Directors, Audit & Supervisory Board Members and Executive ... · Directors, Audit & Supervisory...

Directors, Audit & Supervisory Board Members and Executive Officers

Hiromitsu Kuramoto

Kenji Mizushima

Toru Kamiyama

Hitoshi Sakurada

Akio Futami

HidetoshiNakanishi

Toshiyuki Kimura

Makoto Satani

Yasuhiko Ueda

Setsuko Egami

Hiroshi Toda

Hideo Egawa

Chairman and Representative Director

President and Representative Director

Director

Audit & Supervisory Board Member (Full-Time)

Director


Director

Outside Audit & Supervisory Board Member (Part-Time) Independent Auditor

Director


Outside Director(Part-Time)Independent Director

Outside Director(Part-Time)Independent Director

Directors

Audit &Supervisory Board Members

2017 Annual Report 21 2017 Annual Report 22

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President’sMessage

Appointment Name Management Area

Chairman and Representative Director

Hiromitsu Kuramoto

President and Representative Director

Kenji Mizushima

Director Toru Kamiyama Transform 2025 Chamber, Global BPM Department, Information Business System Department, Business Development & Planning Department 1, Business Development & Planning Department 2, Global Air Freight Business Department, Air Freight Forwarding Department, Global Ocean Freight Business Department, Ocean Freight Forwarding Department, Contract Logistics & Transport Department Corporate Officer of Nippon Yusen Kabushiki Kaisha

Director Akio Futami Accounting Department, Finance Department, Corporate Communication Department, Corporate Planning Department, Corporate Investment Chamber

Director Toshiyuki Kimura Operation Administration Department, Customs Clearance Control Chamber, Chief Regional Officer of Japan Region (Japan Region Reform Promotion Division, East Japan Export Sales Division, East Japan Import Sales Division, Central Japan Sales Division, West Japan Sales Division, Contract Logistics Sales Division)

Director Yasuhiko Ueda Internal Audit Chamber, Legal Affairs Department, General Affairs Department, Human Resources Department

Outside Director(Part-Time) Independent Director

Hiroshi Toda

Outside Director(Part-Time) Independent Director

Hideo Egawa

Appointment Name


Hitoshi Sakurada


Hidetoshi Nakanishi


Makoto Satani


Setsuko Egami

Directors

Audit &Supervisory Board Members

2017 Annual Report 22

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Appointment Name Management Area

President Kenji Mizushima

Senior Managing Executive Officer

Shoji Murakami Chief Regional Officer of Europe Region,Managing Director of Yusen Logistics (Europe) B.V.

Senior Managing Executive Officer

Toru Kamiyama Global BPM Department, Information Business System Department, Business Development & Planning Department 1, Business Development & Planning Department 2, Global Air Freight Business Department, Air Freight Forwarding Department, Global Ocean Freight Business Department, Ocean Freight Forwarding Department, Contract Logistics & Transport Department In charge of Transform 2025 Chamber Corporate Officer of Nippon Yusen Kabushiki Kaisha

Managing Executive Officer Akio Futami Accounting Department, Finance Department, Corporate Planning Department, Corporate Investment Chamber Assists Contract Logistics & Transport DepartmentIn charge of Corporate Communication Department

Managing Executive Officer Toshiyuki Kimura Central Japan Sales Division, West Japan Sales DivisionIn charge of Operation Administration Department, Customs Clearance Control Chamber, Chief Regional Officer of Japan Region (Japan Region Reform Promotion Division (General Manager), East Japan Export Sales Division, East Japan Import Sales Division, Contract Logistics Sales Division)

Managing Executive Officer Yasuhiko Ueda Internal Audit Chamber, Legal Affairs Department, General Affairs DepartmentIn charge of Human Resources Department

Managing Executive Officer Kunihiko Miyoshi Chief Regional Officer of Americas RegionPresident of Yusen Logistics (Americas) Inc.

Executive Officer Minoru Futonaka In charge of Global BPM Department (General Manager), Global Air Freight Business Department, Air Freight Forwarding Department, Global Ocean Freight Business Department, Ocean Freight Forwarding Department

Executive Officer Masayuki Yokoyama In charge of Corporate Planning Department, Corporate Investment Chamber

Executive Officer Toshio Kawashima In charge of Business Development & Planning Department 1, Business Development & Planning Department 2, Contract Logistics & Transport Department

Executive Officer Lee Check Poh Chief Regional Officer of South Asia & Oceania RegionChairman of Yusen Logistics (Singapore) Pte. Ltd.

Executive Officer Yasumasa Chudo In charge of Central Japan Sales Division (General Manager)

Executive Officer Yoshiaki Shirata In charge of Accounting Department, Finance Department (General Manager)

Executive Officer Michiyo Ono In charge of West Japan Sales Division (General Manager)

Executive Officer Misao Kondo In charge of General Affairs Department (General Manager)

Executive Officer Satoshi Watanabe In charge of Internal Audit Chamber, Legal Affairs Department (General Manager)Chief Compliance Officer (CCO)

Executive Officer Hiroyuki Katayama In charge of Information Business System Department

Executive Officer Seiji Yuzen Chief Regional Officer of East Asia Region, Chairman of Yusen Logistics (China) Co., Ltd.

Executive Officer Shiro Oyasu Executive Officer of TRANSCONTAINER LIMITED

Executive Officers


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Yusen Logistics does not set up a dedicated organization to

support the operations of Outside Directors and Outside Audit &

Supervisory Board Members, but has a support system in which

the Support Office for the Board of Directors gives explanations

about proposals to the Board of Directors to Outside Directors

and Outside Audit & Supervisory Board Members in advance.

Yusen Logistics has developed a support system to provide

additional explanations to Outside Audit & Supervisory Board

Members by full-time members as required.

Corporate Governance

Based on the interests of its stakeholders, which include

shareholders, customers, employees, business partners,

creditors and local communities in Japan and overseas, Yusen

Logistics strives to meet the trust placed in it by these diverse

stakeholders, drive sustainable growth, and enhance corporate

value. This is carried out based on a recognition of the

importance of establishing and creating a corporate governance

system that encourages speedy and strong-minded decision-

making, in addition to ensuring transparency in management

and strengthening management supervision functions.

Yusen Logistics recognizes responding to Japan’s Corporate

Governance Code that went into force in June 2015 as an

important challenge and is implementing initiatives to enhance

its corporate governance framework in line with five basic

principles. To this end, we formulated our Corporate

Governance Principles in November 2015.

Yusen Logistics Corporate Governance Principles

URL: https://www.yusen-logistics.com/sites/default/files/

global/corporate-governance-principles_en.pdf

Yusen Logistics has a system where the directors perform their

duties properly and efficiently in accordance with their authority

and the decision-making rules stipulated in the regulations of

the Board of Directors and the rules for submitting proposals to

the Board of Directors. We have eight directors. The directors

pass resolutions about matters stipulated in laws and regulations,

the Articles of Incorporation, and other important management

issues at ordinary Board of Directors meetings, which are held

once a month, or extraordinary Board of Directors meetings,

which are held as needed.

Furthermore, we have introduced an executive officer system. The

Executive Officers Board, which is made up of 20 executive officers

including executives who are also directors, meets twice a month.

All executive officers perform their duties under the direction and

supervision of the representative directors. This system accelerates

decision making, clarifies responsibility in the execution of duties

and raises management transparency and efficiency.

Audit & Supervisory Board members attend meetings of the Board

of Directors and the Executive Officers Board to stay abreast of

business challenges. Furthermore, to develop a deeper

understanding of the actual status of operations, they also attend

other important company-wide meetings, including sales meetings

and budget meetings. Moreover, Audit & Supervisory Board

members conduct proper audits designed to prevent violations

of laws and regulations and the Articles of Incorporation.

Basic Concepts Concerning Corporate Governance

Corporate Governance Framework

Governance Support System for the Outside Directors and Outside Audit & Supervisory Board Members

Matters Relating to Business Execution, Audit and Supervision, Nomination, Compensation Setting and Other FunctionsItem Overview

Organizational structureCompany with Audit &

Supervisory Board members

Number of Directors 8

(Of whom, the number of outside directors)

(2)

Term of Directors 2 years

Number of Audit & Supervisory Board members

4

(Of whom, the number of outside Audit & Supervisory Board members)

(2)

Number of Independent Officers 4

Accounting AuditorDeloitte Touche Tohmatsu

LLC

Adoption of the Executive Officer System Yes

Approaches to the Corporate Governance Code

(As of June 23, 2017)


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making and the Board of Directors makes decisions on

important business execution. Yusen Logistics believes that this

structure contributes to sustainable growth and enhanced

corporate value as well as appropriate decision-making.

In addition, the Audit & Supervisory Board, which includes

multiple outside members, and the members conduct

exhaustive audits of management that also involve activities in

We have established the Internal Audit Chamber, which carries

out planned internal audits. Audit & Supervisory Board members

conduct hearings on the audit plans of the Accounting Auditor at

the beginning of the fiscal year and receive reports on audit

results at the end of the fiscal year. Audit & Supervisory Board

members are also present when the Accounting Auditor conducts

audits to confirm the audit methodology. Moreover, Audit &

Supervisory Board members cooperate with the Internal Audit

Chamber and receive regular reports on the audit results.

The certified public accountants who audited the financial

statements of Yusen Logistics were Toshiyuki Ono, Tomoya

Noda and Takuma Ueki, all of whom are with Deloitte Touche

Tohmatsu LLC. These three accountants were assisted by four

other certified public accountants and seven others.

Yusen Logistics concludes agreements with outside directors

and outside Audit & Supervisory Board members that limit

liability for damages due to negligence in the performance of his

or her duty as provided for in Article 30, Paragraph 2 and

Article 39, Paragraph 2 of the Articles of Incorporation as set

based on Article 427, Paragraph 1 of the Companies Act of

Japan. These agreements limit the maximum amount of their

liabilities to the higher of either ¥15 million or the amount

prescribed in Article 425, Paragraph 1 of the Companies Act.

Multiple outside directors supervise the management and

business execution of Yusen Logistics in consideration of the

interests of stakeholders from a standpoint that is independent

from major shareholders. At the same time, the Executive

Officers Board has been established to ensure speedy decision-

Reasons for Selecting the Current Corporate Governance Framework

Schematic Diagram: Yusen Logistics Co., Ltd. (YLK)

General Meeting of ShareholdersAppointment,Dismissal

AppointmentDismissal,

Appointment,Dismissal

Board of Directors(Chairperson: Chairman)

Compliance Committee

Internal Audit Chamber

InvestmentExamination Committee

Audit &Supervisory Board

(Kansayaku-Kai)

AccountingAuditor

Full-Time Members (2)Part-Time,

Outside Members (2)

Personal InformationProtection Committee

Board of Directors

Accounting Audit

Audit

Audit

Reports

Reports

Organization ofBusiness Operations

President andRepresentative Director

YLK

YLK Group Companies

Appointment, Dismissal, Supervision

Cooperation Cooperation

Cooperation

ContactsContacts

Des

igna

tion

/ Re

mun

erat

ion

Coun

cil

Ope

ratio

nal

Audi

tD

irec

tion,

Su

perv

isio

n

Directors (6)Outside Directors (2)

conjunction with the accounting auditor and Internal Audit

Chamber. This structure is deemed to be effective as Yusen

Logistics’ current auditing framework.


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Total Amount of Remuneration Paid to Directors and Audit & Supervisory Board Members

Attendance at Board of Directors meetings and Audit & Supervisory Board meetings of Outside Directors and Outside Audit & Supervisory Board Members

Hiroshi Toda, Outside Director

Mr. Hiroshi Toda attended 14 out of the 14 Board of Directors meetings held in FY2016. He provides beneficial opinions on management decisions made by the Board of Directors primarily regarding proposals for the overall investment with his expert knowledge of financial markets gained in a securities firm, and also with considerable experience and insight as a corporate executive over the years.

Hideo Egawa, Outside Director

Mr. Hideo Egawa attended 14 out of the 14 Board of Directors meetings held in FY2016. He contributes to the vitalization of the Board of Directors meetings to provide advice and recommendations regarding resolutions related to Yusen Logistics’ overseas development with his extensive knowledge cultivated in overseas strategy at engineering and manufacturing companies.

Makoto Satani, Outside Audit & Supervisory Board Member

Mr. Makoto Satani attended 13 out of the 14 Board of Directors meetings and 14 out of the 14 Audit & Supervisory Board meetings held in FY2016. He provides opinions that enrich discussions in the Board of Directors meetings from a supervisory position of management based on his extensive experience related to international business as well as broad and in-depth knowledge shaped during his time as a corporate executive. He also makes timely queries at the Audit & Supervisory Board meetings from a managerial perspective and exchanges opinions regarding audits.

Setsuko Egami, Outside Audit & Supervisory Board Member

Ms. Setsuko Egami attended 12 out of the 14 Board of Directors meetings and 12 out of the 14 Audit & Supervisory Board meetings held in FY2016. She actively provides opinions at Board of Directors meetings that leverage her extensive experience as a specialist in such areas as human resource development, corporate strategy and marketing strategy. She also makes timely queries at the Audit & Supervisory Board meetings from a technical perspective based on her experience and exchanges opinions regarding audits.

Position Number of recipients* Amount of payment (Millions of Yen)

Directors 10 246

(Of whom, outside directors) (2) (23)

Audit & Supervisory Board members

4 67

(Of whom, outside members) (2) (23)

Total 14 313

(Of whom, outside officers) (4) (46)

* Number of recipients includes a Director and Audit & Supervisory Board member who resigned on June 2016.

(From April 1, 2016 to March 31, 2017)

Reasons for Selecting Outside Directors and Outside Audit & Supervisory Board Members

Hiroshi Toda,Outside Director

Mr. Hiroshi Toda has been involved with numerous important decisions as a manager utilizing his expertise and considerable experience accumulated in the bond and financial markets and financial investment strategies over the years. He has fulfilled his role properly from an objective and independent standpoint with regard to business execution as an Outside Director of Yusen Logistics with his considerable international experience through diplomatic activities as Ambassador Extraordinary and Plenipotentiary, and it has been deemed that he would contribute to further enhance the functions of management supervision and monitoring. He satisfies the criteria for independence stipulated in Article 14 - 2 of Yusen Logistics’ Corporate Governance Principles, and there is no concern of a conflict of interest with general shareholders.

Hideo Egawa,Outside Director

Mr. Hideo Egawa has a wealth of experience in overseas strategy and the aerospace industry cultivated over a long period, along with keen insight regarding corporate management. Yusen Logistics has determined that he will draw upon these qualities in its overall management. In addition, it is expected that he will continue to execute his duties as an Outside Director in an appropriate manner by providing accurate advice regarding management from a broad perspective and demonstrating a high level of supervisory competence and objectivity from an independent standpoint. He was involved in business execution at Mitsubishi Aircraft Corporation until March 2015. He is currently a member of Mitsubishi Heavy Industries, Ltd., but is no longer involved in business execution at this company. He satisfies the criteria for independence stipulated in Article 14 - 2 of Yusen Logistics’ Corporate Governance Principles, and he fulfills his role as an Independent Director to protect the joint interests of shareholders from a standpoint independent from Management and major shareholders.

Makoto Satani,Outside Audit & Supervisory Board Member

Mr. Makoto Satani was part of the management team at Nippon Oil Corporation (currently JXTG Nippon Oil & Energy Corporation) for many years. Yusen Logistics expects him to provide appropriate advice on matters such as the surveillance of company management based on his broad and in-depth knowledge and extensive experience gained as a corporate manager over the years. In addition, he has been designated as an Independent Director since he fulfills the requirements for an Independent Director as stipulated by the Tokyo Stock Exchange, Inc. and there is no concern of a conflict of interest with general shareholders. He is currently also a councilor of Nippon Kaiji Kyokai (ClassNK). Yusen Logistics does not have any business connections or conflicts of interest with this organization.

Setsuko Egami, Outside Audit & Supervisory Board Member

Ms. Setsuko Egami has engaged in a variety of efforts in industry, including corporate strategies, marketing strategies and human resource development. Yusen Logistics expects her to provide effective surveillance of company management and appropriate advice by utilizing her broad and extensive experience. Furthermore, she has been designated as an Independent Director since she fulfills the requirements for an Independent Director as stipulated by the Tokyo Stock Exchange, Inc. and there is no concern of a conflict of interest with general shareholders. She is currently also a professor at Musashi University, a professor at the Graduate School of Musashi University and an Outside Director at Mitsubishi Estate Co., Ltd. Yusen Logistics does not have any particular connection with any of these organizations.


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Yusen Logistics has expressed standards and policy related to

independence from Yusen Logistics for selecting outside

directors and outside Audit & Supervisory Board members in

Article 14 of its Corporate Governance Principles. Candidates

shall be designated based on a comprehensive judgment that

they possess extensive knowledge and experience as managers,

expert knowledge and experience of financial, accounting and

legal affairs and so on, independent from the Yusen Logistics

Group, and are capable of ensuring sufficient time for advice to

and supervision of Yusen Logistics businesses, as well as in full

consideration of diversity of the Board of Directors.

Outside directors attend Board of Directors meetings and outside

Audit & Supervisory Board members attend Audit & Supervisory

Board meetings and Board of Directors meetings to provide

opinions from a neutral and objective viewpoint based on

knowledge amassed through extensive experience. Yusen Logistics

incorporates the viewpoints made from an independent standpoint

outside the Company in management by reflecting the opinions

of outside directors and outside Audit & Supervisory Board

members. We believe that this ensures objectivity and neutrality

in decision-making by the Board of Directors.

FY2015

The 21 consolidated subsidiaries of Yusen Logistics paid

remuneration of ¥221 million for audit certification activities and

remuneration of ¥46 million for non-audit activities to a member

firm of Deloitte Touche Tohmatsu Limited, which is affiliated

with the same professional network as the certified public

accountants and others engaged in audits of Yusen Logistics.

FY2016

The 23 consolidated subsidiaries of Yusen Logistics paid

remuneration of ¥215 million for audit certification activities and

remuneration of ¥37 million for non-audit activities to a member

firm of Deloitte Touche Tohmatsu Limited, which is affiliated

with the same professional network as the certified public

accountants and others engaged in audits of Yusen Logistics.

To ensure that the internal control system at Yusen Logistics

functions effectively, we promote compliance and conduct risk

management in an efficient manner.

The Yusen Logistics Group stipulates the Group Code of Conduct

in order for executives and employees to execute corporate

activities in accordance with the laws and regulations, and

internal rules, and social ethics, provide education and training,

and to ensure familiarization therewith so that this will be put

into practice in daily activities.

We stipulate the Basic Compliance Promotion Rules and

establish the Compliance Committee, chaired by the President,

for promotion and stabilization of our compliance system. The

committee sets a compliance program each fiscal year and

establishes and maintains a group-wide compliance framework.

Each department and Group company of Yusen Logistics has a

risk management system for the workplace to expose risk as

well as formulate, implement and evaluate countermeasures.

This enables risk related to operations in a particular area of

responsibility to be identified and managed. The status of

management for important risks in a department in charge is

reported by an executive officer via the Compliance Committee,

and company-wide risk that may lead to loss is recognized.

In addition, to ensure early identification and correction of an

act, or failure to act, that breaches laws and regulations, we have

set up an internal reporting center inside and outside the

Company, in accordance with compliance helpline regulations,

that facilitates a framework for consulting and receiving

inquiries.

Based on the Business Continuity Basic Policy, Yusen Logistics

hold the business continuity management (BCM) meeting

chaired by the President and Representative Director to compile

activities related to company-wide business continuity

management, formulate an annual plan, examine effectiveness

through training, and discuss and decide improvement

measures in preparation for an emergency such as a large-scale

disaster or failure.

The Internal Audit Chamber conducts regular audits of Group

companies and gives advice and proposes improvements as

required.

Internal Control System

Compliance

Other Important Remuneration

Remuneration Paid to the Certified Public Accountants Engaged in Audits of the Company

(Millions of Yen)

Classification

FY2015 FY2016

Remuneration paid for auditcertification

activities

Remuneration paid for

non-audit activities

Remuneration paid for auditcertification

activities

Remuneration paid for

non-audit activities

Yusen Logistics Co., LTD.

66 — 66 —

Consolidated subsidiaries — — — —

Total 66 — 66 —

Risk Management System


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a serious impact on the business performance and financial

position of the Yusen Logistics Group. However, a sharp increase

in fuel surcharges could temporarily reduce the profitability of

the Yusen Logistics Group.

The Yusen Logistics Group has expanded its business to

encompass not only Japan but also the Americas, Europe, Asia,

Oceania, and the Middle and Near East, and the majority of the

Group’s overall sales activities are conducted in overseas

markets. The risks listed below are consistently inherent in such

global expansion.

a. Political and economic factors

b. The effect of public regulations, including business and

investment approvals, taxation, currency exchange controls,

trade restrictions, etc.

c. The impact of natural disasters, including earthquakes,

tsunamis, typhoons, hurricanes, etc.

d. Social turmoil due to wars, international disputes, riots,

terrorism, strikes, and other factors

e. Global economic turmoil due to rapid and drastic fluctuations

in currency exchange rates

f. Spread of extremely contagious diseases with high mortality

rates, such as new strains of influenza

The Yusen Logistics Group carries out a full study of the local

political situation and economy as well as the culture and customs,

health, and other factors when it expands to a new overseas

market to address all possible risks at the time to the maximum

extent. Nevertheless, a variety of unforeseen events, including

increasing sophistication of telecommunications technology,

economic and cultural globalization, frequent incidence of

terrorist acts, and the spread of new infectious diseases, have

been occurring around the world. The business performance

and financial position of the Yusen Logistics Group could be

affected by such events and changes in the international situation

that the Yusen Logistics Group is unable to predict.

The following risks could affect the business performance and

financial position of the Yusen Logistics Group. Forward-looking

statements in the text of this report are based on the judgment

of the Yusen Logistics Group as of the date of submission of the

Annual Securities Report.

In addition to economic trends in target countries and regions,

international logistics demand could be affected by economic

trends in Europe and the Americas that have a substantial

impact on the global economy. In particular, products and

components for personal consumption such as IT-related and

digital devices account for a high proportion of the demand for

Air Freight Forwarding and can be strongly affected by economic

trends in the countries of consumption.

The Yusen Logistics Group has been working to increase its

handling of items such as medical equipment-related products,

daily commodities and food and beverages, which are relatively

immune to economic fluctuations, in addition to electronics,

automobile components and other items. In doing so, it aims to

achieve a business structure that ensures sustainable growth.

Fuel surcharges from aviation companies, in addition to

fluctuations in fuel charges, are usually paid by customers

separately from air freight rates and should not, therefore, have

Potential Risks Accompanying the Global Expansion of BusinessRisks Arising from General Economic

Trends

Risks Arising from Changes in Fuel Surcharges

Business Risks


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The Yusen Logistics Group has set up a redundant system for its

computer networks and is working to further strengthen its

backups structure for hardware and data to reduce damage

caused by natural disasters, such as earthquakes, storms and

flooding, to keep their impact to a minimum, and enable prompt

recovery. Moreover, the Yusen Logistics Group has installed

firewalls and virus detection software in its e-mail servers and

terminals, to prevent unauthorized external access and infection

by computer viruses.

Nevertheless, the business performance and financial position

of the Yusen Logistics Group could be affected by a temporary

failure of its computer systems or a leakage of information due

to unforeseeable circumstances such as the invasion to the

internal information systems using technology beyond the

estimated security level.

The Yusen Logistics Group handles a large volume of customer

information. Moreover, the Group provides customs clearance

services, with a duty of confidentiality for customer information

and therefore strives to prevent the leakage of such information.

Nevertheless, the business performance of the Yusen Logistics

Group could be affected by a deterioration of social credibility in

the Group or claims for damages in the event of leakage of

information to any third party due to unforeseen circumstances.

The business of the Yusen Logistics Group is subject to various

legal regulations around the world. These primarily include

social regulations to ensure safety and legal regulations

concerning logistics operations. Key legal regulations in Japan

are as follows.

Changes to current legal regulations around the world may

impact the business results and financial position of the Group

due to one-off expenses that include capital investment.

In addition, serious violations of legal regulations may impact

the business results and financial position of the Yusen Logistics

Group due to a financial imposition such as a fine or levy, and to

suspension of all or part of a business or cancellation of permits

and licenses.

Although the Yusen Logistics Group has foreign currency-

denominated claims and obligations, it uses forward exchange

contracts to reduce the impact of currency exchange rate

fluctuations. Therefore, there is no risk of a major impact on the

Yusen Logistics Group. However, the figures included in the

financial statements of overseas consolidated subsidiaries are

converted into Japanese yen when preparing the consolidated

financial statements of the Yusen Logistics Group, and

fluctuations in currency exchange rates could affect the business

performance and financial position of the Yusen Logistics Group.

Legal Regulations

Risks from Deterioration of Social Credibility or Claim for DamagesArising from Leakage of Customer Information

Risks Arising from Fluctuations in Currency Exchange Rates

Name of permission/approval Ministry/agency with jurisdiction Content of permission/approval Term of validity

Second Class Consigned Freight Forwarding Business

Minister of Land, Infrastructure, Transport and Tourism

Permission for business operation

No specific term of validity

Air Transport AgentMinister of Land, Infrastructure, Transport and Tourism

Notification of business operation

Same as above

Customs Clearance BusinessDirector-General of Customs with regional jurisdiction

Permission for business operation

Same as above

First Class Consigned Freight Forwarding Business

Director of the Transport Bureau with regional jurisdiction

Registration of business operation

Same as above

Warehousing BusinessDirector of the Transport Bureau with regional jurisdiction

Registration of business operation

Same as above

Medical Devices Manufacturer Prefectural GovernorPermission for business operation

September 26, 2015 to September 25, 2020

Specially Controlled Medical Devices Sales and Leasing Business

Prefectural GovernorPermission for business operation

June 12, 2013 to June 11, 2019

Risks Arising from Computer Failure, Viruses, Cracking and Cyberterrorism


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a. Position within the NYK Group

As of March 31, 2017, Nippon Yusen Kabushiki Kaisha Group

(NYK Group) was composed of 552 consolidated subsidiaries

and 200 equity-method affiliates and is a comprehensive

logistics enterprise centered on the ocean transportation

business.

The Yusen Logistics Group is mainly involved in the Freight

Forwarding Business and the Warehousing Business, and no

other NYK Group company engages in the same Air Freight

Forwarding Business as Yusen Logistics with permission from

the Minister of Land, Infrastructure, Transport and Tourism as

a Second Class Consigned Freight Forwarding Business.

As a listed company, Yusen Logistics also strives to ensure its

independence, and none of the decisions made by Yusen

Logistics require the prior approval of NYK.

b. Personnel relationships with the NYK Group

As of the date of submission of the Securities Report, one of

Yusen Logistics’ 12 officers serves concurrently at an NYK

Group company. The position and name of this officer at

Yusen Logistics and the position at the NYK Group are shown

below.

c. Transactions with NYK and consolidated subsidiaries of NYK

(excluding the Yusen Logistics Group)

The principal transactions between Yusen Logistics and NYK

and the consolidated subsidiaries of NYK during the

consolidated fiscal year under review are shown below.

Business transactions are conducted on the same terms as

those of regular transactions taking into account the actual

market conditions.

i. Transactions with NYK

The principal transactions between Yusen Logistics

and NYK concern delegation of NYK for the

transportation of some marine freight handled by

Yusen Logistics. Business transactions during the

consolidated fiscal year under review amounted to

¥2,398 million.

ii. Transactions with consolidated subsidiaries of NYK

The principal transactions between Yusen Logistics

and consolidated subsidiaries of NYK concern

delegation to UNI-X Corporation and 18 other

companies of marine transportation and associated

operations. Business transactions during the

consolidated fiscal year under review amounted to

¥4,401 million.

Relationship with the NYK Group

Position at Yusen

LogisticsName

Position at NYK Group Company

(excluding the Yusen Logistics

Group)

Director,Senior Managing Executive Officer

Toru Kamiyama

Corporate Officer, Nippon Yusen Kabushiki Kaisha


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Human Resource Development / Initiatives for Diversity

In 2011, Yusen Logistics introduced training under its Global Sales

Enrichment Program (GSEP) for mid-level sales representatives

from overseas as well as Japan. The program aims to enable

participants to acquire knowledge related to Air Freight Forwarding,

Ocean Freight Forwarding and Contract Logistics to provide

optimum solutions which meets customers’ expectations.

In November 2016, the sixth GSEP was held, with 35 people from

21 countries. A total of 192 employees had participated by 2016,

which has served to bolster our overall sales network.

Another objective of the program is to build global networks

among employees who take part in this program.

Going forward, efforts will be made to strengthen organizational

capabilities by fostering human resources worldwide who have the

expertise and knowledge to take on roles globally.

It was such a wonderful experience to take part in the GSEP.

People from different generations and cultures came together

and participated enthusiastically in the sessions, with the aim of

Yusen Logistics’ further growth. This resulted in the successful

exchange of a lot of information in a short time on such topics as

the work environment, logistics market and so on in each country.

There were a number of other sessions besides discussion and

debate, including a workshop on kaizen (continuous improvement)

and proposals for logistics solutions to simulated customers. The

Global Sales Enrichment Program (GSEP)

Comment from a Participant

program transcended regular operations and helped us build

connections with other employees who were working hard in

different parts of the world, thus truly embodying Yusen Logistics’

brand promise “Create Better Connections”. I came to see that

each person, including those in the program, has a role to play in

supporting Yusen Logistics, and because of this, I’m confident that

Yusen Logistics will continue to expand into the future.

Shota GotoYusen Logistics Co., Ltd.


ESG /Sustainability

CompanyData


OurStrategy

BusinessOverview


As part of its efforts to promote diversity, Yusen Logistics Co., Ltd.

initiated a project to advance women’s success in 2016. We view

women’s roles as key to driving dramatic advancement for Yusen

Logistics going forward. With this in mind, we are collating the

issues facing female employees around Japan, led by the Human

Resources Department. The issues are then discussed along with

project members to find viable solutions.

Despite the fact that more females are being hired for Yusen

Logistics Co., Ltd. than men, the proportion of female managers

was only slightly higher than 6% overall as of March 2017. An

urgent task is to therefore foster more women who can take on

managerial roles.

Yusen Logistics (China) Co., Ltd. took part in a run event in October

2016. It was a 5.6-kilometer race run challenge held in the

Shanghai Oriental Sports Center.

It has been held for 40 sessions, covering five continents, seven

countries and thirteen cities all over the world. It intended to make

people aware of work-life balance when chasing dreams.

This was the 6th event since 2011. Yusen Logistics (China) Co.,

Ltd. participated in this big event with other NYK group companies,

there were 15 participants in total. They were not only veterans

who continuously joining for many years but also many new faces.

To Advance Women’s Success

Enhancing Colleague Friendship through Running Race

Japan

Although the situation has improved, the number of years of

continuous employment for women is still lower than that for men.

Accordingly, we are working hard to improve the working

environment for women. Our efforts include setting up a

consultation office for employees who are returning to work

following maternity leave or childcare leave, as well as providing a

self-development program to enable a smooth transition back to

work, so that employees on leave do not feel a sense of distance

from Yusen Logistics.

Critical areas in the initiative to foster female employees involve

further improving the work-life balance, and creating an

organization in which all managers are much more aware of the

need to foster female employees.

In addition, to conduct more suitable personnel evaluations, we

formulated an evaluation policy that focuses on productivity per

hour and efficiency, alongside the degree of contribution to Yusen

Logistics, and are striving to reform work styles to ensure higher

motivation in daily operations.

Through initiatives such as these, we are aiming to double the

proportion of female managers in Japan to at least 12% by 2021.

Through the team racing, we could enhance colleague friendship

and recognize the importance of our healthy lifestyle.

East Asia


ESG /Sustainability

CompanyData


OurStrategy

BusinessOverview


0

2,000

4,000

6,000

FY2014 FY2016

(TEU)*1

Corporate Social Responsibility (CSR)

Application of the Strang System is contributing to the reduction of

lumber during ocean transport, which was previously thrown out

after use. Previously, lumber 15-30 meters length was required for

each container. Now, thanks to the Strang System, lumber is no

longer needed at all. We have been increasing the number of

containers using the Strang System every year, with more than

5,000 such containers on a TEU*1 basis handled in FY2016. In

addition to reducing lumber used in ocean transport, this helps

popularize the use of recyclable expanded polystyrene (EPS)*2.

The Strang System is a safe and efficient method for securing

heavy cargo such as steel products for intermodal transport in

shipping containers using a revolutionary system incorporating

expanded polystyrene (EPS). It is a new technology that has

been patented all around the world, including Japan. Yusen

Logistics Co., Ltd. acquired an exclusive license for using the

technology in Japan from Strang Systems an Australian port

service company.

Yusen Logistics Co., Ltd. is working to reduce the consumption of

paper in air transportation through electronic air waybills instead

Yusen Logistics is working on activities that are kind to the environment such as reducing the environmental

burden and protecting natural surroundings.

The NYK Group’s environmental policy is applied to these activities.

Increased of Environmentally Friendly Metal Products Forwarding (the Strang System)

Our Initiatives for the EnvironmentWhat is the Strang System?

Reduction of Paper Consumption through Electronic Air Waybills

Lumber lashing system previously in use

*1 TEU: Twenty-foot equivalent unit*2 EPS is a resource-saving material consisting of 98% air and 2% resin. It permits 100%

recycling since its properties remain relatively unchanged.

Strang System

Number of Containers Exploiting the Strang System

of its paper version. We digitized 7.2% of all master airwaybills by

FY2016. We also digitized 21.3% of all house airwaybills by FY2016.

Japan

The NYK Group’s environmental policyhttps://www.yusen-logistics.com/en/about-us/csr/environment/


ESG /Sustainability

CompanyData


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Industrial materialsHeat recovery / Thermal insulation

material / Sedatives / Steel raw material

Yusen Logistics (Americas) Inc. completed a LED light retrofit

project at its warehouse in Carson, California with the aim of

reducing power consumption.

Yusen Logistics replaced 966 fixtures with LED lights at the

486,000-square-foot facility. The retrofit will reduce energy use on

average by one million kilowatt-hours (kWh) per year.

The project will also eliminate 309 tons of carbon dioxide each

year, which is the equivalent of removing 3,488 cars from the road.

Yusen Logistics Co., Ltd. has started an initiative to recycle

administrative documents into toilet paper when disposing of

documents after completion of the retention period.

As a first trial in December 2016, approximately 12 tons of

documents were recycled into some 71,000 rolls of toilet paper.

Measures to Reduce Power Consumption by LED Light in a Warehouse

Promotion of Paper Recycling

Administrative documents Process at dissolution treatment plant

Japan

Americas

In addition to an expectation of 60% savings in total annual lighting

costs, it is expected that energy consumption will be reduced by

65% year on year.

Besides achieving significant energy cost savings, the retrofit

created a safer work environment by providing brighter and more

uniform lighting throughout the warehouse.

Recycled toilet paper

Paper, fiber

Incombustibles


ESG /Sustainability

CompanyData


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BusinessOverview


On a breezy Saturday afternoon in October 2016, 61 employees of

Yusen Logistics (Singapore) Pte. Ltd. joined “Yusen Love Our Beach

Day” with enthusiasm, doing their part for corporate social

responsibility (CSR). The event raised awareness and promoted a

culture of giving back to the community.

The employees wholeheartedly gathered and geared up with

tongs, gloves and trash bags to clean the beach. To boost

everyone’s determination and make the event more memorable, a

treasure hunt was arranged during the cleaning. After the gratifying

beach cleaning, everyone enjoyed yummy bentos with refreshing

chilled drinks.

In April 2016, Yusen Logistics (Czech) s.r.o. joined an international

initiative “Clean up the World” an annual event with aim to identify

and eliminate illegal waste dumps and trash around the country.

“Yusen Love Our Beach Day”

Let’s Clean Up the Czech Republic

Through this event, Yusen Logistics (Singapore) Pte. Ltd. is able to

carry out sustainable environmental practices and be more

conscious of our social and moral responsibilities. Yusen Logistics

aspires to organize more engaging CSR activities for its employees

to have a positive impact on social and environmental wellbeing.

The employees supported the event together with their families

in the neighbourhood of Yusen Logistics (Czech) s.r.o. sites in

Strančice, Ovčáry and Krupka. Yusen Logistics (Czech) s.r.o. has

supported this event regularly for 3 years. The number of

participants has been increased year by year.

South Asia & Oceania

Europe


ESG /Sustainability

CompanyData


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BusinessOverview


Yusen Logistics Co., Ltd. and Yusen Logistics (Thailand) Co., Ltd.

supported transport goods from Thailand to Japan through air

freight. The goods are sent overland to Bangkok by Yusen Logistics

(Thailand) Co., Ltd. Chiang Mai branch and then sent to Narita

Airport in Japan with the cooperation of an airline company. Yusen

Logistics Co., Ltd. then handled import and transportation goods

from Narita Airport to the NPO Ban Rom Sai Japan’s Kamakura

store. In December 1999, Ban Rom Sai was established in a suburb

of Chiang Mai in northern Thailand as an orphanage for children

who have lost their parents or have contracted the human

Yusen Logistics (Americas) Inc. supported the transport of relief

supplies by Boeing to Charleston, South Carolina, which was hit

hard by Hurricane Matthew at the start of October 2016.

Boeing sent bottled water, sanitizing wipes, blankets and other

provisions from Seattle-Tacoma Airport to support the recovery of

Boeing employees who were working in Charleston as well as the

local community. Yusen Logistics (Americas) Inc. cooperated with

Support for a Community Facility for Children in Thailand through Air Freight

Assisting Boeing with Transportation of Relief Supplies

immunodeficiency virus (HIV) from their parents. Ban Rom Sai

conducts operations independently, without depending solely on

donations. The facility makes original products such as clothing and

crafts using hand-woven cloth from Chiang Mai and uses cloth

from ethnic minorities. These are sold at NPO Ban Rom Sai Japan’s

Kamakura store and other places.

Yusen Logistics is committed to contributing to the achievement

of a prosperous society for children through its global Air Freight

Forwarding Business.

the transportation as a long-time partner of Boeing, provided

warehouse services at its Seattle Branch, including receiving,

sorting, labeling and repacking of supplies as well as delivery to

the airport.

Japan

Americas

South Asia & Oceania

Social Contribution


ESG /Sustainability

CompanyData


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BusinessOverview


In January 2017, Yusen Logistics Co., Ltd. held a swimming class for

children attending the Hakuyo Swimmers school in Chiba, Japan.

The swimmer Ayatsugu Hirai is a top athlete, who joined Yusen

Logistics Co., LTD. in April 2016 after using “Athnavi”, served as an

instructor for the class, which attracted some 60 children.

As part of our social contribution activities, the swimming class

was conducted with the cooperation of the Hakuyo Swimmers

school. Many children attended the class because it was held

where Hirai, who has achieved a number of exceptional results in

tournaments in Japan and around the world, had practiced in the

past.

In September 2016, Yusen Logistics (Czech) s.r.o. organized a

collection of old toys which their children no longer need but still

are in good condition. Yusen Logistics (Czech) s.r.o. managed to

collect huge amounts of toys and after sorting them, some were

delivered to foster homes and the others were delivered to asylum

house for mothers with children suffering hardships. As you can

imagine the children jumped for joy when they received toys

without having a Christmas.

Swimming Class for Children by a Top Athlete

Collecting Toys for Children

The day included a talk show, instruction on freestyle and the

breaststroke, and a series of events such as relay races where

participants were split into six groups. Many of the children

commented on how much fun the program was.

Yusen Logistics will continue contributing to the continuous

development of society through its global logistics business. It will

also ensure that each employee keeps social contribution activities

at the forefront of their thinking, including the support of culture as

a good corporate citizen.

Europe

Japan


ESG /Sustainability

CompanyData


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BusinessOverview


Yusen Logistics (Hungary) KFT. joined the Light of My Eyes

Foundation’s “Thank You! Donations Sweets program” in 2016.

The Light of My Eyes Foundation based in the city of Pécs in

Hungary has committed to the building of a purpose built

hospice for children and young adults with the help of “Thank You!

Donations Sweets program” and other donation programs. Profit

from the sale of “Thank You! Donations Sweets program” is used to

care for sick children.

The Light of My Eyes Foundation works on the very special field of

Children’s health and education. They provide free children’s

ambulance and transportation services. The foundation opened

Making a Donation with Buying ‘Thank You Candies’

the first Hungarian Children’s Hospice House. The Light of My Eyes

Foundation’s mission is to improve the quality of life of terminally

ill children and to support their parents and families during a

difficult time.

We would like to enhance our support relationship with the Light

of My Eyes Foundation in 2017.

Europe


ESG /Sustainability

CompanyData


OurStrategy

BusinessOverview


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