Integrated Report 2023
The Global Production Engineering Company

Mission Statement

We courageously pursue technical innovation while contributing to thebetterment of mankind, development of individuals and enhancement ofour company’s capabilities.
Management Philosophy
HirataBrings out the best in every person.
Brings out the best in every person is the idea that everyone has some kind of ability, and that there are jobs and places
where they can play active roles. Also, even if the work cannot be done alone, the idea is that if we can work together asa group, we can produce great results.

Challenges technical innovation.
Every time a customer's new product is released into society, that product is giving rise to innovative technologies.
We have been continuing to innovate to meet the demands of our customers.		
Continuing to face the challenges of innovative technologies that could not previously be created will contribute to thedevelopment of society, while we continue to grow as a world-leading technological group.

Respects humanity.
At the root of our Group’s philosophy of respect for humanity is the desire to free people from mundane tasks.
We believe that a world in which people are able to devote themselves to creative work for the very reason that only they
are able to carry out that work can provide creative products and services to society.

Opens the door to a creative life.
We are a company that enriches the lives of individuals through their work for the Hirata Group.
Through your work around the world, you will open up the door to your own creative life by broadening your personal
perspective, improving your personal abilities, and gaining numerous opportunities.

Contributes to society.
We consider a company to be a public entity of society.
A company, we have as our goal to always strive to contribute to the development of asustainable society, and our corporate activities contribute to therealization of a prosperous society.

Makes its customers successful.
Making our customers successful forms part of our philosophy of valuing
everyone involved in our Group. Valuing all the people involved in our Group,
as a company we will continue to grow together with them.

Editorial Policy
Hirata Corporation has been publishing an integrated report intended for all
stakeholders, including shareholders and investors, since 2022. Positioned as acommunication tool, the purpose of the integrated report is to convey informationon our initiatives for sustained corporate value enhancement to our stakeholders in acomprehensive manner based on integrated thinking, from both a financial perspective
and a non-financial perspective, including ESG. The following guidelines were referenced
during the creation of this report: Guidance for Collaborative Value Creation from
the Ministry of Economy, Trade and Industry of Japan (METI), International Integrated
Reporting Framework from the International Integrated Reporting Council (IIRC), IFRS
Sustainability Disclosure Standards from the International Financial Reporting Standards
Foundation (IFRS), and the GRI Standards from the Global Reporting Initiative (GRI).

Target Period
Fiscal 2022 (from April 2022 to March 2023)
However, some of the Company’s activities prior to and after the target period are also
included in the report.
Scope
In principle, Hirata Corporation and its subsidiaries. When data pertains to Hirata
Corporation alone, a note to that effect is provided.
Publication Date
December 2023
Forward-Looking Statements and Other Cautionary Notes
Statements regarding the future of the Company mentioned in this report are basedon information that was currently available at the time of its compilation. Since there
are a number of external factors that could affect our business performance, suchas the global economy, exchange rate fluctuations, industry market conditions, andcapital investment trends, readers are asked to please remain aware that the content
described in these materials may differ. Its purpose being merely to convey information
to our stakeholders, this report is not intended to solicit or recommend trading either
in the Company’s stock or of any other securities and financial instruments.

Contents
2

President’s Message

8

About Hirata
8 Value Creation Milestones
10 At a Glance
14 Hirata’s Competitive Advantage
18 Value Creation Process20

Hirata’s Strategies
20 Medium-Term Management Plan (FY2022–FY2024)
25 Business Segment Strategies

		26 Automotive-related Business		29 Semiconductor-related Equipment Business		32 Other Automatic Labor-saving Business
34 Financial/Capital Strategies
36	Taking On the Biological Genetic Resource Business		 (Mainly Plant Genetic Resources)

37

Hirata’s Sustainability
38 Sustainability Management
40 Our Sustainability Activity Vision
41 Materiality
58 Supply Chain Management
60 Corporate Governance
69 A Talk between Our Outside Directors
72 List of Directors

74

Data
74 Principal Financial/Non-financial Data
76 Company Profile/Stock Status

Narrow

Target readership Wide

Scope of Integrated Reports
Integrated reports are edited and published with a focus on corporate
information that is considered of particular importance. For more information,please visit our website.

WebsiteReportSummary/Representation

Published content

Detailed/Data

IR Information

Sustainability

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

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

Hirata Integrated Report 2023

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President’s Message

We will realize sustained corporate valueenhancement through a business strategy
leveraging our unparalleled experience inproduction systems and by further strengthening
ESG management.

Jin-Gi-Kou-Ken: A Slogan Representing 70 Yearsof Philosophy
In May 2022, on the occasion of having formulated its new Medium-Term
Management Plan, the Company announced the slogan Jin-Gi-Kou-Ken as its
vision. Jin-Gi-Kou-Ken expresses that Hirata exists because of its technology, thatits technology exists because of its people (employees), and that Hirata exists
because of the happiness of its employees. I believe that the words “technology,
people, and happiness” reflect Hirata’s unique spirit and management foundation created by our predecessors.
For 70 years, we have been managing the Company with the founding desire
to use automation and robot technology to solve problems so that people canwork without physical or mental pain, and with the desire to take care of ouremployees and their families and protect their employment. In other words,
the three words Jin-Gi-Kou (people, technology, and happiness) were createdby successive generations of management and employees. As the fourth word
Ken means “contribute to society,” the slogan Jin-Gi-Kou-Ken means “To makeeveryone involved in Hirata content and contribute to society by means oftechnology.”
When I witnessed the devastation of the Kumamoto Earthquake, which
occurred in April 2016, I decided to return to Kumamoto, the region where theCompany was founded, because I wanted to encourage the people there.
At that time, I sent the following message: “We will acquire much work fromall over the world and donate as much money as possible to Kumamoto.” To
our employees, conveying that protecting the region where the Company was
founded is one of our initiatives for contributing to society. Although we werealso impacted by the disaster and faced difficult conditions, our desire to donate
as much money as possible to Kumamoto and contribute to the reconstructionof our home region raised the morale of all employees. As a result, we achieved
record sales in that fiscal year. Our Management Philosophy states that Hirata“Contributes to Society.” However, it will be difficult to contribute to society
if we do not possess a suitable level of managerial strength. We learned fromthe Kumamoto Earthquake that making everyone involved with Hirata happy
increases the potential for the Company to grow significantly.
In addition to Kumamoto, the Company has bases in Japan and overseas, including Group companies. We conduct business in those regions and respect thoseregions just as we do Kumamoto. The accumulation of this history naturally led
to the creation of the four-word slogan Jin-Gi-Kou-Ken.

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Hirata Integrated Report 2023

Yuichiro Hirata
Representative Director, President

Hirata Integrated Report 2023

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President’s Message

We will differentiate
ourselves from othercompanies through thesynergistic effects ofour engineering capabilities
and manufacturing capabilities.

The Biggest Opportunities Since the Company’s Founding Are Coming
In the previous report (Integrated Report 2022), we statedthat we recognized the fact that the Company has thegreatest opportunities since its founding, mainly in theautomotive-related equipment business and semiconductorrelated equipment business. As we predicted, demand forequipment at related manufacturers in Japan and overseas
is expanding as EVs (electric vehicles) become more popular. As a result of mass production for EV-related products,
the profitability of our automotive-related equipment
business has also improved. Furthermore, as competition
among automobile manufacturers is intensifying, the needfor each company to establish production systems (production facilities, including production lines) as soon as possible

to realize their strategies has led to the expansion of opportunities for production system integrators like Hirata.
Despite recent fluctuations in demand in the­semiconductor-related equipment business sector, the emergence of applications equipped with AI and 5G technologies
will stimulate the market. Therefore, business opportunities
for the Company are expected to expand in the future.
Although the current outlook is that the order volumes
will be at the highest levels ever, the number of our plants
and engineers is limited. Therefore, I believe that the mostimportant issue to maximize opportunities is to maintain
information coordination and management accuracy to
avoid confusion at business sites and avoiding delay risks.

Our Unparalleled Experience in Production Systems Is Our Greatest Strength
We recognize that our strength lies in our unparalleledexperience in production systems, or in other words, theengineering capabilities and manufacturing capabilities
possessed by our group of engineers. Although that experience may be abstract and difficult to understand, we havea history of building one-off made-to-order products with
our unique business model. When customers manufacture
products, they take steps such as product planning, design,
prototyping, production preparation, and mass production.
In line with this, we have been proposing optimal production systems while customers make various requests andhold discussions with us from the product prototype stage
to the production system introduction stage.

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Hirata Integrated Report 2023

In this way, we respond to hundreds of inquiries every
year, both in Japan and overseas. Naturally, we must
maintain confidentiality with our customers, but we often
find that our ideas regarding one customer’s equipment
can also be applied to different products. As our customers’ products change in line with changes in the world, we
also make improvements in accordance with the following
trends. We possess information-related capabilities cultivated through our participation from the product prototype
stage for global customers, and the accumulation of technological expertise that enables us to respond to changes in
the playing field from one project to the next is one of ourstrengths.

Review of the First Year of the Medium-Term Management Plan
In terms of business performance for fiscal 2022, net sales
increased from the previous fiscal year due to an increase inorders for automobile-related equipment and the relaxationof restrictions on activities at overseas subsidiaries andaffiliates. In terms of profit, in addition to an increase in net
sales, we were able to control outsourcing costs throughthe expansion of in-house production, which resulted in a
profit margin higher than in the previous fiscal year. As aresult, net sales for the fiscal year under review amounted
to ¥78,443 million (up 16.9% year-on-year), operating
profit was ¥5,920 million (up 53.5% year-on-year), ordinary
profit was ¥5,802 million (up 36.3% year-on-year), andprofit attributable to owners of parent was ¥4,269 million(up 59.2% year-on-year).
In fiscal 2022, we launched a new Medium-Term
Management Plan, which includes the four Basic Policies of“Business expansion in growth markets,” “Strengthening
competitiveness as a global company,” “Strengthening of
ESG management initiatives,” and “Realization of management in line with the new-normal era.”In regard to “Business expansion in growth markets,”
we saw record-high orders for EV-related equipment(¥30,239 million) in the automotive-related equipment
business against the backdrop of global efforts to achievecarbon neutrality. As we started with a high backlog oforders, we plan to increase net sales in the automotiverelated equipment business by 25.4% year-on-year to ¥38
billion in fiscal 2023, and achieve net sales of ¥40 billion
in the automotive-related equipment business segment,
as planned in the Medium-Term Management Plan. The
improvement in the profitability of the automotive-related
equipment business as a whole is a major achievement as aresult of receiving multiple large-scale orders for EV-related
equipment and other factors. Our current challenges are tostrengthen the development of battery-related equipment

and secure production capacity capable of responding to anincrease in orders. Therefore, we are expanding production
space at three of our bases: Shichijo Plant in Kumamoto,
Kanto Plant in Tochigi, and Kansai Plant in Shiga.
In the semiconductor-related equipment business, orders
for wafer transfer machines remained flat year-on-year at¥19,731 million, as the semiconductor market as a wholeentered an inventory adjustment phase worldwide. In order
to expand our wafer transfer machine production capacity,
the entire Group, including our overseas affiliates, is working
together to promote local production. Advancement of procurement and other measures have resulted in shorter leadtimes, lower transportation costs, and avoidance of traderisks. In the medium to long term, semiconductor demand is
expected to increase due to the emergence of generative AI
and other factors. While capturing this demand, we aim toachieve ¥40 billion in net sales in the semiconductor-related
equipment business segment as set forth in the MediumTerm Management Plan.
In terms of “Strengthening competitiveness as a global
company,” we are strengthening cooperative relationships
with overseas Group companies. For example, in China, wehave been focusing on the EV-related equipment business
until now. However, we have also entered the semiconductor-related equipment business in China through collaboration within the Group, working to expand our businessareas to include growth markets.
In regard to “Realization of management in line with the
new-normal era,” we are implementing virtual commissioning using an emulator as business digitalization while
promoting VR factory tours, VR assembly processes, andremote observation and maintenance. These efforts have
led to improved work efficiency, and in addition to shortening delivery times, they have been significantly effectivefrom the viewpoint of profitability management.

ESG management Is Indispensable for Sustained Corporate Value Enhancement
With regard to “Strengthening of ESG management
initiatives,” one of the four Basic Policies of the MediumTerm Management Plan, we formulated the Sustainability
Basic Policy and established the Sustainability Promotion
Committee in October 2022 to promote it as a Companywide initiative while linking it with our medium- to longterm management strategies. Full-scale operations of the
Sustainability Promotion Committee began in fiscal 2023
with internal working groups considering solutions tomaterial issues while incorporating the opinions of outside
directors and external experts.
We continue to build production systems that support
manufacturing in various industrial fields, and we can saythat we have supported the history of manufacturing inJapan and overseas. In the past, through the era of mass
production and mass consumption, we have contributed tothe creation of economically affluent lifestyles. Today, since
the sustainability of the global environment is in jeopardy,
ignoring the need to respond to climate change and environmental issues could also threaten the survival of business.
I think we are in a situation where if the entire supply chain
does not address this issue, companies themselves may cease
to exist.
In addition to quality, price, delivery, and other conditionsas prerequisites for obtaining business opportunities, various requirements, such as commitment to the environment

Hirata Integrated Report 2023

5

President’s Message

and respect for human rights, are needed. We have continued to respond to the needs of our customers in accordance with the times, proposing many solutions, and haveearned their trust. This trust is not only related to our technical skills and the quality that we provide but also related
to our consideration for the environment and respect for

the human rights of all people involved in our business.
ESG management is indispensable as a foundation for thesustainable survival of our business. It is also indispensable
to maintain and improve the trust of our customers andsociety, create opportunities for us to contribute to manufacturing in the next era, and improve our corporate value.

Initiatives to Address Materiality That Has Evolved through a New Framework
In order to evolve our efforts to address our materiality,
which is organized into four themes and 10 items, we haveestablished a structure that consists of the Sustainability
Promotion Committee, its subordinate organizations, andthe working groups that carry out cross-organizational
activities for each theme. With the establishment of the
Sustainability Promotion Committee and working groups,
we are now able to discuss issues from a medium- to longterm perspective looking at the entire Company, and theframework of indicators (KPIs) and quantitative targets is
gradually beginning to emerge. In addition, we can expect
Hirata’s original measures and plans to be developed bycreating an activity plan using a bottom-up approach, notjust a top-down approach. By establishing a medium- tolong-term timeline and goals and formulating an action
plan through backcasting, rather than being bound by
conventional methods, we have identified not only risks
and opportunities in the process of getting there but also
several issues in the execution phase, such as the limitationsof the current structure and organizational system andresource allocation, which we intend to resolve one by one.
One of the materiality issues that I place importance onis the theme related to human capital. I believe that it is an
important management issue to improve employee engagement by creating an environment in which each employee
can make the most of their expertise and individuality,
and in which each employee can feel more satisfaction
and joy when it comes to their work. I appreciate thatorders have been stable recently. However, at Hirata, oursystem engineers are the biggest cornerstone that leads
to the success of each job that we handle for customers.
Having a large number of system engineers with extensive
experience makes it possible to proceed with large projects
without delay. It takes time to develop such skills though,so it is necessary to strategically secure and develop humanresources who will become the next generation of leaders.
Furthermore, the increased workload on each engineer,

6

Hirata Integrated Report 2023

the influential role still required of middle management,
and other constraints on “Brings Out The Best In Every
Person,” part of our Management Philosophy, are far fromfew, and the increased workload on employees and the riskof impact on production management are also recognized
as issues. Therefore, I believe it is extremely important tobring out the best in every person through means such as
strengthening human resource development and promoting diversity, equity, and inclusion (DEI).
Additionally, as a response to climate change, contributing to carbon neutrality through our products and services
is also an important theme. For example, installing an allelectric transport system consisting of the Hirata Eco electric series instead of the air equipment used at a customer’splant can significantly reduce electricity consumption andCO2 emissions, as well as running costs. Since our engineers
are deeply knowledgeable about the needs of our customers, I believe that they can propose optimal systems basedon customers’ issues.
Also, strengthening governance is an important theme
for sustained corporate value enhancement. As a measure
aimed to achieve this, we transitioned to a Company with
an Audit and Supervisory Committee organization structurein June 2023. The purpose of this transition is to strengthen
the supervisory function of the Board of Directors and further strengthen the oversight system by appointing Audit
and Supervisory Committee members who are responsible
for auditing the execution of duties by directors as members of the Board of Directors. We will continue to further
enhance our corporate governance. By contributing to theenvironment, addressing social issues through the promotion of human rights and DEI, and further advancing corporate governance, we aim to achieve sustainable corporate
growth from the perspective of achieving both corporate
growth through business activities and resolvingsocial issues.

To All Our Stakeholders
In addition to being the prefecture where our Company
was founded, Kumamoto is also the region ruled by Kato
Kiyomasa, a famous military commander. He contributed
greatly to the creation of a prosperous country that
continues to the present day. Contributions include theconstruction of Kumamoto Castle, considered one of thethree premier castles in Japan, the development of industrial
infrastructure, such as civil engineering and a flood control,
and the cultivation of human resources and a rich culture.
Kato Kiyomasa, a person of high integrity, has been highly
respected by residents of Kumamoto prefecture to date.
In August 2023, we unveiled FLAGNOID Kiyomasa,*a robot created out of respect and gratitude for Kato
Kiyomasa. We produced and broadcast/distribute acommercial featuring an animated version of FLAGNOID
Kiyomasa. In particular, I would like to provide opportunities for young people to learn about the Company, and toraise awareness about him throughout the world.
* “FLAGNOID” is a word coined byHirata. “FLAG” expresses boththe Blue Flag Iris, a plant loved by
Lord Kiyomasa, and the raising of
his battle banner in Kumamoto.
"NOID" means “humanoid
robot.”

It is said that Kiyomasa always told the people aroundhim when he was building his country that it was “for thesake of the future,” and that many of the measures at thattime were long-term initiatives with a focus on the future.
As many of these measures still serve as the foundationof Kumamoto’s industry and culture, I believe they were
truly sustainable initiatives. I believe this is what leads tothe creation of a sustainable nation, an approach that leads
to the sustainability management that the Company andmany other companies are focusing on.
We are developing business with customers all over
the world in collaboration with our domestic and overseas bases, centered on Kumamoto, the region where
the Company was founded. I would like to learn from
Kiyomasa’s foresight and continue to engage in management that considers the future, that is, management that
contributes to the realization of a sustainable society.
In order to achieve this, we will continue to deepen
communication with all stakeholders and work toward thesustainable growth of the Company. I look forward to yourcontinued understanding and support of the Company.

Yuichiro Hirata
Representative Director, President

For more information on FLAGNOID Kiyomasa, please visit the website below.
https://www.hirata.co.jp/flagnoid-special/ (Japanese only)

We will deepen mutualcommunication with stakeholders
around the world and aim
to achieve sustainable growthby having all Group
companies work together.

Hirata Integrated Report 2023

7

About Hirata

Value Creation Milestones

Manufacturing continues to evolveon a daily basis around the world.
Hirata’s job is to support
manufacturing in various
industrial fields.

Net sales
Market capitalization(As of March 31 for each fiscal year)

1951

1960

Manufacture and sale ofindustrial vehicles

1951
Company Established asa Corporation
Hirata Sharyo Industrial Co., Ltd.
was established in Kumamoto City,
Kumamoto Prefecture, for the manufactureand sale of industrial vehicles. This increasedorders for industrial vehicles, such as carts,and belt conveyors.

1970

1980

1990

2000

Expansion of orders for production lines based on the concept“enhance people to double their capabilities”*1
Promotion of robot development
and automation of production lines
centered on conveyors

The Company introduces control technology and software technology to achieve a higher level of automation. Engages in the manufacture and sale of process equipment as well as assembly lines

1974
Hirata Corporation Is Born

1980
Expansion of Overseas BasesAs the Company’s business expanded with theincreased utilization of automatic assembly
machines for the home electronics industry
and other industries, three affiliated companies, Taihei Conveyors, which mainly handled
portable conveyors, Hirata Sharyo Industrial,and Hirata Industrial Commerce, whichhandled conveyors used in the manufacture ofhome electronics-related products, merged toform Hirata Corporation.

Began supplying assembly lines not only tohome electronics manufacturers in Japanbut also to major overseas home electronics manufacturers, and established our firstoverseas base in the United States to further
develop sales channels. Afterward, we established affiliates in Europe, Southeast Asia,
China, and other regions.

CRT manufacturing equipment“MEP Chain” Conveyor
Adoption of operator-centric free flow system
where products stop in front of operators

ACS concept model
exhibited at a trade show inNorth America as an effort
to expand the automotiverelated equipment business

AR-K robot
designed for use
in clean rooms

4-axis ARM-BASE SCARA*² robot*2 S elective Compliance Assembly Robot Arm(Horizontally articulated robot)*1 Hirata’s coined phrase that expresses the idea of making the best use ofpeople by having them do jobs with higher added value, instead of laborsaving that reduces the number of people by automating equipment.

8

Hirata Integrated Report 2023

2017
Change of our stock
market listing to theFirst Section of Tokyo
Stock Exchange

2006
Going public In December
2006, the 60th anniversary of
the Company’s establishment
and the 55th anniversary of
the Company’s founding, theCompany is listed on JASDAQ(Tokyo Securities Exchange
JASDAQ), a long-awaited event.

2010

2020

mainly involved in the automotive, semiconductor,
and home electronics fields

With the birth of the ACS concept, which
responds to various demands by combining
standards, the Company’s reputation among
foreign automakers began to grow in the
mid-1990s. Evolution of automotive assemblylines is accelerated.

2022

2024 (FY)

Anticipating futureneeds to gain acompetitive edge

Production system integrator

1990
Company Receives High Praisefrom Overseas Automakers
with Its ACS Concept

2022
Change of our stock market
listing to the Prime Market

2000
Expanding Business to Meetthe Needs of the Times
Entered the flat panel display (FPD) market,
anticipating a shrinking cathode-ray tube
(CRT) TV market. We also entered thesemiconductor-related equipment businessand dealt with major overseas manufacturers.
The Company moves to the world stage as a
production system integrator.

The present
Selecting and Focusing on
Technologies for the Realizationof a Sustainable Society
In response to the once-in-a-century change in
the automotive industry and changing needs
for the realization of a sustainable society, we
will respond with reliable quality and technology. Using digital technology, we propose
smart factories that are highly convenientand contribute to the environment. We will
strengthen the development of products forwhich demand is expected to increase in the
future, such as key devices related to electricvehicles (EVs).

Brushless DC motor
Hirata BLUE MOTOR

Eco Electric Series

Dual head wire bonder

ACS concept engine assembly lines

Real-time operating status monitoring

Hirata Integrated Report 2023

9About Hirata

At a Glance
Beginning with the manufacture and sale of industrial vehicles, Hirata has developed into a production system
integrator that meets the needs of a diverse range of fields, including automobiles, semiconductors, flat panel
displays (FPDs), and home electronics, by realizing customers’ requirements. We will utilize the technologies andknow-how we have cultivated so far to pursue further technical innovation and support manufacturing aroundthe world.

Consolidated Performance (FY2022)

Total assets¥114,522

millionNet sales¥78,443

million(up 116.9% year-on-year)

Net sales by businesssegment (outer ring)Operating profit by businesssegment (inner ring)Automotive-related
BusinessSemiconductor-related
Equipment Business

Operating profit¥5,920 ther Automatic
O
Labor-saving Businessmillion(up 153.5% year-on-year)

Number of Group companies(as of March 31, 2023)

Consolidated subsidiaries:

1210

companies

Hirata Integrated Report 2023

Number of consolidated employees(As of March 31, 2023)

1,882

Net sales
Automotiverelated
Business¥30,298

Operating profit
million

Other
Automatic
Labor-saving
BusinessmillionWe comprehensively handle equipment forelectric vehicles (EVs), engines, transmissions,and automotive component production. We
provide optimized solutions by means of preverification utilizing digital technologies andcomprehensive commissioning at our plants.

Operating profit

Net sales
Semiconductorrelated
Equipment
Business¥1,559¥28,954

million¥3,445

million

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

Net sales

Operating profit¥16,952 million¥930 million

Manufacture and sale of automatic labor-saving
equipment in the fields of medical and scientificequipment, home electronics, industrial robots,logistics (transport systems), and flat panel displays (FPDs). We also support single-item salesof factory automation (FA) equipment.

Hirata Integrated Report 2023

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About Hirata

At a Glance
We support manufacturing around the world from Kumamoto, our home.
Domestic

49.2%
50.8%

1,882
Overseas
24.6%

Domestic/
overseas
sales ratio

Overseas

Number of consolidated employees

Ratio ofdomestic/
overseas
employees(As of March 31, 2023)(As of March 31, 2023)

Domestic
75.4%
Note: C alculated according to where customers are based.
“Domestic” includes a portion of sales where the final destination of products is overseas.

Domestic Branches
With our headquarters located in Kumamoto, our domestic branches consist of
the Kumamoto Plant, Kumamoto East Plant, Kanto Plant, Kansai Plant, Kusuno
Plant, Shichijo Plant, and Tokyo Office (seven bases, six plants).

Kumamoto East Plant

Shichijo Plant

Headquarters/
Kumamoto Plant
Kusuno Plant
Kanto Plant
Tokyo OfficeKansai Plant

Domestic bases

Domestic affiliates
Kumamoto East Plant

Taihei Technos Co., Ltd.

Est. 1988

Est. 1980
http://www.taiheitechnos.co.jp (Japanese only)

Kusuno Plant

Shichijo Plant

Est. 1984

Est. 2008

Hirata Field
Engineering Co., Ltd.

Kanto Plant

Kansai Plant

Est. 1968

Est. 1981

Est. 1999
https://www.hirata-fe.com/en/https://hirata-fe.com

Headquarters/
Kumamoto Plant
Est. 1964

Tokyo Office
Est. 2016
https://www.hirata.co.jp/en/corporate/office12

Hirata Integrated Report 2023

Trinity Inc.
Est. 1986
https://www.3inc.jp (Japanese only)Automotive-related equipment business
Semiconductor-related equipment business

Overseas Affiliates

Other automatic labor-saving equipment business

Hirata has nine overseas affiliates located in regions including
North America, Europe, Southeast Asia, China, and Taiwan.
The icons indicate the main businesses for each base.

Manufacturing base

Hirata Corporation of America
Detroit (New Hudson) Office

Hirata Engineering Europe GmbH
Hirata Automated Machinery (Shanghai) Co., Ltd.

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

Indianapolis Office
Hirata Engineering S.A.de C.V.

Hirata Engineering (Thailand) Co., Ltd.
Hirata FA Engineering (M) Sdn. Bhd.
Hirata FA Engineering (S) Pte. Ltd.

EuropeSoutheast Asia

China/Taiwan

North America

Hirata Engineering
Europe GmbH (Germany)

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

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

Hirata Corporation ofAmerica (USA)Est. 1993https://www.hirata.de

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

Est. 2006
https://www.hirata-cn.com/en/

Est. 1980

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

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

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

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

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

Est. 2000

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

Taiwan Hirata Corporation(Taiwan)Est. 2012

Est. 2006
http://www.hirata.com.tw/

Hirata Integrated Report 2023

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About Hirata

Hirata’s Competitive Advantage

Engineering Capabilities, Manufacturing
Capabilities, and Support Capabilities
Hirata possesses engineering capabilities and manufacturing capabilities cultivated by responding to various
customer requests. The strengths of the Group are createdby the synergies of these two capabilities. We conduct concurrent engineering that leads to new ideas and efficiency
improvement by having employees responsible for engineering and manufacturing functions share informationand collaborate at a high level.
Because Hirata supports manufacturing sites around theworld, we utilize the technology and know-how we haveaccumulated over the years to work on operation support, maintenance, and product updates. In this way, we
have grown and expanded our business by grasping andresponding to the changing needs of the times around theworld.

eness
nsiv
o
p
s
Re

Maintenance/
Service

Supportcapabilities

Manufact
capabili
Ab

y

il i

to

t

Production
start-up

m

ak

ep

rop
o

sals t oAssembly, inspection,and testing

Support capabilities
In supporting production sites, there are various practical issues, including labor practices, customs, and safety
standards in each region. We face these issues in earnest
and continue to provide optimal production systems andimprove them every day based on experience and knowhow. In addition, our global network, which includes nine
overseas bases, provides reliable support for our customers.

14

Hirata Integrated Report 2023

Development/
ProposalEngineering capabilities

to changeDesignFrom the development stage and conceptual stage, maintaining a customer-oriented mindset is indispensable. Our
experienced engineers, who have cultivated their uniqueproposal and design skills for each job, give shape to andrealize customer needs.
The experiential knowledge of our engineers is accumulated in our organization. We can provide high-level
solutions by actively incorporating the latest tools into thisknowledge.

Engineering
capabilities

st

s

uring
ties

realize c

ust

om

e

u
eq
rr

e

Component
manufacturing

Manufacturing capabilities
Our manufacturing capabilities can be said to be manufacturing capabilities that reinforce our engineering capabilities. The integrated production that achieves both quality
and speed through a sense of unity, which can be describedas manufacturing versed in production sites and designversed in manufacturing, produces the greatest effect andleads to our competitive advantage. We are also actively
working to improve the efficiency of our own production
processes and to increase added value.

Hirata Integrated Report 2023

15

About Hirata

Hirata’s Competitive Advantage

Demonstrating Our Three Capabilities in the Value Chain
Hirata has an integrated production system that includes development and proposal and design, component
manufacturing, assembly and verification, production start-up, and maintenance and service. In this system, we
work closely with customers from conceptual design to verification and maintenance to realize production systems with low total cost and high production efficiency. By sincerely addressing the needs of our customers andpursuing technical innnovation, we respond to needs that change with the times.

Development/Proposal and Design

Engineering
capabilities

We respond to the needs of our customers by making use of our track record in production
system design in a wide range of fields. By engaging engineers from the inquiry stage, we canclear up issues that would normally be present in design, part manufacturing, and assemblyand verification, leading to efficient proposals. Through the active use of simulations, we canmaterialize requests at the conceptual design stage and ask customers to confirm the details.

Supportcapabilities

Component Manufacturing
Since our development, design, and manufacturing departments are located at the same
location, the employees of these departments can cooperate together closely. This allows us
to offer more sophisticated proposals while reducing waste and rework. We have a full rangeof machine tools and manufacturing facilities, enabling us to manufacture parts in-house. Thisability allows us to maintain a high level of quality and realize stable part supply.

Assembly, Inspection, and Testing/Production Start-Up
We have a large assembly and trial run space and clean room, allowing us to assemble andverify even large production systems at our own plants. This enables us to conduct efficienttesting and commissioning adjustments prior to on-site installation, ensuring quick delivery.
Our digital utilization at manufacturing sites and remote observation and maintenance havebeen very well received by our customers.

Maintenance/Service
Having three Group companies in Japan and nine Group companies overseas allows us to
support operation training, maintenance, and upgrades tailored to sites in various countries.
The knowledge that we gain by providing maintenance and service and through ­customer
feedback is utilized for subsequent development efforts and proposals.

Manufacturing
capabilities

Engineering
capabilities
Manufacturing
capabilities

Engineering
capabilities
Supportcapabilities

Hirata’s Production System Evolves in Response to the Changing Times 
Since our founding, we have developed production equipment and systems that meet the needs of the times by fulfilling theneeds of our customers at a high level and have enhanced our technological capabilities and ability to make proposals.
The following are examples of Hirata’s production facilities and systems that have evolved along with changes in manufacturing.

16

Powertrains/transmissions for internal combustion engines

EV (electric vehicle) EDUs
(electric drive units)/batteries

Developed assembly lines

Developed assembly lines

Cathode-ray tube (CRT) televisions

FPD

Developed assembly lines

Developed assembly lines
and transfer robots

Hirata Integrated Report 2023

OLED televisions andsmartphones
Developed panel vacuum
deposition equipment(serving as the core of
production systems)

Hirata’s Competitive Advantage Is Being Demonstrated in Each Business Field.
Hirata demonstrates its strengths in production systems in a wide range of fields, including automotive, semiconductor, medical and chemical equipment, and home electronics-related equipment.

Automotive-related Business
1. Wide-ranging lineup of EV equipment
We are able to develop new products that our customers
demand with technology that extends our existing broad
product lineup, contributing to the enhancement of ourpresence.
We are able to handle a wide range of processes, from
IGBT, inverter, EDU, EV motor, and LiB to battery moduleand pack-related processes. Although some processes areprone to price competition, we create added value by covering IGBT and LiB charging and discharging.

2. Robots and transport systems/equipment are
manufactured in-house
We have expanded the range of proposal targets and offer
comprehensive proposals for the transport section of theline that meet the customer’s requirements, differentiating
us from our competitors.

3.	Electrification of equipment through our
Eco Electric Series and motor development
This allows us to promote the environmental friendliness of
our customers’ manufacturing facilities.

4. T rusting relationships with Japanese autoparts manufacturers
Detailed communication between Hirata and Japanese autoparts manufacturer allows us to create prototypes of new
products.

5. G
 lobal network consisting of nine companies
overseas
Having a global network allows us to support the global
expansion of our customers.

Semiconductor-related Equipment Business1. Trustful relationships with customers
Through continuous communication, we gain an understanding of the needs and issues of our customers, allowing
us to make appropriate proposals.

3. G lobal network consisting of nine companies
overseas
Having a global network allows us to support the global
expansion of our customers.

2. Wide-ranging lineup of related equipment
We accept bulk orders for transfer robots, load ports, openers, etc., increasing customer convenience.

Other Automatic Labor-saving Business
Medical and scientific equipment

Industrial robots

In the market for automated equipment for medical applications, it is close to being an oligopoly market since we havefew competitors in Japan. In addition, we are very different
in that we can propose production systems that include
robots. We provide after-sales services such as maintenanceservices offered through Hirata Field Engineering Co., Ltd.

While there are many other companies specializingin ­robotics, we can propose incorporating robots into
­production systems.

How We Will Further Enhance Our Strengths in the Future 
As society keeps changing rapidly, it is expected that the Company will play an increasingly important role in advancing customer requests and realizing a sustainable society. We will further enhance our engineering capabilities,
manufacturing capabilities, and support capabilities to meet the expectations of society and enhance our competitiveness. Under the Medium-Term Management Plan (FY2022–FY2024), we will aim to further grow our businessand strengthen our competitiveness by expanding our business in growth businesses, improving customer value
through the use of digital technologies, and strengthening our structure as a global company.

Hirata Integrated Report 2023

17

About Hirata

Value Creation Process

Mission Statement: W e courageously pursue technicalhumankind, development of indivi

Input

Business Model

Capital (as of March 31, 2023)
Financial capital
Consolidated net assets¥59,575 million

World-class production
system construction
Development/
Proposal

Manufacturing capital
Production bases(spaces that can realize entire production lines)

15 plants (in nine countries/regions)
iveness to chan
pons
ge
Res

Sales bases (global)

28 (in nine countries/regions)
Human capital
Number of employees(excluding temporary employees)

Maintenance/
Service

1,882

Supportcapabilities(Non-consolidated: 1,054;
consolidated subsidiaries: 828)
Intellectual capital
Number of registered patents

603

3,952 klmoNatural capital*
Energy usage

yt

Production
start-up

il i tSocial capital
Strong relationships of trust with customers

Manufacturing
capabilities

Ab

Production system construction know-how

Engineering
capabilities

ak

ep

rop

osa

ls t orealize custom

er

u
req

es

ts

Water usage

34,510 m

3

Assembly, inspection,and testing* Hirata Corporation only (fiscal 2022 data)

Sustainability Management
Materiality*
Response to
Climate Change

Building of asustainable society

Bringing out thebest in every person* Materiality has been grouped under these four themes and identified as 10 items (page 41).

18

Hirata Integrated Report 2023

innovation while contributing to the betterment ofduals, and enhancement of the Company’s capabilities.

OutputValue for stakeholders
Customers
Improved safety, productivity, convenience, and comfort
Reduced environmental impact
Employees
Self-realization through growth
Safe and secure work environments
Suppliers
Stable trading
Opportunities for business expansion
into new areas

DesignAutomotiverelated Business

Semiconductorrelated
Equipment
Business

Component
manufacturing

Other AutomaticLabor-saving Business

Shareholders/Investors

Assembly, inspection
and testing

Stable shareholder returns
Local communities
Tax payments, co-prosperity withlocal communities
Global environment
Saving of energy and resources
Reduction of GHG emissions

Value for Hirata (FY2022 performance)

Our Vision
人技貢献

Jin-Gi-Kou-Ken
To make everyone involved
in Hirata content and contribute to society by means oftechnology

Economic value
Net sales¥78.443 billion
Operating profit¥5.92 billion
ROE

7.5%
Intellectual capital
Accumulation of technology andknow-howStrengthening of ourmanagement foundation

Social capital
Trustful relationships with customers
and partner companies

Hirata Integrated Report 2023

19

Hirata’s Strategies

Medium-Term Management Plan (FY2022–FY2024)

Positioning of the Medium-Term
Management Plan (FY2022–FY2024)
In formulating the current Medium-Term Management
Plan, we reviewed our Mission Statement andManagement Philosophy, which constitute our founding spirit, and arrived at the idea that the duty of ourGroup is “To make everyone involved in Hirata content
and contribute to society by means of technology”(Jin-Gi-Kou-Ken).

2024
2022
Transformation to competitive
management structure

Basic Policies and Measures 

Business expansion in growth markets
Existing businesses are defined as businesses that respond to
growth markets driven by social issues such as reduction ofenvironmental impact and digitalization and other businesses.
In particular, we will focus our resources on the two
growth markets of electric vehicles (EVs) and semiconductors and pursue efficiency improvements in other businesses, such as FPDs and home electronics as continuing
operations.
In addition, we will position the biological genetic
resource business (mainly plant genetic resources) as a business that will present new challenges and will strive to build
an internal structure with a view to commercialization.

 trengthening competitiveness as a global
S
company
To strengthen our management foundation, we will
engage in:
Basic Policy 2

Strengthening of ESG management initiatives

Basic Policy 4

Realization of management in line with

Jin-Gi-Kou-Ken

Basic Policy 1

Business expansion in growth markets

Basic Policy 3

人技貢献

As a group, establish management bases
and work to expand business in growth To make everyone involved in Hirata conmarkets while securing profit from exist- tent and contribute to society by means
ing businessesof technology

Based on our Jin-Gi-Kou-Ken concept, we have establishedfour basic policies and measures to resolve social issues
through our business activities over the medium term.
To strengthen our profitability, we will engage in:
Basic Policy 1

Sustainableimprovement
in corporate
value

the new-normal era

Positioning of Medium-Term Management Period for Each BusinessResource concentration

Automotive-related equipment (EV related)

Existing businesses × social issues
Reduction of environmental impact digitalization= Growth markets

Semiconductor-related equipment

Existing businesses
FPD-related equipment

Home electronics-related
equipment

Industrial robots

Transfer machines/Automatedwarehouse systems

Medical, chemistry, andphysics devices

Internal combustionrelated equipment

Pursuit of efficiency

Continuing business
Building internal systems toward commercialization

Biological genetic resource business(mainly plant genetic resources)

New businessBusiness that will
present new challenges

Individual Business Measures in Growth Markets
EV-related equipment business

Semiconductor-related equipment business(1) Selection of specialized processes(1) Clarification of target areas(2) Development and improvement of key devices
Strengtheningof the batteryfield(3) Strengthening of product appeal throughstandardization(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

20

Hirata Integrated Report 2023

(2) Introduction of new production control system
Realizationof optimal
production
system(3) Increased production capacity
Increased number of manufacturing staff
Expansion of production area
(4) Efforts to adopt EFEM standardization

Management Targets
Under the current Medium-Term Management Plan,
we set the management targets shown on the right.
In fiscal 2022, net sales amounted to ¥78,443 million,
operating profit was ¥5,920 million the operating profit
ratio was 7.5%, ROE was 7.5%, and ROIC was 7.1%,
surpassing cost of capital (WACC), which was 5.5%.

FY2022 Results FY2023 Forecast*

FY2024 Plan

Net sales¥78.4 billion¥90 billion¥100 billion

Operating profit¥5.9 billion¥5.4 billion¥10 billion

Operating profit
ratio

7.5%

6.0%

10.0%

ROE

7.5%

–

11.0%

*As of November 2023

Basic Policy 2

Basic Policy 3Strengthening competitiveness as a global company
Optimization of development/production systems
within the Group
Global response
Strengthening of cooperation within the Group

Business
initiatives

Strengthening of ESG management initiatives
To achieve both business growth and the resolution of social
issues as well as to improve corporate value, we formulated
the Sustainability Basic Policy, identified materiality, andorganized the relationship between our philosophy systemand corporate value. During the time frame of the current
Medium-Term Management Plan, we will formulate a specific road map, such as setting targets for each materiality.

Thorough digitalization-based profitability management system
Please refer to page 38 for details on sustainability management.

Strengthening of product competitivenessStakeholders

For our global response to expand profits in growth markets such as EVs and semiconductors, we will optimize
business collaboration between each business unit andeach Group company to create synergies in terms of orders,development, and production systems.
We will also work on front-loading activities as a businessinitiative to strengthen competitiveness. All departments
will cooperate with each other, and at the initial stage ofthe project they will identify the risks related to the content
of the inquiry and increase profits by planned responses.
We will further strengthen this activity by utilizing
digitalization.

Medium-Term Management
Plan/Business Activities

Materiality (Important Issues)

Sustainability Basic Policy

MissionStatement

Management
Philosophy

Basic Policy 4

Realization of management in line with the new-normal era
We will expand the value provided to customers and society by promoting digitalization
for business. This will include CADVR, which imports existing 3D design data as it is andallows users to hold remote meetings while confirming equipment in the VR space, theuse of emulators that virtually verify the CAD data of development systems and industrial
programs, and IoT, whereby we are aiming to digitize, quantify, and visualize every manufacturing process so that plants can be operated continuously for 24 hours.

Hirata Integrated Report 2023

21

Hirata’s Strategies

Medium-Term Management Plan (FY2022–FY2024)

Basic Policy

1

Business Expansion in Growth Markets

We will position EVs (electric vehicles) and semiconductors, which are driven by social issues, as growth businesses
and concentrate our resources on these areas. At the same time, we will seek to improve efficiency in continuing
operations in FPD, home electronics, and other businesses by identifying areas where profitability is expected.

Automotive-related Business—Acquisition of Orders for New EV-Related Processes

22

Strengthening of product appeal through selection of
specialized processes and standardization
We specialize in EDU assembly lines for EVs, IGBT module
assembly lines, and inverter assembly lines with a proventrack record while promoting efforts for standardizing entire
lines and customer development. In the battery field, which
is a key area of focus, we are promoting the standardizationof entire lines with proven battery module manufacturing
processes, battery pack manufacturing processes, andcharging and discharging systems. Furthermore, we areworking on development and measures to enter thebattery cell manufacturing process field, a new area for theCompany, and are accumulating know-how.
Development and improvement of key devices
We have completed four of the five tasks set forth in
the Medium-Term Management Plan (Improvementof Automated Warehouses, Dual Head Wire Bonding
Machines, AGV Improvements, and Plant Simulation(Software)).

Improve production capacityAs orders grow, we are also addressing production-related
issues such as factory space and human resource shortages.

Semiconductor-related Equipment Business

Other Automatic Labor-saving Business

Keep up with technological innovation
We are promoting activities to develop equipment that iscompatible with the miniaturization of semiconductors.
Enhance production capacity
In order to shorten the lead time to delivery, we will work
to improve production capacity and ensure the stable procurement of parts and materials through cooperation with
suppliers and promotion of digitalization.
Establish a Group production system for the
Semiconductor-related Equipment BusinessWe are also focusing on building a cooperative system with
our overseas affiliates and are strengthening cooperation inother regions, such as Southeast Asia and North America,
in addition to existing affiliates in China and Taiwan.
In order to improve our ability to respond to changes inthe external environment, we plan to review and formulate
the functions and strategies of our overseas bases.

Focusing on areas where profitability is expected
We conduct development and production while identifying
areas with high added value and high profitability potential,
such as conveyor equipment and medical and scientificequipment.
In the field of medical and scientific equipment, in collaboration with SONIRE Therapeutics Inc., we are jointly
developing a high-intensity focused ultrasound cancer
treatment device for clinical trials for patients with unresectable pancreatic cancer and have started human clinical
trials. In the future, we will promote the development ofequipment for mass production.
To create new businesses and expand business domains,
we are working to verify business possibilities and establish
a research and development system.
With regard to M&A and collaboration, we are actively
gathering and examining information and are promoting
initiatives such as partial collaboration.

Hirata Integrated Report 2023

• Oct. 2023 Kansai Plant (Yasu City, Shiga
Prefecture) goes into full-scale operation
In October 2023, we completed the renovation of the
Kansai Plant, which has been carried out in stages since2021, and launched it into full-scale operation. A new
2,800 m2 assembly building and engineering center havebeen added to improve productivity.
• April 2024 Operations scheduled to start at
the Shichijo Plant (Kikuchi City, Kumamoto
Prefecture)
The Shichijo Plant is scheduled to start operations in
April 2024 ahead of the initial schedule (operations werescheduled to start in June 2024.).

Basic Policy

2Strengthening Competitiveness as a Global Company

We will strengthen our competitiveness in growth markets as a group by promoting collaboration with Group
companies in Japan and overseas and with partner companies. In addition, we will work to thoroughly manage
profitability using digital technology.

Global Response
Optimization of development/production systems
within the GroupWe will reorganize the business portfolios of each site andinvest management resources in areas where high added
value and mass production are expected. Currently, we areconducting training for local employees in order to build
a production system for semiconductor-related equipmentat our China base. Also, we dispatch sales representatives
from domestic branches mainly to East and Southeast Asia
to share know-how on sales activities and order-taking
activities at exhibitions and other events.

Strengthening of cooperation within the Group
Until now, collaboration between each Group company
has been centered on business and sales, but in order togenerate further synergies as a group, we will strengthen
collaboration from the perspective of governance. We arereviewing policies and formulating plans for strengthening
global governance, including those of overseas-relatedcompanies, and discussing the positioning and functions ofeach overseas affiliate within the Group.

Topic
Expansion of System for Collaboration with Overseas Affiliates
The trend toward glocalization* is gaining momentum, with an increasing number of customers, particularly Japanese automotiverelated customers, requesting local procurement for capital investment at their overseas plants. Under such circumstances, we recognize that strengthening our global response capabilities is an initiative that will lead to the strengthening of our competitiveness inthe market. We aim to strengthen the global response capabilities of the Hirata Group and provide an environment where customers
can use equipment with greater peace of mind by conducting activities that meet the requirements of customers for local procurement and establishing a prompt support system for problems after delivery.
* The flow of economic activities rooted in local culture while considering things on a global scale

Business Initiatives
Thorough digitalization-based profitability
management system
To strengthen the profitability management system for eachproject using digital technology, we are promoting front-loading
activities that put a load on the initial design stage and advancework ahead of schedule. During the planning phase, departments work together across the board to ensure they are awareof scheduling, workload, procurement planning, and cost
control and to clarify the level of development difficulty andthe risk of technical problems. In addition, collaboration tools
and 3D emulators can be utilized to improve the efficiency of
information sharing and enable early verification. Through these
initiatives, we aim to curb unnecessary costs, shorten delivery
times, improve quality, and reduce projects with low profitability.

Strengthening of product competitivenessIn order to strengthen our competitiveness as a global company, we recognize that it is important to be able to respondto changes in the market, and we are advancing various
initiatives from the perspectives of costs, delivery times, production capacity, quality, flexibility, and other factors.
We strive to differentiate ourselves by working closelywith our customers to solve their problems, repeatedly
developing and improving our products and making uniqueproposals. Furthermore, by promoting initiatives for collaboration with partner companies and making effective
use of external resources, we aim to supplement the shortage of technology and production capacity and increase thevalue we provide to customers.

Topic
Establishment of Profit-oriented Behaviors
As stated in our Management Philosophy with the words “Hirata Makes Its Customers Successful,” we are working on ensuring quality
and meeting delivery deadlines for customers as top priorities. On the other hand, in terms of costs, although we have been focusing
on cost reduction activities, there were issues with the awareness of profitability for each project. In order to secure stable profit margins
for individual projects, we will strengthen and improve profitability management processes and risk management systems for individual
projects. By preventing delays in drawing output and an increase in the rate of revision, we will reduce unnecessary costs, such asincreases in design costs. By doing so, we aim to improve the profit margin of the Company as a whole.

Hirata Integrated Report 2023

23

Hirata’s Strategies

Medium-Term Management Plan (FY2022–FY2024)

Basic Policy

4

Realization of Management in Line with the New-Normal Era

Looking ahead to the next era, we will promote value chain transformation using digitaltechnology, aiming to expand the value we provide to our customers and other stakeholders,and create new value.

Promoting Value Chain Reform through the Use of Emulators
By collaborating with Rockwell Automation and introducing
the company’s Emulate3D engineering software, we
are advancing operational improvements focusing on
designers through virtual commissioning. It is effective
for shortening the waiting time for problems such as
insufficient debugging time due to delays in the previous
process and interference problems caused by the actualmachine. Specifically, in the value chain process centered on
design work, program debugging can be performed before
assembly and electrical work are completed, enabling asignificant reduction in the debugging period for actual
equipment. Currently, we are expanding the application
business fields and increasing the number of usage results.

Improving Customer Value
Design reviews using VR(in the engineering anddesign phases)

3D simulation(in the design andcommissioning phases)

Previously, design reviews were conductedin 2D, but by reproducing the equipmenton the metaverse using VR and exchanging
opinions while grasping the actual sizeand distance, it is possible to uncover
the potential needs of the customer’sequipment and reduce the waste ofrework and modification during the actual
equipment observation.

For equipment that is difficult to see theinternal structure from the outside, byusing an emulator after design, creatinga video that reproduces the actual
movement in 3D, and using it for meetings
with customers, it becomes easier tounderstand the structure and check for
defects.

Virtual commissioning
Through virtual commissioning, faults
with equipment can be detected before
checking actual operation during the fieldinstallation. It prevents problems at thesite and reduces the inspection process by
40%. It contributes to the early start-upof the customer’s plant by shortening thework time.

Comments from employees of the department that promotes digital engineering
It has been about four years since we started working as members of the Digital Engineering
Promotion Division, and we are pleased that the results of our efforts are beginning to be visible
both internally and externally. Currently, in parallel with the improvement of QCD in the existingvalue chain, we are also providing consulting services related to value chain reform of production
equipment using Emulate3D according to the customer’s wishes. Value chain reform throughdigital technology is an important theme for the manufacturing industry, and the Hirata Groupaims to lead the industry.

24

Hirata Integrated Report 2023

Business Segment Strategies
Automotive-related Business
Semiconductor-related Equipment Business
Other Automatic Labor-saving Business

Hirata Integrated Report 2023

25

Hirata’s Strategies

Business Segment Strategies

Automotive-related Business
Including EV-related systems, the primary components of power transmissions and drive
trains, electronic equipment such as computers to control them, sensors and other in-vehicle electronic components, and the air compressors used in air-conditioning, we provide
support for a wide range of production systems. Completely handling a large number ofdevices and items of equipment at the Company, we run comprehensive in-house tests toensure their correct operation before delivering them to our customers’ factories. Hirata’s
standard designs and solutions improve ease of maintenance for the end user. In addition,
digital twin technologies are used to design and develop production lines more efficiently.

S

W

Strengths

Weaknesses(1) Integrated systems, from development to production andmaintenance(1) P rofitability management and profitability in new development projects(2) Engineering capabilities that enable us to fulfill customer
requirements(2) D evelopment capabilities for our unique key devices andstandard equipment(3) Vast plants where entire production lines can be verified(3) Competitiveness in specific regional markets(4) Trust and continuous transactions from customers(5) Broad product lineup

Opportunities

Threats

OT(1) Expansion of market for products that address environmental issues(1) C hanges in market environment due to tightening of environmental regulations(2) Local production for local consumption (strengthening of
local procurement at each manufacturing company)(2) D ecrease in number of parts and in demand for production
systems due to shift to EVs(3) Advancement of digitalization for business(3) Rise of Chinese companies(4) Cooperation on overseas expansion with domestic
companies(4) Exchange rate fluctuations

Business Environment 
Industry Outlook
The long-term expansion of the EV market represents afuture trend that can be regarded with certainty. To help
curb global temperature rises, governments around theworld and auto industry leaders have pledged to increase
the market penetration of EVs, the sales of which are
expected to reach 42 million units annually in fiscal 2030.
Major Business Partners
Our major business partners include General Motors andFord Motor Company in North America, Stellantis N.V. in
Europe, Toyota Motor Corporation, Honda Motor Co., Ltd.,and DENSO Corporation in Japan, as well as start-up EV
manufacturers.

EV Global Sales Volume Forecast(Millions of units)
80

60

75

Annual growth rate

19%

)

30

2

02

(2
40

20

42

22

20
10
31
0

56

2020 2021 2022

2025

2030

2040

(FY)

Source: BloombergNEF

26

Hirata Integrated Report 2023

Fiscal 2022 Results Both orders and sales of EVs have remained strong due
to continued strong capital investment in EVs against the
backdrop of global efforts aimed at carbon neutrality.

FY2022 Results

FY2024 Targets

Net sales (millions of yen)

30,29840,000Operating profit (millions of yen)

1,559

2,000

Operating profit ratio

5.1%

5%

Topic
Orders for Large Projects
1. Order for large-scale EV-related facility project (July 2022)• Two electric drive unit (EDU) assembly lines for EVs were ordered with an order value exceeding ¥10 billion• Part of this expected to contribute to the results from fiscal 2023 onward
2. Order for large-scale EV equipment project from an emerging North American manufacturer(November 2022)• EDU assembly lines for EVs and other equipment were ordered with an order value exceeding ¥7.5 billion• Part of this expected to contribute to the results from fiscal 2023 onward

Business Strategies 
In addition to EDU assembly lines for EVs, IGBT module
assembly lines, and inverter assembly lines, we are focusing
on standardizing entire lines and customer development.
In addition to these existing businesses, we are working
to acquire and expand orders for new processes. In thebattery field, which is a key area of focus, in addition to
standardizing entire lines in the existing battery module
manufacturing process and charge and discharge systems(within the cell manufacturing process), we are working on
development and trial production to enter the cell manufacturing field and accumulate know-how. In regard to thedevelopment and improvement of key devices, we have

Medium-Term
Management Plan
Basic Policy

1completed four of the five tasks set forth in the MediumTerm Management Plan (Improvement of AutomatedWarehouses, Dual Head Wire Bonding Machines, AGV
Improvements, and Plant Simulation (Software)). Regarding
the development of charging and discharging equipment,
we have changed our strategy from in-house production toexternal procurement.
As orders grow, we are also addressing productionrelated issues such as factory space and human resource
shortages and are working to develop and receive orders
for mass production projects that will lead to continuationand expansion.
Development of Key Devices in the Battery Field

Business expansion in growth markets
Efforts to strengthen profitability of automotive-related business

Plan

ResultStrategy change(switched from inhouse production
to external
procurement)

Charge/dischargemachines

Improvement of automated warehouses

Dual head wire­bonding machines

AGV improvements

Development
complete(orders and inquiries
are on the rise dueto the expansion ofprocesses that we
support)Plant simulation(software)

An example of an EV-related component production system

Hirata Integrated Report 2023

27

Hirata’s Strategies

Business Segment Strategies

Existing fields

Significant progress was made in standardizing entire lines and developing customers: EDU assembly lines for EVs,
IGBT module assembly lines, inverter assembly lines, gear-box assembly lines, rotor assembly lines, and statorassembly lines.

Prior investment/New fields

We have already begun development and prototyping for standardization of entire lines and entry into the cellmanufacturing field for the following: battery module and battery-pack manufacturing process and charging anddischarging systems (in cell manufacturing processes).

Development of key devices

Four of the five development themes set forth in the Medium-Term Management Plan have been completed(1) Chargers/Dischargers, (2) Improvement of Automated Warehouses,(3) Dual Head Wire Bonding Machines (Hard wiring devices with two heads),(4) AGV Improvement, and (5) Plant Simulation (Software)
Charging and discharging machine manufacturing was switched from in-house production to external procurement.

Business Strategies by Region 

28

North America
Since the establishment of a North American Group
company in 1980, we recognize that our long-standing
track record and reliability have been highly evaluated.
While major automakers are investing heavily in EVs, highperformance ICE (internal combustion engines) sales are
expected to continue as the infrastructure for the full-scale
development of EVs has not yet been established. Hirata
will strengthen its competitiveness in both markets bystrengthening relationships with customers and promoting
standardization of equipment.

China
EVs are a market with solid demand due to China’s national
policies, such as “Made in China 2025” and “Strong
Manufacturing Country 2030.” We have also built up
a track record from the wave of local procurement by
Japanese companies. By promoting the acquisition ofdesign technology for EVs, regarding which we are aheadof the competition in Japan, we will expand opportunities
for orders in China.

EuropeIn Europe, demand for EVs is expanding against the backdrop of demand-boosting measures by governments invarious countries. However, the market is highly c­ ompetitive,
and we will promote the creation of a system that canreliably conduct sales and maintenance without pursuingorder scale.

Southeast Asia
We recognize that, at this point in time, EV-related investments have yet to begin in earnest, and that the resulting
major wave of local production opportunities has yet topresent itself. We will, however, make preparations for asmooth transition to the production systems in which Japanand other countries are taking the lead.

Hirata Integrated Report 2023

Semiconductor-related Equipment BusinessWe develop, manufacture, and sell components such as openers for various storage containers used for wafer transfer in semiconductor manufacturing processes, atmosphericand vacuum robots, and aligners. In addition, we are focusing on system products that
apply these technologies. For semiconductor manufacturing equipment manufacturers,
we provide EFEMs* optimized for each equipment type in the form of OEM and ODM, andfor semiconductor manufacturers (foundries), we offer EFEMs and sorters under our brand
name. We are also responding to innovations in semiconductor manufacturing technology(miniaturization and 3D miniaturization). In addition to the development, manufacture,and sale of various components and system products (EFEMs) used for the transportationof PLPs, we also offer N2 EFEMs to transport wafers in N2 (nitrogen) environments to curb
the adverse effect that the atmosphere has on wafers.
* Equipment front-end modules

S

W

Strengths(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

Weaknesses

(1) D elays in strengthening overseas production bases (cost competitiveness) and in responding to local production for local
consumption trend(2) S trengthening of sales structure in European and U.S. markets(3) Profitability of parts sales and after-sales service business(4) Strengthening the lineup of our own-brand system products

Opportunities

O(1) Further growth of semiconductor market(2) Innovation in semiconductor manufacturing technology(3) Acceleration of electrification due to stricter environmental
regulations(4) Local production for local consumption
(5) Trends toward vertical set-up and standardization of facilities
for fabrications by end users(6) Establishment, revisions, and addition of SEMI industry association standards

ThreatsT(1) S oaring material prices and longer delivery times stemming fromgrowing demand and conflicts(2) Rise of emerging market companies and start-ups(3) Innovation in semiconductor manufacturing technology(4) Economic friction, sanctions, and disputes(5) M arket exclusion due to legal regulations and economic policies(6) E stablishment, revisions, and additions of SEMI industry association standards

Business Environment 
Industry Outlook
Demand for semiconductors, which can be said to be thecore product of digitalization, is increasing year by year.
Also, in societies that are aiming to be carbon neutral by
2050, electrification is gaining pace, and the importanceof semiconductors, including their automotive applications, is increasing. Against the backdrop of governments
around the world that are considering the introduction andexpansion of policies to actively support investment in theirsemiconductor industries, semiconductor manufacturers ineach country are also planning record-high levels of capital
investment. The semiconductor market is expected toreach the equivalent of approximately ¥100 trillion in 2030,
and the semiconductor manufacturing equipment field is
expected to grow accordingly.
Major Business Partners
Our major business partners include Tokyo Electron Limited,
DISCO Inc., Advantest Corporation, ULVAC, Inc., and Ebara
Corporation.

Forecast of Global Semiconductor-related Equipment
Market Size
(10 billions of U.S. dollars)

120

11
9

100
80

5
4

40

7
6

6
5

60

100

60

55
44

20
0

2020

Semiconductors

2021

2022

Production equipment

2030

(FY)

Materials and components

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

Hirata Integrated Report 2023

29

Hirata’s Strategies

Business Segment Strategies

Fiscal 2022 Results Despite a slowdown in the semiconductor market, wesecured a high level of orders and sales in the fiscal year
under review, backed by a backlog of orders from theprevious fiscal year and capital investment demand in thelegacy (older generation) semiconductor sector.

FY2022 Results

FY2024 Targets

Net sales (millions of yen)

28,95440,000Operating profit (millions of yen)

3,445

6,000

Operating profit ratio

11.9%

15%

Business Strategies 
We are promoting activities to develop equipment that iscompatible with the miniaturization of semiconductors. We
recognize that shortening the lead time until delivery is also
an issue, and we will work to improve production capacity
and availability of parts and materials through cooperation
with suppliers and promotion of digitalization.

Medium-Term
Management Plan
Basic Policy1

We are also focusing on building a cooperative systemwith our overseas affiliates and are strengthening
cooperation in other regions, such as Southeast Asia andNorth America, in addition to China and Taiwan.
In response to changes in the external environment, weplan to review and formulate strategies and functions atoverseas bases.

Business expansion in growth markets
Efforts to strengthen profitability of semiconductor-related equipment business and bolster efforts to adopt EFEM
Standardization

System Example
Vacuum robot

Load port

Vacuum-compatible
wafer transfer robot

A device that delivers
wafers into various
processing devices

EFEM
Located in front ofprocess equipment thatprocesses wafers andpanels, EFEM transfers
wafers and panels
between containers andprocess equipment in aclean environment.

Atmospheric robot
Atmospheric wafertransfer robot

Electric gate valve
An electric device thatmaintains a vacuum state

30

Hirata Integrated Report 2023

Aligner
Wafer
positioning
devicePromotion of Local Production
In addition to Taiwan, we have established a system that enables production and sales in China (Shanghai) and Southeast
Asia (Malaysia and Singapore) and are promoting local procurement of components.

Hirata Corporation of America
Detroit (New Hudson) Office

Hirata Engineering Europe GmbH
Hirata Automated Machinery (Shanghai) Co., Ltd.

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

Indianapolis Office
Hirata Engineering S.A. De C.V.

Hirata Engineering (Thailand) Co., Ltd.
Hirata FA Engineering (M) Sdn. Bhd.
Hirata FA Engineering (S) Pte. Ltd.

Base where local production is being newly promoted
Base where local production is currently being conducted
Other type of baseProduction efficiency

Strengthen cooperation with suppliers to reduce the risk of delays in component delivery and improve productivity

Development of next-generationequipment

Development of semiconductor transport equipment responding to the miniaturization of semiconductors has alreadybegun

Business Strategies by Region North America
We have an ongoing business relationship with a specificsemiconductor manufacturer in the United States and willcontinue to maintain a system that enables us to realize
local sales and maintenance while cooperating with ourmanufacturing bases in Japan.

China
The investment environment for semiconductors has been
improving due to China’s national policies, such as “Madein China 2025” and “Strong Manufacturing Country
2030.” We will focus on providing technical education for
employees so that we can expand the manufacturing ofwafer transfer equipment in China, which is ahead of othercompanies in Japan and Taiwan.

EuropeOrders for openers and other products have beenstrong thanks to the expansion of investments by local
manufacturers in the semiconductor market. Whilefocusing on standard products, we will promote thecreation of a system that enables us to realize local sales
and maintenance.

Southeast Asia
In Singapore and Malaysia, as semiconductor fab investments
have been announced one after another, we will promotesales of wafer transfer equipment, recognizing that theseregions are expected to grow in sales in the future.

Hirata Integrated Report 2023

31

Hirata’s Strategies

Business Segment Strategies

Other Automatic Labor-saving Business
Having started out as a manufacturer of transport equipment that supplied carts, theCompany commenced the manufacture of conveyors, which formed the catalyst for ourcurrent business, after its establishment in 1951 and then underwent a transformation
into a robotics and production systems business. Having pursued technological innovation
with the desire to allow people to devote themselves to creative work that only people
can do, and having not limited ourselves 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 (FY2022–FY2024), we reviewed our business segments
and classified them into three businesses: Automotive-related, semiconductor-related
equipment, and other automatic labor-saving equipment. In the latter, we manufactureand sell production equipment for a variety of fields, such as flat panel displays (FPDs),
home electronics, and medical and scientific devices.

Net sales (millions of yen)

FY2022 Results

FY2024 Targets

16,95220,000

930

2,000

5.5%

10%

Operating profit (millions of yen)
Operating profit ratio

Individual Segments 
Medical, Chemistry, and Physics Devices
We are developing and manufacturing robot systems andmedical devices that contribute to the automation of laboratory testing.
We are promoting product development with the goalof fully automating pathological examinations. Engaging in
the development of equipment for medical use, with regard
to cancer treatment equipment, we are working together
with our customers to develop medical devices that comply
with laws and safety standards for the purpose of obtaining
pharmaceutical approvals.

ATS (cell observation device)

EZ-PATH FLOAT (pathological tissue
specimen preparation device)

TopicsHigh-intensity Focused Ultrasound Device forCancer Treatment

Head section containing an ultrasonic transducer

Fusion of ultrasound technology and robotic technology
In January 2021, we started joint development of a high-intensity focusedultrasound device for cancer treatment with SONIRE Therapeutics Inc.
(hereinafter “SONIRE”). In order to take advantage of the new treatment
method developed by SONIRE called microbubble-enhanced HIFU (highintensity focused ultrasound) treatment, we have developed a safe medical robot that can accurately follow the control inputs performed by thedoctor.

Comment
It was important to create a system and structure that would not delay the
production of specifications, verification records, and design documents
without omissions during development. Since it is necessary to move theheavy head section of the unit to the affected area, we devised a function thatallows medical professionals to operate the head section directly and easily.
We are committed to realizing functions that are easier to use and safer, andwe would like to use our technology to treat as many people as possible.

32

Hirata Integrated Report 2023

Mr. Inoue

Mr. Shimizu#1 Equipment
Business Division

Robot Division

Home Electronics
By effectively combining the technologies that are at theCompany’s disposal, such as transfer, robot, clean room,and precision assembly technologies, we provide global
support for parts and final assembly of home electronics

that are continuing to evolve. These include mobile devices
such as smartphones and tablets, high-quality displays, andhigh-performance vacuum cleaners.

Industrial Robots
Industrial robots represent our core technology. We havestandard robot controllers, with which multiple types ofrobots can be operated in a same environment. It is also
possible to operate a robot from a host device such as aprogrammable logic controller (PLC) or PC without using arobot language, reducing the burden on system designers
and shortening the time required to set up the equipment.
Selling multiple types of robots articulated along orthogonal,
horizontal, and vertical axes, we provide products that match
the processes of a wide range of production systems.

Putting functional safety at the forefront, we are working
on the development and improvement of industrial andmedical robots.
Targeting production systems in the electric vehicle (EV)and semiconductor fields, which are expected to see further
growth in the years to come, we will make more improvements in terms of safety, performance, functionality, andoperability and strive to broaden the reach and improve theperformance of our equipment.

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

tailor-made for the products and factory environments ofour customers.

FPDs
Due to the high image quality and high-speed responsefeatures of organic EL displays, demand for their use isincreasing not only in mobile phones but also in devices
with large screens. To improve productivity, there isdemand to shift the substrate size from G6 to G8, which
is currently the mainstream, and equipment development

is progressing, but as the equipment has become larger,
many technical issues have arisen. With our technologicalstrength and production capacity for large FPD production
systems that we have cultivated so far, the Group will workto acquire markets.

Topic
Eco Electric Series—Contributing to Sustainable Manufacturing
The brushless DC motor developed in-house enables labor-saving andcompactness of conveying equipment.

Hirata’s eco-friendly conveyance system for sustainable manufacturing• Built-in compact, high-efficiency
brushless DC motor developed inhouse for the Eco electric series• Activates only through 24 VDC ON/
OFF operation. Does not require adrive panel or controllerF or more information, please visit the Eco Electric Series website.
https://hirata-ecoele.com/en

Hirata Integrated Report 2023

33

Hirata’s Strategies

Financial/Capital Strategies
Summary of Fiscal 2022 and Recognition of Environment 
net sales, ¥10 billion in operating profit, a 10% operating
profit ratio, and ROE of 11% for fiscal 2024. To improve
capital efficiency, we will work to secure ROIC that exceeds
the weighted average cost of capital (WACC). In fiscal 2022,
we achieved net sales of ¥78.443 billion, operating profit of¥5.92 billion, an operating profit ratio of 7.5%, and ROE of
7.5%. In addition, we secured ROIC of 7.1%, exceeding costof capital (WACC) of 5.5%.
We will continue to focus on profitability indicators such as
operating profit ratio, ROE, and ROIC and allocate resources
to expand business in growth markets while solidifying ourmanagement base, leading to long-term growth.

The Group receives orders for production equipment frommanufacturers of products in a wide range of fields, suchas electric vehicles (EVs) and other Automotive-related
Businesses, semiconductors, and other automatic labor-saving equipment. Therefore, due to changes in the economic
conditions in Japan and overseas, changes in the lifecycles ofcustomer products and other factors, fluctuations in capital
investment by business partners may affect performance.
The Medium-Term Management Plan (FY2022–FY2024)
has been positioned as a three-year period in which toexpand business in growth markets while generating profit
from existing businesses and solidifying our managementbase. We have adopted numerical targets of ¥100 billion in

Basic Financial Policy 
In terms of the strengthening of our finances, we will continue working to reduce interest-bearing debt, reduce interest
costs, and hedge risks through forward exchange contracts andother measures, as we have been doing, while maintaining a
disciplined D/E ratio level based on fluctuations in performance.
The cash conversion cycle (CCC) worsened year-on-year due
to an increase in length of the trade receivable turnover period,
an increase in length of the inventory asset turnover period due
to longer delivery dates for parts, and a decrease in length of the
trade payable turnover period due to changes in payment policies.
In addition to setting and increasing advance payments forlarge projects and long-term projects, we will continue to negotiate with customers for the early collection of trade receivables,
improve procurement lead times, and reduce inventories.

A major issue for the period of the current Medium-Term
Management Plan is to strengthen profitability in growthmarkets such as EVs and semiconductors. As customers’
capital investment in EVs and semiconductors is booming, we
will strengthen process control and manage the profitabilityof projects more thoroughly than ever before in response to
an increase in production load, as well as develop 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, we will curb
the occurrence of extraordinary expenses and improve theefficiency of assets such as accounts receivable and inventories.

Progress of Medium-Term Management Plan Management Index Targets
Final-Year Target of
the Medium-Term
Management Plan
(FY2024)First-Year Result(FY2022)

Second-Year Forecast(FY2023)

Automotive-related equipment

400

302

380

: Increase in orders

Semiconductor-related equipment

400

289

310

: Improving production efficiency is an issue

Other automatic labor-saving
equipment, etc.

200

191

210

: Continued investment despite declining FPD
business

Total

1,000

784

900

: Expanding production capacity is an issue

Segment

Net sales

Operatingprofit(Operating
profit ratio)(Unit: 100 million yen)

State of Progress

Automotive-related equipment

20

(5%)

15.5

(5.1%)‐*‐*: EV profitability improvement

Semiconductor-related equipment

60

(15%)

34.4

(11.9%)‐*‐*: Passing on the cost of high component
prices is an issue

Other automatic labor-saving
equipment, etc.

20

(10%)

9.1

(4.7%)‐*‐*: Profitability worsened due to specificproducts

Total

100

(10%)

59.2

(7.5%)

54.0(6.0%): Improving profit margins in each segment
is an issue* Forecast for operating profit by segment for the fiscal year ending March 31, 2024 has not been disclosed ended.

Cumulative
capitalinvestment(% increase(decrease))

34

Investment to strengthen production/
development capacity60

21.6 (36.0%)

57.8 (96.3%): Responding to an increase in orders received
in the automotive and semiconductor fields

Investment in biological genetic resources(mainly plant genetic resources) R&D

40

0.8 (2.0%)

14.5 (36.2%): Delay in equipment arrangements due tothe impact of COVID-19

IT system-related investment

10

4.6 (46.0%)

6.0 (60.0%): Implemented major update of core systems

Total

110

27.0 (24.5%)

78.3 (71.1%): Ensuring IT system-related investment during
the fiscal year under review is an issue

Hirata Integrated Report 2023

Cash Conversion Cycle(Days)

CCC

200

215

216

214

222

232

59

62

70

75

72

74

217

223

222

210

215

214

75

76

70
Q1

Q4

79

225

65

Q3

Q4

Inventories

Trade payables

57

56
Q1

Q2

FY2022

FY2021
Trade receivables

72

Q2

247

FY2023

Cash conversion cycle

Financial Strategy in Current Medium-Term Management Plan (Cash Allocation Concept) 
While effectively investing generated operating cash flows 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.
Distribution of Net Cash Provided by Operating Activities

Net cash provided byoperating activities

Growth investments

We will implement capital investments (enhancement of production
and development capacity, research and development of plant genetic
resources, and investments related to IT systems) 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 return

Consolidated dividend payout ratio of 20% or more

Shareholder Return Policy 
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 a consolidated payout
ratio of 20% or more, while taking into consideration consolidated performance and future business development, andstriving to achieve returns in a stable and continuous manner.

In FY2022, the consolidated dividend payout ratio was
21.9%, and dividends per share came to ¥90. Goingforward, we will discuss shareholder return policies while
paying close attention to various changes, such as feedback
from shareholders and investors with regard to shareholder
returns and the business environment, without beingbound by a conventional shareholder return policy.

Changes in Dividends per Share and Consolidated Dividend Payout Ratio(Yen)(%)
60

150

125.0

46.1
100

100.0

32.2

15.5

16.4

15.0

12.5

12.5

15.0

2011

2012

2013

2014

Dividends per Share

90.0
28.4

50

0

125.0

17.5

16.0

19.5

40

21.9

23.8

65.0

65.0

40.0

16.6

25.2

20

2020

2021

0
2022 (FY)

30.0
2015

2016

2017

2018

2019

Payout ratio

Hirata Integrated Report 2023

35

Hirata’s Strategies

Special feature

Taking On the Biological Genetic Resource Business(Mainly Plant Genetic Resources)

For more than 70 years since our founding, we have grown and expanded our business by proposing a manufacturing style that responds to customer needs that change with the times. In order for the Company to achieve sustainable growth amid ever-increasing changes in society, we believe that it is necessary to value traditional businesspractices, more flexibly grasp the needs of society, and actively take on the challenge of new businesses.
During new business development, we consider businesses irrespective of manufacturing framework on the condition that we anticipate the needs of society and contribute to society. The biological genetic resources business(mainly plant genetic resources) has been positioned in the current Medium-Term Management Plan that calls on us
to take on new challenges. Although we are starting from scratch in a completely new field, we will broaden ourperspective as a company and aim for sustainable growth.
Genetic resources are materials derived from plants, animals,
and microorganisms or materials that have functional
units of heredity with real or potential value. When using
genetic resources derived from foreign countries for research
purposes, ABS (access and benefit sharing) procedures are
required to distribute profits generated from the use of genetic
resources a fair and equitable manner, and any acquisition or
use that does not comply with the laws and regulations of thedonor country can be a serious risk to the researcher and to
Japanese science as a whole. However, since there are many

problems related to ABS procedures, it is a major barrier toresearch on the utilization of genetic resources.
To address these issues, we are currently focusing mainly onplant-based genetic resources, which is a pioneering and rarebusiness condition, even in Japan. By securing comprehensive
acquisition permits for undiscovered and underutilized genetic
resources, we can significantly reduce associated risks fordomestic companies, universities, and research institutions.
Note: References definitions from the Convention on Biological Diversity

University ofTsukuba
Guidance/Advice
Commissioned
research

Necessary negotiations
and procedures

Donor Countries
Indonesia and Argentina

Unique ABS
contract modelResearch andDevelopment
Headquarters

Evaluation/Advice

Support for the acquisition of genetic resourcesthat conform to the ABS legal system

Users

Royalties/license fees

Domestic companies, universities, and research institutes

ABS Market
Creation Task
Force
Experts in related legal systems,
business feasibility,
functionality, and researchand development

Benefits for donor countries

36

Benefits for users• Development of national genetic resources based on
global market information• New development of agricultural production andrevitalization of exports• Job creation and revitalization of local economies• Conservation of genetic resources• Simplification of information acquisition and response regarding ABS measures in other countries• Drastically reduces the risk of obtaining patents related togenetic resources• Simplification of procedures required to commercialize results• Shortened research and development time

We are working on commercialization of biological genetic
resource research while receiving objective evaluations,advice, and support from the ABS Market Creation Task
Force, which consists of external experts, and the Universityof Tsukuba. We have already developed several projects
for the sustainable use of plant-based genetic resources inIndonesia and Argentina. The fair and equitable distribution of benefits arising from the use of genetic resources

between the donor country and the user, while ensuring
appropriate access to unused resources, is mutually beneficial. Furthermore, this initiative provides the Company withthe hidden potential benefits of new business development
and participation in new fields.

Hirata Integrated Report 2023

For more information, please visit the website below.
https://www.hirata.co.jp/en/r_and_d/efforts

Hirata’s Sustainability
38

Sustainability Management

40

Our Sustainability Activity Vision

41

Materiality

44 Theme One: Response to Climate Change
51 Theme Two: Building of a Sustainable Society
52 Theme Three: Bringing Out the Best in Every Person
56 Theme Four: Strengthening of Our Management Foundation
58

Supply Chain Management

60

Corporate Governance69

A Talk between Our Outside Directors

72

List of Directors

Hirata Integrated Report 2023

37

Hirata’s Sustainability

Sustainability Management

The Hirata Group emphasizes both business growth andthe resolution of social issues while bringing about
improvements in corporate value.
Emphasis on three types of value to improve corporate value

Improvement ofenvironmental
value

Increased

economic
value

Contributing to the spread of sustainablesocial infrastructure through Hirata’s businesses

social value

Aiming to be a global company withdiversity of human resources
and the ability to respond to change

Stakeholders

Include our shareholders, investors,
employees, customers, suppliers,
and local communities

Medium-Term
Management Plan/
Business Activities

Specific management plans andbusiness plans, based on materiality(important issues)

Materiality (Important Issues)

Ten areas of materiality (important
issues), based on our Sustainability
Basic Policy

Sustainability Basic Policy

Basic thoughts with regard to
improvements in corporate value
and sustainability initiatives, basedon our Corporate Philosophy

MissionStatement

38

Improvement ofHirata Integrated Report 2023

Management
Philosophy

Purpose and significance ofthe Hirata GroupBasic Concept behind Sustainability 
The Group’s Sustainability Basic Policy was decided at
the Board of Directors’ meeting held in April 2022. The
Sustainability Basic Policy clearly states in writing our policy
to contribute to the realization of a sustainable society
through the Group’s corporate activities from the threeperspectives of the environment, society, and economy. The
starting point of our Group’s sustainability is the perspective of continuing to grow our business while fulfilling oursocial responsibilities to all stakeholders.

Sustainability Basic Policy
The Hirata Group aims to make everyone involved in the Company content andto contribute to the building 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 andservices that show our consideration for the global environment—
we will ensure management transparency and soundness while working
to achieve both business growth and the resolution of social issues.

Sustainability Promotion System 
Sustainability Promotion Committee carries out activities
while integrating the committee with management, and
it is currently formulating targets and action plans for theidentified materiality.

The decision to establish a Sustainability Promotion
Committee was taken at the Board of Directors’ meeting
held in October 2022. Five working groups have been
established under the committee to promote each initiative. Under the supervision of the Board of Directors, theBoard of Directors
Supervise

ReportCommittee
Sustainability Promotion
Committee

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

Promotion function
Corporate Planning Department

Working Groups

Green Factory

Green Market
Green Product

Bringing Out the Bestin Every Person

Supply Chain

Corporate GovernanceGroup company management/promotion

Hirata Integrated Report 2023

39

Hirata’s Sustainability

Our Sustainability Activity Vision

2050

Achievement of carbon neutrality across all businesses,
including their supply chains.
Lead global sustainability efforts and contribute to thewell-being of everyone involved with Hirata and thecreation of a sustainable society.

2030

Instill engagement in sustainability activities throughout the Group while balancing business growth withsocial issues.
Meet stakeholders’ expectations at a high level.

2024

Determine the direction of sustainability initiatives
and formulate a road map for sustainability activities.
Understanding of sustainability initiatives within the
Company is widespread.

2023

Five working groups are promoting materiality initiatives to realize the vision.

Q1

Q2

Q3

Q4

Prepare for Goals andActivity Plans

Review Goals andActivity Plans

System Creation andVerification of Feasibility

Prepare for
Execution Phase• Examine goals andactivity plans based on
external requirements
for each materiality• Establish a systemfor determining andrealizing goals andactivity plans for eachmateriality• Incorporate goals andactivity plans into eachdivision’s next fiscal
year business plan for
specific activities• Understanding ofsustainability• Establishment of an
examination system• Confirmation anddetermination ofassumptions forformulating goals andactivity plans

40

Hirata Integrated Report 2023

• Committee deliberations on the above
goals and activity
plansMateriality
To achieve both sustainable business growth and the resolution of social issues, even amid an external environment that 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.
Based on changes in the business environment and social trends, the Company will periodically review its
materiality.

Materiality Identification Process In addition to discussions at management meetings andBoard of Directors’ meetings, we received opinions andevaluations from external experts when identifying theimportant issues. Along with incorporating these materiality

issues into the Medium-Term Management Plan, we will
work to instill awareness of them throughout the Company
by specifically reflecting our Sustainability Basic Policy andour sustainability activity vision in the form of activity plans.

Issue identification and management
STEP

1

Having referred to international guidelines on sustainability and survey results from ESG rating agencies, we have identifiedsocial issues that could conceivably have a significant impact on the Group’s management and business. Among approximately
100 issues considered for selection, we have organized into groups those issues that will become candidates for materiality inlight of the Company’s future direction, such as its business characteristics, management plans, and targets.

Level-of-importance assessments by senior management and external experts
From among the extracted and organized issues, we assessed levels of importance to narrow down the important
items in terms of the medium- to long-term management of the Group. For the assessments, we conducted aquestionnaire of internal and external senior management as well as external experts. At that time, we asked themto assess the Company along two axes: level of importance in terms of corporate value (horizontal axis) and level ofimpact on society (vertical axis).
Materiality matrix
High

Identified materiality (important issues)(1) R eduction of environmental impact by theCompany and in the supply chain
STEP

(3) C
 reation of new customer needs in accordance with social changes

Level of impact on society

2

(2) C
 ontribution to carbon neutrality throughproducts and services(4) R esponse to progress of digitalization(5) S ecuring and training human resources(6) C reating diverse, safe, and secure workplaces(7) Improvement of product safety and quality(8) S upply chain management(9) E nhancement of corporate governance(10) R isk management

High
Level of importance in terms of corporate value

Approval and inclusion in Medium-Term Management Plan
STEP

3

Following the assessments, the materiality proposal was deliberated at multiple management meetings and Board 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 are setting targets and working on visualizing the initiatives throughout the
duration of the plan.

Hirata Integrated Report 2023

41

Hirata’s Sustainability

Materiality

With regard to the identified materiality, each working group is currently formulating its 2030 goals and KPIs.
The table below shows some of the goals and KPIs that have already been decided within the Company.

Four themes

Response
to Climate
ChangeMateriality (important issues)

Risks

Opportunities

Key initiatives(1) R eduction ofenvironmental impact by
the Company and in the
supply chain•D ecrease of business opportunities
and increase of response costs when
we cannot comply with customers’
environmental requirements and industrycode of conduct•R estrictions on business activities due tolaws and regulations• Acquisition of trust of stakeholders bystrengthening environmental initiatives andimprovement of long-term corporate value• Reduction of GHG emissions at our plants
and reduction of environmental impact on
local communities•R educe environmental impact•R educe GHG emissions• P romote resource-recycling society(2) C ontribution to carbon
neutrality throughproducts and services• Trade impact due to the provisionof products that do not meet theenvironmental requirements of ourbusiness partners• Reduced competitiveness of our products• Acquire business opportunities through theprovision of products and services with low
environmental impact• Expand the carbon-neutral market(3) C reation of new customer
needs in accordance withsocial changes•D ecrease of business opportunities due todelays in understanding needs and R&D
due to social changes• Improve competitive advantage by creatingproducts and services that contribute tocarbon neutrality• Expand business fields beyond existingproducts and services• D iscover new customer needs inaccordance with social changes andmake related improvements(4) R esponse to progress ofdigitalization• Decline in competitiveness and outflow
of human resources due to a delay inresponding to digitalization• Effective strategy formulation by
understanding customer behavior andmarket trends through data analysis• Respond to progress of digitalization• Prepare the foundation for a smart society(5) S ecuring and training
human resources• L ack of a group of engineers, which
is necessary for establishing an orderbusiness when human resource
development is insufficient• P roductivity decline due to inferior
recruitment of human resources amid theshrinking labor force in Japan• Increase in employee engagement• Acquisition of a competitive advantage inproposal-based business• Opportunity to demonstrate organizational
strength through diverse human resourcesin a highly uncertain business environment• S ecure and train human resources• DE&I(6) C reating diverse, safe, andsecure workplaces• Impact on the physical and mental healthof employees• Stagnation of business activities
due to occupational accidents• Realization of diverse workstyles• Preservation of the physical andmental health of employees• Improve work–life balance• Create a safe workplace where
employees can work with peace of mind(7) Improvement of productsafety and quality•D istrust in the safety and quality of
products and services•D istrust of QCD/Poor quality• Establish and strengthen trust in QCD• Improve product safety and quality(8) Supply chain management• Stagnation of business activities andnon-fulfillment of contracts due to delays
in delivery• Decrease of business opportunities due
to delays in environmental and social
practices• Business continuity and strengthening of
the production system• Creation of trustful relationships withbusiness partners• Implement supply chain management• Respect human rights(9) Enhancement of corporate
governance• Loss of opportunities due to lack ofinvestor relations and shareholder relations• Deterioration of the business environmentand stagnation of business due to lack ofgovernance function• Acquisition of trust from stakeholders by
responding to global standards• Increased momentum for strategic change
through appropriate oversight andexecution of responsibilities• Stakeholder engagement• Enhance corporate governance• Loss of social credibility due to violationsof laws, regulations, and compliance• Improvement of management andcorporate culture by acting with integrityand ethics in addition to compliance withlaws and regulations• Establishment of a risk management systemthat aligns with management strategies• Adhere to fair trade compliance• Conduct risk management• Maintain soundness of financial capital

P.44

Building of asustainable
society
P.51

Bringing out
the best in
every person
P.52

Strengtheningof ourmanagementfoundation
P.56(10) Risk management

Note: As of fiscal 2023, the goals and KPIs above are for Hirata Corporation alone.

42

Hirata Integrated Report 2023

Working Groups
Green factory (GF)
Green market/Green product (GMP)
Bringing out the best in every person (People)
Supply chain (SC)Corporate governance (CG)

Efforts implemented

Goals/KPIs* for 2030

• E stablished Environmental Policy andenvironmental management system(acquired ISO 14001 certification)• E xamined Scope 1 and 2 emissions,installed solar panels, and examined
renewable energy procurement methods
such as PPA• P romoted the introduction of energysaving equipment, reviewed water
circulation equipment settings, andparticipated in beautification campaigns

[GF]
*C
 urrently under discussion
by the Sustainability
Promotion Committee[GMP]
*C
 urrently under discussion
by the Sustainability
Promotion Committee•D eveloped and improved key devices in thebattery field for electric vehicles (EVs)(dual head wire bonders, etc.)•D eveloped and improved products to meetcustomer needs[GMP]
*C
 urrently under discussion
by the Sustainability
Promotion Committee• E nhanced the advancement of 3D design(implementation and training)•U se of CADVR and emulators•A utomation of other business processes[GMP]
Improve work efficiency byreplacing core systems (30%workload reduction)• E xpansion of training (specialized themes
such as harassment, anger management,
mental health, communication, evaluator
training, etc.)• E nhanced career recruitment• E ngagement surveys[People]20% employee engagement rate

• E stablished a health management center
within the Human Resources Department• E xpanded rules to make working hours
more suitable, such as regular day shift
work, time off, and interval time
• F ormulated Health and Safety Policy• E xpanded barrier-free accessibility (atfacilities, etc.)[People]
Strengthen health andproductivity management
initiatives (acquire “White
500” certification)• E stablished Quality Policy andenvironmental management system(acquired ISO 9001 certification)• P romoted standardization[GMP]
Customer satisfaction survey• Response rate: 90%• Weighted average of survey
results: 4.5 points or more
Continue to report zero
serious accidents caused byproducts• F ormulated Procurement Basic Policy• F ormulated procurement guidelines•H eld supplier meetings•C onducted CSR procurement
self-assessments[SC]
CSR procurement selfassessments: No suppliers witha score of less than 3.7 points• E nhanced risk management system

Green Factory
Reduction of greenhouse gas emissions at our plants(Scope 1 and 2) and reduction of other environmental
impacts are the main themes of our activities. At present, we are formulating a plan for achieving carbon
neutrality at our plants and conducting concrete
discussions and verification to set reduction targets
by 2030. Although there are many issues to consider,such as how to collect and aggregate data and how
to deal with renewable energy, we will work on it byaggregating wisdom across the Company.

Jo Yoneda

Green Market/Green Product• E xpanded the Eco Electric Series lineup• E xpanded opportunities to make carbonneutral-related proposals to customers•D eclared support for TCFD
recommendations• S igned United Nations Global Compact•R eviewed our Code of Conduct

Comments from Working Group Leaders[CG]
• Zero serious legal violations• Zero key compliance item
violations

Our mission is to contribute to carbon neutrality
through our products and services and to create newcustomer needs in response to social changes.
We believe that these efforts will provide opportunities for us to expand our market and develop new
products. In response to the advancement of digitalization, we will make full use of digital technology to
improve operational efficiency and increase the added
value of our products. We will reflect these activities inour medium- to long-term business strategy and aim
for continuous growth.

Shigeru Maeda

Bringing Out the Best in Every Person
As stated in our Management Philosophy, from thetime of our founding, Hirata has always believed
in nurturing people by taking advantage of theircharacteristics and valuing their growth, and it wants
each person’s life to be wonderful by working for theCompany. In order to achieve this, it is necessary to
first ensure that employees are healthy both physically and mentally, to create a workplace that ensures
psychological safety and a safe working environment, and then to create a system that enables
employees to think about their careers and play
an active role. We are working to clarify issues andthereafter realize more effective initiatives by grasping actual conditions through employee engagement
surveys and promoting dialogue between management and employees.

Miho Mori

Supply Chain
As a global company, Hirata recognizes that supply
chain management has rapidly increased in importance in recent years. We are required to ensure astable supply based on quality, price, and delivery
time and also to practice CSR procurement that fulfills social responsibilities, such as considerations forthe environment, labor (human rights), and ethics.
Although there are many issues to be addressed, we
will work together with our customers and suppliers
to face those issue in earnest in order for each otherto survive and grow over the long term.

Shojiro Hirata

Corporate Governance
We will review and organize the Hirata Group Codeof Conduct to ensure that officers and employees
comply with laws and regulations and act in goodfaith under high ethical standards. In addition, we
have set a goal of zero violations in priority areas andpromote a PDCA cycle (Plan–Do–Check–Act), such as
monitoring, with the aim of gaining high trust andrecognition from stakeholders from all walks of life.

HidekiNinomiya

Hirata Integrated Report 2023

43

Hirata’s Sustainability

Materiality Theme 1 Response to Climate Change

Environmental Management
Hirata has established environmental policies and promotes environmental activities in line with those policies.
We will contribute to protecting the global environment by reducing the environmental load in all aspects of ourbusiness activities, products, and services.

Environmental Policy
Hirata Corporation contributes to protecting the global environment by reducing the environmental load in all aspectsof its business activities, products, and services in order to achieve a sustainable society.
(1) We lower the environmental load of our products
by considering each phase of a product’s life cycle
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 as needed. We also
develop coordination and cooperative relationships
with relevant government agencies and contribute to
local communities.(3) We strive to improve productivity and conserve theenvironment throughout all our business activities
and production processes, including sales, design,
manufacturing, installation, and after-sales services. • Reducing energy usage and emissions of greenhouse gases• Reducing waste and promoting recycling• Reducing harmful materials and using substitute articles• Preventing environmental problems and accidents• Preserving biological diversity(4) We increase environmental awareness by implementing educational and publicity activities.
(5) We review our EMS regularly to enhance environmental performance while striving for continuous
improvement.

Environmental Management Promotion Framework 
Having put in place an environmental management system(EMS) promotion framework led by top management
and environmental management managers, we obtainedinternational standard ISO 14001 certification at ourKumamoto, Kanto, and Kansai plants.

Representative Director, President
Chair of ISO Committee
Environmental management managers
Secretariat: Quality Control Department

ISO monitoring team

ISO Committee members: Division directors,
Business unit general managers, divisional heads
Personnel responsible for ISO management

Environmental Accounting 
The environmental preservation costs for fiscal 2022 were as follows.
(Unit: Thousands of yen)

Item

Major Initiatives

Cost of preventing pollution• Installation of warehouses for hazardous materials

Global environmental protection cost
Cost of resource recycling

Cost

4,007

16,753• Introduction of energy-saving equipment

163,888

172,107• Disposal of general and industrial waste−

58,140

Upstream and downstream costs• Investigation of chemical substances contained in products

−

6,428

Administration costs• Installation of energy measurement units• Maintenance of environmental management system• Environmental measurement• Environmental education

400

44,148Social activity costs• Environmental preservation and beautification• Donations to environmental protection organizations

−

2,422

168,295

299,998

Businessarea costs

Total
Note: The above data is on a non-consolidated basis.

44

Investment

Hirata Integrated Report 2023

Status of Business Activities and Environmental Impact Environmental impact in fiscal 2022 was as follows.
Input

OutputHirata Corporation Business Activities

Energy Usage(Crude oil equivalent)*1 3,952 kl

Design and Development
Procurement

Gasoline

3 kl

Kerosene

10 kl

Light oil

11 kl

LP gas73 t

Electricity

15,205 MWh

Production
Processing
Coating
Assembly

Co2 Emissions*2

5,031 t-CO2

Waste
Industrial waste

460 t

General waste

32 t

Valuable resources

790 t

Chemical Substances(PRTR substances)

Water Resources
Groundwater

28,974 m3

TolueneClean water

5,536 m3

1, 2, 4-Trimethylbenzene
0.5 t

Chemical Substances
PRTR Substances

2.9 t

Xylene

0.5 t

Other

0.6 t

4.5 t

*1 Energy usage calculated using method based on the Energy Conservation Law*2 CO2 emissions associated with power consumption calculated based on basic emission factors from electric power companies
Note: The above data is on a non-consolidated basis.

Environmental Goals 
No.

Item

Reducing
energyusage

1

Preventionof global
warming
Reducing
CO2
emissions

Reducing
water
usage

2

Effective useof resources

3

Reductionof industrial
waste
generation: Achieved: Nearly achieved* Scope: Hirata Corporation only

Goals

FY2022 Accomplishments*

By the end of fiscal 2023, we will have
reduced the amount of energy used
by 3% or more compared with that of
fiscal 2020 when measured based on theactual production amounts.

Energy usage decreased by
12.8% in comparison withactual production
Reduced due to the installationof energy-saving equipment suchas electric forklifts and highefficiency air-conditioners, and theincrease in production output

To promote thereduction of energy
consumption throughthe introductionof energy-saving
equipment, such as
high-efficiency airconditioners and energysaving control devices

CO2 emissions decreased by
23.2% in comparison withactual production
Decreased due to a decreasein energy consumption and adecrease in greenhouse gas
emission factors from electric
power companies

To strive to reduce CO2
emissions by reducing
energy consumption

Water usage decreased by
24.7% in comparison withactual production
Reduced due to an increase inproduction output

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

Industrial waste generation
decreased by 16.2% incomparison with actual
production
Reduced due to a decreasein waste oil discharge and anincrease in production output

To work to reduce theamount of industrial
waste generated byexpanding the use of
returnable boxes

Goal for fiscal 2022
2% reduction in energy usage comparedwith fiscal 2020
By the end of fiscal 2023, we will have
reduced the amount of CO2 emissions
by 3% or more compared with that of
fiscal 2020 when measured based on theactual production amounts.
Goal for fiscal 2022
2% reduction in CO2 emissions comparedwith fiscal 2020
By the end of fiscal 2023, we will have
reduced the amount of water used by
3% or more compared with that of fiscal
2020 when measured based on theactual production amounts.
Goal for fiscal 2022
2% reduction in water usage comparedwith fiscal 2020
By the end of fiscal 2023, we will have
reduced the amount of industrial waste
generated by 3% or more compared withthat of fiscal 2020 when measured basedon the actual production amounts.
Goal for fiscal 2022
2% reduction in industrial waste
generation compared to fiscal 2020

Evaluation

FY2023 Target: Underachieved

Hirata Integrated Report 2023

45

Hirata’s Sustainability

Materiality Theme (1): Response to Climate Change

Reduction of Environmental Impact by the Company and in the Supply Chain
Changes in Energy Consumption/CO2 Emissions 
The Company is working to rationalize its energy use basedon the Act on the Rational Use of Energy and Shifting to
Non-fossil Energy (Energy Efficiency Act). In fiscal 2020,
operations started in the new headquarters factory area in the
Kumamoto Plant, so both energy consumption and energy
consumption per unit of output increased significantly. In
our environmental targets, we set a 3% reduction in energy
consumption intensity by fiscal 2023, using fiscal 2020 as thebase year. In fiscal 2022, energy consumption was reducedby 12.8% in comparison with actual production, using fiscal
2020 as the base year, due to the introduction of electric
forklifts and high-efficiency air-conditioners, and increased

CO2 Emissions

Energy Usage(kl)

(kl/million yen)

8,000

0.07370.0620production output.
In terms of environmental targets concerning CO2 emissions, for which we also deem fiscal 2020 as the base year, we
adopted a 3% reduction in CO2 emissions per unit of production by fiscal 2023. In fiscal 2022, CO2 emissions were reduced
by 23.2% compared with actual production output due toreduced energy consumption and a decrease in CO2 emission
factors (basic emission factors) from electric power companies.
In addition, the Sustainability Promotion Committee is discussing medium- and long-term initiatives, and concrete measures
will be reflected in the future.

0.08

0.0723(t-CO2)(t-CO2/million yen)

12,000

0.118

0.107

0.06430.0613

0.082

0.06

6,000

0.084

8,000
4,000

4,013

3,587

4,169

3,952

5,798

0.04

3,313

4,014

3,834

4,068

274

121

0.04

6,163
5,299

5,995

294

499

381

278

2019

2020

2021

2022

0.02

2,834

0

6,376
5,031

4,000
3,812

0.08

6,848

2,955
2,000

0.12

0.111

3,775
201

155

118

685
0

2018
2019
2020
2021
2022
(FY)
Fuel consumption (kl)*Electricity usage (kl)*Energy usage per unit of output (kl/million yen)
* Calculated using the fuel and electricity conversion factors from the Act on the Rational
Use of Energy and Shifting to Non-fossil Energy
Note: The above data is on a non-consolidated basis.

0

2018

4,753

0
(FY)

CO2 emissions (t-CO2): FuelCO2 emissions (t-CO2): Electricity*
CO2 emissions per basic unit (t-CO2/million yen)
* Based on power usage, CO2 emissions calculated using basic emission factors
published by electric power companies
Note: The above data is on a non-consolidated basis.

Efforts to Conserve Water Resources 
To conserve water resources, the Company is reducing
water usage and monitoring factory wastewater.
We conduct analyses of the wastewater from all ourplants every year and respond to any abnormalities.

Water Usage(m3)(m3/¥100 million)

120,000

109.1

120

112.8

100,000

100

80,00060,00063,0808,244

61.3
54,374
8,592

40,00054,83620,00080

74.5

45,78240,5368,550
31,98656.1

60

35,365
6,862

34,5105,536

40

28,503

28,974

0

20
0

2018
2019
2020
2021
2022
(FY)
Groundwater usage (m3)Clean water usage (m3)Amount of water usage per ¥100 million of actual production (m3/¥100 million)
Note: The above data is on a non-consolidated basis.

46

Hirata Integrated Report 2023

Approach to Resource Recycling 
To help realize a sustainable society, we are working to create products that show we have given consideration to resource
recycling at each stage of the product life cycle (the procurement of materials and parts, design, production, and disposal
after use). Through eco-friendly design, we are promoting the reduction of raw materials used in product manufacturing andthe provision of products that can be recycled at the time of disposal. We are also working to reduce the packaging materials
for some equipment imported from overseas suppliers, reduce waste in production activities, and promote recycling.

Reducing use of natural
resources by addressing eachstage in product life cycle

Naturalresources

Materials

Designing of products thatfacilitate recycling

Processing

Suppliers
Finishedproducts

Assembly

Products

After use

Waste

Raw materials

Recycling
Improvement in recycling rate
in cooperation with waste
disposal companies

Recycling
Landfill
disposal

Efforts to Reduce Industrial Waste Output 
The industrial waste generated by the Company mainlycomprises wood chips, waste plastics, and waste oil.
Used to package deliveries to the Company, wood chips
and waste plastics are disposed of as waste after u­ npacking.
For this reason, we are working to reduce the amount ofwaste generated by reviewing and simplifying the packaging methods for some equipment imported from overseas
suppliers.

Industrial Waste Output(t)

(t/¥100 million)

1.0

1,000
0.893

0.847

0.791

0.790

800

0.748

0.6

600
490
17
400

0.8

141
115

200
216

381
3
98
83
197

486
13
125
118
229

456
24
142

460
12
123

93

138

197

187

0.4

0.2

0

0

2018
2019
2020
2021
2022
(FY)
Wood chip waste output (t)Waste plastic output (t)Waste oil output (t)Output of other waste materials (t)Amount of industrial waste output per ¥100 million of actual production(t/¥100 million)
Note: The above data is on a non-consolidated basis.

Managing Hazardous Substances 
To respond to chemical substance-related laws and regulations in Japan and overseas, including the European RoHS Directive*1
and REACH Regulations,*2 we are strengthening the management of the chemical substances contained in our products.
We ask our suppliers to submit information through chemSHERPA*3 and cooperate with our surveys on the chemical
substances contained in our products. We will continue to work on managing the chemical substances contained in our
products.
*1 Regulations on hazardous substances in the European Union*2 Chemical substance management regulations in the European Union*3 Format for providing data on chemical substances contained in products in a supply chain

Hirata Integrated Report 2023

47

Hirata’s Sustainability

Materiality Theme (1): Response to Climate Change

Disclosure Based on TCFD Recommendations
In 2022, the Group announced its endorsement of the recommendations of
the Task Force on Climate-related Financial Disclosures (TCFD) and released
information on climate-related risks and opportunities based on the TCFD
recommendations. Going forward, we will continue to enhance climatechange-related information disclosure and strive to further increase ourcorporate value by resolving social issues and growing our business.

Governance 
Based on our Sustainability Basic Policy, we have establishedthe Sustainability Promotion Committee to promotesustainability management, including climate change.
The committee is chaired by the president, with internal
directors serving as committee members. Furthermore, inorder to enhance opinions from an external perspective andlead to deeper discussions, outside directors are allowed
to attend the meetings of the Sustainability Promotion
Committee as observers. The Sustainability Promotion

Committee submits proposals, reports, and provides
information. The Committee will also be subject to regular
oversight by the Board of Directors.
The Sustainability Promotion Committee discusses targets
and plans to support the sustainable growth of the Groupand aims to enhance opportunities for more proactive
discussions on climate change countermeasures in light ofour business activities.

Risk Management 
The Sustainability Promotion Committee identifies, assesses,
and manages risks related to climate change.
We added climate change and other sustainability-related

items to the Hirata Risk Map on which the Company's
risks are listed and strengthened cooperation with thedepartment in charge of risk management.

Strategies Through scenario analyses, in fiscal 2021, the Group
ascertained the changes in the Group and its customers’
industries in 2030 and 2050—under the 1.5°C and 4°C
scenarios, based on scientific information such as thatfrom the International Energy Agency (IEA)—and analyzed
climate change risks and opportunities.
Based on the results of the analyses, we worked to
expand energy-saving products and reduce physical risks.
Specifically, we expanded the product lineup of our Eco

48

Hirata Integrated Report 2023

Electric Series and made advance arrangements to reduce
procurement risks.
In particular, for our Eco Electric Series (see page 50), we
will implement initiatives that will lead to the realizationof carbon neutrality worldwide, including within the
Company, such as reducing CO2 emissions at plants byapproximately 75%.** Compared with our previous products

Scenario Analyses Results
Based on the aforementioned 1.5°C Scenario, the Group recognizes that, while business opportunities will increase due toincreased demand for energy-saving products, the impact of physical risks will increase in the 4°C Scenario.
Based on the results of these analyses, the Group will sequentially verify initiatives for maximizing opportunities while
addressing recognized risks, starting with those with the highest feasibility, and promote the reflection and integration of
those initiatives into management strategies.
Opportunities

Products
that savemore energy

Developmentof energysaving
products

Details of Opportunities

MiddleCategory

Main Category

Demand tosave labor

1.5°C
In accordance with energy-saving
policies and rising temperatures,electrification and automation atcustomer factories will advance,and demand for products that raise
productivity and improve energy-saving
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

Risks
Main
Category

Degree ofimpactDetails of risks

MiddleCategory

Countermeasures

4°C

Large

Small

• Expand local production for local consumption businessmodels, such as local manufacturing and sale of parts andrepair parts that have already started in some regions, andconsolidation of production bases• Introduction of eco-friendly electrification products anddesign and development of products for which lightness andlongevity have been taken into account, etc.

Small

Small

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

Degree ofimpact1.5°C

4°C

Medium

Small

Small

Small

MediumSmall

Countermeasures

Transition risks
CarbonpricesRawmaterial
costs

Energy costs

Scope 1, 2

Scarceresources

Cost of plastic

Increase in manufacturing costs due tointroduction of carbon taxes in eachcountry, emissions trading, and bordercarbon adjustment measures
Increased procurement costs due torestrictions placed on raw materials andpurchases due to emission regulations
Increased costs for materials containing
plastic due to regulatory restrictions
placed on their use and requirementsthat recycled plastic be used

Electricity
costsElectricity costs are increasing due todecarbonization of the Company’splants and offices as well as
popularization of renewable energy

Airconditioningcosts

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

Distribution
costs

Distribution costs rise due to shift toelectric vehicles (EVs) for large vehicles

Restoration/
operatingcosts

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

• S etting of carbon emission reduction targets such as carbonneutral declarations•A scertaining of Scope structure for carbon emissions,building a monitoring system, etc.
• P romoting the reuse and recycling of equipment and parts
through remodeling and repair services, including renewal of
aging robots, etc.
• In addition to reviewing excessive packaging in productpackaging, reducing the amount of plastic used by switching
to recycled paper and returnable boxes, etc.

• Promotion of energy saving by installation of LED lighting, etc.
• E xamining installation of in-house power generationequipment (solar power generation equipment) and theutilization of leasing services
Medium Medium • Introduction of optimal operation by means of energy
management systems, starting with buildings and plants
where said systems are already be installed or considered,and gradual expansion to locations places where not yet
introduced, etc.
•O perational improvements, including ventilation reviews,
measures against air leaks, and measures to shade external
Small
Small
air-conditioning units• Installation of energy-saving air-conditioning equipment, etc.
•C onsolidate production bases and expand initiatives withcustomers (OEMs) for joint transportation in some businesses
to streamline interfactory transportation
Medium Medium• E xamine expansion of streamlining of distribution bymultidrop (milk run) shipments of goods to suppliers in theregion, etc.

Physical risk
Physical
costs

Small

Large

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

Indicators and Targets Curbing global warming by reducing CO2 emissions is
becoming an essential activity for realizing a sustainable
society.
In order to curb global warming, we aim to achieve net
zero CO2 emissions (Scopes 1, 2, and 3) from our businessactivities by 2050 (carbon neutrality).

In order to achieve this target, we are considering theformulation of intermediate targets, reduction plans, andreduction measures. We are also considering a plan toprioritize our supply chain CO2 emissions (Scope 3) in thehigh-emission categories.

Hirata Integrated Report 2023

49

Hirata’s Sustainability

Materiality Theme (1): Response to Climate Change

Contribution to Carbon Neutrality through Products and Services
As the importance of environmental considerations increases, the development and provision of products andservices that reduce CO2 emissions and power consumption from factories is one of the most important issues.
Since our customers and other stakeholders have many needs for eco-friendly products
and services, we see the expansion of the carbon-neutral market as an opportunity tocontribute to carbon neutrality and sustainable manufacturing through our products
and services.

Hirata Eco Electric Series 
In the automotive field, moves to shift from internal combustion engines to electric vehicles (EVs) are rapidly progressing on a global scale. In terms of production, there is a
shift from pneumatic systems, which emphasize power andemit a large amount of CO2, to electric systems, which areenvironmentally friendly and safe. Based on its track recordin various industrial fields, Hirata provides ­non-pneumatic,
safe production equipment by realizing all-electric transport, which is the basis of the production system, andcontributes to the realization of factories that do not placea burden on the environment.
The Eco Electric Series is Hirata’s all-electric transfer system that is people-friendly and environmentally friendly.
01

02

03

No pneumatics makes the system
environmentally friendly

Low thrust makes thesystem safe

Reliability andperformance

Compressors account for 25% of power
consumption at factories. The Eco electricseries reduces power consumption byapproximately 75% compared with ourconventional products because it does
not require pneumatics, reducing CO2
emissions.

The Eco Electric Series does not requiresafety-related equipment such as safety
fences and light curtains because of its low
thrust, allowing people to work together.
While maintaining the required speed, it
achieves a high level of safety that can be
stopped with the force of one hand in theevent of an emergency, such as a collision.

It has been certified as a designated product by major automobile companies inJapan and overseas with more than approximately 29,000 units delivered.

Hirata BLUE MOTOR
The Heart of the Eco Electric Series
Hirata BLUE MOTOR is a compact, high-efficiency brushless
DC motor developed in-house for the Eco Electric Series.
This compact yet powerful motor is installed in the
Eco Electric Series and contributes
greatly to energy-saving performance. It is compatible with various
standards, such as UL certification,and can be used globally.

Approximately

75%*

1

Approximately

75%*

CO2
Power use

CO2 emissions*1 Compared with our similar conventional system. The reduction rate shown here is the representative value to describe thefeatures of the Eco Electric Series as a whole.

Further Expansion of the Eco Electric Series
In addition to the existing lineup, we are working to expand the Eco Electric Series for use in growth fields and make it applicable for use in key devices.
F or more information, please visit the
Eco Electric Series website.
https://hirata-ecoele.com/en/

50

Hirata Integrated Report 2023

1

Materiality Theme 2 Building of a Sustainable Society

Creation of New Customer Needs in Accordance with Social Changes
Currently, we are contributing to carbon neutrality by providing production systems to the EV market, including
hybrid vehicles.
It is expected that global needs for the realization of a sustainable society will continue to grow. However,
it is necessary to build a system that responds to the possibilities of being significantly affected by the policies
of each country and which responds to the diversification of needs. The Green Market/Green Product working
group led by the managers of the sales divisions of each business division conducts market research and otheractivities to accurately and quickly grasp market needs from a medium- to long-term perspective while paying
attention to the global situation.

Efforts to Address Needs along with Rising Environmental Awareness 
At present, we are catering to the energy-saving needs ofour customers’ factories by developing and expanding salesof environmentally friendly products with a focus on the
Eco Electric Series. In promoting efforts toward a sustainable society throughout the supply chain with customers

and suppliers, we recognize that accurate measurement of
Scope 1, 2, and 3 emissions and calculation of CO2 emission reductions through environmentally friendly products
and other initiatives are important issues that are being
discussed by the working group.

Respond to Progress of Digitalization
We are working to improve operational efficiency by reforming our value chain through the use of digital technology and introducing new core systems. Also, we actively support the digitalization of our customers’ production sites and exchange opinions with other companies to accelerate innovation and contribute to the smart
manufacturing industry as a whole.

TopicCreation of SDGs-relatedIntellectual Property
We are promoting the developmentof technologies that contribute tosolving social issues, including the
SDGs. Of the 272 patents registeredand pending in Japan for which theCompany (including joint applications) is the applicant, 169 patents*
are related to the SDGs, accounting
for about 62% of the total. We willcontinue to develop technologies that
contribute to solving social issues andpromote the appropriate management and utilization of intellectual
property.
* As of September 2023

Total number of Hirata’s
SDGs-related patents

Total numberof Hirata’s
SDGs-related
patents:169

 ote: Created by Hirata using
N“Visualization of SDGs-related
Technologies” provided by theIntellectual Property AI ResearchCenter of the Japan Patent Information
Organization (JAPIO)

1

11

15

131

8

2

1

Hirata Integrated Report 2023

51

Hirata’s Sustainability

Materiality Theme 3 Bringing Out theBest in Every Person
In the Medium-Term Management plan (FY2022–FY2024), we returned to our founding principles and Management
Philosophy. We decided on Jin-Gi-Kou-Ken as a slogan from our desire to contribute to society by means oftechnology as well as to make everyone involved in Hirata content. Aiming to improve both its corporate value andemployee engagement, the Group is actively working to promote the creation of environments in which each andevery employee can make the most of their expertise and individuality while they and the Company grow together.
We believe that creating a virtuous cycle through initiatives aimed at securing human resources, developing
human resources, and creating environments that bring out the best in every person will result in higher employee
engagement.

人技貢献

Jin-Gi-Kou-Ken

Our Company Vision

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

Strategic securing of human resources
with the aim of improving
corporate value

Improvements in employee
engagement

Strengthening of human resource
development and creation ofenvironments in which employees
can continue to take on challenges

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

Human Resource Development Policy

Internal Environment Development Policy

Under the slogan Jin-Gi-Kou-Ken, which was formulated as theCompany’s vision, we aim to develop human resources who
continue to learn independently and come together to take onchallenges.
Specifically, we provide rank-specific training and technicalspecialized training tailored to each employee’s experience andskills so that each employee can take on challenges by making themost of their expertise and individuality.
The Company is also working to expand its self-development
support system by encouraging employees to learn autonomously
and introducing e-learning by hierarchy and theme. Hirata will
also focus on developing global human resources through thetraining of next-generation management candidates, assigning
employees to overseas Group companies, technical training, andpersonnel exchanges.
In addition, we will continue to strengthen our initiatives
by regularly reviewing our training programs and invigorating
personnel exchanges and transfers with the aim of deepening
mutual understanding and further strengthening cooperation.

We aim to create an environment where employees with diverse
careers and social backgrounds (gender, age, nationality, disability,
lifestyle, etc.) can experience growth through their work, workwith satisfaction and pride, and feel happy. Specifically, we areworking on introducing teleworking to realize flexible workstyles
that are not bound by time or place.
In order to support employees’ self-directed careerdevelopment, we will promote job rotation, expand follow-up andcareer interviews after joining the Company, and build evaluationand compensation systems that enable employees to feel a senseof satisfaction and fulfillment from their work.
Additionally, we place the highest priority on the healthand safety of our employees, their families, and many others
involved in the Company, and we are also focusing on healthmanagement. We will strengthen initiatives such as realizing awork–life balance by reducing overtime work, strengthening thehealth management center system, and providing various healthrelated programs for employees and their families.

Human Resource-Related Data
FY2022
Ratio of women to people hired

52

FY2022

21.5%

Childcare leave acquisition rate (Companywide)

Ratio of female employees to male employees

17.3%Childcare leave acquisition rate (male employees)

46.7%

Ratio of women serving as section heads

12.4%

Childcare leave acquisition rate (female employees)

100%

Ratio of women in managerial positions

5.2%

Average overtime hours of employees per month

20.8 hours

Average length of service of male employees

18.3 years

Average length of service of female employees

18.2 years

Hirata Integrated Report 2023

Percentage of annual paid leave taken

54.3%

68.6%

Strategic Securing of Human Resources with the Aim of Improving Corporate Value While each and every employee has been making the most of
their expertise and individuality, the Group has been facing thechallenges of new businesses, technical innovation, high-set
goals, and issues that have led to sustainable growth.
To further improve our sustainable corporate value andachieve our management strategies, we will work to recruit,
train, and relocate highly specialized human resources tostrategically secure human resources for the necessaryfunctions and functions where there is a shortfall, such as
in human resources with digital technology expertise andbusiness creation as well as management human resources.
To expand our business in growth markets and enhance ourability to respond to changes in the business environment, we
will also actively recruit diverse human resources regardlessof gender, age, nationality, religion, or whether they have adisability.

 trengthening of Human Resource Development and Creation ofS
Environments in Which Employees Can Continue to Take On Challenges 
Under our Management Philosophy of “Bringing Out
the Best in Every Person,” we believe that creating anenvironment in which each and every employee cangrow and maximize their abilities is the most importantmanagement issue, and we are working to strengthen
support for human resource development. Because of thehigh importance of rank-based training, we have set atarget of 100% participation rate among the employees.
Going forward, we will reallocate human resources
to focus businesses to achieve our Medium-Term
Management Plan and aim to develop the human resources
necessary for our growth from a long-term perspective.

By means of training programs that support the careersof diverse human resources and promoting the activationof staff change rotations and reviews with regard toevaluations, we will encourage not only human resources
who possess high technical skills and expertise but also thecontinuous development of global human resources andmanagement human resources. In addition, by enhancing
our self-development support system, we will actively work
to foster environments and the climate in which each andevery employee can pursue their own dreams and goals,
improve their personalities and abilities, and continue tochallenge themselves to reach their potential.

Support for Active Participation of Diverse Human Resources 
We are strengthening our DE&I-related initiatives andsupporting the active participation of diverse humanresources as activities of the Bringing Out the Best in Every
Person working group.
By respecting the values of each and every employee,increasing their motivation, providing them with aplace where they can make the most of their abilities
and individuality, and bringing together their diverse
strengths, we will actively work not only for the wellbeing of employees but also for the development of theorganization and the sustainable growth of the Company.

Creation of Workplaces Where People Can Work with Peace of Mind 
Giving top priority to health and safety, the Company
has implemented a raft of measures to ensure that its
employees remain healthy and active and to improve theirwork–life balance.
We established health management centers, which are
working on initiatives aimed at health management. The
centers are staffed by professionals with public healthnursing qualifications and have consultation desks formental and physical health.
Additionally, we strengthened our consultation system
for mental and physical health by increasing the number ofcontracted industrial physicians and signing new contracts
with clinical psychologists.
To improve work–life balance, we are also creating
systems and implementing measures to realize diverse
work-styles.
We will continue to focus on creating a work
environment and culture that enables employees toachieve a work–life balance in line with the wishes of each
employee, such as raising the rate of male employees

taking childcare leave, actively participating in malechildcare, volunteer activities, and health promotion.
Summary of Previous Measures
FY2015• 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

FY2016• Salary and bonus payment days are also on days when employees leave work on time
• Overtime management changed from 30-minute unit increments to one-minute unit
increments• Expanded the scope of shortened working hours for childcare to employees withchildren up to the third grade of elementary school

FY2018• Introduction of interval system

FY2020• Established health management centers

FY2021• Reduced prescribed working hours from eight hours to 7.5 hours• Began application of shift work on days when employees leave work on time
• Systematic implementation of telecommuting

FY2022• Number of annual paid leave days required to be taken increased to eight days
• Started operation of new sick and leave system“Unused annual leave and sick leave system” changed to "Uniform 40-days system”• Converted menstrual leave into wellness leave, with a maximum of 12 days off
per year

FY2023• Number of annual paid leave days required to be taken increased from eight days
to 10 days
• Ban on working on holidays (in principle)• Expanded wellness leave (for treatment of diseases designated as intractablediseases, cancer treatment, dialysis treatment, fertility treatment, etc.)
Work–life
balance support

Hirata Integrated Report 2023

53

Hirata’s Sustainability

Materiality Theme (3): Bringing Out the Best in Every Person

Health and Safety Policy Based on its Sustainability Basic Policy, the Hirata Group engages in the following with the participation of all employees toensure 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 andsafety management system.
• We will work to prevent accidents and disasters by conducting risk assessments, making improvements based on the
results, and providing health and safety education.
• We will remain in compliance with occupational health-and-safety-related laws and regulations and the health andsafety rules set by each Group company.
• Promoting the manufacture of safe and secure products, we will meet the expectations of our stakeholders.

Health and Safety Promotion System Based on its Health and Safety Policy, the Company has
formed health and safety committees at all of its business sites, as is required by law. We have also formed a
Companywide health-and-safety committee to investigate
and deliberate on health and safety management on a
Companywide basis while promoting health and safety.

In accordance with the size of its workforce, each plant’s
health and safety committee appoints generalist health andsafety managers, specialist safety managers, and healthmanagers as well as industrial physicians and other relevant
personnel.

Representative Director, President

Companywide Health and Safety Committee

Health and Safety Committee Office

Kumamoto Plant
Health and Safety
Committee

Kumamoto East Plant
Health and Safety
Committee

Shichijo Plant
Health and Safety
Committee

Kansai Plant
Health and Safety
Committee

Kanto Plant
Health and Safety
Committee

Collaborating company health andsafety committees

Health and Safety Initiatives Based on annual plans, the Companywide Health and
Safety Committee’s remit includes reporting on thestatus of implementation of health and safety promotion
measures, discussing measures to prevent the recurrenceof accidents, as well as the drafting and setting of rules
governing health and safety. Carrying out and improving health and safety patrols and conducting kiken yochi(hazard prediction) training (KYT) at each site, the healthand safety committees at each factory work to ensure
safety. Safety patrols of each factory are also conducted bydirectors every year, and strict checks are carried out fromthe perspective of management.
In fiscal 2022, we conducted in-house KYT trainer training and forklift training
to prevent accidents.
However, accidents
resulting in lost workdays
occurred, significantly
increasing the ­frequency
rate of lost-time
accidents.

54

Hirata Integrated Report 2023

In fiscal 2023, we are reviewing the procedures for occupational health and safety risk assessments and reassessing
and improving risk management at each site in order toachieve a zero lost-time accident frequency rate.
Occupational Accident Status(Number of accidents)

(%)

6

1.2
1.18

5
4

1.0
0.79

0.8
3

3
2

0.40

0.39

2

1

1

1

2020

2021

0.6
0.4
0.2

0

0

2018

0.00
2019

Number of accidents resulting in lost workdays
Lost workday injury frequency rate (%)
Note: The above data is on a non-consolidated basis.

2022

0
(FY)

Respect for Human Rights
Based on our Sustainability Basic Policy, the Hirata Group established a global human rights policy in fiscal 2022
to respect the basic human rights of all people involved in its business. Established by resolution of the Board of
Directors, we apply said policy to all officers and employees of the Group. With regard to our efforts to respecthuman rights based on our global human rights policy, we have established our guidelines for respecting humanrights, referring to the JEITA Guidelines for Responsible Corporate Behavior, etc., and we ask all our business
partners, including our suppliers, to support and implement them.

Basic Approachto HumanRightsComplying with the laws and regulations applicable to Japan and the countries and regionsin which it conducts business, the Hirata Groupsupports and respects the Guiding Principles
on Business and Human Rights of the United
Nations and other international norms withregard 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
and Right to Collective
Bargaining(8) Occupational Health and
SafetySystem for Respecting Human Rights As part of our efforts to build a system for respecting
human rights, we have appointed a human rights awareness promotion supervisor and a human rights awarenesspromotion officer at our three bases in Kumamoto (and theTokyo office), Kanto, and Kansai in fiscal 2023. Each humanrights awareness promotion supervisor and human rights
awareness promotion officer is responsible for planningand implementing human rights education at each site,
conducting and verifying assessments, implementing andverifying corrective measures against identified risks, andinstilling human rights policies and guidelines to suppliers.
Furthermore, the personnel in charge of promoting humanrights awareness at each site also serve as a human rights
consultation desk within the Company, striving to create aculture in which all employees can easily consult with theCompany on human rights issues.
Human Rights Promotion System
Board of Directors
Head of Administration Division

Headquarters/
Kumamoto Plant
Human Rights AwarenessPromotion Supervisor

Kanto Plant
Human Rights
Awareness Promotion
Supervisor

Kansai Plant
Human Rights
Awareness Promotion
Supervisor

Human Rights Due Diligence 
Following the formulation of the Global Human Rights
Policy in fiscal 2022, the following initiatives were implemented in fiscal 2023 as part of human rights due diligence.
• We have formulated and expanded our human rights
policy guidelines to promote the spread of our global
human rights policy throughout the Company• Conducted human rights assessment of Hirata c­ orporation(the fiscal 2023 assessment did not include subsidiaries or
suppliers.)
As a result of the assessment, out of all 43 items to
be checked, two items were judged to be inadequate:“Regular education on human rights” and “Education on
anti-discrimination for all employees, including migrant
workers.”
If appropriate corrections are not taken, there is concernof the negative impact on human rights through our business activities. As a result, we are currently taking corrective
measures. Specifically, we will conduct training for all
employees to which the two items above are applicable byMarch 2024.
We plan to conduct human rights assessments every
other year.

Initiatives for the Next Fiscal Year and Beyond • We will expand the scope of our human rights assessment to include consolidated subsidiaries.
• In order to identify negative human rights impacts
throughout the supply chain, suppliers (who meet certain
requirements) will also conduct assessments.
• We will continue to provide human rights awarenesseducation at Hirata Corporation and its consolidated
subsidiaries.
• The Hirata Group Code of Conduct, which was formulated during fiscal 2023, will also clearly state respect forhuman rights.
etc.

Major Guidelines Referred to in Conducting Human
Rights Due Diligence, Including for the Establishmentof Our Global Human Rights Policy• United Nations Universal Declaration of Human Rights• United Nations Guiding Principles on Business and Human
Rights• United Nations Global Compact, ILO International Labor
Standards• JEITA Responsible Business Conduct Guidelines (ver. 1.1)
• OECD Guidelines for Multinational Enterprises, OECD Due
Diligence Guidance for Responsible Business Conduct, etc.

Hirata Integrated Report 2023

55

Hirata’s Sustainability

Materiality Theme 4 Strengthening of Our
Management Foundation
Improvement of product safety and quality
As the best partner for our customers, we will endeavor to deliver trustworthiness and satisfaction to the wholeworld, being sure to embody various requests for safety, quality, and productivity.

Quality Management We have in place an ISO 9001-based quality control system that includes the promotion of measures to improve product safety.
We strive to improve quality, productivity, and customer satisfaction (CS) through continuous improvement of our quality
management system (QMS).
(1) Provision of products andservices that satisfy ourcustomers• 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 prevention of any recurrence• CS improvements(2) High-quality manufacturing•R eliability-ensuring designs based on theories and principles (reliability engineering)•R eduction of quality risk through design reviews, verification, and validation•C ompliance with laws, regulations, and standards•R eflection of product safety and Hirata Standard (Hirata internal standards) in products• P roduct perfection improvements by inspection standard clarification• T horough supplier and design change management• Improvements in management/enhancement activities and problem-solving capabilities using
statistical management methods(3) Establishment of standardizationand commonality in high-mix,
low-volume production• P romotion of standardization• P romotion of commonality of parts• P romotion of unitization• P roactive development and management of products (mass-produced products)

QualitypolicyQuality Management Promotion Framework
Representative Director, President
Chair of ISO Committee
Quality control managers
Secretariat: Quality Control Department

ISO monitoring team

ISO Committee: division directors, business unit general managers, divisional heads
Personnel responsible for ISO management

Quality Management System (QMS) 

Procurement

Manufacture

Inspection•C onceptual • Design review (DR)design• Design verification• Actual design

Installation

Verifications• Conceptual design (design estimate)• Production technique proposal

DesignJointinspection

Shipment• Test-run adjustments• Prototype evaluation

Do: Sales / Design / Procurement / Manufacturing / Inspection

Quality policy (policy development = target management)
Management resource
investments (humanresources/infrastructure
work environment)

Clarification of
responsibilities
and authorities

QMS process corrections/preventions
Product realization corrections/preventions

Development of management organization

Plan

Action: Measure implementation
Continuous Improvement

56

Hirata Integrated Report 2023

Management review

Top management

Customer satisfaction (CS)/
Complaint information

Receiptof orders

Various performance data

Product requirement
review

Verifications

SE

Issue ofordersRequests

Sales

Proposals

Customers

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

Check: Analysis/Evaluation

Specific QMS Efforts 
Utilization of PDCA Quality Management System
Having obtained ISO 9001 certification, we promote
standardization by establishing procedures for eachprocess from order acceptance, design and development,
procurement, manufacturing, and assembly to shipping
and packing to stabilize quality and prevent defects. In
addition, we carry out activities with an awareness of a
PDCA cycle, including monitoring of quality conditions
such as complaints and continuous improvement based on
the results of activities such as customer satisfaction (CS)surveys and management reviews.

Implementation of ISO Internal Audits and Quality
Management Audits for Our Suppliers
Evaluating effectiveness and suitability through annual ISO
internal audits, the Company utilizes its QMS in its efforts
to prevent quality defects, in addition to taking reliablecorrective actions, by providing corrective guidance asappropriate. We also conduct quality management audits
geared toward those suppliers with which the Company
does business. Having built a system that can guarantee thequality of each part incorporated in our products, we areworking to provide safer and more reliable products.

Knowledge Acquisition That Leads to Improvements in Quality Awareness and Product Reliability 
We deliver trustworthiness and satisfaction to ourcustomers. With this in mind, we plan and implementa range of educational programs that lead to improved
quality awareness and product reliability. Basic productsafety education is conducted annually by qualified safetyassessors (Company employees) by means of case studies.
In fiscal 2022, we held seminars on CE (Europe) and UKCA

(UK) given by external lecturers with the aim of acquiring
the knowledge necessary for dealing with products for
Europe. Furthermore, we are working to improve thequality of operations throughout the Company, suchas conducting human error prevention training for all
departments, including indirect administrative departments.

Educational Programs Implemented in FY2022 (Education Aimed at Improving Quality Awareness and Product Reliability)
Program name

Number ofparticipants

Purpose/Content

Basic Education for Quality Management(Introduction to ISO 9001, ISO Auditor)

In addition to acquiring basic knowledge about ISO 9001, this program deepens
understanding of ISO, such as the effects of unifying business processes and theimportance of a PDCA cycle.

34

QC Methodology Education(Reason Analysis, 7 QC Tools)

For acquiring skills in analyzing collected data, analyzing factors, and identifying root
causes of problems, leading to early resolution of problems and improvement of theeffectiveness of recurrence-prevention measures.

78

Inspector Training

In addition to acquiring the basic knowledge of inspection work, cultivating themindset as an inspector will lead to the prevention of outflow of quality defects byimproving the reliability of the inspection process.

29

Change Management Education

By raising the level of basic knowledge of change management, participants
understand the importance of accurate action and communication at the time ofchange, leading to the prevention of quality defects.

52

Basic Product Safety Education (Machinery Safety,
Electrical Safety, and Product Risk Assessment)

Raising the level of basic knowledge about product safety and raising safety awareness.

337

Seminar on CE (Europe) and UKCA (UK)
(Outside Lecturer)

A program to deepen participants’ basic knowledge of the European Union CE
marking and the UKCA (UK) and to deepen knowledge that can be used in their work.

30

Human Error Prevention Education

By incorporating the idea of preventing human errors, we will revitalize the creationof a mechanism that prevents mistakes from occurring.

80

Building an Improvement System That Reflects Customer Feedback 
The Company listens to opinions and suggestions throughall departments that have opportunities to interact withcustomers. Fifty-four customers participated in our customer
satisfaction survey. Based on these valuable opinions andother factors, we are striving toward product improvements
and strengthened service support.
In fiscal 2022, scores for product evaluation and service
evaluation improved slightly compared with fiscal 2021.
However, since the scores for these two items are lower
than other evaluation items, we consider them to beissues. Many of the opinions from customers were related
to overseas services and communication issues due tolanguage barriers, so we will work to improve these issues.

Satisfaction Weighted Average Score(Five Points Max.)
Product evaluation
4.5

Corporateevaluation

3.79

4.03

Evaluation of person
in charge (sales)

4.0

4.02
3.5

3.76

4.08
Evaluation of
person in charge(design)

Serviceevaluation

3.97

Technology
evaluation

FY2020

FY2021

3.94

Evaluation of person
in charge (nanufacture)

FY2022

Hirata Integrated Report 2023

57

Hirata’s Sustainability

Supply Chain Management
To remain a company that is trusted and chosen by all stakeholders, including its customers and suppliers,
the Group fulfills its corporate social responsibility (CSR) in its procurement activities. We will also share theProcurement Basic Policy with our suppliers and work on responsible procurement activities and continuous
improvement in accordance with the Hirata CSR Procurement Guidelines.

Procurement
Basic Policy(1) In compliance with laws and ethics(2) In a fair and just manner as an equal partner with our suppliers(3) Giving due consideration to human rights concerns and the reduction of environmental
impact in the selection of suppliers and procured items

Initiatives for Sustainable Procurement Activities 
Under the lead of its director, the Procurement Division plays a central role in promoting sustainable procurement activities incooperation with sustainability promotion activities. The Sustainability Promotion Committee oversees initiatives by reporting,discussing, and making decisions on directions and issues.
• Holds supplier meetings (Company performance reports, explanation of market trend policies, explanation of trends andpolicies of the Procurement Division, and supplier awards)• Conducts CSR procurement self-assessments and sends out consent forms• Exchanges information and provides improvement support through CSR procurement audits• Builds a cooperative framework for BCP

CSR Procurement Self-Assessments 
In procuring products, materials, and raw materials, we arepromoting CSR (corporate social responsibility) throughout
the supply chain and making improvements in accordancewith conventional requirement items of quality, performance, price, and delivery time and items added from theperspective of the environment, working environment,
human rights, etc.
In fiscal 2021, we conducted CSR procurement selfassessments for the top 70% of the transaction value
suppliers (the top 100 domestic transaction value suppliers).
In fiscal 2022, we completed responses for the top 80%of the transaction value suppliers (the top 120 domestictransaction value suppliers), as a result of the surveys
conducted for suppliers that have not yet implemented theProcurement Basic Policy
Requests to Suppliers
Hirata CSR Procurement Guidelines

previous surveys. In addition, we have received consent to
the Hirata CSR Procurement Guidelines along with requests
for cooperation in self-assessments (100% recovery rate forself-assessment and consent forms).
Furthermore, in fiscal 2022, we worked to formulate a
CSR procurement audit sheet and conducted trial auditsof some suppliers. Although no major problems have been
confirmed at this time, we will make improvements asnecessary and strive to maintain sustainable procurement
activities, such as expanding the scope of audits.
F or more information on the Hirata CSR Procurement Guidelines, please
visit the website below.
https://www.hirata.co.jp/files/uploads/esg_20230301_05.pdf

Results of CSR Procurement Self-Assessments(Points)(FY2022)
Labor
3.6

Policy well-known and understoodamong suppliers

Code of conduct

4.0
3.5
3.0

3.6

Health and safety

2.5

3.5

2.0
1.5
1.0

Implementation of CSR
procurement self-assessments
Evaluation and feedback

0.5

BCP

3.2

2.9

Implementation of CSR
procurement audits
3.1

Realization of sustainableprocurement

58

Hirata Integrated Report 2023

Management system

3.2

EthicsEnvironment

Supplier Engagement
In June 2023, we held a supplier meeting to talk about the Group’s
consolidated results for fiscal 2022, the forecast for fiscal 2023,
trends and policies of business divisions, basic procurement policies,
and priority measures.
In fiscal 2023, we established and shared two new items that wewould like our suppliers to actively work on in the fields of society
and the environment. We will promote this with the goal of having
all Tier 1 suppliers, which account for the top 80% of the transaction value suppliers, focus on these items.
The Company will continue to engage in sustainable procurement activities while engaging in dialogue with suppliers about its­business activities and sustainability.

Matters to be promoted in the social and­environmental fields
1. E stablishment of social and environmental policies• Labor and human rights policies• Health and safety policies• Environmental policies• Ethics policies
2. Understanding of the CO2 emissions of suppliers

Business Continuity Plan As a result of conducting an assessment of the business
continuity plan (BCP) through the CSR procurement selfassessment, it was found that there were issues in thestatus of initiatives compared to other items.
In recent years, in order to minimize the impact on our
production activities in the event of serious natural disasters,such as frequent earthquakes and floods, we have been
promptly confirming the damage situation with our suppliers. In FY2022, we investigated the impact of four natural
disasters on production activities among our suppliers.

Establishment of Supplier Whistleblowing Contact Point (Supplier Helpline) In response to the Revised Whistleblower Protection Act
and in accordance with the strengthening of governance,
the Company set up a supplier helpline in 2022 and posted
the point of contact on its website. Based on the information provided, the helpline secretariat (the Company’s

Reporting method
Those subject to reporting

Compliance Department) will conduct an internal investigation and take corrective and preventive measures. Strictly
protecting the confidentiality of reports, the Company will
not provide disadvantageous treatment to whistleblowers
as a result.

We have set up a dedicated point of contact on our website.  

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

Suppliers (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 to cease anddesist, correction or recurrence prevention, to be taken if non-compliance proven

Number of reports

1

Responsible Procurement of Minerals 
We are aware of and actively cooperate with international
efforts to investigate and monitor the use of conflictminerals,* which have been implicated in human rights
abuses and labor problems, and minerals that pose a riskof child labor and environmental destruction. In line withthe update of the RMI (Responsible Minerals Initiative)

information, we regularly conduct surveys of each supplierusing survey templates (CMRT, EMRT, etc.).
* Conflict minerals: The term refers to minerals, among them tantalum, tungsten, tin,gold, 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 are committing serious human rights violations.

Hirata Integrated Report 2023

59

Hirata’s Sustainability

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

Basic Stance 
As a company that targets the global marketplace, Hirata
has promoted sound and effective management activities
with an emphasis on corporate governance to fulfill its social
responsibilities. Hirata is thus working to enhance its compliance system, continuously strengthen its business competitiveness, and further improve its corporate value.

From the standpoint that a company is an entity thatbears public responsibility, public interest, and social
responsibilities, Hirata believes that the maintenanceof good relationships with all stakeholders will lead to
improved shareholder value over the long term.

Changes to Corporate Governance 

60

2005

• Introduction of executive officer system• Management Meeting established2006• Stock listed on JASDAQ Securities Exchange

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

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 disclosure2023• Transitioned to a Company with an Audit and Supervisory Committee organizational design

Hirata Integrated Report 2023

Governance Framework and Summary Approved during the 72nd Ordinary Shareholders’ Meeting held on June 23, 2023, we have shifted from being a Company
with a Board of Corporate Auditors to a Company with an Audit and Supervisory Committee in order to further enhance­corporate governance by strengthening the supervisory function of the Board of Directors and further strengthening themonitoring system through the inclusion of Audit and Supervisory Committee members, who are responsible for auditing theexecution of duties by the directors, as members of the Board of Directors.

Shareholders’ Meeting
Appointment/Non-reappointment

Nomination andCompensation Advisory
Committee

Appointment/
Non-reappointment

Appointment/Non-reappointment

Board of Directors

Audit and Supervisory
Committee

Directors

ReportAudit and Supervisory
Committee members

Audits, etc.
Representative Director,
President

Cooperation(Decision-making and Management Oversight)
AuditsAppointment/
Non-reappointment

ReportSupervision

Sustainability Promotion
Committee

ReportManagement Meeting

Cooperation
Cooperation

Risk Management
Committee

Executive Officers(Operational Execution)

ReportCompliance Committee
Business Headquarters /Administration Division / Subsidiaries

Internal director

AuditsInternal Audit Department

Outside director (Audit and Supervisory Committee member)

Independent outside director (Audit and Supervisory Committee member)

Body

Financial Auditors

Board of Directors

Audit and Supervisory Committee

Independent outside director

Woman

Nomination andCompensation Advisory Committee

Chairperson
Chairperson

Composition

Ratio of women: 17%
Ratio of independent outside directors: 42%

Ratio of women: 25%

Ratio of women: 33%

Note: In June 2023, we transitioned to a Company with an Audit and Supervisory Committee organizational design.

Operational Status of Board of Directors, Discretionary Committees, and Audit & Supervisory Board (FY2022) Body

Record of
Meetings Heldin FY2022

Board of Directors

Audit & Supervisory Board

Nomination and Compensation
Advisory Committee

14 times

18 times

8 times

Average attendance rate: 98.8%(Directors and Audit & Supervisory Board members)

Average attendance rate: 98.6%(Audit & Supervisory Board members)

Average attendance rate: 100%
(All committee members)

Main Themes• Transition to a Company with an Audit andSupervisory Committee organizational design• Establishment of a sustainability promotion systemand formulation of basic policies• Formulation of various policies such as humanrights policies

Main Themes•A udit system after adoption of the
Audit and Supervisory Committee• S tatus of development and operationof Group governance

Main Themes•N omination of directors and executive
officers, as well as determination of
remuneration and related policies• Development of succession plan

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61

Hirata’s Sustainability

Corporate GovernanceEvaluations of Effectiveness of Board of Directors’ Meetings (Fiscal 2022) To improve the effectiveness of its Board of Directors’ meetings, the Company has evaluations of their effectiveness conducted by a third-party organization. Based on the results of the evaluations, the issues are shared and countermeasures are
discussed at Board of Directors’ meetings.
Method of
Evaluation
Main Evaluation
Question Items

Anonymous questionnaires and individual interviews for directors and Audit & 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 and Audit & Supervisory Board members; voluntary committee
operations

FY2021 Evaluation Results (Issues)

FY2022 Initiatives

FY2022 Evaluation Results (Issues)

Future Initiatives• Formulation and follow-up of
management strategies for medium- tolong-term improvement of corporate
value and strengthening of monitoring
functions• Formulation of human resource
strategies consistent with medium- tolong-term strategies• Optimization of Board of Directors’
meeting agenda items• Strengthening of Board of Directors’
secretariat functions, etc.

•M onitoring of Medium-Term
Management Plan progress anddiscussions on human resource
strategies to be incorporated into annual
schedule of Board of Directors’ agenda
items•C ontinuous reviews of Board of
Directors’ meeting discussion standards• E arlier provision of more accurate
agenda items and strengthening ofsecretariat functions such as support foroutside directors and training• Formulation and follow-up of
management strategies for medium- tolong-term improvement of corporate
value and strengthening of monitoring
functions• Formulation of human resource
strategies consistent with medium- tolong-term strategies• Strengthening of Board of Directors’
secretariat functions• Establishment of an internal control
system for the entire Group andsufficient supervision of its operation,etc.

• Review of the standards and authority
for deliberation by the Board of
Directors in light of the transition to a
Company with an Audit and Supervisory
Committee organizational design• Use of opportunities for discussion
separate from the Board of Directors• Review of Group governance• Strengthening the secretariat functions
such as through provision of proposals
at an early stage, setting priority themes,
and conducting training

In addition to the above, the Company consulted with the Nomination and Remuneration Advisory Committee on theappropriateness of policies and procedures for the appointment and dismissal of directors and executive officers, the reviewof the skills matrix for the transition to a Company with an Audit and Supervisory Committee organizational design, and theideal form of the officer remuneration system. Based on the results of the effectiveness evaluations and analyses of the statusof compliance with the Corporate Governance Code, we will continue to make ongoing efforts to further improve the effectiveness of the Board of Directors in the years to come.

Appointment/Non-reappointment of Directors Nomination and Compensation Advisory Committee
The Company established the Nomination andCompensation Advisory Committee as a voluntary advisory
body to the Board of Directors. The purpose of this committee is to deliberate important matters, such as the nomination and compensation of directors and executive officers,
and to thereby ensure the objectivity and transparencyof these matters and to further strengthen the corporate
governance system.
Committee Chair: Yuichiro Hirata (representative director, president)
Committee members: Satoru Ogawa (independent outside director),
Ryoko Ueda (independent outside director)

Appointment/Non-reappointment of Directors
To ensure transparency and fairness in the nomination of both
director candidates and executive officers, the Nomination
and Compensation Advisory Committee, in which independent outside directors form the majority, deliberates thecriteria and policies for nominating the candidates as wellas candidate nomination proposals. The results of those

deliberations are reported to the Board of Directors, whichmakes decisions after receiving reports from the Nomination
and Compensation Advisory Committee on the basis of thecandidates’ knowledge, experience, ability, performance evaluations, and other factors.
In addition, with respect to the nomination of candidates for director who are not members of the Audit
and Supervisory Committee, the right of the Audit andSupervisory Committee to state its opinion on the nomination shall be properly exercised, and with respect to thenomination of candidates for director who are members of
the Audit and Supervisory Committee, the consent of the
Audit and Supervisory Committee shall be obtained.
If a director or executive officer breaks the law or acts
in a manner contrary to the Articles of Incorporation orinternal regulations, or should it be recognized that there
is a difficulty to perform duties properly due to physicalor mental breakdown or a lack of ability, in such cases
the Board of Directors will consider dismissal after having
received a report from the Nomination and Compensation
Advisory Committee.

Executive Training and Support System for Outside Directors We support outside officers so that they can deepen their understanding of the Company through training for officers, providing and explaining support systems for outside officers, and visiting production sites. Additionally, the Company provides
support for outside officers to fulfill their roles, such as holding preliminary briefings for outside officers prior to meetings ofthe Board of Directors and providing opportunities for interviews with key executive officers and employees.

62

Hirata Integrated Report 2023

Skills Matrix of the Company’s Directors 
For the Board of Directors to fulfill its responsibilities of realizing sustainable growth and supervising business execution,
the Company has defined the key skills and areas of experience required of its directors—corporate management, industry
knowledge, technology and research and development, global perspective, risk management, finance and accounting, and
ESG expertise—and aims to maintain a Board of Directors that is well balanced in terms of its composition.

Name

Corporate
Management

Industry
Knowledge

Technology andResearch andDevelopment

GlobalPerspective

RiskManagement

Finance andAccounting

ESG Expertise

Directors (excluding Directors Who Are Audit and Supervisory Committee Members)
Yuichiro Hirata
Shojiro Hirata
Shigeru Maeda
Masaru Kozaki
Shigeharu
Nishimura
Hideki Ninomiya
Satoru Ogawa(Outside Director)

Ryoko Ueda
(Outside Director)

Directors Who Are Audit and Supervisory Committee Members
Naokuni Motoda(Outside Director)

Ken Imamura(Outside Director)

Yasuhiko Endo
(Outside Director)

Asako Okabe(Outside Director)
Note: The above shows the knowledge, experience, and capabilities particularly expected of each individual and is not a complete list of all the expertise possessed by said individuals.

Corporate Management
In order to achieve the sustainable growth of the Group and increase its
corporate value over the medium to long term, we need directors who
have the ability to set a vision in order to determine the major directionof management strategies and ability to make decisions to establish a
strategy, taking into account the management issues faced and futurebusiness opportunities. We need directors who can make strategic
proposals and make decisions in light of changes in the business environment, such as politics, the economy, society, and technology, taking into
account business trends and risks, and the business conditions of theGroup.
Industry Knowledge
Directors who have knowledge of the Group’s business, businessmodels, and trends in the market environment and who can makeproposals and make management decisions regarding business strategies and marketing are required.
Technology and Research and Development
We need directors who have diverse knowledge in cutting-edge
technologies, products, and services from a global perspective; view
solutions to social and business issues as new innovations, business
opportunities, and research themes; and can judge the appropriatenessof the research from an objective perspective.
Global Perspective
In order to expand the support system for the Group’s global expansion
and local production, we need directors who have a global perspective
and a broad perspective to judge global business strategies and have acertain understanding of business practices and regional characteristics
in multiple countries with abundant overseas business experience.
Since we are promoting One Hirata, an integrated Group management

initiative, we need directors who can make decisions from a global
perspective in an optimal overall manner.
Risk Management
Legal risks are always associated with the Group’s management andbusiness activities, and it is essential not only to mitigate and eliminate
them but also to assess the severity of the risks and take risks. Also, inorder to establish an optimal governance system, it is also important for
the Group to focus on a Companywide risk management system thattakes into account management strategies, management issues, andfuture visions. Based on the above, it is necessary to have directors withspecialized knowledge of legal affairs, internal control, and compliance.
Finance and Accounting
In addition to having knowledge of finance, accounting, and tax affairs,
directors are required to have a full understanding of the Group’s business and to be able to grasp and make judgments on management
figures in accordance with products and business characteristics. In termsof strategy, directors who can make proposals and make management
decisions regarding capital procurement and dividend policies for growthinvestments and business strategies that contribute to the sustainableenhancement of the Group’s corporate value are necessary.
ESG Expertise
In order for the Group to realize ESG management that integrates
sustainability into management, it is essential to establish a perspectivethat balances corporate growth and the resolution of social issues, aswell as an optimal governance system. Based on this point, it is necessary to have directors who can make decisions from the perspective of
medium- to long-term ESG management without sticking to short-term
profits.

Hirata Integrated Report 2023

63

Hirata’s Sustainability

Corporate Governance

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(if performance indicator targets are achieved).
• Outside directors who are primarily responsible for supervisory functions shall receive only basic compensation.
Process for Determining Compensation
Regarding individual remuneration for directors (excluding
Audit and Supervisory Committee members), the Board of
Directors delegates decision-making of specific details to
the Nomination and Remuneration Advisory Committee.
In delegating such authority, we respect the Audit andSupervisory Committee's right to state opinions regarding remuneration and take measures to ensure that such
authority is properly exercised.
The remuneration of individual directors who are Audit
and Supervisory Committee members is determinedthrough discussion among directors who are Audit andSupervisory Committee members.
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 compensation thatreflects performance indicators. Such bonuses are calculated in accordance with the level of achievement of theconsolidated ROE targets for each fiscal year.
By sharing the profits and the risks of stock price fluctuations between directors and shareholders, stock compensation shall be paid via a stock delivery trust mechanism
in order to raise awareness of contributing to improving
medium- to long-term business performance and increasing
corporate value. For each fiscal year, points are awarded
according to position and length of tenure of office aswell as according to the level of achievement of the target
values for evaluation indicators (consolidated ROE andconsolidated operating profit ratio) in the settlement ofaccounts. At the time of retirement, stock equivalent topoints shall be delivered.
The performance indicators and their target values for
performance-linked compensation are reviewed based onrecommendations from the Nomination and Compensation
Advisory Committee depending on changes in the businessenvironment and other factors.

Composition of Executive Compensation

Executive Directors

1

0.8

Basic compensation

Performance-linked compensation

Basic Compensation(In the event that performance indicator targets
have been achieved)

Performance-Linked Bonus

Performance-Linked
Stock Compensation

Short-term incentive

Medium- tolong-term incentive

0.5

0.3

Fixed compensation

Outside Directors

Basic Compensation

Executive Compensation Breakdown (Fiscal 2022)

Basic
Compensation

PerformanceLinked Stock
Compensation

Bonus

Directors(Excluding Outside Directors)

233,910

148,960

31,61053,34031,6108

Audit & Supervisory Board
Members(Excluding Outside Audit &Supervisory Board Members)

−

−

−

−

−

−

76,70076,700

−

−

−

11

Director Classification

Outside Directors

64

Total Amount by Type of Compensation, etc. (Thousands of Yen)

Total Amount ofCompensation(Thousandsof Yen)Hirata Integrated Report 2023

Number of
Of the Items on
Eligible Directors
the Left,
Non-Monetary
Compensation, etc.

Group Governance
The Hirata Group consists of Hirata and 12 consolidated
subsidiaries. Based on the following businesses—the­Automotive- and Semiconductor-related Equipment­businesses and Other Automatic Labor-saving business—
the Group is developing 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 management’s
duties, each Group company strengthens Group controls by
ensuring the Company’s involvement in important decisionmaking and the reporting of serious incidents, such ascompliance violations, to the Company in accordance withaffiliated company management regulations.
As the most recent major initiative in Group control,
we have established subcommittees consisting of members from multiple departments, including the affiliatedcompany management department, the general affairs
department, and the corporate planning department, withthe aim of formulating a basic policy for Group governanceby the end of fiscal 2023. The basic policy under consideration sets the level of involvement of affiliated companies
from the perspectives of fund management, release of
personnel, and involvement in business strategies and isconsidering effective control by monitoring risk based on
the financial condition of each Group company.

Furthermore, in parallel with the formulation of the above
policy, each department of the Administration Divisionand the management departments of affiliated companies
cooperate in carrying out activities with a plan to completea review of Group head office functions by the end of fiscal
2023. We aim to build an optimal system for maximizing
corporate value by exerting certain controls on the scope offunctions handled by the head office to each Group company, which had been entrusted to each division.
In addition, in order to increase synergies across theGroup, companies hold regular briefings (quarterly fordomestic affiliates and biannually for overseas affiliates) toshare business strategies and issues and monitor businessperformance as appropriate.
In audits, the Company’s Audit & Supervisory Board
members and other committee members conduct auditsof Group companies, and the Group Company Audit &Supervisory Board Members Liaison Meeting is held ona regular basis to enhance the effectiveness of audits ofGroup companies by sharing the audit status of Group
companies and risk-related matters. The Internal Audit
Department also regularly conducts audits of Group companies and reports to the Board of Directors and the Audit
and Supervisory Committee in a timely manner.

Cross-shareholdings(1) Approach to
Cross-shareholdings(2) V erification 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 the enhancement of
its corporate value.

In line with the basic policy,
verification of aspects such as thebenefits and risks associated withthe holdings and whether to continue with them is undertaken at
Board of Directors’ meetings. The
Company shall consider sellingshareholdings that are judged tohave low rationality.

(3) C riteria for Exercising
Voting Rights Related to
Cross-shareholdings
With regard to the voting rights
related to shareholdings, thesewill be exercised in an appropriate manner with the sustainablegrowth of the issuing company asan evaluation criterion and on thepremise that they will contribute to
the improvement of the Company’s
corporate value.

Hirata Integrated Report 2023

65

Hirata’s Sustainability

Corporate GovernanceCompliance
Compliance Charter 
Fundamental Principles
Because of our global nature, we at Hirata as well as each of our Group companies abide by a set of established rules we call our
Code of Conduct. We strive for total compliance with the code to effectuate commercial endeavors that are both fair and transparent
always in accordance with legal statutes both domestically and abroad along with social norms and in-house regulations.
Code of Conduct
Based on our business principles, we at Hirata are fully aware of our mission androle as a corporate entity with respect to our valued customers, shareholders,business partners, employees, and members of 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.
Note: For more details on each of these items please visit:https://www.hirata.co.jp/en/sustainability/esg/compliance

1. A
 biding by legal statutes and regulations
2. Engaging in fair and just business3. Disclosure of corporate information
4. P roper management and utilization of
corporate assets
5. Contribution to society
6. Respecting the individual
7. C ontrolling confidential information andpersonal information
8. Duty of practice and accountability

Compliance System Compliance Promotion Framework
Having established a Compliance Committee under the
Board of Directors, the Company formulates compliancemeasures and, should a compliance violation arise, it conducts investigations and analyses, issues cease-and-desist
orders, and formulates measures to prevent a recurrence.
Including the implementation status of each measure andthe operational status of the internal whistleblowing system,
reports are also made to the Board of Directors.
Efforts to Strengthen Compliance
The Company provides compliance training for employees
when they join the Company, and theme-based training,which for example covers the Act against Delay in Payment
of Subcontract Proceeds, Etc. to Subcontractors, security
export controls, and harassment prevention, is conducted
as appropriate for Group employees.
Having conducted compliance fact-finding surveys since
fiscal 2020 on a yearly basis, the Company is continuing toconduct a variety of measures and education based on thesurvey results. The Company has also set up a compliancewebpage on its intranet, on which educational and othermaterials based on violation case studies are posted for
employees on a monthly basis.
Board of Directors
Instructions

ReportCompliance Committee
Committee chair(Representative director, president)
Committee vice chair(Person in charge of Companywide
risk management)

Directors who are Audit andSupervisory Committee members(Can attend committee meetingsand state their opinions)

Full-time committee members
Compliance committee secretariat

Investigations/Cease-and-desist orders/Guidance

ReportAll departments
Divisional compliance promotion managers

Whistleblowing System 
The Company has established a whistleblowing system inorder to quickly identify compliance violations and takeappropriate measures. In addition to an internal hotline,
we have established an external hotline for reporting tothird-party outsourcing companies that enables anonymous
reporting in the local language and a supplier hotline thatcan be used by suppliers. Each hotline has a system in placethat complies with the Revised Whistleblower Protection
Act, and regulations stipulate the duty of confidentiality

66

Hirata Integrated Report 2023

of whistleblower information and the prohibition ofdisadvantageous treatment due to whistleblowing.
Reports received are handled in accordance with said
regulations and reported to the Board of Directors throughthe Compliance Committee Secretariat.

Number of whistleblowing reports

FY2020

FY2021

FY2022

6

8

12

Risk Management
Risk Management System 
The Company has established a Risk Management
Committee under the Board of Directors, which conductsCompanywide risk management in accordance with the
Risk Management Rules to deal with events that may
affect the achievement of business goals or sustainable
management.
In the Company’s risk management system, the division
director of the Administration Division is responsible
for Companywide risk management and conducts suchmanagement. The Risk Management Committee, chairedby the representative director and president, has been
established as a deliberative body for risk management.
We comprehensively grasp and evaluate risks that occur
throughout the Group from the perspective of the entire
organization and conduct activities to maximize corporate
value, prevent risks from occurring, and minimize losses
after they occur.
The department in charge of each risk item identifies
risks evaluates them, and implements countermeasures.
The department in charge of risk management summarizes
Companywide risks and monitors the implementation
status and effectiveness of countermeasures, and theInternal Audit Department audits the effectiveness andresponse status.

Board of Directors
ReportInstructions

Risk Management Committee
Committee chair(Representative director,
president)

Directors who are Audit andSupervisory Committee members(Can attend committee meetingsand state their opinions)

Committee vice chair(Person in charge ofCompanywide risk management)

Full-time committee members
Risk Management Committee Secretariat

Monitoring

ReportAll departments

Ascertaining of and Responding to Risks 
The Company has created a Hirata Risk Map that broadlyclassifies approximately 70 risk items into four categories:
management process risks, which include governance;
external factor risks such as market changes; indirectbusiness process risks that cover human resources andIT systems; and direct business process risks related tobusiness activities such as production. Based on the
Hirata Risk Map, the Company has established the main
department in charge of each risk item and put in place amechanism whereby the information collected on assumed
and incurred risks is aggregated by the department
responsible for risk management.
From the aggregated risk information, the department
responsible for risk management comprehensively evaluates
the likelihood of the occurrence, magnitude of the impact,
and priority of the risk. The Risk Management Committee
then determines major risks and related measures, monitors
the status of measures, and reports to the Board of
Directors.

Company-wide Risk Management Flow
Main Departments in Charge
Grasp/Plan

Rebuild

All Departments
AuditsInternal audit
Cooperation

Check

Implement• PDCA support• Regular monitoring

Report/Consult

Department responsible for risk management• Reports new and significant risks• Reports on the results of regular monitoring surveys andanalyses to each department

Instructions

Risk Management Committee
ReportBoard of Directors

Hirata Integrated Report 2023

67

Hirata’s Sustainability

Corporate GovernanceBusiness Continuity Plan (BCP) 

From few days to few
months after occurrence

Regional contribution activities

From day of occurrence

Based on its BCP Policy, which places the highest priority
Flowchart for Implementing BCP
on the lives and safety of employees and their families, theOccurrence of emergency
Company has established procedures for clarifying how to
confirm the safety of employees and others. We also secure
Initial response, BCP operations
stockpiles of supplies in the event that makes it difficult
Establish task force, confirm conditions of damage and personnel safety
for employees to return home. In addition, by sequentiallydeveloping and reviewing procedures for checking theContact customers, suppliers, and related organizations
damage status of building infrastructure at our businesssites and procedures for conducting surveys on the damage
Draft policy for continued operation of core business, establish systemstatus of suppliers, we will not only ensure the safety of ouremployees but also minimize the impact on our customSupport employees and Handle financial liabilities
ers’ businesses, thereby contributing to our stakeholders.
Support clients andEnsure, pay, and financebusiness resources
partner companies
Furthermore, by conducting simulated drills on a regular
working capital
Administer emergency
Adjust and restore deals
aid and restorationbasis, we are working to promote understanding of the
BCP among employees and others while ensuring the effectiveness of procedures, etc.
Restoration and reconstruction
In the event of an emergency, the BCP organization willplay a central role in the initial response, business continuity,and recovery following the flowchart for implementing our BCP.
BCP Policy
To as far as possible avoid circumstances that could endanger business continuity due to unexpected disasters or problems, we plan
to continue business by extracting risks in advance and defending ourselves against and mitigating those risks and to restore business
operations in a short period of time in emergency situations.
• Give top priority to the lives and safety of employees and their families• Minimize any negative impact on our customers’ businesses • Assist our stakeholders
We review our BCP on a regular basis for continuous improvement

IT Security
IT Security Management 
To protect information and information assets, including IT
equipment, from threats such as leakage and damage aswell as to conduct its business activities safely and securely,
the Company established an IT Security Basic Policy andformulated IT security management regulations.
To act as a management system, we have establishedan IT Security Committee while reviewing policies andregulations, conducting risk analysis, and monitoring IT
security measures, including those of Group companies andthe supply chain.
In the event of a security incident, we form a response
team in accordance with set procedures so that we canrespond swiftly.

Efforts to Strengthen IT Security 
To ensure the safety of the IT assets handled by theCompany, we have implemented a raft of measuresfrom both system and human resource perspectives. As
an example of one such system, we have introduced an
endpoint detection and response (EDR) service to quickly
implement appropriate countermeasures against new
threats, such as previously unknown computer viruses
and targeted threat emails. We are working to improve IT

68

Hirata Integrated Report 2023

security literacy by providing our employees with IT security
education and targeted threat email training.
Management Meeting

Board of Directors

PolicyReportInstructions

IT Security Committee
Risk Management Committee

Persons in charge ofIT security
IT security policy,
rules, procedures,and monitoring

System Management
Department

Incident reports

IT Management Department
IT managers

IT systems managers

AuditsInternal audit

A Talk between Our Outside Directors

Ryoko Ueda
Outside Director

Naokuni Motoda
Outside Director
Full-time Audit & Supervisory
Committee member

We will work to enhance the medium- to long-term corporate
value of the Company through fulfilling our responsibility as directors.
Outside Director and Full-time Audit and Supervisory Committee Member Naokuni Motoda, who has been participating in the management of the Company since his appointment as a full-time Audit & Supervisory Board member(outside Audit & Supervisory Board member) in 2015 and Outside Director Ryoko Ueda, who has been involved in therevision of the Japanese Stewardship Code and Corporate Governance Code as an academic expert, exchanged views
on corporate governance to enhance the Company’s corporate value over the medium to long term.

Completion of the First Year of the Medium-Term Management Plan
Motoda During the first year of the Medium-Term
Management Plan, which started in fiscal 2022, orders
received were at a record high. However, I believe there
are issues with the Company’s operating profit and operating profit ratio. Our Medium-Term Management Plan is athree-year plan, but in order to achieve sustainable growth,
it is always necessary to formulate management strategies
that look 10 to 20 years into the future. While it is natural
to be particular about achieving the numerical targets of
the Medium-Term Management Plan, it is also necessary to
deepen discussions on the Company’s vision for the futurewith an eye to the future. Through these efforts, I believethat the achievement of the numerical targets of the current
Medium-Term Management Plan will become more realistic,
so I think it is important for the Board of Directors to discuss
it from a medium- to long-term perspective.
Also, in the process of promoting the Medium-Term
Management Plan, I think there are some issues in reviewing the progress of the plan. It is necessary to review not

only the degree of achievement of numerical targets but
also whether various measures are functioning effectively.
As an Audit and Supervisory Committee member, I havealready made recommendations on this point, and progress
management is being improved.
Ueda I agree. It is important for the Board of Directors
to thoroughly discuss the vision for the future and shareit internally. The Medium-Term Management Plan sets
three-year targets for realizing our vision for the future.
There are many companies that simply follow the numbersin the plan, achieving first-year targets, but, because they
will not achieve targets in the second year, do everything in
the third year, which is the last year of the plan. This meansthat accomplishing the plan is the objective. Clarifying whatkind of company we want to be and what kind of presence
we want to have in society in the future will change theway we manage our business. First of all, I think it is important to clarify the Company’s vision for the future.

Full Implementation of Sustainability Management
Ueda The Sustainability Promotion Committee, aCompanywide committee, which started full-scale
operation in fiscal 2023, has set targets for each materiality
issue identified and has been materializing action plans toachieve those targets.

However, the demands and expectations of society are
drastically changing more than we think, so we need to beflexible enough to keep up to date with the latest information.
I believe that our current form of sustainability management is
at the stage of raising the quality of our initiatives with a uniquecorporate identity while being fully aware of external feedback.
Hirata Integrated Report 2023

69

Hirata’s Sustainability

A Talk between Our Outside Directors

specific theme, which raise a variety of issues and report on
progress toward resolving each issue.
Prior to the establishment of the Sustainability Promotion
Committee, the Audit & Supervisory Board (now the Audit
and Supervisory Committee) had proposed specific initiatives
for issues such as human capital, risk management, andcompliance. These initiatives are being embodied in theactivities of the various working groups of this committee. I
feel that management centered on sustainability has begun
to move in a systematic manner.

The Sustainability Promotion Committee, which meetsregularly and in which I participate as an observer, has
specific discussions with an awareness of the issues. In
the future, as an outside director, I would like to evaluate
efforts, taking into account the perspectives of external
stakeholders such as shareholders and investors, anddisseminate them externally as necessary.
Motoda The Sustainability Promotion Committee iscomposed of five working groups, each dedicated to a

Ueda We must proactively expand information disclosure
regarding the recognition of sustainability issues and theprogress and results of our initiatives. As the next step, it isnecessary to set specific KPIs to trace the degree of achievementof targets and the progress of initiatives for each materiality
and to formulate a concrete road map for implementation.
In the future, discussions on these issues, which are
indispensable for improving our corporate value, will takeshape, but in setting them, we need not only an internal
perspective but also an objective viewpoint from outside
the Company. As an outside director, I would like to be fully
involved and supportive of these discussions.

Toward Strengthening Human Capital
Motoda As one of the important themes of the
Sustainability Promotion Committee, various initiatives tostrengthen human capital are being considered and promoted. However, I believe that an accurate understandingof the current status of human resources with what abilities
and to what extent they are available within our Groupis necessary for carrying out those initiatives. The specificdirection in which human resource investment is headed
is closely related to management strategy. This means that
if the management strategy for the future is clarified, therequired human resources will be determined. I am awarethat the extent to which management strategy and humanresource strategy are aligned is an important theme for the
Board of Directors.

Ueda On the other hand, we as directors must always
think about how we can keep employees motivated andworking with a positive mindset.
Especially among the younger generation, the feelingsof belonging to the Company and workstyle needs are
becoming more diverse. Only by respecting such diversity
and motivating employees to continue working will theyrealize growth and make a greater contribution to theCompany.
I think that it is important for us to always consider whata corporate culture and work environment should be like inwhich individuals and organizations can grow sustainably.

Contributing to the Enhancement of Corporate Value throughAppropriate Risk Management
Motoda Various risks are always present in the execution of all business operations. Through my many years at
a financial institution, I have learned various forms of risk
management and have experienced many successes andfailures.
As a member of the Audit and Supervisory Committeeof the Company, I would like to make use of the correct
approach to risk management that I have experienced in
discussions at Board of Directors’ meetings and in my daily

70

Hirata Integrated Report 2023

activities. It is essential to hedge the risk of loss in advance.
On the other hand, there are situations in which drastic risktaking is necessary by management judgment in order toincrease corporate value.
I would like to contribute to the sustainable enhancement of corporate value by utilizing my knowledge tosupport the Board of Directors’ prompt and decisivedecision-making from both risk-hedging and risk-taking
perspectives.

Strengthening Governance for Sustained Corporate Value Enhancement.
Motoda In June 2023, in accordance with the transition
to a Company with an Audit and Supervisory Committeeorganizational design, we established a new basic policy
for fiscal 2023 in the form of the Audit and Supervisory
Committee. One of our stated goals is to establish a highquality Group governance system that lives up to the trustof society. In the past, we made recommendations on
strengthening governance every year, and in fiscal 2023,
Group governance remains a priority audit item for the
Audit and Supervisory Committee. The way we manage
our business in a rapidly changing business environment is
to establish a high-quality Group governance system. I am
confident that this will lead to the sustainable developmentof the Company and the enhancement of corporate value.

Ueda As a member of the Japanese government’s panelof experts, I am involved in the revision of the Corporate
Governance Code, and I believe that the main purposeof strengthening corporate governance is to sustainably
increase corporate value from a medium- to long-term perspective. Although corporate value is fundamentally basedon shareholder value, we must also enhance corporate value
for all stakeholders. We feel that the Company has a goodbalance between those two types of value. While being very
conscious of corporate value for shareholders and investors,
the Company’s management also emphasizes consideration
for its customers, suppliers, employees, and local communities. The executive side is making efforts to further enhance
corporate value, and through my duties as a director, I would
like to support management while maintaining an awarenessof all stakeholders.

What the Transition to a Company with an Audit andSupervisory Committee Organizational Design Has Brought About
Motoda Before the introduction of the Corporate
Governance Code and the outside director system, each
Audit & Supervisory Board Member actively asked q­ uestions
and made recommendations at meetings of the Boardof Directors. This culture has continued to this day, andeven after the transition to a Company with an Audit andSupervisory Committee organizational design, directors who
are Audit and Supervisory Committee members actively
speak during meetings of the Board of Directors. We haveconducted not only legal audits but also audits on appropriateness since the days of the Audit & Supervisory Board, andour basic role has not changed even after said transition.
As a result of the formation of the Audit and Supervisory
Committee, Audit and Supervisory Committee members
have received new voting rights in the Board of Directors.
In addition, I have been granted the legal authority andresponsibility of expressing opinions on the nomination andremuneration of directors at the Shareholders’ Meeting,so I believe that I must participate more responsibly indecision-making.

Supervisory Committee members will have new voting
rights at the Board of Directors and will be able to­contribute to strengthening governance beyond the­conventional framework. I also believe that the addition oflegal authority and responsibility has established moreclearly the position and role of Audit and Supervisory
Committee members in management.
We do not have a mindset of "I can only say so muchbecause I am an Audit and Supervisory Committee
member." In addition, each Audit and Supervisory
Committee member possesses a high level of expertise,so I believe that we have a very well-balanced structure.
The opinions of the Board of Directors as a whole,including Audit and Supervisory Committee members,
are always respected based on mutual trust and respect,
and r­ elationships are fostered that allow free and open
exchange of opinions. By all means, I would like to playa role in contributing to the sustainable growth of theCompany and the enhancement of corporate value overthe medium to long term, while valuing such relationships.

Ueda Whether a Audit & Supervisory Board or a Audit
and Supervisory Committee, the important thing is whether
it fulfills its substantive functions and roles. What surprised
me when I was appointed as outside director of theCompany is that Audit & Supervisory Board members madevery in-depth comments on the execution of the Company
and that the execution side was taking these comments
very seriously and applying them to their initiatives, rather
than simply saying that they had listened to them.
With the transition to a Company with an Audit andSupervisory Committee organizational design, Audit and

Hirata Integrated Report 2023

71

Hirata’s Sustainability

List of Directors (as of June 26, 2023)
Note:E xtracts from the reasons for selection are provided.
Attendance is based on Board of Directors’ and the Audit & Supervisory Board meeting attendance in fiscal 2022.

Directors

72

Hirata Integrated Report 2023

Yuichiro Hirata

Shojiro Hirata

Representative Director

Director

As representative director and president, has led the
management of the Company and the Group andmade a meaningful contribution to the development of its businesses.

Has made a meaningful contribution to enhancing
the Chinese business, developing the Company’s
device business, and enhancing its procurement
function, through his management of a Chinese
subsidiary and the operation of the Business andProcurement divisions.

Number of shares
owned

Number of Board of Directors’
meetings attended

Number of shares
owned

Number of Board of Directors’
meetings attended

291,600

14/14

163,400

14/14

Shigeru Maeda

Masaru KozakiDirector

Director

Having previously served as manager mainly of
automobile sector departments as well as managerof the Business Promotion Division for the entire
Company, has more recently been fulfilling his rolein supervising overall business management.

In addition to having served in the capacity of­representative of a local subsidiary in Singapore forsix years, has made a meaningful contribution to
the business development of the Group globally by,for example, being in charge of affiliate companies.

Number of shares
owned

Number of Board of Directors’
meetings attended

Number of shares
owned

Number of Board of Directors’
meetings attended

1,600

10/10

400

10/10

Shigeharu Nishimura

Hideki Ninomiya

Director

Director

He has been in charge of business divisions mainlyin the fields of semiconductor-related production
equipment and panel manufacturing equipment,
and since 2022, he has been serving as Division
Director of the Research and Development
Headquarters, contributing to the creation of new
business models using biological genetic resources(mainly plant genetic resources).

He is mainly responsible for legal affairs, risk
management, and corporate governance. Since
2023, he has been the Head of the Administration
Division, and is responsible for overseeing theadministrative divisions, such as strengthening
the ­governance and management foundation of
the Group.

Number of shares
owned

Number of Board of Directors’
meetings attended

Number of shares
owned

Number of Board of Directors’
meetings attended

700— (appointed in June 2023)

2,800— (appointed in June 2023)

Satoru Ogawa

Ryoko Ueda

Outside Director

Outside Director

Outside Independent officer

Outside Independent officer

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

Ms. Ueda possesses extensive experience andsophisticated insight as an expert on corporate
governance and ESG. Has served as an outside
director of the Company since 2022.

Number of shares
owned

Number of Board of Directors’
meetings attended

Number of shares
owned

Number of Board of Directors’
meetings attended

100

14/14

200

10/10

Status of important concurrent positions

Status of important concurrent positions

Representative Director and President, Wako
Industries Co., Ltd.

Senior Research Fellow, Japan Investor Relations
and Investor Support, Inc.
Member, Certified Public Accountants and Auditing
Oversight Board
Professor, SBI Graduate School
Visiting Professor, Kyoto University

Naokuni Motoda

Ken ImamuraOutside Director, Full-time Audit andSupervisory Committee Member*

Outside Director, Audit and Supervisory
Committee Member*

OutsideOutside 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. He has served
as a full-time Audit & Supervisory Board member
since 2015.

Possesses specialized knowledge and experience
as a lawyer handling corporate legal affairs. Has
served as an Outside Audit & Supervisory Board
member for the Company since 2015.

Number of shares
owned

Number of Board of Directors’
meetings attended

Number of shares
owned

13/14

–

500

Number of Board of Directors’
meetings attended

13/14

Number of Audit & Supervisory
Board meetings attended

Number of Audit & Supervisory
Board meetings attended

17/18

18/18
Status of important concurrent positions
Partner, Okuno & Partners

Yasuhiko Endo

Asako OkabeOutside Director, Audit and Supervisory
Committee Member*

Outside Director, Audit and Supervisory
Committee Member*

Outside Independent officer

Outside Independent officer

Possesses specialized knowledge as a certified fraud
examiner (CFE) and a wealth of experience andinsight regarding stocks and management. Has
served as an Outside Audit & Supervisory Board
member for the Company since 2018.

As a certified public accountant (CPA) possessing
specialized knowledge and extensive experience incorporate accounting, Ms. Okabe has served as an
Outside Audit & Supervisory Board member for theCompany since 2022.

Number of shares
owned

Number of Board of Directors’
meetings attended

Number of shares
owned

14/14

–

400

Number of Board of Directors’
meetings attended

10/10

Number of Audit & Supervisory
Board meetings attended

Number of Audit & Supervisory
Board meetings attended

18/18

13/13

Status of important concurrent positions

Status of important concurrent positions

Outside Audit and Supervisory Board Member,
Estelle Holdings Co., Ltd.
Outside Director and Audit and Supervisory
Committee Member, Sac’s Bar Holdings Inc.

Representative, Okabe Asako Certified Public
Accountant Office*A s a result of the transition to a Company with an Audit and Supervisory Committee organizational design in June 2023, they
became a director and Audit and Supervisory Committee member, shifting from their former position of Audit & Supervisory
Board member.

Executive Officers
Yuichiro Hirata

Shojiro Hirata

Shigeru Maeda

Masaru Kozaki

President and Chief Executive Officer

Senior Executive Officer

Senior Executive Officer

Managing Executive Officer

Division Director, Procurement
Division, In Charge of Quality Control

Division Director, Business Headquarters

Division Director, Global Business
Headquarters

Shigeharu Nishimura

Hideki Ninomiya

Toshiyuki Matsuzaki

Yoshitaka Taniguchi

Executive Officer

Executive Officer

Executive Officer

Executive Officer

Division Director, Research andDevelopment Headquarters

Head of Administration Division

Business Headquarters
Executive General Manager,#1 Business Unit

Business Headquarters
Executive General Manager,#2 Business Unit

Takenori Hirakawa

Kazuhiro Toda

Michinobu Shuto

Jo Yoneda

Executive Officer

Executive Officer

Executive Officer

Executive Officer

Business Headquarters
Executive General Manager,#3 Business Unit

Business Headquarters
Executive General Manager,#4 Business Unit
Head of Device Center

Administration Division
In Charge of Strategy and Corporate
Communications and Head ofCorporate Planning

Administration Division
In Charge of Administration and
Secretarial Section

Miho Mori
Executive Officer
Administration Division
In Charge of Governance andInternal Control

Hirata Integrated Report 2023

73

Data

Principal Financial/Non-financial Data
Financial Data (Consolidated)
Item

FY2012FY2013

FY2014FY2015Net sales(Thousands of yen)

38,146,271

47,129,390

52,145,406

53,048,377

Operating profit(Thousands of yen)

450,769

1,723,784

2,123,053

2,924,843

Profit before adjustment for income taxes(Thousands of yen)

501,328

1,640,681

1,935,017

2,734,125

Profit attributable to owners of parent(Thousands of yen)

284,943

840,891

946,787

1,713,342

Net assets(Thousands of yen)

18,392,251

19,194,579

21,864,968

21,584,433

Total assets(Thousands of yen)

53,632,949

58,352,066

61,798,755

59,681,671

D/E ratio(Times)

1.06

1.17

0.91

0.81

Cash flows from operating activities(Thousands of yen)(643,444)

959,0433,704,748

2,651,214

Cash flows from investing activities(Thousands of yen)

(1,018,579)(480,572)(402,881)(872,030)

Cash flows from financing activities(Thousands of yen)

(679,328)

2,387,270(2,816,534)(3,549,306)

R&D expenses(Thousands of yen)

596,946

768,761449,500

601,756

Capital expenditures(Thousands of yen)

1,238,515

661,468

790,003

1,047,573

Depreciation & amortization(Thousands of yen)

910,541

989,857

951,832

920,171

Basic earnings per share

(Yen)

27.12

80.86

91.19

171.13

Dividends per share

(Yen)

12.5

12.5

15.0

30.0

Dividend ratio

(%)

46.1

15.5

16.4

17.5

Operating profit ratio

(%)

1.2

3.7

4.1

5.5

ROE

(%)

1.6

4.5

4.7

8.0

ROA

(%)

0.5

1.5

1.6

2.8

Equity-to-asset ratio

(%)

34.0

32.5

34.9

35.6

Notes: 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 fiscal 2018, and the main management indicators, etc., related to fiscal 2017 are those after retroactive application of said accounting standard.
2. The Company applied the Accounting Standard for Revenue Recognition from fiscal 2021.

Non-Financial Data (Redundant, Non-Consolidated)
Employee Turnover Rate

Salary Gap between Male and Female Employees

(%)

(%)

12
10

9.4

9.6

9.4

9.7

90

10.2

80

8
6
4
2
0

77

77

2019

2020

79

78

2021

2022

70
2.1

2018

1.5
2019

2.1

2.2

2.2

2020

2021

2022

60

(FY)

0

2018

(FY)

Hirata Corporation (%)
National Average (%)*
* In reference to“Outline of Employment Trend Survey Results,” Ministry of Health,Labour and Welfare (conducted annually between January and December)

Salary gap between male and female employees (%)
Notes: 1. Average salary ratio for women assuming the average salary (annual salary) for men is 100
2. Full-time employee basis

Childcare Leave Acquisition Rate

Percentage of Women in Managerial Positions

(%)

(%)

100

100

100

100

100

15

100

12

80
54

60
40

34

28

20

12

0

7
2018

Men (%)

74

75

21

7

4

24

2019

2020

2021

Women (%)

Total (%)

Hirata Integrated Report 2023

10.0

3.1

3.4

2018

2019

12.4

11.2

11.5

5.3

5.6

5.2

2020

2021

2022

9
6

47

3
2022

9.7

(FY)

0

Percentage of women in managerial positions (%)
Percentage of women in assistant manager positions (%)(FY)

FY2016

FY2017FY2018FY2019FY2020

FY2021

FY202280,542,366

94,163,561

77,302,745

65,612,306

65,255,919

67,087,433

78,443,846

8,247,285

9,371,006

6,249,169

2,736,754

4,995,273

3,856,104

5,920,209

8,400,835

9,242,225

6,215,587

2,881,784

5,169,129

4,266,785

5,861,257

5,891,441

6,666,227

4,637,9781,744,770

4,075,964

2,682,267

4,269,969

27,571,776

46,582,462

46,610,448

46,993,088

51,999,042

54,938,509

59,575,645

88,246,646

95,330,813

90,573,727

85,409,651

92,794,895

99,485,900

114,522,788

0.95

0.46

0.41

0.31

0.36

0.44

0.50

(5,862,118)(1,932,931)

10,579,685

8,094,504

690,065(3,444,072)(5,687,502)(1,445,514)(4,425,279)(1,994,763)(2,629,885)(2,378,900)(1,082,530)(2,057,413)

8,152,082

6,990,056(6,002,410)(5,719,431)

3,536,717

4,150,348

5,101,568

677,866

784,561

1,162,175

1,005,512

866,3101,020,326

1,229,849

2,090,645

2,397,132

4,135,668

2,580,584

3,160,102

1,464,615

2,708,959

971,026

1,080,489

1,198,906

1,225,779

1,453,916

1,478,400

1,494,281

624.39640.73440.89168.15392.70258.42411.23

100.0

125.0

125.0

40.0

65.0

65.0

90.0

16.0

19.5

28.4

23.8

16.6

25.2

21.9

10.2

10.1

8.1

4.2

7.7

5.7

7.5

24.3

18.2

10.1

3.8

8.3

5.1

7.5

8.0

7.3

5.0

2.0

4.6

2.8

4.0

30.9

48.3

50.9

54.4

55.5

54.8

51.7

Energy Usage

Water Usage(kl)

(kl/million yen)

0.10

5,000
4,000
3,000

3,587
0.0620

2,955

4,013

4,169

0.07370.07230.0613

3,952
0.0643

0.08

1,000

0.02

Electricity usage (kl)

2019

2020

2021

2022

80,00060,000

109.1

112.8

63,08054,374

0

0

2018

2019

(t)

6,000

0.107
0.084

5,798

0.111
6,376

4,068

4,000

0.12

5,031

2,000
0

2018

CO2 emissions (t-CO2)

2019

2020

2021

2022

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

34,510

60

2020

2021

2022

0

(FY)

(t/100 million yen)

600

1.2
490

0.082

35,365

Water usage (m )Amount of water usage per ¥100 million of actual production (m3/100 million yen)

Industrial Waste Outputs

0.118

56.1

3

(t-CO2)(t-CO2/million yen)

6,848

0.072361.3

30

CO2 Emissions
8,000

90

74.5

20,000(FY)

Energy usage per unit of output (kl/million yen)

120

40,53640,0000.04

2018(m³/100 million yen)

0.06

2,000

0

(m³)

0.09

450
0.847

381

486
0.893

0.790

456
0.791

460

0.748

0.9

0.06

300

0.03

150

0.3

0

0

0

(FY)

0.6

2018
2019
2020
2021
2022
(FY)
Industrial waste output (t)Amount of industrial waste target substance output per ¥100 million of actual production (t/100 million yen)

Hirata Integrated Report 2023

75

Data

Company Profile/Stock Status
Company Profile (as of March 31 2023) Company Name

Hirata Corporation

Headquarters

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

Representative

Yuichiro Hirata

Date Established

December 29, 1951

Fields of business

Manufacture and sale of various manufacturing line systems, industrial robots, and logistic equipment

Capital¥2,633 million

Employees

Consolidated: 1,882 Non-Consolidated: 1,054

Fiscal Year-End

March 31

Stock Exchange Listing

Tokyo Stock Exchange Prime Market

Representative Director, President

Stock Status (as of March 31, 2023) 
Stock information

Treasury Stock

2.9%
Authorized Number of Shares

37,000,000

Issued Number of Shares

10,756,090

Number of Shareholders

10,933Foreign Investors

16.0%

Major Shareholders

12.1%

Name/Company Name

Number of
Shares Held
(Shares)

Percentageof Shares
Held(%)

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

1,069,300

10.24

SMC Corporation

500,000

4.79

Higo Bank, Ltd.

456,000

4.36

STATE STREET BANK AND TRUSTCOMPANY 505025

424,300

4.06

Mizuho Trust & Banking Co., Ltd.
Securities Management Trust 0700096

400,000

3.83

Custody Bank of Japan (Trust Account)

391,000

3.74

Yuichiro Hirata

291,600

2.79

NIKKON Holdings Co., Ltd.

272,400

2.61

Hirata Corporation Employees
Stockholdings

263,110

2.52

SANYO DENKI CO., LTD.

192,900

1.85

Hirata Integrated Report 2023

Individuals
and Others

38.8%

Securities
Companies

1.9%

Financial Institutions

28.3%

Treasury Stock

Note 1. In addition to the above, the Company holds 308,852 treasury shares.
2. Treasury shares do not include 63,000 shares held by the trust for granting shares
to officers.
3. In a large shareholding report made available for public inspection as of May 31,
2021, Goodheart Partners LLP is listed as holding 538,300 shares, or 5.00%, asof May 24, 2021, but as we are unable to confirm the number of shares actually
held by the company as of March 31, 2023, it is not included in the above list ofmajor shareholders.

76

Distributionof Shares by
Shareholder

Other JapaneseCompanies

2.9%

1–999 shares

15.7%

100,000 or
more shares

51.0%
1,000–4,999 shares

Distribution of
Shares by Numberof Shares

9.0%
5,000–9,999 shares

2.9%
10,000–49,999 shares

8.1%

50,000–99,999 shares

10.4%

Dividend Policy 
The Group considers the return of profits to shareholders to be
one of the most important management issues. While working tostrengthen our financial position, as a general guideline we areaiming to maintain a consolidated payout ratio of 20% or more,while taking into consideration consolidated performance andfuture business development and striving to achieve returns in astable and continuous manner. With regard to the record datefor dividends, since the relationship between interim results andfiscal-year results is low due to the nature of the build-to-order
structure, dividends are paid once at the end of each fiscal year,
in principle.

Changes in Dividends per Share andDividend Payout Ratio
Dividends per share(Yen)

Dividend ratio(%)

FY2018

125.0

28.4

FY201940.0

23.8

FY202065.0

16.6

FY202165.0

25.2

FY202290.0

21.9

Policy for Dialogue with Shareholders and Investors—Results of Dialogue in Fiscal 2022 
The Company discloses information appropriately in accordance with relevant laws and regulations. In order to gain thecorrect understanding and trust of shareholders and investors, even if the disclosure items do not fall under laws and regulations, we strive to disclose corporate information that is judged to have a material impact on investment decisions in a timely,
accurate, and fair manner.
Specifically, with regard to our business environment, management plans, business strategies, etc., we are working tostrengthen our response to interviews using web conferences, enhance the content of disclosure at financial results briefings and other meetings, and strengthen the dissemination of information through our website. In fiscal 2022, we held 166­individual interviews and small meetings and conducted 3 plant tours.
The content of communication with shareholders and investors is reflected in the enhancement of day-to-day IR activities
and is reported quarterly to the Board of Directors, which is utilized in management activities aimed at further enhancing
corporate value.
Signing of the United Nations Global Compact
Hirata is a signatory to the United Nations Global Compact (UNGC) and registered as aparticipating company on September 10, 2023. We also joined the Global Compact Network
Japan (GCNJ), the local network of the UNGC in Japan. We will continue to work to achieveboth business growth and resolution of social issues by providing products and services withrespect for human dignity and consideration for the global environment while ensuring thetransparency and soundness of our management.

External Evaluation of Sustainability 
Hirata has been selected as a constituent of the FTSE Blossom
Japan Sector Relative Index (FTSE Blossom SR), an ESG(­environmental, social, and governance) investment index, andthe S&P/JPX Carbon Efficient Index, a global environmental equity
index. These indicators are adopted by the Government Pension
Investment Fund (GPIF).
FTSE Blossom
Japan Sector Relative Index(FTSE Blossom SR)

S&P/JPX Carbon
Efficient Index

Hirata Integrated Report 2023

77

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

TH2402-E0EG01