c20sr report12 pdf version - hitachi metals · hitachi metals corporate philosophy code of conduct...

PDF Version

CSR Repor t

2012

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Hitachi Metals Corporate Philosophy Code of Conduct for Hitachi Metals Group Companies

Enhancing Awareness of Social Responsibility and Corporate EthicsAdhering to the principle of "Obey the law and walk the path of virtue," we will develop our corporate activities in an ethical manner, with full grasp of our social responsibility and the potential effects of our corporate activities. As we conduct business on a global scale, we will comply with all relevant international conventions and the laws of each country, while striving to understand each country's local religions, cultures and customs in order to contribute to regional economic development.

Pursuing Mutual Growth with our Business PartnersWith the aim of generating the highest possible customer satisfaction, we will engage in the development of unique basic technologies and new technologies that empower us to continue providing high quality, reliable products. In achieving this aim, we will conduct fair and appropriate business transactions with our suppliers.Based on an awareness of social responsibility shared jointly with our business part-ners, we will carry out corporate activities to realize mutual growth.

Promoting Truthful Communication with SocietyWe will disclose appropriate corporate information in a timely, fair and transparent manner to our shareholders and other stakeholders. At the same time, we will endeavor to establish a relationship of mutual trust with society through well-coordinated two-way communication.

Thinking about Our Next Generation - An Environmentally Friendly SolutionRecognizing the importance of protecting the environment, we will ensure effective and environmentally conscious utilization of limited natural resources in order to bestow a clean environment to the next generation.Through creation of new products and businesses that bring new value to society, we will base our sustainable growth on the provision of high quality products in harmony with the environment.

Fostering the Welfare of Employees and SocietyWe will create a safe and ideal workplace, embracing the great diversity of our individual employees and their capabilities, while promoting their personal develop-ment through work. As a good corporate citizen, we will continue efforts to contribute to society through sincere, nondiscriminatory corporate activities based on mutual trust with all members of society.

Formulated July 26, 2006

(59 consolidated subsidiaries and 9 equity-method affiliates). The scope of environmental data includes data for the 49 companies within the Groupdemonstrating environmental burden exceeding its standards for disclosure. This accounts for about 98% of the environmental burden created by the Hitachi Metals Group overall.Company names and related particulars are current as of March 31, 2012.

●PeriodThis report essentially covers fiscal 2011(April 1, 2011 through March 31, 2012).

●Underlying Guidelines"Environmental Reporting Guidelines" 2007 Edition, the Ministry of the Environment, Japan"Environmental Performance Indicators for Businesses" 2002 Edition, the Ministry of the Environment, Japan"Environmental Reporting Guidelines 2001-With Focus on Stakeholders," the Ministry of Economy, Trade and Industry, Japan"Sustainability Reporting Guidelines 2006," Global Reporting Initiative

●Purpose of PublicationThis report is published with the aim of acquainting readers with the Hitachi Metals Group’s view towards corporate social responsibility (CSR). Disclosing examples of its daily business activities in a reader-friendly manner, the Group hopes that this report will serve as a valuable tool for communicating with its stakeholders.This report introduces the scope of Hitachi Metals Group management activities to its broad spectrum of stakeholders.The contents include corporate governance and compliance structures, as well as its product development and monozukuri activities that significantly contribute to the creation of a recycling-oriented society. Through disclosure of such information, the Group aims to broaden and deepen conversations with the global community, while diversifying the scope of corporate activities.Detailed information can be found on the website.

●ScopeThis report covers 69 companies of the Hitachi Metals Group (the Group) consisting of Hitachi Metals, Ltd. (the Company) and its Group companies

Note on the Corporate Social Responsibility Report

Editorial Policy

We aspire to contributing to society by cre-

ating "the best possible company" based

on harmony among people with affection

for our company - a goal to be pursued by

drawing on its more than 100-year history,

by ensuring that our mainstay products

lead their industries in both quality and

quantity, and by applying ourselves to the

advancement of technology.

The entire content of the Good Practice Guidance for Hitachi Metals Group Companies is available on the following webpage:http://www.hitachi-metals.co.jp/e/corp/corp15.html

Formulated Sep 17, 2010

Good Practice Guidance for Hitachi Metals Group Companies

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Top Message

Response to Flood Damage in Thailand


Corporate Governance


Hitachi Metals Group’s CSR


Personal Information Protection / Information Security Initiatives

Social Repor t

In Cooperation with Society and the Local Community

[Harmonious Coexistence with the Local Community]Sponsoring and Supporting Sporting Events / Plant Tour for Children's Social Studies / TOPICS

[Pursuing Mutual Growth with our Business Partners]With Our Customers / With Our Suppliers

[Fostering the Welfare of Employees and Society]With Our Employees

[Promoting Truthful Communication with Society]With Society, Including Our Shareholders and Investors

Environmental Report

Medium-to-Long-Term Environmental Strategy / Environmental Objectives, Targets, and Results

Third Term Environmental Action Plan (Fiscal Years 2011 – 2015)

[Eco-Management & Eco-Mind]Hitachi Metals Group Basic Environmental Protection Policies / Hitachi Metals Group’s Environmental Management / An Integrated Environmental Management System / Environmental Auditing / Environmental Education and Awareness Promotion / GREEN 21

[Environmental Accounting]

[Eco-Products]Environmentally Conscious Vision for Products and Services / Expansion of Eco-Products / Revised Eco-Design Assessment / Participating in Exhibitions / Metglas® Amorphous Metal Materials (SA1, HB1M) / Amorphous Cut Cores for Solar Power Systems / Target Materials for CIGS Photovoltaic Cells (Mo, CuGa) / Clad Metals for Photovoltaic Interconnectors / SORASIE® Solar Power System / ZMGTM 232 Series J3 & G10 Solid Oxide Fuel Cell (SOFC) Interconnects / Precision Cast Blades for High-Efficiency Gas Turbines (H-80) / NEOMAX® Series Nd-Fe-B Sintered Magnets / Fashionable SCUBA® Aluminum Wheels / HERCUNITE® Series of Heat-Resistant Cast Components / CERACAT® Filter / DAC-MAGIC® High-Performance Steel for Die-Cast Molds / Small-Diameter End Mills for Deep Cutting Epoch Deep Evolution Series / Warm Water Panels / DUPLEX® Composite Tungsten Carbide Roll

[Eco-Factories]Global Warming Prevention / Reducing the Environmental Burden of Transportation / Reducing Waste / Reduction of Substances of Environmental Concern / Site Data

Third Party’s Opinion

Economic Report /Corporate Data

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The Hitachi Metals Group, operating in countries with diversified values, will as a global corporate group, pursue business activities that respond to public trust and expectations.I would first like to express my appreciation to all stakeholders in Hitachi Metals for their continued understanding and support. Thank you also for taking the time to read the Hitachi Metals Group’s 2012 CSR Report.The Hitachi Metals Group’s corporate philosophy is to contribute to society by creating "the best possible company," and we believe corporate social responsibility (CSR) to be the essence of management.In this report I will explain the Hitachi Metals Group’s CSR from a management perspective, while reviewing the highlights from the past year.

President, Chief Executive Officer and Director

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The succession of major natural disasters during 2011, including the

earthquake disaster in Japan and flooding in Thailand, allowed us to

reaffirm through our response our social responsibilities as a company.

During the Great East Japan Earthquake, the Hitachi Metals Group

suffered damage to a portion of its facilities, but managed to restore

operations in a short time. We were also able to limit the impact from

the government ’s directive to curb power use in the Tokyo Electric

service area by making arrangements for in-house electricity produc-

tion, and shifting our operations plans. As the situation for Japan’s

power supply remains unclear, we will continue to make a concerted

effort as a corporate group to further our power conservation measures.

Heavy rainfall in Thailand also caused extensive flooding in many

areas of the country, and in October flood waters reached the indus-

trial park where many Japanese companies are located. The Hitachi

Metals Group’s production facility was inundated and forced to cease

operations. However, we were able to limit the impact on our cus-

tomers by shifting production elsewhere and implementing other

measures. At the same time, thanks to the diligent recovery efforts

of our local employees, we managed to resume production com-

paratively quickly.

The areas hit in this disaster are prone to flooding, and the risk of flood

damage remains. The Thai government is building retaining walls and

implementing other measures to prevent a reoccurrence. At the Hitachi

Metals Group’ s factory, as part of the recovery plan we are moving

electricity receiving equipment and other power facilities to higher

locations in an effort to limit the damage from any future flooding.

The recovery effort from the Thai flood damage was deeply moving

and impressive. When the factory was inundated with water, local

employees left their own swamped homes and rushed to the factory

to assist with the recovery work.

Our local subsidiary, Hitachi Metals (Thailand) Ltd., adopted "Reli-

ability" as its corporate motto at the time of establishment, and has

pursued management as part of the local community, adhering to

the idea that the company belongs to the employees who work

there. It gave me great pleasure to see that at a time when the com-

pany faced a difficult situation, the ideals that we had been reiterat-

ing were taken to heart.

Globalization is an essential part of our business development. In its

purest form globalization is measured by whether local employees

recognize that the factory is part of their company, and that they are

in the same boat with everyone at Hitachi Metals. I believe this spirit

was on display.

Cultures and customs differ among countries and peoples, and it is

not our intention to unilaterally force the Japanese way on anyone.

At the same time, however, the fact remains that we are all in the

same Hitachi Metals boat, and are working together. The response

in Thailand will serve as an example of fostering a sense of unity in

regions around the world.

Lessons Learned in Disaster a Guide for the Future

What the Response of Our Thailand Employees Taught Us

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The increase in the number and scale of natural disasters as a

consequence of climate change, such as the flooding in Thai-

land, has become an issue in recent years. Recent natural disas-

ters have forced us to accept the possibility of events unimagi-

nable from past experience, and that surpass our expectations.

In addition to natural disasters, all manner of business risks have

increased, including such rapid changes in the business environ-

ment as the acute rise in raw material prices, and fluctuations in

the currency market. It is important that we revise such strategies

as consolidation to enhance efficiency, in order to diversify risk.

The major impact on the whole supply chain resulting from the

recent string of natural disaster has called into question the

adequacy of our corporate Business Continuity Plan (BCP). While

this plan must of course focus on resuming operations quickly

when a risk becomes an issue, at the same time we need to

ensure a minimum level of capacity in order to meet our respon-

sibility to maintain supply.

I believe we were able to recover relatively quickly from the

earthquake disaster and Thai flooding. However, even if our

facilities are restored, disruption in the supply chain means that

we are unable to obtain materials, and so cannot fulfill our

responsibility to maintain supply. We are currently formulating

BCPs for all business divisions both in Japan and overseas. We

expect to finalize plans for all domestic divisions of the Hitachi

Metals Group by the end of fiscal 2012, and will confirm plans at

overseas divisions as quickly as possible

A thorough awareness of compliance and safety helps to secure

the Hitachi Metals Group’s public standing as a healthy company,

and is the foundation for corporate management to ensure

sustainable corporate growth in the future.

Compliance today extends beyond direct violations of the law, and

includes cases that take into account influence over the supply chain

or value chain. The social responsibility for companies is becoming

broader in scope, and subject to close scrutiny.

As a result of globalization the employee makeup for the Hitachi

Metals Group includes an extremely diverse range of peoples,

nationalities and values. With this in mind, in 2010 we formulated

the Good Practice Guidance for Hitachi Metals Group Companies to

serve as a common global standard for corporate conduct. By ensur-

ing full understanding of these principles, we are raising compliance

awareness at the individual level. Based on our Corporate Philosophy

of "Obey the law and walk the path of virtue," we will continue to

strive to be worthy of public trust and to meet expectations.

Creating a BCP to Fulfill our Responsibility to Maintain Supply

Fostering Compliance and Safety Awareness in Globalization

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Alongside compliance, ensuring a safe workplace is the foundation

of our business activities, and a driver for competitiveness. Maintain-

ing the work environment is always a priority matter. Nevertheless,

individual awareness is a large part of preventing accidents, and

unfortunately there is still room for improvement.

The best way to ensure compliance and safety is through step by

step training and other assiduous efforts to foster ethics at the indi-

vidual level. At the same time, we also believe in the need for stricter

auditing with warning and check functions. We are seeking to elimi-

nate accidents and mishaps through such a dual approach of

improving ethics and conducting regular checks.

Hitachi Metals is a materials company with a unique capacity for

technological development. Materials are the starting point for

change and evolution in all sorts of industries, and our social

responsibility as a materials company is in essence the creation of

high-quality materials suited to the needs of the times.

Environmental responsiveness has today become a global issue. We

seek to contribute to society and ensure sustainable growth by

developing and offering environmentally-friendly products that draw

on our strengths.

Companies in all industries establish their own approaches to envi-

ronmental responsiveness by building on their particular characteris-

tics. In the automotive industry, for example, the energy-efficiency

strategies of various companies include hybrids, electric vehicles,

clean diesel, turbochargers and low-fuel engines, and the materials

they require are of course different. However, we are able to provide

light, strong, and high-quality materials for a variety of purposes,

such as neodymium magnets for electric vehicles, and HERCUNITE®

casting components for turbocharged engines. This development

capacity to meet the diversified energy efficiency needs of a wide

range of companies is the core strength of the Hitachi Metals Group.

We believe that by utilizing this ability to maximum effect we are

meeting public expectations in the environmental field.

We place importance on maintaining communication with the areas

where our business offices are located. Each business office sup-

ports its local community and seeks to build a sense of unity by

becoming part of it. Through sporting events, employee volunteer

programs and other means we take a long-term, community-based

approach without focusing on the scale of events.

For example, the Hitachi Metals Group has been a long-standing

supporter of sporting events, including the Junior High School Good-

will Sporting Event through the Yasugi Works (Shimane Prefecture),

and the Kumagaya Sakura Marathon through the Kumagaya Works

(Saitama Prefecture). These events have become established as

annual traditions in the community.

Sustainable growth for the Hitachi Metals Group would not be possible

without CSR. At the same time, there is still room for improvement in

our CSR initiatives. All employees need to embody the Good Practice

Guidance by consistently applying it in their everyday business activi-

ties. We strive to pursue communication with all stakeholders, includ-

ing customers, business partners, shareholders and investors, employ-

ees and local communities, to reflect a broader perspective in man-

agement, and to build a relationship of trust with society. We welcome

honest opinions and feedback from readers regarding our CSR efforts.

Environmental Conservation as a Materials Company with Technological Development Capabilities Communication with Stakeholders

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Hitachi Metals (Thailand) Ltd. overcomes flood damage and restores local manufacturing operations

The flooding in Thailand during October 2011 severed the power supply to Rojana Industrial Park in Phra Nakhon Si Ayutthaya Province, where Hitachi Metals (Thailand) Ltd. is located, while rising water in the factory caused extensive damage to equipment and products. Concerns were raised that the cessation of operations at the factory, which manufactures electronics components and other products, would have a major impact on the Hitachi Metals Group’s business activities. However, owing to the rapid and concerted effort by local staff, together the assistance of business partners and Hitachi Group companies in Thailand and around the world, we made diligent efforts toward recovery and the manufacture of alternative products, and while limiting the negative impact on customers, restored local operations in April 2012.

The reopening ceremony and inauguration of the spirit house was held on April 17

Message from Thailand

The flooding of our factory was an unprecedented crisis. But drawing on the expertise we have accumulated over the 21 years since our establishment, we quickly implemented measures in response, including setting up a temporary office in Saraburi and a factory in Nakhon Nayok, and shifting production to partners in Thailand, as well as to Japan and the Philippines. In particular, owing to the dedication of local staff members, many of whom also suffered flooding to their homes, and with a determination to restore operations at Hitachi Metals (Thailand), all employees came together as one, and with a massive push, in a stroke put us squarely on the path to recovery. The restoration was nearly complete by April. We will continue to contribute to Hitachi Metals’ business development as a member of the corporate group, and as one will strive to realize the principle of "To Be an Excellent Company" and gain the trust of customers. Soichi Nakanishi (pictured, center) President of Hitachi Metals (Thailand) Ltd.

The Hitachi Metals factory during the flood Employees heading for cleanup work after the waters receded

Local employees were dispatched to Japan to support alternate manufacturing operations

Electricity receiving equipment was relocated to a higher location as a measure against future flooding

Everyone at Hitachi Metals (Thailand) Ltd.

R e s p o n s e t o F l o o d D a m a g e i n T h a i l a n d

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Position of the Good Practice Guidance for Hitachi Metals Group Companies

Overview of the Good Practice Guidance for Hitachi Metals Group Companies

Corporate Philosophy


CSR Guidebook regulations and Company rules

Social norms for behavior that society expects of a company (formulated July 2006)

Common code of conduct for Hitachi Metals Group companies worldwide (formulated September 2010)

Easy-to-understand explanations of the Code of Conduct and Good Practice Guidance

The Good Practice Guidance for Hitachi Metals Group Companies was formulated in September 2010 as a complement to the Code of Conduct for Hitachi Metals Group Companies. We plan to implement this Good Practice Guidance throughout the Hitachi Metals Group, both in Japan and overseas, by September 2011.The Good Practice Guidance provides specific, easy-to-understand common standards of conduct for managers and employees, and will reaffirm awareness of compliance across the Hitachi Metals Group worldwide.

Code of Conduct for Hitachi Metals Group

Companies

Specific practices for the Good Practice Guidance for Hitachi Metals Group Companies to be uniformly applied throughout the Hitachi Metals Group have been compiled in the following categories. We will implement these practices under the leadership of top man-agement, and conduct business activities in accordance with our principle of "Obey the law and walk the path of virtue," and rooted in our corporate philosophy and in compliance with laws and regulations.

Chapter 1: Honest and Fair Business Activities1.1 Provision of Safe High-Quality Products and Services 1.2 Sales Activities 1.3 Procurement Activities 1.4 Respect of the Hitachi Brand1.5 Observance of Engineering Ethics

Chapter 2: Environmental Protection2.1 Promoting of Environmental Management 2.2 Environmentally Conscious Business Activities and Environmental Management2.3 Communication with Stakeholders

Chapter 3: Relations with Society3.1 Disclosure of Company Information 3.2 Contribution to Local Communities 3.3 Relations with Politics and Government Administration3.4 Prevention of Anti-social Transactions 3.5 Regarding Gifts, Business Entertainment, Etc.3.6 Observance of Laws and Regulations and Respect of the Culture and Customs of Each Nation and Region

Chapter 4: Respect of Human Rights4.1 Promoting Respect of Human Rights 4.2 Eliminating Discrimination 4.3 Respect of Human Rights in Information Management4.4 Respect of Basic Rights at Work

Chapter 5: Management Foundation5.1 Management and Use of Information 5.2 Use of Inside Information and Related Considerations 5.3 Management and Preservation of Company Assets 5.4 Arranging a Work Environment That Draws Out Employee Strengths 5.5 Observance of Laws and Regulations Governing Imports and Exports

Chapter 6: Complete Observance of Codes of Conduct6.1 Complete Observance of Rules 6.2 Implementation of Self-Audits 6.3 Internal Reporting System

Chapter 7: Responsibility of Top Management

Supplementary Provisions Hitachi Group Implementation of Codes of Conduct

The entire content of the Good Practice Guidance for Hitachi Metals Group Companies is available on the following webpage: http://www.hitachi-metals.co.jp/e/corp/corp15.html


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2012 Report on Corporate Governance is available on the following webpage:http://www.hitachi-metals.co.jp/ir/pdf/cgr20120713.pdf

The underlying basis for corporate governance at Hitachi Metals is to ensure transparent and efficient management, meet the needs of our stakeholders, and increase corporate value. We believe this to be one of our most important management challenges.

Accordingly, it is imperative that we create an organizational structure in which management oversight and business operations function effectively and in balance. We also believe that timely, high-quality information disclosure contributes to the improvement of corporate governance. In pursuit of this philosophy, we go beyond simple financial disclosure, regularly publishing the details of indi-vidual business segments and mid-term management plans.

We acknowledge that compliance is the linchpin of corporate governance. Consequently, our corporate activities go beyond mere compliance with laws and internal regulations: they also respect social mores and ethics, and recognize our role as a member of society. We established the Code of Conduct and Good Practice Guidance for Hitachi Metals Group Companies, which reflects this stance with specific standards of conduct for company executives and employees.

For our corporate governance structure, we have adopted an institutional composition as a company with a committee governance structure.We strive to facilitate prompt decision making through the substantial transfer of authority for business decisions from the Board of Directors to the Executive Officers. At the same time, we also strive to improve the transparency and efficiency of management by reflecting the objective opinions of members of the Nominating Committee, Audit Committee, and Compensation Committee and out-side directors on the Board of Directors, as well as by strengthening supervisory functions.


Corporate Governance Structure

General Meeting of Shareholders

Board ofDirectors

Executive Officer(President)

Accountingaudit

Appointment /dismissal

Direction and orders

AccountingAuditor

Proposal to appoint /dismiss directors

Audit of exercisefunction

Compensation decisions

NominatingCommittee

Audit Committee

CompensationCommittee

Board ofDirectors

OfficeCSR Management Office

Internal Auditing OfficeBusiness audit(Internal control function)

Business Divisions

InternalCompanies

CorporateCommunication

Risk management

ExecutiveCommittee

Internal controlfunction( )

Supervisory andcontrol functions

Supervisory and control functions

Promoting compliance

Supervision of exercise function and appointment / dismissal of executive officers

Proposal to appoint /dismiss accounting auditors

Appointment / dismissal of

directors

Upgrading internal control systems

More detailed information on corporate governance at the Hitachi Metals Group is provided in the Report on Corporate Governance.This Report has been uploaded to our website, as well as those of the Tokyo Stock Exchange and the Osaka Securities Exchange.

C o r p o r a t e G o v e r n a n c e

Hitachi Metals Group CSR

Social ReportEnvironm

ental ReportEconom

ic Report/Corporate DataCorporate Governance

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Internal Control SystemHitachi Metals has developed the following internal control system.

1. An Executive Committee consisting of all executive officers has been formed to ensure that the business activities of executiveofficers comply with laws, regulations and the Company’s Articles of Incorporation, and are carried out efficiently. Significantbusiness issues that have an impact on the entire company are deliberated by this committee, with the decision made by the executive officer responsible.

2. A Compliance Office has been established in the CSR management office, which designates a manager responsible for the Company- wide compliance system.

3. A CSR Management Office has been established to facilitate a Company-wide approach to compliance, social contributions andcorporate social responsibility.

4. A Compliance Hotline has been established for employees at Hitachi Metals and Group companies, when encountering situations that violate laws or Company regulations, to report facts of such incidents that through a specified channel without fear of reprisal. This system ensures early discovery and correction of misconduct.

5. Our policy is to take a resolute stance against antisocial forces that pose a threat to the order and safety of civil society, and cutoff all ties with them. To ensure the effectiveness of this policy, we have set up a division to oversee this which sets in placestructures for managing information related to antisocial forces, cutting off transactions with them, and taking other responses.It also works diligently to coordinate closely with specialized, outside agencies such as the police.

6. An Internal Auditing Office under the direct control of the president has been established, which conducts internal audits of business divisions and Group companies to ensure compliance with laws, regulations and internal rules, as well as the efficiencyof their business activities. The results of internal audits are reported to the president and the Audit Committee to confirmwhether directives are being correctly carried out.

7. The Company has continued to implement and expand a system of internal controls based on a standard framework (COSOFramework*), incorporating the requirements of the U.S. Sarbanes-Oxley Act, documenting and evaluating the effectiveness ofinternal controls related to financial reporting within the Company. Beginning fiscal 2008, the Company has also formalizedan internal controls reporting system based on the requirements of Japan’ s Financial Instruments and Exchange Law,improving and expanding the internal controls infrastructure within the firm.

*COSO framework: The most commonly used basic framework for internal control in the United States, also adopted by the Hitachi Group.

[Compliance Hotline]Hitachi Metals formulated the policy for its Compliance Hotline in April 2005, and launched the internal reporting system at Hitachi Metals and Group companies in order to help prevent legal violations or improper actions, and to quickly correct the situation should violations occur.This system allows all employees at Hitachi Metals or its Group companies to report incidents in their workplace by e-mail or sealed letter. Employees can use this system to directly report and resolve issues when they are unable to consult with their supervisor, or receive no response.In this system, employees can not only report anonymously or through a specified channel for the Compliance Hotline but also directly to the Audit Committee.An explanation of the Compliance Hotl ine system is included in al l company-wide compliance training to ensure a high level of awareness of its existence is maintained among all employees.

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Hitachi Metals formulated its Code of Conduct for Hitachi Metals Group Companies in July 2006. In September 2010, the Good Practice Guidance for Hitachi Metals Group Companies was established as a group-internal rule to complement the code of conduct. We have also been promoting CSR initiatives with "Obey the law and walk the path of virtue" at the foundation of our corporate activities.However, violations of the Antimonopoly Act were uncovered in 2006 and 2007. Since then, in order to prevent recurrence, we have been implementing internal on-site training at our domestic and overseas offices led by the Compliance Department. In fiscal 2011, we continued to take measures for these offices such as internal on-site training and compliance training for specific levels and positions. We will maintain our compliance efforts without sidestepping the cases of the past.

Fiscal 2011 CSR Activities Report

[Internal On-site Training at Hitachi Metals Group Companies Inside and Outside Japan in Fiscal 2011]1. On-site training seminars conducted by the sales director and the Compliance Department

regarding compliance with the Antimonopoly Act and the Code of ConductTraining content: Compliance with the Antimonopoly Act and the Code of Conduct,

global compliance for the prevention of acts of bribery, and information security

Target offices for training: Domestic business officesHitachi Metals head office, branch offices, sales offices,manufacturing sites and research centers; and Groupcompanies' head offices and sales sites

Target employees: All holders of e-mail addressesTerm: August to December 2011Number of sessions: 77 seminars for 140 business offices

(including joint and multiple sessions)Number of participants: 3,591

2. On-site training seminars at overseas offices conducted by the Compliance DepartmentTraining content: Compliance with the Antimonopoly Act and the Code of Conduct,

global compliance for the prevention of acts of bribery, and information security

Target offices for training: Overseas business officesTarget employees: Manager level and aboveTerm: January to March 2012 (July 2012 for the business offices in Thailand)Number of sessions: 25 seminars for 31 business offices (including joint sessions)Number of participants: 502

3. Compliance training for specific levels and positions2011 Apr. Training for new hires

Jun. Training for newly appointed assistant managersJul. Training for newly appointed junior executiveAug. Sales accounting trainingNov. Training for newly managers

[Compliance Extraordinary Audits]Hitachi Metals conducted extraordinary audits of all its business offices, and the consolidated subsidiaries that operate commercial businesses or independent businesses. Auditors reviewed documents related to these businesses (such as invoices, and papers on industrial organizations to which they belong) and took statements from all sales managers to ensure there were no violations of the Antimonopoly Act.We also reviewed the minutes from meetings of industry groups and the like that our employees attended (Compliance Record*), and confirmed that no illegal activity was carried out.

December 2011 - March 2012: 19 business offices and 78 general managers and above responsible for sales.

[Compliance Audits]The Hitachi Metals Group conducts internal audits of all its offices led by the Internal Auditing Office. The Compliance Department joins this audit activity in order to conduct compliance audits to check whether there is any illegal practice.

* Compliance Record: A record stating that no action was taken in violation of applicable law in occasions where meeting with employees of competitors was unavoidable, such asindustry-group conferences or similar events.

Compliance training at the head office

Compliance training at overseas office

Compliance training at overseas office


Since its founding, the Hitachi Metals Group has conducted its business activities in accordance with its corporate phi-losophy that impels it to "contribute to society by creating 'the best possible company.'" Our CSR activities consist of corporate activities that create this "best possible company," and this corporate philosophy neatly portrays the atti-tudes Hitachi Metals Group holds toward CSR.

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●Hitachi Metals Group Corporate Ethics MonthOctober 2011 was designated as the Hitachi Metals Group Corporate Ethics Month. During this month, we carried out the following measures.

(1) We held a Hitachi Metals Group Corporate Ethics Month Compliance Conference, providing a compliance workshop to companydirectors, corporate officers, business-segment officers, directors, branch managers, sales office managers, corporatedivision managers, group-company presidents, and the presidents of overseas sales subsidiaries.

(2) We distributed a message prepared by the president (in Japanese, English, Korean and Chinese) to employees of the HitachiMetals Group.

(3) All employees filled out the Hitachi Metals Group CSR Guideline Self Audit Checklist, and reported the results to their superiors.

(4) Each division filled out a Self Evaluation Report in accordance with the Hitachi Metals Group CSR Guidebook, and submittedit to our corporate headquarters.

(5) Compliance Training1) On-site training (August 2011 - March 2012)

Subjects: Code of conduct and CSR; Anti-Monopoly Act; global compliance; information security

Japan: All employees with e-mail addressesTarget offices: Hitachi Metals head office, branch offices, sales offices, manufacturing sites and research centers;

Group companies’ head offices and sales sitesNumber of sessions: 77 at 140 locations (in some cases, sessions were held jointly or multiple times)Overseas: Manager-level employees and aboveTarget offices: Overseas business offices (31 total)Number of sessions: 25 at 31 locations (some sessions were held jointly)

2) E-learning on the Code of Conduct and the Good Practice Guidance for Hitachi Metals Group Companies (original e-learningcourses by the Hitachi Metals Group)Applies to: All employees of the Group; in addition, DVD training materials are provided for those who are unable to receivethe e-learning courses; these materials are also provided in other languages (English, Thai, Indonesian, Korean and Chinese)for foreign staff working in the Group's overseas offices.

●Establishment of the Good Practice Guidance for Hitachi Metals Group CompaniesWe implemented the Good Practice Guidance for Hitachi Metals Group Companies, which serves as internal regulations that supple-ment our Code of Conduct for Hitachi Metals Group Companies, throughout the Group by the end of September 2011.The shared norms that company executives and employees must adhere to were stipulated in this Code of Conduct in order to make them more specific and easier to understand in the aim of once again thoroughly driving home an awareness of compliance within the Group and worldwide.




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*1 An "arterial industry" primarily uses natural resources are to manufacture products utilized in everyday life.

*2 A "venous industry" collects, separates and processes used products and the waste generated from households and facto-ries to turn them into resources.

●●●

●●●

Arterial Route

Venous Route

Materials Route

●●●●●●

●●●●●●●●●●●●

●●●●●●●●●●●●

Resources generated by a recycling company

Energy saving and reducing hazardous substances

Environmentally Conscious Products

FunctionalProducts

Processing toturn waste into

resources

Reuse and recycling throughout the process

Use of virgin materials

Proper processingof waste

Proper processingof waste

Manufacturing CycleArterial Industry

Product CycleSocial

Responsibility Cycle静脈産業

Transformation into functional materialsthrough advanced

productiontechniques

Environmental burden reducedduring use by

customer

Recovery and recycling

Reduction in waste Circular Flow of Resources

Arterial Industry

Venous Industry

Collection and transport company

UsedProducts

Waste

Since our inception, the Hitachi Metals Group has valued resource recycling as an indispensable busi-ness mechanism. We are an upstream materials manufacturer acting as an arterial industry*1. At the same time, we also act as a downstream venous industry*2, adding new value to industrial waste output from various industries, reconstituting this waste as useful resources. The Hitachi Metals Group has continued to be a leading entity in devel-oping resource recycling mechanisms, even before the phrase "recycling-oriented society" became popularized.Our mission, and a driver of our business growth, is to contribute to the creation of a sustainable society, reducing the burden on the environment not only during the manufacturing process but also through-out the entire product lifecycle, from raw materials procurement to customer consumption to disposal.

Hitachi Metals Group Sustainable Business Model: Resource Recycling

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Personal Information Protection / Information Security Initiatives

Office organization

PositionsPositions

Groupcompanies

President

Secretariat

Basic Policy of Information SecurityStandards for Information Security Measures

Personal Information Protection PolicyRegulations on Management of Personal Information

Overall management of personal information protection / information security

●Implementation of various measures

General administration of all personal information protection / information security at office

●Implementation of various measures

●Information systems management and operation

Execution Administrator (Secretariat)

Personal Information Protection /Information Security Committee

Personal Information Protection /Information Security Manager (office manager)

Information Asset ManagerPersonal Information Administration manager

Information Asset ManagerPersonal Information Administration manager

Information Systems Administrator

Security Management MeasuresInformation Security Regulations

Create administrative standards for handling personal information

Informationassets to be protected

Educate administra-tors and users●Basic measures●Obey rules, secure

actions

Measures to protect information assets●Administrative measures; create

and implement rules●Technical measures; prevent

information leaks using IT

Clearly identify the information assets to protect(categorize & analyze risks)

Clearly identify the personal information to protect(identify, categorize, and register)

Establish information-security organization●Use plan-do-check-action (PDCA) cycle●Respond to incidents

Personalinformation

Personal dataStored personal

data

Create point of contact for identified individuals

Create privacy managers

Acquisition Use Management

Personal Information Protection / Information Security InitiativesThe evolution and spread of IT, particularly in the form of the Internet, has resulted in expanded litany of security risks. Managing and protecting corporate information, including the private information of individuals, is more important than ever as a corporate social responsibility. The Hitachi Metals Group established a "Basic Policy of Information Security" in April 2004, followed by a "Personal Information Protection Policy" in January 2005, establishing a system of personal information protection/information security based on these policies. The Company continues to update information security measures on an ongoing basis.

Personal Information Protection / Information Security InitiativesHitachi Metals has instituted a set of rules related to the handling of Company information (including personal information), the use of information equipment, and information security, working to instill an understanding of these rules throughout the entire Company.The Company conducts an annual review of these rules to keep up to date with changes in legal and environmental conditions.

Information Security MeasuresHitachi Metals has systematically implemented measures against external threats from unauthorized access and computer viruses, internal threats such as the unauthorized removal or loss of company information, and other threats including natural disasters, etc.Since fiscal 2007, the Company has also requested its business partners to deploy equivalent measures to prevent business informa-tion leakage via file-sharing software on personal PCs.Since fiscal 2009, we have introduced a filtering system to monitor all e-mails sent externally as a measure to prevent external leaks of operational information. Further efforts have also been made to enhance the measures for the prevention of information leaks, such as reviewing and improving our management system for portable information terminals in order to prevent losses of increasingly capable mobile phones and other devices.In fiscal 2011, we implemented the training session "Understanding and preventing targeted e-mail attacks" for all employees with company e-mail address in order to mitigate the increasing risk of targeted e-mail attacks that steal company information.

15

Employee EducationEach year, the Company conducts information security education for all employees (including temporary staff, etc.) who use IT equip-ment. This education is designed to instill an understanding of rules related to the use of IT equipment, including the handling of infor-mation (including personal information), and the prohibition against using personal PCs for work. During fiscal 2011, the Company conducted on-site training at Hitachi Metals Group locations (simultaneously with compliance training), while also instituting e-learning training. Both initiatives were designed to improve the security awareness of every Hitachi Metals Group employee.

Self-AuditEach year, the Company conducts a self-audit of personal information protection / in-formation security, confirming the status of the rules compliance, and improving any areas that need to be addressed.Our fiscal 2010 audit was performed between November and December.

●On-site training at domestic business officesAugust 2011 - December 2011Training recipients : All persons with e-mail addresses of the Hitachi Metals GroupNumber of sessions:77 sessions covering 140 business offices (including joint and multiple sessions)

●On-site training at overseas business officesJanuary 2012 - March 2012Training recipients : Managerial employees at overseas business offices (total: 31 business offices)Number of sessions :25 sessions at 31 locations (including joint sessions)

●e-learningFebruary 2012Training recipients :All persons with of the Hitachi Metals Group e-mail addresses (domestic)Content : "Countermeasures and preparedness for targeted email attacks"

* For employees in some overseas offices who were unable to receive e-learning courses via the Group's Intranet, PDF materials in a self-study format were provided.




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[In Cooperation with Society and the Local Community]

The Corporate philosophy of the Hitachi Metals Group is to "contribute to society by creating 'the best possible company,'" and the Code of Conduct for Hitachi Metals Group Companies includes the aspiration to continue to contribute to society as a good corporate citizen. Pursuant to these policies, the Company is engaged in a variety of social contribution activities.

Harmonious Coexistence with the Local CommunityIn every location, Hitachi Metals Group companies volunteer both personnel and physical support for local community activities,

including popular community races and school athletic events. Hitachi Metals Group companies also proactively engage in communi-

cations with the local community, bringing in tour groups, participating in local cleanup activities, and opening company recreational

facilities to the public (gymnasiums, play fields, tennis courts, etc.).

1

2

3

4

5

Support Offered through a FoundationDriven by the goal of contributing to the development of material science research in Japan, Hitachi Metals has provided personnel

and physical support to the Research Foundation for Materials Science in Japan, established largely with funds willed by Dr. Kakuno-

suke Miyashita (former Hitachi Metals vice president), since its inception. The Hitachi Metals Group also supports and contributes to

environmental preservation projects, educational, academic and cultural interchange with Asian countries, support projects for the

healthy development of youth, educational activities in the United States, etc. conducted by Hitachi Group foundations Hitachi Envi-

ronment Foundation, the Hitachi Scholarship Foundation, the Hitachi Mirai Foundation, and the Hitachi Foundation (U.S.).

Preservation of Historic Sites and Traditional CultureHitachi Metals supports the production of Tatara steel engaged in by the Society for the Preservation of Japanese Art Swords. Tatara

is a steel-making technique unique to Japan, with a historyspanning more than 1000 years, and resulting in the creation of Tamaha-

gane steel indispensable to the manufacture of Japanese swords. Tatara steel ceased to be produced after the war, but the tech-

nique was revived in 1977 as the Nittoho Tatara by the Society for the Preservation of Japanese Art Swords with the support of the

Japanese national government. Hitachi Metals has offered its backing for the restoration of this uniquely Japanese cultural tradition,

continuing to support the manufacture of Tatara steel.

Disaster Area SupportWhen earthquakes and other major disasters occur, the Hitachi Metals Group coordinates with related organizations, providing sup-

port for the disaster area.

Social WelfareThe Company provides wheelchair and other universal access equipment to social welfare organizations in areas surrounding head-

quarters and company housing facilities. In addition, the Company supports and contributes to the activities of the "Sawayaka Wel-

fare Foundation," (social welfare foundation) which promotes the creation of groups (local networks) that promote volunteer activities

in the community.

S o c i a l R e p o r t



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[Harmonious Coexistence with the Local Community]

Kuwana WorksHitachi Metals Cup Junior High School Baseball Pennant Tournament

Sponsoring and Supporting Sporting Events

HMW, Ltd.Wakamatsu Ward Junior High School rubber-ball Baseball Tournament

The Kyushu Works of Hitachi Metals, Ltd. has been sponsoring the Kanda Town Fureai Marathon Festival every year. The festival was held on Sunday, March 4 2012, aiming to invite the residents of the entire Kanda Town to promote the "Town People Charter" as well as their good health. Although it was raining, the employees of the Kyushu Works conducted volunteer activities such as doing reception work, collecting runners' number tags and presenting commemorative gifts.

Supporting the 30th Kanda Town Fureai Marathon Festival Kyushu Works, Hitachi Metals, Ltd.

Sponsor: The 30th Kanda Town Fureai Marathon Festival CommitteeOrganizer: Kanda Town, Kanda Town Board of Education, and Kanda Town Athletic AssociationSupporter: Kanda Town Sports Promotion Committee, Kanda Town Traffic Safety Instruction Council, Kanda Town Community

Leaders Association Shirakawa Group, Kanda Town Child-rearing Association, and Kanda Town Youth Development CouncilCo-sponsor: Kyushu Works of Hitachi Metals, Ltd.Date: Sunday, March 4, 2012

Presentation of support money




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Tottori WorksTottori Prefecture Junior High Volleyball TournamentMen's and Women's Championship Tournament

Kumagaya WorksThe 22nd Kumagaya Sakura MarathonDate: March 18, 2012




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Yasugi WorksYasugi District Hitachi Metals Cup Junior High School Goodwill Sporting Event

Plant Tour for Children's Social Studies

Yasugi WorksPlant Tour for Elementary School Children




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Participating in the Prefectural Forest Preservation Initiative Yasugi Works, Hitachi Metals, Ltd.

The Shimane Prefecture has launched its Shimane Forest CO2 Absorption Certification System in 2010. This system is to certify the amount of carbon dioxide absorption increased as a result of preservation activities for prefectural- and municipality-owned forests by companies and organizations through donation of funds or labor. In 2011, the Yasugi Works donated funds for preserving 5.33ha of forests (equivalent to 47.96 tons of CO2 absorption increased) under the system.Furthermore, a forest preservation event was held on November 28, 2011 to promote the certification system as well as the CSR activities of companies who participated in the system. From the Hitachi Metals Group, 52 volunteer employees of Hitachi Metals, Ltd. (the Yasugi Works and Metglas Yasugi Works), HMY Ltd. and Hitachi Metals Precision, Ltd. joined the event. They conducted tree thinning, pruning, bucking, etc. for about 0.1ha of the forest to improve its environment. We plan to continue voluntary forest preservation activities.

T O P I C S

[2011 Forest Preservation Event to Promote the Shimane CO2 Absorption Certification System]Date: November 28, 2011Place: Fube, Hirose-cho, Yasugi City, Shimane PrefectureSponsor: Shimane Shinrin-Support CenterCo-sponsor: Yasugi Works, Hitachi Metals, Ltd.Partners: Shimane Prefecture, Yasugi City,

and Shimane Tobu Forestry CooperativeParticipants from Hitachi Metals Group: 52 employees

Hitachi Metals’ employees conducting forest preservation activities

A sign to promote forest preservation Forest preservation activities 2011 CO2 absorption certificate




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Receives an Inspiration Award at the Hitachi Group Green Curtain Contest - Efforts to Increase the Awareness of Energy-saving by Goya Green Curtains - Hitachi Metals FineTech, Ltd.

T O P I C S

On December 27, 2011, the first Hitachi Group Green Curtain Contest was held.This contest is designed to value innovative activities relating to the Green Curtain Project, one of the initiatives of the Hitachi Group Summer Energy Conservation Campaign. It also aims to raise employees' awareness of energy conservation and motivate their efforts. In May 2011, 10,000 seedlings of Goya (bitter gourd) were distributed to about 300 domestic offices of the Hitachi Group. At the contest, excellent activities in the use of "Green Curtains" were selected from among 85 candidates and awarded Grand Prizes, Excellence Prizes and Encouragement Prizes by group and individual categories. Among the Hitachi Metals Group, Hitachi Metals FineTech, Ltd. was selected as recipient of the Encouragement Prize, Inspiration Award in the category of group for its promotion efforts to increase the awareness of energy-saving through Goya cultivation.

[Ruriko Takeo, Hitachi Metals FineTech, Ltd.]We at Hitachi Metals FineTech, Ltd. have been participating in the Asahi Town Corporate Econet, a local volunteer organization. Under the Green Curtain Project, we encouraged the member companies of Econet including the Mie Prefectural Government to grow Goya, aiming to increase the awareness of energy-saving within the town. We planted 66 seedlings of Goya in 33 planters set along the wall of our office building. At first, the seedlings grew very slowly: all of us cared for the plants and watered in the morning and evening, saying "Grow up!" We often talked about Goya which activated communication among the employees. Eventually, we harvested 262 Goya in the first year: we shared Goya, enjoying it at home and the company cafeteria. We are really happy to receive this prize and willing to continue working together on energy-saving efforts.

[Environmental Management Department, Engineering & Technology Center, Hitachi Metals, Ltd.]In May 2011, the Hitachi Group called for the Green Curtain Contest within its Group companies and supplied Goya seedlings to them. Responding to this campaign, we encouraged the business offices within the Hitachi Metals Group to join the contest, and as a result 20 business offices joined. Each of them reported the growth of Goya seedlings in their own unique way: some wrote in the form of a diary and others in the form of quiz. We could see that they really enjoyed growing Goya.The Group plans to host the contest again this year. We wish as many of our employees as possible to join it, with the aim of reducing CO2 emissions and improving internal communications, and obviously, the happy goal of harvesting Goya.

The green curtain cared for by all employees The award ceremony




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We Are Promoting the Ecocap Program!Hitachi Metals Head Office and Hitachi Tool Engineering, Ltd.

Hitachi Metals head office and Hitachi Tool Engineering, Ltd. located within the SEAVANS North Building (Shibaura, Minato-ku, Tokyo) have been promoting the "Ecocap Program" since June 2011. This program is initiated and promoted by the Ecocap Movement, a non-profit organization (NPO), through collection and sale of plastic bottle caps (to recyclers) and donation of the sales proceeds to developing countries for children's vaccines.The first collection was carried out in February 2012, about eight months after the start of the program, which amounted to 7kg of caps (equivalent to 30,400 caps). We made a donation from the sales proceeds of the caps that could provide vaccines for 38 children.

T O P I C S

I am very happy to know that our efforts to the Ecocap Program were finally successful to some extent. Before starting this program, the way of disposing garbage at the headquarters was not good. In order to improve the situation, we decided to change the arrangement of garbage bins at the end of 2010. We started by checking the actual condition of disposal, confirming the waste disposal rules of the community and the office building, and referring to the advice of the cleaning company and its staff members. Through these processes, the Ecocap Program was included as part of the waste separation campaign at the headquarters.

[Mieko Sato, Environmental Management Department, Engineering & Technology Center, Hitachi Metals, Ltd.]

Science Club: A membership organization of the Science Museum,targeting children from those in their third year of elementary school to high school ages. It aims to nurture and develop children's love of science, by allowing them to experience the "Joy of Creation" through various science activities such as workshops, experiments, natureobservation classes as well as tours of the Museum's facilities.

Hitachi Group Companies Hosted a Hitachi Science Seminar for Elementary School ChildrenThe Hitachi Science Seminar titled "the Amazing World of Magnetism" was hosted at the Science Museum (Chiyoda-ku, Tokyo) on three Sundays from November 20, 2011 led by three companies of the Hitachi Group. About 50 elementary school children who are the members of the Science Club* attended.

The seminar is a science class conducted by Hitachi, Ltd., Hitachi Metals, Ltd and Hitachi Plant Technologies, Ltd. It offers science programs developed based on the technologies and expertise of each company, aiming to keep children from losing further interest in science and nurture their interest in creating things and learning the system of society. This time, the theme was "magnet": children were asked to think about technologies using magnets.

In the first session titled "What is a magnet?" an instructor from Hitachi Metals, Ltd. explained the origin and properties of a magnet and conducted an experiment to make a magnet by adding a strong magnetic force to materials. The second session "Making a clip motor" was conducted by Hitachi, Ltd. The instructor first explained the history of motors, and then let children make a clip motor using paper clips and explained why and how it works. The third session was about the magnetic treatment for purifying water (Hitachi ballast water purification system) lectured by Hitachi Plant Technologies, Ltd. Through an experiment of water purification, the children learned how Hitachi technologies are used to prevent marine pollution by using magnets.

In the end, we received positive feedback from the children participated in the seminar: "I was surprised to find that magnets are used in so many different types of technology," "I never realized that magnetics are used in our daily lives," "I want to do such a job in the future," etc.We will continue to offer various hands-on science programs to inspire children's interest in science, thereby contributing to the education and development of the next generation.

*




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[Pursuing Mutual Growth with our Business Partners]

Seeking to create products that offer the greatest customer satisfactionDriven by our philosophy underpinning quality assurance activities that is grounded in the famous Hitachi "Ochibo Hiroi" (gleanings) concept, the Hitachi Metals Group continues to improve our quality assurance technologies, offering products that delight both our customers and the ultimate product consumer. This is yet another way in which we contribute to the betterment of society.

With Our Customers

Quality Assurance StructureThe Group’s core materials and components are supplied to a wide range of customers in the steel, automotive and electronics indus-tries. Quality assurance, appropriate to the needs of each customer, is carried out at every site. All domestic factories have received ISO 9001 (2000) or ISO/ TS16949 certification, and have established quality assurance structures in place.The Hitachi Metals Group has manufacturing plants in the United States, Asia and Europe, and is developing businesses appropriate to each area of operation. The factories in Japan function as "mother factories" to their overseas counterparts, and provide guidance regarding manufacturing technologies and quality control through close links. The major factories overseas have also received ISO 9001 (2000) certification.

July 1, 1988 President

Philosophy Underpinning Quality Assurance Activities

1. Objectives behind the Establishment of our PhilosophyUnderpinning Quality Assurance Activities The company creed of the Hitachi Metals is the continual pursuit of technology, contributing to the betterment of society through the manufacture and sales of high-quality, distinctive products.Quality assurance activities are the underpinning of our "monozukuri" activities. We practice quality assurance activities as a fundamental part of our daily work. To further instill an awareness of quality assurance activities throughout our organization, we have established a Company-wide standard, clearly defining our philosophy regarding quality assurance activities within Hitachi Metals.

2. Philosophy Underpinning Quality Assurance ActivitiesThe Hitachi Metals’ philosophy concerning quality assurance activities is built on the famous Hitachi "Ochibo Hiroi" (gleanings) concept. This activity philosophy is as described below.

(1) Quality First, Customers FirstProduct quality is the highest priority among our many duties to our customers.Our primary objective is to be a trusted company that satisfies customers and plays a role in the betterment of society.

(2) Build quality into our products, and conduct final inspections from the standpoint of the customerQuality is the starting point for all of our corporate activities.When development, production, sales and other departments maintain a focus on quality, all working as a team to consistently improve quality within the organiza-tion, we can build quality into our products as an inherent component. Manufacturing and final inspection are the twin pillars of quality assurance. Error-free technology and equipment, production management, and a continuous approach to final inspection from the standpoint of the customer is what ensures the quality of Hitachi Metals products.

(3) A sincere response to quality issues; prevention of recurrenceIf we ever inconvenience our customers because of a quality defect, we believe it is our responsibility to resolve the issue in the best manner possible. We must fully investigate the underlying cause of the issue, learning the lessons that will ensure the issue never happens again.




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・・・

・・・

・・・

・・・

Executive Director Responsible for Technology

Headquarters Quality Assurance Group

Corporate Divisions

Manufacturing Facilities PS Committee

Company PS Committee

Companywide PS/PL Committee

Chairperson

Headquarters

Members

Headquarters

Members Sales/Planning/Related Sales Divisions

Company President Company President

General Manager, Works General Manager,Works

HeadquartersAssurance Division

MembersTechnology Division Manufacturing Division

Members MembersControl Division

Quality Assurance Manager (General Manager Responsible for Technology)

President


Safe Product Supply SystemThe Product Liability (PL) Committee is composed of PL Committee members from each corporate division and each internal company factory, and carries out product safety (PS) activities. New products and those in development are subject to thorough PS design reviews, thereby assuring the production of safe products. With the aim of assuring product safety, the Group-wide PS activities are linked with Works-based PS activities. The entire Hitachi Metals Group also has further strengthened its controls on substances of environmental concern.

With Our Customers

＋

Development Procurement Manufacture, quality assurance (QA)

Environmental CSR-Compliant Monozukuri Structure

*1 REACH regulation:Registration, Evaluation, Authorisasion of Chemicals

*2 J-Moss:Refers to a new set of regulations issued inDecember 2005 to coincide with the revision of the Law for the Promotion of Effective Utilization of Resources. These regulations are stipulated as a JIS standard (JIS C 0950:2005) and are in line with the EU’ s RoHS Directive. J-Moss concerns the disclosure of the presence of specific chemical substances in electrical and electronic devices.

*3 Promote the identification of chemical substances included in products; register and file for approval of chemical substances, provide information regarding chemicalsubstances to customers.

Management standardsand operational rules

Basic policyand structure

Customers

Development ofproducts thatdo not contain

hazardous substances

Purchase of materialsand components

that do not containhazardous substances

Do not shipproducts that

contain hazardoussubstances

Ingredientlabeling,

guarantee andmaintenance

■Worldwide Spread of Product-Based Environmental Regulations

Quality Incident Response StructureAll incidents involving products are reported to the Corporate Division and to the internal company through the designated information channels. In addressing such incidents, both the direct causes and the background factors leading to those causes are investigated thoroughly. When investigating background factors, the Hitachi Metals Group places particular importance on uncovering motivational factors as part of its efforts to prevent recurrences. The legendary Hitachi Group "Ochibo Hiroi" (gleanings) meeting is one activity that we undertake to ensure that we learn lessons from accidents and other mistakes. This meeting is held annually within each Group company, as well as at the domestic and overseas manufacturing facility level.

Supervision of substance contained in productThe Hitachi Metals Group embraces a global approach to "Environmental CSR-Compliant Monozukuri" activities—methods of produc-tion that do not incorporate harmful substances. As shown in the figure below, these activities involve applying mechanisms to elimi-nate harmful substances at each stage of production. Doing so allows us to promote the identification of chemical substances con-tained in our products, and register and file for approval of chemical substances and provide information on them to our customers with regards to REACH and other regulations. We also intend to cooperate with our customers and business partners to ensure that we can provide information in an efficient manner.

●Europe : RoHS Directive, ELV Directive, REACH Regulation*1

●China : Provisions on the Environmental Administration of New Chemical Substances●Japan : J-Moss*2, Act on the Evaluation of Chemical Substances and Regulation of Their

Manufacture*3, etc., and various recycling laws




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Our Approach to CSR ProcurementCSR in procurement activities means that first and foremost, we are a company that pract ices CSR, and that we do business with other companies that practice CSR.We communicate this fundamental stance to potential business partners prior to entering a new relationship, confirming that the activities of the potential partner comply with accepted CSR practices.In addition, we ask our supply chain partners to comply with our policy to avoid using conflict minerals* in our products, and inquire them to ensure these conflict minerals are not used. In this way, we strive to conduct the appropriate management of raw materials not to include these conflict minerals.

With Our Suppliers

●Open, global procurementWe procure materials from suppliers regardless of their nationality, size, and performance based on the principle of free competition.

●Fair, clean tradingWe select suppliers on a fair and equitable basis according to their economic rationality such as quality, prices, delivery time, technologies, the credibility of management and services. We never receive any personal gifts or offers from them.

●Maintain partnershipsWe cultivate fair business relations with all of our suppliers on an equal footing. We constantly strive to deepen mutual understanding and trust, and aim to achieve growth, development and a working partnership with them from a long-term perspective.

●Comply with lawsWe conduct procurement activities in compliance with applicable laws and regulations as well as social norms. We are determined not to have any relations with anti-social forces that threaten the order and safety of civil society

●Make consideration to human right, occupational safety and healthWe take special care to ensure human rights, occupational safety and health in our procurement activities. We also ask our suppliers to make the same efforts.

●Keep confidentialityWe treat all confidential information of our suppliers obtained through procurement activities as being strictly private and confidential by using the same degree of care we use to safeguard our own proprietary information. We do not disclose their information to a third party nor use for purposes other than the original intent without their prior consent.

●Preserve the environmentWe give priority to suppliers those who positively work on environmental preservation as well as to environmentally friendly materials and components.(For our environment-related procurement activities, please see the section of "Green Procurement")

Procurement PolicyBasic Concept of Material Procurement

ComplianceThe Company makes a daily commitment to obey laws, regulations, and social proprieties in our transactions with our business partners.On a regular basis, we call together our procurement specialists to provide ongoing education regarding laws and regulations, as well as to confirm the status of compliance.Specific initiatives regarding legal compliance include establishing and implementing internal rules for self-regulation regarding compliance with the Act against Delay in Payment of Subcontract Proceeds, Etc. to Subcon-tractors.

Green PurchasingHitachi Metals began a green purchasing initiative with office paper, statio-nery and other office supplies, which has since expanded to include office equipment and more.All of our factories have adopted the use of Internet-based procurement, allowing us to select and purchase indirect materials that conform to the Law on Promoting Green Purchasing or are otherwise environmentally friendly. We are presently looking to expand this practice across other Group companies as well.

* Our Initiatives to Address the Issue of Conflict MineralsIn 2010, the US Dodd–Frank Wall Street Reform and Consumer Protection Act was established. The act sets out the obligation of US listing companies to report to the Securities and Exchange Commission (SEC) about their use of conflict minerals (i.e., four minerals of gold, tanta-lum, tin and tungsten that are the funding sources of the armed groups) produced in the Democratic Republic of the Congo and its neighbor-ing countries ("DRC countries"). This aims to cut off funding sources from armed groups engaging in human rights abuses such as tyranny and oppression in the conflict-ridden DRC countries. In responding to this Act, the SEC plans to formulate a rule to request US companies using the conflict minerals in products to disclose in their annual reports whether these minerals are originated from the DRC countries.The Hitachi Metals Group will never be complicit in such human right abuses in the DRC countries. In order to maintain responsible procure-ment, we strive to improve the transparency of our supply chains and procure minerals without giving any advantage to the armed groups engaging in human right abuses through collaboration with Hitachi, Ltd. and other Group companies as well as our suppliers.

Response to GlobalizationWe strive to establish and expand a global procurement network across Europe, North America, and Asia, while sharing our procurement policy and enhancing CSR risk management within the network.




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[Fostering the Welfare of Employees and Society]

With Our Employees

Encourage self-independenceCreate a corporate culture that fosters self-responsibility

and awareness of the importance of career formation

To Achieve Our Management Vision●Develop Talented Leaders Who Bring Innovative Changes●Develop Human Resources Highly Skilled in Organizational

Management●Develop World-Class, Technically Superior Human Resources

●Career development system (career registration, self-assessment, FA system, recruitment system)●Develop human resources based on

the superior/subordinate relationship utilizing management by objectives, and incorporating the PDCA cycle

●Career design training, career counseling

●Regular implementation of career path/career assessment through HR development conferences

●Career development support emphasizing expertise and opportunities to demonstrate skills

● In-house training, including business management techniques; manager development training

(　　　　　　　　　　　　　　　 )Goals

Specificmeasures

Human Resources TrainingWith the management philosophy of "contributing to society by creating the best possible company," we aim to attain sustainable growth as one of the world's leading materials manufacturer. In order to grow as a global company amid the turbulent market condi-tions, we need to cultivate human resources who can constantly develop and put on the market the world's best environmentally friendly products that are original and highly functional.Our approach to our "people" is the distillation of "strength through harmony," our fundamental spirit since the inception of our com-pany. Based on this philosophy, we continue to conduct activities toward creating an organizational culture that facilitates individuality and independence.

Under the HR slogan "Learn, shine, and accept the challenge" reflecting the determination for each and every employee within the organization to be a key driver of growth, a sentiment incorporated into our communications symbol "Materials Magic," we support our employees in developing their expertise so that they become an efficient workforce who can actively seek out challenges and take action to achieve success or solve problems.

Training and Education SystemRecognizing that the strength of a corporation is derived from the aggregation of individual and organizational capabilities, we strive to develop our original in-house training programs and contents to help our employees develop their professional skills, which will, as a result, differentiate us from other companies at both individual and organizational levels.

Labor and Management RelationsHitachi Metals sincerely addresses common management-labor issues, respecting the basic rights and responsibilities of each, built on a "foundation of mutual trust." The Company provides full explanations of management policies, business plans, management measures, etc., at various meetings, while at the same time listening to feedback from the employee union as Company management works for the rapid implementation of various corporate measures.Since fiscal 2010, we have been fully implementing a new labor and management structure that corresponds to our company-based system (currently a division-based system). Increasing the level of communications will help establish a stronger relationship between labor and management within the Company.

The employee unions of the Hitachi Metals Group companies have formed a union council, using the forum to periodically exchange opinions and making clarification regarding Group management policies and plans, enhancing mutual understanding.

Respecting Human RightsIn becoming the "best possible company" to which we aspire, we must create a work environment of mutual trust, where the individual-ity and rights of each person are respected without discrimination. As a member of the Hitachi Group, we adhere to the ten principles ofthe Global Compact advocated by the United Nations, and have established harassment hotlines and related oversight programs. We are also committing Company resources to educational programs that formally promote awareness of human rights. These programs include e-learning systems for human rights education, training according to seniority within the Company, and other opportunities.




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2.2

2.0

1.8

1.6

1.4

1.2

1.0

130

120

110

100

90

80

70

123

2.06123

115

2.08

1.86

FY2011FY2007

30

25

20

15

10

5

0FY2011FY2009FY2008 FY2009

126

1.94

FY2010 FY2010

17

26

FY2010FY2006 FY2007 FY2008 FY2009 (Year)

2.00

1.50

1.00

0.50

0.00

13

21

2.05

121

12

19

FY2011

Employmat rate for physically-challenged individuals (%)No. of Employees

(people) (people)

*Figures based on the Handicapped Persons' Employment Promotion Act

Frequency of Occupational Injuries

All Industries Manufacturing Steel Hitachi Metals Group

[Fostering the Welfare of Employees and Society]

With Our Employees

Employment rate for physically-challenged individuals

No. of Employees

No. of Births

Requests for Leaves of Absence

Change in employment rate of physically-challenged individuals Requests for Child-Rearing Leaves of Absence

*Frequency of Occupational Injuries = No. of occupational deaths or injuries ÷ total labor hours × 1,000,000

Employment of the Physically Challenged and Support for Nurturing the Next GenerationHitachi Metals has been an early adopter in building a system providing employment opportunities for physically challenged individuals. In 1998, Hitachi Metals established the Hallow, Ltd., a special subsidiary, followed by Kuwana Create Co., Ltd. (current Hitachi Metals FineTech, Ltd.) in 2006, which received special government certification as a company offering employment opportunities for the physically challenged. These two companies have been recognized by their local communities for their policies, including the active hiring of mentally impaired individuals. Starting from fiscal 2008, the Company has established a children allowance benefit for employees as a policy for supporting the development of the next generation, strengthening our support of employees who are raising children. In 1992, Hitachi Metals was also one of the first companies to adopt a system to re-employ individuals who have retired from the Com-pany due to childbirth or home care, demonstrating once again our forward-thinking policies. In addition, Hitachi Metals has an estab-lished child-care/home-care leave program. This program provides employees with generous conditions in terms of the scope and period of leave that exceed the requirements under the revised Child Care and Family Care Leave Act. For example, employees can take home-care leave not only for their children but also their parents (or in-laws) and spouse.

Effort to Eliminate Occupational InjuriesThe safety records of our Group in fiscal 2011 show four accidents involving lost work time at Hitachi Metals and eleven accidents at the Hitachi Metals Group in Japan. This indicates that we were unable to improve our safety records sufficiently during the past one year.To improve the situation, we plan to implement a group-wide safety and health program in fiscal 2012, under the slogan "Entrench the concept of 'Safety always comes first' in the culture of Hitachi Metals Group with all-out efforts by each employee." Since the analysis result shows that 90% of accidents last year were due to human error, we are now focusing on the themes of "planning and implementa-tion of measures for basic facilities to ensure fundamental safety" and "increasing safety awareness among employees." To be more precise, we strive to improve facilities used for works that are considered to be highly risky, in order to ensure fundamental safety, and eliminate factors that hinder the enhancement of safety culture, seriously reflecting on the state where the awareness of safety is not deeply entrenched in our workplace.




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The front cover of the Shareholders’ Newsletter for the 75th Fiscal Period (left) and the top page of the Hitachi Metals web site

[Promoting Truthful Communication with Society]

With Society, Including Our Shareholders and Investors

Timely Publication of InformationTo earn trust as a highly transparent "open firm", the Hitachi Metals Group is working to enhance in-house systems to appropriately implement prompt, accurate and fair disclosure of company information and publish information in a timely manner.Divisions work together, centered on the Communications Office, to disclose quarterly operating and financial results information, and hold presentations including operating results briefing for institutional investors and analysts. This effort extends beyond infor-mation on operating results, and we also actively disclose information on topics by separate business and our medium-term man-agement plans.The Hitachi Metals Group communicates our management philosophy via shareholder newsletters, annual reports (English), corpo-rate websites and numerous other communications channels.




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29

Website for personal investorshttp://www.hitachi-metals.co.jp/mms/index.html(in Japanese)

Shareholder and investor information websitehttp://www.hitachi-metals.co.jp/e/ir/indx_ir.html

Exhibition in "Eco-Products 2011"

[Promoting Truthful Communication with Society]

With Society, Including Our Shareholders and Investors

ExhibitionsHitachi Metals exhibited at Eco-Products 2011 held at the Tokyo Big Sight from December 15 through December 17. We exhibited rare-earth magnets, amorphous ribbons, and other Eco-Products. We also designed a demon-stration area to allow people of all ages to learn about rare-earth magnets, experimenting with strong magnetism and electricity generation.

Introduction to the Hitachi Metals Group IR websitesAs a tool to bring us closer to our shareholders and investors, we have established Internet websites designed for shareholders and investors as well as personal investors. On these sites we publish timely disclosure materials, annual reports, slide presentation mate-rials regarding operating results and other materials, and release information pertaining to operating results.We also have established an e-mail address just for IR purposes, which we are employing as one communications tool for listening to what our shareholders and investors have to say.




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30

200

400

600

800

1000

1200

1400

0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

0

CO2

emis

sion

s (k

t-CO

2/y

ear)

Net s

ales

ene

rgy

rate

(Kℓ

crud

e oi

l equ

ivale

nt/m

illion

yen

)

1990 2005 2006 2007 2008 2009 2010 2011 2012

Net sales of Eco-Products (results)

Ratio of Eco-Products sales per net sales (results)

Ratio of Eco-Products sales per net sales (target)

CO2 emissions (results)

CO2 emissions (target)

Net sales energy rate (results)

2015

600,000

400,000

200,000

0

100

90

80

70

60

50

40

30

20

10

0

Net s

ales

(milli

on y

en)

Ratio

of E

co-P

rodu

cts

sale

s to

net

sal

es (%

)

2008 2009 2010 2011 2012 2015

500,000

300,000

100,000

Ratio of Eco-Product Sales

Quantitative Items

Qualitative Items

Eco-Mind & Global Eco-Management

Plants and Offices with High Level of Consideration to the Environment

Providing Next-Generation Products & Services


Providing Next-Generation Products & Services

Cooperation with Stakeholders

Environmental ObjectivesCategory Indicators Fiscal 2011 Targets Fiscal 2011 Results Achievement level

Category Environmental Objectives Fiscal 2011 Results Achievement level

Raising the Level of Our Environmental Activities

Environmental Education

Expand Eco-Products

Reducing the Product Transportation Burden

Improving Our Generation of Waste per Unit

Global Warming Prevention

Promoting Global Environmental Management

Improving Environmental Managers’ Skills

Preserving Ecosystems (Biodiversity)

Proper Management of Chemical Substances Contained in our Products

Environmental Information Disclosure

PR activities for Eco-Products

Social Contribution

GREEN 21 - 2015＊1 Green Points

Completion rate of Eco-Mind training through e-learning

Registration rate of Eco-Products

Creation of Eco-Products Select＊2

Reduction rate in transport energy consumption (from previous year’s level, in Japan)

Reduction rate in our generation of waste per unit of nominal output(from fiscal 2005 level, globally)

Reduction rate in CO2 emissions per unit of nominal output (from fiscal 2009 level, in Japan)＊3

Reduction rate in CO2 emissions (from fiscal 1990 level, in Japan)＊3

Held Hitachi Metals Group Environmental Committee meeting

Implementing environmental impact studies at overseas business offices

Environmental Internal Auditor training: 22 people attended

Environmental Internal Auditor follow-up training: 5 people attended

Creation of Ecosystem Preservation Assessment Check Sheet

Implement the Environmental CSR-Compliant Monozukuri structure

Creation and implementation of a management system for chemicals in our products

Hitachi Metals Group CSR Report 2011 issued

Welcoming plant tours

Planning exhibitions, etc. (Exhibits at Eco-Products 2011, etc. )

Presenting information about our Eco-Products in Eco-Products Directory

Participation in local environmental preservation activities

Implemented local area cleanup activities

351GP

90%

75%

1 model

1%

7%

2%

10%

410 GP

99%

76%

2 models

1%

18%

16%

23%

●Medium-to-Long-Term Environmental Strategy

Towards Global Environmental ManagementThe Hitachi Metals Group continues to reduce our environmental burden, with a focus on the environmental risk management. We promote a shared understanding of the Hitachi Metals Group Basic Environmental Protection Policies and action plans among Group companies, understanding the different characteristics of the areas around the world in which we operate.

Global Warming PreventionTaking society ’s need to reduce CO2 emissions as an opportunity, we aim to innovate our manufacturing processes, and strengthen our manufacturing technologies while simultaneously aiming to reduce CO2 emissions.

Expansion of Eco-ProductsWe dedicate management resources to creating and expanding Eco-Product lines that reflect environmental concerns for reducing energy and saving resources, preventing global warming, and reducing the use of hazardous substances

Recycling of ResourcesWe are pushing forward multiple initiatives such as the reduction of the amount of waste by innovating the manufacturing processes, development of uses for recycled waste, and recovery of used products.

●Environmental Objectives, Targets, and ResultsIn fiscal 2011 we began implementing our Third Term Environmental Action Plan (for fiscal years 2011 – 2015). Through recovery of used products, strengthening communication with our overseas business offices and other measures, we have been able to achieve our targets in all categories.

＊1 :Hitachi Group’s system for evaluating the achievement level for environmental activity targets. Evaluation criteria were changed in fiscal 2011.＊2 :These are selected eco-products and services with especially high environmental value.＊3:The site subject to the target is a Type 1 designated energy management plant in Japan.

Global Warming PreventionExpand Eco-Products

CO2 emissions targets900 thousand tons or less (2008–2012)

: Target Achieved : Target 90% or More Achieved : Target Not Achieved

E n v i r o n m e n t a l R e p o r t



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[Third Term Environmental Action Plan (Fiscal Years 2011 – 2015)]

＊1: Hitachi Group’s mechanism for fiscal 2015 for evaluating the achievement level for environmental activity targets＊2: Products and services with the highest environmental value level among our Eco-Products＊3: The site subject to the target is a Type 1 energy management designated plant in Japan

Green21-2015＊1 Green Points(GP)Eco-Mind & Global Eco-Management

Providing Next-Generation Products and Services

Plants and Offices that Give High-Level Consideration to the Environment

Improving Our Generation of Waste per Unit

Reduction rate in our generation of waste per unit of nominal output

Completion rate of Eco-Mind training through e-learning Registration rate of Eco-Products

Eco-Products sales ratio

Creation of Eco-Products Select＊2(sum total)

Reduction rate in CO2 emissions per unit (vs. previous year, in Japan)

CO2 emissions per unit (vs. FY2009, in Japan)＊3

Reduction rate in CO2 emissions (vs. FY1990, in Japan)＊3

Raising the Level of Our Environmental Activities

Environmental Education

Expand Eco-Products

Reducing the Product Transportation Burden

Global Warming Prevention

Category Environmental Objectives Indicators Fiscal 2012 Targets Fiscal 2015 Targets

392GP

95%

75%

2models

1%

9%

3%

10%

Quantitative Items


Providing Next-Generation Products and Services

Environmental Information Disclosure

Providing education and training on related environmental items

Formulating the Action Plan

Implement the Environmental CSR-Compliant Monozukuri structure

Hold Hitachi Metals Group Environmental Committee meetingCreating an overseas environmental management structure

Promoting Global Environmental Management

Improving the Skills of Environmental Managers

Preserving Ecosystems (biodiversity)

PR Activities for Eco-ProductsCooperation with Stakeholders

Category Environmental Objectives Content of Activities for Fiscal 2011

Qualitative Items

Proper Management of the Chemical Substances Contained in Our Products

Social Contribution

Applying a system for managing hazardous chemicals in products

Issue Hitachi Metals Group CSR Report 2011Holding environmental meetings

Active participation in exhibitions and other events, and strategic applications for environment-related awards

Participation in local environmental preservation activities and projects

We have formulated our Third Term Environmental Action Plan, which we have been implementing since fiscal 2011 and which will last through fiscal 2015.

514GP

95%

80%

3models

5%(vs. FY2010)

15%

6%

20%




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[Eco-Management & Eco-Mind]

Hitachi Metals Group Basic Environmental Protection Policies

PhilosophyHitachi Metals’ fundamental corporate philosophy is to be "the best possible company" and to contribute to a greater society. In line with this philosophy, we regard it as crucial to ensure that humanity’ s shared environmental resources can be passed down to future generations in the best possible condition. Accordingly, throughout our operations we treat environmental considerations as an issue of the highest importance and strive actively to promote environmental protection efforts on both the global and local community levels.

Slogan●With a deep awareness that environmental protection is major issue for all humanity, fulfill social responsibilities by striving to establish

a sustainable society in harmony with the environment regarding it as one of the essential aspects of corporate activity.

●Contribute to society by developing highly reliable technologies and products in response to needs for environmental protection andthe limited nature of resources.

Business Conduct Guidelines

1. Compliance with environmental laws and regulations, and prevention of pollutionComply with all applicable laws and regulations concerning environmental issues on all levels, from international laws to national, regional, and local pacts. Establish voluntary environmental standards as needed in order to assure compliance.Identify potential environmental problems and take action to prevent pollution. In the event that environmental problems have happened, take appropriate countermeasures to minimize environmental impact.

2. Maintenance of environmental organizational structure and enhancement of environmental supervisionMaintain an organizational structure that includes leadership by an executive responsible for managing environmental issues, as well as an underlying administrative structure. Promote environmental protection activities by applying voluntary environmental standards and establishing clear environmental-related goals.Additionally, strive to continually improve our environmental management through confirming that our environmental protection activities are being carried out in an adequate, effective, and proper manner.

3. Promotion of global manufacturing with consideration of LCA (Life Cycle Assessment)Endeavor to reduce the environmental burden at entire life cycle, including R&D, product design, manufacture, distribution, sale, use, and disposal.Promote the following as global manufacturing priorities: environmentally conscious products in society, prevention of global warming, conservation and recycling of resources, chemical management, as well as conservation of biodiversity.

4. Environmental consideration at the sites all over the worldConsider environmental impact in the areas around our manufacturing sites, and strive to carry out policies responsive to the requirements and needs of the local communities.

5. Education and training to increase environmental awarenessEducate and train employees about environmental protection and importance of compliance with environmental laws and regula-tions to raise employees’ awareness of environment with a broad perspective.

6. Information disclosurePromote positive communication through the disclosure of information regarding environmental protection activities to stakeholders, and strengthen the mutual understanding and collaborative relationship.

April 1, 2010

Hitachi Metals, Ltd.President and Chief Executive Officer

Hiroyuki Fujii

33

President & CEO

Executive Officer in Charge of Environmental Issues

Hitachi Metals GroupEnvironmental Committee＊

General Managers ofWorks

Environmental Committee Meeting

General Affairs OfficeEnvironmental Managers＊

Internal Environmental Audit Team

Specialty Division Meeting

Each Division

Environmental Managers＊

Engineering & Technology Center＊

General Managers＊

Each Internal CompanyCorporate

Board Member in Chargeof Environmental Issues＊

Board Member in Chargeof Environmental Issues

Same as Figure 1 Same as Figure 1

Group Companiesin Japan

Group CompaniesOutside Japan

Figure 1

[Eco-Management & Eco-Mind]

The Hitachi Metals Group environmental management promotion structure

Hitachi Metals Group’s Environmental ManagementThe Hitachi Metals Group’ s Environmental Management is a structure where the Engineering & Technology Center, headed by an executive officer responsible for managing environmental issues of Hitachi Metals, Ltd., promotes environmental management in coordination with senior managers responsible for environmental issues in internal companies.In April 2005, we revised our Hitachi Metals Basic Environmental Protection Policies, and renamed them the Hitachi Metals Group Basic Environmental Protection Policies. We did this in order to clarify our stance that the entire group is united in its commitment to environmental management.Especially, in order to advance environmental management suited to a corporation that does business globally, we strive to ensure that the basic environmental policies are thoroughly shared in the Hitachi Metals Group, taking into account national and regional differences.Our efforts to reduce environmental burden and our response to environmental risk are based on these shared policies. Policies and targets related to environmental activities are reviewed and revised annually at the Hitachi Metals Group Environmental Committee.

An Integrated Environmental Management SystemThe Hitachi Metals Group has been acquiring ISO14001 certifications since 1998, and the ISO14001 certification acquisition rate is currently about 90% (on a site base).* Beginning with the acquisition of certification at the plant-level, we have moved forward with the creation of an integrated company-wide environmental management system (integrated EMS) to meet the increased need for coordination between divisions (engineering, planning, and sales etc.) due to such factors as product-based environmental regulations and increased sales of Eco-Products. As a result, we completed the establishment of integrated EMS for all the companies in Japan in fiscal 2009.

＊Group Environmental Committee are attended by the executive officer in charge of environmental issues, senior managers responsible for environmental issues of each internal division, environmental managers at the Works, the general managers of corporate divisions, the directors of Group companies in charge of environmental issues, and the staffs of the Engineering & Technology Center.

* But this excludes several sales offices, including those overseas.

Each Division / Works




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Environmental Training structure

Training for new employees

Training for mid-career employees

Training for managers

Environmental Internal Auditor training

Environmental Internal Auditor follow-up training

Training for risk communication

Qualification-based education

On-site environmental education

Company sales education

e-learning

Hierarchy-BasedTraining

SpecializedTraining

Environmental issues and environmental preservation activities

Environmental issues and workplace responsibilities

Environmental issues and corporate roles

Environmental laws and regulations, EMS recognition and auditing skills

Audit planning, practice and training

Practice responding to stakeholders

Legal qualification examination training

Routine environmental management for general employees

Relationship between products and the environment

Eco-Mind training (HITACHI Group)

Environmental AuditingThe Engineering & Technology Center implements company-wide environmental auditing on how well environmental laws are con-formed to, the appropriateness of EMS operations, and environmental risks.Implemented in fiscal 2011 were environmental audits at three sites and EMS internal audits at seven sites. It was confirmed that no major nonconformities existed at any of the audited sites. To keep pace with the advancing globalization of business activities and enhance global environmental management, environmen-tal management audits were carried out at eight sites in the United States, four sites in China and seven sites in Asia serving as overseas manufacturing bases. Looking ahead, the plan is to conduct regular environmental audits in the same way as they are done in Japan.

Environmental Education and Awareness PromotionHitachi Metals Group has built workplace-specific training and training systems as part of our EMS, and has established clearly defined roles for Group wide training and individual factory-level training for further improvement of the staff’ s environmental aware-ness as well as the enhancement of knowledge and skills relevant to each workplace.




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Hitachi Metals Group Results and Targets

Environmental management

Eco-Products

Fiscal 2011 Achieved

Fiscal 2011 Target

Supply chain

No. Categories Evaluation Elements

1

2

3

4

5

6

7

8

Target Score

FY2011 FY2012 FY2013 FY2014 FY2015351 392 432 473 514

100

80

60

40

20

0

Eco-Minds

Product business strategies

Eco-Factories-Resources recycling

Environmental cooperation with stakeholders

Eco-Factories-Prevent global warming

Environmental management, environmental accounting, regulatory compliance

Curbing CO2 emissions to 100 million tons, environmental business strategies

Supply chain routed environmental information collection and communication

Environmental education, training of environmental experts

Product and service assessment

CO2 emission cuts, energy saving efforts, transport energy conservation

Resources recycling, chemical substance management

Disclose information, communication activities, world citizenship activities, ecosystem protection

Environmental management

Product business strategies

Supply chain

Eco-Minds

Eco-Products

Eco-Factories-Prevent global warming

Eco-Factories-Resources recycling

Environmental cooperation with stakeholders

GREEN 21The Hitachi Group promotes “GREEN21” activities as a system of point-based evaluation of continuing improvements in environmen-tal activities and the progress made in raising the activity levels. Changes have been made in the evaluation criteria three times to date, with GREEN21 Ver.3 adopted through fiscal 2010. For the five-year period from 2011 to 2015, revisions in the evaluation criteria have been implemented congruent with the newly formulated Third Term Environmental Action Plan, with activities now being promoted under the banner of “GREEN21-2015.”In order to obtain an appropriate grasp of environmental activities, GREEN21-2015 carries out point-based evaluations of environ-mental activities for the following categories.

The GREEN21-2015 program involves setting targets through fiscal 2015 and continuing activities.

The Hitachi Metal Group’s score for fiscal 2011 was 411 green points (GPs), falling far short of our target score of 3,510 GPs. A category in which we failed to achieve our target by a particularly wide margin was Eco-Factories (Prevent global warming). In this category, the score fell due to failure to achieve the target for the net sales energy rate in the wake of reduced production output. A low score was also received in the "Environmental cooperation with stakeholders" category, reflecting the results of activities such as town meetings. The decline in the green procurement rate also resulted in a low score for "Eco-Products."

Fiscal 2012 will witness the formulation of an action plan to enhance environmental cooperation with stakeholders, advance activi-ties to uphold the fruits of this fiscal year and other efforts taking into account the results of fiscal 2011, with the vigorous promotion of higher activity levels.




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[Environmental Accounting]

Results of Environmental Accounting

■Environmental Costs

■Environmental Effects

(¥100 million)

(¥100 million)

●Scope of disclosure:The Hitachi Metals Group in Japan

●Calculation period: April 1, 2010 to March 31, 2011

Prevention of air pollution and water pollution, etc.

Global warming prevention, energy conservation

Reducing and recycling waste, conservation of water

Green procurement expenses, recycling of containers and packaging

Implementation and maintenance of EMS, operation of environment-related department

Research and development for the reduction of the environmental impacts caused by products and manufacturing processes

Supporting nature protection and local environmental activities, disclosing environmental information

Details

Cost ClassificationFY2009 FY2010 FY2011

Expense Investment Expense Investment Expense Investment

FY2009 FY2010 FY2011ItemWaste Processing and Recycling

Energy Conservation

Others

EconomicEffects

Total

ItemEnergy Saved (Crude oil equivalent)

Waste ReductionPhysicalEffects

FY2009 FY2010 FY2011

13.1

3.3

16.1

32.4

0.9

7.3

31.7

0.1

0.6

73.1

1.0

3.5

0.2

4.7

0

0

8.5

0

0

13.2

14.2

5.5

16.9

36.6

0.8

7.7

35.3

0.1

1.0

81.5

0.6

2.9

0.0

3.5

0

0

10.8

0

0

14.3

13.8

5.9

18.1

37.8

0.8

6.4

24.9

0.2

0.7

70.9

0.3

6.3

1.4

8.0

0

0

9.4

0

0

17.4

19.5

2.7

2.1

24.3

34.9

0.9

2.4

38.2

42.1

0.8

2.4

45.3

7,519kℓ

1,250t6,618kℓ

2,213t3,764kℓ

2,020t

Analysis of Results for Fiscal 2011

●Environmental CostsFiscal 2011 environmental costs totaled ¥8.83 billion – ¥7.09 billion in expenditures and ¥1.74 billion in investment. The reduction in the volume of solid waste and other industrial waste generated during the year was accompanied by a decline in expenditures for that purpose. Investment for energy saving measures increased, while outlays also targeted R&D of eco-friendly products.

●Environmental EffectsAdvances were made in harvesting valuable resources from industrial waste by reducing the amount of solid waste generated and through resource recovery initiatives, realizing major results in resources recycling.

The Hitachi Metals Group has introduced environmental accounting in order to assign corporate resources appropriately, streamline our environmental investment and environmental activities, and promote continuous improvement of environmental activities. It also aims to increase the understanding of our stakeholders by disclosing information about the effect and efficiency of our activities.Environmental costs include things like environment-related capital investment, equipment maintenance and administration costs, and R&D costs. Environmental effects include both economic effects, which are measured in monetary terms, and physical effects, which are measured in terms of environmental impact.

BusinessAreaCosts

Pollution Prevention

Global Environmental Preservation

Resource Recycling

Upstream and Downstream Costs

Management Activity Costs

Research and Development Costs

Community Activity Costs

Others

Total

Subtotal




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600,000

400,000

200,000

0

100

90

80

70

60

50

40

30

20

10

0

Net s

ales

(￥m

illion

)

Ratio

of E

co-P

rodu

cts

sale

s pe

r net

sal

es (%

)

2008 2009 2010 2011 2012 2015

Net sales of Eco-Products (results)

Ratio of Eco-Products sales per net sales (results)

500,000

300,000

100,000

Ratio of Eco-Products Sales




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[Eco-Products]

The Hitachi Metals Group considers "preserving the earth’ s environment and passing it on to future generations" as an important managerial issue. We contribute to the realization of a sustainable society through the creation of new products and new technologies that give rise to such needs, as well as through the provision of advanced Eco-Products.

Environmentally Conscious Vision for Products and ServicesThe Hitachi Metals Group is focusing our attention on environmental and energy sectors as we promote the development of new products with our next-generation flagship products. What is more, for the development and design of new products we promote environmentally friendly product development based upon the Hitachi Group Ecodesign Management Guidelines.

Expansion of Eco-ProductsThe Hitachi Metals Group promotes the expansion of Eco-Products*5 which reduce the burden on the environment throughout their entire lifecycle, from the procurement of raw materials to the design, development, manufacture, distribution, use and disposal of the actual products. In fiscal 2011, 76% of our consolidated net sales were generated by Eco-Products. We continue to vigorously advance activities aimed at expanding our Eco-Product lineup.

R&D Case StudiesField Environmental key words

Energy

Automobiles

Electronics

R&D field

Materials for solar cells (amorphous cut cores, interconnector materials, target materials)Materials for wind power generation (rare-earth magnets, amorphous metal materials, Finemet cores)

High Efficient power generation

Electricity storing / transforming smart grids

Regulations on hazardous substances

Electromagnetic field

Hybrid / Electric vehicles

More compact, lighter weight

Reduced weight / low fuel consumption

*1 SOFC：Solid Oxide Fuel Cell　*2 CVT：Continuously Variable Transmission　*3 EPS：Electronic Power Steering *4 EMC：Electro-Magnetic Compatibility

Renewable energy

Exhaust gas regulations

*5 Products that have been evaluated along eight categories that take the products’ life cycle into consideration via our Eco-Design Assessment (chart 2) and which have received two or more points and an average score of three points or higher for each item that carries a perfect score of five.

Ultra heat-resistant metal materials, precision casting blades for turbine wheels, components for SOFC*1 fuel-cell components (electrode materials, interconnector materials)

Amorphous metal materials for low-loss transformers and high-efficiency amorphous motors,electrode components for secondary cells

Components that help clean exhaust gas

Heat-resistant cast steel materials, light weight components for engines, light weight aluminum wheels, CVT*2 belt materials, magnets for EPS*3

Materials / Products free from hazardous substances

Magnetic components for EMC*4

Radio front end module, and malti-layer ceramics components

Rare-earth magnets for motors, amorphous metal materials, Finemet cores, clad metals for secondary battery electrodes

Energy-saving consumer electronics

Semiconductors / liquid crystal panels

Air conditioning / refrigerator compressor magnets

Mass flow controllers, linear stages

38

Eco-Design Assessment

Participating in ExhibitionsThe Hitachi Metals Group participates in various exhibitions and introduces its environmentally conscious technology, products, etc.The Group tries to show how its products contribute to the reducing of environmental burden.

Eco-Design (design review), fulfillment of required categories, environmental consideration of customers

Energy savings during manufacture, introduction of energy-saving equipment, productivity improvements, process improvements

Improved yield rate, expanded use of recycled products, improved recycling rate, reduced water use

Reduced use and proper management of hazardous chemicals, lowered VOC air emissions

Energy savings and low fuel consumption during product use, higher environmental functions, improved efficiency during use

Product downsizing and weight reduction, long service life, reduced rare metals

Management of product chemical content, responses to RoHS Directive and REACH Regulations

Supply of product environmental information, recyclability of packing materials, reduced transportation burden, recovery and recyclability, etc.

Environmental consideration during development,design and procurement stages

Environmental consideration during production stages (energy conservation)

Environmental consideration during production stages (resource conservation)

Environmental consideration during production stages(chemical substances)

Environmental consideration in products (energy conservation, etc.)

Environmental consideration in products (resource conservation)

Environmental consideration in products(chemical substances)

Environmental consideration during sales, distribution, and product disposal

Evaluation Items Evaluation Points

Revised Eco-Design AssessmentThe Hitachi Metals Group uses “Eco-Design Assessment” to evaluate its Eco-Products. In fiscal 2011 this assessment was revised, with the evaluation categories reworked to better reflect the state of the LCA from development, design and procurement through the use and disposal of the products.

May 18~20, 2011

June 17~18, 2011

July 20~22, 2011

July 20~22, 2011

July 27~29, 2011

September 21~23, 2011

September 25, 2011

October 4~8, 2011

October 17~20, 2011

October 13~16, 2011

October 26~28, 2011

October 31~ November 3, 2011

December 7~9, 2011

December 2~11, 2011

December 15~17, 2011

January 18~20, 2012

February 9~10, 2012

February 16, 2012

February 17~20, 2012

People and Car Technology Expo (Yokohama)

Reconstruction Future Fair (Tokyo)

TECHNO-FRONTIER 2011, The 24th EMC JAPAN 2011 (Tokyo)

TECHNO-FRONTIER 2011, The 29th MOTORTECH JAPAN 2011 (Tokyo)

The 43rd Plumbing & Sanitary Materials and Equipment Show (Tokyo)

BRUNEI ENERGY EXPO 2011 (Brunei)

Yasugi Environmental Fair (Yasugi)

CEATEC JAPAN 2011 (Makuhari)

Solar Power International (Dallas)

Enecon Expo 2011 (Viet Nam)

FPD International 2011 (Yokohama)

FUEL CELL SEMINOR & EXPOSITION (Florida)

SEMICON Japan 2011 (Makuhari)

Tokyo Motor Show 2011 (Tokyo)

Eco-Products 2011 (Tokyo)

Automotive World 2012 (Tokyo)

Hitachi Exhibition 2012 (Chongqing)

Hitachi Eco Conference (Jakarta)

FC EXPO 2012 (Tokyo)




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Substation

Solar CellsSmart Grids

Fuel Cells

Distribution Grid

Electrical Grid

Smart Meter

Target Materials for CIGS Solar Cells

Interconnector Materialsfor Solar Cells

Interconnector Materials forSolid Oxide Fuel Cell (SOFC)

Amorphous Ribbon for Distribution TransformersMetglas®

Magnetic components for power line communication

Clad Metals for Secondary Battery Electrodes

Rare-Earth MagnetFor HEV/EV NEOMAX®

Precision-Cast Blades for Gas Turbines

Rare-Earth Magnets for Wind Power GenerationNEOMAX®

Amorphous RibbonMetglas®

Amorphous Cut Cores

Solar Power SystemSORASIE®

Turbine Blades

Hybrid/Electric Vehicles

Hybrid/Electric Vehicles

Heat-Resistant Cast ComponentsHERCUNITE®-S Cast series

Fashionable Aluminum Road Wheels SCUBA®

Factories/Plant

Advanced Die Steel for Die Casting DAC-MAGIC®

End Mills for Deep-CuttingEpoch DeepEvolution Series

Composite Tungsten Carbide Roll DUPLEX®

Fuel-Efficient Vehicles

Society & Infrastructure

Thermal Power Generation, and Others

Wind and Solar Power Plants

Amorphous Cut Cores

Non-Sprinkling Snow Melting EquipmentHot Water Panel

Diesel Particulate Filter for Medium and Heavy Duty Diesel Engine

P47

P46P45

P40P41P41

P42

P42

P46

P40

P43

P43P40

P40

P44P43 P44

P45

●Hitachi Metals Group Eco-Friendly, Energy-Conservation Products

The Hitachi Metals Group provide materials and products that contribute to the environment and energy conservation in the fields of our lives, such as electric power generation / transformation and power usage in factories, homes and automobiles.




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Amorphous ribbon – Metglas®

●Environmental Features and Characteristics

・No-load loss in transformers is one-third that of grain-oriented electricalsteel*2.

・Advanced melting and casting techniques allow for mass production of amorphous wide-ribbon forms with exceptional reliability. The new Metglas ®

2605 (HB1M) provides enhanced saturation magnetic flux density, allowing amorphous transformers to be made smaller.

Metglas® Amorphous Metal Materials (2605SA1, 2605HB1M)

Hitachi Metals’ Metglas ®*1 amorphous metal materials utilizesuperior soft magnetic properties to significantly reduce electricity loss during power conversionin transformers and other equipment, making a significant contributionto energy conservation and CO2 reductions

Main Characteristics

・Metglas ® is amorphous (noncrystalline) and has an irregular, randomatomic arrangement. As such, it has the following characteristics:

1)The lack of crystal magnetic anisotropy allows for even magnetization,providing superior soft magnetic properties (the magnetic domain canbe easily moved during magnetization)

2)Approximately one-tenth the thickness of grain-oriented electricalsteel (Approx. 25μm)

3)More than twice the rate of high electrical resistance compared tograin-oriented electrical steel (120μΩcm)

*1.Metglas® is a registered trademark of Metglas, Inc.

*2.Hitachi Hyoron Vol.93 - No.2, P76 (2011)

Mag

netic

Flu

x De

nsity

B (T

)

External Magnetic Field H (A/m)

Comparison with Amorphous Hysteresis LoopSA1: Metglas® 2605SA1HB1: Metglas® 2605HB1MM3: Grain-Oriented Electric Steel

Amorphous cut cores

Amorphous Cut Cores for Solar Power Systems

Enhancing the efficiency of solar power generation requires a combination of high-output solar panels or other modules, along with a highly efficient inverter to convert the electricity. Hitachi Metals’ amorphous cut cores feature a high saturation magnetic flux density and low loss, and when used as the reactor for solar power inverters help to enhance the efficiency of renewable energy.

●Environmental Features and Characteristics1)Low core loss, helping to lessen power loss in the reactor.2)High saturation magnetic flux density (Bs=1.56T), allowing the system

to be smaller.3)The primary component is iron to enhance recyclability.

High-Grade Metals Company Soft Magnetic Materials Division

Electronics and IT Devices Company Information System Components Division




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Target Materials for CIGS Photovoltaic Cells (Mo, CuGa)


・Thinner components lessen the amount of material used in solar panels, and help to curb costs.

・Greater panel generating efficiency helps promote the switch to naturalenergy.

Target Materials for CIGS Solar Power Cells (Mo, CuGa)

The market for CIGS Solar Power cells*1 is expected to expand greatly in the future, as these cells are thinner than silicon and offer high power generation efficiency. Hitachi Metals is helping to develop and promote the adoption of renewable energy by providing the target materials for thin films.

*1.Photovoltaic cells of a compound comprising copper (Cu), indium (In), gallium (Ga), selenide (Se),and other elements. As a thin film it can be easily mass produced with fewer resources.

Expectations of enhanced performance have heightened the focus on CIGS as a potential

next-generation photovoltaic cell.

Clad Metals for Solar Power Interconnectors

Solar cells have tremendous potential as a new energy source. Hitachi Metals’ cladding technologies help to lower the cost of panelsand improve power-generating efficiency.


・Lower panel costs and improved power generating efficiencyThe thermal stress generated in connections with silicon cells is alleviated by the low-thermal expansion clad core. This preventscracking of the thin silicon cells of the solar panel. Extremely low-yield strength copper cores are also available, which help to improve power-generating efficiency by lowering the electrical resistance.・RoHS*2 compliant

Lead-free solder is used for the surface coating, allowing for RoHS compliant products.

*2.RoHS is a European Union (EU) directive prohibiting the use of harmful substances in electric and electronic devices, including lead, mercury, cadmium, and hexavalent chromium.Similar regulations have been adopted in countries outside the EU.

Interconnectors (bobbin)

Clad cores(cross section photo)

Low-yield strength Cucores(cross section photo)

Solder Cu

Solder

Cu

Invar alloy

High-Grade Metals Company Specialty Steel Division

NEOMAX MATERIALS Co., Ltd.




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Finished SOFC interconnector material (pressed product)

Finished SOFC interconnector material (etching product)

Solar panel display at Hitachi Metals Techno’s Kanto Manufacturing Center

Power generation display

●Benefits of Installing a Solar Power System

・Reduce CO2 emissions・Cut costs by producing and selling electricity・Potential to take advantage of preferential tax treatment(in Japan)・Utilize idle or unused land・Regarded as a "green area" under the Factory Location Act(in Japan)・Draw attention to environmental initiatives・Energy savings from screening effect

SORASIE® Solar Power System

This solar power system uses clean solar energy. We tailor our proposals according to the customer’ s needs, purpose and requirements, and provide consistent support from design through construction.

ZMGTM 232 Series J3 & G10 Solid Oxide Fuel Cell (SOFC) InterconnectsSOFCs are a next-generation energy source that is clean and provides a high rate of power-generation efficiency.These interconnect materials, made from ferritic alloys comprised mainly of iron and chrome with additional microelements, extend the life of SOFCs.


・ZMG232 series J3:World-class alloy design technologies provide the material with significantly enhanced oxidation resistance and electrical conductivity compared to ordinary stainless steel as well as our previous materials (ZMG232L), helping to improve the power-generating capacity of SOFC stacks.

・ZMG232 series G10:The superior oxidation resistance and electrical conductivity of this material is on a par with ZMG232 series J3, and helps extend the product lifecycle by reducing the amount of chrome evaporation. Further, refinements to the oxidation layer to allow special elements to be added to the material surface lessens the amount of chrome evaporation from within the material at working temperatures compared to ZMG232L, helping to prevent deterioration in the power-generating capacity of the SOFC stack.

・Finished products availableIn addition to basic materials (coils, sheets), we offer finished products (pressed, etched products) and meshes, allowing for practical use of SOFCs in a variety of

●Main Characteristics of SORASIE®

・Hitachi Metals Techno functions as a system integrator, not only selling the hardware, but providing a complete service from planning,design, and procurement of equipment to installation.

・We offer a one-stop solution that includes the solar power system as well as rooftop waterproofing and greening.

Hitachi Metals Techno, Ltd.

High-Grade Metals Company Specialty Steel Company




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H80 Gas TurbineSource: Hitachi Hyoron, 2010, Vol. 92, No. 4

First stage stationary Black

●Environmental Features and CharacteristicsFeatures of Precision Cast Blade Materials for Power GenerationAble to be used at high combustion temperatures of 1,300ºC

・Hollow construction (cooling fan blade)Hitachi Metals Precision unique precision casting technologies have made possible hollow construction precision blades withmultiplecooling flow channels.

・Retains strength at high temperaturesThe high-strength nickel heat-resistant alloy (developed byHitachi,Ltd.) retains strength even in high temperature.

Precision Cast Blades for High-Efficiency Gas Turbines (H-80)

From the standpoint of preventing global warming and with the current reexamination of the safety of nuclear power, there has been a sharp rise in demand for thermal power generation from gas turbine engines that use LNG and so emit less CO2. Enhancing the efficiency of gas turbine power generation requires their use at high temperatures and the manufacturing of complex turbine blades. By drawing on its precision casting technologies, Hitachi Metals Precision is able to mass produce materials for precision cast blades for use in gas turbines of the 1,300ºC class.

First stage rotating Black

NEOMAX® series Nd-Fe-B sintered magnets

●Environmental Features and CharacteristicsHitachi Metals is the first company to develop and mass produce Nd-Fe-B (neodymium, iron, and boron) sintered magnets, which are among the world’ s strongest magnets.Their strong magnetism helps motors to operate more efficiently and to be made smaller, helping to improve the fuel efficiency of hybrid and electric vehicles when used for such applications as drive motors, generators, electric power steering, and electric braking.These magnets are used in a wide range of industries, including in appliances such as compressors for air conditioners and refrigera-tors, servo motors for machine tools, and medical devices. The improved energy efficiency of these devices helps to prevent global warming and reduce environmental impacts.

NEOMAX® Series Nd-Fe-B Sintered Magnets

Hitachi Metals’ NEOMAX ® sintered magnets are among the world’ s strongest permanent magnets*,and help to reduce environmental impacts by making products more efficient, smaller, and energy efficient.

Hitachi Metals Precision, Ltd.

Electronics and IT Devices Company NEOMAX Division

*As of June 2008. Source: Hitachi Metals,




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■Temperature range for each material (reference values)

NSHR® A5N

NSHR® A3K

NSHR® F5K

NSHR® F2K

HERCUNITE® -S

SCUBA® Fashionable aluminum wheels

●Features

・Exceptional design and light weight (15% lighter than our previousproducts)

・Fancy surface treatments available (We have also establishedcoating technologies that do not use volatile organic compounds(VOCs).)

SCUBA® Fashionable Aluminum Wheels

Hitachi Metals’ SCUBA ®*1 aluminum wheels utilize high-precision CAE*2 designs that combine exceptional strength and rigidity with light weight (15% lighter than our previous products), helping to improve automobile fuel efficiency and reduce CO2 emissions.

*1.SCUBA®: Sharp-styled Casting & Uncompromised Bright Appearance

*2.CAE: Computer-Aided Engineering

HERCUNITE® series of heat-resistant cast components

Heat-resistant cast steel and iron materials help to meet the reductions in CO2 emissions and fuel costs demanded in next-generation gasoline automobiles. They also help to enhance the environmental performance of exhaust compo-nents that withstand the high-temperature combustion of engines, such as exhaust manifolds and turbine housings.

●Features

・Wide temperature range (Max. 1,050ºC)

・Optimal shapes for cast components possible with HitachiMetals’ unique prototype design and evaluation system

HERCUNITE ® Series of Heat-Resistant Cast Components

These components are resistant to the high-temperature combustion of engines, and help to improve fuel efficiency and cleaner exhaust.

High-Grade Functional Components Company Automotive Components Division

High-Grade Functional Components Company Automotive Components Division

1.4849(38Ni-18Cr)

1.4848(20Ni-25Cr)

D5S(35Ni-2Cr)

Standard materials

600 650 700 750 800 850 900 950 1000 1050 1100

(Hitachi Metals estimates)Temperature Limit (ºC)




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Diesel Filter Particulate

DAC-MAGIC®’s Characteristic serial (a conceptual diagram)

●Environmental Features and CharacteristicsThe need to enhance fuel economy in automobiles has driven greater use of lightweight and recyclable die-cast aluminum parts, and these components have become bigger and more elaborately designed. The material used in the dies for die-cast aluminum parts are subjected to a harsh heating and cooling cycle during casting, and from the standpoint of enhancing productivity, the casting cycle needs to be short.DAC-MAGIC® is a product that answers the need for extended life of molds in such an extreme usage environment, retaining the same level of toughness as traditional die materials while offering greater strength in the high-temperature range.

DAC-MAGIC® High-Performance Steel for Die-Cast Molds

The Specialty Steel Company’s DAC-MAGIC ® High-Performance Steel for Diecasting Die received an award at the 53rd Best 10 New Product Awards*1 in 2010.

●Environmental Benefits

・The material’ s enhanced toughness and strength*2 at elevated temperatures, as well as its improved resistance to stress corrosion cracking,extends the life of the die.

・Lifecycle of the die until heat cracking is 1.5 to 2 times longer than traditional diecasting die steel.

*1.The Best 10 New Products Awards is a prize sponsored by Nikkan Kogyo Shimbun that rigorously selects from among new products original inventions with a major impact in Japanand other countries, and that play a pioneering role in furthering the advancement of industry and society.

*2.Toughness is the metal’s resistance and ability to withstand external force.

Stre

ngth

at e

leva

ted

tem

pera

ture

Toughness

High

High

●Reduces release of particulate matter into the atmosphereExhaust gas is passed through micro pores in the filter, which capture particulate matter (PM) emitted by the diesel engine, reducing the release of PM into the atmosphere.

●Reduces CO2 emissions through high fuel efficiencySophisticated control of the micro pores provides not only superb capture performance, but also low pressure loss,which reduces fuel consumption.

Diesel Particulate FilterThis filter reduces the amount of particulate matter (PM) in the exhaust gas of medium-and heavy-duty diesel engines. It helps meet exhaust regulations that are increasingly stringent worldwide.

High-Grade Metals Company Roll Division

High-Grade Metals Company Specialty Steel Company

Model die made of DAC-MAGIC®




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Epoch Deep Evolution series

Typical Warm Water Panel System

●Environmental BenefitsElectrical discharge machining (EDM) is an inefficient process, requiring consid-erable time and expense including costs for the electrode material, processing of the electrode, and the electrical discharge machining.Hitachi Tool Engineering’s Epoch Deep Evolution series allows for direct cutting of hardened steels, helping to vastly shorten processing times and cut costs. With our broad lineup of products, the tooling process can be divided into finer segments according to the configuration, providing for machining under highly efficient conditions.Regrinding is also possible, allowing tools to be reused. This both reduces costs, and contributes to the effective utilization of ultra-hard base materials.

Small-Diameter End Mills for Deep CuttingEpoch Deep Evolution Series

Shifting from electrical discharge machining (EDM) to direct cutting considerably shortens processing times. Our lineup includes a broad range of products compatible with various manner of die configurations and that can also be used for regrinding, allowing them to be recycled.

Warm Water Panels

These panels are used to melt snow and provide for improved transportation safety in snow-covered regions by reducing traffic hazards, and ensuring the safety of pedestrians.Hitachi Metals’ warm water panels utilize a non-sprinkler system with an exceptional snow melting capacity that transfers the heat from the medium through the heat sink alone. Since the heating medium is recycled, no water is discharged, helping to lessen the environmental load.

Hitachi Tool Engineering, Ltd.

High-Grade Functional Components Company Piping Components Division


・Since the heat exchanger uses thin steel plates with high heat dissipation efficiency, it is possible to melt snow with low-temperatureheat sources such as underground water.

・The warm water used for the heat medium is recycled, so as opposed to sprinkler snow melting systems securing a water supply isunnecessary, and there are no problems with noise or freezing.

・The system uses corrosion-resistant hot-dip galvanization, with reduced amounts of lead and cadmium in the plating.

Warm water panels – top (left) and underside (right)

Warm water panels

Makeup water (antifreeze solution)

Expansion tank

Circulation pump

Heating equipment




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DUPLEX®


・ Ample rolling area reduces the frequency of roll replacements.

・Only the working layer is cemented carbide, helping to conserveresources.

DUPLEX® Composite Tungsten Carbide Roll

Hitachi Metals’ DUPLEX® is a composite carbide roll of joined metal carbide and alloy, with an outer layer of cemented carbide sintered over an inner alloy.Compared to conventional ring carbide rolls, the entire length of the shaft surface can be cemented.

●Characteristics

・Residual stress is placed on the working layer, improving crackresistance

・Suitable for high-torque rolling

・Suitable for use with a variety of rolls and rollers

High-Grade Metals Company Roll Division




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The Hitachi Metals Group Material Balance of Fiscal 2011 (Global)

Input of Primary Materials

INPUT

OUTPUT

Recycle

Reuse

Hitachi Metals Group

549kt

Input of Energy

596,944kℓ(Crude oil equivalent )

Input of Water Resources

14,335thousand m3

Transfer of WasteAmount of Reused / Recycled Resources

Final disposed volume

Products

320kt

233kt

81kt

Released to the Atmosphere

CO2 : 1,099ktSOx : 63tNOx : 226tHazardous Substances＊4 : 297tVOC : 606t

Released into Water

Total volume of wastewater :14,057thousand m3

BOD＊1 : 14.4tCOD＊2 : 117.4tSS＊3 : 21.7tHazardous Substances＊4 : 2.1t

＊1 BOD: Biochemical oxygen demand＊2 COD: Chemical oxygen demand＊3 SS: Suspended solid. SS are undissolved solids suspended in water＊4 Hazardous substance : Substances targeted by the PRTR Law in Japan

High-Grade Metal Products and MaterialsElectronics and IT DevicesHigh-Grade Functional Components and Equipment

[Eco-Factories]

This is a graphical representation of the balance of materials in manufacturing processes at Hitachi Metals Group for fiscal 2011. The Hitachi Metals Group is promoting the reduction of the environmental burden in two directions: reducing the volume of inputs through the efficient use of resources and energy, and reducing the volume of outputs by controlling atmospheric releases and wastewater discharges, reducing and recycling waste, and so on.




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FY1990

2,000

1,800

1,600

1,400

1,200

1,000

800

600

400

200

0FY2005 FY2006 FY2007 FY2008 FY2010

3.0

2.0

1.0

0FY2009 FY2012

179

175 171 170124

821

749 759 761 713

104

536601

128

662

2.107

2.2382.284

150

FY2011

597

151

1.869

CO2 emissions(kt-CO2/year)Net sales energy rate

(kℓcrude oil equivalent / million yen)

Net sales energy rate (in Japan)

Group Companies in Japan CO2 emissions

Hitachi Metals, Ltd. CO2 emissions

Net sales CO2 emission rate

Global Warming PreventionThe Hitachi Metals Group is a materials manufacturer and uses much energy in its manufacturing processes. For this reason, the Group has positioned the prevention of global warming as a management priority. The Group established medium-to long-term targets and is working to reduce CO2 emissions and promote energy conservation measures through efforts such as project activities.

Points of the Activities●Enhance manufacturing (improve productivity,

reduce defects, improve product yields, etc.)● Improve operating efficiency of combustion

furnaces●Review energy sources●Enhance equipment management at manufac-

turing sites

In addition, we are involved in activities such as introducing renewable energies (solar power gen-eration) and energy conservation in distribution, and are actively promoting the prevention of global warming.

Changes in CO2 Emissions and Net Sales Energy Rate

In fiscal 2011, the Hitachi Metals Group's CO2 emissions were 748,000 t-CO2 from its target sites in Japan, and 351,000 t-CO2 from its target sites outside Japan*2. We have cut the emissions from our domestic group companies by 25% compared to the fiscal 1990 level. These figures are calcu-lated by using a CO2 emission factor for each elec-tric company based on the revised Act on Promotion of Global Warming Countermeasures effective on April 2006.When using a CO2 emission factor (0.36t-CO2/MWh) projected by the Industrial Structure Council of the Ministry of Economy, Trade and Industry (METI), the reduction rate of our CO2 emissions is greater, 31% compared to the fiscal 1990 level. In addition, our net sales energy rate for fiscal 2011 was 0.996, 20% lower than the fiscal 1990 level. In fiscal 2011, we have taken energy-efficiency mea-sures such as increasing the yield ratios of our prod-ucts, improving the operating efficiency of our com-bustion furnaces and preventing loss by insulation.

Visions for Preventing Global WarmingThe Hitachi Metals Group has set the medium-term targets shown on the right for fiscal 2012.In order to reach these targets, it is rolling out initiatives to reduce CO2 emissions linked to manu-facturing.

CO2 emissionstargets(in Japan)

Targets for Fiscal 2012 in Medium Term Environmental Action Plan*1

1. Reduce net sales CO2 emission rate by 1% per year(Actual for FY 2009 was 2.284; Target for FY 2012 is 2.216 or less)

2. Reduce CO2 emissions by 10% (from FY 1990 levels)(Actual for FY 1990 was 1,000,000 t-CO2; Target for FY 2012 is 790,000 t-CO2 or less)

Fiscal 2011 Results

1. Net sales CO2 emission rate: 1.869(Net sales energy rate: 0.996 (20% reduction from FY 1990))

2. CO2 emissions: 748,000 t-CO2 (25% reduction from FY 1990 levels)

*1 Object sites for the targets: Type 1 Energy Management Designated Works in Japan (about 97% ofCO2 emissions in Japan)

*2 he Group companies outside Japan and Japanese sites exceptType 1 Designated Energy Management Works.




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Tran

spor

t-ge

nera

ted

CO2

emis

sion

s (t-

CO2 )

Tran

spor

tatio

n bu

rden

ene

rgy

rate

(kg

-CO

2/t

-km

)

FY2006 FY2007 FY2008 FY2009

50,000

40,000

30,000

20,000

10,000

0

0.2

0.15

0.1

0.05

0FY2010

Transportation burden energy rate

FY2011

Changes in transport-generated CO2 emissions and transportation burden energy rate (in Japan)

Transportation burden energy rate

CO2 emissions

Reducing the Environmental Burden of TransportationThe Hitachi Metals Group is engaged in reducing the environmental burden of transportation through various means, which include modal shifts and improved loading ratios (Hitachi Metals, Ltd. is a "designated shipper" under the law).In fiscal 2011, the Hitachi Metals Group generated 18,453t-CO2 emissions from its transportation in Japan, which is 5% lower than the previous fiscal year. The transportation load was 1,587,037,000 ton-kilometers, which is 1% lower than the previous fiscal year, and our shipping volume emissions rate improved by 4%.We have taken measures to reduce transportation load such as improving loading ratios; reducing the number of dispatches; adopt-ing a modal shift (shifting from truck to rail and marine transportation); and reducing transportation distances.We will strive to formulate effective measures to decrease the environmental burden from our transportation while accurately mea-suring our transportation load data.




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2.5%

1.6%

5.7%2.4%

2.3%

0.3%0.1%0.2%

6.1%1.2%

42.4%

38.2%

75.3%

6.0%

15.5%

FY2011FY20080

100,000

200,000

300,000

400,000 100

75

50

25

0FY2009 FY2010

81.6

96.6

86.3

74.2

SlagDustSludgeGlass and Ceramics

Waste PlasticWaste OilScrap MetalOther

Final Disposal Volume

Recycled Volume

Total Generated Volume

Recycle Rate

Group Companies outside Japan

Group Companies in Japan

Hitachi Metals, Ltd.







Hitachi Metals Group (in Japan)

t /year %Recycling Ratio

Trends in Waste and Resource Recycling Rates Breakdown of Waste Generated(Hitachi Metals Group)

Reducing WasteVision Concerning Waste ReductionThe Hitachi Metals Group has long been committed to the creation of a recycling-oriented society by preventing the illegal disposal or dumping of waste, and helping to improve resource productivity, recycling rates, and reduce final disposal volumes as laid out in the 2nd Basic Plan for Establishing the Recycling-Based Society, and also reusing and recycling waste internally.The volume of final disposal increased from the previous fiscal year due mainly to lower demand for road materials and other con-struction materials, which are major applications of recycled waste, caused by decreased public works spending.To date, we have continued with our recycling activities in order to reduce our final disposal volume in particular. However, due to the fact that it has become difficult to cope with the social changes in the demand for recycling, for the future we will advance multi-faceted initiatives that are focused mainly on considering process innovations like overhauling our manufacturing processes. In addi-tion, since fiscal 2011, we have been working to reduce our waste generation measured by a basic unit of waste generation based on net sales as an indicator, by focusing on the improvement of recycling productivity. More specifically, we are aiming to achieve a 15% reduction in the basic unit of waste generation based on net sales by fiscal 2015, setting the fiscal 2005 level as a baseline. We are also considering such topics as the ideal way to recycle resources, including collecting used products. We will then incorpo-rate measures to improve our resource recycling rate and other factors into our next set of measures.

＊Zero emissions : Deemed to be a final disposal volume no greater than 1% of total emissions.

TotalGeneratedVolume:178 kt

FinalDisposalVolume:24 kt

Total waste volume generated from production processes other than manufactured goodsDirect and post-processing landfill disposal volume Recycled volume includes Reuse volume

Total Generated Volume:Final Disposal Volume:Recycled Volume:Recycle Rate: Recycled volume ÷ (Recycled volume + Final disposal volume) ×100

Results of Waste ManagementIn fiscal 2011, the Hitachi Metals Group in Japan produced a total of about 219,000 tons of waste. It recycled approximately 172,000 tons into resources, and sent approximately 44,000 tons for final disposal. This resulted in a resource recycling rate of 74.2%. Additionally, the Group achieved zero emissions at 15 business sites.Although the Group’ s emissions were 11,000 tons higher than in fiscal 2010 and the final disposal level increased by 2,000 tons, we were also able to increase our recycling amount by 13,000 tons.The main increase in final disposal was from slag, due to reduced demand for road materials, concrete aggregate, and other con-struction materials.We have successfully achieved a 17.9% reduction in fiscal 2011 compared to the fiscal 2005 level in the basic unit of waste gen-eration based on net sales, a new management indicator.

＊

Waste PlasticWaste OilScrap MetalOther

0.3%0.2%0.0%0.1%




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PRTR in fiscal 2011 (in Japan)

Volume Consumed, Released and Transferred Breakdown of Volume Handled

Breakdown of Volume Released and Transferred

Transferred1.7%

Released1.3%

Boron and its compounds3.1%

Cobalt and its compounds4.8%

Molybdenum and its compounds5.2%

Manganese and its compounds7.3%

Landfill at own site11.5%

Sewage system0.0%

Public watersystem

0.6%

Atmosphere87.9%

Waste100%

Other

3.8%

Ethylbenzene

7.8%

Soil0.0%

Triethylamine

8.9%

Other

11.6%

Boron and its compounds

1.5%

Cobalt and its compounds

0.5%

Nickel

5.3%

Molybdenum and its compounds

3.2%

Ferric chloride

6.8%

Other2.7%

Consumed97.0%

Nickel35.0%

Chromium andchromium (Ⅲ)compounds

41.8%

Toluene

47.3%

Xylene

32.2%

Chromium and chromium (Ⅲ)compounds

40.6%

Reduction of Substances of Environmental ConcernOf the volume of substances handled that are the subject of PRTR* Law, chromium, nickel, cobalt, manganese, molybdenum and boron are regulated by the law and are essential raw materials for Hitachi Metals’ products. These six substances constitute approximately 97.0% of the regulated materials handled by the Group, and 88.4% of the total amount transferred.Of this total amount of release, 87.9% was released into the atmosphere and 87.3% of atmospheric release were comprised of three Volatile Organic Compounds (VOCs), which are toluene, xylene and ethylbenzene.

Volume handled : 25,710t Volume consumed :24,922tVolume released : 338t Volume transferred :450t

Manganeseand its

compounds30.5%

Volumehandled:25,710t

* PRTR Law: Law Concerning Reporting, etc. of Releases to the Environment of Specific Chemical Substances and Promoting Improvements in Their Management

Volumetransferred:

450t

Volumereleased:

338t




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Changes in Reducing VOC emissions

Rate of reduction (%)

1,200

1,000

800

600

400

200

0

60

40

20

0

VOC emissions volume (t/year)

FY2000 FY2007 FY2008 FY2009FY2006FY2005FY2004 FY2010

VOC emissions volume (outside Japan)

VOC emissions volume (in Japan)

Rate of reduction (compared with 2000)

FY2011




ental ReportEconom


22.8 35

48.8

30.9

31.7

Note: The scope of data collection was revised in fiscal 2008.

PRTR data (in Japan) In kg/year

Reductions of Volatile Organic Compound (VOC) EmissionsThe Hitachi Metals Group has been working on mea-sures to reduce VOC emissions, aiming for a 30% reduction of these emissions by fiscal 2011 compared with fiscal 2000.

The major part of the VOC emissions by the Hitachi Metals Group come from solvent components that are used for product coating. Efforts in technical investiga-tions and changes in the equipment have been made to find substitutes for coating materials.Emissions to the atmosphere of VOCs in fiscal 2011 were reduced by 31.7% compared with fiscal 2000.

＊Total of substance handled 1 ton per year or greater

Ordinance number Chemical substance CAS No. Released

to theatmosphere

Volumehandled Released

to publicwater system

Released to soil

Totalreleased

Transferto sewage

system

Transferas waste

Totaltransferred

Disposal to landfill at own site

Ferric chloride

Xylene

Silver and its water-soluble compounds

Chromium and chromium ( ) compounds

Cobalt and its compounds

Inorganic cyanide compounds (except complex salts and cyanates)

1, 3, 5-Trimethylbenzene

Toluene

Naphthalene

Lead

Nickel

Nickel compounds

Volume released Volume transferred

Ⅲ

Ethylbenzene53

71

63

82

87

132

144

277

297

300

302

304

308

309

321

400

405

411

412

453

100-41-4

7705-08-0

1330-20-7

—

—

—

—

121-44-8

108-67-8

108-88-3

91-20-3

7439-92-1

7440-02-0

—

—

71-43-2

—

50-00-0

—

—

Benzene

Boron compounds

Formaldehyde

Manganese and its compounds

Molybdenum and its compounds

Vanadium compounds

Triethylamine

27,003

165,768

132,215

39,860

10,753,842

807,201

1,306

26,402

7,241

169,321

3,722

29,332

9,010,214

88,753

1,409

1,436

1,222,794

2,145

1,880,555

1,339,966

25,710,486

23,110

0

95,549

3

30

65

0

26,402

5,766

140,517

2,680

0

83

1

0

1,047

0

1,544

95

31

296,925

0

0

0

0

752

1

0

0

0

0

0

0

0

353

0

0

248

0

703

0

2,058

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

10,942

0

0

0

0

0

0

0

0

27,576

0

0

0

0

316

0

38,834

0

0

0

3

0

0

0

0

0

0

0

0

3

3

11

0

0

0

1

0

20

3,317

0

22,714

2

182,912

2,249

0

0

1,474

22,353

1,042

4

23,895

30,808

101

0

6,972

587

137,389

14,522

450,341

23,110

0

95,549

3

11,724

67

0

26,402

5,766

140,517

2,680

0

83

27,930

0

1,047

248

1,544

1,114

31

337,817

3,317

0

22,714

5

182,912

2,249

0

0

1,474

22,353

1,042

4

23,897

30,810

112

0

6,972

587

137,390

14,522

450,361

54

8,188

42,648

15,782

111,981

24,186

256

10,901

1,396

27

480

31,345

327

121

16,655

0

5,238

28,836

3,707

29,909

4,638

3,149

139

6,155

2,251

148

0

14,278

14,816

2,931

24,036

1,641

1,295

5,698

2,670

499

37

963

787

147

49

4,239

5,227

170

28

4,292

1,742

2,528

884

296

483

75

1,300

19,959

27,538

16,258

164,463

26,550

6,329

23,165

4,717

4,185

3,256

11,605

4,203

4,180

1,366

11,290

7,858

7,085

722

23,744

7,914

16,152

1,389

9,408

3,398

276

5,894

165

583

769

6007

330

50

478

36

101

16

53

24

22

148

8

8

1561

4

134

143

267

63

55

78

27

25

21,307

20,640

12,434

62,445

23,716

333

6,402

82

344

296

484

2,104

187

147

1,866

4,661

5,948

562

42,329

5,000

2,822

167

912

204

53

1,205

29,322

43,919

33,264

365,191

45,800

12,484

37,209

5,406

4,877

5,965

22,797

6,338

4,701

2,088

23,312

16,311

11,036

1,003

37,591

9,242

18,279

1,974

14,614

6,171

352

9,194

0.0

0.2

1.6

56.5

0.6

－2.0

0.3

－0.0

0.0

－－－0.4

－－－－－0.1

－－1.4

－－

0.1

2.5

7.0

166.7

12.5

－－3.2

1.8

6.1

0.0

－－－1.0

－2.8

－8.3

0.5

1.6

－10.7

1.4

－－

0.3

1.1

－13.5

6.3

－－0.0

0.1

0.0

－－1.0

－0.3

－－－0.0

－0.5

－－0.5

－－

0.0

0.2

－0.6

6.5

0.0

1.2

0.0

0.1

0.0

－－1.0

－0.0

－1.1

－0.0

0.1

0.3

3.2

－0.5

0.1

－

165

583

781

6,007

681

50

0

36

77

16

53

24

22

0

15

8

1,561

4

134

143

267

63

55

78

27

25

－－

2.27

6.11

2.5

－3.73

0.44

－－－－－－

0.63

－－－－－

2.27

－9.68

1.83

－－

－－

0.05

0.077

0.0063

－0.0055

0.002

－－－－－－

0.014

－－－－－

0.004

－0.11

0.01

－－

180

180

180

180

180

－－－

150

180

－－－－

180

－180

－200

－180

－220

950

－－

0.1

0.2

0.25

0.2

0.2

－0.4

－0.1

0.15

0.2

－－－0.3

0.2

0.20

－0.25

0.1

0.25

－0.15

0.1

－－

2.2

41.5

44

49

45.5

－－－40

2.5

－－－－

77.5

－85

－10

－100

－110

700

－－

0.001

0.0035

0.005

0.0038

0.00685

－0

－0.005

0.001

0.0005

－－－

0.003

0.00235

0.01

－0.011

0.0027

0.001

－0.039

0.004

－－

5.8～8.6

5.8～8.6

5.8～8.6

5.8～8.6

5.8～8.6

5.0～9.0

－6.0～8.6

5.7～8.7

－－

5.8～8.6

5.0～9.0

－5.8～8.6

5.8～8.6

5.8～8.6

5.8～8.6

5.0～9.0

5.7～8.7

5.8～8.6

5.0～9.0

5.8～8.6

5.8～8.6

5.8～8.6

－

7.6

7.2

7.7

8.5

7.4

7.3

－7.3

7.4

－－7.8

7.6

－8

－7

7.3

8

7.7

7.7

7.6

7.2

7.5

7.2

－

4

2.75

7

3.7

3

1.8

－－

2

－－0.5

30

－0.5

－0

8

28

8.4

2

8

4

1.5

2

－

50

50

100

150

60

600

－－

300

－－70

600

－30

－90

100

600

300

60

300

150

200

90

－

15

－25

20

－－－－－－－－－－20

－－

100

－－－－－－－－

3.6

－1

3.8

－－－－－－－－－－2.4

－－12

－－－－－－－－

－25

－－25

600

－－

300

－－25

600

－－－25

－600

300

25

600

130

160

60

－

－0.45

－－10

19

－－4.1

－－4.1

45.2

－－－0.7

－53

5.5

2

50.5

4.3

1.5

3

－

INPUT OUTPUT

Classification Primary Materials

(t/year)

Subsidiary Materials

(t/year)

Energy Usage(Crude oil

equivalent, kℓ/year)

Water Use

(Thousand m3/year)

Waste

(t/year)

CO2 SOx *1 NOx *1 COD *1 BOD *1

(t/year)

Wastewater

(Thousand m3/year)(t/year) (t/year) (t/year) (t/year)

Site DataMaterials flow in major manufacturing sites in the Hitachi Metals Group in fiscal 2011

Environmental analysis data at major manufacturing sites in the Hitachi Metals Group in fiscal 2011

Kyushu Works (include Kyushu Technometal Co., Ltd.)

Moka Works (include Moka Technos, Ltd.)

Kuwana Works*4

Yasugi Works

Kumagaya Works (Automotive Components Company)

Tottori Works

Kumagaya Works (NEOMAX Company)

Wakayama Works*4

Yamazaki Manufacturing Center

Ceramics Division

Metglas Yasugi Works

Hitachi Tool Engineering, Ltd. / Narita Plant*4

Hitachi Tool Engineering, Ltd. / Yasu Plant


HMY, Ltd.


Seitan Inc.

Hitachi Valve, Ltd.*4

HMW, Ltd.


NEOMAX KINKI Co., Ltd.

NEOMAX KAGOSHIMA Co., Ltd.

NEOMAX KYUSHU Co., Ltd.*4

Toyo Seihaku Co., Ltd. / AKITA Plant

Toyo Seihaku Co., Ltd. / NIIGATA Plant

Hitachi Metal Tool Steel, Ltd.

Arc furnace

Melting furnace

Annealing furnace

Heating furnace

Melting furnace

－Arc furnace

Small boiler

Boiler

Arc furnace

Arc furnace

－－－

Boiler

Melting furnace

Heating furnace

－Heat-treating furnace

Vacuum melting furnace

Sintering furnace

－Arc furnace

In-house power generator

－－

Kyushu Works (include Kyushu Technometal Co., Ltd.)

Moka Works (include Moka Technos, Ltd.)

Kuwana Works*3

Yasugi Works

Kumagaya Works (Automotive Components Company)

Tottori Works

Kumagaya Works (NEOMAX Company)

Wakayama Works*3

Yamazaki Manufacturing Center

Ceramics Division

Metglas Yasugi Works

Hitachi Tool Engineering, Ltd. / Narita Plant*3

Hitachi Tool Engineering, Ltd. / Yasu Plant


HMY, Ltd.


Seitan Inc.

Hitachi Valve, Ltd.*3

HMW, Ltd.


NEOMAX KINKI Co., Ltd.

NEOMAX KAGOSHIMA Co., Ltd.

NEOMAX KYUSHU Co., Ltd.

Toyo Seihaku Co., Ltd. / AKITA Plant

Toyo Seihaku Co., Ltd. / NIIGATA Plant

Hitachi Metal Tool Steel, Ltd.

*1: Atmospheric emission concentrations measured based upon the Air Pollution Control Law.

*2: Representative facilities in sites regulated by the Air Pollution Control Law.

*3: Wastewater is not subject to regulation. The figures given are voluntary standards.

Exhaust gas quality*2 Wastewater quality

ClassificationType of Facility

Regulation Levels Results

SOx (Nm3/h) NOx (ppm) Dust (g/Nm3) pＨ Suspended Solids (mg/ℓ) Chemical Oxygen Demand (mg/ℓ) Biochemical Oxygen Demand (mg/ℓ)

Regulation Levels Results Regulation Levels Results Regulation Levels Results Regulation Levels Results Regulation Levels Results Regulation Levels Results




ental ReportEconom


55

BCPs. That means to internalize the crisis response into normal

management activities.

The Hitachi Metals Group views firmly maintaining fundamental

principles, advancing technology development in the materials

field and responding to the needs of society as their mission. In

such fields as energy, automobiles and electronics, the ratio of

sales from environmental products reached 76% in fiscal 2011.

This report also introduces employee environmental activities and

community activit ies. The activit ies of female employees in

particular are outstanding. I hope the employment environment for

women improves and that the female employees can better

manifest their creativity.

Workplace safety is the keystone of CSR. The Hitachi Metals

Group must make improvements to both systems and hardware to

prevent any recurrence of the type of incident which suspended

operations in 2011.

CSR activities are expanding along with globalization. Because

compliance related issues are complex, including the supply chain

starting with the mining or procurement of iron ore and relations

with local stakeholders, CSR management will demand even

greater attention in the future. It will become necessary to expand

global CSR information collection systems and disclose the data in

CSR reports.

This repor t is a good example of the Hitachi Metals Group’s

efforts to uphold their ideology while evolving through innovation.

I expect this company to continue demonstrating CSR leadership

in the future.

From 2011 through early 2012, the Japanese economy suffered

various shocks, making corporate management difficult. In the

global economy, financial uncertainty deepened in the Euro zone

and the foreign exchange rate switched to a higher yen. In Japan,

the Great East Japan Earthquake struck amid stagnant economic

conditions and in Thailand, Japanese-affiliated plants suffered

major damages in disastrous flooding.

The risks affecting corporate activities are expanding with shifts in

the g loba l economy and sudden changes i n the na tu ra l

environment. It is significant that President Fujii mentions disaster

response first in the Top Message of this CSR Report. In the

recovery process following the flooding in Thailand, the strength

of the trust with the local employees was particularly impressive.

As also stated in this report, the idea that the company belongs to

the local employees is key. I think globalization means to think

globally and act locally. While this is a phrase used in the global

environmental movement, it also applies to companies advancing

abroad. I believe the Hitachi Metals Group’ s response to the flooding

in Thailand showed the good points of Japanese management.

The Top Message also touches on the draft ing of the BCP

(Business Continuity Plan). For conceivable situations, companies

consider the risk (probability) and make preparations during

normal times. Unforeseen circumstances, however, are typically

called crises (complete uncertainty with no known probability),

and when crises occur the determination of managers becomes

critical. It is important for companies to learn from these two

natural disasters and further evolve their crisis response using

confirms that the Hitachi Metals Group’s approach to globalization

has not been mistaken.

Yet we still have many issues that must be addressed including

the approach to the supply chain that has newly emerged with

globalization, relations with stakeholders, and local compliance. In

safety measures, the Hitachi Metals Group has a clear policy of

giving top priority to safety, and the entire Group is actively

working together in promoting safety efforts. The Hitachi Metals

Group will continue advancing CSR activities and responding to

the expectations of society.

Thank you very much for your valuable advice. Under the current

wave of globalization which is affecting all companies, the Hitachi

Metals Group has used the Code of Conduct for Hitachi Metals

Group Companies and the Good Practice Guidance for Hitachi

Metals Group Companies, which are based on our management

principles, as guideposts in aiming at management that responds

to changes in the global external environment. Last year while we

were responding to the unprecedented disaster of the Great East

Japan Earthquake, our local factory in Thailand was completely

flooded. As you pointed out, the swift reconstruct ion there

ProfessorFaculty of Humanity and Environment, Hosei University Kozo Horiuchi

Hitachi Metals’ Answer Vice President, Representative Executive Officer and DirectorHitachi Metals, Ltd. Nobuhiko Shima

T h i r d P a r t y ’s O p i n i o n



ental ReportEconom


56

Corporate Data

Hitachi Metals Group Major Manufacturing Facilities (As of the end of March 2012)

Corporate Profile

High-Grade Metal Products and Materials High-Grade Functional Components and Equipment

Electronics and IT Devices

Establishment:

Capital:

Chief Executive Officer:

Number of Employees:

Yasugi Works2107-2 Yasugi-cho, Yasugi-shi, Shimane 692-8601, Japan

HMW, Ltd.1-9-1 Kitahama, Wakamatsu-ku,Kitakyushu-shi, Fukuoka 808-8558, Japan

Tottori Works70-2 Nan-ei-cho, Tottori-shi, Tottori689-1121, Japan

Kumagaya Works(NEOMAX Company)

5200 Mikajiri, Kumagaya-shi, Saitama360-8577, Japan

Yamazaki Manufacturing Center2-15-17 Egawa, Shimamoto-cho,Mishima-gun, Osaka 618-0013, Japan

Kyushu Works35 Nagahama-cho, Kanda-machi,Miyako-gun, Fukuoka 800-0393, Japan

Moka Works13 Kinugaoka, Moka-shi, Tochigi 321-4367,Japan

Kumagaya Works(Automotive Components Company)

5200 Mikajiri, Kumagaya-shi, Saitama360-8577, Japan

Kuwana Works2 Daifuku, Kuwana-shi, Mie 511-8511,Japan

Products and Businesses:

Group Companies:

Headquarters:

April 10, 1956

￥26.3 billion (As of the end of March 2012)

Hiroyuki FujiiPresident, Chief Executive Officer and Director

Hitachi Metals Group: 18,056(As of the end of March 2012)

Manufacture, sales, and service of high-grade metal products and materials; electronics and IT devices; high-grade functional components and equipment; and services and other activities

59 subsidiaries, 9 affiliates

SEAVANS Nor th Building, 2-1 Shibaura 1-chome, Minato-ku, Tokyo 105-8614, JapanTel: +81-3-5765-4000 Fax: +81-3-5765-8311

Wakayama Works1850 Minato, Wakayama-shi, Wakayama 640-8404, Japan

Metglas Yasugi Works1240-2 Hashima-cho, Yasugi-shi,Shimane 692-8601, Japan

Consolidated Financial Highlights (Years ended March 31, 2012)

Net sales Operating income Net income Capital expenditures Research and development

Return on equity

Million yen %Million yen Million yen Million yen Million yen

201020092008 2011 2012 201020092008 2011 2012 201020092008 2011 2012 201020092008 2011 2012 201020092008 2011 2012 201020092008 2011 2012

E c o n o m i c R e p o r t & C o r p o r a t e D a t a



ental ReportEconom


SEAVANS North Building, 2-1 Shibaura 1-chome, Minato-ku, Tokyo 105-8614, JapanTel: +81-3-5765-4591 Fax: +81-3-5765-4597

http://www.hitachi-metals.co.jp/e/index.html

Messages concerning Hitachi Metals’ corporate social responsibility efforts can be directed to:

c20sr report12 pdf version - hitachi metals · hitachi metals corporate philosophy code of conduct...

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