January 31, 2024
To whom it may concern
Company name
Representative
Contact

OLBA HEALTHCARE HOLDINGS, Inc.
Yohei Maeshima, President and CEO(Securities code: 2689; TSE Standard Market)
Nobuharu Murata, Managing Director andGeneral Manager, Administrative Department(Phone: +81-86-236-1115)

Announcement of the Update of Our Basic Approach to ESG

OLBA HEALTHCARE HOLDINGS, Inc. (the “Company”) announces that the Board of Directors, at a
meeting held on January 31, 2024, adopted the attached resolution regarding its basic approach to ESG(Environmental, Social, and Governance) in the Group’s business activities.

1. Reasons for Establishment
The Company has set a goal of building a foundation for the next 100 years in its medium-term
management plan with the following key initiatives: "strengthening current businesses and improving
productivity," "promoting SDGs and ESG management," "exploring and nurturing new businesses," and"promoting digital transformation (DX)." Of these initiatives, we have summarized and articulated ourbasic approach to "promoting SDGs and ESG management" on November 14, 2022, as shown in theattachment. In addition, we disclose information on the status of each ESG initiative, and have updated
the information on the status of our initiatives.
As stated in our Employee Charter, which reflects our corporate philosophy, we are committed to"providing value to our stakeholders (customers, business partners, employees, local communities, andshareholders) in a sincere and continuous manner and pursuing sustainable management." Without
losing sight of this spirit, the Company will continue to strive to enhance its corporate value, bearing in
mind our Basic Approach to ESG.

2. Updated on: January 31, 2024
3. Details: Refer to the following pages

Basic Approach to ESG
As stated in our Employee Charter, which reflects our corporate philosophy, we are committed to"providing value to our stakeholders (customers, business partners, employees, local
communities, and shareholders) in a sincere and continuous manner and pursuing sustainable
management." In this spirit, we have established the following basic approach to ESG
management.

Environmental (E)We recognize that addressing environmental issues is essential for society and corporations toengage in sustainable social activities.
Based on the Employee Charter established as our corporate philosophy, the Group will not
only comply with environmental laws and regulations, but also work together with various
stakeholders to reduce environmental impact and preserve the environment, thereby
contributing to the realization of a sustainable society.
Social (S)As a healthcare company that supports medical and nursing care, we believe that our
greatest contribution to society is to ensure that we never cease to provide medical andnursing care in the community. As stated in our Employee Charter, we are committed to"respecting diversity and recognizing diverse opinions, values, and ways of working," and"creating an environment where members are healthy in mind and body and are motivated
to contribute.” Therefore, in addition to aiming for diversity in human resources and work
styles, we are promoting reforms in the way we work so that our employees can continue towork in a healthy and vigorous manner.
Governance (G)A stock company is entrusted with capital by its shareholders and is expected to make aprofit through its business activities, increase its corporate value, and increase shareholder
returns. Thus, the primary mission of a stock company is to respond to its shareholders’trust. To this end, we believe it is essential that we fulfill our responsibilities to employees,
customers, business partners, and local residents in the public interest.
As a company that enjoys continuous and widespread support, we have made ongoing
efforts to ensure the transparency, efficiency, and soundness of our management, as wellas to actively accept external audits and recommendations, and have put in place thenecessary mechanisms to do so.
To continue to meet our shareholders’ expectations, we, as a holding company with acentral role in the Group, strive to provide each group company with infrastructure,including human resources, education, funds, technology, and information systems, torealize the following:(1) Comply with laws and regulations;(2) Gain social support;(3) Improve management efficiency and profitability; and(4) Demonstrate our collective strength as a Group.

1

● For the Environment■Monitoring energy use to reduce environmental impact
We use energy and thus emit CO2 as a result of our business activities. We regularly
monitor the amount of greenhouse gas emissions from our Group activities in order toeffectively reduce our environmental impact and protect the environment.
Applicable companies: OLBA HEALTHCARE HOLDINGS, Inc., Kawanishi Co.,
Ltd., Sansei Medical Materials Co., Ltd., Nikko Medical Materials Co.,
Ltd., Kawanishi BarcMed Co., Ltd. HOSNET-JAPAN INC., Life Care
Co., Ltd.
◆ Greenhouse gas emissions(Unit: t-CO2)
FY06/22

Scope 1

FY06/23

Gasoline

2,478

2,506

Diesel oil

224

219

Scope 2
Electricity
1,133* CO2 emissions are calculated using emission coefficients based on the Act on
Promotion of Global Warming Countermeasures.

1,242◆ Energy consumption

FY06/22

FY06/23

Gasoline (kL)

1,068

1,080

Diesel oil (kL)

87

85

2,452

2,481

Electricity consumption (thousand kWh)
■ Utilizing LED lighting

Our company-owned offices and warehouses are outfitted with environmentally friendly
LED lighting, which reduces power consumption and environmental impact compared to
traditional fluorescent and mercury lighting.
■Reducing the use of copy paper
We are working to reduce the use of copy paper by introducing an electronic approvalsystem and promoting paperless distribution of materials at meetings.
■Reducing business travel
Since 2012, the Group has been reducing business trips for meetings and other purposesby implementing videoconferencing and web conferencing systems at each groupcompany location, and is working to reduce the environmental impact of travel.

2

● For Society■ Providing a consistent supply of medical devices

The Group is committed to quality control to ensure a consistent supply of medical devices
and nursing care products. This includes maintaining appropriate inventories, managing
medical device expiration dates, controlling appropriate temperatures, and managing thetransfer record of biologically derived products.
■ Responding to natural disasters and pandemics

Based on the objective of "contributing to the development of medical science, medical care,and nursing care through our business and contributing to the health and longevity of thepeople," the Group is committed to fulfilling its responsibilities as a healthcare group thatplays a part in community health care. To fulfill our mission of never ceasing to provide
medical and nursing care, the Group has established a business continuity plan (BCP) that
includes the following:⚫

Utilizing data centers that are resilient to natural disasters⚫

Establishing BCPs at each group company and regularly conducting BCP exercises⚫

Holding regular meetings of the task force committee to share information on disastercountermeasures in the Group⚫

Preparing disaster preparedness stockpiles at each company in case of emergency⚫

Installing in-house power generation equipment (at some facilities)⚫

Using an advance notification system for emergency vehicles (in some municipalities)⚫

Cooperating in stockpiling and storing medical supplies that can be dispensed urgently inthe event of a disaster (with some municipalities)⚫

Implementing safety confirmation systems and conducting drills, etc.

3

● For Employees■ Promoting self-directed learning

We offer training programs, such as career-oriented OLBA Academy, where employees
who are self-motivated and eager to grow can learn.

Academic conferences and research groups

At eachcompany/
externallyStudy sessions for each manufacturer

Medical Management Consultant
Certification

CDR Certification

Acquisition ofqualification

MDIC Accreditation

Excel Skill Improvement Course

OJT Leader Course

Presentation
CourseThesisCourse
GuidedLogical Thinking Course

e-Course(Online lessons)Compliance training

Academic mini-seminars

New Year’s ceremony

Company-wide seminars

Kickoff

Management
CourseMedical Globe Marketing

Executive Course

GLOBIS Unlimited Learning

Executive

OLBA Academy

Management
Generalemployee
2nd-Year
employee
New employee

OLBA Academy
Framework

Self-development

Book Purchase Support System

Company-wide training

Basic Course
New Employee
Orientation

Onboarding

Our main training courses and other programs are as follows.
▽OLBA Academy Basic Course
This course is intended primarily for new employees to acquire basic skills as a memberof society, learn about the Group's history and culture, and gain basic knowledge about
medical and nursing care as well as medical devices and nursing care equipment. Throughthe training, which lasts approximately 10 months, participants can develop a habit ofcontinuous learning, and also get clues as to which areas to study and how to study them.
▽OLBA Academy Research Paper Course
Under the supervision of their seniors, younger employees spend approximately one year
preparing and presenting a research paper in this course. Participants can improve theirlogical thinking and presentation skills by identifying issues at clinical sites and within thecompany and discussing solutions.
▽OLBA Academy Management Course
This course is designed for entry-level managers and serves as the Group's management
dojo (training ground). Participants can not only learn deeply about the Group's history andculture, but also gain necessary management know-how, such as PDCA, dealing withsubordinates, accounting, labor control, and management strategy.

4▽OLBA Academy Executive Course
This course is intended for executives and senior managers, who will learn basic skills andknowledge essential for corporate management, including governance codes, ESG
management, DX, harassment, business planning, accounting and finance. At the sametime, this course aims to develop management personnel who are highly aware ofcompliance and can respond to change.
▽OLBA Academy e-Course
This course introduces an e-learning system that allows students to take classes
whenever is most convenient for them so that they can efficiently gain the knowledge
required for work, including laws and regulations, company rules, general education, IT
skills, and medical devices. Most of the learning content is produced in-house, which also
improves the skills of the employees who produce the content.
▽Self-development programs
In this program, the company supports employees' self-motivated learning through a"Book Purchase Support System" that subsidizes the cost of purchasing books and an"Excel Skill Improvement Course" to learn Excel skills.
▽Participation in internal study groups and various academic conferences
When medical device and nursing care equipment manufacturers launch new products,
we hold in-house study sessions to update related knowledge. Our employees also
participate in academic conferences held in various regions to obtain information ondiseases, treatment methods, and the latest devices and equipment.
■ Supporting a diverse workforce

The Group’s Employee Charter states that we aim to be an organization that “emphasizes
diversity and recognizes diverse opinions, values, and work styles.” There are no
restrictions on joining the company, being promoted, or being promoted to management
positions, and we have created an environment in which people with different attributes,
characteristics, and values can fully demonstrate their abilities.
For example, in the entire Group, all employees from the president down to new employees
address each other as "XX-san" in the “-san” campaign to create an organizational climate
in which people can freely express their opinions regardless of position, age, or gender.

5◆ Status of the overall Group (the Company and its domestic consolidated subsidiaries)

⚫

⚫

⚫

Composition of Directors (as of July 1 of each year)
2020

2021

2022

2023

Male

23

22

23

24

Female2233Percentage of female employees/contract employees (as of July 1 of each year)
2020

2021

2022

2023

38.9%

40.3%

40.9%

42.0%

Percentage of women in management positions
The percentage of female employees in management positions in the Group has beensteadily rising, albeit slightly, and we will continue to develop an environment that allows
women to excel.
FY06/20

FY06/21

FY06/22

FY06/23

5.9%

6.4%

7.1%

7.0%

* Calculated based on the provisions of the "Act on the Promotion of Women's Active Engagement inProfessional Life” (Act No. 64, 2015).

⚫

Percentage of male employees taking childcare leave
The Group has been making efforts to raise awareness of the maternity and paternity
leave system among employees by creating and distributing a "Maternity and Paternity
Leave Guidebook," conducting e-learning programs, and introducing examples of male
employees taking maternity leave in the Company newsletter, as well as creating anenvironment that encourages employees to take childcare leave, and the percentage of
employees taking childcare leave is on the rise.
FY06/20

FY06/21

FY06/22

FY06/23

0.0%

0.0%

5.3%

12.8%

* Percentage calculation of childcare leave, etc. made under Article 71-4-1 of the “Ordinance for
Enforcement of the Act on Childcare Leave, Caregiver Leave, and Other Measures for the Welfare ofWorkers Caring for Children or Other Family Members” (Ministry of Labor Ordinance No. 25, 1991),
based on the provisions of the “Act on Childcare Leave, Caregiver Leave, and Other Measures for the
Welfare of Workers Caring for Children or Other Family Members” (Act No. 76, 1991).

⚫

Wage differences between male and female employees (FY06/23)
In accordance with Article 4 of the Labor Standards Act, the Group applies the samewage system to men and women in the same job group, and has established common
standards for personnel evaluation for men and women. Accordingly, we have analyzed
that the difference in wages between male and female employees is due to the low ratioof women in managerial positions. Going forward, we will promote the development offemale leaders and their promotion to management positions.

All employees
Difference in

52.0%

RegularNon-regular

employees

employees

61.4%

71.8%

wages between
male and female
employees (%)
Notes 1. Calculated based on the provisions of the “Act on the Promotion of Women's Active Engagement

6

in Professional Life” (Act No. 64, 2015).
2. The wage difference between male and female employees represents the average wage level for
women when the male wage level is set at 100%.

◆ Status of consolidated subsidiaries

FY06/23

Company
nameKawanishiCo., Ltd.,

Percentage offemaleemployees inmanagement
positions (%)(Note 1)

Percentage of male employees taking
childcare leave (%) (Note 2, 4)All employees

Difference in wages between maleand female employees (%) (Notes
1, 3)

Regular Non-regular
All
Regular Non-regular
employees employees employees employees employees

9.4

14.3

14.3

-

50.2

55.3

65.8

0.0

0.0

0.0

-

51.1

59.3

60.9

0.0

20.0

20.0

-

69.7

72.7

59.9

7.1

-

-

-

54.6

84.1

92.4

20.0

22.2

22.2

-

68.9

70.3

71.1

Sansei
MedicalMaterials
Co., Ltd.,
Nikko
MedicalMaterials
Co., Ltd.,HOSNETJAPANINC.,
Life Care
Co., Ltd.

* OLBA HEALTHCARE HOLDINGS, Inc. is not a company required to disclose the percentage of female employees inmanagement positions, the percentage of male employees taking childcare leave, and the difference in wages between maleand female employees in the current fiscal year under the Act on the Promotion of Women's Active Engagement inProfessional Life or the Act on Childcare Leave, Caregiver Leave, and Other Measures for the Welfare of Workers Caring forChildren or Other Family Members. Therefore, we are not providing such information.
Notes 1. Calculated based on the provisions of the “Act on the Promotion of Women’s Active Engagement in Professional Life”(Act No. 64, 2015).
2. Percentage calculation of childcare leave, etc. made under Article 71-4-1 of the “Ordinance for Enforcement of the
Act on Childcare Leave, Caregiver Leave, and Other Measures for the Welfare of Workers Caring for Children or
Other Family Members” (Ministry of Labor Ordinance No. 25, 1991), based on the provisions of the “Act on Childcare
Leave, Caregiver Leave, and Other Measures for the Welfare of Workers Caring for Children or Other Family
Members” (Act No. 76, 1991).
3. The difference in wages between male and female employees represents the average wage level for women whenthe male wage level is set at 100%.
4. If there were no births during the fiscal year, the percentage of male employees taking childcare leave is shown as “-.”7◆ Action plans based on the Act on Promotion of Women's Participation andAdvancement in the Workplace (linked documents below are only available inJapanese)
Kawanishi Co., Ltd.
(https://www.kawanishi-md.co.jp/kw/assets/files/top/active_participation.pdf)
Sansei Medical Materials Co., Ltd.
(https://ryouritsu.mhlw.go.jp/hiroba/planfile/202110221515553550585_1.pdf）
HOSNET-JAPAN INC.
(https://www.hosnet-21.co.jp/pdf/katsuyaku_2022.pdf?20220704)
In addition, each group company has set a goal of achieving the legally mandated
employment rate of persons with disabilities and is working to create a workplaceenvironment in which all employees can work comfortably.
◆Employment of persons with disabilities (as of July of each year; Group total)
Each Group company aims to comply with the legally mandated employment rate of persons with disabilities and is
working to create a workplace environment where all employees can work comfortably.

2022
Number of employed persons
with disabilities
Employment rate of persons withdisabilities

2023
33.0

33.5

2.20%

2.16%

■ Keeping track of working hours and improving operations

The Compliance Committee keeps track of employee working hours, while the officers incharge of each group company keep track of working hours at group companies to prevent
overwork and comply with relevant laws and regulations. We also strive to continuously
improve our operations through such measures as simplifying internal documents andassigning a person in charge of promoting operational reforms at some group companies.

8

■ Promoting flexible work styles

To realize the goal of “emphasizing diversity and recognizing diverse opinions, values, andwork styles” as stated in our Employee Charter, we are creating an organization in whichpeople with diverse values, talents, and lifestyles can each realize their full potential.
Specific initiatives are as follows.
⚫

Flexible working hours⚫

Shift work, staggered work hours⚫

Telecommuting⚫

Encouraging side jobs

■ Streamlining operations with OLBA-DX

In 2021, we established the DX Promotion Office as an organization dedicated to achieving
the Group's digital transformation (DX). The DX Promotion Office encourages efficiency
improvements in sales processes and back-office operations through the use of new digitaltechnologies such as cloud services. The resources generated by these efficiency
improvements are then reinvested in new value creation. In terms of human resources, inparticular, we aim to create a work environment that allows employees to focus on highvalue-added operations.

9

■ Promoting health & productivity management

The Group has been certified under the Certified Health & Productivity Management
Outstanding Organization (Large Enterprise Category) for four consecutive years since2020. This certification system is led by the Ministry of Economy, Trade and Industry(METI) to promote health and productivity management, and is a system to award
corporations that practice particularly excellent health and productivity management.
The Group is undertaking various initiatives to promote health and productivity
management.
▽Initiatives to help employees quit smoking
Starting in 2019, we established a "no smoking during working hours" rule to encourage
employees to quit smoking. By prohibiting smoking during working hours, including
overtime hours, and making all company premises non-smoking, we aim to maintain andimprove employee health and realize efficient work styles.
We also established a smoking cessation support system to prevent passive smoking
damage to family members and others around smokers. We support employees to quit
smoking by subsidizing a portion of the cost when they visit a smoking cessation clinic anduse a smoking cessation patch/gum or app, or when they purchase a smoking cessation
patch/gum over the counter at a drugstore.
◆Ratio of smokers among Group employees (as of July 1 of each year)
2020

2021

2022

2023

25.8%

23.0%

22.3%

22.8%

▽Support system for club activities
We have a subsidy system in place for club and circle activities for purposes such as
stimulating communication within the company through exercise, encouraging employees
to refresh their minds and bodies, and having them leave work on time on a regular basis.
Currently, we have futsal, soccer, and baseball teams that hold regular activities.
▽Other initiatives
In addition to the above, we implement various other initiatives such as subsidizing thecost of influenza vaccinations, installing vending machines with "Food for Specified HealthUses (FOSHU; known as Tokuho)" inside the company, and conducting health-related
seminars and training programs.

10

● For Local Communities■ Contributing to local communities

The Group is actively involved in social contribution activities that are rooted in local
communities. We will continue to work together with local residents in pursuit of sustainable
management with an eye to the future that will lead to the development and revitalizationof local communities.
▽Club sponsor of Fagiano Okayama
Fagiano Okayama, established in 2006, is the first professional soccer club based in
Okayama Prefecture. In 2009, the club joined the J2 Japan Professional Football League.
The club carries out activities with the goals of "bringing together the best players andchildren," "contributing to the development of a society in which families, communities, andschools work together," and "becoming the pride of Okayama” based on the clubphilosophy, “Dreams for Children!” The Group has been a sponsor of the club since 2012.
▽Team sponsor of Okayama Rivets
Okayama Rivets is a men's table tennis team established in April 2018, which has been
participating in the table tennis league of Japan, T.League, since October of the same year.
The Group shares the team's vision of "contributing to the health of Okayama through table
tennis" and has been a sponsor of the team since 2018.
▽Partner company of Okayama Tech Planter
Okayama Tech Planter is a program to create new businesses based on technology
originating in Okayama and to foster and support startups. The program aims to solve
problems in the world based on research results generated by universities and research
institutions. The Group became a partner company in this program in the hope of promoting
the local economy by supporting the creation of local startups.
▽Official partner of Ohara Museum of Art
Founded in 1930 by Magosaburo Ohara, an entrepreneur from the city of Kurashiki,
Okayama Prefecture, the Ohara Museum of Art was Japan's first private art museum
focusing on Western art. Today, the museum is engaged in a wide range of activities, suchas educational outreach to foster children's creativity, support for artists' production, andrestoration to protect valuable cultural assets, as a dynamic museum for the 21st century.
The Group serves as an official partner of the museum to support these activities.
▽Teraoka Memorial Scholarship Foundation
The Teraoka Memorial Scholarship Foundation aims to contribute to the development of
medical science and the spread of cutting-edge technology by supporting the activities of
medical researchers and medical technicians in Okayama Prefecture through research
grants and overseas study grants. The Company supports the Foundation’s activities.

11● Corporate Governance■Basic policy on corporate governance
As a company that enjoys continuous and broad-based support, we have made ongoing
efforts to proactively accept external audits and recommendations while ensuring thetransparency, efficiency, and soundness of management, and have put in place thenecessary mechanisms to do so.
In order to continue to meet the expectations of shareholders, we, as a holding company
at the center of group companies, will provide infrastructure such as human resources,
education, funds, technology, and information systems to each group company, and strive
to do the following:(1) Comply with laws and regulations;(2) Gain social support ;(3) Improve management efficiency and profitability; and(4) Demonstrate our collective strength as a Group.
■Overview of corporate governance structure
The Board of Directors consists of seven directors, three of whom are outside directors.
Outside directors who are not from affiliated companies or major business partners andwho have insight into the Group’s business environment are appointed. In addition toattending Board of Directors meetings from an independent standpoint, outside directors
provide advice, recommendations, and opinions to ensure the adequacy andappropriateness of the Board's decision-making, such as by providing opinions mainly fromthe perspective of management supervision, corporate governance, and compliance. We
have designated all three outside directors as independent directors.
The term of office of directors is set at one year in order to clarify their management
responsibilities and to build a management structure that can quickly respond to changes
in the business environment.
The Board of Auditors consists of three auditors, all of whom are outside auditors. We havedesignated two of the outside auditors as independent directors.

12

■Corporate governance structure
General Meeting of Shareholders
Dismiss/Appoint

Dismiss/Appoint

Dismiss/Appoint

Board of Auditors
Delegate authority/
Consult

ReportDelegate
authority/Supervise

Outside Directors
Meeting

ReportNomination andCompensation Committee

Appoint/Supervise

Cooperate

Accounting Auditors

Governance

Audit

Board of Directors

Cooperate

Audit

Supervise
ReportSupervise

Corporate Planning Council• Compliance Committee• Risk Management Committee• Internal Control Committee

Executebusiness

Supervise/Audit

Sales
Department
Supervise

Corporate
Planning
Department
Supervise

President

Academic
Department
SuperviseInternal Audit
Office

Audit

Legal Advisors

Internal Control System

Supervise

Cooperate

Supervise

Supervise

Administrative
Department
Supervise

Affiliated Companies■Compliance policy
We have established Compliance Regulations to maintain and improve the awareness oflegal compliance among all group officers and employees, as well as to implement
corporate governance in pursuit of social responsibility. In accordance with the Regulations,
we hold regular meetings of the Compliance Committee and conduct the necessary
activities to ensure compliance.
■Risk management policy
In accordance with the Risk Management Regulations, the Risk Management Committee
meets regularly to develop the Group’s risk management system and conduct educational
activities regarding the prevention of potential risks. The Risk Management Committee
includes executive directors, managers of major business units, the head of the Internal
Audit Office, and full-time corporate auditors.
The Risk Management Committee evaluates the priority of risk countermeasures andexamines specific risk countermeasures based on the assessed value of each risk, whichis calculated by classifying possible risks according to their causes, taking into account theprobability of occurrence and maximum damage, and the status of countermeasuresagainst each risk at the time of assessment. In addition, the status of risk assessment andcountermeasures are reported to the Board of Directors on a semiannual basis.
Furthermore, the Risk Management Committee constantly shares information with theCompliance Committee with regard to the emergence of important issues, including issues
related to achieving sustainability for the entire Group, and the status of responses to such
issues.
■Basic policy on internal control system
In accordance with the enforcement of the Companies Act, our Board of Directors adopted
a basic policy regarding internal control systems on May 11, 2006 (partially amended on
April 30, 2015).

13

■Compliance with important relevant laws and regulations
The Group continues to operate its business under the licenses obtained in accordancewith the relevant laws and regulations, including the Act on Securing Quality, Efficacy and
Safety of Products Including Pharmaceuticals and Medical Devices ("Pharmaceuticals andMedical Devices Act") and the Long-Term Care Insurance Act. In obtaining licenses andpermits to engage in medical and nursing care, we recognize that compliance with
important relevant laws and regulations is a critical issue, and we have established an
Employee Charter that requires all executives and employees to promote businessactivities with high ethical standards. We conduct periodic compliance training for all
officers and employees of the Group to foster high ethical standards and to ensure that all
officers and employees are familiar with important relevant laws and regulations.
■Guidelines related to transparency with medical institutions, etc.
The Japan Federation of Medical Devices Associations has established the Code of Ethics,
the Charter of Business Behavior, and the Promotion Code of the Medical Devices Industry,
while the Japan Fair Trade Council of the Medical Devices Industry has established the
Fair Competition Code of the Medical Devices Industry in Japan. In accordance with thespirit of these industry organizations, the Group ensures the transparency and reliability ofits business relationships with medical institutions and other organizations. And, in
accordance with their guidelines, the Group discloses all information regarding its fundingof such organizations to ensure that the public understands that the Group’s businessactivities are conducted in a highly ethical manner and contribute to the development of
medical science and medical care.
■Policy on entertainment with national public officials, etc.
The Group has established Regulations Concerning Entertainment with National Public
Officials (including Deemed Public Officials and Local Public Officials) to prevent bribery
and corruption by its officers and employees.
■Policy on entertainment with foreign public officials, etc.
The Group has established “Rules Concerning Entertainment with Foreign Public
Officials, etc.,” to prevent bribery and corruption toward foreign public officials by theGroup’s officers and employees.

14■Establishment of a whistleblower system
In accordance with the Whistleblower Protection Act, the Group has established acompliance consultation service as follows. In operating the consultation service, we
prohibit any disadvantageous treatment of whistleblowers on the basis of their reporting.
▽Internal consultation (group companies)
Consultation services are available at each group company.
▽Internal consultation (common to all group companies)
Employees can consult with the Group's common consultation service if they have any
concerns that they are not comfortable discussing with the company to which they
belong.
▽External consultation
Employees can also consult with an outside law firm to resolve issues without having a
conflict of interest with the company.
▽External consultation (exclusively for sexual harassment and power harassment)
A dedicated outside consultation service is available for sexual harassment and power
harassment, which can involve particularly sensitive issues among compliance issues.

15

■Risk information
The following are examples of the risks related to the Group's business and accounting
conditions that may have a significant impact on investors' decisions.
Forward-looking statements in the text are based on the Group’s assessment as of thedate the Annual Securities Report was submitted (September 29, 2023).
For details, please refer to Business and Other Risks in the Annual Securities Reportposted in the IR Library on our website (only available in Japanese).
(1) Reimbursement price system(2) Laws and regulations for business continuation(1) Notification and permission regarding the sale of medical devices(2) Permission for the manufacture and sale of medical devices(3) Legal regulations on the sale of pharmaceutical products(4) Poisonous and Deleterious Substances Control Act(5) Legal regulations on specific and general construction business(6) Long-Term Care Insurance Act pertaining to welfare equipment sales(7) Long-Term Care Insurance Act pertaining to welfare equipment rental(3) Laws and regulations related to products(1) Legal regulations concerning expiration dates of medical devices andpharmaceutical products(2) Legal regulations on the sale of biologically derived products(3) Recall of products, suspension of sales, etc.
(4) Fair Competition Code regarding restrictions on the provision of premiums in the
medical device industry(5) Management of personal information(6) Information security(7) Corporate restructuring, acquisitions, mergers, etc.
(8) Impairment of non-current assets(9) Natural disasters and the spread of infectious diseases

16