CSR Report of LLC Yokohama R.P.Z. (YRPZ)

Business activities: Production of tires for passenger cars Total site area: 29 ha Number of employees: 782 (as of June, 2016) Location: YOKOHAMA Plant, SEZ “”, Kazinka Village, District, Lipetsk Region, , 399071

Contact for consultation and complaints: HR and Administration Dept. Tel: +7 (4742) 727-800 Fax: +7 (4742) 727-900

Message from the President

Located approximately 450 kilometers south of In FY2014, we obtained TS16949 Certification, and we are now proceeding the Russian capital of , LLC Yokohama with the operation and continuous improvement of this system. R.P.Z. commenced its production activities in Furthermore, we are also proceeding with preparations to obtain the Lipetsk Region in 2012. Environmental Management System ISO14001 Certification. We have conducted business operations As a YOKOHAMA Forever Forest Project activity, since FY2013 we have aimed at the new targets for FY2015. held planting festivals each year. These events have involved guests “Become a plant that is capable of flexibly drawn from employee families, local officials and neighboring companies. producing and supplying a wide range of Moreover, the YOKOHAMA Forever Forest Project was not the limit of our products in response to diverse customer activities. We have also deepened exchanges with the local community needs, and that has high productivity and through participation in the Green Wave Tree Planting Project aimed at has secured raw material suppliers that can improving the environmental awareness of the young generation since Kazuo Kawata respond to the changing environment with the FY2014. market competitiveness required for surviving Going forward, we will proceed in the Russian market.” with our operations while aiming to Approximately four years have now passed since production commenced, become a company that is trusted and the priority order of the requirements of the greatest importance by our customers, our employees to us is safety (S), the environment (E), quality (Q), and delivery (D), even and the local community. more so than cost (C).

Organizational Governance

So as to respond to the complex Russian legal system whose laws seem proves difficult, we use external consultants and respond in a manner that to undergo regular revision, under the company’s Vice President we have is fair by taking responsible decisions and actions. established legal, compliance and internal control department with a lawyer appointed section manager. For issues for which internal resolution

Labour Practices Improving worksite safety Labour and Management Councils We are advancing our safety policies through actions such as the risk Employees appoint their representatives, and we conduct Labor and assessment of equipment, the lateral spreading of improvement examples Management Councils with them regularly. from other YRC Group companies, and the improvement of safety devices, So as to create a company that is both attractive and easy to work for, etc. for the purpose of ongoing improvement we talk with each individual Training is conducted on a one-on-one basis between managers and workers employee about requests they might have for improvements. We for the purpose of safe work practices based upon Standard Operating created a soccer team in FY2014, Procedure. We also engage in safe worker evaluation activities, etc. and are working to promote the development of employee fitness Improving the workplace environment and health. Several local soccer We have conducted evaluations of the workplace environment since players participated in FY2015, and FY2013 in accordance with Russian law. The evaluations were conducted we achieved third place in Moscow. once again in FY2014 and FY2015 in order to comply with legal revisions. In addition to once again evaluating new posts after their establishment Employment in accordance with Russian legal regulations in increased numbers and also forwarding the relevant reports to the Many female managers are recruited. We handle pregnancy and childbirth authorities, we properly paid allowance payments based on the results for issues in accordance with the law. FY2013. We have made it easy to obtain the legally-entitled 28 days paid leave. We comply with the law allowing paid leave for blood donations, and we Education and training commenced employment of people with disabilities from FY2014. By also obtaining the cooperation of external consulting companies, we In December 2015 we were certified and registered as a company carry out a variety of training including first-aid and manager education, conducting responsible labor management and employment in etc. An English language class that is conducted outside business hours compliance with all labor laws and regulations in Russia. We became the has also been established. first foreign company among the registered companies in the region. The Environment

On October 12 2013, we held a Forever Forest Festival similar to Japan’s Pollution prevention Forever Forest Project. At this event 1,656 trees were planted. In accordance with Russian law, we control our discharges into the air and In May 2014, we added an additional 1,950 trees in our second plantings. any industrial waste emissions. We planted 2,700 trees in October 2015, and we plan to plant 4,400 trees annually going forward, reaching a total of 16,000 trees by FY2017. Resource conservation We are continuously working on measures to reduce scrap resulting from production; measures to improve recycle rates and measures to reduce industrial waste.

Saving energy By undertaking measures that help strengthen employee awareness such as the establishment of “Energy-Saving Month” in February and “Environment Month” in June of FY2015, we are continuously implementing improvements that respond to utility defects.

Fair Operating Practices Preventing misconduct Business partners We prevent misconduct in purchasing activities by establishing the details Concerning raw material procurement from new Russian domestic of all internal approval rulings. suppliers, we work to handle matters as fairly as possible in cooperation with YRC’s procurement department.

Consumer Issues Quality management system Production of green products Having obtained quality management systems (ISO/TS16949) during the In concert with “BluEarth-AE01” production commencing, we have been course of FY2014, we are now proceeding with improvement activities appealing to visitors about the benefits of green products. through the suitable operation of these systems.

Strengthening communication with consumers We have obtained the cooperation of the Technical Service Department of LLC Yokohama Russia (our Russian sales company), and we are working with them to gather market information about our products.

Community Involvement and Development Strengthening relations with local communities Internal and external communication We conducted many factory tours and worked to strengthen charity For the purpose of communication with employees, through cooperation activities during FY2015. received from LLC Yokohama Rubber (our Russian sales company), we ・Donation of recreational facilities to orphanage in the region are calling on agent customers to participate in guided tours of our ・Donations for children with serious illnesses or requiring expensive plant. Furthermore, we are also implementing the YOKOHAMA Forever medical care Forest Project to communicate with our employees. In addition, we ・Support for local churches in need of repair started holding joint birthday parties for employees from FY2014, and we etc. continue to hold these parties now.