Hitachi Metals Group

CSR Communication Report

2015

SEAVANS North Building, 2-1 Shibaura 1-chome, Minato-ku, Tokyo 105-8614, Japan

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

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

CSR Promotion Department

Tel: +81-3-5765-4591 Fax: +81-3-5765-4597

Printed in Japan

Catalog No. HM-45(E)-2015Printed in Aug. 2015

The body of this report is printed with 100% vegetable ink containing no VOC (volatile organic compounds).

The body of this report uses “Morino Chonai-Kai paper with forest thinning contribution,” achieved through cooperation between Office-Chonai-kai, which works on paper recycling, and Iwaizumi Town, Iwate Prefecture, which works on forest regeneration.

Please give this report for collection and recycling after use. It can be recycled into printing paper.

Fulfilling the Responsibilities Society Expects,Growing Along with Everyone We Are Involved with

President and Chief Executive Officer

We are deeply grateful to all our stakeholders for their under-standing and support. Thank you for taking the time to read this CSR Communication Report 2015.

Since its founding, the Hitachi Metals Group has created products based on materials technology and development—our strengths as a metal material company—while contributing to the development of society. We have advanced along with the times to meet needs and continue breathing life into everyone’s daily activities through the function and performance, as well as the convenience and safety, of our finished products.

As we move forward with initiatives aimed at contributing to the global environment and the realization of a sustainable society amid increasingly borderless markets, our role as a materials development manufacturer is growing in significance.

In FY2014, for the first time ever, Group net sales amounted to more than ¥1 trillion, a major turning point in our movement towards sustainable growth. We are executing a variety of restructuring and growth strategy action plans under the keywords “innovation” and “challenge” to establish a manage-ment base enabling sustainable growth. To this end, we consider the thorough fulfillment of the corporate social respon-sibilities (CSR) expected of us to be of utmost importance. CSR according to Hitachi Metals involves not only the creation and provision of top caliber products and services meeting customer needs, but also the establishment of fair and equitable business practices based on laws and corporate ethics. Our aim is to conduct corporate activities that impact society in a responsible manner, to meet the demands of all our stakeholders, and be recognized as a “trustworthy partner” by society.

Through activities including, in the environmental field, the provision of materials and products to a wide range of indus-tries that contribute to the improved environmental perfor-mance of finished products and the development of various activities to reduce environmental loads in related manufac-turing processes, we are engaged in realizing sustainable societies on a global scale.

Based on this concept, we are executing three action plans announced in our Medium-term Management Plan: Accelerate the global strategy, expand and create business activities, and establish a robust management base.

In terms of accelerating the global strategy, we have added Waupaca Foundry, Inc. (United States) to the Group, thereby establishing an overwhelming position in the global market for transportation machinery iron castings. Also, in the magnet business, we are considering the establishment of a produc-tion base in China.

With respect to expanding and creating business activities, we are focusing on the expansion and sustainable growth of a fourth pillar of business—aerospace and energy—in addition to our mainstay areas of automobiles, electronics and industri-al infrastructure. We have acquired and converted to a subsidi-ary MMC Superalloy Corporation (now Hitachi Metals MMC Superalloy Ltd.), which has a strong track record in the aerospace business. We intend to accelerate expansion of this business through collaboration between this company, our own factories and Japan Aeroforge, Ltd.

We are also engaged in building a robust management base enabling sustainable growth. In addition to creating systems and structures to minimize any negative impacts our business may have on the environment and local communities and accelerate benefits from business integration, we are strength-ening risk governance through initiatives aimed at cultivating an ethical awareness among all employees comprising the Hitachi Metals Group.

Going forward, the Hitachi Metals Group will continue to grow along with local communities, customers, suppliers, employees, shareholders, investors, and everyone we are involved with.

We ask all our stakeholders for their understanding and support in future.

Hideaki TakahashiPresident and Chief Executive Officer

Editorial Policy

Disclaimer

IndexThe “CSR Communication Report 2015” presents major Hitachi Metals Group FY2014 CSR activities in a simple, easy to understand format intended to be read by a wide range of stakeholders.

■ Outside AssessmentIn September 2014, Hitachi Ltd. (Hitachi Metals is a consoli-dated subsidiary of Hitachi Ltd.) was added to the World Index, one of the Dow Jones Sustainability Indices, the world’s leading social responsibility investment fund index.

Message from Management

CSR Management

Business Overview and Growth Strategies

Special Features: Sustainable Growth Policies

1 Focused on Global Growth in the Iron Castings Business

2 New Pillars of Business: Aerospace an Energy Sector Materials

Enhancing CSR Management

Environmental Activity Report for FY2014

Corporate Information

Third-Party Opinion

2

3

7

9

13

15

16

17

18

■ ScopePeriod:

Written to mainly cover FY2014 (April 1, 2014 to March 31, 2015)Organizations covered:

Hitachi Metals, Ltd. and consolidated subsidiariesScope of recorded data:

Finance: Hitachi Metals, Ltd. and 97 consolidated subsidiaries, and 14 equity method companiesSocial: Unless stated otherwise, Hitachi Metals, Ltd.Environment: Data on environmental loads covers manufacturing

business offices, which account for approximately 95% of loads. (Does not include data on companies that became subsidiaries during the period under review)

■ Underlying Guidelines• “Environmental Reporting Guidelines” 2012 Edition,

the Ministry of the Environment, Japan

• “Sustainability Reporting Guidelines Fourth Edition,” Global Reporting Initiative

• ISO 26000: 2010 (International Organization for Standardization)

Please refer to above index.

Major Initiatives ReportCSR Communication Report 2015 content

I. Message from Management

II. About the Hitachi Metals Group

III. Corporate Governance Corporate Governance Structure / Internal Control System / Director Compensation System / Risk Management

IV. CSR Management CSR Activities at the Hitachi Metals Group / Compliance / Information Protection and Management / Respect for Human Rights and Compliance with International Norms

V. Report on Social Aspects Responsibility to Customers / Together with Our Procurement Partners / In Cooperation with Society and the Local Community / Responsibility to Employees / Responsibility to Shareholders and Investors

VI. Report on Environmental Aspects Environmental Management / Environmental Consideration in Products Environmental Consideration in Manufacturing, etc.

Reporting Media

Detailed Activity ReportCSR Detailed Activity Report 2015

This report contains forward-looking statements and descriptions of plans, estimates and projections as well as facts about the Hitachi Metals Group in the past and at present. Such statements and descriptions reflect our current assumptions and expectations of the future events based on information available at present. According-ly, they are inherently susceptible to uncertainties and changes in circumstances, and future performance and events may differ.This report has been translated into English from the Japanese version. In cases where the Japanese description is different from the English description, the Japanese description shall take preference.

The CSR Detailed Activity Report 2015, which is available on the official website in PDF format, provides a comprehensive presentation of informa-tion, including Hitachi Metals’ approach and activities pertaining to its corporate social respon-sibility. The “CSR Communication Report 2015” is a booklet presenting initiatives related to the most important issues for management with a strong focus on society. The full content of both versions, as well as news releases and the latest company information is available on the website.

PDF

On Hitachi Metals website

Latest informationDetailed activityreportMajor initiatives report

CSR Detailed Activity Report 2015

CSR Communication Report 2015

PDFOnline

http://www.hitachi-metals.co.jp/e/corp/corp14.html

• CSR at Hitachi Metals Group• Environmental activities• Charity and volunteer activities

WEB

Booklet

Booklet

Message from Management

21 CSR Communication Report 2015 CSR Communication Report 2015

Fulfilling the Responsibilities Society Expects,Growing Along with Everyone We Are Involved with

President and Chief Executive Officer

We are deeply grateful to all our stakeholders for their under-standing and support. Thank you for taking the time to read this CSR Communication Report 2015.

Since its founding, the Hitachi Metals Group has created products based on materials technology and development—our strengths as a metal material company—while contributing to the development of society. We have advanced along with the times to meet needs and continue breathing life into everyone’s daily activities through the function and performance, as well as the convenience and safety, of our finished products.

As we move forward with initiatives aimed at contributing to the global environment and the realization of a sustainable society amid increasingly borderless markets, our role as a materials development manufacturer is growing in significance.

In FY2014, for the first time ever, Group net sales amounted to more than ¥1 trillion, a major turning point in our movement towards sustainable growth. We are executing a variety of restructuring and growth strategy action plans under the keywords “innovation” and “challenge” to establish a manage-ment base enabling sustainable growth. To this end, we consider the thorough fulfillment of the corporate social respon-sibilities (CSR) expected of us to be of utmost importance. CSR according to Hitachi Metals involves not only the creation and provision of top caliber products and services meeting customer needs, but also the establishment of fair and equitable business practices based on laws and corporate ethics. Our aim is to conduct corporate activities that impact society in a responsible manner, to meet the demands of all our stakeholders, and be recognized as a “trustworthy partner” by society.

Through activities including, in the environmental field, the provision of materials and products to a wide range of indus-tries that contribute to the improved environmental perfor-mance of finished products and the development of various activities to reduce environmental loads in related manufac-turing processes, we are engaged in realizing sustainable societies on a global scale.

Based on this concept, we are executing three action plans announced in our Medium-term Management Plan: Accelerate the global strategy, expand and create business activities, and establish a robust management base.

In terms of accelerating the global strategy, we have added Waupaca Foundry, Inc. (United States) to the Group, thereby establishing an overwhelming position in the global market for transportation machinery iron castings. Also, in the magnet business, we are considering the establishment of a produc-tion base in China.

With respect to expanding and creating business activities, we are focusing on the expansion and sustainable growth of a fourth pillar of business—aerospace and energy—in addition to our mainstay areas of automobiles, electronics and industri-al infrastructure. We have acquired and converted to a subsidi-ary MMC Superalloy Corporation (now Hitachi Metals MMC Superalloy Ltd.), which has a strong track record in the aerospace business. We intend to accelerate expansion of this business through collaboration between this company, our own factories and Japan Aeroforge, Ltd.

We are also engaged in building a robust management base enabling sustainable growth. In addition to creating systems and structures to minimize any negative impacts our business may have on the environment and local communities and accelerate benefits from business integration, we are strength-ening risk governance through initiatives aimed at cultivating an ethical awareness among all employees comprising the Hitachi Metals Group.

Going forward, the Hitachi Metals Group will continue to grow along with local communities, customers, suppliers, employees, shareholders, investors, and everyone we are involved with.

We ask all our stakeholders for their understanding and support in future.

Hideaki TakahashiPresident and Chief Executive Officer

Editorial Policy

Disclaimer

IndexThe “CSR Communication Report 2015” presents major Hitachi Metals Group FY2014 CSR activities in a simple, easy to understand format intended to be read by a wide range of stakeholders.

■ Outside AssessmentIn September 2014, Hitachi Ltd. (Hitachi Metals is a consoli-dated subsidiary of Hitachi Ltd.) was added to the World Index, one of the Dow Jones Sustainability Indices, the world’s leading social responsibility investment fund index.

Message from Management

CSR Management

Business Overview and Growth Strategies

Special Features: Sustainable Growth Policies

1 Focused on Global Growth in the Iron Castings Business

2 New Pillars of Business: Aerospace an Energy Sector Materials

Enhancing CSR Management

Environmental Activity Report for FY2014

Corporate Information

Third-Party Opinion

2

3

7

9

13

15

16

17

18

■ ScopePeriod:

Written to mainly cover FY2014 (April 1, 2014 to March 31, 2015)Organizations covered:

Hitachi Metals, Ltd. and consolidated subsidiariesScope of recorded data:

Finance: Hitachi Metals, Ltd. and 97 consolidated subsidiaries, and 14 equity method companiesSocial: Unless stated otherwise, Hitachi Metals, Ltd.Environment: Data on environmental loads covers manufacturing

business offices, which account for approximately 95% of loads. (Does not include data on companies that became subsidiaries during the period under review)

■ Underlying Guidelines• “Environmental Reporting Guidelines” 2012 Edition,

the Ministry of the Environment, Japan

• “Sustainability Reporting Guidelines Fourth Edition,” Global Reporting Initiative

• ISO 26000: 2010 (International Organization for Standardization)

Please refer to above index.

Major Initiatives ReportCSR Communication Report 2015 content

I. Message from Management

II. About the Hitachi Metals Group

III. Corporate Governance Corporate Governance Structure / Internal Control System / Director Compensation System / Risk Management

IV. CSR Management CSR Activities at the Hitachi Metals Group / Compliance / Information Protection and Management / Respect for Human Rights and Compliance with International Norms

V. Report on Social Aspects Responsibility to Customers / Together with Our Procurement Partners / In Cooperation with Society and the Local Community / Responsibility to Employees / Responsibility to Shareholders and Investors

VI. Report on Environmental Aspects Environmental Management / Environmental Consideration in Products Environmental Consideration in Manufacturing, etc.

Reporting Media

Detailed Activity ReportCSR Detailed Activity Report 2015

This report contains forward-looking statements and descriptions of plans, estimates and projections as well as facts about the Hitachi Metals Group in the past and at present. Such statements and descriptions reflect our current assumptions and expectations of the future events based on information available at present. According-ly, they are inherently susceptible to uncertainties and changes in circumstances, and future performance and events may differ.This report has been translated into English from the Japanese version. In cases where the Japanese description is different from the English description, the Japanese description shall take preference.

The CSR Detailed Activity Report 2015, which is available on the official website in PDF format, provides a comprehensive presentation of informa-tion, including Hitachi Metals’ approach and activities pertaining to its corporate social respon-sibility. The “CSR Communication Report 2015” is a booklet presenting initiatives related to the most important issues for management with a strong focus on society. The full content of both versions, as well as news releases and the latest company information is available on the website.

PDF

On Hitachi Metals website

Latest informationDetailed activityreportMajor initiatives report

CSR Detailed Activity Report 2015

CSR Communication Report 2015

PDFOnline

http://www.hitachi-metals.co.jp/e/corp/corp14.html

• CSR at Hitachi Metals Group• Environmental activities• Charity and volunteer activities

WEB

Booklet

Booklet

Message from Management

21 CSR Communication Report 2015 CSR Communication Report 2015

The origins of our company can be traced back about one hundred and ten years,

and our main products have been standing at the top in each industry

both qualitatively as well as quantitatively.

We devote ourselves to technology and aspire to contribute to society

by being the best enterprise based on the wa-kyo spirit our people possess

and their loyalty to the company.

Hitachi Metals Company Philosophy

1. 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.

2. 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 transac-tions with our suppliers. Based on an awareness of social responsibility shared jointly with our business partners, we will carry out corporate activities to realize mutual growth.

3. Promoting Truthful Communication with SocietyWe will disclose appropriate corporate information in a timely, fair and transparent manner to our shareholders and other stakehold-

The Hitachi Metals Group systematically established guidelines for CSR activities as follows:

The Hitachi Metals Group aims to carry out its social responsi-bility and realize its company philosophy through the obser-vance, by all directors and employees, of laws and regulations

and the Good Practice Guidance for Hitachi Metals Group Companies, and their implementation of the Code of Conduct for Hitachi Metals Group Companies, in their daily duties.

Guidelines for CSR Activities

Since our independence from Hitachi, Ltd. in October 1956, we at Hitachi Metals have operated under our Company Philosophy, which aims to contribute to society by being “the best enterprise.” Accordingly, we have worked to help solve social issues by utilizing our advanced technologies and capabilities.

CSR management, which calls on corporations not only to pursue profitability but also to meet stakeholders’ expectations

and contribute to the development of society, is literally consis-tent with our aspiration declared in our Company Philosophy. It is fair to say that the guiding principles of CSR are the Company Philosophy which we have embraced since our independence.

We at the Hitachi Metals Group will promote CSR activities based on our Company Philosophy, aiming to contribute to society through our business operations.

Code of Conduct for Hitachi Metals Group Companies

ers. At the same time, we will endeavor to establish a relationship of mutual trust with society through well-coordinated two-way communication.

4. 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.

5. 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 development 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

The Hitachi Metals Group has always engaged in compliance activities. Regrettably, in December 2013, an order for overhead power transmission line construction placed by Tokyo Electric Power Company, Incorporated, was in violation of the Anti-Monopoly Act. In April 2014, the Group violated the European Competition Law in connection with a past transac-tion involving high-voltage power cables. In October 2014, the Group violated U.S. antitrust laws with regard to a portion of automotive brake hose sales and entered into a plea agreement with the U.S. Department of Justice.

In recognition of the seriousness of these situations, the Hitachi Metals Group conducted the following initiatives in FY2014.

Ensuring Full Compliance

(1) Corporate Ethics Month(A President’s Message was issued to the entire Group in 19 languages)

(2) Written commitments from all sales department employees to strictly observe the Anti-Monopoly Act

(3) On-site CSR training(In Japan: 112 times at 169 business officesOverseas: 58 times at 66 business offices)

(4) Compliance training for specific levels and positions(5) Special compliance audits (related to the Anti-Monopoly Act)

Under the Company Philosophy of “Contributing to Society by Being the Best Enterprise,” We Make Contributing to Society Through Our Business a Basic Policy, and Promote CSR Activities Accordingly.

The Company Philosophy governs all corporate activities of the Hitachi Metals Group. It also functions as the guiding principles of our CSR activities.

1. CompanyPhilosophy

2. Code of Conduct for Hitachi Metals Group Companies

3. Good Practice Guidance for Hitachi Metals Group Companies

4. Laws, Regulations, and Rules

The Code of Conduct for Hitachi Metals Group Companies is the translation of the Company Philosophy into the principles of actions that our employees are expected to follow. It is a declaration to society concerning in which direction our Group should move forward and it also serves as the standard of our corporate ethics. The Code of Conduct can be construed as the Code of CSR Activities.

The Good Practice Guidance for Hitachi Metals Group Compa-nies is a set of internal regulations which specify CSR standards in a more detailed manner. It is designed to ensure that through its observance and compliance with the Good Practice Guidance, along with other internal standards and procedures, violations of applicable laws, regulations and rules will be prevented.

Laws and regulations are the basic rules of corporate activity. It should be noted, however, that they stipulate minimum requirements only.

CSR Management

3 CSR Communication Report 2015 4CSR Communication Report 2015

The origins of our company can be traced back about one hundred and ten years,

and our main products have been standing at the top in each industry

both qualitatively as well as quantitatively.

We devote ourselves to technology and aspire to contribute to society

by being the best enterprise based on the wa-kyo spirit our people possess

and their loyalty to the company.

Hitachi Metals Company Philosophy

1. 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.

2. 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 transac-tions with our suppliers. Based on an awareness of social responsibility shared jointly with our business partners, we will carry out corporate activities to realize mutual growth.

3. Promoting Truthful Communication with SocietyWe will disclose appropriate corporate information in a timely, fair and transparent manner to our shareholders and other stakehold-

The Hitachi Metals Group systematically established guidelines for CSR activities as follows:

The Hitachi Metals Group aims to carry out its social responsi-bility and realize its company philosophy through the obser-vance, by all directors and employees, of laws and regulations

and the Good Practice Guidance for Hitachi Metals Group Companies, and their implementation of the Code of Conduct for Hitachi Metals Group Companies, in their daily duties.

Guidelines for CSR Activities

Since our independence from Hitachi, Ltd. in October 1956, we at Hitachi Metals have operated under our Company Philosophy, which aims to contribute to society by being “the best enterprise.” Accordingly, we have worked to help solve social issues by utilizing our advanced technologies and capabilities.

CSR management, which calls on corporations not only to pursue profitability but also to meet stakeholders’ expectations

and contribute to the development of society, is literally consis-tent with our aspiration declared in our Company Philosophy. It is fair to say that the guiding principles of CSR are the Company Philosophy which we have embraced since our independence.

We at the Hitachi Metals Group will promote CSR activities based on our Company Philosophy, aiming to contribute to society through our business operations.

Code of Conduct for Hitachi Metals Group Companies

ers. At the same time, we will endeavor to establish a relationship of mutual trust with society through well-coordinated two-way communication.

4. 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.

5. 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 development 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

The Hitachi Metals Group has always engaged in compliance activities. Regrettably, in December 2013, an order for overhead power transmission line construction placed by Tokyo Electric Power Company, Incorporated, was in violation of the Anti-Monopoly Act. In April 2014, the Group violated the European Competition Law in connection with a past transac-tion involving high-voltage power cables. In October 2014, the Group violated U.S. antitrust laws with regard to a portion of automotive brake hose sales and entered into a plea agreement with the U.S. Department of Justice.

In recognition of the seriousness of these situations, the Hitachi Metals Group conducted the following initiatives in FY2014.

Ensuring Full Compliance

(1) Corporate Ethics Month(A President’s Message was issued to the entire Group in 19 languages)

(2) Written commitments from all sales department employees to strictly observe the Anti-Monopoly Act

(3) On-site CSR training(In Japan: 112 times at 169 business officesOverseas: 58 times at 66 business offices)

(4) Compliance training for specific levels and positions(5) Special compliance audits (related to the Anti-Monopoly Act)

Under the Company Philosophy of “Contributing to Society by Being the Best Enterprise,” We Make Contributing to Society Through Our Business a Basic Policy, and Promote CSR Activities Accordingly.

The Company Philosophy governs all corporate activities of the Hitachi Metals Group. It also functions as the guiding principles of our CSR activities.

1. CompanyPhilosophy

2. Code of Conduct for Hitachi Metals Group Companies

3. Good Practice Guidance for Hitachi Metals Group Companies

4. Laws, Regulations, and Rules

The Code of Conduct for Hitachi Metals Group Companies is the translation of the Company Philosophy into the principles of actions that our employees are expected to follow. It is a declaration to society concerning in which direction our Group should move forward and it also serves as the standard of our corporate ethics. The Code of Conduct can be construed as the Code of CSR Activities.

The Good Practice Guidance for Hitachi Metals Group Compa-nies is a set of internal regulations which specify CSR standards in a more detailed manner. It is designed to ensure that through its observance and compliance with the Good Practice Guidance, along with other internal standards and procedures, violations of applicable laws, regulations and rules will be prevented.

Laws and regulations are the basic rules of corporate activity. It should be noted, however, that they stipulate minimum requirements only.

CSR Management

3 CSR Communication Report 2015 4CSR Communication Report 2015

★ ★ ★

★ ★ ★

★ ★ ★

★ ★ ★

★ ★ ★

★ ★ ★

★ ★ ★

★ ★ ★

★ ★ ★

★ ★ ★

★ ★ ★

★ ★ ★

★ ★ ★

★ ★ ★

*1 Mechanism for assessing degree of environmental action plan target achievement and activity details classified into environmental activities consisting of eight categories and 52 items. Each category is scored out of a possible 100 green points (GP), while each item is assessed according to one of five levels.

*2 Consisting of a supply chain CSR guidebook, procurement policies, conflict mineral procurement policies and BCP support requests.*3 Meetings conducted from the customers’ perspective to determine the primary causes of product accidents and deliberate preventative measures.*4 Project that works with institutional investors to disclose the greenhouse gas emissions of major corporations.

★ ★ ★

★ ★ ★

★ ★ ★

★ ★ ★

★ ★ ★

★ ★ ★

★ ★ ★

★ ★ ★

★ ★ ★

★ ★ ★

★ ★ ★

★ ★ ★

★ ★ ★

★ ★

FY2014 Measures (Planned)

・Seek advice on/assessment of the company’s CSR activities from outside experts (ongoing)

・Standards for materiality analysis

・Establish a Compliance Management Committee

・Improve assessment within “Green 21-2015”*1, the Hitachi Group’s environmental activity level assessment system

・Conduct traveling CSR training at all business offices・Conduct environmental education at the Head Office

and each company

・Conduct “Hitachi Insights” research to assess Hitachi Group employee satisfaction

・Received advice and assessment from Professor Hasegawa, Faculty of Humanity and Environment at Hosei University; see “Third-Party Opinion” section of this report.

・Researched relevant guidelines and case studies, organized CSR activity issues based on ISO 26000 with the aim of carefully examining present conditions

・Improved assessment within “Green 21-2015” (581 GP)

・Established Compliance Promotion departments in each company. Created Compliance Management Committee consisting of CSR-related department heads and Compliance Promotion department heads, with CCO as chairman and CSR Promotion Department as secretariat

・Conducted CSR training tour at all 235 business offices・Conducted environmental e-learning (100% of employees) and environmental

auditor development training (once)

・Conducted “Hitachi Insights” targeting all back office workers (6,585 employees on a consolidated basis)

2. Organizational Governance

1. Recognition of Social Responsibility

3. Human Rights

4. Labor Practices

CSR Activity Initiative Results and Plans

FY2014 Measures (Results) Self-assessment Measures Planned for FY2015 FY2014 Measures (Planned) FY2014 Measures (Results) Self-

assessment Measures Planned for FY2015

・Seek advice on/assessment of the company’s CSR activities from outside experts (ongoing)

・Reduce active mass per production unit of VOC emissions 14% (compared to base year FY2006)

・Reduced active mass per production unit of VOC emissions 18% (compared to base year FY2006)

5. The Environment

6. Fair Operating Practices

7. Customers (Consumer Issues)

8. Community Involvement and Development

9. Review and Improvement of CSR Activities

・Reduce active mass per production unit of VOC emissions 22% (compared to base year FY2006)

・Reduce active mass per production unit of energy consumed 9% (compared to base year FY2005)

・Reduced active mass per production unit of energy consumed 14% (compared to base year FY2005)

・Reduce active mass per production unit of energy consumed 10% (compared to base year FY2005)

・Reduce active mass per production unit of waste/valuable generation 16% (compared to base year FY2005)

・Reduced active mass per production unit of waste/valuable generation 23% (compared to base year FY2005)

・Reduce active mass per production unit of waste/valuable generation 18% (compared to base year FY2005)

・Increase eco-friendly product sales ratio (goal: 88%) ・Increased eco-friendly product sales ratio (98%) ・Increase eco-friendly product sales ratio (90%)

・Control CO2 emissions of applicable products (goal: 1.30 million tons)

・Controlled CO2 emissions of applicable products (1.33 million tons) ・Control CO2 emissions of applicable products (1.5 million tons)

・Conduct extraordinary compliance (Anti-Monopoly Act) audit

・Conducted extraordinary compliance audit (document review, hearing with all sales department managers)

・Conduct extraordinary compliance (Anti-Monopoly Act) audit (ongoing)

・Conduct survey to ascertain CSR response status at each company and spread awareness of company CSR-related policies*2 among suppliers

・Conducted CSR response status survey at each company and spread awareness of company CSR-related policies among 439 suppliers representing 90% of procurement, with 435 companies responding (99.1% response rate)

・Analyze results of FY2014 CSR survey and conduct CSR survey among overseas suppliers

・Conduct Corporate Ethics Month (October) (ongoing since FY2009)

・Conducted various measures to ensure thorough legal compliance and ethical behavior during Corporate Ethics Month in October

・Conduct Corporate Ethics Month in October (ongoing)・Review audit of corruption-related laws and

status of legal compliance

・Conduct information security education・Conduct information security self audits・Confirm that business information has been

erased from privately-owned computers・Targeted email attack countermeasures

・Conducted information security education among everyone with a company email address・Conducted information security self-audits to check status of compliance

with rules at Hitachi Metals Group business offices・Confirmed that business information had been erased from privately-owned

computers among everyone with a company email address・Conducted targeted email attack simulations among everyone with a

company email address

・Conduct information security education (ongoing)・Conduct information security self audits (ongoing)・Confirm that business information has been

erased from privately-owned computers (ongoing)・Conduct cyber attack simulations (ongoing)

・Conduct gleaning meetings*3 attended by company executives at main unit factories and major domestic subsidiaries (10 times per year)・Expand company-sponsored mini gleaning meetings

at consolidated subsidiaries

・Held gleaning meetings attended by company executives (ten times)・Held first-time company-sponsored mini gleaning meetings at two locations

in Japan and two locations overseas

・Conduct gleaning meetings at consolidated companies (ongoing)・Expand company-sponsored mini gleaning

meetings at business offices in Japan and overseas (ongoing)

・Expand new product sales ratio and development of strategic new products

・Expanded new product sales ratio and developed strategic new products (new product sales ratio: 27%)

・Expand new product sales ratio and develop strategic new products (new product sales ratio: 30% or higher)・Formulate technological development medium-term

road map in light of technological mega trends

・Conduct regional contribution activities mainly in regions where offices and factories are located

・Conducted regional contribution activities mainly in regions where offices and factories are located

(social contributions amounting to 230 million yen)

・Consider social contribution activities enabling a closer relationship with regional citizens and culture

・Contribute to material science technical research through support of the Material Science Foundation research assistance fund ・Support ancient Japanese “tatara” method of

iron manufacturing

・Contributed to material science technical research through support of the Material Science Foundation research assistance fund (4 million yen)・Supported “tatara” method of iron manufacture (operations and

personnel) conducted by The Society for Preservation of Japanese Art Swords at “Nittoho Tatara” in Okuizumo, Shimane Prefecture

・Support the Material Science Foundation research assistance fund (ongoing)・Support “tatara” method of iron manufacture

(ongoing)

・Improve management quality using CSR research ・Conducted activities linked to next steps based on feedback from the CSR research results of relevant divisions (improved to 73rd place)

・Improve management quality using CSR research (ongoing)

・Develop activities conforming to international standards for CSR and various research and assessment institutions

・Organized CSR activity issues based on International Standard for Organization (ISO) social responsibility guidance ISO 26000・Improved scope of disclosure in accordance with sustainability reporting

international guideline GRI-G4

・Develop activities conforming to international standards for CSR and various research and assessment institutions (ongoing)・Improve responses to carbon disclosure project

(CDP)*4

・Begin review aimed at materiality analysis

・Compliance Management Committee will meet quarterly to analyze social and environmental risks, formulate preventative measures and share information

・Improve assessment within “Green 21-2015” (target level: 544 GP)

・Conduct traveling CSR training at all business offices (ongoing)・Conduct environmental education at the Head

Office and each company (ongoing)

・Ongoing implementation of “Hitachi Insights” Hitachi Group employee satisfaction survey

・Spread awareness of “Hitachi Metals Group Human Rights Policy” (formulated March 2014) to Group companies

・Made “Hitachi Metals Group Human Rights Policy” an official regulation in all domestic and international Group companies

・Further inculcation of “Hitachi Metals Group Human Rights Policy” among Group companies・Standardize human rights due diligence

according to Hitachi Group policies

・Conduct human rights training systematically throughout entire Hitachi Metals Group

・Systematically conducted human rights training throughout entire Hitachi Metals Group (2,572 employees)

・Conduct human rights training systematically throughout entire Hitachi Metals Group (ongoing)

・Conduct diversity training for management professionals at all major company centers across Japan・Create management/professional rating system

incorporating diversity management as assessment criteria

・Conducted diversity training for management professionals (six times, four locations)・Incorporated diversity management category into competency evaluation

(behavioral assessment) targeting managers and professionals (1,800 employees) beginning in FY2015

・Conduct diversity training (ongoing)・Begin operation of manager and professional

evaluation system

・Update childcare-related system in line with labor agreement revisions

・Extended age limit regarding shortened working hours for childcare from 3 year olds to 3rd year elementary school students・Segmented childcare working hour unit from 0.5 hour to 0.25 hour・Extended age limit regarding overtime consideration from beginning

elementary school to 3rd year elementary school students・Added “fertility treatment” to reserve annual paid vacation usage category・Enabled acquisition of childcare leave in half-day increments

・Launch initiatives to acquire “Kurumin” mark and other certifications・Conduct review of systems promoting equal

opportunities for women

・People with disabilities at legal employment rate of 2.0%

・Met legal employment rate for people with disabilities of 2.0% ・Aim to increase ratio of employees with disabilities above legal rate to 2.2%

・Conduct risk assessment with participation of all personnel focused on health and safety management in non-routine work

・Conducted risk assessment: 0 fatal accidents ・Review countermeasures based on risk assessment results ・In addition to annual safety education, conduct

education focused particularly on foreman training and working with hazardous materials

・Conduct reviews aimed at application of minimum safety standards in line with Hitachi Group policies at each business base

・Conducted reviews for application of minimum safety standards at each business base

・Begin sequential application of minimum safety standards at each business base

・Formulate human resource development plan for employees representing the next-generation, conduct systematic personnel rotation and training programs・Promote national staff development at overseas

Group companies

・Invited management candidates from priority support companies selected by Hitachi Metals Group companies to Japan and provided education・Conducted training to promote the spread of corporate philosophy and

culture among national staff from various countries

・Promote horizontal deployment of activities conducted in FY2014 (including education of next-generation leaders in overseas Group companies)

★★★ Achieved　　★★ 90% Achieved　　★ Not Achieved

★ ★ ★

CSR Management

5 CSR Communication Report 2015 6CSR Communication Report 2015

★ ★ ★

★ ★ ★

★ ★ ★

★ ★ ★

★ ★ ★

★ ★ ★

★ ★ ★

★ ★ ★

★ ★ ★

★ ★ ★

★ ★ ★

★ ★ ★

★ ★ ★

★ ★ ★

*1 Mechanism for assessing degree of environmental action plan target achievement and activity details classified into environmental activities consisting of eight categories and 52 items. Each category is scored out of a possible 100 green points (GP), while each item is assessed according to one of five levels.

*2 Consisting of a supply chain CSR guidebook, procurement policies, conflict mineral procurement policies and BCP support requests.*3 Meetings conducted from the customers’ perspective to determine the primary causes of product accidents and deliberate preventative measures.*4 Project that works with institutional investors to disclose the greenhouse gas emissions of major corporations.

★ ★ ★

★ ★ ★

★ ★ ★

★ ★ ★

★ ★ ★

★ ★ ★

★ ★ ★

★ ★ ★

★ ★ ★

★ ★ ★

★ ★ ★

★ ★ ★

★ ★ ★

★ ★

FY2014 Measures (Planned)

・Seek advice on/assessment of the company’s CSR activities from outside experts (ongoing)

・Standards for materiality analysis

・Establish a Compliance Management Committee

・Improve assessment within “Green 21-2015”*1, the Hitachi Group’s environmental activity level assessment system

・Conduct traveling CSR training at all business offices・Conduct environmental education at the Head Office

and each company

・Conduct “Hitachi Insights” research to assess Hitachi Group employee satisfaction

・Received advice and assessment from Professor Hasegawa, Faculty of Humanity and Environment at Hosei University; see “Third-Party Opinion” section of this report.

・Researched relevant guidelines and case studies, organized CSR activity issues based on ISO 26000 with the aim of carefully examining present conditions

・Improved assessment within “Green 21-2015” (581 GP)

・Established Compliance Promotion departments in each company. Created Compliance Management Committee consisting of CSR-related department heads and Compliance Promotion department heads, with CCO as chairman and CSR Promotion Department as secretariat

・Conducted CSR training tour at all 235 business offices・Conducted environmental e-learning (100% of employees) and environmental

auditor development training (once)

・Conducted “Hitachi Insights” targeting all back office workers (6,585 employees on a consolidated basis)

2. Organizational Governance

1. Recognition of Social Responsibility

3. Human Rights

4. Labor Practices

CSR Activity Initiative Results and Plans

FY2014 Measures (Results) Self-assessment Measures Planned for FY2015 FY2014 Measures (Planned) FY2014 Measures (Results) Self-

assessment Measures Planned for FY2015

・Seek advice on/assessment of the company’s CSR activities from outside experts (ongoing)

・Reduce active mass per production unit of VOC emissions 14% (compared to base year FY2006)

・Reduced active mass per production unit of VOC emissions 18% (compared to base year FY2006)

5. The Environment

6. Fair Operating Practices

7. Customers (Consumer Issues)

8. Community Involvement and Development

9. Review and Improvement of CSR Activities

・Reduce active mass per production unit of VOC emissions 22% (compared to base year FY2006)

・Reduce active mass per production unit of energy consumed 9% (compared to base year FY2005)

・Reduced active mass per production unit of energy consumed 14% (compared to base year FY2005)

・Reduce active mass per production unit of energy consumed 10% (compared to base year FY2005)

・Reduce active mass per production unit of waste/valuable generation 16% (compared to base year FY2005)

・Reduced active mass per production unit of waste/valuable generation 23% (compared to base year FY2005)

・Reduce active mass per production unit of waste/valuable generation 18% (compared to base year FY2005)

・Increase eco-friendly product sales ratio (goal: 88%) ・Increased eco-friendly product sales ratio (98%) ・Increase eco-friendly product sales ratio (90%)

・Control CO2 emissions of applicable products (goal: 1.30 million tons)

・Controlled CO2 emissions of applicable products (1.33 million tons) ・Control CO2 emissions of applicable products (1.5 million tons)

・Conduct extraordinary compliance (Anti-Monopoly Act) audit

・Conducted extraordinary compliance audit (document review, hearing with all sales department managers)

・Conduct extraordinary compliance (Anti-Monopoly Act) audit (ongoing)

・Conduct survey to ascertain CSR response status at each company and spread awareness of company CSR-related policies*2 among suppliers

・Conducted CSR response status survey at each company and spread awareness of company CSR-related policies among 439 suppliers representing 90% of procurement, with 435 companies responding (99.1% response rate)

・Analyze results of FY2014 CSR survey and conduct CSR survey among overseas suppliers

・Conduct Corporate Ethics Month (October) (ongoing since FY2009)

・Conducted various measures to ensure thorough legal compliance and ethical behavior during Corporate Ethics Month in October

・Conduct Corporate Ethics Month in October (ongoing)・Review audit of corruption-related laws and

status of legal compliance

・Conduct information security education・Conduct information security self audits・Confirm that business information has been

erased from privately-owned computers・Targeted email attack countermeasures

・Conducted information security education among everyone with a company email address・Conducted information security self-audits to check status of compliance

with rules at Hitachi Metals Group business offices・Confirmed that business information had been erased from privately-owned

computers among everyone with a company email address・Conducted targeted email attack simulations among everyone with a

company email address

・Conduct information security education (ongoing)・Conduct information security self audits (ongoing)・Confirm that business information has been

erased from privately-owned computers (ongoing)・Conduct cyber attack simulations (ongoing)

・Conduct gleaning meetings*3 attended by company executives at main unit factories and major domestic subsidiaries (10 times per year)・Expand company-sponsored mini gleaning meetings

at consolidated subsidiaries

・Held gleaning meetings attended by company executives (ten times)・Held first-time company-sponsored mini gleaning meetings at two locations

in Japan and two locations overseas

・Conduct gleaning meetings at consolidated companies (ongoing)・Expand company-sponsored mini gleaning

meetings at business offices in Japan and overseas (ongoing)

・Expand new product sales ratio and development of strategic new products

・Expanded new product sales ratio and developed strategic new products (new product sales ratio: 27%)

・Expand new product sales ratio and develop strategic new products (new product sales ratio: 30% or higher)・Formulate technological development medium-term

road map in light of technological mega trends

・Conduct regional contribution activities mainly in regions where offices and factories are located

・Conducted regional contribution activities mainly in regions where offices and factories are located

(social contributions amounting to 230 million yen)

・Consider social contribution activities enabling a closer relationship with regional citizens and culture

・Contribute to material science technical research through support of the Material Science Foundation research assistance fund ・Support ancient Japanese “tatara” method of

iron manufacturing

・Contributed to material science technical research through support of the Material Science Foundation research assistance fund (4 million yen)・Supported “tatara” method of iron manufacture (operations and

personnel) conducted by The Society for Preservation of Japanese Art Swords at “Nittoho Tatara” in Okuizumo, Shimane Prefecture

・Support the Material Science Foundation research assistance fund (ongoing)・Support “tatara” method of iron manufacture

(ongoing)

・Improve management quality using CSR research ・Conducted activities linked to next steps based on feedback from the CSR research results of relevant divisions (improved to 73rd place)

・Improve management quality using CSR research (ongoing)

・Develop activities conforming to international standards for CSR and various research and assessment institutions

・Organized CSR activity issues based on International Standard for Organization (ISO) social responsibility guidance ISO 26000・Improved scope of disclosure in accordance with sustainability reporting

international guideline GRI-G4

・Develop activities conforming to international standards for CSR and various research and assessment institutions (ongoing)・Improve responses to carbon disclosure project

(CDP)*4

・Begin review aimed at materiality analysis

・Compliance Management Committee will meet quarterly to analyze social and environmental risks, formulate preventative measures and share information

・Improve assessment within “Green 21-2015” (target level: 544 GP)

・Conduct traveling CSR training at all business offices (ongoing)・Conduct environmental education at the Head

Office and each company (ongoing)

・Ongoing implementation of “Hitachi Insights” Hitachi Group employee satisfaction survey

・Spread awareness of “Hitachi Metals Group Human Rights Policy” (formulated March 2014) to Group companies

・Made “Hitachi Metals Group Human Rights Policy” an official regulation in all domestic and international Group companies

・Further inculcation of “Hitachi Metals Group Human Rights Policy” among Group companies・Standardize human rights due diligence

according to Hitachi Group policies

・Conduct human rights training systematically throughout entire Hitachi Metals Group

・Systematically conducted human rights training throughout entire Hitachi Metals Group (2,572 employees)

・Conduct human rights training systematically throughout entire Hitachi Metals Group (ongoing)

・Conduct diversity training for management professionals at all major company centers across Japan・Create management/professional rating system

incorporating diversity management as assessment criteria

・Conducted diversity training for management professionals (six times, four locations)・Incorporated diversity management category into competency evaluation

(behavioral assessment) targeting managers and professionals (1,800 employees) beginning in FY2015

・Conduct diversity training (ongoing)・Begin operation of manager and professional

evaluation system

・Update childcare-related system in line with labor agreement revisions

・Extended age limit regarding shortened working hours for childcare from 3 year olds to 3rd year elementary school students・Segmented childcare working hour unit from 0.5 hour to 0.25 hour・Extended age limit regarding overtime consideration from beginning

elementary school to 3rd year elementary school students・Added “fertility treatment” to reserve annual paid vacation usage category・Enabled acquisition of childcare leave in half-day increments

・Launch initiatives to acquire “Kurumin” mark and other certifications・Conduct review of systems promoting equal

opportunities for women

・People with disabilities at legal employment rate of 2.0%

・Met legal employment rate for people with disabilities of 2.0% ・Aim to increase ratio of employees with disabilities above legal rate to 2.2%

・Conduct risk assessment with participation of all personnel focused on health and safety management in non-routine work

・Conducted risk assessment: 0 fatal accidents ・Review countermeasures based on risk assessment results ・In addition to annual safety education, conduct

education focused particularly on foreman training and working with hazardous materials

・Conduct reviews aimed at application of minimum safety standards in line with Hitachi Group policies at each business base

・Conducted reviews for application of minimum safety standards at each business base

・Begin sequential application of minimum safety standards at each business base

・Formulate human resource development plan for employees representing the next-generation, conduct systematic personnel rotation and training programs・Promote national staff development at overseas

Group companies

・Invited management candidates from priority support companies selected by Hitachi Metals Group companies to Japan and provided education・Conducted training to promote the spread of corporate philosophy and

culture among national staff from various countries

・Promote horizontal deployment of activities conducted in FY2014 (including education of next-generation leaders in overseas Group companies)

★★★ Achieved　　★★ 90% Achieved　　★ Not Achieved

★ ★ ★

CSR Management

5 CSR Communication Report 2015 6CSR Communication Report 2015

Transferred all shares in Hitachi Metals Techno, Ltd.

in March 2015

Mitsubishi Hitachi Tool Engineering (converted to an affiliated company accounted for under the equity method in April 2015)

Infrastructure Automobiles Electronics

Energy field; factory, plant and housing field; aerospace field, etc.

Automotive products field, molds field, electronic components field, etc.

IT and home appliances field, telecommunications field, medical field, etc.

Sputtering target materials for LCD displays

Metglas® amorphous metals

NMF™ series sintered ferrite magnets

NEOMAX® rare-earth magnets

High-frequency, low-loss soft ferrite

Polyethylene gas piping systems

SCUBA™ aluminum wheels

HERCUNITE™ heat-resistant exhaust

casting components

Probe cables for ultrasound diagnostic equipment

Wires for rolling stock

APRESIA™ Ethernet* switches

Harnesses for electric parking brakes

High-Grade Metal Products and M

aterialsM

agnetic Materials

High-Grade Functional Com

ponents and Equipm

ent

Wires, Cables,

and Related Products

Specialty Steel

Rolls

Soft Magnetic Materials

Alloys for Electronic Products

DAC-MAGIC™ die cast tool steel

Turbine blades

Rolls for steel mills

Magnets

Soft Ferrite and Other Soft Magnetic Materials, and Their Applications

Piping Components Automotive Castings

Electric Wires and Cables

Information Systems Automotive Products

1の狙い

Establish an overwhelming position in the global market for castings for transportation equipment

Aim of Measure 2

Expand business in the aerospace/energy fieldAim of Measure 1

Promote CSR Management

Establish a Robust Management Base

Expand and Create Business Activities

Accelerate the Global Strategy

Plan for FY2015

* The pre-merger performance of Hitachi Cable, Ltd. is added in.* Assumed exchange rate for FY2015: USD1 = JPY115* The FY2015 earnings forecast was created based on International Financial

Reporting Standards (IFRS).

Establish the Basis for Sustainable GrowthHitachi Metals: An Essential Presence for the Market and for Customers

FY2015 (target)FY2014 (results)

New product sales ratio

27%

FY2013 (results)

26%30%

4125

34

2015(target)

2013(results)

2014(results)

(FY) (FY)

(%)

4147

60

30

0

55

Overseas sales ratio

Medium-Term Management Plan (FY2013–2015)

2015(target)

2013(results)

2014(results)

(%)60

30

0

Overseas production ratio

Hitachi Metals Acquires MMC SuperalloyCorporation as a Group Company

Acquisition of All Shares in Waupaca Foundry Holdings, Inc. (U.S.)

1

2

Measure

Measure

or higher

billion yen107

OperatingIncome

14.5%

ROE

billion yen1,100

Net Sales

Free cashflow

FY2010–FY2012 (results) FY2013–FY2015 (target)

Total

97.6billion yen

Total

36.9billion yen

In FY2014, we executed bold business selection and concen-tration through changes to existing businesses and M&A activities. We also promoted global human resource training and promotion while attempting to strengthen control functions at each overseas location in response to business globalization. As a result, Hitachi Metals Group performance is proceeding at a higher level than the numerical targets initially projected.

Medium-Term Management Plan Progress Report

In July 2014, Hitachi Metals acquired 51 percent of the issued shares in MMC Superalloy Corporation from Mitsubishi Materials Corporation. Subsequently, the company name was changed to Hitachi Metals MMC Superalloy Ltd.

In November 2014, Waupaca Foundry Holdings, Inc., which owns all shares in Waupaca Foundry Inc., both became Group companies after the completion of a 100% share acquisition.

Business Domains and Major Product Applications

See page 9

See page 13

Sustainable Growth,” the promotion of this action plan is intended to “Accelerate the global strategy,” “Expand and create business activities” and “Establish a robust management base.”

The Hitachi Metals Group is engaged in the promotion of a Medium-Term Management Plan for the period FY2013–2015. Predicated upon the basic policy of “Establishing a Basis for

Promoting Globalization Through the Medium-Term Management Plan, Aiming to Become Essential for the Market and Customers

* Ethernet is a registered trademark of Fuji Xerox Co., Ltd.

FY2014 Highlights

Business Overview and Growth Strategies

7 CSR Communication Report 2015 8CSR Communication Report 2015

Transferred all shares in Hitachi Metals Techno, Ltd.

in March 2015

Mitsubishi Hitachi Tool Engineering (converted to an affiliated company accounted for under the equity method in April 2015)

Infrastructure Automobiles Electronics

Energy field; factory, plant and housing field; aerospace field, etc.

Automotive products field, molds field, electronic components field, etc.

IT and home appliances field, telecommunications field, medical field, etc.

Sputtering target materials for LCD displays

Metglas® amorphous metals

NMF™ series sintered ferrite magnets

NEOMAX® rare-earth magnets

High-frequency, low-loss soft ferrite

Polyethylene gas piping systems

SCUBA™ aluminum wheels

HERCUNITE™ heat-resistant exhaust

casting components

Probe cables for ultrasound diagnostic equipment

Wires for rolling stock

APRESIA™ Ethernet* switches

Harnesses for electric parking brakes

High-Grade Metal Products and M

aterialsM

agnetic Materials

High-Grade Functional Com

ponents and Equipm

ent

Wires, Cables,

and Related Products

Specialty Steel

Rolls

Soft Magnetic Materials

Alloys for Electronic Products

DAC-MAGIC™ die cast tool steel

Turbine blades

Rolls for steel mills

Magnets

Soft Ferrite and Other Soft Magnetic Materials, and Their Applications

Piping Components Automotive Castings

Electric Wires and Cables

Information Systems Automotive Products

1の狙い

Establish an overwhelming position in the global market for castings for transportation equipment

Aim of Measure 2

Expand business in the aerospace/energy fieldAim of Measure 1

Promote CSR Management

Establish a Robust Management Base

Expand and Create Business Activities

Accelerate the Global Strategy

Plan for FY2015

* The pre-merger performance of Hitachi Cable, Ltd. is added in.* Assumed exchange rate for FY2015: USD1 = JPY115* The FY2015 earnings forecast was created based on International Financial

Reporting Standards (IFRS).

Establish the Basis for Sustainable GrowthHitachi Metals: An Essential Presence for the Market and for Customers

FY2015 (target)FY2014 (results)

New product sales ratio

27%

FY2013 (results)

26%30%

4125

34

2015(target)

2013(results)

2014(results)

(FY) (FY)

(%)

4147

60

30

0

55

Overseas sales ratio

Medium-Term Management Plan (FY2013–2015)

2015(target)

2013(results)

2014(results)

(%)60

30

0

Overseas production ratio

Hitachi Metals Acquires MMC SuperalloyCorporation as a Group Company

Acquisition of All Shares in Waupaca Foundry Holdings, Inc. (U.S.)

1

2

Measure

Measure

or higher

billion yen107

OperatingIncome

14.5%

ROE

billion yen1,100

Net Sales

Free cashflow

FY2010–FY2012 (results) FY2013–FY2015 (target)

Total

97.6billion yen

Total

36.9billion yen

In FY2014, we executed bold business selection and concen-tration through changes to existing businesses and M&A activities. We also promoted global human resource training and promotion while attempting to strengthen control functions at each overseas location in response to business globalization. As a result, Hitachi Metals Group performance is proceeding at a higher level than the numerical targets initially projected.

Medium-Term Management Plan Progress Report

In July 2014, Hitachi Metals acquired 51 percent of the issued shares in MMC Superalloy Corporation from Mitsubishi Materials Corporation. Subsequently, the company name was changed to Hitachi Metals MMC Superalloy Ltd.

In November 2014, Waupaca Foundry Holdings, Inc., which owns all shares in Waupaca Foundry Inc., both became Group companies after the completion of a 100% share acquisition.

Business Domains and Major Product Applications

See page 9

See page 13

Sustainable Growth,” the promotion of this action plan is intended to “Accelerate the global strategy,” “Expand and create business activities” and “Establish a robust management base.”

The Hitachi Metals Group is engaged in the promotion of a Medium-Term Management Plan for the period FY2013–2015. Predicated upon the basic policy of “Establishing a Basis for

Promoting Globalization Through the Medium-Term Management Plan, Aiming to Become Essential for the Market and Customers

* Ethernet is a registered trademark of Fuji Xerox Co., Ltd.

FY2014 Highlights

Business Overview and Growth Strategies

7 CSR Communication Report 2015 8CSR Communication Report 2015

Hitachi Metals Group Iron Casting Market

Business domain up to now(High-value-added niche-zone）

High-grade DCI market (High-grade)

GI/DCI market (Middle range)

Waupaca’s core business (Volume-zone）

Our Vision: Global No. 1

DCI: Ductile Casting Iron GI: Gray Iron

Significant expansion under new structure

Waupaca Foundry, Inc. Overview (As of April 1, 2015)

Location : Wisconsin, USA

Representative : Gary Gigante, CEO

Business : Development, manufacture and sales of iron castings for the transportation, agriculture, construction equipment and other industrial segments.

Sales : US$1,735 million (September 2013)

Established : May 4, 1955

Waupaca Foundry, Inc. Core Products

Iron Casting Business Prospects

Focused on Global Growth in the Iron Castings Business

As part of the growth strategy outlined in our Medium-Term Management Plan, Hitachi Metals welcomed Waupaca Foundry, Inc., an iron castings manufacturer with the world’s largest production capacity, to the Group in November 2014. The addition of Waupaca’s exceptional manufacturing technologies and solid customer base augments Hitachi Metals’ traditional strengths in materials and product design development capabilities, enabling us to provide new products and service solutions meeting the expectations of customers throughout the world.

Responding to growing demand in the global market as the world’s largest iron castings manufacturer

Iron casting has been Hitachi Metals’ core business for many years. In particular, we are building a global supply structure for high-grade ductile cast-iron products, including the deployment of production centers in Japan, South Korea and the United States, as well as the addition of a manufacturer in India as a subsidiary in April 2014.

The addition of Waupaca ensures a competitive position in the global market while expanding our business domain to achieve further growth.

With six foundries in the United States, Waupaca serves the North America transportation, agriculture, construction equipment and other industrial segments. Waupaca’s strengths, including the world’s largest production capacity, exceptional manufacturing technologies and a solid customer base, are the driving force behind the company’s stable growth.

The addition of Waupaca’s competitive mass production capabilities enables us to develop global business respond-ing to various customer needs, bolstering the Hitachi Metals Group existing focus on providing added value.

To create new value as a unified Group, Hitachi Metals has established project teams to inculcate our corporate philosophy and systems and promote the sharing of

technologies and expertise. Going forward, we plan to introduce Waupaca’s exceptional manufacturing technolo-gies to production centers in Japan, South Korea, the United States and India. We will also realize efficient business activities utilizing Group economies of scale to conduct collaborative technological development and materials procurement.

With this new strengthened business structure and the vision to be “Global No. 1,” we will become the true global leader in the iron casting business, surpassing all others in terms of production capacity, sales, profitability and growth potential.

Brake rotor for passenger car Brake caliper for passenger car

Differential case for passenger car driveline

Motor housing for electric motors

Special Feature 1

109 CSR Communication Report 2015 CSR Communication Report 2015

Hitachi Metals Group Iron Casting Market

Business domain up to now(High-value-added niche-zone）

High-grade DCI market (High-grade)

GI/DCI market (Middle range)

Waupaca’s core business (Volume-zone）

Our Vision: Global No. 1

DCI: Ductile Casting Iron GI: Gray Iron

Significant expansion under new structure

Waupaca Foundry, Inc. Overview (As of April 1, 2015)

Location : Wisconsin, USA

Representative : Gary Gigante, CEO

Business : Development, manufacture and sales of iron castings for the transportation, agriculture, construction equipment and other industrial segments.

Sales : US$1,735 million (September 2013)

Established : May 4, 1955

Waupaca Foundry, Inc. Core Products

Iron Casting Business Prospects

Focused on Global Growth in the Iron Castings Business

As part of the growth strategy outlined in our Medium-Term Management Plan, Hitachi Metals welcomed Waupaca Foundry, Inc., an iron castings manufacturer with the world’s largest production capacity, to the Group in November 2014. The addition of Waupaca’s exceptional manufacturing technologies and solid customer base augments Hitachi Metals’ traditional strengths in materials and product design development capabilities, enabling us to provide new products and service solutions meeting the expectations of customers throughout the world.

Responding to growing demand in the global market as the world’s largest iron castings manufacturer

Iron casting has been Hitachi Metals’ core business for many years. In particular, we are building a global supply structure for high-grade ductile cast-iron products, including the deployment of production centers in Japan, South Korea and the United States, as well as the addition of a manufacturer in India as a subsidiary in April 2014.

The addition of Waupaca ensures a competitive position in the global market while expanding our business domain to achieve further growth.

With six foundries in the United States, Waupaca serves the North America transportation, agriculture, construction equipment and other industrial segments. Waupaca’s strengths, including the world’s largest production capacity, exceptional manufacturing technologies and a solid customer base, are the driving force behind the company’s stable growth.

The addition of Waupaca’s competitive mass production capabilities enables us to develop global business respond-ing to various customer needs, bolstering the Hitachi Metals Group existing focus on providing added value.

To create new value as a unified Group, Hitachi Metals has established project teams to inculcate our corporate philosophy and systems and promote the sharing of

technologies and expertise. Going forward, we plan to introduce Waupaca’s exceptional manufacturing technolo-gies to production centers in Japan, South Korea, the United States and India. We will also realize efficient business activities utilizing Group economies of scale to conduct collaborative technological development and materials procurement.

With this new strengthened business structure and the vision to be “Global No. 1,” we will become the true global leader in the iron casting business, surpassing all others in terms of production capacity, sales, profitability and growth potential.

Brake rotor for passenger car Brake caliper for passenger car

Differential case for passenger car driveline

Motor housing for electric motors

Special Feature 1

109 CSR Communication Report 2015 CSR Communication Report 2015

Waupaca manufactures a variety of iron casting products for a wide range of industrial segments, from automobiles, agriculture and construction to material handling. Waupaca maintains company-wide certifications including the ISO 9001 and ISO/TS 16949 international quality standards. The company also supplies brake components and other parts important for ensuring safety.

From melting and casting to finishing, Waupaca possesses the world’s largest integrated manufacturing technologies, enabling the stable provision of high quality products—the company’s strength. Waupaca’s products are highly durable and reliable due to its proprietary manufacturing process and technologies, molding equipment and automated finishing system. Furthermore, the high precision of its finishing requires minimal post-process machining, contributing to lower produc-tion costs for the customer.

Waupaca has established goals to be achieved by the year 2020 and is executing various policies with the aim to reduce the environmental impact of its business activities.

EnergyEach Waupaca plant is engaged in energy-saving measures, such as the use of waste heat and energy-saving equipment, which are linked to cost reductions.

For example, at Plant 1, waste heat from the cupola iron-melt-ing process is used to provide approximately 70% of the plant’s space heating requirements during winter, as well as heat for 100 % of the plant’s hot water needs.

Pollution ControlTo prevent air pollution, Waupaca has installed state of the art pollution control devices that trap dust and filter air at all its plants. We have also introduced sophisticated air pollution control monitoring systems. Advanced bag leak detection probes are installed within the emission control systems to monitor this equipment and ensure it is operating properly.

WasteOne of Waupaca’s largest waste streams is spent foundry sand used to make molds for the casting process. To reduce the amount of sand disposed in landfills, the company promotes reductions in the amount of sand used and the efficient reuse of spent foundry sand. Waupaca cooperates with government institutions to reuse foundry sand as a highway sub base fill, geotechnical fill and for other general construction uses.

WaterTo reduce the amount of water used, Waupaca installed closed-loop water cooling systems that recycle water used in the manufacturing process. Introduction of this technology has resulted in a 30-95% reduction in cooling water use at Plant 4, the variation of which is due to seasonal water demands.

Waupaca’s Monozukuri*

Maintaining Positive Relationships with Regional Communities

Reducing Environmental Impacts in the Manufacturing Process

Quality Management through Unique Manufacturing Technologies

Supporting Various Activities as a Member of the CommunityBased in Wisconsin, USA, Waupaca engages in various activities that contribute to the local community, including the donation of equipment to local schools, support for community fire prevention and rescue efforts and environ-mental management. It also sponsors and participates in community activities.

Since 2012, Waupaca has participated the construction of the Swan Park Recreation Facility located in Waupaca, Wiscon-sin. Swan Park is a multipurpose facility for summer and winter recreation featuring a 42-foot (12 meter) high sledding

hill providing families a place to play in winter. Waupaca’s three local area foundries donated approximately 200,000 cubic yards (150,000 cubic meter) of foundry sand and slag used as an unconfined geotechnical fill, making effective use of production process byproducts and reducing the city’s construction material costs.

In addition, the company hosts business symposiums for veterans to provide ongoing employment opportunities in the community. Waupaca also collaborated on the 2014 commu-nity art event “Tell Your Story in the Tiles,” where it assisted participants in the creation of iron tiles.

Special Feature 1

*The Japanese word monozukuri expresses the art and joy of making things as perfectly and efficiently as possible, while respecting nature in terms of the materials used and the environment.

Closed-loop water cooling systemFinishing process Swan Park aerial view

Molding machine Automated finishing processWaupaca Environmental Activity Goals and 2014 Achievements

Category Status of progressGoal for 2020

Reduce energy intensity* 25% compared to 2009 levels. Note: Measured in one million Btu’s per ton of product shipped.

Reduced energy intensity by more than 14% at all six plants between 2009 and 2013.Energy

Maintain best available air pollution control systems considered.

Maintain air pollution control systems considered as “best available” by the U.S. Environmental Protection Agency and associated state regulatory agencies for all processes.

Pollution control

Reduce spent foundry sand generation 30% compared to 2010.

Reusing over 70% of foundry byproducts used in metal casting process.In 2014 a total of 400,000 tons of sand was reused.

Waste

Reduce amount of water used by 80% compared to 2010. Reduced water consumption at all six plants by more than 17% from 2010–2014.Water

1211 CSR Communication Report 2015 CSR Communication Report 2015

Waupaca manufactures a variety of iron casting products for a wide range of industrial segments, from automobiles, agriculture and construction to material handling. Waupaca maintains company-wide certifications including the ISO 9001 and ISO/TS 16949 international quality standards. The company also supplies brake components and other parts important for ensuring safety.

From melting and casting to finishing, Waupaca possesses the world’s largest integrated manufacturing technologies, enabling the stable provision of high quality products—the company’s strength. Waupaca’s products are highly durable and reliable due to its proprietary manufacturing process and technologies, molding equipment and automated finishing system. Furthermore, the high precision of its finishing requires minimal post-process machining, contributing to lower produc-tion costs for the customer.

Waupaca has established goals to be achieved by the year 2020 and is executing various policies with the aim to reduce the environmental impact of its business activities.

EnergyEach Waupaca plant is engaged in energy-saving measures, such as the use of waste heat and energy-saving equipment, which are linked to cost reductions.

For example, at Plant 1, waste heat from the cupola iron-melt-ing process is used to provide approximately 70% of the plant’s space heating requirements during winter, as well as heat for 100 % of the plant’s hot water needs.

Pollution ControlTo prevent air pollution, Waupaca has installed state of the art pollution control devices that trap dust and filter air at all its plants. We have also introduced sophisticated air pollution control monitoring systems. Advanced bag leak detection probes are installed within the emission control systems to monitor this equipment and ensure it is operating properly.

WasteOne of Waupaca’s largest waste streams is spent foundry sand used to make molds for the casting process. To reduce the amount of sand disposed in landfills, the company promotes reductions in the amount of sand used and the efficient reuse of spent foundry sand. Waupaca cooperates with government institutions to reuse foundry sand as a highway sub base fill, geotechnical fill and for other general construction uses.

WaterTo reduce the amount of water used, Waupaca installed closed-loop water cooling systems that recycle water used in the manufacturing process. Introduction of this technology has resulted in a 30-95% reduction in cooling water use at Plant 4, the variation of which is due to seasonal water demands.

Waupaca’s Monozukuri*

Maintaining Positive Relationships with Regional Communities

Reducing Environmental Impacts in the Manufacturing Process

Quality Management through Unique Manufacturing Technologies

Supporting Various Activities as a Member of the CommunityBased in Wisconsin, USA, Waupaca engages in various activities that contribute to the local community, including the donation of equipment to local schools, support for community fire prevention and rescue efforts and environ-mental management. It also sponsors and participates in community activities.

Since 2012, Waupaca has participated the construction of the Swan Park Recreation Facility located in Waupaca, Wiscon-sin. Swan Park is a multipurpose facility for summer and winter recreation featuring a 42-foot (12 meter) high sledding

hill providing families a place to play in winter. Waupaca’s three local area foundries donated approximately 200,000 cubic yards (150,000 cubic meter) of foundry sand and slag used as an unconfined geotechnical fill, making effective use of production process byproducts and reducing the city’s construction material costs.

In addition, the company hosts business symposiums for veterans to provide ongoing employment opportunities in the community. Waupaca also collaborated on the 2014 commu-nity art event “Tell Your Story in the Tiles,” where it assisted participants in the creation of iron tiles.

Special Feature 1

*The Japanese word monozukuri expresses the art and joy of making things as perfectly and efficiently as possible, while respecting nature in terms of the materials used and the environment.

Closed-loop water cooling systemFinishing process Swan Park aerial view

Molding machine Automated finishing processWaupaca Environmental Activity Goals and 2014 Achievements

Category Status of progressGoal for 2020

Reduce energy intensity* 25% compared to 2009 levels. Note: Measured in one million Btu’s per ton of product shipped.

Reduced energy intensity by more than 14% at all six plants between 2009 and 2013.Energy

Maintain best available air pollution control systems considered.

Maintain air pollution control systems considered as “best available” by the U.S. Environmental Protection Agency and associated state regulatory agencies for all processes.

Pollution control

Reduce spent foundry sand generation 30% compared to 2010.

Reusing over 70% of foundry byproducts used in metal casting process.In 2014 a total of 400,000 tons of sand was reused.

Waste

Reduce amount of water used by 80% compared to 2010. Reduced water consumption at all six plants by more than 17% from 2010–2014.Water

1211 CSR Communication Report 2015 CSR Communication Report 2015

Sorting out issues through discussions with relevant departments

In 2014, the Hitachi Group revised the Hitachi Group CSR Policy (formulated in 2005), which is aimed at furthering the integration between management and CSR. These revisions were made to provide a new framework based on ISO 26000, the global standard for corporate social responsibility. In accordance, Hitachi Metals will further reinforce its PDCA cycle for CSR management to accurately recognize interna-tional society’s expectations, to make steady progress toward fulfilling its responsibilities and to ensure ongoing improve-ments in management quality.

In FY2014, Hitachi Metals confirmed its current status with regard to this new framework, aligning key issues and setting activity policies and implementation plans. The CSR Promotion Department, which serves as the CSR supervisory department, spearheaded the effort of working with CSR-related depart-ments to determine the state of the Company’s initiatives with respect to the seven core ISO 26000 subjects. We then solicited advice from Caux Round Table Japan in considering materiality with respect to the Hitachi Metals Group’s business characteristics. On this basis, we established medium- to long-term implementation targets and key performance indica-tors (KPIs), formulating a roadmap with plans through FY2015.

Under this new framework, every year after FY2015 the Hitachi Metals Group will evaluate its activity results and set targets and measures for upcoming fiscal year. By repeating this cycle of roadmap-setting and implementation, we aim to continu-ously enhance management quality.

* Green Industry: An award for green industrial practices conferred by Thailand’s Ministry of Industry. The award is separated into five levels; as a company achieves each level, they receive a Green Industry Mark. Level 3, the Green System, recognizes the introduction of systematic environmental management.

New CSR Management Framework for the Hitachi Group Hitachi Metals Group Initiatives in FY2014

Ongoing Improvements in Management Quality in Line with ISO 26000

Key Items in the Environmental Action Plan and Results in FY2014

The Hitachi Metals Group formulated an Environmental Action Plan based on its Code of Conduct for Hitachi Group Companies and Basic Environmental Protection Policies, taking into account the characteristics of the countries and regions where it does business and the demands of its stakeholders. In doing so, it endeavors to reduce environmental loads, expand eco-products and strengthen its environmental management system.

Thai Hitachi Enamel Wire Co., Ltd.,Green Activities

Green Industry certificateHitachi Metals (Thailand) Ltd.

Recognition as a Green Industry in ThailandTwo Hitachi Metals Group subsidiaries, Hitachi Metals (Thailand) Ltd., and Thai Hitachi Enamel Wire Co., Ltd., were awarded Green Industry (Level 3)* by Thailand’s Ministry of Industry. Before receiving the Green Industry award, these companies were engaged in a wide range of green activities, including the creation of internal systems, employee awareness education, energy conservation and garbage separation.

Going forward, these activities will be further developed within and outside the Company in an aim to take them to an even higher level.

TOPICS

Green Industry AwardHitachi Metals (Thailand) Ltd.

The Hitachi Metals Group adopted and implemented the “Hitachi Metals Group Environmental Action Plan FY2014,” based on the Hitachi Group Third Environmental Action Plan for

FY2013 to 2015. The key indicators of the Environmental Action Plan, FY2014 results and evaluations and FY2015 targets, are as stated below.

Formulation of a new Hitachi Group CSR activity roadmap in line withthe new Hitachi Group CSR Policy

Recognition of current status in accordance with ISO 26000

Consideration of material issues to address

Ongoing improvements in line with the PDCA cycle

Reduction of water usage per sales amount by at least 18%(Base year FY2005, outside Japan)

Establishment of a corporation that creates environmental value

Categories Items FY2014 Action Target FY2014 Results Rating FY2015 Targets

Eco-mind

Next-generation products & services

Eco-factories

Helping reduce CO2 emissions by 100 Mt till 2025 through products

GREEN 21-2015

Environmental education and training

Promotion of Eco-products

Global warming prevention

Effective use of resources

581 GP

100%

98%

544 GP

100%

90%

Target Achieved Target 90% Achieved Target Not Achieved

1.30 million t-CO2 1.33 million t-CO2 1.50 million t-CO2

498 GP

e-learning attendance rate 95%

Sales ratio 88%

Increasing “Eco-Product Select” models

Improvement of energy consumption ratio per production unit at least 9% (Base year FY2005, global)

Reduction of waste/valuable generation per production unit at least 16% (Base year FY2005, global)

9 model(2011–2014

cumulative total)9 models total

13.9%

22.5%

78.9%

34.9%

10%

18%

90%

20%

Promote registration ratio of Electric Waste Manifest System at least 75%

1 2 3 4 5 6 7 8 9

RecognizeProperly recognize our social responsibility

Identify, Prioritize and Act

Review and ImproveReview and improve CSR activities through proactive communication and stakeholder engagement

Identify relevant issues, establish priorities for addressing issues, and act

Recognition of Social ResponsibilityOrganizational GovernanceHuman RightsLabor PracticesThe EnvironmentFair Operating PracticesCustomers (Consumer Issues)Community Involvement and DevelopmentReview and Improvement of CSR Activities

Environmental Activity Report for FY2014Enhancing CSR Management

Ongoing Management Quality Enhancements Based on New Framework in Accordance with International Standards

15 CSR Communication Report 2015 16CSR Communication Report 2015

Sorting out issues through discussions with relevant departments

In 2014, the Hitachi Group revised the Hitachi Group CSR Policy (formulated in 2005), which is aimed at furthering the integration between management and CSR. These revisions were made to provide a new framework based on ISO 26000, the global standard for corporate social responsibility. In accordance, Hitachi Metals will further reinforce its PDCA cycle for CSR management to accurately recognize interna-tional society’s expectations, to make steady progress toward fulfilling its responsibilities and to ensure ongoing improve-ments in management quality.

In FY2014, Hitachi Metals confirmed its current status with regard to this new framework, aligning key issues and setting activity policies and implementation plans. The CSR Promotion Department, which serves as the CSR supervisory department, spearheaded the effort of working with CSR-related depart-ments to determine the state of the Company’s initiatives with respect to the seven core ISO 26000 subjects. We then solicited advice from Caux Round Table Japan in considering materiality with respect to the Hitachi Metals Group’s business characteristics. On this basis, we established medium- to long-term implementation targets and key performance indica-tors (KPIs), formulating a roadmap with plans through FY2015.

Under this new framework, every year after FY2015 the Hitachi Metals Group will evaluate its activity results and set targets and measures for upcoming fiscal year. By repeating this cycle of roadmap-setting and implementation, we aim to continu-ously enhance management quality.

* Green Industry: An award for green industrial practices conferred by Thailand’s Ministry of Industry. The award is separated into five levels; as a company achieves each level, they receive a Green Industry Mark. Level 3, the Green System, recognizes the introduction of systematic environmental management.

New CSR Management Framework for the Hitachi Group Hitachi Metals Group Initiatives in FY2014

Ongoing Improvements in Management Quality in Line with ISO 26000

Key Items in the Environmental Action Plan and Results in FY2014

The Hitachi Metals Group formulated an Environmental Action Plan based on its Code of Conduct for Hitachi Group Companies and Basic Environmental Protection Policies, taking into account the characteristics of the countries and regions where it does business and the demands of its stakeholders. In doing so, it endeavors to reduce environmental loads, expand eco-products and strengthen its environmental management system.

Thai Hitachi Enamel Wire Co., Ltd.,Green Activities

Green Industry certificateHitachi Metals (Thailand) Ltd.

Recognition as a Green Industry in ThailandTwo Hitachi Metals Group subsidiaries, Hitachi Metals (Thailand) Ltd., and Thai Hitachi Enamel Wire Co., Ltd., were awarded Green Industry (Level 3)* by Thailand’s Ministry of Industry. Before receiving the Green Industry award, these companies were engaged in a wide range of green activities, including the creation of internal systems, employee awareness education, energy conservation and garbage separation.

Going forward, these activities will be further developed within and outside the Company in an aim to take them to an even higher level.

TOPICS

Green Industry AwardHitachi Metals (Thailand) Ltd.

The Hitachi Metals Group adopted and implemented the “Hitachi Metals Group Environmental Action Plan FY2014,” based on the Hitachi Group Third Environmental Action Plan for

FY2013 to 2015. The key indicators of the Environmental Action Plan, FY2014 results and evaluations and FY2015 targets, are as stated below.

Formulation of a new Hitachi Group CSR activity roadmap in line withthe new Hitachi Group CSR Policy

Recognition of current status in accordance with ISO 26000

Consideration of material issues to address

Ongoing improvements in line with the PDCA cycle

Reduction of water usage per sales amount by at least 18%(Base year FY2005, outside Japan)

Establishment of a corporation that creates environmental value

Categories Items FY2014 Action Target FY2014 Results Rating FY2015 Targets

Eco-mind

Next-generation products & services

Eco-factories

Helping reduce CO2 emissions by 100 Mt till 2025 through products

GREEN 21-2015

Environmental education and training

Promotion of Eco-products

Global warming prevention

Effective use of resources

581 GP

100%

98%

544 GP

100%

90%

Target Achieved Target 90% Achieved Target Not Achieved

1.30 million t-CO2 1.33 million t-CO2 1.50 million t-CO2

498 GP

e-learning attendance rate 95%

Sales ratio 88%

Increasing “Eco-Product Select” models

Improvement of energy consumption ratio per production unit at least 9% (Base year FY2005, global)

Reduction of waste/valuable generation per production unit at least 16% (Base year FY2005, global)

9 model(2011–2014

cumulative total)9 models total

13.9%

22.5%

78.9%

34.9%

10%

18%

90%

20%

Promote registration ratio of Electric Waste Manifest System at least 75%

1 2 3 4 5 6 7 8 9

RecognizeProperly recognize our social responsibility

Identify, Prioritize and Act

Review and ImproveReview and improve CSR activities through proactive communication and stakeholder engagement

Identify relevant issues, establish priorities for addressing issues, and act

Recognition of Social ResponsibilityOrganizational GovernanceHuman RightsLabor PracticesThe EnvironmentFair Operating PracticesCustomers (Consumer Issues)Community Involvement and DevelopmentReview and Improvement of CSR Activities

Environmental Activity Report for FY2014Enhancing CSR Management

Ongoing Management Quality Enhancements Based on New Framework in Accordance with International Standards

15 CSR Communication Report 2015 16CSR Communication Report 2015

Corporate Information Third-Party Opinion

Corporate Name

Established

Headquarters

Representatives

Capital

Hitachi Metals, Ltd.

April 10, 1956

2-1 Shibaura 1-chome, Minato-ku, Tokyo 105-8614, Japan

Hideaki TakahashiRepresentative Exective OfficerPresident and Chief Executive Officer

26,284 million yen(As of the end of March 2015)

Number of Employees

Products and Businesses

Group Companies

Hitachi Metals, Ltd., Non-consolidated: 6,306Hitachi Metals Group, Consolidated: 30,278(As of the end of March 2015)

Manufacture and marketing of high-grade metal products and materials, magnetic materials and applications, high-grade functional components and equipment, wires, cables, and related products

Consolidated subsidiaries97 companies (38 in Japan, 59 overseas)

Equity method companies14 (6 in Japan, 8 overseas)(As of the end of March 2015)

(Millions of yen) (Millions of yen)

(FY)20142013201220112010

807,952807,952

1,006,3011,006,301

520,186520,186

1,200,000

800,000

400,000

0

120,000

80,000

40,000

0

Net sales Operating income

High-grade metal productsand materials

258,908 (25.7%)

Consolidated net sales

1,006,301million yen

Others

1,980 (0.2%)

Wires, cables, and related products

328,014 (32.6%)

High-grade functional components and equipment

281,968 (28.0%)

Magnetic materialsand applications

135,431 (13.5%)

Japan

529,295 (52.6%)

Consolidated net sales

1,006,301million yen

Others

14,641 (1.5%)

Europe

49,330 (4.9%)

Asia

212,655 (21.1%)

North America

200,380 (19.9%)

43,14343,143 44,86744,867

21,07921,079

59,53659,536

78,21678,216

535,779535,779556,914556,914

Net Sales and Operating Income

Sales by Region Sales by Division

Ph.D. Naoya HasegawaProfessorHumanity and Environment, Hosei University

Kenichi NishiieRepresentative Executive Officer; Executive OfficerHitachi Metals, Ltd.

Visualizing CSR Activities and Enhancing Corporate ValueThe CSR Communication Report 2015, comprised of (1) CSR management progress status, (2) business growth strategies and special features and (3) an environmental activities report, can be said to express ideas embodying the social contribution aims of the best enterprise. Disclosing CSR activity initiative achievements and plans based on the ISO 26000 seven core subjects facilitates a solid understanding of how CSR activities are deployed using the Plan-Do-Check-Act method. Nearly all targets established in the fiscal 2014 implemen-tation plan were achieved; and I have high regard for the company’s solid efforts and accomplishments across all CSR categories. However, some achievement levels were not specifically disclosed in the implementation plan, so I think there is room for improvement with respect to setting targets.

This report includes a special feature focused on business growth strategies. This is content not traditionally covered in CSR reports by this or any other company, but I read it with great interest as it conveys a strong sense of the Hitachi Metals Group intention of advocating social contributions through its core business. In recent years, amid an increased interest in integrated reports, the relationship between core business and CSR activities has been reaffirmed. Disclosing business strategies that generate corporate value is meaningful for investors and stakeholders alike. I expect this report to be the first step towards an integrated report.

Response to Stewardship and Corporate Governance CodesThe introduction of stewardship and corporate governance codes are affecting the investment stance of institu-tional investors and ushering in an era when governance reform initiatives have an impact on corporate value. For institutional investors, ESG*-related initiatives and fair and transparent decision-making processes are becoming important investment criteria. To enhance corporate value, the promotion of communication with stakeholders through CSR reports and fuller disclosure of ESG information is necessary. Compared to last year’s report, solid progress has been made in terms of the amount and quality of information disclosed. In addition to realizing sustainable growth and expansion, I hope the Hitachi Metals Group continues its efforts to communicate the meaning of CSR activities in an easily understandable way for investors and the public.

Expectations Going ForwardI’d like to point out two issues going forward. I thought there was not enough discussion regarding material balance and flow from an environmental perspective. If the overall materials invested (input) and environmental impact (output) of business activities were expressed quantitatively, I think the company’s environmental conservations activities would receive greater recognition.

From a societal perspective, I feel more should be done in terms of human rights initiatives. As stated in the special feature, the expansion of supply chains across national borders and M&A targeting overseas companies are giving rise to increasingly diverse and complex human rights issues. I think it should be understood that initiatives aimed at respecting human rights, namely (1) employee rights, (2) supply chain management and (3) regional community rights, enhance a company’s competitive position in the market. I expect the Hitachi Metals Group to establish a new image for corporations as a manufacturer of highly functional materials taking on the challenge of resolving social issues.

Thank you for your valuable advice.

Business mergers and M&A have led to the rapid expansion of both the domain and scale of global business. The Hitachi Metals Group is aware that international society’s demands for corporate social responsibility are on the rise. In response, we introduced a new CSR management framework based on ISO 26000 and strength-ened the PDCA cycle in an attempt to continuously improve the quality of our management.

With respect to human rights issues, we formulated a Group-wide human rights policy last fiscal year, and this fiscal year are engaged in strict human rights due diligence to create an appropriate support structure for respecting human rights. Furthermore, in terms of environmental activities, we are making an effort to disclose information that can be easily understood by a wider range of stakeholders.

It has become increasingly crucial to explain to our stakeholders the importance of introducing stewardship and corporate governance codes, as well as awareness and initiatives with respect to ESG* issues in management. Going forward, the Hitachi Metals Group will attempt to expand ESG information disclosure and proactively promote dialogue with stakeholders through this CSR Report etc.

Hitachi Metals’ Answer

Corporate Profile

Performance (FY2014) (consolidated)

*Sales by division indicates sales to external customers

1,006,301 million yen(124.5% of preceding term)

78,216 million yen(131.4% of preceding term)

51,474 million yen(160.9% of preceding term)

20,903 million yen(124.3% of preceding term)

Operating income

Capital expenditures

Research and development

Net sales

*Acronym for Environment, Society and Governance.

17 CSR Communication Report 2015 18CSR Communication Report 2015

Corporate Information Third-Party Opinion

Corporate Name

Established

Headquarters

Representatives

Capital

Hitachi Metals, Ltd.

April 10, 1956

2-1 Shibaura 1-chome, Minato-ku, Tokyo 105-8614, Japan

Hideaki TakahashiRepresentative Exective OfficerPresident and Chief Executive Officer

26,284 million yen(As of the end of March 2015)

Number of Employees

Products and Businesses

Group Companies

Hitachi Metals, Ltd., Non-consolidated: 6,306Hitachi Metals Group, Consolidated: 30,278(As of the end of March 2015)

Manufacture and marketing of high-grade metal products and materials, magnetic materials and applications, high-grade functional components and equipment, wires, cables, and related products

Consolidated subsidiaries97 companies (38 in Japan, 59 overseas)

Equity method companies14 (6 in Japan, 8 overseas)(As of the end of March 2015)

(Millions of yen) (Millions of yen)

(FY)20142013201220112010

807,952807,952

1,006,3011,006,301

520,186520,186

1,200,000

800,000

400,000

0

120,000

80,000

40,000

0

Net sales Operating income

High-grade metal productsand materials

258,908 (25.7%)

Consolidated net sales

1,006,301million yen

Others

1,980 (0.2%)

Wires, cables, and related products

328,014 (32.6%)

High-grade functional components and equipment

281,968 (28.0%)

Magnetic materialsand applications

135,431 (13.5%)

Japan

529,295 (52.6%)

Consolidated net sales

1,006,301million yen

Others

14,641 (1.5%)

Europe

49,330 (4.9%)

Asia

212,655 (21.1%)

North America

200,380 (19.9%)

43,14343,143 44,86744,867

21,07921,079

59,53659,536

78,21678,216

535,779535,779556,914556,914

Net Sales and Operating Income

Sales by Region Sales by Division

Ph.D. Naoya HasegawaProfessorHumanity and Environment, Hosei University

Kenichi NishiieRepresentative Executive Officer; Executive OfficerHitachi Metals, Ltd.

Visualizing CSR Activities and Enhancing Corporate ValueThe CSR Communication Report 2015, comprised of (1) CSR management progress status, (2) business growth strategies and special features and (3) an environmental activities report, can be said to express ideas embodying the social contribution aims of the best enterprise. Disclosing CSR activity initiative achievements and plans based on the ISO 26000 seven core subjects facilitates a solid understanding of how CSR activities are deployed using the Plan-Do-Check-Act method. Nearly all targets established in the fiscal 2014 implemen-tation plan were achieved; and I have high regard for the company’s solid efforts and accomplishments across all CSR categories. However, some achievement levels were not specifically disclosed in the implementation plan, so I think there is room for improvement with respect to setting targets.

This report includes a special feature focused on business growth strategies. This is content not traditionally covered in CSR reports by this or any other company, but I read it with great interest as it conveys a strong sense of the Hitachi Metals Group intention of advocating social contributions through its core business. In recent years, amid an increased interest in integrated reports, the relationship between core business and CSR activities has been reaffirmed. Disclosing business strategies that generate corporate value is meaningful for investors and stakeholders alike. I expect this report to be the first step towards an integrated report.

Response to Stewardship and Corporate Governance CodesThe introduction of stewardship and corporate governance codes are affecting the investment stance of institu-tional investors and ushering in an era when governance reform initiatives have an impact on corporate value. For institutional investors, ESG*-related initiatives and fair and transparent decision-making processes are becoming important investment criteria. To enhance corporate value, the promotion of communication with stakeholders through CSR reports and fuller disclosure of ESG information is necessary. Compared to last year’s report, solid progress has been made in terms of the amount and quality of information disclosed. In addition to realizing sustainable growth and expansion, I hope the Hitachi Metals Group continues its efforts to communicate the meaning of CSR activities in an easily understandable way for investors and the public.

Expectations Going ForwardI’d like to point out two issues going forward. I thought there was not enough discussion regarding material balance and flow from an environmental perspective. If the overall materials invested (input) and environmental impact (output) of business activities were expressed quantitatively, I think the company’s environmental conservations activities would receive greater recognition.

From a societal perspective, I feel more should be done in terms of human rights initiatives. As stated in the special feature, the expansion of supply chains across national borders and M&A targeting overseas companies are giving rise to increasingly diverse and complex human rights issues. I think it should be understood that initiatives aimed at respecting human rights, namely (1) employee rights, (2) supply chain management and (3) regional community rights, enhance a company’s competitive position in the market. I expect the Hitachi Metals Group to establish a new image for corporations as a manufacturer of highly functional materials taking on the challenge of resolving social issues.

Thank you for your valuable advice.

Business mergers and M&A have led to the rapid expansion of both the domain and scale of global business. The Hitachi Metals Group is aware that international society’s demands for corporate social responsibility are on the rise. In response, we introduced a new CSR management framework based on ISO 26000 and strength-ened the PDCA cycle in an attempt to continuously improve the quality of our management.

With respect to human rights issues, we formulated a Group-wide human rights policy last fiscal year, and this fiscal year are engaged in strict human rights due diligence to create an appropriate support structure for respecting human rights. Furthermore, in terms of environmental activities, we are making an effort to disclose information that can be easily understood by a wider range of stakeholders.

It has become increasingly crucial to explain to our stakeholders the importance of introducing stewardship and corporate governance codes, as well as awareness and initiatives with respect to ESG* issues in management. Going forward, the Hitachi Metals Group will attempt to expand ESG information disclosure and proactively promote dialogue with stakeholders through this CSR Report etc.

Hitachi Metals’ Answer

Corporate Profile

Performance (FY2014) (consolidated)

*Sales by division indicates sales to external customers

1,006,301 million yen(124.5% of preceding term)

78,216 million yen(131.4% of preceding term)

51,474 million yen(160.9% of preceding term)

20,903 million yen(124.3% of preceding term)

Operating income

Capital expenditures

Research and development

Net sales

*Acronym for Environment, Society and Governance.

17 CSR Communication Report 2015 18CSR Communication Report 2015

Hitachi Metals Group

CSR Communication Report

2015

SEAVANS North Building, 2-1 Shibaura 1-chome, Minato-ku, Tokyo 105-8614, Japan

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

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

CSR Promotion Department

Tel: +81-3-5765-4591 Fax: +81-3-5765-4597

Printed in Japan

Catalog No. HM-45(E)-2015Printed in Aug. 2015

The body of this report is printed with 100% vegetable ink containing no VOC (volatile organic compounds).

The body of this report uses “Morino Chonai-Kai paper with forest thinning contribution,” achieved through cooperation between Office-Chonai-kai, which works on paper recycling, and Iwaizumi Town, Iwate Prefecture, which works on forest regeneration.

Please give this report for collection and recycling after use. It can be recycled into printing paper.