Integrated Report2022

CONTENTS
2

Mission Statement

At a Glance

Hirata’s Value Creation
4
10
12
14
16
18
22
22
24
26
28

We courageously pursue technical innovation
while contributing to the betterment of mankind,development of individuals and enhancement ofour company’s capabilities.

President’s Message
Value Creation Milestones
Value Creation Process
Sources of Value Creation
Materiality
Medium-Term Management Plan
Strategies by Business Segment
Automotive-related Equipment
Semiconductor-related Equipment
Other Automatic Labor-saving Equipment
Financial/Capital Strategies

ESG That Supports Sustainable Growth
30
32
32
34
36
38
38
42
44
45
46
46
51
52
54
55
56
57

Management Philosophy

Hirata

1. BRINGS OUT THE BEST IN EVERY PERSON.
2. CHALLENGES TECHNICAL INNOVATION.
3. RESPECTS HUMANITY.
4. OPENS THE DOOR TO A CREATIVE LIFE.
5. CONTRIBUTES TO SOCIETY.
6. MAKES ITS CUSTOMERS SUCCESSFUL.

Data Section
58
60
62

CSR Information

WebsiteReportNarrow

Forward-Looking Statements and Other Cautionary Notes
Statements regarding the future of the Company mentioned in thisreport are based on information that was currently available at thetime of its compilation. Since there are a number of external factorsthat could affect our business performance, such as the global
economy, exchange rate fluctuations, industry market conditions andcapital investment trends, readers are asked to please remain awarethat the content described in these materials may differ.
Its purpose being merely to convey information to ourstakeholders, this report is not intended to solicit or recommend
trading either in the Company’s stock or of any other securities andfinancial instruments.

IR Information

Target readership

Scope
In principal, all Group companies, including Hirata Corporation.

Publication Date
December 2022

Integrated reports are edited and published with afocus on corporate information that is considered ofparticular importance. For more information, please
visit our website.
Wide

Target Period
FY2021 (from April 2021 to March 2022)
However, some of the Company’s activities prior to and after thetarget period are also included in the report.

Financial/Non-financial Principal Data
Global Network
Company Profile/Stock Status

Scope of Integrated Reports

Editorial Policy
This marks the first time that Hirata Corporation has published an
integrated report, which comprehensively brings together financial
and non-financial information.
Integrated Report 2022 is intended for all stakeholders,
including shareholders and investors. In addition to the Company’s
management strategies, the sources of its value creation andbusiness performance, this report comprises mainly ESG information,such as initiatives for the environment, human resources andcorporate governance.

Sustainability Management
Environment
Environmental Management
Response to Climate Change
Environmental Load Reduction
Society
Brings Out the Best in Every Person
Product Safety/Quality Improvement
Supply Chain Management
Respect for Human Rights
Governance
Hirata’s Corporate GovernanceOutside Director’s Message
List of Directors
Group Governance/Cross-shareholdings
Compliance
Risk Management
IT Security

Summary/Representation

Published content

Detailed/Data

https://www.hirata.co.jp/en/ir/

https://www.hirata.co.jp/en/corporate/csr/
Hirata Integrated Report 2022

1

At a Glance

Spread of Sustainable Social Infrastructure

We support the manufacturing processes of our customers
by providing high-quality, high-efficiency and easy-to-use
production systems.
We manufacture and sell production systems for various ﬁelds, including automobiles,
semiconductors, ﬂat panel displays (FPD) and home electronics.
We continually take on the challenges of responding to the needs of our customers inmany industries by utilizing the technology and know-how we have accumulated throughour wide-ranging experience in global manufacturing.

Automotive-related Equipment

Hirata’s all-electric transfer system reduces theenvironmental impact of customer factories
and contributes to carbon neutrality

Contribution to
Carbon Neutrality
with Our ProductsP22-23

We completely handle equipment for electric vehicles (EVs), engines, transmissions andautomotive component production. We provide optimized solutions by means of
pre-veriﬁcation utilizing digital technologies and comprehensive tests at our plants.
We support assembly equipment for
products ranging from EV-related
components and the main components ofpower transmissions/drive systems known
as powertrains to smaller components suchas the computerized systems that control
them, automotive electronic parts such as
sensors, air compressors for
air-conditioning, and ABS brake modules.

Installing an all-electric transfer system equippedwith a Hirata-developed DC brushless motor
renders pneumatic tooling unnecessary,
contributing to signiﬁcant reductions in electricity
consumption, CO2 emissions and running costs.

Leveraging digital technologies to transform
entire businesses

Efforts to Realize
Management Adapted • Virtual commissioning using an emulator• Utilization of new technologies, such as
to New Normal Era

extended reality (XR) and artiﬁcial intelligence (AI)• Remote meetings/remote maintenance• Digitization of forms/use of cloud computing• Visualization of plant operational status

Other Automatic Labor-saving Equipment
Semiconductor-related Equipment

P24-25

P26-27

Industrial robots, contract manufacturing of organic electroluminescent (EL) panel vacuum
deposition equipment, single-item sales of factory automation (FA) equipment, manufactureand sale of home electronics, transfer-related equipment, medical and scientiﬁc equipment, etc.

Manufacture/sale of load ports that load silicon wafers into various processing equipment,
wafer transfer robots that can handle atmospheric and vacuum environments, aligners andthe equipment front-end modules (EFEMs) that integrate them as well as vacuum platforms.

In the front-end processes of semiconductor
manufacturing, we manufacture and sell equipment
platforms, transfer equipment, etc. In post-process,we mainly manufacture and sell the transfer
equipment utilized within and between processes.

We also provide the load ports and transfer robots
for FOPLP* equipment and the EFEMs that
integrate them. In the ﬁeld of semiconductor-related
equipment, we also have N2 purge load port,
N2EFEM and other technologies available for use inminiaturization.
*Fan Out Panel Level Packaging

2

Hirata Integrated Report 2022

Our core industrial robot
technology is incorporated in
production equipment in avariety of applications, such as
automotive, semiconductor andhome electronics manufacturing.

We manufacture and market
medical, chemistry and physics
devices that are used in thehealthcare ﬁeld and in thedevelopment of new medicines.
We endeavor to contribute tosociety by providing productsthat are easier to use and havehigh reliability.

We help customers to optimize
their plant layouts and provide
material handling equipment forcoaters and laminating systems,
for the ﬂat panels and baseplates used for OLED and LCD
applications as well as for thesystems used for transfer,division and shifting systems.

Hirata Integrated Report 2022

3

President’s Message

Jin-Gi-Kou-Ken: 70 Years of Management
Philosophies Summarized
After its founding in Kumamoto City in 1951, Hirata has continued to create
production systems that support manufacturing in a variety of industrial fields,
but primarily centered on the automotive, semiconductor, and home electronics
sectors. Today, we are the production facility integrator that is most commonlychosen by our customers around the world.
In May 2022, on the occasion of having formulated its new Medium-Term
Management Plan, which is aimed at realizing long-term Group growth, theCompany announced the slogan Jin-Gi-Kou-Ken as its vision. A summarizedversion of the Company’s management philosophies accumulated over the 70year history since its establishment, this means “To make everyone involved in
Hirata content and contribute to society by means of technology.”
Until the Kumamoto Earthquake, I myself did not possess a deep
understanding of social contribution in a true sense. However, after having
witnessed the devastation wrought by the earthquake, which occurred in April
2016, I was heartbroken for my hometown of Kumamoto, which had suffereddamage. I decided to return to the city, where the Company had been founded,with a fervent desire to “encourage Kumamoto.” At the same time, I also told theemployees that “We will take on many projects from all over the world and donate
as much money as possible to Kumamoto as support for reconstruction in theaftermath of the earthquake.” I also told them that protecting their hometown was
their own form of social contribution. Under such circumstances, we were also
affected by the disaster and the environment was harsh, but the desire to donate
as much money as we could to Kumamoto and contribute to the reconstructionof our hometown boosted the morale of all the employees, and sales reacheda record high that fiscal year. It was from this experience with the Kumamoto
earthquake that I learned that, by making everyone involved with Hirata content,
we could also grow significantly as a company.
J i n - G i - K o u - K e n

人技幸献
To make everyone involved in Hirata content andcontribute to society by means of technology

While securing profits in existing
businesses, we will work to expand
business in growth markets, including
the creation of new businesses.

Review of Consolidated Performance for Fiscal Year
Ended March 31, 2022
In the automotive-related equipment business in the year ended March 31, 2022,

Yuichiro Hirata

strong capital investment in next-generation vehicles such as electric vehicles

President(EVs) was seen, backed by global efforts to become carbon neutral. In thesemiconductor-related equipment business, demand for semiconductors increased
due to the full-scale development of fifth-generation (5G) mobile communication
The Noh stage in the entrance hall of the
Hirata Corporation headquarters embodies
the idea of becoming a “headquarters thatcan convey the traditions of Kumamoto
and Japan to the world.”

4

Hirata Integrated Report 2022

systems and the spread of telecommuting, and semiconductor-related capital
investment, such as in silicon wafer transfer equipment, was aggressive. Mainly
as a result of these factors driving performance, net sales for the fiscal year underreview amounted to ¥67,087 million (¥65,255 million for the previous fiscal year),
Hirata Integrated Report 20225Formulation of New Medium-Term Management Plan
(FY2022-FY2024)

Taking into account the expansion of
the EV and semiconductor markets,
we will proactively make management
decisions to expand earnings over the
medium to long term.

I believe that the significant increase in demand in the automotive- andsemiconductor-related equipment businesses will continue for about the next
10 years, until the spread of EVs has progressed. In the meantime, we willdevelop businesses that will become the pillars of new businesses alongside
our existing businesses. Based on this, we formulated a new Medium-Term
Management Plan in May 2022 with the aim of achieving long-term Group growthby strengthening technological superiority and profitability, which were issues in
the previous medium-term management plan. We will promote a raft of measures
under the Plan’s four basic policies. Among them, under “business expansion
in growth markets,” we will concentrate management resources on existing

operating profit was ¥3,856 million (¥4,995 million for the previous fiscal year),businesses, such as automotive- and semiconductor-related facilities, which weordinary profit was ¥4,258 million (¥5,176 million for the previous fiscal year), andhave positioned as growth markets. As one of the measures for “strengthening

profit attributable to owners of parent was ¥2,682 million (¥4,075 million for thecompetitiveness as a global company,” we will also thoroughly manage

previous fiscal year).

profitability by utilizing DX.

Note: We are applying the Accounting Standard for Revenue Recognition (Accounting Standards
Board of Japan [ASBJ] Statement No. 29, dated March 31, 2020) from the beginning of thecurrent consolidated fiscal year.

As new management targets, we are aiming for net sales of ¥100 billion andoperating profit of ¥10 billion in FY2024, the Plan’s final fiscal year, the targets thatwere not achieved under the previous medium-term management plan.

Recognition of Business Environment• Basic Policies and Priority Measures

The work involved in creating production equipment is extremely difficult, and the

Basic
Policies

1. Business expansion in growth markets
2. Strengthening competitiveness as a global company
3. Strengthening of ESG management initiatives
4. Realization of management in line with new normal era

Priority
MeasuresThoroughprofitability
management thatutilizes DX

number of competitors is decreasing. Under these circumstances, we are currently
facing what could be said to be the greatest opportunities since our founding in
our main automotive- and semiconductor-related equipment businesses. First, inthe automotive-related equipment business, the EV-related market is burgeoning
engines, EVs have fewer parts, even for the engine alone, making it easier to

FY2021 Results

increase mass production efficiency, so we can expect an improvement in profit
margins. Since our company has traditionally worked with the major European and
U.S. automakers as its customers, and we have extensive experience in EV-related
equipment, I recognize that we are in a leading position in terms of technologicalcapabilities and delivery record. Next, in the semiconductor-related equipment
EVs, to electronic products. In addition to the progress being made with DX and
IoT, it is expected that large-scale investments by semiconductor manufacturers
worldwide will increase going forward.

Growth strategy
for semiconductorrelated equipment
business

Initiatives for new
businesses• Management Targets

on a global basis. Compared with vehicles powered by internal combustion

business there is a shortage of semiconductors, from automobiles, including

Growth strategy
for EV-related
equipment
business

Medium-Term
P18 Management
Plan
Financial/Capital
P28 Strategies

Final year of Medium-Term
Management Plan (FY2024)

Net sales

67.0 billion yen

100 billion yen

Operating profit

3.8 billion yen

10.0 billion yen

Operating profit ratio

5.7%

10.0%

ROE*

5.1%

11.0%

Secure Target ROIC that exceeds the cost of capital (WACC)
and improve capital efficiency* ROE assumed as (Increase in retained earnings for each fiscal year) = (Profit attributable to ownersof parent) - (Dividend payment [Note: dividend payout ratio 20%])

In fact, in FY2021 we received large-scale orders for equipment related
to both EVs and internal combustion engine-powered vehicles, and orders forsemiconductors were also strong. The current fiscal year is also starting withrecord-high orders.
In contrast, up until now our company has maintained a strong sense of
putting the customer first, and if there was a problem with a customer, we tended
to respond even if the profit was low. From a management perspective, I now
believe it is necessary for us to narrow down projects and business areas fromthe perspective of efficiency and profitability, and make decisions to concentrate
management resources to expand earnings over the long term.

6

Hirata Integrated Report 2022

Adding “Made by Hirata” Products forLong-Term Growth
The strength of our group undoubtedly lies in our overwhelming experience withproduction equipment. We are handling hundreds of large and small productionlines every year for customers in 40 countries around the world. In the case ofEVs, we fully understand the on-site needs of our customers, for example bypossessing a thorough knowledge of the differences between customers in
Europe, North America, and China, and always make the most suitable proposals.

Hirata Integrated Report 2022

7

A large assembly line with a total length of several hundred meters also requires alarge-scale team-up, and engineers, who account for about 70% of all employees,
are involved.
This group of engineers is the source of our company’s strength, but the factthat we have manufacturing functions in-house is also a factor that sets us apartfrom other companies. We are more than just an engineering company, as we

We solve customer issues throughthe synergistic effects of ourengineering capabilities andmanufacturing capabilities.

use the know-how we have acquired through actual production and manufacturing
activities to make proposals that lead to solving our customers’ problems. Throughthe synergistic effects of our capabilities in engineering and manufacturing, wehave achieved integrated production, from development and design to start-up andmaintenance, and earned the trust of our customers.
While leveraging these strengths in our existing businesses, we are also
focusing on efforts to increase new earnings pillars. Specific examples include theplant genetic resource business, which under the Medium-Term Management Plan
is positioned as one that will present new challenges, and the Hirata ECO electric

12 Value Creation Processof Value
14 Sources
Creationseries, which reduces the environmental impact of air equipment in customers’

are familiar with the needs of our customers, so this kind of shift to electrification

factories. Our company is a facility manufacturer, and thus our basic policy isis possible.

to ultimately hand over the products we make to our customers. In addition, in

As we enter the new normal era, I expect that the shift to remote and online

the years to come, we will strive to evolve from a made-to-order business andoperations, which has taken root due to the COVID-19 pandemic, will accelerate.

improve profitability by increasing the ratio of products and services that we have

Before the pandemic, I used to travel overseas frequently, but now my work isdeveloped in-house and thus are, so to speak, “Made by Hirata.”

mainly via the Metaverse (a virtual space built on the internet). Under the current
management in line with the new normal era, we are implementing virtual

Naturally, employees are included in "everyone involved in Hirata" in Jin-Gi-KouKen. For our employees to work with pride and remain content, we will value in-commissioning using an emulator as business DX while promoting VR factory

house manufacturing as we aim for further growth and scale expansion.

tours, VR assembly processes, remote attendance and maintenance. Not only
enabling the achievement of shortened delivery times that will lead to improved
work efficiency, these initiatives can also be expected to be effective from the

Identification of Materiality and Promotion of
ESG Management
The two other basic policies under the new Medium-Term Management are

16 Materiality

viewpoint of profitability management.

To All Our Stakeholders

the “strengthening of ESG management initiatives" and the “realization ofmanagement in line with the new normal era.”
To further promote ESG management, we had identified materiality consisting

Our business itself will continue to create value over the medium to long term, andwe will continue to actively and continuously contribute to our stakeholders andof four themes and 10 areas as our key issues for FY2021. During the period

local communities. Recognizing the significance and mission of social existence,of the Medium-Term Management Plan, we will formulate specific action plans

we also recognize that continuing to be an organization that “brings out the best

based on the materiality (important issues) and contribute to solving social issues

in every person” will remain an important factor in further improving our corporate

under the leadership of our Sustainability Promotion Committee.

value.

One of the issues on which we place importance is human capital, which is

In the years to come, we will continue to deepen mutual communication withalso specified in our materiality. I believe that it is a management issue to improve

all of our stakeholders, and all officers and employees will work together as one as

employee engagement by creating environments in which each employee canwe aim for sustainable growth.

make the most of their expertise and individuality and feel more joy. To this end,
I will proactively encourage efforts to strategically secure human resources,

In anticipation of your ongoing support, I would like to take this opportunity toconvey my heartfelt appreciation.

strengthen human resource development, and promote Diversity & Inclusion.
As part of our response to climate change, it is also important to contribute toachieving carbon neutrality by means of our products and services. For example,
instead of the air equipment used in customers’ factories, a significant reduction
in running costs as well as electricity usage and CO2 emissions can be achievedby installing an all-electric transfer system, consisting of the Hirata ECO electricseries. As I mentioned earlier, our engineers possess a wealth of experience and

8Hirata Integrated Report 2022

Yuichiro Hirata
Representative Director, President

Hirata Integrated Report 2022

9

Value Creation Milestones

1950~

1940~
Transportation
streamlining

Market Changes

Changes in
Production Thinking
Hirata Solutions

1980~• Manufacture and sale of conveyors• Pursuit of conveyance streamlining

2000~

Automation

Globalization

DX + Environmental Contribution

Low-mix, high-volume production
Line production

High-mix, low-volume production
Cell production

Multiproduct variable quantity production (mass customization)Line production + Cell production• Production lines that realize aim to“enhance people to double their capabilities” *• Development of robot products• Development/establishment of ACS concept• Strengthening of responses overseas• Supply of production equipment
incorporating digital technologies• Utilization of IoT and development/sale ofproducts with reduced environmental impact* Hirata’s coined phrase that expresses the idea of making the best use
of people by having them do jobs with higher added value, instead of“labor saving” that reduces the number of people by automating equipment.

Net sales(Billions of yen)

100

80

Handcart

Free Flow Conveyor

MACHINE-BASE Cartesian
coordinate robot

ACS concept model exhibited
at Chicago robot exhibition

Automotive-related equipment• Engine assembly lines

HIRATA BLUE MOTOR
DC motor

ECO electric series

60
Cart

Television assembly line

ARM-BASE SCARA* robot

Cathode-ray tube (CRT)
production line

* Selective Compliance Assembly
Robot Arm
(Horizontally articulated robot)

Semiconductor-related equipment• Load ports• Wafer transfer robots• EFEM

Realization ofsmart
factories

Real-time operating
status monitoring

40

2022
Change of our stock
market listing to
the Prime Market

2017
Change of ourstock market listing
to the First Section ofTokyo Stock
Exchange

20

1991
Expansion ofoverseas bases

1951
Company
establishment

2016
Relocated
headquarters from
Tokyo toKumamoto

2006
Going public

0

1940
10

Hirata Integrated Report 2022

1950

1960

1970

1980

1990

2000

2010

2020

(FY)

Hirata Integrated Report 2022

11

Value Creation Process

Mission Statement: We courageously pursue technical innovation while contributing toenhancement of our company's capabilities.

Materiality

Capital (as at March 31, 2022)

the betterment of mankind, development of individuals and(Important issues)

Provided ValueBusiness Model/Output

Financial capitalA b il• Number of employees

Manufacturing
capabilitiesliveIntellectual capital• Number of registered patents

617

O

th

er

ak

ep

ry

au

iz

e

to

m

De

(Non-consolidated 1,350,
Group companies 833)

World-classproduction facilitiesr o p o sals to

l
rea

P

tom

atic l ab or -s a vi

• Stable trading• Opportunities for business expansion
into new areas

Shareholders/Investors

d
ro

qu
ng e

u

ip m

t
en

• Production facility
construction know-how

Global customer
network ofapprox. 1,000 companies
in 40 countries

Jin-Gi-Kou-Ken

人技幸献• Stable shareholder returns

To make everyone involved

Local communities

in Hirata content and• Tax payments, co-prosperity withlocal communities

contribute to society bymeans of technology

Global environment• Saving of energy and resources• Reduction of GHG emissions

Indirectly Provided Value

Social/relationship capital• Strong relationships of trustwith customers• Hirata build-to-orderbusiness model

Suppliers

re

it y

2,233

e sts

Engineering
capabilitiesn

Human capital• Self-realization through growth• Safe and secure work environmentsqu

29 (in nine countries/regions)e• Sales bases (Global)

Employeesdve

16 plants (in nine countries/regions)eequipm nt
ted
ela
r-r
to
n
uc
esig
/D

(Space that can realize entire
production lines)

io• Production facilities• Improved safety, productivity,
convenience and comfort• Reduced environmental impact

Se
mi
t
en
co
m
nd
O
p
rde
ui
r
s
e
re
c
ce
n
i
na
es
siven s to ch
n
an
o
p
g
es

ct

Manufacturing capital

Customers

R

54,938,509 (Thousand yen)

Directly Provided Value

Production facility/systems construction

Automoti
ve-r
ela
te
d
eq
Ma
in
te

• Consolidated net assets

Social value• Realization of smart society

Deepening of business model

Environmental value• Contribution to carbon neutral society

Natural capital• Energy usage

4,169 (kl)• Mass-produced products (products forincreasing electriﬁcation of automobiles)
manufacturing businessEconomic value• Sustained corporate value enhancement• Water usage

35,365 (m )2

12Hirata 統合報告書2022

Hirata 統合報告書2022

13

Sources of Value Creation

Hirata’s Competitive Advantage
Synergistic effects created by engineering and manufacturing capabilities

Engineering capabilities reinforced by manufacturing capabilities

Our competitive advantage is created by the synergistic effects of our engineering and manufacturing capabilities, which• Highly experienced engineers who provide concreteOver our 70-year history, our engineers, who have been

have been cultivated by responding to various customer requests. The major factor that enabled the fusion of the two forces

proposals and realize customer requests

nurtured by customers and on-site, have cultivated their

was the close distance between design and production and the sense of unity that comes from that. At the same time,

Accounting for about 70% of Hirata employees, ourunique proposal and design capabilities. At the same

concurrent engineering, which integrates design, procurement, and production, has created new ideas and efficiencies.

engineers are experienced human resources who cantime accumulated within the organization is engineers’

Stemming from these advantages, we cultivated our ability to respond to change and our ability to make proposals from thecover a wide range of segments. For engineers, the“experience knowledge,” which we are working tocustomer’s point of view, and the Assembly Cell System (ACS) concept is a representative example of this idea.

workplace is a place of practice = a place of education.

strengthen by actively incorporating the latest tools.

InterviewR

heavy pressure, but with the support of our customers, wewere able to successfully complete the project in more thana year. Hearing the customer say, “I was very impressed withquthe professionalism and disciplined spirit shown by the entire
Hirata team,” led to a sense of accomplishment. I will continuelir o p o sals t o reiz

to aim to be an engineer who supports Hirata quality on the

n

al

io

ep

front lines to satisfy our customers.

ct

De

ak

e

to

re

it y

Manufacturing
capabilities

ry

to the on-site installation and handover, we struggled undere sts

A b ilve

for an automobile manufacturer. From the conceptual stage

n
esig
/D

e

Engineering
capabilitiesmEngineer Who Supports Hirata Quality on Front Lines

As a leader, I was in charge of building an engine assembly line

d
ve

Ma
in
te

Orde
rs
e
re
c
ce
n
a
i
n
ess to
n
e
v
i
ch
ns
a
o
ng
p
es

Pr

o

du

Employee in Manufacturing Department
Kumamoto #1 Business Division, #1 Business Unit

Manufacturing capabilities that underpin engineering capabilities
Assembly Cell System (ACS) Concept• Integrated production that balances quality

times and a processing system that can operate 24

and speed

hours a day.

• Accelerates production start-up by shortening the time to install and qualify equipment.

Our engineering capabilities are underpinned by our• Simplifies the assembly line by standardizing parts to reduce space and ease maintenance.

well-equipped in-house equipment that can handle• Shortens the assembly line and reduces in-process inventory.

large-scale production equipment with short delivery

The effects of in-house production contribute to ahigher speed of development and cost reduction.

• Adapts readily to product changes or future assembly line changes.
• Supports changing production output by modifying equipment quantity or layout.
Integration

Flexibility

Quality

Equipment and parts used in each process
are standardized and integrated into
standardized modules.

Each module is equipped with a range offunctions adaptable to different
manufacturing processes.

Stable product quality and a minimizationof equipment failure are assured
through standardization.

A conventional assembly line

An assembly line based on the ACS concept

Single-Function MachineStandardized Modules

A dedicated, single-function machine isstationed at each stage of production processStandardization

Standardized modules enable high-mix
manufacturing through multiple processes
Vast plant that enables trial runs

14

Hirata Integrated Report 2022

Hirata Integrated Report 2022

15

Materiality

To achieve both sustainable business growth and the resolution of social issues, even amid an external environment

Our Sustainability Activity Visionthat is dramatically changing, the Hirata Group identified materiality (important issues) in fiscal 2021.
Materiality is organized into four themes and 10 items. Going forward, the Sustainability Promotion Committee
will take the lead in setting KPIs and targets and then implement initiatives.

2050

Based on changes in the business environment and social trends, the Company will periodically review its materiality.

Materiality Identification Process2030

In addition to discussions at management meetingsmateriality issues into the Medium-Term Management

and Board of Directors’ meetings, we received opinions

Plan, we will work to instill awareness of them throughout

and evaluations from external experts when identifying

the Company by clarifying our basic sustainability policy

the important issues. In addition to incorporating theseand sustainability activity vision.

STEP

1

Issue identiﬁcation and management
Having referred to international guidelines on sustainability and survey results from ESG rating agencies, wehave identiﬁed social issues that could conceivably have a signiﬁcant impact on the Group’s management andbusiness. We have also organized into groups those issues that are candidates for materiality in light of theCompany’s future direction, such as its business characteristics, management plans, and targets.

2024
To formulate a roadmap for sustainability
activities during the course of the Medium-Term
Management Plan and promote internal
understanding.

Achievement of carbon neutrality across all
businesses, including their supply chains.
Making everyone involved in the Hirata
Group content by becoming a global leader
in sustainability activities.

To instill engagement in sustainability
activities throughout the Group, whilebalancing business growth with social issues.
Having acquired global external assessmentsof our Group’s initiatives, to meet stakeholderdemanded standards to a high level.

Identified Materiality (Important Issues)

2

Level of importance assessments bysenior management and external experts
From among the extracted and organized issues, we assessed
levels of importance to narrow down the important items interms of the medium- to long-term management of the Group.
For the assessments, we conducted a questionnaire survey ofinternal and external senior management as well as external
experts. At that time, we asked them to assess the Company
along two axes: Level of importance in terms of corporate value(horizontal axis) and level of impact on society (vertical axis).

Materiality Matrix

Four Themes

Level of impact on society

STEP

Response
to climatechangeLevel of importance in terms of corporate value

Cooperation was gratefully received from following external experts
Tetsuro Ii
President and Representative Director,
Chief Investment Officer
Commons Asset Management, Inc.
Tsukasa Kanai
Executive Fellow andChief Sustainability Officer,
Sustainability Promotion Department,
Corporate Planning Department
Sumitomo Mitsui Trust Bank, Limited

STEP

3

16

Yasuyuki Kamata
President
Kamakura Investment Management Co., Ltd.
Koji Shimada
Professor, Graduate School of Economics
Ritsumeikan University
Takahiro Suzuki
Associate Professor
Department of Business Law
Nihon University

Keisuke Takegahara
Executive Fellow and Deputy Director,
Research Institute of Capital Formation;
General Manager/Head of Research,Center on Financial Economics
Development Bank of Japan Inc.
Kyoko Narita
Senior Manager
CDP Worldwide Japan

Bringing out
the best in
every person

Megumu Murakami
Senior Specialist, Emerging Strategy Center
The Japan Research Institute, Limited

Approval and Inclusion in Medium-Term Management Plan
Following the assessments, the materiality proposal was deliberated at multiple management meetings andBoard of Directors’ meetings and ﬁnally approved at the Board of Directors’ meeting held in January 2022.
Having adopted “strengthening of ESG management initiatives” as a basic policy under the new Medium-Term
Management Plan, which was announced in May 2022, we will set targets and work on producing visual formsof the initiatives throughout the duration of the Plan.

Hirata Integrated Report 2022

Building of asustainable
society

Strengtheningof ourmanagementfoundation

Materiality (Important Issues)

Main Initiative Themes

Reduction of environmental
impact by our company and in
the supply chain

Reduction of environmental impact
Reducing emissions of GHGs
Promotion of resource recycling society

Contribution to carbon neutrality
through products and services

Expansion of carbon-neutral market

Creation of new customer
needs in accordance with socialchangesCreation of new customer needs inaccordance with social changes
Harnessing of innovation

Response to progress ofdigitalization

Response to progress of digitalization
Development of infrastructure toward
smart society

Securing and training humanresources

Securing and training human resources

Creating diverse, safe andsecure workplaces

Diversity & Inclusion
Creating safe, secure, and rewarding
workplaces

Improvement of product safety
and quality

Improvement of product safety and quality

Supply chain management

Supply chain management
Respect for human rights

Enhancement of corporate
governance

Stakeholder engagement
Enhancement of corporate governanceRisk management

Respect for compliance with fair tradepractices
Risk management
Maintaining soundness of financial capital

Contributing to the spread ofsustainable social infrastructure
through Hirata’s business

Relevant
SDGs

Aiming to remain a global
company with diversity of humanresources and the ability torespond to change

Relevant
SDGs

Hirata Integrated Report 2022

17

Medium-Term Management Plan

Previously, the Hirata Group had grown as a company by its involvement in new markets, with new customers,
and new product technologies.
In addition to our manufacturing capabilities, from the medium-term management plan before last (FY20152017) to the previous medium-term management plan (FY2018-2020), we have been aiming for further growth
by further pursuing our unique business model of being a system integrator of production facilities and our
global ability to respond that is chosen by our customers around the world. As a result, we have been able tosolidify our business foundation, exceeding net sales of ¥50 billion and reaching the point at which we can aim
for net sales of ¥100 billion.
Under the new Medium-Term Management Plan from FY2022, we will work on strengthening our
profitability, which is an issue for further growth, and our management bases that sustain that profitability.

Net sales(Billions of yen)

100.0

Net sales

Face challenges of¥100 billion scale

Operating proﬁt

8.0

Growth to ¥50 billion scale
50.0

4.0
25.0
0

0
Previous Medium-Term
Management Plan

New Medium-Term
Management Plan

05/3 06/3 07/3 08/3 09/3 10/3 11/3 12/3 13/3 14/3 15/3 16/3 17/3 18/3 19/3 20/3 21/3 22/3

Medium-Term Management Plan before Last
(FY2015-2017)

Previous Medium-Term Management Plan
(FY2018-2020)

New Medium-Term Management Plan
(FY2022-2024)

From breakthrough to growth trajectory

Accumulation of achievements,
establishment of evaluations

Strengthening profitability and management foundation
for further growth

Positioning

Full-scale entry into growth markets (EVs,etc.) Including production and sales systems,
establish foothold as global company

Build up track record in growth markets andestablish evaluations in global market bystrengthening systems

Basic Policies

1. Initiatives geared toward globalization
2. New development of domestic market
3. Initiatives geared toward new businesses

1. Strengthening order receiving/production/
development systems
2. Deepening and expanding existing business
3. Venturing into growth markets
4. Establishing mass production business andcommercialization

Plan
Net sales(Billions of yen)
Operating profit ratio

ActualApprox.
50.0–90.0

50.0
5% or more

Approx. 5–10%

Far exceeding the planPlan
Net sales(Billions of yen)
Operating profit ratio
Capital investment(Billions of yen)
R&D expenses(Billions of yen)

100.0
10% or more

ActualApprox.
60.0–70.0
Approx. 4–8%

Cumulative total Cumulative total
15.0
9.8
Cumulative total Cumulative total
5.0
3.0

12.0

75.0

Medium-Term Management
Plan before Last

Management
Targets andResults

Operating proﬁt(Billions of yen)

-4.0

25/3
(Month/Year)

Expand business in growth markets, improve profitability, andstrengthen the management foundation that sustains them

Jin-Gi-Kou-Ken

1. Business expansion in growth markets
2. Strengthening competitiveness as a global company
3. Strengthening of ESG management initiatives
4. Realization of management in line with new normal era

人技幸献

Net sales (Billions of yen)
Operating profit (Billions of yen)

Target100.0
10.0

Operating profit ratio

10%

ROE

11%

To make everyone involved
in Hirata content andcontribute to society bymeans of technology

Taking advantage of added impetus provided by a growing market,
enhance plan’s feasibility

Approx. 30-40% down on plan
Achievements
and Issues

Achievements• Review of sales bases and production system inChina• Established Thai base as joint venture with local
capital to strengthen business foundation inSoutheast Asia
• New plant in North America began operations,strengthened production system• Entry into EV business• Sales of unit products• Established Overseas Business Headquarters tostrengthen cooperation with Group companies
overseas
Issues• Management system unable to keep pace withincreasing number of orders received• Plenty of room left for deepening business in growthmarkets• No progress made in development of new business
areas

18

Hirata Integrated Report 2022

Achievements• Promotion of commercialization of key components• Development of organizational management system
and internal rules to promote investment development• Expansion of business scale in semiconductortransfer field• Building of track record as top company in EV field• Expanded lineup of ECO electric series products,
standard product registration with major automotiverelated manufacturers
Issues• Enhancing the performance of the investment/R&D
plan promotion system• Thorough management of project profitability• Technological developments that meet customer
needs• Strengthening of collaborative system between
Group companies• Expansion of business scale by developing new sales
channels for ECO electric series products

Basic Policies and Measures(1) Business expansion in growth markets• Recognition of EV and semiconductor markets as growth markets• Review of business portfolio• Recognize EVs/semiconductors as growth markets and concentrate resources• Efforts to create new businesses and expand business areas(2) Strengthening competitiveness as a global company• Global support• Optimize development and production systems within the Group and strengthen
cooperation• Business initiatives• Thorough profitability management utilizing DX, strengthening of productcompetitiveness(3) Strengthening of ESG management initiatives• Improving corporate value through ESG management• Formulation of basic sustainability policy• Building of a promotion system• Identify materiality (important issues), visualize goal setting and initiatives• Appropriate information disclosure and enhanced dialogue with stakeholders(4) Realization of management in line with new normal era• Initiatives for DX• Virtual commissioning utilizing an emulator• Utilization of new technologies (XR, AI, etc.)• Remote meetings/maintenance
Hirata Integrated Report 2022

19Medium-Term Management Plan (FY2022- 2024)
Positioning of Medium-Term Management Plan (FY2022-2024)

Management Targets

Sustainableimprovement
in corporate
value

In formulating the new Medium-Term
Management Plan, we reexamined our founding
principles and management philosophy while

2024

2022

Transformation to competitive
management structure

Jin-Gi-Kou-Ken

Operating profit

人技幸献

Operating profit ratio

As a group, establish management bases and work
to expand business in growth markets while securing
proﬁt from existing businesses

To make everyone involved in Hirata
content and contribute to society
by means of technology

in Hirata content and contribute to society byof itself the Hirata Group’s mission.

FY2021 Results

Net sales

believing that “To make everyone involvedmeans of technology” (=Jin-Go-Kou-Ken) was

Under the new Medium-Term Management Plan we set the following management indicators.

Basic Policies and Measures
Based on our Jin-Go-Kou-Ken concept, we haveestablished four basic policies and measures to resolve
social issues through our business activities over the
medium term.
To strengthen our profitability, we will engage in:(1) Business expansion in growth markets(2) Strengthening competitiveness as a global company
To strengthen our management foundation, we will
engage in:(3) Strengthening of ESG management initiatives(4) Realization of management in line with new normal era

ROE

FY2024 Plan

67 billion yen 100 billion yen
3.8 billion yen 10.0 billion yen
5.7%
10.0%
5.1%
11.0%

FY2024 Plan

Net sales
Operating profit
Operating profit ratio

Automotive-related
equipment

Semiconductorrelated equipment

Total

40 billion yen 40 billion yen 20 billion yen 100 billion yen
2.0 billion yen 6.0 billion yen 2.0 billion yen 10.0 billion yen
5%
15%
10%
10%

Note: Please refer to pages 28-29 for details of financial and capital strategies.

Basic Policy (1)Basic Policy (2)Basic Policy (3)Business expansion in growth markets

Strengthening competitiveness as a
global company

Strengthening of ESG management
initiatives

For existing businesses, we have defined businesses that
respond to growth markets and that we regard as being

To achieve both business growth and the resolving ofdriven by social issues, such as environmental impact
reduction and DX, and other businesses.

Global response

Positioning the EV and semiconductor markets in

Optimization of development/production
systems within the Groupsocial issues as well as to improve corporate value,

Strengthening of cooperation within
the Groupmateriality, and organized the relationship between

particular as growth markets on which to concentrate
in other businesses, such as FPD and home electronics.
Having also positioned business related to plant

we formulated a basic sustainability policy, identified
our philosophy system and corporate value. During theresources, we will also continue to seek greater efficiency
Business
Initiatives

Thorough DX-based proﬁtability
management system

timeframe of the new Medium-Term Management Plan,

Strengthening of product competitivenesstargets for each materiality.

genetic resources as a business that will present new

we will formulate a specific roadmap, such as setting
Note: Please refer to pages 30-57 for details of initiatives.

challenges, we will also strive to build an internal structure

For our global response to expand profits in growthwith an eye toward commercialization.

markets such as EVs and semiconductors, we will
Stakeholders
Medium-Term
Management Plan/
Business Activities

optimize business collaboration between each business
Positioning of Medium-Term Management Plan Period for Each Business

unit and each Group company to create synergies in terms
Resource concentration

Automotive-related equipment (EV related)

Existing business × Social issues
Reduction of environmental impact DX= Growth markets

Semiconductor-related equipment

Existing
businesses

Other automated,labor-saving
equipment/Other

Pursuit of efficiency

FPD-related equipment

Home electronicsrelated equipment

Industrial robots

Transfer machines/
Automated warehousesystems

Medical, chemistry andphysics devices

Internal combustionrelated equipmentof orders, development, and production systems.
We will also work on front-loading activities as aMateriality (important issues)

business initiative to strengthen competitiveness. All
departments will cooperate with each other, and at the

Sustainability Basic Policy

initial stage of the project will identify the risks related tothe content of the inquiry and increase profits by planned

Continuing business

responses. We will further strengthen this activity by

Mission Statement

Management Philosophy

utilizing DX.
Building internal systems toward commercialization

New businessBusiness that will
present new challenges

Plant genetic resources businessIndividual business measures in growth markets
EV-related equipment business

Strengtheningof the battery
ﬁeld

20

(1) Selection of specialized process(2) Development and improvement of key devices(3) Strengthening of product appeal through standardization(4) Clariﬁcation of target customers(5) Active collaboration with outside companies that does
not limit us to in-house resources(6) Review of human resource allocations

Hirata Integrated Report 2022

Basic Policy (4)Realization of management in line with new normal era
We will expand the value provided to customers and society by promoting DX for

Semiconductor-related equipment businessRealizationof optimal
production
system(1) Clariﬁcation of target areas(2) Introduction of new production control system(3) Increased production capacity
Increased number of manufacturing staff
Expansion of production area
(4) Efforts to adopt EFEM standardization

business. This will include CADVR, which imports existing 3D design data as they
are and allows users to hold remote meetings while confirming equipment in the
VR space, the use of emulators that virtually verify the CAD data of development
systems and industrial programs, and IoT by which we are aiming to digitize andconvert to numerical and visual forms every manufacturing process so that plantsthat can be operated continuously for 24 hours.
Hirata Integrated Report 2022

21

Strategies by Business Segment

Automotive-related Equipment• Profit Opportunities

Including EV-related systems and the primary components of power transmissions and drive trains tomore specific components like computerized control systems, sensors, and the air compressors used in airconditioning, we produce and sell a wide range of assembly equipment. Completely handling a large numberof devices and items of equipment at our company, we run comprehensive in-house tests to ensure theircorrect operation before delivering them to our customers’ factories.
Hirata’s standard designs and solutions improve ease of maintenance for the end-user. In addition, digitaltwin technologies are used to design and develop production lines more efficiently.

S

1. Integrated systems, from development to production andmaintenance
2. Engineering capabilities that enable us to fulfill customer
requirements
3. Vast plants where entire production lines can be verified
4. Trust and continuous transactions from customers

O

1. Expansion of market for products that address environmental
issues
2. Local production for local consumption (strengthening of local
procurement at each manufacturing company)
3. Advancement of DX for business4. Cooperation on overseas expansion with domestic companies

Strengths

Weaknesses(Internal)(Internal)

Opportunities

Threats(External)(External)W

1. Profitability management and profitability in new development
projects
2. Development capabilities for own key devices and standard
equipment
3. Competitiveness in specific regional markets

1. Changes in market environment due to tighteningof environmental regulations
2. Decrease in number of parts and in demand for production
equipment due to shift to EVs
3. Rise of Chinese companies
4. Exchange rate fluctuations
5. Loss of business opportunities due to travel restrictions brought
about by spread of infectious diseases, natural disasters, etc.

T

- North America- China

In recognition of the high regard in which our track record

There is a wave of local procurement by Japaneseand reliability are held, in terms of EV-related equipment

companies, amid which our company is also building up a

we will further strengthen our cost competitiveness,track record. Going forward, we will further strengthen our

speed, quality, local support, and modification response,

sales and production as well as cost response capabilities,

while strengthening the relationships with our customers.

while expanding opportunities for receiving orders in
China.

- Europe
A market in which the in-region competition is intense,- Southeast Asia

there is a sense that the export of equipment from Japan

We recognize that, at this point in time, EV-related

is problematic. In response to this situation and to lower

investments have yet to begin in earnest, and that theprices, we will cultivate cooperation with peer companies

resulting major wave of local production opportunities has

and suppliers in Eastern European countries andyet to present itself. We will, however, make preparations

strengthen our responsiveness by the building of supply

for a smooth transition to the production systems in whichchains, while working to increase profitability.

Japan and other countries are taking the lead.

Business Strategies• Retrospective Overview of Previous Medium-Termneutrality, we regard capital investments in EVs and other

Management Plan

initiatives as a major business opportunity. In aiming to

In EV-related equipment, we entered the European market

improve our competitive advantage to win more orders

and accumulated know-how with regard to customer

in the Japanese, North American, European and Chinese

specifications and other factors. We also aimed tomarkets, we are working on product development.

included personnel exchanges within the Group.
As an ongoing issue, in regions with high demand forEVs such as Europe and China, we came to recognize

curb global temperature rises, governments around theMore than
70.0 million

the market penetration of EVs, the sales of which are
expected to reach 40 million units annually in 2030.

l

a
nu

35

• Major Business Partners

nd

an

u
po

m
Co

Our major business partners include General Motors andas start-up EV manufacturers.

Participating from the customer’s product development
stage—and actively collaborating with external parties

insufficient.

so that we are not limited to our own resources—we are

th
ow
gr

e
rat
0)

3
20
1→

0

3.1
2020

and implementing initiatives to save energy and reduce

Medium-Term Management Plan

costs with the goal of creating products that meet

Against the backdrop of efforts towards global carbon

customer needs and exceed their expectations.

2

Topics40.0

New, EV-related Wire Bonder Product2(20• Business Strategies and Priority Measures in New

4%

Development of world’s largest dual-head wire bonder
capable of handling large battery modules for EVs

19.0

Ford Motor Company in North America, Fiat Chrysler
Motor Co., Ltd., and DENSO Corporation in Japan, as welldemand is expected.

conducting the development of new EV-related products(Millions of units)
70

world and auto industry leaders have pledged to increase

Automobiles in Europe, Toyota Motor Corporation, Honda

process in the field of EV batteries, where expansion in

production, engineering, and procurement had been
EV Global Sales Volume Forecast

The long-term expansion of the EV market represents afuture trend that can be regarded with certainty. To help

improvement of key devices in each type of manufacturingthat the strengthening of the systems relating to local

Business Environment• Industry Outlook

We are focusing in particular on the development andstrengthen cooperation by implementing measures that

5.6

2021

Source: BloombergNEF

2025

2030

2040 (Year)

Installing two bonding heads has shortened cycle times, which are
an issue with large batteries, and doubled the previous processing
capacity. Also, configuring the standby position of the bonding
heads outside the bonding area has achieved high maintainability,
as the battery cells can be easily accessed should a problem occur.

22

Hirata Integrated Report 2022

Hirata Integrated Report 2022

23

Strategies by Business Segment

Semiconductor-related Equipment
We develop, manufacture, and sell the components—primarily the openers for various storage containers,
atmospheric/vacuum robots, and aligners—used to transfer wafers in the semiconductor manufacturing
process. We are also focusing on system product applications for these components. For semiconductor
manufacturing equipment manufacturers, we provide optimized EFEMs* for each item of equipment in original
equipment manufacturer (OEM) and original design manufacturer (ODM) forms, and for semiconductor
manufacturers (foundries) we provide EFEMs and sorters under our own brand.
We also support innovation (miniaturization and the switch to 3D modelling) in semiconductor
manufacturing technologies. In addition to developing, manufacturing, and selling the various components
and system products (EFEMs) used for panel level packaging (PLP) transport, we also provide N2EFEM, whichtransfers wafers in an N2 (nitrogen) environment to reduce the adverse effects of the atmosphere on wafers.
*Equipment Front End Modules

S

1. Extensive line-up of wafer transfer components
2. Provide lineup of components for PLP substrate transfer
3. Lineup of system products that combine various components
4. Knowledge and technology necessary for customization andoptimization of components and system products

Strengths

Weaknesses(Internal)(Internal)

1. Further growth of semiconductor market
Opportunities
2. Innovation in semiconductor manufacturing technology(External)
3. Acceleration of electrification due to stricter environmental
regulations
4. Local production for local consumption
5. Trends toward vertical set-up of/standardization of facilities forfabrications by end-users
6. Establishment, revision/addition of SEMI industry association standardsO

Threats(External)

1. Delays in strengthening overseas production bases (costcompetitiveness) and in responding to local production for
local consumption trend
2. Strengthening of sales structure in European and U.S. markets
3. Profitability of parts sales/after-sales service business4. Insufficient development resources due to excessive
customization
5. Strengthening the lineup of our own-brand system products

W

1. Growing demand, soaring material prices and longer delivery
times stemming from conflicts
2. Rise of emerging market companies and start-ups
3. Innovation in semiconductor manufacturing technology
4. Economic friction, sanctions, disputes
5. Market exclusion due to legal regulations and economic
policies
6. Establishment, revision/addition of SEMI standards

T• Major Business Partners

refining existing components and system products, will

Our major business partners include Tokyo Electron Limited,enable us to further increase our earnings. In the case of

DISCO Inc., Advantest Corporation, ULVAC, Inc., and Ebara

in-process transfer systems, we are also looking to further

Corporation.

expand our earnings by broadening the scope of our Group’s
response through the development and market introduction• Profit Opportunitiesof new products, such as vacuum-related components,

We believe that further growth in the semiconductor

systems, and logistics systems, outside the scope of themarket, allied with increasing our share of that market byexisting products mentioned above.

Business Strategies• Retrospective Overview of Previous Medium-Term• Business Strategies and Priority Measures in New

Management Plan

Medium-Term Management Plan

Amid burgeoning demand for semiconductors, we moved

In a market in which growth is expected, we will promote

toward local production in China, implemented initiatives

the investment of resources in this business field through,such as the building of a collaborative system within thefor example, internal organizational restructuring while

Group, and achieved net sales of ¥10 billion.

working to expand the scale of our response in each field.
By strengthening our sales capabilities, we will deepen our

In contrast, we recognized that there was still roomfor growth in terms of sales and various types of profit

understanding of customer needs to an unprecedented

compared with other companies in the same industry. We

level and thereby promote the development of products

thus believed that we needed to aim for further growthwith high added value. By focusing on standardizingby building an optimal production system in this business,

products and the adding of functional products, we will

including the strengthening of our global production

broaden the scope of our responses to customer needs.

system. We also recognized that the promotion of productIn our business, which has been based on a made-standardization and the shortening of lead times throughto-order business, we will also aim to realize an optimalbulk orders were issues that needed to be addressed.

production system and expand earnings by, for example,
introducing a new production management system for

Business Environment

mass-produced products and expanding the in-houseproduction area in this business field.

• Industry Outlook
Demand for semiconductors, which can be said to be
the core product of digitalization, is increasing year by

Forecast of Global Semiconductor-related Market Size
(Billions of U.S. dollars)
1,200

year. Also, in societies that are aiming to be carbon
neutral by 2050, electrification is gaining pace, and theimportance of semiconductors, including their automotive

110

1,000

90

800

applications, is increasing. Against the backdrop ofgovernments around the world that are considering
the introduction and expansion of policies to actively
support investment in their semiconductor industries,
the semiconductor manufacturers in each country arealso planning record-high levels of capital investment.
The semiconductor market is expected to reach theequivalent of approximately ¥100 trillion in 2030, and the

600
400

50
40

200

440

60
50

70
60
1,000

550

600

0
2020
Semiconductors

2021

2022

Production equipment

2030 (Year)
Materials/Components

semiconductor manufacturing equipment field is expected
to grow accordingly.

24

Hirata Integrated Report 2022

Source: Based on all kinds of data, including Japan Electronics and Information
Technology Industries Association (JEITA), Ministry of Economy, Trade andIndustry (METI)(Composition ratio of semiconductors, production equipment, and materials
and components assumed to remain same until 2030, based on the METI’s
Strategy for Semiconductors and the Digital Industry [Summary] June 2021.)

300mm EFEM/Sorter series
An employee from #3 Engineering Department#3 Business Unit
Hirata Integrated Report 2022

25

Strategies by Business Segment

Other Automatic Labor-saving
Equipment

Industrial Robots

more improvements in terms of safety, performance,
functionality, and operability, and strive to broaden the
spread and improve the performance of our equipment.

Having started out as a manufacturer of transport equipment that supplied carts, our company commenced
the manufacture of conveyors, which formed the catalyst for our current business, after its establishment in1951 and then underwent a transformation into robots and production systems. Having pursued technologicalinnovation with the desire to allow people to devote themselves to creative work that only people can do,
and having not limited our selves to the automotive and semiconductor industries, we provide labor-saving
equipment to customers in a variety of fields.
In formulating the Medium-Term Management Plan covering FY2022–2024, we reviewed our businesssegments and classified them into three businesses: Automotive-related, Semiconductor-related, and Other
automatic labor-saving equipment. In the latter, we manufacture and sell production equipment for a variety
of fields, such as flat panel displays (FPDs), home electronics, and medical/chemistry and physics devices.

Individual Segments

Distribution (Transfer Systems)• Business Overview
For a variety of industrial fields, we offer highly versatileand customized automated warehouses and storage
stockers with no restrictions, manufacturing and selling• Business Overview and Strategy

products tailor-made for the products and factory

Industrial robots represent our core technology. We

environments of our customers.

have standard robot controllers and are able to operate

Constructed by means of advanced simulation

multiple types of robots in the same environment. It is

technology and highly versatile and expandable transfer

also possible to operate the robot from a host device such

equipment, our Group’s transfer systems have a provenas a programmable logic controller (PLC) or PC without

track record in the automotive and home electronics fields

using a robot language, reducing the burden on system

and are in operation in many factories.

designers and shortening the time required to set up theFPDs

is progressing, but as the equipment has becomelarger, many technical issues have arisen. Expanding ourtechnological strength and production capacity for large
FPD production equipment that we have cultivated so far,
our Group will work to acquire new markets by realizing
the manufacturing of next-generation FPD production
equipment.

• Business Overview and Strategy

Medical/Chemistry and Physics
Devices

Utilizing the resources that the Group possesses (large,
assembly of large equipment, design and manufacturing

products that match the processes of a wide range of• Business Overview

production systems.

By effectively combining the technologies that are atPrioritizing functional safety, we are working on the

the Group’s disposal, such as transfer, robot, clean roomdevelopment and improvement of industrial and medical

and precision assembly technologies, we provide global

robots.

support for parts and final assembly of home electronics

Targeting production facilities in the EV andthat are continuing to evolve. These include mobile devices

semiconductor fields, which are expected to see

such as smartphones and tablets, high-quality displays,

further growth in the years to come, we will makeand high-performance vacuum cleaners.

ECO Electric Series
Contributing to realization of carbon neutrality

provide, in OEM/ODM form, vacuum process and vacuumtransfer equipment in the production processes of sixthto 10th-generation large glass substrate organic EL andliquid crystal displays. Applying the thin film coating
technology that we have cultivated over many years, inrecent years we have, on the basis of that technology, also

• Business Overview and Strategy

been providing equipment for laminating cover glass andWe are developing and manufacturing robot systems

displays using silicon resin (adhesive) in the production

and medical devices that contribute to the automation ofprocess of in-vehicle displays that require weather

laboratory testing.
We are promoting product development with the goal

Due to the high image quality and high-speedof fully automating pathological examinations. In medical

response features of organic EL displays, demand for

devices engaging in the development of equipment for

their use is increasing not only in mobile phones but

medical use, with regard to cancer treatment equipment,

also in devices with large screens, such as tablets and

we are working together with our customers to develop

gaming displays. To improve productivity, there is a

medical devices that comply with laws and safety

demand to shift the substrate size from G6 to G8, which

standards for the purpose of obtaining pharmaceuticalis currently the mainstream, and equipment development

approvals.

Hirata Integrated Report 2022

Home Electronics

Electrification

personnel with a wealth of experience, etc.), we mainly

26

along orthogonal, horizontal, and vertical axes, we provide

Topicsfive-face processing machines, clean rooms for the final

resistance.

equipment. Selling multiple types of robots articulated

Amid the environmental considerations, such as
the SDGs, that are required, for example, in theautomotive field, moves to shift from internal
combustion engines to EVs are progressing ona global scale. In terms of production, there is a
shift from pneumatic systems, which emphasize
power and emit a large amount of CO2, toelectric systems, which are environmentallyfriendly and safe.
Based on our achievements in a variety ofindustrial fields, we provide non-pneumatic,
safe production equipment and contribute to therealization of factories that do not place a burden
on the environment by realizing all-electrictransfer on the basis of production equipment.

ECO electric series products
Specially set-up ECO series product website

https://hirata-ecoele.com/en/

Hirata Integrated Report 2022

27

Financial/Capital Strategies

Summary of Previous Medium-Term Management Plan, Recognition of Environment

Financial Strategy in New Medium-Term Management Plan (Cash Allocation Concept)

The Group receives orders for production equipmentfrom manufacturers of products in a wide range of fields,such as EVs and other automotive-related products,
semiconductors, and other automatic labor-saving
equipment. Therefore, due to changes in the economic
conditions in Japan and overseas, changes in economic
trends due to COVID-19, changes in the life cycles ofcustomer products and other factors, fluctuations incapital investment by business partners may affect theperformance of the Group.
Under this business model, in the previous mediumterm management plan (FY2018–2020), consolidated net
sales were in the ¥60 billion to ¥70 billion range, and theoperating margin was in the 4% to 8% range, and thus we

While effectively investing generated operating cash flow as growth capital for capital investment and M&A, targeting
existing businesses and businesses in which future expansion is expected, we will also work to strengthen our finances by
repaying interest-bearing debt and increasing cash on hand.

fell short of our targets of consolidated net sales of ¥100
billion and an operating margin of 10% or more.
Showing how efficiently profits are earned relative
to the amount invested by shareholders, the Company’s
return on equity (ROE) has been on a downward trend
since 10.1% in FY2018 and reached 5.1% in FY2021. In
contrast, the equity ratio, which indicates financial stability,
improved by 3.9 percentage points, from 50.9% in FY2018
to 54.8% in FY2021.
Given this financial situation, recognizing the need
to work to improve efficiency, we are concentrating on
businesses with high cash-generating capacity, while
keeping in mind profitability indicators, such as operating
income, operating margin, and ROE.

Basic Financial Policy
The Medium-Term Management Plan covering fromFY2022 to FY2024 has been positioned as a three-year
period in which to, as a Group, establish management
bases and work to expand business in growth markets
while securing profit from existing businesses. We haveadopted numerical targets of ¥100 billion in net sales, ¥10billion in operating profit, 10% operating profit margin, and
11% ROE for the fiscal year ending March 31, 2025. To
improve capital efficiency, we will work to secure ROIC
that exceeds the weighted average cost of capital (WACC).
A major issue for the period of the new Mediumterm Management Plan is to strengthen profitability ingrowth markets such as EVs and semiconductors. As
the number of orders received is expected to increaseamid brisk capital investment by customers in EVs andsemiconductors, we will further strengthen the profitability
management of projects and put in place a system tofurther strengthen our financial base.
Specifically, we will promote front-loading such as
cooperation between departments at the inquiry and sales
stages, resource management, 3D design, and preliminary
verification utilizing an emulator. Through these measures,

FY2024 Plan

¥67.0 billion¥100 billion

Operating profit¥3.8 billion¥10.0 billion

Operating profit ratio

5.7%

10.0%

ROE

5.1%

11.0%

Capital Investment Plan in Medium-Term Management Plan

28

Investment
Capital investment into strengthen
biogenetic resource
production/
R&D
development capacity

IT system-related
investment¥6.0 billion¥1.0 billion ¥11.0 billion¥4.0 billion

Hirata Integrated Report 2022

We will implement capital investments (enhancement of production/development capacity, research and development ofplant genetic resources, information system related) and investments to realize the measures, such as M&A, stipulated in
the Medium-Term Management Plan, while maintaining an awareness of the ROIC-WACC spread.

Financialstrengthening

Disciplined D/E ratio level, repayment of interest-bearing debt, and cash increases based on trends in earnings ﬂuctuations

Shareholder
returnDividend payout ratio of 20% or more

The Group considers the return of profits to shareholders
to be one of the most important management issues.
While working to strengthen our financial position,
as a general guideline we are aiming to maintain aconsolidated payout ratio of 20% or more, while taking
into consideration consolidated performance and futurebusiness development, and striving to achieve returns in astable and continuous manner.

For the fiscal year ended March 31, 2022, theconsolidated dividend payout ratio was 25.2%, and thedividend per share ¥65. Going forward, we will discussshareholder return policies while paying close attention
to various changes, such as feedback from shareholders
and investors with regard to shareholder returns andthe business environment, without being bound by theconventional shareholder return policy.

Changes in Dividend per Share and Consolidated Dividend Payout Ratio
(Yen)
150

46.1

(%)
50

Dividends
Payout ratio

100

12.0%
ROIC

10.0%

Growthinvestments

Shareholder Return Policy

ROIC-WACC Spread

40
32.2

28.4

WACC

15.5

50

8.0%

16.4

17.5

16.0

23.8

19.5
125.0

6.0%

125.0

100.0
0

4.0%
FY2020Results

FY2021Results

FY2022Plan

FY2023Plan

FY2024
Plan

15.0

12.5

12.5

15.0

2011

2012

2013

2014

30
20

65.0

65.0

2020

2021

10

40.0

30.0
2015

25.2
16.6

0
2016

2017

2018

2019

(FY)

Policy for Dialogue with Shareholders and Investors

Equity Spread
ROE

Net sales

Total over three
years of Plan

Net cashprovided byoperatingactivities

12.0%

Management Index Targets in Medium-Term
Management Plan
FY2021 Results

we will curb the occurrence of irregular expenses andimprove the efficiency of assets such as accounts
receivable and inventories.
In terms of the strengthening of our finances, we willcontinue working to reduce interest-bearing debt, reduce
interest costs, and hedge risks through forward exchange
contracts and other measures, as we have been doing,
while maintaining a disciplined D/E ratio level based on
fluctuations in performance.

Distribution of Net Cash Provided by Operating Activities

Total

10.0%

Cost of equity

8.0%
6.0%
4.0%
FY2020Results

FY2021Results

FY2022Plan

FY2023Plan

FY2024
Plan

Note: Plans for WACC and cost of equity capital from FY2022 to FY2024
are left unchanged due to unpredictability. ROIC and ROE from the FY2022
plan to the FY2024 plan are planned values based on the management index
targets and capital investment plans in the Medium-Term Management Plan.

We disclose information appropriately on the basis of
the relevant laws and regulations. Even if the information
does not fall under disclosure items based on laws andregulations, to gain the correct understanding and trustof our shareholders and investors, we strive to disclose
corporate information that we judge to have a significant
impact on investment decisions in a timely, accurate andfair manner.
Specifically, with regard to our business environment,
management plans, business strategies, etc., we areworking to strengthen our responses to the gathering of

media material and interviews using web conferences,to enhance the content disclosed at financial results
briefings, etc., and strengthen information dissemination
via our website.
In addition to reflecting the content of our communications
with shareholders and investors in the enhancement of ourdaily IR activities, such content is reported to the Board of
Directors on a quarterly basis and utilized in management
activities aimed at further improving corporate value.
https://www.hirata.co.jp/en/ir/

Hirata Integrated Report 2022

29

Sustainability Management
Basic Concept behind Sustainability
The Group’s Sustainability Basic Policy was decided at a Board of Directors’ meeting held in April 2022.

The Hirata Group emphasizes bothbusiness growth and the resolutionof social issues while bringing about
improvements in corporate value

The Sustainability Basic Policy clearly states in writing our policy to contribute to the realization of asustainable society through the Group’s corporate activities from the three perspectives of environment,
society, and economy. Recognizing that it is the Hirata Group’s mission to contribute to the realizationof a sustainable society through our businesses, the starting point of our Group’s sustainability is theperspective of continuing to grow our business while fulfilling our social responsibilities to all stakeholders.

Sustainability Basic Policy
The Hirata Group aims to make everyone involved in our company content and to contribute to theEmphasis on three value areas to improve corporate valuebuilding of a sustainable society. To that end, based on the founding spirit encapsulated in our Mission
Statement—and through the spirit of respect for people and the provision of products and services thatshow our consideration for the global environment—we will ensure management transparency andsoundness while working to achieve both business growth and the resolution of social issues.

Improvement of

Increased

Improvement ofenvironmental value

economic valuesocial value
Sustainability Promotion Framework

Contributing to the spread ofsustainable social infrastructure
through Hirata’s businesses

Aiming to remain a global company
with diversity of human resources andthe ability to respond to change

The decision to establish a Sustainability Promotion Committee was taken at a Board of Directors’
meeting held in October 2022. We are planning to set up working groups that report to the Committee
as we build up a promotion framework. As the responsibility for its supervision will fall to the Board of

Include our shareholders, investors,
employees, customers, business partners
and local communities

Stakeholders

Directors, the Committee’s activities will be integrated with management, and efforts with regard to
identified materiality strengthened.
Board of Directors

Medium-Term
Management Plan/
Business Activities
Materiality (important issues)

Sustainability Basic Policy

Based on materiality (important issues),
speciﬁc management plans,business plans
Based on our basic policy,
our 10 areas of materiality(important issues)
Based on our Corporate Philosophy,
basic thoughts with regard to
improvements in corporate value
and sustainability initiatives

Supervise

Committee
Sustainability
Promotion Committee

Management Philosophy

Member composition:
Chair of Committee: Representative President
Committee members: Five internal directors

Promotion function
Corporate Planning Department
Working Groups

Green Factory

Mission Statement

ReportGreen Market
Green Product

Bringing out thebest in every person

Supply chain

Corporate governancePurpose and aims of the Hirata Group
Group company management/promotion

30

Hirata Integrated Report 2022

Hirata Integrated Report 2022

31

Environment

Environmental Management
We at Hirata establish environmental policies and promote environmental activities in line with those policies.
We will contribute to protecting the global environment by reducing the environmental load in all aspects ofour business activities, products, and services.

Status of Business Activities and Environmental Impact
Environmental impact in FY2021 was as follows.

Particulars of Our Environmental Policy

InputsEnergy Usage(Crude oil equivalent)1 4,169 kl

Hirata Corporation contributes to protecting the global environment by reducing the environmental load in all
aspects of our business activities, products, and services in order to achieve a sustainable society.
1. We lower the environmental load of our products byconsidering each phase of a product’s lifecycle throughout
our supply chain, from raw material sourcing to design,
production, transportation, use of the product, and its
disposal after use.
• Making products that save more energy when in use• Designing and manufacturing products to be recyclable at
disposal• Reducing the amounts of harmful materials used in our
products and using substitutes
2. We abide by environmental laws, treaties, requirements,and voluntary standards set as needed. We also develop
coordination and cooperative relations with relevant
government agencies and contribute to local communities.

Hirata Corporation Business Activities• Gasoline• Kerosene• Light oil• LP gas• Electricity

3. We strive to improve productivity and conserve theenvironment throughout all our business activities andproduction processes, including sales, design, manufacturing,
installation, and after-sales service.
• Reducing energy usage and emissions of greenhouse gases• Reducing waste and promoting recycling• Reducing harmful materials and using substitute articles• Preventing environmental problems and pollution• Preserving biological diversity

Design and Development

CO2 Emissions2
• CO2

3 kl
17 kl
55 kl
63 t
15,924 MWh

Waste• Industrial waste
456 t• General waste
25 t• Valuable resources 883 t

Production• Processing• Coating• Assembly• Groundwater 28,503 m3• Clean water
6,862 m3

Chemical Substances(PRTR substances)

5. We review our EMS regularly to enhance environmental
performance while striving for continuous improvement.

• Toluene
2.7 t• 1,2,4-Trimethylbenzene
0.5 t• Xylene
0.3 t• Other
0.5 tChemical Substances• PRTR Substances

Environmental Management
Promotion Framework
Having put in place an Environmental Management
System (EMS) promotion framework led by top
management and environmental management
managers, we obtained international standard ISO
14001 certification at our Kumamoto, Kanto, and Kansai
region production bases.

1. Energy usage calculated using method based on Energy Conservation Law
2. CO2 emissions associated with power consumption calculated based on basic emission factors from electric power companies(Note) Hirata Corporation non-consolidated data

Environmental management managers
Secretariat:
Quality Control Department

ISO monitoring team

Environmental Goals○: Achieved

ISO Committee: Head of Quality Control Department,
Business Unit general managers, divisional heads

No.

Item

Personnel responsible for ISO management

Environmental Accounting
1

The environmental preservation costs for FY2021 were as follows.
Item
Major Activities
Cost for preventing pollution • Maintenance of septic tanks
Global environmental• Installing energy-saving equipment
protection cost
Cost of resource recycling
Upstream and downstream costs
Administration cost
Research & development costSocial activity cost

32

Hirata Integrated Report 2022

• Leakage control construction• Disposal of general and industrial waste• Investigation of chemical substances contained in products• Maintenance of environmental management system• Environmental measurement• Environmental education• Waste generation reduction tests• Environmental preservation and improvement• Donations to environmental protection groups
Total

Investment–

Cost
16,381

14,921

101,386–

45,417

–

6,596

–

30,604

–

30

–

6,973

14,921

207,3872
Effective
use ofresources
3△: Nearly achieved

Goals

FY2021 Accomplishments

Reducing
energyusage

By the end of FY2023, we will have
reduced the amount of energy used by 3%
or more compared with that of FY2020
when measured based on the actual
production amounts.

Reducing
CO2
emissions: Underachieved

Evaluation

FY2022 Plans

Energy usage decreased by 1.9% incomparison with actual production
Reduced due to the installation of energysaving equipment such as high-efficiency
air conditioners and the increase inproduction output.

◯

To promote the reductionof energy consumption by
the introduction of energysaving equipment such as
electric forklifts.

By the end of FY2023, we will have
reduced the amount of CO2 emissions
by 3% or more compared with that of
FY2020 when measured based on theactual production amounts (reducing CO2
emissions by reduction of energy usage)

CO2 emissions increased by 3.8% incomparison with actual production
Increased due to the effect of thegreenhouse gas emission factor of electric
power companies being more than the
reduction from energy consumption.

△

To strive to reduce CO2
emissions by reducing
energy consumption.

Reducing
water
usage

By the end of FY2023, we will have
reduced the amount of water used by 3%
or more compared with that of FY2020
when measured based on the actual
production amounts.

Water usage decreased by 18% incomparison with actual production
Reduction due to a review of the settingsof the water circulation system at the
Kumamoto Plant and the increase inproduction output.

◯

To work to reduce water
usage by reviewing
equipment that uses water.

Reductionof industrial
waste
generation

By the end of FY2023, we will have
reduced the amount of industrial waste
generated by 3% or more compared withthat of FY2020 when measured based on
the actual production amounts.

Industrial waste generation decreased by
11% in comparison with actual production
Reduced due to a review of packaging
materials and the increase in production
output.

◯To work to reduce theamount of industrial waste
generated by reviewing
packaging and othermeasures.

Preventionof global
warming(Unit: Thousands of yen)

Businessarea cost

4.0 t

Top management
Chair of ISO Committee

6,376 t-CO2

Procurement

Water Resources

4. We increase environmental awareness by implementing
education and publicity programs.

Outputs

Hirata Integrated Report 2022

33

Environment

Response to Climate Change
Using the adoption of the Paris Agreement in 2015 as an opportunity, the Company—its stated mission insummary being to “contribute to the development of society”—revised its environmental policy in 2016 amid
the rapidly growing global interest relating to climate change. We are aiming to achieve both the developmentof society through the proliferation of products that contribute to reducing CO2 emissions and environmental
impact, and the resolution of environmental issues such as climate change.
In November 2022, the Company announced its endorsement of the final report of the Task Force on
Climate-related Financial Disclosure (TCFD). In addition to identifying, analyzing, and evaluating the risks andopportunities that climate change poses to management, we
are working to enhance the quality and quantity of information
disclosure that contributes to engagement (constructive dialogue)
with all stakeholders, including shareholders and investors.

Developmentof energysaving
products

Products thatsave moreenergyDemandto savemanpower

At a Board of Directors’ meeting held in October 2022,

The Committee will also be subject to regular oversight bya resolution was passed to establish a Sustainability

the Board of Directors.

Promotion Committee, and full-scale operations are

The Board of Directors gives consideration to climate-scheduled to begin in April 2023. The Sustainability

related issues when reviewing medium-term management

Promotion Committee will submit proposals, reports,

plans and making investment decisions.

and provide information on matters related to ESG

Note: Please refer to page 31 for details of the sustainability promotion
framework.

Carbon priceScope 1, 2

Scarceresources
Raw material
cost
Cost of plastic

Risk Management
The Sustainability Promotion Committee identifies,

Details of opportunity

impact of each risk.

assesses, and manages risks related to climate change.

Going forward, we will report the results of risk

In scenario analyses, the Committee extracts theassessments in scenario analyses to the department inrelevant parameters to identify risks and conducts

charge of risk management and link them with company-

assessments on a regular basis. The Committee also

wide risk management.

Energy cost

Details of risks

Large

Small

Small

Small

Degree of impact
1.5 °C
4°C
scenario scenario

Increase in manufacturing costs due
to introduction of carbon taxes in each
Medium Small
country, emissions trading, and bordercarbon adjustment measures
Increased procurement costs due torestrictions placed on raw materials
Small Smalland purchases due to emission
regulations
Increased costs for materials containing
plastic due to regulatory restrictions
Medium Small
placed on their use and requirementsthat recycled plastic be used

Countermeasures• Expand local production for local consumption business models, suchas local manufacturing and sales of parts and repair parts that havealready started in some regions, and consolidation of production bases.
• Introduction of eco-friendly electrification products, design anddevelopment of products for which lightness and longevity have beentaken into account, etc.

• Development of products for automated warehouses, automated guided
vehicles, etc.

Countermeasures• Setting of carbon emission reduction targets such as carbon neutral
declarations• Ascertaining of Scope structure for carbon emissions, building amonitoring system, etc.
• Renewal of aging robots, etc., promoting the reuse and recycling ofequipment and parts through remodeling and repair services, etc.
• In addition to reviewing excessive packaging in product packaging,
reducing the amount of plastic used by switching to recycled paper andreturnable boxes, etc.

Electricity
costElectricity costs are increasing due
to decarbonization of the Company’splants and offices as well as
popularization of renewable energy• Promotion of energy saving by installation of LED lighting, etc.
• Examining installation of in-house power generation equipment (solar
power generation equipment) and the utilization of leasing services
Medium Medium • Introduction of optimal operation by means of Energy Management
System from buildings and plants where already being installed orconsidered, gradual expansion to locations places where not yet
introduced

Airconditioningcost

Due to rising temperatures, operating
rate of air conditioning in plants, etc.
rises, and thus air-conditioning costs
increase

Small

Distribution
cost

Distribution cost rises due to shift toEVs for large vehicles• Consolidate production bases and expand initiatives with customers(OEMs) for joint transportation in some businesses to streamline interMedium Medium
factory transportation• Examine expanding distribution by multidrop (milk run) shipments ofgoods to suppliers in the region, etc.

Restoration/
operatingcosts

Increasing costs from expenses forrestoring equipment following theeffects of abnormal weather, etc.

Smallmanages risks by quantitatively evaluating the financial

Strategies (Scenario Analysis Overviews)

Degree of impact
1.5 °C
4°C
scenario scenario

In accordance with energy-saving
policies and rising temperatures,electrification and automation atcustomer factories will advance,
demand for products that raise
productivity and improve energysaving performance in factories and at
facilities will increase
In accordance with declining laborproductivity due to rising temperatures,
demand for labor saving and efficiency
improvement at production sites will
increase

Risk
Main
MiddleCategory
Category
Transition risks

Governancemanagement, including responses to climate change.

Opportunities
Main
MiddleCategory
Category

Small• Operational improvements, including ventilation reviews, measuresagainst air leaks, and measures to shade external air-conditioning units• Installation of energy-saving air-conditioning equipment, etc.

Physical risk

• Scenario Analysis Overviews
Through scenario analyses, the Group ascertained thenecessary to respond to risks such as plant shutdowns
and supply chain disruptions.

changes in the Group and its customers’ industries inPhysical cost

Large

• Implementation of risk reduction through multiple purchasing• Advance arrangements in line with business content so that a certain
level of production activity can be carried out even if supply is interrupted,
appropriate inventory management and thorough operation, etc.

2030 and 2050—under the 1.5°C/4°C scenarios, based• Scenario Analysis Resultson scientific information such as from the International

Based on the previous section’s vision of future society

Energy Agency (IEA)—and analyzed climate change risks

with a 1.5°C rise, the Group recognizes that whileand opportunities. In all of the scenarios used in thesebusiness opportunities will increase due to increased

analyses, we confirmed that resilient management isdemand for energy-saving products, the impact of physicalCurbing global warming by reducing CO2 emissions isterm goals while referring to the greenhouse gas reduction

possible in the businesses targeted for analysis.

risks will increase at 4°C.

becoming an essential activity for realizing a sustainabletarget announced by the Japanese government in April

society. To fulfill its responsibility, the Hirata Group

2021. In the years to come, we will carefully examine

Indicators and Targets

Under the 1.5°C scenario, a major change in policy

Based on the results of these analyses, the Group will

toward decarbonization is assumed. In addition to thesequentially verify initiatives for maximizing opportunities

is promoting measures to reduce CO2 emissions

the indicators that are important to the Group from theintroduction of a carbon tax, soaring raw material andwhile addressing recognized risks, starting with thosein its business activities. As a goal for reducing therisk and opportunity items in the scenario analyses, whileenergy costs will require a shift to a more decarbonizedwith the highest feasibility, and promote reflecting andenvironmental impact of our business activities, we arecontinuing to monitor CO2 emissions (Scope 1, 2, 3).

business model. In contrast, in the 4°C scenario, theintegrating those initiatives into management strategies.

also considering more in-depth global, medium- to long-impact of physical risks will increase, and it will be

34

Hirata Integrated Report 2022

Hirata Integrated Report 2022

35

Environment

Environmental Load Reduction
Changes in Energy Consumption/CO2 Emissions

Approach to Resource Recycling

The Company is working to rationalize its energy use

conditioners, and due the increase in production output.

based on the Act on the Rational Use of Energy (Energy

In terms of environmental targets concerning CO2

Efficiency Act). In fiscal 2020, operations started in the

To help in the realization of a sustainable society, we areused in product manufacturing and the provision ofworking to create products that show we have given

products that can be recycled at the time of disposal. We

emissions, for which we also deem fiscal 2020 as theconsideration to resource recycling at each stage of theare also working to reduce the packaging materials, reduce

new headquarters factory area in the Kumamoto Plant,base year, we adopted a 3% reduction in CO2 emissions

life cycle (the procurement of materials and parts, design,waste in production activities, and promote recycling forso both energy consumption and energy consumption

per unit of production by fiscal 2023. Despite having

production, and disposal after use). Through eco-friendly

some equipment imported from overseas suppliers.

per unit of output increased significantly. In terms of

been able to achieve a reduction in energy consumption,

design, we are promoting the reduction of raw materials

environmental targets, having set fiscal 2020 as theCO2 emissions per unit of production increased by 4%base year, we adopted a 3% reduction in our energy

in fiscal 2021 due to an increase in the electric power

consumption per unit of output by fiscal 2023. In fiscal

company CO2 emissions factor (basic emissions factor).

Hirata Corporation
Materials

2021, energy consumption per unit of output was reduced

In the years to come, we will contribute to the reduction

Natural resources

by 2% compared with fiscal 2020 following the installationof CO2 emissions by installing and updating energy-savingof energy-saving equipment, such as the renewal of air

equipment as well as by reducing our energy consumption.

Reducing use of natural
resources by addressing
each stage in life cycle

Energy usage

CO2 emissions
0.07370.05990.06200.07230.116

0.0613

4,013

4,169

Raw materials

6,848

0.111

6,376

274

Fuel consumption (kl)*

3,775

121

2018

2019

5,995

5,299

2,834

434

Efforts to Reduce Industrial Waste Outputs

4,068
6,163

4,014

3,812

2020

1,105

155

201
2021

(FY)

Electricity usage (MWh)*

Energy usage per unit of output (kJ/million yen)
* Calculated using the fuel and electricity conversion factors from the Act on the
Rational Use of Energy

2017

685
2018

CO2 emissions (t-CO2): Fuel

Recycling

Landﬁlldisposal

2,955

3,313

The industrial waste generated by the Company mainly

294
2019

After use

Recycling
5,798

7,006

381

499
2020

2021

(FY)

CO2 emissions (t-CO2): Electricity

CO2 emissions per basic unit (t-CO2/million yen)

Industrial waste outputs

comprises wood chips, waste plastics, and waste oil. Used

0.967

to package deliveries to the Company, wood chips and675

waste plastics are disposed of as waste after unpacking.
For this reason, we are working to reduce the amount

167

152

packaging methods for some equipment imported from

486
141

13

456
24

125

3
98

142

118
93

83

339
216

2017

an initiative to reduce water usage in fiscal 2021, we

0.791

381

115

Efforts to Conserve Water Resources

water usage and monitoring factory wastewater. As

0.893
0.790

490
17

of waste generated by reviewing and simplifying the* Based on power usage, CO2 emissions are calculated using basic emission
factors published by electric power companies

0.847
18

overseas suppliers.

To conserve water resources, the Company is reducing

Finished products

Improvement in recycling
rate in cooperation with
waste disposal companies

0.084

3,587

3,748

Assembly
Waste

8,111

4,182

2017

Products

0.118
0.107

Designing of productsthat facilitate recycling

Processing

Supplier

Water usage
115.6

109.1

112.8

2021

Waste plastic output (t)Waste oil output (t)Output of other waste materials (t)

(FY)

74.5

Kumamoto Plant and were thereby able to further reduce

8,244

61.3

the amount used. We conduct analyses of the wastewater

To respond to chemical substance-related laws and8,592

regulations in Japan and overseas, including the European

8,550

71,420legal requirements and voluntary management standards.

6,862

54,83645,782

2017

2020

Wood offcut waste output (t)Managing Chemical Substances

9,282

from all our plants every year to confirm that it satisfies

2019

197

Amount of industrial waste target substance output per ¥100 million of actual
production (t/¥100 million)

reviewed the settings of the cooling water circulation
system to reduce the amount of cooling water used at the

2018

229

197

2018

Groundwater usage (m3)2019

31,9862020

28,5032021(FY)

Clean water usage (m3)Amount of water usage per ¥100 million of actual production (m3/¥100 million)

contained in our products.
The chemical substances used in-house are evaluated

RoHS Directive1 and the REACH Regulations2, we will

before use and, based on the evaluation results, we

strengthen the management of the chemical substances

undertake management necessary to comply with laws

contained in our products.
We ask our suppliers to submit information throughchemSHERPA3 and cooperate with our surveys of thechemical substances contained in our products. We will

and regulations.
1. Regulations on chemical substances in EU
2. Chemical substance management regulations in EU
3. Format for providing data on chemical substances contained in products in
a supply chain

continue to work on managing the chemical substances

36

Hirata Integrated Report 2022

Hirata Integrated Report 2022

37

Society

Brings Out the Best in Every Person
In the Medium-Term Management Plan FY2022-2024,
we returned to our founding principles and management

while they and the Company grow together.
We also identified “securing and training human

Strategic securing of human resources with aim of improving corporate value

philosophy. In addition to making everyone involved inresources” and “creating diverse, safe and secure

Hirata content, we decided on Jin-Go-Kou-Ken as a slogan

workplaces” as human resource-related materiality for

While each and every employee has been making thethe necessary functions and functions where there

the Group. We consider that efforts aimed at “securing

most of their expertise and individuality, the Groupis a shortfall, such as in human resources with digital

human resources, developing human resources, andhas been facing the challenges of new businesses,

technology expertise and business creation as well as

creating environments that bring out the best in every

technological innovation, high-set goals and challenges

management human resources.

person” will as a result lead to improvements in employeethat have led to sustainable growth.

from our desire to contribute to society by means oftechnology.
Aiming to improve both its corporate value andemployee engagement, the Group is actively working tocreate environments in which each and every employee

To enhance our ability to respond to changes in the

To further improve our sustainable corporate value

engagement.

can make the most of their expertise and individuality

business environment, we will also actively recruit diverse

and achieve our management strategies, we will work

human resources regardless of gender, age, nationality,

to recruit, train, and relocate highly specialized humanreligion, or whether they have a disability.

resources to strategically secure human resources for

Our Company Vision

Jin-Gi-Kou-Ken

人技幸献

To make everyone involved in Hirata content andcontribute to society by means of technology
Improvements in corporate value /Corporate growth

Improvements in employee engagement

Strengthening of human resource development and creation of environments inwhich employees can continue to take on challenges
Under the Group’s management philosophy of “bringing

rotations and reviews with regard to evaluations, we willout the best in every person,” we believe that creating

encourage not only human resources who possess highan environment in which each and every employee cantechnical skills and expertise but also the continuous

grow and maximize their abilities is the most importantdevelopment of global human resources and management

management issue.

human resources. In addition, by enhancing our self-

Going forward, we will reallocate human resources toStrengthening of human resource
Strategic securing of human resources
development and creation ofwith aim of improving corporate value environments in which employees cancontinue to take on challenges

Support for active participation ofdiverse human resources
Creation of workplaces where people
can work with peace of mind

development support system, we will actively work tofocus businesses to achieve our management plan andfoster environments and the climate in which each andaim to develop the human resources necessary for our

every employee can pursue their own dreams and goals,

growth from a long-term perspective. By means of training

improve their personalities and abilities, and continue toprograms that support the careers of diverse humanchallenge themselves to reach their potential.

resources and promoting the activation of staff change

Support for active participation of diverse human resources
Having identified Diversity & Inclusion as one of ourmost of their abilities and individuality, and bringing

material issues, we are supporting the active participation

together their diverse strengths, we will actively workof diverse human resources. By respecting the values of

not only for the well-being of individuals but also for theeach and every employee, increasing their motivation,

development of the organization and the sustainable

providing them with a place where they can make thegrowth of the Company.

• Current Initiative Status

38

Hirata Integrated Report 2022

Women

Senior Human Resources

Global Human Resources• Employment of human resources
regardless of gender• Enhancement of support systems forbalancing childcare/nursing care andwork• Dispatch to external training sessions
for female employees• While showing consideration for thework styles desired by senior humanresources, promoting the handing
down of excellent skills that makeuse of the knowledge and experience
they have cultivated over many years• Recruitment of human resources
regardless of nationality• In addition to training global humanresources by sending employees
from head office to Group
companies, conducting technicaltraining and personnel exchanges by
loaning them to head office (Japan)
from overseas Group companies

Hirata Integrated Report 2022

39

Society

Creation of workplaces where people can work with peace of mind
Giving top priority to health and safety, the Company

Health and Safety Policy• Summary of Previous Measures

has implemented a raft of measures to ensure that ouremployees remain healthy and active and to improve their• Ban on working on legal national holidays• Ban on overtime work on Wednesdays, the designated day when all
employees leave work on time
• Ban on overtime work after midnight• Annual paid leave can be taken in one-hour units

2015

work-life balance.
In 2020, we established health management
2016• Salary and bonus payment days are also on days when employees
leave work on time
• Overtime management changed from 30-minute unit increments to oneminute unit increments

2020• Health management centers established2021• Reduced prescribed working hours from eight hours to 7.5 hours• Began application of shift work on days when employees leave workon time• Systematic implementation of telecommuting

2022• Number of annual paid leave days required to be taken increased toeight days

centers, which are working on initiatives aimed at healthmanagement. The centers are staffed by professionals
with public health nurse qualifications and haveconsultation desks for mental and physical health.

Based on its Sustainability Basic Policy, the Hirata Group engages in the following with the participation of all
employees to ensure the health and safety of all people involved in the Group.
• We will give top priority to health and safety while
striving to develop and improve our occupational
health and safety management system.
• We will work to prevent accidents and disasters byconducting risk assessments, making improvements
based on the results, and providing health and safety
education.

• We will remain in compliance with occupational healthand safety-related laws and regulations and the healthand safety rules set by each Group company.
• Promoting the manufacture of safe and secure
products, we will meet the expectations of our
stakeholders.

In fiscal 2021, we were among the first in the
Kumamoto area to implement workplace vaccinations
with the aim of assisting in the prevention of COVID-19
infections among the many people involved with theCompany, including employees and their families,
suppliers, and local residents.

Toward Enhancement of Work-Life Balance

Health and Safety Promotion System
Based on its Health and Safety Policy, the Company has

In accordance with the size of its workforce, each

formed health and safety committees at all of its businessplant’s health and safety committee appoints generalist

sites, as is required by law. We have also formed ahealth and safety managers, specialist safety managers

company-wide health and safety committee to investigate

and health managers as well as industrial physicians andand deliberate on health and safety management on aother relevant personnel.

company-wide basis while promoting health and safety.
We are implementing measures with regard to work-life

to change their working hours (days when they leavebalance that are designed to achieve diversity in working

work on time)styles.

Labor and management will continue to work together• Ban on overtime work by setting days for leaving work

to implement measures for the improvement of work-on time (Wednesdays, salary/bonus payment days)

life balance. Starting with increasing the rate of male

Top Management
Company-wide Health and Safety Committee
Health and Safety Committee Office
Kumamoto Plant
Health and
Safety Committee

employees taking childcare leave, we will focus on• Eligibility for reduced working hours for childcare
expanded to include childcare for children up to the third

creating an environment and culture that allows each

grade of elementary school

employee to achieve a work-life balance that meets their• Prescribed working hours reduced from eight hours toindividual needs, such as by encouraging male employees
to actively participate in childcare as well as by volunteer

7.5 hours• Introduction of shift work system that allows employees

Kumamoto East Plant
Health and
Safety Committee

Shichijo Plant
Health and
Safety Committee

9.2%
7.4%

3.1%

safety committee’s remit includes reporting on the status

Childcare Leave Acquisition Rateof implementation, discussing measures to preventthe recurrence of accidents as well as the drafting and

9.5%
100%

100%

100%

100%

28%

25%

2%
2019

2020

2021

Percentage of women in management positions
Percentage of those in managerial positions who are women
Note: Managerial positions is total of managers and assistant managers

Hirata Integrated Report 2022

0.79
3

the health and safety committees at each factory work

3.4%

2018

1.19

setting of rules governing health and safety. Carrying out

5.6%

(FY)

2017
Male

conducted by directors every year, and strict checks are21%

carried out from the perspective of management.

24%

Furthermore, many people at the Company are

4%
7%

7%

2018

2019

Female

2020

2021

2

to ensure safety. Safety patrols of each factory are also

34%

12%

40

100%

kiken yochi (hazard prediction) training (KYT) at each site,

2.2%

2017

Occupational Accident Status

and improving health and safety patrols and conducting
5.3%

Collaborating company
health andsafety committees

activities and health promotion.

7.8%

6.1%

Kanto Plant
Health and
Safety Committee

Health and Safety Initiatives
Based on annual plans, the company-wide health andRatio of Women in Managerial Positions*Kansai Plant
Health and
Safety Committee

(FY)

Total

Note: Childcare leave acquisition rate: (Number of people who took childcare leavein the year in which a child was born ÷ Number of people with children born inthat year) × 100

commuting to work by private car, and incidences ofcommuting accidents are becoming a problem. Traffic safety

0.00

0
2017

2018

2019

0.39

0.40

1

1

2020

2021

(FY)

Number of accidents resulting in lost workdays
Lost workday injury frequency rate

education was therefore conducted online for all commuters
who commute by their own cars, and a comprehension test
was also conducted to improve traffic safety awareness.

Hirata Integrated Report 2022

41

Society

Product Safety/Quality Improvement
As the best partner for our customers, we will endeavor to deliver trustworthiness and satisfaction to thewhole world, being sure to embody various requests for quality, safety, and productivity.

Specific QMS Efforts

Quality Management• Utilization of PDCA quality management system• Implementation of ISO internal audits and quality

Having obtained ISO 9001 certification, the Company

management audits for our suppliers

carries out activities with PDCA in mind from order

Evaluating effectiveness and suitability through annual ISO

We have in place an ISO 9001-based quality control system that includes the promotion of measures to improve productacceptance, design/development, procurement,internal audits, the Company utilizes its QMS in its efforts

quality and safety.

manufacturing, assembly and shipping/packing processes

to prevent quality defects by providing corrective guidance

to continuous improvement based on the results ofas appropriate. We also conduct quality management

activities such as CS surveys and management reviews.

audits geared towards those suppliers with which the• Quality policy details• Quality Management Promotion Framework
Top management

We strive to improve quality, productivity, and customer satisfaction (CS)through continuous improvement of our quality management system (QMS).
(1) Provision of products and services that satisfy our customers• Improving technology and providing safe and highly productive products• Confirmation of contract details and sharing of information in documents• Establishment of system for handling complaints and thorough preventionof any recurrence• CS improvements(2) High-quality manufacturing• Reliability-ensuring designs based on theories and principles (reliability
engineering)• Reduction of quality risk through design reviews, verification, and validation• Reflection of product safety and Hirata Standard (Hirata internal standards)
in products• Product perfection improvements by inspection standard clarification• Thorough supplier and design change management• Improvements in management/enhancement activities and problemsolving capabilities using statistical management methods

Having established procedures in place for each

Company does business. Having built a system thatprocess and promoting standardization, the Company is

can guarantee the quality of each part incorporated inworking to stabilize quality and thereby prevent any risk ofour products, we are working to provide safer and more

a defect arising.

reliable products.

Chair of ISO Committee

Knowledge acquisition that leads to improvements in quality awareness andproduct reliability

Quality control managers

Office: Quality
Control Department(3) Establishment of standardization and commonality in high-mix. lowvolume production• Promotion of standardization• Promotion of commonality of parts• Promotion of unitization• Proactive development and management of products (mass produced
products)

ISO MonitoringTeam

We deliver trustworthiness and satisfaction to our customers. With
this in mind, we plan and implement a range of educational programs
that lead to improved quality awareness and product reliability. Product

ISO Committee: Division directors, Business
Unit general managers, divisional heads

safety education is provided by qualified safety assessors (Company
employees) by means of case studies. In fiscal 2021, we also held
seminars by outside lecturers on China’s GB standards and China
Compulsory Certification (CCC) systems as well as reliability education

Persons in charge of ISO management(Failure Mode & Effects Analysis [FMEA] basics).

In response to the large number of employee attending theseminars, we dispersed the venues to avoid crowding.

Educational Programs for Improving Quality and Reliability (FY2021 results)

Quality Management System (QMS)
Customers

Procurement Manufacture Veriﬁcation• Conceptual design • Design review (DR)• Actual design• Design veriﬁcation

Joint
inspection

Shipment• Test run adjustments• Prototype evaluation

Do: Sales / Design / Procurement / Manufacturing / Inspection
Top management

Clariﬁcation of
responsibilities
and authorities

Management resource
investments(human resources/
infrastructure work
environment)

QMS process corrections/preventions

Product realization corrections/preventions

Development of management organization

Plan

Action: Measure implementation

Management review

Quality policy (policy development =target management)

Customer satisfaction (CS) /Complaint information

DesignVarious performance data

Receiptof ordersInstallation• Concept design (design estimate)• Production technique proposal

Veriﬁcations

Product requirement
review

SE

Issue ofordersVeriﬁcations

ProposalsRequests
Sales

ISO internal audit
Achievement status of quality targets
Process implementation status
Analyses of complaints/defects
Analysis of customer information

Check: Analysis / Evaluation

Number of times
implemented

Number ofparticipants
109

Quality control (QC) basic education (ISO 9001, QC procedures)

4

Education on changes in management

1

10

Product safety basic training (mechanical safety, electrical safety, product risk assessment)

9288

Seminar on China’s GB standards and China Compulsory Certification (CCC) systems(outside lecturer)*

1

129

Reliability education (Failure Mode & Effects Analysis [FMEA] basics)

2100* Conducting education including Group companies

Improvement System That Reflects Customer Feedback
Listening to opinions and suggestions through all

Satisfaction weighted average score (5 points max.)
FY2020

customers, we also conduct company-wide CS surveys

FY2021every year. Based on these valuable opinions, we are

Product Evaluation

FY2019departments that have opportunities to interact with

5
4

Corporate
Evaluation

3

Evaluation of person
in charge (Sales)2

striving towards product improvements and strengthened

1service support.
Evaluation of person
in charge (Design)

Service
Evaluation

Continuous improvement
Technology
Evaluation

42

Hirata Integrated Report 2022

Evaluation of person
in charge (Manufacture)

Hirata Integrated Report 2022

43Society

Supply Chain Management
To remain a company that is trusted and chosen by all stakeholders, including its customers and suppliers, the Groupalso fulfills its corporate social responsibility (CSR) in its procurement activities. We will also share the Procurement
Policy with our suppliers and work on responsible procurement activities and continuous improvement in accordancewith the Hirata CSR Procurement Guidelines.
Procurement Policy(1) In compliance with laws and ethics(2) In a fair and just manner as an equal partner with our suppliers(3) That give due consideration to human rights concerns and the reduction of environmental impact in the selection of
suppliers and procured items

Business Continuity Plans
As a result of conducting a self-assessment of BCPs

In recent years, when serious natural disasters such as

in the supplier CSR procurement questionnaire, theirearthquakes and floods have been occurring frequently, we

implementation status was found to be an issue. Going

have been promptly confirming the damage situation withforward, we will promote improvements designed to raise

our suppliers to minimize the impact on our production

the level of implementation.

activities.

Establishment of supplier whistleblowing contact point (supplier helpline)

CSR Procurement Initiatives
In addition to conventional items, such as quality,
performance, price and delivery, when procuring products,
materials, and raw materials, the Company adds requirementsfrom the viewpoints of the status of the supplier’s responseto the environment, labor environment, human rights andother matters. In this way, we are working to improve while
promoting CSR throughout the supply chain.
We conducted a CSR procurement questionnairetargeting the suppliers in the top 70% in terms oftransaction value (top 100 companies in domestictransaction value; response rate: 100%).
We also obtained confirmation from 98 companies
that they were in agreement with our CSR Procurement
Guidelines.
The results of the questionnaire revealed that the
average score for the Business Continuity Plan (BCP),
which is regarded as an important item in the supply chain,
was 2.9 points, which was lower than the other items. We
also recognized understanding the calculation of Scope 3 asan issue for the future in reducing GHG emissions into theenvironment.

First of all, we would like to ascertain the current
situation and work together with our suppliers to improve
the level. We have set a goal of reducing to zero thenumber of suppliers with evaluation points of 2.5 points orless out of a maximum of 4.0 by 2024.
When promoting CSR procurement questionnaires in theyears to come, we will conduct regular evaluations of the top
80% of domestic suppliers in terms of transaction value.

Company’s Compliance Department) will conduct an

and in accordance with the strengthening of governance,internal investigation and take corrective and preventive

the Company set up a supplier helpline on April 1, 2022,

measures. Strictly protecting the confidentiality of reports,

and posted the point of contact on its website. Based

the Company will not take any retaliatory action withon the information provided, the helpline secretariat (theregard to them.

ReportingmethodWe have set up a dedicated point of contact on our external website

https://www.hirata.co.jp/en/contact/

Those subject
to reporting

Suppliers (purchasers of goods, software, utilities, equipment, etc. necessary for our production activities)

Post-report
handling

Promptly conducting a factual investigation of the reported case, necessary measures, such as an order tocease and desist or recurrence prevention, to be taken if non-compliance proven

Aggregated Results from CSR Procurement Questionnaire
Labor

Response to Conflict Minerals*

4.0
3.5

3.6 3.0

Code of Conduct

Health and Safety

2.5

3.6

3.5

2.0
1.5
1.0
0.5

2.9

BCP

3.2

3.1

Environment

3.2

With regard to conflict minerals, which are illegallyminerals, we provide any information that we know in

exploited and mined and are a factor causing humangood faith.

rights violations as well as labor and other problems,* Conflict minerals: The term refers to minerals, among them tantalum(Ta), tungsten (W), tin (Sn), gold (Au) and cobalt, produced in the
Democratic Republic of the Congo and neighboring countries,
which are regarded as a source of funding for armed groups that arecommitting serious human rights violations.

the Company is aware of and actively cooperates withinternational efforts to investigate and monitor their use.

Management system

EthicsProcurement Policy
Requests to Suppliers
CSR Procurement Guidelines

The CSR Procurement Guidelines were formulated with reference to the Responsible Business Alliance (RBA) Codeof Conduct Ver7.0. The Company formulated the Guidelines for the purpose of sustainable corporate activities
and the social development, to work together with our suppliers in adhering to the law on matters concerning theenvironment, the labor environment, and human rights, and to remain in compliance as well as to aim for sound andsustainable growth.

Policy well-known andunderstood among suppliersThis is a request to our suppliers to share the Company’s Procurement Policy and our CSR Procurement Guidelines.
We also ask our suppliers to take proactive measures.

Implementation of CSR
procurement questionnaires
Evaluation and feedback

Conducting questionnaire surveys of our suppliers concerning the status of their education with regard to the CSR
Procurement Guidelines and their requirements, we collect and analyze the responses we receive and provide
feedback. The questionnaire also includes a BCP survey. We are also planning to conduct an information security
survey.

Implementation of CSR
procurement audits

In response to the Revised Whistleblower Protection Act

Conducting on-site audits of our suppliers, we share the results with them and will ask them to make improvements,
to which we lend our support. We are planning to prepare audit materials in FY2022 and implement them fromFY2023.

In response to inquiries from customers relating to conflict

Respect for Human Rights
Based on its Sustainability Basic Policy, the Hirata Group has established a globally implemented human rights policy
to respect the basic human rights of all people involved in its businesses. Having established the human rights policy
consisting of the items listed below through a resolution of the Board of Directors, we apply it to all officers andemployees of our group while strengthening our efforts. We also ask for the understanding and cooperation of all ofour business partners, including our suppliers, with regard to our human rights initiatives.
Basic Approach to Human Rights
Complying with the laws and regulations applicable
to Japan and the countries and regions in which it
conducts business, the Hirata Group supports andrespects the Guiding Principles on Business and Human
Rights of the United Nations and other international
norms with regard to respect for human rights.

Human Rights Policy (Items only)(1) Prohibiting Forced Labor(2) Prohibiting Child Labor(3) Decent Working Hours(4) Adequate Wages andAllowances(5) Prohibiting Inhumane Treatment(6) Prohibiting Discrimination(7) Freedom of Association andRight to Collective Bargaining(8) Occupational Health and Safety

Realization of Sustainable Procurement

44

Hirata Integrated Report 2022

Hirata Integrated Report 2022

45

Governance

Hirata’s Corporate Governance
The Company aims to make everyone involved in Hirata content and to contribute to society throughtechnology. To achieve this, we believe that it is essential to build and effectively operate a management
system that enables transparent, fair, prompt, and resolute decision-making. We will thus work to strengthen
corporate governance as one of our most important tasks.

Governance Framework and Summary
Shareholders’ Meeting
Appointment/
Non-reappointment

Appointment/
Non-reappointment

Basic Stance
As a company that targets the global marketplace,

improve its corporate value.
From the standpoint that a company is an entity thatmanagement activities with an emphasis on corporate

bears public, public interest, and social responsibilities,

governance to fulfill its social responsibilities. Hirata is thus

Hirata believes that the maintenance of good relations

working to enhance its compliance system, continuouslywith all stakeholders will lead to improved shareholder

strengthen its business competitiveness, and further

value over the long term.

Changes to Corporate Governance

2006

Audit andSupervisory Board

Board of Directors

Hirata Corporation has promoted sound and effective

2005

Appointment/
Non-reappointment• Introduction of executive officer system• Management Meeting established

Nomination andCompensation
Advisory Committee

Directors

Reports

Audit and Supervisory
Board members

AuditsRepresentative Director, President

Cooperation(Decision-making and Management Oversight)

Reports

Appointment/
Non-reappointment

Sustainability
Promotion Committee

Supervision

Reports

Financial auditors

AuditsManagement Meeting

Risk Management
Committee

Executive Officers(Operational Execution)

Compliance
Committee

Business Headquarters /Administration Division /Subsidiaries

Reports

AuditsCooperation

Cooperation

Internal Audit Department• Stock listed on JASDAQ Securities Exchange
Independent
outside directors

2014• Appointed one independent outside director• Abolition of executive retirement benefits system

2016• Appointed two independent outside directors

2017• Stock market listing changed to First Section of Tokyo Stock Exchange• Establishment of independence standards for outside directors• Introduction of stock options• Began evaluations of Board of Directors’ effectiveness2018• Establishment of voluntary Nomination and Compensation Advisory Committee

2019• Shortened director term of office from two years to one year
• Independent outside directors to account for at least one third of those present in Board of Directors’ meetings

Body

Board of Directors

Internal directors

Independent outside Audit andSupervisory Board members

Nomination and Compensation
Advisory Committee

Outside Audit andSupervisory Board member

Audit and Supervisory Board

Chairperson

Composition

46

2021

• Policy decisions on executive compensation, etc.
• Introduction of performance-linked compensation system

2022• Moved to Tokyo Stock Exchange Prime Market• Appointed two female directors• Appointed one female Audit and Supervisory Board member• Skills matrix disclosure

Hirata Integrated Report 2022

Four members(Outside 1; independent outside members 3)
One independent outside Audit and(Internal 5; independent outside members 3) (Internal 1; independent outside members 2)
Supervisory Board member is female
Two independent outside directors are female One independent outside director is female

Eight members

Three members

Operational Status of Board of Directors, Discretionary Committees, and Audit
and Supervisory Board (FY2021)

Body

Record of
Meetings Heldin FY2021

Board of Directors

Nomination and Compensation
Advisory Committee

Audit and Supervisory Board

13 times

10 times

17 times

Average attendance rate: 99.3%(Directors and Audit and Supervisory
Board members)

Average attendance rate: 100%
(All committee members)

Average attendance rate: 98.5%(Audit and Supervisory Board members)

Main Themes• Medium-Term Management Plan
• Policy to reduce cross-shareholdings• Identification of materiality

Main Themes• Creation of skills matrix• Selection of director candidates• Determining of director compensation

Main Themes• Audit of operational status of Grouprisk management system• Audit of operational status of Group
compliance system

Hirata Integrated Report 2022

47

GovernanceEvaluations of Effectiveness of Board of Directors’ Meetings (FY2021)
To improve the effectiveness of its Board of Directors’ meetings, the Company has evaluations of their effectivenessconducted by a third-party organization. Based on the results from the evaluations, the issues are shared and countermeasures
discussed at Board of Directors’ meetings.
Method of
Evaluation
Main Evaluation
Question Items

Anonymous questionnaires and individual interviews for directors and Audit and Supervisory Board
members conducted by a third-party organization (Individual interviews held every other year)
Include composition, operation, discussions, and monitoring functions of the Board of Directors,
performance of directors, support system and training for directors/Audit and Supervisory Board
members, voluntary committee operations

Name

Corporate
management

Industryknowledge

Technology,
research anddevelopment

Global

●

●

●

●

●

●

Yuichiro Hirata
Shojiro Hirata
Yasuhiro Fujimoto
Shigeru Maeda
Masaru Kozaki
Satoru Ogawa
Tamami Koyama
Ryoko Ueda

Risk management

Finance andaccounting

●

●

●
●

●

●

●

●

●

●
●

ESG

●

●

●
●

●

●

Note: The above shows the knowledge, experience and capability particularly expected of each individual, and is not a complete list of all the expertisepossessed by the individuals.

Reference: Initiatives prior to FY2021

Appointment/Non-reappointment of Directors

These have included the formulation of medium-term management plans, responding to the revised Corporate Governance
Code, such as ESG management and a director skills matrix, and monitoring the operational status of the internal control
system. In addition to formulating and implementing an annual schedule for Board of Directors’ meeting agenda items thatincorporates priority issues, we have expanded the functions of the Board of Directors’ secretariat to include, for example, theproviding of support for outside directors.

• Nomination and Compensation Advisory Committee

Directors, which makes the decisions after receiving reports

The Company established the Nomination andfrom the Nomination and Compensation Advisory Committee

Compensation Advisory Committee as a voluntary advisoryon the basis of the candidates’ knowledge, experience,

body to the Board of Directors. The purpose of thisability, performance evaluations and other factors.

committee is to deliberate important matters, such as the• FY2021 Evaluation Results and Initiatives to Be Addressed
Main Issues

Initiatives to Be Addressed• Monitoring of medium-term management plan progress and• Formulation and follow-up of management strategies fordiscussions on human resource strategies to be incorporated
medium- to long-term improvement of corporate value,
strengthening of monitoring functions
into annual schedule of Board of Directors’ agenda items• Formulation of human resource strategies consistent with• Continuous reviews of Board of Directors’ meeting discussion
medium- to long-term strategies
standards• Optimization of Board of Directors’ meeting agenda items• Earlier provision of more accurate agenda items,• Strengthening of Board of Directors’ secretariat functions, etc. strengthening of secretariat functions such as support foroutside directors and training

Concerning the Audit and Supervisory Board member

nomination and compensation of directors and executive

candidates, after having obtained the consent of theofficers, and to thereby ensure the objectivity and

Audit and Supervisory Board, those with the knowledge,transparency of these matters and to further strengthen

experience, and skills necessary to perform their duties

the corporate governance system.

as corporate auditors will be selected as Audit andCommittee Chair: Yuichiro Hirata (Representative Director, President)
Committee members: Satoru Ogawa (Independent Outside Director),
Ryoko Ueda (Independent Outside Director)

Supervisory Board member candidates. Those candidates
to be proposed at the Annual General Meeting of
Shareholders are determined by resolution of the Board of
Directors.

• Appointment/Non-reappointment of Directors

If a director or executive officer breaks the law or acts

In addition to the above, the Nomination and Compensation Advisory Committee was consulted on previous matters, such

To ensure transparency and fairness in the nomination

in a manner contrary to the Articles of Incorporation oras the nomination and compensation of director candidates, and newly consulted concerning the size and composition of theof both director candidates and executive officers, theinternal regulations, or should it be recognized that there

Board of Directors and approaches to succession planning.

Nomination and Compensation Advisory Committee, in

is a difficulty to perform duties properly due to physicalBased on the results of the effectiveness evaluations and analyses of the status of compliance with the Corporate

which independent outside directors form the majority,

or mental breakdown or a lack of ability, in such cases

Governance Code, we will continue to make ongoing efforts to further improve the effectiveness of the Board of Directors indeliberates the criteria and policies for nominating thethe Board of Directors will consider dismissal after having

the years to come.

candidates as well as candidate nomination proposals. The

received a report from the Nomination and Compensation

results of those deliberations are reported to the Board ofAdvisory Committee.

Skills Matrix of the Company’s Directors
For the Board of Directors to fulfill its responsibilities of

Executive Training, Support System for Outside Directors“realizing sustainable growth” and “supervising businessexecution,” the Company has defined the key skills andWhen new directors and executive officers are appointed,

understanding of the Company by providing them withareas of experience required of its directors—corporate

they are provided with opportunities to attend training

information and explanations about Hirata and by visiting

management, industry knowledge, technology/researchsessions, including on compliance, that are geared toward

our production sites. We also assist outside officers

and development, global, risk management, finance andnewly appointed directors. The Company will also provide

in fulfilling their roles by holding preliminary briefings

accounting, and ESG—and aims to maintain a Board ofthem with opportunities to acquire the necessary knowledge

for them prior to Board of Directors’ meetings and by

Directors that is well-balanced in terms of its composition.

on an ongoing basis even after having taken office.

providing opportunities for interviews with key executive

We are also working to deepen outside directors’48

Hirata Integrated Report 2022

officers and employees.

Hirata Integrated Report 202249

GovernanceOutside Director’s Message
Executive Compensation• Executive Compensation Policy
The Company’s decision-making policy with regard to
executive compensation and associated matters is decided
upon by the Board of Directors. The main basic policies are
as follows:- To achieve sustainable growth and increase corporate value
over the medium to long term, directors’ compensation
shall involve a system that functions as an incentive and at
an appropriate level based on position and responsibility.
- Specifically, in addition to their basic compensation,
executive directors will receive executive bonuses andstock compensation as performance-linked compensation,
the ratios of which shall be approximately 1:0.5:0.3 (ifperformance indicator targets are achieved).
- Outside directors who are primarily responsible forsupervisory functions shall receive only basic compensation.
• Process for Determining Compensation
The Board of Directors entrusts the representative director
and president with specific decisions regarding individualcompensation for directors.
To ensure that delegated authority is properly exercised,
the Board of Directors consults with the Nomination andCompensation Advisory Committee on the drafting ofindividual compensation amounts. That report having beenobtained, the representative director and president makes

decisions based on its content.
• Details of Performance-linked Compensation
Intended to raise awareness of improving performanceeach fiscal year, the bonuses in performance-linked
compensation shall be regarded as cash compensationthat reflects performance indicators. Such bonuses arecalculated in accordance with the level of achievement of
the consolidated ROE targets for each fiscal year.
By sharing the profits and the risks of stock pricefluctuations with shareholders, stock compensation isintended to raise awareness of contributing to improving
medium- to long-term business performance and increasing
corporate value. Stock compensation shall be paid via astock delivery trust mechanism. For each fiscal year, points
are awarded according to position and length of tenure of
office as well as according to the level of achievement of
the target values for evaluation indicators (consolidated ROE
and consolidated operating income ratio) in the settlementof accounts. At the time of retirement, stock equivalent topoints shall be delivered.
The performance indicators and their target values
for the performance-linked compensation are reviewed
based on recommendations from the Nomination andCompensation Advisory Committee depending on changes
in the business environment and other factors.

• Composition of Executive Compensation

1

0.8

：

Performance-linked compensation

Basic compensation

Executive Director

Basic compensation* In the event that performanceindicator targets have beenachieved

Performance-linked bonus

Performance-linked
compensation

Short-term incentive

Medium- tolong-term incentive

0.5

：

0.3

Fixed compensation

Outside director

Basic compensation• Executive Compensation List (FY2021)

Basic compensation

Stock delivery trust

Directors(excluding outside directors)

255,719

164,800

Audit and Supervisory
Board members(excluding outside Audit andSupervisory Board members)—

78,500Outside directors

50

Total amount by type of compensation, etc. (Thousands of yen)

Total amount ofcompensation(Thousands of yen)

Director classification

Hirata Integrated Report 2022

Bonus

Of the items on theleft, non-monetarycompensation, etc.

Number of eligible
directors

36,13754,782

36,137

6

—

—

—

—

78,500

—

—

—

—

8

While handing down Hirata
Corporation’s DNA, I willassist further improvements
in profitability and in theGroup’s growth.
Satoru Ogawa
Outside Director

Looking Back on First Year after Appointment
More than a year has passed since I was appointed as
an outside director. Although there were many remotemeetings due to the COVID-19 pandemic exactly at thattime, I have recently been able to visit various offices
and meet face-to-face with employees to ascertain thesituation on the spot.
Looking once again at Hirata Corporation, besides theenthusiasm for manufacturing conveyed from each andemployee, I can sense the Company’s strength as a oneof-a-kind production equipment system integrator. Basedon my experience so far, I have gained the impressionthat makes me ask myself the question “Would it not be
possible to secure higher profitability?” I recognize that
improving profitability for further corporate growth is an
issue, and I have been saying to all of Hirata’s employees,“Let's make more money.”
To Further Improve Corporate ValueAt Board of Directors’ meetings we are discussing ideas
for further growth in light of the booming markets in the
EV and semiconductor fields, but I think it would be niceto have franker exchanges of opinions. It is also necessary
to discuss the formulation of business strategies that can
improve profitability.
One of the most important issues for management
is sustainability, in other words, the pursuit of business
continuity. The necessary tools for Hirata to havesurvived 100 to 200 years from now are the formulationof visions and long-term strategies. To achieve these,
we must further improve the quality and quantity of theManagement Meetings and Board of Directors’ meetings.
In addition to monthly regular and special meetings, forexample, it may be effective to have a training camp withall officers and think about these matters all at one time.

Governance System and Board of Directors’Management
Hirata Corporation’s governance system is managed ina well-balanced manner, with business execution andoversight checking each other. Drawing on my experiencein a global company and my track record in corporate
management, I provide independent oversight and advice
from both monitoring and managing perspectives.
As part of that, I am also a member of the Nomination
and Compensation Advisory Committee. In June 2022,
Ms. Tamami Koyama, who has extensive experience inmanufacturing and is familiar with ESG, and Ms. Ryoko
Ueda, who has a background in finance and specializes ingovernance and ESG, joined the outside directors. Thus
the composition of the Board of Directors has become
more diverse in terms of gender and knowledge. However,I believe it is necessary to continue to consider the skills
matrix for the sustainable growth of the Company.
With regard to the operation of the Board of Directors,
I hope that the participation of newly appointed internaland outside directors will allow management supportand monitoring from new perspectives, including
business models, beyond the conventional concept ofmanufacturing.
To Our Stakeholders
Hirata Corporation’s DNA is to hand down our founder’sspirit, to treat our employees as part of the family, andalways to think deeply about what would make theCompany better, people better, and what makes everyone
content. In addition to handing down this tradition, it is also
my intention to provide advice to management. In the hopethat all of the Company’s stakeholders will gain a deeper
understanding of Hirata Corporation, which is the “only oneof its kind in the world,” I will endeavor to further improve
profitability and support the Group’s growth.

Hirata Integrated Report 2022

51

Governance

List of Directors(as at June 24, 2022)

Directors(Note) Extracts from the reasons for selection are provided.

Yuichiro Hirata

Shojiro Hirata

Yasuhiro Fujimoto

Shigeru Maeda

Representative Director

Director

Director

Director

As Representative Director and President, has
led the management of the Company and theGroup and made a meaningful contribution to thedevelopment of its businesses.

Has made a meaningful contribution toenhancing the Chinese business, developing theCompany’s device business and enhancing its
procurement function, through his managementof a Chinese subsidiary and the operation of thebusiness and procurement divisions.

Familiar with accounting, IR and public relations,is currently leading the promotion of corporate
governance, the improvement of the internal
control system, and the implementation of SDGs.

Having previously served as manager mainlyof automobile sector departments as well as
manager of the business promotion division for
the entire Company, had more recently been
fulfilling his role in supervising overall business
management.

Masaru Kozaki

Satoru Ogawa

Tamami Koyama

Ryoko Ueda

Director

Outside Director Outside Independent officer

Outside Director Outside Independent officer

Outside Director Outside Independent officer

In addition to having served in the capacity of
the representative of the local subsidiary in
Singapore for six years, has made a meaningful
contribution to the business development of theGroup globally by, for example, being in chargeof affiliate companies.

In addition to extensive experience in theformulation of information strategies andcorporate management at other companies,
possesses sophisticated insights into
manufacturing and corporate management. Has
served as an Outside Director of the Company
since 2021.

Ms. Koyama possesses sophisticated insights
into technology, research and development
and ESG acquired through her experiencein the organic EL field in another company
and as director in the launch of ESG-relatedorganizations. Ms. Koyama has served as an
Outside Director of the Company since 2022.

Ms. Ueda possesses extensive experience andsophisticated insights as an expert on corporate
governance and ESG. She has served as an
Outside Director of the Company since 2022.

Audit and Supervisory Board Members
Naokuni Motoda

Ken Imamura

Yasuhiko Endo

Asako Okabe

Full-time Audit and Supervisory
Board Member Outside

Audit and Supervisory Board
Member Outside Independent officer

Audit and Supervisory Board
Member Outside Independent officer

Audit and Supervisory Board
Member Outside Independent officer

Possesses specialized knowledge and extensive
experience as a director and executive officer ofa financial institution as well as a representative
director of a general corporation. Has served as
the full-time auditor on the Company’s Audit andSupervisory Board since 2015.

Possesses specialized knowledge and experience
as a lawyer handling corporate legal affairs. Has
served as an Outside Auditor for the Company
since 2015.

Possesses specialized knowledge as a Certified
Fraud Examiner (CFE) and a wealth of experienceand insight regarding stocks and management.
Has served as an outside auditor for theCompany since 2018.

As a certified public accountant (CPA) possessing
specialized knowledge and extensive experiencein corporate accounting, Ms. Okabe has served
as an outside member of the Company’s Audit
and Supervisory Board since 2022.

Executive Officers
Yuichiro Hirata

Shojiro Hirata

Yasuhiro Fujimoto

Shigeru Maeda

Masaru Kozaki

President andChief Executive Officer

Managing
Executive Officer

Managing
Executive Officer

Executive Officer

Executive Officer

Division Director, Procurement Division,
Quality Control

Division Director, Administration
Division, Internal Controls, SDGs

Division Director, Business
Headquarters

Division Director, Global Business
Headquarters

Yoshitaka Taniguchi

Masahiro Koizumi

Takenori Hirakawa

Michinobu Shuto

Shigeharu Nishimura

Executive Officer

Executive Officer

Executive Officer

Executive Officer

Executive Officer

Executive General Manager,#2 Kumamoto Business Divisionin #2 Business Unit

Executive General Manager,#2 Business Unit,
Kansai Business Division

Executive General Manager,#3 Business Unit,#2 Equipment Business Division*

Administration Division,
Corporate Planning, IT Planning,
Investor Relations & Public Relations,
Secretariat

Division Director, Research andDevelopment Headquarters*

Kazuhiro Toda

Toshiyuki Matsuzaki

Hideki Ninomiya

Jo Yoneda

Executive Officer

Executive Officer

Executive Officer

Executive Officer

Executive General Manager,#4 Business Unit,
Device Center*

Executive General Manager,#1 Business Unit

Administration Division,
Deputy Division Director,
Administration Division,
Legal, Intellectual Property,
Compliance, Accounting

Administration Division,
General Affairs, Human Resources

Front row, from left

①Asako Okabe, ②Tamami Koyama, ③Shojiro Hirata, ④Yuichiro Hirata, ⑤Yasuhiro Fujimoto,⑥Ryoko Ueda
Back row, from left

⑦Naokuni Motoda, ⑧Yasuhiko Endo, ⑨Ken Imamura, ⑩Satoru Ogawa, ⑪Shigeru Maeda,⑫Masaru Kozaki

⑦
①

⑧
②

⑨
③

⑩
④

⑪
⑤

⑫
⑥

* Following management changes on October 1, 2022.

52

Hirata Integrated Report 2022

Hirata Integrated Report 2022

53

GovernanceGroup Governance
The Hirata Group consists of Hirata Corporation and
12 Group companies. Based on three businesses—
automotive- and semiconductor-related equipment andother automatic labor-saving equipment—the Group isdeveloping its businesses at bases in North America,
Europe, Southeast Asia, China and Taiwan.
Having established a Basic Policy for Establishing an
Internal Control System, the Board of Directors is working
to strengthen Group controls.
In addition to monitoring the execution of duties bymanagement at Group companies, directors and Audit andSupervisory Board members dispatched or appointed by
the Company are working to strengthen Group controls.
They ensure that the Company is involved in important
decision-making and that, on the basis of affiliatedcompany management regulations, serious matters suchas compliance violations are reported to the Company.
Forming part of our efforts to strengthen risk
management and promote compliance, the most recent(from fiscal 2020 onwards) major initiatives in Group

Compliance
control have included: the setting up a whistleblower
hotline for overseas Group companies; the issuing of a
No Harassment Declaration, the establishment of a Risk
Management Committee; and the conducting of reviewsof our credit management systems and rules.
To enhance the synergies within the entire Group,
we hold Group company debriefings on a regular basis(every quarter for domestic affiliates, every six months foroverseas affiliates), share business strategies and issues,
while monitoring performance as appropriate.
In terms of audits, audits of Group companies are
conducted by Audit and Supervisory Board members, and
we also regularly hold Group Company Auditor Liaison
Meetings. We are increasing the effectiveness of auditsof the corporate group by sharing the audit status and riskrelated matters of each Group company. The Internal Audit
Department also conducts audits of Group companies ona regular basis and reports to the Board of Directors andthe Audit and Supervisory Board in a timely manner.

(2) Verification of Crossshareholding Suitability

In working to maintain medium- tolong-term relationships and expand
transactions with its business partners,
the Company’s basic policy is to hold
only those stocks that contribute to theenhancement of its corporate value.

In line with the basic policy, verificationof aspects such as the benefits andrisks associated with the holdings
and whether to continue with themis undertaken at Board of Directors’
meetings. The Company shall consider
selling shareholdings that are judged tohave low rationality.

■ Fundamental Principles
Because of our global nature, we at Hirata Corporation as well as each of our Group companies abide by a set of establishedrules we call our Code of Conduct. We strive for total compliance with the Code to effectuate commercial endeavors that areboth fair and transparent always in accordance with legal statutes both domestically and abroad along with societal norms andin-house regulations.

■ Code of Conduct
Based on our business principles, we at Hirata are fully aware of our mission and role as a corporate entity with respect to ourvalued customers, shareholders, business partners, employees as well as the members of our local communities. To make acontribution to society at large, the following Code of Conduct is applied to all employees of every company in the Hirata Group
with every single employee having the responsibility of maintaining and improving upon them.
1. Abiding by legal statutes and regulations
2. Engaging in fair and just business3. Disclosure of corporate information

4. Proper management and utilization of
corporate assets
5. Contribution to society

Note: For more details on each of these items please visit:

6. Respecting the individual
7. Controlling confidential information
8. Duty of practice and accountability

https://www.hirata.co.jp/en/corporate/csr/compliance

Compliance System

Cross-shareholdings(1) Approach to Cross-shareholdings

Compliance Charter(3) Criteria for Exercising Voting
Rights Relating toCross-shareholdings
With regard to the voting rights
relating to the shareholdings, thesewill be exercised in an appropriatemanner with the sustainable growth of
the issuing company as an evaluation
criterion and on the premise that they
will contribute to the improvement of
the Company’s corporate value.

• Compliance Promotion Framework
Having established a Compliance Committee that reports
to the Board of Directors, the Company formulates
compliance measures and, should a compliance violationarise, conducts investigations and analyses, issues ceaseand desist orders, and formulates measures to prevent a
recurrence based on Board of Directors’ resolutions andinstructions from the Representative Director. Including theimplementation status of each measure and the operational
status of the internal whistleblowing system, reports arealso made to the Board of Directors.
• Efforts to Strengthen ComplianceTraining sessions on compliance, which for example
cover the Act against Delay in Payment of Subcontract
Proceeds, Etc. to Subcontractors, security export controls,
and harassment, are conducted as appropriate for Group
employees.
Having conducted compliance fact-finding surveys since
fiscal 2020, the Company is continuing to conduct a variety

of measures and education based on the survey results.
The Company has also set up a compliance webpage on its
intranet, on which educational and other materials based on
violation case studies are regularly posted for employees.
Board of Directors
Instructions

Reports

Compliance Committee
Committee Chair(Representative Director, President)

Audit and Supervisory
Board members

Committee Vice Chair(Can attend Committee meetings andstate their opinions)(Person in charge of risk management)

Full-time Committee Members
Non-permanent Committee Members
Compliance Committee Secretariat
Investigations/Cease andDesist Orders/Guidance

Reports

All Departments
Divisional compliance promotion managers

Whistleblowing System (Compliance Hotlines)
The Company has established a whistleblowing systemthat enables reports from domestic and overseas Group
company employees and suppliers. In addition to an internal
hotline that accepts reports, we have put in place anexternal point of contact that enables anonymous reportingin the local language, and a supplier hotline that can beused by suppliers. Each hotline has a system that complies
with the amended Whistleblower Protection Act, and the54

Hirata Integrated Report 2022

helpline operation regulations stipulate confidentiality ofwhistleblower information and prohibit disadvantageous
treatment of a whistleblower on the grounds of having
passed information.
Processed in accordance with regulations, any suchinformation received is reported to the Board of Directors
via the Compliance Committee secretariat.

Hirata Integrated Report 2022

55

GovernanceRisk Management
Risk Management System

Business Continuity Plan (BCP)
Based on its BCP policy, the Company is working toprevent, defend itself against and mitigate risks. In theevent of an emergency, the BCP organization will be central
to the initial response and business continuity/recovery inaccordance with the flowchart for implementing the BCP.

Board of Directors
Instructions

Reports/Proposals

Risk Management Committee
Committee Chair(Representative Director, President)

Audit and Supervisory
Board members

Committee Vice Chair(Can attend Committee meetings andstate their opinions)(Person in charge of risk management)

Full-time Committee Members
Risk Management Committee Secretariat
Reports

All Departments

Ascertaining of/Responding to Risk
The Company has created a Hirata Risk Map that broadlyclassifies 70 risk items into four categories: management
process risks, which include governance; external factor
risks such as market changes; indirect business processrisks that cover human resources and IT systems; anddirect business process risks related to business activities
such as production. Based on the Hirata Risk Map, theCompany has established the main department in chargeof each risk item, and put in place a mechanism whereby
the information collected on assumed and incurred risks

Reports

Persons in charge ofIT security

Matters of concern Aggregation of
informationthat may affectmanagement/
Risks that havealready emerged

External factor risks
Risks from external inﬂuencessuch as natural disasters

Direct business process risks
Risks directly related to businessactivities such as production
and design

Discusses risk mitigation/
recurrence prevention

Reports

Compliance Committee
Compliance
Committee
Secretariat

Risk Management
Committee

IT security policy, rules,
procedures and monitoring

IT Management
Department

IT Systems Managers

IT Managers

AuditsAll Departments

Handling ofrequests Formulation and implementationof measures to mitigate
risk/prevent recurrence

Reports

Incident reports

System Management
Department

Deliberations aimed at
resolving compliance violations

Management Meeting

Indirect business process risks
Risks related to management
infrastructure such as humanresources and legal affairs

Risk Management
Committee
Secretariat

Board of Directors

All Departments

Risk Management Committee

Board of Directors

PolicyExamines risk-handling departments based on
Hirata Risk Map
Determines responses in accordance with nature of
risk/circumstances

Management process risks
Risks related to fundamental
management such as governance

Hirata Integrated Report 2022

Management Meeting

IT Security Committee

Committee meetings held should
Company-wide response be required

Contact customers, suppliers andall persons concerned

Support clients and Support employees
partner companies
and businessresources
Adjust and restore deals
Administer emergency
aid and restoration

Handleﬁnancial liabilities
Ensure, pay and ﬁnanceworking capital

Restoration and reconstruction

IT Security

Risk Integration Department

Hirata Risk Map

56

is aggregated by the Risk Integration Department that has
been placed in overall charge.
From the aggregated risk information, the Risk
Integration Department comprehensively reviews factorsthat include the nature of the risk, the likely magnitudeof its impact, and the level of priority. Deliberations are
conducted by the Risk Management Committee andCompliance Committee, and reports made to the Board of
Directors as necessary.

Initial response, BCP operations
Establish task force, conﬁrm conditions of damage and personnel’s safety

Draft policy for continued operationof core business, establish system
From few days to few
months after occurrence

Monitoring

Occurrence of emergency

Activities to assist
affected region/area

Non-permanent Committee Members• BCP Policy
To as far as possible avoid unexpected disasters or
problems that could endanger business continuity, we plan
to continue business by having extracted risks in advance,and preventing, defending ourselves against and mitigating
those risks, and to restore business operations in a shortperiod of time in emergency situations.
• Give top priority to the lives and safety of employees andtheir families.
• Minimize any negative impact on our customers’
businesses.
• Assist our stakeholders.
We review our Business Continuity Plan on a regularbasis for continuous improvement.

• Flowchart for Implementing BCP
From day of occurrence

To deal with events that may interfere with the achievementof its business goals or hamper sustainable management,
the Company has established a Risk Management
Committee that reports to the Board of Directors.
Headed by the Chief Risk Officer (CRO), company-widerisk management is carried out in accordance with theCompany’s Risk Management Regulations. The Committee
formulates and implements measures to prevent theoccurrence or recurrence of risk and monitors risks basedon information collected from all departments.
The Internal Audit Department verifies theimplementation status of the initiatives that have beenformulated and implemented.

Internal audits

IT Security Management
To protect information and information assets, including IT
equipment, from threats such as leakage and damage as well as
to conduct its business activities safely and securely, the Company
established an IT security basic policy and formulated IT security
management regulations.
To act as a management system, we have established an
IT Security Committee while reviewing policies and regulations,conducting risk analysis, and monitoring IT security measures,
including those of Group companies and the supply chain. In theevent of a security incident, we form a response team in accordancewith set procedures so that we can respond swiftly.

Efforts to Strengthen IT Security
To ensure the safety of the IT assets handled by the Company, we
have implemented a raft of measures from both system and humanresource perspectives. As an example of one such system, we haveintroduced an Endpoint Detection and Response (EDR) service toquickly implement appropriate countermeasures against new threats,such as previously unknown computer viruses and targeted threat
emails. We are working to improve IT security literacy by providing
our employees with IT security education and targeted threat email
training.

Hirata Integrated Report 2022

57

Data Section: Financial/Non-financial Principal Data

Financial Data
Item

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

Net sales(Millions of yen)

47,622

38,14647,12952,14553,04880,542

94,16377,302

65,612

65,25567,087

Operating profit(Millions of yen)

1,337

450

1,723

2,123

2,924

8,247

9,371

6,249

2,736

4,995

3,856

Profit before income taxes(Millions of yen)

1,260

501

1,640

1,935

2,734

8,400

9,242

6,215

2,881

5,169

4,266

Profit attributable to owners of parent(Millions of yen)

489

284

840

946

1,713

5,891

6,666

4,637

1,744

4,075

2,682

Net assets(Millions of yen)

17,66818,392

19,194

21,864

21,58427,571

46,582

46,61046,99351,99954,938

Total assets(Millions of yen)

54,52853,63258,352

61,79859,681

88,246

95,33090,57385,40992,794

99,485(Times)

1.07

1.06

1.17

0.91

0.81

0.95

0.46

0.41

0.31

0.36

0.44

D/E ratio
Cash flows from operating activities(Millions of yen)

943

(643)

959

3,704

2,651

(5,862)(1,932)

10,5798,094

690(3,444)

Cash flows from investing activities(Millions of yen)(740)

(1,018)

(480)

(402)

(872)

(1,445)(4,425)(1,994)(2,629)(2,378)(1,082)

Cash flows from financing activities(Millions of yen)

(540)

(679)

2,387

(2,816)(3,549)

8,152

6,990

(6,002)(5,719)

3,536

4,150

R&D expenses(Millions of yen)

935

596

768

449

601

677

784

1,162

1,005

866

1,020

Capital expenditures(Millions of yen)

857

1,238

661

790

1,047

2,090

2,397

4,135

2,580

3,160

1,464

Depreciation & amortization(Millions of yen)

902

910

989

951

920

971

1,080

1,198

1,225

1,453

1,478

Basic earnings per share

(Yen)

46.59

27.12

80.86

91.19

171.13624.39640.73440.89168.15392.70258.42

Dividends per share

(Yen)

15.00

12.50

12.50

15.00

30.00

100.00125.00125.00

40.00

65.00

65.00

Consolidated dividend ratio

(%)

32.2

46.1

15.5

16.4

17.5

16.0

19.5

28.4

23.8

16.6

25.2

Ratio of operating profit

(%)

2.8

1.2

3.7

4.1

5.5

10.2

10.0

8.1

4.2

7.7

5.7

ROE

(%)

5.6

1.6

4.5

4.7

8.0

24.3

18.2

10.1

3.8

8.3

5.1

ROA

(%)

0.9

0.5

1.5

1.6

2.8

8.0

7.3

5.0

2.0

4.6

2.8

Equity-to-asset ratio

(%)

32.1

34.0

32.5

34.9

35.6

30.9

48.3

50.9

54.4

55.5

54.8

1 The Company applied the Partial Amendments to Accounting Standard for Tax Effect Accounting (Accounting Standards Board of Japan [ASBJ] Statement
No. 28, issued on February 16, 2018) from the beginning of 2018, and the main management indicators, etc. relating to fiscal 2017 are those after the
retroactive application of the said accounting standard.
2 The Company applied the Accounting Standard for Revenue Recognition from fiscal 2021.

Non-financial Data
CO2 emissions (t-CO2)

Industrial waste outputs (t)

8,111

74

6,860
5,797

6,376

490

2018

486

75

77

77

Total training cost (Millions of yen)
79

46.8

456

2019

2020

2021

(FY)

2017

2018

2019

2020

2021

49.1

(FY)

2017

2018

2019

2020

2021

(FY)

2017

47.6
32.5

32.0

381

4,068

2017

Salary gap between men and women (%)*

675

2018

2019

2020

2021

(FY)

* Ratio of average salary for women when men’s average salary (annual income)taken as base of 100

Average length of service by gender (Years)

Employee turnover rate (%)

20.4
19.5

19.7
18.9

2017

2018

Men Average length of service

Hirata Integrated Report 2022

19.3 19.4

19.3

19.0
18.3

58

Total social contribution expenditure (Millions of yen)

2.1

2019

18.6

2020

2021

(FY)

2.2

Ratio of outside directors on Board (%)

117.9

40
33

1.5

1.4

2017

2.1

2018

2019

2020

2021

(FY)

2017

1.0

4.7

2018

2019

11.7
2020

17

17

2017

2018

30

3.6
2021

(FY)

2019

2020

2021

(FY)

Women Average length of service

Hirata Integrated Report 2022

59

Data Section: Global Network

Hirata’s customer base extends to over 40 countries around the world, including Japan. We havenine global subsidiaries in North America, Europe, Southeast Asia, China, and Taiwan. We canprovide quick, flexible response to any inquiries for new business as well as any support, maintenanceor upgrade requests. We are capable of providing production systems that meet the requirements
and manufacturing philosophies of our customers anywhere in the world. We also have theknowledge necessary to take into account regional issues such as safety and local labor practices.

Headquarters/Kumamoto plant• Domestic Branches

Hirata Engineering Europe GmbH

Hirata Corporation of America Detroit (New Hudson) office
Hirata Corporation of America Indianapolis office

Headquarters/
Kumamoto plant

Kumamoto
east plantEst.1964

Est.1988

Kusuno plant

Shichijo plantEst.1984

Est.2008

Kanto plantKansai plantEst.1968

Est.1981

Tokyo office

Hirata Automated Machinery (Shanghai) Co., Ltd.

Est.2016

Hirata TSUSHO (Shanghai) Co., Ltd.
Hirata Engineering S.A.de C.V
Taiwan Hirata Corporation

Kanto plant

Hirata Engineering (Thailand) Co., Ltd.

Tokyo office

Hirata FA Engineering (M) Sdn. Bhd.
Kansai plant
Hirata FA Engineering (S) Pte. Ltd.
Headquarters/Kumamoto plant
Kumamoto east plant
Kusuno plant
Shichijo plant• Subsidiaries
EuropeSoutheast Asia

China, Taiwan

North America

Japan

Hirata Engineering
Europe GmbH (Germany)

Hirata FA Engineering (S)Pte. Ltd. (Singapore)

Hirata Automated Machinery(Shanghai) Co., Ltd. (China)

Hirata Corporation of America(USA)

Taihei Technos Co., Ltd.

Est.1993
https://www.hirata.de/Est.1991
https://www.hirata.com.sg/

Est.2006
http://www.hirata-cn.com

Est.1980

Hirata Engineering (Thailand)Co., Ltd. (Thailand)

Hirata TSUSHO (Shanghai)Co., Ltd. (China)

Trinity Inc.

Est.2004
https://www.smri.asia/en/hirata/

Est.1999
http://www.hirata-hts.com

Est.1986
https://www.3inc.jp

Est.1980
http://www.taiheitechnos.co.jp/

Indianapolis

Detroit (New Hudson)

Hirata FA Engineering (M)Sdn. Bhd. (Malaysia)
Est.2012

60

Hirata Integrated Report 2022

Taiwan Hirata Corporation (Taiwan)
Est.2006
https://www.hirata.com.tw/en

Hirata Engineering
S.A.de C.V (Mexico)
Est.2000

Hirata Field Engineering Co., Ltd.
Est.1999
https://hirata-fe.com/en/

Hirata Integrated Report 2022

61

Data Section: Company Profile/Stock Status

Company Profile (as at March 31, 2022)

Stock Status (as at March 31, 2022)• Distribution of Shares by Shareholder• Stock information
Company Name

Hirata Corporation

Headquarters

111 Hitotsugi, Ueki, Kita, Kumamoto, 861-0198 Japan

Representatives

Yuichiro Hirata, President

Date EstablishedDec. 29, 1951

Fields of business

Manufacture and sales of various manufacturing line systems,
industrial robot and logistic equipment

Capital2,633 million yen

Employees

Consolidated 2,233
Non-Consolidated 1,350

Accounts Closed

Mar. 31

Stock Exchange
Listings

Tokyo Stock Exchange Prime Market(from April 4, 2022)

Authorized Number of Shares

37,000,000 shares

Issued Number of Shares

10,756,090 shares

Number of Shareholders

10,731• Domestic branches

Name/Company Name

The Master Trust Bank of Japan, Ltd.
1,069,900(Trust Account)

10.24

SMC Corporation

500,000

4.79

Higo Bank, Ltd.

456,000

4.37

STATE STREET BANK AND TRUSTCOMPANY 505025

455,400

4.36

Custody Bank of Japan(Trust Account)422,600

4.05

Mizuho Trust & Banking Co., Ltd.
Securities management trust 0700096

400,000

3.83

Yuichiro Hirata

291,600

2.79

Kanto plant

Kumamoto east plantKansai plant

NIKKON Holdings Co., Ltd.

272,400

2.61

Tokyo office

Hirata Corporation Employees
Stockholdings

265,410

2.54

SANYO DENKI CO., LTD.

192,900

1.85

Kumamoto east plant

Shichijo plant

Other JapaneseCompanies
12.1%

Number of Percentage ofShares Held Shares Held
(Shares)(%)

Headquarters/Kumamoto plant

Kusuno plantForeign Investors
14.7%• Major Shareholders
Headquarters/Kumamoto plant

Individuals and Others
39.0%

Treasury Stock
2.9%

Securities Companies
3.1%
Financial Institutions
28.2%• Distribution of Shares by Number of Shares
1–999 shares
15.4%
100,000 or more shares
57.5%

1,000–4,999 shares
9.0%
5,000–9,999 shares
2.8%
10,000–49,999 shares
8.2%
50,000–99,999 shares
7.1%

Note: In addition to the above, the Company holds 310,711 treasury
shares. The shareholding ratios are calculated after deducting
treasury shares.

• Stock price/trading volume (In the months April 2018 to March 2022)• Subsidiaries(Yen)
12,000Taihei Technos Co., Ltd.
Trinity Inc.

Kanto plant

10,0008,000

Hirata Field Engineering Co., Ltd.

6,000

Hirata Corporation of America (USA)

4,000

Hirata Engineering S.A.de C.V (Mexico)

2,000

Hirata Engineering Europe GmbH (Germany)0

Hirata FA Engineering (S) Pte. Ltd. (Singapore)(Shares)
5,000,000

Hirata Engineering (Thailand) Co., Ltd. (Thailand)

4,000,000

Hirata FA Engineering (M) Sdn. Bhd. (Malaysia)

3,000,000

Hirata Automated Machinery (Shanghai) Co., Ltd. (China)

2,000,000

Hirata TSUSHO (Shanghai) Co., Ltd. (China)
Taiwan Hirata Corporation (Taiwan)

1,000,000

Kansai plant
0
2018
Apr.

62

Hirata Integrated Report 2022

2019
Jan.

2020
Jan.

2021
Jan.

2022
Jan.

Hirata Integrated Report 2022

63

Hirata Corporation Integrated Report 2022

https://www.hirata.co.jp/en/

Cover Design
Representing the abundant water resources on
which Kumamoto Prefecture prides itself, the motif
features the pretty purple flowers of the gentians(the Kumamoto prefectural flower) that bloom on
the Aso grasslands.

TH2303-E200OB01