ACCOUNTING REPORT

Tuoya, Phan, Hyosik, RachayaPeijun, John & Charles

2016.Nov.18

Company Background

Type Public Kabushiki gaisha ("stock company")

Traded as TYO: 6501 Industry Conglomerate Founded 1910: 106 years ago(1910) Founder

Namihei Odaira　Headquarters Chiyoda, Tokyo, Janpan

Area served Worldwide

Key people Takashi Kawamura (Chairman) Hitoalo Nakanishi (President)

Capital stock 458,790 million yen

Number of Employees 335,244

Number of Shares Issued Common Stock 4,833,463,387 shares

Number of Shareholders 399,597

Products

Information & Telecommunication Systems, Social

Infrastructure, High Functional Materials & Components,

, Power Systems, Electronic Systems &

Equipment, Automotive Systems, Railway & Urban Systems, Digital Media

& Consumer Products, Construction Machinery and Other Components &

Systems

Services Financial Services Consulting

Mission and Vision • "Inspire Red" to reflect the passion

• “Blue”, conjuring the image of the vast blue sky they all share

• Guided by this vision, the Company has been advancing businesses with a mission to turn customers into fast-moving creator of cutting-edge businesses

Mid-Term Management Strategy

Science and Med-

ical

Industrial and IT

Systems

Fine Tech-nology

Systems

Advanced Industrial Products

Electronic Device

Systems

CurrentManagement by segment

Instruments Industrial Systems s

Science and Medical Sys-

tems

Electronic De-vice

Systems

Materials

Advanced Industrial Producs

Target Business model

Information and Telecommunications

Social Infrastucture

High Functional Materials and Components

Others (Logistics,etc)

Electonic Systems

Automotive

Construction and Machinery

Smart Life and Ecofriendly Systems

Power Systems

Financial Services

0 2 4 6 8 10 12 14 16 18 20

19

15

14

12

10

9

7

7

4

3

Share Revenue in %

Share Revenue

Segments by Product and Services

Segments by Division/Regions Hitachi Communication

Technologies America Hitachi Consulting Hitachi Data Systems Hitachi electronics Hitachi Defense Systems

Company Hitachi Metals Ltd Hitachi Koki Hitachi Plant Technologies Hitachi Rail Hitachi Solutions America Hitachi Works R&D Group

Acquisitions and MergersCompany Date Company Description Hitachi Product/ServicesFinmeccanica S.P.A 24th Feb, 2015 Signaling and rolling Stock Social Infrastructure (Railway)

Pentaho Corporation 4th June, 2015 Data Analytics Software Info and Telecommunications

OXYA 17th Feb, 2015 Cloud Services and SAP Solutions

Info and Telecommunications

Pantascene and AVRIO September 2014 Surveillance Solutions Info and Telecommunications

Above Security 15th Oct, 2015 IT Security Services Info and Telecommunications

Mitsubishi Heavy Industry (Joint Venture)

February 2014 Thermal Power Generation Power Systems

Sepaton 13th August,2014 Backup Storage Info and Telecommunications

Prizm Payment Services (India) 2014 Payment Services Financial Services

Cash flow statement(Millions of yen)

ended March

31, 2014

ended March 31,

2015Cash flows from operating activities 439,406 447,348 Cash flows from investing activities

(491,363) (610,255)

Free cash flows (51,957) (162,907)Cash flows from financing activities 32,968 250,335 Effect of exchange rate changes on cash and cash equivalents

49,574 63,886

Net increase (decrease) in cash and cash equivalents 30,585 151,314 Cash and cash equivalents at beginning of year 527,632 558,217 Cash and cash equivalents at end of year 558,217 709,531

Hitachi, Ltd. and Subsidiaries

• Good performance on operating, cash flow increases

• Financing activities show strong

• Exchange rate wrinkles

• Affluent cash flow

Balance sheet

(Millions of yen)of

March 31, 2014

ofMarch 31,

2015Total assets 

11,016,899

12,395,379

Cash & cash equivalents, Short-term investments

567,389 715,534

Total liabilities 7,164,435 8,121,066 Interest-bearing debt 2,823,049 3,354,616 Non-controlling interests 1,201,223 1,344,004 Total stockholders' equity 2,651,241 2,930,309 Stockholders' equity ratio 24.1% 23.6% D/E ratio (including non-controlling interests) (times)

0.73 0.78

Hitachi, Ltd. and Subsidiaries

• Good performance at investment

• Shareholders increase, positive attitude

• Strengthen the controlling of the company

Income statement

• Overseas market expands, domestic market decreases slightly.

Hitachi, Ltd. and Subsidiaries

55.45%

44.55%

2014 revenuejapan outside

52.9%47.1%

2015 revenuejapan outside

(Millions of yen)ended

March 31, 2014

ended March 31,

2015Revenues  9,563,791 9,761,970 Japan 5,303,474 5,172,463 Outside Japan 4,260,317 4,589,507 Cost of sales 7,030,903 7,087,200 Selling, general and administrative expenses 1,994,600 2,074,291 Operating income 538,288 600,479 Income from continuing operations, before income taxes 573,691 535,612 Income from continuing operations 369,539 415,565 Loss from discontinued operations (5,509) (52,797)Net income (loss) 364,030 362,768 Net income (loss) attributable to Hitachi, Ltd. stockholders 264,975 241,301

Comparative Analysis_ Horizontal

HITACHI CORP. & MITSUBISHI CORP.Condensed Balance Sheet

2015, March 31 (in Millions of Yen)

HITACHI During2015

MITSUBISHI During2015

Assets 2015 2014 Percent 2015 2014 Percent

Current assets 5,882,412 5,262,083 12% 7,608,690 7,270,043 5%

Non-current assets 6,551,315 5,836,108 12% 9,165,676 8,631,082 6%

Total assets 12,433,727 11,098,191 12% 16,774,366 15,901,125 5%

Liabilities and Stockholders’ equity

Liabilities

Current liabilities 4,779,478 4,300,444 11% 4,978,985 4,852,591 3%

Non-current Liabilities 3,357,907 2,928,916 15% 5,739,826 5,509,164 4%

Total Liabilities 8,137,385 7,229,360 13% 10,718,811 10,361,755 3%

Stockholders’ equity

Common stock 458,790 458,790 0% 204,447 204,447 0%

Additional paid-in capital 608,416 617,496 -1%

266,688265,356

1%

Retained earnings 1,477,517 1,277,970 16% 3,591,447 3,352,692 7%

Treasury stock (cost) -3,542 -3,146 13% -7,796 -14,081 -45%

Other Stockholder's equity 1,755,161 1,517,721 16% 2,000,769 1,730,956 16%

Total equity 4,296,342 3,868,831 12% 6,055,555 5,539,370 9%

Total Liabilities and equity 12,433,727 11,098,191 12% 16,774,366 15,901,125 5%

Comparative Analysis_ Horizontal HITACHI CORP. & MITSUBISHI CORP.

Condensed Income statement 2015, March 31 (in Millions of Yen)

HITACHI During 2015

MITSUBISHI During

2015

2015 2014 Percent 2015 2014 PercentNet sales 9,774,930 9,666,446 1.1% 7,669,489 7,635,168 0.4%Cost of goods sold -7,198,232 -7,173,747 0.3% - 6,459,595 - 6,449,163 0.2%Gross profit 2,576,698 2,492,699 3.4% 1,209,894 1,186,005 2.0%Selling and administrative expenses -1,935,373 -1,887,901 2.5% - 998,751 - 952,898 4.8%Income from operations 641,325 604,798 6.0% 211,143 233,107 -9.4%Interest expense, net -15,065 -12,732 18.3% -14,723 761 -2034.7%Other income (expense), net -160,767 79,477 -302.3% 378,302 298,086 26.9%Income before income taxes 465,493 671,543 -30.7% 574,722 531,954 8.0%Income tax expense -122,075 -146,540 -16.7% -168,331 - 145,595 15.6%Net income 343,418 525,003 1.1% 406,391 386,359 5.2%

Comparative Analysis_ Vertical HITACHI CORP. & MITSUBISHI CORP.

Condensed Balance Sheet_ 2015, March 31 (in Millions of Yen) HITACHI MITSUBISHI HITACHI MITSUBISHI

Assets 2015 2015 2014 2014Current assets 5,882,412 47% 7,608,690 45% 5,262,083 47% 7,270,043 46%Non-current assets 6,551,315 53% 9,165,676 55% 5,836,108 53% 8,631,082 54%Total assets 12,433,727 100% 16,774,366 100% 11,098,191 100% 15,901,125 100%Liabilities and Stockholders’ equity Liabilities Current liabilities 4,779,478 38% 4,978,985 30% 4,300,444 39% 4,852,591 31%Non-current Liabilities 3,357,907 27% 5,739,826 34% 2,928,916 26% 5,509,164 35%Total Liabilities 8,137,385 65% 10,718,811 64% 7,229,360 65% 10,361,755 65%Stockholders’ equity Common stock 458,790 4% 204,447 1% 458,790 4% 204,447 1%Additional paid-in capital (Capital Surplus) 608,416 5% 266,688 2% 617,496 6% 265,356 2%Retained earnings 1,477,517 12% 3,591,447 21% 1,277,496 12% 3,352,692 21%Treasury stock (cost) -3,542 0% -7,796 -0.05% -3,146 -0.03% -14,081 0%Other Stockholder's equities 1,755,161 14% 2,000,769 12% 1,518,195 14% 1,730,956 11%Total equity 4,296,342 35% 6,055,555 36% 3,868,831 35% 5,539,370 35%Total Liabilities and equity 12,433,727 100% 16,774,366 100% 11,098,191 100% 15,901,125 100%

NC.A 53%

C.A 47%

Liabilities65%

Equity35%

NC.A 55%

C.A 45%

Liabilities

64%

Equity34%

Comparative Analysis_ Vertical HITACHI CORP. & MITSUBISHI CORP.

Condensed Income Statement2015, March 31 (in Millions of Yen)

HITACHI MITSUBISHI

HITACHI MITSUBISHI

2015 Percent 2015 Percent 2014 Percent 2014 PercentNet sales 9,774,930 100.0% 7,669,489 100.0% 9,666,446 100.0% 7,635,168 100.0%Cost of goods sold -7,198,232 -73.6% - 6,459,595 -84.2% -7,173,747 -74.2% - 6,449,163 -84.5%Gross profit 2,576,698 26.4% 1,209,894 15.8% 2,492,699 25.8% 1,186,005 15.5%Selling and administrative expenses -1,935,373 -19.8% - 998,751 -13.0% -1,887,901 -19.5% - 952,898 -12.5%Income from operations 641,325 6.6% 211,143 2.8% 604,798 6.3% 233,107 3.1%Interest expense, net -15,065 -0.2% - 14,723 -0.2% -12,732 -0.1% 761 0.0%Other income (expense), net -160,767 -1.6% 378,302 4.9% 79,477 0.8% 298,086 3.9%Income before income taxes 465,493 4.8% 574,722 7.5% 671,543 6.9% 531,954 7.0%Income tax expense -122,075 -1.2% - 168,331 -2.2% -146,540 -1.5% - 145,595 -1.9%Net income 343,418 3.5% 406,391 5.3% 525,003 5.4% 386,359 5.1%

Financial Analysis: Liquidity Ratio

Hitachi Mitsubishi012345678 7.22

5.01

6.7

4.96

INVENTORY TURNOVER

FY 2014 FY 2015

Hitachi Mitsubishi0

0.20.40.60.8

11.21.41.61.8

1.22

1.5

1.23

1.53

CURRENT RATIO

FY 2014 FY 2015

Inventory turnover=

Current ratio= • The current ration essentially

flat.• Mitsubishi performed better

in these two years.

• Inflect the inventory cost and turnover of capital

• Better sales than Mitsubishi

Financial Analysis: Profitability Ratio

Hitachi Mitsubishi0

50

100

150

200

250

300

75.37

219.30

73.60

246.39

EARNING PER SHARE

FY 2014 FY 2015

Hitachi Mitsubishi0.002.004.006.008.00

10.0012.0014.0016.0018.0020.00

8.90 8.59

18.30

8.79

PRICE/EARNING RATIO (PER)

FY 2014 FY 2015

Earning per share =

Price/Earning ration (PER) =

• Indicate company profitability on share holder basis

• Illustrate what investor expect to invest in a company

Financial Analysis: Solvency Ratio

Hitachi Mitsubishi0.63

0.64

0.65

0.66

0.650.652

0.655

0.639

DEBT TO ASSET RATIO

FY 2014 FY 2015

Hitachi Mitsubishi0

0.010.020.030.040.050.060.070.08

0.061

0.037

0.055

0.074

CASH DEBT COVERAGE

FY 2014 FY 2015

Debt to asset ratio =

Cash debt coverage=

• Show the financial flexibility

• Ability to pay liability compare with operation activities

Competitiveness

• Rapid advances in IT transforming industrial structures and business models• Strengthen and accelerate global growth strategies• Create new products and develop new technologies (R&D)• Meeting customer satisfactions with high quality products• Products and services must be at a price competitive• Products must also be competitive in terms of engineering

sophistication, quality and brand value

Company Concerns

• Economic Trends•Currency Exchange Rate Fluctuations• Supply and Demand•Overseas Growth Strategies•Product Quality• Intense Competition• Significant Disaster and Similar Events & etc

Findings & ConclusionFor the Financial Year 1015, the company had performed well:• It increased asset and had Good performance at investment

• Shareholders increase and had positive attitude towards the business performance

• Strengthen the controlling of the company

• Overseas market expands, domestic market decreases slightly

Thank you

Tuoya, Phan, Hyosik, RachayaPeijun, John & Charles

2016.Nov.18