KYB Group Report
April 1, 2020 - March 31, 2021

2021

Contact

World Trade Center Bldg., South Tower 28F,
4-1, Hamamatsu-cho 2-chome,
Minato-ku, Tokyo 105-5128, Japan
Tel. +81-3-3435-3511
Fax. +81-3-3436-6759

KYB’s Heritage

Our Precision,Your Advantage

What KYB Aims to Be

Value

By providing technologies and products thatmake people’s lives safe and comfortable,
the KYB Group contributes to society.

Technology for
comfortable living

With society placing increasing importance on corporate social responsibility, KYB seeks to be a corporate group

Visionthat meets the expectations of its stakeholders. Guided by our Corporate Spirit, each and every one of us at KYB isaware of our responsibilities as a company, and will act with awareness of that in complying with laws andMonozukuri thatbrings happinessregulations, and enhance our corporate value to remain a trusted enterprise.

Corporate Spirit (What KYB Aims to Be)

By providing technologies and products thatmake people’s lives safe and comfortable,
the KYB Group contributes to society

Relationship between
the KYB Group and Stakeholders

2. We shall build a corporate culture full of vitality, and hold high goals.

Contribute to thecommunity

3. We shall value kindness and sincerity, cherish nature and care for theenvironment.

Coexistence with suppliers
and local communities

4. We shall constantly pursue creativity to contribute to the prosperityof customers, shareholders, suppliers and society.

Management Vision

Human Resource Development

Customers

To develop human resources who have a thorough understanding ofour policies and strategies and can accomplish our goals with passion.

KYB’s aim is to support the development of society through the joyof monozukuri, and make people happier as a result.
The mission of the KYB brandMonozukuri that goes the extra mile

Coexist withthe global
environment

KYB
Group

Environmental management,
energy-saving
plantsKYB will remain an enterprise that delivers value to customers andmarkets by making use of the reliable technical expertise we havebuilt up over the years. Through our efforts, we provide monozukurithat goes the extra mile to offer our customers new value andgreater satisfaction than they have ever known.

The KYB Group’s Social
Responsibilities

Value the KYB brand creates

Technology for comfortable living

The KYB Group always seeks to be creative in its businessTechnology and Product Development
To offer products that gain the admiration, provide comfort and satisfy
all of our customers throughout the world.

Monozukuri (Japanese manufacturingexpertise) that brings happiness

GlobalEnvironment

Provide usefultechnologies
and products
Quality, customer
satisfaction, and new
product and technology
development

What the KYB brand offers the world

Monozukuri that
goes the extra mile

Society

1. We shall follow all rules and face all issues with honesty.

MissionShareholders

Monozukuri (Japanese Manufacturing Expertise)

Provide soundreturns on
business activities

To operate plants filled with the creative inspiration of committedmonozukuri, and joy of creating products that satisfy our customers.

Economic contribution
and internal
controls

Management

Employees

Achieve a
healthy workplaceenvironment
Human rights, worker
safety and health,human asset
development

activities and to contribute to the progress of customers,

Value we can feel: Comfortable living, the joy of monozukuri
Value we can use: Reliable quality
The value KYB promises to end users: A higher level of comfortableliving through our creative technology and dedication to productdevelopment.
The value KYB promises to its customers: Reliable quality that comesfrom thinking of end users as our customers, too.
The value KYB promises to its employees: The joy of monozukurithat comes from knowing they are changing the world.

shareholders, business partners and local communities.
Each department sets out the corporate social responsibility(CSR) activities that it will implement during the fiscal year
based on the Corporate Spirit and Management Vision. The
outcome of each activity is reviewed in an ongoing cycle ofimprovement and renewal.

To be always self-aware of our corporate social responsibilities and to
pursue efficient management.

Employees follow the Corporate Guiding Principles in theirwork and deepen their awareness of the importance of CSR.

For details, see the “Corporate Guiding Principles”
section of the Company website.

Contents

https://www.kyb.co.jp/english/company/guidelines.html

KYB’s Heritage
Editorial Policy
The KYB Group has issued this integrated report since FY2019 to communicate
its management policies, business strategies and CSR activities to shareholders,investors and all other stakeholders. We hope to create new opportunities for
dialogue by covering business performance, management strategies andother financial information, as well as the environment, society, governance(ESG) and other non-financial information in order to inform readers about
our efforts to increase corporate value over the medium to long term. For abetter reading experience, we will continue to improve the report based on
stakeholder feedback. We welcome your suggestions.
Reporting Period
FY2020 (April 1, 2020 to March 31, 2021)(Includes some activities and information from outside the above reporting
period)01

KYB Group Report 2021

Scope
The report covers KYB Corporation and subsidiaries and affiliates in Japan andaround the world. Environmental data is for KYB Corporation (Sagami Plant,
Kumagaya Plant, Gifu North Plant, Gifu South Plant and Gifu East Plant)
unless otherwise annotated.
Date of Issue
November 2021

Corporate Spirit, What KYB Aims to Be
KYB’s History
Message from the President
Roadmap to Our Vision
KYB’s Manufacturing
FY2020-2022 Medium-Term Management Plan

Business Strategy
01
03
05
07
09
13

Basic Policy for ESG
Corporate GovernanceRisk Information
Social Initiatives
Environmental Initiatives

43
45

Strategy by Business
Automotive Components Operations

47

Hydraulic Components Operations
Other Businesses
Contributing to Social Issues through Our Business

ESG Initiatives
Forward-Looking Statements
This report includes plans and forecasts as of the issue date, and estimates
based on our business plans and management policies. Forward-looking
statements are based on information available at the time of report preparation,
and actual results may differ depending on changes in relevant conditions.

Product Lineup

KYB Group Business Overview

19
21
29
31
38

49
51
52

Company Data
Financial Highlights
Global Network
Shareholder Information
Corporate Information

53
55
57
58
KYB Group Report 2021

02

KYB’s Heritage

KYB’s History

Original technologies and dependable
quality that have met the needs of the times
The origins of KYB date back to 1919, when inventor Shiro Kayaba
founded the Kayaba Research Center at the young age of 21. Shiro
Kayaba’s invention, which utilized the most advanced hydraulic technology
at the time, had a structure and design that no one else had thought of
before, and his more than 100 patents supported the Company’s survivaland growth. He also contributed to the advancement of hydraulictechnology in Japan in ways such as making original products available
and providing guidance to engineers of other companies.

One of KYB’s strengths, in addition to the technologies it has built up
through the years, is its global production and sales network.
KYB set its sights on overseas markets early on, when it presented along-term management vision in 1966 to become a global player as acomprehensive manufacturer of hydraulic equipment, and established
the Overseas Business Division in 1973. The KYB brand spread widely
outside Japan, centering on shock absorbers. In 1981, our export ratio
reached 10.1% with export value exceeding ¥10 billion.
Meanwhile, Japanese automakers began focusing on developmentof luxury cars with high added value in response to the rapid rise in thevalue of the yen following the Plaza Accord.*
KYB, in partnership with Nissan Motor Co., Ltd., began developmentof an electronically controlled suspension, and became the first in theworld to successfully commercialize it. In 1990, we received theTechnology Development Award from the Japan Hydraulic &Pneumatic Society.
* Plaza Accord: An exchange rate stabilization agreement signed in September 1985 at theG5 (Japan, the United States, the United Kingdom, Germany and France) meeting offinance ministers and central banks.

1990-

Improvement of Management Structure and Productivity Gains

1919

Establishment

Active Overseas Expansion“Everything in use is still developing, a legacy from the past. The world continuously seeks that which isnew. The unique ability of humankind to progress lies in its constant search for perfection. ”
Founder Shiro Kayaba

Amid the collapse of Japan’s economic bubble and dramaticallychanging times, KYB, with its future at stake, set the goal ofestablishing a slim and resilient management structure, andfocused on transforming its business structure and strengthening
its financial position. Harnessing the power of the KYB Group, wedeveloped new products and created new businesses, while
enhancing productivity throughout our operations by promoting
total productive maintenance (TPM; an approach that engages all
employees in production maintenance and production management)
and total quality control (TQC).

2000-

Weathering the Recession by Reducing Costs
1945-

Entering New Fields with Creative Technologies
In the second half of 1946, just after World War II, KYB began
research and development of a new product—shock absorbers—incooperation with car manufacturers, and its share of that market
gradually expanded with the popularization of automobiles. In the
postwar construction boom, KYB in-licensed production technology
for concrete mixer trucks from overseas. After further developing thetechnology, in 1959 it started production of a revolutionary “tilting

mixer,” in which the drum body rotated and agitated the concrete
through gravitational force. This product put KYB on the map.
In 1951, we began development of oil dampeners for railways carsin collaboration with Japanese National Railways (now the Japan
Railways Group). We have since established a strong customer basewith a variety of partners including automobile manufacturers,
motorcycle makers and construction machinery companies.

performance, and in the 1990s we developed and successfullycommercialized a high-efficiency control valve. We have continued
to enhance human resource development to improve the level ofunderstanding of technologies, safety and quality. As part of thateffort, we gathered engineers from overseas for training to deepen
their understanding of monozukuri (Japanese manufacturingexpertise) and share their expertise in 2006.

2010-

Aiming for Further Growth Based on the Hydraulic Technologies We Have Cultivated Since Our Founding

1980-

Shifting to High-Value-Added Products
Hydraulic excavators, which were created in the 1950s, took amajor step forward after technology was introduced in Japan in
the 1960s. Today, Japan is at the world’s forefront in terms oftechnology development for hydraulic excavators. In fact, thehistory of technological advances in hydraulic excavators mirrors the
progress of KYB’s hydraulic products. The product that is considered
the culmination of that technology is the KCH high-pressure
cylinder that KYB began producing in 1984. With a new structurethat conquered the simple challenge of creating a cylinder thatTechnological DNA

would not leak, rust or break, this became a core product. The basic
data and calculation methods behind the meticulous design necessary
to ensure the proper strength, right down to each screw, have been
passed on, and improvements continue to be made even today.
In the mid-1980s, we began to focus on computer-aided
engineering (CAE) ahead of our industry peers, and our accumulationof data from that is reflected today in our use of big data from theintroduction of digital transformation (DX) technology.

Higher Added Value in Our Core Products: Evolution of Technologies
Automotive shock absorbers

The Kayaba Award, a technology award born from the wishesof our founder (the awards ceremonies were held at each
operating base in 2020 and 2021 due to the pandemic)

03

During Japan’s prolonged economic downturn, we actively expanded
overseas, mainly through joint ventures in the United States andEurope, with the goal of becoming “No. 1 Globally.” At the sametime, we implemented a total cost-cutting program Company-wide,and continued to strengthen our operations in an effort to reduce
lead time by half.
As exhaust gas regulations for hydraulic excavators became stricter
in various countries, customers required better environmental

KYB Group Report 2021

The Developmental Center, a long-held dream of our engineers,
opened in 2011. This enabled us to develop and test products more
quickly, and greatly improved our technology development
capabilities. The new center sought to link the knowledge and theexpertise of all KYB engineering divisions to boost productdevelopment efficiency and establish a quality assessment method.
As the importance of environmental issues increased worldwide,
people’s interest began to shift to safety, peace of mind, and comfort.
To pursue these, we would need even stronger technologicalcapabilities. Therefore, we established the DX Improvement

Department in 2019. We are utilizing various digital technologies tosupport the creation of new ideas and businesses, as well as improve
quality and productivity, and are building KYB’s IT systems in line with
global standards.
Based on the precise hydraulic technologies that have been
continuously refined since its founding, KYB is applying and combining
various basic technologies, such as automobile and motorcycle
suspensions, vibration control technologies exemplified by power
steering systems, and power control technologies used in drive systemequipment, to create new products that meet the needs of society.

100th Anniversary

We marked the 100th anniversary of KYB’s founding in November 2019.
The heritage left by KYB’s founder remains a part of the Company today.

Technology Applications

Basic Research (Tribology)

Uniform Quality Worldwide

DLC coating with excellent sliding
characteristics and beautiful appearance

Global engineer training

Pursuit of Quality

Hydraulic cylinders, valves and pumps
for construction machinery

Para-skier
Takeshi Suzuki(KYB employee)
Variable damping shock absorbers with proportional solenoids

KCH hydraulic cylinder

Load-sensing system formini excavators

Shock absorber for a chair ski we began
developing for the 1998 Winter Olympics

Extensive track record of quality awards

KYB Group Report 2021

04

KYB’s Heritage

Message from the President

KYB contributes to the sustainable
development of the earth and society
as a global leader in vibration control
and power control technologies.

I would like to extend my thoughts to all those who havebeen impacted by the ongoing COVID-19 pandemic,
and hope for the earliest possible recovery. I also want
to express my heartfelt respect and appreciation for thehealthcare professionals working hard to treat patients on
the front lines every day.
The KYB Group is working to prevent the spread of thevirus, and will respond promptly and appropriately basedon the requests of the relevant authorities, with the safetyof our customers, suppliers, and employees and theirfamilies as our top priority.

Start of FY2020-2022 Medium-Term
Management Plan—
Return to Profitability amid
the Pandemic
FY2020, the start of our new medium-term management
plan, presented very challenging conditions, including a
sharp decline in shipments due to stagnation of economic
activity in Japan and globally because of the COVID-19
pandemic in the first half of the year. However, weaggressively implemented various improvement measures,with a focus on reduction of fixed costs, and thesemeasures, coupled with the later recovery in demand,
resulted in a turnaround to profitability at a higher level
than we expected.
While the COVID-19 pandemic has caused various
problems, it has also highlighted some issues we needed toaddress, and served as an opportunity to make drastic
structural reforms including organizational restructuring
and a review of our businesses, as well as reform of work
styles for our employees. It was a year that reminded us
how important it is to maintain a positive outlook and keep
moving forward even in difficult conditions.

Stabilization of Our Revenue Base
Aiming for Higher Corporate Valueand Sustainable Growth
In FY2021, the uncertain operating climate is expected topersist due to COVID-19, the chip supply shortage andother factors, but we will make up for the slow start to themedium-term management plan by continuing toreorganize our production bases and focusing on issues
such as scaling back or discontinuing unprofitablebusinesses and products in order to stabilize our revenue
base. Regarding the problem of our seismic isolation/
mitigation oil dampers, which has caused trouble andconcern for our stakeholders, we will sincerely address theissue at remaining properties to finish bringing all dampers
into conformity. To make sure we do not repeat the same

mistakes, we will instill awareness of compliancethroughout the Company, from top management tofrontline workers.
The growth strategy in the FY2020-2022 Medium-Term
Management Plan, in addition to solving current
challenges, also seeks to address societal issues such as theaging population and declining birthrate as well as
environmental problems. Our approaches will include thecreation of high-value-added products that further deepen
KYB’s core technologies and innovative monozukuri thatraises the level of automation. At the same time, we will
actively promote measures to enhance medium-to-longterm corporate value and ensure sustainable growth.

Monozukuri to Leave a Better
Environment for the Next Generation
We established the ESG Promotion Office in July 2021 toroll out and promote our ESG Policy throughout the Group.
We also plan to reduce the Group’s overall CO2 emissions
and develop products that contribute to the sustainableadvancement of society. In addition, we will take a fresh
look at our existing business activities from ESG
perspectives, and proactively promote monozukuri to leavea better environment for the next generation.

A Global Leader in Vibration Control
and Power Control Technologies
KYB has a history of more than 100 years since its
founding in November 1919, and continues to lead theway as a top global manufacturer specializing in vibration
control and power control technologies. KYB’s products
support people’s daily lives worldwide, delivering safety,
peace of mind and comfort. Going forward, KYB willcontinue to evolve to provide products that satisfy
customers throughout the world, with the goal of being “atrusted brand that contributes to the prosperity of society.”
We ask for your continued support and guidance.

Masao Ono
Representative Director andPresident Executive Officer

05

KYB Group Report 2021

KYB Group Report 2021

06

KYB’s Heritage

Roadmap to Our Vision

KYB’s operating environment isin a once-in-a-century revolution

Societal needs• Changing technological and social landscapes• Focus resources on core businesses and turn

● Post-pandemic world
Focus oncore
businesseschange into opportunity• Bring to market products with high added value

Enhancement of long-term
corporate value—
A trusted brand that contributes
to the sustainability of the earthand society● Diversity & inclusion● Response to global warming

such as diverse features, automation, etc.

FY2020-2022
Medium-Term
Management Plan

Market expansion

Ensure compliance and achieve
high profitability
P. 13

KYB’s coretechnologies

Measures to recover trust and pride
Strengthen
compliance andgovernance

Respond tosocial demands

Human resource
development

Safety firstand quality
management
initiatives

Stabilize therevenue base

Growthstrategies incore businesses

Innovation Strategy
Utilize advanced technologies

Vibration
control
technology

Powercontrol
technology

Technology expansion

Hydraulictechnology

KYB’s Heritage

Corporate Spirit

07

KYB Group Report 2021

The business essence and technologies handed down since
KYB’s founding
By providing technologies and products that make people’s lives
safe and comfortable, the KYB Group contributes to society

Tackle production innovation

Artificial intelligence (AI)Respond to movement toward self-driving
and electric vehicles, energy-saving
vehicles and environmental restrictions

Internet of things (IoT)

Create new markets andnew products

Digital transformation (DX)

Create productsthat contribute tosocial sustainability
P. 11

P. 09

100th

Anniversary
P. 19

KYB Group Report 2021

08

KYB’s Heritage

KYB’s Manufacturing
KYB develops technologies and products by combining its two core businesses—
vibration control and power control technologies—with elemental technologies suchas electronic control technologies, and through cooperation among research facilities,businesses and Group companies.
In addition, KYB is carrying out Companywide activities to address environmental
issues, which cannot be ignored today, as well as looking at solutions to social issues,
the achievement of the SDGs, DX-driven production innovation, and the creation of
new businesses.

KYB’s Technology Development
The origin of KYB is the Kayaba Research Center, which
was established by the inventor Shiro Kayaba, theCompany’s founder, in 1919. Since the founding of
the center, we have spent a century refining hydraulictechnologies. Today, our shock absorbers are used in
one out of every five automobiles in the world, and haveachieved dominant market shares with their advanced
technology and high quality.
A major feature of hydraulic pressure is that it
produces a larger output in a more compact device thanelectric, pneumatic or other driving methods. The easeof control due to its superior responsiveness is anotherreason for its wide use. For instance, an automobile shock
absorber that absorbs impact from the road surface is agood example of the use of the viscosity of oil to exert
an appropriate damping force, and hydraulic pressure isconsidered the best system for construction machinery

because of the large output required.
KYB has created a variety of hydraulic products
in combination with other elemental technologies
such as electronic control, centering on the two coretechnologies of hydraulic vibration control and power
control. Even with today’s rapidly advancing technologies,
we have confidence in the meaningful contribution thathydraulic technology can make to the development ofsociety. Therefore, we are not only further deepening ourcore technologies, but also responding to changing times
by adopting cutting-edge technologies such as AI, IoT
and advanced simulations to promote the systemizationof products. We are also taking on the challenge ofdeveloping the next generation of hydraulic equipmentthat offers both higher efficiency and better safety,
such as automated ICT construction machinery using
electronic control.

KYB’s Technology Development System
KYB is actively developing advanced technologies,
primarily at the Basic Technology R&D Center and theProduction Technology R&D Center, to solve challenges
such as those relating to energy conservation and reductionof environmentally hazardous substances, as well as toimprove the performance of and add functionality toexisting products.
We aim to create new value by integrating ourtechnologies, global production operations and marketing
functions. To do this efficiently, we have created a vision of
future technology based on studies, analysis and forecastsof long-term environmental changes and the associatedchanges in society and customer needs. We are creating
a clear roadmap for sustainable growth and conducting
research and development to achieve that vision.
In basic research, we are conducting research for the next
generation of businesses and products as well as elemental
technology research. To convert the results of that research
into tangible assets, we are, for example, developing an
integrated system that combines electronically controlled

Control, vibration, information and communications, electrical/electronics, mechanical elements,
sensors, surface treatment, heat treatment, processing, assembly, inspection, automation, etc.
Basic Technology R&D Center/Production Technology R&D Center
Basic research

Future technology
research

Elemental technology
research

Digital technology

Vibration control

Intellectual property
strategy

Simulation technology

Product development

KYB’s CoreTechnologies

Intellectual Property
Department

CAE* Promotion Department/DX Improvement Department
AI and IoT

KYB’s Technologies

suspension and electronic power steering technologies forthe self-driving vehicles of the future.
At the same time, the technology divisions of eachbusiness area are also developing new products on theirown and moving them into mass production, in addition
to improving the performance and lowering the cost of
existing products.
The original product technologies and mass production
technologies developed from these activities will be used in
production by business divisions and Group companies, andwill be applied throughout the Group. The combination of
the new production methods developed by the Production
Technology R&D Center and the expertise cultivated ateach factory is leading to construction of new facilities andinternal production of jigs and tools.
Recently, we have begun promoting DX throughout
the Company to increase the efficiency and speed ofthese research and development efforts. We are also
actively working to boost efficiency and productivity withapproaches such as data analysis that uses AI.

Mass production
Businesses/Group companies*CAE: Computer-Aided Engineering. The use of computer simulations to resolve issues faced by technical departments.

Power control

Environmental Initiatives

Elemental Technologies
HydraulicElectronic control

Motorization

AI and IoT

SystemMaterials

Testing andevaluation

Advanced simulations

Monozukuri (Japanese manufacturing expertise)09

KYB Group Report 2021

Leading-Edge Technologies

Digital technology

The need to address environmental issues is unavoidable
today. KYB is promoting research and development related
to environmental issues. For example, among our products,
we are working on electrification and weight reductionof the hydraulic pumps built into continuously variabletransmissions (CVTs) for automobiles and various devices,and energy savings and efficiency improvements in hydraulicequipment for construction machinery.
KYB has multiple operating bases in Europe. We conduct
research and development in close coordination withlocal subsidiaries in order to comply with the EU’s REACH
Regulations,* for example. To expedite these research anddevelopment activities, we established the Environmental
Regulation Response Group in FY2020. This will enable us
to share and stay one step ahead of information regarding
environmental regulations such as lead-free directives, inaddition to the REACH Regulations.
Recently, the EU stated its goal of becoming carbon neutral
by 2050. We will examine the details of implementationplans and develop specific measures with a technology
roadmap (backcasting).
*	REACH stands for Registration, Evaluation, Authorisation and Restriction of Chemicals.
It is an EU law intended to protect human health and the environment while fostering
competitiveness within the European chemical industry.

KYB Group Report 2021

10

KYB’s Heritage
KYB’s Manufacturing

Four Initiatives to Solve Social Issues
13 	Research and development for new products and new markets (conscious of social

contribution and SDGs)

Creation of a technology roadmap (backcasting)now, have been insufficient. Therefore, we will envision
what we want KYB to become, with the future as thestarting point, and then use a “backcasting” approachin which we think about what we will need and what
we should do in order to realize that vision. From thatperspective, we will organize what we need to do, andformulate a roadmap that connects this approach with theconventional forecasting approach.

KYB has promoted research and development to meet theneeds of existing customers and provide a timely and stablesupply of excellent products to the market. As a result, wehave mainly conducted research and development witha view ranging from the recent past to the medium-term
future (i.e., a forecasting approach). However, our activities
connected to aspects such as contribution to society andachievement of the SDGs, which are required components

Backcasting

Set a vision (what we want to become)(Thinking with now as the starting point)• What will we need?
• What should we do?

Thinking as an extension of current technology• What we can do• What seems possible

Research anddevelopment
value

Societal needs, new services andresponding to various regulations

Data platform and design support system

Product development

DX-driven production innovation and creation of new businesses (innovation strategy)
from production facilities as initiatives for production
innovation, and to the research and development of asmart road monitoring system as a new business creation
initiative. In addition, we will actively recruit and develop
human resources proficient in using digital technology.

At KYB, we are making Companywide changes to the ways
we utilize data with strong support from management.
In 2020, we produced an IoT platform in-house as adata utilization platform. We will apply this platform toequipment failure prediction and collection of information

Construction of a Data Utilization Platform❷ Collect and store data in one location

Production

KYB

Quality
information

Overseas
bases

Productivity improvement

Visualization and analysis Administration

Designinformation

Sales
information

Quality improvement

Sales

Production site

• Sales information• Complaint information• Production information• Product informationcommercialization

11

KYB Group Report 2021

follow-up of projects. The aim is to create a system forexecuting projects as an organization. The ultimate goal
is not only to offer products at the price customers want,
but also to take into account the need to meet productdevelopment schedules and ensure the Company’s
profitability. This will help us become a corporate groupthat our stakeholders can rely on.

In advancing research and product development projects
derived from customer requests and the technology
roadmap, we have begun an initiative in which divisions
engaged in research and product development, as
well as other divisions, including cost planning, sales,
procurement, production technology, and manufacturing
divisions, work together to visualize the progress and❺ New business creation

Offering of new value

R&D

Production
technology

Manufacturing

Users

Product
planning

Companywide commercialization activities

Product added value
improvement

Research anddevelopment

Aiming to be a
corporate groupthat stakeholders
can rely on• Meet the needsof customers

Corporate Spirit• Design information• Research data

Costplanning

Technology roadmap(forecasting, backcasting)

Product
information❹ On-site visualization

Environmental regulations

4 	Promoting a seamless Companywide process from research and development to❸ Analysis with AI and statistical methods
Design & development

Groupcompanies

Carbon neutrality

SDGs
Changes in social conditions
Carbon neutrality

Market needs
Processing

Aging population and declining birthrate

Customer needs

Data collection and preservation

AI/ML■ Response to changes in social conditions

R&D

Market challenges
Customer needs
Social trends

IoT-Platform
Equipment
information

New markets
and products(Plus)

Our way forward

FutureProduction
information■ Targets of SDGs

IP landscapePresent❶ Collection of data from various devices (IoT)

Existing customers(OEM, etc.) and our businesses

Corporate Spirit

Short-term R&D initiatives
Balance of short- and long-term initiatives
Long-term R&D initiatives (anticipating and waiting)2(Backcasting)and responding to social and environmental regulations,which are likely to increase in number. We will include thisobjective in our technology roadmap and incorporate it into
every system in the Company to accelerate these activities.

Product development activities involving
the whole Company

SDGs, ESG, carbon neutrality, aging population anddeclining birthrate, environmental regulations, changes insocial conditions

Market issues, customer challenges,
self-driving vehicles, competitive trends,
ICT construction, social trends, etc.

(Forecasting)

Existing businesses
and products(Thinking from a future starting point)

Forecasting

KYB continues to provide quality products to existingcustomers every day.
To further expand our businesses, in addition to providing
products to existing customers, we will actively develop
new markets and products while contributing to society

Technology
trendsFuturehypothesisCore
technologies

Sales

Procurement• Ensure profitability
for the Company

Activities that involve alldivisions concerned
Competitive
trendsKYB Group Report 2021

12

KYB’s Heritage

FY2020-2022 Medium-Term Management PlanIn FY2020, the first year of the new medium-term management plan, we implemented
measures to prevent the recurrence of nonconforming acts, and placed awareness ofcompliance at the core of management as part of reforms to our corporate culture
initiated under the slogan, “Recovering trust and pride.” However, the year started
under extremely challenging conditions, including the spread of COVID-19, which led
to lockdowns in many countries and the state of emergency in Japan. As such, we
needed to take countermeasures to address the situation.
In FY2021, we will make up for the delay in implementing measures of the mediumterm management plan and work to establish a highly profitable structure. Although
the spread of COVID-19 continues and the future of the global economy remains
uncertain, we will work together as a group to realize the goals of the plan andrecover the trust of our customers as soon as possible.

FY2020 in Review
In FY2020, the global economy was severely impacted by
the COVID-19 pandemic. Although there have been signs ofrecovery in economic activities in some countries, including
the U.S. and China, and there are growing expectations
that COVID-19 will be brought under control throughvaccination, the situation still remains unpredictable dueto the reemergence of virus variants and other factors.
In the Japanese economy, the government’s economic
stimulus measures have led to signs of recovery in exports
and production in some industries, and economic activity
seems to be picking up again. However, the outlook remains
uncertain due to the resurgence of COVID-19 cases.
In this environment, the automobile market, a major
source of demand for our products, saw a decrease indemand compared with the previous fiscal year due to thestalling of the global economy and the impact of factory

shutdowns and other factors. The construction machineryand other markets also experienced a similar decreasein demand.
As a result, net sales were ¥328.0 billion, a decrease of¥53.5 billion.
Operating profit was ¥18.3 billion (compared with anoperating loss of ¥40.3 billion in the previous fiscal year),and profit before tax was ¥16.3 billion (compared with a loss
before tax of ¥41.4 billion in the previous fiscal year), mainly
due to a reversal of the provision for product warranties forseismic isolation/mitigation oil dampers. Profit attributableto owners of the parent was ¥17.1 billion (compared with aloss attributable to owners of the parent of ¥61.9 billion in
the previous fiscal year).

KYB’s Operating Environment
The end of the COVID-19 pandemic is still nowhere in sight,
as variants have emerged. In addition, other uncertainties haveappeared, including the direction of tension between the U.S.
and China with the change of presidential administrations in
the U.S., a weakening of growth in emerging economies, andthe global tightening of supply and demand for semiconductors
and resins. KYB’s operating environment in Automotive
Components Operations is undergoing a once-in-a-century
revolution, symbolized by the terms “Mobility as a Service”(MaaS) and “connected, autonomous, shared, electric” (CASE).
We must respond to these trends without delay. Meanwhile, in
our Hydraulic Components Operations, we need to tailor our
strategies to the development stages of the mature markets ofJapan and Western countries, and new and growing markets suchas China and ASEAN. In the Aircraft Components Division, private
sector demand fell sharply due to the COVID-19 pandemic, but
the Special-Purpose Vehicles Division grew steadily on the backof solid domestic demand. In system products, KYB has nearlycompleted work to bring seismic isolation/mitigation oil dampers
into conformity, and is restoring the trust of customers.

Revolution in the
Operating
Environment

Diversification ofwork styles

ESG
SDGs

Globalization

Basic Policies of the FY2020-2022 Medium-Term Management Plan
1. Strengthen compliance and governance:

4.	Safety first and quality management initiatives:

	Instill awareness of compliance and reform thecorporate culture

Zero serious accidents
Strengthen Group quality inspection system

2. Respond to social demands:

5. Stabilize the revenue base:	Evolve into ESG management

	Discontinue unprofitable businesses, locations andproducts

3. Human resource development:	Companywide reorganization, including back-office
operations

	Thorough health management	Train Group human resources, including overseas
employees	Total cost reduction activities and innovative
monozukuri

Promote diversity

6. Growth strategies in core businesses:

	Improve productivity of back-office operations

	Strengthen new market and new product strategies

Consolidated Financial Results for FY2020 (IFRS)FY2019FY2020 Results [YoY Change]

Net sales¥381.6 billion¥328.0 billion[-¥53.5 billion]

Segment profit¥17.6 billion¥13.3 billion[-¥4.3 billion]“Recovering trust and pride”

Trust

Pride

Strengthen new market and new product strategies
Change to a high-profit structure
Thoroughly enforce safety first and quality management initiatives

Profit (loss) attributable to owners of
the parent(¥61.9 billion)¥17.1 billion[–]

Develop human resources that support management
Respond to social demands (ESG, SDGs)
Strengthen governance system

Cash dividends per share

¥0

¥75

Awareness and practice of compliance
13

KYB Group Report 2021

KYB Group Report 2021

14

Progress of Measures to Prevent Recurrence ofSeismic Isolation/Mitigation Oil Damper Problems
Summary of Medium-Term Management Plan
The KYB Group has formulated the three-year FY20202022 Medium-Term Management Plan. In FY2020, theinitial year of the plan, we refrained from releasing targets
for management indicators because it was extremely
difficult to predict the impact of the COVID-19 pandemic.
However, we recently reviewed that policy in light of theexternal environment. The targets are shown below.

To stabilize our revenue base, we will improve
profitability by strengthening our fixed cost management
system, restructuring unprofitable businesses, locations andproducts, implementing global total cost reductions, andoptimizing the Group’s production operations. To improve
our financial structure, our basic policy will be to secure
profit on a non-consolidated basis and improve the Group’s
equity ratio, with a target of 34% in FY2022.

FY2020-2022 Medium-Term Management Plan Financial Targets (Consolidated)
FY2020 Actual Results(comparison with previous fiscal year)

FY2022 Target

Net sales¥328.0 billion (-¥53.5 billion)¥378.0 billion

Automotive Components Operations¥197.5 billion (-¥34.6 billion)¥229.0 billion

Following the announcement on the KYB website entitled“Investigation into the causes of nonconforming acts in theinspection process, etc. for buildings installed with seismic
isolation/mitigation oil dampers manufactured by KYB Corporationand its subsidiary, and measures to prevent their recurrence”

dated February 13, 2019, we have been taking preventive
measures and working to restore trust.
As of June 30, 2021, approximately 97% of the measures toprevent recurrence have been completed, and we are continuing
our efforts to complete unfinished measures.

Progress of Measures to Prevent Recurrence (As of June 30, 2021)
Completed
Completed•	Revise the Corporate Guiding Principles and other guidelines
Completed•	Emphasize the importance of compliance regularly
Completed•	Implement personnel evaluations and related measures
Completed•	Conduct education and training to raise awareness of social responsibility
Completed•	Conduct education that incorporates numerous case studies and best practices from other companies Completed• Conduct education on laws and regulations specific to businesses and products
In progress• Make education regarding quality mandatory
Completed•	Establish compliance awareness at KYB Corporation and KSM*

Foster strict complianceawareness and reformthe corporate culture

Establish compliancemanagement

Change the mindset of all
officers and employees•	Foster compliance awareness throughout the Group•	Revise use of mass-production evaluation procedures for individual and small-batch products

Completed
Completed
Completed
Completed• Ensure personnel are rotatedCompleted• Ensure thorough documentation of meetings, reports and instructions

Completed
Completed
Completed
Completed
Completed• Ensure appropriate business management

Hydraulic Components Operations¥111.3 billion (-¥14.0 billion)¥13.3 billion (-¥4.3 billion)

Segment profit
Segment profit margin

4.1% (-0.5%)26%Equity ratio¥130.0 billion¥25.0 billion

Establish a balanced
business operation system
Evaluate businessfeasibility, and revise
business operations,information-sharing
systems and othermatters

6.6%

Ensure personnel arerotatedCollect information andestablish a feedback
system

Improve inspection
systems and methods

Strengthen Compliance and Governance

Based on the lessons we learned from the seismic isolation/
mitigation oil damper problem, during the FY2020-2022
Medium-Term Management Plan we will instill a corporate
culture that places top priority on awareness of compliance,
all the way through to frontline business activities, andimplement compliance programs to create a workplaceenvironment committed to treating all compliance-related
matters seriously.
To strengthen governance, we will aim to create a speedy
and efficient management structure and establish fair andtransparent management oversight centered on the Boardof Directors.
P. 21• Develop business systems• Ensure that internal regulations are applied in the event of an emergency• Review the internal whistleblowing system to improve its effectiveness• Clarify the actions to be taken when quality misconduct is detected• Create a mechanism for extracting information

34%
Implement inspection
systems

Measure ❶• Review how decisions to accept orders are made• Strengthen the independence of quality assurance• Improve methods for on-site oil damper inspections with the customer present• Review inspection manual• Tighten internal procedures for changing the software of oil damper inspection machines

Implement preventive
measures against
fraudulent operation of
inspection machines• Regularly monitor the software of oil damper inspection machines• Automatically record inspection results, without human involvement• Automate inspection processes• Tighten controls on access to oil damper inspection machines• Ensure traceability of performance test data
• Perform audits that consider quality misconduct

Enhance internal quality
inspection system• Perform audits that effectively verify inspection data
• Institute audits by KYB Corporation• Leverage the support of experts

Strengthen internal audit
and control systems• Strengthen systems for sharing information and collaborating among Group companies

Tighten the subsidiarymanagement system

Corporate Governance• Review management systems for Group companies• Analyze and monitor Group companies’ business risks• Reorganize Group companies

Completed
Completed
Completed
Completed
Completed
Completed
Completed
Completed
Completed
Completed
Completed
Completed
Completed
Completed
Completed
In progressCompleted*	KSM: Kayaba System Machinery Co., Ltd. was merged into KYB Corporation on July 1, 2021.

Progress of Replacement Work, Etc. (As of August 31, 2021)
Replacement, etc. started1:

968 buildings (98%)

Replacement, etc. completed2:

937 buildings (95%)

1. Includes delivered dampers taken back and readjusted and dampers that will not be replaced.
2. The number of buildings where replacement work, etc. has started includes buildings where replacement or other work has been completed and buildings where it has been decided not to replace
the dampers. It is not the number of buildings in the Corrective Measures Completion Report submitted to the specified administrative agency.

15

KYB Group Report 2021

KYB Group Report 2021

16

KYB’s Heritage
Medium-Term Management Plan

Measure ❷Measure ❺Respond to Social Demands

In response to significant changes in the external environment
related to ESG issues, we established the ESG Promotion
Office in July 2021. ESG-oriented management will be thebasis for formulating policies going forward.
In promoting ESG, we will not simply addressenvironmental and social needs, but will look for business
opportunities and promote activities that increase ourcorporate value. We will also summarize and actively
communicate our ESG-related activities to stakeholders inorder to foster trust.

Measure ❸In an unstable market resulting from the COVID-19
pandemic and tight supplies of semiconductor chips, wehave been continuing to focus on fixed cost reduction
since the second half of FY2020. We will continue ourcost-cutting activities to build a production system that isresilient to fluctuations in demand.
For locations and businesses that are unable togenerate sufficient profits, we will strengthen themonitoring and administrative structure, and address
unprofitable businesses with a willingness to withdraw
from them if necessary. On the other hand, we willcapitalize on new trends such as MaaS, CASE and DX, andcontinue our drive to create new markets and new
products that will become future revenue sources.

Target for improved profitability+¥7.4 billion• Improve productivity (reduce manufacturing costs)+¥3.4 billion(FY2019: ¥17.6 billion→FY2022: ¥25.0 billion)

Innovative monozukuri (increase automation level), promote workforce streamlining, etc.

Measure ❻Creating healthy andrewarding workplaces

Developing human resources who can help
put our Corporate Spirit into practice

Improving productivity ofback-office operations

P. 34

Human Resources Development*	RPA: Robotic Process Automation

Discontinue domestic production of unprofitable automobile EPS, close European power steering plant, etc.

+¥1.0 billion• Reduce variable costs
VA and VE, promote local procurement, etc.

• Consolidate plants and build the optimal production system+¥0.7 billion

Reorganize European plants, build optimized global CVT production system, etc.

• Promote sales expansion+¥0.6 billion

Sales promotions for mini-excavators to accompany the application of electronic controls,
expansion of the sales network for aftermarket products, etc.

business, and working to prevent serious quality problems
by fostering positive and open workplace environments.
We will also achieve a high level of quality by improving
the quality assurance system and using a technique called
three-step evaluation.

Growth Strategies in Core Businesses

Automotive Components Operations
Unlock potential with strengthening, evolution andnew initiatives
In the FY2020-2022 Medium-Term Management Plan, tounlock the potential of our Automotive Components
Operations, we will strengthen and evolve existing businesses
while pursuing new opportunities as a growth strategy. In
FY2021, we are continuing the fixed cost reductions that wehave been applying since the second half of FY2020; securing
profit at individual locations by executing various
reorganization plans; enhancing mechanisms and systems forbusiness controls; conducting profit-oriented management by
securing cost competitiveness; developing new markets andproducts and cultivating new customers from MaaS and CASE
by establishing the position of customer development
partners; and making integrated structural reforms in theaftermarket business with cooperation among production,marketing and technology development operations.

Safety First and Quality Management Initiatives

We are reinforcing safety and strengthening the legal
compliance monitoring system with the aim of creating andexpanding industrial and fire accident-free production bases.
To ensure quality, we are imprinting awareness ofcompliance regarding our social responsibility to deliver
quality, with the belief that quality is the basis forGoals forFY2022

Establish a position as a core supplier byfurther strengthening existing businesses
and core technologies

Hydraulic Components Operations
Be a first-choice manufacturer that customers trustand “Shift to an emphasis on profits”
In Hydraulic Components Operations, our basic strategy in the
FY2020-2022 Medium-Term Management Plan is to improve
long-term profitability through selection and concentration.
We are carrying out regional strategies and product functionbased strategies according to the development stage of eachmarket. For example, we will focus on maximizing revenue
from high-value-added products in the mature markets ofJapan, Europe and the U.S., and aim to secure stable profitsby emphasizing cost reductions in new and growing markets
such as China and ASEAN. In FY2021, we are further
advancing these efforts and working on the development of
next-generation electronic hydraulic equipment, centered on
our regional strategy, with an eye on the future. At the sametime, we will aim to create the optimal structure for andenhance the functions of Hydraulic Components Operations
overall by reorganizing sales departments and improving the
productivity of back-office operations.

Strengthen: Stabilization of revenue base•	Optimize production by consolidating and reorganizing
major plants• Cost reduction activities• Structural reform of the aftermarket business

Basic
Strategy

Goals forFY2022• Respond to automation and complex needs•	Cost competitiveness

Basic
Strategy•	Strengthen original technology (respond to the shift toEVs, CASE and MaaS)P. 47
KYB Group Report 2021

Automotive Components Operations

Hydraulic Components Operations that continue to be trusted by customers
and used around the world
Be a first-choice manufacturer that customers trust

Evolve: Innovative monozukuriNewinitiatives: Creation of high-value-added products

17+¥1.7 billion• Discontinue or reduce activity in unprofitable fields

Human Resource Development

As one initiative to promote health management, in 2021
KYB acquired certification for the second consecutive year
as a Health & Productivity Management Organization. Weview the health of our employees and their families as animportant management resource and a source of theCompany’s vitality, and are creating rewarding workplacesin which all employees can work in good physical andmental health.
We are fostering awareness of compliance in order toregain trust, creating open workplaces free fromharassment and promoting diversification of humanresources. We are also working to develop the next
generation of leaders through small group activities and bytraining operating base managers globally. Moreover, we
are increasing the value-added productivity of back-office
operations, mainly with robotic process automation (RPA),
which will lead to lower fixed costs.

Measure ❹Stabilize the Revenue BaseDevelop electronically controlled, load-sensing products,
and develop medium- and large-sized pumps• Cost reductions and promotion of local procurement
Improve market competitiveness by launching low-priced models

P. 49

Hydraulic Components Operations
KYB Group Report 2021

18

ESG Initiatives

ESG Initiatives
Basic Policy for ESG
Corporate
Spirit•	With ESG management as the basis for formulating policies, we will establish an overall picture(our values, business model, sustainability, growth potential, etc.) for our value creation cycle.

By providing technologies andproducts that make people’s lives safe
and comfortable, the KYB Group
contributes to society.

•	We will also reexamine existing initiatives in terms of ESG initiatives and communicate them outside
the Company in order to foster trust.
In promoting ESG, we will not simply respond to the environment and society. We will also explore business
opportunities and implement initiatives that will increase our corporate value. To achieve this, we will coordinate
all internal ESG-related initiatives and communicate them to stakeholders in order to foster trust.

Outline of Activities
1 Environment

2 Social❶ Initiatives for a carbon-free society❷ Initiatives for a resource-recycling society

Becoming carbon neutral❶ Respect for human rights

Compensation systems and harassment prevention

Reduction of industrial waste

management, promotion of mental and❷ Labor practices	Healthphysical health, and safety

Prevention of environmental pollution❸ Initiatives for coexistence with nature
and conservation of biodiversity

an environment where diverse human❸ Diversity of human resources Creating
resources can work together❹ Product development❹ Social contribution

Development of eco-friendly products and processes

Social contribution activities

3 Governance

4 Strengthening Our Management Foundation❶ Strengthen governance system❶ ESG education and human resource development❷ Compliance❷ External communication to foster trust❸ Risk management

Evolution of ESG Management at KYB

19

1

We shall follow all rules and face all issues with honesty.

2

We shall build a corporate culture full of vitality, and hold high goals.

3

We shall value kindness and sincerity, cherish nature and care for the environment.

4

We shall constantly pursue creativity to contribute to the prosperity ofcustomers, shareholders, suppliers and society.

KYB Group Report 2021

In recent years, there have been growing calls for ESG management, including carbon-neutral and other environmental initiatives,
measures to increase social trust such as the promotion of diversity and health and productivity management, and the establishment ofcorporate governance systems capable of ensuring that those activities are implemented. In line with this trend, KYB established the ESG
Promotion Office on July 1, 2021, in an effort to evolve its current ESG management. The role of the office is to implement and promote
basic policies for the environment, society and governance throughout the Group. We want to remain aware of ESG-related value in allof our activities. We will evolve our ESG management so that it forms the basis forformulating policies rather than just serving as an extension of the usual production
Keisuke Saito
Executive Vice President
improvement measures that we have implemented to date. We will also reexamine
Executive Officer(In charge of promoting ESG)
existing initiatives in terms of ESG initiatives, and work to foster trust by communicating
information both inside and outside the Company. Furthermore, the entire Groupwill work to reduce CO2 emissions, develop products that contribute to thesustainable development of society, and create health-conscious workplaces.

KYB Group Report 2021

20

ESG Initiatives

Corporate GovernanceCorporate Governance Principles
In order to fulfill our corporate social responsibility tocontribute to society as well as to meet stakeholders’expectations by realizing sustainable growth andincreasing corporate value, we are working to ensure a
speedy and efficient management structure, fair andtransparent management oversight centered on the Boardof Directors, and continuous efforts to strengthen andenhance corporate governance based on the Corporate

The members of each of the aforementioned organizations are as follows.
Spirit and the basic policies below.
In the FY2020-2022 Medium-Term Management Plan,
we placed awareness and practice of compliance, which
are part of our corporate culture reforms to prevent therecurrence of the seismic isolation/mitigation oil damper
problem or other potential nonconforming acts, at the coreof our management as we transform to a highly profitablestructure under the slogan “Recovering trust and pride.”

Basic Policies
1. We shall respect the rights of shareholders, and ensure the equal and fair treatment of all shareholders.
2. We shall take the benefits of stakeholders into consideration and endeavor to appropriately cooperate with those stakeholders.
3.	We shall disclose not only information on compliance with the relevant laws and regulations, but also actively provide important
and/or useful information to stakeholders for their well-informed decision making.
4.	The Board of Directors shall be cognizant of its fiduciary responsibility and accountability to shareholders, and shall appropriately
fulfill its roles and responsibilities in order to promote sustainable and stable corporate growth and increase corporate value,
profitability, and capital efficiency.

Title

Domestic AffiliatedBoard ofBoard ofCompanies
Directors Executive Officers Management
Meeting

Name

Yasusuke Nakajima

◎

○

○

Representative Director,
President Executive Officer

Masao Ono○◎○

Representative Director,
Executive Vice President Executive Officer

Takaaki Kato

○

○

◎

Member of the Board of Directors,
Executive Vice President Executive Officer

Keisuke Saito

○

○

○

Outside Director

Rokurou Tsuruta

○

○

○

Outside Director

Shuhei Shiozawa

○

○

○

Outside Director

Masakazu Sakata

○

○

○

Director, Chairman

Audit &
Supervisory Board

Audit & Supervisory Board Member (Full Time)

Eiji Hisada◎

Audit & Supervisory Board Member (Full Time)(Outside)

Junichi Tanaka○

Audit & Supervisory Board Member (Full Time)(Outside)

Masahiko Sagara○

Audit & Supervisory Board Member (Full Time)

Hideki Nonoyama○

17 executive officers

○

­—

○

Note: ◎ denotes the chairperson

5.	We shall engage in constructive dialogue with shareholders, and make efforts to obtain shareholders’ support regarding theCompany’s business policies and also reflect shareholders’ opinions and concerns in the improvement of management.

Corporate Governance Structure
General Meeting of Shareholders

Corporate Governance Overview and Structure
We have adopted the “Audit & Supervisory Board
system” as defined by the Companies Act of Japan.
Board of Directors
The Board of Directors comprises seven members, including
three outside directors. In principle, the Board of Directors
meets once a month. The Board of Directors makes
decisions based on laws, the Articles of Incorporation andCompany regulations, and deliberates on policies and otherimportant matters involving management. The Board of
Directors also oversees the management of business
operations. In addition, three outside directors are registeredas independent officers.
Board of Executive Officers
The Board of Executive Officers, a body that reports
directly to the Board of Directors, deliberates onimportant matters concerning management from a
Company-wide perspective.
Other Management Committees
We have also established other management committees,
including the Domestic Affiliated Companies Management21

KYB Group Report 2021

Meeting, where functional and business divisions/departments report on the status of business execution,and the Global Executive Meeting, where regular reports
on business conditions are submitted to those responsible
for overseeing management of KYB Group companies
overseas. In addition, we are working to strengthen Groupmanagement oversight and have established the
Operational Review with the President Meeting, where thepresident executive officer visits production sites to review
and follow-up on matters related to policy development
and important manufacturing issues.
Audit & Supervisory Board
The Audit & Supervisory Board comprises four full-time
Audit & Supervisory Board members, two of whom areoutside members. Through audits by outside Audit &Supervisory Board members, we expect to achieve effective
management oversight and have concluded that aneffective governance system is in place. In addition, two of
the outside Audit & Supervisory Board members areregistered as independent officers.

Elect/Dismiss

Elect/Dismiss
Consult

Compliance Committee

Board of Directors

Advisory Committees(Nomination, Compensation)

ReportRisk Management Committee
Audit &
Supervisory Board

Accounting Auditor

Audit

Audit

General Manager
CSR & Safety Control Division

Regional
Representative Officers

Representative Director,
President Executive Officer

Board of Executive Officers andother management meetings
Audit Department
J-SOX OfficeInternal Control Department

Evaluation based on J-SOX Audit

Audit

Responsible head office departments, operational headquarters,
Group companies, branches, representative offices

Independence Criteria
For details, see “Outside directors and outside Audit & Supervisory Board Members” on the KYB website
https://www.kyb.co.jp/english/company/governance.html

KYB Group Report 2021

22

ESG Initiatives
Corporate GovernanceEvaluation of the Effectiveness of the Board of Directors(1) Evaluation Method
Respondents: 11 respondents, comprising seven directors(including three independent outside
directors), four Audit & Supervisory Board
members (including two independent outside
Audit & Supervisory Board members)
Survey period: January to February 2021
Methodology: A dministration, analysis and evaluation of aself-assessment questionnaire
Key questionnaire items
I.	Composition of the Board of Directors and balance ofknowledge and experience
II. Administration of the Board of Directors
III. Discussion topics at meetings of the Board of Directors
IV. Systems supporting the Board of Directors
V. Relationship and dialogue with shareholders(3) Calculation and Determination of Performance-Linked Compensation

Number of survey questions
34
Questionnaire method
Evaluation of the current situation: Evaluate on a scale of 1 to 4
Specific suggestions for improving the current situation:
Open-ended response(2) 2020 Results
Comments and suggestions were submitted regarding thematters to be discussed at Board meetings and the compositionof the Board to strengthen its supervisory functions, and theevaluation results and comments from respondents werereported and shared at a meeting of the Board of Directors.

(3) Future Actions
Based on the results, the Board will continue to discuss bothinternal and external issues in order to further improve its
effectiveness.

1. Criteria and Business Results That Serve as the Basisfor Calculation
Performance-linked compensation is calculated according to
the degree of achievement in the preceding fiscal year (theCalculation Criteria“base fiscal year”) of the consolidated performance forecast
according to the calculation criteria (four items) in the tablebelow. These criteria were selected because they are important
indicators for the Group’s management.
TargetResultSegment profit (Millions of yen)

6,200

13,325

Segment profit margin (%)

2.00

4.06

Profit (loss) attributable to owners of the parent (Millions of yen)500

17,087

Profit (loss) margin attributable to owners of the parent (%)

0.16

5.21

2. Calculation of Amount to Be Paid
Total performance-linked compensation is limited to 1.0% of
profit attributable to owners of the parent. Moreover, the ratioof performance-linked compensation to total compensation(fixed compensation + performance-linked compensation) of
directors (excluding outside directors) shall not exceed 40%.

Note: The targets are the consolidated financial
results forecast for the base fiscal year
(FY2020, or the fiscal year ended March 2021)
described in the financial statements at theend of the fiscal year prior to the base fiscal
year (FY2019, or the fiscal year ended March
2020). The first consolidated performance
forecast for the base fiscal year will be thebaseline if the announcement of results for the
recently ended fiscal year does not include a
consolidated performance forecast.

The total amount to be paid is calculated by multiplying the
maximum amount payable by a payout ratio derived from thenumber of calculation criteria targets in 1. that were achieved.
Performance-linked compensation is not paid in the case of aloss attributable to owners of the parent.

3. Total Compensation for Each Officer Category, Total Compensation by Type, and Number of Eligible Officers(1) Compensation Structure
Officer compensation consists of fixed monthly
compensation (basic compensation) according to position
and responsibilities, and performance-linked compensation(bonus) that varies depending on the Company’s businessType of Compensation

Fixed
compensation

Performancelinked
compensation

results. Outside directors and Audit & Supervisory Board
members only receive fixed compensation according to theirrespective roles, and in view of their independence do notreceive performance-linked compensation.

Eligible Officers

Maximum Total Compensation

Date of Resolution of the General
Meeting of Shareholders

Calculation Process

Directors¥30 million per month(¥360 million per year)

June 27, 1997
75th Ordinary General Meetingof Shareholders

Consultation with
Compensation Committee

Audit & Supervisory Board
members¥8 million per month(¥96 million per year)

June 24, 2011
89th Ordinary General Meetingof Shareholders—

Directors(Excluding outside directors)

40% or less of totalcompensation(Fixed compensation +Performance-linked
compensation)

Approval annually by
resolution at theOrdinary General Meetingof Shareholders

Consultation with
Compensation Committee

Compensation by Category (Millions of yen)

Total Compensation(Millions of yen)Fixed Compensation

Performance-linked Compensation

Number of
Eligible Officers

Directors(Excluding outside directors)

145

145

—

4

Outside directors

22

22

—

3

43

43

—

3

44

44

—

3

Category

Officer Compensation

Audit & Supervisory Board members(Excluding outside members)
Outside Audit &Supervisory Board members

Notes: 1. Total compensation for directors (excluding outside directors) does not include salary for employees concurrently serving as directors.
2.	The above data includes two Audit & Supervisory Board members who retired at the conclusion of the 98th Ordinary General Meeting of Shareholders on June 25, 2020.
3.	The fixed compensation for FY2020 above reflects a reduction of the portion of compensation that directors and executive officers declined for the 12-month period from April 2020 toMarch 2021 in order to take the lead in contributing to efforts to improve profitability in response to the deterioration of the market environment.
		 The compensation of Audit & Supervisory Board members also reflects a reduction of the portion of their compensation that they declined.
4.	KYB abolished the retirement benefits system for directors at the conclusion of the 89th Ordinary General Meeting of Shareholders on June 24, 2011, but the payment of retirement
benefits according to tenure as of the close of that meeting was also approved. Based on this approval, in addition to total compensation shown above, the following retirement
benefits for directors (excluding outside directors) were paid for FY2020.
		 ¥14.0 million (one director)
		 Note: This amount includes the payment of ¥12.0 million to one director, which was disclosed in previous years as allowance for retirement benefits.
5. FY2020 retirement benefits for directors did not increase because the retirement benefit system for directors was abolished as described above.

Note: The limit on total fixed remuneration for directors does not include salary for employees concurrently serving as directors.

Initiatives for Sustainable Growth and Enhancement of Corporate Value(2) Compensation Decisions
For director compensation, the discretionary Compensation
Committee composed of representative directors and outside
directors verifies the propriety of the criteria for calculating
fixed and performance-linked compensation and reports
the propriety of criteria to the Board of Directors.
Fixed compensation for directors is determined by resolutionof the Board of Directors, upon receiving a report from theCompensation Committee, within the limit on total

23

KYB Group Report 2021

compensation decided at the General Meeting of Shareholders.
Payment of performance-linked compensation for directors(excluding outside directors) is approved annually by
resolution at the Ordinary General Meeting of Shareholders.
Fixed remuneration for Audit & Supervisory Board members
is determined in consultation with Audit & Supervisory Board
members, within the limit on total compensation decided at
the General Meeting of Shareholders.

(1) Establishment of the position of Regional Representative Officer (April 1, 2021)(2) Regular meetings between the Audit & Supervisory Board and the Internal Control Department (from Q1 of FY2021)(3) Appointment of a female outside officer as replacement auditor (June 25, 2021)(4) Establishment of Audit & Supervisory Board Members Office (June 1, 2021)

KYB Group Report 2021

24

ESG Initiatives
Corporate GovernanceInternal Control and Compliance

3. Internal Control System
Compliance Committee Members

Basic Policy
The Board of Directors of the Company ensures effective
corporate governance by adhering to the Basic Policy forInternal Control System in accordance with the Companies
Act, and by implementing various measures including a risk
management system, a Group management system and aninternal compliance system.
The Company believes that compliance is not limited
to adherence to laws, ordinances and regulations, which
are the norms of society, but also includes compliancewith the Company’s Articles of Incorporation, internal
regulations, contracts and other Company rules related
to business activities.
The Company has begun the FY2020-2022 Medium-Term
Management Plan under the slogan “Recovering trust and

pride.” The plan positions awareness and practice ofcompliance at the foundation of management. Our
Corporate Spirit leads off with the statement, “We shallfollow all rules and face all issues with honesty,” and we aretaking practical steps to foster compliance awarenessthroughout the KYB Group.

Compliance Committee(Chair: President Executive Officer)

Group Compliance Promotion Office (KYBJ Internal Control Department)
Compliance managers
General managers ofbusiness divisions/departments and functional
divisions/departments

Please refer to the Company website for additional
details.

Europe/Americas/
China Regional

ReportReportInstruct/Reporthttps://www.kyb.co.jp/english/company/csr.html

Report Representative Officers ReportCompliance managers
Presidents of domestic and overseas
Group companies

Compliance managers
Presidents of overseas regional
headquarters

Instruct/ReportCompliance officers(Department manager)

The Risk Management Committee reports to the Board of Directors. Based on the
Risk Management Rules, it designates responsible departments to conduct risk
management activities for major risks such as quality problems and occupational
accidents during the fiscal year.

KYB Group Information Protection

Based on the Basic Policy for Information Security, KYB shall implement a system toprotect information assets and take measures against the risk of information leaks
and information system failures caused by cyberattacks.

3

Rigorous Application of Internal
Regulations during Emergencies

We inform all employees of Group companies of their reporting obligations to ensure
rigorous reporting under internal reporting rules that include the Rule of Prompt
Report* and Bad News First system, which calls for employees of Group companies
to immediately notify the Company should they become aware of a potentiallyserious problem.

4

Review to Improve the Effectiveness ofthe Whistleblowing System

We are working to improve effectiveness through continuous explanations andnotifications to all employees about the internal reporting system.

2* A core component of the KYB Group’s crisis management system, in which department heads and production base managers promptly and accurately report important information to thepresident of the Company.

2. FY2020 Initiatives
A. Compliance training for top management
Conducted a training session for top management,
including management of Group companies. Hosted
lectures and discussions by compliance experts.
B. Compliance education
Provided new teaching materials with many illustrative
explanations to Group companies to deepen understandingof the Corporate Guiding Principles.
C. Compliance Improvement MonthWe designated October as Compliance Improvement25

KYB Group Report 2021

ReportCooperate

Compliance managers
Presidents of affiliated companies
Instruct/Report

Instruct/Report

Regional headquarters
compliance officers

Compliance officers

Cooperate

Compliance officers

Cooperate

Cooperate

Cooperate

Cooperate

Key compliance personnel

Key compliance personnel

Key compliance personnel

Key compliance personnel(KYBJ)(Domestic and overseas subsidiaries)(Overseas regional headquarters)(Affiliated companies)

Responsible persons

Compliance officers

Key compliance personnel

General managers of business divisions/departments andfunctional divisions/departments, and factory managers

Supervisors, department managers

Department and section managers

Group companies (domestic and overseas subsidiaries/overseas regional headquarters companies/affiliated companies)

KYB Group Risk Management

ReportKYBJ

1. Key Points for Internal Control
1

1. Chair: President Executive Officer
2.	Members: Chairman, outside directors, general manager of CSR &Safety Control Division, executive officer In charge of auditing andgeneral manager of General Affairs & Human Resources Division
3. Observers: Audit & Supervisory Board members
4.	Administrative offices: CSR & Safety Control Division, Internal
Control Department

Month, and conducted various activities to promoteheightened compliance awareness among all employees.
• Competition for solicitation of compliance mottos, andrecognition of winners(The best ones were selected for daily reinforcement at all
workplaces)
Winning motto (translation): “Reconfirm the Company’s
rules and your own actions”
Winning motto (translation): “Don’t criticize, hide or waste
opportunities to learn from your failures”
D. Conducted compliance awareness questionnaire

Responsible persons

Compliance officers

Key compliance personnel

KYB President Executive Officer

Supervisors, department managers, etc.

Department and section managers

Point to note:• Key compliance personnel are not limited to those listed on theleft, and multiple people may be appointed according to the scaleand situation of each company. In principle, however, they are
executives who communicate with the administrative offices.

4. Compliance Issues and Responses• The Special Audit Committee on Wrongdoing Risk was
dissolved and a permanent Compliance Committee wasestablished. This committee is creating a system not only
for responding to wrongdoing after the fact, but also
for conducting regular and repeated education andawareness programs. In FY2021, the committee’s firstyear, we are making ongoing improvements in order tomake it more effective.

• To further improve the effectiveness of the whistleblowing
system, we issue messages from the president andnotifications to encourage reporting. We also conduct
education on the purpose of reporting, provide individual
guidance to locations with zero reports, and offer education
to deepen understanding of the purpose of the system.

Measures to Improve the Corporate Governance SystemI have been an outside director of KYB since 2015, and haveshared my opinions and offered advice from my perspective as alegal professional regarding investigation of the seismic isolation/
mitigation oil damper problem and efforts to regain trust after itcame to light in 2018. The management team showed leadershipin its response, including investigating the cause and replacing
components, and later worked to establish measures to prevent a
recurrence. Those efforts continue even now, and I think that has
led to an earlier recovery of results. The Company has been
implementing awareness-raising programs to instill complianceawareness throughout the KYB Group, and is creating a system toensure that potential wrongdoing is not overlooked. That role is
now being taken on by the newly established Compliance
Committee and the Basic Policy for Internal Control System.

The corporate governance system has also been improved, andI expect more complete reports and information from departments
so that outside directors can make faster and more accurate
management decisions.
KYB’s strengths are monozukuri based on hydraulic technology,
its key technology, and sound management by its core businesses.
The Company is focusing on changing to a high-profit structure
based on establishment of compliance awareness and emphasison compliance, which are the pillars of the medium-term
management plan, as well as new initiatives to address ESG and
the SDGs. I will do everything I can to contribute to the successof those efforts.

Rokurou Tsuruta
Outside Director

KYB Group Report 2021

26

ESG Initiatives
Corporate GovernanceManagement Team (As of June 25, 2021)
Directors

Audit & Supervisory Board Members

Yasusuke Nakajima1

Masao Ono1

Takaaki Kato1

Keisuke Saito1

Eiji Hisada2

Junichi Tanaka2, 4Masahiko Sagara2, 4

Hideki Nonoyama3

Member of the Board of Directors,
Chairman

Representative Director, President
Executive Officer

Representative Director, Executive Vice
President Executive Officer, CFO

Member of the Board of Directors,
Executive Vice President Executive Officer

Audit & Supervisory Board Member(Full Time)

Audit & Supervisory Board Member(Full Time) (Outside)

Audit & Supervisory Board Member(Full Time) (Outside)

Audit & Supervisory Board Member(Full Time)

April 1979 Joined the Company
April 2005	General Manager, Hydraulics Sales & Marketing
Headquarters, Hydraulic Components
Operations
June 2005	Member of the Board of Directors, General
Manager, Hydraulics Sales & Marketing
Headquarters, Hydraulic Components
Operations
April 2007	Member of the Board of Directors, General
Manager, Hydraulics Sales Headquarters,
Hydraulic Components Operations
June 2009	Managing Member of the Board of Directors,
General Manager, Hydraulic Components
Operations
June 2010	Senior Managing Member of the Board of
Directors; In charge of purchasing, generalaffairs and human resources
June 2011	Member of the Board of Directors, Senior
Managing Executive Officer; In chargeof purchasing, general affairs andhuman resources
April 2012	Member of the Board of Directors, Senior
Managing Executive Officer; In charge ofpurchasing; General Manager, HydraulicComponents Operations
April 2014	Member of the Board of Directors, Senior
Managing Executive Officer; In charge ofpurchasing; General Manager, Corporate
Planning Division
June 2015	Representative Director, President Executive
OfficerJune 2018	Representative Director, Chairman, President
Executive Officer
January 2019	Representative Director, Chairman, President
Executive Officer, General Manager in chargeof Seismic Isolation/Mitigation Correspondence
Operations
April 2019	Representative Director, Chairman; In charge ofSeismic Isolation/Mitigation Correspondence
Operations
June 2019	Member of the Board of Directors, Chairman;
In charge of Seismic Isolation/Mitigation
Correspondence (current position)

April 1979	Joined the Company
January 2004	General Manager, Operations Planning
Department, Automotive Devices Business
Division
April 2005	General Manager, Operations Planning
Department., Automotive Components
Operations
June 2006	General Manager, Purchasing Department
June 2008 General Manager, Purchasing Division
April 2012	Executive Officer, General Manager,
Purchasing Division
April 2014	Managing Executive Officer, General Manager,
Purchasing Division
April 2016	Senior Managing Executive Officer; In charge ofpurchasing and CSR; General Manager,
Corporate Planning Division
April 2017	Senior Managing Executive Officer; In charge ofpurchasing and auditing; General Manager,
Corporate Planning Division
June 2017	Member of the Board of Directors, Senior
Managing Executive Officer; In charge ofpurchasing and auditing; General Manager,
Corporate Planning Division
April 2018	Member of the Board of Directors, Senior
Managing Executive Officer; In charge ofpurchasing; General Manager, Corporate
Planning Division
June 2018	Member of the Board of Directors, Executive
Vice President Executive Officer; In charge ofSpecial Purpose Vehicles Division, domestic
affiliated companies and purchasing; General
Manager, Corporate Planning Division
January 2019	Member of the Board of Directors, Executive
Vice President Executive Officer; In charge ofglobal business strategy, Aircraft Components
Division, domestic affiliated companies andpurchasing; General Manager, Corporate
Planning Division
April 2019	Representative Director, President Executive
Officer (current position)

April 1980	Joined The Fuji Bank, Limited (currently, Mizuho
Bank, Ltd.)March 2005	General Manager, Hong Kong Branch, Mizuho
Corporate Bank, Ltd. (currently, Mizuho Bank,
Ltd.)
April 2008	Executive Officer, Mizuho Securities Co., Ltd.
April 2009	Managing Executive Officer, Mizuho Securities
Co., Ltd.
April 2011	Managing Executive Officer, Mizuho Securities
Co., Ltd.; Chairman, Mizuho Securities Asia
LimitedApril 2013	Joined the Company, Managing Executive
Officer, Deputy General Manager, Finance &Accounting Division
June 2014	Managing Executive Officer, General Manager,
Finance & Accounting Division
April 2015	Senior Managing Executive Officer, General
Manager, Finance & Accounting Division
June 2015	Member of the Board of Directors, Senior
Managing Executive Officer; In charge ofauditing and CSR; General Manager, Finance &Accounting Division; General Manager,
Corporate Planning Division; CFO
April 2016	Member of the Board of Directors, Senior
Managing Executive Officer, CFO; General
Manager, Finance & Accounting Division
April 2017	Member of the Board of Directors, Senior
Managing Executive Officer, CFO
June 2017	Representative Director, Executive Vice
President Executive Officer, CFO(current position)

April 1983	Joined the Ministry of International Trade andIndustry (currently, Ministry of Economy,
Trade and Industry)
August 2002	General Manager, Beijing Office, Japan-China
Economic Association
September 2005	Director, Industrial Revitalization Division,
Economic and Industrial Policy Bureau,
Ministry of Economy, Trade and Industry
July 2007	Director, Industrial Science and Technology
Policy Division, Industrial Science andTechnology Policy and Environment Bureau,
Ministry of Economy, Trade and Industry
July 2008	Director, Finance Division; Minister’s
Secretariat, Ministry of Economy,
Trade and Industry
July 2009	Director-General for Energy Conservation andRenewable Energy Department, Agency for
Natural Resources and Energy, Ministry of
Economy, Trade and Industry
September 2010	Special Adviser of the Company
June 2011	Member of the Board of Directors, Senior
Managing Executive Officer, General
Manager, Engineering Division; General
Manager, Corporate Planning Division
April 2014	Member of the Board of Directors, Senior
Managing Executive Officer; In charge oflegal affairs and information technology
administration; General Manager,
Engineering Division
January 2016	Member of the Board of Directors, Senior
Managing Executive Officer; In charge ofInformation Technology Administration andAircraft Components Division; General
Manager, Engineering Division
April 2017	Member of the Board of Directors, Senior
Managing Executive Officer; In charge ofAircraft Components Division; General
Manager, Hydraulic Components Operations
April 2018	Member of the Board of Directors,
Senior Managing Executive Officer,
General Manager, Hydraulic Components
Operations; General Manager,
Aircraft Components Division
January 2019	Member of the Board of Directors, Senior
Managing Executive Officer, General
Manager, Seismic Isolation/Mitigation
Correspondence Operations
June 2019	Member of the Board of Directors, Executive
Vice President Executive Officer, General
Manager, Seismic Isolation/Mitigation
Correspondence Operations (current position)

April 1978	Joined the Company
November 1999	General Manager, Overseas Administration
Department
April 2004	General Manager, International Headquarters
April 2005	General Manager, Affiliated Business
Department, Corporate Planning Division
June 2007	Member of the Board of Directors, General
Manager, Corporate Planning Department,
Corporate Planning Division
June 2009	Member of the Board of Directors, General
Manager, Human Resources Division; General
Manager, Gifu Human Resources Department
April 2012	Managing Executive Officer, General Manager,
Human Resources Division
April 2015	Managing Executive Officer, Deputy General
Manager, Corporate Planning Division; General
Manager, Corporate Planning Department
June 2016	Managing Executive Officer; President, KYB
Europe Headquarters GmbH (currently, KYB
Europe GmbH)
February 2019	Managing Executive Officer; In charge ofauding and General Manager,
President’s Office
May 2020	Managing Executive Officer; In chargeof auditing
June 2020	Audit & Supervisory Board Member (Full Time)(current position)

April 1984	Joined The Yasuda Fire and Marine InsuranceCo., Ltd. (currently, Sompo Japan Insurance
Inc.)
September 2014	Senior Vice President, General Manager, Global
Business Planning Department, Sompo Japan
Nipponkoa Insurance Inc. (currently, Sompo
Japan Insurance Inc.); Senior Vice President,
General Manager, Global Business Planning
Department, Sompo Japan Nipponkoa
Holdings, Inc. (currently, Sompo Holdings, Inc.)
April 2016	Executive Vice President, General Manager,
Europe & South America, Regional
Headquarters, Sompo Japan Nipponkoa
Insurance Inc.; Executive Vice President,
General Manager, Europe & South America,
Regional Headquarters, Sompo Japan
Nipponkoa Holdings, Inc.
October 2016	Executive Vice President, General Manager,
Europe & South America, Regional
Headquarters, Sompo Holdings, Inc.
July 2017	Executive Vice President, Sompo Japan
Nipponkoa Insurance Inc.; Executive Vice
President, Sompo Holdings, Inc.
April 2018	CEO of Overseas Insurance Business,
Executive Vice President, Sompo Holdings, Inc.
June 2018	CEO of Overseas Insurance Business, Director,
Executive Vice President, Sompo Holdings, Inc.
June 2019	Audit & Supervisory Board Member (Full Time)(Outside) of the Company (current position)

April 1981	Joined The Yasuda Mutual Life Insurance
Company (currently, Meiji Yasuda Life
Insurance Company)
January 2004	General Manager, Non-life Insurance
Administration Office, Coordination
Department., Meiji Yasuda Life Insurance
Company
September 2004	General Manager, Osaka-kita Branch, Meiji
Yasuda Life Insurance Company
April 2008	General Manager, Gunma Branch, Meiji Yasuda
Life Insurance Company
April 2011	General Manager, Corporate Business Planning
Department., Meiji Yasuda Life Insurance
Company
July 2012	Executive Officer, General Manager, Corporate
Business Planning Department., Meiji Yasuda
Life Insurance Company
April 2014	Managing Executive Officer, Meiji Yasuda Life
Insurance Company
April 2017	Managing Executive Officer, General Manager,
Agency Business Division, Meiji Yasuda Life
Insurance Company
April 2019	Representative Director and Chairman, Meiji
Yasuda General Insurance Co., Ltd.
June 2020	Audit & Supervisory Board Member (Full Time)(Outside) of the Company (current position)

April 1980	Joined the Company
January 2004	General Manager, Operations Planning
Department, Automotive Devices
Business Division
April 2012	Executive Officer, General Manager, Corporate
Planning Department, Corporate Planning
DivisionJanuary 2014	Executive Officer; President, KYB Americas
Corporation
April 2016	Managing Executive Officer; President, KYB
Americas Corporation
April 2018	Managing Executive Officer, Deputy General
Manager, Finance & Accounting Division
January 2019	Managing Executive Officer; In charge of CSR
and safety control
April 2019	Managing Executive Officer; In charge ofpurchasing, CSR and safety control
June 2019	Managing Executive Officer; In charge ofpurchasing; Deputy General Manager, Seismic
Isolation/Mitigation Correspondence Operations
April 2020	Managing Executive Officer; In charge ofpurchasing; Deputy General Manager, Seismic
Isolation/Mitigation Correspondence
Operations; General Manager,
Promotion Headquarters
January 2021	Managing Executive Officer; In charge ofpurchasing and logistics; Deputy General
Manager, Seismic Isolation/Mitigation
Correspondence Operations; General Manager,
Promotion Headquarters
June 2021	Audit & Supervisory Board Member (Full Time)(current position)

Notes: 1.	Term of office: One year from the conclusion of the Ordinary
General Meeting of Shareholders held on June 25, 2021.
2.	Term of office: Four years from the conclusion of the Ordinary
General Meeting of Shareholders held on June 25, 2020.

3. Term of office: Three years from the conclusion of the Ordinary General Meeting of Shareholders held on June 25, 2021.
4. Members of the Board of Directors Rokurou Tsuruta (Outside), Shuhei Shiozawa (Outside) and Masakazu Sakata (Outside),and full-time Audit & Supervisory Board Members Junichi Tanaka (Outside) and Masahiko Sagara (Outside) are independent
officers as prescribed in Rule 436-2 of the Securities Listing Regulations of the Tokyo Stock Exchange.

Executive Officers
Representative Director,
Masao Ono
President Executive Officer
Executive Vice President
Executive Officers

Rokurou Tsuruta

Shuhei Shiozawa

Masakazu Sakata

Member of the Board of Directors(Outside)

Member of the Board of Directors(Outside)

Member of the Board of Directors(Outside)

April 1970	Prosecutor, Tokyo District Public Prosecutors
OfficeApril 2005	Superintending Prosecutor, Nagoya High Public
Prosecutors Office
July 2006	Registered as an attorney (Daini Tokyo Bar
Association)
June 2007	Outside Director, TEIKOKU PISTON RING CO.,LTD. (currently, TPR Co., Ltd.) (current position)
September 2007	Outside Audit & Supervisory Board Member, J.
FRONT RETAILING Co., Ltd.
June 2012	Outside Corporate Auditor, Sumitomo Mitsui
Financial Group, Inc.
June 2015	Member of the Board of Directors (Outside) of
the Company (current position)
May 2017	Outside Director, J. FRONT RETAILING Co., Ltd.
June 2017	Outside Corporate Auditor, Sumitomo Mitsui
Banking Corporation

April 1981	Assistant, Faculty of Economics, Keio University
April 1987	Associate Professor, Faculty of Economics,
Keio University
April 1991	Visiting researcher, Institut d’Etudes Politiquesde Paris
April 1994	Professor, Faculty of Economics, Keio University
January 2001	Director for International Economic Affairs,
Cabinet Office
October 2005	Dean, Faculty of Economics, Keio University
March 2012	Member of the Board of Directors (Outside),
Kenedix, Inc.
June 2016	Member of the Board of Directors (Outside) of
the Company (current position)
June 2017	Independent Director (Audit & Supervisory
Committee member), Ahresty Corporation(current position)
April 2019	Professor Emeritus, Keio University(current position)
April 2019	President, Tokyo International University(current position)

April 1983	Joined Fuji Xerox Co., Ltd.
April 2007	General Manager, Public Relations andAdvertisement Department.,
Fuji Xerox Co., Ltd.
April 2010	Senior Vice President, Fuji Xerox Advanced
Technology Co., Ltd.
June 2011	Senior Vice President and Director, Fuji Xerox
Advanced Technology Co., Ltd.
June 2015	Executive Vice President, Fuji Xerox Information
Systems Co., Ltd.
June 2017	President and Representative Director, Fuji
Xerox Advanced Technology Co., Ltd.
April 2019	Senior Adviser, Fuji Xerox Co., Ltd.
June 2020	Member of the Board of Directors (Outside) of
the Company (current position)
June 2020	Outside Audit & Supervisory Board Member,
ULS Group, Inc. (current position)
October 2020	Outside Director, PLANET, INC.
(current position)

1, 4

1, 4

1, 4

Senior Managing
Executive Officers

Managing
Executive Officers

Takashi Tezuka

In charge of quality control and Aircraft Components
Division; General Manager, Quality Division

Takaaki Kato

In charge of Global Corporate Finances; In charge ofNorth, Central & South American Operations

Ryuji Uda

Assistant, China Operations; Chairman & President,
KYB (China) Investment Co., Ltd.

Keisuke Saito

In charge of China Operations; General Manager,
Seismic Isolation/Mitigation Correspondence
Operations

Minoru Ishika

General Manager, CSR & Safety Control Division

Ichio Nemoto

ToshihikoHatakeyama

In charge of production; General Manager, Production
Division; Deputy General Manager, Seismic Isolation/
Mitigation Correspondence Operations

In charge of global corporate planning and domestic
affiliated companies; General Manager, Corporate
Planning Division;

Takashi Saito

Assistant, European Operations; President,
KYB Europe GmbH

Shizuka Sakai

Assistant, North, Central & South American
Operations; President, KYB Americas Corporation

Shozo Amano

General Manager, Gifu South Plant, HydraulicComponents Operations

Ikuo Inagaki

In charge of technology; General Manager,
Engineering Division; General Manager, Engineering
Planning Department

Hajime SatoIn charge of European Operations; In charge of sales
and marketing; In charge of purchasing and logistics;
General Manager, Sales Division

Osamu Kunihara

General Manager, Finance & Accounting Division

Kazuaki Shoji

In charge of auditing; General Manager,
General Affairs & Human Resources Division

Executive Tomoki Takaoka General Manager, Procurement Department I,
Officers
Purchasing and Logistics Division,
Ukuru Tsuchida General Manager, Special Purpose Vehicles Division
Minoru Tamai

General Manager, Sagami Plant, HydraulicComponents Operations

Toshimichi Izeki Deputy General Manager, Engineering Division;

General Manager,
Basic Technology R&D Center; Curator, KYB Museum

Masahiro Kawase General Manager, Automotive Components
Operations; General Manager, Suspension
Headquarters

27

KYB Group Report 2021

KYB Group Report 2021

28

ESG Initiatives

Risk Information

This section explains the major risk factors relevant to the
KYB Group’s operating results and financial condition that
may have a significant effect on decisions by investors. The
KYB Group’s Risk Management Committee reports to theBoard of Directors. Based on the Risk Management Rules, it
identifies material risks the Group must address and thebusiness units responsible for managing them, and also

addresses large-scale natural disasters through Groupwide
BCP initiatives. Business units are responsible for managing
their risk exposure while the Risk Management Committeemonitors their actions. Forward-looking statements in thissection represent the judgments of the KYB Group (KYB andits consolidated subsidiaries) as of March 31, 2021.

1. N onconforming Acts in the Inspection Process for Seismic Isolation/
Mitigation Oil Dampers
The Company and its subsidiary Kayaba System MachineryCo., Ltd. manufacture and sell seismic isolation/mitigation
oil dampers for buildings. Some did not conform toperformance evaluation standards certified by the Ministerof Land, Infrastructure, Transport and Tourism (the“Minister”),* or to the standards of customers, because offalsification of performance inspection record data (the“Incident”). We reported the Incident to the Ministry ofLand, Infrastructure, Transport and Tourism (MLIT) andannounced the status of our response on October 16, 2018.
* There is no Minister’s certification system for seismic mitigation oil dampers.

Since July 5, 2019, we have announced the status
and progress of measures to prevent recurrence andcountermeasures regarding this issue once every threemonths on the following website of the Company.
As of March 31, 2021, we have completed implementationof 63 of 67 specific measures to prevent recurrence. Our
initiatives to complete implementation of the remaining
measures are ongoing.

Status and progress of measures to prevent recurrence:https://www.kyb.co.jp/company/progress/prevent.html(Japanese only)
Status of countermeasures:https://www.kyb.co.jp/company/progress/exchange_
progress.html(Japanese only)

Also related to the Incident, the Company records provisions
for product warranties for seismic isolation/mitigation oil
dampers using information and facts currently available andconsidered reliable. Provisions have been recorded in our
accounts for costs to produce seismic isolation/mitigation oil
dampers, to replace seismic isolation/mitigation oil dampers,
to make structural modifications, and to cover compensation
expenses. At this point, however, no provision has beenrecorded for litigation costs related to this matter, for whicha reliable and reasonable estimate is difficult. Therefore,
additional provision recorded as a result of future events
could have a significant impact on the business results of
the Group.

2. Risk Due to the COVID-19 Pandemic
Due to the global COVID-19 pandemic that has beenongoing since the previous year, national and local
governments worldwide have implemented measuresthat include lockdowns and restrictions on movement.
Production cuts by major customers have also had anegative impact on the Group’s business performance. In
addition, the future remains uncertain due to the possibilityof additional waves of infection even in regions where life
is returning to normal. As a result, the pandemic could

have a significant impact on the KYB Group’s operating
results and financial position.
Each Group company is implementing measures that
include thorough hygiene management, limiting domestic
and overseas business trips, and expanding telecommuting
and web conferencing in accordance with the restrictions
and guidelines to prevent the spread of COVID-19 issued
by national and local governments worldwide.

29

KYB Group Report 2021

due to the state of supply and demand for major
component materials such as semiconductors, could havea significant impact on operating results. The KYB Groupsells most of its system products, aircraft components andspecial-purpose vehicles in Japan. In particular, demand
for the KYB Group’s special-purpose vehicles, which areprimarily concrete mixer trucks, can fluctuate significantly
due to changes in the amount of construction activity,
which is closely correlated with the economic outlook.

sufficiently to reflect a reduction in selling prices, which
could have a significant impact on operating results.
3-4. Funding
The KYB Group obtains loans mainly from financial
institutions in Japan and other countries to fund capital
expenditures and to secure working capital. The Groupobtains these loans while carefully monitoring financial
markets. However, it may be unable to procure funds
when needed at favorable terms due to events including abroad decline in the prices of the Group’s products, aneconomic recession, a credit crunch, or a decline in theGroup’s credit rating, which could affect the Group’s
financial condition and operating results.
3-5. Business Downturn
Bankruptcy at KYB Group overseas production or sales bases
caused by factors including a decline in orders or profitability
could significantly impact the Group’s operating results.
3-6. Counterparty Credit Risk
The KYB Group sells its products to automobile andconstruction machinery manufacturers and many othercustomers. An unexpected problem involving customer
credit could affect the Group’s operating results.

4. Risks Associated with Natural Disasters, Accidents, Etc.
While the KYB Group in and outside Japan has prepared
for a large-scale natural disaster through the Groupwide
BCP Project, an earthquake, wind and flood damage, fire,conflict, act of terrorism or other event in a region where
the Group has a plant could cause a substantial decline in
the Group’s production capacity.
In Japan, many plants of the KYB Group and many of its
suppliers are located in the Chubu area. A major earthquake,wind and flood damage or other event in this area that

hampers these plants from operating could cause asubstantial decline in the Group’s production capacity.
In addition, many plants of the KYB Group produce
hydraulic products that utilize the properties of oil. In addition,some plants have coating equipment that uses organic
solvents, and storage tanks for hydraulic oil, chemicals andother substances. A fire or hazardous substance leak could
temporarily shut down manufacturing activity.

5. Risks Associated with Fluctuations in Exchange Rates and Interest Rate Increases
With an overseas sales ratio of 55.9%, the KYB Group relies
heavily on markets outside of Japan. As a result, fluctuations
in foreign exchange rates have a significant impact on theGroup’s exports from Japan and the performance of Group

companies in other countries. An increase in interest rates inJapan or other countries could have a significant impact on
the KYB Group’s operating results.

6. Risks Associated with Significant Lawsuits or Other Legal Action
If the KYB Group is the defendant in a lawsuit and theoutcome is unfavorable, the resulting payment and other3. Risks in Business Operations
3-1. Demand Trends
Sales of the KYB Group’s Automotive Components andHydraulic Components Operations segments depend
heavily on the global production volume of automobiles
and construction machinery. The Group’s main products
are components supplied to manufacturers of automobiles,
construction machinery and industrial vehicles. A decline
in demand for these products due to a global economic
downturn, or changes to customer production schedules

3-2. Prices and Quality
The KYB Group’s products are subject to intense pricecompetition in both domestic and international markets.
Customers regularly request cost cuts and lower prices.
Quality is also critical. The Group supplies vital automotive
components, such as shock absorbers that maintain vehicle
stability and power steering systems. For construction
machinery and commercial vehicles, the Group supplies key
functional components such as motors and hydrauliccylinders that drive the main unit.
Consequently, the Group may incur substantial
expenses, including the payment of damages demanded bycustomers, if it supplies defective products. Furthermore,sales volume and prices for aftermarket automotive shock
absorbers are subject to the impact of regional economic
conditions and competition.
3-3. P rocurement of Materials and Components
The KYB Group purchases materials and components from alarge number of suppliers. Prices of these items are closely
linked to factors including prices on international commodity
markets. The KYB Group may not be able to fully reflect anincrease in the cost of materials or components in its selling
prices, or to reduce prices of materials and components

demands may have a significant impact on the Group’s
operating results.

7. Risks Associated with Information Security
The KYB Group has set out a Standard Information Security
Policy to protect information assets and appoints persons
responsible for information security management to ensure
the integrity of information security. In addition, the Group
conducts regular training and drills for all employees andofficers, reviews evaluation standards for management
systems, and strives for ongoing improvement.
Nevertheless, in addition to the increasingly sophisticatedand complex information system environments of recent

years, and increased frequency of access from outside theCompany by employees as a result of remote work
becoming standard, cyberattacks have become increasingly
complex and diverse, leading to increased risks associatedwith information security. As a consequence, any resulting
event such as an information leak or system failure could
have a significant impact on the KYB Group’s operating
results or financial position.

KYB Group Report 2021

30

ESG Initiatives

Social Initiatives
Basic Approach for Social Initiatives

Human Resource Initiatives

KYB’s basic approach to social initiatives is outlined in the KYB Group Corporate Guiding Principles. All employees in the KYBGroup are expected to follow these guiding principles.

Basic Approach

Respect for Human Rights• We will respect the dignity of all individuals and respect human rights that are internationally recognized and,additionally, we will not be involved in violations of human rights. In the unlikely event it is found or likely thatour business activities, products or services may cause violations of human rights, we will forthwith take anappropriate measure against it.
• We will absolutely not tolerate any discriminatory acts on the grounds of race, gender, sexual orientation,nationality, religion, age or physical or mental disabilities or illnesses.
• We will not practice forced labor and child labor in any form whatsoever.

Respect for Workers’ Rights• Pursuant to international standards and the laws and regulations of each country, we will respect the fundamental
rights of labor, such as workers’ freedom of association, right to organize and right to bargain collectively.

Supply Chain• We will acknowledge that we have social responsibilities to our supply chain as well. We will oppose forcedlabor and child labor in any form in the supply chain and implement the non-use of conflict minerals.
• We will aim to create products that are friendly to the earth and people and work hard in our procurement thattakes the environment into consideration.
• We expect our suppliers to share the values expressed in this clause.

Participation in Activities ofIndustry Associations andOther Related Organizations• We will join and be active in industry associations and other related organizations solely for the purpose ofpromoting and familiarizing technology related to our products and services, as well as contributing to thesound development of the industry.

No Involvement with
Antisocial Forces• We will not have any relationships whatsoever with forces, associations and illegal organizations that threaten
the safety and order of society. We will take a resolute stance as an organization against improper or illegal
demands from those forces, etc. and we will not provide them with any benefit whatsoever.

Contribution to Society• We will promote coexistence and cooperation with local communities, proactively engage in such activities asvolunteer activities and conducting local events, and contribute to the development of local communities as“good corporate citizens.”• We will respect local communities' history, culture and customs, and support non-commercial aspects such as
culture and arts in order to contribute to development of a sustainable society.

Preservation of
Natural Environment• We will recognize that we are dependent upon rich and varied nature and make efforts to create products thatare friendly to the earth and people in our domestic and overseas business activities.
• We will actively promote preservation of natural environment by identifying environmental conservation
activities as one of the important indicators for the evaluation of management and undertaking global warming
countermeasures, energy conservation promotion, recycling of resources, waste reduction and proper
management of chemical substances.

Health and Safety• We will always think safety first and engage, with all employees participating, in activities aimed at prevention ofindustrial accidents and occupational diseases and the creation of an accident-and-risk-free work environment.
• We will prepare a clean and hygienic work environment through thorough tidiness, order, cleanliness, sanitationand training.

Creation of Comfortable
Working Environment• We will value a way of working that takes the diversity of our employees into consideration and strive to create
lively workplaces.
• We will strive to create a vibrant and comfortable workplace where we care for each other while giving
consideration to physical and mental health, respect each persons’ point of view and position, and allow free
and open exchange of opinions.
• We will absolutely not tolerate acts that worsen the working environment and cause mental and physical pain
beyond the proper scope of operations.

Enhancing Workplace
Capabilities through Educationand Skills Development• As “human resources” that support the sustainable growth of the KYB Group operating its business globally,each one of us will proactively increase our own abilities through diverse education and training and we willbuild strong workplace capabilities at every workplace.

The KYB Group believes that helping to achieve the SDGs
is essential for increasing our corporate value.
As part of our ongoing efforts to recover trust following
the occurrence of nonconforming acts, along with fostering
an awareness of compliance, we are working to build anopen corporate culture with an emphasis on freedom fromharassment, given that harassment can create a situation
where it is difficult to raise one’s voice within a company.

Furthermore, to ensure that all workplaces are rewarding
ones, the Group is helping to improve the physical andmental health of employees, ensuring that personnel are
assigned to suitable positions and departments, providing
training to employees who will help realize the Corporate
Spirit, and utilizing the talents of diverse human resources.

Freedom from Harassment
We made the implementation of power harassment
prevention measures mandatory throughout the Company
from June 1, 2020. Harassment-free workplaces arean essential foundation for creating free and open
communication at work, maintaining and improving thephysical and mental health of employees, and promoting
human resource development. We have been carrying out
educational campaigns to raise awareness of compliance.
KYB has created new training programs covering
listening skills and equality under the law as a way topromote mutual respect, an important factor for
preventing harassment. The listening skills training has
already begun, and the equality training will begin as an

Article in internal newslettere-learning course. In addition, antiharassment posters havebeen put up in workplaces and articles have appeared ininternal newsletters. KYB also surveys the extent ofreported cases of harassment through stress assessments,
which employees take every year.
KYB plans to clearly state its approach to prohibiting
harassment in the workplace through business/departmental
policy documents, and will integrate antiharassment
education into new training programs. We will also conduct
evaluations on a trial basis.
The Company promptly responds to cases reported to theharassment helpline and the whistleblower hotline, taking
strict disciplinary action after confirming the facts.

Poster displayed inCompany workplaces

KYB Group Corporate Guiding Principles (excerpt)

31

KYB Group Report 2021

KYB Group Report 2021

32

ESG Initiatives
SocialHealth Management
KYB Health Declaration

Human Resource Development
Five Pillars of Health Management

KYB sees the health of employees and theirfamilies as an important management resource
and a source of corporate vitality, and is working toachieve sustainable growth through the creation ofan environment in which all employees can work ingood health both physically and mentally.
We are committed to actively supporting
employees who are engaged in health promotion
activities and to promoting organizational measuresfor health promotion in order to live up to our
Corporate Spirit by “building a corporate culture
full of vitality and holding high goals.”

Be a sound company that ensures
the health of its employees and thehappiness of their families

Goal

Physical health
Measures

Measures toprevent serious
illness
Passive smoking
countermeasures

Promotion of
exercise and ahealthy diet

Mental health
Mental andphysical healtheducation

Creating vibrantworkplaces

Freedom fromharassment

KYB has redesigned its human resource training programs toensure that employees have the qualities necessary to help
realize the ideas (honesty, vitality, love and creativity) behind
the Corporate Spirit. We have been working to improvethese programs, while recognizing that transparency inemployee evaluations and promotions is one of the mostimportant aspects of human resource development. For thisreason, we have clarified the necessary qualities andachievement levels for every job level and reviewed therequirements for management promotions based on this.

We are also exploring ways that improvement measures canbe incorporated into on-the-job training, which is importantfor complementing human resource development systems.
KYB recognizes that training managers of overseas bases isvital for ensuring the sustainable growth of global operations.
Therefore, we provide them with experience in departmentsthat are essential for managing their workplaces over the
medium term, helping them develop the qualities they needthrough training. We then assign them to leadership positions
when the time is right.

Qualities Required to Make the Corporate Spirit a Reality (Ideal Human Resources)

November 1, 2019

Masao Ono

Basic
actions

Representative Director andPresident Executive Officer
KYB Corporation

Expansion of health management policies, collaboration withrelated departments, and the participation of employees

Health management
promotion officer (Director in
charge of Human Resources)

Health management
promotion teamHealth Insurance Association
SupportLabor Union

Main initiatives

25% by FY2023
Ensure at least 90% of employees and their family
members undergo specified health checkups by FY2023
75

Ensure at least% of employees and their family
members receive specified health guidance by FY2023
1) Passive smoking countermeasures
Indoor smoking areas phased out in April 2020
Reduced from 10 areas in FY2019 to zero in FY2020
Employee smoking rate was 33.8% in August 2020
	Smoking prohibited during working hours starting fromJanuary 2021
2) Exercise programs
Walking event held in October 2020
1,339 participants
Daily Challenge 8000 event held monthly from April 2020
A total of 5,004 participants over nine months
3) Health checkups
	88.0% of employees underwent specified health checkups
in FY2020	70.6% of employees received specified health guidance
in FY2020

33

KYB Group Report 2021

Customerorientation

5
Challengeorientation

6

7

8

9

10

Instruction andtraining ability

Task and strategy
formulation
ability

Basic knowledge
and skills

Specialized
knowledge
and skills

Improvement andreform ability

Two skills

Training Managers of Overseas Bases
Training rotation

Skill development training
KYB’s main training programs translated
into English• Human resources: Awareness of compliance, mutual
respect, ability to formulate strategies, ability to make
improvements and reforms, quality control methods• Business execution: Explanations of company andbusiness policies

Formulate plans for training rotationand follow-up

Training to instill thenecessary qualities(Candidates for management
positions outside Japan)

Assignment of candidates
Set and deploy criteria forassignments

2. Mental health

Reduce the employee smoking rate to no more than 

Goals

Mutual respect
and teamwork

4

Creativity

Human Resources Planning Department

Policy execution

1. Physical health3
Ability tocarry out social
responsibilities

Sincerity

10 components of training programs (focusing on eight qualities and two skills)

Health Support Center

Functional andbusiness divisions

2

Vitality

Eight qualities

Organizational Structure for Promoting Health Management
Health management officer(Representative Director,
President Executive Officer)

1
Awareness ofcomplianceand ethics

Honesty

1) Class-specific education
	Training for new employees, mid-career employees,
supervisors, section heads who have been recently appointed
or are in their third year, and department heads (some training
postponed due to the COVID-19 pandemic)
2) Stress assessments
99.98% of employees participated in FY2020
Assessment results were disclosed to managers and officers

Certification as a 2021 Health &Productivity Management Organization
For the second consecutive year, KYB was certified as a Health &Productivity Management Organization in recognition of its efforts tomanage the health of employees. We see the health of employees
and their families as an important management resource and asource of corporate vitality, and will continue fostering workplaces
that allow all employees to work productively and in good health inorder to ensure the Group’s sustainable growth.

Promoting Diversity
KYB regards the diversity of human resources as an importantfactor for realizing sound operations. Accordingly, we fostera corporate culture that accepts and respects diverse
values, cultures, and customs, while maintaining flexibility
in management strategies and product development.
As part of our efforts to promote diversity, KYB has beenstrengthening systems and awareness campaigns for helping
women thrive in the workplace. We have increased thenumber of female career-track employees with a view toraising the number of female managers (achieved the target
in FY2020). Going forward, the Company plans to help
women set their career paths—in this way raising theirawareness of opportunities and their possible futures—andcreate training programs for supervisors to raise theirawareness of issues impacting women in the workplace.
KYB has also established special organizations that employ
people with disabilities, and has carried out related activities.

To enable all employees to play active roles in theworkplace, we are continuing to allow remote work,
encouraging employees to take their annual paid leave,and striving to reduce long working hours in order to help
employees maintain a healthy work-life balance.
Raise personal awareness

Raise awareness of workplaceissuesDraw on the talents ofdiverse human resources
Foster working
conditions that allow everyone
to thrive on the job

Create systems that
employees need and want

Enhance the value offered by individuals and organizations,and increase the value the Company provides to society

KYB Group Report 2021

34

ESG Initiatives
SocialQuality Management

Supply Chain Management

KYB Group Basic Policy for Quality

Basic Policy for Procurement

KYB and its Group companies (“KYB”) are committed torestoring the trust they have lost, and have established a
medium-term action plan for compliance with the KYBGroup Basic Policy for Quality to do so. To prevent a
recurrence of quality-related misconduct, we will continue tofoster and establish an awareness of compliance as theprerequisite for and foundation of quality management.

The KYB Group shall:
1. A ddress quality improvement with honesty driven by
the belief that quality is the basis for business.
2. D eliver safe and secure products in compliancewith promises to customers as well as with laws
and regulations.

KYB works to fulfill its corporate social responsibility (CSR)
and continues to be a company that society can rely upon.
Suppliers are important partners for us in continuously
developing our business through monozukuri (Japanesemanufacturing expertise) and contributing to the realizationof an affluent society.
Our basic policy for procurement is described below.
Basic Approach to Procurement

Quality Assurance System
We have built and operate an ISO 9001-compliant quality
assurance system that emphasizes the quality of work
processes as well as the quality of products and services. We
strive each day to make improvements in all aspects of quality.
At KYB, we implement what is called a three-stepevaluation system for the development and mass productionof products, the development of technologies, manufacturingmethods, and so on. We make every effort to achieve highquality throughout the product life cycle, from the productplanning stage, to defect reduction and change management
after mass production and shipment. At our production
bases, we take a variety of quality improvement measures
under the leadership of base managers and plant managers,
and we are working to promote the unerring operation of
our three-step evaluation system. Furthermore, to ensure thequality of mass-produced products, we also follow thissystem for single, small-lot orders and when production is
moved to another production base.

Development of Products and Technologies
through a Three-Step Evaluation Systemand the Quality Safety Audit
Step
Prior and model
development
DR*0 evaluation
meeting

Order development
DR1 evaluation
meeting

Mass-production
development andproduction
preparations

Goal of the Three Steps
Proof of possibility(Description and evaluation ofdevelopment quality)

Proof of mass production(Description and evaluation ofdevelopment quality)

Proof of applicability and serialization(Demonstration and evaluation ofstart quality)

Development quality

Specific Initiatives
Mass-production quality

Quality Safety Audit

DR2 evaluation
meeting

Bad News First
Execute (until the reporter receives feedback)
When abnormalities arise: Stop, Call, Wait

* Development and researchStrengthening the Quality Audit System
KYB is strengthening its quality audit system to thoroughly
prevent quality-related misconduct. Quality audits evaluate
the materialization of risks of quality-related misconduct,
improvement of such risks, and the effectiveness of the
improvement measures taken. In addition, we are working
to achieve our goals by evaluating whether our plans for
quality assurance and quality control activities are being
implemented effectively and systematically, and theeffectiveness of our measures, among other factors.

Revision of Quality Audit Regulations(March 2020)⑥ On-time delivery⑦ Protection of the naturalenvironment⑧ Construction of global
procurement system⑨ Risk management⑩ Classified information
management⑪ Prevention of corruption

Start quality

Evaluate manufacturing site, manufactured products anddata to confirm that mass-production quality is problem-free
and that reliable production and shipment are possible.

Quality Safety
Audit

Mass production
Initial flow
management

Quality Assurance Step

① Procurement activities
aimed at the coexistence
and mutual prosperity of
KYB and its suppliers② Legal compliance③ Quality first④ Safety and health,human rights and labor⑤ Continuous cost reduction
activities

FY2020 Procurement Policy Briefing
We planned to hold the FY2020 KYB Purchasing Policy
Briefing in April 2020 in Nagoya, to which suppliers would
be invited. When COVID-19 began to spread, however, weconsidered the risk of infection to our business partners andcancelled the event. Under normal circumstances, we would
have explained our corporate and purchasing policies
directly to our suppliers’ representatives, but instead weshared the briefing materials with our suppliers via KS-NET
and gave explanations through documents. We sentcommemorative shields and mementos to excellent suppliers
who have contributed greatly to QCD.** Quality, cost and delivery

assurance and quality control activities. We reflect the resultsin our business management, and work to improve the levelof our quality assurance and quality control activities.

Establishment of Procedures for Dealing
with Quality-Related Misconduct (April 2020)
We newly established procedures to strengthen compliancein management and maintain social credibility by
establishing a framework for appropriate response to reportsof organizational or personal quality-related misconductfrom employees or other parties and by conducting early
detection and correction of quality-related misconduct.

Supplier QC Circle Convention
For our 50th Supplier QC Circle Convention, planned for
FY2020, we told prospective attendees that it would bepostponed until September due to COVID-19. However, thepandemic did not look like it would be brought undercontrol by that date. We then gave top priority to reducing
the risk of infection and decided to cancel the convention.
In light of COVID-19’s impact, we will consider holding
the event online in FY2021.

Survey of Status of BCP
In FY2019, we conducted a questionnaire of suppliersconsisting of 100 items in seven categories. To help improve
the responsiveness of the entire supply chain, we contacted
suppliers who needed to strengthen their BCP activities andconfirmed the implementation of countermeasures against
major earthquakes. We then discussed upcoming issues andpromoted BCP initiatives with suppliers.
Keneikai Activities (Formerly the Theme Study Group)
The theme study group changed its name to Keneikai in
FY2020, with the aim of revitalizing and implementing
initiatives under a new system. Even though there weresome restrictions on activities due to the spread of
COVID-19, we used online conferencing to carefully selectthemes that could be promoted, and worked on BCP
improvement measures. Through those measures, suppliers
were able to further improve their BCP management systems.
Initiatives to Prevent Human Rights Violationsin the Supply Chain
In recent years, there has been growing demand forcompanies to prevent human rights violations globally,
including in their supply chains.
In light of the Dodd-Frank Act,* the KYB Group annuallychecks its products with the cooperation of its suppliers,
summarizes the results and reports to customers thatrequest such information.
In addition, in accordance with the U.K. Modern Slavery
Act 2015 we annually release a statement on KYB Groupbusiness activities and initiatives to prevent slave labor andhuman trafficking in our supply chain, including the abovementioned conflict mineral measures. We will carry on with
our awareness-raising activities on prohibiting human rights
violations and slave labor.
* The Dodd-Frank Act is a U.S. financial regulatory act that aims to indirectly cut off trade inmineral resources mined in the Democratic Republic of the Congo and nine neighboring
countries because of concerns that these mineral resources are the source of funding forarmed groups that are responsible for environmental destruction and human rights violations.

For details, see the “Supply Information” section of
the Company website.
https://www.kyb.co.jp/english/company/supply_information.html

We conduct quality audits to prevent quality-related
misconduct and to identify the actual conditions of quality

35

KYB Group Report 2021

KYB Group Report 2021

36

ESG Initiatives

Environmental Initiatives
Safety Activities

Environmental Management

Creating a Safe, Secure Working Environment

Basic Approach

Under the slogan “Safety is the top priority,” the entire
company works as one to achieve zero occupational
accidents. Our Corporate Guiding Principles say, We will
always think safety first and engage, with all employees
participating, in activities aimed at prevention of industrial
accidents and occupational diseases and the creation of an
accident-and-risk-free work environment. The Global Safety
Promotion Committee, which is chaired by KYB’s president,
works to revitalize activities. The Environment & Safety
Committee, which is chaired by the executive officer incharge of CSR and safety, discusses safety measures related
to the KYB Group. In these ways, we are promoting safety
and security in the working environment.

As sustainability activities aimed at preventing global
warming and realizing a sustainable recycling society,KYB manufactures products that are friendly to people
and the earth, and actively promotes environmental
conservation activities.

Basic Environmental Policy
SloganSafety education (instruction on dust mask use)

Protect the Green Earth and Create
Environmentally Friendly Products

OSHMS/ISO 45001 Certification Acquisition
In order to systematically implement initiatives to build an
occupational health and safety management system andstrengthen its foundation, we are introducing and promoting
OSHMS/ISO 45001* certification. We introduced OSHMS at

Gifu North Plant

Overseas (ISO 45001 Certification)
KYB Americas Corporation (United States)

Environment & Safety Management System

KYB Manufacturing do Brasil Fabricante de Autopeças S.A. (Brazil)

Sagami Plant(Including the Basic Technology R&D Center and the Electronics
Technology Center)

KYB Advanced Manufacturing Spain, S.A.U. (Spain)

We established the Environment & Safety Committee, andhave positioned officers responsible for environment andsafety as leaders. Under the system shown on the right, KYB
works to promote unity in environment and safety initiatives.

KYB Suspensions Europe, S.A.U. (Spain)

KYB Manufacturing Czech, s.r.o. (Czech Republic)
KYB CHITA Manufacturing Europe s.r.o. (Czech Republic)

KYB-YS Co., Ltd.

1. Develop and build up production and corporate
activities based on recycling to reduce impacts on theenvironment.

4. Clarify the role of each employee and encourage theparticipation of all employees.

Gifu South Plant(Including Gifu East Plant, Production Technology R&D Center,
Machine Tools Center)

Takako Industries, Inc.
(Shiga Plant)

The KYB Group creates user- and earth-friendly products.
We actively promote environmental conservation activities
as an important tool for evaluating management.

3. Work to promote relationships with local communities
and contribute to society as a good corporate citizen.

* ISO 45001: An occupational safety and health management system (OSHMS) standard
issued in 2018 by the International Organization for Standardization (ISO).

KYB Mexico S.A. de C.V. (Mexico)

Kumagaya Plant

Basic Environmental Policies

2. Strive to ensure long-term and sustainable operations
throughout the entire KYB Group.

the Gifu North Plant in FY2004, and we have been rolling it
out Groupwide.

Bases with Certification (As of April 2021)
Japan (OSHMS)

In order to strengthen our efforts toward helping toachieve the SDGs and carbon neutrality, which is a global
target, we established the ESG Promotion Office in FY2021
to further enhance our environmental initiatives.

KYB (Thailand) Co., Ltd. (Thailand)
KYB Steering (Thailand) Co., Ltd. (Thailand)

KYB’s Environment & Safety Management System
President
Executive Officer

ESG Promotion Office

Executive Officer
in charge ofEnvironment & Safety

PT. Kayaba Indonesia (Indonesia)

Environment & Safety
Committee

PT. KYB Hydraulics Manufacturing Indonesia (Indonesia)

Chairman:
Executive Officer in chargeof Environment & Safety

KYB-UMW Malaysia Sdn. Bhd. (Malaysia)
KYB Motorcycle Suspension India Pvt. Ltd. (India)

KYB Trondule Co., Ltd.

KYB Industrial Machinery (Zhenjiang) Ltd. (China)
Changzhou KYB Leadrun Vibration Reduction Technology Co., Ltd. (China)

KYB Motorcycle Suspension Co., Ltd.

Wuxi KYB Top Absorber Co., Ltd. (China)
KYB Manufacturing Taiwan Co., Ltd. (Taiwan)

KYB Kanayama Co., Ltd.

KYB Manufacturing Vietnam Co., Ltd. (Vietnam)

Executive Officer
in charge of ESG

Respective business units
Plant General Manager

Overall Safety
Supervisor

Environment
Supervisory Officer

Safety and HealthCommittee

Environment
Supervisory Committee

Subcommittees

Subcommittees

Subcommittees
Environment Preservation
Subcommittee
Energy-saving Plant
Subcommittee
Safety and Health
Subcommittee

Takako Vietnam Co., Ltd. (Vietnam)

37

KYB Group Report 2021

KYB Group Report 2021

38

ESG Initiatives
Environment

Medium-Term Environmental Plan (CO2 Reductions)

Environmental Conservation Efforts and Future Initiatives
Initiatives for Reducing Emissions

Upgrade to cogenerationequipment

CO2 emission volume• Upgrade to highly efficient power receiving and transforming equipment• Install highly efficient air-conditioning systems• Switch to LED lighting•U se heat shielding and insulating coatings on the roofs of plants andother buildings• Upgrade to highly efficient compressors• Lower compressor loads by reducing air leaks• Increase the efficiency of manufacturing equipment• Upgrade machinery with standby power systems• Install heating and cooling heat pumps• Control the dispersion of steam and air to reduce heat loss from pipes• Upgrade and install cogeneration equipment to improve efficiency• Install solar power generation systems (completed at the Sagami Plant andunder consideration at the Gifu North Plant and other plants)• In logistics, organize delivery routes based on shipment loads, improveloading efficiency, raise transportation efficiency, ship mixed loads, reduce
the number of deliveries, and end the use of stopover storage

Installation of in-house solar power
generation systems

Scope 2
Indirect
emissions fromelectricity
generation

Electricity
generated fromfossil fuelsElectricity
Electricity
from
from
renewable
decarbonized energy
sources

Scope 1
Directemissions fromthe Company’s
operations

0

In-house electricity
generated fromrenewable energy

Natural gas fromfossil fuels＋↑−↓

CO2 emission credits
2013

2020

2030

Creation of plants that aim to minimize
energy consumption and waste• Consider environmental friendliness by reducing
energy consumption and CO2 emissions• Utilize energy sources with low CO2 emissions
and promote initiatives to prevent global
warming• Promote measures through energy visualization• Contribute to creation of sustainable society
while considering ESG initiatives and develop
energy and facilities that are environmentallyfriendly

2050

Up to 2030

Up to 2050

• R educe energy consumption by 1% every year
• Increase renewable energy sources to 15% of
all sources by 2025
• R educe CO2 emissions• Promote visualization of energy-related
performance indicators through IT• Reduce industrial waste and improverecycling rates• Reduce energy consumption by 1% every year
• Achieve carbon-neutral operations• Realize visualization of energy-related
performance indicators through IT• Continue to reduce industrial waste andimprove recycling rates

KYB had been working to achieve the goals of the newthree-year medium-term management plan using 2019 as
the benchmark year. From early 2020, however, the
COVID-19 pandemic significantly impacted the Company’s
production and some operations were suspended.
Consequently, energy consumption in operations, CO2

emissions, and the volume of various types of waste all
decreased substantially compared with 2019 levels. We
made efforts to recover amid falling market demand, andachieved the following results for energy consumption (on aunit basis).

○: Goal attained ×: Goal not attained

Results for FY2020
Theme

Target ValueFY2020 Results

Prevention of global warming

CO2 emission volume

95,778 t-CO2 or less

77,755 t-CO2○

Energy saving

Energy consumption per basic unit

0.20 kℓ/million yen or less

0.196 kℓ/million yen○

Improvement of resource
recovery and recycling rate

Recycling rate

91.8% or higher

91.9%

○

Zero emission

3.3% or less

3.3%

○

Reduction of waste

Overview ofMajor Initiatives in FY2021

Evaluation

General waste

510 t or less

372 t

○

General waste per basic unit

2.83 kg/million yen or less2.63 kg/million yen○

Metal scrap

19,126 t or less

15,792 t○

Metal scrap per basic unit

221 kg/million yen or less111.7 kg/million yen○

Industrial waste

3,522 t or less

2,855 t○Industrial waste per basic unit

32.12 kg/million yen or less20.2 kg/million yen○

Global Warming Prevention
Measures include replacing lightingwith LEDs, LVDs, and other highly
efficient devices, adopting inverter
control for hydraulic units, upgrading tohigh-efficiency compressors, eliminatingleakage of air, reducing air consumption
in plants, and implementing activities
for environment impact reduction by
installing high-efficiency air conditioning
equipment and controlling facility
temperatures.
Waste Material Reduction
Measures include reducing paint dust
through biological treatment, introducing
waste treatment and reduction systems,
turning waste into valuable products andpromoting recycling.

Notes: 1. Basic units are calculated using a method determined by KYB.
2. For energy, crude oil equivalent is calculated for electricity and fuel, and the total value indicates energy consumption.
3. CO2 emissions and energy consumption per basic unit are calculated using methods determined by KYB.
4.	We have been promoting recycling activities to reduce industrial waste since FY2019. Therefore, recycling that turns waste into valuable products has been excluded.

Environment-related Data
Environmental Impact by Business Activity
KYB uses energy, water, chemicals and a variety of other resources. In order to make efficient use of those limited resources in
production, we take steps to reduce waste, CO2 and other emissions.

CO2 Emissions(t-CO2)200,000(t-CO2/million yen)
0.60

0.52

Input

Production Activities

Raw materials (Metal, non-metal)

Development/Design

146,705 t
EnergyElectric power

91,862 MWh

18,713 kℓ

1,539 km3

Chemical substances (PRTR law target substances)

233 t

100,000 96,545 101,289 102,134 96,745(Landfill disposal)

628 t

Production

Emission into atmosphere
CO₂

NOx

77,755 t-CO2

32 t

SOx

Dust

2t

0.39 t• Development of technologies andproducts that are environmentallyfriendly as a result of recycling,energy saving and safety, etc.
• Promotion of green procurement• Promotion of modal shift

50,0000

Wastewater

1,419 km3

Recycling inside Company

Recycling outside Company• Scrap (Effective utilization in the KYB Group)• Deteriorated solution for chrome plating• Water used for rinsing in chrome plating process, etc.

• Metal scrap • Waste oil • Waste plastic• Grinding powder • Waste thinner • Paper, cardboard, etc.

KYB Group Report 2021

0.20

2018

2019

2020

Related company(kℓ)
80,000

1,633

1,500
1,251

1,604

1,539

1,331

40,000500

20,000

0
2017

2018

20,000

1,961
1,522

2019

17,931

10,000

500

5,000

2020

2018

2019

2020

20,364

42,113

0.15

0.05

(FY)

0
2016

2017

2018

2019

2020

(FY)

19,31915,792

3,469

3,539

3,827

3,557

504

597

515

372

0504
2017

19,75515,000

1,000

2016

0.196 0.20

■ Consumption (Left scale)   ━ Basic unit (Right scale)(t)
25,000

1,946

0.205

0
2016

(kℓ)
2,500

1,673

0.210

0.10

Waste Emissions

2,171

0.222

47,572 49,777 50,134 47,459

Energy Consumption forTransportation** Crude oil equivalent(kℓ/million yen)
0.25

60,000

1,000

(FY)

0

Scrap

39

2017

(km )
2,000

■ Emissions (Left scale)  ━ Basic unit (Right scale)

2,000

Recycling company

0.40

0
2016

1,500

Production process

0.45

77,755

1,308 tDistribution

Water

Amount of waste(Reuse, etc.)(Crude oil equivalent)

0.46

Output2,855 tEnergy Consumption

3

0.226
0.47

150,000

Procurement
Fuel/Gas

0.50

Water Usage

(FY)

2016

2017

2018

2019

2,855

2020

(FY)

■ General waste   ■ Metal scrap   ■ Industrial waste

KYB Group Report 2021

40

ESG Initiatives
Environment

Environmental Accounting
Recognized by the Government as a Company That Excels at Saving Energy
In FY2019, the Agency for Natural Resources and Energy of the
Ministry of Economy, Trade and Industry of Japan recognized KYB as
a company that excels at saving energy. KYB received an S rating,the highest rating under the system for evaluating businesses basedon the Act on Rationalizing Energy Use. We will continue to saveenergy and reduce emissions of greenhouse gases from business
operations in order to help build a sustainable low-carbon society.

The amounts of investment and cost were calculated with reference to the Environmental Accounting Guidelines, 2005, provided by
the Ministry of the Environment.

(Millions of yen)

Cost Type(1)-1 Pollution
prevention cost

Chemical Substance Management
Response to Environmental Controls
on Products
For the protection of the environment, the REACH Regulations,other ELV1 and RoHS directives,2 and various laws andregulations, which contain increasingly stringent provisions,have been established and are being implemented. We are
addressing these changes by keeping an eye on trends
in European environmental rules such as stricter RoHS
directives as well as REACH and other regulations in eachcountry where we operate and by incorporating the details
in technology development plans.
We have built a chemical substance database, which is abreakdown of chemical substances and mixtures containing
chemical substances that we currently use or plan to
introduce. Using the database, we can rapidly respond torequests from customers to determine the presence orabsence of not only banned substances and restricted-use
materials but also of substances of very high concern, which
can be added at any time. We will continue to provide
products that meet customer and market needs. Specifically,(1) Business area cost

we will work to help achieve a low-carbon society andpromote product development with an awareness ofrecycling. This includes complying with lead-free andhexavalent chromium regulations.
Notes: 1.	A directive that came into effect in the EU in October 2000 to reduce
environmental impact caused by end-of-life vehicles.
2.	A directive that came into effect in the EU in July 2006 that restricts the use of
specific hazardous substances found in electrical and electronic products.

Major Contents(2) Upstream/downstream cost(3) Management activity cost

Cost

10.4

197.5

9.1

12.7

65.0

231.6

0.0

0.0

0.0

96.9

4.7

31.1

0.0

3.0

0.0

0.0

14.6

17.2

• Air pollution and water pollution prevention activities• Maintenance and inspection of pollution prevention facilities• Analysis and measurement of atmosphere and water quality(1)-2 Global environmental • Energy conversion
conservation-cost• E nergy-saving activities (Investments, etc.)(1)-3 Resource
circulation cost

Invested Amount• Recycling of plant waste• Reduction of industrial waste
Not available• Maintenance and management of ISO 14001, etc.
• Monitoring of environmental impact and employee education• Environmentally friendly product development

Use and Management ofChemical Substances(4) R&D cost

Chemical substances must be handled appropriately andmanaged carefully, given the harm they can cause to people
and the danger they pose to the environment. Therefore,
to manage potentially harmful and dangerous chemical
substances, all companies in the KYB Group use a databaseto share information needed for risk assessments of chemical
substances and mixtures containing chemical substancesthat we currently use or plan to introduce. We are working
to ensure that workers handle these substances carefully.

(5) Social activity cost(6) Environmental remediation cost(7) Other cost• Lightweight products and products containing less hazardous
chemical substances• Support of non-profit environmental protection• Afforestation and maintenance of scenery around plants
Not available• Internal environmental conservation• Welfare conservation
Subtotal
Grand total

103.8

590.0
693.8

Note: Classification and Definition of Environmental Conservation Costs
Invested amount: Expense for the purpose of environmental conservation during the target period with effect that continues for a number of terms and running cost for those periods.
Cost: Cost or loss generated from expenditure of finances/services for the purpose of environmental conservation.

Successful Environmental Initiatives
ISO 14001 Certification Acquisition
In order to systematically develop initiatives for environment
conservation, we are introducing and promoting an ISO

14001 environmental management system. We will shift tothe 2015 edition sequentially in renewal examinations.

Japan

Overseas
KYB

Gifu South Plant (Including Gifu East Plant, Production Technology R&D Center,
Machine Tools Center, KYB Motorcycle Suspension Co., Ltd.)
Sagami Plant (Including the Basic Technology R&D Center and the Electronics
Technology Center)

Mie PlantGroup Companies in Japan41

KYB Group Report 2021

KYB Advanced Manufacturing Spain, S.A.U. (Spain)
KYB Manufacturing Czech, s.r.o. (Czech Republic)

PT. Kayaba Indonesia (Indonesia)
KYB-UMW Malaysia Sdn. Bhd. (Malaysia)
KYB Industrial Machinery (Zhenjiang) Ltd. (China)

Takako Industries, Inc. (Shiga Plant)

KYB Trondule Co., Ltd.

KYB Suspensions Europe, S.A.U. (Spain)

KYB Steering (Thailand) Co., Ltd. (Thailand)

Gifu North Plant (Including KYB Kanayama Co., Ltd.)All KYB Group production plants have been replacing old equipment and machinery, and this includes
installing highly efficient compressors and quantity control equipment. All plants have also been repairing
air leaks to boost the overall performance of compressors. As a result of these efforts, the Group has
reduced CO2 emissions equivalent to 160 t-CO2.

KYB Manufacturing do Brasil Fabricante de Autopeças S.A. (Brazil)

KYB (Thailand) Co., Ltd. (Thailand)

Kumagaya Plant

KYB-YS Co., Ltd.

Group Companies Overseas
KYB Americas Corporation (United States)

Saved Energy by Upgrading Compressors

Changzhou KYB Leadrun Vibration Reduction Technology Co., Ltd. (China)
Wuxi KYB Top Absorber Co., Ltd. (China)
KYB Manufacturing Taiwan Co., Ltd. (Taiwan)
KYB Manufacturing Vietnam Co., Ltd. (Vietnam)

Environmental Load Reduction through Installation of LED Lighting
Aiming to substantially reduce our CO2 emissions, the KYB Group has been working to save energy.
These initiatives include placing the optimal number of lights in offices and over production lines,
installing sensors that turn off the lights when people are not there and replacing fluorescent lights with
LED lights at all production plants. As a result of these efforts, the Group has reduced CO2 emissions
equivalent to 67 t-CO2.

Takako Vietnam Co., Ltd. (Vietnam)
Takako America Co., Inc. (United States)

KYB Group Report 2021

42

Business Strategy

Business Strategy

KYB Group Business Overview
KYB provides products to customers in various fields by combining electronic control andsystems technologies that apply its two core technologies for vibration control and power
control. KYB’s business and product segments are divided into Automotive Components
Operations, Hydraulic Components Operations, the Special-Purpose Vehicles Division, theAircraft Components Division, and the System Products and Electronics Components Business.

KYB’s Core Technologies and Businesses
Automobiles
Motorcycles

Vibration
ControlTechnology

Main Businesses

Automotive Components Operations

Electronic
ControlTechnology

HydraulicTechnology

This business primarily develops and supplies a wide variety of products
for automobiles and motorcycles. Leveraging vibration control
technology, it serves market requirements for comfort, safety andmaneuverability in day-to-day driving and motorsports.

Railroad equipment

Automotive

Construction machinery

SystemTechnology

Special-purpose vehicles

Power Control
Technology

Aircraft components
System products

Major Products
Shock absorbers for automobiles: Shock absorbers (original equipment(OE), aftermarket)
Shock absorbers for motorcycles: Front forks, rear cushion units
Hydraulic equipment for automobiles: Vane pumps, vane pumps forcontinuously variable transmissions (CVT), hydraulic power steering systems,
electric power steering (EPS)
Others: Stay dampers, shock absorbers for all-terrain vehicles, free locks

Electronics components

Motorcycles

Net Sales by Business Segment (FY2020)

Segment Profit (Loss) by Business Segment*(FY2020)

Hydraulic Components Operations

Other
Businesses

This business develops and supplies a variety of hydraulic equipment for
construction machinery, industrial vehicles and railroad cars. It also
leverages power control technology to meet the needs of on-site
monozukuri and railroad infrastructure for precision miniaturization,
digitalization and systemization.

billionOther
Businesses¥19.2

Construction
Machinery(¥0.4)

billionNet Sales

HydraulicComponents
Operations¥328.0Automotive
Components
Operations

billion¥111.3billionHydraulicComponents
Operations¥5.5

Segment
Profit (Loss) by
Business Segment¥13.3
billionbillion¥197.5Major Products¥8.2

billionHydraulic equipment for industrial use: Cylinders, valves, pumps,
motors, mini-motion packages (MMP), hydrostatic transmissions (HST)
Others: Dampers for railroad cars, brakes for railroad cars, active
suspension systems for railroad cars, seals

Industrial
VehiclesAutomotive
Components
Operations
billion* Segment profit corresponds to operating profit under JGAAPMarket Share of Major Products Source: KYB data (As of March 31, 2021)

Other Businesses
Special-Purpose Vehicles Division

System Products and Electronics Components BusinessThis business develops and manufactures special-purpose vehicles,
focusing on a lineup of small to large concrete mixer trucks that havethe largest market share in Japan. The excellent mixing, discharging,environmental performance and other features of our products boost
work efficiency.

We are opening up new possibilities for hydraulic technology, such as
auditorium and stage control systems that support theater performances.
In addition to hydraulic technology, we are also focusing on electronic
control technology to develop products such as electronic control units(ECU) for automobiles and other uses.

Aircraft Components Division

Major ProductsThis business supplies flight control systems, landing systems, hydraulicand pneumatic systems and other hydraulic equipment for aircraft. In
the aerospace technology market, which requires outstanding reliability,
we leverage cutting-edge hydraulic technology to support flight safety
and comfort.

43

Shock Absorbers for
Automobiles

KYB Group Report 2021

Market Share in Japan

40%

Market Share Globally

14%

Motorcycle
Front Forks

Hydraulic
CylindersMarket Share in Japan

Market Share in Japan

44%

Concrete
Mixer Trucks

25%

Market Share in Japan85%

System products: Equipment for military vessels, seismic isolation andvibration suppression devices, simulators, hydraulic systems, tunnel boringmachines, environmental devices
Special-purpose vehicles: Concrete mixer trucks, granule carriers, specialfunction vehicles
Aircraft components: Steering components, control devices, emergency
equipment
Electronic components, etc.: Electronic devices

KYB Group Report 2021

44

Business Strategy

Product Lineup
We support daily life by providing safety and comfort. The products presented here areused in a broad range of fields.

Automotive

Through the pursuit of technology, KYB is able to offer
automotive components that offer users advanced
maneuverability and drivability. We support comfort, security
and excitement in any driving situation, from a family outing
to a challenging motorsports event.

KYB makes motorcycle components for the highest level ofriding stability by using world-class race-proven technology
designed for extreme speed and safety. We support comfortable
driving and superior maneuverability. Our shock absorbers forsnowmobiles and chairs skis are specially designed to operate
in the snow.

For many years, KYB has worked to meet the needs of construction sites for machinerythat does not break even when used for long periods of time, day and night, and underharsh conditions ranging from extreme colds of -30°C to scorching deserts. We support
construction sites with the world’s highest level of reliability. We develop andmanufacture all of our drivetrain components (control valves, piston pumps, travel
motors, swing motors, cylinders, etc.) in-house, and are also involved in system
proposals for construction machinery.

45

KYB Group Report 2021

Agricultural
Machinery

Motorcycles

Construction Machinery

Automotive Components Operations

KYB agricultural machinerycomponents save space and energy
for easier farming.

Industrial Vehicles

Special-Purpose
VehiclesKYB puts its components to work in
forklifts and other industrial vehicles
to provide powerful support for
improved operational efficiency.

KYB special-purpose vehicles support
comfort in all environments. KYB
concrete mixer trucks have the highest
market share in Japan.

Hydraulic Components Operations

Industrial Machinery

Other Businesses

Railroad Equipment

KYB supplies components forindustrial machinery from elevators
to factory equipment to help
accelerate production.

KYB railroad equipment helps achieve
comfortable high-speed travel bybuffering rolls from air pressure when
cornering, passing oncoming trains orentering tunnels.

Marine ProductsSports and Welfare

KYB hydraulic and tension control
technologies make work at sea easier,including for ships operating remotedevices for deep sea exploration, as
well as for transport ships, supply
ships and rescue ships.

KYB uses its core technologies todevelop products for sports andwelfare.

KYB Group Report 2021

46

Business Strategy

Strategy by BusinessTechnological Strategy

Automotive Components Operations

1. Suspension and steering for next-generation vehicles

Business Strategy
Realizing true value: Strengthen, evolution and new initiatives
In Automotive Components Operations, our goal for
FY2022 is to “establish a position as a core supplierby further strengthening existing projects and coretechnologies.” To achieve this goal, our basic strategies are“stabilization of our revenue base,” “innovative monozukuri”
and “creation of high-value-added products.”
To stabilize our revenue base, we are consolidating
and reorganizing our main bases to maximize profits byleveraging optimal production locations in line withcustomer demand. In the commercial market, we are
implementing structural reforms in which production, sales
and technologies are integrated and promoting local
production for local consumption, including making flexible
adjustments and localizing production systems.

For production, we will improve the level of automation
and reduce manufacturing costs by introducing laborsaving operations. We will then successively introduce thesemeasures at domestic and overseas bases, aiming to become
the No. 1 manufacturer in terms of low costs through ourinnovative monozukuri.
Regarding technology, in order to address changes in thesocial environment and customer needs, we will respond to
new markets and new products through EV, CASE1 and
MaaS,2 develop new customers and create high-value-added
products by strengthening our proprietary technologies.
1. Connected cars, autonomous driving, sharing and electrification. This keyword indicates thetrend in the automobile industry.
2. Mobility as a Service. A new concept in the transportation service industry for integrating
various means of transportation into a single service.

Automobiles are equipped with suspensions, which improvecomfort and steering stability, and the shock absorber is thepart that absorbs vehicle chassis vibration.
Featuring superior technology, KYB shock absorbers are
the preferred choice of many automobile manufacturers
worldwide, and we have achieved high market share. In
addition, we recommend replacement within five years of
initial registration or at 70,000 kilometers (43,495 miles) as
deterioration will occur due to mileage and aging. This
commercial demand for replacements is a major business
opportunity for KYB.
Driving, turning and stopping are the basic functions ofan automobile, and the steering system handles turning.
Hydraulic power steering (PS), which uses hydraulic force to

KYB Technologies Capable of Responding to the Evolution of Automobiles
Internal combustion engine(ICE) vehicles

HVs/PHVs

ZEVs

Gasoline-fueled vehicles

Hybrid vehicles

Electric vehicles/fuel cell vehicles

Suspension

Basic Strategy

Tire
Brake

Establish a position as a core supplierby further strengthening existing
projects and core technologies

Evolution:
Innovative monozukuri
New initiatives:
Creation of high-value-added products

Tire
Brake

Steering

Corner module(In-wheel suspension/Motor)

Steering
Battery

strengthen its core technologies such as vibration control
and power control. We will also promote modularization,
electronic control and system support for main products
while applying our hydraulic technologies in various ways.

(Millions of yen)

Meeting Market Needs by Strengthening Core Technologies

15,000300,000
243,725

245,807

232,101

11,043
197,453

200,000

ICE vehicles

11,696
10,61810,0009,806

100,000

5,000

2018

2019

2020

0
(FY)

Main products

Strengthening
core technologies

Shock absorber

Modularization/electronic
control

Electronic
control system

Power steering

HydraulicElectric

Vane pump

Vane

Electrical and electronic (EE)/system support

2016

2017

2018

2019

2020

(FY)

Notes: 1.	As of FY2017, “Royalty income” and “Revenue related to mold compensation,” which were previously recorded in “Other income” in the Consolidated Statements of Income, are included in“Net sales.”
2. Segment profit is calculated by deducting cost of sales and selling, general and administrative expenses from net sales.

KYB Group Report 2021

ZEVs

Respond to
next-generation platforms

Application of
hydraulic technologies

2017

HVs/PHVs

New vehicles

Market needs: Silent operation, space, performance,
low vibration and comfort

Technological strategy

8,196

47

Motor
InvertereAxle

In the automotive market, needs for features such as silent
operation, space, performance, low vibration and comfort
will grow even more in the future, and parts manufacturers
are improving their technologies to meet these needs. KYB
is working to support next-generation platforms as part ofits technology strategy. In addition, KYB will further

Segment Profit2(Millions of yen)

2016

Battery

KYB technologies that stand the test of time

■ Shock absorbers for automobiles ■ Shock absorbers for motorcycles■ Hydraulic equipment for automobiles ■ Others0

New vehicles

2. Response to automotive market needs

Net Sales1

231,025

Suspension

EngineTransmission
Drive shaft

Goal for FY2022

Strengthen:Stabilization of our revenue basereduce the effort needed to turn the wheels, is indispensable
for safe driving as it enables a quick response to danger.
Electric power steering (EPS), which is powered by a battery,
can improve fuel efficiency compared with PS, which is
powered by the engine.
Even if the shift from conventional gasoline-fueledvehicles to hybrid vehicles with two or more power sources
or to ZEVs continues, there will still be a need for suspension
systems and steering. As KYB’s proprietary technologies
evolve further, business opportunities will expand as well. In
addition, we will collaborate and form alliances withcompanies for technologies that we do not possess to
become an even stronger supplier.

CornermoduleElectric

Evolve main productsCore technologies: Vibration control and power control

KYB Group Report 2021

48

Business Strategy
Strategy by BusinessTechnological Strategy

Hydraulic Components Operations

Proprietary technologies enable advanced control

Business Strategy
Securing a competitive advantage through system proposals
In Hydraulic Components Operations, our goal for FY2022 is
to be a “business that continues to be trusted by customers
with products used around the world.” To achieve this goal,
our basic strategy is to “respond to automation and complex
needs” through the development of electronic control andload-sensing products and medium and large pumps. As ameasure to strengthen our competitiveness, our strategy is to“promote cost reduction and local procurement.”
In our Hydraulic Components Operations, we handle
hydraulic equipment for industrial use, mainly for construction
machinery, as well as other hydraulic equipment. The

drivetrain system of construction machinery, such as
excavators, consists of parts including control valves, piston
pumps, travel motors, swing motors, and cylinders, andKYB is one of the few manufacturers that produces allof these products. The fact that we can make systems
proposals to construction machinery manufacturers is amajor competitive advantage.
In addition, the overall trend in the markets we serve is
expansion in growth areas, so we will promote strategies foreach region according to its development stage and develop
low-cost models.

To respond to automation and complex needs, we arecontinuing to develop electronically controlled models forhydraulic equipment and adding them to our lineup.
The “brain” of construction machinery is the control
valve, which regulates various actuators (drive devices thatconvert energy into translational or rotational motion via
hydraulic or electric motors) and enables smooth operations
such as traveling, turning, and the flexing and stretching of
mechanical arms. Combining electronic controls with KYB’s
specialty hydraulic technologies and fusing them with thepump, which is the “heart,” enables advanced control andcreates new added value.

As for mini excavators, we are working on load-sensing*pumps to meet market needs for lower noise and fuelconsumption, improved operability, and diversification of
attachments. We will also address the growing need for
responding to environmental issues. The advantages of aload-sensing system include simultaneous or combined
operation, which previously relied on operator experience aswell as energy savings, and digitalization and automationthat is able to handle a variety of loads without issue.
* Load sensing: A system in which the load sensed by the valve is sent to the pump. The system
is able to adapt the flow rate to the pressure required for operation.

Market Trends and KYB Technologies
Medium-Term Management Plan

2020

2025

TrendsBasic Strategy

Computerization/Introduction of ICT

Goal for FY2022

Respond to automationand complex needs

AnalogA business that continues to betrusted by customers with products
used around the world

Promote cost reduction
and local procurement

Use of IoT and big data

Hydraulic pilot control

Automation, remote work and addressing
environmental issues

Digital   Electromagnetic proportional control

Excavator
Respond to exhaust gas restrictions
Expand pump lineup
Introduce electronic controls for control valves

Net Sales1■ Hydraulic equipment for industrial use■ Others(Millions of yen)

(Millions of yen)

150,000

15,000140,625
125,321

122,787

11,304111,348

100,000

Improve maneuverability and durability,
reduce noise and decrease costs

Segment Profit2

96,327

Trends11,907Lower noise and fuel consumption, improved operability,
safety, and ability to respond to multiple operations

Respond to attachment diversification and use of electric motors(addressing environmental issues)

10,000

6,634
5,534

50,0005,502

Mini-excavator

5,000

Respond to exhaust gas restrictions
Transition to a load load-sensing

0

2016

2017

2018

2019

2020

0
(FY)

2016

2017

2018

2019

2020

Develop load sensing system
Expand lineup
Introduce electronic controls(FY)

Notes: 1.	As of FY2017, “Royalty income” and “Revenue related to mold compensation,” which were previously recorded in “Other income” in the Consolidated Statements of Income, are included in“Net sales.”
2. Segment profit is calculated by deducting cost of sales and selling, general and administrative expenses from net sales.

49

KYB Group Report 2021

KYB Group Report 2021

50

Business Strategy

Contributing to Social Issues
through Our Business
Other Businesses (System Products, Special-Purpose

Approaches to ICT and IoT in Hydraulic Equipment

Vehicles, Aircraft Components Division)

Support for ICT and IoT in Hydraulic Equipment
In recent years, computerized operation using ICT and monitoring functions using IoT have increased in the construction industry.
Combining traditional hydraulic equipment with advanced electronic equipment requires overcoming challenges in terms of cost,
durability and systemization, but we are continuing our development initiatives, mainly in sensing technology.

Strategy by Business
System Products and Electronics
Components Businesses

e-Mixer Computer Controlled Concrete
Mixer Truck

In July 2021, Kayaba System Machinery Co., Ltd., a subsidiary,
was absorbed into KYB Corporation. Under the slogan“Let’s become a trusted company once again,” we will
focus on promptly bringing seismic isolation/mitigation
oil dampers into conformity. We will also strengthen
governance and build a system that will be recognizedby third parties as appropriate.

The e-Mixer is an environmentally friendly concrete mixer
that achieves lower noise, exhaust and fuel consumption
through application of our unique hydraulic technology and
ECU. Using sensors to detect the level of the load, computer
control optimizes the flow rate of the hydraulic equipment,
thereby reducing engine revolutions to about half thoseneeded by a conventional manual mixer. We havesignificantly enhanced operability by continuously making
improvements, and the e-Mixer’s functions meet the needsof users.
The initial model e-Mixer that was launched in 2004
was upgraded to the e-Mixer II in 2011. We are currently
incorporating further advances to develop the e-Mixer III,
which will be easier to use and offer enhanced safety
features.

Special-Purpose Vehicles Division
In Japan, we are working to strengthen our profit structure
by developing high-value-added products that are friendly
to the environment and to people and that meet market
needs. Overseas, we will establish the foundation for a
global network for special-purpose vehicles by formulating
and implementing new business plans.

Launch of Hydraulic Cylinder Compatible with ICT(Stroke Sensing Cylinders for ICT Construction Equipment Machinery)
We have launched a cylinder with a stroke sensing function as a
product for computerized construction equipment. In the caseof an external sensor, there is a risk of damage due to contact
with soil or other substances. However, a built-in sensor that isinterchangeable with standard cylinders can prevent damage.
For ease of use and high accuracy, the stroke sensing cylinders
support controller area network (CAN) communication andutilize absolute output (absolute position detection).

Development of Monitoring System for Hydraulic Cylinders and Other Equipment
We are developing a cylinder failure detection system as a
product for monitoring systems utilizing IoT. A fully wirelesssensor mounted on the cylinder monitors the inside of thecylinder and reports malfunctions. KYB has continued to makeadvances in its hydraulic cylinders to improve their durability.
Moreover, by providing advance notice of the inevitable
deterioration of consumable items or accidental failures, thissystem minimizes the suspension of operations and reduces
parts replacement costs, thus contributing to the maintenance
operations of construction machinery manufacturers.
The product is in
the evaluation stage
Relief valve
as a subsystem thatprovides data to the
Wireless sensor
hydraulic cylinders
Seal housingof construction
Sensor holder
machines.

Aircraft Components Division
We aim to improve profitability by strengthening compliance,
putting safety first and promoting quality management.
We will work to reduce losses associated with disruptionsin production, review our production system and costs,
and reorganize the business.

Remote control operation near the discharge chute

Net Sales1

Segment Profit (Loss)(Millions of yen)

(Millions of yen)

30,00027,964

27,231

24,163
1,000

947

1,028

19,23620,000

500
297

346

2018

2019

10,000
0

0

2016

2017

2018

2019

2020

-500
(FY)

CAN communication(SAE J1939)
Terminals used aspressure andtemperature sensors

Receiver• Judgment
function• Communication
function

Personal area
network (PAN)
communication

System developed by KYBInternal
communication

Construction
machineECU

Construction
machine network
communicationequipmentLine for CAN communication(SAE J1939)

Construction
machine system

Joint Development of a Next-Generation Modular EV Platform

1,500
25,782

Wireless sensor(for cylinder
mounting)

(372)

2016

2017

2020

(FY)

KYB has entered into a strategic partnership with REE
Automotive of Israel, a company with advanced EV platform
technologies, to develop suspension capabilities for future EV
platforms. Our suspension technologies will contributesignificantly to improving the performance of REE Automotive’s
next-generation EV platform, providing cost-effective, scalable
solutions in e-mobility.
The new platform features a high degree of design freedom
and is expected to enable innovations in EV design, with all
drivetrain components, including steering, braking, suspension
and electric motor, integrated into the wheel. Through thispartnership, we will promote the development of a suspension

subsystem that supports the needs of tomorrow’s mobility
ecosystem to revolutionize methods of transporting people,
goods and services.

Notes: 1.	As of FY2017, “Royalty income” and “Revenue related to mold compensation,” which were previously recorded in “Other income” in the Consolidated Statements of Income, are included in“Net sales.”
2. Segment profit is calculated by deducting cost of sales and selling, general and administrative expenses from net sales.

51

KYB Group Report 2021

KYB Group Report 2021

52

Company Data

Company Data

Financial Highlights(Millions of yen)

FY

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

Accounting standards applied

JGAAP

JGAAP

JGAAP

JGAAP

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

Net sales

320,082

337,158

305,752

352,710370,327355,320355,316

393,743

412,214

381,584

328,037

—

—

—

—

15,506

17,58818,62422,94922,01017,575

13,325

Operating profit (loss)

24,152

21,538

10,473

18,17014,461

4,327

19,247

20,885(28,496)(40,298)

18,297

Profit (loss) before tax [Income (loss) before
income taxes and minority interests]

24,44021,76012,994

21,032

14,892

2,825

18,852

20,881(29,510)(41,419)

16,340

Profit (loss) attributable to owners of theparent [Net income (loss)]

17,014

13,898

7,789

12,761

8,036(3,161)

14,544

15,202(24,757)(61,879)

17,658

Capital expenditures

8,916

27,17339,21529,90830,087

21,30020,578

20,95625,34523,347

13,322

Depreciation and amortization

13,427

13,50814,554

17,294

15,191

17,075

15,922

16,98817,581

20,615

18,634R&D expenses

3,218

4,035

5,468

6,917

8,910*

7,760

7,621

8,102

6,750

6,312

5,368

Cash flows from operating activities

35,433

17,39918,98428,78822,335

19,95831,15329,252

17,047(4,999)20,826

Cash flows from investing activities(7,233)(20,000)(36,125)(36,078)(30,658)(20,320)(21,337)(16,386)(13,616)(21,505)(6,281)

Cash flows from financing activities(16,968)(3,455)

8,529

5,709

(555)

(3,395)(969)(4,482)

10,41822,576

1,146

Cash and cash equivalents at end of period

48,12342,01035,215

38,13230,51025,29633,98842,70256,09250,42368,700Total assets

285,134

301,349

327,912361,083

387,877

359,002381,326

412,493441,074

410,454426,635

Interest-bearing debt 2

81,64180,51895,33888,81392,44891,68593,563

94,641

108,634

154,608

160,278

Total equity [Total net assets]

89,964

102,762

116,435

153,997

175,256

153,381

169,771

186,651

155,643

79,815

116,726

Basic earnings per share [Net income (loss)
per share]3 (Yen)

77.54

62.87

35.24

55.25

31.45

(12.37)56.93

595.09(969.18)(2,422.53)

668.95

Cash dividends per share applicable tothe year3 (Yen)

8.00

9.00

8.00

9.00

12.00

11.00

12.00

150.00

0.00

0.00

75.00

Return on equity attributable to owners of
the parent [Return on equity] (ROE; %)

21.1

14.8

7.3

9.7

5.1

(2.0)

9.3

8.8

(15.0)(55.4)

18.5

Ratio of equity attributable to owners of theparent [Equity ratio] (%)

30.6

33.2

34.5

41.2

43.6

41.3

43.1

43.7

33.9

18.1

25.9

P/E ratio (Times)

8.6

8.0

13.1

7.9

14.0

—

10.2

8.5

—

—

4.5

11,44011,97512,306

13,033

13,732

13,796

14,35014,754

15,427

15,43914,718Segment profit1

Number of employees

KYB Corporation and Consolidated Subsidiaries
Notes: 1. Segment profit is calculated by deducting cost of sales and selling, general and administrative expenses from net sales.
2.	Interest-bearing debt = Short-term borrowings + Current portion of long-term borrowings + Current lease obligations + Long-term debt + Non-current lease obligations + Guarantee
deposits received
3.	The Company carried out a 1-for-10 reverse stock split effective October 1, 2017.
Items in brackets are Japanese Generally Accepted Accounting Principles (JGAAP) line item names applied prior to the year ended March 31, 2015 (FY2014).
* JGAAP53

KYB Group Report 2021

KYB Group Report 2021

54

Company Data

Global Network (As of October 1, 2021)★ Regional Headquarters● Production Base

◆ R&D Base

■ Sales Base/Other Services

AMERICAS★ ● KYB Americas Corporation (Indiana)■ KYB Americas Corporation (Greenwood)		 ■ KYB Americas Corporation (Chicago)● Takako America Co., Inc.
● KYB Mexico S.A. de C.V.
● KYB Manufacturing do Brasil Fabricante deAutopeças S.A.
■ KYB International America, Inc.
■ KYB Latinoamerica, S.A. de C.V.
■ Comercial de Autopeças KYB do Brasil Ltda.

EUROPE★ ◆ KYB Europe GmbH★ KYB Europe GmbH (Navarra Branch)■ KYB Europe GmbH (Düsseldorf Branch)■ KYB France■ KYB Iberia■ KYB Italy■ KYB Poland■ KYB Romania■ KYB Turkey■ KYB UK■ KYB Ukraine● KYB Suspensions Europe, S.A.U.
● KYB Advanced Manufacturing Spain, S.A.U.
● KYB Manufacturing Czech, s.r.o.
● KYB CHITA Manufacturing Europe s.r.o.
■ LLC KYB Eurasia■ KYB Eurasia Vladivostok■ KYB Middle East FZEASIA★ KYB (China) Investment Co., Ltd.
● KYB Industrial Machinery (Zhenjiang) Ltd.
● ■ Wuxi KYB Top Absorber Co., Ltd.
● Changzhou KYB Leadrun Vibration Reduction
Technology Co., Ltd.
● Hubei Henglong & KYB Automobile Electric Steering
System Co., Ltd.
● CHITA KYB Manufacturing (Zhenjiang) Co., Ltd.
● KYB Manufacturing Taiwan Co., Ltd.
● KYB Steering (Thailand) Co., Ltd.
● KYB (Thailand) Co., Ltd.
● KYB Manufacturing Vietnam Co., Ltd.
● Takako Vietnam Co., Ltd.

55

KYB Group Report 2021

JAPAN
● PT. KYB Hydraulics Manufacturing Indonesia● PT. Kayaba Indonesia● PT. Chita Indonesia● KYB-UMW Malaysia Sdn. Bhd.
● KYB Motorcycle Suspension India Pvt. Ltd.
● KYB-Conmat Pvt. Ltd.
■ KYB Asian Pacific Corp. Ltd.
■ KYB Asian Pacific Corp. Ltd.
		 (Amata Nakorn Branch)■ KYB Corporation Chennai Branch

KYB Corporation★ KYB Head Office● Kumagaya Plant● Sagami Plant● Gifu North Plant● Gifu South Plant● Gifu East Plant● Mie Plant◆ Basic Technology R&D Center◆ Production Technology R&D Center◆ Machine Tools Center◆ Developmental Center■ Kita-Kanto■ Minami-Kanto■ Nagoya■ Osaka■ Hiroshima■ Fukuoka● KYB Trondule Co., Ltd.
● KYB-YS Co., Ltd.
● KYB Kanayama Co., Ltd.
● KYB Motorcycle Suspension Co., Ltd.
● KYB Stage Engineering Co., Ltd.
● KYB-CS Co., Ltd.
● Takako Industries, Inc.
■ Kensiyuu Co., Ltd.
■ KYB Engineering and Service Co., Ltd.
■ Japan Analysts Co., Ltd.
■ KYB Logistics Co., Ltd.
■ Chikuyo Seiki Kogyo Co., Ltd.

KYB Group Report 2021

56

Company Data

Shareholder Information (As of March 31, 2021)

Corporate Information (As of March 31, 2021)

Shareholder Information

Corporate Information

Common Stock
IssuedNumber of
Shareholders
Transfer Agent andRegistrar

Major Shareholders

25,748,431

Company Name

14,002Composition of Shareholders
Treasury shares

206

thousand(1%)

Financial
institutions

Other domestic
companies

5,403

thousand

(21%)

9,018
25,748thousand(35%)

thousand shares

Foreigncompanies

4,213

Individuals andothers(16%)

thousandToyota Motor Corporation

1,965

7.7

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

1,606

6.3

Meiji Yasuda Life Insurance Company

1,005

3.9

Custody Bank of Japan, Ltd. (Trust Account)

970

3.8

Hitachi Construction Machinery Co., Ltd.

892

3.5

KYB suppliers’ stock ownership

875

3.4

Custody Bank of Japan, Ltd. as trustee forMizuho Bank, Ltd. Retirement Benefit Trust
Account re-entrusted by Mizuho Trust andBanking Co., Ltd.

612

2.4

Ogaki Kyoritsu Bank, Ltd.

591

2.3

Corporate Website

Mizuho Bank, Ltd.

491

1.9

Please visit the following pages for more information.

KYB Employee Shareholding Association

388

1.5

Head OfficeWorld Trade Center Bldg.,
South Tower 28F,
4-1, Hamamatsu-cho 2-chome,
Minato-ku, Tokyo 105- 5128, Japan
TEL: +81-3-3435-3511
FAX: +81-3-3436-6759

Top Page

Notes: 1.	The shareholding ratio is calculated after the deduction of own shares(205,872 shares).
2.	The number of shares held has been rounded down to the nearest thousand shares.

6,845

thousand

Percent of Total
Shareholdings
Shares Issued(Thousands)
(%)

Name

Mizuho Trust & Banking Co., Ltd.
2-1, Yaesu 1-chome, Chuo-ku, Tokyo
103-8670, JapanKYB Corporation

Date of
Establishment

March 10, 1935

Fiscal Year

April 1 to March 31

Paid-in Capital¥27,647.6 million

Number of
Employees

14,718 (Consolidated basis)

Securities Traded

Tokyo Stock Exchange (First Section)

Investor Relations
https://www.kyb.co.jp/english/ir/index.html(27%)

Monthly Stock Price Range (Tokyo Stock Exchange)
Stock price (¥)

Stock price (Left scale)■ Trading volume (Right scale)

Trading volume (Shares)

800,000,000

8,000

Products
6,000

600,000,000

4,000

400,000,000

https://www.kyb.co.jp/english/index.html

KYB Technical Review
200,000,000

2,000

Engineers report on research anddevelopment activities in various fields.
We have published this report for thelast 31 years.

https://www.kyb.co.jp/english/products/index.html

KYB Sponsorship
Through sponsorship and support for racing teams, we are refining ourtechnical capabilities and working to improve quality.

00FY2016FY2017FY2018FY2019FY2020High (¥)

6,460

7,380

5,660

3,695

3,350

Low (¥)

2,980

4,705

2,312

1,712

1,692

At year-end (¥)

5,800

5,050

2,718

2,069

3,020

https://www.kyb.co.jp/technical_report/index.html(Japanese only)

https://www.kyb.co.jp/english/special/index.html
https://www.kyb.co.jp/company/sponsorship/index.html(Japanese only)

Note: The Company carried out 1-for-10 reverse stock split on the effective date of October 1, 2017. Numbers for the prior fiscal years are as recorded after the reverse stock split.

57

KYB Group Report 2021

KYB Group Report 2021

58