Basic Concept

The products manufactured by the Yamato Kogyo Group support social infrastructure that is indispensable to people's daily lives, such as buildings, port construction, ships, and railroad turnouts. If a problem or quality issue were to occur with a product, the impact would be significant due to the nature of social infrastructure, leading to not only loss of opportunity but also damage to trust and reputational risk.

We are aware of our responsibility to support these social infrastructures, and by listening to our customers and society, proposing new values, and making continuous improvements, we aim to place the highest priority on providing safe, secure, high-quality, and high-value-added products and services.

Medium-term Sustainability Plan "Product Liabilities"

• * Unless otherwise stated, descriptions under these items target iron and steel products business, that would have the greatest impact on the Yamato Kogyo Group.

Ensuring Product Quality and Safety

The steel products manufactured by our group are mainly general-purpose products that are defined by JIS, the Japanese national standard. The products are shipped based on the test results of each lot, and each product is assigned a serial number and production date, which can be traced back to the serial number. As a result of our pursuit of product quality, there have been no recalls due to quality problems.

In addition, we are making continuous efforts to improve our quality and reliability as follows.

• Automation of tension testing machines to improve data reliability.
• Applied for expansion of JIS certification for products with new dimensions, and obtained new JIS certification for special dimension sizes that are not on the standard dimension list of JIS H-beams.
• We are now considering the use of 3D scanning for inspection of cast steel products and machined parts and operational improvement.
• Thoroughly prevent human error and data falsification by automating the process from test results to result reporting.
• Based on a quality management system based on ISO 9001, we have acquired JIS, classification society standards, and other standard certifications required for steel products.

Quality complaints received from customers is shared with the Quality Assurance Department and the manufacturing site, with the sales department acting as the point of contact, to track down the causes and make further improvements. The number of complaints in FY2022 improved by 29% compared to FY2020. We will focus on improving the quality of large products and maintain the quality management level, although the ratio of sales of large products to properties is expected to increase further as the production of blast furnaces is downsized.

Appropriate product information disclosure / CS improvement

To guarantee the quality of our products, we submit to our customers the inspection certificates related to JIS products and JIS and ISO certificates. We also disclose the chemical composition of our products and histograms of mechanical properties through our sales department if requested by our customers. Currently, we can respond to requests for histograms for the past year. We also consider customer requests from the sales department and customer satisfaction surveys and respond flexibly.

Although the sales ratio of large products increased in FY2022, customer satisfaction in with quality items remained at the previous year's level. We will continue to implement activities based on the quality management system based on ISO9001, while strengthening our quality assurance system, guidance, and education, especially in quality improvement of large products, to improve customer satisfaction.

Basic Concept

Our group is a global steel manufacturer with operations ranging from iron refining to the manufacture and sale of steel products in seven countries around the world. We were one of the first steel manufacturers to expand our business globally, and have paved the way for our growth. We are proud to be a manufacturing company and value the spirit of fairness, and we place importance on building fair relationships with markets, partners, business partners, and every employee, both in Japan and around the world.

Medium-term Sustainability Plan "Human Resource Development"

• * Unless otherwise stated, descriptions under these items target iron and steel products business, which would have the greatest impact on the Yamato Kogyo Group.

Fostering Advanced and Diverse Professional Human Resources

To develop professional human resources for our diverse business fields, we have established an education system that includes on-the-job training in actual operations and training by job level. As a complement to OJT, we have a variety of training programs to acquire various business and management skills, in addition to more advanced business knowledge and expertise. In fiscal 2022, we completely revised the grading system, evaluation system, wage system, education system, and other systems, and introduced a new personnel system in April 2023. The new personnel system is centered on the systematic development and increase in the number of high-level management personnel, high-level professional personnel, and global personnel who are active in overseas offices, who and practice the Group's corporate philosophy, through the establishment of various training programs.

Fostering globally active talent

Our group has a variety of human resource development plans in place to expand our global business.

We are working on initiatives such as training to support the development of skills according to the career stage of employees and increasing educational opportunities for young employees, such as short-term business trips to overseas group companies.

Various Training and Support for Global Human Resource Development

Training to improve the technical skills of the entire group

To improve the technological capabilities and promote DX (Digital Transformation) of the entire Group, we are constantly sharing and developing information and know-how related to improvements in operations and facilities, new equipment, and technology among Group companies.

Once a year, engineers from each group company gather for a technical conference to exchange information and develop technologies horizontally. By communicating with overseas engineers and stimulating each other to learn, we can maintain world-class technology and achieve high performance.

Nucor-Yamato Steel Company (NYS) in the U.S. and Siam Yamato Steel Co., Ltd. (SYS) in Thailand, which have introduced the latest technologies and equipment, will be reimported to Yamato Steel to promote DX at manufacturing sites.

Basic Concept

Creating a comfortable working environment and respecting diversity will help secure excellent human resources, which in turn will be a source of growth and competitiveness for the company.

The Yamato Kogyo Group’s Employee Code of Conduct stipulates that the Group "shall always strive to maintain a healthy work environment, respect the human rights of each individual, and never engage in any conduct that could lead to discrimination," and believes that by promoting diverse work styles that are unique to each individual, employees can make the most of their abilities. To this end, we respect the human rights and diversity of individual employees, prohibit discrimination, and have established a variety of support systems and measures to enhance work-life balance.

Maintaining Proper Employment and Labor-management Relations

Our Group provides working conditions (wage levels, benefits, etc.) and a working environment that are at least at the same level as other companies in the same industry in the same region, which can guarantee an appropriate balance between work and life, not to mention compliance with the relevant laws and regulations (Labor Standards Act and Industrial Safety and Health Act). We comply with laws and regulations regarding the payment of salaries, and in all regions, we set wages at or above the minimum wage established for each industry sector. Furthermore, bonuses are paid to employees as a means of returning the results of their performance. In terms of the amount to be paid, we consult with labor unions and pay bonuses per the performance of domestic and overseas group companies. In addition, although the industry is particularly prone to large fluctuations in the suitable employment of workers in response to economic trends and production conditions, we have responded by diversifying the Group's businesses and transferring employees within our Group, and we emphasize and maintain lifetime employment for our employees.

Regarding labor-management relations, the collective agreement between labor and management recognizes that the union is the only labor union that represents the employees, respects the union's "right to organize" and "right to collective bargaining," negotiations are conducted with the members representing the union, as well as clearly states that freedom of union activities and consideration for such activities are to be clearly stated and observed. Any changes in working conditions, important regulations, work rules, etc., are always discussed with and agreed upon by representatives of the labor union. In addition, regular labor-management consultations (exchange of opinions) are held, and through the union, we strive to create a vibrant workplace by hearing requests to the company from workplace members and ascertaining and improving the actual working environment. The Company has concluded a union shop agreement, and as stipulated in the labor agreement, the labor union membership rate of general employees excluding managers, branch staff, etc. is 100%. (As of March 31, 2023: 483 employees)

Annual Bonus Compensation

(Unit: 10,000 yen)

(Note) Model of a 37-year-old, skilled manufacturing worker with 19 years of service, who is a union member.

Creating an Environment for Diverse Work Styles

Our Group believes that diverse work styles recognize the individuality of each employee and help create a comfortable workplace and increase productivity.

We reviewed our structure and shifted our human resources, general affairs, and accounting from a company-based organization to a function-based organization in July 2021. By doing so, we aim to unify policies and policies related to general affairs, human resources, and accounting, as well as to recruit, train, and utilize human resources, and to activate personnel exchanges among group companies as a whole.

In addition, to improve QCD (quality, cost, delivery), reform work styles, digitize and visualize corporate resource information, and speed up management decision making, we are promoting the renewal of our core systems to carry out a drastic reform of operations with the cooperation of the entire company. On the manufacturing front, we are actively investing in the introduction of the latest digital technology and the development of DX human resources, and are working to automate factory operations to save manpower, improve efficiency and stability, and enhance safety and product quality. In addition, we are working to improve employee efficiency and communication through the latest and most convenient groupware introduced in November 2020. The Groupware can be accessed from home or outside the office, speeding up business and ensuring a certain level of communication functionality even in situations such as the recent Corona disaster or in the event of a disaster.

In September 2021, we introduced a new human resources system, which enables employees to view pay stubs, complete year-end adjustments, electronically apply for various personnel notifications, and inquire about employee information on the Web, further improving convenience and efficiency. In September 2021, we will introduce a new HR system that will allow employees to view their pay stubs, complete year-end adjustments, electronically submit personnel reports, and inquire about employee information via the Web, further improving convenience and efficiency.

Basic Concept

Recognizing that the occurrence of occupational accidents has a significant impact on the survival of a company, the entire group conducts its business activities with the utmost respect for human life. Particularly in the production division, we naturally place the highest priority on safety, and we are developing various occupational accident prevention activities to cultivate "safety sensitivity”. In addition, since the development of human resources who are strong in safety is essential to the prevention of occupational accidents, we invite external lecturers with extremely high expertise in specific fields, such as social insurance labor consultants and occupational safety consultants, to provide education and continuously strengthen the learning process for our employees.

At the beginning of each fiscal year, Yamato Steel formulates a safety and health management plan for the year, and from the perspective of preventing the company from becoming stuck in a rut, each time we present activities that we will focus on to prevent occupational accidents. We always go back to the starting point of "safety first," and the entire company, including subcontractors, is committed to the thorough implementation of 5S ("Seiri" - organizing, "Seiton" - tidying, "Seiso" - cleaning, "Seiketsu" – sanitation and "Shitsuke" - discipline), which is the basis of safety, as well as complying with basic safety rules. We are also working to identify and improve hazardous areas and dangerous work by using risk assessment and KYT (hazard prediction training). To create a safe and secure workplace, we will continue to engage in safety and health activities with the belief that "safety takes precedence over everything else".

<Target for FY2023>

• More than 180 days without injury
• Zero lost time injury
• Zero heat stroke accident
• Less than 4 minor injuries

Structure

Yamato Steel has established the Health and Safety Committee and the Workplace Health and Safety Conference to promote health and safety management. The Health and Safety Policy applies not only to our company but also to our affiliated contractors, and we implement health and safety activities in cooperation with our manufacturing divisions and contractors.

Yamato Steel Health and Safety Management Organization Chart

Prevention of Occupational Accidents

To eliminate occupational accidents, our Group has established a management organization system according to the Industrial Safety and Health Act. We also conduct risk assessments through health patrols and other types of patrols, improve workplace risks, and measure the working environment to prevent occupational accidents and illnesses among employees. To ensure safety at work in our factories, we lend safety shoes, work clothes, and all other items necessary for safe work, and AEDs (automated external defibrillators) are installed at each location.

To prevent overwork, we not only comply with the relevant laws and regulations (Labor Standards Act and Industrial Safety and Health Act), but also require employees to use a time recorder to record their entry, start end, and exit times each day to manage the company's retention and working hours.

In addition, we are working to build a comfortable workplace by conducting health checkups (every April) to protect the physical health of our employees and interviewing industrial physicians in case of physical or mental weakness.

Our Group's^*safety performance in FY2022 was 1.72 lost time injury frequency rate and 0 fatalities.

• * The scope of the project covers Yamato Kogyo, Yamato Steel, Yamato Trackwork System, and Yamato Shoji.

Mental Health Care

In the safety and health management plan formulated at the beginning of each fiscal year, we set a plan for mental health care as one of the priority items to be implemented and introduced a stress check system for all employees to prevent mental health problems by helping employees recognize and cope with their stress and improving the work environment. We have introduced a stress check system for all employees.

Basic Concept

In the Yamato Kogyo Group Employee Code of Conduct, we state that "As a corporate citizen, we will actively engage in all kinds of social contribution activities, both in Japan and overseas, to create a prosperous society and region". We recognize that incorporating the realization of social fairness, regional contributions, and consideration for the environment into our management is the most fundamental sustainability activity for a company. With "Manufacturing" as the core of our management, we contribute to local communities in Japan and overseas by providing safe and high-quality products, and as an environmentally friendly company that recycles resources, we also focus on environmental conservation in our business activities.

Social Contribution Activities for Community Development

Our Group has a global presence, contributing to the infrastructure of various countries and regions, creating jobs, and contributing to the development of each country. We purchase from local suppliers, taking into consideration the economic rationality of our Group. At the same time, to promote the development of the regions in which we operate, we are taking the following initiatives.

<Next generation development>

• We support an English presentation contest for local high school students in Hyogo Prefecture, thus contributing to the development of global human resources for the future.
• To support the development of global human resources, we offer scholarships for international Collaborative Degree established by the Graduate School of Management, Kyoto University and Cornell University.
• We conduct annual plant tours for nearby elementary school students, providing them with an opportunity to learn about the manufacturing industry that supports Japan as part of their social studies education.

English presentation contest support

Graduate School of Management, Kyoto University Scholarship aid

<Sports support>

• We have a top sponsorship contract in 2018 with Victorina Himeji, a local women’s professional volleyball team based in Himeji City, and aiming for the top of the V-League under the slogan "From Himeji to the World".
• As a sponsor, we support AS Harima Albion, a women's football club that belong to Japan’s Nadeshiko League and is based in the Harima area of Hyogo Prefecture.

<Education and culture>

• Efforts to improve education
  As the main sponsor of a charity golf tournament to support scholar ships at Arkansas Northeastern College (ANC), located near Nucor-Yamato Steel, Inc. (NYS) in the U. S., the cumulative amount of donations since 1991 has reached approximately US$530,000 (as of September, 2022). In 1996, we introduced a short-term study abroad program for ANC students in Japan, introducing them to Japanese culture through homestays at the homes of our employees and visits to cultural heritage sites.
• Protecting and promoting the use of community culture and traditions
  Sponsorship of autumn festivals and safety rituals in neighboring districts.
  We hold lectures and plant tours at nearby community centers to promote mutual exchange.

Basic Concept

To contribute to society as a global company, the Yamato Kogyo Group believes that it is essential to give due consideration not only to the company itself but also to the entire supply chain. To build a relationship of trust with society as a whole, including our business partners, and to achieve mutual growth, we have established the Yamato Kogyo Group Employee Code of Conduct and Basic Procurement Policy, which stipulate what employees should observe. We will promote not only compliance and fair and equitable transactions, but also a consideration for human rights and the environment, and information management.

Policy

Establishment of a Whistleblower System

We accept reports from our business partners and subcontractors through our Whistleblower Desk for early detection and correction of illegal activities that violate laws and regulations and corporate ethics.

Reporting System for Suppliers and Subcontractors (Japanese)

Compliance / Internal Reporting System