Inherited
ULVAC-Style

Corporate Governance

Message to OurReaders

About ULVACULVAC’s VisionCorporateGovernance

ULVAC’s Strategy

Financial Data/
Corporate Information

Risk Management
The ULVAC Group considers that responding appropriately to increasingly complex and diverse risk factors leads
to the creation of governance structures that contribute to the fulfillment of legal requirements and the creationof internal control structures, and by extension, the medium- to long-term improvement of corporate value.
We are expanding systems that can respond appropriately to risk factors through identification, classification,analysis, and evaluation, and we are working to increase corporate value by reflecting them in our management
strategy.

Management of Risks
Principal risks are identified that may have a significant impact on financial position, business results, andcash flows and are described below. ULVAC examines measures to reduce these risks and utilize them asopportunities through discussion at a decision-making body such as the Management Council.
Recognized Risks in Business, etc.

Risk Management System

Market fluctuation

We have established rules concerning the risk management system, classifying a broad range of risks from various
perspectives, and designated the control offices primarily responsible for risk management according to theclassification of risks. Furthermore, these risk control offices identify more specific risks and respond to them. We
work to ensure that these offices efficiently gather information that is important for operating the risk management
system. In addition, in order to share and evaluate information concerning the operation of the risk management
system on a company-wide basis, we have a Risk Management Committee, which is chaired by the president,
and mainly comprises representatives of the risk control offices with primary responsibility for risk management.
The Risk Management Committee holds regular meetings as an umbrella organization for risk management, andit determines company-wide basic policies, monitors the state of management and administration, and considers
any improvements that can be made, etc. Furthermore, initiatives at ULVAC, Inc. are implemented at ULVAC Group
companies as appropriate for the scale and business type of the company in question.

Supply chain

Risk Management SystemULVAC, Inc.

ULVAC Group companies

Research and development

Laws and regulations

Intellectual property rights

SafetyQuality

Global competitive environment
Fund procurement

Securing of human resources

Information security

Environmental regulations, response to climate change

Currency fluctuations
OtherMarket Fluctuation
The Group has acquired its market share and achieved growth by developing unique technologies and introducing
them in the field of vacuum equipment used, in particular, in FPD, semiconductor, and electronic device production
processes. On the other hand, if a great reduction in capital investment occurs or customers’ financial conditionsdeteriorate owing to change in the market conditions of FPD manufacturers, or semiconductor and electronic device
manufacturers, who are the Group’s customers, the Group’s business results and financial position may be adverselyaffected.
In the mid-term management plan launched in July 2023, the Group set a twofold basic policy: “Creating Social
Value through Vacuum Technology” and “Enhancing Profit and Capital Efficiency Oriented Management” Under thebasic policy, even in the case of market fluctuation, we aim to improve profitability by enhancing productivity andachieve sustainable growth by focusing on development in growth fields. Our diverse products are used in a wide
range of fields. We will enhance our ability to respond to market fluctuations by building a stable revenue basecentering on the semiconductor and electronic component fields.

Research and Development

Chief Risk Officer =President and CEO

Chief Risk Officer =President and CEO

Reporting andinstructions
forimprovement

Risk Management Committee

Risk Management Committee

By maintaining vigorous R&D investment, the Group has continued to introduce a stream of new products thatincorporate the latest technologies. However, if development is significantly delayed for a compelling reason, resulting
in delay in introduction of new products to the market, the Group’s business results and financial position may beadversely affected.
The Group is accelerating development, which is necessary for growth, through selection and concentration ofinvestment. At the same time, periodic monitoring is implemented for progress management in order to prevent
significant delay in development.

Global Competitive Environment

Risk control
officeRisk control
officeRisk control
officeRisk control
officeRisk control
officeRisk control
officeThe Group operates business globally and provides products to customers in various countries and regions, butcompetitors also operate globally, and it is a competitive environment with new entrants. In such an environment,competition is intensifying not only in terms of product performance but also price, and the Group’s business results
and financial position may be adversely affected.
The Group is striving to maintain competitiveness by sharing its technology and product roadmap with customers
and launching products using cutting-edge technologies at the appropriate time.

Securing of Human Resources isk control offices are designated according to risk classifications and they implement risk management throughRa PDCA cycle.
Each Group company decides whether it is necessary to establish a Risk Management Committee in consideration ofthe size of the company in question and other factors.

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ULVAC VALUE REPORT 2023

The Group considers the securing of human resources to be the most important factor determining the Group’s
ability to continue to grow in the global business environment. If the Group is unable to continue to secure the humanresources necessary for business growth, competitiveness will decline, and the Group’s business results and financial
position may be adversely affected.
The Group views human resources as “human assets” and strives to create opportunities for diverse humanresources to continue to take on challenges. We secure the necessary human resources by promoting developmentof human resources and health and productivity management and other measures to ensure that diverse humanresources in excellent physical and mental health and good spirits can demonstrate their abilities to the fullest.

ULVAC VALUE REPORT 2023

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