SUSTA I N A B I L I T Y RE P O R T 2014
Year ended March 31, 2014

CREATING A BRIGHT FUTURE SINCE 1964
USHIO believes in the almost infinite possibilities that light can illuminate and accomplish. We are
pioneering new markets that use light to not only illuminate but also to power modern life, using
ultraviolet light to create photochemical energy and infrared light for thermal energy.

Xenon short arc lamp—a light that has been
described as a “miniature sun.” A product thatmade xenon lamps the recognized standard forcolor movies.
（the left image is a xenon projector at the time）

Editorial Policy① CSR Report

In choosing the material for this Sustainability Report 2014, we made an

For the USHIO Group’s detailed CSR report, please see the section of oureffort to report in greater depth on the correlation between

website entitled CSR/Society & the Environment.

management and corporate social responsibility (CSR) issues. We havealso tried to create links so that the report will serve as a gateway to our
CSR website and Online Annual Report. We have edited the report tomake it easy to read for a wide stakeholder audience.

2

http://www.ushio.co.jp/en/csr/

Sustainability Report 2014

Contents

C2

USHIO Group Management Philosophy

04

Top Message

08 FEATURE: Amazing Invisible Light
10			VUV Radiation Also Offers Answers
			 to Environmental Problems
12

USHIO’s CSR

14

Governance		Corporate Governance and Compliance16PeopleWorking Together with Employees

18

QualityBusiness Partners

20

Environment
Environmental Activities

22

Society
Relationship with Society

24

Business Overview

25	Third-Party Opinion
Response to Third-Party Opinion

The USHIO Group’s approach to CSR can be seen in the
management philosophy underpinning all activities of
USHIO and USHIO Group members. In 1965, the year
after the Company was founded, four key emphases
were created based on the desire to make USHIO an
indispensable company for everyone by drawing on thewisdom of employees to grow. The wording of thesefour key emphases has been revised over the years toreflect the changing times.

② Online Annual Report

Scope of Report

For information about the USHIO Group’s business activities, please see

Time period: This report basically covers from April 1, 2013 to March 31,

our Online Annual Report 2014, and our Group website.
http://www.ushio.co.jp/en/ir/ar2014/

2014, but also includes some continuing activities from fiscal
2012, and some activities in fiscal 2015.
Organizations: All USHIO INC. business sites and Group companies worldwide

01

FOR THE NEXT FIVE DECADESOn April 1, 2014, we marked the 50th anniversary of the establishment of USHIO INC. The tiny “light”
that we created in 1964 has growth into a major source of energy, used across a wide range of fields
from semiconductors and liquid crystal displays to visual and lighting equipment, medical andenvironmental applications. Now as a professional in the field of light, we will continue our journey toseek out its possibilities and to provide solutions that illuminate the future for the planet and thepeople who live on it.
• Formulated the 10 Action
Guidelines• Acquired ISO 14001 (Harima)• Acquired ISO 9001 (Gotemba)• Acquired ISO 9001 (Harima)

1964

1990

(1965)
Solar simulator for the University of Tokyo
Solar Simulator 1 delivered to the University of Tokyo
Institute of Space and Aeronautical Science(1972)
Dirt incineration system / waste fluid and waste
oil incinerating system
A foray into the field of pollution prevention(1968)IC exposure tool “Unimask”
The first commercial application of the projection
method in the world and the origin of the current
UX series(1974)
UV water sterilization system
A UV water sterilization system using an inbuilt
low-pressure UV lamp

(1971)
Standard halogen light bulb
USHIO’s halogen light bulb is recognized by theInternational Commission on Illumination as theglobal standard

02(1975)
Large-scale solar simulator for testing satellites
Delivered to the National Space Development
Agency of Japan (currently the Japan Aerospace
Exploration Agency)
Also participated in the Japanese government’s
Sunshine Plan

(1982)UNILIZER high-powered UV sterilization system
The world’s first mass produced system with aten-fold increase in sterilizing performancecompared with conventional systems. Developed forsterilizing food packaging and containers, as well aswater purification(1974)UNICURE system UV curing and drying device
The UNICURE system cures using light. USHIO’sbest-selling product, it was initially developed for use
with labels and stickers(1994)
Excimer VUV/03 Cleaning System
A fine cleaning system that uses light. Achieves morethan 10-fold increase in cleaning speed andcleanliness over wet cleaning using water orchemicals, or dry cleaning uses ultrasonic waves or
low-pressure UV lamps, and consumes only 1/3 of theelectricity while enabling low-temperature processing

Sustainability Report 2014

MEDIUM-TERM PLANNING FOR CSR

PHASE 1PHASE 2

PHASE 3Form an infrastructure for
CSR initiatives, gather
information

Dig deeper into
CSR issues

Complete integration ofmanagement strategy with
CSR issues• Integrated ISO renewal examination• Announced a Basic Policy Statement for
Conflict Minerals (conducted survey)• Signed the United Nations Global Compact• Changed the name of the Environmental
Committee to the CSR Committee• Start of a wide-area accredited collection•

business for semiconductors and LCD lamps• Launch of integrated ISO (quality and environment)• Started collection and recycling of cinema projector lamps
Formulated the USHIO Group Management
Philosophy• Started publishing the Sustainability Report• Established CSR Department(Changed from the Environmental Report)

USHIO’S ENVIRONMENTAL INITIATIVES• ISO integrated survey• CSR Action Plan

PHASE 1PHASE 2

• Acquired ISO 14001 (Companywide)• Started publishing Environmental Report• Started risk avoidance at business sites

PHASE 3

PHASE 4

• Environmental tasks incorporated at
productivity improvement meeting• Launched Environmental
Committee• Introduced material flow cost accounting• Risk Management Guidelines established• Introduced electric power monitor system• Introduced environmental management• Introduced waste measurement system (Harima)

information system• Established the USHIO Group Green• Transition from in-house company system
to business division system

Procurement Standards

2000

2010

2014
Net sales¥157.8 billion(1998)
NSH lamp for LCD projector
These lamps can be used with DLP® (digital lightprocessing)-type projectors to increase theirscreen size or picture quality. A high-luminosity
light source developed based on super-highpressure UV lamps(2008)
24 Mercury-free fluorescent lamp XEFL®
The world’s first mercury-free light source able
to select the required wavelengths of light fromthe UV spectrum(1999)
Digital Cinema ProjectFirst used in the U.S. to screen Star Wars.
Today, USHIO has a 40%* share of the market(2010)
UX-5 series modular steppers forsemiconductor package substrates
The UX-5 developed in 1999 upgraded to meet theperformance requirements of the current generation.
In the future, it will be possible to upgrade andcustomize functions selectively as required(2008)
Energy-saving fish-luring light U-BEAM.eco
Winner of the Eco-Products Awards Minister ofAgriculture, Forestry, and Fisheries Prize, andthe Environment Minister’s Award for Global
Warming Prevention Activity.

(2008)
TheraBeam UV308® excimer UV phototherapy device
The TheraBeam® treats patients with skin diseases such as psoriasis, vitiligo, and atopic dermatitis
by irradiating them with UV light in the 308 nm band from an excimer light, which offers
improved therapeutic effects. It is the first UV phototherapy device with an excimer filter, which
reduces the risk of damage to healthy skin to provide safe, effective irradiation therapy(2013)
37 Point Reader® blood analyzer
The first system in Japan to achieve
quantitative measurements ofserum ferritin using theimmunochromatography method(2011)LED Modules for Office Automation
Equipment for Reading Documents
Achieves the same level of brightness as
conventional rare-gas fluorescent lamps using
only 1 or 2 LED chips per unit, enabling a 75%
saving in electricity(2009)LED Spot UV Irradiation Unit "SPL-1"
First use of an LED light source in the SPOT
CURE light-concentrating UV irradiation unit,
which has been continued since 1972

Employees
5,470(2013)
Photo alignment system
Controls the direction of light in
non-contact cleaning by light,
greatly improving yield and productperformance(2012)
Min-Excimer excimer irradiation unit
An A5 paper sheet-sized excimer irradiation
unit that enables table-top excimer light
experiments. The unit enables excimer light
experiments such as inducing hydrophilicity orform changing simply and flexibly*Percentage is as of the end of March 2014.
Based on USHIO data.

03

Top Message

USHIO promotes light-related businesses
that solve social issues while growing
together with society
My name is Kenji Hamashima. On October
1, 2014, I was appointed President andChief Executive Officer of USHIO, INC. In
April 2014, USHIO celebrated the 50th
anniversary of its founding. The small rayof light that USHIO brought into being in
1964 has grown into a source of both
illumination and energy for a variety ofindustrial fields. As I assume leadership of
the USHIO management team, rest
assured and expect that we remain ascommitted as ever to contributing
solutions to society’s issues through afocus on cutting-edge technologies thatpush the possibilities of light, together
with highly transparent management.

Net Sales

Operating Income / Operating Income Ratio(Billions of yen)(Billions of yen)

200

145.1

150

150.0

20

9.7

15

14.0

157.8
143.4

（%）

6.1
100

10.6

5.3

2011

2012

2013

2014

0

15

6.2

2010

2011

2012

2013

6.0

5.6

6

4.7
9.5

10

7.5

Operating Income (left scale)Operating Income Ratio (right scale)

04

7.5

10.7
8.7

2014

2.5

5

0

0

4

4.3
7.1

7.0

5

2010

8

5
7.2

0

（%）

20

12.1

10

50

(Billions of yen)

10
7.7

7.1

119.0

Net Income / Return on Equity (ROE)

2

2010

2011

2012

2013

Net Income (left scale)
Return on Equity (right scale)

2014

0

Sustainability Report 2014

Fiscal 2014 Performance

New Cinema-Related Business and
New Light Sources

In the fiscal year ended March 31, 2014, sales andincome increased year on year in both the light sources

In the imaging equipment sector USHIO will launcha new audio business offering high sound quality inbusiness and the equipment business segments. Net
sales were ¥157.80 billion, ordinary income was ¥15.94
billion, operating income was ¥12.11 billion, and net

cinemas to further build up a business offering a onestop solution. Currently, we are also investing actively
in development of laser diode-based laser projectors.

income was ¥10.77 billion.

Since these projectors offer numerous benefits tocinemas and their customers in terms of outstanding
environmental performance and deliver extremely brightimages, they are expected to gain popularity all over theworld in the future.

Medium-term Management Plan
In our three-year medium-term plan announced in
April 2014, we set a net sales target for the fiscal year
ending March 31, 2017 of ¥210.0 billion, an increaseof approximately 30% compared with net sales in thefiscal year ended March 31, 2014.
To meet this target, we will position the fields
described below in the electronics, imaging, andmedical and life sciences markets as growth drivers,
then move to further ramp up the pace at which wedevelop both new markets and our one-stop solution
business. We also hope to earn trust as a company that
contributes solidly to global society through high-quality

High-Definition Displays Leading to
Expansion in Optical Equipment
In the LCD panel market for smart phones and tablet
PCs, USHIO has launched its photo-alignment system,
which went on sale during the fiscal year ended March
2014. USHIO’s photo-alignment technology uses theaction of light on liquid crystal, a distinctive difference
from conventional technologies. It produces anextremely high yield while enabling high-quality panel
manufacture that conserves energy and achieves highprecision. Meanwhile, we intend to invest actively in
product development targeting the next generation in

products and services backed by superior technology.
We will do this through innovation and a deep
commitment to management that prioritizes speed not
only in our products but also across all operations—fromthe semiconductor and electronic component fields.
Specifically, we will invest in high-tech equipment, as

R&D through to sales and distribution.
In the drive to realize this goal, it is essential towell as automotive and medical equipment—all ofwhich offer good prospects for future growth.

put management systems and a working environment
in place that can optimally draw upon the sensitivity,
creativity, ideas and passion of all of our employees. Thisis the source of our innovation, and we will make every
effort to address it as an urgent management issue.

Promoting Early Commercialization of SolidState Light Sources
In the light sources business, we are actively working
in the environmental field such as using UV and VUVMEDIUM-TERM MANAGEMENT PLAN
2014 (actual)

2015 (plan)2017 (plan)

Net Sales¥157.8 billion¥170.0 billion¥210.0 billion

Operating Income¥12.1 billion¥14.0 billion¥21.0 billion

7.7%

8%

10%

6%

─

More than 8%

Operating Income Ratio
Return on Equity (ROE)(%)

05

light for sterilization, disinfection, deodorization, anddenitration. We also plan to offer a lineup of valueadded LED light sources developed primarily throughour partnership with an architectural design firm.
Moreover, we restructured our solid-state lightsources business into a new, independent organization
on April 1, 2014, in order to hasten its development
into a commercially viable business. Looking ahead, we
will make even greater investments in development toensure that the business has products to market andstarts commercial operation as soon as possible.

allow me to introduce the Group governanceapproaches and mechanisms USHIO adopts as a global

An Independent Business Unit for Biomedical
Operations

Roughly translated as “Mountain Peak Management,”
Renpo Keiei has been the USHIO Group management
philosophy since day one. Rather than a groupstructure topped by USHIO INC., the image is one of agroup comprised of all companies, each representing
individual “peaks” that form an optimal groupconfiguration. This promotes respect for the spiritof self-reliance, independence and the diversity ofeach company, while also sharing common values.
Today, USHIO has developed under this philosophy
the mechanism for organizational governancedescribed below.

We are taking a similar approach in our biomedical
operations, where we aim to accelerate growth bymaking the relevant business unit into an independent
organization. It takes time to obtain pharmaceuticallicenses for medical products, and one current task istherefore to work on obtaining the necessary licenses
in each country. At the same time, however, we are
stepping up our efforts, including development of
new reagents. To this end, we are strengthening
our collaboration with academic and governmentalorganizations including university hospitals. In future,
we intend our biomedical operations to rank alongside
our visual imaging and electronics operations in termsof scale, and we are actively committing resources toachieve this.

USHIO as a Global Company and CSRThis year USHIO celebrated the 50th anniversary of
its founding. Today, we have more than 50 Group
companies in Japan and overseas, and almost 80% of
our consolidated net sales are accounted for by sales tooverseas customers. Of the Group’s 5,470 employees,
3,089, or more than half, are employed by Group
companies overseas, and our management itself is
becoming more global.

06

From my stint as CFO at USHIO AMERICA in
1990 until my recent appointment as President and CEO,I have served for many years as part of the management
team at USHIO AMERICA and CHRISTIE, both in the
United States and Canada. Referencing that experience,company with respect to diverse regions and people.

Organizational Governance Based on Renpo
Keiei Group Management Philosophy

We have a system for sharing information suchas our corporate ethics and basic approach to CSR.
In this system, the top management of each Group
company share information at a CSR-related session
provided in the meeting of the Group Coordination
Council, while the respective Group Communication
Committee representatives share information atcommittee meetings. Finally, all employees share
information through the Group in-house bulletin.
In addition, each Group company we respect eachGroup company’s policies based on individuality,
independence, and autonomy to ensure that day-to-day
operations are in keeping with local culture, history, andother background aspects.

Sustainability Report 2014

Furthermore, to ensure that this system is
effective, USHIO has established a CSR Committee,

Promoting Light-Related Businesses that
Solve Social Issues

which I chair as the president, to decide on overall
Company policy. We also established separate
subcommittees for each initiative and issue that we

In the fiscal year ended March 31, 2014,
USHIO made both its solid-state light sources

are addressing, and these are linked with our businessdivisions and Group companies.

Group Companies Meet Diverse Social Needs
To improve the quality of life for employees, our Hong
Kong subsidiary has reformed rooms in the singles
dormitory, making them useable by many more
employees now, including those with families. We
have also been the first among other companies in our
industrial park to create a staff cafeteria, which has
helped to reduce absences from work. These examples
show how much progress our Group companies havemade in putting a working environment in place basedon an understanding of local needs. The subsidiaries
in North America where I spent many years engage inboth social contribution, most notably cooperation withlocal volunteer organizations, and local communication

business and biomedical businesses into a new
independent organization in order to accelerate
light-related businesses that can solve social
issues. Currently, the organization is not verylarge, but in the future, we plan to develop it intoa third main earnings source.
There are still many possibilities of light that have
not yet been discovered, representing a vast, untapped
potential. As a leading light technology company, we will
combine the latest research results and previous
knowledge with society’s needs in order to pioneer new
applications for light. We are already developing a seriesof products to solve pressing issues. One example
appears in the feature section of this report, where we
introduce a light device that enables mass volume
exports of fresh, high-quality Japanese agricultural
produce, and another that can breakdown atmosphericpollutants with extremely high efficiency. I hope you will

activities. In addition to active participation in these
programs by many employees each year, they also

take a look through this section.

provide corporate support for various causes.
Meanwhile, in Japan, we are facing
different issues. The direction of government
action has shifted markedly from responding to a
decline in the working population, to promoting

At the juncture of our 50th anniversary, I would like toreaffirm our commitment to continue to contribute to

greater participation by women in the workforce.
At USHIO we have further advanced our existingmeasures, such as a system for supporting
working while also raising children, a childcare
leave system, and a policy of gender-blindappointments to management roles. By doing so,society by providing “light” solutions as USHIO has done
thus far. My aspiration for my appointment as president
is to convey to all of you our desire to continue growing
together with society. I hope you will continue to support
our efforts even further.

October 2014

we are confident that we will see an increase inopportunities for women going forward.
Kenji Hamashima
President and Chief Executive Officer

07

FEATURE

Amazing Invisible Light
Have you heard of vacuum ultraviolet (VUV) radiation? It is found in sunlight, but as it
travels through air it is absorbed by the oxygen, so it doesn’t reach the surface of the Earth.
It was given its name because it can exist only in a vacuum. Of all types of light, VUV has theshortest wavelength, packing the greatest punch in terms of energy. It is known that it can
trigger a variety of photochemical and biological reactions and it is used in a wide range ofcontexts, including semiconductor manufacturing and photo-cleaning of LCD panels. Now
it is attracting attention as one way of tackling issues of global concern, including thoserelating to the environment, agriculture, and energy.

Invisible Light Makes Plants Grow?

So, what uses might there be for this VUV radiation of 200 nm

Light plays a major role in the growth of plants, and its benefits

or less that doesn’t reach the Earth’s surface?

differ according to the wavelength: Infrared light has thegreatest effect on photosynthesis, while UV light is believed to

Mass-Exporting Strawberries

be necessary for normal development of leaf shape. Recent

Japanese strawberries are mouthwatering and are especiallyresearch demonstrated that UV radiation with a wavelength of

popular elsewhere in Asia, where they fetch high prices. But

320 nm (UVB radiation) increases the content of an antioxidant

strawberries easily lose their freshness and go moldy, so they

enzyme known as anthocyanin in leaf lettuce, enabling

can be exported only by air. The problem is that air transport isparticularly nutritious lettuces to be grown. Remarkably,

costly, which limits the quantity of strawberries that canhowever, it also showed that UV radiation of the same

be exported.

wavelength can hinder growth, depending on the plant’s stageof development.

Ge

Ethylene gas encourages
strawberries to ripen

BUT it also causes ripe
strawberries to deteriorate
Right…

ter… ♡
wee
ts
Eth

ylen

e

Ethylene

Ethylene

So, if VUV radiation is used togenerate ozone…
VUV radiation

w rot!
No
Ethy

lene

Ethyle

ne

Ozone

Fu
l

ly

e
rip

The ozone preserves the strawberries’ freshness in two ways: controlling mold as well as breaking down ethylene gas.

08

Ozone

EthyleneSustainability Report 2014transportation methods that could deliver greater quantities ofGenerating Clean Ozone with VUVRadiation

strawberries to consumer locations overseas. The key issue is

There are several methods of producing ozone, and the one

how to prevent the strawberries from after-ripening (ripening

most commonly used these days employs electrical discharge.

further once they are picked) and curb the growth of mold.

However, production of ozone using electrical discharge alsoThis is where VUV radiation and ozone come into play.

generates nitrogen oxide (NOx), which is extremely harmful toThat is why exporters are currently looking into ship-based

human health. An alternative method, therefore, is to expose

Ozone Prevents Deterioration?

oxygen to UV radiation. This method can produce clean ozone,

The maturation hormone ethylene enables fruit to grow. Once

but UV light contains a mixture of wavelengths, some of which

the fruit is harvested, however, it will continue to after-ripen,

generate ozone, while others break the ozone down, making

releasing ethylene gas that then causes deterioration orconventional UV lamps extremely inefficient. USHIO addressedrotting, and spoils the surrounding fruit as well.

this problem by developing a VUV lamp that can deliver

Despite being essential for growth, therefore,

precisely the 172 nm wavelength light that generates ozone,

ethylene gas also causes ripe fruit to deteriorate. However, theexcluding all other wavelengths. USHIO is already collaborating

gas can be broken down, and its effects halted, using ozone,

with fruit producers and shipping operators to start developing

which breaks ethylene down into water and carbon dioxide

and testing ozone generating devices incorporating this lamp(see figure below). If a shipping container holding fruit is filled

for use in containers. Perhaps it won’t be too long before

with ozone, the ozone can prevent ethylene-induced

USHIO’S light-based technology enables Japan’s juicy

deterioration of the fruit within the container and preserve thestrawberries to be mass-delivered to people all over the world.

fruit’s freshness. And it is VUV radiation that is necessary to
produce ozone.

Ozone breaks ethylene gas down into
water and carbon dioxide
CarbondioxideWater

Mechanism by Which Ozone Breaks Down Ethylene

Carbondioxide

O

Mixes
O
H

H
C

O

Water

O

H
O

Ozone
(O3)

Mixes

C
H

Ethylene(C2H4)

H

C
O

O

Ozone
(O3)

O

Carbon Dioxide(CO2)

Breaks
down

O

H

Water
(H2O)
C

H

O

Water
(H2O)

H

O

O

Ozone
(CO2)

09

FEATUREVUV Radiation Also Offers Answers
to Environmental Problems
Air, soil, and water pollution are now serious issues for countries all over the world. However,technologies to combat that pollution are steadily making headway, and this is another field inwhich USHIO’s VUV technology is playing an active role.

Breaking Down NOx, the Cause of
Photochemical Smog

treat exhaust gas at 900°C or higher. It is now possible,

There are a whole range of substances that cause atmosphericcombination of NOx, ammonia, and oxygen to VUV radiation,

pollution, but NOx is the one that causes photochemical smog

thereby rendering the NOx harmless at an ambientand acid rain. It is emitted from the diesel engines of cars,

temperature and without the need for an expensive catalyst.

ships, and other vehicles, as well as from thermal power

This new technology* offers potential for use with suchstations and garbage incineration plants, among other sources.

pollution sources as diesel engines, which emit exhaust gas at

However, this harmful NOx can be broken down into harmlessa low temperature, making the use of previous denitration

nitrogen and water vapor using a technology known astechnologies difficult.

however, to directly expose exhaust gas containing adenitration. In the past, this meant using an expensive catalyst
that had to be constantly replenished, or using ammonia to* Developed jointly by USHIO, Gifu University, and ACTREE Corporation
Denitration Using VUV Light

Denitration Using VUV Light
Exposure to VUV LightVUV Lamp

Exhaust gas

Mixed gas

Ammonia gas

10

Mix in ammonia gas thatwill react with exhaust gas

Denitrify by exciting the ammonia gas with VUVlight, causing it to react with the exhaust gas

Clean gas

Exhaust gas is denitrified
and discharged as clean gas

Sustainability Report 2014

Is That Incinerator Ash Really Safe?
When garbage comprising a variety of materials is

VUV Radiation Can Also Reduce CO2Emissions?

incinerated, the majority of the resulting ash (including fly

It is known that when the wavelength of VUV radiation isash) is disposed of via landfill. However, this ash contains

shorter than that at which ozone can be generated, it contains

traces of lead chloride and cyanide, which are easily soluble

light with a distinctive ability to break down carbon dioxide. In

in rainwater and groundwater. Lead is known to cause

fact, it has been suggested that we could use this particularpoisoning, and ingestion of even a small amount can causelight to break carbon dioxide down into oxygen and carbon,

anemia or neurological disorders. In the past, therefore, soil

releasing the oxygen into the atmosphere and using theand water pollution was prevented by mixing in chemicals

carbon for energy. This may sound like a pipe dream, butthat render metals less soluble, or covering the ash with aconsidering that coal is derived from plants that took in carbon

sheet to avoid scattering, then letting nature take its course

dioxide, used photosynthesis to grow, and subsequently

for years, or even decades, until the lead oxidized. But

transformed themselves over time, maybe it is not so far-operators of incineration plants are now seeking a more

fetched after all.

efficient, safe, and reliable disposal method.

At USHIO we believe that light offers limitlesspotential, and that it can provide the answers to several of theBoth Lead and Mercury Can Be Treated
Using VUV Radiation

issues currently facing humankind. We will continue to rise to
the challenge of unlocking that potential.

Research is currently being conducted into the efficacy of
causing a chemical reaction between ozone and the lead inincinerator ash, turning the lead into lead oxide, which is

USHIO’s VUV lamps

not easily soluble in water. In addition, research has started
on a new method for treating mercury, which is also
harmful to human health. In both cases, generation ofozone using VUV radiation is regarded as the mostpromising method. It is considered to be the best way ofresolving environmental issues because it can generateclean ozone without emitting any substances harmful toeither humans or the natural environment.

Excimer lamp

UV-XEFL lamps

11

USHIO’s CSR

Approach to Corporate Social Responsibility (CSR*)
Society

Create and provide new value to society
USHIO Group

Build good
relationships

Stakeholders

We consider it natural that a corporate citizen
should observe laws and regulations, contribute tosociety, and take steps to protect the environment.
These are the foundations of all corporate activity. In
addition, a corporation should build good relationships with its various stakeholders* and advanceby creating and offering new value to contribute tosociety. This is the kind of corporation that USHIO isworking to become.

Compliance*

CSR Promotion Framework
CSR Promotion Framework
CSR Committee(Chairperson: president)
CSR Department

Separate subcommittees
for each initiative

Business divisions

UGN*

Group
companies

USHIO has established a CSR Committee, which ischaired by the president. The committee decides
on policies for the whole Company relating to CSR
initiatives. The CSR Committee establishes subcommittees as needed to oversee practical implementation of the policies it has decided, and discusses
specific initiatives and ways to promote them. At the
21st CSR Committee meeting held in October 2013,
the members confirmed current priorities to beaddressed and initiatives to be taken going forward.
Furthermore, at the Group CSR Council
held in March 2014, the top management of Group
companies attended from bases around the world,
reporting on diverse social needs and sharing theirrespective priorities with the entire Group. The
attendees confirmed their commitment to carryingout specific activities under the Group CSR plan.

United Nations Global Compact’s* Ten Principles
USHIO has declared its support for the United
Nations Global Compact of principles concerning
human rights, labor standards, the environment
and anti-corruption. We have joined the local UN
network supporting the compact, Global Compact
Japan Network, and have taken an active role invarious sectional activities, including our involvement in co-sponsoring a proposal on supply chain
management as one of the participating companies.
We have joined the local UN network supportingthe compact, Global Compact Japan Network, andare working to promote all facets of CSR among themany other participating companies. To this end, we
have taken an active role in sectional activities forsharing information on necessary specific measures,and enhancing the activities of each company.
Please see the separate glossary for explanations of words marked with an asterisk (*).

12

Sustainability Report 2014

http://www.ushio.co.jp/en/csrprogram (Toward Realizing a Sustainable Society)Medium-term Plan for CSR

The results of the survey were as follows:

USHIO established the CSR Department in 2009, and formulated
a medium-term CSR plan aimed at fusing the Company’s management strategies through to 2016 with its CSR tasks. USHIO’s
medium-term CSR planning comprises three phases over a sevenyear period. In phase-1 (2010 to 2012), we focused our efforts on“forming an infrastructure for CSR initiatives” and achieved our
initial targets. We are currently in phase-2 (2013 to 2014) during
which we are working to “dig deeper into CSR issues.”

Survey Requests for which Inquiries Were Received (USHIO Group)
20
15
10
5

Phase-2
In phase-2, the current phase, we have started off a PDCA cycle forfusing the actual business operations of our business divisions andGroup companies with CSR aspects, by ensuring that the activity
infrastructure we built during phase-1 is functioning effectively.
Specifically, under the direction of the president, who is the chairperson of the CSR Committee, in fiscal 2013 we strenuously promoted these respective CSR initiatives within our business confines,
treating the CSR Action Plan as a guiding principle for fitting in our
five CSR pillars harmoniously with the business plan and momentum of each division and department. Each department brought upa host of measures and plans relating to human resource development, customer satisfaction, diversity, environmentally responsible
products, and so forth, which were discussed.
In the fiscal year ended March 31, 2014, we conducteda survey of all Group companies and business sites regarding CSR
tasks in each Group company. We plan to use this survey as astarting point for stepping up our stakeholder engagement acrossthe entire Group going forward.

0

CSR in general

Customers

Conflict minerals

BCP

Chemical substancemanagement system

Government agencies/universities/industry groups, etc.

CSR Action Plan
In formulating the CSR Action Plan, the CSR Committee and otherrelated organizations investigated CSR factors of the USHIO’s
business activities from various angles, while giving consideration
to the seven core subjects of ISO 26000 and many other sourcesof guidance and guidelines. As a result, the Group’s issues wereclassified under the five pillars of governance, people, quality,
society, and environment. These items are then broken down
further into action policies. Currently, the CSR Action Plan shows
USHIO’s CSR framework while forming the underlying philosophy
for business planning at each business division and Group company. The Action Plan is modified each year to reflect the resultsof the listening survey.

Formulation of a CSR Action Plan under the Five Pillars
Five Pillars

IssuesFiscal 2015 Action Plans

Governance• Promulgation throughout the Company• Internal control*• Global measures• Formulation of BCP*
• Compliance and ethics• Strengthen information security• Protecting property rights• Fair and impartial business activities• Promotion of risk management• Take steps to promote observance of laws and regulations• Strengthen information security• Protect and make strategic use of intellectual property rights• Formulate a business continuity plan

People• Human rights• Promotion of diversity• Promotion of work-life balance• Health and safety• Human resources• Promote formulation and implementation of human resource development
plans based on a long-term perspective• Promote diversity (development and utilization of local human resources,development and utilization without regard to gender or race)• Total work hour reduction to promote work-life balance• Promote safety measures• Conduct human rights education (avoid contributing to human rights issues,
conduct due diligence)• CSR procurement• Quality• Creation of solutions to meet new social
needs*• Increase customer satisfaction through quality improvement• Strengthen supply chain (promote green procurement and CSR
procurement)• Promote business in emerging countries based on social priorities and needs,
pioneer new applications and develop new products• Product safety assessment

Establish a compliance system thatencompasses international standards in global
corporate activities, work to publicize CSRrelated information and establish stakeholder
communication, and strengthen and enhance
the governance framework

Considering workplace environments, humanrights, and diversity of values in hiring and using
human resources

Quality

Initiatives to meet the needs of customers,
shareholders, and business partners based on
observance of market rules, and regulations

Environment

Engage in corporate activities to protect theenvironment. Strive to meet both environmental
and business needs, including addressing global
environmental problems affecting biotopes• Expanding sales of environmentallyconscious products• Global warming countermeasures• Chemical substance management• Resource conservation — Biodiversity
preservation

Society

Engage widely with society at all levels fromlocal to international, cooperating andcoordinating with other groups in contributing
to education, culture, welfare, development
and other aspects of society• Social contribution activities• Targets and Proposals Based on Phase Four of the Environmental Action Plan
･ Implement initiatives to conserve energy and resources･ In product development, use substitute technologies and gather
information in anticipation of environmental regulation trends･ In product development, use designs that reduce the number ofcomponents and the amount of labor in manufacturing･ Use environmentally responsible products when selecting components andmaterials･ Construct systems that support efficient operations• Strengthen chemical substance management• Increase corporate value by proactively contributing to society･ Implement community interaction and volunteer activities･ Promote business that contributes to social issues through links with NPOs
and NGOs• Promote business in emerging countries

13GovernanceCorporate Governance and Compliance
The basic policy of the USHIO Group is to ensure the transparency and efficiency of the Group’s
management, and increase corporate value to meet the expectations of all the Group’s
stakeholders. To this end, we place the establishment and maintenance of systems of internal
control, incorporating compliance with laws, regulations, social norms, corporate ethics, andJ-SOX regulations, as a top management priority and make every effort to promote thesesystems.

Corporate Governance* Framework
USHIO uses a management structure that includes a Board of Corporate Auditors. Management andadministrative responsibilities are divided among three governance units. The first is the Board of Directors, which determines management policies and makes decisions about other matters of the highest
importance. The directors also oversee the management of business operations. The second is therepresentative directors, who are responsible for conducting business operations. The third is the Board of
Corporate Auditors, which is responsible for audits. To assist the Board of Directors in reaching decisions,the USHIO Group has three advisory units that examine and discuss management strategies and medium
and long-term management policies with respect to the entire Group. The units are the Executive Council
and Group Coordination Council. In addition, the USHIO Group has a business unit structure and an
executive officer system for the purposes of strengthening and speeding up the execution of business
operations by the representative directors.

USHIO’s Internal Control Framework
General Meeting of Shareholders
Election anddismissal

Election anddismissal

ReportingBoard of Directors

Board of Corporate Auditors

Auditing
Election anddismissal

Election anddismissal

Reporting

Auditing•Appointments Reporting
and removals•Supervision

Independent Auditing Firm

• Approval of appointments andreappointments• Evaluation of appropriateness offinancial audits

Reporting

Reporting

Representative Directors
ReportingInstructions andsupervision

Reporting about
importantmatters

Reporting
Security Export Control Committee

Business Auditing Department

Corporate Social Responsibility Department
Compliance Committee

Executive Council
Group Coordination Council(Deliberation on important matters)
Instructions andsupervision

Auditing

Reporting about
important matters

Submitting policy
proposals and plans

Divisions, subsidiaries, and affiliates

14

Authorization of policy
proposals and plans

Sustainability Report 2014

http://www.ushio.co.jp/en/governance (Corporate Governance System)
http://www.ushio.co.jp/en/compliance (Compliance)

Board of Directors and Outside Directors
The Board of Directors comprises a total of 11 directors: 9 internal directors and 2 highly independent outside directors. Internal
directors with complete knowledge of the Company’s businessdetails ensure prompt decision making, while the appointment
of independent outside directors strengthen monitoring andhelp maintain the objectivity of management. Based on theTokyo Stock Exchange’s rules for protecting general shareholders, USHIO has filed a notice stating that its outside directors
are independent directors who have no conflict of interest withgeneral shareholders.
*Interviews with newly appointed an outside director can beviewed on our website.
http://www.ushio.co.jp/en/ir/ar2014/governance/interview.html

Audits by Corporate Auditors
USHIO has a Board of Corporate Auditors with five members that
include three outside auditors who are independent of the USHIOGroup. The outside corporate auditors are professionals in fields
such as finance, accounting, and law. The inclusion of outside
corporate auditors makes it possible to perform audits from an
objective and neutral perspective. The board submits reports concerning legally required items and other matters to the Board of
Corporate Auditors. Other matters include items that may have asignificant impact on the entire Group, important items concerning
monthly business operations, and other information that should bereported. The outside corporate auditors submit an annual auditing plan to the Board of Corporate Auditors and explain its specificauditing objectives to the corporate auditors. In addition, the outside corporate auditors provide the corporate auditors with reviewsof quarterly and year-end financial reports as well as reviews of thefinancial audits and summaries of audit results. This forms the basis
for periodic meetings of the outside corporate auditors and Boardof Corporate Auditors.
*Interviews with newly appointed an outside auditor can beviewed on our website.
http://www.ushio.co.jp/en/ir/ar2014/governance/interview.html

Business Audits
The importance of internal audits has increased along with theenactment of the Companies Act and Financial Instruments
and Exchange Act of Japan, and in order to prevent corporate
impropriety. Besides compliance audits of laws, regulations andso forth, and assessments of the design and operation of internal
controls, internal audits must now also serve as a consulting function with a view to improving business processes and other aspectsof the company. At USHIO, we conduct various audits, including
compliance audits and audits of export controls, both internallyand at our Group companies. To ensure the quality and raise theeffectiveness of these audits, the corporate auditors coordinate
with relevant departments at all times. The theme and inspection
items in our internal audits are selected in accordance with thesituation of the organization to be audited from the perspectivesof the Company’s business aims and minimizing management
risks. We take care to ensure that the audits provide value by
helping USHIO achieve its organizational objectives. Moreover,the indications and recommendations raised by the internal audits
are followed through periodically until the required improvements
have been made. We will continue to have audits conducted inclose observation of actual frontline business conditions with aview to issuing recommendations for streamlining management,
improving business operations, safeguarding assets, and improving
the management structure while minimizing risks.

Compliance
It is widely recognized that breaches of compliance can undermine
the very foundations of the public’s trust in a company or government, and carry a risk of significant losses through claims for damages, and sharp declines in sales. At USHIO we have established aCompliance Committee to address compliance-related concerns,
including potential risks, across the entire Group as early as possible. We have also established the USHIO Helpline as a point ofcontact for external consultation and reporting.

Information Security
USHIO often handles customers’ private information or is entrustedwith their important company information and other information
assets in the course of its business activities. We consider it a toppriority to safeguard such information from threats such as leaks
and modification. Moreover, because we recognize that information is an asset that generates value, and is a source for increasing
corporate value, we are taking measures such as raising awarenessof information security among our employees and improving ourrisk management systems. This kind of management requires threeinterlocking initiatives: rules must be determined, a framework
must be created for observing those rules, and awareness mustbe raised. We implement these based on our information security
management rules. Our next step will be to make sure theserules are applied uniformly and consistently for the USHIO Groupthroughout the world.
Specific examples include the promotion of countermeasures, such as having a certain secure area at each business sitewhere access is controlled with IC-embedded ID cards, antivirus
measures for PCs, encryption of hard drives, authorization management of operation systems, and strengthening the capacity torespond to disasters and faults. Other measures include reducing
the risk of leaks by encrypting technical documents, setting up
automatic encryption for external email attachments, functions toprevent sending emails to the wrong recipient and keyword filtering functions, replacing PCs in conjunction with the end of support
for Windows XP, enhancing security control by replacing our PC
asset management tool, strengthening Internet access control, andbolstering data access privileges by integrating our file services.
It is also important to enhance information security
awareness and skills for each individual employee in order to prevent information leaks. We have therefore taken steps to increaseawareness among employees of the various threats and opportunities where leaks may occur, by implementing a companywide
e-learning program, and conducting level-specific training for new
recruits. In fiscal 2014, we will promote these initiatives by operating a PDCA cycle to ensure that this awareness penetrates ourentire organization at every level.

Fair and Equitable Business Transactions
The USHIO Group’s 10 Action Guidelines expresses our commitment to always respecting the position and rights of the otherparty in business dealings, to conducting transactions fairly andequitably, and to not taking advantage of a dominant position to
impose inappropriate terms or conditions. We also promise towork to prevent corruption and carry out appropriate business
transactions in line with socially accepted practices.

15

PeopleWorking Together with Employees
By working to fulfill its responsibilities to society, the USHIO Group aims to create a company
where employees can work with enthusiasm and a sense of purpose. As is clear from the first itemin the Group’s management philosophy: “Build both a prosperous Company and prosperous
employees,” this goal has remained the same since the Company’s foundation.

Respecting Human Rights
The USHIO Group respects the International Labor Organization’s* Declaration on Fundamental Principles
and Rights at Work. USHIO also declared its support for the ten principles of the United Nations Global
Compact in October 2010. The principles relate to human rights, labor, the environment, and anti-corruption. USHIO is promoting initiatives to ensure adherence to them. In addition to this, CSR procurement,
conflict minerals* survey, and diversity are also important themes related to human rights. Initiatives topromote diversity have been increasing in Japan guided by national policy, and USHIO is following a longterm plan to ensure that the Company does not discriminate based on nationality, gender, or any othersuch factor when offering employment or promotion opportunities.
In the fiscal year ended March 31, 2014, USHIO established the Basic Policy Statement for
Conflict Minerals, recognizing its responsibility in using a large quantity of tungsten for lamp electrodes.
The policy statement is designed to be considerate of the human rights issues in conflict regions. During
the fiscal year, we actively promoted measures to realize a society where all human rights are observed,
such as conducting human rights education aimed at achieving respect for human rights in our businessactivities and establishing a CSR Procurement Policy to ensure consideration of human rights in the
supply chain.

Diversity*
Utilizing Global Human Resources
Overseas sales account for almost 80% of the USHIO Group’s total. Human resources capable of blending
in to communicate and understand local needs are indispensable in promoting business overseas. We
are therefore working to develop and utilize global human resources by conducting international study
programs, hiring international students, sending personnel from Group companies overseas to the parent
company in Japan, and providing opportunities for interaction between Group companies.

Employment of People With Disabilities
In the fiscal year ended March 31, 2014, USHIO achieved a ratio of employees with disabilities of 1.96%,
slightly below the legal requirement of 2.0%. We will continue taking steps to make our workplaces
barrier free, including installing sliding doors in restrooms and handrails on stairways, and to promote
employment of people with disabilities going forward.

Re-Employment System
USHIO actively supports employment for seniors. We have established extended employment programs(Senior Partner Program and Senior Expert Program) that are conducted through our re-employment
system. These popular programs allow employees to work up to the age of 65.

Support for Working Women
We believe that new talent pools are needed in order to generate new business amid the matured
economies of the industrialized nations. Consequently, we have more than doubled the percentage offemale employees in sales and technical positions since 2007 in our effort to recruit human resources
without regard to gender, and in January and April 2013, we held talks between our Chairman andfemale employees to make sure that their voices are being heard by senior management. We have also
taken steps to encourage and motivate employees on an individual level. For example, in December
2014, we invited a female sales manager from outside the Company to come and run a study andnetworking session for female sales staff. The average service period of USHIO employees continues to
用語集year, and in the fiscal year ended March 31, 2014, the service period for female employees
increase eachexceeded that of their male counterparts, reaching 16 years.

16

Sustainability Report 2014

http://www.ushio.co.jp/en/peoples (Working Together with Employees)

USHIO’s Work-Life Balance Support Program (Balancing Work and Parenting)Prior to Birth

Birth•Leave of absence for fertility treatment•Shortened working hours (pregnancy)•Leave of absence for maternity clinic visits•Pregnancy discomfort leave

Post Natal•Childcare leave
t Women may take up to two years leave
two times for each child, regardless ofwhether their spouse is working•Paternity leave•Antenatal/postnatal leavet 8 weeks eachWork-Life Balance*
Support Programs
USHIO aims to be able to flexibly accommodate diverse values
and working styles regardless of employees’ lifestyles and gender.
As part of this, we have a support system for childcare leave thatoffers much more than the legally required level of support. In
March 2009, we created the Work-Life Balance Handbook, whichcontains information on programs for balancing work. It also contains information on child-raising and maternal welfare, how managers should respond, and other tips for employees who would
use the programs and for their managers. In July 2011, we revised
our system for working shorter hours to extend the eligibility ofchoosing to work shorter hours until a child is six years old. Moreover, in an effort to build an environment conducive to supporting
gender equality, we uploaded stories of male employees and theirexperience with childcare leave and interviews with female employees to view on our intranet portal. Consequently, in June 2012,
for the third time we earned Kurumin* certification under the Act
for Measures to Support the Development of the Next Generation.
The ratio of women returning to work after taking maternity leaveis virtually 100%, and several male employees also take childcare
leave each year.
Employees Using Childcare Leave
Men
Women
Total

2012

2013

2014

2
27
29

5
32
37

4
29
33

Paid Vacation and No-Overtime Days
Based on a commitment to work-life balance, we designate certain
days as no overtime days and prearrange paid vacation days to give
employees time to spend with their friends and family or on theirown pursuits and to help create a more dynamic working environment. We believe that performance improves when employees
maintain their physical and mental health by taking time off torelax and rejuvenate.

Cafeteria Plan (Selective Benefit System)
As the social environment changes and lifestyles diversify, employees’ needs are also diversifying. In response, in April 2014, we
introduced U’s Club, a system that allows employees to select awide range of benefits that they wish to use from a menu.
By linking the Company’s system with services provided
by a benefit service provider company we have expanded therange of options beyond what the Company’s system has provided(including childcare, nursing care, health, and self-development

Childcare•Short working hours (childcare)•Excused from work outside of regular
hours, or amount of over-time work
limited•Amount of late night work limited•Nursing care leave•Childcare leave•Hospital visit leave•Preschod / daycare suppot

options), so that each employee can enjoy a more fulfilling andmeaningful life. The system is also intended to provide backup andsupport for employees so they can achieve even better focus in
their jobs.

Education and Training for Human Resources
Development
Various training programs have been established to facilitate thedevelopment of personnel capable of acting independently and to
make it possible to align “Build both a prosperous Company andprosperous employees.”
In addition, revisions were made to the skills required for eachdivision and type of job, and a system established at each office
which will facilitate training and evaluation of employees.
Regardless of the type of job, all employees are trained todevelop their ability to maintain an awareness of the problem, aproblem-solving approach that is not limited by past experience andthe ability to independently develop and implement new proposals.

Support for Self-Development
Business English School: To help our human resources achieve
results on a global stage, we support them in improving theirEnglish language capabilities—which is the common foundation
underpinning such endeavors. Employees who wish to take classes
can join in-house classes at each worksite. The classes are gradedby proficiency and have between three and six students. Externalteachers (Japanese and native English speakers) are invited to teachthe in-house classes, which are run once a week after work. The
system was started in October 2013 and in six months 28 employees have taken the classes, which have been highly rated.
TOEIC testing: TOEIC tests are given to employees who want togauge their English ability and further improve it. The Company
pays a portion of the testing fees. A total of 125 employees took
the test in the fiscal year ended March 2014.

Big Sister and Brother System
This system provides one-on-one support for new recruits’ development, provided by senior colleagues acting as mentors to newrecruits for one year after their initial assignment. The guidancecovers day-to-day working, as well as issues that occur in company life and even personal issues. To help the senior colleagues
approach their recruit guidance roles with enthusiasm, we conduct
big sister and brother training. The system has helped new recruits
to build trust with their senior colleagues, enabling them to workwith confidence, and has helped to increase the rate of new
graduate recruits who stay with us into their third year.

17Quality

Business Partners
To accurately grasp the needs of our customers, we think from their perspective, then work as one
with our business partners to improve our product development and quality. In this way weprovide products and services with appealing quality that goes above and beyond therun-of-the-mill.

Quality Policy
USHIO has created unified quality policies for the entire Group and continued its efforts to improve
quality.

UPS (USHIO Production System)
UPS (USHIO Production System) is the name ofa new initiative aiming to establish a unique
Basic Philosophy
new production system at USHIO’s Harima DiviUSHIO regards product quality as an overriding priority
sion from fiscal 2011. Amid a rapidly changing
and will promptly provide global markets with high quality,business environment, it is important to be able
safe products and services that are highly reliable andto efficiently supply high-quality products ineconomical in order to fulfill the requirements of customers.
any environment. To achieve this, we saw the
Action Guidelines
need to think outside of the box and promote
1. We will act rigorously in putting the customer first andputting quality first, and will develop appealing products
improvements from a broad-ranging perspectivewith cutting-edge technology to fulfill the requirements
by integrating our ongoing UPS, TPM and TQC
of customers and earn their trust.
improvement activities, rather than repeatedly
2. We will strive to further improve quality by developing
going over the same ground.
entity-level quality management systems and continually
The main thrust of the UPS movement
working to improve their effectiveness in order to meetthe needs of customers.
is ZD (zero-defects) activities, which seek to
3. We will work to share information with customers,
eliminate defective work by stimulating individmake cost improvements, develop new products, pioual autonomy and enthusiasm among employneer new markets, and promptly provide global markets
ees and fostering creative thinking. Traditionally,
with high quality, safe products that are highly reliable
and economical.
the movement consisted of three pillar groups.
October 1, 2014
Namely, the Manufacturing Technology Group,
Kenji Hamashima
the Quality Assurance System Reform Group
President andand the Education and Enlightenment Group.
Chief Executive Officer
However, we have now reformed the activities
USHIO INC.
within our business sites, and from April 2014
we started a new initiative of small group activities within business sites to carry out specificimprovement activities by thoroughly promoting “full participation by all people at business sites” and“visualization.” We have formed 91 groups within business sites and have also been proactive in appointing younger employees and female employees as activity leaders in order to develop human resources topromote autonomous management while conducting specific improvement activities. The activities havealso contributed to reforming employee awareness of the front lines.
Through these activities we aim to establish a foundation for more visible, efficient manufacturing, to invigorate our workplaces, and continuously to maintain our activities.

Customer Service Center Initiatives
In our Customer Service Center we prioritize stable operation of customers’ equipment and customer
satisfaction. We work to provide them with confidence and safety, on time, while aiming to ensure that
we retain their trust and reliance. Recently, more and more of the end users for our equipment products
have tended to be overseas, so we are taking steps to enhance our local service systems through links
with our bases in South Korea, Taiwan, and China. The need for this is being driven by an increase in the
product groups that these bases can handle, for example medical equipment, as well as further development of proposal-based services. We will deepen the connection of customer service with product sales,
while striving to increase customer satisfaction even further going forward.

18

Sustainability Report 2014

http://www.ushio.co.jp/en/supplier (Working Together with Business Partners)
http://www.ushio.co.jp/en/customer (Working Together with Customers)

Launch of the Quality Assurance Center
From April 2013, the separate Quality Assurance Divisions that had
been established at each business site were integrated to launch
the Quality Assurance Center. With this move, USHIO will exploit
the good aspects of quality control knowhow developed at eachbusiness site, to achieve even more attractive quality and efficiency.
This will enable us to meet the exacting demands for quality
required by our lineup of medical equipment, which has continued
to expand in recent years. Moreover, we will use our accumulated
knowhow in making products for industry to strengthen our activities in line with ISO 13485 (an international standard for quality
assurance of medical equipment. The content of the standard
has been modified from the ISO 9001 standard, and additional
requirements inherent to medical equipment have been added),in order to deepen our relationships with overseas manufacturing
companies going forward and create an integrated Group-wide
quality assurance system.

Promoting Green Procurement and Compliancewith International Environmental Laws andRegulations
To ensure the smooth, stable supply of its products in the face of adiversifying body of overseas laws and regulations, USHIO is focusing on timely collection of information, and building a value chain*
designed in response to these requirements. We hold explanatory
meetings with our suppliers to deepen mutual understanding andgain their cooperation in responding to purchasing policy, green
procurement standards, RoHS, and REACH regulations. We also
conduct continuous activities based on dialogue with suppliers
to avoid problems arising with delivery schedules and productquality. Through these activities we aim to raise overall customer
satisfaction.
In recent years, there has been a rising demand forcompliance with RoHS regulations, and we are strengthening our
initiatives in this regard.

Contributing to Society with USHIO Products
Having started out as a manufacturer of light sources for industrial
applications, USHIO has continued to develop products to meet theneeds of the times. Recently, an important theme for us in fulfilling
our corporate social responsibility is contributing to society throughour main business. In line with this, we have been aggressively
launching products to solve issues in a variety of fields through theapplication of light.
In the year ended March 2014, we focused on broadly
extending the scope of our ‘super green’ products, which haveenvironmental assessments from the product development stage,and have been strengthening our initiatives to renew the performance of our products. We will use the light technologies we havedeveloped through the years, applying them and developing themto address problems that must be solved at the global level suchas medicine, health, the environment, energy, water, security, andfood. At the same time, we will provide products and services thatoffer high added value to meet our customers’ needs.

Product Development Related to Biomedical QOL
Improvement
From fiscal 2013, we have established an independent business
unit for biomedical operations. We began development of medical
equipment starting with the TheraBeam 308® excimer light phototherapy device, and since obtaining various medical approvals, wehave been developing a range of business infrastructure.

With regard to the Point Reader® blood analyzer, in addition to theoriginal blood serum ferritin measurement and applications suchas countermeasures for endemic diseases in developing countries,
we have also opened new frontiers for application, including blood
test diagnoses for animals, and we continue to expand the scopeof potential. Currently, we are moving ahead to create infrastructure to support medical equipment manufacture, sales, and repair,
pharmaceutical manufacture and sales, and veterinary pharmaceutical manufacture, among others. We will continue to prepare afoundation for providing value through light in various ways that
contribute to improving quality of life.

Promoting CSR Procurement
From the fiscal year ended March 31, 2013, the Green Procurement Committee was renamed the CSR Procurement Committee,
as we implemented green procurement as part of our CSR Action
スーパーグリーン製品マーク
Plan. In the fiscal year ended March 31, 2014, we analyzed ourcustomers’ expectations of us in terms of CSR initiatives. For
the fiscal year ending March 31, 2015, we have established a
CSR Procurement Policy to further ensure that we conduct CSR
procurement.

Checking for Conflict Minerals*
In accordance with the clause on conflict minerals in the U.S.
Securities and Exchange Commission’s Dodd-Frank Wall Street
Reform and Consumer Protection Act, in August 2012, a final rule
was adopted requiring companies listed on securities exchanges in
the U.S. to disclose and report on their use of conflict minerals intheir products. Conflict minerals include tantalum, tin, gold, andtungsten, produced in the Democratic Republic of the Congo or
adjacent countries. The law has been enforced since January 2013.
USHIO uses significant quantities of tungsten in its electrodes, andhas therefore responded by strengthening its surveys on suppliers’
use of materials, and has started surveys using the EICC/GeSI*
Conflict Minerals Reporting ledger sheet.
In November 2013, we formulated our Basic Policy
Statement for Conflict Minerals, and we have been promoting
coordination on this policy within the Group, including with Group
company USHIO Lighting.

BCP* Initiatives
The Great East Japan Earthquake of March 2011 taught us a
powerful lesson on how entire industries can be impacted by theinability to supply just one component. USHIO INC. commands
extraordinarily large market shares for many of its light source
products used in various industries. Recognizing our important
responsibility to ensure stable supplies of these products, we havebeen actively promoting business continuity plans (BCP).
In April 2012, we established a dedicated, companywide
committee to formulate a business continuity plan, mainly for thelight source business, including building systems to enable minimization of damage and swifter recovery and enable coordination
between each business site in the event of a major disaster. In April
2014, we formulated the USHIO INC. BCP (business continuityplan). With respect to information security, for example, we havemade our business process systems more robust against disasters
and faults, and have bolstered our network infrastructure andinternal data assets as part of an ongoing effort to ensure stability
across all aspects of our operations.

19Environment

Environmental Activities
The USHIO Group has defined a vision of where it wants to be in 2020, and is strengthening its
initiatives to contribute to the realization of a sustainable society through its core operations.

2020 Environmental Vision
The USHIO Group formulated its 2020 Environmental Vision with the goal of becoming a company able
to contribute through its business activities to the realization of a low-carbon*, recycling-oriented*,
biodiversity-preserving* society by the year 2020.

Phase Four of the Environmental Action Plan
In setting our objectives for Phase Four of the Environmental Action Plan, we focused on production
efficiency assuming power shortages in light of the power supply situation following the Great East Japan
Earthquake, and set out the following four key themes. In particular, we focused on contributing tosociety by reducing CO2 at business sites and through our electrical products, and peripherally to these,by developing a material database and Super Green products.
We will also enhance our activities to increase actual sales of the environmentally conscious
products such as LEDs that we steadily developed during the Third Phase, while in chemical substancemanagement, we are aiming to comply with international standards and remain firm in this approach.
We will also take our coordination with Group companies a step further.
Further details of our activities and progress during the fiscal year ended March 31, 2014 areavailable on our website.

Phase Four of the Environmental Action Plan
Expand Sales ofEnvironmentally
Conscious Products• Create Super Greenproducts• Increase ratio ofenvironmentallyconscious products
among net sales

Global WarmingCountermeasures

Chemical SubstanceManagement• Reduce CO2 emissions
at business sites• Reduce CO2 emissions
due to distribution• Enhance reliability andefficiency of CMS• Enhance customer
response regarding
chemical substancemanagement

Resource Conservation
and Biodiversity
Preservation• Reduce waste emission
volume by unit sales• Promote stakeholder
engagement*• Social contribution
activities and biodiversity
preservation

Committees for Each Measure Promote Activities
Global WarmingCountermeasures
Committee

Green Products
Committee

3R activities at eachbusiness site

CSR Procurement
Committee

SCOPE 3* Initiatives
Up until now, companies have been required to accurately grasp the volume of CO2 directly emitted bytheir business activities and the amount of energy generated indirectly from electricity usage and so forth,and to make an effort to reduce these. However, CDP and other social demands now call upon companies to correctly recognize factors that have an even greater impact, such as total energy consumption
across the entire value chain, including environmental resources used by the products, and to strive toalso improve these. In response to this situation, from fiscal 2013 we started keeping count of our energy
consumption in line with SCOPE 3 requirements, and we will now widen our scope for data collection
and improvement activities to include all Group companies. We have widened our view to include theentire value chain and taken our first step towards better environmental activities.

20

Sustainability Report 2014

http://www.ushio.co.jp/en/environmental (Environmental Management System)
http://www.ushio.co.jp/en/energy (Global Warming Countermeasures)

Acquired Clean Producer Designation

modules for the backlight. The new sign uses only about one thirdof the electricity of the old fluorescent lights, and the light sources
will not need to be replaced for 10 years.

Yokohama Division
At the Yokohama Division, we have been upgrading our fluorescent lighting with LEDs in stages. Currently, we are replacing
around 100 lamps every six months in planned stages, focusing
mainly on the floors for business operations such as the reception
room and conference room.

USHIO PHILIPPINES, INC. (UPI)In September 2013, USHIO. (SUZHOU) CO., LTD. received the“Clean Producer” designation from the Suzhou Environmental
Protection Office and the Suzhou New District Economic
Development and Reform Office. The designation is awarded tocompanies in China, and was formally announced by the Chinese
government. The company was highly evaluated for improving
productivity by automating its onsite facilities, reducing its power
consumption by replacing its lighting with fluorescent lights, andtaking other autonomous actions to conserve energy.

USHIO INC. Business Sites Reduce CO2 Emissions
One of the four themes of Phase Four of USHIO’s Environmental
Action Plan is global warming countermeasures. During the fiscal
year ended March 31, 2014, USHIO took steps to reduce CO2 emissions at business sites and due to distribution seeking to achieve a
1% reduction in emissions per unit sale versus fiscal 2012. By continuing to replace the lighting at each business site with LEDs, USHIO
achieved a 9.5% reduction in emissions per unit sale versus 2012.
Looking ahead past the 2020 Environmental Plan, USHIO
will continue its current efforts to reduce CO2 emissions, aiming toachieve a further 10% reduction over the next 10 years until 2025.

Replacing Lighting at Each Business Site with LEDs
Upgrading USHIO’s rooftop sign with LEDs

At UPI, around 10% of the company’s total electricity usage wasrelated to lighting, so we began changing the conventional 72 W
fluorescent lights to 20 W LED lights as part of our energy conservation activities. We expect to achieve a significant energy savingwith our plan to successively change allスーパーグリーン製品マーク
of the approximately 1,800
fluorescent lamps in our factory to LEDs.

TAIWAN USHIO LIGHTING, INC. (TULI)At TULI we completed changing over the lighting for our production lines, changing around 50% of the lines from the conventional 40 W fluorescent lamps to 26 W T5 fluorescent lamps, andchanging the remaining 50% of the lines to even more efficient
LED lamps. Even when the T5 lamps and LED lamps are used in
combination, the visual brightness is undiminished, and they provide a uniform light throughout the factory.

USHIO ASIA PACIFIC PTE. LTD. (UAP)At UAP we have also started changing our office lighting toLEDs. Once we have completed changing the 80 fluorescentlamps in the entire office, we plan to change the fluorescentlamps in the warehouse.

CHRISTIE DIGITAL SYSTEMS USA, INC. (CDSU) and
USHIO AMERICA INC. (UAI) Introduce Solar Power
Generation

Before 1987

DaytimeNight

After 2013

Himeji City in Hyogo Prefecture is USHIO’s birthplace and the siteof the Company’s largest business site, the Harima Division. To
mark our 50th anniversary, we changed this rooftop sign in frontof JR Himeji Station to an LED sign. We used waterproof LED modules from USHIO Lighting, using 615 high-power, wide-angle modules for the USHIO logo section, and 2,022 narrow, thin-profile LED

CDSU and UAI have installed 2,190 solar panels on their three
office roofs, and expect to generate 832,981 kW in their firstfiscal year. A monitoring system has been installed to keep trackof the power generation status, and the monitored items can beviewed over the Internet as well as on a micro-tile video wall thathas been newly installed in the lobbies of both CDSU and UAI.
Displaying the monitor output in the lobbies enables both visitorsand employees to see at a glance the solar power generation
status and CO2 reduction volume, helping to raise awareness about
energy conservation.

21

Society

Relationship with Society
As a member of the international community, USHIO will contribute to the development ofrespective regions where it conducts business. The Group has a growing body of contribution
examples following its expansion in Japan and overseas, and in addition to the initiatives
reported here, is engaged in various activities in the fields of education, culture, disaster support,
and exchanges with local society. These areas are vital aspects of sustainability.

The USHIO Foundation
The USHIO Foundation was established in 1994 to commemorate the30th anniversary of the founding of
USHIO, and in 2014 the foundation
marked its 20th anniversary. As theglobalization progresses, the foundation will contribute to society by
assisting the development of thenext generation of human resources, including overseas students, who will be responsible for leading theworld in the future by providing scholarships to assist with their studies, and promoting further interaction and mutual understanding between Japan and other countries.
In fiscal 2013, the foundation provided scholarships to 40 graduate students (including overseas
students) and 11 students in specialized courses at colleges of technology. So far, 457 scholarship students have been accepted, and we continued to focus on calling for scholarship applicants from schools
in areas affected by the Great East Japan Earthquake.

USHIO INC.
Family Day at Head Office and Tokyo Sales Headquarters
On August 7, 2014, we held our first family participation event, “Family Day 2014,” at Head Office andTokyo Sales Headquarters. Families who participated commented that it was a good opportunity to gaina deeper understanding of USHIO by listening to an explanation about the company’s products and being
able to encounter them up close.

Factory Tours at the Harima and Gotemba Divisions.
For children of employees we held
the Summer Holiday Children’sOpen Day at Harima on August
9, 2013, and the Family Tour at
Gotemba on August 30, 2013. The
children all showed immense interest in the site with its many large
machines, the office with its rowsof computers, and at the sight of their parents working. At Gotemba, the parents also participated, creating an excellent opportunity for communication.

Participation in Tsukuba Science Edge 2014
On March 21, 2014, USHIO participated in Tsukuba Science Edge
2014, which was held at the International Congress Center. After thecontest at which junior high schooland high school students presented
their ideas relating to science, there
were workshops at which USHIO
An experiment using a mini excimer device
offered all participants a chance toexperience “welding with light”
using a mini excimer device. By trying out the system, which welds different materials together withoutadhesive using only light, participants encountered some of the possibilities of light.

22

Sustainability Report 2014

http://www.ushio.co.jp/en/contribution (Working Together with Local Communities)
http://www.ushio.co.jp/en/society (USHIO Group Support for Culture and Learning)

Market in Support of Areas Affected by the Great
East Japan Earthquake

Second Round of the School Supply Backpack
Campaign
In the summer of 2013, theemployees of CDSC cooperated with the Global Interior
Foundation to give backpacks
filled with school supplies tochildren living in the townof Stanton (the neighboring
town to Cypress, where
CHRISTIE USA is headquartered). This time they wereable to buy 45 back packs.

On March 14, 2014, an Earthquake Support Market was held in
the buildings of the Head Office and the Tokyo Sales Headquarters.
This year the event was again attended by many people. It was thethird time we have held the market, and there were stalls selling
products from Iwate, Fukushima, and Miyagi prefectures, as well as
the Oraga Otsuchi Recovery Diner from the town of Otsuchi on thesouthern coast of Iwate Prefecture. It was a lively event, including
sales of famous produce from the sea around Sanriku, and Sashikoembroidered T-shirts made by local women in the hope of supporting the region’s recovery.

CHRISTIE DIGITAL SYSTEMS CANADA, INC. (CDSC)CHRISTIE Community Garden

CHRISTIE DIGITAL SYSTEMS USA, INC. (CDSU)
Donation to California Cypress High School FBLA
Program
The Future Business Leaders of America (FBLA) program is a
non-profit educational organization comprising 250,000 students
preparing for future careers in business or in fields related to business. The organization runs a contest where students can pit theirbusiness knowledge and skills against one another. This year, we
supported the students of Cypress High School as they participatedin the national FBLA contest.

Helping to Pack Food for Children Facing Starvation
This year, CDSU continued to support the humanitarian food aidorganization Stop Hunger Now through volunteer activities, witharound 80 employees managing to pack around 13,196 meals.
These meals were sent to facilities and schools in Central Asia andSoutheast Africa under the International School Feeding Program.

USHIO AMERICA, INC. (UAI)
Relay for Life*At the illumination event, each team lit their“dream lanterns” before releasing them into
the sky.

In April 2013, CDSC invited all of its employees to a new projectcalled “Health, Wellness, Green Initiative Participation Drive.” At
the CHRISTIE Community Garden, which has been created on thecompany site, approximately 30 volunteers brought in 55 cubic
yards of new topsoil from a garden supplier, and a custom-maderainwater storage tank was supplied along with a storage area forthe required tools. Many varieties of vegetables and flowers are
now growing beautifully, and the garden has become a popular
new spot at this business site.

This year again, the USHIO Angels* from the Oregon Divisionparticipated in the Relay for Life event run by the American Cancer
Society in June. In one year, the Oregon Division managed to raise
US$2,045 (approximately ¥20,000) through their activities.

Supporting an Electric Car Race at a Local HighSchool and Bluebell College
In May 2014, the students of a local high school and students from
Bluebell College formed the Bluebell CHRISTIE Team to enter a raceat the National Electric Cart Association with an electric car they
designed and assembled themselves. CDSC supported the team
not only with funding, but also with a design and provision of
production technology.

23

Business Overview
Breakdown of Sales

Breakdown of Operating Income(Billions of yen)(Billions of yen)

Other Businesses 2%

Breakdown of Assets(Billions of yen)

Other Businesses 1%

Other Businesses 16%

Equipment
Business
58%

Equipment
Business
21%

Equipment
Business
44%

2014

2014

2014

¥157.8¥12.1¥255.3Light
Sources
Business
40%

Light
Sources
Business
78%

Light
Sources
Business
40%

Equipment Business

Light Sources Business

Other Businesses

Imaging equipment

Discharge lamps• Digital projectors for cinemas• Digital projectors for general imaging(control rooms, simulators, signage, virtual
reality, and others)• UV lamps for manufacturing semiconductors, flat
panel displays, and electronic components• A range of lamps and industrial LEDs for use incinema projectors, data projectors, officeequipment, illumination, and other opticalequipment

Machinery for industrial uses
and others

Optical equipment• Optical equipment for manufacturing
semiconductors, flat panel displays andelectronic components (exposure tools, photocleaning units, photocuring systems, and others)• UV phototherapy devices, blood analyzers andother medical equipment• EUV light sources for inspection anddevelopment applications

Sales and Segment Income(Billions of yen)

6

100
94.5
85.9

80

Halogen lamps• For use in office equipment• For illumination applications (commercial
facilities, stage and studio lighting, specialized
lighting, and others)• Halogen heaters

Sales and Segment Income(Billions of yen)(Billions of yen)

100

9.3

(Billions of yen)

10

7.6

80
4

(Billions of yen)

0.15

4

60

2.5

2

3.2

0.11
64.1

5

54.6

3.0

0.10

0.10

2
0.07

40

0.05
1

20

20

3.3

3
6.1

52.5
2.7

Sales and Segment Income(Billions of yen)

91.2

60
40

• Plastic forming applications, peripheral
machinery• Factory automation systems• Others

1.1

0

2012

2013

2014

Sales (left scale)
Segment Income (right scale)

0

0

2012

2013

2014

0

Sales (left scale)
Segment Income (right scale)

0

2012

Sales (left scale)
Segment Income (right scale)Corporate Data
Established 		 March 1964

Employees: 5,470 (as of March 31, 2014):

Paid-in capital		 ¥19,556,326,316
President and Chief Executive Officer

Parent company 1,793
Kenji Hamashima

Subsidiaries• Japan 588• Overseas 3,089

24

2013

2014

0.0

Sustainability Report 2014

Third-Party Opinion
In light of the senior management changes announced in October
2014, I read this report with a great deal of anticipation, curious about
the ways in which USHIO’s stance with respect to CSR andsustainability would continue and evolve. This time around, the reportoffered what I see as at least four major take-away points: (1) the
development of a sustainable, top-led CSR promotion structure(incorporation of CSR issues as part of management strategy), (2) the
promotion of supply chain management centered on CSR, and, after
soliciting information from departments responsible for CSR (3) the
inclusion of “human rights in global society” as a component of risk
management training for internal, section and general managers, andfinally (4) progress on preparations to create an integrated report forthe disclosure of non-financial data. For the remainder of this opinion,
I want to discuss the future outlook and issues, with emphasis on
points (1) and (2).
Merger of Management Strategy and CSR Issues
As has been stated in past opinions, messages and leadership from top
management are essential elements in the promotion of CSR andsustainability. Understanding and responding to new rules andstandards in the global market is especially important given
globalization in the entire integrated flow encompassing everythingfrom funding procurement to manufacturing, distribution and sales, aswell as the fact that some 80% of USHIO’s consolidated net sales arefrom outside of Japan. In that sense, the message from top
management has a clear global perspective, reflecting the newpresident’s ample experience in the United States. As such, we can
expect to see the promotion and evolution of CSR management going
forward. From next year onward, it will be crucial that managers ineach segment take the top message in this report to heart, and share
their assessment of the situation and issues with respect to CSR in theirown words. I say this because USHIO, as suggested on page 13 of thereport, hopes to completely merge its management strategy with CSR
issues by 2016 as part of its medium-term CSR plan now under way. At
the same time, for a top-led medium-term CSR plan, it is important to
tweak and clarify points based on feedback from the frontlines ofoperations by grasping the current situation on the ground in eachsegment and determining what kinds of issues to address next.
Promoting CSR-centered Supply Chain Management
As mentioned earlier, USHIO is making steady strides in measures
regarding CSR procurement. More specifically, in November 2013, theResponse to Third-Party Opinion
We appreciate receiving valuable feedback once again this year fromDr. Masaatsu Doi, Associate Professor of Hosei University, on our
Sustainability Report 2014. Along with offering a highly favorable
evaluation of USHIO initiatives and progress with respect to CSR andsustainability, Dr. Doi has provided us with concrete guidance andissues to consider regarding our efforts to merge management strategy
with CSR issues, as well as supply chain management. In our CSR
promotion activities, we will continue to execute said activities byCompany established its “Basic Policy Statement for Conflict Minerals”
in relation to the use of substantial amounts of tungsten in theelectrode components of its lamp products. On one level, this is a
global trend in terms of what is expected for responsible raw material
procurement. But looking ahead, together with the full-scale
development of structures for examining the use of conflict minerals at
production sites, USHIO is expected to show leadership by modelingand promoting CSR procurement not only for direct suppliers but also
for secondary and tertiary levels across the entire supply chain. There isno question that from the beginning, guaranteeing transparency in the
supply chain and ensuring traceability has been a daunting task for theelectronics industry. In confronting these issues, engagement withdiverse stakeholders, including NPOs/NGOs, government agencies, anduniversity research institutes as specialist organizations, has proveneffective; it is also likely necessary to have connections to and crosscutting industry measures related to the social and environmental
initiatives of existing mining companies. The diligent process ofseriously garnering opinions from investors and a diverse range ofother stakeholders, presenting those opinions to management asfeedback, and disclosing the results is, I contend, the way to enhance
the sustainability of USHIO and the key to winning the trust of its
stakeholders.

Masaatsu Doi

Associate Professor
Graduate School of Social Well-being
Studies, Hosei University
Dr. Doi holds a PhD in commerce. In 2009,
he became an associate professor at the
Takasaki City University of Economics
after graduating from the Hitotsubashi
University Department of Economics andcompleting post-doctoral research at the
Hitotsubashi University Graduate School ofCommerce and Management. Dr. Doi has
been in his current position since 2014. He
has written several books, including CSR
Keiei—Kigyou no Shakai teki Sekinin
to Stakeholders (co-author,
CHUOKEIZAI-SHA, INC.), and Social
Enterprise—Shakai teki Kigyou no Taitou(co-author, CHUOKEIZAI-SHA, INC.).

Atsuyuki Kobayashi

Director, Officer in Charge of CSR, USHIO INC.

breaking down CSR issues into our business planning, and to utilize thethinking and values of a variety of stakeholders connected to global
procurement and markets as feedback that we combine into drivers ofimprovement in our corporate value and sustainable growth.
As stated at the outset of the feature section, USHIO willcelebrate its 50th anniversary on April 1, 2015. By addressing CSR
issues identified from the past 50 years, we hope to devise a policy thatwill usher in our next five decades in business.

25

CSR Department, Risk Management Office
USHIO INC.
6409 Moto-Ishikawa-cho, Aoba-ku, Yokohama-shi,
Kanagawa 225-0004, Japan
Tel: +81 45-901-2812 Fax: +81 45-901-2814
E-mail:kankyo@ushio.co.jp

http://www.ushio.co.jp/en1409S①