ULVAC REPORT2015
CSR & Annual Report

ULVAC, Inc.
2500 Hagisono, Chigasaki, Kanagawa 253-8543, Japan
Phone +81-467-89-2033

www.ulvac.co.jp

CONTENTS
Basic Corporate Philosophy

Editorial Policy

The ULVAC Group aims to contribute to the development of industries and science

We have integrated the previous
Annual Report and the CSR Report
into this ULVAC REPORT three
years ago. This report is publishedto promote understanding of the
ULVAC Group’s operating resultsand CSR activities among our
stakeholders, and we consider it
an important communications
tool.

by comprehensively utilizing its vacuum and peripheral technologies through themutual cooperation and collaboration of the Group companies.
Management Policies• Improvement of Customer Satisfaction• A Free and Open Culture• Innovative Production Technology• Enhancement of Corporate Value■ Published:
December 2015
(Previous Japanese edition
published in September 2014; thenext edition is to be published in
September 2016)• Innovative Product Development■ Guidelines Referenced:
ISO26000; 2010
(Guidance on social
responsibility) first Edition

Report’s Scope and Period

About the ULVAC Group and Editorial Policy

1

ULVAC Group’s history

3

Interview with Top Management

5

ULVAC Group’s Value Creation Flow

9

Financial Highlights
Financial Highlights

11

Analysis of Business Results

13

Consolidated financial statements

15

Technology Topics: Special Feature

From smartphones to the IoT
ULVAC’s vacuum technology is also used for the IoT

19

ULVAC’s vacuum technology supports the evolution of smartphones

21[Scope]■ ULVAC Group
While the report covers the ULVACGroup as a whole, any portions forwhich the scope differs areindicated.

Research and Development

23

Global Network

25■ Year ended June 30, 2015
(July 1, 2014 to June 30, 2015)
Portions with information relating
to periods other than the above
are indicated.

Customer Support

26(Disclaimer)

Quality assurance and product safety27

Procurement (supply chain management)

28

HR Management

29

Supporting the Manufacturing of ULVAC by Promoting Employees’ Health31

Occupational Safety and Health

32

Environment

33[Period]

Corporate Profile of the ULVAC Group

Business Segments of the ULVAC Group•Name:ULVAC, Inc.

Vacuum equipment business•Trademark:ULVAC•Head Office:2500 Hagisono, Chigasaki, Kanagawa•Established:

August 23, 1952

•Capital:¥20,873,042,500

FPD and PV production equipment• Liquid crystal display (LCD) production
equipment• Organic LED production equipment• Inkjet printing production equipment• Roll coater(evaporation and sputtering)• Solar cell production equipment(crystalline silicon and compound )•Number of Employees: Non-consolidated 1,097
Consolidated 5,904 (As of June 30, 2015)•Business Areas:1

Development, manufacturing, sale and customer
support for vacuum equipment, peripheral devices,vacuum components and materials for the display, solarcell, semiconductor, electronic, electric, metal,
machinery, automobile, chemical, food product andmedical product industries, as well as universities andresearch labs, and import and export of various
equipment. Additionally, research guidance andtechnical advising on vacuum technologies in general.

Semiconductor and Electronic device
production equipment• Semiconductor (memory, logic, power orother semiconductors) production
equipment• LED production equipment• Electronic device production equipment

Components• Vacuum pumps• Vacuum gauges• Helium leak detectors• Process gas monitor• Spectroscopic ellipsometer• EB, RF and DC power generator• Vacuum valve• Deposition controller• Vacuum robot
Industrial equipment• Vacuum heat-treating furnaces• Vacuum melting furnaces• Vacuum brazing furnaces• Rare-earth magnet production equipment• Vacuum freeze-drying equipment• High-vacuum distillation equipment• Automatic Leak Tester

Vacuum application
business
Materials• Sputtering target materials• High-melting-point materials
and production ofcomponents• Nano metal inks
Others• Surface analyzers• Controllers• Mask blanks

ULVAC Group’s Strengths

Figures shown in tables andgraphs in this report may not add
up to the indicated total becauseof rounding. Some figures havebeen revised from previous years’
data because the scope ofreporting was expanded or
calculating methods have beenchanged.

Foundations of value creation

Roundtable Discussion

Heading towards a further growth phase
Change of activities in terms of production from
VITALIZATION to integration, to be ‘One ULVAC’

35

Global Production

38

Social Contribution Activities

39

Corporate Governance

40

Board of Directors and Auditors

41

Compliance

43

Risk Management

44

CSR Activities for Fiscal 2014 and Targets for Fiscal 201545

ULVAC Report 2015

2

The world’s first liquid
crystal display and ULVACULVACThe spirit of the ULVAC Group,
passed down over more than 60 years

Group’s

Vacuum technology is now an indispensable part of a range of manufacturing
processes.

HISTORY1973

Origin of the “ULVAC” trademark:Striving for the ultimate

As the world’s only comprehensive vacuum products manufacturer, ULVAC
provides products to industry and research institutions etc.
The DNA of young researchers with the ambition to “contribute to JapaneseTransparent conductive film deposition
equipment that contributed to thedevelopment of the liquid crystal display

1963

industry through vacuum technology” has been passed down to this day. ULVAC has

Executive Director Chikara Hayashi
unveils the “ULVAC” trademark when
it is first introduced

been providing the latest technology to the world for more than 60 years.

Electrical tabletop calculating device (calculator) is one of the great global
hit products created by Japanese companies, and they made a tremendous

In the 1960s, as products developed by ULVAC began to contribute toJapanese industry bit by bit, more and more advanced vacuum technology

The story of ULVAC’s establishment - the 6 angels* and ULVAC * Referring to the individual investors who invest in, advise, and guide a venture business.

became sought after.
The Company unveiled the “ULVAC” trademark in 1963, in order to clearly

ULVAC was established in 1952, which was a year in which Japan wasdemonstrate the critical nature of the demands placed on vacuum technology.

attempting post-war recovery and it was unimaginable that vacuum

The name “ULVAC” is an abbreviation of “ULtimate in VACuum” (striving to betechnology could form the basis for a business, let alone contributethe ultimate in vacuums).

to manufacturing.

1952

ULVAC was established in that time period with the blessing of 6angels, led by Konosuke Matsushita, who is known as the god of

Yoshijiro Ishikawa

Gen Hirose

President of Keifuku Electric
Railroad Co., Ltd.
and ULVAC’s first president

President of Nippon
Life Insurance Co.

management and is the founder of Matsushita Electric Industrial Co.,

Konosuke
Matsushita
President of
Matsushita ElectricIndustrial Co., Ltd.

Ltd. (now Panasonic).

changed to “ULVAC Corporation” (currently “ULVAC, Inc.”) and the Japanese
corporate name was adapted in 2001, when the brand name “ULVAC” had

who came together with the aim of “establishing vacuum
technology in Japan and contributing to Japanese industry” andinvested accordingly. These investments resulted in ULVAC (thenYoshio Osawa

Aiichiro Fujiyama

Chairman of the board of
J.Osawa Group Co., Ltd.

Chairman of the Japan
Chamber of Commerceand Industry

Japan Vacuum Engineering Co., Ltd.)

Tamesaburo
Yamamoto

1970~
1960~

1952

●

●

1955
1956
~
1959

1959

3

●

●

●

Established Japan Vacuum
Engineering Co., Ltd.
Received first order for vacuum
evaporation equipment toplate automotive parts from
Hakkosha (now Ichiko
Industries, Ltd.)
Opened Omori Plant andcommenced domestic
equipment production
Merged with Toyo Seiki
Vacuum Research Corporation(1956) and expanded
operations to become acomprehensive vacuum
products manufacturer
through the transferal ofengineers from the Tokuda
Manufacturing Co., Ltd. (1959)
Opened the Yokohama Plant

1960

●

1964

●

1968

●

Developed successive
large-scale vacuum devices
for heavy industries, such as
vacuum melting furnaces
and vacuum distillationequipment
Established ULVAC’s firstoverseas subsidiary in Hong
Kong
Completed Chigasaki Head
Office and Plant

1972

●

1975

●

2001
1990

1992
1986

●

Opened the Institute forSuper Materials as ULVAC’s
first dedicated researchfacility
Received order from IBM for
System 731, which was theworld’s first fully automatedvacuum evaporationequipment

The MCH Series, which was
the world’s firstmulti-chamber sputtering
equipment, received positive
reviews from many
semiconductor
manufacturers

1995

●

The SHD Series of hard disk
manufacturing equipment
was a global hit

manufacture and production equipment, which was a key to the
manufacturing process for the Sharp hit product ELSI MATE EL-805 LCD
calculator. Leveraging this experience, ULVAC gained the top global shareof display device manufacturing equipment for LCD flat-screen TVs.

2010~

2005~
2011
2005

Opened the Fuji Susono Plant
as a specialist semiconductor
manufacturing equipment
plant● Released the SMD series ofsingle substrate film deposition
equipment, which became thebasis for ULVAC’s FPD (flatpanel display) business●

2004

Opened the Institute of
Semiconductor and Electronics
Technologies● Changed company name to
ULVAC, Inc.
● Completed the new Chigasaki
Head Office and Plant building
aimed at development and trial
manufacture of large liquid crystal
display manufacturing equipment●●

Established a vacuum pumpproduction center in China anda sales and service center inSouth Korea

2006

2007

2008

Joined first section of the Tokyo
Stock Exchange● Established a dedicatedproduction center for vacuum
equipment in Suzhou, China●

1988

In 1973, ULVAC perfected the transparent conductive film trial

1990~

President of Asahi
Breweries, Ltd.

1980~

crystal display manufacturing technology to take hold domestically.

become well-known by many users.

2000~

researchers such as Jin Imachi, Chikara Hayashi, and Hideo Shibata,

contribution to Japan by allowing cutting-edge semiconductor and liquid

In 1969, the corporate name “Japan Vacuum Engineering Co., Ltd.” wasThe 6 angels were moved by the devoted passion of young

1952~

The world’s first LCD
calculator display

Established a large-scale
production center for large
liquid crystal display
manufacturing equipment inSouth Korea● Established a production
subsidiary for large liquid
crystal display manufacturing
equipment in Taiwan● Opened the Chiba Tomisato
Plant to handle development
and production of materials● Received order for a thin-film
photovoltaic modules
production turnkey line
● Developed the Magrise
mass-production system forrare-earth magnets andthin-film lithium rechargeable
battery integrated
mass-production technology
as post-FPD businesses
●

2012
2015

Established the South
Korea Institute forSuper Materials inSouth Korea● Celebrated theCompany’s 60th
anniversary● Established the Future
Technology ResearchLaboratory●

Vacuum technology to support
storage media

Developed in 1983, ULVAC’s roll-to-roll vacuum deposition equipment contributed greatly

1983

of fields, spanning video tape through to floppy disks,

to the manufacturing process for high-performance 8mm video tape.
Throughout the history of vacuum technology ULVAC has contributed to a broad range

Roll-to-roll vacuum film
deposition equipment to broaden
the scope of application to fields
such as high-performanceelectronic components

hard disks, magneto-optical disks, and card-type
memory, as well as peripheral devices that use thesestorage media, such as magnetic heads and opticalsensors.
ULVAC Report 20154

Interview with Top Management
have contributed to this have included (1) thoroughly establishing a

Promoting group-wide unified
management, the evolution of
manufacturing and science,and contributing to sustainablesocial development in order toboldly strive to create newvalue
Hisaharu Obinata
President and Chief Executive Officer

Progress of the medium-term management plan

structure that grasps the current business conditions and is able torespond immediately to unforeseen volatility, and (2), creating a(unit: billion yen)

June 2015
Results

June 2016
Forecasts*2

June 2017
Targets

manufacturing system to generate income according to our plan. This is

Orders received

182.7

190.0

200.0

a result of focusing the knowledge that the ULVAC Group has fostered

Net sales

179.2

190.0

200.0

up to this point, such as past data and technical specifications, andOperating profit

11.1

14.5

16.0

Operating profit to net sales (%)

6.2%

7.6%

8.0%

trouble-free manufacturing. I believe that this is the reason we were able

Ordinary profit

12.5

13.0

15.0

to generate income in excess of our targets under the plan.

Ordinary profit to net sales (%)

7.0%

6.8%

7.5%

8.9

10.0

11.0

thoroughly implementing ‘front loading,’ which ensures that thoroughprecautions are already in place before work begins to ensure stable andNet income*1

Q3
fully redeemed preferred
A3 We
stock.

How would you describe the financial soundness of the group?

In September 2012, the Company issued ¥15 billion worth of class A
classified stock in an attempt to seriously promote structural business*1 For the respective fiscal years ending June 30, 2016 and June 30, 2017, this refers to current net
profits that revert to the shareholders of the parent company*2 Revised values announced on November 11, 2015tell us about future efforts under the medium-term
Q5 Pleasemanagement plan.
will further pursue ourA5 We
structural business reformproject.

reform. As a result, there was considerable reform to the financial
structure, such as an increase in consolidated net assets and cash on

Looking back on the fiscal year ended
June 30, 2015tell us about the business environment and results for
Q1 Pleasethis consolidated fiscal year (year ended June 2015).

profits in excess
A1 Achievingof plan’s targets

however, signs of renewed investment in the second half of the fiscal

hand equivalents, as well as a reduction in interest-bearing debt. In

In order to achieve the targets under the medium-term management

year reinvigorated the market. In the automobile market, sales ofNovember 2014, a portion of these shares (¥5 billion capital) wasplan devised in August 2014, we adopted basic policies of

eco-friendly cars remained strong, causing capital investment inpurchased and cancelled. Furthermore, in July 2015, we were also able

“reconstructing a business model to create value (reestablishment of a

automotive parts, including car electronics products, to remain steady.

to purchase and cancel the remaining class A classified stock (¥10 billion

mechanism to increase added value with vacuum technologies at thecapital).

core),” “reviewing unprofitable businesses,” and “reducing break-even

In this business environment, the consolidated results for the fiscal
year ended June 30, 2015 showed a year-on-year increase in bothsales.” We aim to continue to “establish a system to enable us to secureorders received and net sales, with orders received amounting toreliable and stable earnings.” With regard to business segments, we plan

¥182.7 billion (a year-on-year increase of 7.6%), and net sales totaling

to adhere to the plan’s growth scenario, which sees growth being¥179.2 billion (a year-on-year increase of 3.0%). With regard to profit andloss, although operating profit, ordinary profit and net income all

The electronics market, in which the ULVAC Group operates, continues

showed a year-on-year decrease, with operating profit of ¥11.1 billion (ato be buoyed by smartphones, with an increase in shipment of small to

year-on-year decrease of 7.2%), ordinary profit of ¥12.5 billion (amedium-sized LCD panels, semiconductors and other electronic

year-on-year decrease of 6.8%) and net income of ¥8.9 billion (acomponents that are used as smartphone components. With regard to

year-on-year decrease of 23.1%), these figures still exceeded our initial

capital investment in LCD production equipment, a lull was observed

targets under the plan.

early in the fiscal year due to the completion of a round of investment
by various companies and the market remained generally sluggish;
Business Results(unit: billion yen)

(Reference)
June 2014

Plan*

June 2015
Results

Orders received

169.8

170.0

182.7

Year-end order backlog

67.2

62.2

73.0

Net sales

173.9

175.0

179.2

Operating profit

12.0

9.0

11.1

Operating profit to net
sales (%)

6.9%

5.1%

6.2%

Ordinary profit

13.4

8.5

12.5

Ordinary profit to net
sales (%)

7.7%

4.9%

7.0%

Net income

11.5

6.5

8.9

Year-on-year
12.9
+7.6%
5.3
+3.0%
(0.9)
(7.2%)(0.9)(6.8%)(2.7)(23.1%)* Values published in August 20145

do you rate your results for this consolidated fiscal year
Q2 How(year ended June 2015)?
our ability to
A2 Improving
generate steady profits bythoroughly implementing‘front loading’

Outlook for the fiscal year ending June30, 2016 and progress of themedium-term management plan

propelled by the semiconductor and electronic component

tell us about the outlook for the fiscal year ending June
Q4 Please2016.

product competitiveness and profitability through cooperationand sales are
A4 Orderspredicted to meet the plan’stargets and profits are
predicted to exceed targets.

In the fiscal year ending June 30, 2016, which is the second year of the

manufacturing equipment segment while continuing to be supportedby the FPD and PV production equipment, Industrial equipment, andComponent segments, while further pursuing activities to increase
between the development, sales, and production sections under the
structural business reform project.

Sales strategy project●

Strengthening of the Corporate Sales and Marketing Division●

Securing partnerships with companies that are global leaders in newtechnology and open new markets

medium-term management plan, we anticipate that orders and sales
will each amount to ¥190 billion, which will meet the targets under theplan. In addition, we anticipate that profits will exceed targets under theThree years has passed since I took on the role of president in 2012. In

medium-term management plan, with operating income ofthat time, I truly feel that the group as a whole has achieved its targets¥14.5 billion (¥13 billion under the medium-term management plan),under the plan in a challenging business environment and has

ordinary income of ¥13 billion (¥12 billion under the plan) and net

improved its ability to generate steady profits by coming together as

income reverting to the parent company of ¥10 billion (¥9 billion under

one and working towards structural business reform. Major factors thatthe plan. (Profits were upwardly revised on November 11, 2015.)

Development strategy project●

Adding electronics components and MEMS that support the IoT to theeight important business areas●

Establishment of the Future Technology Research Laboratory, which willcontribute to long-term growth

Cost management enhancement project●

Establishment of front loading and global expansion●

Ensuring the Group’s production efficiency

ULVAC Report 20156

Q6
are pursuing maximum
A6 We
efficiency through INTEGRATED
Please tell us about each project and important points for theirthorough implementation.

Group management, and steadily
improving results.

Firstly, with regard to the sales strategy project, we will further
strengthen ULVAC’s Corporate Sales and Marketing Division. At present,

By promoting these projects, the ULVAC Group will chart a course
towards efficient management which embodies the keyword of “oneULVAC” in order to achieve solid growth. Up to this point we havetechnology to avoid the energy crisis that is being faced by society

ULVAC’s mission and value creation

pursued the structural business reform project using the keyword of“vitalization.” This has led us to promote global vitalization for ourdevelopment, sales, and production sections, as well as increased
product competitiveness and profitability etc. Looking forward, the
ULVAC Group will seek to integrate these areas in order to achieve
maximum efficiency, and promote integrated management in order to

Q8 What are your thoughts concerning ULVAC’s mission?
believe ULVAC’s mission is to
A8 Icontributeto society byconducting research anddevelopment concerning
cutting-edge technology.

ensure increased growth.

order to respond to these developments, we plan to align and optimize
the Group’s sales activities, led by ULVAC’s Corporate Sales andCompanies are said to be a public instrument of society, and we are

Marketing Division, and promote a more effective approach toaware that we only exist because of society at large, so we work on the

Shareholder returns

partnerships with companies that are global leaders in new technology,
we would like to have a firm grasp of future technological trends, whilebuilding many connections, such as by continuously holding technicalroadmap meetings.
With regard to the development strategy project, we have added
electronics components and MEMS that support an advanced
information-oriented society (IoT) to the ULVAC Group’s eight important

premise that we must be a company that is valuable to society. In
addition, I think that it is our utmost duty to contribute to society

Q7
dividend for the year
A7 Theended June 2015 was ¥10 per
Please tell us about your thoughts concerning dividends.

share.

business areas, so that we are now promoting development in nine
important business areas. Furthermore, we have created the Future

Through the structural business reform that the ULVAC Group has comeTechnology Research Laboratory to assist ULVAC 10 or 20 years in thetogether to engage in up to this point, we have implemented a systemfuture. For the past several years, we have valued development aimed atthat allows us to ensure secure and stable income, and fully redeemedthe current plan to receive orders; however, we are now proactively

the class A classified stock, etc. This led us to the decision that we had

engaging in development from a medium-term perspective withachieved our goal of being able to resume dividends for common stock

dreams of contributing to social progress and the ULVAC Group’s futureand duly issued a dividend of ¥10 per share for the fiscal year ended

growth.

June 30, 2015. With regard to the fiscal year ending June 30, 2016,

With regard to the cost management enhancement project, welooking forward we will secure the internal reserves necessary forwill expand globally, while further enhancing our implementation of

investment in research and development and to strengthen ourfront loading, which we have been engaged with up to this point.

financial base, and in consideration of the future earnings forecasts andFurthermore, we will thoroughly pursue efficiency in the Group’s

dividend payout ratio, etc., we anticipate that dividends will increase by

production.

¥20 for a total dividend of ¥30.

high-efficiency solar cells, and automotive-related technology. The
second field that we will contribute to is key technology for the growth

our customers’ production activities are spreading around the world. In

obtaining orders globally. Furthermore, in preparation for securing

through four projects concerning power devices, high-brightness LEDs,

through the ULVAC Group’s greatest strength, which is cutting-edge
technology, while fulfilling our responsibility to all of our stakeholders.

and development of society. We are devoting ourselves to thedevelopment of technology which is necessary for four projects
concerning display-related technology, non-volatile memory, hyperfine
wiring, and high-density mounting, as we head towards a highly
information-oriented society, which is represented by the acronym “IoT.”
We are also working on a ninth project, which concerns electronic
components and MEMS. MEMS technology is extremely important forthe creation of the communication devices and sensors etc. that will
support the IoT age. The Group has advanced processing technology
relating to this area, and we plan to place particular emphasis on it
looking forward. The Group has determined that these two fields areimportant, and we will aggressively promote technologicaldevelopment for the realization of a rich and safe lifestyle for people allover the world. (Refer to p. 23)

Since our establishment in 1952, at ULVAC, we have dauntlessly
challenged ourselves to create new value that is demanded by thetimes, seeking out the infinite possibilities of vacuums, and refining
technology that freely manipulates vacuums, based on our corporate
philosophy of “contributing to manufacturing and science throughvacuum technology.” In addition, a diverse range of fields utilize thevacuumtechnology

that

we

have

developed,

includingsemiconductors, electronic components, flat-panel TVs, solar cells,
automobiles, pharmaceuticals, food, and science, and it is afundamental technology that is indispensable for the advancement ofplease tell us about the type of group that ULVAC
Q10 Finally,
aspires to be.

aim to be a corporate
A10 Wegroup that creates newvalue that is demanded by
the times and is valued by
all kinds of businesses andsocieties.

many industrial fields and science.
In recent years, intricately connected social issues such as

I feel that business management should value safety, quality, and profits,environmental problems have become prominent, and I think that thein that order. Profits cannot be achieved without safety and quality. If

fields in which the ULVAC Group’s products and technology can

you merely chase profits and neglect safety and quality, it will lead tocontribute are expanding exponentially.

accidents down the line and cause inconvenience to the societies. Also,
if you neglect quality, you will lose the trust of your customers. Once you

Q9hope to contribute toA9 We
society in the fields of

In what specific fields do you hope to contribute to society inthe future?

energy and IoT.

make sure that you achieve safety and quality, only then will you be able
to seek profits. I feel that this is prudent business management.
My aim for the Group is to create new value that is demanded by
the times and to be valued by all kinds of businesses and societies bybringing together our manufacturing ability and the abilities of ourpersonnel who support it, firmly based on a corporate culture thatvalues safety and quality above all else. To that end, we will strengthen

Although we are facing many issues, the Group aims to make great
contributions in two specific fields. One of these is the energy saving
and power generation field, which will help to provide technologicalsolutions to deepening social issues. There are concerns about
insufficient power supply in the future due to the increasing global

our relationships with all of our stakeholders including our customers,
sustainably expand our businesses by building a stable businessstructure, and continually improve corporate value. We appreciate yourcontinued support and invite you to join us in the bright future that
ULVAC will create.

population, and we will continue to be a leader in the development of

7

ULVAC Report 2015

8

ULVAC Group’s Value Creation Flow
Contribu t ing to the pr o g re ss of so c ie t y
by ta c kling s oci al i ssu e s t hr o u g h t hepr ov ision of pr od u cts a nd t e c hnolo g yMedicinedeltimes, seeking out the infinite possibilities of vacuums, and refining technology that freely manipulates vacuums.
Based on our three strengths of “research and development,” “global networking,” and “customer support,” wegrasp the requirements of customers and the market, and provide products and technologies that contribute to the

Next-generation
automobiles

Semiconductor
and electronic
device production
equipmentlogieshno
nd tecucts a
d
o
r
ie
p
r
ing
ust s
Provid to many ind

Researchanddevelopment

Customer
supportULVAC Group’s strengths

Hyperfine wiring

High-density
mounting

Power devices

Next-generation
non-volatilememoryNext-generation
displays

ed
cat
i
t
s
i
Soph

Components

Materials

Environment

Contributing to
the progress of society
by providing value ina range of different
fieldsElectronic
components
and MEMS

Vacuumtechnology

Socialissues

New energy

fi
el
d

FPD and
PV production
equipment

Needs of customers
and the market

Future areasnand continual improvement in corporate value in order to be an institution that is valued by society.

Globalnetworking

High-efficiency
solar cells

High-brightnessLEDs

solution of social issues. Furthermore, we will contribute to the progress of society through sustainable expansion

Othersaving and po
rgy-s
wer
Ene
ge
ne
ra
ti
on

fi

Since ULVAC was established, we have dauntlessly challenged ourselves to create new value that is demanded by the

m
or
f
in

io
at

Industrial
equipment

ULVAC Groupandsustainable social
Research anddevelopment

ULVAC Group’s
strengths

Revolutionary and advanced
vacuum technology paving the way
for the future

Global networking

Customer support

Solution networks that support
global industrial development

ULVAC CS Solutions focuses allof the Group’s knowledge

progress· Earn the trust of stakeholders· Increase corporate value

Foundations of value
creation

9

Product safety and quality assurance
Supply chain management● HR management● Supporting manufacturing through health promotion

Environmental conservation
Occupational health and safety● Global production● Social contribution activities

●

●

●

●

Sustainably strengthening corporate
governance● Strengthening compliance and risk
management●

ULVAC Report 201510

Financial Highlights

Financial Highlights

179,174

250,000

250,000

11,996

11,132200,000(565)

15,137

12,654(49,984)(3,807)

11,538

8,874

17,827

12,719

6,761

6,217

6,731

Depreciation

10,717

9,096

7,967

7,421

7,630

R&D costs

8,255

7,088

4,989

5,213

5,562

166,778

169,808

182,732

Net sales

232,040

196,804

163,351

173,878

Operating income (loss)

1,850(6,384)

6,115

Income (loss) before income taxes(9,192)(33,704)

Net income (loss)(8,706)

Capital expenditures

150,000

2011.06

2012.06

2013.06

2014.06

2015.06

Total assets

313,616

249,651

243,289

230,791

242,348

Net assets/Shareholders’ equity

92,023

41,18759,436

72,23884,928

Number of employees

7,878

6,981

6,579

5,971

5,904

150,000

100,000

100,000

50,00050,0000Millions of yen

YEAR-END DATA

200,000

11.06

12.06

13.06

14.06

0

15.06

Capital expenditures/Depreciation (Millions of yen)
Capital expenditures

11.06

12.06

169,808

152,221

166,778

235,932

152,221

Orders received

179,174

2015.06

173,8782014.06

163,3512013.06

196,804

2012.06

235,932

Orders received (Millions of yen)

2011.06

232,040

Net sales (Millions of yen)

FOR THE YEAR DATA

182,732

Millions of yen

13.06

14.06

15.06

R&D costs (Millions of yen)

Depreciation(Yen)

15,000Net income (loss)(176.43)(1,012.94)(87.79)223.18172.73—Diluted−−−

165.62148.48Cash dividends

−

−

−

−

10.00

—Basic10,0002011.06

2012.06

2013.06

2014.06

2015.06

Net income / Average total assets (ROA)

−

−

−

4.9

3.8

Net income / Average shareholders’ equity (ROE)

−

−

−

18.8

12.1

28.1

14.8

22.7

29.2

32.8

Shareholders’ equity ratio

8,000

5,000
(%)

OTHER INFORMATION

10,00020,000

0

11.06

12.06

6,000

13.06

14.06

15.06

100,000ULVAC’s customers in the flat-panel display (FPD), solar cells, semiconductor, and electronic parts industries face the challenge of the rapid

75,00072,23850,00059,43622.7

84,928
32.8

29.2

30

20

14.8

20,000

10

0

0

13.06

14.06

15.06

Free cash flow0

-20,000

32,21329,19021,992

22,357

17,73017,937

17,851
2,896-8,492-10,000

25,000

12.06

15.06

40,00010,00041,187

11.06

14.06

Cash flows frominvesting activities

30,000cause, directly or indirectly, performance to fluctuate. The factors that could cause results to differ materially from the statements herein
include the world economy; fluctuations in the exchange rate; market conditions for flat-panel displays, semiconductors, and electric devices;

12.06

Cash flows fromoperating activities

40

28.1

11.06

Cash flows (Millions of yen)

92,023pace of technological advances and fierce competition.
Consequently, actual earnings may vary substantially from the projections included in this report due to a number of factors that could0

Shareholders’ equity ratio

Disclaimer regarding forward-looking statements

13.06

2,000

Total net assets (Millions of yen)/
Shareholders’ equity ratio (%)
Total net assets

Forward-looking statements of the company in this report are based on information available at the time these documents were prepared.

4,000

5,562

1,398.66

5,213

1,040.23

4,989

806.387,088

751.008,255

1,787.51

6,731
7,630

2015.06

6,217
7,421

2014.06

6,761
7,967

2013.06

12,7199,096

2012.06

17,827

Net assets

2011.06

10,717

PER SHARE DATA

-11,328-14,833-4,506-3,023-4,055-19,820-30,000
11.06

12.06

13.06

14.06

15.06

and trends in capital investments.

11

ULVAC Report 201512

Analysis of Business Results

Net sales by business segment (Millions of yen)

Net sales by region (Millions of yen)

■ FPD·PV production equipment■ Semiconductor and electronic device production equipment ■ Components■ Industrial equipment ■ Material ■ Others■ Japan ■ Taiwan ■ South Korea ■ China ■ Other Asia ■ Europe, others

250,000

250,000

200,000

200,000

150,000

150,000

100,000

100,000

50,00050,000Business results for the current fiscal year
In the consolidated fiscal year ended June 2015, the Japanese economy

With regard to capital investment in LCD production equipment, acontinued its gradual recovery with individual consumption showing

lull was observed in the first half of the fiscal year due to the completion

steady improvement, and corporate earnings showing positive signsof a round of investment by various companies and the market remained

etc., while employment and the earnings environment continued togenerally sluggish; however, signs of renewed investment in the second

improve. In the United States, although capital investment was weak,

half of the fiscal year reinvigorated the market. In the automobile market,

economic recovery continued with increased individual consumption

sales of eco-friendly cars remained strong, causing capital investment inetc. In Europe, the economy continued to rally, although attention must

automotive parts, including car electronics products, to remain steady.

be paid to the problems in Greece and trends in the unemployment rate

As a result, orders received rose by 12.924 billion yen or 7.6% year

and commodities prices. In China, the economy began to gently slow

on year to 182.732 billion yen and sales rose by 5.296 billion yen orwith a decline in increases in individual consumption and production

3.0% year on year to 179.174 billion yen for the consolidated fiscal year

etc.

ended June 2015. With regard to consolidated profit and loss, operating
The electronics market, in which the ULVAC Group operates,

income fell by 863 million yen or 7.2% year on year to 11.132 billion yen,

0

11.06

12.06 13.06 14.06

0

15.06

Vacuum Application Business
31,533 (18%)

VacuumEquipment Business

Others17,111 (10%)

continues to be buoyed by smartphones, with an increase in shipment

ordinary income fell by 908 million yen or 6.8% year on year to 12.475

Material
14,422 (8%)

of small to medium-sized LCD panels, semiconductors, and otherbillion yen, and net income for the period fell by 2.664 billion yen or

Industrial equipment
25,493 (14%)

electronic components, which are used as smartphone components.

23.1% year on year to 8.874 billion yen.

147,641 (82%)

Total
179,174(Millions of yen)

Components
26,482 (15%)

11.06

12.06 13.06

14.06

15.06

Europe, others
13,014 (7%)
Other Asia
5,177 (3%)

FPD·PV production equipment
59,699 (33%)

Taiwan19,294 (11%)

Semiconductor and electronic
device production equipment
35,967 (20%)

South Korea
27,909 (16%)

Japan

Total
179,174

64,522 (36%)(Millions of yen)China
49,257 (27%)

Overseas
114,652 (64%)

Vacuum Equipment Business■ FPD production equipment and PV production equipment
Orders received increased for small to medium-sized LCD manufacturing
equipment in addition to large LCD manufacturing equipment and organic
EL manufacturing equipment in the second half of the fiscal year.
■ Semiconductor and electronic device production equipment
In relation to semiconductors, sputtering equipment and natural oxide
film removal equipment for mobile DRAM and NAND flash memory, andin relation to electronic components, advanced device manufacturing
equipment for mobile devices and LED manufacturing equipment, allcontributed to orders received and sales exceeding those of the previous
fiscal year.

■ Components
Markets steadied behind the FPD, semiconductor, electronic components,
and automotive related industries, and orders received and sales bothexceeded those of the previous fiscal year.
■ Industrial equipment
Sales exceeded those of the previous fiscal year with a particular emphasis
on vacuum heat treatment furnaces for automotive parts manufacture etc.

Stock Information (As of June 30, 2015)
Total number of stocks authorized

Total number of stocks issued
Total number of shareholders

Common stock
Class A classified stock
Class B classified stock
Common stock
Class A classified stock

49,355,938
1,000

Common stock
Class A classified stock

13,542
1

Note: Class A classified stock was acquired and cancelled on July 3, 2015
and the Company’s stock now comprises only common stock.

Major Shareholders (Common Stock)
Shareholder’s name

Vacuum Application Business■ Materials
Orders were received for sputtering targets for LCDs, mainly from major
Japanese and Korean panel manufacturers etc., and both orders received
and sales exceeded those of the previous fiscal year.

100,000,000
1,500
37,500■ Others
The market for mask blanks steadied due to increased demand forsmartphones and tablets, as well as in-vehicle semiconductors.

TAIYO FUND, L.P.
Nippon Life Insurance Company
Mizuho Bank, Ltd.
Sumitomo Mitsui Banking Corporation
State Street Bank and Trust Company 505019
Japan Trustee Services Bank, Ltd. (Trust account)
TAIYO HANEI FUND, L. P.
Goldman Sachs and Company Regular Account
The Master Trust Bank of Japan, Ltd. (Trust account)
Goldman Sachs International

Number of shares Ratio of shareholding(%)(thousands)

6,610
3,242
1,916
1,864
1,803
1,160
1,154
1,026
939
926

13.39
6.57
3.88
3.78
3.65
2.35
2.34
2.08
1.90
1.88

Number of Shareholders (Common Stock) total: 13,542 shareholders
Individuals and Other

13,135

Foreign Companies

164

Domestic Corporations

144

Financial Institutions
Securities Companies
Foreign Investors

40
34
24

Treasury stock: 1 shareholders

Number of Shares Held (Common Stock) total: 49,355,938 shares
Foreign Companies

21,154,113
14,317,020

Financial Institutions
8,714,344

Individuals and Other
Domestic Corporations
Securities Companies
Foreign Investors

4,342,126
791,43133,803

Treasury stock: 3,101 shares

Note: Stock ownership ratio is calculated by the number of treasury stocks (3,101 stocks)

13

ULVAC Report 201514

Consolidated financial statements
Consolidated Balance Sheets(Unit: Millions of yen)

Fiscal year ended June 30, 2014
(June 30, 2014)

Fiscal year ended June 30, 2015
(June 30, 2015)

AssetsFiscal year ended June 30, 2014
(June 30, 2014)

Fiscal year ended June 30, 2015
(June 30, 2015)

Liabilities

Current assets

Current liabilities

Cash on hand and in banks

57,66962,684

Notes and accounts payable, trade28,70033,816

Notes and accounts receivable, trade46,341

56,684

Short-term borrowings

69,242

62,844Merchandise and finished goods

4,068

3,551

Lease liabilities

338

385

Work in process

21,392

18,685

Accrued income taxes

1,473

1,392

Raw materials and supplies

8,892

9,897

Advances received

9,785

14,492

Deferred tax assets

1,774

1,620

Deferred tax liabilities

51

52

Other

6,006

5,264

Accrued bonuses for employees

1,043

1,931

Allowance for doubtful accounts

(360)

(482)

Accrued bonuses for directors and corporate auditors

245

203

145,783

157,903

1,593

2,059

Total current assets
Fixed assets

Accrued warranty costs
Provision for loss on contract

Property, plant and equipment

Other

581

129

9,097

9,976

122,148

127,277

79,614

81,341

Accumulated depreciation(41,103)(43,718)

Buildings and structures, net

38,511

37,623Long-term debt

20,36419,805

Machinery, equipment and vehicles

64,46467,281

Lease liabilities

648

557

Accumulated depreciation(48,774)(51,787)

Deferred tax liabilities

1,850

1,590

Machinery, equipment and vehicles, net

15,68915,494

Net defined benefit liability

11,759

6,715

Accrued pension and severance costs for directors andcorporate auditors

720

394

Asset retirement obligations

340

333

Other

723

747

36,40430,142

158,552

157,420

20,873

Buildings and structures

Total current liabilities
Long-term liabilities

13,77913,684(12,393)(12,390)

1,386

1,294

Land

8,476

8,198

Leased assets

1,270

1,490

Accumulated depreciation

(757)

(923)

Leased assets, net

514

567

Construction in progress

2,325

2,487

Total property, plant and equipment

66,901

65,662

Shareholders’ equity
Common stock

20,873

166

Capital surplus

37,10016,4358,510

34,609Tools, furniture and fixtures
Accumulated depreciation
Tools, furniture and fixtures, net

Intangible fixed assets
Leased assets

181

Total long-term liabilities
Total liabilities

Net Assets

Software

1,120

1,023

Retained earnings

Other

3,709

3,436

Treasury stock, at cost

4,625

Total shareholders’ equity

Total intangible fixed assets

5,010

(10)

(10)

66,474

71,908372

718

Accumulated other comprehensive income

Investments and other assets
Investment securities

4,130

4,718

Unrealized gain (loss) on securities, net of taxes

Guarantee deposits

1,936

1,877

Foreign currency translation adjustment

1,925

7,462

Remeasurements of defined benefit plans(1,389)(718)

Deferred tax assets

2,384

1,766

Other

5,549

6,896

Total accumulated other comprehensive income

908

7,462

4,856

5,559

Allowance for doubtful accounts(901)(1,100)Minority interests

Total investments and other assets

13,097

14,156

Total net assets

72,23884,92885,00884,444

Total liabilities and net assets

230,791

242,348

230,791

242,348

Total fixed assets
Total assets

15(Unit: Millions of yen)

ULVAC Report 201516

Consolidated statement of income

Consolidated statement of cash flows(Unit: Millions of yen)

Fiscal year ended June 30, 2014
(July 1, 2013–June 30, 2014)
Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Selling expenses
General and administrative expenses
Total selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividend income
Foreign exchange gains
Insurance and dividend income
Gain on sales of scraps
Share of profit of entities accounted for using equity method
Other
Total non-operating income
Non-operating expenses
Interest expenses
Commission for syndicate loan
Loss on valuation of inventories
Share of loss of entities accounted for using equity method
Other
Total non-operating expenses
Ordinary income
Extraordinary income
Gain on sale of fixed assets
Gain on sales of shares of subsidiaries and associates
Insurance income
Other
Total extraordinary income
Extraordinary losses
Loss on disposal of fixed assets
Loss on disaster
Business structure improvement expenses
Other
Total extraordinary losses
Income before income taxes and minority interests
Current income taxes
Deferred income taxes
Total income taxes
Income before minority interests
Minority interests in income
Net income

179,174
135,710
43,464

13,707
16,94430,651
11,996

14,97817,35332,331
11,132

216
267
765
242
1,100
1,110
3,699

181
310
743
360
1,143
128
954
3,818

1,257
198
109
747
2,311
13,384

1,038
365
363
710
2,475
12,475

1,068
838
535
31
2,471

326
28
354

145
279
133
161
718
15,137
2,805
3
2,808
12,329791
11,538176
176
12,654
3,183
13
3,196
9,458
584
8,874

(Unit: Millions of yen)

Fiscal year ended June 30, 2014
(July 1, 2013–June 30, 2014)
Income before minority interests
Other comprehensive income
Unrealized gain (loss) on securities, net of taxes
Foreign currency translation adjustment
Remeasurements of defined benefit plans, net of tax
Share of other comprehensive income of entities accounted for using equity method
Total other comprehensive income
Comprehensive income
Comprehensive income attributable to:
Owners of parent
Minority interests

17

Fiscal year ended June 30, 2015
(July 1, 2014–June 30, 2015)

173,878
131,23142,646

Consolidated Statement of Comprehensive Income(Unit: Millions of yen)

Fiscal year ended June 30, 2015
(July 1, 2014–June 30, 2015)

12,329

9,458

40
2,086
21
2,147
14,475

346
5,999
672
40
7,056
16,514

13,515960

15,427
1,087

Fiscal year ended June 30, 2014
(July 1, 2013–June 30, 2014)
Cash flows from operating activities
Income before income taxes and minority interests
Depreciation
Business structure improvement expenses
Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in provision for bonuses
Increase (decrease) in net defined benefit liability
Increase (decrease) in provision for directors’ retirement benefits
Increase (decrease) in provision for product warranties
Increase (decrease) in provision for loss on order received
Interest and dividend income
Interest expenses
Subsidy income
Share of (profit) loss of entities accounted for using equity
methodDecrease (increase) in notes and accounts receivable - trade
Decrease (increase) in inventories
Increase (decrease) in notes and accounts payable - trade
Increase (decrease) in advances received
Increase (decrease) in accrued consumption taxes
Other
Sub totalInterest and dividend income received
Interest expenses paid
Income taxes paid
Net cash provided by (used in) operating activities
Cash flows from investing activities
Payments into time deposits
Proceeds from withdrawal of time deposits
Purchase of property, plant and equipment and intangible assets
Proceeds from sales of property, plant and equipment andintangible assets
Proceeds from sales of shares of subsidiaries resulting in change
in scope of consolidation
Subsidy income
Other
Net cash provided by (used in) investing activities
Cash flows from financing activities
Net increase (decrease) in short-term loans payable
Proceeds from long-term loans payable
Repayments of long-term loans payable
Repayments of lease obligations
Cash dividends paid
Purchase of treasury shares
Cash dividends paid to minority shareholders
Other
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

Fiscal year ended June 30, 2015
(July 1, 2014–June 30, 2015)

15,137
7,421
133
626
23
(661)
83
(209)
(2,636)
(483)
1,257
(219)

12,654
7,630
271
857
(176)
(301)
348
(458)
(491)
1,038
(53)

109

(128)

13,178
8,986
292(4,345)(100)(4,068)34,522554(1,254)(1,609)32,213(7,626)
4,354
3,740
3,344
297
1,103
26,403539(1,043)(3,907)21,992(898)
658(5,539)(624)
379(5,846)

1,989

1,070

867

490

360
(461)
(3,023)207
269(4,055)(9,559)7,769(14,137)
(668)
(0)
(266)
(20)
(16,881)500
12,80844,20457,012(3,972)
7,525(10,893)(387)(1,050)(5,811)(287)(20)(14,895)
1,616
4,658
57,012
61,670ULVAC Report 201518

Smart cities

Industry

Health and medical

Transportation and automobiles

Food and farming

Technology Topics:
Special Feature

From smartphones to the IoT

The Internet of Things

ULVAC Group is the global

IoT

leader supporting thetechnology required forsmartphones today and willcontribute in vacuum
technology for the spreading
IoT world.

Smartphones has become more advanced with the increasing
demand.
Vacuum technology is essential for such state-of-the-art
technology advancements and for ULVAC, as the world’s only
global comprehensive vacuum equipment manufacturer, it is achallenge to create new value.
Smartphones is only the beginning and the quickly expanding IoTsociety will connect many more Things to the internet. Moreinformation will direct to increase cloud servers demand, higher
performance, and energy saving technologies. Each individualThings connected will have independent sensors, communication
mechanism, and batteries.
ULVAC’ equipments will continue to contribute in production andadvancements of key devices essential to the IoT society such as
non-volatile memory, MEMS sensor, communication modules,
thin film battery and many more.

P.21-22

IoT
Deep relationship withULVAC’s vacuum technology.
19

The IoT (internet of things) is

Information and communication through computers and smartphones

The IoT is expected to help many challenges facing within the

expected to be a step towards

will advance to everything and anything with the capability to be

Health, medical, transportation, agriculture, and many other industries

connected to the internet and/or communicate to each other,and also generate innovation. To realize such society, technology

independently having sensor and communication capability to allow

advancement in the field of smaller and low power sensor,

automatic sensing, automatic control, and remote measurements.

diversification of network, and the cloud is essential.

solving social problems andgenerate innovation.

Things, people, places, and the environment all connected to eachwill change the everyday life and our business activity.

ULVAC Report 201520

Technology Topics:
Special Feature

From smartphones to the IoT
Sensors

Semiconductor
integrated circuits

Behind the scene:
Evolution of smartphones
with ULVAC’s vacuum
technology

Image sensors and gyro sensors etc.

High-density packaging, flash
memory, mobile DRAM, and low
power consumption CPU

Many semiconductor integrated circuits is used within the smartphone such
as CPU, acting as the controlling brain, flash memory to store importantdata and photo, DRAM, and etc. High level technology is required to realize
small space, high integration, and power saving.

Smartphones has become more advanced with the increasing demand.

ULVAC contributes to the advancement of technology by supplying vacuum
equipments and target materials to semiconductor production lines.

Vacuum technology is essential for such state-of-the-art technology
advancements and for ULVAC, as the world’s only global comprehensive
vacuum equipment manufacturer, it is a challenge to create new value.

Sensors within smartphones act as a key device and will beever more important for the IoT society. Already the
number of quantity of sensors has increased with variety offunctions. Image sensors for cameras, gyro sensors todetect motion, are just few examples.

ULVAC contributes to the advancement of technology such as smaller sizeand high performance sensor production by supplying vacuum deposition
equipments, dry etching equipments, and target materials.

What is ULVAC’s vacuum technology contribution to the state-of-the-art
smartphone advancements?

Sputtering equipment
ENTRON Series

Sputtering equipment
SIV Series

High-definition displays

Sputtering equipment
SME Series

Liquid crystal, organic EL, touch panel, and flexible displays

High-definition

DISPLAY

LTPS (low temperature polysilicon), which is utilized in high quality liquid crystal displays and organic
EL displays, is used for smartphone displays. It is essential for higher definition images and smooth
video playback. In addition, touch panel displays has become the interface as much of use ineveryday life.

Natural oxide film
removal equipment
RISE Series

Etching equipment
NE Series

Sputtering
Target materials

Sputtering
Target materials

BatteriesThin film lithium secondary battery

Panel manufacturers require state-of-the-art vacuum equipments to produce high definition
display which ULVAC role is to provide such deposition equipments and target materials usedduring the coating process.

High-speed
communication modules
SAW devices and high-frequency devices

Sputtering equipment
SMD Series

Touch panel display
manufacturing equipment
STD Series

21

Organic EL display
manufacturing
equipment
ZELDA Series

Sputtering target materials
IGZO

Smartphones have many wireless communication capabilities such as
phone communication, internet connection, etc. To realize each wirelessfunction high-frequency technology is essential. High frequency devices are
sometimes installed individually, while some types are an integrated
module. Electromagnetic shielding technology is utilized to minimize
electromagnetic interference of each devices caused by the integration.

ULVAC contributes to the advancement oftechnology such as higher performancedevices, high density modules, by
supplying vacuum deposition equipments
to the device manufacturing line andelectromagnetic shielding process.

Thin, flexible and safe with no leakage, these batteries also have a long life
and are already used in RFID tags and smart cards etc. In the future, they are
expected to be adopted for wearable technology and smartphones.

ULVAC contributes through film deposition equipment for mass
production and target materials etc.

Inductive sputtering equipment
SIV Series

Evaporation equipment
EIH Series

Sputtering equipment forelectromagnetic shielding
SDH Series
Etching equipment
NE Series

ULVAC Report 201522

ULVACGroup’sStrengths

Product creation at the source of
responding to market needs and profits
ULVAC contributes to the shaping of a safe and prosperous society
by investigating vacuum technology and creating new value thatwill be needed in the future.
・Key technologies for growing and developing fields↗

Important areas

Research andDevelopment
Sustainably creating value from a
medium to long-term perspective

The ULVAC Group provides products andmaterials around a core of vacuum technology,
which is indispensible in a range of sectors. In
the future, we will continue to contribute to theadvancement of society by seeking out
revolutionary and advanced technologies to
respond to actual and potential needs andproducing products and technologies with high・Technological solutions to deepening social issues
Next-generation displays(High-definition displays and flexible displays)

Next-generation non-volatile memory (high capacity and low power
consumption memory) and hyperfine wiring

Sophisticatedinformation field

Electronic components, MEMS (devices and sensors to support the
IoT), and high-density mounting
Energy-saving andpower generation field

High-efficiency solar cells, high-brightness LEDs, power devices, andnext-generation automobiles

Planting the seeds of long-term growth byestablishing a new Future Technology ResearchLaboratory

Strengthening global intellectual property rights,
including those of Group Companies

We are establishing a global development structure that includes theoverseas arms of the group in addition to the domestic arm.
We are differentiating our technology by speeding up development
through unification, as well as innovative technology, and technologicalfusion at each company.
Furthermore, in addition to development and operation in ourdesignated important areas to conduct product development to ensure
short to medium-term profits, we have established and commenced
operation of the Future Technology Development Laboratory in orderto sow the seeds for the long term future, in 10 or 20 years.

Hisaharu Obinata

Working towards a prosperous and safe lifestyle

President andChief Executive Officer

In order to leverage ULVAC’s strengths, we have designated nine areas as “important areas”
and we are dedicating ourselves to development in these areas. Furthermore, we areconducting development and enhancement in each area through the cooperation of themarketing manager (CPM), design and cost reduction manager (CDM) and theDr. Paik Choong Ryul
Managing development
Executive Officer

Research and Development Planning Department

Global Market and Technology Strategy Division

technology manager (CTM).

Research and Development Department

Priority fields

Next-generation displays
High-efficiency
solar cells

High-brightness Energy-saving
and power
LEDs

generation field

Next-generation
automobiles

Next-generation
non-volatile memory
HyperfinewiringPower devices
Electronic devices
and MEMS

・Advancement that pre-empts changes
・Creating added value by refining technology

Future Technology Research Laboratory

ULVAC KOREA, Ltd./South Korea:
Korea Institute for Super Materials

High-density mounting

New energy

Environment“Protecting intellectual property rights concerning Group Companies’
products” and “respecting third-parties’ intellectual property rights” arethe ULVAC Group’s basic intellectual property strategy. We are applying
for patents, particularly in countries where we have many customers.
At the end of the fiscal 2014, we held 2,039 overseas patents, which is
the most we have ever held. In particular, patents in the Asian region
such as South Korea, China, and Taiwan now account for approximately
65% of all patents held, which is a large increase.
In accordance with market trends, the number of product groups
that have previously been developed and manufactured in Japan, but
for which the technology has now been transferred to overseas Group
Companies is also increasing. In the Asian region, such as South Korea,
China, and Taiwan, we have been promoting the enhancement of ourresearch and development structure, such as by engaging in thedevelopment of equipment and processes appropriate to each market
and the needs of our customers. In addition to our intellectual property
rules, which also apply to Group Companies, we have also been
preparing measures to avoid infringing the intellectual property rightsof third-parties.
In the future we will pursue development of new technologies
and new products as well as efficient patent applications based on oursales plan and marketing information. We will also conduct efficientand high-quality overseas applications to enhance our global
intellectual property rights, while giving consideration to therelationship with our business plan.

Institute for Super Materials

Institute of Semiconductor and Electronics Technologies

Sophisticatedinformation field

Future fields

23

ULVAC Group’s Global Intellectual
Property■ ULVAC’s Research and Development Structure (as of July 2015)

Nine important areas

added value around a core of vacuum
technology.

Development institutions

U.S.A.:■ Patents held by area (in the fiscal 2014)

South-East Asia

Other

74 (4%)

62 (3%)

EuropeSouth Korea

242 (12%)497 (24%)

North America

China

319 (16%)439 (22%)ULVAC Technologies, Inc.

Taiwan:ULVAC TAIWAN INC.

China:ULVAC Research Center
SUZHOU Co., Ltd.

Taiwan406 (20%)

MedicalULVAC Report 201524

ULVAC Group’s Strengths

Customer Support

Global Network
Solution networks that
support global industrial
development

ULVAC GroupWe are building sales and service
networks that are optimized for eachregion, not only in Japan, but
throughout the Group’s 50 companies
with a focus on North America and Asia.
Vacuum technology is one of the key
technologies for many other cuttingedge technologies, and will be
increasingly required for a wide range
of industries and growth fields in the
future.
As the world’s largest
comprehensive vacuum products
manufacturer, we conduct everythingfrom research and development,
through to manufacture, sales, andcustomer support. Looking forward, we
will continue to support theadvancement of the world’s industries
through vacuum technology.

ULVAC Group Companies in Japan●ULVAC TECHNO, Ltd.

ULVAC Technologies, Inc.

ULVAC TAIWAN INC.

ULVAC KYUSHU CORPORATION

Physical Electronics USA, Inc.

ULTRA CLEAN PRECISION TECHNOLOGIES CORP.

ULVAC TOHOKU, Inc.

●

EuropeULCOAT TAIWAN,Inc.

ULVAC KIKO, Inc.

ULVAC GmbHULVAC AUTOMATION TAIWAN Inc.

ULVAC EQUIPMENT SALES, Inc.

●

China

ULVAC SOFTWARE CREATIVE TECHNOLOGY,CO.,LTD.

ULVAC CRYOGENICS INCORPORATEDULVAC (CHINA) HOLDING CO., LTD.

ULVAC Materials Taiwan,Inc.

ULVAC-PHI, Inc.

ULVAC (NINGBO) CO., Ltd.

●TIGORD CORPORATIONULVAC (SUZHOU) CO. LTD.

ULVAC KOREA,Ltd.

ULVAC COATING CORPORATIONULVAC Orient (Chengdu) Co., Ltd.

Ulvac Korea Precision,Ltd.

NISSIN SEIGYO Co,. LTD.

ULVAC Automation Technology (Shanghai) Corporation

Pure Surface Technology,Ltd.

ULVAC Human Relations, Ltd.

ULVAC Tianma Electric (Jingjiang) Co., Ltd.

ULVAC CRYOGENICS KOREA INCORPORATEDSHINKU CERAMICS CO., LTD.

ULVAC Vacuum Furnace (Shenyang) Co., Ltd.

ULVAC Materials Korea,Ltd.

FINE SURFACE TECHNOLOGY CO., LTD.

ULVAC (Shanghai) Trading Co., Ltd.

UF TECH,Ltd.

Reliance Electric Limited

ULVAC Materials (Suzhou) Co., Ltd●

SHOWA SHINKU CO., LTD.

ULVAC Opto-electronics Thin film Technology(Shenzhen) Co., Ltd.

ULVAC SINGAPORE PTE LTDULVAC CS Solutions focuses all of the Group’s knowledge

ULVAC, Inc.

Overseas ULVAC Group Companies
North America●

ULVAC CRYOGENICS（ NINGBO）INCORPORATEDULVAC NONFERROUS METALS (NINGBO) CO., LTD.

TaiwanSouth Korea

service.

Southeast Asia●ULVAC MALAYSIA SDN.BHD.
ULVAC（THAILAND）LTD.

effective usage techniques, and improvements in yield rate and productivity over many generations for theequipment they are already using.
●Hong Kong ULVAC Co., Ltd.

138

parts, selection of equipment, and process development, by contract, dispatch or personnel transfer.
●

139

510

Centers

1,636
566

Factory outsourcing (FOS)

We conduct support for the operation and maintenance of equipment and facilities, as well as the ordering of

VACUUM EQUIPMENT (SHANGHAI) CO., LTD.

(Consolidated)

Global CIP (continuous improvement program)This service is for the purpose of providing our overseas customers, in addition to our domestic customers, with

Luoyang Xinyou Magnesium CO., LTD

5,904

Equipment maintenance service
By valuing close communication with our customers, we are able to achieve rapid

ULVAC Research Center SUZHOU Co., Ltd.

Employees (people)

We provide global customer support to keep our customers satisfied after purchaseof equipment, from installation of equipment to operation, field support, evaluation,
analysis, provision of materials and parts, and maintenance etc. of vacuum pumps
etc. In the future, in order to respond appropriately to the demands of diversificationand sophistication, we will pursue value-adding service focusing all of ourknowledge, such as our unique technology, service, and know-how, in order tosupport our customers’ production activities in a manner that meets their needs.
Furthermore, by using information about our customers’ needs as feedback fordevelopment of new equipment, we are able to produce even more sophisticatedvacuum technology and service.

50
50 Group Companies

Rejuvenation, precision cleaning, and resource recovery

We aim for overall cost reductions through extension of component life and the cleaning cycle, and recoveryof valuable materials etc. Based on our extensive knowledge of vacuum equipment as a whole, we propose theoptimal surface treatment and cleaning for your needs.

Component maintenance●

Pump maintenance

We maintain components such as vacuum pumps.
North America South-East Asia Taiwan

South Korea

China

2,915

Research andDevelopment
Centers
Manufacturing
Centers●

8

JCSS vacuum gauge calibration service

ULVAC is an MRA/JCSS* accredited calibration laboratory in the pressure (vacuum gauges) category.

17*JCSS (Japan Calibration Service System): Calibration laboratory accreditation system under the Measurement Act*International MRA (mutual recognition agreement)

Components and consumables
We achieve high-quality, swift, and reliable delivery through in-house manufacture of components.
Service
Centers

Japan

66

Analysis service
We conduct an analysis service using the ULVAC Group’s analysis and evaluation equipment.

Second-hand sales and purchase
We sell, purchase, refurbish, relocate, import and export etc. second hand products, ranging from components
to production equipment.

Training service
We conduct a training service for ULVAC products (equipment, vacuum pumps, and components).

25

ULVAC Report 201526

Foundations of value creation

Quality assurance and product safety

Procurement (supply chain management)

From this fiscal year, we will roll out initiatives to contribute to customer expectations of high-quality and safe “ULVAC quality” by adding
front loading activities to the ULVAC Group’s quality policy and implementing these activities at each company.

At the ULVAC Group, we maintain and promote proper, just, and fair business relationships, working to build secure relationships of
mutual trust with our suppliers. Furthermore, we are working to enhance product competitiveness through thorough cost reduction
activities in conjunction with each division.

ULVAC Group’s quality policy“Customer confidence in quality of ULVAC production”
The ULVAC group is committed to provide the highest quality
products and services to respond to the global needs of ourcustomer and become their partner of choice.

Action Policies
We comply with all rules and procedures.
● We do not deliver any nonconforming products to the next
process.
● We observe delivery times leading to the next process.
● We commit to the production budget.

In fiscal 2014, we merged the ISO 9001 certification of 18
companies in the ULVAC Group, in order to provide high-quality
products, with the aim of achieving even greater improvement inquality from all companies in the ULVAC Group.
In fiscal 2015, we will merge the certification of another 19
companies, in order to deliver “ULVAC quality” that meets the demandsof globalization throughout the world.

●

Front loading and global expansion
In order to enhance front loading, we are creating links between oursales department, technology department, design department andmanufacturing department and their technologies and skills, as well as
sharing our experience and know-how and related information anddata. We are also putting effort into activities to reflect each of our
successes in our upstream design processes. Looking forward, we will
deliver “ULVAC quality” throughout the world in order to respond to
globalization, implementing education and upskilling, with directcontrol over our overseas quality assurance members.

Global certification status

QFD
Risk control

Product safety

VE proposals) through design review.
We positively accept suggestions from our suppliers concerning

Businesses have seen the necessity of personnel training for thedevelopment of knowledge concerning machine safety with the
purpose of preventing workplace accidents caused by machinery. At
ULVAC, we have been systematically studying safe technology basedon the international standards, and since the fiscal 2014, we have been
implementing machinery safety education as a measure to entrenchmachine safety consciousness in design and at manufacturing sites.
This fiscal year, we plan to apply this even more broadly and roll it out
globally.

• DR0

Drawing

DR2

Specificationdifference control

FMEA• DR1~3

At the ULVAC Group, the ULVAC Group Basic Procurement Policy has
governed legal compliance, fair and free competition, and maintaining
healthy and friendly relations with our suppliers up to this point.
Looking forward, we humbly request that the following 9 items be
included in response to the conflict minerals issue, for the purpose ofbuilding further partnerships with our suppliers and fulfilling our social
responsibility including in our supply chain.
● Laws and Regulations, and Social Norms*● Fair Transactions and Corporate Ethics● Respect of Human Rights and Occupational Safety and Health❸ We make proposals with regard to standardization and● Safety and Quality of Products and Services

replacement of purchased goods based on information from our● Information Security

suppliers.

● Environmental Preservation● Realization of Appropriate Prices and Delivery Times❹ We promote balanced global procurement.
❺ We conduct activities that result in cost reduction, including
allowing those who make orders, technicians and designers to● Improvement of Technical Strengths● Sound and Stable Corporate Management* For the conflict minerals, refer to the above “Laws and Regulations, and Social Norms.”

actually visit and observe suppliers, and engage in exchange of
opinions.

❶ We are improving buyer skills through the continuation of cost

DR1

Thorough understanding ofspecifications required by the customers,
QCD risks and development elements

VE proposals.

Supplier Expectations— We are promoting increased productivity
through the continuation of cost table and costbenchmark education and plans to implement
instructor development.
Risk assessment training

Input design data

Pre-order engineering
examination meeting❶ We promote cost reductions through forecasting and centralizedpurchasing.

Front loading using 3D printed models andmachinery safety education

price calculation ability education.
❷ We are seeking appropriate pricing in conjunction with ourOperations briefing for suppliers (held every year)

suppliers.

Procurement risk reduction
activities

Quality Assurance System Concept in Relation to Development and Design Flow (for an equipment production process)

DR0— We are promoting thorough cost reduction
activities with all of our suppliers.

❷ We make effective cost reduction proposals (value engineering =The ULVAC Group’s products maintain “ULVAC quality” by strictly
managing and evaluating products for conformity with the ULVAC
trademark usage policy.

Negotiation / Quotation / Order receipt

Enhanced product competitivenessthrough thorough cost reduction activities

Output design data

Manufacturing

DR3

Shipping

Receiving inspection Acceptance

DR4

Drawing check
Assembly check
Risk mitigation measures
Shipping quality inspection

Is input DR being conducted as specified in the DR0 control
document?
Confirm the QCD of design input for modules and units with high risks

DR5
Post-launching
Evaluation
meeting

We are undertaking activities to minimize supply risk for parts that areprovided for important products and services in the event of a natural
disaster or accident. We are working towards reducing procurement
risk by working with our suppliers and sharing information.

• DR4

Confirm that no verification items remain unchecked

DR: Acronym of Design Review
QFD: Acronym of Quality Function Deployment, a method to transform qualitative customer demands into quantitative parameters.
FMEA: Acronym of Failure Modes and Effects Analysis. This is a preventive process implemented prior to the introduction of new functions
to product or process change, a systematic analysis technique for potential failure modes.
QCD: Acronym of Quality, Cost and Delivery, three fundamental conditions for manufacturing.

• DR5

Reflect on the project to utilize the profit
and loss and problem response recordin future orders

Determination of applicable products and services

2013

2014

2015

2016

Step 1 Identifying the relevant product or component
Step 2 Supplier interview
Evaluation and improvement of supplier’s system
We have implemented the cycle of the investigations in step 1 and step 2 followed byevaluation and improvement for each of ULVAC’s products.

27

ULVAC Report 201528

HR Management

Aiming to achieve a work-lifebalance

We are concentrating on increasing the abilities of each individual, while vitalizing organizations in order to build a value creation business model.
Furthermore, we aim to invest in organizations and personnel that enable the ULVAC Group as a whole to contribute to society from a global
perspective.

— Creating workplaces that are conducive to work

(Persons)

At ULVAC, we aim for employees to have both meaningful work and afulfilling lifestyle.

2,000● We grant annual paid leave from the date joining ULVAC

1,500

We understand that a system whereby employees who make great
efforts are rewarded properly is the basis for vitalization of both people
and organizations. We are proceeding with continuous review of eachof our rules and systems using the keyword of “reasonableness.” At thesame time, we are aggressively conducting transfer of authority tocreate an environment where each employee can fulfill their
responsibilities with passion and ambition as a full participant, with thedesire to make ULVAC the best it can be and what it should be.
With regard to management by objectives and evaluation systems,
we are putting energy into management and evaluation using clear
benchmarks, while conducting systems management that more highly
values boldly attempting to solve difficult issues and tackling tasks as ateam, rather than merely focusing on results. We would also like tocontinue to value the flexible thinking and the open and dynamic
corporate culture that has been essential as a development company.
Furthermore, we are devoting ourselves to increasing opportunities
for education. We provide a range of programs, encourage personal
growth, and actively promote targeted education in order for all
employees to voluntarily engage in skills development.
We recognize that promotion of next-generation training and arotation system are also essential to the invigoration of organizations.
We are engaging in flexible organizational operation and conducting
personnel exchange in consideration of the diversity of staff who sharesdifferent viewpoints and cultures, including both domestic andoverseas Group Companies, while being conscious of achieving abalance between specialists and generalists.

Basic Policy for Human Resource Development(Revised in fiscal 2012)
1. Human resources who respect other individuals, trust each otherand fulfill their responsibilities
2. Human resources who can see the true nature of each issue and create
revolutionary technologies and projects with passion and tenacity— Level education system
At the ULVAC Group, we conduct group training to mark milestones
such as beginning employment, beginning the second year of
employment, obtaining internal qualifications, and appointment tomanagerial positions. Until now, the purpose of this has been to
impress on employees the attitude that is necessary at each level of
employment, but from the fiscal 2014, we have conducted training at
all levels around the theme of cooperation. Although “cooperation” can290which have shown positive results.

Fiscal year

Commencement of
parental leave

Return to work
(conclusion of parental
leave)

2014

2

6

2013

7

2

2012

1

1

Notable support systems
Parental leave (may be extended up to a year and a half)● System of shorter work hours for childcare● Leave to nurse sick or injured child● Family care leave

139
137
138

● We have implemented optional staggered work hours and flex time policies,

Furthermore, with regard to promoting diversity, in recent years,
female employees have had a particularly high rate of taking parental
leave and returning to their position. Although we have few female
employees, in the fiscal 2014, 2 of them took parental leave and 6
returned to work. This is a 100% rate of return.

130
128
139

500

worked15.06

Singapore/
Malaysia

North
America

1,750
1,630
1,636

2,155
1,878
1,818

● We appoint work managers at each workplace, and closely manage overtime

592
515
510

1,000

● We are continuing our voluntary summer leave system

14.06

ULVAC, ULVAC Group South Korea
companies
nonconsolidated in Japan

China

Taiwan■ Gender ratio in employees[15.06]■ Gender ratio in management
positions [15.06]

FemaleFemale6% (61)

2% (7)ULVAC,
non-consolidated

ULVAC,
non-consolidated

Male

Male

94% (1,036)

98% (318)■ The number and percentage of disabled employees●

Number of disabled employees

Employment ratio(Persons)

(%)

40
30

1.82

1.83

2.08

2.19

2.14

2.0
1.5

20

After conclusion of maternity and parental leave

1.0

10
0

2.5

0.5
40
11.06

27
12.06

28
13.06

28
14.06

27
15.06

0.0

Internal Auditing Office, Internal Control Audit Section

For inheritance and sharing oftechnology— Technician education

Aiming for cooperation that
extends beyond borders● We conduct spot leave promotion activities

3. Human resources who are full of aspirations to improve themselves
and take voluntary actions to achieve goals
4. Human resources who have a global perspective and aim to takeleadership in exploring the world

13.06

2,500

662
578
566

— Invigorate the Individuals and Organization of
ULVAC■ Number of employees of the ULVAC Group

1,148
1,105
1,097

Seeking an Organization that
Ensures Rewarding Job Experiences

be said in a single breath, it can take a number of forms, includinginternal cooperation between superiors and subordinates or within ateam etc., through to wider cooperation with external parties such as
customers and suppliers. Students learned about the importance ofcooperation as it relates to their level from multiple perspectives, suchas through team discussions, and case studies based on actual cases.
At the ULVAC Group, we are using training to support our goal offurther deepening cooperation that extends beyond the borders of anindividual’s division or company.

HR data

We are implementing “Engineer education” with the aim of handing
down the ULVAC Group’s technology to the next generation. Since
fiscal 2014, we have been conducting “technician education,” whichtakes our engineer education one step further. At ULVAC, we handle avariety of technologies and products, so the main component oftechnician education has been OJT at each laboratory and division. By
creating an infrastructure through the integration of OJT etc., we havebeen able to systematically conduct education to learn the knowledge
and skills necessary for each role. The form that this education takes
varies according to the purpose, but it can include lectures, workshops,
and observations etc. In fiscal 2015, we will devote ourselves to takeroot for instructor development and technician education.

Ayako Yasuki
Enabling both a career andparenting through internal cooperation
I returned to work after taking a total of 1 year and 4 months of maternity leaveand parental leave. Before returning to work, I had many doubts about whether
I would be able to pursue my career and care for my child at the same time, butsince I first returned to work many managers and staff told me “your child comes
first,” which was very encouraging. Also, by notifying which days I would beavailable for overtime and work-related travel in advance, we have been able totailor my work schedule to my needs. Therefore, although there are constraints
on my time, I have been able to work in the same role as before taking leave andI have experienced a fulfilling lifestyle.

ULVAC Report 201530

Supporting the Manufacturing of ULVAC by Promoting Employees’ HealthOccupational Safety and HealthWith the vision of “Vitalizing the Individuals and Organization of ULVAC,” the Health Promotion Office takes the initiative in promoting
employees’ health so that they can work to achieve the highest possible productivity, thereby supporting the manufacturing operationsof ULVAC.

Among the ULVAC Group, “Safety First” is positioned as the fundamental principle of business operations, and as such we endeavor to secure safety
in products and services for our customers and ensure a lively working environment where employees can work in good physical and mental
health. These will be accomplished by operating our Occupational Safety and Health Management System (OSHMS) with a focus on risk assessment.

Supporting the vitalization ofindividuals and organizations froma health perspective
At the ULVAC Health Promotion Office, we work towards the“vitalization of individuals and organizations,” which is our vision, by
managing the health of employees. We conduct periodic internalsurveys of health in “physical,” “mental,” and “social” areas for use as
performance indicators for our activities. Of those surveys, feedback is
given to the workplace in relation to the “social” items in particular, andwe provide assistance to create an action plan for workplacevitalization. This initiative only began in the fiscal 2014, and it has been
implemented in several departments as a model demonstration. We
have received positive feedback from its implementation in the Components
Division as indicated by thefollowing interview. In the fiscal
2015, we contributed to thevitalization of individuals andorganizations by rolling out thisinitiative to even more
workplaces.

Mental healthcare

ULVAC’s Safety and Health Initiatives

Since 2013, we have offered self-care and line-care education based on
the internal regulations called “Detailed Regulations for Ensuring
Mental Health.” More than half of our employees have attended classes
up to this point. Furthermore, we have maintained a low level ofpeople missing work due to mental disorders due to the success of the
return to work initiatives that we are continuing to implement.

Mental Health Education System
Self-Care Education

Line-Care Education

Secure safety and healthEnhance the communication
Objective
between boss and subordinate Enhance motivation
Lecturer

Occupational health nurses

Occupation physicians

TargetAll employees

All middle manager employees

Subjects

Listening
Recognition
Assertion

Fulfillment of the duty of company’s
obligation of health and safety
Critical points of case management
The basics of motivation management— To ensure the safety and health of our customers
and employees
To ensure the safety and good health of its customers and employees,
the ULVAC Group regularly holds meetings of the Global Safety
Committee, which are joined by representatives from the Group
companies to determine the Group policies on occupational safety
and health and ensure that they are evenly implemented, thereby
promoting unified safety and health efforts of ULVAC on a Group-widebasis. Each Group company operates the OSHMS system, which involves
management review by the president or the director in charge of safety
and health activities and risk assessment by each employee to ensurecompany-wide involvement in safety and health management efforts
from the top management to onsite workers. As a result of these efforts,
the number of occupational accidents at the ULVAC Group has been
declining year by year.

Companies in Japan

81.5
2014 (Fiscal year)

I was interested in looking at the division from a different perspective to simply
looking at business progress or results. I expected that leveraging the strengths
of individuals and organizations would lead to invigoration of organizations. At
first I was worried that because this is not directly linked to business, managers
would not actively participate; however, at this point, we are leaving theimplementation up to the head of each division. Implementation has been
more successful in some divisions than in others, so we have rolled out
successful implementations to other divisions. With each repetition, we havebeen able to determine items for action. Through the voluntary initiatives ofyoung employees, such as holding a division-wide end of year meeting for the
first time in 10 years, I feel that we have enhanced our sense of unity as anorganization. Looking forward, I hope this will lead to initiatives to enhance links
with other departments and divisions.

69.6

74.5

Why did you decide to implement
health feedback?

70.9

80
64.7

Kiyokazu Yanagisawa

60
40
20
0

2013

2014

2013

2014

*SPOT
Components Division

Whole company* Results of the survey conducted after receiving health feedback (January 2015)■ Vision and Targets of the Health Promotion OfficeEnhance Motivation

31

Invigorate
the Individuals
andOrganization of
ULVAC

Companies in Taiwan

Global Safety
Committee

Companies in Southeast Asia
Companies in Europe and the United States■ Frequency ratio of occupational accidents throughout the ULVAC Group
Group as a whole

Japan

China

South Korea

Taiwan

North America

Southeast Asia

1.00

0.60

11.06

12.06

Sport competition for invigoration oforganizations（ULVAC KOREA, Ltd.）

Companies in China

Executive Officer andGeneral Manager of the Components Division

100

The Korean Group is aware that it “cannot survive competition
unless safety is assured” and that “safe operation leads to businesscompetitiveness” and we believe that it is necessary to ensure that asafety culture is systematized and takes hold. In order for a safety culture
to take hold, it is important for officers and employees to always consider
safety, and to take responsibility as a company for creating a safety-firstenvironment so that safety measures can be put into practice. At ULVACKOREA, Ltd., we have been calling out the safety slogan of “safety is apractice, safety is a habit, safety is a lifestyle” every morning at morning
assembly since July 2015, in order to improve the safety consciousnessof officers and employees.

Implementation of the health and safetycoexistence and cooperation program（ULVAC KOREA, Ltd.）

Companies in South Korea

Interview（％）

1(Korean region)■ ULVAC Group Safety Management System

Collecting health feedback■ Health data (understanding expectations and roles)

Activity Case Study

Calling out the safety slogan eachmorning at the morning assembly

0.55

13.06

0.44

0.48

14.06

15.06

This graph shows the rate of work-related accidents in the entire ULVAC Group for each fiscal year,
indicating the value for the fiscal 2010 as 1.00. In the fiscal 2014, the rate of work-related accidents
increased slightly over the previous fiscal year, but compared to the fiscal 2010, the rate of accidents
had declined by 52%, indicating a declining trend.

Building a safety management systemthat is appropriate to the type of businessconducted at each company (Chinese region)

Activity Case Study2

ULVAC (CHINA) HOLDING CO., LTD., which is responsible for the Chinese
region, is promoting safety activities based on the principle thatcompany-wide accident prevention is achieved through increasing
the safety awareness of each employee. Before commencing a task,
employees undergo safety education, with the effectiveness of thisbeing confirmed through patrols by day to day work-site managers,
ensuring improvement in areas that need improving, and building asafety management system that is appropriate to the type of businessconducted at each company through the PDCA cycle. Furthermore, wehave established a safety award system to celebrate employees who
have greatly contributed to safety activities as role-models, as a measure
to encourage increased safety awareness. Through activities such asthese, we are working to reduce work-related accidents.

Enhance the Communication
between Boss and Subordinate

Secure Safety and Health

Forklift safety skills workshop（ULVAC Technologies, Inc. ）First aid workshop(ULVAC CRYOGENICS Inc.)

Fire extinguishing drill(ULVAC (NINGBO) Co., Ltd.)New employee safety training(ULVAC (NINGBO) Co., Ltd.)ULVAC Report 201532

Environment

ULVAC Group’s environmental
activities in the fiscal 2014

The ULVAC Group works hard to develop and manufacture products that allow customers to make maximum contributions to theenvironment. Furthermore, the whole Group is promoting activities with the purpose of minimizing the environmental impact caused bybusiness activities.

The ULVAC Group has engaged in energy conservation measures with(electricity) dropped by approximately 0.3% compared to the previous

The ULVAC Group provides products that allow customers to feel that they
have made environmental contributions based on our environmental
policy of “Develop products that contribute to energy saving, resourcesaving and environmental conservation.” Furthermore, we are ensuring
thorough management and saving of energy consumption and waste
emissions and conducting activities with the purpose of minimizing
environmental impact.
The ULVAC Group possesses a global production system that is
focused on the Asian region, yet has expanded broadly to regions suchas Europe and America. It is essential that we share information within
the group and swiftly carry out instruction from top management etc.
We are working to unify the ISO14001 certification currently held by
each company, and strengthen group governance.
The ULVAC Group will continuously reduce the environmental
impact through its products.

fiscal year. In Japan, our energy usage dropped by approximately 2.3%

Environmental Philosophy
ULVAC Group takes on one of major issues for everyone around theworld, which is to conserve and protect the global environment. We
will consider environmental conservation in all aspects of our businessactivities and will contribute to develop a better place to live and anenriched society.

Environmental Policy
Develop products with a goal to save energy, reduce the use of natural
resources and contribute to the conservation of our environment.
❶ ULVAC Group products/Final products❷ ULVAC Group manufacturing processenvironmental management activities at all companies.

the aim of “reducing energy costs by 10% in 5 years compared to the fiscal
2013.” We increased sales in this fiscal year; however, our energy usageULVAC Group’s environmental
management

In order to reduce the environmental impact attributableto business activities, the ULVAC Group will continue to pursue

on average. However, due to the shift of production to overseas sites,
overseas power consumption has increased by approximately 3%.
Looking forward, it is likely that overseas energy usage will continue toincrease as production optimization and overseas expansion continue.
Furthermore, looking at figures over 5 years, although CO2 output has
increased, this is mainly due to the increase in the number of companies
reflected by the total figure (overseas group companies).
In addition, total waste has increased by 15% over the previous
fiscal year. This increase is attributable to increases in production
volume etc. 3.7% of the waste ended up as landfill in spite of the ULVACGroup’s standard being less than 3%. We are currently pursuing resource
recovery as an initiative of all companies, and we are able to see theeffects of that when comparing this fiscal year’s figure to the figure of
4.9% from the previous fiscal year. In addition, our rate of recovery ofvaluable materials was 30%, which is an increase of around 8% from theprevious year. Recovery of valuable materials is also important from theperspective of material recycling, which is a valuable resource, and theFirst Global Work Improvement Presentation~Awarded the silver prize~
Facilities Manager, General Administration Department,
ULVAC TOHOKU, Inc.

Kohsei Komukai
Promoting aggressing energy
conservation to achieve theGroup’s targets

All managers(The author is in the middle)

At this presentation meeting, which included overseas companies, we made apresentation titled “ULVAC TOHOKU’s Plant Energy Reduction Activity Report,”
receiving a silver prize for our 3-year long-term energy conservation results. All
employees will use this valuable experience of continuously striving to achieve
results to devote themselves to the future growth of the Company throughinitiatives with lofty targets.
Furthermore, with regard to the target of “reducing energy costs by 10%
in 5 years compared to the fiscal 2013“ which the entire ULVAC Group is working
towards, we will continue topursue aggressing energy savingsin order to achieve results that will
enable us to participate in theG l o b a l Wo r k I m p r o v e m e n t
Presentation once more.

ULVAC Group will continue to promote it.
Presentation at the presentation meeting

Providing products that contribute to energy conservation

The DRYMONI freeze-drying process monitoring system
The DRYMONI system visualizes the freeze-drying process, which contributes toimprovements in productivity and quality
Freeze-drying is a drying method wherein an aqueous solution or food is frozen
and the pressure is lowered to below the saturated vapor pressure at thefreezing point, so the moisture content is sublimated. Until now, it was usual fora temperature sensor to be inserted in the substance to be dried in order tomeasure the temperature, and for a person to use his or her judgment todetermine when the drying process was complete. However, when using large
equipment or large containers, the temperature reading is not necessarily
representative of the temperature throughout the container, so there may be
portions that are not completely dry, or alternatively the drying time may be
excessive in order to avoid this issue, which is not only a waste of time, but alsoof energy. However, we have developed the DRYMONI system, which is able tomeasure the amount of moisture in the drying vat by monitoring the amount ofmoisture being sublimated during drying, and creating a visualization of thedrying process. Because this equipment is able to measure the amount ofmoisture sublimation during the freeze-drying process without measuring thetemperature, this has quickly become standard PAT (process analytical

Performance data
Industrial Equipment Division,
Design Department Development personnel

technology) for vacuum freeze-drying equipment used in the pharmaceuticalindustry, where quality control is strict.
Using this system to monitor the freeze-drying process and optimize thefreeze-drying program contributes to improvements in productivity and quality,
such as by preventing poor quality due to incomplete drying, and reducing
wasted time through having precise knowledge of when drying is complete.
Furthermore, in response to customers who currently use equipment thathas been fitted withDRYMONI, and who would
like to use the system with
their older equipment andequipment produced byother companies, we havealso commenced sales of astandalone version.

■ Material Balance■ Transition of CO2 emissions

INPUT
Electricity
use

Fuel use
volumeDomestic companies of the Group
Overseas companies of the Group（t-CO2）100,000
80,000 11,830 20,670

159,176 thousand kWh
LPG: 106 t

Gas usage

OUTPUT
CO2emissions

93,017 t-CO2(Emitted by use ofelectricity, gas and fuel)

LNG: 616 t

Kerosene: 31 kL
Diesel oil: 99 kL

40,00020,000
0

Packagingmaterials

1,162 thousand m3

1,108 tTotal
volume ofwaste
emissions

8,850 tof which recycledvaluables accounted for
2,040 t2010 2011 2012 2013 2014■(Reference) valuable materials purchased (t)■Landfill amount (t)■Recycled amount (t)■ Landfill percentage (%)(t)

10,000
Final
disposal
rate

3.7%

* The above data is based on the data from 42 Group companies in Japan and overseas.
* The volume of packaging materials is based on the data from 26 Group companies in Japanand overseas.

(Fiscal year)■ Waste

8,000

(%)

5.8

6

520
565

4.4

1,769
3.7

6,000

240

4.9

2,040

1,288
289

3.7

254

4,000
2,000

33

60,600 50,286 57,329 60,996 59,804(Fiscal year)

12,000
Water use
volume1,800
1,500 230 332 391
1,200
343 387
900
600
300 1,295 1,091 960 729 775
02010 2011 2012 2013 2014

32,212 33,213

25,642

Domestic companies of the Group
Overseas companies of the Group(Thousand m3)

60,000City gas:
1,451 thousand m3
Heavy oil: 482 kL■ Transition of water use volume

0

5
4
3
2
1

9,116

11,174

6,216

5,613

6,556

2010

2011

2012

2013

0
2014 (Fiscal year)

ULVAC Report 201534

Roundtable Discussion

Heading towards a further
growth phase
Change of activities in terms of production from VITALIZATION to integration,
to be ‘One ULVAC’

certainly established MONODZUKURI systems that will create profit

and training for the personnel that support them. With that in mind, in

according to our plan. Although we faced various issues during the

fiscal 2014, we globalized the ‘Manufacturing Technology Competition’course of our activities, but we re-examining our way of conductingthat we had previously conducted, and commenced rolling out theModerator
Senior Manager, Corporate Communications & IR Team, Management Planning Division, ULVAC Inc.

business from scratch, and to the entire Group coming together to strive

Global Business Improvement Competition and the Skill Challenge forfor improvement, rather than being bound by conventional practices.

a total of three ULVAC Group Vitalization Programs. (Refer to page 38

Since the time we introduced front loading, the number of troubles andfor details.)

Noriaki Suzuki

production budget overruns have actually decreased. Also, as we havestarted to see improvements come to fruition, our motivation and drive

Morimoto: I think that the competitive edge and value of the ULVAC

have increased, and exchanges of ideas between departments haveGroup are its comprehensive capabilities and that it has a diverse range

become livelier. Furthermore, the efforts of each business division haveof personnel around the globe. We are now becoming aware of thisexhibited synergistic effects so that the entire Group’s MONODZUKURI

competitive edge and value once more, and we have created thesesystems and attitude have been vitalized and have been improving

programs in order to maximize the capabilities of our personnel andexponentially.

achieve vitalization. The important point in this instance is that we haveapplied these programs to all organizations and divisions, including

Hideyuki Odagi

Jun Morimoto

Tomoko Hirose

ULVAC Inc.
Director and Managing Executive Officer,
Senior General Manager, Advanced Manufacturing Division

ULVAC Inc.
Senior Manager, Quality Assurance Department,
Manufacturing Technology Center and Production Training Planning
Center, Advanced Manufacturing Division

ULVAC Inc.
Staff Manager, Production Training Planning Center,
Advanced Manufacturing Division

S

ince fiscal 2012, ULVAC Group has been pursuing theIT, administrative office of the quality and environmental management‘structural business reform project’ with the keyword ofsystems, conducting quality inspections, purchasing parts and support

VITALIZATION. This has led to strengthened global

for ensuring safety and protecting the environment before. However, atcooperation with our development, sales and production sections,present we are also responsible for certainly implementing front loading

and increased product competitiveness and profitability, etc. In

and making systems to create stable profit under the structural business

addition, in order to achieve further solid growth, we have changed

reform project made three years ago. Specifically, it is our main mission

a course towards management that embodies the keyword of ‘One

now that we actively participate in MONODZUKURI site of divisions

ULVAC’. With that in mind, the managers of manufacturing

and cooperative working group companies, instruct and advise them

department met and held a round-table talk to discuss how wefor improvement depending on the situation, and control the whole

have been attempting to enhance our collective capabilities, basedGroup’s MONODZUKURI. So to speak, our role has been changed fromon our development capability and human resources that are thesupporting divisions to leading them. It confused us a little at first, but

origin of the ULVAC Group’s value creation.

now all of us feel a firm sense of mission toward further growth of ULVACGroup.

Moderator: It certainly seems that through the structural businessreform project, the role of the Advanced Manufacturing Division has

Moderator: One year has now passed since you assumed thechanged considerably.

management role of manufacturing. How do you rate the current statusof the implementation of front loading and MONODZUKURI systems?

Odagi: The role of the Advanced Manufacturing Division has been
mainly to support other divisions such as improvement of operational

Odagi: Over the last three years, our keyword has been VITALIZATION

efficiency (e.g. accounting, email systems) through the introduction of

and I think that by thoroughly implementing front loading, we have

35

Morimoto: At the moment, changes in business conditions areadministration, without limiting ourselves to engineering fields. We

extreme and I think that the amount that can be achieved by making

aim for employees, who work in a range of divisions, announce theirimprovements in a single organization or a single division is limited.

everyday successes and educational skills, etc. and share with each other,

However, through the whole Group has a common way of thinking

while also competing against each other, to achieve global businessand share ideas to conduct initiatives in this manner, we have been

improvements. And we also aim for a structure where the proposals,

developing many new ideas and have been able to raise results andoriginal ideas and successes of employees are widely and fairly judged

efficiency by several levels. Our mission at the Advanced Manufacturing

and evaluated while also leveraging the strengths of management.

Division is to constantly promote vitalization while ensuring that wemonitor these kinds of initiatives. At present, the results of our front-

Moderator: It seems that this has really resonated with the employees.

loading initiatives are gradually improving; however, I would liketo see us to promote further vitalization with the aim of ensuring

Hirose: Expanding initiatives that have previously been conducted inestablishment and effective operation at each department and Group-

individual countries to the entire group has generated a sense of friendly

wide implementation.

rivalry, which has served as an impetus, and increasing opportunities forcommunication has resulted in all employees engaging passionately

Moderator: On the point of VITALIZATION, three ULVAC Group

with these initiatives. Actually, the other day we participated in the

Vitalization Programs have been rolled out since fiscal 2014. Please tellpreliminary in China, which provided an opportunity to showcase

us about the background of these initiatives and the activities that they

the success to the whole group, and I felt that this greatly increased

entail.

motivation. Also, I heard that the number of employees who wished toengage in further study of engineering in Japan is increasing. I think it

Odagi: By promoting front loading, we have organized and vitalized

is fair to say that one of the results of the current programs is that they

our MONODZUKURI systems; however, I think that there is still plenty of

have increased the enthusiasm of all employees.

room for improvement. The source of the ULVAC Group’s value creation
is human resources and unless we maximize the abilities and skills of ourModerator: Speaking of enhancing engineering capabilities, in

employees, and leverage the Group’s diversity to the maximum extent

fiscal 2015 the Advanced Manufacturing Division established apossible, we will not be able to approach the ‘ideal form’ that ULVAC is

new Production Training Planning Center, who is now engaged inaiming for. In short, we must strengthen both MONODZUKURI systems

engineering training.

ULVAC Report 201536

Global Production
Diversity (having human resources with different ways of thinking and from different cultures) stimulates and vitalizes organizations. We
continue developing ULVAC Group vitalization program and enhancing its value chain as integrated group in order to ascertain what ourstrength in MONODZUKURI is, to enhance it more and to make up for deficiencies.

Odagi: I think that vacuum technology is particularly necessary inOdagi: Until now, under the keyword of VITALIZATION, we have been

growing markets. Until now, we have been dauntlessly challenging

continuously and thoroughly implementing enhancements to ourourselves to create new value that is demanded by the times based on

MONODZUKURI systems and development of human resources that

our corporate philosophy of ‘aiming at contributing to the evolution of

support them by thoroughly implementing front loading. From now

industries and sciences by using vacuum technologies.’ In recent years,

on, we will be adding the keyword of ‘One ULVAC,’ so we are aimingsocial problems such as global environmental issues have become

for maximum efficiency throughout the entire business, which extends

prominent, and I think that the ULVAC Group’s products and technology

beyond the bounds of individual divisions or companies. I think thatcan contribute, particularly in the fields of energy and IoT. However,this means being able to concentrate on achieving our goal of having

those fields require even more difficult technological development

a stable business structure by completely eliminating unreasonable,

than previously, and because stable profit creation during development

inconsistency and waste, and focusing the energy of all employee inis essential, speed and efficiency are also required. The most essential

the same direction. This includes the integration of development,thing is technological capability, so gaining new skills and improving

sales and manufacturing, as well as the integration of the Group andtechnology are important. We established the Production Training

various organizations. Firstly, we will promote reform for ‘One ULVAC,’

Planning Center to devote ourselves even more to engineering training.

with a focus on domestic manufacturing systems. We will face many
challenges, but to create new value that is demanded by the times, all

Hirose: Until now, employee training has been conducted by theGroup employees must work together and strive to become a corporate

Personnel Department; however, we decided to conduct moregroup that not only engages in a broad range of industries, but also one

professional engineering training at the Advanced Manufacturingthat is needed by society.

ULVAC Group Vitalization Program

Ideal Form
Conceptual Diagram

Employees, who work for ULVAC in departments such as engineering,
manufacturing, administrative, sales, common and head office, competeby their skills and their results that they usually cultivate through theirwork. These activities allow us to utilize their proposals and ideas inour management, to appreciate, and to widely share and making useof the original ideas and the fruits of their efforts, by continuing these
programs globally.

Further
Improvement

Global Manufacturing Technology Competition
Global Business Improvement Competition
Skill Challenge

Competition
Training
Daily Business

Administration

Engineering

SkillsGold Winners’ Comments

MONODZUKURI in DC Power
Supply Production

1 Global Manufacturing Technology Competition*1

ULVAC Group hold a 2 step competition, which isa preliminary competition with regard to specified
theme related to manufacturing technology in eachregion and its qualifiers’ finals. We aim at quality
improvement, and sharing and utilizing their results inthe entire Group.

Akihiro Okura
Section 2, Power Supply
Engineering Department
Components Division
ULVAC Inc.

Division. At present, the Advanced Manufacturing Division, in
conjunction with the Board of Department Managers, determines theIt was the good and rare experience for me that I made thepresentation in front of a large audience. Furthermore, it was great
publicity as we were able to let them know about the new DC power
supply, and how we produce it at Chigasaki Plant in conjunction withvarious departments. I’m sure that I will be able to make use of myexperiences at this competition, including interactions with otherpresenters, in my work in the future.

ideal form of each department and, based on this, creates training
materials to draw out the necessary core techniques and skills. In the
future, we will create programs around these training materials, andsystematically implement training programs for our engineers.
Morimoto: In the future, I expect that these training programs will leadDevelopment of a Web-Based
Questionnaire Using a Database
Application to Connect Indirect
Departments with Employees

2 Global Business Improvement Competition*1

The 1st Global Manufacturing Technology Competition

to further growth of employees and career enhancement. For example,
employees who have gained experiences in manufacturing might aim
to become manufacturing leaders or managers. Another option would
be to leverage the experiences gained through manufacturing and aim
for a job in design or engineering. Having a personnel mobility that is

The 1st Global Business Improvement Competition

Presentations with the theme of “’KAIZEN’ for the future”
were given by Group companies, who have been
implementing improvement activities and 5S activities ineach department, including administrative, sales, commonand head office
departments. And
the achievements
were shared andutilized with ULVACGroup.

As an employee who has been working hard every day in a back-office
department, I have been thinking it would be nice if I were able tohave this kind of opportunity, so I jumped at the chance to participate
Health Promotion Office,in this plan, and I was very happy to get the good evaluation. Also,
Personnel Department
ULVAC Inc.
through this competition, I found that many people work hard in thehead office and back-office departments, and it gave me a real senseof the future growth that can be expected from the company. I would like to continue working
wholeheartedly and supporting the business behind the scenes.

Tomo Nakao

not always fixated on the same task vitalizes both organizations andpeople. Also, improved technological capabilities and results lead to

3 Skill Challenge*2

Group-wide growth. I think that this kind of setup is ideal.

As we realized again the importance of on-site skills
in our MONODZUKURI, we not only aim for further
improvement of the individual skill, but also transmit
and share skills throughout the Group by competingin all ULVAC for the skills
cultivated through daily
work.

Moderator: Finally, I would like to ask about future initiatives.
President Obinata has stated that from fiscal 2015, ULVAC will promotemanagement with the keyword of ‘One ULVAC.’ Please tell us about
the future outlook for initiatives aimed at ‘One ULVAC’ at the Advanced
Manufacturing Division.

The 1st ULVAC Group Skill Challenge

Pump Overhaul of Service andMaintenance Category

Yasutomo Saito
Shiga CS Center
Kinki Group 1
Sakai Center, Sakai Headquarters
FOS Division
ULVAC Human Relations, Ltd.

Through this Skill Challenge, I experienced the feeling of tension that
I was not usually able to experience in my work and an even greater
sense of achievement. Furthermore, this competition made meaware that I have company who are involved in pump maintenanceall over the world. I am very proud that my name is associated withthe momentous first-ever Skill Challenge. I hope that Skill Challenges
will be held in a variety of fields in the future, and that these Skill
Challenges will vitalize the whole ULVAC Group.

*1: On this occasion, 14 companies from 6 countries participated in 18 themes.

37*2: On this occasion, 6 people from 5 companies in 5 countries participated.

ULVAC Report 201538

Social Contribution Activities

Corporate Governance

We are promoting global social contribution activities rooted in local regions and cultures based on the ULVAC Group’s Basic Policy forSocial Contribution Activities.

The ULVAC Group understands that corporate governance involves ensuring absolute adherence to corporate ethics and legal
compliance, while engaging in competitive and efficient management. We believe that this leads to sustainable growth and medium tolong-term increases in corporate value, and we recognize that corporate governance is the most important management issue in order tofulfill our corporate responsibility to society and our shareholders.

ULVAC’s Social Contribution
Activities

Volunteer activities at local events

Activity Case Study1(ULVAC, Inc., ULVAC KYUSHU CORPORATION,ULVAC TECHNO, Ltd.)The ULVAC Group has long been involved in a wide range of social
contribution activities around the world. In 2013, We set out a basic
policy and priority subjects for social contribution activities in orderto the growing awareness of the importance of corporate social
contributions. In line with the policy, we will continue to contributeto regional and international communities by effectively using thetechnologies and human resources of the ULVAC Group to solve various
social issues.

Basic Policy for Social Contribution Activities
Based on its corporate philosophy of contributing to the growth of industry and science
with innovative, cutting-edge technologies, the ULVAC Group provides distinctive
technological innovations globally and implements initiatives for solving various social
problems by using ULVAC’s technologies and human resources.

In March 2015, the ULVAC Group, and ULVAC KYUSHU CORPORATION
in particular, supplied volunteer staff to the 14th Yamagano Walking
Event held in Yokogawa-cho, Kirishima-shi, Kagoshima Prefecture. They
prepared the walking environment and erected tents and signs, we well

Operational Structure

For making decisions on particularly important managerial issues,

ULVAC has the Board of Standing Directors and Auditors to supplement

ULVAC has the Board of Directors, which consists of 8 directors,

the decisions made by the Board of Directors, further enabling theincluding 3 external directors, and meets as required in addition toprompt and efficient execution of business operations. Meetings of theregular monthly meetings. Furthermore, we have appointed one of our

Board of Standing Directors and Auditors are held twice a month, andexternal directors as an independent external director.

additional ad hoc meetings are held as required. The Board of Standing

as guiding participants and introducing historic features at important

For monitoring managerial decisions and business execution,

Directors and Auditors has 18 members consisting of standing directors

points on the day. 15 staff members participated, experiencing the

ULVAC has the Board of Corporate Auditors, which consists of 4

and executive officers. Through this, we have achieved a flexible

remains

Kinzancorporate auditors, including 2 external auditors. Furthermore, we havebusiness execution infrastructure that allows us to achieve both careful

by touring historic features andof Yamagano

appointed one of our external corporate auditors as an independentdeliberation and decision making with regard to important

explaining

external corporate auditor. Half of the Board of Corporate Auditors

management matters and streamlined business execution. At the same

comprises external corporate auditors and by appointing antime, from a supervisory perspective, we are implementing checks andindependent external corporate auditor, we are able to ensurebalances by clarifying the rights and responsibilities of each director

completely stringent, fair, impartial and transparent auditing, andand executive, as well as having an external director conduct checks

expand our auditing functions.

from a fairness perspective.

thesefeaturestoparticipants.
Volunteer staff at the 14th Yamagano Walking
Event
Activity Case Study

PET bottle cap collection

2（(ULVAC, Inc.)■ Priority subjects

ULVAC’s Management Structure

ULVAC, Inc. has been collecting PET bottle caps since 2007. These are■ ULVAC Management Structurethen used to provide vaccines for the children of
The Environment

Local communities

Education/
Education support

As of September 30, 2015

the world through the incorporated NPO, Japan

General Meeting of Shareholders

Committee, Vaccines for the World’s Children (JCV).
Appointment

To this point, we have collected 2,173 kg of bottle

Appointment

Appointment

caps in total, which is enough to provide polio■ Number of social contribution activities conducted by the ULVAC Group in fiscal 2014vaccine to 1,738 people.

Board of Corporate Auditors
Award received from the incorporated NPO, Re
Lifestyle in recognition of our continued activities.

Board of Directors
Audit

Corporate Auditors

Selection

Education/education support
10

Clothing donation
The Environment
45

Total
95

Activity Case Study（ULVAC TAIWAN INC.）
Local communities
40

Directors

3

Collaboration

Reportand people with disabilities through Corning Education Center, which(Administrative office) Internal Auditing Division

Appointment

Independent Auditors

Accounting Audit

In March 2015, ULVAC TAIWAN Inc. donated a total of 8 boxes of
employees’ clothing to the elderly as well as people on low incomes

Compliance Committee

President and CEO

Executive Officers
Board of Standing Directors and Auditors

Collaboration

Collaboration

All Divisions

supports independent living, receiving a certificate of appreciation.
Internal Auditing Division

Vacuum demonstrations at local events

39

Tanbo (Rice Field) ProjectInternal Audit

Group Companies

Group Council of Presidents

Donation to the Corning Education Center (Taiwan) and certificate of appreciation(right)ULVAC Report 201540

Board of Directors and Auditors(End of September 2015)

Directors

Executive Officers

Hisaharu Obinata
President and Chief
Executive Officer

Akinori Bo

Mitsuru Motoyoshi

Masasuke Matsudai

Hideyuki Odagi

Director
Executive Vice President

Director
Senior Managing Executive
Officer

Director
Senior Managing Executive
Officer

Director
Managing Executive Officer

Setsuo Iwashita

Masatoshi Yamamoto

Takao Nakamura

Dr. Paik Choong Ryul

Junki Fujiyama

Senior Managing Executive
Officer

Senior Managing Executive
OfficerManaging Executive Officer

Managing Executive Officer

Managing Executive Officer

Hiroyuki Hirano

Dr. Kazuya Saito

Akira Umeda

Ryou Matsumoto

Executive Officer

Executive Officer

Executive Officer

Executive Officer

Akira Mihayashi

Syuzo Ikeda

Norio Uchida

Youichi Oohinata

Kiyokazu Yanagisawa

Shigemitsu Sato

Tsai Yu Jer

External Director

External Director

External Director

Executive Officer

Executive Officer

Executive Officer

Executive Officer

Auditors

41

Seiichi Takahashi

Makoto Ito

Senshu Asada

Kazumi Ohtsuka

Auditors

Auditors

External Auditor

External Auditor

ULVAC Report 201542

Compliance

Risk Management

To introduce systems for full compliance with laws and regulations, the ULVAC Group has systematically established Compliance
Regulations and related rules. In accordance with these regulations and rules, the ULVAC Group has also established operational
procedures for the Compliance Committee and the Compliance Violation Reporting System and has been working to cement a spirit ofcompliance across the company.

The ULVAC Group has developed an organization that facilitates prompt and appropriate action against increasingly complex and diverse
risk factors, through a process of identification, classification, analysis, and evaluation. By linking the risk management system to strategic
business administration, we seek to achieve even greater corporate value.

Establishment of a Corporate Code of
Conduct
ULVAC has established a Corporate Code of Conduct consisting of 18
items that describe the behavioral standards expected of employees.
After describing the details, we give employees a booklet that describes
the content of this code. The booklet helps employees to act into ensure prudent examination while assuring the fairness of internal
investigations. Each member is required to maintain strict confidentiality,
and to operate the system so that reporters and investigators are nottreated detrimentally. In this manger, internal investigations are carefully
conducted. Numerous interviews are held with both internal andexternal parties, and attorneys attend any cases requiring their expertise.

Creating a Risk Management System■ Risk Management System

The ULVAC Group believes that expanding the risk management

ULVAC, Inc.

ULVAC Group companies

Chief Risk Officer =President and CEO

Chief Risk Officer =President and CEO

system is a critical business task. Thus, we have established the ULVAC
Risk Management Policy to ensure that there are common rules acrossthe ULVAC Group. The President of each group company assumes the
position of Chief Risk Officer and shares risk information with related

Reporting andinstruction forimprovement

departments.

compliance with the law as a representative of our business.

Dealing with Acts of Violation

Important information is promptly conveyed from the President ofeach group company to the President of ULVAC, Inc.

Compliance with Laws and Regulations
via the Whistleblowing SystemIf, as the result of an investigation, the Compliance Committee finds that

ULVAC has developed a Whistleblowing System to minimize the effects

to put a stop to the act causing the violation. Penalties are imposed onof any violations of laws and regulations. The contact point for thethose involved in the violation, and adequate penalties are imposed

Whistleblowing System is the Internal Auditing Office that serves asin the case of serious violations after examination by the Disciplinary

ULVAC has classified a wide range of risks, and has set up departments

the secretariat of the Compliance Committee, the internal compliance

Committee. In addition, the fundamental causes that brought about the

responsible for each of them. Each department functions as aninvestigation division. To facilitate the use of the Whistleblowing System,

violation are also studied to formulate effective measures for preventing

information center that works with related departments to identify

the independence of the office’s activities is ensured, and anonymousrecurrence.

and evaluate all specific risks. In addition, the responsible departments

laws and internal regulations are being violated, action is quickly taken

and detect issues. For risk information deemed to be important inof each department serve as members of the Compliance Committee

Risk Management Committee

Risk Control Risk Control Risk Control
OfficeOfficeOfficeRisk Control Risk Control Risk Control
OfficeOfficeOfficeRisk Management Systemconstantly collect risk information, respond appropriately to risks

information is accepted. Moreover, the President and general managers

Risk Management Committee(Controls entire business risks)●

Risk management activities are implemented by the responsible departments through the
PDCA processes.

●

Each group company decides upon the necessity of establishing its Risk Management
Committee in consideration of its size and other factors.

the evaluation process, we continually collect information to enableprompt responses to emergencies. A Risk Management Committee,
chaired by the President and comprised of the departments responsible

Responding to the Results of the Employee CSR Awareness Survey

for the risks, has also been established to verify the risk management
system. As the supervising organization for risk management, theAt ULVAC, we set targets for our stakeholder initiatives each year,

activity, and we are working towards increased quality in our future

Committee meets twice a year to set out basic policies and improve theand promote CSR activities. In the fiscal 2014, we revamped the CSR

CSR activities.

management and operation.

employee awareness survey, with the aim of moving away from a focus

Also, the 5 items regarding which our employees expressed theon improvements in the CSR awareness of employees to providing

highest expectations are as follows. We will invest even more energy

information about specific goals and activities to employees, who

in our initiatives in the future.

are also stakeholders, and deepening their understanding, while also
listening to our employees and increasing the quality of each of ourTop 5 items with highest expectations (percentage of
employees expressing expectation)

initiatives (the PDCA cycle).

●

Creating a safe workplace: 67.5%●

Providing safety and security to customers: 65.8%

to 1,259 employees and received 642 responses (a response rate of●Supplying the quality consistency of the ULVAC brand: 61.7%

51.0%).

●

Promoting the development of products to reduce

From March 16 to April 10, 2014, we administered the survey

This was the first time we had included the new items in thesurvey, so we are using this as a baseline for feedback regarding each43

environmental impact: 61.3%●

Reducing risk to employees’ health: 60.8%

ULVAC Report 201544

CSR Activities for Fiscal 2014 and Targets for Fiscal 2015
Based on its corporate philosophy of contributing to the growth of industry and science with innovative, cutting-edge technologies, the
ULVAC Group provides distinctive technological innovations globally and implements initiatives for solving various social problems byusing ULVAC’s technologies and human resources.
◎: Higher achievements than targeted ○: Targets achieved or proceeded as planned △: Effort required ×: Further effort required

Stakeholders

Communication guidelines

Fiscal 2014 targets

Self-assessment of
the fiscal 2014
achievements

Fiscal 2015 targets

Referencepage○◦ Thoroughly implement globally integrated ISO9000/14001 certification(phase 2).
◦ Promote group-wide roll out of quality improvement items from theglobal management review.
◦ Promote group-wide roll out of front loading.
◦ Aim to reduce the number of the ULVAC Group’s product accidents to halfthat of the previous fiscal year.

P27◦ Continue the supplier BCP survey◦ Respond to the conflict minerals issue- Consider obtaining CFS certification◦ Periodically exchange information with suppliers- Ensure substantial content of supplier meetings- Individual visits to major suppliers

P28

Customers

With a high priority on a trusting relationship with customers, we◦ Thoroughly implement the global integration certification (Phase 1) of ISO9000/14001.
engage in various efforts to enhance the quality and safety of ement the quality inspection that is in accordance with front loading.
◦C
our products.

◦ Completed globally integrated ISO9000/14001 certification (phase 1).
◦ Rolled out 6-stage design reviews as a front loading strategy and contributed
to the control of added costs.

Suppliers

Participate in design reviews at the design stage in operating divisions to reduce
We strive to maintain and promote fair and appropriate
consolidated cost of ULVAC Group through cost reduction in preceding process. (Goods
transactions with our suppliers to help establish a securepurchased: keep at 8.0%, Goods produced: make cost reduction proposals to eachrelationship of mutual trust.
operating division.)

Reduced costs through design reviews and cost reduction meetings
Goods purchased: 6.5% Goods produced: 6.0%
(ULVAC, Inc. + ULVAC TOHOKU, Inc. + ULVAC KYUSHU CORPORATION)

Shareholders andinvestors

We will endeavor to ensure the timely disclosure of businessContinuously disclose information related to the progress of medium-term management
activities and financial information to promote communication
plan while promoting corporate communication.
with shareholders and investors.

Held 129 meetings for institutional investors and 2 technology seminars.
Also worked towards the promotion of internal and external communications
through the creation of company introduction videos.

○Promote information transmission such as technology seminars, whileworking to provide more interviews with institutional investors than in last
fiscal year-

Revise the questionnaire items in CSR awareness surveys.

Entirely revised questions based on CSR targets.

○

Provide the results of the CSR awareness survey as feedback for each divisionand reflect them in initiatives

P43◦ Conduct company-wide hearing in preparation of the personnel rotation andreorganization.
◦ Prepare training system for engineers to ensure their acquisition of skills.
◦ Continue interviews and other means to respond to the employees who were
determined to require medical guidance in order to further reduce the health risks.
◦ With a view to rulemaking of stress checkups, prepare check system enabling early
response to the mental health problem and improvement of the workplace.
◦ Through mental health seminars, enhance communication at workplace and raise themotivation.

❶ Conducted personnel rotation based on interviews with the head of division.
❷ Created a technician education system and conducted seminars for each job
type.
❸ 100% rate of responding to those requiring medical guidance for high healthrisks.
❹ 100% rate of attendance at interviews for those diagnosed with mental healthissues. Revisions conducted to bring into line with questions required forlegislatively mandated stress checkups (from December 2015).
❺ Conducted line-care education for managers and self-care education for all
personnel.

❶○
❷○
❸◎
❹◎
❺

◦ Continue interviews for the purpose of HR-related opinion gathering andinformation sharing (system, employment, and education).
◦ Pursue the development of next-generation leaders.
◦ Conduct activities aimed at preventing aggravation of diseases in
conjunction with the ULVAC Health Insurance Association in order toreduce health risks.
◦ Utilize the results of stress checks and promote activities for the purposeof organizational invigoration.

P29-31◦ Prepare common education program across the ULVAC Group.
◦ S hare a sense of advantage in working at ULVAC among the Group employees
through coordinated Group-wide philosophy in manufacturing which binds theindividual employees together.

◦ Completed sharing of educational content of each individual company.
◦ Established an education center in the advanced manufacturing division in
fiscal 2015, in order to systematize specialist manufacturing-related educationand plan and conduct instructor development, including for Group
companies.
◦ S hared improvement activities and their results, and planned andimplemented mechanisms to mutually boost awareness as Group
revitalization initiatives as part of the programs of the Global Production
Technology Reporting Meeting, Global Work Improvement Presentation, andSkill Challenge.

○◦ Systematize the manufacturing pro education curriculum, and begin
instructor development.
◦ C ontinue global presentation meetings, arising from the Global
Manufacturing Technology Competition, the Global Business
Improvement Competition, and the Skill Challenge, share initiatives,thoughts, and results relating to manufacturing and technology
throughout the group, and revitalize interactions.

P35-38❶ Halve the number of occupational accidents in ULVAC Group compared to theprevious fiscal year.
❷ K eep the number of produc t accidents in ULVAC Group at low le vel
continuously from the previous fiscal year.

❶ Although the number of work related accidents at the ULVAC Group roseslightly over the previous fiscal year, work-related accidents requiring timeaway from work fell.
❷ The number of the ULVAC Group’s product accidents remained at the same
low level as the previous fiscal year.

❶❷○❶ Aim to reduce the number of the ULVAC Group’s work-related accidents
to half that of the previous fiscal year.
* We will transfer product safety targets to the customers’ section from thisfiscal year.

P32◎

Continue to promote development of products to reduce environmental
impact.
Example:◦ Products with low energy consumption◦ Products with low resource loading◦ Products compatible with restrictions on Chemical Substances in
Products

Employees

We will endeavor to provide employees with diverse working
opportunities and an environment in which they can work in
comfort and with a sense of security.

Continue to promote the development of products that contribute to reducing theenvironmental burden.
Example:◦ Products with low energy consumption◦ Products with less resource loading◦ Products compatible with Restrictions of Chemical Substances in Products
Environment

We will consider environmental conservation in all aspects of ourbusiness activities and will contribute to develop a better place
to live and an enriched society.
As entire ULVAC Group, reduce the energy use by 10% compared with the fiscal 2013 in
the next five years.

As part of Tanbo Project, newly create Tanbo pictorial book representing the creatures inrice fields at Chigasaki.

Local community

45

Fiscal 2014 achievements

We will perform social contribution activities based on thepractices and cultures of the countries and regions in which we Introduce our initiatives to each Group company and promote the activity.
operate.

Companies and divisions with original products pursued activities for new
environmental product creation.

Each company in the group created an energy management system(organization), and analyzed the energy usage of each company based on the
ULVAC Group’s energy conservation manual. Looking forward, we will pursue
energy conservation, using this analysis to determine important points forconservation.
Following on from the previous fiscal year, we created the ULVAC pictorial book ofcreatures that live around rice fields.

Introduced ULVAC’s social contribution activities both internally and externallythrough internal bulletins, ULVAC reports, and SNS etc.

◎

Continue to reduce the ULVAC Group’s energy use by 10% compared withthe fiscal 2013 in the next five years.

◎

Continue to pursue the creation of the ULVAC pictorial book of nature around
rice fields, which newly introduces the creatures living in the rice fields ofChigasaki as part of the Tanbo (Rice Field) Project. Create awareness of thenatural environment of Chigasaki and the ULVAC Tanbo (Rice Field) Project.
Continue to introduce initiatives and promote activities to deepen
understanding of ULVAC Group Companies’ social contribution activities.

P33-34
P39

P39

ULVAC Report 201546