Contents

1 Millions of Yen Millions of Yen 201420152015201620142016201520142016 Cautionary Statement with Respect to Forward-looking Statements:Statements made in this annual report with respect to the Company s plans and projections as well as other statements that are not historical facts are forward-looking statements, which involve risks and uncertainties. Potential risks and uncertainties include, without limitation, general economic conditions in the Company s markets, exchange rates and the Company s ability to continue to win customers acceptance of its products, which are offered in highly competitive market characterized by continual new product introductions and rapid developments in Total assetsCorporate Name:Head Office:Hitachi Kokusai Electric UDX Building 11th floor,4-14-1 Sotokanda, Chiyoda-ku, Tokyo 101-8980, JapanEstablished:Fiscal Year-end:Accounting Auditor:Paid-in Capital:Employees:URL.

2 November 17, 1949 March 31 Ernst & Young ShinNihon LLC 10,058 million4,980 (consolidated) Review .. 14 Consolidated Statements of Financial Position .. 15 Consolidated Statements of Profit and Loss .. 17 Consolidated Statements of Comprehensive Income .. 18 Consolidated Statements of Changes in 19 Consolidated Statements of Cash Flows .. 21 Notes to Consolidated Financial 23 Independent Auditor s Report .. 62 Consolidated Financial 1A Message from the President .. 2 Directors and Executive 4 Corporate Governance .. 5 Review of 7 Research and 10 Global Network .. 12 Revenues by SegmentTotal 180,740 millionTotal 180,740 millionJapan 91,787 millionNote.

3 The revenues are calculated based on the customers , Adjustmentsand eliminations 959 millionEco- and Thin FilmProcessing 90,563 12,807 millionKorea 25,344 millionTaiwan 19,533 millionEurope and others 10,710 millionOther Asia 20,559 % % % % by RegionVideo and WirelessNetwork 89,218 million Millions of Yen ContentsMillions of Yen (Except as otherwise noted)2016180,740 16,746 12,998 5,739 95,964 RevenuesIncome before income taxesNet income attributable to owners of the parentComprehensive income attributable to owners of the parent Equity attributable to owners of the parent2014165,327 17,581 15,592 18,722 85,042 174,569 Total assets187,147 11,635 (2,351)(7,003)47,567 Net cash provided by operating activities Net cash used in investing activitiesNet cash used in financing activitiesCash and cash equivalents at end of the year 15,644 (4,722)(2,035)57,149 Basic earnings per share (Yen)

4 Equity attributable to owners of the parent (Yen) 2015185,181 19,805 17,471 20,508 94,885 189,283 7,745 (6,700)(13,278)46,870 Net income attributable to owners of the parentNote: The Company has adopted International Financial Reporting Standards (IFRS) for the fiscal year ended March 31, InformationCorporate DataShareholder InformationCommon Share:Number of Common SharesNumber of ShareholdersNumber of Shares per Unit105,221,259 shares7,708100 Stock Listing:Transfer Agent for Shares:Tokyo (1st Section)Tokyo Securities Transfer Agent Co., , Kanda Nishiki-cho, Chiyoda-ku, 6F Kanda Nishiki-cho 3-chome Building Tokyo 101-0054, JapanPhone: +81-3-6833-3907 Stock Data4,980 4,943 4,976 Number of employeesMajor Shareholders:As of March 31, 2016 Breakdown of Shareholders by Category:Name of ShareholderHitachi, Master Trust Bank of Japan, Ltd.

5 (Trust Account) Japan Trustee Services, Ltd.(Trust Account) GOLDMAN SACHS INTERNATIONALGOLDMAN,SACHS & MSCO CUSTOMER SECURITIES CBNY-GOVERNMENT OF NORWAY53,0704,0873,7541,9751,3721,2801, ofShares Held(thousands)Percentageof Total(%)CHASE MANHATTAN BANK GTS CLIENTS ACCOUNTESCROWBNP PARIBAS SECURITIES SERVICES LUXEMBOURG/JASDEC/FIM/LUXEMBOURG FUNDS/UCITS ASSETSSTATE STREET BANK AND TRUST COMPANY505223*The above excludes 2,514 thousands of treasury shares ( ) held by Hitachi Kokusai Electric and on attributable to owners of the parent / Return on Equity (ROE) ( )Ratio of equity attributable to owners of the parent to total assets / Equity Ratio ( )Price earnings ratio (PER) (times)165,327185,181180,74017,47115,592 050,000100,000150,000200,00012,99805,000 10,00015,00020,000187,174174,569050,0001 00,000150,000200,000189,283 Years Ended March 31 Consolidated Financial Highlights Millions of Yen Millions of Yen 201420152015201620142016201520142016 Cautionary Statement with Respect to Forward-looking Statements.

6 Statements made in this annual report with respect to the Company s plans and projections as well as other statements that are not historical facts are forward-looking statements, which involve risks and uncertainties. Potential risks and uncertainties include, without limitation, general economic conditions in the Company s markets, exchange rates and the Company s ability to continue to win customers acceptance of its products, which are offered in highly competitive market characterized by continual new product introductions and rapid developments in Total assetsCorporate Name:Head Office:Hitachi Kokusai Electric UDX Building 11th floor,4-14-1 Sotokanda, Chiyoda-ku, Tokyo 101-8980, JapanEstablished:Fiscal Year-end:Accounting Auditor:Paid-in Capital:Employees:URL.

7 November 17, 1949 March 31 Ernst & Young ShinNihon LLC 10,058 million4,980 (consolidated) Review .. 14 Consolidated Statements of Financial Position .. 15 Consolidated Statements of Profit and Loss .. 17 Consolidated Statements of Comprehensive Income .. 18 Consolidated Statements of Changes in 19 Consolidated Statements of Cash Flows .. 21 Notes to Consolidated Financial 23 Independent Auditor s Report .. 62 Consolidated Financial 1A Message from the President .. 2 Directors and Executive 4 Corporate Governance .. 5 Review of 7 Research and 10 Global Network .. 12 Revenues by SegmentTotal 180,740 millionTotal 180,740 millionJapan 91,787 millionNote.

8 The revenues are calculated based on the customers , Adjustmentsand eliminations 959 millionEco- and Thin FilmProcessing 90,563 12,807 millionKorea 25,344 millionTaiwan 19,533 millionEurope and others 10,710 millionOther Asia 20,559 % % % % by RegionVideo and WirelessNetwork 89,218 million Millions of Yen ContentsMillions of Yen (Except as otherwise noted)2016180,740 16,746 12,998 5,739 95,964 RevenuesIncome before income taxesNet income attributable to owners of the parentComprehensive income attributable to owners of the parent Equity attributable to owners of the parent2014165,327 17,581 15,592 18,722 85,042 174,569 Total assets187,147 11,635 (2,351)(7,003)47,567 Net cash provided by operating activities Net cash used in investing activitiesNet cash used in financing activitiesCash and cash equivalents at end of the year 15,644 (4,722)(2,035)57,149 Basic earnings per share (Yen)

9 Equity attributable to owners of the parent (Yen) 2015185,181 19,805 17,471 20,508 94,885 189,283 7,745 (6,700)(13,278)46,870 Net income attributable to owners of the parentNote: The Company has adopted International Financial Reporting Standards (IFRS) for the fiscal year ended March 31, InformationCorporate DataShareholder InformationCommon Share:Number of Common SharesNumber of ShareholdersNumber of Shares per Unit105,221,259 shares7,708100 Stock Listing:Transfer Agent for Shares:Tokyo (1st Section)Tokyo Securities Transfer Agent Co., , Kanda Nishiki-cho, Chiyoda-ku, 6F Kanda Nishiki-cho 3-chome Building Tokyo 101-0054, JapanPhone: +81-3-6833-3907 Stock Data4,980 4,943 4,976 Number of employeesMajor Shareholders:As of March 31, 2016 Breakdown of Shareholders by Category:Name of ShareholderHitachi, Master Trust Bank of Japan, Ltd.

10 (Trust Account) Japan Trustee Services, Ltd.(Trust Account) GOLDMAN SACHS INTERNATIONALGOLDMAN,SACHS & MSCO CUSTOMER SECURITIES CBNY-GOVERNMENT OF NORWAY53,0704,0873,7541,9751,3721,2801, ofShares Held(thousands)Percentageof Total(%)CHASE MANHATTAN BANK GTS CLIENTS ACCOUNTESCROWBNP PARIBAS SECURITIES SERVICES LUXEMBOURG/JASDEC/FIM/LUXEMBOURG FUNDS/UCITS ASSETSSTATE STREET BANK AND TRUST COMPANY505223*The above excludes 2,514 thousands of treasury shares ( ) held by Hitachi Kokusai Electric and on attributable to owners of the parent / Return on Equity (ROE) ( )Ratio of equity attributable to owners of the parent to total assets / Equity Ratio ( )Price earnings ratio (PER) (times)165,327185,181180,74017,47115,592 050,000100,000150,000200,00012,99805,000 10,00015,00020,000187,174174,569050,0001 00,000150,000200,000189,283 Hitachi Kokusai Electric Annual Report 201612)JtachJ ,oLusaJ EMectrJc AnnuaM 3eport 2016A Message from the PresidentIn regards to the market environment surrounding Hitachi Kokusai Electric Group (the Group )