INTEGRATEDREPORT

2023

EXEDY Integrated Report 2023

Index and Logical Structure

On issuance
E XEDY decides to publish an Integrated Report to provide investors and otherstakeholders about the value-creation process, including ﬁnancial and non-ﬁnancial

information in a narrative manner. This report contains a long-term vision EXEDY
has formulated as the aspirational ﬁgure for FY2050, as well as the strategies andinitiatives to realize this vision. Our company strives to create economic and social
value through the realization of this long-term vision. We will continue to disclose

information to our stakeholders in a timely and accurate manner. Finally, we hereby
state that the process used to prepare this report is justiﬁed.

This report uses the following logical structure to explains EXEDY's value creation story.
Index

Page

Editorial Policy■Summary of Our Value Creation Story

Chapter 2: Value Creation Process■Current Value Creation Approach

Hiroshi Toyohara●

In addition to providing ﬁnancial information such as

Scope of Reporting

Target organization: E X E D Y C o r p o r a t i o n a n d t h e E X E D Ybusiness performance, business results, and management

Group (Where "EXEDY Corporation" or "strategies, this Integrated Report also includes non-ﬁnancial(non-consolidated)" is indicated, it refers to

information on ESG (Environmental, Social, and Governance)

Logical Structure

Chapter 1: Message from Top Management 4

Representative Director, Senior Executive Managing Oﬃcer
Executive General Manager of Administrative Headquarters●

CONTENTS8

1. Milestones in Value Creation

10

2. Our Business

12

3. Current Strengths

14

4. Process of Value Creation

22

Chapter 3: Long-term Vision

24

The business environment in which we operate and the value
creation strategies we have formulated based on that environment are presented here in the words of our President.

While we touch on our milestones in value creation and thestrengths we have cultivated, we would also like to introduce how we keep creating value today.

EXEDY Corporation on a non-consolidated

initiatives in support of sustainable growth. For publishingbasis.

this Integrated Report, we referred to "International

Reporting period: Primary reporting period is FY2022 (April

Integrated Reporting Framework" proposed by the2022 - March 2023), partially includes ac-

International Integrated Reporting Council (IIRC) and thetivities after April 2023.

"Guidance for Integrated Corporate Disclosure andCompany-investor Dialogue for Collaborative Value

Target readers: all stakeholders of the EXEDY Group

Creation" issued by the Ministry of Economy, Trade and

1. Recognition of Business Environment

26

2. Corporate Philosophy

28

3. Long-term Vision30

4. Key Performance Indicators (KPI)

32■Business Environment and Long-term Vision
Based on our corporate philosophy, and considering thesigniﬁcant changes in the business environment, we present
our Long-term Vision and key performance indicators (KPIs)
for the ﬁscal year 2050.

Industry (METI). For more detailed information on ourenvironmental reports, etc., please refer to the

Chapter 4: Strategies for Value Creation 34"Sustainability" section on our corporate website.

●

1. Strategies to Strengthen Human Capital
Terms Used in the Integrated Report(names of diﬀerent types of electric vehicles)

Cautionary Note Regarding Future Outlook

The non-historical facts contained in this report are
forward-looking statements based on estimates and plans.
These forward-looking statements

involve risks,36

2. Strategies to Strengthen Intellectual Capital 40
3. Strategies to Strengthen Manufacturing Capital 42

BEV: Battery Electric Vehicle

4. Strategies to Strengthen Social & Relational Capital 44

HEV: Hybrid Electric Vehicle

5. Strategies to Strengthen Natural Capital46

6. Strategies to Strengthen Financial Capital

52

uncertainties, and other factors that may cause actual■Strategies to Strengthen Management Capitalto Achieve the Long-term Vision
EXEDY's six management capitals, which we have accumulated
since our establishment, serve as the foundation for increasing
our corporate value through business activities. We hereby
introduce strategies to strengthen these management capitals
as a path to achieve the above Long-term Vision and KPIs.

results and performance to be diﬀerent from thosedescribed in this report.

●

Chapter 5: Foundation for Value Creation 54

Position of the Integrated Report
Non-Financial Information
EXEDY Homepage
Sustainability

Financial Statements
EXEDY Homepage
Investor Relations

https://www.exedy.com/en/stockholder/

https://www.exedy.com/en/csr/

Integrated Report
Financial Results ⁄Notice for Convocation ofAnnual Shareholders
Meeting, etc.

Corporate Governance /Respect for Human Rights /Our Contributions toSociety, etc.

2

1. Corporate Governance56

2. Directors & Auditors

62

3. Risk Management66

4. Respect for Human Rights

68

5. Health and Safety Activities

70

6. Health Activities

72

7. Sustainable Procurement

74

Chapter 6: Financial and Corporate Information 58
1. Financial and Non-Financial Highlights

60

2. Financial and Non-Financial Summary

62

3. Financial Review

64

4. Environmental Reports

71

5. Company / Stock information

74■Various Systems and Initiatives to Support
Value Creation
We will introduce various systems and initiatives related tocorporate governance, etc., to execute the above strategies andenhance sustainable corporate value.

■Key Financial and Non-ﬁnancial Results
We will present key ﬁnancial and non-ﬁnancial performance
results generated through our value-creating business activities.

3

EXEDY Integrated Report 2023

Chapter 1: Message from Top Management

1.The Environment Surrounding EXEDY

conditions and industrial policies in different
countries and regions. As a company thatmainly handles products for internal combustion
engine vehicles, the flow of the shift to electricvehicles is an important risk, but at the sametime, we recognize it as an opportunity to
expand our business for electric vehicles.

The carbon neutral trend to prevent global
warming remains constant
In FY2023, our revenue has been on a recovery
track with the recovery in order volumes,
particularly in the AT (automatic transmissionrelated business) segment due to the easing ofsemiconductor shortages, promotion of passing
on higher raw material prices to selling prices,and the ongoing depreciation of the yen.
However, the global economic environment
remains in a state of turmoil, with ongoing
tensions between the U.S. and China anddeadlocks in Ukraine and the Middle East, andthe situation leaves no room for optimism. In
the automotive industry, there has been an
accelerating shift to carbon-neutral electricvehicles around the world to prevent global
warming, but demand for BEVs has begun tosoften in Western markets since the second halfof 2023. However, conversely, it is HEVs thatare growing in both markets, and we believethat the shift to electric vehicles, including
HEVs, is unstoppable, although the speed of
the changeover will be different due to energy

The growing demand for companies tostrengthen governance
Meanwhile, in 2023, there were several serious
incidents of fraud in the automotive industry,including certification test fraud and insurance
claim fraud, which became major social
issues. In addition, human rights violations
such as sexual abuse and power harassment
have occurred at prominent companies inother industries, and in some cases, this led
to changes of representatives and company
dissolution. I believe that in each incident, thebackground was a lack of sufficient monitoringand supervision functions by the board of
directors. There is a risk that such incidents
could potentially occur at any company, and we
recognize that as a public company on the TSE
Prime Market, we are required to strengthen
our governance to a higher standard.

4

2.Initiatives in 2023 Related to Our
Long-term Vision Based on Our
External Environment and Corporate
Philosophy

that orders will grow from 413,000 units in
FY2022 to 1,320,000 units in FY2026.
We will continue to contribute to the creationof a decarbonized society through both our
production system and expanding our productlineup.

EXEDY’
s Long-term Vision
In the external environment described above,
we have formulated our Long-term Vision basedon our corporate philosophy of “fulﬁllment
for society,”“fulﬁllment for our customers,”and “fulﬁllment for our EXEDY family.” The
Vision consists of four visions:“Contribute tominimizing environmental impact, including
the creation of a decarbonized society” asfulfillment for society, “Create and deliver
new value to customers”as fulfillment for ourcustomers,“Become an attractive company
where people feel excitement and passion”asfulfillment for our employees, and“Maintaina stable management structure based onstrong governance”as the development of the
management foundation that supports thesevisions.

The Challenge of Creating and Delivering New
Value to Our Customers
As mentioned above, EXEDY views the global
shift from internal combustion engine vehicles
to electric vehicles as an opportunity to launchand expand new businesses. To seize thisopportunity, we need to create new value todeliver to our customers, so we are prioritizingco m m i t t i n g o u r m a n a ge m e n t re s o u rce s ,such as human resources and funds, to thedevelopment of new products. Accordingly, theratio of total R&D expenses for new products is
expected to rise from 29% in FY2019 to 40% in
FY2023, and we aim to raise the ratio to 70%
by FY2030 to further accelerate the creation of
new products.
In addition, at this time, to go back to thebasics and raise the resolution of our own
strengths, we have broken down and organized
the elements of our technology. (See“EXEDY’s
Technology System”on page 18 for details.)
Our technology consists of core technologies
and basic technologies, of which the former
can be broken down into friction, vibration, andfluid technologies, and the latter into materials,
analysis, and reliability evaluation technologies.
By combining these elemental technologies,
we have created and provided value suchas functions for disconnection of rotational
power, suppression of rotation fluctuation,and torque amplification. We aim to create
new value by combining these elemental
breakdowns of technologies and functions, orby combining them with external knowledge
and technologies.
For example, in BEV drive units for two-wheeled
and three-wheeled vehicles, we aim to satisfy
user needs (road handling ability and ride
comfort) and realize compact and lightweight
low-cost products by combining our powertransmission and disconnection functions andtorque amplification functions with motor
technology possessed by a startup. The productis primarily targeted at the increasingly electrified
Indian market, and we plan to utilize technology
from the startup company Starya, in which our
local subsidiary in India invested in June 2023.

Contributing to the Creation of a DecarbonizedSociety With Our Production System and by
Expanding Our Product Lineup
To contribute to the creation of a decarbonizedsociety, we declared in July 2021 that we will
be carbon neutral by FY2050. Since then, we
have been working to reduce GHG emissions
on a Group basis, and as of the end of March
2023, we have achieved a 19.6% reduction
i n CO2 e m i s s i o n s c o m p a re d to F Y2019
by promoting energy-saving activities andintroducing renewable energy.
To further activate our energy-saving activities,
we have added internal carbon pricing to thecriteria for determining capital investment sinceApril 2023. In February 2024, we were also able
to obtain independent third-party assurance
for GHG emissions, which had been an issue,
and we are now advancing development of a
production system to achieve carbon neutrality.
We are also working to expand our lineup of
products for BEVs and HEVs, which contributeto decarbonization, and in June 2023, weestablished a new production line for HEV
damper products at our Headquarters plant
to meet the increasing demand for HEVs inJapan and China. Our HEV damper products
are lighter and have a lower cost due to the
reduced diameter of the frame, and we expect

5

EXEDY Integrated Report 2023

For drone thrust systems (propellers, motors,
and controllers), we are considering startingwith mass production of propellers that cantake advantage of our design and evaluation
technologies related to fluids and the quality
assurance system we have develo p e d inautomotive products, and combining them withthe drone-related technology and knowledgeof Baibars, a Turkish startup in which EXEDY
invested in December 2023.
In wide-range drive systems for BEVs, our torqueamplification function aims to improve drive
performance and vehicle speed when startingin large electric vehicles without changing the
motor size. In this way, new products that cancreate and deliver new value are putting out
buds, and we will work to commercialize themas soon as possible.

Strengthening Governance by Promoting
Diversity in the Board of Directors
With the aim of strengthening governance by
the Board of Directors, EXEDY has set KPIs forthe ratio of independent outside directors andfemale and non-Japanese directors to further
improve the fairness and transparency of theBoard of Directors. In June 2023, we appointed
five independent outside directors (ratio of
41.7%) and two female directors (ratio of
16.7%), thus achieving both targets for FY2030
ahead of schedule. In addition, our outside
directors consist of people with management
experience not only in the automotive parts
manufacturing industry but also in the textile,electronic parts manufacturing, and cosmetics
planning and development industries, as well asa graduate school of business studies professor,
and they have a different sense of speed andknowledge from our in-house directors. At themonthly meetings of the Board of Directors,
we receive opinions that are painfully truein addition to encouragement on the earlycreation of new businesses and other topics,and I myself have experienced the effects of thediversification of the Board of Directors.

Toward an Attractive Company Where People
Feel Excitement and Passion
Aiming to be“an attractive company where
people feel excitement and passion,”EXEDY
has announced policies including humanresource development (creating an environmentthat fosters employee growth) and promotionof diversity and inclusion (expanding systems
that allow diverse employees to work withpeace of mind).
In the former, training for human resources forelectrification, for new business creation, andfor digital transformation (DX) was expanded
in synchronization with EXEDY’s businessstrategy, resulting in an increase in training
hours (people/year) to 31.8 hours in FY2022,
just under six times more than in FY2019. In
addition, to achieve work-life balance, we haveworked to create an environment that makes
it easier for employees to take paid leave bypromoting multi-skill development and setting
paid leave utilization promotion days, resulting
in a total of 1,888 hours worked and a paid
leave utilization rate of 101.2%, thus achieving
our FY2030 targets for both ahead of schedule.
However, the 2023 results for the overall
employee satisfaction rate, which we intended
to improve through the promotion of the abovemeasures, was 46.0%, down three points fromthe previous year. Unfortunately, we recognizethat our progress in becoming“an attractive
company where people feel excitement andpassion” has stalled, and we are currently
analyzing the causes. Based on the results, wewill take measures in FY2024.

3.F uture Initiatives to Realize Management
With an Awareness of the Cost of Capitaland Stock Prices

A s s t a te d i n a p re s s re l e a s e i s s u e d o n
December 27, 2023, EXEDY is committed to
management with an awareness of the costof capital and stock prices. (See“Strategies toStrengthen Financial Capital”on pages 52 to 53
for details.)
Analysis of the Current Situation
EXEDY’s PBR has been below 1 for the lastten years, and even in the most recent period,
when the stock price recovered, it was only
0.57 as of February 22, 2024. In our analysis,
the reasons for the low PBR are low returnon capital and uncertainty about the future of
EXEDY’s business.
Future initiatives
Based on this analysis of the current situation,
we will improve our earning power by
maintaining and improving profitability inexisting businesses, and by preferentiallyusing the funds earned from this process6

for investment in growth, we will promote
the creation and development of new
businesses and increase the return on capital.
Regarding our financial strategy, we will also
consider actively returning cash generated toshareholders, excluding funds for investment
in growth. In addition, we will strive to gain
the understanding of investors and otherstakeholders through proactive IR activities andto dispel the uncertainty surrounding the futureof EXEDY’s business.

new businesses, and we have decided to
add dispatching employees to startups withwhich we collaborate as a human resource
development method. Since joining EXEDY fromanother company, I have been able to growand realize my own dreams by gaining diverse
experiences in different cultures, including
sales subsidiaries in the U.S. and Australia,
the manufacturing subsidiary in the U.S., themanufacturing subsidiary in China, and the
Ueno Division. For human resources who takethe initiative to create their own future without
waiting for the company to give them learning
opportunities, we want them to experiencevarious things by jumping into startups withdifferent cultures and to grow up big andresilient through practical experience.

Maintaining and Improving Profitability in
Existing Businesses
With regard to the torque converter businessin the AT segment, where volume is expected
to decline in the future, we will be holding
discussions with our customers to restructure
production capacity on a global basis. This will
reduce fixed costs and halt the deterioration in
profitability. At the same time, we will promotesales expansion of HEV damper products, forwhich demand is expected to increase.
In the MT business, a high level of production
volume is expected in the Indian passenger car
market, and demand in the repair market isalso expected to remain strong, so EXEDY willcontinue to win orders in these markets.

Proactive IR activities
We are at the stage of finalizing the detailsof the specific measures and targets for the
future initiatives mentioned above, and we will
disclose them as soon as we can. We will also
work to enhance disclosure and strengthen
dialogue with shareholders and investors sothat shareholders and investors can understandour progress going forward. At the same time,
we will strive to strengthen the disseminationof information through integrated reports, theEXEDY website, and so on.
Please look forward to the transformation of
the EXEDY Group in FY2024 and beyond.

Creation and Development of New Businesses
Currently, although the trend of shifting to BEVs
has weakened, EXEDY still sees this trend as
unchanging over the long term, and the Groupwill continue to develop the electrified productsb usine s s a s o ne o f o ur c o r e b usine s s e sgoing forward. Since many companies are
already engaged in this business, for essential
technologies, we will proceed with a view tocollaboration and M&A with companies thatpossess these technologies. At the same time,
we will continue to engage in open innovation
activities, such as making use of our Silicon
Valley office and collaborating with venture
capital, to create an environment where new
business ideas can spring up.

Tetsuya Yoshinaga
President & CEO

Strengthening Human Capital
EXEDY recognizes the need to further
strengthen human capital to promote thecreation and development of new businesses.
The current situation is that we are promoting
the development of human resources throughemployee training and the recruitment of
human resources with knowledge about

7Chapter2

Clutch torsion test

Daikin RM (currently DYNAX) builds a plant in Chitose City

Value Creation Process
Since its establishment in 1950, EXEDY has developed and provided
products that meet the needs of our customers and contribute tosolving social issues. By leveraging the strengths we have developed
over the course of our history and the management capital we have

Ford Q1 certiﬁcation ceremony

Assembly line in about 1973

Aerial photo of the Headquarters plant
during relocation to Neyagawa City

accumulated, we aim to contribute to the realization of a sustainable
society and achieve sustainable growth for the EXEDY Group.

1. Milestones in Value Creation	��������������� 10
2. Our Business........................................... 12

Smart robots at an exhibition

Established EXEDY Siam Sales Thailand

Operations using the IoT

3. Current Strengths................................... 14
4. Value Creation Process.......................... 2289First shipment ceremony for drone propellers

Actual vehicle evaluations ofmotorcycle clutches

Chapter 2: Value Creation Process

EXEDY Integrated Report 2023

1. Milestones in Value Creation

Major awards（2023）
EXEDY DYNAX Shanghai

its establishment in 1950, the EXEDY Group has developed and delivered products to meet various cus-

EXEDY Globalparts

General Motors China Inc
Supplier Quality Excellence Award(10th consecutive year; June 8, 2023)

tomer needs (noise and vibration reduction, fuel efficiency improvement, lightweight/compact design).

TOYOTA MATERIAL HANDLING Inc.
Supplier Performance Excellence Award(June 8, 2023)

By developing and delivering these products, EXEDY Group has refined its strengths (highest quality
manufacturing, technological development capabilities, and customer network) and built a solid posi-

EXEDY Corporation

Nissan Motor Corporation
Best Performance Award(September 22, 2023)

tion worldwide as a manufacturer of clutches and torque converters.

EXEDY Group's Strengths

Revenue in FY2022

EXEDY (Thailand)

Top-quality
manufacturing

Customer
Network

See right forawards received.

See below for
developed products.

Approximately 6,700
customers (covering 200
countries worldwide)Certiﬁcations







1976
1952

Development ofanti-vibration clutch disc toabsorb drivetrain rattle
noise in commercial
vehicles1963

Development of the Kazmatic, atwo-pedal semi-automatic control
device using a manual clutch.

P.T. Mitsubishi Krama Yudha Motors
and Manufacturing
Good Quality Supplier Award(May 25, 2023)

・ISO9001: 1999 ・ISO14001: 2000 ・IATF16949: 2004

Consolidated sales history and main products developed since establishment285.6 billion JPY

EXEDY Manufacturing Indonesia

NissanPowertrain(Thailand)
Regional Supplier Quality Award
Finalist (Component category)(July 13, 2023)

Technological
Development
Capabilities

EXEDY America

General Motors Company
Supplier Quality ExcellenceAward (4th consecutive year,
6th times; June 30, 2023)



1992

Production of
powershift transmissions
for construction machineryand industrial vehicles
begins.

Development of Super
Squashed Torque
Converter





Overseas

1998
Development of clutch discwith wide-angle damper for
excellent noise and vibration
damping performance

1991

1975

Development of ﬂywheel
damper with viscousdamping mechanism for
improved noise andvibration reduction

Production of torqueconverters for automatictransmission vehicles
begins.

In-house development of automatictransmissions for medium-sizedcommercial vehicles

1958

1980

Development ofcoil-spring type clutch
cover Sold as a set with
disc

Development of Silent
Disc for sound andvibration isolation of thedrive system

2005
Development of damper for
hybrid vehicles

Japan

1968

Development of
diaphragm spring
type clutch cover
Established 1950





Relocated our Headquarters
to Neyagawa City 1963

10

2021〜
・Development of Universal e-Drive Unit
・Development of drone motor, propeller, and ESC
・Development of motors for assistive mobility devices
・Development of wide-range drive system for BEVs

2022〜
・Development of drive unit for 2-wheel /・Development of smart robots
Established Daikin Clutch USA, Inc.
(First overseas sales ofﬁce) 1977







Corporate name change (from Daikin Manufacturing) 1995
Established Daikin Clutch Indonesia(First overseas manufacturing base) 1985

11



Chapter 2: Value Creation Process

EXEDY Integrated Report 2023
Next-generation Products and Electric Products

2. Our Business

Taking advantage of the core technologies for friction, vibration, and ﬂuid we have

EXEDY is a comprehensive manufacturer of drivetrain components for automobiles, motorcycles, construction

transportation of people and goods more comfortable, and we are developing new

operations comprising 45 companies in 25 countries around the world. In addition, with our new business,structure and social environment, such as decarbonization and lifestyle changes.

cultivated so far in the development of drivetrain components, we aim to make theproducts to enter new business domains in response to changes in the industrial

machinery, industrial vehicles, agricultural machinery, etc., from development to production, with global
we are focusing on the development of Electric Products and Next-generation Products that are environmentallyfriendly.

Automotive Parts■ Wide Range Drive System for BEV■ Products for Drones

A torque converter specially designed for BEVs is

For the drone market, which is expected to growplaced on the output side of an electric vehicle s
motor, and the system features smooth power

EXEDY manufactures torque converters, for comfortable driving in automatic transmission vehicles, and clutchestransmission without shock from the transmission.

for manual transmission vehicles.

With the torque ampliﬁcation function, we can

Our products are highly regarded by automobile manufacturers around the world and are widely used as genuine

achieve both BEV's hill climbing/starting and higher

products.

to $43 billion worldwide by 2025, this is ahigh-performance made-in-Japan product fordrones that increases drone thrust by combining asmall, lightweight motor and a controller in

addition to a propeller developed by

vehicle speeds.

applying our core technology
of ﬂuid analysis.

Clutch CoverClutch Disc

TorqueConverter■ Drive Unit for 2-wheel / 3-wheel BEVThis three -in - one system combines E XEDY s power

Parts for Motorcycles

transmission technology with a motor and inverter for theBy utilizing the technology cultivated in automotive clutches, we produce clutches for motorcycles inSoutheast Asia and India.

increasingly electriﬁed motorcycle and three-wheeler
market.

The power transmission and shutoﬀ and the torqueampliﬁcation function can reduce motor output to ensureuser needs (road handling■ Universal e-Drive Unit
（ E³-Drive Technology）
This highly versatile elec tric drive unit wasdeveloped by utilizing drive and electriﬁcation

technologies to reduce the burden on workers intransportation work and provide safety
and security.

It can be retroﬁtted for low-speed mobility,

ability and comfort) andsuch as pallet trucks, torealize compact,assist in transporting heavy

light weight, andloads.

low-cost products.
Wet Type Multi-Plate Clutchwith Coil Springs

Wet Type Centrifugal Clutch

We are developing

two types of units:

CVTs and two-speed

Parts for Construction Machinery / Industrial Vehicles / Agricultural MachineryWe strongly support Japanese industry by producing a wide variety of products in small quantities that areequivalent to custom-made items.

units.

■ Smart Robots
Anticipating that robots will penetrate deeper
into our everyday life due to the decreasing

working population and increasing number of
e l d e r l y p e o p l e , w e a re m a k i n g u s e o f

automated transport systems in factories todevelop powerful transport robots as well as
multi - robot s for food and beverage andcommercial facilities.
Power Shift Transmission

12

We will continue to support people s lives inlogistics, commercial facilities, and public institutions.

13

Chapter 2: Value Creation Process

EXEDY Integrated Report 2023

3. Current Strengths（3）Proprietary IoT System: EXPRESS

In the process of value creation, we have built three strengths:“ top-quality manufacturing,”

monitoring functions such as production volume and quality records as well as various check sheets and equipment“techno­logical development capabilities,”and“customer network”. We are currently working

condition monitoring, die history management, and other production-related data are linked and used to improveto create new businesses by applying these strengths.

quality and productivity. In addition, as part of our efforts in recent years to become carbon neutral, it has become

We developed EXPRESS to coincide with the renewal of our core system in 2012. In this system, production

possible for us to check energy and compressed air consumption at each plant in a timely manner.

１）Top-quality Manufacturing
The EXEDY Group is committed to providing the highest quality products that satisfy customers around theworld. To achieve this, while working on zero defect activities, we are accelerating improvement activities andtaking on the challenge of advancing our own production technology capabilities by visualizing the situation at
our plants using our proprietary IoT system (EXPRESS). In addition, we are developing our overseas production
system to achieve the highest quality on a global scale while focusing on training the human resources that will（4）Global Production System

be responsible for this process.

The EXEDY Group has production bases in 11 countries around the world, and we have built a global supply systemwith process settings at all bases at the same level as those in Japan. As a result, we are building our own in-house（1）Company-wide Zero-Defect Activities

BCP system by enabling alternate production and complementarity among our bases (see 21 page for details).

Since automobile accidents directly affect human lives, defective automobile parts are unacceptable. The EXEDYGroup strives to improve development quality through inter-stage transition management at milestones from（5）Training of Factory Technicians and Skilled Professionals

development to mass production, and we are also promoting ASA ZERO activities after mass production, which

The EXEDY Group is focusing on enhancing its skilled worker training system. In 1995, we established a techni­cal

are activities to resolve defective products generated in the process with multiple functions. In addition, withschool (Current name: GETS: Global EXEDY Technical School) to provide training at different levels, from be­ginner to

EXPRESS, we can collect quality records and manufacturing conditions globally, so we use it throughout theadvanced, to put EXEDY’s skills and knowledge to practical use. In addition, we have established a system of technicalGroup to improve quality.

support for highly skilled workers, and highly skilled technicians* provide on-site guidance in four areas (welding,machining, plastic forming, and materials technology). Each plant is also systematically upgrading the technical skills of
its technicians to make them multi-skilled and improve their knowledge of equipment and production methods.

２）Technological Development Capabilities
The EXEDY Group has developed a wide variety of products by refining its core technologies (friction, vibration,
Japan

China

Indonesia

and fluid) and establishing a development system to meet the needs of customers around the world. Also, toincorporate the latest technology, we are conducting research and development in collaboration with academia.

（2）Production Technology Capabilities that Meet Customer Needs
The EXEDY Group not only assembles products, but also conducts in-house production of component parts（1）Core Technologies (friction, vibration, fluid)(casting, forging, pressing, heat treatment, bonding, welding, and various other processes) and friction materials,

The EXEDY Group has applied its friction, vibration, and fluid technologies to develop clutches that absorb noise

which are the core of power transmission shutoff, within the Group. Also, by designing and manufacturing theand vibration and torque converters with high energy transmission efficiency in response to customer needs.

dies, jigs, and equipment to realize these processes ourselves, we can also realize a wide variety of product

These core technologies are supported by basic technologies we have developed through years of accumulated

specifications related to design and functionality. Moreover, we organize the technologies we have cultivatedknow-how (see“EXEDY’s Technology System”on page 18 for details).

over many years as EXEDY technical standards in the fields of design, production technology, and quality control,and utilize them for speedy process design through the latest performance feedback from EXPRESS.

14

15

EXEDY Integrated Report 2023

（2）Basic Technologies (Materials Technology, Analysis Technology,
and Reliability Evaluation Technology)３）Customer Network

The core technologies mentioned above are supported by our basic technologies: materials technology, analysis

The EXEDY Group receives a wide range of OEM orders from automobile, motorcycle, and construction equip­

technology, and reliability evaluation technology.

ment manufacturers in Japan, China, Europe, Asia and the United States.In our aftermarket parts business, weMaterials technology is the technology of correctly understanding and being able to appropriately utilize the properties

have also built a global sales network covering nearly 200 countries worldwide. Through these transactions,of materials.

we are always aware of our customers’needs, and when necessary, we conduct joint development with them,

Analysis technology is the technology for elucidating the mechanisms of fluids, vibrations, structures, and mechanisms.

leading to the creation of new businesses.

For products for drones, which we are currently working on as a new business, we are striving to deepen our analysis
technology related to air fluids with drone propellers and other structures by utilizing the fluid technologies wecultivated through the development of torque converters.）（1）Transactions with Automobile, Motorcycle, and Construction Equipment Manufacturers
in Japan, China, Eu­rope, Asia and the United States (OEM products)
As an independent manufacturer, we are not tied to a specific manufacturer, and we supply clutches, torqueconverters, and other products to automobile, motorcycle, and construction machinery/industrial vehicle/
agricultural machinery manufacturers around the world. We have OEM transactions with almost all automobile
and motorcycle manufacturers in Japan, and have a system in place to meet our customers’requirements. Also,
for non-Japanese companies too, we provide OEM products to major manufacturers in North America, Europe,
China, India, and Southeast Asia (over 50 companies). In particular, for both clutches and torque converters, wehave a top-level market share worldwide.

（2）Global Sales Network (Aftermarket Business)
Since the establishment of Daikin Clutch U.S.A., Inc. in 1977, we have been expanding our aftermarket business.
As of the end of March 2023, we had approximately 6,700 customers, of which the number of customers
involved in the aftermarket business has increased to more than 5,500 companies.

（3）Global Development System
To meet various customer needs in different regions, we have established development sites (7 sites in total)① Expansion of our network of bases

not only in Japan (2 sites) but also in North America (1 site), China (2 sites), and ASEAN countries (2 sites in

We have established 14 sales companies

Thailand), and possess resources that enable development and evaluation on par with those at our headquarters.

in 11 countries around the world to beThis makes it possible for us to provide stable quality and meticulous technical services to customers worldwide

close to our customers and to hear directly(see 21 page for details).

from customers, who vary according to
the country or region. As part of our sales（4）Vertically Integrated Development

promotion activities, we have participated

Our integrated approach of planning, development, prototyping, and mass production enables us toin exhibitions around the world and haveprovide high-quality products in mass production and shorten delivery time. It also allows us to pool

been expanding our aftermarket businessdevelopment ex­pertise within the group, which leads to better solution proposals.

while striving to promote and spread

Automechanika Ho Chi Minh City

SEMA SHOW（Las Vegas U.S.）

Automechanika Dubai

EXEDY Middle East (U.A.E.) 20th
anniversary of establishment
ceremony

the EXEDY brand. In January 2023, we（5）Research and Development of the Latest Technology throughIndustry-academia Collaborationacquired a leading company in the AT(automatic transmission) vehicle repair

To proactively incorporate the latest technology, EXEDY conducts research and development in collaboration with academia,

parts market. With this, we will continue

including Hokkaido University, Kobe University, Hosei University, and Kyushu Institute of Technolo­gy. Similarly, DYNAX is conducting

to expand our supply of products to the

R&D with Hokkaido University, Tohoku University, Niigata University, and other universities.

whole world, including Asia, the Middle East, and Latin America, which are expected to grow in the future. We arealso working to manufacture repair products in local production for local consumption, and in addition to Japan,
we utilize manufacturing companies in seven bases in six countries around the world (see 21 page for details).

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EXEDY Integrated Report 2023

② Effective use of digital tools
The EXEDY Group is continuing to actively take on the challenge of the global trend of digital transformation (DX).

Core Technologies

also contributes to improving customer satisfaction. In addition, we have established an order-receiving system

This technology makes full use of damper design and torsional characteristic design to control vibrations produced by theengine and vibrations and shocks input to related parts.
Dampers absorb and attenuate vibrations and shocks, improving the ride comfort for drivers and passengers and improving
the durability of related parts. Torsional characteristics determine a damper s performance and can control the resonancephenomenon of a vehicle body caused by vibration.

Fluid

important catalogs and to expand our product range. By effectively making use of these tools for marketing, thisThis technology controls frictional energy using pressing load
design, friction characteristic design, and heat capacity
design. By optimally designing the pressing force between
contact surfaces, friction materials, and surface treatment,
friction characteristics such as the coeﬃcient of friction andwear rate are controlled to reduce heat loss and damage
during friction.

Vibrationwith the goals of marketing and improving customer satisfaction. We also utilize information-sharing tools for

Friction

In particular, in our aftermarket business, we are focusing on the Web, cloud management, and app development

By controlling ﬂuid behavior, this technology uses energy
eﬃciently. By optimizing the ﬂow path inside the torqueconverter, the torque produced by the engine smoothly
increases while maximizing the function of the ﬂuid coupling.
Fluids are also used to cool frictional heat and actuate theclutch in the torque converter.

called EXEDY Express Delivery (EED) to provide products to Japanese and overseas markets and have enhanced
our immediate delivery system. The system makes it possible to check various shipping information on a computer
screen on the ordering side.

ＳＮＳ

Basic Technologies

The EXEDY Group’s technology system is as follows, with basic technologies supporting core technologies, andWe make comprehensive use of material mechanics, thermodynamics, ﬂuid dynamics, and mechanical dynamics, which
are important for designing mechanical products, to propose
optimal shapes. This is rooted in our analysis technology thatallows us to faithfully reproduce actual performance. With
this, we can provide our customers with the highest quality
products in the shortest time and at a low cost.

Reliability
Evaluation Technology(Reference) EXEDY’s Technology System

Analysis
Technology

ＥＥＤ

Materials
Technology

Facebook

EXEDY products are composed of various materials. We use
special organic and metal as well as paper materials forfriction materials, and cast iron for parts that receive frictional energy. We also use steel plates and spring materials thathave received special heat treatment. By making full use ofvarious materials, we achieve both durability and light weightwith low inertia.

There are many kinds of vehicles, from motorcycles and lightvehicles to heavy trucks and industrial machinery. It is
important to ensure optimal durability, comfort, and safety inevery vehicle, as well as aﬀordability. EXEDY makes full useof stress, structure, heat, ﬂuid, and various other analysis
technologies as well as actual vehicle and bench evaluations
to provide the highest quality products to vehicle manufacturers worldwide.

the application of both technologies has provided value to our customers. Both of these technologies have beencultivated through the development of various part numbers, and have overwhelming reliability in terms of quality
and cost.
Our Group is working to create new businesses by applying both technologies. For example, improving driving
performance when hill climbing and when starting is an issue for large electric vehicles, so we have begun
developing a wide-range drive system for BEVs (see 13 page) with the aim of improving driving power andincreasing efficiency without increasing motor size by applying torque amplification technology.

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19

Value Proposition■Disconnection of rotational power
We have developed clutches that canproperly transmit engine rotational
power when it is desired and shut it oﬀ
when it is not necessary. By applying
the control technology and materials
technology for friction characteristics
we cultivated through this development process, we provide productsthat can reduce heat loss and damage
during friction while properly transferring frictional energy.

■Suppression of rotation ﬂuctuation
We have developed dampers that
improve occupant comfort and durability of related parts in various vehicles.
By applying the design technology andanalysis technology for dampers andtorsional characteristics we cultivatedthrough this development process, we
provide products that can attenuate
vibration and noise generated during
rotational ﬂuctuation.

■Torque ampliﬁcation
We have developed torque convertersthat contribute to powerful acceleration and improved fuel eﬃciency. By
applying the ﬂuid analysis technology
and ﬂuid behavior control technology
we cultivated through this development process, we provide productsthat can smoothly and eﬃciently amplify torque.**The magnitude of the force acting on an
object when it rotates = Force × DistanceEXEDY Integrated Report 2023

(Reference) Japanese Network(Reference) Overseas Network■●■ ● Production & Sales■ ● Sales■ ● Other■※(squares) indicate headquarters or aﬃliated companies, and(circles) represent sales oﬃces and divisions

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■ ● Production & Sales■●Ueno Division（Iga-shi, Mie）

●Hiroshima Plant（Higashi Hiroshima-shi, Hiroshima）●Tokyo Sales Oﬃce（Musashino-shi, Tokyo）●Shizuoka Sales Oﬃce（Fuji-shi, Shizuoka）●Chubu Sales Oﬃce（Anjo-shi, Aichi）●Kameyama Division（Kameyama-shi, Mie）

●Kanagawa Sales Oﬃce（Atsugi-shi, Kanagawa）●Hamamatsu Sales Oﬃce（Hamamatsu-shi, Shizuoka）●Hiroshima Sales Oﬃce（Aki-gun, Hiroshima）■ Dynax Corporation（Chitose-shi, Hokkaido）● Tomakomai Plant - R&D Center（Tomakomai-shi, Hokkaido）■ EXEDY Casting Co., Ltd.（Fukuchiyama-shi, Kyoto）■ EXEDY Kiko Co., Ltd.（Tenri-shi, Nara）■ EXEDY Precision Co., Ltd.（Mimasaka-shi, Okayama）■ EXEDY Logistics Co., Ltd.（Neyagawa-shi, Osaka）■ EXEDY Trading Co., Ltd.（Neyagawa-shi, Osaka）● Ueno Branch（Iga-shi, Mie）

■ EXEDY Electric Facilities Co., Ltd.（Moriguchi-shi, Osaka）● Hokkaido Branch（Tomakomai-shi, Hokkaido）■ EXEDY Fukushima Co., Ltd.（Kitakata-shi, Fukushima）● Ayagane Plant（Kitakata-shi, Fukushima）■ EXEDY Nara Co., Ltd.（Yamatokoriyama-shi, Nara）● Imago Plant（Yamatokoriyama-shi, Nara）■ ● Other
●

●
● ■

●

■
●

●Kawagoe Plant（Kawagoe-shi, Saitama）■ EXEDY Sun Co., Ltd.（Neyagawa-shi, Osaka）■ Nippon Retarder System Co., Ltd.（Neyagawa-shi, Osaka）■ EXEDY SB Hyogo Co., Ltd.（Tanba-shi, Hyogo）●■ ● Sales■■lines are bases conducting R&D■ EXEDY Corporation（Neyagawa-shi, Osaka）

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■ ■
■

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■

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■

■ EXEDY America Corporation（TN, USA）※(squares) indicate headquarters oraﬃliated companies, and(circles) represent sales oﬃces anddivisions■ Dynax America Corporation（VA, USA）

■ EXEDY Globalparts Corporation（MI USA）

● Silicon Valley Representative Oﬃce（CA, USA）

● Atlanta Sales Representative Oﬃce（GA, USA）

● Myrtle Beach Branch Oﬃce（SC, USA）

■ EXEDY DYNAX MEXICO, S.A. DE C.V.（Aguascalientes, Mexico）■ EXEDY Mexico Aftermarket Sales, S.A. de C.V.（Mexico City）■ EXEDY Latin America S.A.（Panama City）● Ecuador representative oﬃce（Ecuador）■ EXEDY Clutch Europe Ltd.（Cheshire, UK）● Netherlands Oﬃce（Utrecht, Netherlands）● Turkey Oﬃce（İstanbul, Turkey）■ EXEDY DYNAX Europe Ltd.（Tatabanya, Hungary）● DYNAX Stuttgart Oﬃce（Stuttgart, Germany）■ EXEDY AUSTRALIA PTY LTD（Melbourne, Australia）● Sydney Oﬃce（Sydney Oﬃce）● Brisbane Oﬃce（Brisbane, Australia）● Perth Branch Oﬃce（Perth, Australia）● Adelaide Branch Oﬃce（Adelaide, Australia）■ ALLTRANZ Pty Ltd.（NSW, Australia）● Victoria Oﬃce（VIC, Australia）● Queensland Oﬃce（QLD, Australia）■ EXEDY New Zealand Ltd.（Auckland, New Zealand）■ ALLTRANZ Limited（Auckland, New Zealand）● Christchurch Oﬃce（Christchurch, New Zealand）● Christchurch Oﬃce（Christchurch, New Zealand）■ EXEDY CHONGQING CO., LTD.（Chongqing, China）■ EXEDY DYNAX Shanghai Co., Ltd.（Shanghai, China）■ EXEDY Guangzhou Co., Ltd.（Guangzhou, China）■ EXEDY BEIJING Co., Ltd.（Beijing, China）■ Dynax Industry (Shanghai) Co., Ltd.（Shanghai, China）■ EXEDY (Thailand) Co., Ltd.（Chonburi, Thailand）■ EXEDY ENGINEERING ASIA Co., Ltd.（Chonburi, Thailand）■ EXEDY Friction Material Co., Ltd.（Chonburi, Thailand）■ EXEDY POIPET Co., Ltd.（Poipet, Cambodia）■ EXEDY SIAM SALES (THAILAND) CO., LTD.（Bangkok, Thailand）■ EXEDY (MALAYSIA) SDN. BHD.（Negeri Sembilan, Malaysia）■ PT. EXEDY Manufacturing Indonesia（Karawang, Indonesia）■ PT. EXEDY PRIMA INDONESIA（Surabaya, Indonesia）■ EXEDY SINGAPORE PTE. LTD.（Singapore）■ EXEDY India Ltd.（Greater Noida, India）■ EXEDY Vietnam Co., Ltd.（Vinh Phuc, Vietnam）● Philippines Manila Representative Oﬃce（Manila, Philippines）● Aurangabad Plant（Aurangabad, India）■ EXEDY Clutch India Pvt. Ltd.（インド ベンガルール）■ EXEDY MIDDLE EAST FZCO (Dubai, UAE） ● Amman Representative Oﬃce（Amman, Jordan） ● Nairobi Representative Oﬃce（Nairobi, Kenya）■ EXEDY SOUTH AFRICA (PTY) LTD（Johannesburg, South Africa）

20

21

Chapter 2: Value Creation Process

EXEDY Integrated Report 2023

4.Value Creation Process
In consideration of the external environment, the EXEDY Group has established a Long-term Vision and key performance indicators (KPIs) based on its corporate philosophy to promote its business activities.
We will contribute to the realization of a sustainable society and aim for the sustainable growth of the EXEDY group through the efficient application of our six capitals and the utilization of our strengths.

INPUT
¥

BUSINESS ACTIVITIESOUTPUT

Market Share

Financial Capital
Total capital: 239.9 billion JPY

Borrowings

Interest-bearing liabilities:

Corporate Philosophy

33.7 billion JPY

Cash and Cash equivalents :59.5 billion JPY

Creation of Fulﬁllment

Manufacturing Capital
Global Production
SystemManufacturing Facilities
Production
Management System

Production Sites:

Capital expenditures:Japan: 2
Overseas: 5Long-term Vision&
KPI

R&D expenses: 6.6 billion JPY

Human Capital

Education and
Personnel Systems

Manual clutches:

Torque converters

Torque Converters:

Products for construction and industrial
machinery

Number of patent applications

Motorcycle clutches
and other drivetrain
components

Cash generation
Retained earnings forinvestment in growth
Improvement ofﬁnancial position

Equipment
Development

Production

7% share of global market
23% share of global market

Japan: 53
Overseas: 96

Number of Patents
Japan: 335

Cash ﬂow from operating activities
27.2 billion JPY

Dividend / Dividend Payout Ratio
4.2 billion JPY / 92.0%

Employee Awareness Survey
Overall Satisfaction(non-consolidated)

Employees:

Japan 5,295
Overseas 9,786

Procurement(Ratio of overseas employees: 65%)

・Vision (FY2050)

Social Capital・Strategy &Investment
Allocation

Relationship of trust with customers, cooperating companies, and local communities
information dissemination and dialogue with shareholders
and employees

GovernanceCorporate Governance

Natural Capital
Minerals (iron ore, coal,etc.), water, energy

Customer
Network

Manual clutches

Overseas: 464

Social and Environmental Impact

Technical and skilled
personnel, global
human resources

MethodDevelopment

Financial Impact

Manufacturing process
setup and management

EXEDY's Strengths
Technological
Development
Capabilities

Global R&D System
Core Technologies（Friction, Vibration, Fluid）

Product
DesignTopquality
Manufacturing

Sales
and
Aftermarket

11.1 billion JPY

R&D sites:

CustomerFeedback

Customers, Society, Employees

Japan: 7
Overseas: 16Intellectual CapitalIntellectual Property Rights

ResearchandDevelopment

Products & Services

Equity (net assets)
Cash reserves

OUTCOME

Risk Management

Energy consumption volume:1,917,952GJ
Water usage:

2,400,000㎥

Reduction of investment
resources due to
production processreviewDiversiﬁcation ofhuman resources
Compliance withvarious regulations(response to TCFD
recommendations,
initiatives forrespecting humanrights, etc.)

49.0%(+1.6 points compared to the previous year)

Training hours per employee(non-consolidated)

31.8 hours / year(+15.7 hours compared to the previous year)

Ratio of womenin management positions(non-consolidated)

3.6%(-0.1 points compared to the previous year)

Greenhouse Gas Emissions
19.6% Reduction(Compared to FY2019)(Numbers are as of March 31, 2023)

External Environment

Progress indecarbonization

22

Shift toelectric vehicles

Low birthrate andlongevity

Increased severityof natural disasters

Human rights
violations, etc.

23

Presentation of new EXEDY products in Silicon Valley

Chapter3

Fluid analysis of low-noise propellers for drones

Long-term Vision
In 2021, EXEDY formulated a Long-term Vision of what it aims tobecome in the fiscal year 2050.

It is based on our corporate

philosophy, and it takes into account the significant changes in thebusiness environment in which we operate. To contribute to therealization of a sustainable society and to achieve sustainablegrowth for the EXEDY Group, we have also set key performanceindicators and numerical targets.
Operation started at Hokkaido s largest in-house
consumption mega-solar system

1. Recognition of Business Environment..... 26
Solar panels installed on the roof of EXEDY Logistics

2. Corporate Philosophy............................. 28
3. Long-term Vision..................................... 30
4. Key Performance Indicators (KPI)	��� 32

Family Day at EXEDY Manufacturing Indonesia

24

Exhibiting at AUTOMOTIVE ENGINEERINGEXPOSITION 2023 YOKOHAMA

Biomass boiler lighting ceremony

Chapter 3: Long-term Vision

EXEDY Integrated Report 2023

1. Recognition of Business Environment
The world is undergoing rapid changes, including accelerated international cooperation to prevent global warming, the growth of emerging economies, and the reduction of the labor force due to declining birth rate and aging population.
The automotive industry is also undergoing a once-in-a-century transformation, driven by advances in CASE as a result of the evolution of IoT and AI.
At EXEDY, we used the PEST analysis method to forecast the prospects, identify risks and opportunities, and derive our priorities and objectives.

Politics

EconomySociety

Technology

FutureOutlook• Acceleration of international cooperation on
the prevention of global warming.
• Increased government regulation of greenhouse gas emissions.
• Intensification of U.S.-China trade friction.
• Legislation to strengthen efforts to addresshuman rights and environmental issues in the
supply chain.

• Growth of emerging economies, and further global diversification• Changes in car ownership patterns, such as"car sharing”• Expansion of ESG-conscious investments.

• Reduction of labor force due to worldwide declining
birth rate and an aging population• Progress in diversity initiative• The advancement of the replacement of work by AI,
robots, etc., and the transformation of the perspectives on work
• Growing demand for stronger corporate governance• Technological innovation in new technologies (IoT,
AI, etc.) and their implementation in society.
• Acceleration of connected technology.
• Evolution of charging and storage technologies,
including electric vehicles.

Risks• Decrease in sales due to suspension ofinternal combustion engine vehicles.
• Increase in direct costs associated withintroduction of renewable energy.
• Loss of customers and investors due tofailure to address human rights and environmental issues.

• Decline in automobile sales due to shift tosharing economy.
• Divestment due to lack of ESG initiatives.

• Shortage of labor force• Deterioration in turnover due to lack of response
to diversity issues• Deterioration of management due to lack of governance• Decrease in sales due to shift from internal combustion engine vehicles to electric vehicles

Opportunities• Increase in sales due to higher demand for
products for BEVs and HEVs
• Further increase in demand for energy-saving products• Sales increase due to expansion in emerging markets.

• Generation of technological innovation by diversifying human resources.
• Establish a strong management foundation throughenhanced corporate governance

Priority
issues(Materiality)① Prevention of Global Warming② Respect for human rights③ Environmental Compliance④ Sustainable Procurement① Provide new products that transmit power efficiently② Circular economy① Make a company where employees are fulfilled② Diversity and Inclusion③ Governance④ Compliance⑤ Health / Occupational Health and Safety①③

What weaim for ontribute to minimization of theCenvironmental impact, including thecreation of a decarbonized society romote business activities that consider en②③④ P
vironmental issues, human rights, and othersocial issues with cooperating companies① Expand decarbonization-contributing
products and create and deliver newvalue② Contribute to minimizing
environmental impact①• Sales increase from new product development
through technological innovation• Provide new value through technological innovation

Create an environment that encourages employees
to grow and take on new challenges②⑤ Expand systems that allow diverse employees
to work with peace of mind③④ Maintain strong governance and shared values
between management and employees• Create value in the current and new business areas

Our vision, derived from the above recognition of the business environment, is as follows.
<Our vision>"Contribute to minimization of the environmental impact, including the creation of a decarbonized society″ "Promote business activities that consider environmental issues, human rights, and other social issues with cooperatingcompanies″ "Maintain strong governance and shared values between management and employees″ "Create new value in current and new business areas″ "Create an environment that encourages employees to grow and take on
new challenges″ "Expand systems that allow diverse employees to work with peace of mind″ "Expand decarbonization-contributing products″

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27

Chapter 3: Long-term Vision

EXEDY Integrated Report 2022
2023

2. Corporate Philosophy
EXEDY's corporate philosophy system consists of missions, aims, and values. In 2021, in the company's Sustainability Declaration, we declared that we would carry out activities to create a sustainable society and sustainablegrowth of the company (sustainability activities) and made sustainability a management policy. The Long-term Vision is based on the aforementioned recognition of the business environment, corporate philosophy, and man-agement policy, and clearly states what EXEDY aims to become by FY2050. The Seven Values are the concepts (values) that we will emphasize in our business activities in order to put our corporate philosophy into practiceand achieve our Long-term Vision. By achieving our Long-term Vision and adhering to the 7Values, EXEDY will continue to create joy for society, our customers, and ourselves, and contribute to the realization of a sustainable
society.

Corporate Philosophy

MissionCreation of Fulﬁllment
Customers

Society

Employees

Creation of Fulﬁllment
Each employee, with a good conscience and hope for the future, will create fulﬁllment for society.
Through advanced technology and scrupulous attention to detail, we will create fulﬁllment forour customers.
With pride and a desire to grow, we will create fulﬁllment for our EXEDY family.

Policy Statement

EXEDY will continue to grow and evolve as a
global company, contributing to the realization ofa sustainable society. (sustainability)

What weaim forLong-term Vision

Making Sustainability* a management policy*Making society and EXEDY sustainable.

The vision we aim to achieve by FY2050
Contribute to minimizing environmental impact, including the creation of a decarbonized society

Midterm Consolidated Management Plan

(fulﬁllment for society)
Create and deliver new value to customers (fulﬁllment for our customers)
Become an attractive company where people feel excitement and passion (fulﬁllment for our

Seven Values
Values①Safety ﬁrst

②Highest quality④Competitive manufacturing⑤Speed⑦Focus on ESG (Environment, Social, Governance)

Code of Conduct

28

Maintain a stable management structure based on strong governance③Strictly adhere to deadlines⑥Creating a company people want to work for.

Ethics of
Conduct
to befollowed

employees)(CSR Policy, Detailed Conduct Regulations, etc.)

An important foundation for implementing our Corporate Philosophy andrealizing our Policy Statement, Long-term Vision, and Midterm Consolidated
Management Plan.

29

Chapter 3: Long-term Vision

EXEDY Integrated Report 2023

3. Long-term Vision
EXEDY establishes its "Long-term Vision" and "Slogan" after deliberation by the Board of Directors, based on the priorities and goals derived from the recognition of the business environment and the corporate
philosophy of "fulfillment for our society," " fulfillment for our customers," and "fulfillment for the EXEDY employees."

Also, we have set SDG targets that we will contribute through our business activities to realize this Long-term Vision.

SLOGAN

Drive our future. Let’s create fulfillment for all, and our future.
Corporate Philosophy

Drive" means "we are actively involved," and "our" means "all stakeholders including ourselves." It is our wish that "with our will, we can drive our future, including society, our customers, and our
employees."

Creationof
Fulﬁllment

Priority Issues (Materiality)

Prevention of Global Warming
Environmental Compliance
Circular Economy

Creation of
Fulfillment

Creating a Company That Employees Are Happy to Work
Promotion of Diversity and Inclusion
Safety and HealthRespect for Human Rights

Business Environment
Recognition

Priorities&
Goals

Provide New Products That Transmit Power Efficiently
Offer New Value Through Technological Innovation

Long-term Vision (what we aim to achieve by FY2050)
Our Approach and the Way Forward
Contribute to minimization of
the environmental impact,
including the creation of adecarbonized society (fulfillment for society)

Create and deliver new value
to customers(fulfillment for our customers)

Be an attractive company where

Related SDGs

Transform the business portfolio and expand products that contributeto decarbonization
Establish a manufacturing system that is carbon neutral and minimizes
environmental impact
Create new products that efficiently transmit power in addition to
those that make the transportation of people and goods more comfortable
Actively enter new business areas to become a unique company withunrivaled capabilities
Develop an environment that actively encourages challenges andproposals that stimulate growth

people can feel excitement andpassion (fulfillment for our
employees)

Expand systems that allow diverse employees to work with comfort(nationality, gender, age, disability status, family structure, etc.)
Comply with the laws and regulations of each country and region andmaintain high ethical standards

Management
Structure

Compliance
Governance
Sustainable Procurement

Maintain a stable management
structure based on strong
governanceImprove fairness and transparency of the Board of Directors
Strive to share values and aim for a bottom-up business foundation
Work with cooperating companies to promote business activities that addressenvironmental issues, human rights, and other social issues into consideration

To achieve the above Long-term Vision, we are working as follows.
We are taking on the challenge of "contributing to minimizing environmental impact, including creating a decarbonized society," by expanding our product lineup and building a production system.
For "creating and delivering new value," we are focusing our management resources on new product development in both existing and new businesses.
Through "Be an attractive company where people can feel excitement and passion," we are developing an environment in which employees can grow. We are also expanding systems that allow employees to work with comfort.
On "maintaining a stable management structure based on strong governance," we are further improving governance and promoting business activities that take into account environmental issues, etc., in cooperation with cooperating companies.

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31

Chapter 3: Long-term Vision

EXEDY Integrated Report 2023

4. Key Performance Indicators (KPI)
Key performance indicators (KPIs) for the Long-term Vision and targets for FY2030 and FY2050 are set after deliberation by the Executive Committee and the Board of Directors.
In addition, the Sustainability Committee (see 47 page) formulates medium-term targets and action plans and manages progress to achieve the vision and KPIs.
The results for FY2022 are as follows.

Priority issues (Materiality)

Prevention of Global Warming
Environmental Compliance
Circular Economy

KPI

Creating a Company That
Employees Are Happy to Work
Promotion of Diversity andInclusion
Safety and HealthRespect for Human Rights

Subjects

FY2030FY2050

FY2022 Target

FY2022 Actual

FY2023 Target

FY2024 Target

FY2025 Target

Percentage of Sales of Products
Contributing to Decarboniza­t ion(including products for BEVs, HEVs, etc.)

0.2%(FY2019)

29%

83%

0.5%

3.5%

5.1%

5.3%

6.0%

Net GHG(Greenhouse Gas)
Emissions Reduction Rate
<scope> 1 + 2

FY2019

▲46%

▲100%

▲3.0%

▲19.6%▲23.25%▲26.5%▲29.75%

0

0

0

0

0

Consoli­dated

Ratio of R&d Expenses for New
Product Development (*1)
Over Total R&d Expenses

FY201929%(FY2019)0%

Ratio of New product sales（FY2022）

0
70%

90%

36%

35%

53%

57%

61%

30%

94%

-

-

0.02%

0.3%

3.7%

Employee Awareness Survey(Overall Satisfaction)

34.9%(FY2019)

70%

49.4%

49.0%

50.0%

52.0%

54.0%

Human Resource Development(Training Hours/Person/Year)

5.4 hours(FY2020)48 hours

10.8 hours

31.8 hours

20.4 hours

24.3 hours

28.3 hours

4.4%

3.6%

4.2%

4.9%

5.6%

Percentage of Female
Employees in Management
Positions

Nonconsolidated

3.4%(FY2019)

13.9%(Changes
in the percentage
of female
employees)

7.0%

Total Working Hours

2,021 hours(FY2019)

Less than 1,900 hours

Less than
1,988 hours

1,888hours

Less than
1,977 hours

Less than
1,966 hours

Less than
1,955 hours

Paid Leave Utilization Rate
Figure in < > is the Percentage of
Employees Taking Paid Leave

77.7%<20%>(FY2019)

100%<100%>

83.8%
<42%>

101.2%<54.3%>

85.8%
<49%>

87.8%
<56%>

89.9%
<to be decided>

-

0

0

0

0

0

0

-

100%

-

-

100%

100%

100%

-

0

0

0

0

0

0

Number of Major Accidents
Human Rights Training
Attendance Rate

Consoli­dated

Number of Major Law
Violations

Compliance
Governance
Sustainable Procurement

Mid-term target

Base point

Number of Environmental
Incidents

Provide New Products That
Transmit Power Effi­ciently
Offer New Value ThroughTechnological Innova­tion

Long term target

Independent Outside Director
Female and Foreign Directors
Town Hall Meeting Held32

Nonconsolidated

3 <27%>(FY2020)

More than 1/3

More than 1/2

More than 1/3

４<36%>

More than 1/3

More than 1/3

More than 1/3

-

２

3

2

2

2

2

2

52 times in a year
(2 series)

52 times in a year
(2 series)-

52 times in a year
(2 series)

52 times in a year(2 series)

33

Partnership signing ceremony with Starya

Signing ceremony with Baibars

Chapter

4

DYNAX Ice Hockey Team

Head Oﬃce of Astor Co., Ltd., a business partner in motor development
Silicon Valley Oﬃce networking activities

Silicon Valley Oﬃce networking activities

Strategies for Value Creation
The six management capitals that EXEDY has accumulated since
its establishment are the source for achieving a sustainable society
through our business activities and enabling EXEDY to growsustainably. To achieve the Long-term Vision and KPIs described in

In-house practical course on electriﬁcation

Chapter 3, EXEDY is implementing a strengthening strategy for eachmanagement capital.

1. Strategies to Strengthen Human Capital ����������������������������������� 36
2. Strategies to Strengthen Intellectual Capital ��������������������������� 40

EXEDY Olympics (skill improvement activities)
die replacement competition

Employees at TS Manufacturing Headquarters achieved the quality tree targets for the second consecutive year

3. Strategies to Strengthen Manufacturing Capital ��������������������� 42
4. Strategies to Strengthen Social and Relational Capital �������� 44
5. Strategies to Strengthen Natural Capital ���������������������������������� 46
Family workplace visit

6. Strategies to Strengthen Financial Capital �������������������������������� 52

Halloween event at in-house nursery school

34
Employees participating in Raku-Nest training

Table tennis workshop for children by the Women’s Table Tennis TeamChapter 4: Strategies for Value Creation

EXEDY Integrated Report 2023

1. Strategies to Strengthen Human Capital② New Business Creation Training (Basic Courses)

1）Value-creation Approachstarted New Business Creation Training (basic courses) from 2022.

To create new business other than our existing business, we
The training is carried out divided into two parts (Creative Training

With our Long-term Vision of "being an attractive company that inspires excitement andpassion," we aim to be a company that fulfills its employees by creating an environment
where employees can actively take on chal­lenges and make suggestions that promote their
growth and by expanding systems that enable a diverse range of employees to work withpeace of mind.
 Senior Executive Officer Executive General Manager Global Human Resources Development Headquarters

to learn how to come up with ideas and strengthen creativity
and Marketing Training to create and implement effective

strategies) and 101 employees, mainly from the Sales Department,

Development Department, and Production Engineering Department,
attended the training.

From 2023 onward, in addition to these basic courses, we will also New Business Creation Training (held online)

Yoshihiro Yamamuraoffer courses to learn about devising business models and devising plans (applied courses).

2）Targets and Actual③ Digital Transformation Promotion

In each department, to develop human resources who are familiar with digital technologies and data utilization,

Employee Awareness Survey(Overall Satisfaction)
Human resource
development(training hours/person/year)
Percentage of female
managers
Total Working Hours
Paid Leave Utilization Rate

Target (FY2030)

Actual (FY2022)

Compared to theprevious fiscal year

70%

49.0%

＋ 1.6points

48hours

31.8hours＋ 15.7hours

which are central to promoting digital transformation (DX), we first conducted IT literacy training in the firsthalf of FY2023 so they will acquire the ability to appropriately understand and utilize knowledge about IT. At
the same time, on the subjects of creating new businesses and new projects, we also conducted programming
education utilizing external materials for employees who need programming skills.

④ Support for Autonomous Career Development

We provide support for autonomous career development to improve the job satisfaction of each employee. On

7%

3.6%

－ 0.1points

building career awareness, which has emerged as an issue in the Employee Awareness Survey in the past, theLess than1,900hours

1,888hours－ 10hours

recognize that it remains a major issue in the human resources field. We believe that building career awareness100%

101.2%＋ 24.9points

results of the FY2022 survey show signs of gradual improvement, but the absolute value is not high, and weis an important factor that leads to job satisfaction (engagement) for employees, and we will continue to focus
on these activities.

As specific activities, we first prepare individual career plans so that each of our employees can take the initiative3）Policies

and positively envision their careers. These career plans are shared with supervisors at the workplace, and career（1）Human Resource Development (create an environment that fosters employee growth)Approach/Policy

EXEDY is working to refine our core technologies while creating new products, such as electrified products,
and fo­cusing on human resource development to continue to grow as a global company. To provide learning
opportuni­ties for employees, we have set annual training hours per employee as a KPI and formulated a plan tosignificantly increase these hours by FY2030. To develop human resources that will contribute to the sustainablegrowth of our group, we have established training and development programs by job level, taking into accounteach level and its objectives.

interviews are also conducted so they can obtain support for realizing their career plans.

In FY2022, Career Interview Training was held for managers at each department head level to conduct effective
career interviews, and 78 employees participated in the training to work on implementing better careerinterviews.

The Career Interview Training program was expanded in FY2023 to include supervisors at the team leader level.

In addition, during FY2023, we introduced a system that allows employees to take on the challenge of realizing
their career development by themselves, called the Career Challenge System, and established a system tosupport them in realizing their own career development, such as internal recruitment and self-applicationtransfers.

Initiatives① Education on Electrification

To train human resources who can contribute to the development of the electrification-compatible products
we are promoting, since FY2022, we have been inviting specialist
lecturers from outside the company to provide education
on electrification, mainly for employees in the Development
Department and Production Engineering Department.
General Electric System Basic Training I = Foundations of Electricaland Electronic Engineering
General Electric System Basic Training II = Foundations of PowerElectronics
General Electric System Basic Training III = Motor Engineering
The training was created by dividing it into the above three steps.
In FY2022, a total of 311 employees attended lectures, contributing
General Electric System Basic Training
to increased knowledge of electrified products and reskilling.

The Career Interview Training program

36

37

Chapter 4: Strategies for Value Creation

EXEDY Integrated Report 2023

（2）Promotion of Diversity and Inclusion (expand systems that allow diverse employees to workwith peace of mind)
Approach/Policy

EXEDY is a global company with a diverse workforce.To make full use of this diversity and create new value, weare promoting diversity and inclusion, and improving our internal environment. In promoting the empowermentof female employees, we have set a KPI for the proportion of women in management and provide step-by-steptraining courses, etc. according to the career plans of eligible persons to support the realization of this goal. To
achieve work-life balance, we have set KPIs for total working hours and the paid leave utilization rate, and arereviewing the leave system and making it easier for employees to take time off. In addition, we are working to
improve the internal environment so that diverse human resources can maximize their abilities by expanding
work systems such as remote work, flextime work, and limited working hours, as well as initiatives that makeeach employee feel more satisfied in their work.

Initiatives

We have established systems such as remote work, flextime work, and limited working hours so employees canwork in a way that is not restricted by place and time. The use of these systems is shown in the table below.
In FY2021, we established a new career support leave system that allows employees to take up to one year ofleave to ensure diversity in employee work styles, provide opportunities to improve and develop their abilities,
gain new knowledge and experience, and support their careers. In addition, a new career refresh support system
has been established to provide allowances to support autonomous career development at certain milestones.
<Number of users of each system (person)>

System Name

Place

Time

<Three-level training course for female employees>

Training Course
A
B① Work Environment Diversity

Classification

career plan to help them to achieve their career goals.In addition, in order to create a culture free fromunconscious bias, such as the belief that only male employees can achieve management positions, we
provide education on unconscious bias as part of training for new managers and supervisors.
Also, to enable male employees to be actively involved in raising children, from April 2022, we havebeen publicizing individual systems for childcare leave and confirming intentions to take leave, as well
as spreading systems related to childcare throughout the company. As a result, the percentage of male
employees taking childcare leave increased by 32 points, from 1% in FY2019 to 33% in FY2022.

FY2019FY2020

FY2021

FY2022Compared to
FY2019Remote working system

26

212

647

267

1027%

Flexible working system

427

591

663

654

153%

Childcare / limited
working hours system

50

51

77

69

138%

Shortened working
hours for childcare

50

51

54

32

64%

Limited working
hours system(Newly established in
FY2021)23

37

ｰCareer support leavesystem(Newly established in
FY2021)1

4

ｰ② Creating a comfortable work environment

With the aim to“Become an attractive company where people feel excitement and passion,”we set overallsatisfaction (ratio of positive responses) as a KPI. We believe that overall satisfaction will increase throughdiversity-conscious initiatives and efforts to enhance job satisfaction, and we conduct an annual Employee
Awareness Survey to confirm the effectiveness of each initiative and overall satisfaction. The activities to increase
overall satisfaction include company-wide efforts and efforts by headquarters units. From FY2021, labor andmanagement have been working together at MT Manufacturing Headquarters to remedy problems at each
workplace. Issues were prioritized and the process for determining measures was disclosed to employees as
we proceeded. As a result, overall satisfaction improved by 13.7 points. Initiatives like this by each headquarters
are shared among members of the Sustainability Working Group, which includes staff members and executives
from each headquarters, at the Sustainability Meeting held twice a year, and then rolled out horizontally to otherheadquarters.
We are also committed to creating a comfortable work environment where employees naturally express
gratitude, admiration, and respect for each other’s work and actions in words.
We have created educational videos on how to listen to and consult with supervisors and colleagues in their
daily work so they can respect each other’s opinions and actively exchange opinions, which are shared at
department manager meetings and distributed company-wide.

③ Female Employees Empowerment, Men taking childcare leave
In EXEDY, we have set a KPI to increase the proportion of women in management and a target toincrease the proportion of female employees by FY2050. To achieve this goal, we have established athree-level training course for female employees. This course is ailored to each employee's position and

38

C

Aim
On-the-job training for management
appointments
Improve job performance abilities and raiseawareness as management candidates
Boosting motivation

FormatIndividual training(up to 5 years)
Individual training
Group training④ Expansion of Employment of People with Disabilities
EXEDY established EXEDY Sun, a special subsidiary, in March 2011, and employed 28 people withdisabilities (as of March 31, 2022). Employees with intellectual disabilities receive the support they needand perform the tasks that utilize their attributes and skills, such as blade alignment, assembly, and otherprecision work encompassed in torque converters, cleaning product containers, and labeling cosmetic
boxes.
EXEDY Logistics is working to promote the employment of people with disabilities and to develop asystem for accepting them once they are employed, for example, by providing on-site pre-recruitment
training and training for employees to support them.In March 2022, we acquired certification under thesystem for outstanding small and medium-sized employers related to the employment of people withdisabilities (Ministry of Health, Labour and Welfare Monisu Certification System).

Blade assembly work at EXEDY Sun

EXEDY Logistics acquires Monisu Certification⑤ Promotion of reduction of total working hours and increasing paid leave utilization rate
To respect the work-life balance of our employees, we have set KPIs to reduce total working hours
and increase the paid leave usage rate. In addition to promoting multi-skill development in eachdepartment so that multiple employees can take charge of a single operation (process), we have set
aside five paid leave utilization promotion days a year for employees to take paid leave at the sametime throughout the company, and plant operations are suspended at headquarters units and businesssite units according to busy and off-peak periods, as paid leave promotion days making it easier for
employees to take paid leave. In manufacturing departments, labor and management work together tocollaborate on the issue of night shift workers having a particularly hard time taking paid leave, based on
opinions obtained through the Employee Awareness Survey and opinion exchange meetings for younger
employees, and we are taking measures such as labor and management reviewing production plans tomake it easier for employees to obtain paid leave. Since January, we have also established a backup
leave system where employees can take three days off if they have to be absent at short notice one
month or more after taking 100% of their paid leave, thus promoting the systematic use of paid leave. In
FY2022, 196 employees took backup leave.

39

Chapter 4: Strategies for Value Creation

EXEDY Integrated Report 2023

2. Strategies to Strengthen Intellectual Capital③ Strengthening new product development capabilities
Along with the transition to the mass production phase of electric product development, the department was1）Value Creation Approachreorganized into the Mass Production Development Department and Advanced Development Department.

EXEDY's Long-term Vision is to "create and deliver new value" by "creating new value tomake the transportation of people and goods more comfortable" and "Actively enter new
business areas to become a unique company with unrivaled capabilities," we will realize"fulfillment for our customers" and create long-term value for the company. We see theglobal shift to electric vehicles as an opportunity for new business expansion and aim to
shift development resources to new businesses (new products and new business areas)and promote open innovation.
Director, Senior Executive Officer Executive General Manager Development Headquarters
The Mass Production Development Department handles mass production of new products across functions at
the Electric Product Development Center, which brings together people in charge from product design, partsprocurement, production technology, and quality assurance.
In addition, to improve the efficiency of developing electric products, we have established the Element
Technology Department and the System Analysis Technology Department by integrating the element
development and analysis technology functions that had been scattered throughout various departments.

Mitsugu Yamaguchi(2）Open Innovation

2）Target and Actual

Approach/Policy
We aim to create new value by combining EXEDY's accumulated strengths and outside resources from external

Target (FY2030)

Actual (FY2022)

Compared to theprevious fiscal year

70％

35%

+7％

Number of patent applications *2－

Japan 53 (other than internal combustion engines 42) *3
Overseas 96 (other than internal combustion engines 80)－

Number of patents held *2－

Japan 335 (other than internal combustion engines 55) *3
Overseas 464 (other than internal combustion engines 94)－

Total R&D expenditures Ratioof R&D expenses for new
prod­uct development *1

organizations.

Initiatives① We established an open innovation base in Silicon Valley, U.S.A. By having a base in Silicon Valley, where*1: New products, systems, services and creation of new value for current products *2: EXEDY + DYNAX + EXEDY Globalparts *3:
Electrification-related products + HEVs

・EXEDY is increasing the proportion of R&D expenditures related to new products and has applied for patents
mainly for elec
trification-related technologies in FY2022
(the percentage of applications filed excluding internal combustion engines is about 80% each in japan andoverseas.)

technology and startup information from around the world is gathered, we will create new value by promoting
global information gathering and collaboration with startups and research institutions.
② We invested in Starya, a company that plans, develops, and sells BEV motors and controllers for motorcycles
and three-wheelers to build a partnership with them. We will collaborate to accelerate the motorcycle andthree-wheeler EV conversion business in India and ASEAN countries.
③ We will continue to strengthen our partnerships with VCs, as well as cooperation between industry andacademia (Hokkaido University, Kobe University, etc.).

3）Policies（1）Shift to new businesses
Approach/Policy

In anticipation of changes in our business portfolio due to the expanding global BEV and HEV markets, we arestrengthen­ing our new product development structure by reorganizing our R&D resources.

Initiatives① Strengthening long-term strategies and management strategies

To share the progress and issues of new business projects undertaken by each division and to consider the
optimal allocation of resources, we established the New Business Promotion Section under the direct controlof the President. The Executive General Managers of the Development Headquarters, Sales Headquarters,
Production Engineering Headquarters, and Administration Headquarters also serve concurrently as members to
discuss areas for future initiatives.

Information gathering by the Silicon Valley Office

Joining shoulders with venture capital in open innovation activities② Strengthening marketing capabilities

The Business Development Department was established to carry out various marketing activities such as sales
strategies, public relations strategies, business model studies, and research activities. By deploying humanresources with a wide variety of abilities, we are working to create new businesses with a flexible mindset that is
not bound by fixed ideas.

40

41

Chapter 4: Strategies for Value Creation

EXEDY Integrated Report 2023

3. Strategies to Strengthen Manufacturing Capital① Energy-saving activities

1）Value Creation Approachrenewed and relocated to the Kameyama Division (Kameyama City, Mie Prefecture) in July 2023. In this renewal,

The casting process, which had been produced at the Ueno Division (Iga City, Mie Prefecture) since 1975, wasalong with a change to energy-saving equipment, the know-how of skilled technicians was quantified with the

One of EXEDY's strengths is its

latest sensing technology, and the plant has been transformed into a high-efficiency, high-quality plant throughability to provide high-quality

analysis and prediction.

life-carrying automotive andmotorcycle products worldwide.

② Introduction of renewable energy

While leveraging the manufacturing

Each plant is investigating and implementing the most appropriate scheme.

expertise and global production
system developed since our
inception, we are pursuing thehighest quality manufacturing (seepage 14 for details) by promoting
human resource development andproduction system evolution.We
are also working to reduce the

Neyagawa Headquarters and the

Ueno Division and other domestic and overseas group companies have already installed solar panels on the roofsof their plants.
Executive Officer
Executive General Manager
Production Engineering
Headquarters

Toshiyuki
Nakasone

Executive Officer
Executive General Manager
MT Manufacturing
Headquarters

Toshiyuki
TanakaExecutive Officer
Executive General Manager
AT Manufacturing
Headquarters

Yoichi
YoshidaSenior Executive Officer
Executive General Manager
TS Manufacturing
Headquarters

DYNAX has decided and is preparing to introduce renewable energy using a biomass boiler andan off-site PPA model with direct supply from self-owned lines. EXEDY Clutch India and EXEDY Fukushima havealso begun installing renewable energy.

Yoshihiro
Kojimaenvironmental impact of our business activities by improving environmental efficiency and productivity throughthe use of our in-house developed IoT system (EXPRESS).

2）Target and Actual
Target (FY2030)

Actual (FY2022)

Capital Expenditure－11.1 Billion Yen

Greenhouse Gas
Emissions (Comparedto FY2019)-46%-19.6%

3）Policies（1）Developing human resources for manufacturing

EXEDY is committed to enhancing its training system for factory technicians responsible for manufacturing.We
focus on human resource development of technicians who support manufacturing, such as stratified training
programs from basic to advanced levels, multi-skill engineer training based on skill improvement plans for each
workplace, and reskilling to respond to new products.

（2）Initiatives toward carbon-neutral production systems

EXEDY is promoting energy conservation activities at its plants worldwide and considering introducing renew­able
energy sources to achieve carbon neutrality by FY2050.

42

43

Chapter 4: Strategies for Value Creation

EXEDY Integrated Report 2023

4. Strategies to Strengthen Social and Relational Capital
1）Value Creation Approach
EXEDY's business activities consist of relationships with various stakeholders. We aim to further enhance ourcorporate value by building good relationships with our stakeholders and incorporating their opinions and de­mands into our business activities.

Stakeholders

Approach

Customers

Based on our customer base, we will identify customer needs and create new
businesses. We will also leverage our worldwide sales network (approximately
6,700 companies) to expand busi­ness opportunities by providing products thatmeet end-user needs at the fastest possible speed.

Shareholders /Investors

We aim to foster mutual understanding and create value through thedissemination of information and promotion of dialogue with shareholders andinvestors.

Employees

We will promote communication with our employees to share our values andreflect their opinions in our corporate activities.

Partner Companies

By promoting dialogue with cooperating companies, we will work together topro­mote sustainability activities and resolve social issues.

Partner Companies

Through collaboration with local communities, we strive to achieve "diversity,""community building," and "nurturing the next generation," aiming for sustainablegrowth for both society and our company.

2）Initiatives and Achievements（1）Disclosure and promotion of dialogue with shareholders and investors

In the area of disclosure, in addition to the financial statements, we newly started disclosing financial reporting
documents on our website and disclosed information in compliance with the recommendations of the Task
Force on Climate-related Financial Information (TCFD), which is in line with the Corporate Governance Code. We
have been striving to enhance the disclosure of both financial and non-financial information. As a result, we are
selected as an FTSE Blossom Japan and FTSE Blossom Japan Sector Relative Index stock. In addition, we held
50 discussions with shareholders and analysts through one-on-one meetings and conference calls related to thefinancial state­ments.

（2）Hold town hall meetings and management council meetings with employees

There were a total of 104 town hall meetings held by the President and Senior Executive Managing Director intwo series for all employees (approx. 2,600). Management and employees engaged in dialogue to share values,（4）Collaboration with local communities

In terms of achieving diversity, EXEDY Ueno Division (Iga City, Mie Prefecture), which employs many foreign
workers, participated in a study of measures for transnational exchanges as a member of the Iga City Multicultural
Coexistence Promotion Committee, and the Iga City Multicultural Promotion Plan (2023–2026) was formulated
in February 2023. In line with this, we aim to make Iga City a place where all people can feel comfortable living,by establishing an equal relationship with Japanese residents, participating in town planning together, andpreventing foreign residents from suffering social disadvantages.
In addition, the athletes of the EXEDY Women’s Table Tennis Team (Japan Company Team League) and Iga FC
Kunoichi Mie (Nadeshiko League), to which our employees belong, conduct community contribution activities
through sports, such as holding table tennis and soccer classes for children.
Other activities of the Women’s Table Tennis Team / EXEDY Corporation (exedy.com)
Hometown activities / Iga FC Kunoichi Mie website
DYNAX supports the promotion of women’s activities in the community by accepting children of non-employees
at its on-site childcare facilities.
We are actively working to employ people with disabilities in the local community. In 2020, EXEDY Trading wasrecognized by the Osaka Employment Development Association as an excellent workplace hiring people withdisabilities. In March 2022, EXEDY Logistics acquired certification under the system for outstanding small andmedium-sized employers related to the employment of people with disabilities (Ministry of Health, Labour andWelfare Monisu Certification System).
With regard to community development, we have offered our land adjacent to our headquarters as EXEDY
Disaster Prevention Park free of charge to Osaka Prefecture and Neyagawa City.
EXEDY donated 6.5 million yen to support victims of the earthquakes in Turkey and Syria that occurred in
February 2022. EXEDY Clutch Europe and EXEDY Middle East, which are operating in the region, are also
providing support in the form of donations and relief supplies. In response to the major earthquake that hit West
Java, Indonesia, in November 2022, EXEDY Manufacturing Indonesia held an in-house fundraising campaign anddistributed relief supplies to the victims.
At EXEDY and our affiliated companies in Japan and overseas, we are continuously working to improve thelocal environment and continue CSR activities such as community beautification and cleanup, protection of thenatural environment, support for local activities and educational institutions, and donations and contributions. In
recognition of these community contribution activities, EXEDY Thailand was awarded the CSR-DIW Award by theThai Ministry of Industry in August 2022 (DIW: Department of Industrial Works).
In the area of next-generation development, EXEDY supports student automobile races and provides internshipopportunities. Workplace experience for neighborhood junior high school students, which had been suspended
due to the COVID-19 pandemic, resumed in August 2023. EXEDY Thailand and EXEDY Friction Materials (Thailand)also visit elementary schools and children’s centers to support a safe and secure environment for children to
receive a good education by improving the educational environment, providing scholarships, donating teachingmaterials and equipment, and providing education with games and quizzes.
Please refer to the link below for more details on collaboration with local communities.
社会貢献活動｜株式会社エクセディ (exedy.com)

such as Long-term Vision and information about new product development. In addition, four management council
meetings were held between management and employee representatives to discuss various issues in corporate
management.

（3）Holding procurement policy briefings for cooperating companies

Every year, we hold procurement policy briefings for our cooperating companies, and ask them to comply with
our CSR guidelines for cooperating companies and to address social and environmental issues that go backthrough the supply chain. This year, in addition to the above, we invited outside lecturers to hold online climatechange workshops for partner companies, and together we were able to deepen our understanding of public
trends in climate change issues and how to calculate Scope 1 and 2 (our company’s Scope 3).
Please refer to the link to the right for more details on collaboration with cooperating companies.


Supply Chain / EXEDY Corporation (exedy.com)

44

Table tennis class for elementary school students
by the Women’s Table Tennis TeamCSR activities at elementary schools(Thailand)

45

Donation to earthquake-hit areas(Indonesia)

Chapter 4: Strategies for Value Creation

EXEDY Integrated Report 2023

5. Strategies to Strengthen Natural Capital（3）Contribution to Natural Environment Protection and Biodiversity Conservation

To protect the natural environment and biodiversity of each country and region, the EXEDY Group actively
engages in community-based biodiversity conservation and nature conservation activities at each base.

1）Value Creation Approach
Through our business activities, we utilize mineral resources, industrial water, energy resources, and otherresources as raw materials for our products, so we strive to efficiently use natural capital and reduce ourenvironmental impact. In particular, because energy resources are used in the manufacturing process and in
the use of final products, which has an impact on climate change, we are committed to maintaining the global
environment and creating economic value under our Long-term Vision of“contributing to creating a decarbonizedsociety.”2）Target and Actual
Greenhouse Gas Emissions(Compared to FY2019)

Target (FY2030)

Actual (FY2022)▲ 46％▲ 19.6%3）Initiatives（1）Initiatives Regarding Environmental Issues

At EXEDY, each group company operates an environmental management system such as ISO 14001 and promotes
daily environmental conservation activities based on group policies and Midterm Consolidated Management
Plan. In consideration of laws, regulations, and stakeholder requirements, each division addresses environmental
issues specific to its region and business category, such as pollution prevention, legal compliance, coexistencewith local communities, and reduction of environmental impact. We regularly hold issue-specific and regionspecific environmental meetings to obtain synergistic effects for the entire EXEDY group through environmental
conservation activities that utilize the characteristics and strengths of each subsidiary. We are taking initiatives
to strengthen our environmental management system on a global basis by formulating and implementing
group policies and environmental goals, sharing responsibilities and best practices among our subsidiaries, andmonitoring their progress. For details on our environmental policy, management system, and initiatives, pleaserefer to the following.
Environment / EXEDY Corporation (exedy.com)
Environmental Management / EXEDY Corporation (exedy.com)
Efforts to Reduce Environmental Impact / EXEDY Corporation (exedy.com)
In addition, we recognize the reduction of greenhouse gas emissions as one of the most important environmen­tal

issues. So we have established long-term targets at the Board of Directors meeting and medium-term targets at
the Sustainability Meeting chaired by the President & CEO to manage progress.

（2）Examples of Renewable Energy for Reducing Greenhouse Gas Emissions
Power generation by solar panels

EXEDY Group companies have installed solar panels on the roofs of each factory and building to generate ourown electricity. In FY2022, the EXEDY Group as a whole generated 6,773,411 kWh of electricity, and the inhouse consumption rate was 0.39%. We are also promoting the purchase of electricity derived from renewableenergy sources at each of our bases. The results for FY2022 are as follows.

CompanyCountry

Purchased (thousand kWh)

EXEDY Clutch India

India

12,960EXEDY Friction Material

Thailand

4,500

EXEDY Fukushima

Japan

649

46

Cooperation and booth exhibit at the Yodogawa Marugoto
Taikenkai (beautification of the Yodogawa River landscape)

EXEDY Thailand (EXT) tree-planting activity（4）Information Disclosure Under the Recommendations of the Task Force on Climate-related
Financial Disclosures (TCFD)

The EXEDY Group aims to achieve carbon neutrality (substantially zero greenhouse gas emissions) by 2050 in
response to the international challenge of preventing global warming. We are working on the introduction anddevelopment of next-generation electrified products and future products. In addition, we have expressed our
support for the Climate-related Financial Disclosure Task Force (TCFD), the TCFD Consortium, and the Japan
Climate Initiative (JCI), and are working to strengthen the resilience of our strategies (ability to adapt and survive)by analyzing the impact of climate change on our business and the resulting risks and opportunities based on
P36 ガバナンス
multiple scenarios and reflecting them in our management strategies and financial plans.

① Governance

The EXEDY Group recognizes climate change as an importantenvironmental issue, and after deliberation by the Management
Committee and the Board of Directors, has chosen to contributeto the creation of a decarbonized society as one of its Long-term
Visions, and has established climate-related KPIs (key performanceindicators). In addition, to achieve the vision and KPIs, we haveestablished a Sustainability Committee as a meeting body that
formulates sustainability action plans and manages progress. This
meeting is chaired by the President & CEO, and attended by all
executive officers (including those stationed overseas) and the fulltime corporate auditors, and is held twice a year. The committee
deliberates and decides on medium- to long-term goals and thenecessary responses based on laws and regulations and the needsof interested parties, and discusses matters that are deemed tohave a significant impact on the business at the meeting of theManagement Committee and the Board of Directors. In addition,
we have formed the Sustainability Working Group as a working
force to promote sustainability activities. The group is chaired bya director and senior managing executive officer, and its members
are elected from each headquarters, promoting activities acrossthe company.

47

Governance
Structure

Promotion
SystemBoard of Directors
Executive Meeting
Reports andRecommendations

Sustainability Meeting（Chairman: President &CEO)

Planning and progress
management ofsustainability activities
Monitoring
andGuidance

Divisions and Aﬃliates

Sustainability
Working Group（Chairman: Representative
Director and Senior
Managing ExecutiveOﬃcer）

Promotion ofsustainability activities
・Secretariat(Administration
Headquarters)
・Members are
selected from eachheadquarters.

Chapter 4: Strategies for Value Creation

EXEDY Integrated Report 2023

② Strategy
A.Scenario Assumption

Main risks

To understand the potential financial impact of climate change on EXEDY Group's operations and to identify
climate-related risks and opportunities, we referred to external scenarios such as the International Energy
Agency's (IEA) World Energy Outlook and the 2 °Investing Initiative as benchmarks. We also reviewed thescenario analysis for the automotive industry, assumed an overall scenario based on the company's perceptionof its long-term business environment, and identified climate-related risks and opportunities by analyzing thedifferences between the scenario and our long-term strategy. The scenario definition was based on the analysisof all projects on a global basis and classified into two categories: 4 °C scenario (case of little progress inaddressing global warming) and below 2°C scenario (case of accelerated global warming), for the two axes oftransition risk and physical risk.
Transition risk

Parameter
Carbon price

Changes in theenergy mix

Current

Carbon price <de－veloped countries>（US$/t-CO2）
Electricity rate
216
（US$/MWh）
CO2
conversion inFY2019 : 0.46
dex
（t-CO2/MWh）
Iron price（US$/t）

Raw material price

Gasoline diesel
vehicle sales
Changes in customvolume
er behavior
EV penetration
rate

4°C
scenario*3

Below 2°C
scenario*4

Provenance－

FY2030: 100
FY2040: 140
FY2050: 160

IEA "WEO 2021" *5(SDS/Sustainable Development Scenario)

FY2050: 184

FY2050: 242

IEA "WEO 2018"

FY2030: 0.31

FY2030: 0.16

IEA "WEO 2020"
2DII The Transition
Risk-o-MeterReferenceScenarios forFinancial
Analysis *6
2DII The TransitionRisk-o-MeterReferenceScenarios forFinancial
Analysis350

FY2050: 382

FY2050: 506

Current status（=100%）

100% in 2050
LCT *190% reduction in
2050
ACT *2

0.3%

FY2030 5%

FY2030 39%

Global Calculator

Current

4°C
scenario*3

Below 2°C
scenario*4

Provenanceabout 19

FY2030 :about30
FY2050 :about60

Physical risk

Parameter
Average Temperature Rise

Intensification of
extreme weather

Air conditioning
cost(US$/person/year)

FY2030 : about30
IEA“The Future of Cooling”
FY2050 : about35

Flood frequency FY2018:(100%)

FY2040 : 400%

Occurrence of
typhoons andcyclones

Decrease in frequency, potential
increase in intensity

26 cases/
year in 2016

FY2040 : 200%

MLIT“Recommendations for
Flood Protection Planning in
the Context of Climate
Change”2019
Japan Meteorological
Agency / Environment
Agency*1：Limited Climate Transition, *2：Ambitious Climate Transition, *3: Case where global warming countermeasures do notmake much progress*4: Case where global warming countermeasures are accelerated (1.5°C scenario in some cases), *5：International Energy
Agency "World Energy Outlook"*6：2°Investing Initiative（2DII）

B.Identifying climate-related risks and opportunities
After analyzing the differences between the above scenarios and our understanding of the business environment,
which is the premise for the EXEDY Group's long-term strategy, we have identified the key items that we believe
will have a huge potential financial impact on our business, as follows.

48

Key Items

Potential Financial Impact
Increase in direct costs due to introduction of renewable energy
・Greenhouse gas emission reduction target (FY2030)
Tighter Government-46% compared to FY2019. Measures: energy conserRegulations onvation activities (annual reduction of 1%) and introGreenhouse Gas
duction of renewable energy
Emissions・If energy conservation activities are carried out asplanned, the estimated cost of renewable energy in
FY2030 is 590 million JPY/year./ <FY2021: ¥2.93/
kWh>Decrease in sales due to suspension of sales of internal combustion engine vehicles and accelerated transition to electric vehicles
Tighter regulations on
・In the 2DII scenario, sales of internal combustion enexisting products andgine vehicles will decrease by 90%. <FY2050>
market changes
・Of the EXEDY Group's sales, 89% is for internal combustion engines, and the impact on sales in FY2050
will be approximately -180 billion JPY.
Decrease in sales due to factory shutdowns and supply chain disruptions
・According to the MLIT's " Recommendations for Flood
Increased severity andProtection Planning in the Context of Climate Change
frequency", the frequency of flooding is expected to doubleof extreme weather(2°C) to quadruple (4°C) by FY2040.
events such as cyclones
・If operations are suspended (for 5 days) in Japan andand floods
Asia (81% of total manufacturing), where flooding ismost likely to occur, the impact on sales will be -4.6
billion JPY.

Time axis Impact

Countermeasures

Mediumterm
High・Introduction of internal carbon pricing to stimulate the introduction of energy-saving equipment.
・Gathering and researching information on
renewable energy options in Japan andoverseas to minimize the cost of introducing
renewable energy.

Long-term
High・Collection of information on regulations andcustomer trends related to internal combustion engine vehicles in Japan and overseas
・Development of new products for electricvehicles with features that improve efficiency during rotational energy transfer (EXEDY's
strength)

Mediumterm
High・Implementation of risk assessment using
hazard maps
・Implementation of measures in line with risk
assessment~ Completion of relocation of plants with thegreatest risk in FY2020~ Installation of temporary flood barriers, etc.
・Formulation of business continuity plan that
includes cooperating companies

Regarding the transition risk, we evaluated that the potential financial impact on the EXEDY Group's businessis high due to stricter government regulations on greenhouse gas emissions, stricter regulations on existingproducts, and market changes. Regarding physical risks, we evaluated the above impact of increasing severity
and frequency of extreme weather events to be high.
Main opportunities
Key Items

Potential Financial Impact

Time axis impact

More efficient production and logistics
process utilization

Lower energy costs through more efficient production
・One of the measures of the Long-term Vision/reduction of greenhouse gas emissions (-46% in FY2030
compared to FY2019) is -1% annually in energy-saving activities (-11% in FY2030). This action is expected to reduce costs by approximately 600 million JPY.

Mediumterm
High

Increase in sales due to higher demand for productsfor HEVs (Japan and China)
・While regulations on internal combustion engine vehicles are becoming stricter in Europe and the UnitedStates, HEVs (hybrid vehicles) are exempt from reguDevelopment and sales
lations in Japan and China.
expansion of low
・Global HEV sales in FY2032 will be six times higher
emission products
than in FY 2019 (35 million units). The impact onsales in FY2030 is expected to be 37 billion JPY due
to the development of technologies such as HEV
damper and direct drive iSG for HEVs, contributing todecarbonization.
Increased sales due to increased demand for drive
unit products centered on motors for BEVs
・The global BEV (electric vehicle) sales share in
FY2032 is expected to be 42% (2% in FY 2019), andDevelopment of new
the global sales volume to be 43 million units. We
products through R&D
assume that the development of BEV wide-range
and technologicaldrive systems and other technologies will have aninnovation
impact of 5 billion JPY on sales in FY2030.
・The market for drive unit products centered on motors for new fields such as drones is also expected to
grow in the future.

Countermeasure・Continuation of energy-saving activities
・Promotion of production technology development that contributes to further production efficiency
・Examination of optimal production systemwith consideration of sales forecasts for existing flagship products

Mediumterm
High・Set the“sales ratio of products that contribute to decarbonization”as a KPI. Set a target of 15% by FY2030 and 51% by FY2050,
and focus on creating and expanding salesof products for HEVs and BEVs
・Also set the“Ratio of R&D expenses for new
product development”as a KPI. Set a targetof raising this ratio to 70% in FY2030 and
90% in FY2050 and strengthen the development structure.

Mediumterm
High・In addition to the above, we concluded acapital and business alliance with Aster, acompany with strengths in high-output,
compact motors. (EXEDY/drive technology
× Aster/motor technology)
・Accelerate technology development of thefollowing motor-centric drive unit products
~BEV wide-range drive systems, motorcycle
electric units, drone propulsion systems,
Universal e-Drive Units

As for opportunities, we believe that the utilization of more efficient production and logistics processes, thedevelopment and sales expansion of low-emission products, and the development of new products through R&D
and technological innovation have a high potential financial impact on the EXEDY Group's business.

49

Chapter 4: Strategies for Value Creation

C.Impact on management strategy

In order to strengthen the resilience to the impact of the carbon-neutral movement on the EXEDY Group's
product development and production system, which we have recognized by identifying the risks andopportunities mentioned above, we are implementing the following two points.
The first is the formulation of a Long-term Vision that incorporates climate change countermeasures and the

EXEDY Integrated Report 2023

④ Metrics and Targets
The EXEDY Group is working to achieve carbon neutrality by 2050, and has set the following targets for FY2030
and FY2050 based on the "NET GHG (greenhouse gas) emission reduction rate" as a climate-related KPI, and isconfirming progress at the Sustainability Conference.

announcement of a sustainability declaration. In our Long-term Vision, we aim to contribute to the creation of adecarbonized society through both product expansion and production systems. In addition, in the sustainability
declaration, we have announced that we will achieve carbon neutrality by 2050.

Metrics

Secondly, we are strengthening our product development structure through open innovation and organizational
restructuring. As for open innovation, we concluded a capital and business alliance with Aster, a company withTargets

strengths in high-output, compact motors. As part of our organizational restructuring, we have integrated theDevelopment Headquarters and the Motorcycle Clutch Headquarters, and newly established the Development
Planning Department, Smart Technology Department, and other departments. In addition, electric productrepresentatives from the Development, Purchasing, Production Engineering, Quality Assurance, and Manufacturing

Actual(FY2022)

NET GHG Emissions Reduction Rate
Scope 1 (direct emissions) + 2 (indirect emissions: electricity, etc.)
FY2030 -46% <compared to FY2019>
FY2050 -100% <same as above>
Reduction rate -19.6% <Compared to FY2019>
Emissions (1000t-CO2)
Scope 1: 33.5, Scope 2: 170.2, Scope 3: 1,491.8

Headquarters have been assembled to prepare for the mass production of electric products across theentire company. By strengthening these product development systems, we will accelerate the technologicaldevelopment of motor-centered drive unit products, including BEV wide-range drive systems and motorcycle
electric units, utilizing EXEDY's drive technology and Aster's motor technology.

As described above, the EXEDY Group recognizes climate change as an important environmental issue and has
positioned the Board of Directors and the Sustainability Committee as governance and the Sustainability Working
Group as the business promotion organization to establish KPIs and promote sustainability activities. Also, we
have analyzed the circumstances surrounding our company based on multiple scenarios to identify significant

D.Impact on financial planning

There are also two main impacts on financial planning.
The first is an increase in the R&D expense ratio for new product development. As mentioned earlier, against
the backdrop of carbon neutrality, it is necessary to expand the number of new products that contribute todecarbonization and strengthen the development system for new products. Accordingly, in our financial plan, weplan to increase the ratio of new product development expenses to R&D expenses from 29% in 2019 to 90% by
FY2050.

risks and opportunities, and have estimated the potential financial and strategic impact of climate change on ourbusiness, and reflected this information in our management strategies and financial plans. In particular, we haveincorporated measures to address major risks and opportunities into our Long-term Vision and consolidated
medium-term management plan. By steadily implementing these measures, we will strengthen the EXEDYGroup's resilience against the impact of these risks on product demand and other factors.

The second point is to account for the purchase of renewable energy. As part of our production system forcarbon neutrality, we plan to start purchasing renewable energy sources in FY2024 and have incorporated this
into our consolidated medium-term management plan.

⑤ Independent third-party assurance③ Risk Management

We have received independent third-party assurance of the Group’s GHG emissions as described below.

The EXEDY Group's risk management action guideline is to prepare in advance to prevent emergencies andPeriod: April 1, 2022 to March 31, 2023

minimize damage. To ensure that these measures are implemented, we conduct risk management after evaluating

Coverage: Energy-derived CO2 emissions from the Groupand identifying risks. We identify major risk items related to safety and health, environmental preservation
activities, and business continuity management activities, based on the frequency of occurrence, degree of
impact, and surrounding conditions. We are working to strengthen our management system by clarifying the

Scope 1 and Scope 2 (location-based and market-based)
Independent Assurance Report:Environmental Reports / EXEDY Corporation (exedy.com)

department responsible for each risk, the degree of impact of each risk, the causes of its occurrence, andproactive preventive measures.
Regarding climate-related risks, the Sustainability Committee plays a central role in analyzing scenarios, assessing
and identifying risks, and managing the progress of response measures. The status of the response to major risks
is as follows. Regarding the risk of sales decline due to the suspension of sales of internal combustion engine
vehicles, etc., the Management Committee and the Board of Directors have discussed the issue, and developeda Long-term Vision, and strengthened the product development system. Regarding the risk of increased direct
costs from the introduction of renewable energy due to stricter government regulations, the Sustainability
Working Group is researching and studying measures to address this issue, including gathering information on
renewable energy options. Regarding the risk of supply chain disruptions due to floods and other disasters, theRisk Management Committee, consisting of the President & CEO, (Senior) Executive Managing Officers, and fulltime Audit and Supervisory Board Members, is discussing and promoting business continuity plans for suppliers
and other parties.

50

51

Chapter 4: Strategies for Value Creation

EXEDY Integrated Report 2023

6. Strategies to Strengthen Financial Capitaldecrease in production volumes of internal combustion engine vehicles due to the ongoing trend toward EVs, ourproduction capacity has become excessive.
ROE is broken down into“return on net sales × total asset turnover × financial leverage,”but excessive
production capacity has put pressure on profits in the form of higher fixed costs, total asset turnover has also
declined, and financial leverage has declined as we have accumulated equity, leading to the current low returnon capital.

1）Value Creation Approach
To transform our business portfolio and create new value, we will need resources for R&D
for new products, M&A, and other growth investments. We aim to increase our corporate
value by maintaining and improving profitability in our existing businesses and preferentiallyallocating the funds earned from them for the creation and development of new businesses.
In addition, EXEDY has been able to maintain a sound financial position, and we believethat an increase in retained earnings beyond the current status would result in a
deterioration in capital efficiency. This is why, after deducting investment in growth and soon, we will return surplus funds to shareholders more proactively than ever before.

② Uncertainty about the future

The EXEDY Group’s main products are clutches for manual transmission (MT) vehicles and torque converters
for automatic transmission (AT) vehicles, both of which perform the function of transmitting engine power to thetransmission. As production of internal combustion engine vehicles decreases due to the shift to electric vehicles,
demand for our products will also decrease.
For EXEDY to survive in the future, it will be necessary to develop and sell new mainstay products, but ouranalysis indicates that the lack of a clear plan for this is a factor that is causing anxiety about the future andhindering a rise in the stock price.

 Representative Director Senior Executive Managing Officer Executive General Manager Administrative Headquarters

Hiroshi Toyohara2）Target and Actual

ROE
Stable shareholder
returns（2）Future initiatives
Target (FY2030)

Actual (FY2022)

Compared to theprevious fiscal year

More than 10%

2.1％-3.8 points

Dividend payout ratioof 30% or more +maintenance of stabledividends

Dividend: 90 yen per
share per year ※Dividend payout ratio:
92.0%± ¥0 per share per year

※ The dividend payout for FY2023 is scheduled to increase to ¥120 per year3）Actions to Realize Management With an Awareness of the Cost of Capitaland Stock Prices
At the Board of Directors meeting held on December 27, 2023, EXEDY deliberated and decided on the following,
and we are committed to management with an awareness of the cost of capital and stock prices.

（1）Current status assessment

The Group’s return on equity attributable to owners of the parent (ROE) for the fiscal year ended March 31,
2023, was 2.1%, down sharply from 5.9% for the fiscal year ended March 31, 2022. Although this was largely
due to the impact of impairment losses of a total of ¥4.2 billion recorded at subsidiaries in North America andJapan in the fiscal year ended March 31, 2023, we recognize that even if these impairment losses had not beenrecorded, the ROE would have been around 4%, which is significantly lower than the rate of return expected byour shareholders.
Meanwhile, our PBR has been consistently below 1 for about the last ten years, and was 0.33 as of March 31,
2022, and 0.38 as of March 31, 2023. Even with the most recent recovery in the stock price, as of February 22,2024, it was 0.57 (using the parent company owner’s equity per share as of the end of September 2023 as thedenominator).
In our analysis, there are two major reasons why PBR has remained at a low level: firstly, low return on capital,and secondly, uncertainty about the future. Explanations of each are given below.

Based on the above current status assessment, the Group will proceed with the following policy initiatives. Notethat discussions on specific measures and targets are ongoing, and we will report them as soon as they areformulated.

① Maintaining and improving profitability in existing businesses

Among the Group’s existing businesses, with regard to the torque converter business in the AT segment, wherevolume is expected to decline in the future, we will hold discussions with our customers to implement a boldrestructuring of production capacity, taking into account customer demand trends. This will reduce fixed costs
and halt the deterioration in profitability. At the same time, we will promote sales expansion of damper products
for hybrid vehicles, for which production volume is expected to increase in the future.
Meanwhile, in the MT business, a high level of production volume is expected in the Indian passenger car market,
and demand in the repair market is expected to remain strong, so EXEDY will continue to win orders in thesemarkets.

Creation and development of new businesses

As the shift to EVs is expected to accelerate further in the future, the Group will continue to develop theelectrified products business as one of our core businesses. Since this is also an area that many companies
are already engaged in, for essential technologies, we will consider collaboration with companies that alreadypossess such technologies, as well as M&A. We are also promoting the retraining of employees to acquire theskills and knowledge necessary to develop electrified products, as well as hiring human resources with suchknowledge.
At the same time, we will promote open innovation activities, such as making use of our Silicon Valley office andcollaborating with venture capital, to create an environment in which new business ideas will spring up more andmore, not just for electrified products.

③ Financial strategy

Although the EXEDY Group maintains a sound financial position with a consolidated capital adequacy ratio (ratioof equity attributable to owners of the parent) of 68.0% at the end of March 2023, the Group has determinedthat an increase in retained earnings beyond the current status would result in a deterioration in capital efficiency,
and our policy is to return surplus funds to shareholders more proactively than ever before.

④ Carrying out proactive IR activities① Low return on capital

In response to the increased production of automatic transmissions by our customer automobile manufacturers
and transmission manufacturers in the 2010s, the EXEDY Group had been aggressively conducting capital
investment, but to ensure financial stability, we had been using retained earnings as the source of funds.
However, due to the decline in vehicle production volume during the COVID-19 pandemic, followed by the52

We will work to proactively disclose information and engage in active dialogue with investors to make themaware of the progress of the initiatives described above. At the same time, we will strengthen the disseminationof information in the Integrated Report and on the EXEDY website to help shareholders and investors gain adeeper understanding of the Group.

53

Meeting scene

Chapter

Healthy walking activities held at EXEDY DYNAX Shanghai

5Foundation for Value Creation
In order to execute the strategies for value creation described inBlood donation campaign at EXEDY Malaysia

Conducting BCM training

Chapter 4 and sustainably enhance corporate value, EXEDY hasestablished a system and formulated policies related to corporate
governance, etc., and is promoting various initiatives.

1. Corporate Governance ��������������������������� 56
2. Directors and Auditors ���������������������������� 62

Greetings at the conclusion of technical intern training

Conducting a ﬁreﬁghting drill

3. Risk Management �������������������������������������� 66
4. Respect for Human Rights������������������������ 68
5. Health and Safety Activities�������������������� 70
6. Health Activities������������������������������������������ 72
7. Sustainable Procurement������������������������� 74

54
EXEDY Friction Material receives a Platinum Safety Award from the government of Thailand for the sixth consecutive year

Chapter 5: Foundation for Value Creation

1. Corporate Governance

EXEDY Integrated Report 2022

A schematic of our system of corporate governanceCorporate Governance Policy

Annual General Shareholders Meeting

We at EXEDY recognize that constructing a system of corporate governance and thoroughly carrying out compliance management serves as the basis for management. More specifically, we have established a system thatmonitors and reviews the actions of our directors through our Board of Directors and our Audit and Supervisory
Board, and we will make our management more transparent and strive to strengthen our governance and compliance management system by improving the functionality of our internal controls and building an organization that
responds promptly to changes in our management environment.

Basic Policy
1) We will strive to ensure the equality and rights of our stockholders.
2) We will endeavor to cooperate with all stakeholders outside of our stockholders, including customers, business counterparts, creditors, the local community, employees, etc.
3) We will strive to ensure both the transparency and proper disclosure of information.
4) W e will endeavor to ensure have our Board of Directors properly carries out its functions and obligations ina manner that it both makes decisions in a quick responsive and decisive, as well as manner and remains
fair and transparent.
5) We will strive to have a constructive dialogue with stockholders so that we can improve our medium tolong-term business value and continue to grow.

Initiatives to Enhance Corporate GovernanceTo continue growing as a global company that can contribute to society, we have adopted a Long-term Vision of"maintaining a stable management structure based on strong governance," and are striving to improve the fairness
and transparency of the Board of Directors. We have been making various efforts to improve corporate governance. In June 2009, we introduced an executive officer system and reduced the number of directors to speed up
decision-making and execution. In FY2014, we introduced a stock compensation program for full-time directors
and executive officers, intending to raise awareness of their contribution to improving our business performanceand increasing our corporate value. In June 2016, we appointed two independent outside directors. Since then,
the number of independent outside directors has increased step by step, and as of June 2023, 5 out of 12 directors
are independent outside directors, which is more than 1/3 of the total number of directors.In June 2023, we appointed two female directors (ratio of female directors: 12.5%), and we are striving to ensure diversity in terms ofgender and other aspects. Since FY2021, we have been holding town hall meetings for dialogue between management and employees to reinforce shared values and improve our bottom-up management foundation., andthese continued in FY2023.
In addition, in FY2022, we promoted the transfer of authority and created an environment for the Board of Directors to further deepen discussions of management strategies for the sustainable growth of the company.We willcontinue our efforts to enhance corporate governance as the foundation for our sustainable growth.

An Outline of Our System of Corporate Governance
EXEDY is a company with an Audit and Supervisory Board and has established a General Meeting of Shareholders,a Board of Directors, a Board of Auditors, and an Accounting Auditor as corporate bodies.In addition, to carry out
corporate affairs in a manner that responds promptly to any changes in the management environment, we have set
the number of directors at 12 or less as stipulated in our Articles of Incorporation, and we have established an
executive officer system to ensure more flexible business operations by appointing personnel with expertise inbusiness operations as executive officers.The term of directors and executive officers is set at one year in order tobuild a flexible management structure that can respond to changes in the management environment and to further
clarify management responsibility. The corporate governance structure is explained on the following page "A schematic of our system of corporate governance."

Our Reasons for Selecting Our Current System of Corporate Governance
We at EXEDY are carrying out efficient work operations and exercising prompt decision-making through the introduction of our executive officer system, where five of our directors concurrently serve as executives managing
corporate affairs. At the same time, so that we can ensure transparency in all business operations, we made ourboard of directors consist of 12 directors and four auditors, of which nine individuals are outside executives (andof these five individuals serve as independent outside directors and two individuals serve as independent outside
auditors), and we have deemed that our present structure of a company with an Audit and Supervisory Board iscurrently the optimum choice.

56

Appoint Dismiss
Appoint Dismiss

Audit &
Supervisory
Board

Appoint Dismiss
ReportAuditors:4(External members: 3)

Audit

External
Audit

Whistleblower
Ofﬁce

Appoint / Dismiss

Supervise

Submitproposals toCompensation Committee
Directors: 7(External Independent
Director members: 5)

Nomination Committee
Directors: 7(External Independent
Director members: 6)
ReportRepresentative
Directors

ReportManagement
Meeting
Submit proposals(to the BOD)
Submit importantmatters outside of
the agenda

Employees

Top Management
Committee

AssignWork Duties

For a corporate
review

Basic
PolicyAdministrative
Headquarters
Risk
Management
Team

President & CEO, (Senior) Executive
Managing Ofﬁcers

All Full-time
Executives

ReportPerform internal audits
Monitor the state ofcompany regulations

Submitproposals to

Directors: 12(External
members:6)

ReportGlobal Auditing
Department

Board ofdirectors

ReportExchange information

Submitwhistle-blowing
complaints

Submitproposals to

Promote risk
management
CSR policy

Each Divisional Headquarters
Compensation Committee

Nomination Committee

The Compensation Committee deliberates and decides on the policy
for determining the details of remuneration for each individual
directors, and submits the decision to the Board of Directors.
FY2022：Held two time

The Nominating Committee formulates succession plans and selects
directors or candidates, and submits the nominees to the Board of
Directors.
FY2022：Held two times

Top Management Committee

Management Meeting

The Top Management Committee consists of four members,
President & CEO, Senior Executive Managing Ofﬁcer, and Executive
Managing Ofﬁcer, and reviews managerial strategies.
FY2022：Held 20 times

The Management Meeting, consisting of all full-time ofﬁcers, reportson the status of business execution and makes speciﬁc businessdecisions within the scope of authority delegated by the Board of
Directors.
FY2022：Held 27 times

Board of Directors
EXEDY’
s board of directors is comprised of 12 individuals, six of whom serve as outside directors. Our Board of
Directors holds regular meetings once a month, and, when deemed necessary, additional meetings are held under
special circumstances, where directors thoroughly discuss the matters at hand and make management decisions
regarding them. In FY2022, 12 meetings were held. By appointing four independent outside directors, more than
one-third of the 12 directors, the Company strives to strengthen its monitoring and supervisory functions and toenhance the Company's sustainable growth and corporate value over the medium to long term. Moreover, in orderto balance the diversity of the Board of Directors and its overall knowledge, experience, and abilities, we aim toappoint executive officers who are familiar with EXEDY's operations and experienced representatives of major
subsidiaries as directors, as well as outside directors and corporate auditors with a high level of expertise.

Policies and Procedures for the Election and Dismissal of Directors and Executive Officers
Nominations of director candidates are determined by the Board of Directors after the Nominating Committee's
selection, with consideration given to the balance between quick decision-making and diverse viewpoints. The
Board of Directors will decide on the election and dismissal of Executive Officers. Proposals for the dismissal will
be submitted to the Annual General Shareholders' Meeting by the following criteria.
(1) In the event of conduct that violates laws and ordinances or public order and morals(2) In the event of omission of duties or acts in violation of company regulations(3) In addition to the above, in the event of significant damage to corporate value.

57

Chapter 5: Foundation for Value Creation

Assessment of Board of Directors’Effectiveness
Every year, we conduct a questionnaire on the effectiveness of the Board of Directors, and in FY2022, we conducted the same questionnaire.Based on the results, we believe that the effectiveness of the Board of Directors has
been generally secured.
Based on feedback from Directors and Auditors, we will continue to make improvements to further enhance theeffectiveness of the Board of Directors.

Criteria for Independent Outside Directors
In appointing independent outside directors, we emphasize their abundant experience and high-level insight into
their fields of expertise, in addition to the outsider requirements of the Company Law. The criteria for designation
as an independent outside director are that he/she meets the qualifications for an independent director as stipulated by the Financial Instruments Exchange and that there is no risk of a conflict of interest with general shareholders.

EXEDY Integrated Report 2022

auditor individually in advance, and determine a balanced composition of the Board of Auditors as a whole.

Internal Audit Department

The Global Auditing Department sets annual audit themes, formulates audit plans and audits the operations ofeach department, and conducts ad hoc audits as needed to ensure internal governance. In addition, the Global
Auditing Department enhances cooperation with full-time auditors and accounting auditors by exchanging information as necessary, including periodic meetings on audit planning, progress and results of audits, and other mattersas required.

Support System for Outside Directors (Outside Auditors)
When convening a Board of Directors meeting, outside directors and outside auditors are provided with the samematerials as internal directors and auditors in advance to share information on business execution.

Ratio of Outside Board Members

Business Execution Structure

Board of directors

Audit & Supervisory Board

Nomination Committee

Compensation Committee

To realize expeditious decision-making, the Board of Directors has established various regulations, such as the"Rules of the Board of Directors" and the "Regulations for Executive Officers," and determined the decision-making
authority of the Board of Directors, the Executive Committee, the President, and the Executive General Managers,
based on the degree of management importance and influence. In principle, the Management Committee holds a
meeting twice a month, which is composed of all full-time executives, including executive officers, and reports on
the status of business execution and makes specific decisions on business execution within the scope of authority
delegated by the Board of Directors.
In addition, management strategies are discussed at the Managing Directors' Meeting, consisting of four members,
President & CEO, Senior Executive Managing Officer and Executive Managing Officer.

External Director
and Corporate
Auditor:9

OutsideCorporate
Auditors:

OutsideCorporate
Auditors:

OutsideCorporate
Auditors:

Internal
Directors andCorporate
Auditors:

56%

7

3

Full-time
Corporate
Auditors:

675%Internal
Director:

1

1

86%

The Board of Directors, Audit and Supervisory Board, Nominating Committee, Compensation Committee's Attending Members

Supervision and Audit of Management

Audit and
CompenNomination
Supervisory
sationCommittee
Board
Committee
◎

male

◎

Representative Director

Hiroshi Toyohara

male

○

Director

Yuzuru Hirose

male

○

Director

Junji Yamakawa

male

○

Director

Mitsugu Yamaguchi

male

○

Transactions between Related Parties

Director

Hisashi honjo

male

○

Director

Moritaka Yoshida

male(Outside)(Outside)dent)

Director

Tetsuya Yoshinaga

The four corporate auditors (one of whom is a certified public accountant and has considerable knowledge of finance and accounting) determine audit policies and plans and other matters related to the execution of their duties at the Board of Corporate Auditors Meetings (held at least once a month) following the Board of Corporate
Auditors' Regulations. Auditors and the Board of Auditors receive reports from the accounting auditor on the fiscal
year's accounting audit plan and the results of the accounting audit and hold discussions as appropriate. In addition, the full-time statutory auditor and the Global Auditing Department exchange information on audit planning,
progress, and results of audits as appropriate. Full-time auditors exchange information with each other and work
closely with the Global Auditing Department and accounting auditors.

Auditor

Auditors and Board of Auditors

◎
○

○

○

○

○

○

○

○

○

Director

Ichizo Yoshikawa

male

Director

Toshiki Takano

male

Director

Takashi Hayashi

male(Outside) (Independent)

○

○

○

Director

Fukuko Inouefemale(Outside) (Independent)

○

○

○

Director

Kimiko ito

female(Outside) (Independent)

○

○

○

Full-time Corporate Auditor

Ryu Suzuki

male

○

◎

Auditor

Shintaro Itomale(Outside)○○

Auditor

Tadashi Fukuda

male(Outside) (Independent)○○

Auditor

Satoshi Tsubota

male(Outside) (Independent)○○(Outside) (Independent)

Composition of the Board of Auditors
When nominating the auditor candidates, besides considering their knowledge in various fields such as finance,accounting, taxation, legal, etc., and in our business and corporate management, we also consult with the current

58

2

Board ofDirectors
President & CEO(Indepen-

71%

Internal
Directors:◎ Chairman 〇 Attending Members

By appointing five independent outside directors, more than one-third of the 12 directors, we strive to strengthen
the supervision of the Board of Directors and to enhance the company's sustainable growth and corporate value
over the medium to long term. The four auditors, including three outside auditors, attend meetings of the Boardof Directors, provide audit opinions on management decision-making, and audit the execution of duties by directors.

Following the Companies Act, EXEDY has established in the Regulations of the Board of Directors that any proprietary or competing transactions with the company's directors are subject to prior approval. In addition, even incases where we conduct transactions with major shareholders or others, prices and other terms and conditions oftransactions are determined through negotiations, considering the prevailing market conditions, as is the case withother third parties.

559

Chapter 5: Foundation for Value Creation

EXEDY Integrated Report 2022

Remuneration for Board Members

The above maximum amount of remuneration for directors does not include employee salaries and bonuses for

The Board of Directors approved the following resolution on May 27, 2022, regarding the policy for determining the details of remuneration, etc. for individual directors.

of directors was 14 and the number of auditors was four. In addition, the following resolution was passed regard-

directors who also serve as employees. As of the close of this Annual General Shareholders' Meeting, the number

Basic Policy

The Company's basic policy is to link the remuneration of directors to shareholders' profits in order to provide
sufficient incentive for the sustainable enhancement of corporate value. The Company's basic policy is to set the
remuneration of each director at an appropriate level based on their responsibilities. In concrete terms, the remuneration of executive directors shall consist of base remuneration as fixed remuneration, bonuses, and stock-based
remuneration, while outside directors, who are responsible for supervisory functions, shall be paid only base remuneration in view of their duties.

Policy on determining the amount of monetary remuneration (base remuneration and bonus) paid to individuals(including the policy regarding the determination of the timing or conditions for granting remuneration, etc.)
The basic remuneration of directors in EXEDY shall be a monthly fixed remuneration, and bonuses shall be paid at
a fixed time annually. The amount of bonuses shall be determined by a comprehensive review of position, responsibility, and years in office, while also taking into consideration standards at other companies, our company's performance, employee salary etc.

Policy for determining the amount of non-monetary remuneration and the method for calculation, etc.

(including the policy regarding the determination of the timing or conditions for granting remuneration, etc.)
The Company's non-monetary remuneration, etc. for directors shall be stock remuneration (restricted stock). The
remuneration shall be determined with comprehensive consideration of the scope of responsibilities, our management plan and performance, an appropriate ratio of base remuneration and bonuses, remuneration level, etc. It
shall be determined annually at a meeting of the Board of Directors, which is held within one month of the date of
the Annual General Shareholders' Meeting.

Policy on Determining the Ratio of the Amount of Monetary or Non-monetary Remuneration, etc. of Individual Directors

ing stock-based remuneration, which is separate from monetary remuneration. Resolution on share-based remuneration at the 68th Annual Shareholders' Meeting held on June 26, 2018.
Stock-based compensation: Up to ¥200 million per year
Maximum number of shares: Up to 50,000 shares per year (Outside directors and non-executive directors are noteligible)As of the close of the said Annual General Shareholders' Meeting, the number of directors (excluding outside
directors and part-time directors) was seven.

Cross-shareholdings
Policy on Cross-Shareholdings

In principle, we do not hold listed shares as "cross-shareholdings", except when it is necessary to maintain andstrengthen trust and business relationships with business partners and various stakeholders from the viewpoint of
improving our group's corporate value in the mid- to long-term.

Verification of Cross-Shareholdings

The Board of Directors evaluates each issue related to cross-shareholdings, including whether the risks and benefits exceed the cost of capital. At present, we assess that all of our cross-shareholdings meet the criteria, and wewill continue to review their appropriateness.

Criteria for Voting Rights Concerning Cross-Shareholdings

In EXEDY, voting rights shall not be exercised on a uniform basis, but shall be exercised after careful considerationand comprehensive judgment from the viewpoint of improving the group's corporate value, especially with respect

The ratio of remuneration of executive directors by type will be determined individually, so that, in principle, theweight of stock-based remuneration will increase with higher executive positions, considering the remunerationlevel of other companies in the same business size and related industries and business categories as our company.

to proposals concerning the following.

The Compensation Committee shall deliberate and determine the amount of monetary compensation for eachdirector and report to the Board. The Board of Directors shall take into account the report and decide on the remuneration. As for stock-based remuneration, the number of shares to be allocated to each director shall be resolved by the Board of Directors.

period of time in a row, etc.)

Matters Concerning Determination of Remuneration, etc., for Individual Directors(1) Reorganization Proposal(2) Takeover Defense Proposal(3)Appointment of Directors Proposal (in the event of misconduct, in the event of being in the red for a certain

Cross-Shareholdings Status (Year Ended March 31, 2023)
Number of Issues
Balance Sheet Amount(Mil. JPY)

Issues whose shares
increased in FY2022

Issues whose shares
decreased in FY2022

Unlisted stock

8
344

1
306

－
－

Stock other than unlisted
stock

8
1,077

2
11

3
1,011

Amount of Remuneration for Directors and Auditors (FY2022)

Category

Total amount of
remuneration, etc.
(Mil. JPY)

Director（Outside Director）

Total amount of remuneration, etc. by category (Mil.
JPY)

Number of Board
Members

Basic
Remuneration

Bonus

Non-monetarycompensation,
etc.

264
（30）

222
（30）

24
（－）

18
（－）

13
（6）

Auditor（Outside Auditor）

35
（17）

35
（17）

－
（－）

－
（－）

5
（4）

Total
（Outside Board
Member）

299
（47）

257
（47）

24
（－）

18
（－）

18
（10）

* The main reason for the growth in the stocks with an increased number of shares in FY2022 mainly resulted fromthe necessary acquisition for our group's medium- and long-term business strategy.

1．
The amount of remuneration does not include employee salaries and bonuses for directors who also serve as employees.
Non-monetary remuneration consists of stock-based compensation (restricted stock), and 10,500 shares were2．
issued to six directors based on a resolution of the Board of Directors on June 28, 2022.
Limit of monetary remuneration according to the resolution of the 56th Annual General Shareholders' Meeting held on June 27,
3．
2006.
Director: ¥300 million per year
Auditor: ¥60 million per year

60

61

Chapter 5: Foundation for Value Creation

EXEDY Integrated Report 2023

2. Directors and Auditors

1 Tetsuya Yoshinaga

2 Hiroshi Toyohara(January 3, 1960)▶Career summary, position and duties at the Company(Important concurrent positions)▶ Career summary, position and duties at the Company(Important concurrent positions)Jul. 1988

Joined the Company

Jan. 1995

Joined the Company

Apr. 1980

Joined Toyota Motor Co., Ltd.

Apr. 1970

Joined Suminoe Textile Co., Ltd

Mar. 2009

President of EXEDY America Corporation

Apr.2010

Executive Ofﬁcer of the Company

Jun. 2009Managing Ofﬁcer of Toyota Motor Corporation

Aug. 1997

Director of Suminoe Textile Co., Ltd.

Jun. 2009

Executive Ofﬁcer of the Company

Apr.2011

Apr. 2014

Senior Managing Ofﬁcer of Toyota Motor Corporation

Apr. 2016

President of EXEDY DYNAX Shanghai Co., Ltd.

Executive General Manager, Financial
Planning Headquarters of the Company

Jan. 2018

Executive Vice President of Toyota Motor Corporation

Aug. 2005

Representative Director and President of
Suminoe Textile Co., Ltd.

Apr. 2017

Senior Executive Ofﬁcer of the Company

Jun. 2020

Representative Director & Chairman of
TOYOTA CENTRAL R&D LABS., INC.

May. 2016

Outside Director of KINTETSU
Department Store Co., Ltd. (to present)

Jun. 2021

President, Member of the Board of
AISIN CORPORATION (to present)

Jun. 2022

Director of the Company (to present)

Jun.2012

Executive General Manager, AT
Manufacturing Headquarters of the Company
Jun. 2019

Ueno Division General Manager of the Company

Apr. 2020

Executive Managing Ofﬁcer of the Company

Apr. 2021

Senior Executive Managing Ofﬁcer of the Company

Jun. 2022

President and Representative
Director of the Company (to present)male

3 Yuzuru Hirose

Executive General Manager, Administrative
Headquarters (to present)

Apr.2016

Executive Managing Ofﬁcer of the Company

Apr. 2020

Senior Executive Managing
Ofﬁcer of the Company (to present)

Jun.2022

Representative Director of
the Company (to present)

Number of Board Meetings attended

12 / 12 (10 0 % )

12 / 12 (10 0 % )4 Junji Yamakawa(February 21, 1972)

Aug. 2000

Joined the Company

Apr. 2014

Shanghai Co., Ltd.

Apr. 2014

Executive Ofﬁcer of the Company

Apr. 2015

Executive Ofﬁcer of the Company

Apr. 2018

Senior Executive Ofﬁcer
Jan. 2018

Apr. 2019

Executive General Manager, Sales
Headquarters of the Company (to present)

President of Exedy DYNAX
Mexico, S.A. DE C.V.

Jun. 2019

Director of the Company (to present)

Apr. 2018

Senior Executive Ofﬁcer of the Company(to present)

Jun. 2019

Executive General Manager, Quality
Assurance Headquarters of the Company

Jun. 2022

Executive General Manager,
Procurement Headquarters of the Company

Reasons for candidacy:

Reasons for candidacy:

Mr. Yuzuru Hirose has long worked overseas as an expatriate and has extensive
experience and achievements in all aspects of sales and marketing and has beenbroadly engaged in management of the Group business serving as Director andSenior Executive Ofﬁcer of the Company.

Mr. Junji Yamakawa has long worked overseas as an expatriate and has extensive
experience and achievements in North Central America-related business operations, etc.,
and has been broadly engaged in management of the Group business serving as Director
and Senior Executive Ofﬁcer of the Company.

Number of Board Meetings attended

12 / 12 (10 0 % )6 Hisashi Honjo(August 9, 1962)▶ Career summary, position and duties at the Company(Important concurrent positions)Mar. 1985

Joined the Company

Jul. 2006

Deputy Executive General Manager ofEngineering & Development Headquarters

Jun. 2009

Executive Ofﬁcer of the Company

Apr. 2015

Special Technical Advisor

Nov. 2017

President of EXEDY America Corporation

Apr. 2018

Executive Ofﬁcer of the Company

Apr. 2021

male

Executive General Manager ofMotorcycle Clutch Headquarters

Jul. 2016

Representative Director and Chairman andPresident of Suminoe Textile Co., Ltd.

Aug. 2021

Director and Chairman of
Suminoe Textile Co., Ltd. (to present)

Number of Board Meetings attended

Number of Board Meetings attended

Toshiki Takano (August 31, 1954)
Jan. 1984

12 / 12 (10 0 % )(August 16, 1963)

取締役会出席回数

12 / 12 (10 0 % )Director of ROHM Co., Ltd.

Jun. 2015

Retired from the post of director of ROHM Co., Ltd.

Jun. 2017

Director of the Company (to present)

male

male

Outside IndependentMar. 1979

Joined Nihon Radiator Co., Ltd.
(Currently Marelli)Jun. 2008

Director and Executive Vice President of
the above company

Jun. 2011

Representative Director, President andCEO of TOKYO RADIATOR MFG Co., Ltd.

Jun. 2019

Director and Chairman ofTOKYO RADIATOR MFG Co., Ltd.

Jun. 2020

Director of the Company (to present)

Outside Independent

Reasons for candidacy:

Reasons for candidacy:

Mr. Takashi Hayashi has long accumulated abundant expertise as a corporate
manager in automobile component business, by fulﬁlling his responsibilities as adirector of TOKYO RADIATOR MFG Co., Ltd.

Mr. Toshiki Takano has long accumulated abundant expertise as a corporate manager, by fulﬁlling his responsibilities as a director of ROHM Co., Ltd.

Number of Board Meetings attended

Number of Board Meetings attended

12 / 12 (10 0 % )6 Kimiko Ito

Fukuko Inoue (October 18, 1963)

12 / 12 (10 0 % )(January 20, 1949)▶ Career summary, position and duties at the Company▶ Career summary, position and duties at the Company(Important concurrent positions)(Important concurrent positions)Apr. 1987

Joined UCC UESHIMA COFFEE CO., LTD.

Representative Director and President of
Tashima Co., Ltd. (to present)

Sep. 1996

Human Resources Ofﬁcer, Training Ofﬁcer at Budget
Personnel Bureau of Human Resources Department ofJun. 1995

Apr. 2010

Deputy Executive General Manager of
Quality Assurance Headquarters

Executive Secretary, Kobe Association of
Corporate Executives (to present)

Executive Ofﬁcer of the Company

May. 2004

Human Resources Development Manager atGeneral Affairs and Human Resources
Headquarters of Vodafone Japan Co., Ltd.

Apr. 2013

Apr. 2019

Jun. 2006

Human Resources Manager of Tiffany & Co.

Nov. 2016

Vice President, Kobe Chamber ofCommerce and Industry (to present)

Jun. 2022

Executive General Manager, Quality
Assurance Headquarters of the Company(to present)

Executive Ofﬁcer of Human Resources, General
Manager of Human Resources Headquarters of
SAP Japan Co., Ltd.

Sep. 2017

Vice Chairperson, Kobe City University ofForeign Studies (to present)

Apr. 2023

Senior Executive Ofﬁcer of the Company(to present)

Sep. 2011

Section Chief, Human Resources Planning Divisionat Human Resources Department of International
Atomic Energy Agency

Jun. 2023

Director of the Company (to present)

Jan. 2013
Jul.

Senior Human Resources Ofﬁcer, Management
Bureau of the above institution

female Outside Independent

Director of the Company (to present)―

Reasons for candidacy:

2017

Apr. 2018

Professor, Doshisha Business School at
DoshishaUniversity (to present)

Jun. 2022

Director of the Company (to present)

Jun. 2023

June 2023 Outside Director of ROHM Co., Ltd. (to present)

female Outside Independent

Reasons for candidacy:

Reasons for candidacy:
Ms. Kimiko Ito has been involved in management for many years and has extensive
managerial knowledge as the President of Tashima Co., Ltd.
She has also contributed to regional development by serving as Vice President of theKobe Chamber of Commerce and Industry.

Ms. Fukuko Inoue is serving as a professor at a university after holding important positions ofhuman resources at global companies and international organizations, and accumulated
abundant expertise as an academic expert in organizational development and humanresource management.

Number of Board Meetings attended

62(Important concurrent positions)

Joined the Company

Reasons for candidacy:
Mr. Hisashi Honjo has abundant experience and achievements in all aspects of quality andhas been broadly engaged in management of the Group’s business, including serving asa Senior Executive Ofﬁcer of the Company.

Mr. Mitsugu Yamaguchi has long worked overseas as an expatriate and accumulated
experience and achievements in development ﬁeld in general, and has been broadly
engaged in management of the Group business serving as Director and Senior Executive
Ofﬁcer of the Company.

▶ Career summary, position and duties at the Company

Joined ROHM Co., Ltd.

Jun. 201012 / 12 (10 0 % )Takashi Hayashi (April 22, 1956)▶ Career summary, position and duties at the Company(Important concurrent positions)Reasons for candidacy:

Reasons for candidacy:

10/10 (10 0 %)Mar. 1986

Jun. 2023

Executive General Manager of Development
Headquarters (to present)

Number of Board Meetings attended

Director of the Company (to present)

Mr. Ichizo Yoshikawa has long accumulated abundant expertise as a manager ofa listed company, by fulﬁlling corporate management responsibilities as arepresenta tive director of Suminoe Textile Co., Ltd.

(Important concurrent positions)

Director of the Company (to present)
Jun. 2021

Jun. 2016

Reasons for candidacy:▶ Career summary, position and duties at the Company

Senior Executive Ofﬁcer of the Company(to present)maleOutside Independent

Director of the Company (to present)

male

Executive Managing Ofﬁcer of theCompany (to present)

5 Mitsugu Yamaguchi

male

Mr. Moritaka Yoshida has held important positions at Toyota Motor Corporation
and AISIN CORPORATION and accumulated abundant expertise in the automotive industry.

Joined the Company
President of EXEDY DYNAX

President of EXEDY Globalparts

Number of Board Meetings attended

OutsideRepresentative Director and Chairman of
Suminoe Textile Co., Ltd

Reasons for candidacy:(March 16, 1968)

Mar.2011

Apr. 2023

male▶ Career summary, position and duties at the Company(Important concurrent positions)▶ Career summary, position and duties at the Company(Important concurrent positions)Apr. 2001

Apr.2013

Mr. Hiroshi Toyohara has abundant experience and achievements in generaladministrative operations, starting as head of the ﬁnancial and planningdepartment and has been broadly engaged in the execution of the Group businessserving as a Director and Senior Executive Managing Ofﬁcer of the Company.

Mr. Tetsuya Yoshinaga has long worked overseas as an expatriate and has beenin charge of China-related business for many years. He has been broadly engaged
in management of the Group's business operations, including serving as Director
and Senior Managing Executive Ofﬁcer of the Company.

Number of Board Meetings attended

Director of the Company
Senior Executive Ofﬁcer of the Company

Reasons for candidacy:

Reasons for candidacy:

male

Ichizo Yoshikawa (May 20, 1946)▶ Career summary, position and duties at the Company(Important concurrent positions)▶ Career summary, position and duties at the Company(Important concurrent positions)

Director of the company

male

Moritaka Yoshida (July 12, 1957)(August 19, 1962)

取締役会出席回数

10 / 10 (10 0 %)63―

Chapter 5: Foundation for Value Creation

EXEDY Integrated Report 2023

2. Directors and Auditors

1 Ryu Suzuki

Shintaro Ito (March 19, 1961)(Nov 28, 1966)▶ Career summary, position and duties at the Company(Important concurrent positions)Mar. 1991

Joined the Company

Apr. 2013

President of EXEDY (Thailand) Co., Ltd.

Apr. 2017

Executive Ofﬁcer, Executive General
Manager of Production Engineering
Headquarters of the Company

Jun. 2023

Auditor of the Company (to present)

male

―

監査役会出席回数―

Jun. 2010

Managing Ofﬁcer of AISIN SEIKI CO., LTD.

Apr. 2017

Senior Managing Ofﬁcer of AISIN SEIKI CO., LTD.

Apr. 2019

Executive Ofﬁcer of AISIN SEIKI CO., LTD.

Apr. 2021

Executive Vice President of AISIN SEIKI CO., LTD.

Jun. 2021

Representative Director of
AISIN CORPORATION (to present)

Apr. 2022

Reasons for candidacy:

Reasons for candidacy:
Mr. Ryu Suzuki has been engaged in Group management for many years, serving as an
Executive Ofﬁcer of the Company and managing overseas subsidiaries, and his extensive
experience and insight can be reﬂected in audits.

Joined AISIN SEIKI CO., LTD.
(current AISIN CORPORATION)

Jun. 2022

Auditor of the Company (to present)

Number of Board Meetings attended―

Number of Audit & Supervisory
Board Meetings Attended―

Directors

Reasons for candidacy:

OutsideApr. 1983

Tadashi Fukuda (March 4, 1953)▶ Career summary, position and duties at the Company(Important concurrent positions)Jun. 2000

male

Outside Independent

Outside Auditor of SHINYEI KAISHA
Outside Director of the above company

Oct. 1984

Joined AOYAMA AUDIT CORPORATION/
PricewaterhouseCoopers

Aug. 1988

Registered as a Certiﬁed Public Accountant

Apr. 1999

Registered as a certiﬁed Public Tax Accountant

Jun. 2015

Auditor of the Company (to present)

Jul. 2001

Joined Kaisei Certiﬁed Public Accountants
Joint Ofﬁce (to present)

Mar.2016

Representative Partner of Daiichi Legal
Professional Corporation (to present)

Jun. 2005

Outside Auditor of O-WELL CORPORATION

Outside Auditor of
Mitsubishi Tanabe Pharma Corporation

Jun. 2015

Auditor of the Company (to present)

Jun. 2016
Mar. 2020

Outside Director of
ES-CON JAPAN Ltd. (to present)

Jun. 2020

Outside Director (Audit & Supervisory
Committee Member) of O-WELL
CORPORATION (to present)

male

Reasons for candidacy:

Number of Audit & Supervisory
Board Meetings Attended

Tetsuya Yoshinaga male●

Hiroshi Toyohara

male

●

Yuzuru Hirose

male

●

Junji Yamakawa

male

●

Mitsugu Yamaguchi

male

●

Hisashi Honjo

male

●

Moritaka Yoshidamale

Outside●Ichizo Yoshikawa

maleOutside Independent●Toshiki Takano

maleOutside Independent●

Takashi Hayashi

maleOutside Independent●

Fukuko Inouefemale Outside Independent

Kimiko Itofemale Outside Independent

Ryu Suzuki

maleShintaro Itomale

OutsideTadashi FukudamaleOutside Independent

Satoshi Tsubota

maleOutside Independent

Sales,
Purchasing●●

Number of Board Meetings attended

12 / 12 (10 0 % )

16 / 16 (10 0 %)Number of Audit & Supervisory
Board Meetings Attended

16 / 16 (10 0 %)64

Safety,Human Resource
Legal,
Environment,
Development Sustainability Risk Management

Global

●

●

●
●

●

●

●

●

●

●
●

●
●

●

●
●
●

●
●

●
●

●

●

●

●

●

●

●

●
●

●

●
●

●
●

●

Mr. Satoshi Tsubota has extensive expertise in accounting and taxation.

12 / 12 (10 0 % )Finance,
Accounting●

Reasons for candidacy:

Mr. Tadashi Fukuda has extensive expertise in the legal profession.

Number of Board Meetings attended

Outside Independent

Auditors

Apr. 1986▶ Career summary, position and duties at the Company(Important concurrent positions)Registered as an attorney-at-law
and joined Daiichi Law Ofﬁce(now Daiichi Legal Professional Corporation)

Engineering,
Corporate
Management Development

Name▶ Career summary, position and duties at the Company(Important concurrent positions)male

取締役会出席回数

The expertise and experience of each Director is as follows.

65●

Chapter 5: Foundation for Value Creation

EXEDY Integrated Report 2022

3．
Risk Management

2. Initiatives Regarding Information Security

Our Basic Approach to Risk Management

In order to properly protect confidential information and personal information from threats such as cyberattacks,

The EXEDY Group recognizes that risk management is one of the most important management tasks and is working
to enhance and strengthen it. With changes in the business environment surrounding the company, the risks facedby the EXEDY Group are expected to become increasingly diversified in the future. In order to respond to thesecircumstances, the EXEDY Group's action guideline for risk management is to prepare for emergencies by taking
preventive measures and preparing in advance to minimize damage and to assess and identify risks to ensure theirimplementation. We identify major risk items related to safety and health, environmental preservation activities,
and business continuity management activities, based on the frequency of occurrence, degree of impact, and surrounding conditions. We are working to strengthen our management system by clarifying the department responsible for each risk, the degree of impact of each risk, the causes of its occurrence, and proactive preventive measures.

ing employees, we strive to strengthen our information security and prevent information leakage.

Risk Management Committee

compliance with the laws and regulations of each country and transparent management are essential for earning

Our Basic Approach

Organization of the Risk Management Committee

With the support of external experts with a deep knowledge of cyber security and internal fraud, we establisheda system to respond to information security incidents and warnings. While sharing information with external organizations, our company, including its affiliates, we work to make improvements to this environment.
We also conduct regular targeted e-mail training for all employees, provide education regarding personal information protection and security, and promote thorough personal information protection and information security.

3. Initiatives Regarding Compliance Risk

Through our business activities in different regions around the world, we have learned that prompt and reliable

Furthermore, it is essential to respect human rights, to consider the health and working environment of employees,
to treat employees fairly and appropriately, and to conduct fair and appropriate business transactions with suppliers to ensure better compliance.
And to prevent compliance violations, it's necessary to raise each employee's awareness of ethics and norms.
To achieve this goal, we continuously conduct various training and educational activities for our employees.
We also establish a whistle-blowing system and other measures to identify and correct compliance violations.

Board of Directors

Early Detection and Correction of Problems through the Internal Reporting System

Risk Management Committee
Chairperson

Initiatives for Information Management

the trust of our stakeholders.

The Risk Management Committee, consisting of the President & CEO, (Senior) Managing Executive Officers, andAudit and Supervisory Board Members, convene as necessary to address group-wide issues and to discuss recurrence prevention measures.

Director in Charge

we have developed and deployed policies and regulations concerning information security. By periodically educat-

Secretariat

In the unlikely event of a serious compliance violation, we will report it to the Board of Directors and consider countermeasures.

The Risk Management Committee Schedule

In FY2022, the Risk Management Committee gathered 4 times to respond to group-wide problems and discuss
recurrence prevention measures. In addition, information on risk issues is shared among group companies to ensure appropriate business execution.

Examples of Dealing with Risks
1. Business Continuity Plan (BCP) and Climate-related Risks

In the Great East Japan Earthquake of March 2011, the Kawagoe Plant suffered no severe damage but a tremor
with a seismic intensity of lower 5 required a temporary evacuation of all employees. Fortunately, no damage wascaused to the plant, and we took the necessary actions in response to the situation, such as shifting to nighttime
production in response to production stoppages by automobile manufacturers and planned power outages. Having keenly realized the importance of prompt and efficient business recovery we have since established a BCP crisis
management program as part of our Midterm Consolidated Management Plan and built an organization capable ofresponding to contingencies.
In addition to earthquakes, the EXEDY Group also recognizes climate change as an important environmental issue,
including the increasing severity and frequency of extreme weather events. Concerning climate-related risks, theSustainability Committee, a meeting body that formulates the Company's sustainability action plan and manages
the progress and other matters, plays a central role in analyzing scenarios, evaluating and identifying risks, andmanaging the progress of response measures. The status of our responses to major risks is as follows. The risk ofsales decline due to the suspension of sales of internal combustion engine vehicles, etc. is discussed at the Management Committee and Board of Directors meetings, leading to the formulation of a long-term vision and thestrengthening of the product development system. Regarding the risk of increased direct costs from the introduction of renewable energy due to stricter government regulations, the Sustainability Working Group is researchingand studying measures to address this issue, including gathering information on renewable energy options. Concerning the risk of supply chain disruptions due to floods, etc., the Risk Management Committee and other committees discussed and promoted business continuity plans that include suppliers.

66

The reporting desk also collects information internally and externally and promptly responds to problems as theyarise.

Internal Consultation/Reporting Reception System
In addition to an internal reporting desk, the Company has established a consultation service for the entire Group
concerning ethics in business conduct. In addition, the "EXEDY Hotline" has been established to allow employees
to consult and report directly to outside attorneys for the prevention and early detection of misconduct and otherillegal activities. To ensure that all employees are fully aware of the above, the EXEDY Code of Conduct, which is
distributed to all Group employees, clearly specifies the contact point for consultation and raises awareness ofcompliance issues.

【Internal Consultation Desk】

Handles any matters regarding the Code of Conduct, ethical issues, working environment, etc.
Phone numbers and email addresses can be found in the Code of Conduct.

【Internal Reporting Desk】

Handles violations of laws and company regulations.
Phone and fax number and email address can be found in the Code of Conduct.

【External Consultation and Whistleblowing Contact "EXEDY Hotline"】

An external lawyer's office can be contacted by telephone, email, or letter.
Phone number, address, and email address can be found in the Code of Conduct.

67

Chapter 5: Foundation for Value Creation

EXEDY Integrated Report 2023

4. Respect for Human Rights（1) Actual conditions of acceptance for foreign technical intern training

Our Approach
Respect for human rights is the foundation of our business activities, and we recognize that we are required tohave a deep understanding of and appropriate responses to human rights issues related to the countries andbusinesses in which we operate.

EXEDY Group Human Rights Policy
The EXEDY Group Human Rights Policy was formulated in March 2022 after deliberation and approval by theManagement Committee.
This human rights policy is based on the United Nations Guiding Principles on Business and Human Rights(hereinafterreferred to as the UN Guiding Principles) and is established to ensure that the EXEDY Group, as a global
enterprise, respects human rights and complies with relevant laws and regulations in the countries where we
operate, and is positioned as the highest policy in our business activities.
For more information, please refer to this page.
Respect for Human Rights ｜ EXEDY Corporation (exedy.com) Japanese only

Promotion System
In EXEDY, we have assigned oversight responsibility for respect for human rights to our Risk Management
Committee.
In the committee, the President & CEO is ultimately responsible for risk management, and the Representative
Director and Senior Executive Managing Officer of the Administrative Headquarters is responsible for overall risk
management, deliberating and deciding on systems and activity plans related to respect for human rights.
Also, the Administrative Headquarters serves as the secretariat for these initiatives and promotes them incooperation
with related departments.
Board of Directors
Risk Management
Committee

Ultimate Responsibility for Risk Management: President
Supervisor of Risk Management: Executive General Manager, Administrative Headquarters
Other attendees: (Senior) Executive Managing Ofﬁcers, Corporate Auditors

Secretariat

Administration Headquarters

Human Rights Due Diligence Human Rights Education
Inside EXEDY: Human Resources (Due Diligence)
Human Resources Development Department(Human Rights Education)
Afﬁliate Relations: Accounting & Financial Department Consolidated Accouting and Legal Team
Cooperation with Partner Companies: Purchasing Headquarters

Information Disclosure
CSR Public Relations Department

Each department, afﬁliated companies, and cooperating companies

Initiatives

Regarding the acceptance status of technical intern trainees under the organization-supervised model in Japan,
we conducted both voluntary and on-site audits in FY2022 at three group sites that accept technical interntrainees under this model. The audits did not reveal any violations leading to human rights abuses; however, it
was confirmed that the personal expenses borne by individuals from certain countries to come to Japan werehigh relative to the local cost of living in their home countries. Although within local regulatory limits, thesehigh expenses, coupled with recent yen depreciation, pose a risk of debt bondage. Therefore, we are working
with supervising organizations and our group companies to consider switching to countries of origin where thepersonal expense burden is lower. Additionally, we will continue to conduct ongoing investigations at sites
accepting trainees in FY2023.

（2) Migrant labor survey

In FY2023, we conducted a migrant labor survey of 27 overseas Group companies to identify risks that could
constitute forced labor. As a result of the investigation, we confirmed that there are no risks related to the hiring
process employment conditions.

（3) Understanding the actual situation in relation to human rights risks in general

To confirm awareness of human rights in the Group and our supply chain, the level of responses, issues, etc., webegan conducting human rights self-checks at Group companies in Japan and overseas in FY2023. As a result, (1)bases where management systems had not yet been established were instructed to establish them, and (2) therules were disseminated throughout the Group.
We will continue to conduct regular monitoring.

2）Education

In FY2022, we conducted human rights training for 3,032 employees (including directors, associate
employees, contract employees, and technical interns) with the aim of deepening their understanding of
initiatives to respect human rights.The training will cover topics such as society's and our company's efforts
torespect human rights, risks of harassment and other human rights violations that need to be recognized, andhuman rights due diligence. The training is conducted online so that trainees can take the course at theirconvenience,
and a comprehension test is given afterward to ensure an understanding of the training content.
The scope of this program was expanded in FY2023 to cover 38 Group companies in Japan and overseas (11 in
Japan and 27 overseas).

3）Consultation Service

We have established a consultation and reporting desk for human rights issues for the entire Group.
In addition, we have established the "EXEDY Hotline," a counter where employees can consult and report directly
to outside attorneys, to prevent and detect human rights issuesas well as other issues at an early stage.
To ensure that all employees are aware of this, we specify the Consultation Desk in the EXEDY Code of Conduct,
which is distributed to all group members, to raise awareness of our commitment toward respect for humanrights.
Furthermore, we clearly state that we will protect the privacy of the person consulting or reporting and that wewill not take any disadvantageous action because the person consulted or reported.

４）Expansion into the supply chain

Regarding efforts to respect human rights, we have expanded the CSR Guidelines for Cooperating Companies
to our suppliers in Japan and overseas and have requested their compliance with the guidelines throughprocurement policy briefings. We also evaluate our suppliers on the status of their compliance with the guidelines
and provide feedback on the results.

５）Payment of wages

1）Human Rights Due Diligence

In FY2023, as in FY2022, we have made prohibiting forced labor a top priority issue. We have identified“foreigntechnical training”and“migrant workers”as risks of forced labor in Japan in light of the increasing movement
around the world to protect the rights of migrant workers, such as the Modern Slavery Act, the growing publicconcern in Japan over foreign technical trainees, and the recognition of the challenge by our shareholders,customers, etc.

We comply with the laws and regulations of each country in which we pay wages and set amounts exceeding
those specified in each country and region, by industry sector, etc., to guarantee a living wage.
In addition, based on the concept of equal pay for equal work, we carry out effective management to prevent
unreasonable disparities between non-regular and regular employees.
We also ask our suppliers to comply with the applicable laws and regulations of each country in our CSR
Guidelines.

68

69

Chapter 5: Foundation for Value Creation

EXEDY Integrated Report 2023

5. Health and Safety Activities

Initiatives“Going home the same as we arrived in the morning”

1）Cultivating Safe Workers

EXEDY’s basic stance is to prioritize safety in everything we do, and we are steadily implementing activities tocreate workplaces where people can work with a smile and peace of mind.
Going home the same as we arrived in the morning is our greatest joy.

Safety & Health Policy【Basic Policy】

1. If our employees are not safe, our company cannot do business. In order toachieve‘zero defects’and‘zero hospital visits’, we will adhere strictly tohealth and safety laws and internal regulations.
2. By creating a healthy and comfortable workplace, we will improve
communication, prevent work-related illnesses, and maintain and promote
physical and mental health.
3. When an abnormality occurs, we will thoroughly follow our STOP, CALL and
WAIT procedure.
4. We will conduct risk assessments to eliminate all hazards and harmful factors
in the workplace, and continuously implement kaizen and 5S5T to reducerisks.

（3) Basic Life Support Training Course

Since 2012, first-aid instructors have been carrying out basic life support training courses and more than 1000
employees have participated in the course. We will continue promoting this activity in the future so that EXEDY
employees can protect lives, not only at the company but also in daily life.

（4) Risk assessment

In accordance with the Health and Safety Risk Assessment Procedure, we conduct detailed assessmentsof health and safety risks in new and existing operations, and establish compliance requirements in pursuitof creating essential safety of machinery and equipment (existing and newly introduced equipment) andoperations. Based on the results, we also are taking action against identified risks.

President

Whole Safety Sanitation Chairman（5) Global safety measures

Central Safety Sanitation Committee
Special Force●Crane ●Sanitation●Press●High Pressured Gas●Folk Lift ●Safe Transportation●Electricty ●Risk Reduction

HQ

Ueno Plant

Kawagoe Plant Aﬃliated companies

HQ S.S.chairman

Ueno S.S.chairman

Kaeagoe S.S.chairman

HQ S.S.committee

Ueno S.S.committee

Kawagoe S.S.committee

Member in Sales
each Dept Branches

Menber in each Dept(including sales branches)

After disseminating accident reports throughout the Group, each company holds monthly Health and Safety
Committee meetings to educate all employees (100% employee attendance rate). In addition, we provide
safety training at the time of recruitment and before assignment.

To enable our employees to carry out their work in the plants in absolute safety, and predict and prevent
danger in advance, we offer training consisting of safety lectures and practical education in our safety dojo,
a training room equipped with 17 simulators that were made based on accidents that actually occurred.
Employees who pass this training are certified as a safe workers, and receive "Safe Worker Certificate". In2018 this safety training for employees was held 43 times. We also get requests from outside the company toprovide this highly valued training.
In addition, in 2018, we renewed the‘working at heights training room’to ensure that work at height iscarried out safely.

【Action Policy】

To protect all employees from occupational
accidents, EXEDY has established a health andsafety activities system led by the Central Healthand Safety Committee (meeting twice a year). The
Committee brings together safety officers and othersafety experts from Group companies to review
the latest information on the Industrial Safety and
Health Act, formulates corrective measures basedon accident trends, and deploys these measures toGroup companies（1) Safety education（2) Basic safety education

Ensuring the safety and health of our employees serves as the foundation of ourcorporate activities and social responsibility. With respect for human life andsafety as our highest priority, we are committed to promoting health and strive tocreate a safe, comfortable, and pleasant workplace where people can work withpeace of mind.

Health and Safety Activities
Promotion System

Safety First is our company policy. No matter what it is that we do, at the EXEDY Group we make our judgmentswith safety being the top priority.The status of safety-related training in FY2022 is as follows.

(Group)Domestic Overseas

Once a year, we hold the EXEDY Global Safety Summit to raise safety awareness throughout the entire EXEDYGroup, share cases of accidents of each company and conduct cross-check activities.
Three times a year we hold the Safety Instructor Training. We invite safety staff and plant managers fromoverseas affiliates and share company-wide safety and health activities. We provide English and Chinese
language support.
In addition, twice a year we carry out priority activities to prevent accidents at overseas bases, and provide
general guidance on safety.

2）Various Training and Education

The EXEDY Group conducts training and education on a daily basis to prevent accidents and to minimize damage
in case of an emergency.

（1) Company-wide Earthquake Disaster Drills

Target and Actual (EXEDY Group)
Actual (FY2022)

Target (FY2023)

Significant and semi-significant accidents

０件

０件

Furnace fires and explosions

０件

０件

On-site subcontracting work accidents

０件

０件*Definition of a significant accident:(1) The worker’s death; or (2) the worker’s injury or illness has resulted in or is likely to result in any of the disabilities
listed in the physical disability columns of Grade of Disability 1 to 7 in the Grade of Disability Table in Appended Table 1 of
the Enforcement Regulations of the Industrial Accident Compensation Insurance Act.

70

Every year in March, we conduct a company-wide earthquake disaster drill, to develop an organization thatis able to respond calmly and smoothly in case of an emergency. In the first part, we set up an in-house
firefighting department and conducted firefighting and lifesaving activities. In the second part, we set up adisaster countermeasure department to train to collect information and report on the situation, and prepareplans to restart production.

（2) In-house Firefighting TeamWe have established a self-defense fire brigade at domestic bases and sales offices. We carry out regulartraining such as table-top exercises and training with the portable pump. In addition, the fire prevention
committee members participate in in-house seminars on fire prevention and disaster prevention knowledge,
held twice a year, to solidify the basis of disaster prevention knowledge.

71Chapter 5: Foundation for Value Creation

EXEDY Integrated Report 2023

6. Health Activities

Initiatives

Our Basic Approach

To maintain and promote the physical and mental health of each and every employee, the health management
division of each company, industrial physicians, health staff, and the health insurance association cooperate invarious initiatives.

The EXEDY Group recognizes that the health of each and every employee is an important company asset, andthis is why we have clearly defined our health policy in our Health Management Policy.

Purpose２．By creating a healthy and comfortable workplace, we will improve
Safety & Healthcommunication, prevent work-related illnesses, and maintain and promote
Action Policy
physical and mental health.
The EXEDY Group's Long-term Vision identifies Health/Occupational Health and Safety as a priority issue(materiality).
We aim to realize our Long-term Vision through various initiatives related to health.
Priority Issues(Materiality)

Safety and Health

Initiatives to realize the Long-Term Vision and expected effects
Initiatives to realize
Indexes (and targets)
Expected effects
the Long-Term Vision
Percentage receiving
detailed examinations
Early detection(Target: 80%)and prevention
Medical checkups - Findings rate • Maximize theof aggravation of
Expand systems
Number of employees on
performance of eachdiseasesthat allow diverse
leave due to injury or illness
and every employee
employees to work
• Increase labor(other than mental)
with comfort
productivity
Stress checks
High stress rate
Mental healthdisorder prevention Number of employees onleave due to mental illness

Promotion System
The company-wide General Health and Safety
President & CEO
Manager (executive officer in charge at theAdministration Headquarters) is in charge,
Company-wide General Safety and Health Manager（Representative Director Senior Executive Managing Oﬃcer）
and related departments, including the healthmanagement division, industrial physicians, healthCentral Health and Safety Committee
staff, the health insurance association, and theDivision Health and Safety Committees
EXEDY Workers Community (EWC; labor union),work together to promote health promotion
Health Management Dept. Health Management Dept.
EXEDY Workers
activities.
Health Insurance
at each Division
at Domestic Aﬃliates
Community
In addition, at the EXEDY Collaborative Health
Association（Workers Union）
Industrial Physician,Industrial Physician
Meeting, which is composed of the health
Healthcare Staﬀ
Healthcare Staﬀ
EXEDY Collaborative Health Meeting
insurance association, each division, affiliatedcompanies, and EWC, the insurer and thedivisions discuss health issues twice a year and work together to promote health.

Indexes (medical checkups, stress checks, employees on leave/returning to work)

Initiative

Eligible persons

Implementation details

Lifestylediseases

Medical checkups
and follow-up
measuresAll employees*Health insurance services
are for subscribers
All employees*Health insurance services
are for subscribers
Health insurance
subscribers(Target ages exist)
Health insurance
subscribers(Female, age 30 and older)• Tests for statutory items and lifestyle disease items(Target ages exist)• Support for people at high risk for lifestyle diseases

Early detection Dentistry Dental checkups
and preventionof aggravation of
diseases
CancerCancer screening

Long-term Vision /Our Approach andthe Way Forward※ For details of specific initiatives, refer to the health-related initiatives on the next page

Field

Femalespecificdiseases

Mental healthdisorderprevention

Female-specificdiseases

Stress check

All employees

Support for returning to work

All employees

Mental health education

Supervisors(Department managers,
section managers)

Infectious disease
Workplace vaccinations
prevention
Support forbalancing
Balancing fertility
work andtreatment
Healthy working
family life
environment
supportSmoking
Smoking cessation
cessation
treatment support
ExerciseWalking events
recommendations

2020

2021

2022

Regular medical
checkups
Examination rate

100%

Findings rate

81.4%

78.4%

78.0%

Percentage
receiving detailed
examinations

70.1%

80.4%

70.3%

Health guidance
implementation rate

74.1%

72.2%

72.3%

100%

100%

StresschecksEmployees
on leave
Peoplereturning
to work

72

FY

2020

2021

2022

Response rate

90.80%

86.60%

88.20%High stress rate

22.00%

16.60%

16.20%

Numberof people
interviewed

3

7

5

Mental15

21

15

Other injuries
and illnesses

38

52

36

Mental8

16

13

Other injuries
and illnesses

38

50

35

• Stomach cancer screening (gastric X-ray, ABC test)• Colorectal cancer screening (fecal occult blood)• Prostate cancer screening (PSA test)• Breast and cervical cancer screening(Once a year)• Implementation of stress checks and follow-up
measures(Doctor interview)• Conduct group analysis and workplace improvement
activities based on results• Regular follow-up during leave of absence• Four-party interview upon return to work
(The individual, superior, HR, industrial physician)• Regular follow-up after returning to work

healthinsurance
healthinsurance

Company

Company• Self care education• Line care education

Company

All employees• Influenza vaccinations (costs are subsidized)• Workplace vaccinations against COVID-19

Company

All employees

Fertility treatment leave system (up to 5 days per
year)

Company• Taking a smoking cessation program (online) andAll employees
cost assistance*Health insurance services• Treatment for smoking cessation at workplace
are for subscribers
clinics (covered by insurance)
Health insurance
subscribers
Holding walking events using ICT (twice a year)(Under 19 years old)

Company
healthinsurance
healthinsurance

At the EXEDY Clinic, industrial physicians, public health nurses, and nurses follow up with employees after their
medical checkups, and we are working to prevent serious illness. Medical treatment by physicians, as well asinterview guidance and health consultations by public health nurses and psychotherapists, are also available, andwe are working to help employees maintain their physical and mental health.
In addition, dental hygienists are stationed at the dental clinics of the Head Office and Ueno Division, andemployees can receive treatment from dentists. We conduct dental checkups in conjunction with regularcheckups at all of our plants, leading to early detection and treatment.

(EXEDY Corp.)
FY

Dental checkups(Cavities, periodontal disease, mucosal disease, etc.)

Responsibleorganization
Company
healthinsurance
Company
healthinsurance73

Chapter 5: Foundation for Value Creation

7. Sustainable Procurement
1）Building Relationships of Trust as a Good Business Partner

EXEDY Integrated Report 2023

5）C SR Guidelines for Cooperating Companies & Green Procurement
Guidelines

EXEDY conducts procurement activities based on the following four basic policies and "Promotion of Appropriate

At EXEDY we believe CSR efforts throughout the automotive industry's supply chain are of vital importance, if wewant to keep developing in a way that is sustainable to earth and society. Therefore, we established the "CSR
Guidelines for Cooperating Companies". We ask our cooperating companies to comply with these guidelines andto forward them to their suppliers.
In addition, with the publication of our Green Procurement Guidelines, we require our partner companies toreduce CO2 and other greenhouse gases, recycle resources including waste, conserve water, and conserve
biodiversity.
Each guideline was revised in March 2023 in line with trends around the world. We are working to build
consensus by asking for the changes to be rolled out at the procurement policy briefings in FY2023 and to beextended within our partner companies and the supply chain, as well as by receiving written confirmation thatthey understand the main purpose of the guidelines and will work to implement them.

services that satisfy our customers.

6）Risk Assessment and Response to Partner Companies(1)Open, Fair and Impartial Transactions

EXEDY conducts quality audits to improve the quality level of partner companies. In Japan, the priority andfrequency of these audits are determined based on risk analysis, including partner companies for parts with highquality requirements such as special processes, non-acquisition of IATF 16949 certification, and a track recordof quality defects occurring. Audits of approximately 150 companies are planned to be conducted at least once
every five years to determine the status of development and compliance with the quality management system.
In FY2022, audits of 49 companies were conducted as planned. During these audits, compliance with quality
standards is confirmed. If there is a problem, an improvement plan is prepared, and advice and verification
continue until the improvement is completed. In addition to natural disasters and fires, infectious diseases andgeopolitical risks have recently increased. For risks that threaten the stable procurement of purchased products,
information provided by partner companies regarding the manufacturing process of purchased parts and raw
materials is registered in a database and used, and we have established a system for swift initial responses andrecovery action. In the event of an emergency, we identify impacts in a timely manner based on supply chain
information. Otherwise, we are also assessing risks to continuity of supply due to management, successors, andaging equipment, and taking action.

EXEDY receives various parts and raw materials from a number of partner companies around the world in its

production activities. In accordance with the principles of good faith and integrity, we believe that production
sharing based on mutual trust is to be established as the basic principle of transactions. In addition, we believethat it is important to clarify and deepen our understanding of each party’s terms of business in advance toattain mutual trust, and we will work to build relationships of trust with our partner companies.

2）Our approach to procurement
Transactions (Compliance with the Antimonopoly Act and Subcontract Act)" in order to provide products andIn selecting business partners, we will provide fair and impartial opportunities regardless of nationality,
corporate size, or business experience, and will make comprehensive judgments based on quality, delivery, cost,
technology, and other capabilities, as well as management stance toward continuous improvement, and efforts
toward social responsibility such as environmental issues.

(2)Coexistence and Co-prosperity Based on Mutual Trust

Through close two-way communication with our partner companies, we share necessary information with eachother and build a relationship of trust. Based on this, We will strive for mutual improvement and coexistence andco-prosperity as partners in strengthening our competitiveness.

(3)Promoting Green Procurement

We will promote the supply of products and services with low environmental impact in accordance with theGreen Procurement Guidelines for Cooperating Companies.

(4)Compliance7）Mutual Improvement With Partner Companies

Procurement Guidelines (for environmental conservation) and CSR Guidelines for Cooperating Companies (CSR

EXEDY provides human resource development support to major partner companies with the aim of improving
the skills of our partner companies and strengthening their corporate structure. Specifically, we accept students
into EXEDY Technical School, our in-house educational institute, in line with the needs of our major partnercompanies. In addition, we regularly hold the EXEDY Olympics with the aim of improving the technical skills ofeach employee and having them acquire the ability to engage in more difficult tasks. Competitions include those
aimed at improving safety awareness and technical skills such as forklift operation and die change work, andmeasurement skills competitions aimed at acquiring accurate and speedy measurement skills. We encourage
mutual improvement by having not only our employees participate in these competitions but also participantsfrom our partner companies.
In addition, we develop and share information on safety and environmental activities with partner companies. We
are pursuing developments related to the prevention of occupational accidents, cybersecurity, the status of thelatest legislative revisions, and so on.
In FY2023, we also invited outside lecturers to hold online climate change workshops for partner companies,
and together we were able to deepen our understanding of public trends in climate change issues and how to
calculate Scope 1 and 2 (our company’s Scope 3).

suppliers after showing them the social issues that we are seeking to address and informing them that we are8）Initiatives for Appropriate Transactions

We will comply with all applicable laws and regulations, as well as the "Guideline for Appropriate Transactions in
the Automobile Industry" (formulated by the Ministry of Economy, Trade and Industry) and its spirit.

3）Supply Chain
エクセディが直接取引している 1 次の協力企業の数は主資材企業で 214 社、副資材企業を加えると 490 社です。

4）Promoting Sustainability Together with Partner Companies
When entering into transactions with new suppliers, we evaluate their safety, health, and environmental
efforts. We form contracts that include provisions on "environmental conservation," "resource conservation,"and "elimination of antisocial forces". When signing contracts with new suppliers, we distribute our Green

compliance) (we provide an English version for companies outside Japan). We have started doing business withseeking similar initiatives not only internally but also upstream in the supply chain.

In addition, we visit existing suppliers on a regular basis for the purpose of conducting on-site audits of safety,
health, and environmental aspects, and provide guidance for improvement if any deficiencies are found.

In FY2022, we carried out audits at eight of our existing partner companies and identified 47 improvements, allof which have been completed.

74

To enable each and every employee engaged in procurement activities at EXEDY to promote fair and honest
procurement activities, we have set out compliance with the Subcontracting Act and specific actions as detailed
rules of conduct in the EXEDY Code of Conduct, which is distributed to all Group employees. In addition, every
November is set as“Subcontracting Transaction Improvement Promotion Month,”and everyone involved withprocurement functions is encouraged to attend seminars by external organizations.

75

Chapter

6

Commemorative photo of employees receiving in-house awards

Financial and Corporate Information
EXEDY creates value in both financial and non-financial aspects
through its business activities.

Iga FC Kunoichi Mie

Employee Tatsuya Osaki won the GR86 BRZ Cup
Clubman Class

Notice of Convocation of the 73rd Annual General
Shareholders Meeting (Business Report)

TS Manufacturing Headquarters achieved quality tree targets for the second
consecutive year

1. Financial and Non-Financial Highlights����� 78
2. Financial and Non-Financial Summary����� 80
3. Financial Review...................................... 88
4. Environmental Reports.......................... 89

Panoramic view of the oﬃce ﬂoor

5. Company and Stock Information	���������� 92

76
Panoramic view of EXEDY Hall

BoardroomChapter 6: Financial and Corporate Information

EXEDY Integrated Report 2023

1. Financial and Non-Financial Highlights■ Revenue/Operating Proﬁt/Operating Proﬁt Ratio（%）(100 Mil. JPY)

3,000

2,856

2,824
2,639

2,500

2,611
2,274

6.9

9.0

■ CO2 emissions/CO2 emissions per unit of net sales■ Employee satisfaction (non-consolidated)(100 Mil. JPY)

（1000t-CO2）

（％）

250

300

8.0

7.0

200

7.0

6.3

2,000

■ Proﬁt before Tax/Proﬁt Attributable to Owners of Parent

6.0

1,500

4.2

4.0

3.1 3.0

1,000

95

Revenue

FY2020Operating Profit

FY202150

46

0FY2022FY2018Operating Profit Ratio(Right axis)

FY2019Profit before Tax

FY2020

FY2021

FY2022FY2019Profit Attributable to Owners of Parent

(JPY)

350

92.0

350

295

300

269.52

200

179

185

265.92

199

195
186
176

198.34

200

100

100

33.4
90

90

50

50

0

0

Capital Expenditures

FY2022FY2018Depreciation

60

50

50

40

40

30

30

20

20

10

10

0

0

78

FY2022

47.4

Unmeasured

FY2020

Dividend per share

FY2021

FY2022（%）(hour)

（％）

90

50

10

80

45

9

40

8
7

35

31.8

6

5.3

5

20
30

20

FY2021

FY2020

Employee satisfaction (non-consolidated)

Emissions per sales (Right axis)

40

33.8
97.78
90
90

49.0

34.9

FY201925

106.24FY2019Earnings per share

FY202130

60

FY202160■ Percentage of female managers (non-consolidated)

60

45.4
111

FY2020

70

50

150

FY201971.3 70■ Training hours per employee (non-consolidated)

70

56.5

FY2020CO2 emissions

250

234

150

FY2018204

0(100 Mil. JPY)

228

80

50

■ Earnings per share/Dividend per share/Payout ratio

250

220

150

■ Capital Expenditures / Depreciation

300

80

84.1

88
0.0

FY2019

90

1.0

183

0
FY2018

90

99

91

50

500

168

100

100

2.0

196

125
95

100

253

200

130

100

96.0

218

150

150
5.0

250

195

190

（t-CO2/100 Mil. JPY）

96.0

0

0

FY2022
Payout ratio(Right axis)

3.6

FY2021

FY2022

2

10
5

3.7

3

15

10

3.6

4

16.1

5.4

1

Unmeasured
FY20190
FY2020

FY2021

FY2022FY2019FY2020Percentage of female managers (non-consolidated)

Training hours per employee (non-consolidated)

79

Chapter 6: Financial and Corporate Information

EXEDY Integrated Report 2023

2. Financial and Non-Financial Summary
FY2018Financial Summary

FY2019FY2020

FY2021(Fiscal year ended
March 31, 2019)(Fiscal year ended
March 31, 2020)(Fiscal year ended
March 31, 2021)(Fiscal year ended
March 31, 2022)

FY2022(Fiscal year ended （Unit）
March 31, 2023)

Revenue(Consolidated)

282,398

263,899

227,420

261,095

285,639

Overseas Sales Revenue Ratio(Consolidated)

53.8

52.7

53.1

54.5

57.1

%

Operating Profit(Consolidated)

19,626

16,751

9,513

18,3288,760

Mil. JPY

Profit Before Taxes(Consolidated)

19,03914,964

9,066

19,467

9,916

Mil. JPY

Profit attributable to owners of parent(Consolidated)

12,967

9,492

4,983

12,477

4,591

Mil. JPY

Comprehensive income attributable to owners of parent(Consolidated)

13,113

3,854

10,481

21,074

8,222

Mil. JPY

Equity attributable to owners of parent (Consolidated)200,153

196,938

203,927

221,756

225,563

Mil. JPY

Total Assets(Consolidated)

311,975

301,019

312,741

332,785

331,875

Mil. JPY

Total Equity(Consolidated)

212,026

208,709

216,730

236,023

239,901

Mil. JPY

Capital Investment(Consolidated)

29,477

22,82423,365

17,578

11,146

Mil. JPY

Amortization Expenses(Consolidated)

17,882

18,464

18,563

19,46319,923Mil. JPY

R&D Expenditure(Consolidated)

5,726

5,862

5,292

5,787

6,593

Mil. JPY

R&D to Revenue(Consolidated)

2.0

2.2

2.3

2.2

2.3

%

EPS (Basic Earnings per Share)(Consolidated)

269.52

198.34106.24265.9297.78

JPY

BPS (Net Assets per Share)(Consolidated)

4,157.72

4,200.17

4,347.73

4,725.44

4,803.89

JPY

Dividend(Consolidated)

90

90

60

90

90

JPY

Dividend Payout Ratio(Consolidated)

33.4

45.4

56.5

33.8

92.0

%

Ratio of equity attributable to owners of the parent (Consolidated)

64.2

65.4

65.2

66.6

68.0

%
%

Mil. JPY

FY2019FY2020

FY2021

FY2022

18,116

17,355

16,253

15,74015,081peopleMale employees

13,802

13,236

12,48812,058

11,581peopleFemale employees

4,314

4,119

3,765

3,682

3,500

peopleFemale employees ratio

23.8

23.7

23.2

23.4

23.2

%

3,948

3,798

3,657

3,533

3,358

peopleMale employees

3,363

3,262

3,169

3,071

2,902

peopleFemale employees

585

536

488

462

456

peopleFemale employees ratio

14.8

14.1

13.3

13.1

13.6

%

123

132

137

135

138

peopleMale managers

116

125

132

130

133

peopleFemale managers

7

7

5

5

5

people

5.7

5.3

3.6

3.7

3.6

%

Number of Employees

Number of Employees

Number of Managers(Consolidated)

6.6

4.8

2.5

5.9

2.1

Price–earnings ratio(Consolidated)

8.90

8.06

15.75

5.92

18.54

times

Cash flows from operating activities(Consolidated)

31,76036,10330,10528,43427,224Mil. JPY

Cash flows from investing activities(Consolidated)△ 27,763△ 26,515△ 16,765△ 15,494△ 12,794

Mil. JPY

Cash flows from financing activities(Consolidated)△ 3,260△ 8,638△ 8,450△ 10,540△ 11,179

Mil. JPY

Free cash flows(Consolidated)

3,997

9,588

13,34012,94014,430Mil. JPY

Cash and cash equivalents at end of period(Consolidated)

45,41345,416

51,56755,40759,538Mil. JPY

Operating Profit Ratio(Consolidated)

6.9

6.3

4.2

7.0

3.1

%

ROE (Return on equity attributable to owners of parent)(Consolidated)

6.6

4.8

2.5

5.9

2.1

%

110.69109.10106.17112.86134.95

80(Fiscal year ended (Fiscal year ended (Fiscal year ended (Fiscal year ended (Fiscal year ended
March 31, 2019) March 31, 2020) March 31, 2021) March 31, 2022) March 31, 2023)(Consolidated)(NonConsolidated)(NonConsolidated)

Female managers ratio（Unit）

Employee Satisfaction(NonConsolidated)

-

34.9

-

47.4

49.0

%

Training hours per employee(NonConsolidated)

-

-

5.4

16.1

31.8

h/yearTotal Working Hours(NonConsolidated)

2,131

2,021

1,688

1,898

1,888

hour

Paid Leave Utilization Rate

(NonConsolidated)

69.1

77.7

72.9

76.3

101.2

%

(Consolidated)

14

19

16

10

20

case

0.43

1.12

0.35

0.71

1.22

%

-

253,403

218,405

219,658

203,625

Number of Accidents resulting
in work leave
Accidents resulting in work
leave frequency rate
Total CO2 Emissions

Return on equity attributable to owners ofparentExchange Rate

FY2018

Non-Financial Summary(Consolidated)

Emissions per sales index
Waste emissions
Emissions per sales index(Consolidated)

t-CO2
t-CO2/100
Mil. JPY

-

96.0

96.0

84.1

71.3

-

20,982

16,50918,61915,825

t

-

7.95

7.26

7.13

5.54

t/100 Mil. JPY

US dollar

81

Chapter 6: Financial and Corporate Information

EXEDY Integrated Report 2023

3. Financial Review
Overview of Operating Results for Current Period

Segment Information

In the current consolidated fiscal year, the revenue

subsidiaries due to expected declines in profitability

increased by the impact of foreign exchange

because of changes in the business environment.

conversion due to the depreciation of the yen,

The results for current consolidated fiscal year were,

although orders decreased due to the lockdown in

Revenue ¥285.6 billion (increased by 9.4% from the

China and production cuts by customers because

previous fiscal year), Operating profit ¥8.8 billionof the semiconductor shortages. In terms of profits,(decreased by 52.2% from the previous fiscal year),

Operating profit decreased due to the decline in

Profit before tax ¥9.9 billion (decreased by 49.1%

MT (Manual Transmission Related Business)

Othersorders, soaring global raw material prices and supply

from the previous fiscal year), Profit attributablechain disruptions. In addition, the decrease in profit

to owners of the parent company was ¥4.6 billion

was due in part to impairment losses on fixed assets(decreased by 63.2% from the previous fiscal year).

Revenue was ¥71.5 billion (increased by 10.0% fromthe previous fiscal year). Segment profit was ¥8.6
billion (increased by 8.9% from the previous fiscal
year), despite soaring raw material prices which wasproceeded with passing on to the selling price.

Revenue was ¥32.6 billion (increased by 18.0% fromthe previous fiscal year). Segment profit was ¥2.4
billion (increased by 16.7% from the previous fiscal
year) due to an increase in sales, despite soaring raw
material prices.

at the Company, its US subsidiary, and its domestic

Revenue

285.6
282,398

billionJPY

263,8998.8

9.4％Increase

227,420

261,095

285,639300,000

20,000250,000

15,000200,000

10,000150,000

5,000
0

100,000(Mil. JPY)FY ended
March 31,2019

FY ended
March 31,2020

FY ended
March 31,2021

FY ended
March 31,2022

FY ended
March 31,
2023

IFRS

IFRS

IFRS

IFRS

IFRS

(Mil. JPY)

Profit Before Taxes

9.9billionJPY
19,03914,964

9,513

18,3288,760

FY ended
March 31,2019

FY ended
March 31,2020

FY ended
March 31,2021

FY ended
March 31,2022

FY ended
March 31,
2023

IFRS

IFRS

IFRS

IFRS

IFRS

billionJPY
9,492

compared to previous year

63.2％ decrease
4,983

12,477

4,591

20,000

Japan

North and Central America

Revenue was ¥122.5 billion (increased by 3.0% from theprevious fiscal year). Operating profit was ¥7.0 billion(decreased by 37.6% from the previous fiscal year) due toa decrease in orders by the lockdown in China, production
cuts by customers because of the semiconductor shortages
and soaring raw material costs and an impairment loss
recorded at the Company and its subsidiaries.

Revenue was ¥50.5 billion (increased by 19.4% fromthe previous fiscal year). Although revenue increasedby the impact of exchange conversion due to thedepreciation of the yen, the operating loss was ¥4.6
billion (¥1.3 billion operating loss in the previousyear) due to soaring raw material prices and an
impairment loss recorded at the US subsidiary

Asia and Oceania

Others

Revenue was ¥103.7 billion (increased by 12.6% fromthe previous fiscal year). Operating profit was ¥6.9 billion(decreased by 24.7% from the previous fiscal year) due
to the lockdown in China and the impact of production
cuts by customers due to semiconductor shortages,
although revenue increased from the impact of exchange
conversion due to the depreciation of the yen.

Revenue was ¥9.0 billion (increased by 15.2% from theprevious fiscal year). Operating profit was ¥0.3 billion(decreased by 54.2% from the previous fiscal year) due
to soaring raw material prices and other factors, despite
an increase in sales by the impact of foreign exchange
conversion because of the yen depreciation.

Sales Composition Ratio by Business
Segment (Reference)

Sales Composition Ratio by Region(Reference)

15,00015,000

Others

10,00010,00032.6 billion JPY

5,000

5,000

(Mil. JPY)

16,751

12,967

9,916

20,000052.2％ decrease

19,626

4.6

49.1％ decrease
19,467compared to previous year

Profit Attributable to Owners of Parent

compared to previous year

9,066

billion
JPY

Revenue was ¥181.6 billion (increased by 7.8% from the previous fiscal year). Although sales increased by the impactof foreign exchange conversion because of the depreciation of the yen, the segment loss was ¥1.1 billion (¥8.6 billion
operating profit in the previous fiscal year) due to the lockdown in China, production cuts by customers because of
the semiconductor shortages and soaring raw material costs and an impairment loss recorded at the US subsidiary.

Location Information

Operating Profit
compared to previous year

AT (Automatic Transmission Related Business)Business)

0
FY ended
March 31,2019

FY ended
March 31,2020

FY ended
March 31,2021

FY ended
March 31,2022

FY ended
March 31,
2023

IFRS

IFRS

IFRS

IFRS

IFRS

(Mil. JPY)11%

FY ended
March 31,2019

FY ended
March 31,2020

FY ended
March 31,2021

FY ended
March 31,2022

FY ended
March 31,
2023

IFRS

IFRS

IFRS

IFRS

IFRS

Other

9.0 billion JPY3%

MT71.5 billion JPY

25%

Asia and Oceania
103.7 billion JPY
36%

FY2022285.6 billion JPY

285.6 billion JPY

AT

181.6billion JPY
64%

North and Central America* Revenue refers to sales to external customers.

82

Japan

122.5 billion JPY
43%
FY202283

50.5 billion JPY
18%

Chapter 6: Financial and Corporate Information

3. Financial Review

EXEDY Integrated Report 2023

Consolidated Statement of Financial Position(Mil. JPY)

previous fiscal year

Overview of Financial Position for Current Period.

current fiscal year

（March 31, 2022）（March 31, 2023）

AssetsCurrent assets

Total equity was ¥239.9 billion (¥236.0 billion in theprevious consolidated fiscal year), it increased by ¥3.9
billion (1.6%) from the end of the previous fiscal year.
The main contents were ¥0.6 billion increase in retained
earnings (¥4.6 billion increase due to the profit attributableto owners of the parent company, ¥4.5 billion decrease
due to the appropriation of surplus (dividend), and ¥0.5
billion increased by transfer of other components ofequity to retained earnings due to sale of investment
securities) and ¥3.1 billion increase in other componentsof equity due to an increase in the conversion difference of
foreign operation due to the depreciation of the yen. The
ownership equity ratio attributable to owners of the parent
company was 68.0% (66.6% at the end of the previous
consolidated fiscal year).

In terms of the assets at the end of this consolidated
accounting period, the total assets were ¥331.9 billion(¥332.8 billion at the end of the previous consolidated
fiscal year), it decreased by ¥0.9 billion (0.3%) from theend of the previous fiscal year. The main contents are ¥8.3
billion decrease in tangible fixed assets due to impairment
losses, ¥1.5 billion decrease in investments in Equity
Instruments, ¥2.5 billion increase in inventories and ¥4.1
billion increase in cash and cash equivalents.
Total liabilities were ¥92.0 billion (¥96.8 billion at theend of the previous consolidated fiscal year), it decreasedby ¥4.8 billion (4.9%) from the end of the previous fiscal
year. The main contents are ¥4.3 billion decrease incorporate bonds and borrowings due to the repayment ofborrowings, ¥2.3 billion decrease in income taxes payable,and ¥1.7 billion increase in trade and other payables.

Cash and cash equivalents

55,40759,538Trade and other receivables

53,82453,929Other financial assets

1,974

2,155

Inventories

41,72644,198Other current assets

2,262

3,634

Total Current Assets

155,192

163,454

Property, plant and equipment

162,964

154,632

Goodwill and intangible assets

2,802

2,939

Non-current assets

Investments accounted for using equity method
Investments in equity instruments
Other financial assets

45

96

6,022

6,366

Retirement benefit asset

1,233

1,206

Other non-current assets

1,027

1,100

Total Non-current Assets

177,593

168,421332,785

331,875

Bonds and borrowings

10,3818,228

Trade and other payables

36,09337,789Other financial liabilities

594

545

Income taxes payable

4,005

1,664

Employee benefits accruals

1,954

2,336

Provisions

2,240

2,186

Other current liabilities

3,636

3,379

Total current liabilities

58,90356,127

Total Assets

Funds earned from cash flows from operating activities
in the current consolidated fiscal year was ¥ 27.2 billion
which decreased by ¥ 1.2 billion (4.3%) from the same
period of the previous year (¥ 28.4 billion). This isbecause Income before Income Taxes decreased by ¥9.6 billion, Income taxes paid increased by ¥ 4.1 billion,
however, the changes in trade receivables and otherreceivables increased by ¥ 5.9 billion, the impairment
loss increased by ¥ 4.1 billion, also the changes ininventories increased by ¥ 3.6 billion.
Funds used for cash flows from investing activities was¥ 12.8 billion which decreased by ¥ 2.7 billion (17.4%)
from the same period of the previous year (¥ 15.5
billion). This was due to the decrease of ¥ 2.0 billion in

Liabilities and equity

Forward-Looking Information
Regarding the forward-Looking information, although theglobal economy is on a recovery trend due to factors
such as China's shift away from its zero-COVID policy
and the fact that the surge in resource and energy
prices is subsiding, the outlook remains uncertain due
to factors such as high inflation rates and continued
monetary tightening by central banks around the world
will increase instability in the financial system which
will affect the global economy. Under such a businessenvironment, revenue is expected to remain firm forthe full year, despite the risk that the shortage ofsemiconductors may have a prolonged impact.
In terms of profits, we will strive to secure profits

by improving overall management efficiency, suchas improving capacity utilization rates and reducing
overhead costs, along with passing on higher parts, rawmaterial cost and energy cost to selling prices.
As a result, we expect the revenue for the fiscal
year ended March 2024 will be ¥310.0 billion (8.5%
increase from this fiscal year), operating income willbe ¥13.0 billion (48.4% increase), and income before
income taxes will be ¥14.0 billion (41.2% increase).
Profit attributable to owners of the parent company is
expected to be ¥9.0 billion (96% increase).
The exchange rate is assumed to be ¥141 yen per US
dollar.

84

272
1,810

Deferred tax assets

Overview of Cash Flow for the Current Period
expenditures for the acquisition of tangible fixed assets.
Funds used for cash flows from financing activities was¥ 11.2 billion which increased by ¥ 0.6 billion (6.1%)
from the same period of the previous year (¥ 10.5
billion). This was due to the increase in expenditure of¥ 1.2 billion due to the dividend payment.
In addition to the above, there was the increase of ¥ 0.9
billion (¥ 1.4 billion increase in the same period of theprevious year) due to the conversion difference for cash
and cash equivalents, as the results the balance of cash
and cash equivalents in the current consolidated fiscal
year was ¥ 59.5 billion which increased by ¥ 4.1 billion(7.5%) from ¥ 55.4 billion at the end of the previous
consolidated fiscal year.

195
3,305

Liabilities
Current liabilities

Non-current liabilities
Bonds and borrowings

27,53325,423

Other financial liabilities

879

1,076

Retirement benefit liability

6,724

6,609

Deferred tax liabilities

1,245

697

Other non-current liabilities

1,479

2,042

Total non-current liabilities

37,85935,84896,762

91,975

8,284

8,284

Total liabilities
EquityShare Capital
Capital Surplus

7,555

7,541

Treasury Shares△3,768△3,709Other components of equity

7,524

10,639Retained Earnings

202,160

202,808

Total equity attributable to owners of parent

221,756

225,563

Non-controlling interests

14,267

14,338

Total Equity

236,023

239,901

Total liabilities and equity

332,785

331,875

85

Chapter 6: Financial and Corporate Information

EXEDY Integrated Report 2023

3. Financial Review
Consolidated Profit and Loss Statement(Mil. JPY)

previous fiscal year

current fiscal year

(April 1, 2021 to March 31, 2022)(April 1, 2022 to March 31, 2023)

Revenue

261,095

285,639

Cost of sales

213,151

240,872

Gross profit

47,94444,767

Selling, general and administrative expenses

30,64732,895

Other income

2,072

2,431

Other expenses

1,041

5,544

Operating Profit

18,328

8,760

Finance income

2,080

2,149

Finance costs

961

1,051

Share of profit of investments accounted for using equity method

20

57

Profit Before Taxes

19,467

9,916

Income tax expense

5,645

4,680

13,822

5,236

12,477

4,591

ProfitProfit attributable to
Owners of parent
Non-controlling interests
Profit1,345

646

13,8225,236

265.92

97.78

Earnings per share
Basic and diluted earnings (JPY) per share

Consolidated Statement of Changes in Equity(April 1, 2021 to March 31, 2022)

13,822current fiscal year

(April 1, 2022 to March 31, 2023)

5,236

Other comprehensive income

Other components of equity

Share
Capital

Net change in fair value of equity instruments
designated as measured at fair value throughother comprehensive income

△37

△736

Remeasurements of defined benefit plans

89

187

Total of items that will not be reclassified
to profit or loss

53

△549

9,473

4,952

Share of other comprehensive income ofinvestments accounted for using equity method

6

4Total of items that may be reclassified to profit or loss

9,479

4,956

Total other comprehensive income

9,532

4,406

Comprehensive income

23,354

9,643

Owners of parent

21,074

8,222

Non-controlling interests

2,279

1,421

23,354

9,643

86

Remeasurements of defined
benefit
plans

Total

7,555

△3,768

7,274

250

-

7,524

-

-

-

-

-

-

Other comprehensive income

-

-

-

4,181

△736

187

3,631

-

-

-

4,181

△736

187

3,631

Total
Purchase of treasury shares

-

-

△0

-

-

-

-

Disposal of treasury shares

-

△15

59

-

-

-

-

Dividends of surplus

-

-

-

-

-

-

-

Share-based payment transactions

-

-

-

-

-

-

-

Transfer to retained earnings

-

-

-

-

△329

△187

△516

Total transactions with owners

-

△15

59

-

△329

△187

△516

Total changes in equity

-

△15

59

4,181

△1,066

-

3,115

8,284

7,541

△3,70911,454△815-

10,639Balances as ofMarch 31, 2023

Equity attributable to owners of parent
Retained Earnings
Balances as of April 1, 2022
ProfitOther comprehensive income
Purchase of treasury shares
Disposal of treasury shares
Dividends of surplus
Share-based payment transactions
Transfer to retained earnings

Balances as of March 31, 2023

Total

Non-controllinginterests

Total

202,160

221,756

14,267

236,023

4,591

4,591

646

5,236

-

3,631

775

4,406

4,591

8,222

1,421

9,643

-

△0

-

△0

-

44

-

44

△4,459△4,459△1,350△5,809
-

-

-

-

516

-

-

-

△3,943△4,415△1,350△5,765

647

3,807

71

3,878

202,808

225,563

14,338239,901

Comprehensive income attributable toComprehensive income

Exchange differences ontranslation offoreign operations-

Total changes in equity

Exchange differences on translation offoreign operations

Treasury
Shares8,284

Total transactions with owners

Items that may be reclassified to profit or loss

CapitalSurplus

Net change infair value ofequity instruments designated as measured at fairvalue throughothercomprehensive income

ProfitBalances as of April 1, 2022

Total

Items that will not be reclassified to profit or loss

(Mil. JPY)

Equity attributable to owners of parent(Mil. JPY)

previous fiscal year

ProfitConsolidated Statement of Changes in Equity

87Chapter 6: Financial and Corporate Information

EXEDY Integrated Report 2023

3. Financial Review

4. Environmental Reports (EXEDY)Consolidated Statement of Cash Flows(Mil. JPY)

previous fiscal year

(April 1, 2021 to March 31, 2022)

current fiscal year

Environment Accounting
Cost of Environmental Conservation for the 2022 Fiscal Year

(April 1, 2022 to March 31, 2023)

Cash flows from operating activities

Item

Cost

Anti-pollution
Measures

028

Wastewater treatment facilities, installation of environmental equipment

Preservation of the
Global Environment

78

48

Solar panels, LED lighting, air conditioning upgrade

Recycling Natural
Resources044

Waste Disposal, Recycling Processing

Management Activities

017

Environmental month events, ISO periodic audits

Research Activities

0

3,406

Social Activities

0

7

Total

78

3,550

Profit Before Taxes

19,467

9,916

19,46319,923

103

4,222

△281

△284

776

833

Environmental Conservation Cost

Share of loss (profit) of investments accounted
for using equity method (△=profit)

△20

△57

Investment

Foreign exchange loss (gain) (△=profit)△15

9Decrease (increase) in inventories (△=increase)△4,186△549

Decrease (increase) in trade and otherreceivables (△=increase)△4,676

1,258

Increase (decrease) in trade and other payables(△=decrease)

△165

308

Interest and dividend income
Interest expenses

2,245

31

32,71035,610FY2019FY2020

83

94

43

50

38

512

548

1,180

1,001

FY2018FY2019FY2020

FY2021(tons of CO2)

Quantity Effect71,16462,223

48,59347,93542,143

Greening of business offices, environmental education

Volume of valuables sold

34,59533,52929,49428,916

26,064

Reduction
and Recycling

3,119

2,813

2,081

2,351

2,165

Final disposal(landfill)

137

128

123

256

136

Amount ofIndustrial
Waste
Discharged

3,628(Mil. JPY)

FY2019FY2020

FY2021

FY2022

60

47

258

53

78

3,292

3,146

2,938

3,141

3,550

Total

3,352

3,193

3,196

3,194

3,628

* CO2 conversion factor: Based on FY2017-18 Voluntary Action Plan for the Environment, JAPIA (0.453

t-CO2/thousand kWh)
From FY2019 onward, adjusted CO2 conversion factors (residuals) by electricvehicle are used.
（https://ghg-santeikohyo.env.go.jp/calc/denki）

Material Balance
Amount used and purchased
Item

Unit

Electricity

thousandkWh

FY2018

KeroseneKL

FY2019FY2020

FY2021

FY2022150,999

139,553

115,363

122,494

108,775

140

120

112

140

114

Item

Unit

Steel

t

FY2018
131,677

FY2019127,816

110,193

112,939

99,598Castingt

11,51910,652

8,606

9,804

11,545

85

75

25

36

52

Forgingt

16,515

15,134

12,794

14,603

13,715

KL

165

166

75

127

63

Friction
Materials

Mil.
Facings

11.0

10.1

8.3

10.3

10.1

City gas

thousand㎥

35

31

23

22

21

Tap Water

1000 m3

134

132

100

110

111

t

552

509

435

461

392

Industrial
Water

1000 m3

104

104

80

75

49

LPG

△7,826

Net cash provided by (used in) operating activities

28,43427,224

Within EXEDY△844△4,912

Amount of Chemical Substances Discharged and Transferred

Proceeds from withdrawal of time deposits

909

4,796

Purchase of property, plant and equipment△13,938△11,973

352

82

△866

Proceeds from sale of investment securities

2

Purchase of shares of subsidiaries resulting inchange in scope of consolidation

Amount Recycled
Scrap (Recycling)

Unit:tons

FY2018FY201912,874FY202011,376FY20219,900

FY2022

12,204

9,113

PRTR Subject Chemical Substance (FY2022)
Class I Designated Chemical
Location

Substance

No.

Headquarters

80
384
20

Unit: kg

AmountDischarged

Transferred

Waste

1-Bromopropane
Ethanolamine

0

0

2,000

0

0

0.0

0.0

1,100

△746

Other

△1,109△513

Net cash provided by (used in) investing activities△15,494△12,794

Proceeds from short-term borrowings

16,837

9,857

Repayments of short-term borrowings△16,698△7,933

Proceeds from long-term borrowings

10,392

1,468

Repayments of long-term borrowings△16,548△8,225

Air

OK

OK

-

-

Dividends paid

△3,285△4,468

Water

OK

OK

-

-

Other

△1,237△1,877

Noise

OK

OK

OK

OK

Net cash provided by (used in) financing activities△10,540△11,179

Effect of exchange rate changes on cash and cash equivalents

1,439

881

Net increase (decrease) in cash and cash equivalents

3,840

4,131

Cash and cash equivalents at beginning of period

51,56755,407

Cash and cash equivalents at end of period

55,40759,538Cash flows from financing activities

Ueno

80

Xylene

12

0.0

0.0

296

1,2,4-Trimethylbenzene

6.9

0.0

0.0

FY2022Nox emissions

SOx emissions

30,153

Headquarters

No applicablefacilities

No applicablefacilities

384

1-Bromopropane

25,0000.0

0.0*Kawagoe Plant, Hiroshima Plant: not applicable

NOx, SOx emissions
Sulfur Oxide (SOx) emissions (t) = SOx concentration (ppm) x 10-6 x dry gas emissions (Nm3/h) x
facility annual operating hours (h) x 64/22.4 x 10-3
Nitrogen Oxide (NOx) emissions (t) = Amount of NOx per hour (Nm3/h) x facility annual
operating hours (h) x 46/22.4 x 10
*1 Result: Less than 5ppm detection limit → Calculated as 5ppm
*2 Result: Less than 1ppm detection limit → Calculated as 1ppm

Legal compliance status and monitoringmeasurement results
Item / Division

Vibration
Manifest Delivery Status
Waste

Headquarters

Ueno Division

Groundwater pumping volume
Freon
Chemical substance usage/transfer (PRTR)

Hiroshima Plant

Penalties and fines for exceeding
standards, violating laws, etc.
During the subject period, no penalties were applied or associated costs
paid due to exceeding standards or violations of laws and regulations.

Regarding Environmental Reports

OK

-

-

OK

OK

OK

OK

OK

This report covers the domestic production bases: EXEDY Headquarters, Ueno Division, Kawagoe Plant and Hiroshima Plant.

No measurements
in FY2022---

Preparing this report, we referred to the Environmental Report
Guideline (2018 Edition) issued by the Ministry of the Environment.

Reported---

Disposal site
Waste residue analysis

Kawagoe Plant

OK

OK: Simple/Periodical measurement leakage less than 1t
Reported

Reported--*- means that these locations are not obliged to report or measure their operations

88(unit: kg)

FY2022

Ueno Division 0.20127（※1） 0.50633（※2）
VOCs emissions
Target substances: Substances with a boiling point of less than 150°
C among the substances
reported under the PRTR Law and those with a boiling point of 150°
C or
higher for painting, cleaning, and adhesive purposes.
Target facilities: Facilities notified under the PRTR Law-

Division

Unit:kg

VOCs emissions

Industrial

850

XyleneEmissions to the atmosphere

Consumed

Atmospheric
Emissions

Name

△472
944

FY2022KL△3,737Purchase of intangible assets

FY2021

Gasoline

Income taxes paid

Proceeds from sale of property, plant and equipment

FY2020

Diesel△853

Payments into time deposits

FY2022*CO2 Emissions

Cost

292

Cash flows from investing activities(Mil. JPY)

FY2022796△804Interest paid

FY2021

Sale of valuables

Water

265

Interest and dividends received

FY2018

Cost of Waste Disposal

Purchased
Materials

Subtotal

Economic Benefits

Fuel efficient products, development of recycled materials, and weight reduction

FY2018Energy

Other

Total

Economic and material benefits associated with environmental conservation

Details

Depreciation and amortization
Impairment losses(Mil. JPY)

Investment

89

The report covers the period from April 1, 2022 to March 31, 2023.
However, matters from other periods that were deemed necessary,
have been included as well.

Chapter 6: Financial and Corporate Information

4. Environmental Reports (Global*)

EXEDY Integrated Report 2023

* The scope of each data is as follows
FY2020: EXEDY and 28 domestic/overseas affiliates
FY2021: EXEDY and 37 domestic/overseas affiliates
FY2022: EXEDY and 38 domestic/overseas affiliates

GHG data(Unit: tons of CO2)

Market-based
CO2 Emissions (by Scope)

FY2020CO2 Emissions (by Country)

China

FY202033,032.32

184,619.56
218,354.15

FY2020Australia

FY202233,734.59

185,166.76
217,057.25

the Entire Group（Scope2)
the Entire Group（Scope1+2)

Unit:MWh

Location-based

FY2021

31,890.49

the Entire Group（Scope1)

31,890.49

170,165.84
203,198.17

FY2021

FY202133,734.59

197,207.26
229,097.75

FY2022

FY202233,032.32

204,426.69
238,161.28

FY2020187,791.79
220,824.12

FY2021-222.46194.15-222.46194.1544,591.34

42,688.49

48,758.66

48,174.19

42,688.49

Cambodia

-

-

86.32

-

-

86.32

Hungary

2,770.68

2,759.36

2,935.00

2,368.15

2,814.55

2,676.76

India
Indonesia

14,063.81
3,600.20

11,453.35
4,533.67

10,726.86
4,439.72

18,286.94
3,178.93

19,624.96
3,978.19

19,660.18
4,439.72

Japan

91,594.61

95,082.48

85,883.24

100,794.75

107,594.13

97,674.95

Malaysia

1,177.96

1,265.52

1,458.90

1,177.96

1,265.52

1,458.90

MexicoNew Zealand

5,102.39-

4,536.39-

3,223.51
50.57

4,145.04-

4,264.80-

2,958.89
50.57

Panama

-

42.73

20.05

-

42.73

20.05

Singapore

-

25.01

26.09

-

25.01

26.09

South Africa
Thailand

21,036.99

22,518.32

7.55
19,517.05

20,973.68

22,935.83

7.55
22,292.60

0

50.41

47.13

-

52.07

47.13

0
34,086.71
1,733.41
217,057.25

66.92
29,177.37
2,028.83
218,354.15

73.39
29,521.95
2,298.20
203,198.17

27,680.23
1,733.41
229,097.75

66.92
25,071.10
2,028.83
238,161.28

73.39
24,170.18
2,298.20
220,824.12

United Kingdom
United States of America
Vietnam
Total
Other GHG Emissions(CH4, N2O, CFCs)

FY2020the Entire Group（Scope1)

FY2021

1,347.54

FY2022

1,303.41

FY2020426.58FY2021

1,347.54

FY2022

1,303.41

426.58

CO2 Conversion Factor
CO2 conversion factor of electricity (Market-based)
Country

FY2020

Unit:t-CO2/MWh

Country

FY2021Country

FY2022

Yuhao Hydropower
Development Co., Ltd.

China

Hungary0.3280E.O.N. Észak-dunántúliÁramhálózati Zrt.

Hungary

0.2180MVM Zrt.

India

0.71000

BESCOM

India

0.85000

BESCOM/IEX
Atria energy services pvt.ltd

0.8700

Purusahaan Listrik Negara

Indonesia

0.8700

Purusahaan Listrik Negara

0.39890.45860.4940

CFE( Comision Federal deElectricidad)

0.4230

CFE( Comision Federal deElectricidad)

0.49600.41300.44310

AMATA B-Grim Power

Indonesia
Mexico0.4800Thailand
UnitedStates ofAmericaJapan

0.4780Atria energy services pvt.ltd

AMATA B-Grim Power0.4960PROVINCIAL ELECTRICITYAUTHORITY

1.0100Appalacian Power

0.2710KUB Combined Meters:

0.6010

Hokkaido Electric Power Co.,Inc.

0.5220

Tohoku Electric Power Co.,Inc.

0.4420Tokyo Electric Power Co.,Inc.

0.4260Chubu Electric Power Co.,Inc.

0.3180

The Kansai Electric Power
Company, Inc.

0.5850

The Chugoku Electric Power Co.,Inc.

MexicoThailand

United Statesof America

Japan

FY2020

FY2021

FY2022Australia
China
Hungary
India
Indonesia

0.70900.63700.25200.74500.76700.68500.62300.22700.72200.76200.67830.61440.21980.68930.7707

Malaysia
MexicoPanamaSingapore
Thailand
United Arab Emirates
Englandunited states of america
Vietnam
Cambodia
new zealandSouth Africa

0.65900.40000.66300.38900.47900.52000.22900.41000.5530ーーー

0.66200.39700.70900.38500.46100.50500.20800.38200.6490ーーー

0.65100.39860.32970.38410.47180.52780.19320.35340.6284
0.49370.12940.9238Japan

0.49600.48700.4761

Hungary0

Atria energy services pvt.ltd

Mexico0.4350

CFE (Comision Federal deElectricidad)

0.5500

Hokkaido Electric Power Co.,Inc.

0.4570

Tohoku Electric Power Co.,Inc.

0.4430Tokyo Electric Power Co.,Inc.

0.3790Chubu Electric Power Co.,Inc.

0.3510

The Kansai Electric Power
Company, Inc.

0.5210

The Chugoku Electric Power Co.,Inc.

0.5950ESS

0.3640

CD Energy Direct

United Statesof America

Japan

by Fuel TypePetroleum
Kerosene
Diesel
LPG
City gas

2.321660

Natural gas

0.77370.28400.5370

Hokkaido Electric Power Co.,Inc.

0.4880

Tohoku Electric Power Co.,Inc.

0.4570Tokyo Electric Power Co.,Inc.

0.3880Chubu Electric Power Co.,Inc.

0.3110

The Kansai Electric Power
Company, Inc.

0.5450

The Chugoku Electric Power Co.,Inc.

0.4410ESS

0.3240

CD Energy Direct222.25Unit

2.217050

t-CO2/1,000N㎥

t-CO2/tNew zealand

5,842.55

South Africa
United Arab Emirates
England72,049.28

172.9264,561.21

India

22,170.24

24,508.86

25,372.28

5,296.47

5,748.96

IndonesiaJapan

4,070.22
173,785.38

5,129.10
188,175.63

5,673.08
172,978.90

Mexico10,206.33

10,529.86

7,271.86

Malaysia

1,788.58

Amount of solar power
generated

1,858.87

FY2020

FY2021

FY2022

-

59.30

60.27
43.44

Thailand

40,077.25

44,882.46

41,928.66

united states of america

45,380.11

44,061.55

45,218.43

Total

376,943.50

400,224.13

375,247.19

FY2020

FY2021

FY2022-

Amount of solar power
generated

1,459.28

FY2022
単位：MWh-Total Energy Consumption
FY2020

-

60.81
46.38

-

-

Vietnam

FY2022

1,546.67

FY2021

PanamaSingapore

2,168.10

FY2021

1,646.62

Self-consumption

FY2020197.76

71,436.93

8.17

58.91
79.71

2,732.00

50.66
73.13

2,815.00

3,563.00

Sold

5,134.32

5,090.75

5,314.14

Total

6,780.94

6,637.42

6,773.41

Fuel Consumption

Unit

Fuel Consumption

Unit

Petroleum

KL

88.30

187.11252.04LPG

t

Kerosene

KL

254.45274.50250.60City gas

DieselKL

279.78366.81439.98Natural gas

Bunker A

KL

71.47

52.79

0.00

FY2020

FY2021

FY2022

2,031.25

2,096.68

2,013.56

1000

53.99

5,404.42

5,331.23

1000

10,790.48

5,937.74

5,745.21

Unit:TJ

Total Energy Consumption

FY2020

FY2021

Unit:TJ

FY2022

Total Energy Consumption

Petroleum

2.89

6.13

8.26

Electricity

Kerosene

8.97

9.68

8.84

Conversion Factor
CDP technical note

Diesel

10.05

13.17

15.80

Bunker A

2.79

2.06

0.00

LPG

103.19106.51102.29City gas

2.42

242.12238.84Natural gas/LNG

362.56199.51

193.04

Total

492.87579.18567.07Water

FY2020

FY2021

1,357.00

FY2022

1,440.81

1,350.89●Petroleum

LHV

44.3 TJ/Gg●Diesel

LHV

43TJ/Gg●Kerosene

LHV

43.8 TJ/Gg●Natural gas/LNG LHV

48TJ/Gg

Greenhouse Gas Emissions Calculation, Reporting and Publication System
https://ghg-santeikohyo.env.go.jp/●Bunker A 39.1GJ/KL● LPG 50.8GJ/ｔ●City gas 44.8GJ/MNm3

1TJ=277.778MWh

単位：千㎥
FY2020

Unit:1000㎥

FY2021

FY2022

2,266

2,368

2,400

443

503

526

Breakdown: Secondary treatment

1,199

1,200

0

Breakdown: Primary treatment

Breakdown: Water source: Groundwater

194

201

178

Breakdown: Water source: City water

873

967

2,222

62

65

87

Total water withdrawals
Water withdrawal (water-stressed area)
Breakdown: Water source: rivers, lakes and marshes

Amount Consumed
Total Discharged Water Volume
Breakdown: Discharges to: rivers, lakes and marshes

Emissions per treatment level

233

315

376

2,204

2,303

2,312

1,372

1,377

1,421

60

65

114

770

854

Amount Recycled

Breakdown: Discharges to: soil
Breakdown: Discharges to: sewage

FY2020

Breakdown: Tertiary treatment

Breakdown: No treatment

FY2021

FY2022

1,713

1,776

1,732

203

274

249

2

14

67

286

239

264

Definition of water-stressed areas: water stress at the time of Aqueduct's reporting"Baseline water stress" is confirmed to be medium or higher in July of the following
year of actual.
Primary treatment: Physical removal of suspended solids by sedimentation, etc.
Secondary treatment: Primary treatment + decomposition of organic matter by
biological treatment, etc.
Tertiary treatment: secondary treatment + many processes such as suspension,
colloidal, dissolved components, etc.

774

(Unit: cases)(Unit: cases)

Water Quality

FY2020

FY2021

FY202200Water Quality

0

FY2020

FY2021

FY20220

Accidents and serious leaks

0(Unit: 1000 tons)

Type

Notes

FY2020

FY2021

16.5

Total waste

t-CO2/kl

t-CO2/kl
t-CO2/kl
t-CO2/tt-CO2/1,000N㎥

by country

0

Waste
(Unit: 1000 tons)

Type

FY202218.6

15.8

FY2020

Breakdown: Recycled amount
Breakdown: Final disposal

Source:Ministry of the Environment: List of Calculation
Methods and Emission Factors for Calculation,
Reporting, and Publication System (https://ghgsanteikohyo.env.go.jp/)

Location-based: IEA, Emissions from Fuel Combustion
Market Standard: Residual Mix values for each country. Countries that could not be identified
adopted Location-base Value
Ministry of the Environment: List of Calculation Methods and Emission Factors for Calculation,
Reporting, and Publication System
https://ghg-santeikohyo.env.go.jp/

90-

FY2022

Cambodia
China

Emission standards exceeded

2.489483
2.584963
2.998893
2.234027

2.709630

Bunker A

Australia

FY2021Type

CO2 conversion factor of electricity(FY2019 ～ common-standard)
CO2 conversion
factor

FY2020AMATA B-Grim Power
AMATA B-Grim Power（REC）
PEA (SALE ELECTRICITYFROM EGAT)
Appalachian PowerKUB Combined Meters/TVA

0.55370.77400.2780MVM Next.

India

ThailandPROVINCIAL ELECTRICITYAUTHORITYAEP
KUB Combined Meters/TVA

0.4960CO2 conversion factor of electricity(Location-based)
Unit:t-CO2/MWh
Country0

Yuhao Hydropower
Development Co., Ltd.

0.26400

ChinaCountry

Hungary

FY2022

41,890.48

United Arab Emirates

Electric Power Data

FY2021

FY2022

11.9

13.1

10.6

4.6

5.5

5.1

Environmental Management System Certification Status (as of January 2024)
by Sector

ISO14001 Certified

Number ofCompanies

By Region

ISO14001 Certified

Number ofCompanies

By Region

ISO14001 Certified

Number ofCompanies

Manufacturing

20

23

Japan

4

10

14

13

Southeast Asia

0

11

Sales

North and Central America

2

2

Other

8

7

India

4

3

Europe

0

4

Total

45

2

Oceania

24

1

China

3

5

Other

0

2

Total

24

45

Manufacturing site ISO14001 certification acquisition rate: 87%

91

Chapter 6: Financial and Corporate Information

EXEDY Integrated Report 2023

5. Company / Stock information
Company Outline

Major Shareholders (Top 10)(As of March 31, 2023)

Number of sharesheld（1,000 shares）

Shareholding
ratio（％）

AISIN CORPORATION

7,230

15.4%

Aisin Holdings of America, Inc.

4,500

9.6%

Aisin Europe SA

4,500

9.6%

The Master Trust Bank of Japan, Ltd.

4,435

9.4%

The Custody Bank of Japan, Ltd.

1,735

3.7%

Bashokai (Basho Association of Japan)

1,355

2.9%

RE FUND 107-CLIENT AC

747

1.6%

EXEDY’s Employee Shareholding Association

633

1.3%

NORTHERN TRUST GLOBAL SERVICES SE, LUXEMBOURG RE CLIENTS NON-TREATY ACCOUNT

614

1.3%

DFA INTL SMALL CAP VALUE PORTFOLIO

610

1.3%

Shareholder

Company Name

EXEDY Corporation

Established

July 1950

Capital¥8,284 million

President & CEO

Tetsuya Yoshinaga

Headquarters

1-1-1 Kidamotomiya, Neyagawa-shi, Osaka, 572-8570

Number of employees

Consolidated:15,081
Non-consolidated: 3,358 (as of March 31, 2023)

Number of group companies

Japan 13 (EXEDY Corporation included), overseas 32

Fiscal year

April 1 to March 31 of the following year

Annual General
Shareholders Meeting

June

Share unit value

100 shares

Number of issued shares

Notes: 1
 . EXEDY holds 1,549,737 shares of treasury stock but is excluded from the above major shareholders.
2. Shareholding ratio is calculated excluding treasury stock.

Shareholder Composition Ratio (For Reference)
Treasury Shares

Financial Instruments Business Operator

1,549 thousand
shares3.2%

567 thousand shares
1.2%

Financial
Institutions

48,593,736 shares (as of March 31, 2023)

Number of shareholders

56,271 (as of March 31, 2023)

Securities code

7278

Listed on

Tokyo Stock Exchange

Government &Local Governments

6,745 thousand
shares13.9%

0 thousand shares
0.0%

Other corporations
9,072 thousand
shares18.7%

Foreign corporations, etc.
17,820 thousand shares
36.7%

Individuals and Others
12,835 thousand shares
26.4%■Stock Price Trend (Tokyo Stock Exchange)
Stock price (JPY)4,000

ESG-related external evaluation

3,000

EXEDY has been selected for a leading

2,000

ESG (Environmental, Social, and Governance) investment stock index and has

1,000

received high external recognition.

0

92

January 2018

January 2019

January 2020

January 2021

93

January 2022

January 2023

January 2024

EXEDY Corporation

1-1-1 Kidamotomiya, Neyagawa-shi, Osaka, 572-8570, Japan
Tel: 81-72-822-1152
https://www.exedy.com/en/