Compliance

We want to be a company that complies with all applicable Russian laws in our business activities.
Through our Legal, Compliance, and Internal Control departments, we regularly monitor Russian laws. As a result, any newly enacted or amended laws and regulations that come to our attention are promptly addressed by notifying both management and the relevant business units.
Since July 2016, we have operated an internal reporting system as a tool for anonymous whistleblowing, and we regularly encourage all employees, including new hires, to use the system.
Since August 2017 to date, YRPZ has been working to strengthen its compliance training. To this end, the legal department provides all employees with monthly compliance case studies.

There have been no instances of human rights violations in the Company's activities. In terms of recruitment and employment conditions, all employees are treated equally regardless of nationality, ethnicity, religion, gender, age, or physical appearance.

The company has been conducting its activity in line with the following priorities which are of great importance to us: safety (S), the environment (E), quality (Q), delivery (D), and cost (C).

Labor safety

Safety (S) is the highest-priority item. We are constantly striving, through the measures outlined below, to maintain and improve the safety standards on an ongoing basis.

As COVID-19 pandemic broke out, we launched a COVID-19 prevention patrol made up of section managers as well as top managers. The patrol is aimed at ensuring that all employees undertake the necessary COVID-prevention measures: wearing safety masks, keeping a safe distance, controlling body temperature, and holding risk management committee for prompt action.
In 2021, a change in the law affected the procedures for mandatory preliminary and periodic medical examinations.
The law updated the list of mandatory pre-employment and periodic medical examinations for hazardous (or) dangerous working conditions and tasks. In addition, it listed prohibitions that should be considered before performing certain types of work because of their adverse health effects.
YRPZ puts safety first and strictly adheres to these legal documents.
YRPZ continued to review its near-miss reporting procedures in FY2021. During the year, 8,933 near-miss reports were submitted by employees. Corrective or preventive actions were initiated for 8,912 of these reports.
In 2021, there was a strong focus on ensuring the safety of work performed at height. In addition to the required personal protective equipment (PPE), employees who work at heights must receive special training to ensure they can perform their duties safely.

Disaster response safety measures

In 2021, the company conducted appropriate activities to enhance safety in relation to disaster prevention.

YRPZ continues to provide fire safety training for all employees and conducts regular fire drills.
In February 2021, a successful fire drill was held in the mixing process. Employees from the mixing process and the M&E department participated in the drill.
In July 2021, employees from the production and M&E departments participated in a fire drill. They practiced how to use fire extinguishers. In addition, new employees were given training on the safe use of fire extinguishers.
In August 2021, an evacuation drill was held; employees (shift and clerical) from all divisions of YRPZ participated in the drill (269 employees). The local fire brigade participated in the drill.

Promoting health

Employee wellness plays an important role in ensuring safety. We conduct preventive monitoring by regularly checking the health of our employees and conducting health checkups at the time of hire and periodically thereafter. Records of medical examinations are kept in a medical facility on the premises of YRPZ.
Voluntary Medical Insurance (VMI) is not mandatory under Russian law, but YRPZ continues to offer it to all employees.
YRPZ's VMI program continues to be the best among industrial companies in Lipetsk Oblast in terms of coverage and content.
VMI allows employees to receive prompt, quality medical care and a better chance of recovery.

In FY2021, YRPZ took steps to further improve VMI, including continued support for YRPZ employees, expansion of coverage and clinic list, clinic audits, and employee satisfaction surveys and subsequent remediation measures.

As the COVID-19 pandemic began in March 2020 and will continue into 2021, we have implemented a number of measures aimed at protecting the health of our employees.

1. Even before the pandemic began, we provided disinfectant solutions to our employees in our workplaces
2. We continued to provide safety face masks
3. Regular temperature control was conducted at the plant entrance before the start of the workday and several times during the workday
4. Increased the distance between employees and their desks for safety work
5. Outsider access to the plant premises was limited to only those visits that were highly necessary for temperature control at the plant entrance
6. Switched to online meetings whenever possible (e.g., recruiting, business, negotiations, etc.)
7. If an employee shows signs of illness or reports contact with a COVID-positive person, he/she is immediately isolated and tested for COVID-19 at company expense; COVID testing is also done when employees return from vacation (elsewhere in Russia or abroad) or from sick leave
8. Disinfection of common areas is carried out on a regular basis
9. Meeting rules: no longer than 15 minutes, distance between participants - 3 m
10. To prevent outbreaks of COVID-19, an aggressive vaccination campaign (vaccination promotion, vaccination arrangements at the factory) was implemented, and the vaccination rate among employees reached almost 100%.

Education and training

In order to improve the professional skills and knowledge of our employees, we offer a variety of internal and external training programs.
Training conducted within the company is mainly related to occupational safety and health.
Training conducted externally is aimed at professionalizing and upgrading the know-how and skills of employees, and in many cases, with the cooperation of consulting companies, external instructors are used.
In addition, special allowances are provided to those who demonstrate a certain level of English proficiency.

Employment of people with disabilities

As of the end of December 2021, there are 5 persons with disabilities working at YRPZ as full-time employees.
Each of them can receive medical care without discrimination and has the same opportunities for self-development, promotion, and advancement as other employees.

Motivation and engagement

In order to increase the motivation and engagement level of its employees, YRPZ implemented the following activities in FY2021.

• YRPZ continued its tradition of birthday parties: in FY2021, every employee received a decorative tire-shaped cushion and a birthday card signed by the president.
• YRPZ provided health and wellness camps for employees' children (YRPZ paid 50% of the trip cost per child).
• All employees with school-aged children received a set of school stationery at the beginning of the year (September 2021).
• We held the Best Manager Contest again this year to motivate managers and improve their work efficiency.
• Employees who joined the company in 2011 celebrated their 10th anniversary and were presented with valuable gifts from the company.
• In addition to the traditional gift of sweets, we prepared special New Year's presents for the children of employees (a collection of children's songs from New York written by the children of employees and an eco-cube).
• To reward all employees for their labor in 2021, we provided NY gifts to all employees: NY boxes filled with tea, honey, jam, sweets, gingerbread cookies, wooden Christmas tree ornaments with the brand logo, and NY cards.
• Special allowance for coaching and mentoring. Additional payments were made for mentoring and coaching subordinates and developing practical skills.
• Internal communication channels contributed to improved communication between employees and management, team building, and employee engagement.
• An intranet was launched to increase employee motivation, engagement, and communication. A game-based approach (the chance to earn virtual currency for encouraged activities and spend it in the intranet benefit store) proved effective in increasing engagement.
• Employee success stories were posted on the company intranet and YRPZ's external social networking sites to increase employee awareness of the program.

Environmental management

In addition to safety (S), the environment (E) is also an important issue, and YRPZ complies with all Russian laws and regulations related to the environment. Furthermore, we spare no effort to be an environmentally friendly company.
In our daily operations, we keep abreast of the country's environmental laws and regulations and strive to comply with any revisions.
In 2021, we renewed our ISO 14001:2015 certification. The certification is valid until December 26, 2022.

Environmental data

• FY: January to December
• Greenhouse gas emissions from overseas business sites are calculated using the Greenhouse Gas Protocol Initiative and electricity emission factors of local businesses. It should be noted that 41% of the company’s gas emissions were used for the purposes of heating.

Measures for dealing with industrial waste

Disposal of industrial waste is strictly regulated by the Russian authorities. All waste generated by the YRPZ plant, of whatever type, is disposed of appropriately by certified waste disposal contractors. We are continuing our efforts to reduce the amount of industrial waste generated.
Total waste generated in FY2021 was 924 tons.
The amount of waste generated per tire produced was 0.12 kg/tire.
In FY2021, 2,500 kg of paper and 20,600 kg of cardboard were offered for recycling.

Disposal of used tires

Under the provisions of Regulation dd 09.04.2016 No. 284 issued by the Government of the Russian Federation, which establishes the responsibility of manufacturers and importers for certain products, including automotive tires, as these are considered assets that leave the hands of the consumer (become used products) YPRZ is responsible for taking action to ensure that these are disposed of in accordance with the regulations.
Specifically, we offer two options to manufacturers and importers of such products They can either pay environmental fees according to a tariff set by the government, or they can make guaranteed arrangements for the disposal of their products, either on their own or by joining a union of waste disposal companies.
As a member of the Eco-Tyres Union (a union of tire manufacturers and importers who voluntarily act in accordance with the recycling standards set for tires and rubber products), YRPZ has contracts with recyclers for the joint recycling of used tires.

Tire marking

In compliance with the Russian law (Order of the Russian Government dd. 31.12.2019 No. 1958), which is intended to combat illegal tire production and distribution, YRPZ started obligatory tire marking by means of placing a sticker label bearing an individual DM-code (Data Matrix code) to every tire produced. Through the code it is possible to get the true information about place, date and time of tire production, which proves the tire had been produced legally.

Reducing water usage

YRPZ is constantly striving to reduce water usage through the implementation of a number of measures.
In 2021, total water consumption was 48,457 m3.
In 2021, the following activities were implemented to reduce water consumption.
Optimized the layout of pipelines supplying water to fire water storage tanks (water savings - 860 m3).

Managing wastewater discharge

Wastewater discharged from YRPZ's plant facilities is properly treated in a reliable manner prior to discharge into the sewage system.
In 2021, the following measures were implemented to prevent wastewater contamination.

• Grease discharge and cleaning of grease separators: Implemented twice a year.
• Sampling to control chemical composition of wastewater: conducted monthly and quarterly.

Energy savings

We recognize the importance of energy efficiency, and we are continuing our concerted efforts to make our energy usage more efficient. In particular, in fiscal 2021, we implemented the following energy-saving measures:

• Lighting in the mixing process was changed to LED lamps (185 bulbs).
• Optimization of equipment operation (reduction of idling) in the mixing and MP-1 processes resulted in energy savings of 192 365 kW in 11 months.
• Heat insulation of steam pipes (T72 and T74) was implemented (saving of natural gas).

Biodiversity measures

Internal controls

To prevent fraud, operations are carried out based on an internal approval system by management for contracts, purchases, and settlements. Furthermore, internal rules have been established, and the final decision is made by the final decision maker after checking by the management, legal, and accounting staff.

Selection of business partners

Concerning raw material procurement from new Russian domestic suppliers, we work to handle matters fairly while cooperating with the procurement department of Yokohama Rubber.
When selecting suppliers, we make sure to verify the compliance and reliability of potential suppliers, in order to avoid doing business with firms that are untrustworthy or which are engaged in illegal behavior. To this end, we implement documentary review and enterprise evaluation surveys in advance. As a result, in the period since the YRPZ plant began operation, there have been no instances of signing contracts with suppliers that turned out to be unreliable or engaged in illegal activity.

Quality management systems

In FY2021, we continued our efforts to improve our quality management.
In April 2021, YRPZ successfully passed the surveillance audits for IATF 16949:2016 and ISO 9001:2015.
YRPZ also passed the periodic audit for CCC certification (China) in May 2020.

Deliveries to original equipment manufacturers^*

In fiscal 2021 again, we continued to make original equipment (OE) tire deliveries to the Russian factories of Nissan, Toyota, Mitsubishi Motors and Volkswagen.
We are working hard to expand our OE deliveries business. What is more, in fiscal 2021, we were successful in passing all the regular audits conducted by the OE manufacturers.

• original equipment manufacturers

Strengthening communication with consumers

Based on cooperation with LLC Yokohama Russia which has direct contact with consumers as a sales company, we are working hard to gain evaluative information of products from the marketplace.

Internal activities

On an ongoing basis, the company shall continue to take care in fostering team spirit and a sense of loyalty among employees.

Team-building corporate events

Soccer team activities

External activities (Social contribution)

In 2021, YRPZ continued to develop its social networking sites (Instagram, VKontakte) in order to build a strong HR and employer brand.

In addition, YRPZ actively participated in external events by attending various forums, seminars, and conferences held on a regular basis.
Through these activities, in addition to improving our corporate image, we aim to build good relationships with external companies.
In FY2021, YRPZ employees are actively participating in and presenting at meetings related to the environment, health and safety, and TPS.