40YUASA INTEGRATED REPORT 2023

Value Creation Foundation

DX Promotion

The shift from Single Item Business to Integrated Product-Service.
We aim to realize a sales strategy with a■Overview of Our DX Promotion
market out approach utilizing data.

Digital Talent Cultivation

Defensive/Intermediate DX
Organizing,
operational
improvement

Kaoru Hirose

Senior Executive Officer, Chief Digital Officer,
ESG Promotion Officer

of DX Promotion and its Place in▎ImportanceBusiness Model Transformation

We believe DX promotion is vital for the business modeltransformation the YUASA TRADING Group is aiming to realize inthe shift from single item business to integrated product-service.
Integrated product-service business means that we aggregate
and analyze customer and market issues, needs, information, anddata to provide TSUNAGU solutions, which combine products,
services, and technology, and solve social issues.
In addition, there is an urgent need to reduce operating costs
using IT technologies in the core businesses. We would also liketo implement measures that can provide useful information
using data analysis to YUASA Yamazumi Shareholding Association
and YUASA TANKYOKAI.
Due to the nature of its business as a trading company,
YUASA TRADING already has in place mechanisms for collecting
information from manufacturers and markets. Utilizing DX, wehope to convert this information and YUASA TRADING’s uniqueinformation into data and anticipate rapidly-changing market
needs to realize a sales strategy with a market out approach thatsolves social issues through new mechanisms and solutions.

Processtransformation

Business modeltransformation

Offensive DX

Operational
streamlining

Promote data
accumulation andutilization

Core businesses
expansion

The Future After Digital Talent Cultivation■︎Analyst talentService expansion

New business creation
The shift from Single
Item Business to
Integrated
Product-Service

To promote DX, we provide grade-specific training for
all employees to develop digital talent in addition to
support for Growing Together 2026 (the Medium-termManagement Plan), we are enhancing corporate value
through the creation of a new business model.

Utilize data

・Talent that analyzes
data combining internaland external data,and proposes analysis
results and hypotheses
to management, eachbusiness domain, andDX talentManagement

￥

Data

▎Current Issues and Development

The current issue within the Group is that information is dispersed
and master data management is not in place. This decentralizationof information is because there are too many different,
independent systems.
With the renewal of the core system scheduled for May
2025, we will aim to centralize management of information andstrengthen the Group’s management foundations.
With regards to master data management, which will become
more important with the renewal of the core system, we will assign
specialist personnel as well as addressing operational aspects.
In addition, we launched training for all employees in FY2023
to develop digital talent in parallel with strengthening digital
governance.

Analysis departments

Staff■ ︎IT talent・Talent that utilizes IT tools
and digital technologies toimplement streamlining
and digital measures

Divisions■ ︎DX talent・Talent that utilizes data
analysis results to promoteplanning and proposal
activities

We have positioned FY2023 as our digital “dawn” in orderto realize a digital “age of stability” from FY2026 onward.
We are aiming to produce 100 talented IT personnel, in
addition to providing IT basic training for the acquisition ofbasic IT knowledge, and training for DX and analyst talent.

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YUASA INTEGRATED REPORT 2023

Value Creation Foundation

Environment

We will contribute to realizing a sustainable society both in our Group and in our business based on harmony with the global environment.

▎Approach to the Environment

Code of Conduct (excerpt)
The YUASA TRADING Group strives to meet the social needs ofdiverse consumers while providing safe and useful products
and services, giving adequate consideration to product liability,
resource and energy saving, and environmental problems
and conservation. We also give due consideration to social
responsibility in our handling of products and services.

Environmental Policy
All people who work at the YUASA TRADING Group take positiveand independent action and contribute widely to society
based on the Environmental Policy to realize sustainable
development which aims for harmony between the soundmaintenance of the environment and economic growth.

which consist of managing environmental hazards such as
reducing power consumption, waste emissions, and vehicle
fuel consumption, as well as managing environmental
benefits, such as selling environmentally-friendly, energysaving products. Led by the President, the Group makes
concerted efforts to promote its business activities as“environmentally-friendly YUASA.”
Environmental Management
https://www.yuasa.co.jp/csr/environment/activity1.html■Environmental Management Promotion System
Top management

Environmental Policy
https://www.yuasa.co.jp/en/sustainability/environment/
management/

Person responsible
for environmental
management
Internal auditing
team

Environmental
Management
Executive Office▎Environmental Management Promotion System
Environmental Management
Based on the YUASA TRADING Group Environmental Policy,
we are working to reduce the environmental burden of ourorganizational activities, products, and services to improveGroup-wide environmental performance using ISO 14001 to
implement continuous improvement activities based on thePlan-Do-Check-Act (PDCA) cycle.
The Group’s environmental activities focus on two areas,

Environmental
Management
Committee

Waste and Energy
Saving Committee

Environmental Conservation Activities
in Malaysia

In Malaysia, where our trading relationships in machine
tools and timber span over 50 years, we are implementing
environmental conservation activities in partnership with
the Japan Malaysia Association with the aim of regenerating
and protecting the country’s tropical rainforests. In FY2022,
we planted about 1,000
mangrove trees grown fromseedlings and maintained
the planted trees.
Students from Universiti Sains Malaysia
and local people planting trees

We also implemented an environmental education
program for students in the surrounding area to learn
about the need for conservation of mangrove forests. In
FY2022, we held a painting competition for elementary
school students of all grades at the activity site to draw the
mangrove forest ecosystem making use of TSUNAGU, theslogan of the YUASA TRADING Group.

EnvironmentallyFriendly Products
Committee

YUASA TRADINGGroup companies

Divisions and sites

Environmental
Management
Committee members

Environmental
Management
Committee members

TopicsSome of the paintings and outstanding students from each grade

42

YUASA INTEGRATED REPORT 2023

Value Creation Foundation

Environment▎Disclosure Based on TCFD Recommendations

The YUASA TRADING Group declared support for therecommendations of the Task Force on Climate-Related
Financial Disclosures (TCFD) in March 2022, and we havecalculated CO2 emissions and identified risks and opportunities.
In June 2023, we decided to disclose information based on
TCFD following approval by the Board of Directors.

Governance and Risk Management
Viewing risks, opportunities, and impacts relating to climatechange as important issues to do with business strategy andsustainability, the Board of Directors deliberates on these issues
and decides on related strategies, etc. In October 2021, weestablished the Sustainability Promotion Committee chaired by
the Representative Director in order to discuss about importantsustainability issues, including climate change, and inquire andprovide advice to the Board of Directors.
The Sustainability Promotion Committee evaluates risk
management for sustainability overall, including climate change,
and reports on the status of risk management to the Board of
Directors as necessary in cooperation with the person who has
overall responsibility for risk management. P.23

Strategy
As a Service Integrated Shosha Group focused on the four key
areas of manufacturing, home building, environment building,and town building, we handle a diverse range of products andservices, and as a result the impacts of climate change and therelated changes in the business environment present us withboth risks and opportunities.
< Risks and Opportunities of Climate Change >In FY2022, we identified the risks and opportunities of climatechange considered to be important. We are conducting
discussions with representatives from business divisions andstaff in charge of promoting sustainability in administrative
departments. With regard to those businesses and fields thatwill be affected, besides making appropriate changes and■Risks and Opportunities of Climate Change
Categories

Policy andlegal
Transition
risks

Technology
Market andreputation

Physical risks

●
●
●

Acute

●

Chronic●

Products
and services
MarketCost increases due to strengthening of environmental
regulations for products●●

Opportunities

Main content

Cost increases caused by government regulations,such as introduction of carbon tax

●

●
●

●

Decrease in demand for existing products due to low
carbon technology

Cost increases due to soaring prices of raw materials,
etc. and rising energy prices due to decarbonization

Decline in external reputation and lower supply chain
competitiveness due to delays in taking action andinadequate information disclosure
Disruption of Group sites and the supply chain due tolarge-scale natural disasters
Stagnation of production activities due to water andpower shortages
Expansion in demand for products with high energy
efficiency
Expansion in demand for products related toresilience

Expansion in demand for products related to resource
recycling
Expansion in demand for renewable energy

implementing risk management, we are also working proactively
to exploit business opportunities during the transition period thatarise from changes in government policies, regulations and themarket environment, with the aim of realizing sustainable growth.
< Strengthening Initiatives to Seize Opportunities >In 2009, the Group established a dedicated energy saving
consulting team. In addition to providing support for the
introduction of energy-saving equipment and renewable energy
at suppliers’ manufacturing plants, the team promoted proposal
and sale of energy-saving and decarbonization-related products
to reduce CO2 emissions during product use by buyers and theircustomers. At present, we are strengthening initiatives related
to energy saving and decarbonization for overseas markets.
To contribute to reducing environmental impact right aroundthe world, we are holding seminars on carbon neutrality andpromoting energy-saving proposals utilizing the Joint Crediting
Mechanism (JCM).
We are also developing the Resilience & Security Businessto address the physical risks of climate change, which include

intensifying natural disasters. Besides working to promote
products and services that lead to the resilience of social
infrastructure based on the keywords of disaster prevention andmitigation and BCP, we are developing new solutions to tackle
social issues, such as increasingly severe natural disasters andinfectious diseases.

Indicators and Targets
Besides aiming to make the YUASA TRADING Group as a wholecarbon neutral by FY2030, we will also be striving to reduce theenvironmental burden throughout the supply chain. As the firststep toward making the Group carbon neutral, we are aiming
for a 30% reduction in CO2 emissions compared with the fiscal
year ended March 31, 2023, by the fiscal year ending March 31,
2026, the final year of the Medium-term Management Plan.
Starting from FY2022, we have been calculating CO2
emissions for each Group company, both domestic andoverseas, and we have begun implementing various measures
aimed at reducing emissions. Furthermore, in order to drive a
reduction in overall emissions in the entire supply chain throughour business, we have also been calculating Scope 3 emissions.
■︎YUASA TRADING Group’s CO2 emissions (FY2022)

Unit: t-CO2

Scope 1&2

Non-consolidated*1

Group companies*1
3,020

4,045

Scope 2

1,232

1,405

2,637

Scope 1&2

2,257

4,425

6,682

Scope 1

1,025

Total

*1 Non-consolidated includes YUASA TRADING CO., LTD. only. The Group companies include subsidiaries
and associates (except for those companies not accounted for using the equity method).

Unit: t-CO2

Scope 3Distribution-related emissions*2
Data center-related emissions*3

YUASA TRADING CO., LTD.
(non-consolidated)
500

139

*2 Calculated based on the power and fuel consumption of the main warehouses to which the company
outsources distribution operations.
*3 Calculated based on the power consumption at data centers to which the company outsources
operations.

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YUASA INTEGRATED REPORT 2023

Value Creation Foundation

Environment▎Initiatives to Achieve Carbon Neutrality

Holding Overseas Seminars on Carbon Neutrality
As a global trend toward achieving carbon neutrality, reductions
in CO2 emissions are required throughout the supply chain,including outside Japan. Besides Thailand and Vietnam,
where we have been promoting energy-saving projects forsome time, we also held seminars in Indonesia, Mexico, thePhilippines, and Malaysia, where we conduct business, to gain
the understanding of methods for reducing CO2 emissions,
including utilization of the Joint Crediting Mechanism (JCM), aninternational framework for achieving reductions.
The YUASA TRADING Group has been striving to improve
the global environment by conducting initiatives that utilize theJCM system, which contributes to the reduction of greenhousegases in developing countries. In addition to using the seminars
as an opportunity for promoting the overseas expansion of
our environmentally-friendly businesses more strongly, we willcontribute to both economic development and environmental
conservation in the partner developing countries through ourJCM project structuring services.

Obtaining Certification under the J-Credit System(YUASA LUMBER CO., LTD.)
Our Group company, YUASA LUMBER CO., LTD., owns
approximately 100 hectares of forests in Hokkaido and has
managed renewable forest resources in cooperation with local
people. Appropriate maintenance (tree thinning and planting)encourages the growth of forests and increases absorption of
the CO2 in the atmosphere. YUASA LUMBER has developed a“forest management activity project” to quantitatively evaluate
CO2 absorption in its past and future maintenance, and it
has received certification under the Japanese government’s
J-Credit System* for the tree thinning and planting practiced insome of the forests it owns. In FY2022, emission reductions are
expected to be approximately 100 tons, and total absorption is
expected to be approximately 2,800 tons by FY2037.
Going forward, YUASA LUMBER will collaborate with local
government, universities, research organizations, and othergroups in efforts to utilize the unused timber created by tree
thinning, including the thin timber from tree thinning thatcannot be used for lumber manufacturing and branches.

* Reductions of CO2 and other emissions through the introduction of energy-saving equipment and useof renewable energy or absorption of CO2, etc. through appropriate forest management

Seminars already held in six countries(Thailand, Indonesia, the Philippines,
Vietnam, Malaysia, and Mexico)

A seminar on carbon neutrality in Thailand■Diagram Outlining the JCM System (Joint Crediting Mechanism)Japan

Diﬀusion of advanced decarbonizing
technologies, etc., and implementationof mitigation actions

Operation and managementby the Joint Credit Committee
which consists of representatives
from both sides
Credits are used toachieve Japan's emission
reductions target

CreditJCM

JCM

Partner countries
JCM projectMeasurement/
Reporting/Veriﬁcation

GHG emission
reductions/Removals▎Initiatives to Increase Resilience

Developing “RISK SAVER” Supply Chain Risk
Visualization System
Over the past few years, supply chain risks have occurred inquick succession, including unforeseen natural disasters, thespread of infectious disease, shortages of semiconductors,
and human rights problems. In order to identify these risks
and achieve a rapid response when they occur, our Group
company YUASA SYSTEM SOLUTIONS Co., Ltd. and JX PRESSCORPORATION jointly developed “RISK SAVER,” a supply chain
risk visualization system.
RISK SAVER is Japan’s first system with the ability to identify
supply chain risks in real time. The system automatically
picks up on supply chain risks by using AI to monitor online
risk information, such as information on natural disasters
disseminated through social media and news reports, and links it
to a company’s own supply chain information. It instantly displays
information that includes the kind of work assigned to a supplieraffected by a disaster and specific alternative production sites.
This enables preparation for calmly continuing production
even in a highly-charged disaster situation, providing support
for promotion of sustainable procurement.
Online risk information

Natural disasters
and accidents
Terrorism, etc.

The company-owned forest in Hokkaido that tree thinning was conducted for forest
restoration

Access andidentify
information
using AI

Risk assessment
function

Risk information
database

Customer supply chain information
Which components
to order fromwhich suppliers

Supply chain information
database

Alert
notiﬁcation function

Alternative
proposal function

RISK SAVER introductory video
https://www.youtube.com/watch?v=nRaWpkaKS2c

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YUASA INTEGRATED REPORT 2023

Value Creation Foundation

Society

In order to contribute to a sustainable society, we will promote reform of corporate culture centered on management that regard for the individual and build a culture that
normalizes innovation.

eforming Corporate Culture to Strengthen▎RHumanResource Capabilities

Code of Conduct (excerpt)
The YUASA TRADING Group will create prosperity andcomfort for the people working at the Group and ensure asafe environment with ease of employee work in addition
to realizing a corporate culture that gives maximum respect
to personality and individuality and enables employees toexercise free and open-minded creativity.

Overview of the Corporate Culture Reform
Regarding its employees as human resources (human talent),
the equivalent of capital, The YUASA TRADING Group pursues
entrepreneurial spirit and revolutionary ideas and focuses on
shaping the workplace environment based on the organization
and rules founded on concepts of mutual trust and a mindsetof collaboration.
In order to promote the “Total Coordination Skills,”“Challenging Spirit,” and “Communication,” which are the
keywords, there are now various systems already in place outof which new solutions for social issues are created.
We have launched the YUASA PRIDE Project, an allemployee participation-based personnel reform project withthe commitment of top management and led by the Human
Resources Department to attain further evolution over the three
years to FY2025, which is the harvest stage for the achievementof YUASA VISION 360.
We will increase
employee work
satisfaction and ease of
employee work throughthis project.
YUASA PRIDE Project workshop

Objective of Corporate Culture Reform
We will foster a culture which normalizes TSUNAGU innovation through personnel reforms, developing the working environment,
and strengthening governance.
Connection to the Medium-term Management Plan
By normalizing TSUNAGU innovation, we will accelerate business transformation with the aim of solving social issues.
■Overall Picture of Corporate Culture Reform

Accelerate business transformation
Create a culture that normalizes
TSUNAGU innovation
Increase employee
engagement
Increase employee
work satisfaction
・Talent cultivation
・Reform of various
personnel systems

Increase employee
ease of work
・Diversity
・Workstyle reform

Develop an environment that can maximize
TSUNAGU innovation

Governance, compliance, and risk management(the base of corporate culture)

Personnel reforms
YUASA PRIDE ProjectP.��

Develop the working
environmentP.��

Strengthen
governance
P.��

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YUASA INTEGRATED REPORT 2023

Value Creation Foundation

Society▎Personnel Reforms “YUASA PRIDE Project”

Objective of Personnel Reforms
In order to accelerate business transformation, we will increase employee engagement and strive to develop human talent with theability to solve social issues through TSUNAGU innovation. As one of the initiatives for achieving this, we have launched the “YUASAPRIDE Project,” an all-employee participation-based personnel reform project to improve employee work satisfaction and ease ofwork. Under the project, we will consider new personnel systems and promote talent cultivation.
■︎Overall Picture of Personnel Reform
Corporate Philosophy
Becoming a TSUNAGU Service
Integrated Shosha Group● Achievement of YUASA VISION ���●

Proﬁle of the people we are seeking●

Accelerate business
transformation

Project to regard
for the individual

Promotion of diversity● Workstyle reform●

Solve social issues through
TSUNAGU innovation
Increase employee engagement

YUASA PRIDE Project

Generalmanagers
and above

Strategic thinking/business creation

Managers

Leadership

Assistantmanagers

Marketing

Supervisors

Accounting

Staﬀ

Logical thinking (business school)

Prospective
employees

Bookkeeping distance learning/
TOEIC examinations/Excel

Training to develop Business school Headquarters
global humanplacement
andresources
training
division training

Product knowledge/
manufacturer placement training/industry knowledge

Talent cultivation
Reform of various personnel
systems

YUASA BUSINESS SCHOOLBusiness school placement training

Project to increase
work satisfaction■Training System Diagram

Language training in Japan●

Human resources with the ability to solve
management issues of our business
partners

Basic Philosophy
The Group considers the training of management human resources
to be an important part of talent cultivation. Based on this, we willrevise our training system with management beings defined as“organizational management,” “business creation,” and “solving themanagement issues of business partners.”
More specifically, we will offer management skills training,
including business school and support for obtaining qualifications,professional skills training, including headquarters training andsupport for obtaining industry qualifications, digital skills training,
including digital transformation (DX) training, and global skills training,
including an overseas training system and language training.

Overseas training system●

With a challenging spirit, we strive foropen communication between members
inside and outside the division to exercise
the total coordination skills of the YUASATRADING Group that transcend the area of
our own organization.
● With gratitude for our predecessors
based on our understanding of morethan ��� years of tradition, we create newvalue to pass on to the next generation
through constant innovation.
●

YUASA VISIONYUASA Values▎Talent Cultivation<Cultivation of Human Talent to Be Strengthened from April
2023 Onward >・Enhancement of management skills
First, we will provide management skills training usingbusiness schools for all managers, which will be extended to
mid-level and general employees.
・Cultivation of global human talent・Cultivation of digital transformation (DX) human talent P.40

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YUASA INTEGRATED REPORT 2023

Value Creation Foundation

Society▎Personnel System

Basic Philosophy
The Group aims to develop a personnel system that candemonstrate the “Total Coordination Skills,” “Challenging
Spirit,” and “Communication,” which are the keywords.
Moreover, we consider the training of management humanresources to be an important part of human talent cultivation.
To this end, we have launched the all-employee
participation-based YUASA PRIDE Project, and we will establish
a variety of personnel systems through the project.
Through the project, we will also consider “revision of
the seniority system,” “performance-based systems that areappropriate for YUASA TRADING,” and “realizing diversity” andmake necessary reforms to our various personnel systems.
Challenge Evaluation System< Points for Contributions from Other Departments >This is a system which adds points in HR evaluations basedon the results of contributions from other departments forthe purpose of fostering a corporate culture with active crossdepartmental and Group-wide contributions.
Incentive points called “Thanks Point” are added not
only for employees who have made contributions to otherdepartments but also to employees who have requested
incentive points for their cooperation.
■Points for Contributions from Other Departments
Mastery points
Success points
Incentive points

Points are added for internally announcing (registering)areas of expertise

Points are added for success based on cross-departmental
cooperation
Points are added for cross-departmental contributions< Challenge Career Points >This is a system that adds points in HR evaluations for
employees who have selected their own career in order tofoster a culture of taking on challenges in new areas.
■Challenge Career System
Internal FA system

System for employees to submit requests for voluntarytransfers across headquarters

Career pass system

A system in which the company transfers high achievers
across headquarters

Internal recruiting
systemOverseas assignment
system

A system in which the company publishes open positions,and employees who want to be assigned apply for them

A system for employees to request an overseas transfer< New Business Proposal Points >Employees who have made a new business proposal receive
points on their HR evaluations to provide motivation for new
business proposals from employees.
Applications are open to all Group employees in the
categories of “new business,” “new function,” and “new product”
and “new market.” Employees whose proposals advance tothe final selection are given the opportunity to present their
proposals to the company’s board members.

TopicsHolding round table meetings with the
President

Since 2017, we have been holding round table meetings
with the President for face-to-face, direct communicationby the President with the employees at each site, including
the Group companies, with the aim of deepening mutual
understanding and fostering an open corporate culture
through direct dialogue with representatives. In FY2023,
round table meetings are planned for all sites and all Group
companies in Japan.
The round table meetings with the President, whichenable the President and employees to act toward thesame purpose through direct dialogue, are positioned as animportant initiative for stimulating communication, which
is one of the Group’s keywords, and we will continue to holdthem in the future.

■Number of Proposals in the New Business Proposal System
FY201960

FY202151

FY2020
FY2022

70
57

Approximately half of the 57 proposals in FY2022 were in the“new business” category. Some of these proposals are being
considered for concrete commercialization.

Presentations for the new business proposal system

A round table meeting with the President with the employees at the Group
company, NAKAGAWA KINZOKU CO., LTD.

< YUASA Labor Union >YUASA TRADING and the YUASA Labor Union stand on an
equal footing with each other and have entered into a labor
agreement based on impartial understanding and trust.
The aim is to promote sound corporate development andimprovement of the working conditions and environment of
employees.

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YUASA INTEGRATED REPORT 2023

Value Creation Foundation

Society▎Diversity

Basic Philosophy
Based on a spirit of “Regard for the Individual” the YUASATRADING Group has respect for the individuality and rightsof employees, and we have continued to engage in businessactivities while putting value on entrepreneurship andinnovative ideas.
Henceforth, employees with more diverse backgrounds
than ever before in terms of gender, age, nationality, disability,and various lifestyles and values will foster an environment ofrespect for each other’s values and cooperation.
We will also seek to enhance corporate value by
encouraging a transformation in the mindset and behaviorof each and every employee, creating an employee-friendly
environment, and implementing diversity management
throughout the Group.
YUASA TRADING Group Diversity Policy
https://www.yuasa.co.jp/en/sustainability/society/diversity/

Indicators and Targets< Diversity >■KPI for Medium-term Management Plan
“Growing Together 2026”*
��%��%Percentage offemale employees incomprehensive work position

��.�%

��.�%

�%
�%
�%
�%

Percentage of
employed females incomprehensive work position

Percentage offemale managers

Percentage of employed females
in comprehensive work position
Target 12.0%

��.�%

�.�%

�.�%

�.�%

�.�%

�.�%

FY����
Results

FY����
Results

FY����
Results

Percentage of male employee
taking childcare leave and leave
for the purpose of childcare

FY2021 Results

FY2022 Results

FY2025 Plan

56.2％

62.8％

70％

1,977 hours

1,955 hours

1,920 hours

Percentage of taking paid
leave
Average hours of labor

34.3％

Percentage offemale managers
Target 3.0%

FY����
Plan

78.1％

90％

■Initiatives to Support Raising the Next Generation*
Employees working
shortened hours

FY2021

FY202281

90

35

Female employees balancing work andraising of children (female employees withpre-elementary school aged children)

46

Specific Initiatives< Career Track Transfer System >In order to promote women’s empowerment, we have
implemented a system for employees to transfer their career trackfrom general office work positions to comprehensive work positions.

■Trend*Percentage of female employees
in comprehensive work position
Target 6.0%

�.�%

< Workstyle Reform >■KPI for Medium-term Management Plan “Growing Together 2026”*

Special service positions(in transfer trial period*1)

Comprehensive work positiontransfers

FY2021Results

3
1

FY2022
Results

7

FY2023
Plan

2

8
0*2

*1 There is a two-year trial period for a career track transfer from general office work positions tocomprehensive work positions (position = special service position).
*2 Five employees are scheduled to transfer to comprehensive work positions in April 2024.

We held training for employees
who are transferring fromgeneral office work positions
to comprehensive work
positions.

Held in January 2023
Training for employees transferring tocomprehensive work positions▎Health and Productivity Management

Basic Philosophy
In health and productivity management, maintaining andpromoting the safety and mental and physical health of employees
is very important for each and every employee to maximize hisor her individual skills. We have made a commitment to healthand productivity management in order to realize the sustainableenhancement of corporate value.
Health Management Declaration
https://www.yuasa.co.jp/corporate/health_management.html

Promotion System
The Supervisory Manager of Management Administration(Senior Managing Director) is the chief executive for employee
health management, and reports on the status of measures andinitiatives promoted jointly by the Personnel Department and thehealth insurance association at important management meetings.
< Recognized as the “2023 Certified Health & Productivity
Management Outstanding Organization” >Continuing from last year, YUASA TRADING was recognized forthe fifth time as a “Certified Health & Productivity Management
Outstanding Organization” in a system that awards major
companies who execute excellent
health and productivity management.
This is awarded by the Ministry of
Economy, Trade and Industry ofJapan to promote the spread ofhealth and productivity management.
●Major Initiative: Expansion of the Wellness Promotion

Center (WPC)The number of interview rooms have been increased, and afull-time public health nurse was employed in November 2022.

■︎Health and Productivity Initiatives (FY2022)*
Regular health checkup rate
Stress check rate

*Indicators for YUASA TRADING (non-consolidated)

100%
100%

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YUASA INTEGRATED REPORT 2023

Value Creation Foundation

Society▎Development of the Working Environment

Objective of Working Environment Development
We aim for a Group-wide office environment with the ability topromote “Total Coordination Skills,” “Challenging Spirit,” and“Communication.”
We believe the “workplace environment” is as importantas system reform in order to increase employee “worksatisfaction” and “ease of work.”
We will accelerate business transformation by developing anenvironment with open communication regardless of division,
Group, job title, age, and other factors to create innovation.
We will also maximize individual performance to realize
workstyle reform.

■︎Development of the Working Environment We Are Aiming For
Developing an environment with the ability tomaximize TSUNAGU innovation
Total Coordination
SkillsAn environment that candemonstrate division andGroup total coordination
skillsChallenging Spirit
An environmentthat can meet thechallenge of new
business creation andoperational reform

TopicsCommunication
An environmentthat can facilitatecommunication
with diverse
employees

TopicsOccupational safety - disastercountermeasures to keep employees safe

The YUASA TRADING Group puts employee safety firstand has introduced systems for storing stockpiles andconfirming safety at each site and the Group company as
countermeasures in the event of an emergency.
At the head office and Kanto branch of YUASA TRADING,
we store a stockpile equivalent to three days' worth of
supplies for all employees working at the offices in linewith ordinance of the Tokyo Metropolitan Government as ameasure to deal with stranded commuters in the event of adisaster. As storage space is limited inside the offices, besides
the stockpile store room, we also utilize dead space effectively
to secure and disperse storage areas, such as above andbelow wardrobes, in business meeting spaces, and under theseating in break rooms.
A safety confirmation system that can confirm the safetyof employees as quickly as possible has been introduced at
all Group companies in Japan, and we run regular drills.
Moreover, from the perspective of managing various
risks in a disaster, we have distributed the Group's original“Disaster Prevention Handbook” to all employees, inaddition to commencing development of the “Disaster Initial
Response Manual” in FY2022. The manual compiling thesafety countermeasures to be prepared in advanced andwhat to do in terms of initial actions in the event of a disasterwill be distributed to all employees during FY2023.

Basic Philosophy
Based on the mindset of “service with good products” thathas been passed down from the founding of the Group, we
conduct fair, honest, and reliable commercial transactions.
In order to promote management that values sustainability,
including harmony with the global environment, inpartnership with diverse stakeholders, we have establishedthe YUASA TRADING Group Transaction Policy. Under thepolicy, we pay due attention to human rights, labor practices,
environmental conservation, quality, safety, and security in the
supply chain, and carry out regular checks.
YUASA TRADING Group Transaction Policy
https://www.yuasa.co.jp/en/sustainability/society/supply-chain/▎Respect for Human Rights

Compliance with Human Rights Policy
Respect for human rights is one of the important elementsof the YUASA TRADING Group's business activities. Based on
the YUASA TRADING Group Human Rights Policy, all officers
and employees of the Group companies practice the policy
throughout our business activities. In terms of specificinitiatives, besides the implementation of human rights due
diligence, we also engage in dialogue with stakeholders andwill continue to strengthen our measures aimed at respect forhuman rights.
YUASA TRADING Group Human Rights Policy
https://www.yuasa.co.jp/en/sustainability/society/human-rights/

New head office building

We will build a new head office building as a base that willconsolidate the YUASA TRADING Group sites in the Tokyo
metropolitan area, which are currently dispersed across several
locations, to be able to create vigorous communication andchallenging spirit and demonstrate total coordination skills.

▎Sustainable Procurement

Stockpile storage (Left: Under seating in a break room; Right: In empty spacein wardrobes)

49

YUASA INTEGRATED REPORT 2023

Value Creation Foundation

List of Officers(as of June 23, 2023)

1 Hiroyuki Tamura

Representative Director, President & CEO
In charge of Overseas Business Development

Apr. 1982

Joined the Company

Mar. 2000

President of YUASA WARWICK MACHINERY LTD.

Apr. 1997

Oct. 2002
Apr. 2007
Apr. 2009Managing Director of YUASA MECHATRONICS (M) SDN. BHD.
Managing Director of YUASA SHOJI EUROPE B.V.

General Manager of Factory Solution Division of the Company

Executive Officer, General Manager of Factory Solution Division of the Company

Jun. 2010	Director, Executive Officer, in charge of Overseas Business Development andGeneral Manager of Factory Solution Division of the Company

Jun. 2013	Managing Director, Executive Officer, in charge of Overseas Business Development andGeneral Manager of Factory Solution Division of the Company

Apr. 2014	Managing Director, Executive Officer, Chief General Manager of Industrial Market Headquarters,in charge of Overseas Business Development and General Manager of Factory Solution
Division of the Company
Apr. 2016	Senior Managing Director, Executive Officer, Chief General Manager of Industrial Market
Headquarters and in charge of Overseas Business Development of the Company
Apr. 2017

Representative Director, President & CEO of the Company

Apr. 2021	Representative Director, President & CEO and in charge of Overseas Business Developmentof the Company (incumbent)

Reason for election
Mr. Hiroyuki Tamura has full knowledge of the industrial equipment and tools and machine tools areas due
to his serving in such capacities as Director, Executive Officer, Chief General Manager of the Industrial Market
Headquarters and also has abundant experience and achievements in overseas business as a representativeof some of the Company’s overseas subsidiaries and a Director in charge of Overseas Business Development.
Moreover, having demonstrated outstanding management skills since taking the position ofRepresentative Director, President & COO of the Company in April 2017, the Company decided it would beappropriate to have him contributing to the growth of the Company and the Group going forward.

12
4

10

3

5

13

6

7
1

9

2

11

8

2 Haruo Sanoki

Representative Director, Senior Managing Director
Supervisory Manager of Management Administration

Apr. 1978

Joined the Company

Apr. 2011

Executive Officer, General Manager of Machinery Engineering Division of the Company

Apr. 2007

Vice Assistant General Manager of Machinery Engineering Division of the Company

Jun. 2013	Director, Executive Officer, General Manager of Machinery Engineering Division of the Company
Apr. 2015	Director, Executive Officer, Vice Supervisory Manager of Management Administration,
General Manager of General Affairs Department of the Company

Apr. 2017	Managing Director, Executive Officer, Supervisory Manager of Management Administration,in charge of Regional Groups, Committee Chairperson of Export Administration Department,
Ethics and Compliance Committee, Internal Control Committee of the Company

Apr. 2018	Senior Managing Director, Executive Officer, Supervisory Manager of Management Administration,in charge of Regional Groups, Committee Chairperson of Export Administration Department,
Ethics and Compliance Committee, Internal Control Committee of the Company
Jun. 2019	Representative Director, Senior Managing Director, Executive Officer, Supervisory Manager
of Management Administration, in charge of Regional Groups, Committee Chairperson ofExport Administration Department, Ethics and Compliance Committee and Internal Control
Committee of the Company (incumbent)
Reason for election

Mr. Haruo Sanoki has full knowledge of the machine tools area due to his being a Director, Executive Officer,
General Manager of the Machinery Engineering Division and having served as a Representative Director,
Senior Managing Director, Executive Officer, Supervisory Manager of the Management Administration. He
has worked on strengthening the management foundation and governance at both the Company and theGroup and has abundant experience and achievements.

3 Kenichi Tanaka

Senior Managing Director
Supervisory Manager of Sales Division
Chief General Manager of Living Environment Market Headquarters

Apr. 1982

Joined the Company

Apr. 2008

Vice Assistant General Manager of Building Facility Division of the Company

Oct. 2007
Apr. 2010

General Manager of Plant Business Department of the Company

Executive Officer, General Manager of Building Facility Division of the Company

Apr. 2011	Executive Officer, General Manager of Living Environment Division (Eastern Area) of the Company
Jun. 2014	Director, Executive Officer, General Manager of Living Environment Division (Eastern Area) of
the Company

Apr. 2017	Director, Executive Officer, Chief General Manager of Living Environment Market Headquarters,
Supervisory Manager of Construction Business Headquarters, General Manager of Living
Environment Division (Eastern Area) of the Company

Jun. 2017	Managing Director, Executive Officer, Chief General Manager of Living Environment Market
Headquarters, Supervisory Manager of Construction Business Headquarters, General Manager
of Living Environment Division (Eastern Area) of the Company
Apr. 2018	Managing Director, Executive Officer, Chief General Manager of Living Environment Market
Headquarters, Supervisory Manager of Construction Business Headquarters of the Company
Apr. 2019	Managing Director, Executive Officer, Chief General Manager of Living Environment Market
Headquarters of the Company
Jun. 2019	Senior Managing Director, Executive Officer, Chief General Manager of Living Environment
Market Headquarters of the Company

Apr. 2020	Senior Managing Director, Executive Officer, Supervisory Manager of Sales Division and Chief
General Manager of Living Environment Market Headquarters of the Company (incumbent)
Reason for election

Mr. Kenichi Tanaka has full knowledge of the housing, air and fluidic control systems area due to his serving
in such capacities as Managing Director, Executive Officer, General Manager of the Living Environment
Division (Eastern Area) and as Senior Managing Director, Executive Officer, Chief General Manager of the
Living Environment Market Headquarters, and has abundant experience and achievements.

4 Mamoru Hamayasu

Director
Chief General Manager of Industrial Market Headquarters

Apr. 1984

Joined the Company

Apr. 2012

President and General Sales Manager of YUASA TRADING (SHANGHAI) CO., LTD.

Apr. 2011

Vice Assistant General Manager of Factory Solution Division of the Company

Apr. 2014	Supervisory Manager of East Asia Area of the Company, and Chairperson and President of
YUASA TRADING (SHANGHAI) CO., LTD.

Apr. 2015	Executive Officer, Supervisory Manager of East Asia Area of the Company, and Chairperson andPresident of YUASA TRADING (SHANGHAI) CO., LTD.
Dec. 2016	Executive Officer of the Company, and Representative Director, President of YUASA TECHNICALENGINEERING CO., LTD. (currently YUASA NEOTEC CO., LTD.)
Apr. 2021	Executive Officer of the Company, and Representative Director, President of YUASA NEOTEC
CO., LTD.
Jun. 2021	Senior Executive Officer of the Company, and Representative Director, President of YUASANEOTEC CO., LTD.
Apr. 2022	Senior Executive Officer, Chief General Manager of Industrial Market Headquarters of theCompany

Jun. 2022	Director, Executive Officer, Chief General Manager of Industrial Market Headquarters of theCompany (incumbent)
Reason for election

Mr. Mamoru Hamayasu has full knowledge of the industrial equipment and tools and machine tools areas
due to his serving in such capacities as Executive Officer and Senior Executive Officer of the Company,
including as a representative of the Company’s overseas subsidiary and Representative Director,
President of YUASA NEOTEC CO., LTD., a subsidiary of the Company, and has abundant experience andachievements.

50

YUASA INTEGRATED REPORT 2023

Value Creation Foundation

List of Officers (as of June 23, 2023)
5 Takaomi Omura

Director
Chief General Manager of Construction Market Headquarters

8 Yoshiro Hirai

Outside Director

Oct. 1993

Joined Macros Co., Ltd. (currently YUASA MACROS CO., LTD.)

Apr. 1984

Joined the former ITOKI Co., Ltd.

Apr. 2012

Director, General Manager of Administration Department of YUASA MACROS CO., LTD.

May 2012

General Manager, Marketing Strategy Department Group of ITOKI CORPORATION

Apr. 2002
Apr. 2015
Apr. 2018

General Manager of the Administration Department of Macros Co., Ltd.
Representative Director, President of YUASA MACROS CO., LTD.

Executive Officer, General Manager of Construction Materials Division of the Company

Apr. 2023	Senior Executive Officer, Chief General Manager of Construction Market Headquarters of theCompany

Jun. 2023	Director, Executive Officer, Chief General Manager of Construction Market Headquarters of theCompany (incumbent)
Reason for election

Mr. Takaomi Omura has full knowledge of the construction materials and building exterior areas due tohis serving in such capacities as Executive Officer, General Manager of the Construction Materials Division,having served as Representative Director, President of YUASA MACROS CO., LTD., a Company subsidiary,and has abundant experience and achievements.

6 Shinzo Maeda

Apr. 1970

Outside Director

Joined Shiseido Company, Limited

Jun. 2003	Director, Corporate Officer, General Manager of Corporate Planning Department of Shiseido
Company, Limited
Jun. 2005

Representative Director, President and CEO of Shiseido Company, Limited

Apr. 2013

Representative Director, Chairperson, President and CEO of Shiseido Company, Limited

Apr. 2011
Apr. 2014

Jun. 2014
Jun. 2015

Sep. 2015
Jun. 2021

Representative Director, Chairperson of Shiseido Company, Limited
Representative Director, Chairperson of Shiseido Company, LimitedCounselor of Shiseido Company, Limited (retired June 2020)
Outside Director of the Company (incumbent)

Outside Director of TOSHIBA CORPORATION (retired in June 2018)
Outside Director of S.T. CORPORATION (incumbent)

Reason for election

Mr. Shinzo Maeda has worked in various public offices, in addition to having been the Representative
Director, Chairperson of Shiseido Company, Limited, and has abundant experience and high principles asa global business executive and intellectual. Due to these qualities, the Company decided that he can be
expected to give direction and advice from an independent and objective viewpoint as an Outside Director.

7 Kyosuke Kimura

Outside Director

Jul. 2009

General Manager, Human Resources Department of ITOKI CORPORATION

Jan. 2013	Executive Officer and General Manager, Marketing Strategy Department Group of ITOKICORPORATION
Jan. 2015

Executive Officer of ITOKI CORPORATION

Mar. 2022

Special Advisor of ITOKI CORPORATION (retired in March 2023)

Mar. 2015

Jan. 2023

Jun. 2023

President of ITOKI CORPORATION

Representative Director, President of OpenWorking Inc. (incumbent)
Outside Director of the Company (incumbent)

Reason for election

Mr. Yoshiro Hirai has been engaged in the management of ITOKI CORPORATION for many years, andhas a wealth of experience and a high level of insight as a business executive. Due to these qualities,
the Company decided that he can be expected to take on a supervisory and advisory function from an
independent and objective standpoint as an Outside Director.

9 Miki Mitsunari

Outside Director

Feb. 2011

Executive Vice President, PARAMOUNT BED CO., LTD.

President and Chief Executive Officer, PARAMOUNT BED CO., LTD.

President and Chief Executive Officer, PARAMOUNT BED HOLDINGS CO., LTD.

Apr. 2020	Chairperson, PARAMOUNT BED HOLDINGS CO., LTD. (incumbent)
Chairperson, PARAMOUNT BED CO., LTD. (incumbent)
Jun. 2021	Outside Director of the Company (incumbent)
Reason for election

Mr. Kyosuke Kimura has been engaged in the management of PARAMOUNT BED HOLDINGS CO., LTD. and
PARAMOUNT BED CO., LTD. for many years, and has a wealth of experience and a high level of insight asa business executive. Due to these qualities, the Company decided that he can be expected to take on asupervisory and advisory function from an independent and objective standpoint as an Outside Director.

Apr. 2022

Jun. 2022

Audit & Supervisory Board Members Office of the Company

Full-time Audit & Supervisory Board Member of the Company (incumbent)

Reason for election

Mr. Takeshi Maeda has many years of experience and a solid track record related to finance andmanagement administration in the Finance Department and management administration departmentsof the Company. The Company has decided that he possesses sufficient knowledge of finance andaccounting matters.

12 Mitsuhiro Honda

Outside Audit & Supervisory Board Member

Professor, University of Tsukuba Graduate School of Business Sciences (incumbent)

Mar. 2020

Jun. 2020
Jun. 2020
Jun. 2022
Jun. 2023

Outside Director of Funai Soken Holdings Inc. (retired in March 2023)
Director of Japan Accreditation Board (part time) (incumbent)
Board Director of YAMADA HOLDINGS CO., LTD. (incumbent)
Board Director of Solasto Corporation (incumbent)
Outside Director of the Company (incumbent)

Reason for election

Ms. Miki Mitsunari has been engaged in consulting work for the SDGs and corporate ESG for many years,
has a high level of insight as director of a public institution and has been engaged in management of her
own consulting company. Due to these qualities, the Company decided that she can be expected to takeon a supervisory and advisory function from an independent and objective standpoint as an Outside
Director.

Jul. 2010

May 2013
Apr. 2014

Mar. 2016

General Manager, General Affairs Department, Takamatsu Tax Bureau

International Tax Advisor, TOMA Consultants Group Co., Ltd. (incumbent)

Part-time Instructor, Waseda University Graduate School (retired in March 2021)
Outside Audit & Supervisory Board Member, Roland DG (incumbent)

Apr. 2016	Professor, Graduate School of Global Business, Meiji University and Lecturer (retired in March
2022)
Apr. 2017	Research Grant Selection Committee Member, The Institute of Tax Research and Literature(incumbent)
Aug. 2017	Member of the United Nations Committee of Experts on International Cooperation in Tax
Matters (retired in June 2021)
Jun. 2018

Sep. 2021

Outside Audit & Supervisory Board Member of the Company (incumbent)
Outside Director of YOKOREI Co., Ltd. (incumbent)

Reason for election

Mr. Mitsuhiro Honda has expert knowledge of tax matters due to his many years working for the National
Tax Agency and as a university professor, and has experience as an Outside Audit & Supervisory Board
Member of Roland DG and an Outside Director of YOKOREI Co., Ltd. The Company has decided that hepossesses considerable knowledge of tax and accounting matters.

10 Yoshiyuki Furumoto

Audit & Supervisory Board Member

Executive Officer and General Manager of Credit Department of the Company

Senior Executive Director, PARAMOUNT BED CO., LTD.

General Manager of Finance Department of the Company

Apr. 2020	Vice Branch Manager of Kansai Branch Office and General Manager of Osaka Administration of
the Company

Joined the National Tax Agency

Jun. 2016

Apr. 2009

General Manager of Affiliated Companies’ Strategy Department of the Company

Jul. 2012

Member of the Board, Kimura Kosan Co., Ltd. (currently PARAMOUNT BED HOLDINGS CO., LTD.)

Apr. 1997

Apr. 2016

Apr. 1984

Oct. 1982
Apr. 1991

Vice Branch Manager of Kansai Branch Office of the Company

Apr. 2014

Assistant Deputy General Manager of Finance Department of the Company

President of FINEV, Inc. (incumbent)

Joined Fuji Sogo Research Institute (currently Mizuho Research & Technologies, Ltd.)

Joined the Company

Senior Managing Director, PARAMOUNT BED CO., LTD.

Joined the Company

Apr. 2012

Apr. 2007

Joined TOKYU LAND CORPORATION

Apr. 1982

Sep. 1987

Apr. 1984

Sep. 2011

Feb. 2001

Joined Kimura Shindai Industry Co., Ltd. (currently PARAMOUNT BED CO., LTD.)
Member of the Board, Kimura Shindai Industry Co., Ltd.

Audit & Supervisory Board Member

Apr. 1994

Apr. 1979

Aug. 1979

11 Takeshi Maeda

Jun. 2011
Apr. 2018

Jun. 2018

General Manager of Credit Department of the Company

Executive Officer and Special Assistant to the President & CEO of the Company
Full-time Audit & Supervisory Board Member of the Company (incumbent)

Reason for election

Mr. Yoshiyuki Furumoto has many years of experience related to management administration as theCompany’s General Manager of Credit Department and a solid track record as a Full-time Audit &Supervisory Board Member of the Company. The Company has decided that he possesses sufficientknowledge of finance and accounting matters.

13 Chinami Kajo

Outside Audit & Supervisory Board Member

Apr. 1986

Registered as an Attorney at Law (Daini Tokyo Bar Association)

Apr. 2006

Court Adjudicator of Tokyo Family Court (until March 2016)

Apr. 2004

Court Adjudicator of Tokyo District Court (until March 2006)

Apr. 2006	Established Athena Law OfficePartner of Athena Law Office (incumbent)
Apr. 2016

Vice Chairman of Daini Tokyo Bar Association (until March 2017)

Jun. 2023

Outside Audit & Supervisory Board Member of the Company (incumbent)

Apr. 2016

Director of Japan Federation of Bar Associations (until March 2017)

Reason for election

Ms. Chinami Kajo is expected to strengthen the auditing structure of the Company by utilizing her expert
knowledge and experience as a lawyer.

51

YUASA INTEGRATED REPORT 2023

Value Creation Foundation

Corporate Governance

Basic Approach to Corporate Governance
As a social entity, YUASA TRADING Group aims to maximize
corporate value, return profits to society, and continue to operate
in the long term by maintaining and expanding a multi-faceted andpositive relationship between management (Directors) who are
entrusted by many shareholders and various stakeholders, including
shareholders who delegated responsibility to management,
employees, suppliers, sales partners, and financial institutions.
■︎Corporate Governance System (as of June 23, 2023)
Elect/dismiss

ReportAudit & Supervisory Board (�)The Group is a large conglomerate comprised of 37 affiliatedcompanies*, including 30 consolidated subsidiaries and one
equity method affiliate. However, centered on YUASA TRADING,
the Group maintains close cooperation and strives for disciplined
company management that improves the value of the overall
corporate group based on the policies of our governance system.

* As of June 30, 2023

Director /Audit & Supervisory Board Member

General Meeting of Shareholders
Elect/dismiss

Outside Director /Outside Audit & Supervisory Board Member

Report(including � Outside Audit & Supervisory Board Members)★

Governance Advisory Committee(Chair: Independent Outside Director
Members: � Representative Director / � Independent Outside Directors /� Independent Outside Audit & Supervisory Board Members)★

Consult(Directors excluding Outside Directors serving
concurrently as Executive Oﬃcers)

Appoint/dismiss

Instruct/supervise

Marketing Strategy
Meeting

Corporate Management
Committee

Ethics and Compliance
Committee

Consult
Advise★

ReportElect/dismiss

Accounting Auditor (Crowe Toyo & Co.)
Collaborate

Board of Directors (�) (including � Outside Directors)

AdviseChairperson /Accounting audit

Collaborate

Audit★ Committee Chairperson

Sustainability Promotion Committee(Chair: Supervisory Manager of Management Administration
Members: Chief General Managers of Market Headquarters /� Independent Outside Directors)★

Supervise

ReportExecutive Oﬃcers (��)Personnel
Committee▎Timeline of Corporate Governance Strengthening Efforts
FY2022• Continued reducing cross-shareholdings• Reviewed of agenda items to be discussed by the Board of Directors(strengthened the monitoring function of the Board of Directors)

FY2021• Continued reducing strategic shareholdings• Determined remuneration for individual Directors at the Board of
Directors (canceled re-entrustment to the Representative Directors)• Strengthened the monitoring function of the Board of Directors• Increased the number of Outside Directors (Outside Directors accountfor over one third of all Directors)
FY2020• Reduced strategic shareholdings• Strengthened the monitoring function of the Board of Directors

Representative Director

Export Administration
Committee

The company implemented an Executive Officer system
in order to strengthen the function of the Board of Directors
as a decision-making body and an organization that oversees
business execution. In addition to aiming to optimize thenumber of Directors, the company elected four Outside
Directors as we strengthen the execution structure byaccelerating business execution and clarifying responsibilities.
On the other hand, the Audit & Supervisory Board that serves
as the supervising body is comprised of a total of four Audit &Supervisory Board Members, including two Outside Audit &Supervisory Board Members. Each Audit & Supervisory Board
Member attends important meetings, such as the Board of Directors
meetings, and conducts strict audits on the business execution of
Directors from an independent perspective as they contribute to thestrengthening and enhancement of the governance system.

Internal
Auditing Oﬃce

Internal
Control Committee(� Directors serving concurrently, �� not serving concurrently;
includes � serving as Senior Executive Oﬃcers)

Market Headquarters, Management Administration, domestic and overseas Group companies

Environmental and
Resilience Committee

FY2019• Elected a female Independent Outside Director• Established Governance Advisory Committee centered on
Independent Outside Officers• Eliminated advisor system
FY2018Introduced performance-linked share awards
FY2017
Elected one substitute Outside Director

FY2015
Elected two Independent Outside Directors
FY2013
Elected one Independent Outside Director

52

YUASA INTEGRATED REPORT 2023

Value Creation Foundation

Corporate GovernanceEvaluating the Operation and Effectiveness of the Board of Directors▎Operation of the Board of Directors

Chaired by Hiroyuki Tamura, Representative Director andPresident, the Board of Directors is the body making decisions
related to important business execution and monitoringbusiness execution of Directors. The company holds the Boardof Directors meetings once a month, in principle, as well as otherextraordinary meetings as necessary. Directors with expertisein internal operations and Outside Directors with extensive
experience and insight in corporate management supervise
and provide advice from an objective standpoint on importantmanagement decisions in a specialized and wide-ranging
business environment, fulfilling their responsibilities such as
flexible decision-making and supervision.
In order to further strengthen corporate governance andensure management transparency, the company designated four
Outside Directors and two Outside Audit & Supervisory Board
Members as Independent Officers.
In addition, the four Audit & Supervisory Board Members(including two Outside Audit & Supervisory Board Members) attend
the Board of Directors meetings, where they express their opinions
as appropriate and survey the execution of their roles as Directors.
■Term of Office, Attendance at Board of Directors Meetings,
and Number of Company Shares Held
Hiroyuki Tamura
Haruo Sanoki

Kenichi Tanaka

Naomi Nakayama*

Mamoru Hamayasu
Takaomi Omura

Shinzo Maeda

Keiko Toya*

Term of Office as a
Director

Number of Board of
Directors Meetings
Attended (FY2022)

Number of Company
Shares Held(as of May 31, 2023)

10 years

15/15

7,500 shares

13 years
9 years
4 years
1 year

15/15
15/15
11/11

―

Newly appointed

4 years

15/15

8 years

Kyosuke Kimura

2 years

Miki Mitsunari―

Yoshiro Hirai

15/15

―

15/15

15/15

Newly appointed

Newly appointed

8,400 shares

6,700 shares―

1,900 shares
500 shares
―

―

―

―

―

* Term of office ended at the conclusion of the General Meeting of Shareholders held in June 2023.

■Term of Office, and Attendance at Audit & Supervisory
Board Meetings
Yoshiyuki FurumotoTakeshi Maeda

Susumu Tsuruta*
Mitsuhiro Honda
Chinami Kajo

Term of Office as an Audit &Supervisory Board Member

Number of Audit & Supervisory
Board Meetings Attended(FY2022)

1 year

11/11

5 years

12 years
5 years
―

16/16

16/16
16/16

Newly appointed* Term of office ended at the conclusion of the General Meeting of Shareholders held in June 2023.

nitiatives to Improve the Effectiveness of the▎IBoardof Directors

In addition to the Directors and Audit & Supervisory Board
Members doing a self-evaluation of their execution of duties,
we use a questionnaire about the effectiveness of the Boardof Directors to evaluate the aptness of operational methods,
procedures, and deliberation standards. These results arereported to the Board of Directors in order to improve theoperation of the Board of Directors.
For evaluating the effectiveness of the Board of Directors,
all Directors and Audit & Supervisory Board Members fill out aquestionnaire (self-evaluation) and discuss the results every year.
In addition to sharing an awareness of our current status,
it is necessary to continuously improve the effectiveness of
the Board of Directors though an extraction of issues. In lightof the report on the findings of analysis and evaluation of theoperation of the Board of Directors based on the results of thequestionnaire, we review the Board of Directors deliberation
standards and aim to make improvements to create more
nimble Board of Directors operations.

■ Implementation Overview of “Questionnaire on the
Effectiveness of the Board of Directors”

Evaluation Method
・Written questionnaire(5-point scale and free response)

Evaluation Items
・Operation and agenda of Board of Directors
meetings (12 items in total)

Results of FY2021 Effectiveness Evaluation
・For many items, the average score in the 5-point
evaluation exceeded 3.5, and we do not think there
are any major problems with the effectiveness andoperation of the current Board of Directors.
・An overview of the questionnaire results wasreported to the Board of Directors, and based on
the hearing results, measures to further improvethe effectiveness are being considered andimplemented.

FY2022 Initiatives Based on Evaluation Results・Based on the results of this evaluation anddiscussions on the roles and supervisory functionsof the Board of Directors based on the principle of“separation of management and execution,” theBoard of Directors revised the Board of Directors
deliberation standards as part of building a flexible
business execution system by transferring authority
to the executive side.

53

YUASA INTEGRATED REPORT 2023

Value Creation Foundation

Corporate GovernanceEvaluating the Operation and Effectiveness of the Board of Directors▎Audit & Supervisory Board

The Audit & Supervisory Board of the company is chairedby full-time Audit & Supervisory Board Member Yoshiyuki
Furumoto and is comprised of two full-time Audit & Supervisory
Board Members and two part-time Audit & Supervisory Board
Members (Outside Audit & Supervisory Board Members). Basedon the auditing policies and plans established in the Audit &Supervisory Board, Audit & Supervisory Board Members attend
the Board of Directors meetings and other important meetings,
view important decision-making documents, visit each businesssite, and survey subsidiaries in order to conduct audits related
to execution of duties of Directors and internal controls.

Comment

Message from new Audit &Supervisory Board Member

Chinami Kajo

Outside Audit & Supervisory
Board Members

I am deeply honored to be appointed as an Audit &Supervisory Board Member, and I feel the weight andpurpose of the mission given to me.
I feel it is very important to “use one's imagination” as
an approach toward work. It is possible to move forward
by trying to change positions with and understand otherpeople. I will fulfill my responsibilities as an Audit &Supervisory Board Member from a neutral standpoint
outside the company, utilizing the experience I havecultivated in my previous roles. I would be grateful if I
could contribute in any way to the sustainable growth andgovernance of the YUASA TRADING Group.

▎Governance Advisory Committee

The company has established the Governance Advisory
Committee chaired by an independent Outside Director as
an optional advisory body beneath the Board of Directors
with members that mainly consist of independent officers forthe purpose of strengthening governance. The Governance
Advisory Committee is composed of all the independent
Outside Directors and independent Outside Audit &Supervisory Board Members as well as one Representative
Director. The committee deliberates on the following mattersand reports to the Board of Directors.
(1) M atters related to appointment and dismissal of Directors(2) M atters related to remuneration of Directors(3) M atters related to analysis and evaluation on theeffectiveness of the overall Board of Directors and otherproposals related to governanceThis committee meeting was held six times in the fiscal
year ended March 31, 2023 and reported to the Board of
Directors on the following matters.

■Key Considerations

・Determination of individual basic remuneration and bonuses for Directors

・Election of nine Directors; election of one Audit & Supervisory Board Member;election of one substitute Audit & Supervisory Board Member at the 144th Ordinary
General Meeting of Shareholders
・Conclusion of Directors and Officers Liability Insurance

・Changes to the Board of Directors resolution/deliberation standards■Composition of the Governance Advisory Committee(as of June 23, 2023)
Independent Outside Director

Shinzo Maeda (Committee Chairperson)

Independent Outside Director

Yoshiro Hirai

Independent Outside Director
Independent Outside Director
Independent Outside Audit &Supervisory Board Member
Independent Outside Audit &Supervisory Board Member
Representative Director,
Senior Managing Director

Kyosuke Kimura
Miki Mitsunari

Mitsuhiro Honda
Chinami Kajo

Haruo Sanoki▎Sustainability Promotion Committee

The Sustainability Promotion Committee sets targets related tosustainability, monitors progress, and evaluates achievements.
The committee will aim to meet twice a year and submit
reports and recommendations to the Board of Directors onsustainability issues and progress.

(1) Identification of key sustainability issues for the Group froma medium- to long-term perspective, study for resolution ofissues, and design of future vision(2) Establishment, revision, and abolition of basic policy, rules, andprocedures, etc. for the implementation of the aforementioned(3) Matter the Sustainability Promotion Committee deems
necessary related to the Group’s sustainability management(4) Matters for consultation from the Board of Directors■Composition of the Sustainability Promotion Committee(as of June 23, 2023)
Supervisory Manager of Management
Administration
Chief General Manager of Living Environment
Market Headquarters
Chief General Manager of Industrial Market
Headquarters
Chief General Manager of Construction Market
Headquarters

Haruo Sanoki (Committee Chairperson)

Independent Outside Director

Kyosuke Kimura

Independent Outside Director
Independent Outside Director
Independent Outside Director

Kenichi Tanaka

Mamoru Hamayasu
Takaomi Omura
Shinzo Maeda
Yoshiro Hirai

Miki Mitsunari▎Scope of Delegation to Management

Matters to be decided by the Board of Directors, Corporate
Management Committee, approvals, etc., are determined byresolutions of the Board of Directors, approvals of the Corporate
Management Committee, and approval by approval requests,
with a detailed and specific division of authority and responsibility
depending on the degree of importance. In addition, the company
has clarified the authority, division of duties, etc. of businessexecution officers and general managers through internal rules,
and a system has been established to constantly review them.

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YUASA INTEGRATED REPORT 2023

Value Creation Foundation

Corporate GovernanceInitiatives to Ensure the Effectiveness of Governance■Skill Matrix for Directors
Name

Position and main responsibility inthe company

Hiroyuki Tamura

Representative Director, President & CEO
In charge of Overseas Business Development

Haruo Sanoki
Kenichi Tanaka

Corporate
management

Marketing

Organizationand personnel
development

Finance andaccounting

Legal affairs& riskmanagement

Globaloperations

Representative Director, Senior Managing
Director
Supervisory Manager of Management
Administration

Senior Managing Director
Supervisory Manager of Sales Division
Chief General Manager of Living Environment
Market Headquarters
Director

Mamoru Hamayasu Chief General Manager of Industrial Market
Headquarters

Takaomi Omura

Director
Chief General Manager of Construction
Market Headquarters

Shinzo Maeda

Outside Director

Kyosuke Kimura

Outside Director

Yoshiro Hirai

Outside Director

Miki Mitsunari

Outside Director* The above table lists up to four fields in which Director’s expertise is particularly expected, based on the past experience of each candidate for Director. It is not an
exhaustive list of all the expertise and experience the Director possesses.

▎Qualifications and Criteria for Determining the Independence of Independent Outside Directors

With the objective of increasing objectivity in management decision-making and further improving
the soundness and transparency of management, when appointing Outside Directors, in addition
to the requirements under the Companies Act, the company uses the factors for determining(independence criteria) when there is a risk of conflict of interest with general shareholders in
the Guidelines Concerning Listing Control, etc. of the Tokyo Stock Exchange as the criteria for
determining the independence of Independent Outside Directors.
Furthermore, when selecting candidates for Independent Outside Directors, the criteria for selection
is based on their ability to provide advice on management policies and improving management based on
their own knowledge, from the perspective of promoting the company’s sustainable growth and increasing
its corporate value over the medium to long term, and to supervise management through the appointment
and dismissal of senior management and other important decisions of the Board of Directors.

▎Provision of Training for Directors and Audit & Supervisory Board Members

The company continuously provides the necessary opportunities, facilitation, and financial
support, including holding seminars by outside instructors, for all the Directors and Audit &Supervisory Board Members, including Outside Directors and Outside Audit & Supervisory
Board Members, to acquire the business, accounting, finance, legal affairs, and organizational
knowledge required to fulfill their roles and responsibilities. Newly appointed officers also strive
to acquire knowledge of corporate law by attending outside seminars.

▎Support for Outside Directors

Members of the Secretariat provide the Outside Directors with an explanation of the agenda forthe meeting of the Board of Directors before the date when the meeting is held each month. The
full-time Audit & Supervisory Board Member, who participates in the Corporate Management
Committee meetings and other key meetings, also provides the Outside Audit & Supervisory
Board Members with an explanation of the agenda for the meeting of the Board of Directors
before the meeting is held each month. In principle, the meeting of the Audit & Supervisory Boardis also held on the day of the meeting of the Board of Directors to discuss the agenda again.
The company has assigned one member of staff to the Audit & Supervisory Board and works tostrengthen the auditing system to make it more effective.

▎Reasons for the Election or Nomination of Individual Candidates for Director
The reasons for the election of all the Directors and Audit & Supervisory Board Members aredescribed in the reference documents for the General Meeting of Shareholders. In addition,
the areas of expertise that the company particularly expects the candidates for Directors tohave are listed in the form of a skill matrix. In appointing Outside Directors and Outside Audit& Supervisory Board Members, the scale of transactions between the company, the Group
companies, and the companies where the candidates hold concurrent positions is listed toprovide shareholders with information on the determination of independence.

▎Strengthening Group GovernanceIn order to strengthen control over domestic consolidated subsidiaries, YUASA BUSINESSSUPPORT CO., LTD. has been entrusted with their accounting processing. In addition, we haveintroduced an overseas business monitor for the purpose of strengthening financial monitoring,and have prepared a management book specializing in overseas consolidated subsidiaries.

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YUASA INTEGRATED REPORT 2023

Value Creation Foundation

Corporate Governance

Remuneration for Directors and Other Officers■Total Amount of Remuneration, Total Amount of Remuneration by Type, and Number of Recipient Directors and Other Officers(results for fiscal year ended March 31, 2023)
Categories

Director

Audit & Supervisory Board Member
Outside Director

Outside Audit & Supervisory Board Member
Total

Total amount of remuneration by type (millions of yen)

Total amount of
remuneration(millions of yen)

252
48
38
19

358

Basic remuneration

142
48
38
19

248

Performance-linked
remuneration, etc.

68
-

68

Non-monetary
remuneration, etc.

41

Number of recipient directors(and other officers)

-

41

6

3
3
2

14

*1 The limits of remuneration for Directors and Audit & Supervisory Members are set as below based on a resolution of the 139th Ordinary General Meeting of Shareholders held on June 22, 2018.
In addition, the portion of this remuneration that is for the Outside Directors is set as shown in parentheses based on a resolution of the 142nd Ordinary General Meeting of Shareholders held on June 24, 2021.
(1) Directors
A maximum of ¥380 million per year (of which not more than ¥50 million is for Outside Directors). Separately, a maximum amount of money funding for the performance-linked share awards system in the applicable
period comprising three fiscal years is a total of ¥540 million. However, the total for the system is a maximum of ¥360 million for the two fiscal years of FY2019 and FY2020.
Further, the company abolished the remuneration of share acquisition rights as it implemented the performance-linked share awards system.
As of the conclusion of the 139th Ordinary General Meeting of Shareholders, the number of Directors is 10, and as of the conclusion of the 142nd Ordinary General Meeting of Shareholders, the number of Outside Directors is three.
(2) Audit & Supervisory Board Members
A maximum of ¥80 million per year. The company has abolished the remuneration of share acquisition rights. As of the conclusion of the Ordinary General Meeting of Shareholders, the number of Audit & Supervisory
Board Members is four (two of whom are Outside Audit & Supervisory Board Members).
*2 The bonus above is the maximum provision for performance-linked remuneration for Directors (excluding Outside Directors) for the five Directors (excluding Outside Directors) for this fiscal year.
*3 The remuneration sum for Directors (excluding Outside Directors) does not include the ¥39 million (including bonuses) in employee wages for Directors who serve concurrently as employees.

*4 The content of non-monetary remuneration is the performance-linked remuneration described in “Concept of remuneration (1) Remuneration for Directors (b) Performance-linked remuneration.”▎Concept of Remuneration(1) Remuneration for Directors
Remuneration for Directors (excluding Outside Directors) is comprised of basic remuneration and performance-linked
remuneration (bonuses/shares). Outside Directors only receive basic remuneration.
(a) Basic remuneration
Monetary remuneration paid as a fixed sum depending on the position(b) Performance-linked remuneration
Performance-linked remuneration is comprised of bonuses and performance-linked share awards.
• Bonuses are monetary remuneration that fluctuate in amount based on consolidated results and individual results of theprevious fiscal year.
• Performance-linked share awards are comprised of a “fixed portion” that provides points for each fiscal year and a “performancelinked portion” that provides points based on the achievement level of performance targets at the final fiscal year of the Mediumterm Management Plan. This remuneration is paid upon retirement (one point = one share). Further, since 50% is paid as shares of
the company and 50% is used to pay income taxes, etc., the latter is paid as monetary value equivalent to the realized shares.
(2) Remuneration for Audit & Supervisory Members
Remuneration for Audit & Supervisory Members is paid only as a fixed monetary amount as basic remuneration as separately
established for full-time and part-time members through deliberations of all Audit & Supervisory Members in order to reflect theindependent nature, based on the remuneration system and standard corresponding to their duties and responsibilities.

▎Performance Indicators

This remuneration system aims to provide incentives toimprove medium- to long-term company results and corporate
value and share interests with shareholders. The following
indicators were used for evaluations in the Medium-termManagement Plan “Growing Together 2023” that ended in
FY2022.
Evaluation indicator (standard)

Evaluation
weightPerformancelinked factor

1/3

0-2.0

1/3

Consolidated net sales (¥545.0 billion)*
Consolidated ordinary profit (¥16.4 billion)

1/3

Profit attributable to owners of parent (¥11.5 billion)* Before revenue recognition

0-2.0
0-2.0

■Relationship Between Evaluation Indicators andPerformance-linked Factors(method of determining performance-linked share awards amount)
Consolidated net sales

Consolidated ordinary
profit¥599.5 billion or more ¥21.4 billion or more

Profit attributableto owners of parent

Performance linked
factor

¥15.0 billion or more

2.0 (upper limit)¥545.0 billion¥16.4 billion¥11.5 billion

1.0¥490.5 billion or less¥11.5 billion or less¥8.1 billion or less0 (lower limit)
Performance linked
factor(actual values)

Performance indicators

FY2022 results

Evaluation weight

Consolidated net sales(before revenue recognition)¥523.8 billion

1/3

Profit attributable toowners of parent¥15.3 billion

1/3

0.7

¥10 billion

1/3

0.5

Consolidated ordinary
profit0.6* The performance-linked coefficient for performance-linked compensation for the fiscal year ended
March 31, 2023, the final year of the Medium-term Management Plan “Growing Together 2023,” was 0.6
based on the actual values of the performance evaluation indicators.

56

YUASA INTEGRATED REPORT 2023

Value Creation Foundation

Corporate GovernanceDialogue with Stakeholders▎Basic Philosophy

In order to achieve the sustainable growth of the company andincrease its corporate value over the medium to long term, thecompany promotes constructive dialogue with shareholders,clearly explains its management policies in an easy-tounderstand manner, and strives to gain the understanding ofshareholders.

(1) Appointment of a Member of Management or a
Director to Oversee Overall Dialogue
The Director in charge of Management Administration oversees
overall dialogue with shareholders, and through various
initiatives, such as earnings briefings by the Representative
Director, President & CEO, the company strives to proactively
engage in constructive dialogue with stakeholders.
(2) How Departments Work Together to Support
Dialogue
Each department in the Management Administration Division
actively collaborates with each other to share IR informationand knowledge, examine the direction of IR, and prepare
disclosure materials.

(3) Enhancement of Investor Briefings and IR Activities
As a means of dialogue other than individual interviews,
in principle, financial results briefings for analysts andinstitutional investors are held twice a year on a regular basis.
In addition, we are actively engaged in IR activities such as
setting up opportunities for small meetings with institutional
investors as appropriate.

(4) Feedback of Shareholder Opinions to the Company
Opinions, etc. obtained through dialogue with shareholders
are summarized as appropriate and fed back to the
management team and relevant departments in an effort todisseminate and share information.
(5) Insider Information Management during Dialogue
Rules for the management of insider information (Insider
Trading Prevention Rules, and Information Security Policy
Rules) have been established and are managed.
In addition, the Management Administration Division,
which serves as the point of contact, is fully aware of insider
information and fair disclosure rules when communicatingwith shareholders, and responds accordingly.

▎Toward an Open General Meeting of
Shareholders

From the perspective of ensuring sufficient time forshareholders and institutional investors to consider proposals,
the company strives to accelerate the delivery of convocation
notices for the Ordinary General Meeting of Shareholders anddistributes them on-demand for the purpose of disclosing
information to as many stakeholders as possible.
The 144th Ordinary General Meeting of Shareholders
https://webcast.net-ir.ne.jp/80742306/index.html▎Dialogue with Institutional Investors and Analysts

The company disseminates information to shareholders
and investors around the world by holding financial results
briefings online, providing video explanations (financial resultsfor each fiscal year, medium-term management plans, etc.)
through the company's website, and publishing factbooks andother materials.
In addition, individual IR meetings are held from time
to time on a wide range of topics, such as the progress ofmanagement targets and priority strategies, shareholder
return policies, and initiatives to promote sustainability andachieve non-financial KPIs, with importance attached to themas opportunities to receive valuable opinions and impressions
from the market and external parties regardless of theownership status of the company's shareholders.
In FY2022, a total of 18 IR meetings were held withinstitutional investors and analysts in Japan and overseas.

easures to Instill Evaluations from the Capital▎MMarket
within the Company

The feedback obtained through communication withinvestors is shared with management and related internal
departments, and is used as valuable input in considering
future management policies and elements to be disclosed.
Recently, in light of the growing needs of investors andcapital markets, we have established a new KPI from FY2023 to“maintain a DOE (dividend on equity) of 3.5% or higher” as anindicator to show a stable dividend policy, and have decided
to disclose the status of our efforts to achieve this.

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YUASA INTEGRATED REPORT 2023

Value Creation Foundation

Corporate Governance

Ethics and Compliance
The YUASA TRADING Group has enacted a management
philosophy, ethics policy, and code of conduct. The
Representative Director and President is prioritizing theexecution of these policies. By repeatedly expressing thismindset to Directors and employees, the hope is that laws
and regulations and compliance to corporate ethics become afoundation for all company activities.

▎Ethics and Compliance System

We have established an Ethics and Compliance Committeethat is under the direct control of the Representative Director
and President. The chair of this committee is selected by
the Representative Director and President from among the
Directors. The Ethics and Compliance Committee utilizes
in-house training to boost its effectiveness and monitors the■Ethics and Compliance Systemcompliance status along with the Internal Auditing Office.
It has formed an ethics and compliance system that spans
across the YUASA TRADING Group.

▎Ethics and Compliance Hotline

A permanent hotline has been established to directly report andadvise with the Ethics and Compliance Committee if Directors or
employees of the company violate or may have violated laws andregulations, the Articles of Incorporation, or other regulations.
This system also ensures that persons who issue such reports will
not receive disadvantageous treatment for this reason.
With the revision of Japan’s Whistleblower Protection
Act in June 2022, the company revised its internal reporting
rules, limited the internal hotline for reporting and advice tothe Ethics and Compliance Committee Secretariat, the Audit

Representative Director, President & CEO(Delegation)

Global Group Chief Compliance Officer (GGCCO)
Supervisory Manager of Management Administration(Instruction)(Report)Chief general managers
Branch and branch office managers
General Manager of Administration Department(Report)All officers and employees(Instruction)(Report/advice)

Ethics and Compliance Committee

Chair: Global Group Chief Compliance Officer (GGCCO)
General Manager of Administration Department
Secretariat(Report)Compliance Officer (CO)(Instruction)(Appointment)Internal Reporting System

Hotline: Secretariat [Global Helpline]
Hotline: Advising lawyers
Hotline: Audit & Supervisory Board Members(Report/advice)

All Group employees
All Group temporary employees
All Group contract employees& Supervisory Board Members and the external hotline to thelawyers in charge at the advising law firm, and strengthened
compliance with the obligation to protect confidentiality. At
the same time, the company expanded the scope of those whoare able to seek advice so that former officers and employees
can also use the hotline up to one year after their resignation.
After receiving an inquiry or report, the Ethics andCompliance Committee will investigate the incident, enact
measures to prevent it from occurring again, and will reportimportant cases to the Board of Directors through the
Representative Director and President.

▎Response Against Anti-social Forces

The code of conduct declares the severance of any
relationship with anti-social forces. Furthermore, the company
is standardizing the management of information throughmanuals and in-house training in order to eliminate anderadicate anti-social forces. External approaches are managed
in the Ethics and Compliance Committee. The company also
participates in the Tokyo Metropolitan Police Organized Crime
Prevention Association (Tokubouren) and strives to gather
information and preempt transactions with anti-social forces.

▎Compliance Education and Training

The company implements grade-specific (new employees,
employees hired mid-career, newly appointed site managers,
newly appointed line managers, etc.) education and training
on compliance in general, and e-learning education on
preventing harassment for all Group employees (implemented
August – end of October 2022). In addition, through followup training for young employees (two to three years after
joining the company) with practical experience, we strive tocontinuously instill awareness of legal compliance from afrontline perspective.

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YUASA INTEGRATED REPORT 2023

Value Creation Foundation

Corporate GovernanceRisk Management▎Risk Management System

The YUASA TRADING Group has appointed the Director in chargeof the Management Administration as the Risk Management
Supervisory Manager and has established a system to swiftly andappropriately transmit information and respond to emergencies
for each expected risk. The Risk Management Supervisory
Manager reports on the status of risk management to the Boardof Directors as necessary and works to establish a business
continuity management system to minimize business disruption
and impact in the event that a risk materializes.

▎Overview of Operational Status

The Risk Management Supervisory Manager implements
comprehensive and cross-sectional risk management and works
to strengthen business continuity capabilities after appropriately
identifying and assessing the risks associated with businessactivities. Specifically, the Group classifies and evaluates risks
based on management strategies and operational processes,
identifies key risks that may have a significant impact on theGroup’s financial position, operating results, and cash flow
conditions, and ascertains the degree of impact of those risks.

▎Environmental and Resilience Committee

We formulate environmental policies aimed at maintaining
and improving the global environment through our businessactivities, and formulate a business continuity plan (BCP) in
anticipation of situations that may cause significant damage,such as large-scale disasters and the outbreak of new viruses.
Specifically, through ISO and BCP activities, we share
information on environmental laws and regulations, formulate
and develop disaster prevention plans, respond to disasters,
and conduct drills.

▎Export Administration Committee

In order to improve compliance related to overseas
transactions and exports in particular, the Export
Administration Committee established the Safe Export
Management Guidelines as internal standards related tocompliance of export laws and regulations. This committee is
responsible for raising awareness and monitoring activities.

▎Internal Control Committee

We have established internal controls for the entire Group,internal controls for the settlement of accounts, financial reporting
processes and operational processes, and internal controls
for overall IT and operational processes. In order to ensure thereliability of financial reporting, we identify risks that may leadto false statements, and take effective measures to reduce theoccurrence of such risks for matters of high importance.

■Key Risks Assumed
Main risks recognized with the potential to have a material impact on financial position, operating results, and cash flow
Risk item

1. Economic fluctuation risk
2. Share price fluctuation risk
3. Interest rate fluctuation risk
4. Credit risk

5. Exchange rate fluctuationrisk
6. Compliance risk
7. Risk related to information
systems and information
security
8. Product liability risk
9. Country risk

Overview

Countermeasures to mitigate risk

Risk in the event of unforeseen changes in the economic trends in industrial
equipment- and construction-related investments

We are focusing on the expansion of new areas and new markets outside
Japan

Risk in the event of changes in the interest rate for interest-bearing debt
with variable interest rates

In some cases, we may convert interest-bearing debt from variable interest
rates to fixed interest rates, etc.

Risk in the event of changes in share prices

Risk in the event of credit extended to business partners inside and outside
Japan involving credit losses
Risk in the event of changes in the exchange rate in import and exporttransactions

Risk in the event of major changes in or application of unexpectedinterpretations of relevant laws and regulations, including laws andregulations related to business activities

Risks such as leaks of confidential corporate information or personal
information due to unexpected unauthorized external access or invasion
by a computer virus, as well as non-operation of information systems due
to damage to system equipment or issues with communication lines froma natural disaster or an accident
Risk in the event of product defects that lead to a large-scale recall or
product liability compensation

Risk that it will be difficult to collect receivables or investments andloans due to policy changes or changes in the political and economic
environment of counterparty countries overseas

10. Natural disaster risk, etc.

Risk of shutdown of business site functions, damage to equipment, andinterruptions in the supply of power and other services in the event ofa natural disaster, such as an earthquake or large-scale flooding, or an
unexpected outbreak of an infectious disease, such as a new virus

11. Climate change risk

Risk of stronger legal regulations and regulations on provision of products
associated with climate change

We are reviewing our shareholdings as appropriate in accordance with our“Securities Investment Guidelines.”
We are implementing credit management in accordance with internalmanagement regulations.
We are executing exchange forward contracts for import and exporttransactions in foreign currencies.

In addition to establishing an ethics policy and code of conduct, we haveestablished an Ethics and Compliance Committee, which is under the directcontrol of the Representative Director, to ensure thorough compliance andprovide guidance throughout the Group.
In order to promote information sharing and business efficiency, we haveconstructed and operated an information system, and in order to ensure thesafety of information system operations, we have established information
security operating rules and are thoroughly tackling crisis management
responses.
We are engaged in the manufacture and sale of household appliances, andwe take every precaution to ensure the quality of these products, as well as
carrying product liability insurance.
We are responding carefully based on various information regarding thecountry risks that can be anticipated, and making efforts to manage andhedge risks, such as carrying trade insurance.

In order to continue our business activities, we have formulated a business
continuity plan (BCP), introduced a safety confirmation system, prepared adisaster countermeasure manual, and implemented earthquake resistancecountermeasures, and are conducting disaster drills, etc.

Through all of our business activities, the Group is working to solve social
issues by promoting an environmental business that sells and disseminates
equipment and systems that contribute to the global environment
both domestically and overseas, with the aim of achieving sustainable
development that aims for a balance between maintaining a sound global
environment and achieving economic growth.