CSR Report 2013 - OHARA€¦ · 05 OHARA CSR Report 2013 The Long-term Vision 2020 To realize the Long-term Vision 2020, OHARA has been developing business based on the new medium-term

CSR Report

2013

Corporate Social Responsibility Report 2013

01 OHARA CSR Report 2013

Creating the Future for People and Society

Editorial policyWe have been issuing this report on an ongoing basis since 2006 to inform people of OHARA

INC.’s initiatives regarding Corporate Social Responsibility (CSR). OHARA uses such report, the title

of which was changed to “CSR Report” in 2009, as a tool to communicate with many stakeholders.

The 2013 issue features activities aimed towards realizing the “Long-term Vision 2020”, which

describes the future image of the OHARA Group, with OHARA “becoming a dream fulfillment

company which pursues innovation with customers”.

Organized in accordance with OHARA’s philosophy based on corporate principles, reports on

continuous efforts are provided. It is our pleasure if readers can become more familiar with

OHARA through reading this report.

Scope of reportThis report covers the activities of OHARA INC., including our subsidiaries.

* The figures in the financial reports, however, denote numbers that include the results of the Group companies (See

P. 26).

Reporting periodFrom November 1, 2011 to October 31, 2012* There are, however, some references to activities for FY2013.

Editorial policy 01

CSR as conceived by OHARA 02

Message from top management 03

Featured articles

Towards becoming a dream fulfillment

company which pursues innovation

with customers 05

Globalization 07

Establishing new business 08

Adding greater value 09

Human resource development and

organizational culture 10

Sincere activities 11

Harmony with society 15

Disclosure of information 16

Environmental protection 17

Employee respect 23

Corporate profile 26

01

CONTENTS

We value trust above all else, and using our proprietary high technology and advanced materials of the best quality, we are achieving innovation for the next generation and striving for further development.

02OHARA CSR Report 2013

Management PhilosophyThe OHARA Group is honored to keep on creating unique and new values in order to establish a strong company structure for its employees' happiness and for the prosperity of the society.

Vision StatementWith high aspirations for contributing to the creation of the future for human and society through technological advances, we will provide high quality, cutting-edge materials for use in the optical, electronics, and environmental and energy fields worldwide. Working closely with our customers, we will constantly pursue innovation and become the "Dream Fulfillment Company".

OHARA’s philosophy based on our corporate principles

Date of issuance　January 2013

Previous issue: January 2012

Next issue: expected to be January 2014

Sincere activities p.11-14 Environmental protection p.17-22

Harmony with society p.15 Employee

respect p.23-25

Disclosure of information p.16

Reference guidelinesGRI’s “Sustainability Reporting

Guideline (version 3.1 (G3.1))”

Ministry of the Environment’s

“Environmental Reporting Guideline

(2012 version)”

Contact:General Affairs Department,

OHARA INC.

TEL: 042-772-2101

TEL: 042-774-1071

http://www.ohara-inc.co.jp/

Disclosure ofinformation

Harmony withsociety

Sincereactivities

Employeerespect

Environmentalprotection

Management PhilosophyVision Statement

Triple Bottom Line(Environment, Society,

Economy)

CSR as Conceived by OHARAⅡ

Realization of OHARA’s philosophy based on our corporate principles


Disclosure ofinformation

Harmony withsociety

Sincereactivities

Employeerespect

Environmentalprotection

Management PhilosophyVision Statement

Triple Bottom Line(Environment, Society,

Economy)

CSR as Conceived by OHARAⅡ

Realization of OHARA’s philosophy based on our corporate principles



Progressing, challenging, and fulfilling dreams with you,

we aim to be a “dream fulfillment company”.

Message from top management

Regarding OHARA INC.

The OHARA Group’s management philosophy stipulates that the

OHARA Group contribute towards its employees’ happiness and

for the prosperity of the society by building a strong company

that continuously creates unique and new values.

Establishment in 1935, OHARA has developed businesses

centering on optical glass that supports key industries, while

responding to various changes of the times.

Through development and manufacturing of glass materials,

the OHARA has contributed to the development of optical,

electronics and environment and energy fields.

OHARA, which provides materials, can benefit the society only

by having customers use them. OHARA will contribute to the

creation of an abundant future society by realizing its customers’

technological innovation through provision of advanced

materials of the best quality.

Towards Long-term Vision 2020

The Long-term Vision 2020 indicates an ideal image that OHARA

aims to become in 2020 and is, along with its management

philosophy, a matter that should not be altered. Under the four

pillars - globalization, establishing new business, adding higher

value and human resource development and organizational

culture - the Long-term Vision 2020 envisions OHARA to become

a dream fulfillment company that pursues technological

innovation with customers. OHARA will formulate a medium-

term management plan and promote activities to realize the

Long-term Vision 2020.

1 2


CSR Initiatives

A “dream fulfillment company”, as raised in the Long-term Vision

2020, specifically means a company that aims to fulfill people’s

dreams and create an abundant future society by taking the

initiative in technological innovation with advanced materials

of the best quality. In order to become such a company, OHARA

has raised the following five items as OHARA’s principles based

on corporate ethics: sincere activities; harmony with society;

disclosure of information; environmental protection; and,

employee respect. The Company considers OHARA’s CSR to

be the realization of each of the above principles through its

business activities, which would lead to sustainable development

of companies and the society.

The key point of CSR activities lies in each employee who will

implement such activities. Therefore, we strive to improve the

work environment, such as by creating comfortable workplaces,

developing human resources and maintaining occupational

safety and health.

Raising employees’ awareness through compliance seminars, we

conduct various activities based on OHARA’s philosophy based

on corporate principles, such as regional cleanup campaigns,

factory tours, disclosure of information through a CSR report or

the like and environmental protection activities that are in line

with OHARA’s environmental goals.

The Medium-term Management Plan

With the goal of achieving the Long-term Vision 2020, OHARA

started Phase II (from November 2011 to October 2014) in

November 2011. Phase II raises conversion of business structure

and building of a new driver for growth as basic strategies.

Under the conversion of business structure, OHARA is optimizing

systems of development, manufacturing and marketing in order

to accelerate the business development in the growing Asian

markets. Under the building of a new driver for growth, OHARA

will strive to establish an incubation center and construct a

metabolic system towards long-term corporate growth.

FY2012 Initiatives

In March 2012, Taiwan Ohara Optics Material Co.,Ltd. was

established as a new production base. OHARA has been aiming

to establish a stable supply system with multiple production

bases in order to respond to the customers’ launching of

their overseas operations, as well as from the viewpoint of

BCP (Business Continuity Plan). In addition, OHARA has been

accelerating activities with the goal of creating new businesses,

starting with one involving next-generation lithium batteries,

centering on the incubation center. In the Long-term Vision

2020, environmental and energy field has been raised as a future

priority field going forward. OHARA will aim to provide “plus-one”

products (in which a new technology is added) mainly centering

on the use of production technologies for glass and glass

ceramics, which are OHARA’s specialty.

As a consequence of business activities, various environmental

impacts arise, such as energy consumption and generation

of wastes. Even with energy-saving initiatives, use of a certain

amount of energy is unavoidable for melting glass. To protect the

invaluable earth, OHARA will proactively contribute to improving

the global environment through the provision of advanced

materials in the environmental and energy fields.

Message to stakeholders

Aiming to be a “dream fulfillment company”, OHARA will steadily

promote activities in line with the medium-term management

plan based on the Long-term Vision 2020. Through various

activities to realize the dream, OHARA hopes to meet

stakeholders’ expectations.

This report has been issued for the purposes of having all

stakeholders understand OHARA’s thinking regarding CSR and

having better communication with such stakeholders. It would

be our pleasure to receive your feedbacks on OHARA’s business

activities and CSR initiatives. Your continued understanding and

support will be greatly appreciated.

President

Hirokazu Saito

3

4

5

6


The Long-term

Vision

2020

To realize the Long-term Vision 2020, OHARA has been

developing business based on the new medium-term

management plan (Phase II), basic strategies of which

are “conversion of business structure” and “building

of a new driver for growth”. Under the “conversion of

business structure”, OHARA has been optimizing systems

for development, production and marketing in order to

accelerate business development in the growing Asian

markets.

In “building of a new driver for growth”, OHARA is aiming

to establish an incubation center and build a metabolic

system for the company’s long-term growth.

New Medium-term Management Plan (Phase II: from November 2011 to October 2014)

Towards becoming a dream fulfillment company

which pursues innovation with customers

We provide values to all

stakeholders through

realization of the “Long-term

Vision 2020”.

Globalization

From a Japanese company to

customers around the world⇨p7

Adding greater value

Pursuing cutting-edge materials of the

highest quality⇨p9

Creation of new business

Optical business, Electronics business And making

inroads into the third domain - environmental and energy

business⇨p8

Human resource development

Organizational culture

High commitment to helping build a better

society and the capability to execute reforms

⇨p10

Value Creation aimed by OHARA

Customers

Maximizing customer

satisfaction through

provision of advanced

materials of the best

qualityBusiness Partners

Co-existence and co-

prosperity towards sustainable

development through healthy

transactions

Shareholders and Investors

Maximizing OHARA’s

corporate value through

achievement of the Long-

term Vision 2020Employees

Providing a comfortable

work environment in

which employees can

have job satisfaction

Local communities

Environment

Developing innovative

technologies through the

environmental and energy

business

Harmonizing with local

communities through local

environmental protection

activities and plant tours


Fiscal year ending October 2014consolidated fi gure

35 billion yen or more

2.9 billion yen or more

5.0% or more

15.0% or less

Fiscal year ending October 2012(actual result)

24,437 22,700

26,000

7,223 7,700

9,000

［35,000］

［30,400］［31,661］

1,518 1,600

2,900

5,000

4,000

3,000

2,000

1,000

0

Ordinary profi t(million yen)

Sales(million yen)50,000

40,000

30,000

20,000

10,000

0

Sales

Ordinary profi t

ROA

Debt/equity ratio

Optical businessElectronics businessCurrent income

Management Index

Fiscal year ending October 2013

Fiscal year ending October 2014

GlobalizationGlobalization

OHARA acts in various regions, such as Asia, Europe and North America in order to deliver products to customers all over the world.

OHARA OPTICAL (ZHONGSHAN) LTD.

In the midst of relocation of production bases of camera

makers, who are our customers, to China, OHARA Optical

(Zhongshan) LTD. was established as the third

production base for pressed optical lens blanks in 2002,

following such establishment in Taiwan and Malaysia.

Winning considerable trust of customers, its high quality

management at a level equal to that of Japan has

increased value of the OHARA brand and contributed to

job creation in local communities.

* Address: Guangdong, China

* Business description: Production of pressed optical

lens blanks

TAIWAN OHARA OPTICAL MATERIAL CO., LTD.

In 1986, Taiwan-Ohara Optical Co., Ltd. was established

as subsidiaries for production and sales of optical lens

blanks. In 2012, Taiwan Ohara Optical Material Co., Ltd.

was established as a glass manufacturing plant in order

to produce glass at a location closer to customers, and is

presently under construction.

OHARA is aiming for sales activities that leverage on high

quality, competitive costs and shorter delivery period by

having an integrated production base - from melting to

pressing glass - in Taichung.

Address: Huwei Township，Yunlin County 632， Taiwan (R.O.C)

Business: Production of optical glass

AddressA


Creation of new business

Lithium-ion conductive glass ceramics

In the future society, efficient use of energy will be further

pursued. Accordingly, as the demand for storing electrical power

increases, larger capacity and higher level of safety of batteries

must be realized and good balance between the two must be

achieved. OHARA will contribute to social development by

applying the lithium-ion conductive glass ceramics technology,

and producing and selling “solid electrolyte” and “All Solid

Battery”, which would be essential in realizing a next-generation

lithium ion battery with large capacity and high level of safety.

Lithium-ion conductive glass ceramics (LICGCTM)

OHARA aims to develop a business with “plus-one” products, to which a new technology is added, using production technologies for glass and glass ceramics that are OHARA’s specialty.

Demonstration of a battery consisting completely of solid matters

(all solid-state battery)

Photocatalytic glass ceramics

Transition and projection of global market of lithium ion battery

OHARA will create new materials and components that would

provide new value in the environmental and energy fields, using its

expertise on material design and development of products, such as

functional glass and glass ceramics, which have been cultivated in

the optical and electronics businesses, as well as production

technology for high homogeneity glass and advanced physicality

control technology.

Photocatalytic glass ceramics

Photocatalytic glass ceramics are inorganic composite

materials in which crystals with photocatalytic

property are disbursed within a glass. Compared with

other photocatalytic materials embrocated or coated

on a plastic sheet, its photocatalytic function does not

decrease due to the peeling, deterioration of substrate

materials or the like.

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

FY2010FY2011

FY2012 (Projection)

FY2013(Projection)

FY2014 (Projection)

FY2015 (Projection)

Amount (million yen)

Automotive use

Compact consumer use

Industrial use

* Prepared by OHARA based on data estimated by Yano Research Institute Ltd.


Adding greater valueAdding greater value

OHARA pursues the development of cutting-edge materials of the highest quality, which would contribute to its customers’ technological innovation.

Optical business Electronics business

Environmental and Energy business

* Compact mobile devices (All Solid Battery)

* Air purifiers (photocatalytic filter)

Astronomical telescopeVarious types of product forms

* Expanding variations of product forms

* Endeavoring a business involving

post-processing, such as polishing or glass molds

for lens of cameras

* Component materials for precision equipments, such

as semiconductor exposure apparatus, etc.

* Developing for use related to space and

astronomical observation


Human resource development and organizational culture

By having as our mission the provision of products that can

satisfy customers, OHARA has been working on “human

resource development” and “reform of organizational

culture”, aiming to cultivate “human resources who can

create things” from “human resources who make things”.

However, amid quickly changing business conditions,

more diverse and sophisticated human resources are

required in order to respond to globalization, development

of a third pillar of business and cooperation with strategic

business partners.

Under such circumstances, OHARA puts emphasis on

employment and development of human resources who

are committed to contributing to the society and

protecting the global environment.

Management which values and fosters human resources

OHARA fosters human resources who are committed to helping build a better societyand are capable of executing reforms.

OHARA considers it necessary to reform the corporate culture

such that development of new businesses can be actively

advanced. We always consider and carry out measures to foster a

corporate culture in which people can proactively challenge

themselves to provide new values (products) which help

customers realize their dreams, by constantly paying attention to

customer trends and markets and anticipating changes in needs.

Under “Re-evaluation of Human Resource System”, which is one

of such measures, we have been promoting the reform of

corporate culture from the system side for the following purposes:

1) development of human resources who are committed to

helping build a better society and capable of executing reforms;

2) realization of a corporate culture in which people can challenge

themselves without fear of failure; and, 3) creation of a system

which pursues human resources who will voluntarily learn and

grow.

Anticipating customer trends and changes and fostering a challenge-worthy culture

Three pillars of OHARA’s business are the optical business, the

electronics business and the environmental and energy business.

The environmental and energy business is especially expected to

grow. In order to foster such business, we have established an

“incubation center”, as part of the business promoting organization,

and it has been promoting the strengthening of such business.

OHARA will consider flexible organizational frameworks to promote

strategies effectively.

Establishing a framework to promote the three pillars


Corporate Governance System Diagram

General Meeting of Shareholders

Divisions, Factories, Group companies

Board of Directors11 directors

(including three outside directors)

Board of Auditors Accounting Auditors

Representative Directors

Four auditors (including three outside

auditors)

Management Council(makes decisions on

important matters, etc.)

Internal Control Comm

ittee

Ethics and Compliance Com

mittee

Risk Managem

ent Comm

ittee

Information D

isclosure Comm

ittee

Business Audit Departm

ent

Quality Assurance Council

Environmental M

anagement

Council

Safety & Health Comm

ittee

Sincere A

ctivities

Corporate Governance

OHARA believes that strengthening of corporate governance is important in order to increase the confidence of various stakeholders and maximize our corporate value. In order to ensure appropriate and highly transparent decision-making, the Board of Directors (which include three outside directors), the Board of Auditors (which include three outside auditors) and the Management Council (composed of full-time auditors, directors and general managers appointed by the president), which is meant to make decisions appropriately and efficiently from a strategic viewpoint, work together, with the president being in the center. The above set-up enables us to strengthen corporate governance.

Sincere ActivitiesSincere Activities

Based on the auditing plan for each fiscal year, the appropriateness and legality of operational procedures, as well as the effectiveness and efficiency of operations, are checked. For example, whether the operations of each division and subsidiary of the OHARA Group are properly conducted in compliance with the internal regulations, starting with rules on administrative authority is examined.

Ensuring effectiveness and efficiency of divisional management based on internal audit

We will improve the management foundation, promote fair businessactivities in compliance with rules of countries and regions where we conduct business and contribute to customers through providing high quality products.

The Internal Control Committee was established in May 2006 to strengthen the OHARA Group’s internal controls. With the company’s president serving as a chair, the committee consists of the headquarters directors, subsidiary presidents, general managers of the headquarters division and the committee secretariat. The results of internal controls evaluations and items to be improved concerning the OHARA Group’s financial reports are reported to such committee annually in order to ensure reliability of the financial reports.

Ensuring reliability of financial reports base on internal control audit


Sincere A

ctivities

OHARA has established the “Guidelines of Conduct” in accordance with OHARA's philosophy based on our corporate principles. The “Ethics and Compliance Committee” holds a variety of in-house seminars in accordance with such Guidelines on a continuous basis in order to ensure that every employee of OHARA comply with laws and regulations and execute business activities with a high sense of ethics and in a fair and proper manner.

Compliance promotion system

Compliance

Guidelines of Conduct1. Do not be involved with any act or activity that is problematic in light of

ethics or compliance.

2. Honestly admit a violation, deviation or error and promptly take corrective

and preventive measures.

3. Sufficient education shall be offered to every officer and employee of the

OHARA Group on the continuous basis, and the results of such education

shall be likewise confirmed.

4. An appropriate self-audit shall be made every fiscal year in all organizations

within the OHARA Group in accordance with the Internal Audit Policy.

5. Proactive approaches are taken as a priority issue in management.

Sincere Activities

OHARA promotes risk management, led by the Risk Management Committee, in accordance with the OHARA Group’s risk management policy.

Risk Management System

In recent years, the environment surrounding companies has drastically changed and risks which have effects on corporate management have increased. Thus, appropriate risk management systems are required. As a continuation of the previous year, measures, such as raising the production ratio in China where raw materials are produced, were taken in FY2012 in order to secure a stable supply route for rare earth. We also continued to work on the development of improved products that use less amount of rare earth.

Response to Business Risk

Risk Management

Based on OHARA's philosophy based on our corporate principles and the Guidelines of Conduct, OHARA has stipulated the Codes of Conduct: Guidelines, which specify major points of laws and regulations, response policies and matters of caution to be complied with in conducting business activities and has been providing educational activities for all employees using the intranet.

Codes of Conduct: Guidelines

Outline of the Codes of Conduct: Guidelines

1. Matters concerning individuals○ Respect for human rights and prohibition of

discrimination○ Prohibition of drunken driving○ Protection of assets○ Prohibition of insider trading○ Prohibition of sexual harassment○ Prohibition of illegal copying○ Prohibition of acts in conflict of interest

2. Matters concerning sales activities○ Protection of trade secret○ Fair trading with subcontractors○ Prohibition of unfair competition○ Compliance with laws and regulations related

to import export trade○ Respect for and protection of intellectual

property

3. Matters concerning a corporation○ Protection of personal information○ Manifestation of a corporate intention○ Compliance with tax laws○ Prohibition of religious and political

activities as well as sideline activities in the premise of the company.

○ Safety and health as well as disaster prevention

○ Efforts for creating a quality assurance system

○ Appropriate publicity activities and environmental protection

In preparation for emergency events, including natural disasters that may hinder smooth business activities and management targets, OHARA formulated its Business Continuity Plan (BCP) in 2007. In principle, the BCP is reviewed every year. In FY2012, we extensively reviewed evaluations of/countermeasures for risks of the entire Group companies.

Continuous Improvement of the Business Continuity Plan

○ Compliance with the Antimonopoly Act○ Credit management○ Inappropriate offer and receipt of benefits


Sincere A

ctivities

Improving Customer Satisfaction through Quality Control

As quality required by customers has become higher and diverse, cooperation not only with the quality assurance division, but also among all divisions of OHARA will become necessary to provide good products and services. Furthermore, awareness and abilities relating to quality control of all employees working at such divisions will become important. In addition, knowledge regarding quality control is the most basic knowledge that is required to exercise the ability to control and improve quality. Since 2011, OHARA has been encouraging employees of all divisions involved in improving quality of products and services to take the Quality Management and Quality Control Examination (QC certification)” administered by the Japanese Standards Association. As of December 2012, 10 employees passed level two and 51 employees passed level three (including employees who passed both levels).

Fostering human assets who support good quality

Quality policyOHARA INC. pursues the highest quality, and everyone involved in its business activities always “provide customer satisfaction” in accordance with the following guidelines so as to contribute to “creating the future for people and society” with unflagging technological innovation.

Guidelines (excerpts)○ Earn Customer's trust and satisfaction.○ Confirm customer's request.○ Establish and continuously improve a product management system.○ Elaborate quality.○ Thoroughly disseminate the quality policy to all employees.

To provide products that satisfy our customers, OHARA has been implementing a quality management system of ISO9000 International Standard and constructing a quality assurance system since 1996.“Confirmation of customer's request” of OHARA's quality policy stipulates the following: “fully understand customer's request first, and then thoroughly make it known to all concerned parties.” The above is based on the concept that quality is determined by customers.

Construction of Quality Assurance System

Sincere ActivitiesSincere Activities

Impacts from skyrocketing prices of rare earth that have been recognized as a social problem are showing signs of stabilization with the exception of a few specific raw materials. However, the situation has not changed in terms of needing to depend on China for procuring raw materials, starting with lanthanum oxide. Accordingly, in order to avoid risks of procurement of raw materials, we started taking initiatives for diversifying suppliers of raw materials. As raw materials used for optical glass are required to have high purity and quality, they must meet extremely strict requirements for such use. Accordingly, OHARA analyzes impure substances in, and purity of raw materials and evaluate whether they are appropriate raw materials for optical glass. Management of impure substances in raw materials is the most important evaluation item in maintaining individual properties of optical glass. As traces of impure substances in raw materials have to be measured, material analysis must be done with the utmost care in order to prevent contamination of test samples by dust or the like. These tasks are conducted by personnel with abundant experience and knowledge of chemistry. With the goal of further improving quality, we foster a professional team of analysts.

Quality control of raw materials

Circumstances of raw materials analysis


Sincere A

ctivities

As customers' activities have been shifting to overseas, it has become necessary to expand the scope of guarding quality assurance not only within Japan but also to overseas. In order to win the trust of customers in OHARA's products, we have been conducting quality improvement activities for domestic and overseas subsidiaries, as well as at subcontracted plants.Specifically, we have built quality control systems for OHARA and subcontracted plants through exchanging QC chart and quality assurance agreements, so that outsourcing of manufacturing/processing can be done without any issues. Furthermore, we have been preparing a quality assurance guideline and performing activities, such as “improving the PDCA Cycle”, “visualizing (the manufacturing) process” and “equalizing the levels of and certifying plant inspectors”.

Domestic and Overseas Management Activities

Cooperation with Suppliers and Customers

● Clarify management items to be complied with.

● Standardize tasks to eliminate variation.

● Conduct (manufacturing) process audit based on QC chart.

● Levels of inspection/measurement are to be equal to those of

OHARA (conduct certification tests).

● Generally, leveling of inspection/measurement is to be

conducted with inspectors of OHARA on a one-on-one basis.

Points required by OHARA are incorporated into QC

chart/work procedures manual

Sincere Activities

In order to capture the quality required by customers as soon as possible, OHARA has discussions with customers regarding quality from the product design stage to the trial production stage on a regular basis. Further, data relating to OHARA’s quality received from customers are analyzed, mainly by the quality assurance division, and serve as a valuable information source for improving quality.Aiming at further improvement in quality, such information is firstly communicated from the quality assurance division to the production division, then the effectiveness of the quality management system is being continuously improved specifically to have our products reflect such information.

System to reflect customer’s voice

Management with QC chart/work procedures manual

Placing

orders

final

inspectionshipmentacceptance

process

(1)

process

(2)

process

(3)

Management under a quality assurance agreement

Feedback of quality information

Submitting of a performance record

Manufacturing process audit

Quality control activities at subcontracted plants

It has been an internationally significant issue that serious human-rights abuse is being committed by armed forces in “dispute regions”, including the Democratic Republic of the Congo and its neighboring countries. Minerals mined in such regions (tantalum, tungsten, gold and tin) are called “conflict minerals”. There is a concern that conflict minerals would serve as direct or indirect sources of funding for the local armed forces. With respect to this issue, conflict minerals provisions under the Dodd-Frank Act were enacted in 2010. In addition, the Organization for Economic Co-operation and Development (OECD) issued a “Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict Affected and High-risk Areas”. Through these initiatives, companies are being strongly required to take responsible initiatives in regards to their supply chains. OHARA has been advancing initiatives towards the non-use of “conflict minerals” by, for example, conducting surveys on the circumstances of use of minerals in products, in order to fulfill social responsibility in procurement activities.

Approach to Conflict Minerals


Harm

on

y with

Society

OHARA's business activities are supported by its coexistence with local and international societies. Maintaining harmony with society, OHARA will, proactively take initiatives to perform activities that contribute to society as a “good corporate citizen”.

Relationship with Local Communities

Major FY2012 initiatives

Harmony with SocietyHarmony with Society

OHARA donated 2.5 million yen (approximately $30,000) to The American Red Cross through Japan Red Cross Society as relief money to aid the victims and restore the areas hit by Hurricane Sandy that occurred in the eastern part of the U.S. in October 2012.

Monetary donation

Circumstances of a factory tour

As part of the local social contribution activities, OHARA accepts factory tours by students and allows students to experience working at OHARA, mainly from nearby schools. In FY2012, approximately 160 elementary school students participated in the factory tours. We received various questions from such students after they observed the actual glass manufacturing process. Further, three junior high school students visited the Company for work experience, and conducted inspection, packaging of products and administrative work at the reception area together with our employees. It seems the experience of actual work triggered their thinking about “working”.

Accepting Factory Tours and Allowing Experience of Working

Social Contribution Activities

Thank-you letters from neighboring elementary school students who participated

in factory tours

Experience of actually working

March: Participated in a drill for persons who have

difficulty returning home after a large-scale

disaster, etc. held by Sagamihara City

April: Sagamihara Environmental Fair 2012

(Environmental Information Center)

June & October: Sagamigawa River Cleaning Campaign (Takada

Bridge)

June & December: Participated in Global Warming Prevention

Campaign (Sagamiono Station)

September: Supported and participated in Sagamihara

Environmental Festival (City Gymnasium)


OHARA publishes OPTPIA, which is a company newsletter, four times a year in order to communicate its management policies to its employees, have such employees understood such policies and vitalize the company.In FY2012, OPTPIA featured “the environmental and energy business”, OHARA’s new business, as well as the newly incorporated Taiwan Ohara Optical Material Co., Ltd. Further-more, a social gathering of an alumni organization, named “Kojukai”, was held to provide information on the present status and future plans of the Company to former employees.

Disclo

sure o

f Info

rmatio

n

OHARA provides for fundamental policies regarding information disclosure based on OHARA's philosophy based on our corporate principle.

Information Disclosure Initiatives

Disclosure of Information

● Company newsletter OPTPIA

● CSR Report● Company Brochure● Map of Optical Design

Indices for Optical Glass● Pocket Catalog of Optical

Glass● Financial Reports

Communication Tools

OHARA makes efforts for prompt disclosure of information and communication through the annual general meetings of shareholders held in late January, “business reports”, which contain information regarding management performance and other topics and are sent to shareholders twice a year, financial report briefing sessions for institutional investors and the IR department’s response to individual interviews.

Communication with Shareholders and Investors

As tools for communication with customers, a small catalog regarding OHARA's optical glass, called a “pocket catalog”, and CSR Reports are effectively used.The pocket catalog responds to three languages - Japanese, English and Chinese. Furthermore, a CSR Report is delivered to a wide range of stakeholders, and feedbacks through questionnaires are addressed in the activities for the following fiscal year.OHARA also publishes company brochures, financial reports, maps of optical design indices for optical glass, etc.

Communication with Customers

Financial report briefing sessions*As the Great East Japan Earthquake occurred on the day after the financial reporting announcement for the first quarter (March 10), all IR activities for the first quarter were cancelled. Consequently, the number of responses to interviews decreased in FY2011.

To gain the correct understanding of and support from society, we will make efforts for sincere and highly transparent communication through timely and appropriate disclosure of our company information.

1. Transparency

2. Compliance with related laws and regulations

3. Guarantee of Confidentiality and Timeliness of Disclosure

In order to protect information assets and establish a strict management system, OHARA has prescribed the “Personal Information Protection Rules” and presented “Policy for the Protection of the Personal Information” on its website.In addit ion , Ohara sets for th the protect ion of persona l information in its Codes of Conduct: Guidelines to thoroughly make such information known within the company.

Initiatives concerning the Protection of Personal Information

Fundamental Principles of Information Disclosure

Policy for the Protection of the Personal Information1. Statement of principles

OHARA INC. (hereinafter, the "Company") agrees to protect the

personal information which we have received from our customers and

complies with the relevant statutes associated with this.

2. Handling of personal information

As measures to prevent a leakage, loss, etc. of personal information, the

Company has instituted the rules for in-house handling of personal

information and implemented countermeasures against unauthorized

access from outside, etc. We will strive to improve, not to mention maintain,

such rules and countermeasures continuously for stronger protection,

without being content with the status quo. In principle, we do not disclose

or provide the personal information that we have received to any third

parties. When we receive personal information, we will clarify the purpose

for which it is to be used. In case we intend to use such information for any

other purpose than the one for which it was originally intended, we will

inform our customers of such an intention and seek authorization from our

customers.

3. Disclosure of personal information

If a claim from a customer is received for the disclosure, revision, or

deletion of personal information, the suspension of using personal

information, etc., we will promptly confirm the contents of the claim

and take a due response.

In receiving a claim, we will confirm the identity of a customer, of

which we beg your understanding. Any communication pertaining to

the above-mentioned claim should be submitted to the following

person/position.

4. Contact:

General Affairs Section, General Affairs Department, OHARA INC.

Phone: 042-772-2101 Fax: 042-774-1071

E-mail : [email protected]" [email protected]

Communication with Stakeholders

Communication with Current and Former Employees

Kojukai’s second social gathering

FY20082009201020112012

819910873100

The number of responsesto interviews by fiscal year

*

4. Fairness

5. Continuity

6. Confidentiality

al


Environmental Management Council

President

Environmental Management Promotion Headquarters(Secretariat: Environmental Safety Section)

Management Council

Internal Environmental Auditors

Environmental Management General Manager

200,000

150,000

100,000

50,000

0

(Thousand yen)

2008

127,264

2009

79,874

2010

104,731

（FY）

Others

Environmental improvement cost

Anti-pollution cost

Environmental analysis cost

Premises cleanup cost

Waste disposal cost

2011

116,710

Environmental Protection Cost

2012

113,460

Environ

men

tal Man

agem

ent

Cou

nci

Environmental Pollutant

Reduction Promotion Com

mittee

Energ

y Saving

Prom

otion C

omm

ittee

Waste R

edu

ction an

d R

euse

Prom

otion C

omm

ittee

Dep

artmen

ts

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Taking care of our one precious earth, OHARA takes initiatives to proactively protect the environment in all aspects of its corporate activities.

Environmental Management

Environmental ProtectionEnvironmental Protection

One of the most important matters in environmental management is installing and maintaining anti-pollution facilities. In addition to complying with laws and regulations, we strive to reduce the burden on the environment while curbing costs. To that end, day-to-day management will be important. We will promote environmental management activities, with an eye towards the future, by effectively implementing the environmental management system.

Environmental Protection Cost

System for Promoting Environmental Activities

OHARA offers a “company-wide awareness education” program annually to its fulltime and part-time employees, temporary workers and employees of cooperative companies working in its premises.As part of such program, OHARA provides education regarding progress in environmental programs and chemicals contained in products to deepen the understanding of initiatives relating to the environment.

Offering of Environmental Education

OHARA is promoting a variety of activities with the philosophy and policies for environmental management to be applied to all divisions, aiming at harmony between its corporate activities and the global environment.

Philosophy and Policies for Environmental Management

PhilosophyUnder the internationally accepted philosophy of sustainable development, OHARA

recognizes that achieving compatibility between corporate activities and the

environment is one of the most critical issues in running a business. The entire Company

will continue to refine its environmental management systems so that they comply with

international standards, and operate in the areas of light, electronics, the environment

and energy, effectively harnessing the technologies we have developed for optical glass,

specialty glass, hard disc substrates, and applied products. In this way, we will actively

pursue environmental management and contribute to society.

Policiesa) We will comply with laws and regulations related to the environment of the

countries and local jurisdictions in which we operate, as well as the rules of conduct of industry. At the same time, we will establish independent standards for environmental management and improve the environment.

b) We will reduce waste and encourage reuse, energy conservation and resource conservation.1. We will reduce the volume of glass scrap, plastics, refractory bricks, etc. and reuse

them where possible.2. We will conserve electricity and gas energy and reduce CO2 emissions by

improving the air conditioning and lighting systems, production processes and production facilities of our factories.

3. We will conserve source materials and other natural resources by enhancing the yield ratio in glass manufacturing.

c) We will develop and supply products that benefit the global environment.

d) We w i l l protect the env ironment from contam inat ion and deve lop more

environmentally friendly products, for instance by finding alternatives to hazardous

substances. We will also follow international rules and regulations, as well as

customer requirements that we have accepted, while strengthening systems for

controlling the chemical substances contained in our products.

e) We will set environmental objectives and targets, which are to be revised in

response to changes in the surrounding conditions, while at the same time

continuing to improve environmental management systems.

f ) We will implement and maintain environmental policies by operating

environmental management systems, and will make them known to all workers in

our facilities. Policies are to be made public.

g) We will seek to work in harmony with regional communities, business partners and

related organizations.


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FY2012 environmental targets/details of activities and FY2013 environmental objectives/targets

Environmental Protection

In FY2012, we could not achieve satisfying outcomes due to lower productivity caused by skyrocketing prices of rare earth. In FY2013, although the market environment is worsening due to a recession, we will strive to overcome such difficulty through

Company-wide reform activities and take initiatives towards achieving our targets.


ItemsFY2012 Environmental

TargetsActivity Results

Target Achievements

FY2013 Environmental Objectives and Targets

Reducing and recycling waste

Reduce unit consumption of glass wastes by 1% by

October 2012 (relative to 2011)

Since productivity decreased due to change of lots and

other types of products, and the frequency in the production

of g lass mater ia ls , wh ich i s di f f icu l t , inc reased , unit

consumption increased.

Objective: Reduce unit consumption of glass

wastes by 3% (relative to 2011)

Target: Reduce unit consumption of glass wastes

by 2% (relative to 2011).

We will continue to promote initiatives, such

as effi ciently change the types of products and

improve product yield, etc., in order to prevent

the generation of glass wastes.

With reuse and recycling, we will reduce the

volume of glass wastes.

Energy conservation

Reduce unit consumption of energy by 1% by

October 2012 (relative to FY2011)

We achieved the targeted reduction due in part to eff ects from

energy conservation, etc., with respect to glass melting furnaces.

Objective: Reduce unit consumption of energy by 3%

(relative to 2011)

Target: Reduce unit consumption of energy by 3%

(relative to 2011)

We will promote activities aiming to achieve the

target shown above. Energy-saving equipment will

be systematically introduced.

Harmony with Environment

in Local Communities

Participation in activities for local environmental

conservation

・Participate in the Sagamigawa River Cleaning

Campaign

Have participation of 13% or greater of the entire

personnel (excluding temporary workers)

・Participate in other environmental protection

activities

Sagamigawa River, which originates in Yamanaka Lake and runs

through Sagami Bay, is a place of relief for citizens.

In order to protect this rich nature, cleanup work along the

riverbed is performed twice a year. OHARA’s 108 employees

(13.9%)/year participated in such event. In addition, OHARA took

part in street cleanup campaigns, social contribution programs

hosted by other companies, environmental-related seminars, etc.

・Par t ic ipate in the Sagam igawa R iver

Cleaning Campaign Participation of 13% or

greater of the entire personnel (excluding

temporary workers)

・Participate in other environmental protection

activities (Street cleanup campaign, etc.)

・ Participation in environmental seminars

G re e n i n g Co m p a ny Pre m i s e s ( l a n d s c a p e /

aesthetics)

・ Increase green areas w ith in the Company

premises by 100m2 or greater

・Pick weeds within the Company premises at least

10 days per year

From May to October, we picked weeds within the Company

premises during the lunch hour. We picked weeds for a total of

11 days and 241 employees participated in total.

・Increase green areas within the Company

premises by 10m2 or greater

・Pick weeds within the Company premises at

least 10 days per year

Conduct a “No Car Day” campaign to reduce CO2

emissions by 15t annually

・Conduct activities to enhance awareness of a “No

Car Day” campaign

・Have each department submit a report on one

fi xed day every month

The number of employees commuting by car decreased

compared to FY2011. As there were continuous heat wave and

bad weather in the summer, the target was not achieved even

with a reduction of 13.7t in CO2 for the year.

Conduct a “No Car Day” campaign to reduce

CO2 emissions by 15t annually

Contribution to Improving

the Global Environment

Deve lopment and supply of p roduc ts wh ich

contribute to improving the global environment

・Promotion of commercialization of products that

contribute to improving the environment, energy

conservation and more effi cient use of energy

Continuing development towards commercializationCreate new projects by promoting early

launch of new products.

Enhancing Awareness of


Separate disposal, reduction and recycling of plastic

wastes

・ Carry out campaigns for separate disposal,

reduction and recycling of plastic wastes (including

weighing of plastic wastes) to achieve an eco-

plastic rate of 75% or greater

・ Identify issues and take actions/perform

educational activities

We managed to achieve a reduction in total plastic wastes and

an eco-plastic (materially-recycled and heat-recycled plastics)

rate of 77.0%.

・Carry out campaigns for separate disposal,

reduction and recycling of plastic wastes

(including weighing of plastic wastes) to

achieve an eco-plastic rate of 75% or greater

・ Continue activities to donate PET bottle caps

(for vaccine fundraising) and take initiatives

to engage in activities such as donating

pull tabs of empty cans (for wheelchair

fundraising) etc.

Separate disposal, reduction, and recycling of

paper wastes

・ Carry out campaigns for separate disposal,

reduction and recycling of paper wastes

(including weighing thereof) to achieve a

recycling rate of 95% or greater

・Awareness-raising activities to reduce use of

paper for copying

We promoted the separate disposal, reduction and recycling

of paper wastes as well as recycling of glass material sacks and

achieved a recycling rate of 95%.

Carry out campaigns for separate disposal,

reduction and recycling of paper wastes

(including weighing thereof ) to achieve a

recycling rate of 95% or greater.

Strengthening the system for managing the chemicals

in products

・Off er educational classes at least fi ve times/year

・Promote development of products that cause less

burden on the environment

・Cause newly-developed or improved products to be

free from lead and/or arsenic

・Chemicals contained in purchased raw materials to

have an evaluation of at least 67

・Educational classes on the management of chemicals contained

in products were off ered fi ve times.

・ To promote the development of products that cause less

burden on the environment, information obtained from

customers and other sources was provided to the Company.

・New or improved optical glass products were made 100% lead-

free and 98% arsenic-free.

・113 chemicals contained in purchased raw materials were

evaluated.

・Continue to offer educational classes at least five

times/year

・Promote development of products that contribute

to improving the global environment

・Continue to cause newly-developed and improved

products to be free from lead and/or arsenic

・Continue to evaluate chemicals contained in

purchased raw materials

・Build a management system for non-use of confl ict

minerals

Note: Objectives are based on unit consumption as of FY2015, and targets are based on unit consumption as of FY2013.

Degree of target achievement: = 100% or more = 75 - 99% = 75% or less

Final disposal amount

11t

Recycled amount

287t

* Definition of recycled cullet: Glass waste generated at each process that is reused for melting and other processes.

Concrete landfillSimple landfillLandfill after volume reductionHeat recovery

Recycling after volume reductionRecycled resourcesValuable (useful) materials）

* Volume reduction: Reducing volume of wastes

100

80

60

40

20

02008 2009 2010 2011 2012 （FY）

4.3

1.2

1.3

35.4

21.6

36.2

4.9

1.5

0.3

31.0

22.4

39.9

1.9

0.8

0.2

31.1

22.1

43.9

3.8

1.4

0.2

41.0

11.6

41.9

(%)

Waste Disposal Breakdown

7.0

0.9

0.2

47.7

2.8

41.3

Production volume

Total dissolution

PROCESS

OHARA INC.

Recycled

cullet*

Recyycleddd

culleet*

Water Water usage

・Tap water: 2,451m3

・Groundwater: 2,680m3

Major raw materials

Glass raw materials

Amount of glass purchased

EnergyEnergy 1,351kℓ

(Crude oil equivalent)

Figures relevant to burdens on the environment (monthly average)

INPUT

w mmat

q

Wastes

Waste amount 298t

・Glass wastes

・Refractory wastes

・Plastic wastes

Products Shipping volume

Water PRTR designated substances

in factory effluent 1.3kg

Air and global warming substances

Air (PRTR designated substances) 67.2kg

CO2 emissions 2,145t-CO

2

OUTPUT

R d i

ry eeffl

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Material Balance


Waste disposal costs account for majority of environmental costs. OHARA holds a waste reduction and recycling promotion committee meeting on a regular basis to consider the reduction and recycling of glass wastes. OHARA promotes similar activities in regards to other wastes. Such activities continue to be part of OHARA’s objectives/targets in order to use limited resources effectively without wasting.

OHARA develops environmental protection activities by quantitatively understanding the amount of energy and resources used in OHARA’s business activities (INPUT) and products or substances that burden the environment generated from such activities (OUTPUT).

Reduction and Recycling of Wastes

Recycled glass wastes


Water resource use

Breakdown of energy use (based on price)

Gass 27.6%

Water 2.6%Other 1.8%

80,000

70,000

60,000

50,000

40,000

30,000

20,000

10,000

0

58,805 55,867

38,618

49,494

（m3）

2008 20102009 2011 2012　　

Electricity 68.0%

CO2 emissions

31,460

20,875

31,255 30,639

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

2.50

2.00

1.50

1.00

0.50

0.00

(t-CO2/million yen)

35,000

30,000

25,000

20,000

15,000

0

1.27 1.46

1.42 1.30

（t-CO2）

2008 20102009 2011 2012　　

25,537

1.07

61,573

Electricity and gas use (crude oil equivalent)

　Electricity (crude oil equivalent kℓ)

City gas (crude oil equivalent kℓ)

per unit sales (kℓ/million yen)　

25,000

20,000

15,000

10,000

5,000

0

1.5

1.0

0.5

0.02008 20102009 2011 2012　　（FY）

（FY）（FY）

13,251

9,612

13,206

19,670

13,186

19,55819,322

6,419

3,574

6,352

（kℓ）（kℓ╱million yen）

0.797

0.924 0.888

13,442

5,880

0.82216,309

12,099

4,210

0.680

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Energy Conservation


Glass manufacturing consumes much energy (in the form of electricity and city gas). The amount of energy use has been increasing since 2003 with augmentation of production facilities. In FY2012, usage of city gas largely decreased thanks to the introduction of energy saving type furnaces in 2007. Per unit sales has shown a downward trend year by year. CO

2 emissions also decreased. In recent years, however, as use of

water resource has increased, we have been urged to take fundamental measures for improvement. OHARA takes initiatives by setting challenging targets annually to reduce energy consumption and CO

2 emissions. In addition, each

employee in the back-office divisions is highly conscientious regarding energy conservation, and the entire company takes initiatives in unity. Furthermore, OHARA strongly promotes the three Rs (i.e., Reduce, Reuse, Recycle) through various committees and Company-wide campaigns.

Energy and resource conservation initiatives

OHARA is promoting energy use reduction through energy conservation activities per each Department under its environmental programs and activities of the energy conservation promotion committee. The energy conservation promotion committee promotes activities to eliminate wasteful use of energy and enhance awareness of energy conservation by focusing on conducting an energy conservation patrol once a month.In the summer of FY2012, OHARA initiated Company-wide energy conservation measures, such as restricting the use of air conditioners with thorough management of room temperature, implementing a rotating schedule of work time to reduce power consumption at peak time and implementing a “cool biz” style (where employees can dress more casually to combat the heat).

Energy Conservation Initiatives


OUTPUT

INPUT

Number of participants in Sagami River Clean-up Campaign

25,000

20,000

15,000

10,000

5,000

0 2009 2010 2011 2012 　（FY）

19,854

2008

13,694

22,515

18,341

（t-CO2）

CO2 reduction pertaining to commuting by car

120

100

80

60

40

20

0

（Persons）

2008 20102009 2011 （FY）2012

36

56

74

100

108

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Harmony with Environment in Local Communities


Sagami River running through Sagamihara City where the headquarters of OHARA is located, as well as its vicinity, have a valuable natural environment and serves as oases for the local citizens. In order to conserve the environment, a “Sagami River Clean-up Campaign” is conducted semi-annually, in which the local organizations and individuals in the city come together to clean up the riverbed. OHARA has supported such activity, and its employees and their families participate therein to conserve the environment of Sagamihara, the “city of water”.

Sagami River Clean-up Campaign

OHARA promotes a “No Car Day” campaign, which recommends commuting by public transportation, bicycle or on foot in an effort to reduce CO2 emissions. Through such campaign, OHARA seeks to create “harmony with the environment in local communities”. The number of employees who has changed from commuting by car to commuting on foot or by bicycle increased since OHARA established fixed dates of “No Car Days” and proactively called for such change through e-mails, bulletins, etc.

“No Car Day” Campaign

OHARA has been engaging in cost reduction campaigns based on Toyota’s production method, named “Jiayou-sakusen (Encouragement Campaign)”, since 2004. For the purpose of maintaining and enhancing the morale fostered through this campaign, and focusing on the surrounding regions, OHARA cleans its periphery areas of the Company's premises on Friday mornings every two weeks, together with Yamada Corporation that is situated adjacent to OHARA.

Morning Cleaning

Cleaning up the periphery of the Company's

premises

In recognition of the street clean-up activities around the Company's premises, which OHARA has conducted over the years, OHARA was commended as a great contributor in promoting beautification campaigns by the Sagamihara City Beautification Promotion Association at the “Recycle Fair 2012” held within Sagamihara City on October 21.

Commendation for Beautification Campaign


Recycling rate of plastic and paper wastes

2008 2009 2010 2011 2012（FY）

73.968.1 75.7 78.2

70.1

91.294.7 94.9

77.0

95.0

OHARA’s MSDSInform employees via divisions

General Affairs SectionEnvironmental Safety SectionInformation on Various Laws and RegulationsManagement of Chemicals in Products

Purchasing SectionResources/MaterialsReagents MSDS*

Production Control Section 1Purchased Materials MSDS

Manager in charge of chemicals

MSDS Manager

MSDS DeveloperProduction Control Section 1

Personnel Section

（%）

100

80

60

40

20

0

Recycling rate of plastic Recycling rate of paper

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Education on Environmental Conservation


OHARA makes continuous efforts to obtain the latest information on international environmental laws and regulations that are constantly changing. Stipulating the management of chemicals contained in products under its environmental policies, OHARA takes initiatives to, among others, provide company-wide education, cause products to be free from lead and arsenic at the developmental/designing stages, analyze impure substances in Purchased raw materials for glass and thoroughly prevent contamination by impure substances in each process.OHARA will further enhance the management of chemicals in supply chains in the future.

Importance of Chemicals Management

The weight of plastic wastes brought to the Company's recycling center from each workplace every month are managed by classifying them into recyclable items (eco-plastics) and non-recyclable items (miscellaneous plastics). With an eye to promoting separate disposals at each workplace, a “Dictionary on Separate Disposal” was prepared. Due in part to the effective use of such dictionary, the recycling rate of (materially-recycled and heat-recycled) eco-plastics reached 77.0%. In addition, the Company is taking initiatives continuously to turn PET bottles into valuable materials and donate PET bottle caps.

Separate disposal, reduction and recycling of plastic wastes

OHARA individually taught methods of separating wastes appro-priate to each workplace through having concerned parties patrol the separation of wastes at all workplaces. As a result, OHARA achieved a recycling rate of 95.04%, exceeding the ambitious target value of 95%.

Separate disposal, reduction and recycling of paper wastes

Importance of Chemicals Management

* MSDS: information regarding the properties and handling of chemicals and products containing them


Ethics and Compliance Committee Secretariat

③ Reporting of Reported Contents

When a committee meeting must be convened

Consideration/instructing of contents of corrective measures, etc.

⑨ Notification to the informer

② Reception ① Report ② Reception

Informer

Informer

Contact

CCCCon idididsidera iiitition insttruc iititing offff c tont tents offff corr tectiiiive measures ettcConsideration

Ethics and Compliance Committee

④ Conducting and recording of an investigatio

⑤ Consideration of corrective measures

⑥ Implementation of corrective measures

⑦ Confirmation of results of corrective measures taken ⑧ Reporting to contact

External contact(lawyer)

Internal contact(Personnel/General

Affair Sections)

Outline of Employee Education(1) Advanced Management Training Every year, education and training is held outside the company for

employees who have been newly appointed as general manager or

deputy general manager of a division and those who have been

newly promoted to any other position of the same rank.

(2) Intermediate Management Training Every year, in-house education and training, to which lecturers are

invited, is held for employees who have been newly appointed as

manager or assistant manager (including a manager-equivalent

position) of a section and those who have been newly promoted to

any other position of the same rank.

(3) Introductory Management Training Every year, in-house education and training, to which lecturers are

invited, is held for employees who have been newly appointed as

sub-manager or assistant sub-manager and those who have been

newly promoted to any other position of the same rank.

(4) Young Employees Training In principle, such training is held for employees who joined OHARA as

new graduates and have worked for OHARA for three years thereafter.

At a period when such employees become aware of being an adult

and may become complacent, such training is designed to motivate

such employees and have them acquire basic skills for their job. Such

training is administered in-house by inviting lecturers.

(5) Training to Improve Communication Ability Such training is held in-house, to which lecturers are invited, after the

Young Employees Training but before the Introductory Management

Training. Participants learn how to communicate at a workplace and

how to treat the juniors when advising them.

⑥ Incremental Training based on Age (Career Training)

Regardless of job title, in-house training, to which lecturers are

invited, is offered to employees who reach the age of thirty, forty or

fifty years old. Such training provides participants an occasion to look

back on his/her life and think about what he/she should do in the

future, with an eye to promoting their independence and awareness.

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OHARA respects the human rights and individual personalities of its employees.In addition to cultivating the spirit of the corporate principles, OHARA will build a free and open-minded corporate culture in which safe and comfortable work environment is secured.

Human Rights Initiatives

Employee RespectEmployee Respect

In order for a company to grow and continuously develop, it is necessary to continue to reform business and organizations by forecasting and promptly responding to changes in external environments. Such reform, however, cannot be attained only by changing the business and organizations. In order to achieve such reform, it is important for each employee to become the core of such reform. In addition to providing training on an incremental age basis starting from new employees’ training (young employees training, training for employees reaching the ages of thirty, forty or fifty years old), OHARA has in place an educational system incorporating specialized programs related to each employee (management training), with the goal of fostering independent human resources. In response to the “lack of ability to communicate well” among young people in recent years, “training to improve communication ability” was newly introduced in 2012.

Concept of Human Resource Development

In regards to “respect for human rights and prohibition of discrimination”, OHARA’s Codes of Conduct: Guidelines provide as follows: “No person working for OHARA shall be discriminated on the grounds of race, nationality, sex, age, origin, physical disability or any other reason unrelated to the performance of duties. Slander, libel, harassment, intimidation or any other speech or conduct that disregards human rights or the dignity of an individual shall be strictly prohibited as humiliating another person must be prevented.”

Conception regarding Human Rights

OHARA's Human Resource Development

When a corporate ethics issue arises, the department head will respond to a request for advice (or notification) from a person seeking advice (or informer) and promptly take appropriate action, in principle. To deal with difficult cases due to some reason, OHARA has established an internal reporting system (help line) in which a person seeking advice (or informer) can report directly to the Ethics and Compliance Committee. From November 2012, OHARA added the General Affair Section as a contact for internal reporting and put a female lawyer in charge as an external contact. In such ways, OHARA has been making efforts to create a user-friendly environment.

Internal Reporting


2008 2009 2010 2011

18

16

14

12

0

5

10

15

（Persons）

（FY）（FY）

（Persons）20

2008 2009 2010

25

21

2012

17

2011

28

15

0

5

10

15

20

25

30

35

Number of employees taking childcare leave

Number of employees using the scheme for shorter work hours for childcare

2012

25

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Creating a Comfortable Work Environment

Employee Respect

OHARA started company-wide campaigns for “Zero Overtime” and “100% Leaving Work on Time” from November 2006 as initiatives to create a comfortable work environment. One of the objectives of such campaigns is to “realize a work/life balance”. Work supports our livelihood and gives us joy and something to live for, but, at the same time, house duties, child-rearing, caretaking and socializing with our neighbors are indispensable parts of our lives. The building of "bonds" and "ties" is what doubles our motivation and delight in life. In actuality, however, we often become overburdened with work, and the resulting mental and physical fatigue affects our health. Some of us may be having issues between balancing work and personal life.To prevent our employees from falling into such situations, OHARA has been taking initiatives towards realizing a “fulfilling life” in which there is a work/life balance.

Concept of Work/life Balance

OHARA supports employees who are working while raising their children by improving the schemes for childcare leave and shorter work hours for childcare (until their children enter elementary school). In order to enable as many employees as possible to use the Child-rearing Support System, OHARA has been paying wages for reduced work hours (on an hourly basis) since the scheme for shorter working hours was introduced. Such was a significant decision for OHARA at the time because many companies (89.6%) were not paying wages for reduced hours. In FY2011, Sagamihara City praised OHARA for its efforts to pay wages for reduced hours ahead of other companies and honored OHARA as a “company that supports and promotes a work/life balance”.

Childrearing Support System

The source of competitiveness in the manufacturing industry is productivity, which is driven by the performance of each employee. Therefore, manufacturing and administrative back-office departments of OHARA are respectively taking initiatives towards “manufacturing efficiency” and “work efficiency”, and the entire company is together striving to improve productivity.To grow into a strong company that will not lose out in competition with other companies, it is necessary to pursue as a goal the “creation of greater value added with less human resource input”. Recently, activities for improving work efficiency are being proposed more often in outside seminars and symposiums on work/life balance. Examples of contents presented in such seminars and symposiums are as follows: “the concept of business improvement”; “identifying waste”; and, “time management”. Such contents are the same as the themes that OHARA have been incorporating into its initiatives for achieving “work efficiency”. Making work more efficient has contributed to not only "cost-cutting", but also to “growing a strong company which does not lose out to competitors", "keeping a work/life balance" and other various aspects. Accordingly, OHARA will continue such efforts as one of the important activities for OHARA’s survival in Japan.

Activities for Improving Work Efficiency

OHARA has a scheme for reemploying individuals who have

mandatorily retired. Many of the mandatory retirees are “mentally and

physically healthy” and have high “work performance ability”, even

after leaving the company at age 60. Through such reemployment

scheme, expertise and skills would be passed onto the juniors. Among

37 individuals who mandatorily retired at age 60 in the last five years,

27 individuals (73.0%) requested to be reemployed. Presently, all of

them are actively working at the Company.

Reemployment Scheme

VOICEPresently, I am working in China with my family.Deciding to give birth in China, my wife and I notified the Chinese Embassy in Japan in May 2011 to relocate to China. As we did not have a certificate to prove that my wife has not delivered before in China, we could not easily make a reservation for hospitalization. In China, the condition of delivery is harsh. For example, it is necessary to wait all night to receive a medical examination prior to giving birth. Therefore, I hoped to stay in Beijing to support my wife. After consulting with my boss and the Company, I decided to take advantage of the Childrearing Support System (childcare leave). After my daughter was born, I assisted with childcare by, for example, burping the baby and taking care of her during the night on a rotation basis. Now, my daughter is 17 months old. We have been able to overcome the difficulties of delivery and childcare thanks to the availability of the Childrearing Support System.

Liu Song

Using Child-rearing Support System

〔NHG-OHARA OPTICS

(XIANGYANG) CO., LTD.〕


Emp

loyee R

espect

Occupational Safety and Health Initiatives

Employee RespectEmployee Respect

Since the wear and tear of lavatories on the premises haveincreased, OHARA has been refurbishing and repairing such lavatories as part of improving the work environment. In 2012, lavatories at the plants were refurbished, which made employees who always use them happy.

OHARA will makecontinuous efforts to improve the work environment invarious ways.

Improving Work Environment

Refurbished lavatory

Disaster drill

OHARA holds a company-wide disaster drill every year so that its employees can take prompt action in case of a disaster. Similar to FY2011, OHARA conducted an evacuation drill involving allemployees, early-stage firefighting training by local security fire fighters consisting of OHARA’s employees and first responsetraining by security staff. In addition, OHARA makes efforts to strengthen emergency management by offering to its employeestraining to extinguish fire using water and cardiopulmonaryresuscitation training using AED.

Implementation of disaster drill

Support towards Activities to Maintain Health

OHARA has individual interviews with all employees upondelivering the results of regular medical check-ups. OHARA also provides health guidance, such as regarding diet, exercise, etc., to prevent metabolic syndrome, and listen to employees' problems that cannot be answered by the results of medical check-ups. If necessary, OHARA arranges consultations with an industrial doctor or a mental health specialist for its employees.OHARA also transmits information on health through OPTPIA, thecompany newsletter, to educate employees. In November 2012, OHARA launched a human resource section on the intranet inorder to enable all employees to access information on health. Furthermore, OHARA conducts surveys to check the degree of fatigue suffered by over-worked employees and employees stationed abroad and, if necessary, respond by having such employees consult with a nurse practitioner or an industrial doctor. In FY2012, as an event for health week, a "seminar onbreast cancer prevention" was held to teach how to self-check forlumps using a breast model borrowed from the city health center. Half of all women employees participated in such event. Some of themcommented that it was meaningful to understand thetexture of a lump with one'sown hands.

TOPICSOHARA has 14 employees stationed at the OHARA Group’s companies overseas.In 2012, I had the opportunity to inspect such Group companies and their nearby hospitals, and such employees’ actual living conditions and work environment. As there are many difficulties involved with living and working in foreign countries due to differences in culture, lifestyle, etc., as compared to Japan, I sensed that such employees must have many challenges that cannot be perceived from such inspection. Hoping that, even if only a little, such employees become aware of their health in between their busy work schedules, OHARA has been issuing a "Health Newspaper" for employees stationed abroad every other month. Since the thinking and initiatives regarding health in foreign countries differ from those of Japan, it may be difficult to take care of health overseas. However, OHARA will continue to promote health going forward in order to enable the employees stationed abroad to lead healthy lives and become aware of their own health.

Sakura Yamaguchi〔Personnel Section〕Starting health management of employees stationed abroad


67.1％14.7％

Foreign companies

3.8％

Financialinstitutions

9.8％

Securities companies

0.2％ Treasury stock 4.4％

Group Companies

Operating income35,000

30,000

25,000

20,000

15,000

10,000

5,000

0

△5,0002008 2009 2010 2011 2012 (FY)

19,490,

27,456

30,57428,65928 659

(million yen)

6,372

3,2753 2751,644

△ 605

Transition of earnings

31,661

1,072

OHARA INC.ASHIGARA OPTICAL INC.OHARA PRECISION CORPORATION

OHARA OPTICAL (HONG KONG) LTD. (Hong Kong)

NHG-OHARA OPTICS (XIANGYANG) CO., LTD. (China)

OHARA OPTICAL (ZHONGSHAN) LTD. (China)

OHARA GmbH (Germany)

OHARA Quartz Co., Ltd.

TAIWAN-OHARA OPTICAL CO., LTD. (Taiwan)

TAIWAN OHARA OPTICAL MATERIAL CO., LTD. (Taiwan)

Net income

Earnings per share

2008 2009 2010 2011 2012 2 (FY)

6,000

5,000

4,000

3,000

2,000

1,000

0

△1,000

△2,000

500

400

300

200

100

0

△ 100

△200

(million yen) (yen)

3,915,

1,963

866

△△△△△△△1,848

880 780 780 780.780.780.7222222

35.60

△△△△△△ 9875 975 975 975 975.9

158.195858.58.19991919

Transition of net income

(Note) After retroactive adjustment for stock splits.

475

19.55

30

25

20

15

10

5

02008 2009 2010 2011 2012 (FY)

(Yen)

(Note) After retroactive adjustment for stock splits.

Transition of dividend per share

25

15

20 20 20

OHARA DISK(M)SDN.BHD (Malaysia)ysia)HAO

PTICAL(M)SDN.BHD (Malaysia)OHARA OPTICAL(M)SDN.BHD (Malaysia)

East Office) (USA)OCorporatiatOhara Corporation (East O

Ohara Corporation (West Office) (USA)sCorporation (We

Other Domestic corporations

Individuals, etc.

Co

rpo

rate P

rofile

Corporate Profile


Corporate Profi le (As of October 31, 2012)

Company Name: OHARA INC.

Address: 15-30, Oyama 1-chome, Chuo-ku, Sagamihara-shi, Kanagawa, Japan 252-5286

TEL: (81)42-772-2101 (Reception) FAX: (81)42-774-1071

Established October 1, 1935

Capital: 5,855 million yen

Business contents: Manufacture and sale of glass materials for optical and electronics

applications

Number of Employees:　 443 (2,589 for the entire Group)

Products● Optical Business

　・Optical glass/Eco-Optical Glass

　・Low Tg optical glasses for glass mold lens

● Electronics Business

　　・Glass-ceramics for HDD

　・Ultra low expansion glass-ceramics (CLEARCERAMTM-Z)

　・i-line high homogeneity glass

　・Glass-ceramic substrate for DWDM thin-fi lm fi lter (WMSTM-15)

　・Fiber glasses for light guide

　・Glass disk for Magnetic Head Flying Height Tester

(GD-FHTTM)

　・Glass for Art

　・Lithium-ion conductive glass-ceramics (LI CGCTM):

Development Products

　・Measurement service on glasses/ceramics

　・Synthetic quartz glass

　・Ultra precision surface grinding

Stock Information (As of October 31, 2012)

●Total number of authorized shares: 76,000,000 ● Total number of issued shares: 25,450,000 ● Number of shareholders: 5,308● Major shareholders

　Name　　　　　　　　　　　　Number of shares held Investment ratio (%)

1 Seiko Holdings Corporation 4,702,722 19.33%

2 Canon Inc. 4,694,380 19.30%

3 Kyobashi Kigyo Kabushiki Kaisha 4,688,400 19.27%

4 Sanko Kigyo Kabushiki Kaisha 1,638,300 6.73%

5 Topcon Corporation 673,600 2.77%

6 Japan Trustee Services Bank, Ltd. (trust account) 614,500 2.53%

7 Seiko Instruments Inc. 610,000 2.51%

8 The Master Trust Bank of Japan, Ltd. (trust account) 562,200 2.31%

9 Mizuho Bank, Ltd. 500,000 2.06%

10 The Bank of New York - Jasdectreaty Account 183,200 0.75%

(Note) Treasury stock (1,124,474 shares) is deducted in calculating investment ratio.

Issued in January 2013

www.ohara-inc.co.jp/

CSR Report 2013 - OHARA€¦ · 05 OHARA CSR Report 2013 The Long-term Vision 2020 To realize the Long-term Vision 2020, OHARA has been developing business based on the new medium-term

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