csr report 2011 - hitachi metals · hitachi metals group’s view towards corporate social...

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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

demonstrating 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, 2011.

●PeriodThis report essentially covers fiscal 2010(April 1, 2010 through March 31, 2011).

●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 71 companies of the Hitachi Metals Group (the Group) consisting of Hitachi Metals, Ltd. (the Company) and its Group companies (62 consolidated subsidiaries and 9 equity-method affiliates). The scope of environmental data includes data for the 49 companies within the Group

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.

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Top Message

The Effect of the Great East Japan Earthquake

Good Practice Guidance for Hitachi Metals Group Compaines

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 / 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 / Participating in Exhibitions / DAC-MAGIC® High-Performance Steel for Die-Cast Molds / Epoch Mirus Series End Mills Offer Extremely High Production Efficiency / Metglas® Amorphous Metal Materials (SA1, HB1M) / Amorphous Cut Cores for Solar Power Systems / Target Materials for CIGS Photovoltaic Cells (Mo, CuGa) / Cladding Materials for Photovoltaic Interconnectors / 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 / TRANSFORMER® Series of Mass Flow Controllers / Fashionable SCUBA® Aluminum Wheels / HERCUNITE® Series of Heat-Resistant Cast Components

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

Third Partys’ Opinion

Economic Report /Corporate Data

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I would like to express my heartfelt sympathy for the many

people affected by the Great East Japan Earthquake that

struck on March 11, as well as my condolences for the lives

lost. I hope and pray that everyone who has suffered will be

able to return to a normal lifestyle as quickly as possible.

This disaster is truly a national crisis for Japan in terms of both

scale and impact, and considerable time and effort will be

required for rehabilitation and reconstruction. The desire for a

quick recovery is not limited to Japan, but is shared by people

worldwide. Several business locations of the Hitachi Metals

Group were damaged during the earthquake, but we are reso-

lute in taking proactive action to assist with the recovery and

N.B. This interview was based on information available as of the end of June 2011.

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Thank you for taking the time to read the Hitachi Metals Group’s 2011 CSR Report.The Hitachi Metals Group formulated the Good Practice Guidance for Hitachi Metals Group Companies in September 2010 to serve as a common global standard for corporate conduct.This report presents the Hitachi Metals Group’s CSR initiatives in response to an age of greater globalization.

A Shared Sense of Value for the Corporate Group, and the Pursuit of Corporate Social Responsibility (CSR) with a Global Perspective

President, Chief Executive Officer and Director

To Everyone Affected by the Great East Japan Earthquake

reconstruction of the stricken areas. As part of this effort, the

Hitachi Metals Group and its employees together donated approxi-

mately ¥50 million through Central Community Chest of Japan

and other organizations to aid victims and disaster areas.

As many stakeholders have expressed their concern, and we have

received numerous inquiries, I would like to report on the status of

damage to the Hitachi Metals Group as a result of the earthquake

and tsunami, along with our post-disaster response.

None of our employees were injured, though two employee family

members lost their lives, and one person remains missing. In

terms of facilities and equipment, several business offices in the

affected areas incurred damage to equipment, and there was

damage to the ceilings and walls of buildings. However, every-

thing was restored by end of March, and the impact on production

was minimal.

Nevertheless, the rolling blackouts in Tokyo Electric’ s service area

that began soon after the disaster and lasted into April, imple-

mented as a result of the accident at 　the nuclear power station,

hindered production at certain facilities located in the region. The

blackouts later ceased as the supply?demand balance was

regained following restoration of thermal power plants and rising

temperatures, though the Hitachi Metals Group has since contin-

ued to cooperate in reducing power usage in its operations.

As I am sure everyone is aware, severe power shortages are

expected this summer as a result of the disaster, and the Japa-

nese government has issued an order limiting electricity use in the

service areas of Tokyo Electric and Tohoku Electric from July

through September. This order obliges large-lot users with con-

tracted capacity of 500kw or more to reduce their power usage by

15% from peak periods during the summer of 2010. The Hitachi

Metals Group has already completed its response measures,

including decentralization of production, advanced production,

provisions for on-site power

generation, and revision to work shift schedules. We expect to

be able to meet the 15% reductions without any inconvenience

to our customers.

In September 2010, the Hitachi Metals Group formulated the

Good Practice Guidance for Hitachi Metals Group Companies to

complement its Code of Conduct for Hitachi Metals Group Compa-

nies. The Hitachi Metals Group’s corporate philosophy is to con-

tribute to society by creating "the best possible company," and we

conduct our business with the aim of realizing this philosophy.

The current code of conduct provides a basis for the conduct of

the corporate group. We believe that if all of our employees

understand the essence of this code, we will be able to achieve

"the best possible company."

Corporate human resources have become increasingly diverse

with the globalization of business, and there are many employees

of the Hitachi Metals Group around the world with varied back-

grounds. There are local rules that reflect the history and social

climate of each region, as well as differences in culture and cus-

toms. However, we expect all employees, as long as they mem-

bers of the Hitachi Metals Group, to have mutual respect for diver-

sity, and to conduct themselves in accordance with the shared

values of the corporate group.

Looking at the Congo conflict minerals issue, for example, it was

not just the direct action of the companies that was called into

question, but their corporate responsibilities with regard to envi-

ronmental destruction and human rights violations across a broad

spectrum that affected the entire global supply chain. The Good

Practice Guidance was formulated in recognition that in order to

ensure consistency in decision-making and managerial action


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Damage to the Hitachi Metals Group and Our Post-Disaster Response

New Good Practice Guidance to Serve as a Global Standard

regarding issues such as these, there was a need for common

global standards that are specific and easy-to-understand.

As expressed in our corporate philosophy, CSR and our corporate

philosophy are essential to the Hitachi Metals Group, and itis

through the practice of CSR that we will realize our corporate phi-

losophy. Through the new Good Practice Guidance we aspire to a

common understanding of the spirit of our Code of Conduct, and

to be a company that contributes to society.

The significance of existence for the manufacturing industry stems

from its creation of new value to meet the needs of society, and

the returns it provides to society in the form of products and ser-

vices. A company becomes valued by meeting those needs, which

leads to its growth as a business. The Hitachi Metals Group, as a

manufacturer of materials, has the responsibility to utilize distinc-

tive technologies to provide unrivaled products that meet the

needs of the market. As a company conducting business we must

fulfill that responsibility, ensure sustainable growth, and enhance

our corporate value.

The Hitachi Metals Group emphasizes two key phrases for meeting

the constantly changing needs of today’s society and market, and

for maintaining sustainable growth. These are "adapting to global-

ization" and "new product development."

Among the unrivaled products of the Hitachi Metals Group, there

are some that are already considered mature products in markets

in Japan and the West. These same products have considerable-

potential as growth products in the expanding markets of emerg-

ing countries. Considering the global marketplace, the latent

demand for our products is significant, and by uncovering these

needs we hope to achieve continued growth and to contribute to

society. This is one example of adapting to globalization.

For new product development, in the environmental field the Hita-

chi Metals Group has continued to develop such environment-

responsive products as the HERCUNITE® series of products for

automobile exhaust systems and the soft magnetic material

FINEMET®. Drawing on the energy conservation technologies we

have acquired through this research, we anticipate that Hitachi

Metals Group products will make a significant contribution in the

field of solar power and other forms of renewable energy. We also

consider the reform of manufacturing processes to reduce their

environmental load to be a priority matter, and are taking steps to

cut CO2 emissions and various types of industrial waste.

Rising prices for scarce resources such as rare metals and rare

earths, which are essential to Hitachi Metals Group products, is a

serious issue with an impact on production costs. We are pursing

efforts to limit our use of mineral resources as much as possible,

and anticipate that this technology development will become one

of the strengths of the corporate group.

Safety is the foundation for corporate activity, and must be a prior-

ity before anything else. Bearing in mind the major accident at our

Group company in September 2009, we are making a concerted

effort to prevent further workplace accidents, both in Japan and on

a global basis.

As managers we are continually working to improve equipment,

but in the end, enhancing safety awareness among each indi-

vidual worker is essential to prevent workplace accidents.

Workers need to anticipate the inherent risks of a major acci-

dent, and remain alert as they carry out their duties. When

upgrading equipment we must also be keenly sensitive to safety

in evaluating different systems.

In this sense, I feel it is necessary to ensure full training in work-

place safety, and to undertake steady and consistent efforts in

such areas as daily maintenance and repair of machinery.


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Adapting to Globalization and New Product Development are the Keys to Growth

Prevention of Workplace Accidents Results from Raising Individual Safety Awareness

The business locations of the Hitachi Metals Group have regular

programs of community activities that aim to ensure coexistence

with local society. Examples include promoting sports by sponsor-

ing sports competitions and supporting culture and technology

through the restoration of a tatara, an ancient Japanese furnace

for manufacturing iron. Our efforts even extend beyond the imme-

diate area around our business locations, such as how employees

from the Tottori Works pull weeds and clean the area around the

Tottori Sand Dunes. Through these ongoing activities we are work-

ing to deepen our communication with communities.

Many Hitachi Metals Group employees participated in volunteer

efforts in response to the Great East Japan Earthquake. With the

growing momentum for social action on an individual basis, we are

considering measures to establish a foundation to support the

volunteer spirit of employees, such as a program of volunteer

activities with pay.

A string of major events has occurred in the year since I assumed

the position of president in April 2010. In May last year there was

the rapid rise in the yen precipitated by the Greek financial crisis,

and in the fall the global shortage of rare earths and rising prices.

At the start of the year there was the spread of pro-democracy

demonstrations in the Middle East and North Africa, and then in

March the Great East Japan Earthquake. The world had become

smaller with the spread of the Internet and other developments,

and events in far-off countries propagate instantly and a have

major impact on Japan, while events in Japan also affect the

world. The many uncertainties in the world today is a reminder

that unexpected events test a company’ s ability to respond

quickly, and its flexibility. For this reason all Group employees

must be conscious of risk, and enhance their awareness.

Japan is now facing unprecedented difficulties. The Hitachi Metals

Group, however, will pull together and overcome these difficulties

as a corporate group, and strive for further growth.

I would like to thank all stakeholders for their continued support

and cooperation.


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Overcoming Difficulties as a Group

Steady Efforts to Deepen Communication with Communities

The following is a report of the effect on the Hitachi Metals Group as a result of the Great East Japan Earthquake that struck on March 11, 2011.

The Effect of the Great East Japan Earthquake

Damage to Structures and EquipmentA certain degree of damage was sustained to structures and equipment at the following manufacturing facilities: Hitachi Metals’ Moka Works (Moka-shi); Kumagaya Works (Automotive Components Company) (Kumagaya-shi); and Kumagaya Works (NEOMAX Company) (Kumagaya-shi); as well as Auto-tech, Ltd. (Iwaki-shi); Moka Technos, Ltd. (Moka-shi); and Alcast, Ltd. (Kumagaya-shi and Moka-shi).There was also damage to buildings where the following sales offices are located: Hitachi Metals’ Kitanihon Sales Office (Sendai-shi) and Hitachi Sales Office (Hitachi-shi); Hitachi Tool Engineering, Ltd.’ s Kitakanto Sales Office (Hitachi-shi) and Tohoku Sales Office (Sendai-shi); Hitachi Metals Techno, Ltd.’ s Tohoku Sales Office (Sendai-shi); Hitachi Metals Admet, Ltd.’ s Kitanihon Sales Office (Sendai-shi) and Ibaraki Sales Office (Hitachi-shi); and Hitachi Metals Tool Steel, Ltd.’s Tohoku Sales Office (Date-shi) and Iwate Sales Office (Kitakami-shi).There was no significant impact on production or other functions, and business operations were restored by April.

Impact from Rolling BlackoutsTokyo Electric implemented rolling blackouts in its service area immediately following the disaster through April. Certain manufacturing operations were hindered at locations within the service area, but we managed to minimize the impact on production with in-house power generation and measures.

Response to Government Order to Limit Electricity UseThe Japanese government issued an order for the reduction of power usage in the service areas of Tokyo Electric and Tohoku Electric from July through September, by 15% from peak periods during the summer of 2010. The Hitachi Metals Group has completed imple-mentation of measures at affected business locations, including decentralization of production, advanced production, and provision for on-site power generation, and is able to meet the power reduction requirements without compromising production.

Assistance for Disaster AreasHitachi Metals Group companies and their employees sent donations totaling approximately ¥50 million through Central Community Chest of Japan and other organizations.Group company Hitachi Metals Techno, Ltd. also loaned property it owns in Higashi-Matsushima in Miyagi Prefecture to the local city govern-ment free of charge for use as a site to build temporary housing for disaster victims. The company concluded a two-year land use contract with the city on April 25. Construction of approximately 500 units is planned, and residents have already begun moving into the facility.

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T h e E f f e c t o f t h e G r e a t E a s t J a p a n E a r t h q u a k e

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Good Practice Guidance for Hitachi Metals Group Compaines

Position of the Good Practice Guidance for Hitachi Metals Group Companies

Overview of the Good Practice Guidance for Hitachi Metals Group Companies

Management Principles

Good Practice Guidance for Hitachi Metals Group Companies

CSR Guidebook regulations and Company rules

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

Common guidelines 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: Sincere 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 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 Foundations5.1 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: Responsibilities of Top Management

Supplementary Provision Hitachi Group Implementation of Codes of Conduct

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 gover-nance 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 outside 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.

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

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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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[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*), to confirm that no illegal activities were carried out.December 2010 - March 2011: 44 business offices, and 130 general managers and above responsible for sales.

*Compliance Record: A record stating that no actions were taken in violation of applicable law when meeting with employees of competitors cannot be avoided, such as during industry-group conferences or other events.

Hitachi Metals Group’s CSR activities consist of corporate activities that create "the best possible company," and this corporate philosophy neatly portrays the attitudes Hitachi Metals Group holds toward CSR.

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, and we implemented measures including extraordinary audits and internal training to respond. Measures of the same kind were taken also in fiscal 2010 to prevent violations from occurring again. We will continue to do so without sidestepping the cases of the past.In addition, same as in fiscal 2009, we established the month of October as the Hitachi Metals Group Corporate Ethics Month also in 2010, and conveyed a message from the CEO to all employees of the Hitachi Metals Group.

■Compliance Efforts

[Internal On-site Training]1. On-site training seminars conducted by the sales director and the Compliance Department

regarding compliance with the Antimonopoly Act and the Code of Conduct

Target offices for training: Hitachi Metals head office, branch offices, sales offices, manufacturing sites and research centers; Group companies’ head offices and sales sitesTarget persons: all holders of e-mail addressesTerm: August to December 2010Number of sessions: 73 seminars for 136 business offices (including joint and multiple sessions)

* Training on global compliance for the prevention of acts of bribery and on information security was conducted at the same time.

2. On-site compliance training seminars at overseas locations conducted by the ComplianceDepartment

Target offices for training: Overseas business offices (19 business offices)Target persons: manager jobs and aboveTerm: January to March 2011Number of sessions: 18 seminars at 17 locations (including joint sessions)

* Training on global compliance for the prevention of acts of bribery and on information security was conducted at the same time.

3. Compliance training for specific levels and positions

2010 Apr. Training for new hiresJun. Training for newly appointed assistant managersJul. Training for newly appointed junior executiveNov. Sales accounting trainingDec. Training for newly managers

2011 Jan. Group company manager training

Hitachi Metals Group Corporate Ethics Month/Message from CEO

Compliance training at the head office

Compliance training at overseas office

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H i t a c h i M e t a l s G r o u p’s C S R

Hitachi Metals Group CSR

(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, and Chinese) to employees of the Hitachi MetalsGroup.

(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 2010 - March 2011)

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 centres; Group

companies’ head offices and sales sitesNumber of sessions:73 at 136 locations (in some cases, sessions were held jointly or multiple times)

Overseas:Manager-level employees and aboveTarget offices:Overseas business offices (19 total)Number of sessions:18 at 17 locations (some sessions were held jointly)

2) E-learning on Hitachi Metals Code of Conduct (original e-learning course by Hitachi Metals)Applies to :Employees of Hitachi Metals with e-mail addresses

3) DVD training course ("What is CSR of the Hitachi Metals Group?" produced independently by the Company.)Applies to : All employees of Hitachi Metals who did not take the e-learning course

Hitachi Metals Group’s CSRSince its founding, the Hitachi Metals Group has conducted its business activities in accordance with its corporate philosophy 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 attitudes Hitachi Metals Group holds toward CSR.

●Hitachi Metals Group Corporate Ethics MonthOctober 2010 was designated as the Hitachi Metals Group Corporate Ethics Month. During this month, we carried out the following measures.

Fiscal 2010 CSR Activities Report

●Establishment of the Good Practice Guidance for Hitachi Metals Group Companies In September 2010 we established the Good Practice Guidance for Hitachi Metals Group Companies to serve as internal regulations that supplement our Code of Conduct for Hitachi Metals Group Companies. 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.

●Conveyance of a Compliance MessageTo improve the compliance awareness on a global scale, a compliance message from the president was prepared in Japanese, English, Thai, Korean, Chinese and Indonesian language and distributed to employees of the Hitachi Metals Group all over the world.

13



*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

Apr 2006 Apr 2007 Apr 2008 Apr 2009 Apr 2010

Formulation of CSR Measures Policy,

education and awareness promotion

CSR training and awareness promotion

Assessment of current situation based on CSR

Measures Policy

Examination and evaluation of CSR

activities

Optimization of CSR activities and

implementation of strategic CSR

Group-wide measures to address

social issues

Become "the best possible

company"

FY2010

Circular Flow of Resources

Hitachi Metals Group CSR Roadmap

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.

CSR Measures PlanningHitachi Metals newly formulated the Code of Conduct for Hitachi Metals Group Companies in July 2006. This code states as the fundamental principle for CSR that "The Company, in its business activities and relationships with stakeholders, will remain conscious of social and environmental issues and take responsible action, thereby allowing for the sustainable development of the Company and society." To fulfill its corporate philosophy of "contributing to society by creating 'the best possible company'", the Hitachi Metals Group has made its Code of Conduct the cornerstone of Group CSR activities. In line with this policy, we have formulated the Hitachi Metals Group CSR Roadmap, which covers the period through fiscal 2010, and are now implementing the specific measures con-tained therein.

In fiscal 2010, we used various tools to increase internal awareness during Hitachi Metals Group Ethics Month. These included the implementation of the Code of Conduct for Hitachi Metals Group Companies and Policy on CSR Initiatives, and the continuation of our initiatives to address social problems by the Group as a whole and measures to raise awareness of CSR.

Hitachi Metals Group Sustainable Business Model: Resource Recycling

14



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.In 2009, we introduced a system to filter all e-mail sent externally, as a measure to prevent external leaks of operational information.We also took other measures to prevent information leaks, including revisions to how we manage portable information terminals (e.g. PDAs and smart phones), in order to prevent losses of increasingly capable mobile phones and other devices.

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 2010, 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 officesJuly 2010 - December 2010Training recipients : All persons with e-mail addresses of the Hitachi Metals GroupNumber of sessions:73 sessions covering 136 business offices (including joint and multiple sessions)

●On-site training at overseas business officesJanuary 2011 - March 2011Training recipients : Managerial employees at overseas business offices (total: 19 business offices)Number of sessions :18 sessions at 18 locations (including joint sessions)

●e-learningFebruary 2011Training recipients :All persons with of the Hitachi Metals Group e-mail addresses (domestic)

16


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

[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 history-spanning more than 1000 years, and resulting in the creation of Tama-

hagane 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.

17



Kuwana WorksHitachi Metals Cup Junior High School Baseball Pennant Tournament

[Harmonious Coexistence with the Local Community]

Sponsoring and Supporting Sporting Events

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

18



[Harmonious Coexistence with the Local Community]

Sponsoring and Supporting Sporting Events

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

T O P I C S

19



Weeding Volunteer Work at the Tottori Sand Dunes

The Tottori Sand Dunes are a symbol landmark of the Tottori Prefecture. After the end of world war II, forests were planted to acquire agricultural land and protect the villages. For this reason, the movement of the sand dunes was largely restricted, and the sand dunes started to become immobile. Plants began to cover the surface, and the spread of grassland in the dunes is now a serious problem. Moreover, exotic plants that originally do not grow in the sand dunes started to thrive, and 42% of the sand dune surface turned into grassland.Since 2004, the Tottori Sand Dunes Landscape Preservation Council including members from Tottori Prefecture and Tottori City started volunteer weeding activities, which were firmly established as citizen activities in 2007. The Hitachi Metals Group has been participating in the activities as part of our regional contributions from the first year.Since the topography of the sand dunes would change if weeding was performed by heavy machines, the weeding must be done by hand as much as possible. In addition, the roots of the plants growing on the sand dunes reach deep below the sur-face; therefore the weeding is largely different from what one would generally imagine. It is very hard work where holes have to be dug with shovels to pull out the weeds. Furthermore, the sunlight on days with fine weather is very strong and heats up the sand dunes. Therefore it is important to pay attention to health management, including hydration and breaks. The work is exhausting, but thanks to volunteer weeding, the grassland on the sand dunes has shrunk to 19% of the total area in recent years.The communities at the San-in coast, which includes the Tottori Sand Dunes, are currently striving to have the coast certi-fied as a global geopark. We are convinced that our activities contribute to a part of these efforts, and we will continue to take part in these activities in the future.

As part of their regional contribution activities, Tottori Works of Hitachi Metals, Ltd. and Hitachi Ferrite Electronics, Ltd. have been engaged in volunteer weeding of the Tottori Sand Dunes in the San-in Kaigan National Park since fiscal 2004. Every year from July through September, employees and their families volunteer to weed the sand dunes three times a week, on Fridays, Saturdays and Sundays.

20



[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.

21



・・・

・・・

・・・

・・・

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

FY2003 FY2004 FY2005 FY2006

Index* Ratio90%

80%

70%

60%

50%

40%

30%

20%

300

250

200

150

100

50

0

100

145157

191

57%

72% 71%75%

FY2007

238

82%

FY2008

232

86%

Green Supplier Ratio (Number of Companies)

FY2009

86%

132

FY2010

178

87%

22




Our Approach to CSR ProcurementCSR in procurement activities means that first and foremost, we are a company that practices 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.As one measure to prevent the unauthorized disclosure of Company information, we require that business partners perform an annual assessment of Company information on their computers.

With Our Suppliers

●Comply with laws, regulations and social requirements●Fair, clean trading●Open, global procurement●Maintain partnerships●Keep confidentiality●Preserve the environment

Procurement Policy

Green Supplier

87%

Not approved

13%

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 com-pliance with the Act against Delay in Payment of Subcontract Proceeds, Etc. to Subcontractors.

Green ProcurementHitachi Metals is a materials manufacturer, contributing to the betterment of society through products that are incorporated into the final products of our customers. Accordingly, it is important that we do what we can to reduce our environmental footprint in the pro-cess of materials and components procurement.We pursue a policy of Green Procurement, giving greater weight in purchasing decisions to products that meet our environmental quality standards. Our ratio of Green Procurement for fiscal 2010 again exceeded that of the prior fiscal year.What is more, we are working to mitigate the environmental impact by shifting towards having raw materials transported to the har-bors closest to our plants, and consequently minimizing the distances they are transported by truck as much as possible.

Green PurchasingHitachi Metals began a green purchasing initiative with office paper, stationery 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.

*For presentation of index, the amount spent on green procurement in fiscal 2003 is set as base figure of 100.

Green Procurement Ratio (Value of Procurement ) (Hitachi Metals Non-Consolidated)

23



[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 Innovative, Strategic Human Resources●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 TrainingOur goal is to develop human resources indispensable to the continued development of high-function, original, world-leading environ-mentally friendly products.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.As a company, we support the motivation and behavior of our employees to gain expertise, and to become effective human resources who can be proactive in uncovering and resolving areas of improvement. Our corporate HR slogan is "learn, shine, accept the chal-lenge," reflecting the determination for each and every employee within the organization to be a key driver of growth? a sentiment incorporated into our "Materials Magic" communications symbol.

Training and Education SystemWe strive to develop an in-house training program and training content allowing us to differentiate ourselves from other companies on both the individual and organizational levels, recognizing that the strength of a corporation is derived from the accumulation of indi-vidual abilities plus organizational capacity, while still accepting that there are limits to available resources according to the scale of the corporation in question.

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.In fiscal 2010, we will begin the full-scale implementation of a labor and management structure that corresponds to our company structure. 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 of the 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.

2.2

2.0

1.8

1.6

1.4

1.2

1.0

130

120

110

100

90

80

70

123

2.06

1.84

123

96

115

2.08

1.86

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

(people) (people)

*Severely handicapped individuals counted twice

FY2010FY2006

30

25

20

15

10

5

0FY2010FY2008FY2007 FY2008

126

1.94

FY2009 FY2009

17 17

26

Frequency of Occupational Injuries

All Industries Manufacturing Steel Hitachi Metals Group

13

21

26

FY2010FY2006 FY2007 FY2008 FY2009 (Year)

2.00

1.50

1.00

0.50

0.00

24



[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. special subsidiary, followed by Kuwana Create Co., 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.Beginning fiscal 2008, the Company has established a children allowance benefit for employees as a policy for supporting the develop-ment of the next generation, strengthening our support of employees who are raising children. In 1992, Hitachi Metals was also one of the first firms to adopt a system to re-employ individuals who have retired from the Company due to childbirth or home care, demon-strating once again our forward-thinking policies.The Hitachi Metals Group has an established child-care/home-care leave program.Since fiscal 2007, the Group has offered up to 20 days (in combination with family care leave) for each leave year for the care or nurs-ing of the employee’s parents (or in-laws), spouse, or children. The Group has been implementing these programs with application scope, period and other elements exceeding the requirements under the revised Child Care and Family Care Leave Act.

Effort to Eliminate Occupational InjuriesThe safety records of our group in FY2010 show two accidents involving lost work time at Hitachi Metals, and six accidents in the Hitachi Metals Group in Japan. This indicates that we were unable to significantly improve from the two accidents at Hitachi Metals and eight accidents in the Hitachi Metals Group in Japan in the previous year.For this reason, we rolled out a safety and health program in the entire Group in fiscal 2011 under the slogan "Strive to create a work-place where 'Safety always comes first'." On the basis of our occupational safety and health management system and risk assessment system, special emphasis in this year was placed on safety and health education focusing on the observation of rules in order to eliminate occupational injuries at the root, and on the reduction of risks at the workplace by reviewing and updating rules such as work standards.

25



[Promoting Truthful Communication with Society]

With Society, Including Our Shareholders and Investors

The front cover of the Shareholders’ Newsletter for the 74th Fiscal Period (left) and the top page of the Hitachi Metals web site

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.

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 2010"

26



[Promoting Truthful Communication with Society]

With Society, Including Our Shareholders and Investors

ExhibitionsWe position exhibitions as valuable opportunities that enable us to communicate directly with a broad spectrum of interested parties. We also exhibit at IR events for personal investors, as a venue to introduce the details of our business to shareholders and investors and deepen their understanding of the Hitachi Metals Group.

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.

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

27


Quantitative Items

＊1:Hitachi Group’s mechanism for evaluating the achievement level for environmental activity targets ＊2 :The site subject to the target is a Type1 energy management designated plant in Japan ＊3:VOC:Volatile Organic Compounds ＊4 :SVHC:Substances of Very High Concern ＊5 :Registration, Evaluation, Authorisasion and Restriction of Chemicals. An EU regulation that mandates registration and evaluation of chemicals manufactured and imported in the EU, and where the substance is a cause for concern mandates authorisasion and for particularly high-risk

substances, applies restrictions. ＊6 :Final disposal volume is less than 1% of total generated volume

Environment Education ClassIn response to a request from a local high school, the Moka Works presented an on-site lecture about corporate responsibility for global environmental preservation and our activit ies for environmental and workplace safety. Through the class, the participating student recognized a renewed view of environmental issues and came away with a strong commitment to be vigilant about environmental issues, and to do what they can to contribute to a more eco-friendly society.

Exhibition in "Eco-Products 2010"Hitachi Metals exhibited at Eco-Products 2010 held at the Tokyo Big Sight from December 9 through December 11. We exhibited rare-earth magnets, amorphous ribbons, and other Eco-Products. We also designed a demonstration area to allow people of all ages to learn about rare-earth magnets, experimenting with strong magnetism and electricity generation.

●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 manufactur-ing 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 ResultsWe largely achieved our goals during fiscal 2010. We did miss our goal for reusing waste products, mainly due to a drop in demand for road and construction materials. This drop in demand resulted in a lower re-usage ratio of slag on our part. We continue to look for other applications that allow us to reuse slag.

Qualitative Items

Quantitative Items

Reduction rate in CO2 emissions per unit (vs. FY2006, in Japan)

Eco-Management & Eco-Mind Green PointsCompletion rate of Eco-Mind training through e-learning

Registration rate of Eco-Products

Green supplier ratio (non-consolidated)

Resource recycling rate (in Japan)Net sales energy rate (in Japan)＊2

Reduction rate in VOC atmospheric emissions (vs. FY2000)

GREEN 21＊1

Reduction rate in CO2 emissions (vs. FY1990, in Japan) ＊2

Reduction rate in water usage (vs. FY2005, per unit sales)

Eco-Products

Eco-Factories

Environmental Education

Expand Eco-Products

Reducing the Product Transportation Burden

Waste Reduction

Global Warming Prevention

Reducing VOC＊3

Conserving Water Resources

Category Environmental Objectives Indicators Achievement levelFiscal 2010 Targets1280 pt.

90%

70%

90%

10%

99%

1.126

10%

30%

10%

Fiscal 2010 Results1122 pt.99.8%

76.0%

87.0%

34.9%

81.6%

1.139

25%

35.0%

25.1%

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

Eco-Management & Eco-Mind

Held Hitachi Metals Group Environmental Committee meetingParticipation in planning for the information exchange meeting in China for Hitachi Environmental officers

Completion of the company-integrated EMSEnvironmental cost: 9.58 billion yen

Environmental effects (economic effects): 3.82 billion yen

Environmental Management Promotion

Eco-Products

Eco-Factories

Promote environmental meetings

Implementation of Environmental Accounting

Implementation of Environmental Training

Our Response to Regulations on Hazardous Chemicals in Products

Compliance

Promote "zero emission"＊6 at works

Environmental Information Disclosure

Category Environmental Objectives Fiscal 2010 Results Achievement level

Environmental Management System (EMS)

Perfect legal compliance; no accidents

Cooperation with Stakeholders

Social Contribution

Environmental effects (physical effects): Energy reduction 6,618kℓ (crude oil equivalent)

: Waste reduction 2,213 tonsEnvironmental Internal Auditor training: 50 people attendedEnvironmental Internal Auditor follow-up training: 12 people attended

"Zero emission" achieved at 23 sites (added six more sites compared to the prior year)

Hitachi Metals Group CSR Report 2010 issuedExhibited at Eco-Products 2010

Held environmental discussions with various associations

Welcoming plant tours

Participation in local environmental preservation activitiesImplemented local area cleanup activities

Implement the Environmental CSR-Compliant Monozukuri structureImplement the SVHC＊4 survey concerning REACH regulation＊5

PR activities for Eco-ProductsExhibited at the Eco-Products International Fair 2011 (India)

Implemented PRTR Risk Communications

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

cru

de o

il equ

ivale

nt/m

illion

yen

)

1990 2005 2006 2007 2008 2009 2010 2011 2012

Global Warming PreventionExpand Eco-Products

2015

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

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 to

net

sal

es (%

)

2008 2009 2010 2011 2012 2015

500,000

300,000

100,000

Ratio of Eco-Product Sales

Net sales of Eco-Products (results)Net sales of Eco-Products (projected)Ratio of Eco-Products sales to net sales (results)Ratio of Eco-Products sales to net sales (projected)

CO2 emissions (results)CO2 emissions (projected)Net sales energy rate (results)

[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 particularly high environmental value from among our Eco-Products ＊3: The site subject to the target is a Type 1 energy management designated plant in Japan

28



Green21-2015＊1 Green PointsEco-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

Eco-Products sales ratio

Creation of Eco-Products Select＊2

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)

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 2011 Targets Fiscal 2015 Targets

351pt.

95%

75%

1model

1%

7%

2%

10%

Quantitative Items

Eco-Mind & Global Eco-Management

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.

514pt.

95%

80%

3model

5%(vs. FY2010)

15%

6%

20%

29



[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 and the 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 havehappened, 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 protectionactivities 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 globalwarming, 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 regulations 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

30



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 this 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 company, 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.

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

31



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 areconformed to, the appropriateness of EMS operations, and environmental risks.We conducted environmental audits at four sites and EMS internal audits at six sites in fiscal 2010, and confirmed that there wereno major-nonconformities at any sites.

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.

200

150

100

50

0

Hitachi Metals Group Results and Targets

Eco-Management (Environmental management)

Next-Generation Products / Service Strategy

Eco-Mind

Fiscal 2010 Achieved

1,120GP

Fiscal 2010 Target

1,280GP

Eco-Products(Eco-Products)

Eco-Factories (Resources recycling)

Environmental cooperation with stakeholders

Eco-Products(Green procurement)

Eco-Factories(Prevent global warming)

32



Risk management, action plans, environmental accounting

Staff training and education

Environmentally conscious products, Management of substances contained in products

Green procurement, green purchasing

Develop and expand sustainable businesses

Reduce energy consumption at operating facilities, develop environmentally conscious logistics strategies

Reduce waste, manage chemical substances

Disclose information, communication activities, world citizenship activities

Eco-Management-Environmental management

Eco-Minds

Eco-Products-Eco-Products

Eco-Products-Green procurement

Next Products /Service Strategy

Eco-Factories-Prevent global warming

Eco-Factories-Resources recycling

Environmental cooperation with stakeholders

No.

1

2

3

4

5

6

7

8

Categories Evaluation Elements

GREEN 21We have been making progress with raising the level of our activities as we strive to continuously improve and raise the level of envi-ronmental activities, with the goal of improving our quality as an eco-friendly company. As such, we have been promoting the Green 21 system, which is a system that scores our level of achievement for environmental targets. We have changed the scoring criteria twice, and since fiscal 2006 we have been using Version 3 of the GREEN 21 system. Version 3 of the GREEN 21 system assigns scores to environmental activities in the following categories in order to accurately ascertain our environmental activities.

GREEN 21 is a system of continuous action, evaluating the scores from the previous fiscal year, and using that to set the targets for the next year.

The Hitachi Metals Group’s score for fiscal 2010 was 1,122 green points (GPs), which fell short of our target score of 1,280 GPs. A category in which we failed to achieve our target by a particularly large margin was Eco-Factories (Prevent global warming). In this category, our score fell due to our failing to achieve the target for net sales energy rate in the wake of our reduced production output. We also received a low score in the "Environmental cooperation with stakeholders" category, for such activities as town meetings. The drop in our green procurement rate also resulted in a low score for "Eco-Products."

Having concluded our medium-term plan that was set to end in fiscal 2010, we have formulated an Action Plan in which our envi-ronmental activities from fiscal 2011 to fiscal 2015 will serve as our Third Term Environmental Strategy. Together with this, we have also updated GREEN 21 with new evaluation criteria and have been promoting improvement activities.

33



[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 ClassificationFY2008 FY2009 FY2010

Expense Investment Expense Investment Expense Investment

FY2008 FY2009 FY2010ItemWaste Processing and Recycling

Energy Conservation

Others

EconomicEffects

Total

ItemEnergy Saved (Crude oil equivalent)

Waste ReductionPhysicalEffects

FY2008 FY2009 FY2010

13.8

2.4

19.6

35.9

1.2

8.4

33.6

0.2

0.9

80.1

1.0

1.8

0.6

3.4

0

0

6.2

0

0

9.6

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

21.6

1.1

2.4

25.1

19.5

2.7

2.1

24.3

34.9

0.9

2.4

38.2

5,449kℓ1,283t

7,519kℓ1,250t

6,618kℓ2,213t

Analysis of Results for Fiscal 2010

●Environmental CostsOur environmental costs in fiscal 2010 totaled ¥9,580 million, which was an increase compared to the previous fiscal year, due mainly to the rise in R&D costs for our Eco-Products and reducing the environmental impact from our manufacturing processes. ●Environmental EffectsThrough our resource recycling effect (e.g. from the sale of waste materials) our environmental effects from fiscal 2010 came to \3,820 million, which was an increase compared to the previous fiscal year.

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

34



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 to

net

sal

es (%

)

2008 2009 2010 2011 2012 2015

500,000

300,000

100,000

Ratio of Eco-Product SalesNet sales of Eco-Products (results)Net sales of Eco-Products (projected)Ratio of Eco-Products sales to net sales (results)Ratio of Eco-Products sales to net sales (projected)

[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 is promoting the expansion of Eco-Products*5 which have a reduced environmental burden throughout their entire lifecycle, from the procurement of the raw materials to the design, development, manufacture, distribution, use, and disposal of the products. In fiscal 2010, 76% of our (consolidated) net sales were from Eco-Products.

R&D Case StudiesField Environmental key words

Energy

Automobiles

Electronics

R&D field

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

Efficient power generation

Electricity storing / transforming smart grids

Regulations on hazardous substances

Electromagnetic environment

Hybrid, Electric cars

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 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 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, inter-connector materials)

Amorphous metal materials for low-loss transformers, 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

Radio front end module, and malti-layer ceramics components

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

Energy-saving consumer electronics

Semiconductors / liquid crystal panels

Air conditioning / refrigerator compressor magnets

Mass flow controllers, linear stages

35



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.

Green procurement, enhancing of chemical substances management, reducing of chemical substance risks

Improvement of productivity, adoption of energy conservation equipment, fuel conversion

Use of recyclable resources, recycling of waste, reduction of waste generation

Reduction of environmental burden on local area

Not containing hazardous chemical substances, management of and provision of information on products containing chemical substances Energy conservation, improvement of efficiency, and reduction of fuel consumption by products in their usage stage

Reducing products’ weight and size and improving their recyclability, etc.

Providing environmental information on products, recyclable packaging materials, reducing the transportation burden, and collectability and recyclability, etc.

Environmental consideration during production stages (chemical substances)

Environmental consideration during production stages (energy conservation)

Environmental consideration during production stages (resource conservation)

Environmental consideration during production stages (pollution measures)

Environmental consideration in products (chemical substances)

Environmental consideration in products (energy conservation, etc.)

Environmental consideration in products (resource conservation)

Environmental consideration during sales, distribution, and product disposal

Evaluation Items Evaluation Points

April 14~17, 2010

May 19~21, 2010

June 30~ July 2, 2010

July 21~23, 2010

July 21~23, 2010

September 3~4, 2010

October 5~9, 2010

October 12~14, 2010

October 18~21, 2010

October 20~22, 2010

October 21~23, 2010

October 22~25, 2010

November 10~12, 2010

November 25~27, 2010

December 1~3, 2010

December 9~11, 2010

February 10~12, 2011

INTERMOLD 2010 (Tokyo)

People and Car Technology Expo (Yokohama)

PV Japan 2010 (Yokohama)

TECHNO-FRONTIER 2010, The 23rd EMC JAPAN 2010 (Tokyo)

TECHNO-FRONTIER 2010, The 28th MOTORTECH JAPAN 2010 (Tokyo)

Eco Mirai-ichi 2010 (Tokyo)

CEATEC JAPAN 2010 (Makuhari)

Solar Power International (Los Angeles)

FUEL CELL SEMINOR & EXPOSITION (San Antonio)

The 42nd Plumbing & Sanitary Materials and Equipment Show (Tokyo)

The 28th Plumbing & Sanitary Materials and Equipment Show (Nagoya)

The 11th Western China International Fair (Shanghai)

FPD International 2010 (Yokohama)

2010 Japan Die Casting Congress & Exposition (Yokohama)

SEMICON Japan 2010 (Makuhari)

Eco-Products 2010 (Tokyo)

Eco-Products International Fair 2011（New Delhi）

36



Solar Cells

Thermal Power Generation, and Others

Wind and Solar Power Plants

Fuel Cells

Substation

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

For HEV/EVRare-Earth Magnet NEOMAX®

Precision-Cast Blades for Gas Turbines

Rare-Earth Magnets for Wind Power GenerationNEOMAX®

Amorphous RibbonMetglas®

Amorphous Cut Core

Smart Grids

Amorphous Cut Core

Turbine Blades

Hybrid/Electric Vehicles

Fuel-Efficient Vehicles

Rare-Earth MagnetFor HEV/EV NEOMAX®

Fashionable Aluminum Road Wheels SCUBA®

Factories/Plant

Advanced Die Steel for Die Casting DAC-MAGIC®

High-Efficiency End Mills"Epoch Mirus"

Mask Flow Controllers for Semiconductors, Liquid Crystal, and Solar Cell Production

P37

Fuel-Efficient Vehicles

Type R

Type N

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

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

P38

P42

P40 P40

P39

P41

P41

P41

P42P39

P39

P42P43 P43

A trial mold made with DAC-MAGIC®

DAC-MAGIC®’s Characteristicserial (at same magnification ratio)

37



●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 molds for die-cast aluminum parts are subjected to a harsh heating and cooling cycle during casting, and from the standpoint of enhancing productivity, the molding 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 mold 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 Die-Cast Molds received an award at the 53rd Best 10 New Product Awards*1 in 2010.

●Environmental Benefits

・The material’ s enhanced strength and toughness*2 at high temperatures, as well as its improved resistance to cracking, extendsthe life of the mold.・Lifecycle of the mold until heat cracking is 1.5 to 2 times longer than traditional die-cast mold 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.Hi

gh h

eat s

treng

th

Toughness

High

High

Specialty Steel Company

Hitachi Tool Engineering, Ltd.

Epoch Mirus series

38



●Environmental Features and Characteristics

・Special unequal phase configurations on the peripheral edges greatly reduce vibration during machining, allowing for highly efficient and stable processing.・A double-end gash configuration allows for many types of processing, including

oblique cutting and straight feed.・High heat-resistant ATH coating dramatically improves product lifecycle.

The combination of these features shortens the processing time to 1/8 that using previous end mills.

Epoch Mirus Series End Mills Offer Extremely High Production EfficiencyThese ultra-high-performance end mills provide an eight-fold increase in production efficiency compared to previous models. The reduction in processing time helps to conserve energy and reduce CO2 emissions.

●Awards2010 “CHO” MONODZUKURI Innovative Components Awards Grand Prize, Machine Parts PrizeFiscal 2010 Japan Cemented Carbide Tool Manufacturers’ Association, Technical Achievement AwardThe Japan Solid Cutting Tools’ Association, Fourth Environmental Award20th Japanese Society Die and Mould Technology Award, Technology Prize

Type R

Type N

Amorphous ribbon – Metglas®

Amorphous cut cores

39




・No-load loss in transformers is one-third that of grain-oriented electricalsteel2.・Advanced melting and casting techniques allow for mass production of

amorphous wide-ribbon forms with exceptional reliability. The new Metglas®

605HB1M provides enhanced saturation magnetic flux density, allowing amorphous transformers to be made smaller.

Metglas® Amorphous Metal Materials (SA1, HB1M)

Hitachi Metals’ Metglas ®*1 amorphous metal materials utilize superior soft magnetic properties to significantly reduce electricity loss during power conversion in transformers and other equipment, making a significant contribution to 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.Source: Techno-report 2009 (No. 129/2008-1), Chubu Electric Power Co., Inc.http://www.chuden.co.jp/resource/corporate/news_129_N12913.pdf

Mag

netic

Flu

x De

nsity

B (T

)

External Magnetic Field H (A/m)

Comparison with Amorphous Hysteresis LoopM3: Grain-Oriented Electric Steel

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 a solar power inverter 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.

Soft Magnetic Materials Company

Information System Components Company

Target Materials for CIGS Photovoltaic Cells (Mo, CuGa)

40




・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 natural

energy.

Target Materials for CIGS Photovoltaic Cells (Mo, CuGa)

The market for CIGS photovoltaic 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.

Cladding Materials for Photovoltaic Interconnectors

Solar cells have tremendous potential as a new energy source. Hitachi Metals’ cladding technologies help to lower the cost of panels, extend their lifecycle, and improve power-generating efficiency.


・Lower panel costs, extended panel life, 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 and helps to extend the lifecycle of the solar panel. Extremely low-power 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.

*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 potentialnext-generation photovoltaic cell.

*1.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.


NEOMAX MATERIALS Co., Ltd.

Finished SOFC interconnector material (pressed product)

Finished SOFC interconnector material (pressed product)

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

First stage stationary Black

41




・ZMG232 series J3: World-class alloy design technologies provide the material with significantlyenhanced 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 toZMG232L, helping to prevent deterioration in the power-generating capacity of theSOFC stack.・Finished products available

In 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 shapes.

ZMGTM 232 Series J3 & G10Solid Oxide Fuel Cell (SOFC) Interconnects

SOFCs 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.

●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’ unique precision casting technologies have made possible hollow construction precision blades with multiplecooling flow channels.・Retains strength at high temperatures

The high-strength nickel heat-resistant alloy (developed byHitachi,Ltd.) retains strength even in high heat.

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 numerous turbine blades. By drawing on its precision casting technologies, Hitachi Metals is able to mass produce materials for precision cast blades for use in gas turbines of the 1,300ºC class.


Hitachi Metals Precision, Ltd.

First stage rotating Black

NEOMAX® series Nd-Fe-B sintered magnets

TRANSFORMER® series of mass flow controllers

42



●Environmental Features and CharacteristicsHitachi Metals was 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 allows 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 lessen environmental loads.

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 loads by making products more efficient, smaller, and energy efficient.


・Multi-gas/multi-rangeA single unit can handle numerous gasses and a broad flow range, allowing for a considerable reduction in the types of unitsthat require maintenance.・RoHS compliant

These controllers meet standards for environmental regulatedsubstances prescribed by the RoHS directive.

TRANSFORMER® Series of Mass Flow Controllers

Mass flow controllers are used in the manufacturing of products where it is important to control the flow of gasses, such as the manufacture of semiconductors, the liquid crystal display (LCD) panels for computers and televisions, and photovoltaic cells. Hitachi Metals’ TRANSFORMER ® series of mass flow controllers provide high-speed response and exceptional durability, helping to lessen the environmental load by shortening processing times and saving on maintenance.

NEOMAX Company

Piping Components Company

Fashionable SCUBA® aluminum wheels

HERCUNITE® series of heat-resistant cast components

■Temperature range for each material (reference values)

43



●Features

・Sharp and delicate designs possible using advanced aluminumcasting technologies・Fancy surface treatments available (We have also established

coating technologies that do not use volatile organic compounds(VOCs).)

Fashionable SCUBA® 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.

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.

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

*2.CAE: Computer-Aided Engineering

●Features

・Wide temperature range (Max. 1,050ºC)・Optimal shapes for cast components possible with Hitachi

Metals’ 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.

HERCUNITE® -S

HERCUNITE® -MX

Automotive Components Company

Automotive Components Company

The Hitachi Metals Group Material Balance of Fiscal 2010 (Global)

Input of Primary Materials

INPUT

OUTPUT

Recycle

ReuseHitachi Metals Group

560kt

Input of Energy

589,420kℓ (Crude oil equivalent )

Input of Water Resources

14,792thousand m3

Transfer of WasteAmount of Reused / Recycled Resources

Final disposed volume

Products

318kt

241kt

71kt

Released to the Atmosphere

CO2 : 1,186ktSOx : 99tNOx : 251tHazardous Substances＊4 : 162tVOC : 577t

Released into Water

Total volume of wastewater :13,553thousand m3

BOD＊1 : 22.8tCOD＊2 : 88.8tSS＊3 : 21.7tHazardous Substances＊4 : 2.1t

44



＊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 2010. 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.

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

0

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

FY2009 FY2012

Medium- and

long-term targets

179

175 171 170124

821

749 759 761 713

104

536601

128

662

2.107

2.2382.284

Net sales CO2 emmission rate

150

45



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 RateIn fiscal 2010, the Hitachi Metals Group’ s CO2 emis-sions were 751,000 t-CO2 from its target sites in Japan, and 435,000 t-CO2 from its target sites outside Japan*2. At its target sites in Japan, the emissions were 25% lower than their fiscal 1990 levels. For the CO2 emission conversion factors used to calculate CO2 emissions, we used the conversion factor for each electric company announced by the Ministry of the Environment. (Using the previous metric of the forecast (0.36t-CO2/MWh) by the Industrial Structure Council of the Ministry of Economy, Trade and Industry (METI) and standardizing the conversion factors for each electric company results in a 25% reduction from fiscal 1990.)Moreover, our net sales energy rate for fiscal 2010 came to 1.139. This level is 9% lower than fiscal 1990. Also, our net sales CO2 emission rate for fiscal 2010 came to 2,107, with this level being 8% lower than fiscal 2009. The Group’s main energy-efficiency measures in fiscal 2010 included improving the operating efficiency of its combustion furnaces and preventing loss via 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 2010 Results

1. Net sales CO2 emission rate: 2.107 (7.7% reduction from FY 2009)(Net sales energy rate: 1.139 (9% reduction from FY 1990))

2. CO2 emissions: 751,000 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.

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

-kg)

FY2006 FY2007 FY2008 FY2009

0.2

0.15

0.1

0.05

0FY2010

Transportation burden energy rate

46



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

Transportation burden energy rate

CO2 emissions

50,000

40,000

30,000

20,000

10,000

0

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 2010, the Hitachi Metals Group generated 19,411t-CO2 emissions from transportation in Japan, which is 2% lower than the previous fiscal year. Meanwhile, the volume shipped came to 159,987,000 metric tons, which was 18.8% higher than the previous fiscal year, but our shipping volume emissions rate improved by 17.5%.Our main measures to reduce emissions from transportation included reducing the number of trips by increasing load ratios; a modal shift (shifting from truck to rail and maritime transport); and reducing transportation distances.

3.0%

SlagDustSludgeGlass and Ceramics

Waste PlasticWaste OilScrap MetalOther

1.5%6.1%

6.9%5.4%

2.3%

4.0%

0.1%0.3%0.1%0.4%

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)

FY2007 FY20080

100,000

200,000

300,000

400,000t /year

100

75

50

25

0

%Recycling Ratio

81.6

97.3

FY2009

96.6

FY2010

86.3

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

36.0%

71.3%9.0%

15.8%

6.2%1.1%

43.5%

47



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.Specifically, we worked to achieve our target of "zero emissions"＊ by fiscal 2010, but our volume of final disposal has continued to increase year by year. This was due to decreased demand for road materials and other construction materials, which are major applications of recycled waste, due to such factors as the economic recession and 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. We are also working on our reduction rate by using the reduction rate in our generation of waste per unit of nominal output as an indicator when it comes to activities that are centered around improving our recycling productivity. More specifically, we are promoting a 15% drop in the reduction rate in our generation of waste per unit of nominal output by fiscal 2015 with the figures from fiscal 2005 taken as the baseline for this. We are also considering such topics as the ideal way to recycle resources, including collecting used products. We will then incorporate measures to improve our resource recycling rate and other factors into our next set of measures.

Results of Waste ManagementIn fiscal 2010, the Hitachi Metals Group in Japan produced a total of about 227,000 tons of waste. It recycled approximately 185,000 tons into resources, and sent approximately 42,000 tons for final disposal. This resulted in a resource recycling rate of 81.6%. Additionally, the Group achieved zero emissions at 23 business sites.Although the Group’ s emissions were 51,000 tons higher than in fiscal 2009 and the final disposal level increased by 18,000 tons, we were also able to increase our recycling amount by 31,000 tons.The main increase in final disposal was from slag, due to reduced demand for road materials, concrete aggregate, and other con-struction materials. Moving forward, we believe that it will be necessary to consider measures to replace these uses for recycled resources, and work to create stable resource-recycling pipelines.

Note that dust containing cobalt, chromium, tungsten, and other materials is reused internally as a raw material in special steel. Dust containing nickel and other materials is also reused externally as a raw material in specialty steel.

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

TotalGeneratedVolume:227 kt

FinalDisposalVolume:42 kt

Total waste volume generated fromproduction 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

48



Initiatives to Achieve "Zero Emissions"The Hitachi Metals Group has been advancing initiatives to achieve "zero emissions" at our sites through activities to recycle waste. Our target for reductions in our final disposal volume for the Group as a whole were not achieved due to the impact from social circumstances, but we have steadily been increasing our "zero emissions" sites each year through activities at each site. In fiscal 2010 we achieved "zero emissions" at 23 sites by increasing this by four sites compared to the previous fiscal year. For fiscal 2011 and onward we will revise our definition of "zero emissions" from a final disposal volume of no greater than 1% of total emissions that we have used thus far to change it to the high level of 0.5%, and promote activities that will contribute to further improving our environmental performance.

Shimane Prefecture established the "Shimane Hatsu Construction Brands" registration system to support expansion of new technologies and new manufacturing methods developed by the Prefecture’ s construction companies into markets nationally. At present 15 products are registered and the slag produced as a by-product of the steel manufacturing process at the Yasugi Works is registered as an "electric furnace oxidation slag aggregate." This aggregate has a high specific gravity and a low coefficient of water absorp-tion, while its aggregate expansion is small, so it is ideal for ocean construction works. To date about 40,000 tons of the material has been used in ocean construction. (Uses:Concrete production, wave damp-ing blocks, artificial fish reefs, algal reefs, etc.)

Aggregate that uses slag from the Yasugi Works is registered as a "Shimane Hatsu Construction Brand"

Survey on nurturing marine plants and algae Kombu seaweed vegetation survey

Ocean blocks utilizing electric furnace oxidation slag aggregate

Shimane prefecture’s Website：http://www.pref.shimane.lg.jp/infra/kouji/kouji_info/shimane_hatsu/

Consumed98.5%

Transferred0.9%

Released0.6%

Nickel/nickelcompound

50.5%

Chromium andchromium (Ⅲ)compounds

33.6%

Other1.5%

Boron and its compounds2.4%

Cobalt and its compounds2.3%

Molybdenum and its compounds4.6%

Manganese and its compounds5.1%

Toluene

45.7%

Xylene

43.3%

Chromium and chromium (Ⅲ)compounds

42.4%

Landfill at own site34.0%

Other

15.3%

Boron and its compounds

2.0%

Cobalt and its compounds

0.6%

Nickel / nickel compound

7.2%

Molybdenum and its compounds

3.9%

Sewage system0.0%

Soil0.0%

Public watersystem

0.8%

Atmosphere65.2%

Waste100%

Other

4.8%

Ethylbenzene

6.2%

PRTR in fiscal 2010 (in Japan)

Volume Consumed, Released and Transferred Breakdown of Volume Handled

Breakdown of Volume Released and Transferred

Ferric chloride

7.2%

49



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 98.5% of the regulated materials handled by the Group, and 77.4% of the total amount transferred.Of this total amount of release, 65.2% was released into the atmosphere and 95.2% of atmospheric release were comprised of three Volatile Organic Compounds (VOCs), which are toluene, xylene and ethylbenzene.

Volume handled : 43,512t Volume consumed :43,507tVolume released : 246t Volume transferred :398t

Manganeseand its

compounds21.4%

Volumetransferred:

398t

Volumereleased:

246t

Volumehandled:43,512t

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

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)

FY2004(Results)

FY2007(Results)

FY2008(Results)

FY2009(Results)

FY2006(Results)

FY2005(Results)

FY2004(Results)

FY2010(Results)

VOC emissions volume (outside Japan)

VOC emissions volume (in Japan)

Rate of reduction (compared with 2000)

50



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

22.8

35

48.8

30.9

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 2010 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 2010 were reduced by 35% 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

16,329

141,263

118,322

64,598

14,625,370

1,015,704

2,240

3,379

108,814

3,474

29,252

21,961,515

146,219

1,890

1,053,535

2,558

2,220,877

1,997,144

43,512,483

10,032

0

69,466

2

6

49

0

3,095

73,272

2,501

0

89

36

1

0

1,842

68

2

160,459

0

0

0

0

847

3

0

0

0

0

0

0

434

0

29

0

632

0

1,945

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

14,621

0

0

0

0

0

0

0

52,837

0

14,797

0

1,523

57

83,836

10,032

0

69,466

2

15,473

52

0

3,095

73,272

2,501

0

89

53,308

1

14,826

1,842

2,223

59

246,240

0

58

0

0

0

0

0

0

0

0

0

1

0

0

0

0

1

0

61

2,533

28,833

24,240

9

168,532

2,321

0

285

20,143

973

0

28,833

11,974

0

7,871

705

85,096

15,341

397,688

2,533

28,891

24,240

9

168,532

2,321

0

285

20,143

973

0

28,834

11,974

0

7,871

705

85,097

15,341

397,749

100-41-4

7705-08-0

1330-20-7

—

—

—

—

108-67-8

108-88-3

91-20-3

7439-92-1

7440-02-0

—

71-43-2

—

50-00-0

—

—

53

71

63

82

87

132

144

297

300

302

304

308

309

400

405

411

412

453

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

Benzene

Boron compounds

Formaldehyde

Manganese and its compounds

Molybdenum and its compounds

Volume released Volume transferred

Ⅲ

Ethylbenzene

51



9,161

34,958

16,039

121,092

23,877

368

12,091

1,948

0

382

37,767

375

110

14,221

0

3,702

15,779

3,544

35,583

8,366

3,928

194

5,723

2,251

303

0

15,952

10,983

2,881

38,629

602

1,149

3,946

2,861

62

47

1,008

766

126

60

4,322

4,993

102

32

4,805

1,983

3,265

956

278

483

113

807

19,452

26,346

16,642

164,618

25,623

6,795

26,117

5,200

4,783

3,593

12,531

4,726

4,097

1,274

11,289

7,862

6,689

752

25,586

8,971

17,479

1,422

9,264

3,332

401

5,520

167

594

810

6,070

314

58

507

38

113

15

65

23

19

151

16

15

1,498

4

151

222

242

84

53

49

37

15

20,648

19,050

11,658

67,002

22,169

395

7,541

143

418

378

423

1,789

262

144

1,847

4,634

5,876

410

48,904

5,876

4,010

242

3,884

190

60

800

28,628

37,905

36,901

368,470

41,555

13,529

37,754

5,580

5,619

6,743

24,891

6,140

4,347

1,642

23,500

16,416

10,307

1,274

40,511

9,910

18,673

2,031

14,386

6,014

505

7,208

0.0

0.2

1.7

84.7

0.5

－

3.5

0.1

－

0.0

0.0

－

－

－

0.5

－

－

－

－

－

0.1

－

－

0.5

－

－

0.4

3.1

4.8

169.7

10.5

－

－

2.7

1.8

4.6

0.0

－

－

－

0.9

－

1.7

－

5.9

0.5

1.5

－

10.4

3.7

－

－

0.3

1.2

－

13.3

7.0

－

－

0.0

0.1

0.0

－

－

0.7

－

2.4

－

－

－

0.0

－

0.5

－

－

0.0

－

－

0.0

0.1

－

0.8

5.4

0.1

2.0

0.0

0.2

0.0

－

－

1.0

－

0.0

－

1.7

－

0.0

0.1

0.5

2.0

－

0.0

0.0

－

137

380

812

5,913

729

58

0

1

46

13

22

22

19

0

13

5

1,498

4

87

222

242

84

51

20

33

5

－

－

2.27

4.9

2.5

－

3.73

0.44

－

－

－

－

－

－

0.63

－

－

－

－

－

2.27

－

9.68

1.88

－

－

－

－

0.10

0.068

0.0055

－

0.059

0.001

－

－

－

－

－

－

0.0024

－

－

－

－

－

0.004

－

ND

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

－

0.3

0.15

0.2

－

－

－

0.3

0.2

0.20

－

0.25

0.1

0.25

－

0.15

0.1

－

－

48

65

58.5

79

27

－

－

－

43

3.95

－

－

－

－

70.5

－

51.5

－

17.5

－

100

－

75

600

－

－

0.009

0.0066

0.006

0.0031

0.00475

－

0.0048

－

0.0027

0.001

0.0009

－

－

－

0.003

0.0014

0.01

－

0.003

0.0025

0.016

－

ND

0.031

－

－

5.8～8.6

5.8～8.6

5.8～8.6

5.8～8.6

5.8～8.6

5.8～8.6

－

6.0～8.5

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

6.4～7.7

5.8～8.6

5.8～8.6

－

7.6

7.1

7.9

7.4

7.3

7.1

－

7.2

7.48

－

－

7.6

7.1

－

8.1

7.3

7

7.1

7.7

7.5

7.6

7.8

7.4

7.3

7.2

－

2

2.63

2.6

1.8

4

2.2

－

－

3

－

－

0.5

37.3

－

3

1.3

0

6

21

6

2

5.8

4

1.2

1

－

50

50

25

150

60

200

－

－

300

－

－

70

600

－

30

150

90

100

600

300

60

300

25

120

90

－

15

－

25

20

－

－

－

－

－

－

－

－

－

－

20

160

－

100

－

－

－

－

－

－

－

－

3.8

－

1

5

－

－

－

－

－

－

－

－

－

－

2.4

2.9

－

4

－

－

－

－

－

－

－

－

－

25

－

－

25

160

－

－

300

－

－

25

600

－

－

－

25

－

600

300

25

600

20

60

60

－

－

0.25

－

－

8.4

2

－

－

5.6

－

－

3.8

51.3

－

－

－

0.7

－

32

4

2

5.3

3.4

1.3

1

－

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 *2 NOx *2 COD *2 BOD *2

(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 2010

Environmental analysis data at major manufacturing sites in the Hitachi Metals Group in fiscal 2010

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

Hitachi Metals Techno, Ltd.

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*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

Hitachi Metals Techno, Ltd.

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.

*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*3 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

who actually participated in social and local community activities. The

report should cover CSR management in overseas activities, which is

included in the Good Practice Guidance.

The Environmental Report describes the progress in developing new

environmental products and the increase in R&D expenditures, clearly

expressing Hitachi Metals’ characteristics as a leading technology

company. The Company’s environmental performance is improving,

with domestic CO2 emissions on a declining trend compared with

fiscal 1990 and growth in the number of business establishments

that have already achieved zero emissions. As the Hitachi Metals

Group advances overseas, however, the goal will be improved

environmental performance worldwide.

In addition to global warming, the maintenance of biodiversity is also

becoming a major issue. The Hitachi Metals Group Basic Environmental

Protection Policies clearly specify consideration of the conservation of

biodiversity, but overall Hitachi Metals does not write much about this

issue. In addition to preventing global warming through energy

conservation, metal recycling contributes to the conservation of

biodiversity from reduced resource consumption. Furthermore, along

with reductions in CO2 emissions, reduced emissions of hazardous

substances and waste products also support the maintenance of

biodiversity. The mining and procurement of raw materials is closely

related to the conservation of biodiversity for metal manufacturers.

Environmental issues are interrelated, so in planning responses it is

important to integrate the individual issues and make the overall

supply chain greener across the globe.

These are the points I would like to call to attention. I expect that

Hitachi Metals will continue to play a leading role as an innovative

corporate group for the 21st century.

The way in which Japanese enterprises respond to environmental

issues is undergoing a great change. Corporate management is

shifting from the passive response of simply observing government

regulations to grasping environmental problems as a business

opportunity and positively incorporating this into management

strategies. This CSR report clearly demonstrates the Hitachi Metals

Group’s leading strategic stance.

The Hitachi Metals Group established the Good Practice Guidance for

Hitachi Metals Group Companies in September 2010. This code of

conduct was prepared with reference to the United Nations (U.N.)

Global Compact. It presents specific environmental, social, and

economic standards, with a clear flow from corporate philosophy and

action guidelines to the on-site conduct of business. In particular, the

Good Practice Guidance includes the observance of "engineering

ethics." The balance between engineering and profit-making is a

basic management principle, and the observance of engineering

ethics will likely become more and more important for businesses as

ongoing concerns.

Moreover, the "observance of the laws and regulations and respect of

the cultures and customs of each country and region" and the

"respect of human rights" specified in the Good Practice Guidance

have become important issues for the CSR management of

globalizing companies.

While this CSR report is a well-balanced presentation of the Hitachi

Metals Group’s CSR activities, I would like to make a few comments

as follows.

The Social Report discusses compliance in detail, but I would like to

see more complete coverage of women’s activities and regarding

work–life balance. I would also like to hear the voices of employees

Following the March 11, 2011 earthquake disaster, the conditions in

Japan will demand major shifts in management strategies. To work for

continuous growth in this turbulent world, I think it is important for every

employee of the Hitachi Metals Group to earnestly address the

"observance of engineering ethics," "observance of laws and respect of

the cultures and customs of each country and region," "respect of human

rights," and "consideration of the conservation of biodiversity" specified

and advocated in the Good Practice Guidance from a global perspective

as noted by Professor Horiuchi. The Hitachi Metals Group will continue

responding to the expectations of society by advancing CSR activities.

Thank you very much for your valuable advice. The Hitachi Metals

Group has conducted business activities in response to changes in

the global external environment following the Code of Conduct for

Hitachi Metals Group Companies, based on our corporate philosophy

of contributing to society by creating "the best possible company."

Now that the Good Practice Guidance for Hitachi Metals Group

Companies provides global standards that can be applied to specific

daily activities, I expect the Hitachi Metals Group will develop future

CSR activities that are visible in the daily actions of individual

employees.

ProfessorFaculty of Humanity and Environment, Hosei University Kozo Horiuchi

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

52


53

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


Corporate Data

Hitachi Metals Group Major Manufacturing Facilities (As of the end of March 2011)

Corporate Profile

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

Electronics and IT Devices

Consolidated Financial Highlights (Years ended March 31, 2011)

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 2011)

Hiroyuki FujiiPresident, Chief Executive Officer and Director

Hitachi Metals Group: 18,008(As of the end of March 2011)

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

62 subsidiaries, 9 affiliates

SEAVANS North Building, 2-1 Shibaura 1-chome, Minato-ku, Tokyo 105-8614, JapanTel: +81-3-5765-4000 Fax: +81-3-5765-8311

Net sales Operating income Net income Capital expenditures Research and development

Return on equity

200920082007 2010 2011

Millions of yen

200920082007 2010 2011 200920082007 2010 2011 200920082007 2010 2011 200920082007 2010 2011 200920082007 2010 2011

%Millions of yen Millions of yen Millions of yen Millions of yen

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

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

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/

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

csr report 2011 - hitachi metals · hitachi metals group’s view towards corporate social...

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