one week prior to the date of the meeting; provided, date of the meeting; provided, however, that in case of however, that in case of urgency, such period may be urgency, such period may be shortened and such notice may shortened and such notice may be dispatched three days prior be dispatched three days prior to the date of the meeting. the to the date of the meeting. ------------------------------------------------------------------------------------------------------------------------------------ Article 23. (Remuneration) (to be deleted) Since a company which adopts the Committee The remuneration and System must decide the matters regarding retirement allowance for remuneration including retirement Directors shall be decided at allowance for Directors at its a General Meeting of Compensation Committee, the Company Shareholders. intends to delete this provision. ------------------------------------------------------------------------------------------------------------------------------------ Article 24. (Exemption of Directors from Article 22. (Exemption of Directors from In accordance with the purpose of the liabilities) -- Commercial Code as amended, the Company The Company may, by resolution liabilities) intends to have a provision to exempt of the Board of Directors, The Company may, by resolution Directors from liabilities to the Company exempt any Director from of the Board of Directors, by resolution of the Board of Directors, liabilities in respect of any exempt any Director from to enable Directors to fully play their act as provided in Article liabilities as provided in roles expected of them in performing their 266, paragraph 1, item 5 of -------------- duties after adopting the Committee the Commercial Code of Japan Article 21-17, paragraph 1 of System. The Company also intends to have a to the extent as provided in ----------------------------- provision to enable the Company to enter laws or regulations. the Special Exceptions Law to into an agreement to limit liabilities of The Company may enter into an -------------------------- outside Directors in advance, to secure agreement with any outside the extent as provided in laws well-qualified persons as outside Director to limit liabilities or regulations. Directors. The Company intends to move the of such Director in respect of The Company may enter into an exemption of Directors from liabilities in any act as provided in Article agreement with any outside respect of any act prior to the adoption 266, paragraph 1, item 5 of Director to limit liabilities of the Committee System under Article 24, the Commercial Code of Japan of such Director as provided paragraph 1 of the existing Articles of to the aggregate amount as ----------- Incorporation to Article 1 of provided in the items of in Article 21-17, paragraph 1 Supplementary Provisions. paragraph 19 of the said ----------------------------- Article of the Commercial of the Special Exceptions Law Code. ----------------------------- to the aggregate amount as provided in the items of paragraph 19 of Article 266 of ----------- the Commercial Code, which are --------- applied by paragraph 5 of the ----------------------------- said Article of the Special --------------------------- Exceptions Law. --------------- ------------------------------------------------------------------------------------------------------------------------------------

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------------------------------------------------------------------------------------------------------------------------------------ Currently in Force Proposed Amendment (underlined) Reason for Amendment ------------------------------------------------------------------------------------------------------------------------------------ Article 25. Article 23. The Company intends to change the -- numbering of this Article by decreasing (provision omitted) (provision omitted) two numbers. ------------------------------------------------------------------------------------------------------------------------------------ (to be established) Article 24. (Committees) The Company intends to clearly specify the -- ------------ Committees to be set up as new organs in The Company shall have the the Articles of Incorporation. -------------------------- Nominating Committee, the ------------------------- Audit Committee and the ----------------------- Compensation Committee ---------------------- --------------------------------------------------------------------------------------- Article 25. (Regulations of Committees) In accordance with the purpose of the -- --------------------------- Commercial Code as amended, the Company In addition to what is intends to establish a provision ---------------------- concerning establishment of committee provided by laws, regulations, regulations to operate each Committee. ------------------------------ these Articles of ----------------- Incorporation or by the Board ----------------------------- of Directors, the matters ------------------------- concerning each Committee ------------------------- shall be governed by the ------------------------ regulations thereof established ------------------------------- by each such Committee. ----------------------- ------------------------------------------------------------------------------------------------------------------------------------ Section 3. Corporate Auditors and Board of Since a company which adopts the Committee Corporate Auditors System is not allowed to have corporate auditors, the Company intends to delete the provisions concerning the Corporate ------------------------------------------ Auditors. Article 26. (Number) (to be deleted) The Company shall have not more than seven Corporate Auditors. ------------------------------------------ Article 27. (Term of office) The term of office of Corporate Auditors shall expire at the close of the ordinary General Meeting of Shareholders relating to the last closing of accounts within three years after their assumption of office; provided, however, that the term of office of a Corporate Auditor elected to fill a vacancy created by the retirement of another Corporate Auditor before the expiration of his term of office shall expire at the time the term of office of the retired Corporate Auditor would have expired. ------------------------------------------ Article 28. (Application of provisions relating to Directors) The provisions of the first paragraph of Article 17 and Article 23 shall apply, mutatis mutandis, with respect to Corporate Auditors. ------------------------------------------------------------------------------------------------------------------------------------ Article 29. (Exemption of Corporate (to be moved to Article 2 of Supplementary The Company intends to move the provision Auditors from liabilities) Provisions) concerning exemption of Corporate Auditors The Company may, by resolution from liabilities prior to the adoption of of the Board of Directors, the Committee System to Supplementary exempt any Corporate Auditor Provisions. from liabilities to the extent as provided in laws or regulations. ------------------------------------------------------------------------------------------------------------------------------------ Article 30. (Convening of meeting of the (to be deleted) Since a company which adopts the Committee Board of Corporate Auditors) System is not allowed to have corporate Notice for convening a meeting auditors, the Company intends to delete of the Board of Corporate the provision concerning the Board of Auditors shall be dispatched Corporate Auditors. to each Corporate Auditor one week prior to the date of the meeting; provided, however, that in case of urgency, such period may be shortened and such notice may be dispatched three days prior to the date of the meeting. ------------------------------------------------------------------------------------------------------------------------------------

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------------------------------------------------------------------------------------------------------------------------------------ Currently in Force Proposed Amendment (underlined) Reason for Amendment ------------------------------------------------------------------------------------------------------------------------------------ Article 31. (Regulations of the Board of (to be deleted) Since a company which adopts the Corporate Auditors) In addition to Committee System is not allowed what is provided by laws, regulations to have corporate auditors, the or these Articles of Incorporation, Company intends to delete the the matters concerning the Board of provision concerning the Board Corporate Auditors shall be governed of Corporate Auditors. by the Regulations of the Board of Corporate Auditors established by the Board of Corporate Auditors. ------------------------------------------------------------------------------------------------------------------------------------ (to be established) Section 3. Executive Officers The Company intends to institute ----------------------------- a section to provide for Executive Officers to be set up as new organs of the Company. ---------------------------------------------------------------------------- Article 26. (Number) A company which adopts the -------------------- Committee System shall have By resolution of the Board executive officers. The -------------------------- Company intends to establish a of Directors, the Company provision to allow it to have ------------------------ not more than 40 Executive shall have not more than Officers. ------------------------ 40 Executive Officers. ---------------------- ---------------------------------------------------------------------------- Article 27. (Term of office) The Company intends to provide ---------------------------- for the term of office of The term of office of Executive Officer. --------------------- Executive Officers shall ------------------------ expire at the close of the -------------------------- first meeting of the Board -------------------------- of Directors after the ---------------------- ordinary General Meeting ------------------------ of Shareholders relating ------------------------ to the last closing of ---------------------- accounts within one year ------------------------ after their assumption of ------------------------- office; provided, however, -------------------------- that the term of office of -------------------------- those Executive Officers ------------------------ who have newly assumed ---------------------- office while the other ---------------------- Executive Officers are ---------------------- still in office shall be ------------------------ for the remaining balance ------------------------- of the term of office of ------------------------ the other Executive ------------------- Officers presently in --------------------- office. ------- ---------------------------------------------------------------------------- Article 28. (President and Chief The Company intends to provide -------------------------------- for the matters concerning the Executive Officer) President and Chief Executive ------------------ Officer. By resolution of the Board -------------------------- of Directors, a President ------------------------- and Chief Executive ------------------- Officer shall be selected, -------------------------- provided that the ----------------- President and Chief ------------------- Executive Officer must be ------------------------- a Representative Executive -------------------------- Officer. -------- ---------------------------------------------------------------------------- Article 29. (Exemption of Executive The Company intends to establish ----------------------------------- a provision to exempt Executive Officers from liabilities) Officers from liabilities to -------------------------- the Company by resolution of the The Company may, by Board of Directors, to enable ------------------- Executive Officers to fully play resolution of the Board of their roles expected of them in -------------------------- performing their duties. Directors, exempt any --------------------- Executive Officer from ---------------------- liabilities as provided in -------------------------- Article 21-17, paragraph 1 -------------------------- of the Special Exceptions ------------------------- Law to the extent as -------------------- provided in laws or ------------------- regulations. ----------- ------------------------------------------------------------------------------------------------------------------------------------ Article 32 to Article 33. Article 30 to Article 31. The Company intends to change (provisions omitted) -- -- the numbering of these Articles (provisions omitted) by decreasing two numbers each. ------------------------------------------------------------------------------------------------------------------------------------

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------------------------------------------------------------------------------------------------------------------------------------ Currently in Force Proposed Amendment (underlined) Reason for Amendment ------------------------------------------------------------------------------------------------------------------------------------ Article 34. (Dividends) Article 32. (Dividends) In a company which adopts the Dividends shall be paid to the -- Committee System, a proposition shareholders or registered pledgees as of Dividends shall be paid to for the appropriation of each date of closing of accounts after the the shareholders or retained earnings shall be close of the ordinary General Meeting of registered pledgees as of deemed to be approved at an Shareholders concerned. each date of closing of ordinary general meeting of If the dividends mentioned in the accounts. shareholders in principle when preceding paragraph are not received If the dividends mentioned in such proposition is approved by within three years from the date they the preceding paragraph are the board of directors. Hence, became due and payable, the Company shall not received within three the Company intends to stipulate be relieved of the obligation to pay such years from the date they that the timing of the payment dividends. became due and payable, the of dividends shall be determined Company shall be relieved of by resolution of the Board of the obligation to pay such Directors. dividends. ------------------------------------------------------------------------------------------------------------------------------------ Article 35. Article 33. The Company intends to change -- the numbering of this Article by (provisions omitted) (provisions omitted) decreasing two numbers. ------------------------------------------------------------------------------------------------------------------------------------ (to be established) Supplementary Provisions The Company intends to move the ------------------------ provisions of Article 24, Article 1. (Transitional measure paragraph 1 and Article 29 of -------------------------------- the existing Articles of regarding exemption of Directors from Incorporation to the ------------------------------------- Supplementary Provisions to liabilities) maintain the effect thereof. ------------ The Company may, by resolution of the ------------------------------------- Board of Directors, exempt any Director --------------------------------------- from liabilities in respect of any act -------------------------------------- prior to the close of the ordinary ---------------------------------- General Meeting of Shareholders relating ---------------------------------------- to the accounting period ended March 2003 ----------------------------------------- as provided in Article 266, paragraph 1, ---------------------------------------- item 5 of the Commercial Code of Japan to ----------------------------------------- the extent as provided in laws or --------------------------------- regulations. ------------ Article 2. (Transitional measure regarding ------------------------------------------ exemption of Corporate Auditors from ------------------------------------ liabilities) ------------ The Company may, by resolution of the ------------------------------------- Board of Directors, exempt any Corporate ---------------------------------------- Auditor from liabilities prior to the ------------------------------------- close of the ordinary General Meeting of ---------------------------------------- Shareholders relating to the accounting --------------------------------------- period ended March 2003 to the extent as ---------------------------------------- provided in laws or regulations. -------------------------------- ------------------------------------------------------------------------------------------------------------------------------------

On April 1, 2003, the Company deleted the supplementary provision concerning the effective date of Article 14, paragraph 2 (Method of adopting resolutions) of the Articles of Incorporation prior to the amendment. 10 Item No. 4 Election of 13 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 Directors be elected. Election of Directors shall not be made in accordance with cumulative voting, in conformity with the provision of the Articles of Incorporation of the Company. Candidates for Directors proposed by the Board of Directors are as follows. All candidates have agreed to take office as Directors assuming that they are elected at this Meeting. Mr. Toshiro Nishimura will take office upon the condition that he have permission from the First Tokyo Bar Association.

---------------------------------------------------------------------------------------------------------------------------- Outstanding Shares of Conflict Name Hitachi, Ltd. of No. (Date of Birth) Principal Occupation Brief Personal History Owned Interest ---------------------------------------------------------------------------------------------------------------------------- Representative Director 5/1958 Joined Hitachi, Ltd. shares Tsutomu Kanai Chairman of the Board and 6/1985 Executive Managing Director (Feb. 26, 1929) Director, Hitachi, Ltd. 6/1987 Senior Executive Managing 67,500 None President and Director 1 Representative Director, 6/1989 Executive Vice-President and Hitachi Research Institute Director 6/1991 President and Representative Director 4/1999 Chairman of the Board and Representative Director ---------------------------------------------------------------------------------------------------------------------------- Representative Director 4/1959 Joined Hitachi, Ltd. Etsuhiko Shoyama President and Director, 6/1991 Director (Mar. 9, 1936) Hitachi, Ltd. 6/1993 Executive Managing Director 6/1995 Senior Executive Managing 2 Director 50,000 None 6/1997 Executive Vice-President and Representative Director 4/1999 President and Representative Director ---------------------------------------------------------------------------------------------------------------------------- Representative Director 4/1960 Joined Hitachi, Ltd. Yoshiki Yagi Executive Vice President 6/1991 Director (Feb. 27, 1938) and Director, Hitachi, Ltd. 6/1993 Executive Managing Director 3 6/1997 Senior Executive Managing 64,250 None Director 4/1999 Executive Vice President and Representative Director ---------------------------------------------------------------------------------------------------------------------------- Representative Director 6/1961 Joined Hitachi, Ltd. Yoshiro Kuwata Executive Vice President 6/1993 Director (Sep. 1, 1936) and Director, Hitachi, Ltd. 6/1995 Executive Managing Director (General Manager, 6/1997 Senior Executive Managing Corporate Export Director 4 Regulation Division) 4/1999 Executive Vice President and 23,700 None Representative Director Representative Director Chairman of the Board and President, Hitachi High-Technologies Corporation ---------------------------------------------------------------------------------------------------------------------------- Corporate Auditor, 4/1961 Joined Hitachi, Ltd. Shigemichi Matsuka Hitachi, Ltd. 4/1999 Executive Vice President and 5 (May 19, 1937) Representative Director 31,000 None 4/2001 Director 6/2001 Corporate Auditor ---------------------------------------------------------------------------------------------------------------------------- Corporate Auditor, 4/1964 Joined Hitachi, Ltd. Kotaro Muneoka Hitachi, Ltd. 4/1999 Senior Vice President and 6 (Oct. 30, 1940) Director 21,000 None 4/2001 Director 6/2001 Corporate Auditor ----------------------------------------------------------------------------------------------------------------------------

11

---------------------------------------------------------------------------------------------------------------------------- Outstanding Shares of Conflict Name Hitachi, Ltd. of No. (Date of Birth) Principal Occupation Brief Personal History Owned Interest ---------------------------------------------------------------------------------------------------------------------------- President, Japan 4/1958 Joined Ministry of Labour shares Ginko Sato Association for the (currently Ministry of Health, (Jul. 6, 1934) Advancement of Working Labour and Welfare) Women 6/1985 Ministerial Councillor, Ministry of Labour 1/1986 Director-General, Women's Bureau, Ministry of Labour 7 7/1990 Assistant Minister of Labour 0 None 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 ---------------------------------------------------------------------------------------------------------------------------- Representative Director 4/1954 Joined Asahi Glass Company, Hiromichi Seya Chairman of the Board, Limited (Oct. 7, 1930) Asahi Glass Company, 3/1985 Director Limited 3/1987 Managing Director 3/1988 Representative Director Executive Vice President 8 3/1990 Representative Director Senior Executive Vice President 2,000 Note 1 3/1992 Representative Director President 6/1998 Representative Director Chairman & CEO 6/2002 Representative Director Chairman of the Board ---------------------------------------------------------------------------------------------------------------------------- Representative Director and 4/1957 Joined Yawata Iron & Steel Co., Akira Chihaya Chairman of the Board, Ltd. (currently NIPPON STEEL (Mar. 6, 1935) NIPPON STEEL CORPORATION CORPORATION) Representative Director 6/1987 Director and President, Tekko 6/1991 Managing Director 9 Kaikan Co., Ltd. 6/1995 Representative Director and 0 Note 2 Executive Vice President 4/1998 Representative Director and President 4/2003 Representative Director and Chairman of the Board ---------------------------------------------------------------------------------------------------------------------------- Attorney at Law 4/1961 Member of the First Tokyo Bar Toshiro Nishimura Association 10 (Apr. 10, 1933) 5/1966 Senior Partner of Nishimura & 0 None Partners ---------------------------------------------------------------------------------------------------------------------------- Director, Hitachi, Ltd. 4/1960 Joined Hitachi, Ltd. Hiroshi Kuwahara 6/1989 Director (Nov. 23, 1935) 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 11 Representative Director 29,600 None 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 ----------------------------------------------------------------------------------------------------------------------------

12

---------------------------------------------------------------------------------------------------------------------------- No. Name Principal Occupation Brief Personal History Outstanding Conflict (Date of Birth) Shares of of Hitachi, Ltd. Interest Owned ---------------------------------------------------------------------------------------------------------------------------- Director, Hitachi, Ltd. 4/1962 Joined Hitachi, Ltd. shares Takashi Kawamura 6/1995 Director (Dec. 19, 1939) 6/1997 Executive Managing Director 12 4/1999 Executive Vice President and 35,000 None Representative Director 4/2003 Director ---------------------------------------------------------------------------------------------------------------------------- Representative Director 4/1957 Joined Hitachi Sales Corporation Masayoshi Hanabusa Chairman of the Board and 8/1960 Joined Hitachi Credit (Oct. 10, 1934) Director, Hitachi Capital Corporation (currently Hitachi Corporation Capital Corporation) 6/1977 Director 13 6/1983 Executive Managing Director 5,050 Note 3 6/1987 Senior Executive Managing Director 6/1991 President and Representative Director 6/2001 Chairman of the Board and Representative Director ----------------------------------------------------------------------------------------------------------------------------

Notes: (1) Mr. Hiromichi Seya is the Representative Director and Chairman of the Board of Asahi Glass Company, Limited ("Asahi Glass"), with which the Company competes in the areas of manufacture and sale of electronic components, etc. Additionally, the Company has continuous transactions with Asahi Glass, including purchases of glass for use in LCDs etc. from Asahi Glass and leases of information systems to Asahi Glass. (2) Mr. Akira Chihaya is the Representative Director and Chairman of the Board of NIPPON STEEL CORPORATION ("NSC"), with which the Company competes in the areas of power and industrial systems, etc. Additionally, the Company has continuous transactions with NSC, including purchases of steel products of NSC through trading firms etc. and sales of industrial equipment to NSC. The Company has no relation of special interest with Tekko Kaikan Co., Ltd., for which Mr. Chihaya serves as Representative Director and President. (3) Mr. Masayoshi Hanabusa is the Representative Director and Chairman of the Board of Hitachi Capital Corporation ("Hitachi Capital"), with which the Company competes in the areas of cash loans etc. Additionally, the Company has continuous transactions with Hitachi Capital, including leases of manufacturing facilities etc. from Hitachi Capital and sales of computers etc. to Hitachi Capital. Furthermore, as of March 31, 2003, the Company had a deposit of JPY59.6 billion received from Hitachi Capital under the scheme of centralized management of funds within Hitachi Group. (4) Ms. Ginko Sato, Mr. Hiromichi Seya, Mr. Akira Chihaya and Mr. Toshiro Nishimura are candidates who fulfill the qualification requirements to be outside directors as provided for in Article 188.2.7-2 of the Commercial Code of Japan. 13 Item No. 5 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 Number of shares x Ratio of stock split or shares after = before adjustment consolidation adjustment 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 price 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 Amount Number new shares X to be paid of shares + to be issued per share already ---------------------------------------- Exercise Exercise issued Market Price per share Price after = Price before X before issue ---------------------------------------------------------- adjustment adjustment Number of Number of new shares already + shares to be issued issued

14 In the above formula, the number of its own shares 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 Exercise 1 Price = Price x ----------------------------------------- after before Ratio of stock split or consolidation adjustment adjustment 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. 15 Item No. 6 Grant of retirement allowances to the retiring Directors and Corporate Auditors It is proposed that retirement allowances be granted to the retiring Directors, Messrs. Yuushi Samuro, Kazuo Kumagai, Katsukuni Hisano, Kazuo Sato, Takao Matsui, Masaaki Hayashi, Isao Ono and Masaharu Sumikawa, who are retiring from their services as Directors at the close of this Meeting, and the retiring Corporate Auditors, Messrs. Shigemichi Matsuka, Tadashi Ishibashi, Kotaro Muneoka, Makoto Murata and Michio Mizoguchi, who are retiring from their services as Corporate Auditors at the close of this Meeting, as rewards for their contribution. As regards to these allowances, the Board of Directors proposes that the payments be made appropriately in accordance with the office regulations and the customs of the Company. The Board hopes that shareholders will delegate the authority to decide the amount, time and method of payment to the Compensation Committee to be established after adopting the Committee System. Their brief personal histories are shown below.

----------------------------------------------------------------------------------------- Name Brief Personal History ----------------------------------------------------------------------------------------- 6/1993 Director 6/1995 Executive Managing Director Yuushi Samuro 4/1999 Executive Vice President and Representative Director 4/2003 Director ----------------------------------------------------------------------------------------- 6/1993 Director 6/1997 Executive Managing Director Kazuo Kumagai 4/1999 Senior Vice President and Director 4/2001 Executive Vice President and Representative Director ----------------------------------------------------------------------------------------- 6/1997 Director 4/1999 Senior Vice President and Director Katsukuni Hisano 6/2002 Director (Not standing) 10/2002 Senior Vice President and Director 4/2003 Executive Vice President and Representative Director ----------------------------------------------------------------------------------------- Kazuo Sato 6/2001 Senior Vice President and Director 4/2003 Director ----------------------------------------------------------------------------------------- Takao Matsui 6/2001 Senior Vice President and Director ----------------------------------------------------------------------------------------- Masaaki Hayashi 6/2001 Senior Vice President and Director 4/2003 Director ----------------------------------------------------------------------------------------- Isao Ono 6/2002 Senior Vice President and Director ----------------------------------------------------------------------------------------- Masaharu Sumikawa 6/2002 Senior Vice President and Director ----------------------------------------------------------------------------------------- Shigemichi Matsuka 6/2001 Corporate Auditor ----------------------------------------------------------------------------------------- Tadashi Ishibashi 6/2001 Corporate Auditor ----------------------------------------------------------------------------------------- Kotaro Muneoka 6/2001 Corporate Auditor ----------------------------------------------------------------------------------------- Makoto Murata 6/2000 Corporate Auditor (Not standing) ----------------------------------------------------------------------------------------- Michio Mizoguchi 6/2000 Corporate Auditor (Not standing) -----------------------------------------------------------------------------------------

The Company is submitting a proposal that Mr. Shigemichi Matsuka and Mr. Kotaro Muneoka be elected as Directors (Item No. 4). Messrs. Kazuo Kumagai, Katsukuni Hisano, Takao Matsui, Isao Ono and Masaharu Sumikawa will assume offices as Executive Officers. Those persons' retirement allowances for the period after the close of this ordinary General Meeting of Shareholders will be decided by the Compensation Committee at their retirement. 16 Reporting Matter Report on the Business Report and the Statement of Income for the 134th Business Term (from April 1, 2002 to March 31, 2003) and the Balance Sheet as of March 31, 2003 1. Business Report (from April 1, 2002 to March 31, 2003) (1) General Business Results The Japanese economic climate remained harsh throughout the year under review. The positive effect of an upswing in exports, powered chiefly by demand from Asian countries, was more than offset by the absence of any substantial rebound in private-sector plant and equipment investment, a decline in public-sector investment and weak consumer spending. In response to this business environment, Hitachi moved determinedly forward with a transformation of the corporate business structure aimed at achieving a quick earnings turnaround. Results for the year under review were substantially affected by the split-off and transfer of a number of operations to subsidiaries. Orders received during the year declined 7% from the preceding year, to JPY2,984.8 billion, sales were down 12%, to JPY3,112.4 billion, and the year-end order backlog was JPY1,922.4 billion. Operating income amounted to JPY53.7 billion and ordinary income to JPY52.0 billion. Extraordinary gain of JPY92.1 billion and extraordinary loss of JPY63.1 billion were posted, the former consisting of JPY46.6 billion from the sale of real estate, JPY41.3 billion from the sale of subsidiaries' common stock and investments in securities and JPY4.2 billion from the transfer of businesses, and the latter consisting of impairment loss on investments and securities of JPY55.3 billion and loss on additional depreciation etc. of JPY7.7 billion. Taking these items into account, the net income figure came to JPY28.2 billion. Although the profit level was markedly better than in the preceding year, when the company posted an enormous loss, it is still far from satisfactory. Management is committed to making every effort to improve earnings still further. Measures Taken During the year under review, management sought to achieve an early earnings recovery and implement reforms toward establishing a corporate structure capable of realizing high profits in a severe business environment. Particular emphasis was placed on reorganizing the business portfolio and creating new businesses. One focus of the business restructuring effort was the hard disk drive business. The market for hard disk drives is expected to expand along with rising demand for higher capacity storages and ever-greater incorporation of digital technologies into home appliances. Therefore, in line with a decision to concentrate corporate resources on this sector as a core business of the Hitachi Group, the Company on December 31, 2002, acquired the hard disk drive operations of IBM. The business has been placed under the wing of a subsidiary that is now doing business on a global scale. Then, on April 1, 2003, the hard disk drive operations of Hitachi, Ltd. were separated and integrated with the subsidiary. Further, at the extraordinary General Meeting of Shareholders held on February 6, 2003, approval was obtained for a plan designed to secure a stable profit base in the semiconductor business by combining the system LSI-centered semiconductor operations of Hitachi and Mitsubishi Electric Corporation under a new jointly-owned company. The plan came to fruition on April 1, 2003, when the business was put in the hands of the newly-founded Renesas Technology Corp. In the pioneering of new businesses, special attention was given to the promising medical field, most notably to expansion of diagnostic and therapeutic equipment businesses. Advances during the year under review include the development of a blood glucose level tester that does not require blood sampling, establishment of "Personal Health Care Venture Company" that offers hospitals and patients services utilizing various types of test data, and launching of "Medical Strategy Council," also encompassing Group companies, that is working out a unified Hitachi Group business strategy in the medical care business. 17 In January 2003, Hitachi announced a fresh medium-term management plan, the "i.e.HITACHI Plan II," setting out key initiatives and management goals to be reached by the year 2005. The first "i.e.HITACHI Plan" formulated in November 1999, which came to a close at the end of the year under review, encountered more dramatic changes in the business environment than initially anticipated. As a result, it failed to fully attain its earnings objectives. The plan did, however, make solid progress in such areas as speedier decision-making and business structure improvement. Like its predecessor, the "i.e.HITACHI Plan II" also stresses Hitachi's Best Solutions Partner philosophy (of becoming the world's most reliable company in the eyes of customers seeking help with their problems) and the importance of responding nimbly to changes in the business environment. Under the new plan, this philosophy will be pursued through a range of programs whose common thread is concentration of corporate resources on key businesses and withdrawal from low-profit operations. In October 2002, it came to light that persons connected with the Company had in 1991 and 1992 taken part in inappropriate acts relating to periodic nuclear power plant inspections. These acts were totally inexcusable and we are sincerely sorry for the considerable anxiety they caused the Company's shareholders, other stakeholders and the general public. Management is taking every measure in its power to prevent a recurrence and restore confidence in the Company. Major nuclear power-related businesses operations, previously spread over the Company and its subsidiaries, are being consolidated within the Company under a system that clearly defines accountability. Business Results by Operating Sector

(Billions of yen) ------------------------------------------------------------------------------------------------------------ Operating Sector Orders Received Sales ----------------------------------------------------------------------------- 2001(A) 2002(B) (B)/(A) 2001(C) 2002(D) (D)/(C) ------------------------------------------------------------------------------------------------------------ Information & Telecommunication Systems 1,277.7 1,372.7 107% 1,408.9 1,440.0 102% ------------------------------------------------------------------------------------------------------------ Electronic Devices 498.8 492.3 99% 523.3 495.6 95% ------------------------------------------------------------------------------------------------------------ Power & Industrial Systems 926.2 862.0 93% 1,092.9 955.4 87% ------------------------------------------------------------------------------------------------------------ Digital Media & Consumer Products 490.6 257.6 53% 497.1 221.3 45% ------------------------------------------------------------------------------------------------------------ Total 3,193.5 2,984.8 93% 3,522.2 3,112.4 88% ------------------------------------------------------------------------------------------------------------

Note: (1) The businesses of each sector are set out in "(8) Main Products and Services." (2) In accordance with changes in the Company's organization, segmentation of some products is revised. (3) Since the Company separated the Instruments Group and the Semiconductor Manufacturing Equipment Group, which had been part of the Electronic Devices sector, on October 1, 2001, orders received and sales of the separated operations are not included in the Electronic Devices sector on and after such date. (4) Since the Company separated the Displays Group, which had been part of the Electronic Devices sector, on October 1, 2002, orders received and sales of the separated operation are not included in the Electronic Devices sector on and after such date. (5) Since the Company separated the Industrial Machinery Systems Division, which had been part of the Power & Industrial Systems sector, on October 1, 2001, orders received and sales of the separated operation are not included in the Power & Industrial Systems sector on and after such date. (6) Since the Company separated the Industrial Components & Equipment Group, which had been part of the Power & Industrial Systems sector, on April 1, 2002, orders received and sales of the separated operation are not included in the Power & Industrial Systems sector on and after such date. (7) Since the Company separated the Consumer Products Group, which had been part of the Digital Media & Consumer Products sector, on April 1, 2002, orders received and sales of the separated operation are not included in the Digital Media & Consumer Products sector on and after such date. [Information & Telecommunication Systems] Large-capacity disk array systems and hard disk drives did well and good results were also posted by domestic information system design services, particularly in the electronic government-related sector. This enabled the sector to achieve a 2% improvement in sales from the preceding year despite a dull showing by telecommunications equipment. Particularly noteworthy was the sector's full-scale ramp-up of the strategic outsourcing business of offering customers a comprehensive package of information system services extending from planning and development to operation and maintenance. By exploiting the wealth of know-how Hitachi has accrued over many years of experience to provide clients with advanced information systems carefully tailored to their individual business operation 18 requirements, this business offers customers strong support in their quest for robust competitiveness. [Electronic Devices] Semiconductor sales were markedly higher than a year earlier thanks to expanding demand for mobile phone-related products such as LSIs for driving color liquid crystal displays and high-power amplifiers. Sector sales nevertheless fell 5% owing to the split-off of display operations on October 1, 2002. [Power & Industrial Systems] Sector sales were down 13% despite higher automotive equipment sales. This was chiefly because the reluctance of the private sector to invest in new plant and equipment dampened demand for power equipment, industrial plant equipment and other products. The split-off of the industrial components and equipment business on April 1, 2002 was also a factor. [Digital Media & Consumer Products] Plasma TV sales advanced and the performance of liquid crystal projectors was also strong, particularly in exports. Still, sector sales decreased 55% from the preceding year as a result of the split-off of consumer product operations including air conditioners and washing machines on April 1, 2002. Relationship with Subsidiaries and Affiliates Hitachi views synergism among different businesses or companies as a key to Group value enhancement. It is therefore endeavoring to promote shared business strategies and reinforce teamwork among Group companies. As the Hitachi Group is made up of a large number of companies differing markedly in size and the nature of their businesses, however, an attempt was made to clarify more precisely the degree of liaison between the Company and the individual Group companies. This led to the Group companies being classified into the following three categories: (1) Consolidated Group Management: companies that plan their strategies and run their business as one with Hitachi, Ltd. (2) Consolidated Vision and Brand: companies that share a common management vision and brand as members of the Hitachi Group but that are relatively autonomous in the operation of their businesses. (3) Consolidated Finances: companies that have highly independent business operations and are consolidated from the financial viewpoint. Hitachi, Ltd. and the Consolidated Group Management companies will be the prime movers in implementing the strategies and attaining the goals of the "i.e.HITACHI Plan II." [Consolidated Financial Highlights]

(Billions of yen) ---------------------------------------------------------------------------------------------------------------- Fiscal 2001 Fiscal 2002 ---------------------------------------------------------------------------------------------------------------- Net Sales 7,993.7 8,191.7 ---------------------------------------------------------------------------------------------------------------- Operating Income -117.4 152.9 ---------------------------------------------------------------------------------------------------------------- Income before Income Taxes and Minority Interests -586.0 96.8 ---------------------------------------------------------------------------------------------------------------- Net Income -483.8 27.8 ---------------------------------------------------------------------------------------------------------------- Net Income per Share (yen) -144.95 8.31 ---------------------------------------------------------------------------------------------------------------- Diluted Net Income per Share (yen) -- 8.19 ---------------------------------------------------------------------------------------------------------------- Total Assets 9,915.6 10,179.3 ----------------------------------------------------------------------------------------------------------------

Notes: (1) The consolidated figures shown above have been prepared in conformity with accounting principles generally accepted in the United States. (2) In order to be consistent with financial reporting principles and practices generally accepted in Japan, operating income (loss) is presented as net sales less cost of sales and selling, general and administrative expenses. Under accounting principles generally accepted in the United States, restructuring charges etc. are included as part of operating income (loss). (3) The number of consolidated subsidiaries is 1,112 as of the end of fiscal 2002. [Consolidated Business Results] A breakdown of consolidated financial results by segment shows that Information & Telecommunication 19 Systems posted a 4% increase in sales from the preceding year. The better results were attributable mainly to good performance by large-capacity disk array systems and hard disk drives, combined with solid input from information systems design and other services. Operating income rose sharply, to JPY110.5 billion, about three times the year-earlier level. Electronic Devices recorded a 6% increase in sales produced by a substantial surge in semiconductor sales. The bottom line, while considerably better than in the preceding year, still showed an operating loss of JPY23.2 billion traceable to sagging prices of memories and liquid crystal displays for personal computers. Power & Industrial Systems sales rose 1% owing to the contribution of UNISIA JECS CORPORATION, which became a wholly owned subsidiary on October 1, 2002. Operating income, although held back by sluggish sectors like power equipment and air conditioning equipment, was buoyed up to JPY53.2 billion, slightly below the level of the preceding year, by help from automotive equipment and construction machinery. Digital Media & Consumer Products experienced stagnant demand for home appliances such as air conditioners and washing machines but the slack was taken up by optical storage products, plasma TVs and mobile equipment batteries. Sales were up 3% and operating income amounted to JPY6.2 billion. High Functional Materials & Components achieved about the same level of sales as a year earlier on the strength of a vigorous showing by semiconductor and display-related products that made up for slow optical fiber cable sales. Operating income was JPY18.3 billion. Logistics, Services & Others posted a 1% increase in sales and an approximately three-fold rise in operating income, to JPY10.3 billion. Financial Services saw sales rose 2% but operating income fell to JPY12.0 billion, a 68% decline triggered in part by a downturn in personal service and business lease volume and in part by one-time charges for the pension plan reforms etc. Total consolidated sales rose 2% from the preceding year, to JPY8,191.7 billion. Operating income amounted to JPY152.9 billion, income before income taxes and minority interests to JPY96.8 billion, and net income to JPY27.8 billion. These profit figures represent a rebound from the preceding year's deficits that can be attributed mainly to the business restructuring initiative carried out during the preceding year. 20 [The Major Consolidated Subsidiaries of Hitachi, Ltd. (As of March 31, 2003)] --------------------------------------------------------------------------------------------------------------- [Information & Telecommunication Systems] [Digital Media & Consumer Products] - Hitachi Communication Technologies, Ltd. - Hitachi Home & Life Solutions, Inc. - Hitachi Electronics Services Co., Ltd. - Hitachi Maxell, Ltd. - Hitachi Information Systems, Ltd. - Hitachi Media Electronics Co., Ltd. - Hitachi Software Engineering Co., Ltd. - Hitachi Home Electronics (America), Inc. - Hitachi Systems & Services, Ltd. - Shanghai Hitachi Household Appliances Co., Ltd. - Hitachi Computer Products (America), Inc. ----------------------------------------------------- - Hitachi Computer Products (Asia) Corp. [High Functional Materials & Components] - Hitachi Computer Products (Europe) S.A. - Hitachi Cable, Ltd. - Hitachi Data Systems Holding Corp. - Hitachi Chemical Co., Ltd. - Hitachi Global Storage Technologies, Inc. - Hitachi Metals, Ltd. ---------------------------------------------------------------------------------------------------------------- [Electronic Devices] [Logistics, Services & Others] - Eastern Japan Semiconductor Technologies, Inc. - Chuo Shoji, Ltd. - Hitachi Displays, Ltd. - Hitachi Life Corporation - Hitachi Electronics Engineering Co., Ltd. - Hitachi Mobile Co., Ltd. - Hitachi High-Technologies Corporation - Hitachi Transport System, Ltd. - Hitachi Medical Corporation - Nikkyo Create, Ltd. - Hitachi Semiconductor and Devices Sales Co., Ltd. - Hitachi America, Ltd. - Northern Japan Semiconductor Technologies, Inc. - Hitachi Asia Ltd. - Trecenti Technologies, Inc. - Hitachi (China), Ltd. - Hitachi Electronic Devices (USA), Inc. - Hitachi Europe Ltd. - Hitachi Nippon Steel Semiconductor ----------------------------------------------------- Singapore Pte. Ltd. [Financial Services] - Hitachi Semiconductor (America) Inc. - Hitachi Capital Corporation - Hitachi Semiconductor (Europe) GmbH - Hitachi Insurance Services, Ltd. - Hitachi Semiconductor (Malaysia) Sdn. Bhd. ------------------------------------------------------ ---------------------------------------------------------- [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 Industries Co., Ltd. - Hitachi Industrial Equipment Systems Co., Ltd. - Hitachi Kiden Kogyo, Ltd. - Hitachi Plant Engineering & Construction Co., Ltd. - Hitachi Unisia Automotive, Ltd. - Hitachi Via Mechanics, Ltd. - Japan Servo Co., Ltd. - Hitachi Automotive Products (USA), Inc. - Taiwan Hitachi Co., Ltd. ---------------------------------------------------------- Notes: (1) Company names are shown by industry segment used in consolidated accounting. (2) Hitachi Telecom Technologies, Ltd. acquired the business relating to telecommunication equipment of the Company through corporate split and changed its name to Hitachi Communication Technologies, Ltd. on October 1, 2002. (3) Hitachi Tohbu Semiconductor, Ltd. acquired part of the business of Hitachi Hokkai Semiconductor, Ltd. through corporate split, merged with Hitachi Tokyo Electronics Co., Ltd. and changed its name to Eastern Japan Semiconductor Technologies, Inc. on October 1, 2002. Eastern Japan Semiconductor Technologies, Inc. changed its name to Renesas Eastern Japan Semiconductor, Inc. on April 1, 2003. (4) Hitachi Displays, Ltd. was established to acquire the Company's display business through corporate split on October 1, 2002. (5) Hitachi Semiconductor and Devices Sales Co., Ltd. changed its name to Renesas Technology Sales Co., Ltd. on April 1, 2003. (6) Hitachi Hokkai Semiconductor, Ltd. merged with Hitachi Yonezawa Electronics Co., Ltd. and changed its name to Northern Japan Semiconductor Technologies, Inc. on October 1, 2002. Northern Japan Semiconductor Technologies, Inc. changed its name to Renesas Northern Japan Semiconductor, Inc. on April 1, 2003. (7) On April 1, 2003, Hitachi Semiconductor (America) Inc., Hitachi Semiconductor (Europe) GmbH and Hitachi Semiconductor (Malaysia) Sdn. Bhd. changed their names to Renesas Technology America, Inc., Renesas Semiconductor Europe (Landshut) GmbH and Renesas Semiconductor (Malaysia) Sdn. Bhd., respectively. (8) Hitachi Service & Engineering (East), Ltd. acquired the Company's Industrial Components & Equipment Group through corporate split, merged with the Company's three subsidiaries including Hitachi Service & Engineering (West) Ltd. and changed its name to Hitachi Industrial Equipment Systems Co., Ltd. on April 1, 2002. (9) UNISIA JECS CORPORATION became a wholly owned subsidiary of the Company through exchange of shares and changed its name to Hitachi Unisia Automotive, Ltd. on October 1, 2002. (10) Hitachi Home & Life Solutions, Inc. was established to acquire the operations of the Company's Consumer Products Group and two subsidiaries through corporate split on April 1, 2002. (11) Hitachi (China), Ltd. changed its name to Hitachi (China) Investment, Ltd. on April 1, 2003. 21 (2) Plant and Equipment Investment As the Company is working to build a business framework embracing all Group companies on a consolidated basis, the assets acquired by the Company tend to include an increasing percentage of subsidiary shares and the like. Aside from such investment, however, the Company during the year under review also invested JPY77.0 billion in new plant and equipment, JPY1.5 billion more than in the preceding year. This was used primarily to strengthen production facilities for TFT color liquid crystal display panels for use in liquid crystal TVs. (3) Research and Development The Company's research and development program extends beyond current areas of business to encompass aggressive R&D initiatives for acquiring sophisticated technologies needed for the creation of new businesses. The medical equipment field, including high-performance diagnostic equipment, and the battery field, including fuel cells for mobile equipment, are just two areas in which Hitachi is developing new technologies for next-generation products. Expenditures on research and development during the year came to JPY223.0 billion, the equivalent of 7.2% of total sales. One notable success was the development of a basic technology for realizing a next-generation recording system that will enable hard disk drives to be simultaneously increased in capacity and reduced in size. (4) Capital Raising Activity The Company did not raise funds through the issue of debentures or new shares during the year under review. The Company ensured efficient access to operating funds by concluding a commitment line agreement with its four banks under which the company can borrow any amount it requires up to a total of JPY120.0 billion whenever required. It also continued to repay borrowings from the same banks. However, the balance of borrowings and commercial paper at the end of the year was JPY35.2 billion higher than at the end of the preceding fiscal year because of increased fund requirements arising mainly in connection with the acquisition of IBM's hard disk drive operations.

(As of March 31, 2003) -------------------------------------------------------------------------------------------------------------- Creditor Balance of Borrowing Shares Owned by Creditor -------------------------------------------------------------------------------------------------------------- Nippon Life Insurance Company 5.0 billion yen 111,221,960 shares -------------------------------------------------------------------------------------------------------------- The Dai-Ichi Mutual Life Insurance Company 5.0 billion yen 81,770,222 shares -------------------------------------------------------------------------------------------------------------- Sompo Japan Insurance Inc. 4.0 billion yen 28,324,044 shares -------------------------------------------------------------------------------------------------------------- The Yasuda Mutual Life Insurance Company 3.0 billion yen 30,164,100 shares --------------------------------------------------------------------------------------------------------------

(5) Important Events Affecting the Company Subsequent to the Close of Fiscal Year Separation of Semiconductor Operations Centered in System LSIs On April 1, 2003, Hitachi, Ltd. transferred its semiconductor operations centered in system LSIs to Renesas Technology Corp. The value of transferred assets was JPY345.2 billion and the amount of obligations was JPY157.5 billion. The book value of such company's shares allotted to Hitachi, Ltd. is JPY187.7 billion. Issue of Debentures At the meeting held on April 28, 2003, the Board of Directors decided to issue the Company's 12th unsecured debentures in May 2003. The procured funds will be used primarily for convertible debentures redemption. Detailed information on the issue is set out below. Total amount to be issued: Up to JPY80.0 billion Issue price: Not less than JPY99 per denomination of JPY100 Coupon: Not more than 1.1% per annum Maturity: May 2013 (10 years) Acquisition of Its Own Shares The meeting of the Board of Directors held on April 28, 2003 determined that, pursuant to the resolution approved by the preceding ordinary General Meeting of Shareholders, the Company will acquire its own shares, not exceeding 80 million shares, for the aggregate amount not exceeding 30 billion yen from May 1, 2003 through May 30, 2003. 22 (6) Problems Facing the Company Management's assessment of the future business environment is that growth of exports is likely to slow owing to uncertainty about the world economy and that a full-scale recovery of domestic demand, most notably private consumption, cannot be expected anytime soon. Against this backdrop, Hitachi, Ltd. will put primary emphasis on increasing profits rather than on expanding sales. To this end, the following key measures set out in the "i.e.HITACHI Plan II" will be implemented throughout the Hitachi Group. - Corporate resources will be focused on business sectors in which Hitachi can differentiate itself from the competition through further advances in the interlinking and fusing of "Social Infrastructure Systems" including power and transportation systems with "Information System Services" encompassing a wide range of fields such as industry, distribution, government and finance. - In the hardware, software and high functional materials sectors that support the Company's core businesses, competitiveness will be strengthened by concentrating corporate resources on businesses in which Hitachi has the potential to place among the winners in world markets. - The technologies and knowledge of Hitachi Group companies will be synergistically merged to create the next-generation of core businesses. - Hitachi will transform itself into a high-profit company through a drastic recasting of the business portfolio. This will involve withdrawal from and sell-off of businesses accounting for around 20% of consolidated sales. - To reinforce the company's financial position, cash-flow will be improved by shortening the inventory turnover and accounts receivable collection periods and rigorously selecting investments in line with Hitachi's unique added-value assessment criteria (FIV). - The transition to a high-profit corporate structure will be accelerated by cutting material procurement costs still further. - Corporate governance will be strengthened by shifting to a new corporate system, Committee System. Outside directors will be brought in to enhance management transparency, and speedier management ensured by delegating broad powers to executive officers. In addition, teamwork within the Group will be fostered by placing directors on the boards of other Group companies that have also shifted to the new system. (7) Five-year Summary

(Billions of yen) --------------------------------------------------------------------------------------------------------------- Fiscal Year 1998 1999 2000 2001 2002 --------------------------------------------------------------------------------------------------------------- Orders Received 3,706.6 3,604.4 3,812.6 3,193.5 2,984.8 --------------------------------------------------------------------------------------------------------------- Net Sales 3,781.1 3,771.9 4,015.8 3,522.2 3,112.4 --------------------------------------------------------------------------------------------------------------- Operating Income -95.4 40.8 98.5 -84.7 53.7 --------------------------------------------------------------------------------------------------------------- Ordinary Income -114.9 31.7 56.0 -81.6 52.0 --------------------------------------------------------------------------------------------------------------- Net Income -175.5 11.8 40.1 -252.6 28.2 --------------------------------------------------------------------------------------------------------------- Net Income per Share (Yen) -52.59 3.56 12.02 -75.68 8.38 --------------------------------------------------------------------------------------------------------------- Total Assets 4,149.5 4,003.9 4,119.2 3,923.1 3,825.0 ---------------------------------------------------------------------------------------------------------------

Notes: (1) In fiscal 1999, semiconductor memories and microprocessors made a turn for the better, while profits, though improved compared with the preceding year, failed to reach an adequate level owing to expenses incurred mainly in connection with the restructuring of computer-related operations. (2) In fiscal 2000, there was vigorous demand for semiconductors for mobile telephones and other applications, and the solutions services business showed good growth, helped by the implementation of IT by financial institutions. As a result, year-on-year gains were achieved in both sales and income. (3) In fiscal 2001, the semiconductor, display and telecommunications equipment businesses experienced a severe decline in demand and markedly weaker prices. In addition, huge extraordinary losses were incurred owing mainly to the payment of special termination benefits under an early retirement benefit system. In combination, these factors produced a loss for the year exceeding that of fiscal 1998. (4) Net income per share is calculated for years up to and including fiscal 2000 based on total number of shares issued and outstanding at year-end, for fiscal 2001 based on total number of shares issued and outstanding at year-end less number of treasury stocks, and for fiscal 2002 based on total average number of shares issued and outstanding less average number of treasury stocks during the year. 23 (8) Main Products and Services (Fiscal 2002)

------------------------------------------------------------------------------------------------------------------- Percentage to Operating Sector Business Group Main Products and Services Total Sales ------------------------------------------------------------------------------------------------------------------- -Information & Telecommunication Solution Services such as System Systems Integration, Electronic Commerce -Part of Ubiquitous Platform Systems and Outsourcing Services, Software, Information & General-Purpose Computers, Servers, Telecommunication Computer Terminals and Peripherals, 46% Systems Large-capacity Disk Array Systems, Hard Disk Drives, Telecommunication and Network Equipment, PCs, Automatic Teller Machines ------------------------------------------------------------------------------------------------------------------- -Displays Color Liquid Crystal Display -Semiconductor & Integrated Panels, Semiconductor Memories, Electronic Devices Circuits System LSIs, Multi-Purpose 16% Semiconductors ------------------------------------------------------------------------------------------------------------------- -Power & Industrial Systems Power Equipment such as Generation -Building Systems Systems and Power Transmission and -Automotive Products Conversion Systems, Electric and Machinery Systems and Equipment, Industrial Plants, Railroad Systems Power & Industrial such as Rolling Stock and Control 31% Systems Systems, Traffic Transportation Systems, Elevators, Escalators, Electronic Components for Automobiles, Components for Automobile Engines ------------------------------------------------------------------------------------------------------------------- Digital Media & -Part of Ubiquitous Platform Systems LCD Projectors, Mobile Consumer Products Communications Equipment, Plasma 7% TVs, Equipment related to DVDs -------------------------------------------------------------------------------------------------------------------

Notes: (1) Each sector also engages in the sale and lease of software, consulting, licensing of industrial property rights and know-how, engineering and construction work in connection with these products and services. (2) Internet Systems Platform Division and Mechatronics Systems Division of Ubiquitous Platform Systems are included in the Information & Telecommunication Systems sector and other organizations of Ubiquitous Platform Systems are included in the Digital Media & Consumer Products sector. (3) In accordance with changes in the Company's organization, segmentation of some products is revised. (4) On October 1, 2002, Displays Group was separated from the Company. (5) On April 1, 2003, Semiconductor & Integrated Circuits Group excluding DRAM business and Data Storage Systems Division of Information & Telecommunication Systems Group were separated from the Company. (6) On April 1, 2003, Building Systems Group and Automotive Products Group changed their names to Urban Planning and Development Systems Group and Automotive Systems Group, respectively. 24 (9) Board Directors and Corporate Auditors (As of March 31, 2003) -------------------------------------------------------------------------------------------------------------------- Tsutomu Kanai Chairman of the Board and Representative Director -------------------------------------------------------------------------------------------------------------------- Hiroshi Kuwahara Vice Chairman of the Board and Representative Director -------------------------------------------------------------------------------------------------------------------- Etsuhiko Shoyama President and Representative Director -------------------------------------------------------------------------------------------------------------------- Yoshiki Yagi Executive Vice President and Representative Director -------------------------------------------------------------------------------------------------------------------- Yoshiro Kuwata Executive Vice President and Representative Director General Manager, Corporate Export Regulation Division -------------------------------------------------------------------------------------------------------------------- Yuushi Samuro Executive Vice President and Representative Director -------------------------------------------------------------------------------------------------------------------- Takashi Kawamura Executive Vice President and Representative Director -------------------------------------------------------------------------------------------------------------------- Kazuo Kumagai Executive Vice President and Representative Director General Manager, Corporate Brand Management Office and General Manager, Compliance Division -------------------------------------------------------------------------------------------------------------------- Katsukuni Hisano Senior Vice President and Director -------------------------------------------------------------------------------------------------------------------- Kazuo Sato Senior Vice President and Director -------------------------------------------------------------------------------------------------------------------- Takao Matsui Senior Vice President and Director General Manager, Sales Management Division -------------------------------------------------------------------------------------------------------------------- Masaaki Hayashi Senior Vice President and Director -------------------------------------------------------------------------------------------------------------------- *Isao Ono Senior Vice President and Director General Manager, Information Business Group and President & CEO, Information & Telecommunication Systems -------------------------------------------------------------------------------------------------------------------- *Masaharu Sumikawa Senior Vice President and Director President, Power & Industrial Systems and CEO, Power Systems Operation -------------------------------------------------------------------------------------------------------------------- -------------------------------------------------------------------------------------------------------------------- Shigemichi Matsuka Corporate Auditor (Standing) -------------------------------------------------------------------------------------------------------------------- Tadashi Ishibashi Corporate Auditor (Standing) -------------------------------------------------------------------------------------------------------------------- Kotaro Muneoka Corporate Auditor (Standing) -------------------------------------------------------------------------------------------------------------------- Makoto Murata Corporate Auditor Adviser, Showa Denko K.K. -------------------------------------------------------------------------------------------------------------------- Michio Mizoguchi Corporate Auditor Standing Adviser, Kajima Corporation -------------------------------------------------------------------------------------------------------------------- Notes: (1) The Directors marked with * were newly elected and assumed their positions at the 133rd ordinary General Meeting of Shareholders on June 26, 2002. (2) Two Directors, Mr. Toshihiko Odaka and Mr. Kunio Hasegawa, resigned at the close of the 133rd ordinary General Meeting of Shareholders on June 26, 2002. (3) Mr. Katsukuni Hisano became a Director from a Senior Vice President and Director on June 26, 2002 and became a Senior Vice President and Director on October 1, 2002. (4) Mr. Hiroshi Kuwahara retired from an Executive member of Council for Science & Technology Policy, Cabinet Office on January 5, 2003 and became a Vice Chairman of the Board and Director from a Director of the Company on January 6, 2003. (5) On April 1, 2003, Messrs. Hiroshi Kuwahara, Yuushi Samuro, Takashi Kawamura, Kazuo Sato and Masaaki Hayashi became Directors, and Mr. Katsukuni Hisano became an Executive Vice President and Director. (6) Corporate Auditors, Mr. Makoto Murata and Mr. Michio Mizoguchi, are outside corporate auditors who fulfill the qualification requirements as provided for in Article 18.1 of the Law for Special Exceptions to the Commercial Code Concerning Audit, etc. of Kabushiki-Kaisha. (10) Remuneration paid to Directors and Corporate Auditors in Fiscal 2002

---------------------------------------------------------------------------------------- Remuneration Retirement Allowance ------------------------------------------------------------- Number Amount paid Number Amount paid (Millions of yen) (Millions of yen) ---------------------------------------------------------------------------------------- Directors 16 332 2 86 ---------------------------------------------------------------------------------------- Corporate Auditors 5 98 - - ---------------------------------------------------------------------------------------- Total 21 430 2 86 ----------------------------------------------------------------------------------------

Notes: (1) The number of Directors who received remuneration includes two Directors resigned during fiscal 2002. (2) The number of Directors who received retirement allowance consists one Director resigned during fiscal 2002 and one Director retired in 1999. (3) The Company did not pay any bonuses to Directors or Corporate Auditors during fiscal 2002. (4) In accordance with the resolutions adopted by the General Meeting of Shareholders, the total amount of remuneration to be paid to Directors is not more than JPY60 million per month and to Corporate Auditors not more than JPY10 million per month. 25 (11) Employees (As of March 31, 2003) -------------------------------------------------------------------------------- Male Female Total -------------------------------------------------------------------------------- Number of Employees 37,025 5,350 42,375 -------------------------------------------------------------------------------- (Change from the end of the preceding period) -5,605 -610 -6,215 -------------------------------------------------------------------------------- Average Length of Service (years) 18.3 12.3 17.6 -------------------------------------------------------------------------------- Average Age 39.3 33.5 38.6 -------------------------------------------------------------------------------- Note: The total number of employees including part-time workers was 44,375. (12) Major Facilities (As of March 31, 2003)

----------------------------------------------------------------------------------------------------------------- Location ----------------------------------------------------------------------------------------------------------------- Head Office Tokyo (Chiyoda-ku) ----------------------------------------------------------------------------------------------------------------- R&D Tokyo (Chiyoda-ku, Kokubunji), Ibaraki (Tsuchiura, Hitachi), Saitama (Hatoyama), Kanagawa (Yokohama, Kawasaki) ----------------------------------------------------------------------------------------------------------------- Manufacturing, Information & Tokyo (Chiyoda-ku, Koto-ku, Shinagawa-ku, Ome), Ibaraki Design and Telecommunication (Hitachi), Saitama (Kawagoe), Kanagawa (Yokohama, Ebina, Engineering Systems *Odawara, Kawasaki, Hadano), Aichi (Owariasahi, Toyokawa) --------------------------------------------------------------------------------------------- Electronic Devices **Tokyo (Kodaira), **Ibaraki (Hitachinaka), **Gunma (Takasaki), **Yamanashi (Ryuo) --------------------------------------------------------------------------------------------- Power & Industrial Ibaraki (Hitachi, Hitachinaka), Yamaguchi (Kudamatsu) Systems --------------------------------------------------------------------------------------------- Digital Media & Ibaraki (Hitachinaka), Kanagawa (Yokohama) Consumer Products ----------------------------------------------------------------------------------------------------------------- Tokyo (Chiyoda-ku, Koto-ku, Shinagawa-ku, Minato-ku), Kanagawa (Yokohama), Hokkaido Area Operation (Sapporo), Tohoku Area Operation (Sendai), Kanto Area Operation (Tokyo), Sales and Yokohama Area Operation (Yokohama), Hokuriku Area Operation (Toyama), Chubu Area Area Operations Operation (Nagoya), Kansai Area Operation (Osaka), Chugoku Area Operation (Hiroshima), Shikoku Area Operation (Takamatsu), Kyushu Area Operation (Fukuoka) -----------------------------------------------------------------------------------------------------------------

Note: On April 1, 2003, Semiconductor & Integrated Circuits Group and Data Storage Systems Division of Information & Telecommunication Systems Group were separated from the Company. Accordingly, part of the facilities marked with * were transferred to Hitachi Global Storage Technologies Japan, Inc. and the facilities marked with ** were transferred to Renesas Technology Corp. (13) Common Stock (As of March 31, 2003) Authorized 10,000,000,000 shares Issued 3,368,124,286 shares Capital Stock JPY282,032,490,653 Number of Shares per Unit 1,000 shares Issued in fiscal 2002 -------------------------------------------------------------------------------- Number of Shares Issued (shares) -------------------------------------------------------------------------------- Issued on an exchange of shares to make UNISIA JECS CORPORATION (currently Hitachi Unisia Automotive, Ltd.) a wholly owned subsidiary and an exchange of shares to make 29,643,245 Hitachi Electronics Engineering Co., Ltd. a wholly owned subsidiary on October 1, 2002 -------------------------------------------------------------------------------- The Company did not issue any shares on conversion of debentures and cancel any shares by appropriation of profit during fiscal 2002. Number of Shareholders 421,138 26 Acquisition, Disposition and Possession of its own shares in fiscal 2002 (1) Acquisition Acquisition for purchase of less-than-one-unit shares Number of Shares 2,845,363 shares Aggregate Acquisition Prices JPY1,505,619,764 (2) Possession as of the end of the fiscal year Number of Shares 3,216,077 shares The Company did not dispose any of its own shares during fiscal 2002.

Shareholders Composition ------------------------------------------------------------------------------------------------------------------ Number of Number of Shares Held Percentage to Class of Shareholders Shareholders (shares) Total (%) ------------------------------------------------------------------------------------------------------------------ Financial Institutions and Securities Firms 568 1,240,476,330 36.83 ------------------------------------------------------------------------------------------------------------------ Individuals 415,159 1,025,125,898 30.44 ------------------------------------------------------------------------------------------------------------------ Foreign Investors 1,087 989,663,917 29.38 ------------------------------------------------------------------------------------------------------------------ Others 4,320 112,632,492 3.34 ------------------------------------------------------------------------------------------------------------------ Governments 4 225,649 0.01 ------------------------------------------------------------------------------------------------------------------ Total 421,138 3,368,124,286 100.00 ------------------------------------------------------------------------------------------------------------------

10 Largest Shareholders ------------------------------------------------------------------------------------------------------------------ Shareholder's Equity in Hitachi's Equity in Hitachi, Ltd. Shareholder Concerned ------------------------------------------------------- Number of Percentage Number of Percentage Shares Held of Voting Shares Held of Voting Name of Shareholders Rights Rights ------------------------------------------------------------------------------------------------------------------ shares % shares % Japan Trustee Services Bank, Ltd. 212,080,650 6.37 - - -------------------------------------------------------------------------------------------------------------------- NATS CUMCO 172,918,080 5.20 - - -------------------------------------------------------------------------------------------------------------------- The Master Trust Bank of Japan, Ltd. 169,035,321 5.08 - - -------------------------------------------------------------------------------------------------------------------- The Chase Manhattan Bank, N.A. London 133,317,139 4.01 - - -------------------------------------------------------------------------------------------------------------------- Nippon Life Insurance Company 111,221,960 3.34 - - -------------------------------------------------------------------------------------------------------------------- State Street Bank and Trust Company 92,709,173 2.79 - - -------------------------------------------------------------------------------------------------------------------- The Dai-Ichi Mutual Life Insurance Company 81,770,222 2.46 - - -------------------------------------------------------------------------------------------------------------------- Hitachi Employees' Shareholding Association 80,447,952 2.42 - - -------------------------------------------------------------------------------------------------------------------- Trust & Custody Services Bank, Ltd. 79,660,000 2.39 - - -------------------------------------------------------------------------------------------------------------------- Mizuho Corporate Bank, Ltd. 74,958,682 2.25 - - --------------------------------------------------------------------------------------------------------------------

Notes: (1) NATS CUMCO is the nominee name of the depositary bank, Citibank, N.A., for the aggregate of the Company's American Depositary Receipts (ADRs) holders. (2) The Company has 39,865 shares (0.42% of total voting rights) of common stock of Mizuho Financial Group, Inc., which is a parent company of Mizuho Corporate Bank, Ltd. 27 2. Unconsolidated Balance Sheet (As of March 31, 2003) --------------------------------------------------------------- (ASSETS) Millions of yen CURRENT ASSETS 1,921,651 Cash 168,872 Notes receivable 5,880 Accounts receivable 677,917 Marketable securities 4,233 Money held in trust 80,627 Finished goods 45,643 Semi-finished goods 48,556 Raw materials 40,864 Work in process 191,545 Advances paid 40,382 Short-term loan receivables 335,011 Deferred tax assets 85,693 Others 198,768 Allowance for doubtful receivables (2,347) FIXED ASSETS 1,903,377 Tangible fixed assets 420,493 Buildings 162,789 Structures 15,969 Machinery 111,231 Vehicles 209 Tools and furniture 70,273 Land 49,034 Construction in progress 10,985 Intangible fixed assets 155,815 Software 105,546 Railway and public utility installation 926 Others 49,342 Investments 1,327,068 Investments in subsidiaries 749,047 Investments in securities 290,260 Long-term loan receivables 2,129 Deferred tax assets 249,036 Others 47,919 Allowance for doubtful receivables (11,323) --------------------------------------------------------------- TOTAL ASSETS 3,825,029 --------------------------------------------------------------- (LIABILITIES) Millions of yen CURRENT LIABILITIES 1,819,074 Trade accounts payable 750,967 Short-term debt 28,426 Commercial paper 120,000 Current installments of debentures 92,828 Other accounts payable 77,280 Accrued expenses 150,456 Advances received from customers 177,203 Deposits received 394,228 Warranty reserve 12,137 Others 15,545 FIXED LIABILITIES 631,990 Debentures 418,471 Long-term debt 23,548 Accrued pension liability 120,981 Reserve for loss on repurchasing computers 25,240 Reserve for exhibition at The 2005 World Exposition, Aichi, Japan 895 Reserve for contribution to Defined Contribution Pension Plan 42,853 TOTAL LIABILITIES 2,451,065 (STOCKHOLDERS' EQUITY) CAPITAL STOCK 282,032 CAPITAL SURPLUS 268,708 Capital reserve 268,708 RETAINED EARNINGS 802,873 Earned surplus reserve 70,438 Reserve for software program development 32,139 Reserve for special depreciation 1,664 Special reserve 643,990 Unappropriated retained earnings (including net income for the period of 28,289) 54,640 UNREALIZED HOLDING GAINS ON SECURITIES 22,189 TREASURY STOCK (1,839) TOTAL STOCKHOLDERS' EQUITY 1,373,964 --------------------------------------------------------------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY 3,825,029 28 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 subsidiaries 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: JPY1,252,445 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 at March 31, 2003. Unrecognized net asset of JPY34,771 million at transition is amortized by the straight-line method over 5 years. Prior service liabilities are amortized by the straight-line method over the estimated average remaining service years of employees. Unrecognized actuarial gain or loss is amortized by the straight-line method over the estimated average remaining service years of employees from next fiscal year. (6) Reserve for exhibition at The 2005 World Exposition, Aichi, Japan is based on Article 287-2 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 subsidiaries JPY783,096 million Long-term receivables from subsidiaries JPY14,776 million Short-term payables to subsidiaries JPY898,029 million (9) The difference between acquisition cost and carrying cost of other securities in "Total Stockholders' Equity," under Article 290.1.6 of the Commercial Code of Japan, amounted to JPY21,930 million. (10) Stock acquisition rights under Article 280-19.1 of the Commercial Code of Japan

Class Number of shares to be issued Issue price per share Issue period ----- ----------------------------- --------------------- ------------ Common Stock 285,000 shares JPY1,451 7/27/2001 - 7/26/2005 Common Stock 880,000 shares JPY1,270 8/4/2002 - 8/3/2006

(11) In addition to the capitalized fixed assets, as significant equipment, the Company utilizes certain semiconductor and computer manufacturing equipment under the lease arrangements. (12) Pledged assets Investments in subsidiaries JPY2,313 million (13) Loan guarantees JPY43,080 million (14) Net income per share JPY8.38 29 3. Unconsolidated Statement of Income (From April 1, 2002 to March 31, 2003)

------------------------------------------------------------------------------- ORDINARY INCOME AND LOSS Millions of yen Operating income and loss Net sales 3,112,411 Cost of sales 2,517,608 Selling, general and administrative expenses 541,061 --------------- Operating income 53,741 Non-operating income and loss Non-operating income 51,496 Interest and dividends 44,518 Others 6,978 Non-operating expenses 53,223 Interest 12,249 Others 40,974 --------------- Ordinary income 52,014 EXTRAORDINARY GAIN AND LOSS Extraordinary gain 92,198 Gain on sale of real estate 46,638 Gain on sale of subsidiaries' common stock and investments in securities 41,347 Gain on transfer of business units 4,211 Extraordinary loss 63,127 Impairment loss on investments and securities 55,327 Loss on additional depreciation etc. 7,799 --------------- Income before income taxes 81,085 Income taxes Current (17,681) Deferred 70,477 --------------- Net income 28,289 Unappropriared retained earnings at the beginning of the period 34,541 Interim dividends paid 10,012 Transferred retained earnings associated with corporate split 1,822 --------------- Unappropriated retained earnings at the end of the period 54,640 -------------------------------------------------------------------------------

Notes: (1) Gain on sale of real estate of JPY46,638 million arises from sale of the Company's head office and sales of idle and unproductive real estate. (2) Gain on sale of subsidiaries' common stock and investments in securities of JPY41,347 million consists of gain on sale of subsidiaries' common stock of JPY15,952 million and gain on sale of investments in securities of JPY25,395 million. (3) Gain on transfer of business units of JPY4,211 million includes gain of JPY3,044 million due to the transfer of the Company's optical device operation to Opto Device, Ltd., a subsidiary of the Company. (4) Impairment loss on investments and securities of JPY55,327 million consists of impairment loss on investments in subsidiaries of JPY28,681 million and impairment loss on investments in securities of JPY26,646 million. (5) Loss on additional depreciation etc. of JPY7,799 million is in part due to an additional depreciation of machinery and equipment of the Company's Device Development Center. (6) The retained earnings of JPY1,822 million transferred due to acquisition of spin-off assets is an amount obtained by deducting from the retained earnings of JPY2,122 million transferred to the Company as a result of the acquisition of the business relating to its Semiconductor & Integrated Circuits Group upon spin-off thereof from Hitachi ULSI Systems Co., Ltd., a reduction of JPY300 million in book value of the shares of the spin-off company held by the Company. (7) Sales to subsidiaries JPY1,229,130 million Purchases from subsidiaries JPY2,103,899 million Non-operating transactions with subsidiaries JPY219,476 million 30 4. Plan for Appropriation of Retained Earnings

Plan for Appropriation of Retained Earnings ---------------------------------------------------------------------------------------------- Yen Unappropriated retained earnings at the end of the period 54,640,456,216 Reversal of Reserve for software program development 1,529,366,094 Total 56,169,822,310 Unappropriated retained earnings disposed of: Cash dividends (JPY 3.00 per share) 10,094,724,627 Bonuses payable to Directors 200,000,000 Reserve for special depreciation 179,108,693 Special reserve 8,000,000,000 Unappropriated retained earnings carried forward to the following period 37,695,988,990 ----------------------------------------------------------------------------------------------

Notes: (1) An interim dividend of JPY 3.00 per share was paid on December 3, 2002. (2) The amount of cash dividends is calculated after deducting 3,216,077 shares of treasury stock. (3) Reserve for software program development and Reserve for special depreciation are made in accordance with the Special Taxation Measurement Law. 31 5. Transcript of Accounting Auditors' Report INDEPENDENT AUDITORS' REPORT MAY 15, 2003 To Mr. Etsuhiko Shoyama, President and Director Hitachi, Ltd. Shin Nihon & Co. Daihyo Shain Kanyo Shain CPA Hideo Doi Daihyo Shain Kanyo Shain CPA Yoshikazu Aoyagi Daihyo Shain Kanyo Shain CPA Naomitsu Hirayama We have audited the balance sheet, the statement of income, the business report, the statement of proposed appropriation of retained earnings, and the related schedules of Hitachi, Ltd. for the 134th business year ended March 31, 2003 for the purpose of reporting under the provisions of Article 2 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 made in accordance with generally accepted auditing standards in Japan. The auditing standards require us to have a reasonable assurance whether any material misrepresentation 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 income present properly the financial position and the result of operations of the Company in conformity with related laws, regulations and the Articles of Incorporation of the Company, (2) the business report, as far as the accounting data included such report are concerned, presents properly 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. The subsequent event described in the business report will have a material effect on the financial position and the result of operations of the Company for the next business year or thereafter. We have no interest in the Company which should be disclosed pursuant to the provision of the Certified Public Accountants Law. 32 6. Transcript of Board of Corporate Auditors' Report AUDIT REPORT We, the Board of Corporate Auditors of the Company, deliberated on the performance by Directors of their duties during the 134th business term from April 1, 2002 to March 31, 2003, on the basis of each Corporate Auditor's report on his method and results of audit thereof. As a result, we hereby report as follows: 1. Method of Audit by Corporate Auditors in Outline Each Corporate Auditor, in accordance with the audit policy as determined by the Board of Corporate Auditors, attended meetings of the Board of Directors and other important meetings, received from Directors and employees reports on the business operations, 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. We also required the subsidiaries to render reports on their business operations and visited to investigate the state of activities and property at the offices of such subsidiaries, whenever necessary. In addition, we required the Company's Accounting Auditors to render reports on their audit and examined the financial statements and the supporting schedules. With respect to competitive transactions by Directors, transactions involving conflicting interests between Directors 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, 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 method and results of the audit made by the Company's Accounting Auditors, Shin Nihon & Co. are proper; (2) That the business report fairly presents the state of the Company in accordance with the law, regulations and the Articles of Incorporation; (3) 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; (4) That the supporting schedules fairly present the matters to be stated therein and contain nothing to be pointed out; and (5) That in connection with the performance by Directors 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, transactions involving conflicting interests between Directors 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 of their duties. May 16, 2003 Board of Corporate Auditors, Hitachi, Ltd. Shigemichi Matsuka, (Standing) Corporate Auditor Tadashi Ishibashi, (Standing) Corporate Auditor Kotaro Muneoka, (Standing) Corporate Auditor Makoto Murata, Corporate Auditor Michio Mizoguchi, Corporate Auditor Note: Mr. Makoto Murata and Mr. Michio Mizoguchi are outside corporate auditors who fulfill the qualification requirements as provided for in Article 18.1 of the Law for Special Exceptions to the Commercial Code Concerning Audit, etc. of Kabushiki-Kaisha. 33 (Supplementary Information) Consolidated Financial Information Consolidated Balance Sheets

March 31, 2003 March 31, 2002 --------------------------------------------- (Millions of yen) Assets 10,179,389 9,915,654 Current assets 5,193,465 5,507,535 Cash and cash equivalents 828,171 1,029,374 Short-term investments 186,972 178,933 Trade receivables Notes 153,587 204,855 Accounts 1,903,640 1,895,150 Investment in leases 437,076 527,432 Inventories 1,187,529 1,214,399 Other current assets 496,490 457,392 Investments and advances 726,442 834,907 Property, plant and equipment 2,601,050 2,514,424 Other assets 1,658,432 1,058,788 Liabilities and Stockholders' equity 10,179,389 9,915,654 Current liabilities 4,005,228 3,885,265 Short-term debt and current installments of long-term 1,328,446 1,199,921 debt Trade payables Notes 71,934 92,799 Accounts 1,140,130 991,037 Advances received 252,861 334,172 Other current liabilities 1,211,857 1,267,336 Noncurrent liabilities 3,569,371 2,927,421 Long-term debt 1,512,152 1,798,303 Retirement and severance benefits 1,932,646 1,049,054 Other liabilities 124,573 80,064 Minority interests 751,578 798,744 Stockholders' equity 1,853,212 2,304,224 Common stock 282,032 282,032 Capital surplus 562,214 527,010 Legal reserve and retained earnings 1,766,338 1,753,999 Accumulated other comprehensive income (loss) (755,525) (258,484) (Foreign currency translation adjustments) (60,948) (38,012) (Minimum pension liability adjustments) (698,916) (260,100) (Net unrealized holding gain on available-for-sale securities) 4,874 39,997 (Cash flow hedges) (535) (369) Treasury stock (1,847) (333) ---------------------------------------------

34 Consolidated Statements of Income

Years ended March 31 --------------------------------------------- 2003 2002 --------------------------------------------- (Millions of yen) Net sales 8,191,752 7,993,784 Cost of sales 6,240,493 6,184,396 Selling, general and administrative expenses 1,798,292 1,926,803 --------------------------------------------- Operating income (loss) 152,967 (117,415) Other income 46,737 36,039 (Interest and dividends) 23,079 28,615 (Other) 23,658 7,424 Other deductions 102,876 504,696 (Interest charges) 34,338 45,830 (Other) 68,538 458,866 --------------------------------------------- Income (loss) before income taxes and minority interests 96,828 (586,072) Income taxes 52,662 (71,114) --------------------------------------------- Income (loss) before minority interests 44,166 (514,958) Minority interests 16,299 (31,121) --------------------------------------------- Net income (loss) 27,867 (483,837) ---------------------------------------------

35 Consolidated Statements of Cash Flows

Years ended March 31 ------------------------------------ 2003 2002 ------------------------------------ (Millions of yen) Cash flows from operating activities Net income (loss) 27,867 (483,837) Adjustments to reconcile net income (loss) to net cash provided by operating activities Depreciation 480,274 529,418 Deferred income taxes (35,526) (182,072) (Gain) loss on disposal of rental assets and other property (14,064) 59,687 Decrease in receivables 2,280 450,904 Decrease in inventories 7,994 261,229 Increase (decrease) in payables 96,777 (271,698) Other 80,916 119,235 ------------------------------------ Net cash provided by operating activities 646,518 482,866 Cash flows from investing activities (Increase) decrease in short-term investments (8,162) 253,236 Capital expenditures (323,825) (429,835) Purchase of rental assets, net (411,452) (411,519) Purchase of investments and subsidiaries' common stock, net (95,074) (74,173) Collection of investment in leases 411,522 469,108 Other (192,294) (79,688) ------------------------------------ Net cash used in investing activities (619,285) (272,871) Cash flows from financing activities Decrease in interest-bearing debt (184,447) (578,526) Dividends paid to stockholders (9,973) (28,318) Dividends paid to minority stockholders of subsidiaries (13,108) (13,401) Other 358 42,133 ------------------------------------ Net cash used in financing activities (207,170) (578,112) Effect of exchange rate changes on cash and cash equivalents (21,266) 15,888 ------------------------------------ Net decrease in cash and cash equivalents (201,203) (352,229) Cash and cash equivalents at beginning of year 1,029,374 1,381,603 ------------------------------------ Cash and cash equivalents at end of year 828,171 1,029,374 ====================================

Notes to Consolidated Financial Statements: (1) The consolidated financial statements excluding segment information have been prepared in conformity with accounting principles generally accepted in the United States. (2) In order to be consistent with financial reporting principles and practices generally accepted in Japan, operating income (loss) is presented as net sales less cost of sales and selling, general and administrative expenses. Under accounting principles generally accepted in the United States, restructuring charges etc. are included as part of operating income (loss). (3) The number of consolidated subsidiaries is 1,112 as of the end of fiscal 2002. 36 Segment Information Industry Segment

Years ended March 31 2003 (A) 2002 (B) (A) / (B) --------------------- --------------------- ------------ (Millions of yen) Net Sales Information & Telecommunication Systems 1,899,651 19% 1,829,661 18% 104% Electronic Devices 1,570,069 15 1,487,200 15 106 Power & Industrial Systems 2,297,068 22 2,266,895 23 101 Digital Media & Consumer Products 1,205,551 12 1,170,744 12 103 High Functional Materials & Components 1,248,550 12 1,250,248 12 100 Logistics, Services & Others 1,449,594 14 1,430,825 14 101 Financial Services 579,267 6 567,138 6 102 Subtotal 10,249,750 100% 10,002,711 100% 102 ===== ===== Eliminations and Corporate Items (2,057,998) (2,008,927) - ------------ ------------ Total 8,191,752 7,993,784 102 ============ ============ Operating Income (Loss) Information & Telecommunication Systems 110,523 -% 35,757 -% 309% Electronic Devices (23,242) - (163,633) - - Power & Industrial Systems 53,253 - 55,004 - 97 Digital Media & Consumer Products 6,204 - (14,675) - - High Functional Materials & Components 18,301 - (22,024) - - Logistics, Services & Others 10,352 - 3,257 - 318 Financial Services 12,067 - 37,403 - 32 Subtotal 187,458 -% (68,911) -% - ===== ===== Eliminations and Corporate Items (34,491) (48,504) - ------------ ------------ Total (152,967) (117,415) - ============ ============

Note: Net sales by segment include intersegment transactions. Net Sales by Market

Years ended March 31 -------------------- 2003 (A) 2002 (B) (A) / (B) ---------------------- ---------------------- ------------ (Millions of yen) Domestic sales 5,546,543 68% 5,444,662 68% 102% Overseas sales Asia 1,017,439 12 896,050 11 114 North America 890,684 11 930,629 12 96 Europe 537,029 7 513,310 6 105 Other Areas 200,057 2 209,133 3 96 Subtotal 2,645,209 32 2,549,122 32 104 ------------ ----- ------------ ----- Total 8,191,752 100% 7,993,784 100% 102 ============ ===== ============ =====

Five-Year Summary (Consolidated basis)

Years ended March 31 --------------------------------------------------------------------- 1999 2000 2001 2002 2003 -------------------------------------------------------------------------------------------------------------- (Billions of yen) Net sales 7,977.3 8,001.2 8,416.9 7,993.7 8,191.7 Overseas sales 2,443.8 2,343.6 2,625.6 2,549.1 2,645.2 Operating income (loss) (34.0) 174.3 342.3 (117.4) 152.9 Net income (loss) (327.6) 16.9 104.3 (483.8) 27.8 Capital investment (Completion basis, excluding leasing assets) 373.0 363.4 541.1 414.1 328.4 R&D expenditure 496.7 432.3 435.5 415.4 377.1 --------------------------------------------------------------------------------------------------------------

Notes: On April 1, 2000, the Company adopted Statement of Financial Accounting Standards (SFAS) No.115, "Accounting for Certain Investments in Debt and Equity Securities" and restated the figures for prior periods accordingly. 37 (Translation) Hitachi, Ltd. VOTING RIGHT CARD I hereby exercise my voting right as indicated below in respect of the proposals put forward at the 134th Ordinary General Meeting of Shareholders of Hitachi, Ltd. held on June 25, 2003. 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: , 2003 Registered Seal ---------------------------------------------------------------- Number of voting rights held* ---------------------------------------------------------------- *A shareholder is entitled to one voting right per 1,000 shares.

-------------------------------------------------------------------------------------------- Item No. 1 On the proposal by the Board of Directors FOR AGAINST -------------------------------------------------------------------------------------------- Item No. 2 On the proposal by the Board of Directors FOR AGAINST -------------------------------------------------------------------------------------------- Item No. 3 On the proposal by the Board of Directors FOR AGAINST -------------------------------------------------------------------------------------------- Item No. 4 On the proposal by the Board of Directors FOR AGAINST (Except for the candidate at right) ( ) -------------------------------------------------------------------------------------------- Item No. 5 On the proposal by the Board of Directors FOR AGAINST -------------------------------------------------------------------------------------------- Item No. 6 On the proposal by the Board of Directors FOR AGAINST --------------------------------------------------------------------------------------------

Note: -The absence of a "For" or "Against" indication in respect of any proposal will be treated by the Company as an affirmative vote. -With respect to Item No. 4, if you wish to disapprove any of the candidates, please mark "FOR" and write the candidate's number assigned to the person concerned in the parentheses provided. The candidate's numbers are provided in the Agenda in the Notice of Holding 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 24, 2003. Reference Number of Shareholder ------------------------------------------------------------------- Number of shares held ------------------------------------------------------------------- Number of shares in the share-register ----------------------------------------------------------------- Number of shares in the beneficiaries' record -----------------------------------------------------------------