Niterra Co., Ltd. Sustainability Data Book 2023

Sustainability Data Book 2023

Top Message …………………………………………………………… 02
Sustainability Management …………………………………… 02
Priority Issues (Materiality) …………………………………… 05

Sustainability Data ………………………………………………… 74

Society

Initiatives ……………………………………………………………… 86

Development of Technologies, Products, and Busi+
nesses for Contributing to the Resolution of Social
Issues ……………………………………………………………………… 29
Respect for Human Rights ……………………………………… 30

Environment

External Evaluations ……………………………………………… 87
GRI Standards Comparison Table …………………………… 94
SASB Standards Comparison Table ……………………… 100

Global Human Resource Management ………………… 34
Occupational Health and Safety ……………………………… 44

Eco Vision………………………………………………………………… 07

Quality …………………………………………………………………… 50

Environmental Management …………………………………… 09

Proper Procurement ……………………………………………… 52

Editorial policy

Environmental Burdens from Business Activities …… 11

Social Contribution ………………………………………………… 56

The Sustainability Data Book is a summary of the

Response to Climate Change …………………………………… 12

Communication to Stakeholders …………………………… 59

Sustainability pages of our website, published in
PDF format for even easier reading and searching.

Information Disclosure Based on TCFD
Recommendations ………………………………………………… 17
Management of Waste …………………………………………… 21
Conservation of Water Resources …………………………… 22

Period Covered

GovernanceFiscal 2022 (April 1,2022 to March 31, 2023)* The report also includes information pertaining to otherfiscal years.

Environmentally-friendly Products ………………………… 23

Corporate Governance …………………………………………… 61

Management of Chemical Substances …………………… 26

Risk Management …………………………………………………… 66

Recording Date

Conservation of Biodiversity …………………………………… 27

Information Security ……………………………………………… 68

As of October 20, 2023

Compliance ……………………………………………………………… 70
Appropriate Tax Payment ……………………………………… 73

Scope of Report
Niterra Group companies* The report also includes a non-consolidated informationof Niterra Co., Ltd.

1

IndexEnvironment

Society

GovernanceTop Message

Sustainability Management
CSR and Sustainability Charter

Our corporate philosophy, and the CSR and Sustainability Charter includes terms such as "offering new value" and "contributing" tothe people over the world, expressing our desire to contribute to solving social issues through our businesses, which leads tosustainability. With this in mind, we recognize that our mission and raison d'etre is to create products and services that contributeto finding solutions to various social issues.

We contribute to develop a sustainable society, thereby improving our corporate value.
・We build relations of trust with our stakeholders while making highly transparent decisions and actions.
・We cocreate and provide new value to solving social issues.

To realize a sustainable society, we will build a promotion system based on our contribution to solving social issues through ourbusinesses and express our endorsement on the international regulations, purposes, and guidelines such as the United Nations
Global Compact, ISO26000, SDGs, TCFD. We will also proceed with the initiatives to identify Priority Issues (Materiality) regarding
ESG (Environmental, Social, and Governance) to disseminate the information for our stakeholders in an easy-to-understand way.

Our corporate philosophy includes slogans like "proposing new value" and "contributing" to people around the world and shows ourdesire to contribute to society. This leads to sustainability, through our contributions to solving social issues through our business.
We established the CSR and Sustainability Charter and the CSR Basic Policies (12 policies in total) in order to present this idea in aready-to-understand manner and for broad communication both internally and externally, and we promote CSR / Sustainability.
The CSR Basic Policy has been approved by the Board of Directors and covers all processes of the Niterra Group's businesses,
including research and development of product and service, design, production operation, materials procurement, logistics, selectionof suppliers, joint ventures and acquisitions.

In these times of great change and uncertainty, the Niterra Group aims to increase our corporate value by contributing to therealization of a sustainable society while gaining the trust of all stakeholders by enhancing the transparency of management. We
thank you in advance for your continued patronage and support for the Niterra Group.

Shinichi Odo
Representative Director Chairman of the Board

Data

Takeshi Kawai
President & Chief Operating Officer

Corporate Philosophy
2

The Nittoku Way

Corporate Code of Conduct

CSR Basic PolicyLong-Term Management Plan

IndexEnvironment

Society

Governance

Data

CSR and Sustainability Promotion System

United Nations Global Compact Participation

To ensure sustainable growth for our group and society, we have established the CSR and Sustainability Committee to identify priority
issues in each ESG (Environment, Society, and Governance) area and promote actions to resolve these issues.
The CSR and Sustainability Committee is positioned as an advisory committee to the Board of Directors and has two functions: toreport and make recommendations in response to the Board of Directors’ advising, and to supervise each special committee. In
reports and recommendations, external experts will be invited as guest committee members to enhance the knowledge andperspective, and discussions will be held to promote sustainability management with a long-term perspective. For each special
committee, whether or not each special committee, which is positioned on the business execution side, is functioning effectively will beclosely watched and supervised as needed.
The important information from each special committee about the progress of reduction of CO₂ emissions and risk assessments is
also shared with the CSR and Sustainability Committee. Important decisions made by special committees are reported to the board of
directors through the Management Meeting which deliberates, decides, and supervises important matters in business execution.

Niterra Group participated in United Nations Global Compact in November 2016.
“United Nations global compact” is a voluntary corporate citizenship in order to address
various problems such as global warming, environmental problems, gap-widening
society that are progressing on a global scale. They are also initiatives that were
proposed by Kofi Annan, the Secretary-General of the United Nations in 1999, andestablished formally by the U.N. in July 2000.
Niterra Group will uphold ten principles consisted of four issues such as “Human rights,
Labour, Environment, Anti-corruption” being advocated by the U.N. global compact as
good members of society, and will make every effort to promote activities in order tocontribute to building a sustainable society.

Corporate Governance System

The Ten Principles of the UN Global Compact【Human Rights】

Principle 1: Businesses should support and respect the protection of internationally proclaimed human rights.
Principle 2: make sure that they are not complicit in human rights abuses.

Lecture by a guest committee member
CSR and Sustainability Committee【Labour】

Principle 3: Businesses should uphold the freedom of association and the effective recognition of the right to collective
bargaining.
Principle 4: the elimination of all forms of forced and compulsory labour.
Principle 5: the effective abolition of child labour.
Principle 6: the elimination of discrimination in respect of employment and occupation.

CSR and Sustainability Awareness-raising Activities
We distribute SDGs badges to our executives to show our commitment towards the realization of a sustainable society, and we work
to raise awareness of SDGs among our employees and the public.
Additionally, we conduct training by job classification, to ensure that each employee is aware of the connection between their workand society daily so that they are able to take actions that contribute to solving social issues through their work. We also continue tosend out information through e-mail newsletters and other means.

【Environment】

Principle 7: Businesses should support a precautionary approach to environmental challenges.
Principle 8: undertake initiatives to promote greater environmental responsibility.
Principle 9: encourage the development and diffusion of environmentally friendly technologies.

【Anti-Corruption】

Principle 10: Businesses should work against corruption in all its forms, including extortion and bribery.

CSR Training

A Sample of E-mail Magazine
3

IndexEnvironment

Society

Governance

Our Commitments to SDGs

Data

CSR and Sustainability Progress

As a signatory to the United Nations Global Compact, we are committed to doing what we can to contribute towards the achievementof the SDGs (Sustainable Development Goals), the goals set by the United Nations.
*What are SDGs?
SDGs consist of the 17 goals and 169 targets that were adopted at the UN Summit in 2015 which aim to solve worldwide problems
such as poverty, inequality, and climate change by 2030—pledging that “No one will be left behind.”Nov. 1996 Adopted "Corporate Philosophy"
Feb. 1998 Adopted "Corporate Code of Conduct"
Oct. 2010 Established CSR Committee
Apr. 2011 Adopted “CSR Policy“
May. 2013 Published "CSR Procurement Guidelines"
Nov. 2016 Participated in "United Nations global compact"
Aug. 2017 Published “Integrated Report”
Jul. 2019 Published "Sustainability Data Book"
Apr. 2020 Adopted “CSR and Sustainability Charter“4IndexEnvironment

Society

Governance

Priority Issues (Materiality)

Data

Priority Issues
We have identified eight priority issues.
The CSR and Sustainability Committee receives reports from the Sustainability Division on the progress of these issues andmonitors them.
In addition, taking global standards, social trends and the opinions of outside experts into consideration, the issues are reviewed
annually, and any revisions are approved by the Board of Directors.

Basic Philosophy
We improve corporate value through contributions working towards the realization of a sustainable society.
To achieve this, after accurately grasping social issues, we believe it is important to define priority issues (materiality) in each areaof ESG (Environmental, Social, and Governance), and set medium- to long-term goals to work towards them.

Item

The Process of Defining Priority Issues

Environment

Society5

Major Initiatives

Goals and Outputs(FY2029)

Progress in FY2022

Responding to
Climate Change

Reduction of
CO2 emissions

CO2 Emissions: 30%
Reduction [comparedto that of 2018]

27.6％ reduction(210,700 tons)

Providing
Environmentally
Friendly Products

Disseminationand expansion ofenvironmentallyfriendly products

Sales ratio of
precious metal plugs:
not less than 50%

43%

Sales ratio of wide
range oxygen sensor:
not less than 50%

39%

Development offuel cells

CO2 dissemination ofhigh-efficiency
distributed power
supplies with a viewto use free hydrogen

Established a mass
production system of
SOFC cell stacks

Development ofapplications forlead-freepiezoelectricmaterials

Alternative promotion
from leadpiezoelectric materials

Promoted
technologicaldevelopment aimed at
expanding theapplications of leadfree piezoelectricmaterials, andcontinued to
introduce andpropose them

Development ofsensing IoT
business

Improve businessefficiency throughautomation,
optimization, andgeneralization

Development of awater quality control
system for land-based
shrimp farming
underway

CarbonNeutrality as aservice

Establish andintroduction ofsynthetic fuel(methane) production
systemCompleted containertype methanation
demonstration
machine for CCU
solution and preparedfor operation

Development ofTechnology,
Products, andBusinesses forContributing to the
Resolution of Social
IssuesContribution to SDGs

Environment

Index

Item
Society

Governance

Major Initiatives

Goals and Outputs(FY2029)

Progress in FY2022

Promotion of
employment of
women, foreign
nationals, andcareers

Ratio of women,
foreign nationals, andcareer recruits inmanagerial positions:
25%

19.9%

Examination of a
New Personnel
System

Improved results of
employee satisfaction
surveys

Satisfaction: 3.33
(response rate:
92.6%)

Increasing theratio of female
and foreign
nationals to
directors

Ratio of female
directors and foreign
nationals: not lessthan 30%45％（5 out of 11）

Increasing theratio of external
directors

Ratio of external
directors: not lessthan 1/3

64％（7 out of 11）

Risk Management

Management ofserious incidents
signs andprevention of
their occurrence

Establishment of risk
management systemthat contributes tomanagement
decision-making

Promoted measuresfor priority risks

Compliance

Survey of
employees'
awareness andcontinuous
education

Implementation ofcompliancequestionnaires anddisclosure of results

Implemented of
improvement
measures based oncompliancequestionnaire results

Information Security

Maintaining andstrengthening
incident
responseorganizations
and building
preventive
systems

Establishment of
information security
management system

・Obtained TISAX
certification for groupcompanies in Thailand
・Conducted IT
security audits

Global Human
Resource
Management

Corporate
GovernanceContribution to SDGs

Society

Governance

6

Data

IndexEnvironment

Society

Data

Governance

Eco Vision

4 important issues
Eco Vision 2030 issues

Environmental Policy

The milestone to beachieved in 2030

Responding to Climate Change CO2 emissions 30% reduction
compared to fiscal 2018.

As a globally developing core manufacturing corporation, we aim to promote environmental conservation activities linked
with corporate management maintaining a good balance with corporate growth, based on the participation of all of ouremployees, in order to contribute to the construction of a sustainable society.

Action guidelines
・Through all of our business activities, we make particular efforts to reduce CO2 emissions toward the realization of adecarbonized society, conserve water resources, manage waste, and develop, offer and expand environmentally friendly
products.
・We strive to conserve the ecosystem through the control of chemical substances that place a burden on the environment.
・We strive to raise environmental awareness among our employees to ensure that they all positively participate inactivities.
・We observe the laws, ordinances and agreements concerning environmental conservation.
・We aim to substantiate information disclosure to stakeholders and communication activities, and also conduct activities
for coexistence with the regional community.
・In order to achieve these targets, we will strive to make ongoing improvements to our environmental management
system.

Expanding Environmentally
Friendly Products

Eco Vision 2030
Global environmental conservation is fundamental to a sustainable society, and is a key business challenge to be addressed head-on
for all stakeholders.
On the premise of aiming for carbon neutrality in 2050, we have established "Eco Vision 2030," which shows the vision (or goal) of
what we want to be by 2030 and the vision of what we will pursue until 2040.
For Eco Vision 2030, the impacts that our businesses and products would have on society and our company were analyzed, and 13
issues that would have a large impact were selected. Among them, the four issues that were considered to have a greater impact "Responding to Climate Change", "Expanding Environmentally Friendly Products", "Conserving Water Resources", and "Waste
Management" -were positioned as the four important issues, and numerical goals were set for them. Through the practice of Eco
Vision 2030, our group will work together to contribute to the realization of global carbon neutrality and zero emissions.

Conserving Water Resources

Waste Management

7

Our vision for 2040

Explanation

Implementing activities toward ・Reducing CO2 emissions to mitigate climate change is a key
realization of a decarbonizedglobal issue. Many countries and companies around the globe
society.
are seeking to build carbon-neutral societies and are※Achieving carbon neutralitycommitted to reduce CO2 emissions throughout the supply
by 2050
chain.
・Reducing CO2 emissions is a critical issue for our group as amanufacturing company, and it is our responsibility toaccomplish the goal.
・Setting forth the CO2 emissions reduction targets by 2030
toward the goal of attaining carbon neutrality by 2050, we
will first work on Scopes 1 and 2, which we can directly
control. We set targets to be consistent with the objective of"holding the temperature increase to well below 2°C above
pre-industrial levels" in the Paris Agreement. We will makecompany-wide efforts to take proactive actions looking
ahead to achieving carbon neutrality by 2050. The CO2
Management Committee led by the Executive Officer, whichpeople involved from all businesses join, will manage theprogress. Also, we will promote reduction in Scope 3,
including the supply chain.
Expand Nittoku Green
All products contribute to the ・Interest in a sustainable society is growing worldwide. Our
Products
improvement of the global
group is responsible for contributing ourselves to making
environment and contribute tosustainable society come true through our business andmaking sustainable society
products.
come true
・In approaching environmental issues, it is very important to beaware of the environmental impacts of the entire product life
cycle, from raw material extraction to final disposal where theproducts complete their missions.
・In fiscal 2021, our group established a certification system forenvironmentally friendly products to assess theenvironmental impact in the supply chain, including in-houseproduction processes. We annually announce the productsthat satisfy the certification standards as Nittoku Green
Products. Through these activities, we accelerate the creationof products that contribute to solve the environmental issues.
Water consumption intensity: Implementing sustainable
・Our Group has manufacturing bases around the world, and the
Keep below FY2018 levelbusiness operations inwater demand has been increasing in each base. Global water
response to global water risks
demand trends are an important environmental issue thatshould be monitored closely.
・Water resources are unevenly distributed in the world, andsome of the Group's manufacturing bases may face thedrought risk in the future due to ongoing climate change.
Therefore, we periodically conduct water risk assessments,
to determine the current status and estimate the amount of
resources required.
In addition, our group is committed to protecting theenvironment into the future by promoting the efficient use ofwater as it is the essential resource.
Achieve over 95% effective
Contribute to a global recycle- ・Our group uses a variety of raw materials, including ceramics
utilization rateoriented society by promoting
and rare metals. Effective use of resources (reduce waste,
zero emission
reuse and recycle resources) is essential to protect the global
environment.
Reduce at least 1% of waste
・It is important to reduce the amount of resources input byintensity compared to FY2018
improving the manufacturing process, and to reduce thelandfill of wastes by promoting recycling, for stable resource
management into the future.
Promote 3R (reduce, reuse,・At all sites, we will keep promoting group-wide 3R activities forrecycle) activities
further enhancing effective use of resources and reductionof wastes.

IndexEnvironment

Society

Governance

Other issues

Management of Chemical
Substances

Eco Vision 2030 issues

The milestone to beachieved in 2030

<Enhancement of EMS>
Integration with Management

Address global environmental
issues as a business strategy<Enhancement of EMS>
Globalization of EMS<Enhancement of
EMS>Analysis of ClimateRelated Risks andOpportunities

Our vision for 2040

Appropriately manage
Contribute to the conservation ・Social concern about environmentally hazardous substances ischemical substances to reduce of biodiversity through theincreasing as their effects on the human body and on theenvironmental impact.
continuous management ofenvironment become more obvious. While various regulations
appropriate chemical
on chemical substances have been getting stricter over thesubstances.
world, our Group has been reducing the usage of chemical
substances over time.
・Appropriate management of chemical substances is one of thesocial responsibilities of manufacturing companies that use
chemical substances as raw materials, and is essential for thecontinuation of our business.
・Our Group works to thoroughly manage chemical substances inaccordance with relevant laws and regulations, and torespond to customer requirements. We are committed toreducing the use and emission of environmentally hazardous
substances and promoting substitute materials through R&D
and process improvement in order to minimize the impacts
on humans and the environment.
Promoting Green Procurement Achieve 100% introduction of Implementing environmentally ・Our Group is striving to reduce the environmental impacts ofgreen procurement systemfriendly procurement activity to our products throughout their lifecycle, and is promoting themaking sustainable society
products with lower environmental impacts.
come true.
・We have been promoting a green procurement system with our
suppliers by distributing the Green Procurement Guidelines,that describe our approaches to reducing environmental
impact including the management of chemical substances.
As our supply chain over the world is assumed to be getting
more diversified, cooperation with our suppliers will be evenmore essential, in order to reduce CO2 emissions throughout
the supply chain and meet the stricter regulations on
chemical substances.
・We contribute to making sustainable society come true by
establishing a global procurement system and further
promoting a green procurement system.
Expanding Green Logistics
Reduce CO2 emissions by
Our green logistics system
・Increased CO2 emissions through transportation process is one
promoting green logistics and develop globally.
of our concerns related to the business expansion in the
optimizing logistics efficiency.
future. Reducing CO2 emissions in logistics is an issue in
reducing the environmental impact of the entire supply chain.
・Our group has been improving the green logistics network inJapan, but establishing global green logistics system including
overseas sites would be an upcoming challenge.
We aim to develop our green logistics system globally and toachieve our target of reducing CO2 emissions in logistics by
expanding our case studies (efficient transportation route
construction, etc.) to overseas logistics networks.
Enhancing Our Disclosure of Responding to stakeholder
Responding to stakeholder
・Now our Group gives big influences on society as our business
Environmental Information
requests and practicing
requests and practicing
expands. Stakeholders are showing growing interests in ourcommunication that leads to communication that leads toGroup and business. Opportunities to communicate with
dialogue with stakeholders.
dialogue with stakeholders.
institutional investors are increasing. It is important for us tohave stakeholders appropriately understand our business andsupport us for long term in the future.
We will make information disclosure better both in quality andin quantity. We also enhance our transparency andaccountability in response to great concerns to stakeholders,and promote communication opportunities with them.

Explanation

Continued efforts to address ・Protecting the global environment is the basis for maintaining a
global environmental issues assustainable society. Environmental issues are botha business strategy
management risks and business opportunities for us, and it isimportant to integrate environmental activities withmanagement as a business strategy.
Executive management takes
・We have established the Eco Vision 2030, which is aligned withresponsibility for promoting
our Long-term Management Plan, to address environmental
Eco Vision 2030 and achieving
issues as part of our business strategy.
environmental KPIs.
We also enhance management's engagement in EMSs byintroducing incentives for executives based on achievementof CO2 reduction targets. All executives and employees work
together to promote the "Eco Vision 2030" activities.
Enhance systems for overseas The entire group is able to・Our Group has been expanding our business globally and has
affiliates to share
share environmental
had more influence on society than ever. Therefore, ourenvironmental information and information, and a monitoring
responsibilities as expected by society is also increasing.
monitor and supervise theirand supervision system has
Stakeholders expect us to address ESG issues on a global
activities.
been established for all Groupbasis.
companies.
・Eco Vision 2030 is an ambitious initiative that cannot be
achieved without efforts of all our employees. The goals in
Eco Vision 2030 are not quite easy to achieve. But we areconfident of the achievement with all the efforts
concentrated of each employee on our worldwide common
EMS.
Analyze climate change risks Sustainable business growth ・For sustainable business expansion in a carbon-neutral society,and opportunities andby analyzing the impact of
it is essential to analyze the impact of climate change on ourincorporate them into ourclimate change on ourbusiness, determine our responses, and incorporate thembusiness strategies.
business and incorporate theminto our business strategies.
into our business strategies. ・We have endorsed the TCFD’s recommendations, and disclosethe climate-related risks and opportunities and their impacts
in accordance with the framework.

<Enhancement of EMS>
Through environmental
compliance(Compliance withenvironmental laws anderadication of environmental
accidents)

Achieve zero violations ofenvironmental laws andregulations and zeroenvironmental accidents.

We have become a socially・Ensuring thorough environmental compliance is a prerequisite
trusted company by continuing
for business continuity, it would not only preventto achieve zero violations ofenvironmental accidents and maintain a safe and secureenvironmental laws andwork environment, but also ensure the trust of stakeholders,regulations and zeroincluding local residents and society.
environmental accidents.
・We have established internal regulations based on theEnvironmental Management System (ISO 14001) and areworking on continuous improvement via the PDCA cycle. We
carry out our business while ensuring that all employees
understand and follow environmental laws and regulations.

<Enhancement of EMS>
Greater Environmental
Awareness

All employees takeenvironmental education
programs and actively engage
in environmental conservation
activities.

All employees have a high level ・We focus on businesses in the environment and energy fields asof environmental awarenessstated in our Long-term Management Plan. For our businessand contribute to making
success, it is essential to improve the environmental
sustainable society come true.
consciousness of the entire Group, and to develop specialists
who deeply understand the environmental risks that ourbusiness faces, such as responses to climate change, andconnect them to business opportunities.
・We aim to ensure all employees deeply understand the purpose
and importance of the Eco Vision 2030, by providing thelearning programs on Intranet. We are committed to fostering
corporate culture in which each and every one of us naturally
acts in an environmentally friendly manner in our daily work.

Data

8

IndexEnvironment

Society

Data

Governance

Environmental Management

ISO14001 Certified Locations
Certification covering multiple units (Scope of applicability)

Promotion System

CountryJapan

Our group has a matrix-type structure including the internal company and respective regions, promoting environmental activities while
having individual roles clarified. Each internal company is expected to manage its own targets on items relevant to business activities.
Meanwhile, we take the initiatives to such activities as compliance of regulations, raising environmental awareness, and communication
with local society mainly on the regional basis in accordance with action plans. Various working groups are set up as the crossfunctional team across the internal company for promoting activities.
The activities will be confirmed with respect to the progress toward the target, and task in the Central Environmental Committee atwhich President, directors, company presidents, regional environmental administrators, and heads of the working group are present
for continuous improvement.

Name of factories and companies
Niterra Co., Ltd.

Certification obtained individually
Country

Headquarters
and Nagoya
Plant

Japan

NTK CERATEC CO., LTD.

Sendai Plant,
Sendai West
Plant

Komaki Plant

U.S.A.

Niterra North America, Inc.

WV Plant

Satsuma Plant

SparkTec WKS CO., LTD.

Wells Vehicle Electronics,L.P

Ise Plant

MexicoNiterra Mexico, S. A. de C. V.

Inuyama
Logistics Center

BrazilNiterra do Brasil Ltda

FranceNiterra France SAS

U.K.

Niterra UK Ltd.

Nagoya Plant

Germany

Niterra EMEA GmbH

Satsuma Plant

ThailandSiam Niterra Co., Ltd.

Head Office
Plant

SatsumaElectrode Plant
Nino
Headquarters
Plant
Tono Plant
Okusa Plant

Niterra (Thailand) Co., Ltd.
Niterra ASIA Co., Ltd.
South
Korea

NTK Technical Ceramics Korea Co., Ltd.

Malaysia

Niterra Malaysia Berhad

China

Niterra(Shanghai)Co., Ltd.

NICHIWA KIKI CO., LTD.

Niterra(Changshu)Co., Ltd.

KAMIOKA CERAMIC CO., LTD.
NTK CERAMIC CO., LTD.

Environmental Activity Promotion Organization

We received ISO 14001 integrated certification for Niterra and 13 group companies (As of the end of FY2022) in Japan. Other
domestic and overseas group companies have already been certified for environmental management systems including ISO14001
certification, individually, resulting in 17 overseas group companies which have received the certification in the end of the fiscal 2022.
The employee acquisition rate is 96%.

Komaki Plant
Iijima Plant

The Establishment Status of our Environmental
Management System

Kani Plant
CERAMIC SENSOR CO., LTD.

Komaki Plant
Ise Branch room
Nakatsugawa
Plant

9

Name of factories and companies

Indonesia

PT Niterra Mobility Indonesia

India

Niterra India Private LimitedSouth
AfricaNiterra South Africa (Pty) Ltd.

IndexCountryJapan

Environment

Society

Data

Governance

PCB Control

Name of factories and companies
NITTOKU ALPHA SERVICE
CO., LTD.

Head Office

NANSEI CERAMIC CO., LTD.

Komaki Plant

PCB waste stored at our Nagoya Plant and Komaki Plant were disposed of in 2018, but we conducted the survey again after receiving
government information of cases of high-concentration PCB waste found in 2021. As a result, new PCB waste was discovered anddisposed of last fiscal year.
PCB waste is often rediscovered after a simultaneous survey, the Group will continue to conduct surveys in the future.

Komaki Office
Ise Plant

NTK CERATEC CO., LTD.

Komaki Plant

MORIMURA SOFCTECHNOLOGY CO., LTD.

Komaki Plant

In FY2022, we disposed of the PCB waste stored at the Ceramic Sensor Nakatsugawa Plant of our group company.

Drills for Emergency Situations

Takenami Plant

We hold regular drills for emergency situations to prepare for unforeseen accidents, etc. Eachdepartment identifies potential environmental accidents to prevent associated adverse
environmental impacts.

NTK CUTTING TOOLS CO., LTD.
NTK Medical CO., LTD.
CECYLLS Co., Ltd.

Training using wastewaterleakage drill（SparkTec WKS CO.,LTD. Satsuma Plant）

SustainabilityData（Non-FinancialInformation）

Compliance with Environmental Laws and Regulations

ISO14001certiﬁcate

Implementation of Environmental Measurements

Initiatives for Environmental Risk

To ensure compliance with environmental laws and regulations as well as agreements with local municipalities, we conduct
environmental measurements based on strict voluntary standards.
Air, water, noise, and vibration measurements are conducted on a regular basis to prevent legal violations and complaints.

Inherent in business activities are various risks including environmental incidents and pollution. Niterra Group identifies these risks andendeavors to reduce and/or prevent them.

Handling Violations and Complaints in Fiscal 2022

Voluntary Survey of Soil and Groundwater

In FY2022, there was one violation of laws and regulations and one complaint. We promptly took action to address the violations andcomplaints to prevent recurrence.

As part of its environmental management, we have been voluntarily surveying soil and groundwater contamination in our plant on aregular basis since FY2022.

Company

If hazardous substances exceeding the standards of the Soil Contamination Countermeasures Act are detected, we will promptly
report the matter to the administrative authorities and implement appropriate countermeasures in accordance with their guidance.
As a result of our voluntary survey in FY2022, we detected values exceeding the legal limits at Komaki Plant. We promptly reported it
to the administrative authorities and are currently working to prevent the spread of contamination under the guidance of theauthorities.
10

Situation

Countermeasures

Violation

Niterra Co., Ltd.

At the Komaki Plant, the chemical solution flowedout of the offsite gutter from the storm drain on
the premises.

The cause was sudden braking
during delivery by truck and thechemicals were not secured with aband. We reiterated driving andloading rules, including those foroutside vendors.

Complaint

Niterra Co., Ltd.

At the Komaki Plant, we received a noise complaint
when running the fan motor.

The cause was a failure of the Vbelt, so we replaced the V-belt.

IndexEnvironment

Society

Governance

Environmental Burdens from Business
Activities

Environmental Education
Environmental education is conducted to deepen employees’ understanding of environmental
issues and raise their environmental awareness.
In addition to rank-specific education, we hold four courses on “Environmental basics”,“Environmental management system”, “Calculation methods for substances with an environmental
burden”, and “Environmental laws and regulations (for facilities).
We went to the departments related to these four laws and regulations and provide on-siteenvironmental law training focused on the necessary compliance.
From 2021, in consideration of the infection situation of COVID-19, we have been holding online
education that can be taken at home.
In order to make Ecovision 2030 known to employees, we have launched an Ecovision site on theintranet, and posted the background of setting Ecovision 2030, the results obtained by achieving
the Ecovision goals, and requests to employees. We also regularly send out activity topics to ouremployees.

Environmental Burdens from Business Activities

Environmental education（SparkTec WKS CO., LTD.
Satsuma Plant）

Knowing what impacts our business activities have on the environment is the first step in carrying out environmental preservation
activities. We will work to reduce our environmental burden by grasping the amounts of our inputs (such as the raw materials andenergy used by our Group) and the amounts of our outputs (such as the products shipped, CO2 emissions and the wastes emitted
outside the Group as the result of our business activities).
The material balance showing INPUT and OUTPUT is described below.

Support for Suppliers
We offer our suppliers environmental education and support for establishing environmental management systems to acquire thirdparty certification.

EMS Third-Party Certification Support Conducted
Topic

Data

No. of Companies Attending (total sum)

ISO14001

6

Eco-Action 21

37

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IndexEnvironment

Society

Governance

Data

Response to Climate Change*1 The covered scope of each amount reported in INPUT and OUTPUT is indicated with ●.
*2 Group companies in Japan: (subject to integrated certification) SparkTec WKS CO., LTD., NICHIWA KIKI CO., LTD., KAMIOKACERAMIC CO., LTD., NTK CERAMIC CO., LTD., CERAMIC SENSOR CO., LTD., NITTOKU ALFA SERVICE CO., LTD., NANSEICERAMIC CO., LTD., NTK CERATEC CO., LTD.（Komaki Plant）, MORIMURA SOFC TECHNOLOGY Co., Ltd., NTK CUTTINGTOOLS CO., LTD., NTK Medical CO., LTD. (not subject to integrated certification) NITTOKU SMILE CO., LTD., NITTOKU DENSHI
CO., LTD., NTK CERATEC CO., LTD.（Sendai Plant, Sendai West Plant）, CECYLLS Co., Ltd., our domestic sales offices.
*3 Group companies overseas: Niterra(Shanghai)Co., Ltd., Niterra(Changshu)Co., Ltd. NTK Technical Ceramics Korea Co., Ltd.,
Niterra (Thailand) Co., Ltd., Siam Niterra Co., Ltd., Niterra ASIA Co., Ltd., Niterra Malaysia Berhad, PT Niterra Mobility Indonesia,
Niterra India Private Limited, Niterra North America, Inc., Wells Vehicle Electronics, L.P., Niterra do Brasil Ltda, Niterra France
SAS, Niterra South Africa (Pty) Ltd., TAIWAN Niterra Co., Ltd., Niterra Vietnam Co., Ltd., Niterra Philippines, Inc., Niterra
Australia Pty. Ltd., NTK TECHNOLOGIES, INC., Niterra Canada Limited., Niterra Mexico, S. A. de C. V., Niterra EMEA GmbH,
Niterra UK Ltd., Niterra Middle East FZE.
※ Company names as of June 2023
We have received a third-party verification report below from the Japan Quality Assurance Organization (JQA) regarding the
calculation of energy consumption and the associated greenhouse gas emissions, and the amount of water usage andemissions/waste generation(amount of effective use and amount of non-effective use), and greenhouse gas emissions fromdomestic inter-plant logistics (fuel consumption method) in FY2022.
Social and Environmental Information Verification Report

Basic Philosophy
Reducing greenhouse gas emissions to mitigate climate change is an urgent, global-scale challenge, and it is also a priority issue for
the Niterra Group. In particular, as a corporate group engaged in manufacturing, we believe that reducing CO2 emissions from ourbusiness activities is a responsibility that our Group must fulfill.
On the premise of aiming to achieve carbon neutrality by 2050, we have declared in “Eco Vision 2030” a target of reducing CO2
emissions (Scope 1 and 2) by 30% by FY2030 compared to FY2018 levels. We will also strive to reduce CO2 emissions across the
supply chain and product lifecycle, aiming to achieve the target of reducing CO2 emissions (Scope 3) by 30% by FY2030 compared to
FY2018 levels.
Toward achieving these targets, we will implement various measures under four key plans, “Plan A: Energy Conservation,” “Plan B:
Manufacturing and Work Style Improvement,” “Plan C: Energy Creation,” and “Plan D: Procurement/Certificates,” thereby promoting
both systematic CO2 emissions reduction and economic growth. In the future, we will establish a carbon circulation system andpromote the use of hydrogen to reduce CO2 emissions both inside and outside the company so as to contribute to resolving climatechange issues.
12IndexEnvironment

Society

GovernanceOur group’s efforts to achieve carbon neutrality

Measures under Plan A: Energy Conservation

Target for Scopes 1 and 2

Efforts at production sites

Item

TargetScopes 1 and 2

・30% reduction by FY 2030 (compared to that of FY 2018)

Data

When introducing production equipment, we create a checklist for energy-efficient design and conduct checks using it. For existingproduction equipment and ancillary equipment, we are working on equipment improvement to reduce standby energy consumption
during holidays and at night.
In addition, we carry out periodic inspections and maintenance to prevent air leaks and other energy loss due to aging equipment.

Efforts at offices

In addition to switching to LED lighting and turning off lights and PCs during breaks, we encourage “Cool Biz” wear in summer and“Warm Biz” in winter and appropriately control temperature, humidity, and ventilation to save energy.

* The target has been classified by the Science Based Targets initiative (SBTi) as SBT WB2℃ (well below 2℃).

CO2 Emission Reduction Measures up to 2030

Measures under Plan B: Manufacturing and Work Style Improvement

We have created a roadmap to achieve a 30% reduction in Scope 1 and 2 CO2 emissions by 2030. The roadmap mainly consists offour key plans -- “Plan A: Energy Conservation,” “Plan B: Manufacturing and Work Style Improvement,” “Plan C: Energy Creation,” and“Plan D: Procurement/Certificates.” We will implement various measures under these four plans to promote both systematic reductionof CO2 emissions and economic growth.

Efforts at production sites

We review manufacturing conditions (profiles) on an as-needed basis to avoid using excessive energy for production. The amount of
CO2 emissions of each internal business company is visualized on an internal dashboard, and daily improvement activities are being
carried out at each site to ensure production is as energy efficient as possible. Our Group works as one to promote energy saving
activities by sharing successful improvement cases across the Group.

Measures under Plan C: Energy creation
Efforts to introduce renewable energy
We enhance the use of renewable energy, including solar energy, hydropower, andgeothermal energy.
Niterra do Brasil Ltda. and Niterra India Private Limited are equipped with solar power
generation units with a maximum power generation capacity of 793 kW and 514 kW,
respectively.
The Komaki plant has a solar power generation unit with a maximum power generation
capacity of 120 kW and a small hydro generation unit. At the Okusa plant of Sparktec
WKS Co., Ltd., a geothermal heat pump system is installed, and the Nagoya plant of thecompany is equipped with a solar power generation unit and a solar water heater. Ourgroup’s total renewable electricity output in FY 2021 was 2.02 million kWh, which isequivalent to a reduction of 358 tons of CO2.

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Society

Governance

Data

Initiatives aimed at realizing a carbon recycle-oriented society (Carbon
Neutral as a service)

Efforts to create energy
The Komaki plant already has a hybrid power system using a fuel cell with a rated
power output of 250 kW and a compact fuel cell system with a rated power output of
20 kW. We will continue to take on the challenge of reducing CO2 emissions throughthe creation of clean energy by studying the possibility of installing various energy
devices, such as pure hydrogen fuel cell systems and storage batteries.

In order to contribute to the realization of a carbon-neutral society, we are developing methanation-related technologies (hydrogenproduction technology that applies ceramic solid electrolytes and CO2 recovery technology that applies oxygen concentrator
technology).

Pressurized hybrid power system

Measures under Plan D: Procurement/Certificates
Efforts to introduce CO2-free electricity
The headquarters and SparkTech WKS’s Satsuma Plant and Satsuma Electrode Plant
use CO2-free electricity for 100% of their power needs. This initiative has reduced CO2
emissions by approximately 200 tons per year at the headquarters and approximately
20,000 tons per year at the Satsuma and Satsuma Electrode Plants.
We are considering introducing CO2-free electricity at our business sites in the Tohoku
area in the future.

Development of Technologies, Products, and Businesses for Contributing to the Resolution of Social Issues

Adoption of performance-linked stock compensation planAs part of efforts to further reduce CO2 emissions, the CO2 emission reduction rate is included as one of the performance indicators
for the performance-linked stock compensation plan for directors (excluding directors who are members of the audit and supervisorycommittee and outside directors) and executive officers (excluding employed officers).

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Society

Governance

Data

Efforts to achieve carbon neutrality in the supply chain

Efforts to raise internal awareness (internal carbon pricing, internalcarbon taxation, and internal environmental fund)Target setting for Scope 3

To reduce emissions in Scopes 1 and 2 with the aim of achieving carbon neutrality, we take the following awareness-raising measures:internal carbon pricing, internal carbon taxation, and an internal environmental fund.
For internal carbon pricing, our group has decided to collect 10,000 yen per ton of CO2. Internal carbon taxation is a system underwhich fees are collected from departments, including internal business companies and group companies, depending on the amount of
their CO2 emissions. This system is expected to further raise awareness of and accelerate CO2 emissions reduction.
The internal environmental fund is a system to appropriate the fees collected through internal carbon taxation for capital investment
as a grant to reduce CO2 emissions. For example, in FY 2021, we provided a grant for a solar power generation unit to Niterra India
Private Limited.

Item

TargetScope 3:Category 1 “Purchased goods and services”
Category 4 “Upstream transportation and distribution” (in part)
Category 11 “Use of sold products”

・30% reduction by FY 2030 (compared to that of FY 2018)* The target has been classified by the Science Based Targets initiative (SBTi) as SBT WB2℃ (well below 2℃).
Scope 3 emissions are indirect greenhouse gas emissions excluding those in Scopes 1 and 2 (emissions from other companies
associated with our business operations), divided into 15 categories.
Our emissions in Category 1 “Purchased goods and services,” Category 4 “Upstream transportation and distribution,” and Category 11“Use of sold products” make up 97.6％ of our total Scope 3 emissions. Therefore, we work on reducing CO2 emissions by setting atarget to be achieved by FY 2030 in terms of these three categories.
For Category 1 emissions, through the CSR and Sustainability Procurement Guidelines, we ask our business partners to set a target
for reducing CO2 emissions and work toward achieving the target. We also provide our business partners with support when needed.
For Category 4 emissions, as a specified consigner stipulated in the Act on the Rational Use of Energy, we work to reduce CO2
emissions associated with transportation by reducing shipping distances through the restructuring/consolidation of plants and thereconsideration of waste-disposal service vendors.
For Category 11 emissions, which account for the largest portion of total Scope 3 emissions, we work on, for example, designing
products to improve their energy efficiency while being used.

Employee-participatory initiative for carbon neutrality
Under this initiative, our company receives from Chubu Electric Power Miraiz a supply of electricity with added environmental value,
which is derived from surplus electricity* generated from solar power systems at employees’ homes, and uses the supplied electricity
at the Komaki Plant. In addition, employees who provide environmental value of surplus electricity will be given incentives through
Chubu Electric Power Miraiz.
Through this initiative, we will promote carbon neutrality together with our employees.
* Electricity from households for whom the electricity purchase period under the feed-in tariff scheme for renewable energy has
ended

Sustainability Data（Non-Financial Information）
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Data

Initiatives for Category 1: Purchased goods and services

Initiatives for Category 11: Use of sold products

CSR and Sustainability Procurement Guidelines

Environmental considerations throughout the product lifecycle

To promote CSR and sustainability initiatives throughout our supply chain, we have issued the “CSR and Sustainability Procurement
Guidelines” and distributed them to our suppliers.
These Guidelines stipulate what we expect our suppliers to comply with. They also outline our response to climate change, and in the
Guidelines, we ask our suppliers to set CO2 reduction targets and take measures to achieve them. We also ask our suppliers todisseminate these Guidelines to their suppliers and encourage their implementation.

Our Group also contributes to CO2 reduction in its own products.
Among our products, we certify products with particularly high environmental
performance throughout their product lifecycles as “Nittoku Green Products,” and we
strive to expand our lineup of such products.
For example, a vehicle equipped with precious metal plugs and wide-range oxygen
sensors certified as “Nittoku Green Products” saves 13 liters of gasoline annually pervehicle and reduces CO2 emissions by about 30 kg per year compared to a vehicle
equipped with conventional products.

Survey of CO2 emissions related to products for our company

In order to understand CO2 emissions related to our company at our suppliers, we have been conducting surveys of CO2 emissions
related to products for our company. We also provide necessary support to suppliers upon request depending on the amount of their
CO2 emissions.

Assuming that precious metal plugs are installed in 80 million vehicles per year, thiswould lead to a reduction of approximately 2.4 million tons of CO2 emissions. Similarly,
assuming that wide-range oxygen sensors are installed in 25 million vehicles, CO2
emissions would be reduced by approximately 750,000 tons.

Seminars for suppliers

We hold seminars for our suppliers to introduce the risks of climate change and our efforts to reduce CO2 emissions as case studies.

Promoting disclosure of information about climaterelated risks and opportunities

Proper Procurement

Initiatives for Category 4: Upstream transportation and distribution

In July 2020, the Niterra Group announced its support for the Task Force on Climaterelated Financial Disclosures (TCFD) recommendations.
We will examine the impact of climate change on our Group’s business, strategies, andfinance within the company-wide risk management framework based on TCFD
Recommendations, and these topics will be discussed at the Risk Management
Committee and the CSR and Sustainability Committee attended by the entire board of
directors. We will also promote voluntary and proactive disclosure of information inaccordance with the recommendations.

Review of logistics routes
Products manufactured at our plants are transported by land to the nearest port andshipped by sea worldwide.
Products manufactured at the Satsuma Plant were previously shipped overland to
Nagoya Port and Hakata Port, but we have additionally started using Satsumasendai
Port, which is located close to the Satsuma Plant. By transporting some of the products
manufactured at the Satsuma Plant to the Satsumasendai Port, we aim to achieve more
efficient transportation and reduce CO2 emissions from land transport.
By reviewing logistics bases, we expect to achieve an annual CO2 emission reduction of
approximately 42 tons.

Information Disclosure Based on TCFD Recommendations

Participation in business organizations and initiatives
To enhance our efforts to mitigate climate change, our group participates in the following organizations and initiatives:
・Task Force on Climate-Related Financial Disclosures (TCFD)
・Science Based Targets initiative (SBTi)
・Japan Climate Initiative (JCI)・GX League (established by the Ministry of Economy, Trade and Industry)
Initiatives
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Society

Governance

Information Disclosure Based on TCFD
Recommendations

Data

Examples of what was discussed and determined in terms of climatechangeIn July 2020, our group endorsed the recommendations made by the Task Force on Climate-related Financial Disclosures (TCFD).
Based on the TCFD recommendations, we disclose important information related to climate change as outlined below.

・Approval of the priority issue (materiality): “CO2 Emissions: 30% Reduction [compared to that of 2018] (FY2030)”(CSR and
Sustainability Committee in March 2020)・Endorsement of the TCFD recommendations (Management Meeting in July 2020)・Approval of “Eco Vision 2030”(Environmental Committee in March 2021)
・Approval of “Aiming for carbon neutrality in 2050”(CSR and Sustainability Committee in March 2021)

Governance

Strategy (Risks & Opportunities)

Our group is aware that climate change and other environmental issues are serious business issues. Therefore, the board of directors
is responsible for final decision-making and supervision regarding all aspects of our climate change response.
With regard to our management policies and directions related to climate change, the CSR and Sustainability Committee* chaired byan outside director, which functions as an advisory body to the board of directors and meets at least four times a year, compiles
recommendations in consideration of climate-related risks and opportunities and reports them to the board of directors. Finaldecisions are made by the board of directors.
The progress of our response to climate change and other priority issues is reported to the CSR and Sustainability Committee by thesustainability department, and reviewed and monitored at the Committee. Specific activities such as CO2 reduction are monitored forprogress towards the targets and issues to be addressed at the Environmental Committee, which convenes twice a year, in order toachieve continuous improvement. Furthermore, risks associated with climate change are assessed within the context of overall
enterprise risk management at the Risk Management Committee, which convenes twice a year.

Analysis of climate change scenarios
We identified a wide range of climate-related risk and opportunity factors across the entire supply chain, from upstream todownstream, with reference to examples shown in the TCFD recommendations, while forecasting social and regulatory trends in the
short, medium, and long term.
Among the identified risk factors, we primarily considered the risks associated with the transition to a low-carbon economy under the
2°C scenario and the risks associated with climate-related physical changes that may occur in the case of the 4°C scenario due tounmet global CO2 emissions reduction targets. We classified these risk factors according to the TCFD’s classification guidelines andassessed their business impacts. Specifically, the sustainability department conducted extensive discussions to identify risk factors
and developed the assessment of business impacts. Regarding the identified opportunity factors, we classified and examined themaccording to the TCFD’s classification guidelines, particularly focusing on the “opportunities for business transformation throughclimate change mitigation and adaptation measures.”We then discussed and considered the matter with the officer supervising the sustainability department, as well as the members ofother related departments, such as the risk management department and the environment department. The compiled climate-relatedrisks and opportunities were reported to and confirmed by the CSR and Sustainability Committee.

The CSR and Sustainability Committee has the responsibility of overseeing various specialized committees, including theEnvironmental Committee and the Risk Management Committee. Each specialized committee monitors whether tasks associated with
its specialized field are executed effectively, and the CSR and Sustainability Committee, in turn, supervises the overall effectiveness ofthese specialized committees. Important information reported, discussed, and decided upon in each specialized committee, such as
progress in CO2 reduction and risk assessments, is also shared with the CSR and Sustainability Committee.
Important decisions made by specialized committees are reported to the board of directors through the Management Meeting, whichis responsible for deliberating, deciding, and supervising important matters in business operations. The board of directors provides
oversight in this regard.
Furthermore, in order for our executives to take the lead in promoting climate change countermeasures, we have included the
reduction of CO2 emissions as one of the performance indicators in the performance-based stock compensation system for directors(excluding directors who serve on the audit committee and external directors) and executive officers (excluding executive officers on
an employment contract).

< Main scenarios and projections used in the study >2℃ scenario: IPCC RCP2.6, IEA ETP 2DS, etc.
4℃ scenario: IPCC RCP8.5, IHS Markit Automotive "Mobility and Energy Future" service data, etc.
The three terms used below, “short term,” “medium term” and “long term,” have the following meanings:
Short term: until around 2025 in line with the target year of our medium-term management plan
Medium term: until around 2030 in line with the target year of our long-term management planLong term: until around 2040 in line with the vison of our long-term management plan

* We shifted to a company with an audit and supervisory committee in June 2022, and positioned the CSR and Sustainability
Committee as an advisory body to the board of directors.
Corporate Governance System
Risk Management Promotion System

CSR and Sustainability Promotion System
Environmental Management Promotion System
17IndexEnvironment

Society<Climate-related risks>
Risk item
Risks related tothe transition toa lower-carbon
economyPolicy andlegal

Technology

MarketReputation

Business impact (risk)

Assessment(impact)

Timing of the
impactCarbon tax

・If a carbon tax is introduced, taxes levied on
fuel will increase procurement costs,
resulting in a rise in the costs of energy andraw materials.

Large

Short to longterm

Carbon bordertax

・If a carbon border tax is introduced, taxes
will be levied on products to be exported,
resulting in the reduction in the costcompetitiveness of the products.

Large

Short to longterm

Regulations oncarbon emissions

・The achievement of GHG reduction targets
will be required, resulting in increases in thecosts of, for example, making capital
investments and purchasing electricity
generated from renewable energy sources.

Large

Short to longterm

Sale of gasolinepowered vehicles

・In countries that ban the sale of gasolinepowered vehicles, OEM demand will
disappear, resulting in a decrease in sales.

Large

Medium tolong term

Proliferation ofenergy-saving
and renewableenergy
technologies

・The introduction of new energy-saving andrenewable-energy technologies will increase
the cost of, for example, making capital
investments.

Medium tolarge

Short to longterm

Development of
new technologies

・Expenditures on the research anddevelopment of new technologies will
increase.

Large

Short to longterm

Shift in customer
preferences

・After the 2030s, the number of people whochoose ZEVs even as used cars will increase,resulting in a decline in demand for spark
plug replacement and eventually a decreasein sales.
・Products that emit less CO2 in their life
cycle will be chosen, resulting in a decreasein the sales of conventional products.

LargeLong term

Shift in investor
preferences

・Investors’ opinions will turn against internal
combustion engines, resulting indivestments.

Small tomediumMedium tolong term

Shifts in jobseekers’
preferences

・Job seekers’ opinions will turn againstinternal combustion engines. Accordingly,
job seekers will not choose us as their place
to work.

Small tomediumShort tomedium term

Data

GovernanceRisk item
Risks related tothe physicalimpacts ofclimate change

Business impact (risk)

Assessment(impact)

Timing of the
impactAcuteIncreased
severity of
extreme weather
events・Typhoons and other extreme weather
events will cause damage to plants and otherfacilities, resulting in shutdown or a decreasein production. Furthermore, additional costs
will be incurred to restore equipment. Nonlife insurance premiums will also increase.

Small tomediumShort to longterm

Chronic

Sea level rise・Rising sea levels will increase the risk offlooding and storm surges. Plants andtransport infrastructure located in coastal
areas will be damaged and supply chains will
be broken, resulting in the extra costs ofaddressing these problems.

Small tomediumLong term

Changes inprecipitation
patterns andvariability inweather patterns

・Plants in areas facing severe water
shortage will be forced to shut or slow down
operations due to limitations on water usage,
resulting in the cost of shifting production toother plants, increased transportation costs
and the like.

Small tomediumLong term

Rising mean
temperatures

・Employees who work in extreme heat will
frequently get heat stroke. To reduce theirincreased physical burden, the cost ofdealing with extreme heat and labor costs
will increase.

Small tomediumLong term

On the other hand, we also assessed the potential risk of future climate-related disasters, such as floods, droughts, and high tides, andfound that there are regions where an increase in precipitation is anticipated. However, whether this increase directly leads to a higher
risk of events like floods or landslides depends on the location of each business site (including factors such as ground conditions,elevation, and proximity to rivers) and the state of flood control measures. Therefore, we will continue to conduct further
investigations.
<Climate-related opportunities>
Aspect18

Major opportunity

When opportunities
present themselves

Resource efficiency

・The increasing adoption of new energy-saving and renewable-energy technologies
will reduce energy costs.

Short to long term

Energy source

・The increased demand for hydrogen as a fuel exempt from carbon tax will provide
new opportunities in the hydrogen energy market.
・With the development of methanation and its relevant technologies, synthetic fuels
like e-fuel will become more widely used, ensuring the continuity of our current
internal combustion engine business.

Long term

Products and services

・To conform to fuel efficiency regulations, demand for high value-added products
will increase.

Short to medium term

・The hydrogen energy market is expected to grow due to mandatory reduction of
GHG emissions. Increased demand for hydrogen technologies, SOFCs and SOECs
will provide business opportunities.

Long termIndexAspectProducts and services

Environment

Major opportunity

Society

Governance

When opportunities
present themselves

・The demand for CO2 recycling solutions, such as producing hydrogen using
electricity (SOEC) and utilizing recovered CO2 as fuel, will increase.

Long term

・In disaster preparedness, local consumption of locally-produced energy(distributed power generation) will receive attention, resulting in increased demandfor SOFCs.

Long term

・The demand for ceramic-related technologies and products used in electricmotors and generators will increase.

Medium to long termMarkets

・The development of new climate-related technologies that meet social needs will
provide business opportunities.

Medium to long term

Resilience・In disaster preparedness, the continuous reinforcement of the BCM and BCP of
our group, including our supply chain, will help enhance our resilience.

Short to long term

Business risks, opportunities and responses under the climate-related
scenarios
To further clarify climate-related risks and opportunities, we
examined business environments and responses by businesstype under both 2℃ and 4℃ scenarios.
As a result of our examination, no existential impact fromphysical risks has been identified.
With regard to our business related to internal combustion
engines, whose sales revenue makes up 80% of the total atpresent, we are facing a major change. On the other hand,
geared toward the realization of a decarbonized society,hydrogen-related and other new needs and markets are
expected to arise. Therefore, in the 2030 Long-Term
Management Plan NITTOKU BX, we take up “Environment &Energy” as one of the business fields to focus on. Toward 2040,
we will push forward with a business portfolio conversion(Revenue composition: 40% ICE related business, 60% non-ICE
related business).

Data

Examinedbusiness

Product

Responses to future business risks andopportunities

Financial impact

Sales revenue target inour long-term
management plan

Automotive
related business

Spark plugs, glow
plugs, sensors

Under the 2℃ scenario, sales of internal
combustion engine parts are expected to
decline in the future due to stricter
regulations on vehicles with internal
combustion engines.
On the other hand, opportunities willarise in the electric vehicle market andother new markets.
Under a 4℃ scenario, further energy
conservation and toxic-gas-emission
control will be required in terms ofinternal combustion engines. Therefore,
we will take measures to improve theperformance of internal combustion
engines.

Will affect a portion*1of our revenue

450 billion yen(FY2029)

Fuel cellbusiness

Fuel cells

Under either a 2℃ or 4℃ scenario,
demand for non-fossil energy sources is
expected to grow. Therefore, we willcontinue to enhance our measures takenin the relevant markets.
Under a 2℃ scenario, the proliferation ofhydrogen infrastructure is expected.
Therefore, the market may grow at anincreasing rate.

A market worth 200
billion yen is
expected, with thepossibility of morethan that dependingon the spread ofhydrogeninfrastructure.

300 billion yen(FY2029)

Other
businesses

SPE, packages,
oxygenconcentrators,
bearing balls, etc.

Under either a 2℃ or 4℃ scenario, theimpact on risks and opportunities issmall.

The financial impact issmall.

・For the automotive related business, under 2℃ scenario, sales are expected to decline in the future due to stricter
regulations. Therefore, a business portfolio conversion is required.
・For other business types, under either a 2℃ or 4℃ scenario, we will conduct business flexibly and strategically while
keeping a close watch on market trends. Thus, we have high resilience in terms of both medium- and long-term
perspectives.

19

IndexEnvironment

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Data

GovernanceMetrics and Targets*1 Financial impact on our internal combustion engine business
Based on an analysis by IHS Markit Automotive, we anticipate a decline in vehicles equipped with internal combustion enginesfrom the mid-2030s onwards due to greater restrictions on internal combustion engines in various countries as part of theirclimate change countermeasures. On the other hand, our core product within the internal combustion engine business, spark
plugs, are in demand not only for new vehicles but also for replacement parts. According to our projections, we expect the salesof the product to peak after 2040 and gradually decline, considering that vehicles with internal combustion engines are likely toremain in use. Considering this situation, if we assume a 10% reduction in sales revenue for our internal combustion engine
business from FY2040 onwards compared to FY2020, the annual decrease in our sales revenue would be approximately 35 billionyen.

In our “2030 Long-Term Management Plan NITTOKU BX,” announced in May 2020, our group has set the goal of “CO2 Emissions: 30%
Reduction [compared to FY2018] (by FY2030).”
Furthermore, to strengthen our environmental conservation efforts from a long-term perspective, we established “Eco Vision 2030” inApril 2021, outlining our long-term objective of achieving carbon neutrality by 2050.
In “Eco Vision 2030,” we have identified four key priorities, namely climate change mitigation, the expansion of environmentallyconscious products, conserving water resources, and waste management. The expansion of environmentally conscious products aims
to provide products and services that contribute to environmental considerations, including climate change mitigation and CO2
reduction, such as Solid Oxide Fuel Cells (SOFC) and “Carbon Neutrality as a Service.” In addition, reducing water consumption forpreserving water resources, as well as reducing resource input and waste output, also contribute to reducing CO2 emissions.
Therefore, by setting these as the four key priorities and addressing them not as individual issues but as interconnected challenges,
we aim to achieve more synergistic solutions.
To further drive efforts toward achieving these goals, we have introduced “CO2 Emission Reduction Rate” as a performance indicatorin the performance-based stock compensation system for directors (excluding directors who serve on the audit committee andexternal directors) and executive officers (excluding executive officers on an employment contract). Additionally, to promote collective
CO2 reduction initiatives across the group, we have implemented Internal Carbon Pricing (ICP).
We levy ¥10,000 per ton of CO2 emissions from emitting departments through ICP, and the collected funds are allocated to ourinternal environmental fund, which supports investments and infrastructure development for decarbonization.
We will also promote reductions in Scope 3 emissions, including those in the supply chain. As for Scope 3, our initial aim is to achieve
a 30% reduction (compared to FY2018) by FY2030 in Category 1 “Purchased Products/Services,” partial elements of Category 4“Upstream Transportation/Distribution,” and Category 11 “Use of Sold Products.” We also ask our business partners (suppliers) to set
CO2 reduction targets and work towards these goals, providing support as needed.

FY2020 sales revenue: 426.2 billion yen
Share of internal combustion engine business in FY2020: 82%
Expected sales decrease for internal combustion engine products from FY2040 onwards: 10%426.2 billion yen x 82% x 10% = 35 billion yen
Long-term Management Plan

Risk Management
Our group operates business globally and in various fields, which means that each business presents a range of risks andopportunities. Therefore, we assess risks and opportunities on a per-business basis and respond to each of them. With respect toclimate change-related risks and opportunities, we strive to take appropriate measures while monitoring regulatory trends andevaluating their impact on our respective business operations.
The Risk Management Committee conducts risk assessment from a company-wide perspective in terms of whether or not the risk will
have a great impact on our business continuity and goal achievement, by analyzing the level of impact, the probability of occurrence,and the status of countermeasures. Risks deemed to require special attention are identified as “priority risks,” and responsible
departments are designated. The progress of activities to reduce these priority risks is monitored by the Risk Management
Committee.
Risks related to ESG, including climate change and human rights, are also evaluated in conjunction with these efforts. Meanwhile, key
opportunities are reviewed by the CSR and Sustainability Committee, and they are incorporated into our management strategy andpriority issues, if necessary.

<Targets and results of CO₂ emissions reduction>
Item

Risk Management

TargetResultScopes 1 and 2

30% reduction by FY 2030
(Compared to that of FY 2018)

27.6％ reduction in FY 2022
(Compared to that of FY 2018)<Emissions: 211,000 tons><Emission intensity: 0.58
tons/million yen>

Scope 3:Category 1 “Purchased goods and services”
Category 4 “Upstream transportation and distribution” (inpart)
Category 11 “Use of sold products”

30% reduction by FY 2030
(Compared to that of FY 2018)

0.8％ increase in FY 2022
(Compared to that of FY 2018)<Emissions: 11.15 million tons>※ The CO2 emissions reduction targets above were classified by the Science Based Targets (SBT) initiative as SBT WB2℃（wellbelow 2℃）in June 2022.
Priority Issues (Materiality)

Eco Vision

Sustainability Data（Non-Financial Information）
20

Response to Climate Change

IndexEnvironment

Society

GovernanceManagement of Waste

Data

Going paperless
We are working to go paperless to reduce waste.

Basic Philosophy

As part of such efforts, we create and distribute Integrated Reports, Sustainability Data Books, and educational booklets for
employees in digital format.
We will continue our efforts to go paperless.

The earth’s resources are limited and must be therefore protected and used sustainably. As a manufacturing company, our Group
uses a variety of raw materials, including ceramics and rare metals, and we believe it is our responsibility to actively engage in 3R(reduce, reuse and recycle) activities to protect the global environment.
Our Group has set out our vision for 2040 to “contribute to a global recycle-oriented society by promoting zero waste emissions” andset the targets of “achieving an over 95% effective utilization rate,” “reducing at least 1% waste intensity compared to FY2018,” and“promoting 3R activities,” as milestones to be achieved in 2030.
We will also promote sustainable and efficient use of raw materials and other resources in our supply chain.

Effective Utilization of Waste Initiatives
Trends in Effective Utilization Rate of Waste

Waste Reduction Initiatives

The effective utilization rate for the entire Group in FY2022 was 91.3%, unchanged from the previous year. We will continue topromote the effective use of waste in order to achieve our target of 95% or more by 2030.
We will continue to promote the effective use of waste in order to achieve our target of 95% or more by 2030.

Trends in Volume of Waste Generated

Effective utilization of general waste and industrial waste

The amount of waste generated in FY2022 was 21,188 tons, a
6.6% decrease year on year.
Eco Vision 2030, which was launched in FY2021, sets forthtargets of “achieving an over 95% effective utilization rate” and“reducing at least 1% or waste intensity compared to FY2018”as milestones to be achieved in 2030.
The effective utilization rate for the entire Group in FY2022 was
91.3%, unchanged from the previous year. We will continue topromote the effective use of waste in order to achieve ourtarget of 95% or more by 2030.
In FY2022, the waste intensity was 0.058 tons/million yen for
the entire Group. We achieved our target by reducing waste
generation by 22.8% compared to FY2018.

Our company makes effective use of waste through material
recycling and thermal recycling.
Metal waste, which accounts for the highest percentage of
waste, is refined and recycled as a raw material of the same
quality.
Sludge, which accounts for the next highest percentage, ismainly pre-fired ceramic material. The generated sludge isreused as a ceramic raw material or a recycled fill material.
Ceramic powder and ceramic scrap after firing are also reused.
Ceramic powder with high purity is reused as a ceramic raw
material, while the rest is reused as a raw material for cement.
Ceramic scrap is reused as a roadbed material.

We will continue to promote process improvement to reduce
waste.

Waste solvents are distilled and reused or reused as fuel.
Plastics are crushed and reused as raw materials for plastics orconverted into RPF (solid fuel).

Trends in Volume of Waste Generated(Niterra Group)

In addition, from the perspective of CO2 emissions, we believethat it is necessary to switch from thermal recycling to material
recycling and we act accordingly.
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Rate of each waste

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Data

Conservation of Water Resources

Efforts related to the Plastic Resource Circulation Act
As part of efforts related to the Plastic Resource Circulation Act, our Group promotes reuse of packaging materials and material
recycling of waste plastics.

Basic Philosophy

The reuse of packaging materials is an initiative that transcends the boundaries of our Group. Packaging materials that cannot bereused within a company are provided to other companies for reuse. Companies who have received packaging materials have seen adecrease in new purchases of packaging materials.

The water resources crisis is becoming more and more serious around the world, and there are concerns about water shortages due
to depletion and pollution and their impact on biodiversity. Protecting the sustainability of water resources, which are essential for
maintaining ecosystems, is one of the most important issues for our Group.
Our Group has set the vision for 2040 of “implementing sustainable business operations in response to global water-related risks” andset the target of “maintaining water consumption intensity below FY2018 level,” as the milestone to be achieved in 2030.
Our Group is committed to protecting the environment far into the future by promoting the efficient use of water, a precious andlimited resource. We will also promote sustainable and efficient use of water resources in our supply chain.

Material recycling of waste plastics is an initiative to shift from thermal recycling to material recycling. In the manufacturing processof our Group, waste plastic containing a large amount of ceramic components is generated. We have been working to reduce theamount of waste plastic generated as much as possible, but because it is inevitable that some waste plastic is generated in the
manufacturing process, we have started a new material recycling initiative.
To recycle materials, it is necessary to change the shape of the discharged material (e.g., by crushing) to suit the disposal destination,
and we are working to address this issue. In addition, as part of efforts to transform waste into valuables, we compress waste styrene
foam, which used to be thermally recycled, into ingots using a volume reduction machine.

Trends in Volume of Water Usage

Effective use of food waste

The volume of tap water, well 3water, and river water used in
FY2022 totaled 1.61 million m . Total water use decreased by
3% year on year due to water use reduction efforts amid
increased sales. Eco Vision 2030, which was launched in
FY2021, sets forth a target of "maintaining water consumption
intensity below the FY2018 level” as the milestone to beachieved in 2030.
Water consumption intensity for FY2022 was 4.403 m3/million
yen, and we have achieved our target by reducing it by 18.4%
compared to FY2018.
We will continue to promote the efficient use of water.

Despite our active efforts (including awareness-raising) to reduce food waste in company cafeterias, there is still food waste
generated. Food waste generated from the cafeteria at the Komaki Plant is transported to a biogas power plant in Komaki City, where
it is converted into biogas through methane fermentation and is effectively used as fuel for power generation.

Trends in Volume of Water Usage (Niterra Group)22IndexEnvironment

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Data

Governance

Environmentally-friendly Products

Water Resources Conservation Initiatives
Introduction of a closed system

Environmental Friendliness in the Product Lifecycle

The Niterra Plant in India has introduced a closed system in accordance with the relevant law, and no wastewater is discharged
outside the plant premises.

To ensure that “All products contribute to the improvement of the global environment and contribute to making a sustainable
society come true” as part of our vision for 2040, we develop and provide products designed in consideration of environmental
friendliness. With this background, we certify products demonstrating especially high environmental performance throughout theirproduct lifecycles as “Nittoku Green Products” and strive to expand our lineup of such products.

Establishment of a wastewater treatment facility
The Ise Plant has a wastewater treatment facility, which recycles the wastewater discharged from the Plant for reuse.

Improvement of equipment and manufacturing conditions
Ongoing efforts are being made to save water use by improving equipment and manufacturing conditions.

Utilization of groundwater
At the Komaki Plant, groundwater is pumped up and used at the plant after iron, manganese and other elements are removed at thewater treatment plant.
Groundwater is an important resource, but excessive groundwater pumping often causes land subsidence. At the Komaki Plant, we
conduct groundwater management in accordance with Aichi Prefecture’s environmental regulation titled “Ordinance on Preservationof the Living Environment.”
Specifically, at the time of the installation of a pump facility, we set an upper limit for groundwater extraction below the regulatory
limit and ensure that the amount of groundwater extraction does not exceed the set limit. Each year, we report the amount ofgroundwater extraction to the Owari Prefectural Office.

Product Lifecycle and Major Efforts

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GovernanceEfforts Made when Designing and Developing Products
and Services

・Assessment Categories
Categories

Creating new products and services and improving them include the processes of research, development, process design, andpackaging specification design.
When following these processes, we check the entire lifecycle to see if CO2 emissions can be reduced, if reduced use of resources
or more effective use of resources is possible, and if any substance with environmental impact is contained or used. If it is deemedthat there is a significant impact on the environment, we implement the necessary measures.
In addition, we confirm that our products and services comply with environmental laws and regulations and other legal
requirements and there are no ethical problems.

Assessment Points (from the Perspective of Product Lifecycles)

Reduced use of energy

Reduce the use of energy

Reduced use of resources

Reduce the weight, use recycled materials, and extend the product lifecycle

Substances with environmental impact

Use no substances with environmental impact, reduce the use of such substances

・Certification Standards
Must satisfy either of the following conditions:➢Newly developed products whose environmental performance throughout their product lifecycles is above the standards; and➢Improved products whose increase in environmental performance throughout their product lifecycles compared to that ofexisting products is above the standards.

Examples of Nittoku Green Products

Certification System for Environmentally Friendly
Products - Nittoku Green Products

Products

We develop and provide products designed in consideration of environmental friendliness. In that respect, all our products areenvironmentally friendly. Among them, products with especially highly environmental performance from the perspective of theirproduct lifecycles has been certified as Nittoku Green Products since FY2021.
Under this certification system, the Environmentally Friendly Products Certification Committee, headed by the Chair of the Central
Environmental Committee (and convened twice a year), assesses products in terms of the three environmental categories of
reduced use of energy, reduced use of resources, and substances with environmental impact, and certifies the products thatsatisfy the certification standards as such.
We certified eight products. While leveraging this system for promoting environmental friendliness throughout product lifecycles,
we would like to communicate to you the excellent environmental performance of our products.

24

Certification Reason

Relevant
SDGs

Description

Spark plug using a precious metal(iridium alloy) for the center electrode・Reduced use ofresources

・For details

ZFAS®-U3 wide-range oxygen sensor

・Reduced use of energy
・Reduced use ofresources
・Substances withenvironmental
impact・For details

OZAS®-S4 oxygen sensor

・Reduced use of energy
・Reduced use ofresources

・For details

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Products

Certification Reason

Society

Relevant
SDGs

GovernanceOne of our Group’s priority issues is “providing environmentally friendly products.” To tackle this issue, we have set numericaltargets to be achieved by 2030 in the fields of spark plugs and automotive oxygen sensors, which represent our environmentallyfriendly products that can contribute to improving automobile fuel efficiency and purifying exhaust gas.
For “development of technology, products and businesses for contributing to the resolution of social issues,” we have set thefollowing targets: realizing widespread use of fuel cells in anticipation of the use of CO2-free hydrogen; facilitating adoption of our
proprietary lead-free piezoelectric ceramics to replace conventional lead-based equivalents; and increasing operating efficiency
using sensing IoT technology.
Since these products are expected to contribute to solving social problems and boast high environmental performance, we havereaffirmed them as Nittoku Green Products.

Description

LED alumina high heat radiation
package (thick Cu-plated
specifications)・Reduced use ofresources

・For details

O2 Fresh-5G, an oxygen concentrator

・Reduced use of energy
・Reduced use ofresources

・For details

Lead-free piezoelectric ceramics

・Substances withenvironmental
impact・For details

Ozone Air Purifier “Sumikaze”

・Reduced use of energy
・Reduced use ofresources
・Substances withenvironmental
impact・For details

Water quality management system

・Reduced use ofresources
・Substances withenvironmental
impact・For details

Data

Priority Issues

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Data

GovernanceManagement of Chemical Substances

Handling within the GroupTo respond appropriately to increasingly strict chemical substance regulations worldwide, we perform non-containment management
for products and usage management within plants.
For hazardous chemical substances, we set hazard rankings according to toxicity and the strictness of regulations and establish
handling standards for each rank.
From here on out, we will work toward substitution of hazardous chemical substances and the strengthening of management, toassure compliance with laws and with the demands of customer.

Basic Philosophy
Chemical substances are used widely not only in the industrial field but also in various aspects of daily life because of their many
excellent functions.
On the other hand, some of them are harmful to humans and the environment, and regulations regarding hazardous chemicals are
becoming stricter year by year worldwide as society’s concerns about hazardous chemicals grow. As a manufacturing company thatuses chemical substances as raw materials, we believe that appropriate management of chemical substances is one of our social
responsibilities.
Our Group has set the vision for 2040 of “contributing to the conservation of biodiversity through continuous implementation of
appropriate chemical substance management” and set the target of “reducing environmental impact through appropriate chemical
substance management,” as the milestone to be achieved in 2030.
We will also promote appropriate management of chemical substances in our supply chain.

Chemical Substance Management System
We have a three-step management system for handling substances of environmental concern:
1. Answering requests from customers, 2. Handling within the Group, and 3. Procurement from suppliers.
Naturally we ensure compliance with laws and fulfill customer requests. More than that, we aim to reduce the use and emission ofsubstances of environmental concern so as to minimize the impact of chemical substances on the environment and human health.

Answering Requests from Customers

Management System

With the reinforcement of regulations on chemical substances contained in products, requests from customers in the automobile,electrical and electronics industry regarding improved compliance are increasing.
We are aware of the product content of subject chemicals such as the REACH regulation in Europe, the POPs Convention, and theTSCA regulation in the United States. When there is a request from a customer, we are taking all the appropriate measures including
submission of Non-Containing Declarations, submission of various data with IMDS, JAPIA sheet, chemSHERPA, etc., and handlinginvestigations and audits regarding our management systems.

Hazard Rank
Rank

26

Handling standard

Substances covered

Prohibited
substances

Use is prohibited.

Substances prohibited from use or strongly restricted byregulations.

Restricted
substances

Safer substitutes will be sought, while making efforts
to reduce the use of current substances.

Hazard level and toxicity are equivalent to prohibited substances,
but an immediate changeover is impossible due to its special
characteristics.

Monitored
substances

Supplies need to be examined to find existence / nonexistence of applicable substances.

Those not prohibited or restricted but that require monitoring.

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Conservation of Biodiversity

Management of PRTR substance
Aiming at optimized management, the respective divisions have ensured to identify and totalize PRTR substances for clarifying
handling volume, release volume, and transfer volume.

Guidelines for Biodiversity

The emission volume of PRTR Substances released in FY 2022 was 223 tons. Most of it is toluene emitted from the ceramic sheet
manufacturing process, and emissions are increasing as production increases.
Going forward, we plan to systematically introduce treatment system and reduce atmospheric emissions of VOCs (volatile organic
compounds), including toluene, by half by the end of FY 2030.

Recognizing the conservation of biodiversity as a critical global challenge, Niterra Group identifies it as a material environmental issue
for us to address, along with global warming mitigation and resource recycling.
For this reason, in April 2013 we established the Niterra Group Biodiversity Action Guidelines, which outline our policy on biodiversity
conservation.

Niterra Group Biodiversity Action Guidelines
Basic Philosophy
The Niterra Group recognizes that biodiversity is essential for a sustainable society and that the use of energy and resourcesand emissions of environmentally hazardous substances have an impact on biodiversity. We will work with our suppliers andexternal organizations to reduce environmental impact in all our business activities and promote actions to conserve
biodiversity.

Major Initiatives
1．Basic stance
We comply with laws and regulations related to biodiversity.
2．Business sites
In addition to giving due consideration to the impact on the ecosystem when opening, expanding or closing a business site,
we will strive to reduce energy and resource consumption, emissions of environmentally hazardous substances, and noiseand vibration in all business activities.
3．Products
We will strive to develop and market products that not only contribute to reducing energy and resource use andenvironmentally hazardous substance emissions but also are easy to recycle at the time of disposal.
4．Procurement
We will promote green procurement that takes biodiversity into consideration and ask our suppliers for theirunderstanding of and cooperation in the conservation of biodiversity.
5．AwarenessWe will raise awareness of biodiversity among all employees and encourage them to engage in conservation activities on a
voluntary and continuous basis.

Emission Volume of PRTR Substances(Groups in Japan [with integrated certification])

Procurement from Suppliers
To manage chemical substances contained in products appropriately, it is imperative that we gain the cooperation of our suppliers.
For this reason, we request in our Green Procurement Guidelines that our suppliers not use hazardous chemical substances banned by
Niterra. We designate suppliers that meet our system and material standards as Green Suppliers. In collaboration with our Green
Suppliers, we promote appropriate management of hazardous chemical substances.
Our Eco Vision 2030 sets the goal of achieving 100% adoption of a green procurement system, and we will work to establish a green
procurement system for the entire Niterra Group. We have begun preparations to expand this initiative to overseas factories.
Green Procurement Guidelines

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GovernanceInitiatives for Biodiversity
Using the Niterra Group Biodiversity Action Guidelines as a guide, while being fully aware that our activities, particularly involving theuse of energy and resources, are inevitably causing impacts on biodiversity, we will continue working to reduce such impacts
throughout our business operations, in cooperation with our suppliers and external organizations.
In addition, we will fully comply with all applicable laws and regulations and will not pollute rivers or destroy forests.

Introduction of a closed system
The Ise Plant has introduced a “closed system” for production wastewater in order to protect the rich nature of the surrounding area.
Production wastewater is not discharged outside the plant site and is purified and reused on site.

Extermination of lanceleaf coreopsis
As one of the activities outside the business activities, together with Komaki City, Komaki City Natural Environment Watchers (citizens
registered with the city through an open application), and neighboring companies, we are working on extermination of the invasive
alien species lanceleaf coreopsis in Komaki City every year.

Lanceleaf coreopsis

Extermination of lanceleaf coreopsis

Expansion of the disclosure of information on
biodiversity-related risks and opportunities
We will continue to study the biodiversity-related risks on the Group’s business, strategy, and finances and expand our disclosure ofsuch information.

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Development of Technologies, Products,
and Businesses for Contributing to the
Resolution of Social Issues

Data

Sensing IoT
In the era of the Internet of Things (IoT), where various things are connected organically through the Internet, sensing technology isplaying an increasingly important role.
By combining our wide range of sensing technologies with the IoT, we help improve business efficiency through automation,
optimization, and generalization.
・Water quality sensing
We are working to supply a comprehensive solution for land-based aquaculture that facilitates the management of aquacultural workby applying sensing technologies, visualizing water quality data, integrating it with camera-based biological information, andimplementing big-data analysis.
We are working to supply a comprehensive solution for land-based aquaculture that facilitates the management of aquacultural workby applying sensing technologies, visualizing water quality data, integrating it with camera-based biological information, andimplementing big-data analysis.

Development of Technologies, Products, and Businesses
for Contributing to the Resolution of Social Issues
We are committed to developing technologies, products and businesses that meet the demands of society, with the aim of co-creating
and providing new value to help solve social issues.

Water quality sensing（Movie）

Fuel Cells

Initiatives aimed at realizing a carbon recycle-oriented society (Carbon
Neutral as a service)

Solid oxide fuel cells (SOFCs) are expected to be one of the cleanest energy sources
because of their efficiency in high-power generation and effective reduction of carbon
dioxide and other greenhouse gases compared to other fuel cells. Niterra is promoting
the development of stacks that generate electricity from SOFCs, with the major
business theme of contributing to the building of a future hydrogen society.

In order to contribute to the realization of a carbon-neutral society, we are developing methanation-related technologies (hydrogenproduction technology that applies ceramic solid electrolytes and CO2 recovery technology that applies oxygen concentrator
technology).
・Regional CCU (Carbon dioxide Capture Utilization)
We are developing technologies that can contribute to the prevention of global warming by recovering CO2 emitted from factories andcommercial facilities and using it as a resource.
CO2, hydrogen, methane gas, and electricity are interchanged and circulated locally by optimally managing CO2 emissions/demand andrenewable electricity production centered on CCU (Carbon Capture and Utilization).
We will connect a prosperous society aiming for virtually zero CO2 emissions to the next generation and contribute to the realization ofa carbon-neutral society that takes advantage of regional characteristics.

Solid Oxide Fuel Cells（Movie）

Lead-free piezoelectric materials
Piezoelectric ceramics are widely used in the devices for our daily use, but there areconcerns that the presence of lead may have a negative impact on the environment andour health. We have developed lead-free piezoelectric ceramics, aiming to promote
them for the replacement of current piezoelectric ceramics.
Lead-free piezoelectric materials
Lead-free piezoelectric materials（Movie）

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Governance

Respect for Human Rights

Searching and investigating themes that solve social issues
In order to grasp the demands of society, we participate in various organizations and projects to search and investigate new themesthat contribute to help solve social issues.

Human Rights Policy

・Hydrogen Council
The Hydrogen Council is a global CEO-level advisory body with a long-term vision for the key role of hydrogen technology in theenergy transition. We are participating as a supporting member.

We are working to resolve various social issues to realize sustainable societies. We recognize that as a prerequisite for this, it
is important to respect human rights of people who are affected by our business activities, and that it is essential tocontinuously fulfill such responsibilities in truly contributing to the realization of sustainable societies. To this end, we respecthuman rights set out in the Universal Declaration of Human Rights and the ILO Declaration on Fundamental Principles andRights at Work, and make our best efforts to protect the dignity of these people based on the UN Global Compact, the UN
Guiding Principles on Business and Human Rights, and the OECD Guidelines for Multinational Enterprises.

Hydrogen Council
・MATSURI
MATSURI is a corporate collaboration project that promotes the realization of carbon neutrality through the production of algae
utilizing photosynthesis. Various companies from a wide variety of industries participate in this project. Partner companies aredeveloping businesses in all roles from algae production to sales, including the development of equipment related to algae cultivation,
the maintenance of logistics networks, and the development and sale of products, and are working together to build an algae industry.

Action Guidelines
・We comply with the laws and regulations of all countries and regions in which we conduct our business activities. If where
national laws and international human rights differ, we seek ways to respect internationally recognized human rights
wherever possible.
・We identify negative impacts that we could have on human rights through our business activities, and strive to prevent,mitigate, or eliminate the causes of such impacts.
・We establish a scheme for our employees and suppliers to access or report, and accept consultations and notifications
concerning human rights. Upon receiving consultations or notifications, we investigate the facts, and if any problem is
identified, we remedy it through appropriate response.
・We disclose efforts and progress promptly on human rights actions and keep updating ones through discussions anddialogues with various internal and external stakeholders.
・This policy applies to all Corporate Officers and employees of the Group. We provide appropriate education and trainings toensure that all Corporate Officers and employees understand and act with this policy.
・We keep encouraging all of our business partners, including suppliers, to understand the Policy and join our efforts torespect human rights.

MATSURI (Japanese Only)
・eFuel Alliance
The eFuel Alliance is an organization whose goal is to establish and disseminate e-fuel,which contributes to the prevention of global warming, and to make it accepted all over
the world.
* e-fuel: Fuels produced by synthesizing carbon dioxide (CO2) and hydrogen (H2) are called
synthetic fuels. Of these, synthetic fuels that use hydrogen derived from renewable energy
sources are called "e-fuel". Since CO2 in the atmosphere is used as raw material, burning e-fueldoes not increase the amount of CO2 in the atmosphere.

＜Appendix＞
The Policy is top-ranked guideline on human rights actions and had been confirmed by our CSR and Sustainability Committee
and approved by Board of Directors’ meeting. The Policy shows the Group’s approach on human rights and complements our
Corporate Philosophy, CSR and Sustainability Charter, and Corporate Code of Conduct.
The Policy will be periodically updated in response to changing social and business environment and human right issues,
through discussions and dialogues with stakeholders. We keep adequate management system and reflect updates on
relevant business policies and procedures to integrate in entire business activities.

eFuel Alliance30IndexEnvironment

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Governance

Basic Philosophy

The human rights that the Group respects in its corporate activities include the following:[Prohibition of forced labor]
We do not tolerate forced labor and human trafficking, and we employ employees on their own volition.
[Prohibition of inhumane treatment]
We do not engage in inhumane treatment such as abuse, corporal punishment, sexual harassment, or power abuse, and we
respect the human rights of our employees.
[Prohibition of child labor]
We respect rights of children and do not employ them under the minimum age for employment in the country or region.
Workers under the age of 18 shall not perform work that is likely jeopardize the healthy development.
[Prohibition of discrimination]
We prohibit discrimination of any kind, irrespective of race, color, age, gender, sexual orientation, gender identity, ethnicity,
nationality, disability, pregnancy, religion, union membership, protected genetic information, or marital status.
[Working conditions and equal opportunities]
We comply with the laws and regulations of each country and region, and offer working conditions for a better life for our
employees, and pay more than the legal minimum wage and do not unreasonably reduce wages. We also promote equal
opportunities and equality in hiring, promotion, and compensation.
[Freedom of association and collective bargaining]
We respect freedom of association and the right to collective bargaining in accordance with the laws and regulations of eachcountry and region.
[Responsible procurement of resources and materials]
We promote responsible procurement of resources and materials, taking into consideration human rights issues, including
those relating to conflict minerals. If any use of such minerals is found, we will take appropriate measures.
[Respect for privacy]
We respect and do not infringe on the privacy of individuals.
[Comfortable workplace environment]
We comply with the laws and regulations concerning safety, hygiene and health in each country and region, and create asafe, healthy and comfortable workplace environment.
[Engagement with local communities]
To prevent negative impacts on the safety and health of local communities, we prevent environmental destruction andcontamination, and conduct our business activities in consideration of the rights of local residents.
[Respect for the rights of indigenous peoples]
In business activities in areas where indigenous peoples reside, we recognize that indigenous peoples have their own uniquecultures and histories, and we respect the rights of indigenous peoples as stipulated in international agreements.

We are aware that a wide range of people are affected by the business activities of our Group, including not only employees of ourGroup but also employees in the supply chain and local residents. We are committed to respecting human rights through theestablishment of a mechanism to identify, assess, prevent, mitigate, and remedy negative impacts of our business activities on humanrights.

Overview of human rights initiatives

Promotion System
Since human rights issues are wide-ranging, they are addressed by various departments, such as the Human Resources Dept.,
Procurement Dept., Risk Management & Compliance Dept., and Environment & Safety Management Dept., depending on the issue. The
progress of work and problems are checked by each department and each relevant specialized committee.
In addition, in response to the recent global trend toward legislation on business and human rights, we established a Human Rights
Working Group in FY2022 to evolve our Group’s human rights initiatives into ones that meet global standards, and the Working Grouphas begun deliberations.
All initiatives for respect for human rights are supervised by the CSR and Sustainability Committee.
CSR and Sustainability Promotion System

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Formulation and Publication of Human Rights Policy

Human Rights Due DiligenceWe established the Human Rights Policy in 2020 as part of the CSR Basic Policy. Subsequently, we revised the Human Rights Policy inJanuary 2023 in response to the increasing importance of and expectations for corporate human rights initiatives and the increasingneed for companies to promote human rights not only within our Group but throughout the entire value chain.

We are working to identify, assess, prevent and mitigate human rights risks related to the business operations of our Group.
In identifying human rights risks, we organized the Group’s major value chains and related stakeholders and extracted commonly
assumed human rights risks for each value chain. We then organized the Group’s human rights risks by referring to reports frominternational organizations, media databases, and other surveys, as well as benchmarks from other companies. We then conducted asimplified human rights impact assessment and mapped them and identified priority human rights risks.

In making revisions, the Human Rights Working Group, with the advice of external experts in the field of human rights, prepared adraft revision, taking into consideration our Group’s issues, human rights risks, global standards, etc. The draft was then reviewed by
the CSR and Sustainability Committee and approved by the Board of Directors.

Identified Priority Human Rights Risks＜Process of revision of the Human Rights Policy＞

Our Group

Supply Chain

・Inadequate occupational health and safety
・Long working hours
・All discrimination based on race, sex (women / men), gender, sexual
orientation, gender identity, ethnicity, nationality, disability,
religion, etc.
・Malfunction of complaint handling mechanism

・Conflict minerals
・Forced labor
・Child labour
・Health damage to local residents due to environmental pollution
・Inadequate occupational health and safety
・Long working hours
・All discrimination based on race, sex (women / men), gender, sexual
orientation, gender identity, ethnicity, nationality, disability,
religion, etc.
・Malfunction of complaint handling mechanism
・Violation of indigenous peoples' rights

Based on these results, we are now promoting human rights due diligence initiatives depends on risk assessments, primarily within ourgroup and supply chain.
We also recognize that the human rights risks we have identified may change depending on social conditions, the progress of ourgroup's business, the development of new business relations, etc.
In order to increase the effectiveness of our efforts, we will conduct periodic reviews of the risk mapping.

【Our Group】

We conduct compliance awareness surveys of employees and human rights and labor surveys of Group companies to identify humanrights violations and potential human rights risks.
・Compliance awareness survey for employees
A compliance awareness survey is conducted for all Group employees in Japan to identify risks related to compliance (includingharassment), the level of awareness and understanding, and the status of the organization, etc. The survey includes an open-ended
section that allows respondents to anonymously write their opinions about compliance. Issues and potential human rights risks
identified through the surveys are reported to heads of respective divisions to prevent them and make improvements.
・Human rights and labor survey for Group companies
We also conduct annual surveys on our group companies about human rights and labor issues to check for potential human rights
risks.

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GovernanceDialogue with Stakeholders【Supply Chain】

To promote CSR and sustainability efforts throughout our supply chain, we issued the CSR and Sustainability Procurement Guidelines,
which have been deployed to suppliers. The guidelines include compliance matters related to human rights, including labor, safety, andhealth.
To monitor the status of implementation by suppliers, we conduct surveys every two years using a check list and provide feedback on
the results. For suppliers that require follow-up activities, we visit them to check the situation. We also provide support as appropriate
when improvements are needed.
Our Group

Supply Chain

Compliance Awareness Survey

・Conducted in Japan once every two years
・In FY2022, the focus was placed on follow-up of the FY2021
survey results.
・ In FY2023, questions related to human rights are planned to be
reinforced.

Human Rights and Labor Survey

・Conducted every year.
・In FY2022, questions related to human rights were reinforced.
・Interviews are conducted with Group companies with foreigntechnical interns.

Survey using the CSR and Sustainable
Procurement Guidelines check sheet

・Conducted once every two years.
・In FY2022, a survey was conducted on some suppliers using aquestionnaire sheet containing only questions about humanrights.
・In FY2023, questions related to human rights are planned to be
reinforced.

We hold regular labor-management meetings with the labor union, which represents employees, to discuss working hour management
and work styles. For our suppliers, we receive consultations through the consultation desks, etc., and we sincerely listen to theirproblems and concerns and discuss with them to help them solve problems and improve the situation while deepening mutual
understanding.
In addition, we hold roundtable meetings with representatives of residents living near our plants to exchange opinions on various
matters, including whether there are any issues that could threaten their living environment.

Raising Awareness of Human Rights
We distribute the Compliance Guidebook to employees at our group.
The Compliance Guidebook is a booklet that compiles corporate and social rules. It is used to check correct action to be taken as amember of the Niterra Group when it is difficult to make judgments. This guidebook also stipulates compliance matters related tohuman rights, including respect for human rights and prohibition of various types of harassment (e.g., harassment related topregnancy, childbirth, childcare leave and long-term care leave, bullying, and mobbing, as well as sexual harassment, including that
directed against people of the same gender and in relation to sexual orientation or identity). The guidebook is also used in dailyawareness-raising activities, such as read-through at the workplace.
In human rights training for all employees, employees watch a video on the necessity of respect for human rights and the Group’s
human rights policy, and they take a check test to confirm their level of understanding. In addition, we also hold human rights
seminars for management to provide them with the opportunity to consider global trends, business and human rights, etc. We areworking to raise awareness of human rights among management and employees through increased education and information
provision.
We have been recently increasing opportunities to raise awareness about gender equality and LGBT-related issues through ourhuman-rights-related training and e-mail newsletters. We are also monitoring racial problems around the world.

Complaint Handling Mechanism
We have contact points in place to accept opinions, questions, requests, etc. from stakeholders, including customers, suppliers, andemployees.
Reports and consultation requests related to human rights from suppliers and employees are accepted by contact points for thewhistle-blowing system.
For consultations and reports we receive, we investigate the facts with utmost care to ensure that the person who reports or consults
is not identified or does not feel uneasy, and if any problem is identified, we deal with it promptly. In addition, we prohibit
disadvantageous treatment of persons for reasons of having reported or consulted. We also confirm with the persons whether they
are treated disadvantageously.

【Japan】

・Contact points for the Corporate Ethics Helpline (a whistle-blowing system) are in place internally and externally.
・External contact points offer consultation services and accept reports outside working hours and on holidays. Consultation requests
are also accepted anonymously.
・The helpline is available for suppliers and our group employees.

【Outside Japan】

・Respective group companies have contact points for whistle-blowing.
Corporate Ethics Helpline

Data

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Society

Data

Governance

Global Human Resource Management

Showing Support to the “My Declaration of Human
Rights” Project under the Auspices of the Ministry ofJustice

Human Resource Policy

In July 2021, we publicized “My Declaration of Human Rights” to show support for the “My Declaration of Human Rights” project
promoted by the Ministry of Justice.

We acknowledge that our employees are our most important management resource. In light of this, we respect thediversity and individuality of our employees and strive to develop the group as a whole by ensuring that these self-leading
and innovative human resources can fully demonstrate their capabilities.

Action Guidelines
・We foster aspiring human resources who can act to bring about changes and also change themselves (self-leading andinnovative human resources) and establish an environment where they can perform to the best of their abilities.
・We strive to nurture a corporate culture where human resources with different qualities can fully realize their own
capabilities and ensure that the right human resources are assigned to the right posts.
President Kawai holding a declaration card

Basic Philosophy“My Declaration of Human Rights”

In our 2030 Long-term Management Plan “NITTOKU BX,” we have set “change drastically beyond the current way” as our actions
toward our vision for 2040. The core message of this vision is to be a company that coexists with a diverse range of humanresources with aspirations. We are not only concerned with “what ceramics can do,” but also with the acquisition and developmentof autonomous human resources, the combination of diverse knowledge and expertise, and the enhancement of engagement withthe aim of maximizing our human capital and thereby improving corporate value so that we can take on challenges beyond therealm of ceramics and beyond the world and our own imagination.
To realize our vision, we need a diverse range of human resources who have aspirations. We consider diversity, equity, and inclusion(DE&I) to be one of our most important management strategies as we believe that harnessing each employee's individual qualities
and helping them fully demonstrate their abilities are essential for companies to attain sound growth and ensure happiness for all
employees. We strive to understand and accept diverse human resources regardless of traits such as gender and age, and toprovide each with the best support and opportunities in a fair manner.
In addition, to enhance the value of human capital, we recognize that human resources are the most important management
resources for a company. Knowing this, and to achieve the goals of our Long-term Management Plan, we have defined the humanresources we seek as "self-disciplined creative human resources" and are taking systematic and consistent actions to create thiskind of human resources. Among these, we consider the development of next-generation leaders to be an issue of great
importance, and we are working to cultivate managers from early stages and develop human resources for upper management.

Special website for “My Declaration of Human Rights” of the Ministry of Justice34

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Governance

Data

Human Resources Strategy

Personnel System

Our human resources strategy focuses on how to acquire and develop the human resources needed to achieve the vision of our2030 Long-term Management Plan “NITTOKU BX,” and our Medium-term Management Plan. We have defined the image of humanresources we seek and are advancing global human resources management to bridge the gap with our current human resources
and transform our portfolio in this area.
In order to create technologies and new businesses that can respond to rapid changes in the environment, we are focusing not only
on the further development of internal human resources, but also on the strategic acquisition of external human resources withsharp expertise.

In April 2022, the Company revamped its personnel system. In order to accelerate the creation of self-disciplined creative humanresources who can realize the themes of the Medium-term Management Plan to "Break to change" and "Change to create," we haveincorporated the Group Human Resource Policy. This policy clearly defines the direction of human resource policies that the entire
Group will pursue, creating a highly fair personnel system that rewards achievements and challenges regardless of age, gender, andother personal attributes. We have introduced a system in which employee compensation reflects the results produced by each inhouse company, and we expect each employee to be aware of the output that contributes to our business and performance, and towork in a more efficient manner.

Initiatives to develop a Group-wide skill map

Adding evaluation elements

As a specific initiative to create self-disciplined creative human resources, we are working to establish a Group-wide skill map thatdefines the necessary skills for our talent. We will also identify the gap between the current state of our employees and the desired
skills, and create an environment in which employees can improve their skills to fill this gap.

Under the new personnel system, self-discipline, creativity, achievement, and challenge have been newly added as evaluation
elements common to the Group. The entire Group will work together to develop self-disciplined creative human resources who canrealize the themes of the Medium-term Management Plan to “Break to change” and “Change to create.”

Developing DX human resources

Performance management

As for DX, we are actively deploying measures to cultivate our personnel to achieve high efficiency in operations and to realize"change beyond the current way." In FY2022, we implemented educational measures to improve the digital literacy of employee atall domestic Group companies. We will continue to deploy educational measures to harness digital technologies for reforming
operations, and ultimately, creating new businesses.

Individual interviews are held at the beginning of the term to set personal goals that align with the organization's goals. personalgoals that align with the organization's goals.
In addition to confirming progress on a daily basis through one-on-one meetings and progress report meetings, we also review the
first half of the term and discuss how to proceed in the second half on Individual interviews during the term. Finally, performance
evaluations are conducted at end-of-term interviews.
Additionally, by providing feedback on performance evaluation results and advice from the superiors, we are helping to improve
performance and develop future careers.

Recruitment Strategy
In terms of recruitment, in order to respond quickly to changes in the business environment, we aggressively pursue employmentof mid-career personnel who can immediately take on a job effectively, mainly in the new business and IT departments. We are also
promoting the employment of foreign nationals in our effort to adapt to the rapid advancement of globalization and encourage
diverse talent to play active roles. For new graduates, we have been employing around three to five foreign nationals every year,
recently with a special focus on the employment of foreign nationals who have acquired not only Japanese language skills but also
more specialized skills from overseas universities, in addition to those who have studied in Japan. We are also conscious ofincreasing the ratio of female employees and the employment rate of people with disabilities. The inclusion of mid-career
employees and foreign nationals in each workplace has helped increase our diversity awareness across the company.

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Governance

Data

Introduction of role grading system for managers

Improvement proposal system

A role grading system was introduced for managerial positions, and by setting role ranks and salaries according to the roles
required, we established a system so that the actual roles played by the employees and their compensation are aligned. By
abolishing the annual requirement for promotion for staff positions as well, we have been able to quickly appoint excellent humanresources in both managerial and staff positions, regardless of tenure. In addition, as human resources who can make a positive
impact on our business management and performance by utilizing their high level of expertise, we have established qualification for
specialist positions (SP positions). The M positions, the traditional managerial positions, will focus on management, while SP
positions will concentrate on demonstrating their expertise toward more efficient business operations. By further clarifying theroles of each individual, we will realize speedy innovation and the placement of the right people in the right roles to promote theachievement of organizational goals.

We have introduced an improvement proposal system aimed at encouraging employees’ innovation, fostering their motivation andcapability for improvement in their work, and enhancing their sense of engagement with the management. This system accepts
improvement proposals related to work methods and quality, as well as environmental conservation through the reduction ofenergy and raw material consumption, and safety and health. Outstanding improvement proposals are rewarded with cash
incentives.

Idea challenge system
This system has been established to encourage employees to propose cross-departmental ideas or ideas related to their own
department. When a proposal is adopted, the proposer has the opportunity to work towards its realization by applying theirknowledge and skills. Employees whose ideas are adopted are rewarded with cash incentives.

Outstanding patent award system
To encourage employees’ inventions related to patents, utility model rights, or design rights, we recognize employees whose
inventions demonstrate creativity, possess high technical value, and are considered to make a significant contribution to ourcompany. These employees are rewarded with cash incentives.

Employee Satisfaction Survey
The Group conducts employee satisfaction surveys for the following three purposes.
(1) to understand employee motivation and sense of burden(2) to understand the current status, verify the effectiveness, and consider measures for our Action Guidelines “Change(transformation) with (co-existence) Will (will),” as set in the Long-term Management Plan
(3) to improve the workplace through examination of the results

Qualification system for core positions

Award System

The survey results of each individual department are fed back to the departmental heads to notify them of the department’s
situation and challenges indicated by the results. For items with low engagement, countermeasures are considered throughexchanges of opinions within departments to improve workplaces, and in some cases, companies launch projects to proactively
engage in such activities. The HR development department is also working to offer a better working environment for employees byidentifying issues to be resolved through interviews with young employees at each workplace, and the employee satisfaction survey
has become an important tool for reform.
In addition, the change in overall satisfaction has been adopted as one of the indicators used in the calculation of directors'
bonuses as of FY2022. We recognize that improving employee engagement is an important management issue and will work on
measures toward this improvement.

We have established various award systems to encourage employees to engage in various activities.

NITTOKU BX AWARD
The NITTOKU BX AWARD is an internal contest designed to recognize employees who embody the spirit of “Beyond ceramics,
exceeding imagination” and exhibit the mindset of Nittoku Way. Established in FY2021, the award aims to promote understanding
and dissemination of the “Nittoku Way” and the “2030 Long-Term Management Plan NITTOKU BX,” encourage “unprecedentedchanges,” and recognize individuals who “speak of dreams and make them come true.”
We invite submissions for activities that have achieved unprecedented changes or are currently making efforts to achieve them, as
well as activities that contribute to society or the NITTOKU Group. From among the activities submitted by employees, we selectexcellent activities and award the President’s Prize (one per year from all activities) and the Excellence Awards (top ten every six
months).

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Society

GovernanceDiversity,Equity & Inclusion

Data

MT training
The name of this training, “mimi-tako (MT),” is derived from a Japanese phrase meaning “hear enough.” To raise managers’
awareness, the MT training is held repeatedly under the themes of, for example, diversity, the Nittoku Way, and compliance to theextent that trainees feel they have heard enough.

Gender Equality Initiatives (Promoting Empowerment of
Women)
Since 2013, as our first step toward diversity promotion, we have been putting effort in creating working environment across thecompany where women can truly thrive and play active roles. We are trying to change the mindset of both managers and female
employees themselves, regarding the empowerment of women as a driver for the reform of our corporate culture. We will continue tomake further efforts to increase the ratio of women in managerial positions.

Raise UP Program (Selective Female Manager Promotion Training)This is a selective training program for female employees whose next stage of growth will be managerial positions, to acquire theknowledge, skills, and attitude required to become what they want to be. The program embraces the concept “one step forward in a
resilient manner while staying true to oneself,” and the first word in the name of the program represents the components that makeup the concept: Resilient, Active, I (true to oneself), Smart, and Exceed (one step forward). We have appointed several executives asadvisory board members for the program, providing opportunities for trainees to voluntarily seek advice and support for their efforts
in the program, and acquire multiple mentors. Trainees will gain the perspective required of managers, and at the end of the training,they will give a presentation in front of the chairman, president and board member. Through the training, we help trainees get ready to
become managers and to take on challenges with confidence.

Proportion of Female Employees

Number of Female Employees in a Managerial Posts

External commendation for the empowerment of women
・Selected to be a Nadeshiko Brand company (for FY2021)
・Signed the Women's Empowerment Principles (WEPs)
・Granted Kurumin certification (for FY2020)・Selected to be a Nadeshiko Brand company (for FY2018)
・Certified by Aichi Prefecture as an “Aichi Josei Kagayaki Company (Company Supporting Aichi Women’s Career Success) (for
FY2017)・Included in “New Diversity Management Selection 100” by the Ministry of Economy, Trade and Industry (for FY2017)
・Granted Eruboshi two-star certification based on the Act on Women’s Participation and Advancement in the Workplace (for FY2016)
・Granted the 2015 Japan Productivity Center Incentive Award Empowerment Grand Prix for Activities by Women
・Received the 2014 Excellence Award, Nagoya City Accreditation and Commendation System for Companies that Promoted Increased
Roles for Women
Information Disclosure Based on Promoting Empowerment of Women
External Evaluation of Our ESG Initiatives
37IndexEnvironment

Society

Governance

Providing Workplaces Where Employees Can Continue toExert Their Abilities

Data

Diversification of the work styles of the platinum generation
Some employees in the platinum generation are eager to work but do not have confidence in their physical stamina. In response, atsome of our plants we have begun to exempt such employees from the night shift upon request, with other employees working atnight instead.

The growth of employees leads to the sustainable growth of the company. Based on this recognition, we are working to provide
employees with workplaces where they can choose the right career for themselves, enhance their expertise and skills, and continue tomake a meaningful contribution.
As part of such efforts, we defined people aged 60 and above as the platinum generation and implemented the Platinum Project from2018 to 2021 to develop measures that enable all employees, including reemployed retirees, to continue to play an active role in theworkplace. A project team was established, comprising members selected through open recruitment, and the following measures havebeen launched under the Project.

Establishment of a career consultation helpline
Through this contact, employees who have a national qualification for career consulting respond to calls for advice about career
vision, work motivation, life events, etc. The career consultants do not provide solutions but instead help the questioners find answers
for themselves.

Promoting the use of “My Career”

Number of Retirees Reemployed under the System

As a tool to help employees to look back on their past, set their future vision and commit themselves to achieving the vision, we use“My Career.” Employees annually input information about their career to date and their future aspirations into “My Career,” which their
managers then refer to in interviewing them to support their career development.

Employment of the Disabled
We established Nittoku Smile Co., Ltd. in order to promote
employment of workers with disabilities and it was certified as a
special subsidiary in January 2018. We aim to create acomfortable environment for workers with disabilities.
The percentage of employees with disabilities at the end of
fiscal 2022 was 2.59%, reaching the mandated employment rateof 2.3%. We continue to create a better working environment bypromoting understanding of employment of workers withdisabilities within the company.

Idea Challenge System
The “Idea Challenge System” is designed to provide a place and opportunity for employees to fully demonstrate their knowledge andskills. If an employee proposes an idea and the idea passes the screening process, the employee will be given an opportunity toparticipate in the relevant project.

Percentage of Disabled Employees*The numbers in the data are for the end of the fiscal year.

38IndexEnvironment

Society

GovernancePutting Focus on the Employment of New Graduateswith Foreign Nationality

Data

Countermeasures against harassment
Our human rights policy explicitly states that we will not discriminate on the grounds of LGBTQ+. In addition, consultations on LGBTQ+
and other sexual harassment are given by both labor and management at the consultation desks set up at each plant and via the
Corporate Ethics Helpline. Prompt action is taken by the Anti-Harassment Committee.

We are promoting the employment of foreign nationals in our effort to adapt to the rapid progress of globalization and encourage
diverse talent to play active roles. For new graduates, we have been employing about two to five foreign nationals every year, recently
with a special focus on the employment of foreign nationals who have studied the Japanese language at overseas universities andwant to work in Japan, in addition to those who have studied in Japan.
In order to help newly-hired foreign national employees smoothly adapt to life in Japan, we offer them various supports, including ahelp site Nittokupedia created by their senior colleagues, a work buddy program to work with Japanese peers, teaching of Japanese
language and cross-cultural training. With non-Japanese new graduates and mid-career employees, including both engineers and officepersonnel, demonstrating their abilities at our workplaces, we can increase our diversity awareness across the company.
We are recognized as a company that has been proactively employing highly-skilled foreign professionals,* and our efforts shown
above are covered in "Fifty Japanese Companies Providing Successful Careers for Highly-skilled Foreign Professionals" released by the
Ministry of Economy, Trade and Industry, and in a publication issued by the Ministry of Health, Labour and Welfare to introduce acollection of successful case examples that help improve employment management to create an attractive working environment for
highly-skilled foreign professionals. In addition, we have been selected for the Japanese government project "Visionary Management
2021," which selects about 100 companies from all over Japan that are working on employing highly-skilled foreign IT personnel, thatis to say, a new management method of hiring excellent talent regardless of nationality.

Aiming for Workplaces with Diversity
In order to respect the diversity and individuality of our employees, we are promoting initiatives not only for systems and rules, butalso for facilities and equipment.

Adoption of genderless uniforms
We use genderless uniforms with a unified design and color.

Installation of multipurpose toiles*Highly-skilled foreign professionals: foreign human resources with advanced expertise and skills

We have installed multipurpose toilets that anyone can use at our head office, Komaki Plant, and other locations.

LGBTQ Initiatives

Installation of lactation facilities

Our human resources policy states that we respect the diversity and individuality of our employees, and we aim to create a workplace
where LGBTQ+ employees can also play an active role with pride.
The department dedicated to diversity issues takes the lead in promoting various initiatives.

Komaki Plant N-Forest has set up lactation rooms for employees who need to nursing or express milk.
Even at bases that do not have lactation room rooms, we have taken measures such as creating rest spaces for women.

Awareness-raising activities and training

Setting up prayer rooms

To ensure that our employees have the correct knowledge on LGBTQ+, we provide training and disseminate information through our
in-house e-newsletter.

Prayer rooms have been set up at the head office and Komaki Plant N-Forest for employees who need to pray during working hours
for religious reasons.

In FY2022, we co-sponsored Nagoya Rainbow Pride, an LGBTQ+-related event, and held an in-house training session with invited
speakers. The training provided a valuable opportunity for employees to deepen their understanding of LGBTQ+ issues by listening to
LGBTQ+ persons about their experiences and discussing issues with them.
https://www.nagoyarainbowpride.com/sponsor/

39IndexEnvironment

Society

GovernanceWork-Life Balance

Data

Reduction in Working Hours
We are working to reduce overtime in order to reduce total working hours. When pre-planned overtime is known about, the company
management and the labor union confirm the situation in the workplace and engage in consultation designed to keep working hours
within the target. As a result of addressing the issues discussed at the labor reform committee, we are starting no-overtime
Wednesdays and prohibiting overtime in excess of five hours per day.

Work Style Reform
To improve productivity and develop self-disciplined human resources, we have formulated Work Style Reform Declaration based on
two pillars: promoting comfortable remote work and creating new value with tools responding to change.

Furthermore, as a measure of the labor reform committee, we added a new regulation for having 10-hour intermission between
working hours, and failing to comply with the rules is expected to be subject of the labor-management consultation as a strategy forsuppressing overtime work.
An annual variable working system was introduced from April 2020, allowing workers to set their monthly working hours according to
the year’s busy seasons, allowing for a reduction in overtime and a more flexible working style.

Work Style Reform Declaration

We recommend "diversified work styles" for "Creating an organization comprised of passionate individuals working together"of Nittoku BX.

Labor-Management Relations• Promote comfortable remote work to employees→ Create an environment with a goal of a remote work rate of 70% or more.
• Prepare tools that respond to change and create new value→ To that end, we will invest in digital solutions.

Labor-management relations should be oriented to the combined employer-employee effort to contribute to society through theprovision of good products and services. At Niterra, both labor and management understand their respective responsibilities andstrive to improve the work environment through mutual trust and cooperation.
Labor-management conferences are held three to four times a year on individual workplace and companywide bases, providing
communication opportunities. These are chances to discuss various topics including the company's situation and how to improve thelabor environment, and opportunities for employees to have their opinions heard. These conferences serve as opportunities to form alabor-management consensus through lively discussions on various issues, including the situation of the company and improvement of
the working environment.

And we want you to find the best for yourself from the many options and become a “self-disciplined human resource who
can continue to add value”.
Niterra Group respects each person's values and aspirations.
Remote work, which has been promoted as part of work style reform, has taken root thanks to a thorough review of operations at
each workplace, combined with the COVID-19 pandemic. However, in January 2023, we launched a return-to-office strategy toencourage employees to work in the office a minimum of 40% per month in order to further invigorate the organization and maximize
the benefits of both remote work and in-office work through face-to-face communication.
Furthermore, in order to achieve the goal of our work style reform indicated in the Nittoku BX, we aim to institutionalize the following
two measures this fiscal year to improve productivity and employee engagement.

Niterra Group labor union
Participation rate of the Niterra WORKERS’ UNION(1) Diversification of working places
In February 2022, we introduced, on a trial basis, a system to allow employees to work in remote locations. This system seeks topromote a work style that is not restricted by one’s place of residence, thereby aiming to secure excellent human resources living inremote areas and prevent employees from leaving the company.
(2) Diversification of working hours
By expanding the options for working hours, we will create an environment that helps employees balance their work and personal
lives and grow into autonomous human resources98％(As of March 31, 2023)*Including CERAMIC SENSOR CO., LTD, SparkTech WKS CO., Ltd., NANSEI CERAMIC CO., LTD., NTK Medical CO., LTD., NTK CUTTINGTOOLS CO., LTD., NTK CERATEC CO., LTD.（Komaki Plant）

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Society

Initiatives that Consider Work-Life Balance

Various plans and initiatives

We are promoting initiatives improve the work-life balance of
employees.
The percentage of female employees taking childcare leave now
exceeds 98%, and the number of male employees who takechildcare leave has increased in recent years.
Through the revision of our reduced working hours plan, whichused to be only available for those involved in childcare or longterm care, we have made the plan available without imposing
any requirements, thereby expanding the work style options for
employees.
For flextime working, we do not set core hours, and from April
2022, hourly leave can be taken, allowing employees to work ina more flexible manner.
Furthermore, with the aim of improving job satisfaction andquality of work, in February 2022 we introduced a system toallow employees to work in remote locations on a trial basis.
Employees who need, or find it difficult, to change their place ofresidence due to family circumstances (nursing care, childcare,etc.) can now work at a residence far from their place of work.
This system serves as a driver for promoting the participation ofmen in childcare.

Data

Governance

Plan

Number of Employees Using the Leave Schemes

In addition, we hold “Childcare Strategy Seminars” to encourage
employees to think about work-childcare balance, “Return-toWork Training” for employees returning to work after leave, and“Seminars for Supervisors of Returning Employees” forsupervisors of employees returning or planning to return to
work.
Publication of information based on the Act on Advancement of Measures to Support Raising Next-Generation Children

41

Overview

Flextime working plan

Employees can decide the start and end times as long as they work the prescribed total monthly
working hours.

Hourly leave plan

Employees can take hourly leave (paid) for any reason. This leave can be taken in the middle ofwork hours.

Second job plan

Employees can be hired by another company or work freelance in accordance with the rules while
making the job at our company their main job.

Plans related to remote work

We are creating an environment with the goal of achieving a remote work rate of 70% or more.
From January 2023, we have been recommending hybrid work, which encourages employees tocome to office to a certain extent. A remote work allowance is provided depending on the numberof days of remote work from home.

Reemployment plan for employees
retired due to their spouse’s transfer

Those retired due to their spouse's transfer can be rehired.

Special unpaid leave for fertility
treatment

It is possible to take special leave (unpaid) for outpatient visits to undergo infertility treatment.

Special leave for antenatal outpatient
visitsPregnant employees can take special leave as follows:- 12 to 23 weeks pregnant: one day every
four weeks;- 24 to 35 weeks pregnant: one day every two weeks; and- 36 weeks pregnant
onward: one day every week.

Measures to ease the burden ofcommuting for pregnant and nursing
employees

If congestion during commuting causes physical burden, pregnant and nursing employees may
arrive late and leave early in one-hour increments (up to two hours per day), upon request of theemployee and on the advice of an industrial physician or other healthcare provider.

Measures concerning working hours
for pregnant and nursing employees

If working long hours causes physical burden, pregnant and nursing employees may arrive lateand leave early in one-hour increments (up to two hours per day), upon request of the employee
and on the advice of an industrial physician or other healthcare provider.

Measures concerning breaks for
pregnant and nursing employees

If working long hours causes physical burden, pregnant and nursing employees may be allowed tochange their work duties and/or may be exempted from overtime, late-night work, and holiday
work, upon request of the employee and on the advice of an industrial physician or other
healthcare provider.

Paid maternity leave

Employees can take leave 17 weeks before the expected date of delivery and eight weeks fromthe day after delivery. Leave may be taken twice in installments over a period until the childreaches the age of one.

Paid parental leave at birth(Commonly known as “postpartum
paternity leave”)

Men, and women who meet the requirements for adoption, etc., may take up to four weeks ofleave within eight weeks of the birth of a child. Leave may be taken in two installments.

Paid parental leave

Employees can take leave after the birth of their child until the day before the child’s firstbirthday.

Extension of the paid parental leave

The childcare leave period can be extended to the end of April after the child’s second birthday if
the child cannot enter a day-care center, or childcare while working has become difficult due tothe death/injury/illness of the spouse engaged in childcare.

IndexEnvironment

Society

Plan

Overview

Fee assistance for child care services

Employees may choose to receive subsidies for the use of childcare facilities, nursery schools, andbabysitters through the cafeteria plan.

Reduced working hours (childcare)

On the grounds of childcare, employees can reduce their working hours by two hours from theprescribed working hours from the desired date until the end of the school year during which
their child is in the third grade at elementary school.

Reduced working hours (long-termcare)

On the grounds of long-term care, employees can reduce their working hours by two hours fromthe prescribed working hours from the desired date until the end of long-term care.

Reduced working hours (other reasons)Regardless of the reason, employees can reduce their working hours by two hours from theprescribed working hours from the desired date to a predetermined date.

Child nursing care/long-term care leaveplan

Employees can take special leave (unpaid) on an hourly basis to provide child nursing care or longterm care if they are raising a child in the third grade at elementary school or younger, or have afamily member (in the first or second degree) in need of long-term care.

Special paid leave for employees withdisabilities for their outpatient visits

Employees with disabilities who have notified the company of their disability can take special leave(paid) once a month when they need leave for their outpatient visit to undergo an examination or
consult a doctor.

Governance

Data

Human Resource Development
Employee skill enhancement and career development
We introduced a Group-wide skill map for employees to check their own skills as a tool to support their personal growth. In addition
to specialized training with voluntary participation from employees to improve their own skills, we also offer a variety of programs
to support employee career development, including level-specific training to acquire the knowledge and skills necessary for eachlevel and role, and training for manufacturing that focuses on quality education and other areas.
We are also utilizing My Career, a framework to help employees envision their future careers and think autonomously about theapproach they want to take. From this fiscal year, we are also promoting our Career Design Cycle, in which each employee arranges
their "cans" (work they can do) and "wills" (the kind of work they want to do). The Career Design Cycle is a process whereby
employees take ownership of the design and achievement of their own careers, utilizing interviews with workplace supervisors inorder to realize their vision, both for their work and for themselves. In the event that the cycle is not working well for employees
and there are concerns regarding their daily work or career, we offer a consultation helpline that they can contact at any time.
Employees certified as career consultants provide one-on-one counseling to employees, supporting them so that the consulting
employees can find answers for themselves.

Various seminars
Childcare Strategy Seminar

This seminar is designed to help participants strategically consider and prepare for their careers after returning to work afterchildcare leave.
This seminar targets a wide range of people, including our Group employees and their partners who are on childcare leave or planningto take childcare leave, as well as future child-raising generations, and workplace superiors.

Return-to-Work Training

This training is designed for employees returning to work after maternity or childcare leave.

Seminar for Supervisors of Returning Employees

This seminar is designed for supervisors who have subordinates on childcare leave to promote their understanding of the available
work-childcare balance support programs and to help make preparations for accepting returning employees.

42IndexEnvironment

Society

Governance

Development and Management of Managerial Human
Resources

Data

Development of Managers
For the development of managers, we provide them with opportunities to review their past management approaches and observe
the situation of their respective workplaces in an objective manner.

At the management meeting the members discuss personnel affairs regarding core positions and work to place the right person in
the right job for total optimization.
To develop these human resources, we operate programs such as the "HAGI Program" and "Niterra Business School.”
We have also established a selective human resources development program for each of PAMA, Asia and other regions andimplement the program four times a year for the local development of business leaders.

Implementation of a 360-degree survey
We implemented a 360-degree survey targeting departmental managers and those in higher positions in FY2018, and we will
expand the survey target to include sectional managers and those in higher positions in FY2020.
The survey analyzes the attitudes of the subjects, including their awareness and preparedness, based on the results of their
responses to the survey.
The survey results reveal the gaps between what the surveyed individuals think about themselves and what others think about
them. We give feedback to the respondents to help them become aware of the importance of “observing” themselves, and improve
behavior.

HAGI Program
As we expanded our business globally, in 2016, we started a program to find and develop the next generation of global managerial
human resources, targeting all Group companies.
This program is intended to facilitate the employment and promotion of candidates regardless of nationality and to provide themwith opportunities and environments that allow them to demonstrate their abilities. It was named the “HAGI Program” after Hagi
City in Yamaguchi Prefecture, where the Shoka Sonjuku school developed diverse human resources at the end of the Edo period.
Chairman Shinichi Odo serves as the head of the program. Under the program, seminars have been held on a continuous basis toprovide employees with opportunities to learn together with a focus on gaining a big picture view encompassing the entire
company. We are thereby developing leaders with the will and sense of mission required to take the Niterra Group into the future.

Use of an indicator to visualize workplace engagement
Along with the “one-on-one meeting,” which we introduced on a trial basis in FY2019 to foster dialogue between managers andtheir subordinates for the development of workers able to work autonomously, we have also introduced a quantitative indicator asa tool to visualize workplace engagement. This engagement indicator numerically shows the level of employees’ eagerness tocontribute to their organizations and jobs, and is designed for use by line managers to check the management level of theirworkplaces.

Niterra Business School
Targeting human resources in Japan, we run Niterra Business School classes for employees who are almost qualified to participate
in the HAGI Program. For these classes we have prepared a curriculum that helps participants develop logical thinking and acquire
knowledge and skills regarding management strategies, marketing and presentations. It also includes case studies based on actual
examples and is intended to help participants to develop the spirit, techniques and physical stamina required of leaders.

43IndexEnvironment

Society

GovernanceOccupational Health and Safety

Data

Promotion System
With the aim of eliminating on-the-job injuries and creating a comfortable, safe work environment, we have established andimplemented domestic occupational health and safety management system OHSMS (Occupational Health and Safety Management
System). The company, headquarters, and the group companies in Japan set safety goals and safety plans in accordance with our
OHSMS guidelines, aiming to conduct health and safety activities based on a “total involvement" principle. To attain a step-by-step
improvement of our safety status, these progress and results of such OHSMS efforts are verified by our internal health and safety
auditors as well as each health and safety committee and the central health and safety committee.
In FY 2021, our company acquired ISO 45001*1 certification, an international standard for occupational health and safety
management systems. From this time forward, the Niterra Group, including domestic and overseas group companies, will work on
health and safety activities so that these companies can also acquire ISO 45001 certification.
*1：ISO 45001 is the first international standard for occupational health and safety management systems issued by the International
Organization for Standardization (ISO).

Occupational Health and Safety Policy
With high respect to humanity, we act on occupational health and safety as the company’s starting point.

Action Guidelines
・To prevent health damage, injuries at work, and illnesses of employees, we will provide healthy and safety working
environment and act to improve physical and mental health.
・We will comply with laws and voluntary regulations regarding Occupational Health and Safety.
・We will continuously improve occupational health and safety management system and health and safety performance.
・We will eradicate injury at work by eliminating hazards for occupational health and safety and by reducing risks.
・We will promote ability and awareness at occupational health and safety through education and enlightenment.
・We will inform all employees about this policy and engage in health and safety activities with the participation of all
employees.

Basic Philosophy
The Niterra Group has many employees in various locations around the world. We believe that it is our responsibility to makecontinuous efforts to protect the physical and mental health and safety of each and every employee. We contribute to society byproviding our employees with a working environment conducive to mental and physical well-being so that employees can continue
to work happily and comfortably.

Health and Safety Promotion Organization

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Society

Governance

Health and Safety Targets and Results

Targets & Results for Fiscal 2022

From FY2023, in order to achieve the vision (or ideal state) and direction of our initiatives related to “occupational health andsafety” and “health,” we set common targets for the Niterra Group, as well as individual targets for each internal company andGroup company, and promote the implementation of the planned activities.

Item
Healthand
SafetyVision and Direction of “Occupational Health and Safety” and “Health”
Initiatives
Item

PersonVision/Direction

Occupational Health and ・Developing “people” who can act safely
SafetyDevelop people who are aware of workplace risks and rules and who can act safely on their own.
・Providing safe “work” conditions
Promote risk reduction and management to provide safe work conditions for workers.
・Creating a safe “working environment”
Improve and maintain the working environment through work environment measurements and 5S activities.
HealthMachine/work

・“Health” of employees and their families
Ensure that employees work in a comfortable working environment, and raise health awareness of
employees and their families to help them maintain and improve their physical and mental health.

Niterra Group Health and Safety Targets for FY2023
Niterra Group Targets
・Corrective action for nonconformance, andmaintenance/management

Data

Workingenvironment

Indicator

HealthNumber of recurrences of nonconformance: 0

Health and Safety Targets

Ideal Situation

Evaluation

Promotion of “Po・Ke・Te・Na・Shi”

Depending on the situation at each workplace, we
carried out promotional activities for "Po-ke-te-nashi."〇Communicate hazards and risks

We promoted risk assessment, which is the core ofdisaster prevention activities.
At each workplace, workers were informed about
the hazards and risks of risk levels IV and III.

〇

Implementation of traffic KYT(Kiken Yochi Training, or risk
prediction training)

In addition to driving a car, we conducted atransportation KYT that suited the transportation
methods of the participating members.

〇

Setting pointing and calling points
for work procedures

At each workplace, we set pointing and calling points
for high-risk work and instructed employees toconfirm safety before starting work.

〇

Checking differences in operations
between workers through safety
observation

We conducted safety observations of work andconfirmed whether there were any differences inwork methods between workers.
When differences in work methods were found, weinvestigated the cause and reviewed work
procedures.

〇

Improvement of management
category III, II, maintenance of the
management I category

Based on the results of working environment
measurements, we implemented improvements tosuppress the generation of hazardous substancesand noise and reduce the amount of exposure toworkers.

〇

Implementation of measuresagainst life-style related diseases

Each organization held seminars to promote
employee health and overtime management.

〇

Implementation of mental healthmeasures〇

Implementation of passive smoking
measures〇*1: “Po-Ke-Te-Na-Shi” (Pocket-Phone-Handrail-Shortcut-Pointing) is a general term indicating precautions to protect workers frombeing involved in an accident while walking around the workplace and to reduce operational errors by conducting pointing andcalling in practical operations, for example, “Do not walk with hands in pockets,” “Do not use your cell phone while walking,” “Makesure to hold the handrail while ascending or descending stairs,” “Avoid crossing at an angle (shortcut),” and “Never fail to conduct
pointing and calling at the points specified for this practice.”

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Data

Governance

Health and Safety Activities

Status of Group Companies in Japan

Status and Reporting Procedure of occupational
Accidents＜Number of Occupational Accidents＞

In FY 2022, 27 occupational accidents occurred (previous fiscal year: 23 accidents).

FY2021

Status of Niterra Co., Ltd.

Lost Time Incidents

In FY 2022, three occupational accidents occurred (previous fiscal year: seven accidents), and the total frequency rate was 0.42
(previous fiscal year: 0.90). Only minor disasters occurred.

FY2022

No Lost Time Incidents

Lost Time Incidents

No Lost Time Incidents

Niterra Co., Ltd.

1

6

0

3

Group Companies in
Japan

8

16

10

17

＜Total Frequency Rate＞
FY2021

FY2022

Niterra Co., Ltd.

0.90

0.42

Group Companies in
Japan

1.29

1.23

* Our calculation of lost-time injuries frequency rate was reviewed by Japan Quality Assurance Organization (JQA) and we received thefollowing verification report.
Independent Verification Report

Procedures for Reporting Industrial Accidents, etc.

Frequency Rate of Injuries

Upon the occurrence of an industrial accident, the workplace promptly reports this fact and prepares a preliminary report on theaccident. In addition, the workplace conducts a fact-finding survey and prepares an accident witness report featuring permanentmeasures that could be taken to prevent a recurrence.
The preliminary report and the accident witness report are distributed to all employees of the Niterra Group. In this way, we areraising awareness and taking measures to prevent similar accidents from occurring in the future.

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Society

Governance

Data

Risk Assessment (RA) Initiatives

Training with hazard simulation machine

Risk assessment (RA) is the core activity of our occupational health and safety management system (OHSMS). We have reviewed
diverse potential risks resulting from workplace equipment, chemical substances, and work at every workplace and evaluated them totake hardware/software countermeasures (residual risk management), prioritizing the most dangerous risks.
Also, the head of the workplace has conducted work observations and reviewed the results of RA.

The use of hazard simulation machines, which are designed for simulations of accidents that may occur in a workplace, such as being
pinched or entangled, allows trainees to experience the fear of having an accident, which is difficult to describe in words. Trainees canalso learn how to avoid accidents.
In addition to 29 types of hazard simulation machines, two types of machines to check the wearing of protective equipment areavailable.

Improvement of Working Environment
We conduct working environment measurements based on laws and regulations, targeting workplaces that handle chemical
substances and workplaces subject to significant dust pollution and severe noise. Plants and workplaces that have been classified in
the second or third management category are especially encouraged to implement effective solutions so that they can be reclassified
in the first management category.
We also take measures to prevent cases of heat stroke in the summer by measuring the humidity and temperature in hot workplaces,
encouraging an adequate intake of water and salt, providing cooling gear and the like.
In our offices, we appropriately control the level of lighting, temperature and humidity to ensure that the environment is suited to thework. In winter, we install humidifiers to help prevent the spread of colds and influenza. For COVID-19 as well, we take preventive
measures against infection by issuing internal notices in accordance with the guidelines of the Ministry of Health, Labour and Welfare.

Hazard simulation training：
VR (virtual reality) + simulation machines

Health and safety, environment exhibition

Enhancement of Education, Training and Enlightenment

With the work style reform, we held the exhibition online. Efforts and case studies related to health and safety, environment are
introduced to foster employees who will act on their own.

We conducted a variety of educational and training activities with the aim of building a safety culture from the view point of "people,""products" and "systems". Not only to prevent the recurrence of injuries, but to prevent them from occurring.

Health and Safety Guidelines

Stratified training

All employees are given this book, and it is read together in each workplace, leading to safe behavior for each employee.
In response to diversification, the book is translated into English and Portuguese. A web version is also available.

The program is implemented for new employees, third year, tenth year, managers, section managers and supervisors, and is also being
expanded to domestic group companies.

Health and safety committee activities for rule compliance

Specialized training

We conduct activities that comply with the rules to create safe and secure workplaces andemployees. To prevent walking related injuries with a focus on “Po・Ke・Te・Na・Shi” awareness. In
particular, we are promoting pointing and calling.

We are working to prevent industrial accidents by enhancing specialized training on chemical substances.

Managers and supervisors on the workplace also carry out workplace patrols, risk prediction andshare examples of Hiyari-Hatto (near misses), acting as the leaders of workplace health and safety
management.

47" Po・Ke・Te・Na・Shi" awareness posterIndexEnvironment

Society

Governance

Health Promotion Activities

Priority Measures
1) Prevention of lifestyle-related diseases
・Review of diet and exercise habits
・Follow up on those requiring special attention
・Group education and activities
2) Mental health・Prevention through self-care
・Subordinate care enhancement
・Work environment improvement
3) Secondhand smoke prevention
・Promote quitting smoking
・Prevent secondhand smoke

Health and Productivity Management
Niterra regards the health of employees as one of its important managerial resources for sustainable corporate growth and isfostering the health of individual employees for “health and productivity management.” In December 2017, we made a declaration on
health and productivity management as the entire Niterra Group and are implementing preventive and other measures against
lifestyle-related diseases, mental disorders and passive smoking to proactively support the health of employees. In addition, in order toinform as many people as possible about our health and productivity management, we publish a "Well-being Report" that summarizes
our initiatives and the results of analysis of the health status of our employees.
Thanks to the evaluation with respect to our activities, we have been certified as an “Outstanding Health & Productivity Management
Organization” sponsored by the Ministry of Economy, Trade and Industry, and Nippon Kenko Kaigi, for the seventh consecutive year
since 2017. Of these, a total of six times, we were recognized as one of the "White 500" top-ranking enterprises.

*Kenkokeiei is a registered trademark of NPO Kenkokeiei.

Declaration on health and productivity management
Ⅰ．Niterra Group that we will support the health of each and every employee and promote Kenkokeiei（Health andproductivity）by viewing the health of our employees as one of the most important management resources in order to realize
sustainable growth.
Ⅱ．We will respect the diversity and individuality of each employee and promote the creation of a workplace in which each
employee can fully demonstrate his or her abilities as well as work energetically.
Ⅲ．We will work together with the labor and health insurance unions to actively engage in health promotion activities that
include employees’ families from a long-term perspective.
Takeshi Kawai
President & Chief Operating Officer
Well-being Report 2023（Japanese only）

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Society

Governance

Data

Prevention of Lifestyle-Related Diseases

Health Promotion Initiatives and Awareness Raising

To prevent lifestyle-related diseases regular health checks are essential.
To help employees maintain and promote their health, we task industrial physicians, medical doctors and nurses with following up with
employees who have been found to have problems as a result of undergoing health checkups. Such employees are also referred toappropriate medical institutions as needed. Moreover, we provide employees with a smartphone app, which is linked with the internal
health management system, and employees are using the various functions of the app to promote their health.

Implementation of the "Health Challenge Campaign"
As a priority measures of health and productivity management, "Prevention of lifestyle-related diseases," we are holding the "Health
Challenge Campaign" for those who have a BMI of 24 or higher.
Under this initiative, participants report every three months for one year starting in January 2023 on whether they have achieved theirweight-loss goals and established exercise habits, and are awarded welfare points according to their level of achievement. We also
support the efforts of our employees by holding seminars on improving eating habits and online consultations with registereddietitians.

Enhancing Mental Healthcare
We are working on in-house and external Line-Care educational programs for managers
and implementing to read the Self-care handbook in our workplace to make our
employee prevent awareness of disease and self-management of health.

A total of 267 employees, including those from group companies, have entered the program and are challenging themselves to lose
weight in a healthy way.

Also, we carry out stress checks to analyze the impact of work environments on
employees. Based on the results, we provide them with a safe and comfortableworkplace and prevent employees from suffering mental disorders due to stress.

Issuance of the newsletter "KENKO- TSUSHIN"
We issue this monthly newsletter to all employees of our group companies to provide health-related information in an easy-tounderstand format.

The Self-Care Handbook

Prevention of Passive Smoking

Efforts by our Health Insurance Society

Niterra has banned smoking on our premises at all of our business sites in Japan since April 2023.
We also provide support, including outpatient smoking cessation services, to those who wish to quit smoking.

Working together with the company and the labor union, the health insurance society provides a wide variety of programs to support
the mental and physical good health of member workers and their families.
Specifically, health management and disease prevention efforts conducted by the health insurance society include: metabolic
syndrome improvement / prevention programs; subsidies for flu vaccination; and other health management promotion programs suchas walking tours. As an employer, we also promote collaborative health by providing support for specific health guidance andgynecological checkups, etc.
In recognition of these efforts, our Health Insurance Society was selected as one of the 2022 Certified Health & Productivity
Management Outstanding Organizations (Small and Medium-Sized Enterprise Category) under a program jointly sponsored by the
Ministry of Economy, Trade and Industry and Nippon Kenko Kaigi.

Initiative to Prevent Infectious Diseases
To protect employees from the seasonal influenza every year, we strive to prevent the spread of infection. Particularly regarding groupinfection at workplaces, which may affect our daily operations, we are ready to cooperate with the relevant divisions to implement
immediate and intensive measures. During the flu season, we issue weekly reports so that all employees can share the information andtake effective countermeasures.
In addition, we are continuing to gather information on new infectious diseases (novel influenza, novel coronavirus, etc.). We stockpile
facial masks, disinfectants, and other countermeasures, and have formulated infection prevention measures and guidelines for dealing
with infections in the workplace to ensure that all employees are aware of them.

Participation in “Health & Productivity Management
Alliance”
in June 2023, 200 companies and organizations working on health management practices across industries came together to launchthe "Health & Productivity Management Alliance," and our company also participates in it and promotes health management by sharing
issues, methods of planning, implementing, and evaluating various measures.
Health & Productivity Management Alliance（Japanese only）
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Data

Governance

Quality

Support for Suppliers
We actively support the health management efforts of our suppliers and neighboring companies.
We utilize the Health Management Check Sheet created by our company to understand the health management status of our suppliers
and make recommendations for future measures.

Quality Policy＜Examples of support content＞
・Exchanging opinions and providing information with the health and productivity management promotion staff of our suppliers
・Support for companies aiming to obtain certification as “Outstanding Health & Productivity Management Organization”
・Establishment of a consultation desk regarding health and productivity management

We continue to cocreate value with customers and contribute to society in accordance with basic traits of "Quality Product"& "Involvement by all".

Action Guidelines
・We constantly consider what we should do to please our customers with our products and services, with a view toincreasing our organizational capability.
・We are engaged in quality improvement activities across the company and encourage our employees to achieve higher goals
by making the best use of their individual abilities and creativity and uniting their wisdom to address problems andchallenging issues.

Promoting Total Quality Management
Niterra is working to share and practice the concepts of TQM (Total Quality Management) in order to become a group company thatcreates value for all stakeholders and has a system that can respond flexibly and swiftly to change.
Based on our CSR Policy, we have updated Niterra's Corporate Quality Rules and identified the following five areas as the mainstays of
total quality management (TQM).

1）Quality assurance
In order to provide products and services that meet the needs of our customers and society, Niterra will establish all operations andguarantee their safety and reliability and promote development activities aimed at creating new value.

2）Daily management
Niterra will consider methods and indicators to measure the quality of all our operations and promptly investigate the causes whenresults that differ from normal are obtained as well as taking countermeasures to maintain and improve quality.

3）Policy management
50

Niterra will further improve and innovate activities to maintain and enhance quality. We will establish strategies and objectives forcreating new value for customers and responding to the evolving internal and external business environment and explicitly identify
issues and problems that need to be tackled as we work towards achieving our strategies and objectives.

IndexEnvironment

Society

GovernanceData4）Small group improvement activities

Quality Management System

Niterra will use small group teams to solve the various issues and problems identified through daily management and policy
management, thereby developing human resources.

To continue providing products and services that meet customer needs, the "Quality Management System (QMS)" is essential. The
QMS helps us promote systems that differentiates our business and improve our organizational structure as well as acquiring ISO
9001 certification.
For medical device products, we are working to obtain ISO 13485 certification, an international standard for the medical device
industry, by developing the systems and conducting internal audits, focusing on compliance with applicable laws and regulations.

5）Quality control education
Niterra will create the understanding and awareness of the mainstays of TQM, which are the prerequisites for maintaining andenhancing quality and activating improvements and innovation and then establish and implement a grade-specific education system.

Small Group Improvement Activities

Promotion System

As part of our small group improvement activities, we are developing QC circle activities as "NQC Activities." (N denotes an initial letterof Nittoku).
NQC activities organize teams according to the problems and challenges at hand, with activities aimed at solving and achieving them.
In addition to making tangible and intangible contributions to management, they also contribute to fostering employees.
The level of our activities has improved, with a gold medal at the All-Japan QC Circle Competition and the QC Circle Kaoru Ishikawa
Award.
In addition, we are introducing the NQC Station, an IT tool for interactive communication, in order to strengthen NQC activities. We
have systematized the proceedings of our activities and made it easy to understand the situation at hand. A portal site function has
also been provided to enable circle members to obtain useful information and materials for their activities at any time.

We have established a Quality Committee to promote quality management, chaired by the officer in charge of the Quality Management
Division, who is the chief executive in charge of quality management.
The Quality Committee formulates and issues policies and guidelines to optimize our functions from a company-wide perspective.
The Quality Assurance Conference is responsible for raising the level of quality assurance by sharing, discussing the causes of quality
defects and promoting countermeasures.

Quality Control Education
To improve our employee’s quality control and foster employees capable of creating products and services that meet the needs of ourcustomers and society, a variety of training is conducted related to quality control based on the concept of "manufacturing isfostering people".
Beginning with training for engineers to acquire practical skills in product realization concepts and procedures and quality control
methods, as well as periodic training sessions, depending on the type of job and level of responsibility. Also, to improve throughcontinuous upgrading of knowledge and practical skills required to maintain and improve quality. Aiming to improve the overall qualityof the product.
We also offer our suppliers quality training and practical support for problem-solving so that they provide us with consistently highquality parts and materials based on continuous quality improvement.

Awareness through Quality Activity Events
We hold quality activity events during Japan’s Quality Month in November, and also throughout the year.
Past quality exhibitions were held at our sites, but in consideration of preventative measures against COVID-19 and for convenience
we have changed to holding exhibitions online.
We share our approaches to quality as well as the diverse quality-related initiatives in workplaces in order to maintain and improve
quality awareness.
We also promote activities to maintain and enhance quality while engaging all employees through quality slogans and a range of otherevents.

Promotion System
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Proper Procurement

Measurement Management
Appropriate measurement is an essential part of manufacturing. In order to obtain reliable measurements, it is important that
employees involved in manufacturing know the correct measurement techniques and proper measurement management.
Therefore, we are strengthening our quality assurance system by nurturing human resources who understand the importance ofmeasurement management and have correct measurement techniques, managing the accuracy of measuring instruments, andimproving the measurement management system to improve and stabilize accuracy.

Procurement Policy
We aim to realize globally optimal procurement based on our quality products principle. To this end, we focus on
strengthening cooperation with suppliers and promoting our CSR and sustainability efforts throughout our supply chain
system, while at the same time striving to carry out proper purchasing transactions when procuring materials and parts,
based on the following guidelines:

Monozukuri (Manufacturing) Education
To help trainees, acquire the necessary knowledge and skills at the right time, theMonozukuri Education and Training Center has a curriculum that covers the topics ofsafety, quality, maintenance, and improvement. We provide pre-assignment training, for
new employees, that places "discipline" as the foundation of training, in order tocultivate human resources that become socially responsible, follow procedures, andplace importance on quality.
Safety training is conducted with zero industrial accidents in mind, with the guideline of"cultivating employees who can think and anticipate danger by honing their sensitivity
before they act". We are working to improve the content of our education and training
by introducing virtual reality (VR) and incorporating hands-on training to give
employees more realistic experience of accidents such as falls and other accidents.
We are striving to provide valuable education while being flexible. We responded to the
COVID-19 pandemic by introducing web-based lectures and other methods.

Data

GovernanceAction Guidelines
・We conduct rational transactions based on fair, transparent, and open competition.
・We comply with procurement-related laws and regulations and foster responsible procurement. We select suppliers basedon comprehensive assessment of product quality, technology, prices, deliveries, CSR and sustainability initiatives, andefforts to continuously make improvements.
・Aiming to procure more eco-friendly products, we strive to promote our green supplier system.
・We enhance mutual trust with our suppliers, who are good partners for us, and strive to realize mutual development.

Monozukuri Education and Training

Basic Philosophy ～Promoting Responsible
Procurement～
Taking seriously the recent social and environmental issues related to our supply chain, we are promoting responsible procurement
activities that not only comply with various laws and regulations, such as the Subcontracting Act, but also give due consideration tohuman rights and the environment. By responding to expectations from society in cooperation with our diverse suppliers across the
supply chain, we contribute to the realization of a sustainable society.

VR experience52

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Data

Supply Chain Management

Promoting CSR and sustainability procurement

Our Supply Chain

To foster CSR and sustainability measures across the supply chain, we issued our CSR and Sustainability Procurement Guidelines andhave been distributing copies to suppliers.
When we revised this guidelines in 2023, we held briefing sessions to help our suppliers better understand it, and many of them
participated.

We carry out procurement activities on a global scale, and while utilizing the advantages of both centralized and decentralizedpurchasing, we also carry out local procurement for the purpose of optimal procurement at our overseas manufacturing plants.

CSR and Sustainability Procurement Guidelines

The CSR and Sustainability Procurement Guidelines set the rules that our suppliers are requested to comply with concerning theenvironment, human rights and labor, business continuity planning (BCP), business ethics, information security, occupational healthand safety, and product quality and safety. We ask our suppliers to put them into practice together with the Niterra Group. We also
ask our suppliers to distribute copies of the Guidelines to their own suppliers.
To monitor the status of implementation by the suppliers, we conduct surveys every two years using a check list. For the survey weconducted in FY2021, we expanded the scope to include all suppliers, and received responses from 82% of them. For some suppliers,
we held interviews with management and provided other follow-ups, thereby asking for improvement.

Procurement amount composition ratio by country/region

Our Supplier Management
At our company, the procurement department mainly manages suppliers.
Our procurement department mainly manages suppliers. We check and investigate not only quality, technology, price, and delivery, butalso sustainability, such as the environment, social, governance, and attitude toward improvement, etc. as conditions for doing
business with us.
In particular, we identify suppliers who deliver materials, processing and equipment related to our product manufacturing as
significant suppliers and conduct annual evaluations of them based on the above-mentioned perspective of our supplier management.
We rank them from A to D, and encourage continuous improvement based on this feedback.

Purchasing ratio from important suppliers

Significant suppliers ratio by level（FY 2022 annual evaluation results）

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English version: CSR and Sustainability
Procurement Guidelines



761KB

Japanese version: CSR and Sustainability
Procurement Guidelines

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812KB

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Green Procurement Guidelines

FY2021 Survey Results by Check List

These guidelines explain the basic concepts of our green procurement based on our environmental policies. We reviewed the list of
related chemical substances in July 2021 and released version 11.01 of the guidelines. We ask our suppliers to study the guidelines
and cooperate with our green procurement.

Japanese version: Green Procurement Guidelines  1.51MB

Survey sheet
Japanese version: appendix table-1 Survey
regarding the presence or absence of"substances of environmental concern"

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27KB

Japanese version: appendix table-2 Non-use
Declarations

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29KB

Sustainability Training for our procurement department staff

Our procurement department staff receive sustainability training for them to improve the sustainability knowledge.
In FY2022, more than 100 staff received that training.

Green Suppliers

Ensuring green procurement

We certify suppliers that meet our system and material standards prescribed in “Green Procurement Guidelines” as "green suppliers,"
and give priority to these in purchasing.
As of FY2022, we have certified 104 suppliers involved in facilities/jigs and tools, building/incidental facilities, and 153 suppliers
involved in raw/subsidiary materials, parts, processing and outsourcing.

In order to reduce our environmental impact throughout the supply chain, we issued the Green Procurement Guidelines to requestthat suppliers build environmental management systems and ensure the strict management of environmentally hazardous substances.

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Measures against conflict minerals

Data

Survey of CO2 emissions related to products for our company

In order to understand CO2 emissions related to our company at our suppliers, we have been conducting surveys of CO2 emissions
related to products for our company since FY2022, and we will continue to conduct surveys in the future.
In addition, we not only provide seminars and materials on CO2 emission reduction to all suppliers but also provide support tailored toindividual suppliers’ levels of activities and on-site support at the request of suppliers.

There are concerns that some mineral resources mined in the Democratic Republic of the Congo and surrounding countries provide asource of funding to local armed forces, thereby promoting conflicts and infringements of human rights. This issue of conflictminerals is recognized as a serious social issue in relation to the procurement of resources and materials.
Accordingly, we annually conduct surveys on the use of conflict minerals targeting the upstream section of our supply chain and avoid
the use of any with related risks.

Activities to Support Suppliers

Measures to respect human rights

By conducting activities to help suppliers enhance their business foundation and engaging in follow-up activities after our regular
evaluation of them, we make joint efforts for improvement with suppliers, thereby building greater trust.

To ensure respect for human rights of all people who are related to our suppliers and their suppliers, we have specified prohibited
actions regarding human rights in the CSR and Sustainability Procurement Guidelines.
In addition, we periodically conduct supplier surveys to monitor their implementation status of human rights efforts and provide
feedback to encourage suppliers to make improvements in areas with insufficient efforts.

Activities to help suppliers enhance their business foundation (throughclassroom seminars and practical seminars held on-site)

Measures to tackle climate change

We offer seven seminars for our suppliers, including seminars specialized in manufacturing (e.g. seminar on how to create drawings,
why-why analysis seminar), and CSR & Sustainability support seminars aimed at strengthening the foundation of CSR andsustainability and increasing corporate value.
On-site practical courses (5S improvement activities, TPM activities) are activities which we go to the manufacturing sites of our
suppliers and conduct improvement activities together.
We also provide follow-up assessments for suppliers who have completed an On-site practical courses. These activities are conductedto promote human resource development of our suppliers and to help them become more powerful companies. We are thus working
in cooperation with our suppliers to ensure thorough implementation of our “Quality Product” policy and improve manufacturing
capabilities throughout the supply chain.

In order to promote carbon neutrality throughout our entire supply chain, including suppliers, we ask our suppliers for theircooperation in setting greenhouse gas reduction targets and answering surveys on CO2 emissions related to our products.

Setting greenhouse gas emission reduction targets

The CSR and Sustainability Procurement Guidelines, which have been distributed to all our suppliers, stipulate that suppliers should set
greenhouse gas emission reduction targets and promote reduction efforts.
According to the survey conducted in FY2022, 27% of our suppliers had already set CO2 emission reduction targets. We willencourage suppliers who have not yet set targets to do so.

Follow-up activities conducted after the regular evaluation of suppliers
We annually conduct evaluation on some suppliers and inform them of the results. For suppliers that require follow-up activities, wevisit them to provide targeted advice and inspect their sites in order to work with them in thinking about how to rectify any weak
points. We also award suppliers who have been evaluated as excellent.

Status of setting CO2 reduction targets
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GovernanceSocial Contribution

Declaration of Partnership Building
In support of the Declaration of Partnership Building established by the Council on
Promoting Partnership Building for Cultivating the Future*, we have released our own
declaration. We are committed to promoting the coexistence and co-prosperity of theentire supply chain, building new partnerships regardless of the size of business andbeyond the boundaries of business affiliations, and ensuring compliance with the“promotion standards.” At the same time, we implement proper purchasing transactionsin accordance with the Procurement Policy.

Social Contribution Policy
As a good corporate citizen, we aim to contribute to society through the effective use of management resources.

Action Guidelines* The members are the Chairman of the Japan Business Federation (KEIDANREN), the Chairman of the Japan
Chamber of Commerce and Industry, the President of the Japanese Trade Union Confederation (RENGO), andrelevant Ministers (Cabinet Office, Ministry of Economy, Trade and Industry, Ministry of Health, Labour andWelfare, Ministry of Agriculture, Forestry and Fisheries, and Ministry of Land, Infrastructure, Transport andTourism).

●We focus on the following activities:
・Activities closely related to our business fields
・Activities that respect the cultures of individual countries and local communities, as well as activities that contribute tosociety such as traffic safety education programs
・Activities that contribute to the future of society, focusing on environmental conservation, science, and education (inparticular the development of next-generation human resources), as well as cultures to be bequeathed to the next
generation, etc.
●We strive to create a corporate culture that encourages executives and employees to participate together in social
contribution activities as social citizens. We also respect and support their active involvement in society.

Declaration of Partnership Building (Japanese only)

Helpline for Suppliers
We have opened a Helpline as the contact point for suppliers to report any violation by managers or employees of the Niterra Group.
Details are provided in the pamphlet distributed to the suppliers.

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Governance

Cultural Activities

Respecting Connections with Local Communities
From 2013，we have been holding family musical events every year as our company sponsored event. We have invited a total of 3,500
people including families affected by the Great East Japan Earthquake, as well as general visitors, local elementary school children,
kindergarten children, and children from welfare facilities in Aichi Prefecture.

We have established our “Social Contribution Policy” as part of our CSR basic policy, and as a responsible corporate citizen we areengaged in various activities such as culture and welfare promotion.

Our company is an Nagoya Citizens' Auditorium Naming
Rights Partner
Jack And The Beanstalk(Photographed in 2022)

Welcome speech from our company(Photographed in 2022)

About Naming Rights
Previous Name

Name

Nagoya Citizens' Auditorium

Niterra Hall

Large HallFOREST HALL

Medium HallVILLAGE HALL

We renamed the Large Hall and Medium Hall of the Niterra Hall “FOREST HALL” and “VILLAGE HALL,” respectively. We selected thesenames because our company is a member of the Morimura Group and we wanted the Niterra Hall to serve effectively as a “mori(forest)” or “mura (village)” for nurturing rich culture and arts.

Our thoughts to the Niterra Hall
Niterra Hall web site

Since our foundation in 1936, our headquarters has been located in Nagoya City, and we have been engaged in various activities on
the basis of our corporate code of conduct which is "As a good responsible corporate citizen, we actively participate in philanthropic
activities and other social action programs. "Niterra Hall is a traditional and prestigious cultural building representative of Nagoya. It ispopular as a meeting point for cultural exchange. We would like to contribute to the further promotion of culture and arts, as well as
regional revitalization through the Niterra Hall naming rights.

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Contributing to the Development of Motor Sports
We Show Our Support at Motorsport Events, often also in the Form of
Booth exhibitions.

We conduct a wide variety of cultural and sports activities for the benefit of the local community as a good corporate citizen inaccordance with the "social contribution policy" that we established as part of our CSR basic policy.

Our main products, NGK SPARK PLUG, are important components that determine theperformance of engines. We have provided high-quality spark plugs for motor sports
for many years.
Furthermore, in the NGK SPARK PLUG Cup (the last race in Suzuka Sunday Road Race),of which we are a proud sponsor, many ambitious riders from beginners toprofessionals test their skill, aiming to join the All Japan Road Race Championship - thetop race in the country. This event is a gateway to success for riders aiming to be thebest in the world.

Supporting FC GIFUOur Expectations for FC GIFU
Niterra has three group companies in Gifu, an important region in terms of
manufacturing. Based in Gifu Prefecture, FC GIFU actively promotes socially beneficial
activities under the theme of "a team for the citizens of Gifu Prefecture." We share thisspirit of contribution and seek to foster a prosperous community through sports as asponsor of the team. All of our employees, including employees of group companies,
are vocal supporters of FC GIFU.

As the people behind the top brand of spark plugs, we will continue to support these
motorsport-related events. Beyond this, we will also contribute to the reliability anddevelopment of the motorized society.

Contributing to the Vitality of Local Regions throughMarathon Festivals.

FC GIFU Website

On August 25, 2019, the “NGK SPARK PLUG thank you match” was held
between FC Gifu and Kashiwa Reysol.

As we wish to contribute to the vitality of local regions, we also support regional
marathon festivals. Of particular note is the Marathon Festival Nagoya-Aichi. We havesupported this event since 2015 and to further develop our theme of "promoting
women's activities," we will continue to show our commitment through our idea of"supporting women who challenge their best."
・Marathon Festival Nagoya-Aichi
・Komaki City Marathon

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GovernanceCommunication to Stakeholders

Organization of briefings on our technologies for institutional investors
and securities analysts

Information Disclosure Policy

We host a technology orientation for investors and analysts to gain a deeper understanding of our technologies. We also invite themto see the actual manufacturing process.

Aiming to become an enterprise capable of receiving great support and popularity from people around the world, we strive to
conduct transparent business operations and fair information disclosure.

Organization of briefings on the company for personal investors

Action Guidelines

We hold briefings for investors in major cities across the country, and strive to provide the information that investors are looking for inan easy-to-understand manner.

・We disclose any corporate information required to be disclosed by the Financial Instruments and Exchange Act and otherlaws and regulations, in an accurate and timely manner.
・We actively disclose our corporate information, which is not subject to laws and regulations however deemed to beimportant for stakeholders, through our daily actions, such as issuance of press releases and updates of our website.
・We focus on enhancing communication with our shareholders, investors, and other stakeholders to further promote mutual
understanding with them.

Investor Relations

Communication with Customers
We offer information meaningful to customers at our website and through exhibitions so that they can purchase and use our products
and services with peace of mind.

Communication with Shareholders and Investors

Sending Information on Website

We disclose information in compliance with the law and also disclose information promptly via the media and at our website.

Holding of the Annual Ordinary General Shareholders’ Meeting“NGK SPARK PLUGS / NTK TECHNICAL CERAMICS Products” is a website that disseminates detailed information about our products
including NGK spark plugs. Customers can also search for the part number that matches their vehicle and model. The website also
features information on motor sports, primarily teams supported by Niterra as well as upcoming exhibitions and events.
We have set up official accounts on Facebook and Instagram for NGK SPARK PLUGS to further inform more customers of the NGK
spark plug brand.

We hold an annual Ordinary General Shareholders' meeting in June every year.
We send out the notice of convocation for our Ordinary General Shareholders’ Meeting even earlier than the legal deadline so thatshareholders can give adequate consideration to the reports and resolutions. Additionally, we try to carry out earlier disclosure by
releasing the information on the company website before sending out of the notice. We also translate part of the notice ofconvocation into English for overseas shareholders and post it on the company website in parallel with the Japanese version.
Furthermore, we are striving to create a suitable environment for the exercise of shareholders’ rights, including making it possible toexercise rights from a PC or a mobile phone in addition to the exercise of rights in writing. Also, the meeting was later posted on thiswebsite for a certain period of time.

NGK SPARK PLUGS / NTK TECHNICAL CERAMICS Products

Facebook NGK SPARK PLUGS＜Official＞

Instagram NGK SPARK PLUGS＜Official＞

Dialogue with institutional investors and securities analysts

Exhibitions and Events

We hold various dialogues with internal and external institutional investors and analysts in a variety of formats. These include quarterly
financial results briefings, conference calls, individual interviews, and individual teleconferences, to explain our financial and nonfinancial situations in detail, in order to gain an accurate understanding of our situation.

We make sure to have PR booths at exhibits and motor sports events.
These provide valuable opportunities that allow us to meet with customers and explain our products and technologies directly, and we
also use these opportunities to identify constantly evolving needs.
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Responding to Product Defects

Local cleanup activity

We make it a rule that any product defect we have detected and found to possibly cause harm to customers be immediately
announced to the public through our websites, newspapers, trade journals and other media as appropriate and that we simultaneously
implement countermeasures against such defects to protect all users.

We regularly hold clean-up activities in the areas near the offices to preserve the local environment. We also continue to participate inbeautifying activities hosted by local municipalities, etc.

Communication with Suppliers
We are working to build relationships of trust with suppliers as their sound partner and achieve growth together. To this end we
conduct activities across the supply chain, such as holding briefing sessions on our corporate policies.
Cleanup activities (Komaki Plant)

Organization of briefings on the corporate principles

CSR and Sustainability Initiatives

We hold a corporate policy conference with our main suppliers, offering them an opportunity to deepen their understanding of thepresent situation of our company and our goals. We introduce our business results, the company’s policy, and the policies of eachdepartment which are based on the basic policy, procurement policy and initiatives, and request implementation to enhance quality
and promote CSR and Sustainability initiatives.
Proper Procurement

Communication with Local Communities
We respect the local culture and customs at each of our bases located across the world and work for smooth communication withlocal communities. We also participate in various social contribution activities to help create a comfortable society as a corporate
citizen.

Social meetings on the environment
We host environmental meetings with local residents as a venue for communication. At these meetings, we explain our daily
environmental activities as well as hear opinions and comments from participants on how we can further improve things.

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Cleanup activities (SparkTec WKS CO., LTD.)

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Board of Directors
The Board of Directors comprises eleven members (of which seven are outside directors), which meets regularly once every month and holds ad
hoc meetings when necessary. In principle, directors are required to attend all Board of Directors meetings, and the average attendance rate lastyear was 99%.
The Board of Directors deliberates and makes decisions on matters specified in laws and regulations and other important management issues,receives reports from each member and supervises the status of business execution. A majority of independent outside directors are appointed inorder to strengthen the supervisory functions of the Board of Directors and secure transparency of management.

Basic Philosophy
Guided by our corporate philosophy under the slogan “With established trust and confidence inside and outside the company, we aim tocontribute to the peoples of the world by creating and putting at their disposal new values for the future”, we have established, and are working
to enhance, our corporate governance system to promote management aimed at increasing our corporate value over the medium to long term.
Our basic view on corporate governance is to build relationships of trust with our shareholders, customers, business partners, employees, local
communities, and other stakeholders through management that ensures fairness and a high degree of transparency, and to develop and operatemanagement framework and internal control system to achieve sustainable growth through efficient and sound management.

＜Views on Balance and Diversity of Knowledge, Experience, and Skills within and Size of the Board of Directors as a Whole＞
The Company’s Board of Directors believes that it is important for the Board to comprise diverse human resources with different backgrounds,
including specialized knowledge and experience, in order to achieve sustainable growth and increases in corporate value over the medium to longterm. The Board is made up of human resources with extensive experience, high levels of knowledge, and advanced specialization, withconsideration given to gender, nationality, work experience, and age, to achieve a good balance according to the business environment at a giventime.
In addition, by making up the majority of the Board of Directors with outside directors who have experience and specialized knowledge agained
under environments that differ from the Company, the Board can strengthen its supervisory function and engage in deliberations from various
perspectives in an effort to ensure transparency and objectivity in decision making.
Director candidates are not excluded from consideration on the basis of their race, ethnicity, nationality, country of birth, cultural background, etc.

Corporate Governance Report

Corporate Governance System
The Company has selected a company with an Audit and Supervisory Committee for the purpose of further enhancing discussions on
management policies and strategies at the Board of Directors, strengthening the supervisory function, and further speeding up management
decision-making and execution of business. Each organization is set up within the framework of a company with an Audit and Supervisory
Committee.

＜Skill Matrix of Directors＞
Based on the above views, considering the business and management system of the Group, the Board of Directors identified the knowledge andexperience which it should possess from “Basic areas from the perspective of important management decision-making and business execution
supervision” and “Areas that need to be particularly promoted and supervised to realize the medium-term management plan”. According to this,Directors are assigned in well-balanced manner with consideration for diversity.

* With the resolution of the 122nd Ordinary General Meeting of Shareholders (held on June 24, 2022), the Company has transitioned to acompany with an Audit and supervisory committee.

Corporate Governance System

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Board of Directors
Name

ShinichiOdoTakeshi
Kawai

Toru
Matsui

Board of Directors

Mackenzie Miwako Chiharu Takayoshi Mikihiko Kanemaru Fumiko Christina L.
DonaldYasui Nagatomi Ahmadjian
Clugston Doi Takakura Mimura Kato

Representative Representative
Outside Outside
OutsideDirector Director
Director and Director
Director Director
Representative President
Director andOutside Outside Outside Outside Full-time
Position
Chairman of
Director Director Director Director Audit and Audit and Audit and Audit and
Chief
Supervisory Supervisory
the Board Operating Executive Vice
Supervisory Supervisory
President
Committee Committee
Committee Committee
OfficerMember Member Member Member
Gender/Nationality
Male
Male
Male Male/Foreign
Male
Male
Female Female/Foreign
nationality Female Female Malenationality●

IndependenceYears served as a
Director of theCompany

16 Years

Management〇

8 Years〇

5 Years

4 Years●●

2 Years（Of
these, 1
year in3 Years office asanoutsidecorporate
auditor）

〇

●

-

〇

Governance/Legal/
Risk management *1〇

Global Experience〇

Technology/R & D

〇

〇

〇

〇

〇

〇

〇

〇

〇

〇

Sales/Marketing〇

New Business
Development/
M&A

〇

〇
〇

SCM
12/12

6 Years（Of these,
5 years in
9 Years office as an
outsidecorporate
auditor）

〇

●

〇
〇

〇

〇

〇
〇

〇

12/12

12/12

12/12

Attendance Rate at
Board of Directors
Meetings in Fiscal
2022

100%

100%

100%

100%

100% 100%

Number of
Shares Held

36,108shares

18,423
shares12,254
shares0
shares2,267 945
0shares shares shares

-

100%

100%

100%

90.0%

10,956
shares

3,601
shares3,219
shares165
sharesNomination Committee〇〇〇

To ensure reasonableness and transparency and conduct efficient and fulfilling discussion with regard to director nomination and determination of
remuneration, a Nomination Committee was established as advisory bodies to the Board of Directors.
Based on the Board of Directors’ request for opinion, the Nomination Committee deliberates on matters including proposals on the appointment
of directors to be submitted to the General Meeting of Shareholders, the appointment and dismissal of executive officers, the Company’s
performance evaluations, and, based on such evaluations, evaluation of the management’s performance, and then delivers its opinions to theBoard of Directors.
In addition, directors who are Audit and Supervisory Committee members also attend a Nomination Committe as observers.

〇〇

Mackenzie Miwako Chiharu Takayoshi Mikihiko Kanemaru Fumiko Christina L.
DonaldYasui Nagatomi Ahmadjian
Clugston Doi Takakura Mimura Kato

＜Establishment of the Audit and Supervisory Committee Office＞
To support the execution of duties by the Audit and Supervisory Committee, the Audit and Supervisory Committee Office was established, andfour employees were assigned to the office full-time. These employees receive instruction from the Audit and Supervisory Committee members,
liaise and coordinate internally, and gather and provide the necessary information. The Audit and Supervisory Committee Office works under thesupervision and direction of the Audit and Supervisory Committee and their independence in relation to supervision and direction from directors(excluding directors who are Audit and Supervisory Committee members), corporate officers and employees is ensured. In addition, transfers,
personnel evaluations, etc. require the prior consent of the Audit and Supervisory Committee.

〇

〇

Toru
Matsui

The Audit and Supervisory Committee comprises four members (of which three are outside members) and as an independent body entrusted by
the shareholders, audits and supervises the execution of business by the directors. Full-time Audit and Supervisory Committee members are
selected from the perspective of maintaining the audit environment, gathering information from within the Company, and monitoring and verifying
the establishment and operation of internal control systems on a daily basis and share such information with other members to ensure theeffectiveness of organizational audits. The Audit and Supervisory Committee also confirms the appropriateness and suitability of the nominations
and remuneration of directors (excluding directors who are Audit and Supervisory Committee members) by attending Nomination Committee andRemuneration Committee meetings and receiving explanations from the representative directors and forms opinions on these matters.

〇〇

Takeshi
Kawai

Audit and Supervisory Committee

1 Year〇〇〇●ShinichiOdo*1：Basic areas from the perspective of important management decision decision-making and business execution supervision*2：Areas that need to be particularly promoted and supervised to realize the mediummedium-term management plan
*3：The skill matrix above shows the areas of expertise particularly expected for each director / audit and supervisory board member, and does not indicate all of
the knowledge and experience held by each director / audit and supervisory board member.

〇

Human Resource *2

Attendance at Boardof Directors
Meetings in Fiscal
2022

6 Years〇

Finance/Accounting

IT/Digital
Transformation

●

Name

12/12 12/12

-

12/12

12/12

12/12

9/10
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Remuneration Committee

Corporate Officers and Company Presidents Meeting

To ensure reasonableness and transparency and conduct efficient and fulfilling discussion with regard to director nomination and determination of
remuneration, a Remuneration Committee was established as advisory bodies to the Board of Directors.
Based on the Board of Directors’ request for opinions, the Remuneration Committee deliberates on matters related to remuneration of directors(excluding directors who are Audit and Supervisory Committee members) and executive officers, including the appropriateness of policies,
procedures, and systems, as well as the appropriateness of the proposed remuneration of each director (excluding directors who are Audit andSupervisory Committee members) and executive officer, and delivers its opinions to the Board of Directors.
In addition, directors who are Audit and Supervisory Committee members also attend a Remuneration Committee as observers.

The Company adopts the Corporate Officer framework, the objective of which is to expedite execution of business operations based on policies
determined by the Board of Directors and clarify responsibilities for the results. The corporate officers are elected by the Board of Directors, andmeet monthly at Corporate Officers and Company Presidents Meeting to report on the status of business execution for cross-divisional sharing
and exchange of information.

Cooperation among Audit and Supervisory Committee, Independent Auditors
and Internal Audit Departments

CSR and Sustainability Committee

The Company strives to improve the effectiveness of audits by having Audit and Supervisory Committee members attend audits conducted by the
independent auditor and by having the Audit and Supervisory Committee, independent auditor, and Internal Audit Department meet regularly andas necessary to exchange information on audit policies, audit plans, audit implementation status, accounting system revisions, etc. and to work inclose collaboration with one another.
The Audit and Supervisory Committee and Internal Audit Department meet regularly and as necessary to provide direct reports and exchange
information on audit policies, audit plans, audit implementation status, and other matters and to work in close collaboration with one another.
In addition, Audit and Supervisory Committee members attend audits conducted by the Internal Audit Department when necessary, and theInternal Audit Department conducts investigations and makes reports as requested by the Audit and Supervisory Committee, improving thequality of audits by both bodies.

To ensure sustainable growth for our group and society, we have established the CSR and Sustainability Committee, chaired by an outside
director, as an advisory committee to the Board of Directors, to identify priority issues in each area of ESG (Environment, Society, andGovernance) area and promote actions to resolve these issues.
CSR and Sustainability Promotion System
Members of the Committees
Directors who are Audit and Supervisory
Committee members

Directors
Name

ShinichiOdoTakeshi
Kawai

Toru Mackenzie
Donald Miwako
Matsui Clugston
Doi

Independence

Evaluation of the effectiveness of the Board of Directors

Chiharu Takayoshi Mikihiko Kanemaru Fumiko Christina L.
Takakura Mimura
Kato
Yasui Nagatomi Ahmadjian

●

●

●

●

●

●

〇

〇

〇

〇

〇

〇

〇

Attends the Attends the Attends the Attends themeeting meeting meeting meeting

Remunerationcommittee

〇

〇

〇

〇

〇

〇

〇

Attends the Attends the Attends the Attends themeeting meeting meeting meeting

CSR and Sustainability
Committee

-

-

〇

-

-

〇

-

-

-

＜１.Method of evaluation＞
The Company conducted a questionnaire survey of Directors with evaluation items on the composition and operation of the Board of Directors,
review of management strategies, etc., the status of supervision of the execution of business, and other topics relating to fiscal year 2022. Basedon the survey results and other data, we evaluated the effectiveness of the Board of Directors.

●

Nomination Committee〇

The company conducts an evaluation on the effectiveness of the Board of Directors once a year.

＜２.Overview of evaluation results＞
As a result, we confirmed that the Company’s Board of Directors is sufficiently effective and that effective measures are implemented withrespect to the following matters in particular• The roles and functions of the Board of Directors and the management team responsible for business execution are clearly defined, and theBoard of Directors composition is appropriate in terms of knowledge, capabilities, experience, and diversity of background necessary to
perform its roles and functions.
• The Board of Directors has established appropriate internal controls and risk management structure to ensure proper compliance and support
risk-taking, and supervises the status of operations through the Internal Audit Department, the Sustainability Committee, and the committees
that are established under the Sustainability Committee.
• To ensure that appointment and dismissal of the management team members are conducted appropriately, the Nomination Committee
appropriately evaluates whether execution of duties by the management team is performed from the perspectives of sustainable growth andcorporate value.
• The Board of Directors has confirmed that the design of the compensation scheme for the management team is consistent with the Company’s
management and business strategies, and maintains a good balance between short- and long-term targets and non-financial metrics andtargets.
• To ensure that compensation is set in a manner that provides appropriate incentives, the Remuneration Committee appropriately evaluates
whether execution of duties by the management team is performed from the perspectives of sustainable growth and enhancement ofcorporate value.
• The Board of Directors implements appropriate improvement measures regarding the key issues identified through evaluation of theeffectiveness of the Board of Directors, and strives to enhance its effectiveness.

-

Management Meeting
The Management Meeting, comprising representative directors and some executive officers, was established to make decisions on and supervise
important matters relating to business execution in accordance with the basic management policies determined by the Board of Directors, todiscuss and understand in advance management issues to be addressed and risks that the Group is facing, and to promptly respond to changes
in the management environment. The Management Meeting addresses management strategy and other important matters relating to overallmanagement and also focuses its deliberations on important human resource strategies and measures relating to the assignment anddevelopment of human resources as well as significant investments including capital expenditures, equity contributions, acquisitions, and capitaltie-ups.
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Details of human resource development for CEO candidates

Among the issues identified in the fiscal 2021 evaluation of the effectiveness, the issue of “further enhancement of deliberation within the Boardof Directors regarding medium- to long-term management strategies and monitoring of Medium-term Management Plan” was addressed in fiscal
2022 by introducing a new category of matters for discussion by the Board of Directors, aside from the existing categories of matters to beresolved and matters to be reported. This is the matters for consultation category that was introduced in conjunction with the transition to acompany with Audit and Supervisory Committee, for the purpose of deliberating on medium- to long-term management policies. Another action
taken was revision of the approval criteria for delegation of decision-making authority to the business execution side on individual businessexecution matters. Additionally, a regular status report on the progress of the Medium-term Management Plan is provided at the Board of
Directors meetings. As a result of the foregoing, deliberation within the Board of Directors on medium- to long-term management strategies has
been enhanced. However, the manner in which information is provided and agenda items are explained to reflect changes in deliberation mattershas been identified as an issue that needs to be addressed going forward. With respect to “improvement of the prior distribution of materials andprovision of explanations to outside directors,” the Company concentrated its efforts on providing prior explanations to outside directors on
important agenda items of the Board of Directors meetings, which led to enrichment and improved efficiency of discussions at the Board
meetings.
Based on the results of the current effectiveness evaluation, items that are identified as being desirable for further improvement of theeffectiveness of the Board of Directors include improvement of information provision and content of explanations relating to discussions by the
Board of Directors on medium to long-term management strategies, and strengthening of supervision by the Board of Directors and theNomination Committee on the management team’s succession plans. Going forward, the Company will continue to maintain and enhance theeffectiveness of the Board of Directors by addressing these issues.

We are implementing the HAGI Program and a training program in which internal directors and corporate officers participate. These programs aredesigned to develop future CEO candidates in a planned and strategic manner by devoting adequate time and resources to the task.

Training for officers
We provide the directors with sufficient assistance to fulfill their expected roles and responsibilities where applicable. For the internal directors,
we encourage them to take external seminars to acquire additional knowledge to meet their obligations, while the internal directors and corporate
officers are required to attend an executive training session to share the managerial issues and seek out the solution. In order for the outside
directors to deepen understanding of the Group, each department explains the businesses and operations in addition to providing them with
opportunities to visit major sites of the businesses.Directors who are Audit and Supervisory Committee members periodically take externalsessions to gain understanding of what roles the Audit and Supervisory Committee members fulfill, the audit methods, the relevant laws andregulations, and financial accounting knowledge required for the accounting audit.

Remuneration for Director

Roles and Independence of Outside Directors

Officer remuneration comprises fixed remuneration paid in cash, bonuses linked to the degree of achievement of the Company’s performanceover the course of a single year and other factors, and performance-linked, stock-based remuneration that is determined according to rank andthe degree of achievement of performance targets set forth in the Medium-Term Management Plan and so on.
This structure is intended to raise awareness regarding the contribution to improving corporate performance and maximizing corporate value
over the medium- to long-term and is based on a fundamental policy of officers sharing interests with shareholders through ownership ofCompany shares. However, remuneration for director who is an Audit and Supervisory Committee members comprise only fixed remuneration.

To enhance the supervisory function of the Board of Directors and to ensure the transparency and objectivity of decision-making throughdiscussions from multifaceted viewpoints, outside directors make up the majority of the Board of Directors, which comprises diverse talent who
have abundant experience, tremendous insight and a high degree of professionalism. We appoint all the independent outside directors as
independent officers and notify the Tokyo Stock Exchange and the Nagoya Stock Exchange of their appointment. In order to ensure thatcandidates have neither special relationships with the management team and major shareholders nor conflicts of interest with generalshareholders, we designate those who meet all the followings as independent officers: our own criteria for the appointment of independent
officers; the requirement of independent officers set by the Companies Act; and the rules and regulations stipulated by the financial instruments
exchanges.
Outside directors attend the Board of Directors meetings and non-statutory advisory bodies to demonstrate their supervisory function bybecoming involved in the important decision-making of the company from an independent standpoint, while providing advice from an overall
perspective based on their abundant experience and insight when formulating and confirming the progress of medium- to long-term management
policies at the Board of Directors meetings. Outside directors who are Audit and Supervisory Committee members serve as a supervisory andauditing function based on their independence and expert knowledge.

Fixed remuneration
Fixed remuneration is determined holistically according to the position and responsibilities, by taking into account peers’levels, the company
performance, and the level of employee salaries, and then paid.

Policy on the payment of bonus

Succession Plan

As for bonuses, in addition to the base amount set for each position, an amount to be decided as follows is paid to each person: decided
comprehensively in consideration of the quantitative targets set for corporate performance such as consolidated revenue and consolidated
operating income ratio, which reflect the results of sales activities, and based on the qualitative evaluation of the individual performance of theperson. For FY2021, the numerical targets for consolidated revenue and consolidated operating income ratio were 492.0 billion yen and 10.2%,
while the actual results were 491.7 billion yen and 15.4%.

Niterra’s Board of Directors engages in the formulation and implementation of the succession plan, which includes programs such as that todevelop global managerial human resources (“HAGI Program”), such as future CEOs and other business leaders. The members of the Board see toit that sufficient time and resources are committed to developing their successors in a planned manner.

Specific involvement by the Board of Directors
Representative directors as well as outside directors proactively participate in the development of managerial human resources, including serving
as lecturers for the HAGI Program.
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Performance-linked stock remuneration system

The following limits are set on remuneration paid to Audit and Supervisory Board members according to the resolution made at the 106th general
meeting of shareholders held on June 29, 2006.
Total amount of remuneration (excluding 10 million yen or below per month
bonus):
Total amount of bonus:
10 million yen or below per year
*3 “Bonus” corresponds to “performance-linked remuneration, etc.”, and “performance-linked, stock-based remuneration, etc.” corresponds to“performance-linked remuneration, etc.” and “non-monetary remuneration, etc.” The total amount of “bonuses” and “performance-linked, stockbased remuneration” shown in the table was recorded as an expense for FY2022.

We introduced the performance-linked stock remuneration for directors (excluding directors who are Audit and Supervisory Committee members
and outside directors) and corporate officers (excluding employment-type corporate officers) to further clarify the link between the compensationof directors and the value of the Company’s stock, and to have them share interests with shareholders, so as to incentivize them to contribute to
the improvement of the Company’s medium- to long-term performance and to increasing corporate value. Under the system, the Board Incentive
Plan (BIP) is adopted, where points are given to directors based on their position and the level of achievement against the targets set in theMedium-term Management Plan. Points are calculated according to the method stipulated in share granting regulations, which were determinedby the Board of Directors after the deliberation of the Remuneration Committee. After the end of the period, shares of the company and money inthe amount equivalent to the value of the shares are to be given or granted based on granted points.
Indicators against which the achievement of the performance targets is assessed are set based on single-year performance goals, medium-term
performance goals, and non-financial measures goals. The single-year performance goals are based on consolidated revenue and consolidated
operating income, which reflect the results of sales activities. The medium-term performance goals are based on the targets set in the Mediumterm Management Plan, which are consolidated revenue, consolidated operating income, and ROIC, an indicator of whether we have efficiently
earned profits relative to invested capital. For non-financial measures goals, sales from non-ICE business and rate of reduction of CO₂ emissions
are used as indicators to reflect the results of efforts for sustainable growth and corporate value enhancement, and to facilitate thetransformation of our business portfolio.

Stocks Held for Reasons Other than Pure Investment
Purposes
Policy on the stocks held for reasons other than pure investment purposes
Niterra holds the stocks of its suppliers and others basically to maintain and enhance stable business relationships with them, when the company
decides that holding the stocks will help increase its corporate value after verifying the economic rationality from medium- to long-term
viewpoints. The Board of Directors annually checks whether it is rational and useful in terms of enhancing its corporate value to keep the stocks
individually for each of the investee companies, in consideration of the capital cost and comparing the related risks and returns on a medium- tolong-term basis. When the Board decides that the company should not continue to hold any of the stocks, the company will sell them asappropriate, in consideration of the market trend.

Remuneration and bonus paid to directors and auditors in fiscal 2022
Total
remuneration(million yen)
Directors(excluding Directors who are Audit and Supervisory Committee Members)（Outside directors）
Directors who are Audit and Supervisory Committee Members（Outside directors）
Outside directors(Outside auditors)

Total remuneration by type(million yen)
PerformanceFixed
remuneration Bonus linked,stock-based
remuneration

Number ofrecipients(persons)

494

328

111

55

12

（61）
70
（35）
17
（10）

（61）
70
（35）
17
（10）

（-）

（-）

-

-

-

-

（5）
4
（3）
4
（3）

Data

Criteria for the exercise of voting rights
For the exercise of voting rights for the stocks owned by our company, we will decide whether to exercise the rights for each item of the agenda,
considering whether it will contribute to increasing the corporate value of the investee company and of our own company. In particular for theselection of directors, appropriation of retained earnings and other items that have a large impact on shareholder value, we will exercise thevoting rights according to the criteria set for the rights.

Enhancement of Group Governance*1 The following limits are set on the remuneration paid to directors (excluding Directors who are Audit and Supervisory Committee Members)
according to the resolution made at the 122th general meeting of shareholders held on June 24, 2012.
Total amount of remuneration (excluding 60 million yen or below per month
bonus):(Of which, the monthly amount for outside directors is 13 million yen or below)
Total amount of bonus:
180 million yen or below per year
According to the resolution made at the 122th general meeting of shareholders, a performance-linked stock remuneration system is to be
implemented for four fiscal years from FY2020, targeting the company’s directors and corporate officers, with the upper limit on the total
payment amount set at 1,000 million yen.

Niterra has corporate officers who were locally recruited at its regional headquarters (RHQs) for the Americas and EMEA in order to ensure thatspeedy and accurate managerial decisions are made at bases closer to the markets they serve in view of the company’s globally expanding
business environment. We have also formed unique governance teams at the RHQs to build an optimal decentralized system on a group-widebasis and enhance corporate governance as the entire Group.
Moreover, the Global Group Governance Division is in place as an organization that audits the effectiveness of the Group’s governance as an entitythat is separate from its business execution. This organization formulates and implements measures to carry out audits on the management ofGroup companies and RHQs and on the core business operations of each department. It also formulates and implements measures to enhanceinternal control across the Group and thus plays an important role for the enhancement of the Group’s governance.

*2 The following limits are set on remuneration paid to Directors who are Audit and Supervisory Committee members according to the resolution
made at the 122th general meeting of shareholders held on June 24, 2022.
Total amount of remuneration (excluding 10 million yen or below per month
bonus):
Total amount of bonus:
10 million yen or below per year
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Company-Wide Risk Management
In order to identify and limit those risks that could have serious impacts on our business continuity and on the achievement of ourtargets, we follow the risk management process as described below. We also evaluate the ESG-related risks including thoseconcerning climate change and human rights.

Risk Management Policy
We adapt from a global viewpoint to changes in the management environment surrounding our group and to thediversification of risks and will foster risk management to reduce or avoid the loss of managerial resources, thereby
improving our corporate value.

Action Guidelines
・We identify the risks that might hamper the achievement of our management targets from a global and long-term viewpoint
and strive to prevent the actualization of these risks in a planned and organization-based manner.
・In the event that such a risk materializes, we strive to minimize the impact on our stakeholders, maintain their trust andprevent the recurrence of similar incidents.

Promotion System
For risk management, we have appointed the President as “Chief Administrator” and the Director in charge of the Business
Management Dept. as “Promotion Manager”. We are making efforts to improve our risk management system and its operation andcreate one that integrates risk management to prevent risk with crisis management, to handle serious risks when they occur.
Moreover, we have established the Risk Management Committee, which is chaired by the corporate officer appointed by the Chief
Administrator. This committee makes improvements on the risk management system and monitors its operation annually. The
effectiveness of the system has been also regularly reviewed and reported to the CSR and Sustainability Committee for its
confirmation.

We assess risks by analyzing their degree of impact and likelihood of occurrence, as well as the status of countermeasures in place, todetermine whether or not they will have a significant impact on business continuity and goals throughout the company. Any risks
determined to require priority action are designated as priority risks and the Risk Management Committee checks on the status of
mitigation activities for these risks.
<Business risks>
1. World affairs and exchange rate fluctuation risks
2. Business environment risks
3. Product quality risks
4. Technological development risks
5. Intellectual property risks
6. Raw material procurement risks
7. Natural disaster risks
8. Climate change risks
9. Information security risks
10. Human resource securement risks
11. Legal, regulations, and litigation risks
12. Business investment risks
13. Infectious disease risks
14. Human rights violation risks

CSR and Sustainability Promotion System

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Handling Crisis

Major Initiatives Related to Business Continuity Plans (BCPs)

If there is an apparent risk that causes a serious impact on business continuity, a crisis response team with the president as the chief
executive officer is immediately formed to handle the situation. The crisis response team will respond to emergencies by collecting andanalyzing information, deciding and instructing countermeasures, and contacting and coordinating with related organizations.
Moreover, in the event of an important incident, accident, disaster, etc., we have prepared an emergency contact email system thatallows the department in which the incident occurred to notify the officers, the Business Management Office, and related departments
simultaneously.

We have made a BCP for each of our departments. Each plan defines the initial response to be made and recovery procedures to befollowed in case of emergency.
<IT Departments>
To ensure our business continuity, we are continuously working to minimize the damage that might be caused to our IT systems in theevent of a disaster and speed up the time required for recovery.
Specifically, we aim to minimize the damage by moving the system to a highly robust data center. Also, to shorten the recovery time,
we are shifting to cloud backups so that we can recover and restart the systems by using undamaged backups, including groupcompanies.
We are currently moving the system itself to the cloud, and will work to further strengthen business continuity.
Moreover, we are regularly providing more specific and practical education and training so that employees can make better responses
in case of a disaster.
<Procurement Departments>
We are fostering BCP measures for key procurement items such as materials and parts, including purchasing from multiple suppliers.
In view of the fact that we need a range of materials and parts to manufacture our products, we have built up a system to implement
BCP measures across the supply chain in cooperation with suppliers.

Business Continuity Management (BCM)
In preparation against possible earthquakes and other large-scale disasters, we are conducting BCM activities. Specifically, we aremaking business continuity plans and working on disaster control and reduction in a group-wide basis to minimize damage in theevent of a large-scale disaster and resume production as soon as possible if operation is suspended, thereby helping customers
maintain their supply chains.
We are also implementing measures against infectious diseases. To deal with COVID-19, we expanded our work at home system andreviewed work shifts in line, thereby continuing to operate our business while preventing infection. In addition, we will revise thebusiness continuity guidelines for infectious disease threat and establish a system to prepare for future emergencies.

<Buildings and Facilities Department>
We are implementing earthquake-resistant measures for our buildings and facilities in preparation for the Nankai Trough Earthquake.
We have a checklist to ensure if entering the building is possible in the event of an earthquake, and we are promoting building
inspection drills at each site.
Once entering the building, the recovery team inspects the infrastructure, ancillary facilities, and equipment according to theprocedures stipulated in the BCP and implements recovery activities according to the priorities.
<Business Departments>
In the BCP made for each department, we set a limit for the recovery time required for our major products. We also formulate actionplans for the recovery teams to achieve early recovery.
<BCP Training>
We conduct BCP training every December for the purpose of resuming business as soon as possible in the event of a disaster. BCP
training is designed to improve the effectiveness of BCPs by formulating recovery plans for the major businesses, organizing recovery
teams and implementing recovery activities. To prepare for a situation where our internal network is unavailable, we conduct training
on communicating with the emergency headquarters using IP wireless equipment and sharing information via the Internet.

Seminar and discussion meeting on disaster
response

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Information Security

Major Disaster Control and Disaster Reduction Activities<Implementation of the Joint Disaster Prevention Drill>
In anticipation of a Nankai Trough Megathrust Earthquake, we are implementing the Company-wide Disaster Prevention Drill as a joint
drill for domestic Group companies. The drill includes training for evacuation, confirmation of employees’ safety, incipient stage
firefighting, and inspection of damage caused to facilities and equipment and is designed for early recovery in the event of an
emergency.

Information Security Policy
We regard all of our own information assets as one of our management resources. Through the proper protection andeffective use of our information assets, we pursue healthy maintenance and development of our business.

Action Guidelines
Evacuation training

・We establish rules that clearly define the system and responsibilities for the protection and management of all theinformation assets including the information we keep for our customers, the know-how and intellectual properties
owned by our group, and personal information.
・We comply with laws, ordinances, and regulations regarding information security.
・We educate all executives and employees who handle information assets about the importance of information security,
and about specific items to be observed.
・We continuously update the information infrastructure for the maintenance and improvement of the confidentiality,
integrity, and availability of all the information assets.
・We promote measures to prevent accidents in order to address the risks of information leakage associated with thecontinuous advancement and sophistication of information technology. Should an accident occur, we will strive tominimize the damage and take preventive measures against recurrence.

Firefighting training (water discharge
training)<Measures Against Storm and Flood Damage>
Recently, climate change has been causing more extensive storm and flood damage. In response, we will work to minimize damage bymaking disaster-specific timelines for each of our business locations and checking local hazard maps annually, etc.
・Measures against the outflow of hazardous materials in the event of a flood
In order to prevent the outflow of chemicals and oil in the event of flooding due to heavy rain, we investigated the risk of flooding at
each site of our group companies.
At sites with a risk of flooding, we take appropriate measures, such as storing hazardous substances in sealed containers, placing
sandbags, and creating and operating disaster prevention procedures.

Basic Philosophy<Raising Employees’ Awareness of Disaster Prevention>
In order to enhance the disaster response capabilities of our employees and foster our business continuity, we distribute toemployees copies of the booklet titled “NITTOKU BOUSAI” which shows the action guidelines to be followed in the event of a disaster.

As the importance of information security grows, it is necessary for all Group members, from management to the front line, to work
together to improve the effectiveness of information security management and reduce security risks regarding the Group’s
information assets. To this end, we will work to properly protect various types of confidential and personal information, including
information entrusted to us by external parties, as well as to strengthen IT security to respond to increasing cyberattacks.

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Promotion System

Responding to Information Security Incidents

We have established a promotion system for each area of IT security and confidential information/personal information
management, and are working together to strengthen information security.
Regarding IT security, we have established an IT Security Committee (held at least twice a year), to check the status of companywide IT security activities and promote appropriate measures. This committee consists of the Chief Information Security Officer (thecorporate officer in charge of the Digital Transformation Dept.) as the chairman and Head of the Information Systems Division,
Head of the Integrated Management Division, Head of Headquarters, planning divisions of each company, and other major divisions
as members.
Regarding the management of confidential information and personal information, the Confidentiality Management Subcommittee(held at least once a year) was established under the Risk Management Committee to promote the reduction of risks related to the
management of confidential information and personal information. This committee consists of the executive officer in charge of theBusiness Management Dept. as sub-chairman and the heads of each department as members. In addition, information security
activities are led by department managers and department chiefs assigned to each department in the areas of IT security andconfidential information/personal information management.

We have established a Computer Security Incident Response Team (CSIRT).
When an incident occurs, the CSIRT promptly organizes and confirms the facts, determines the level of the incident, and thenresponds. We also accumulate and share knowledge as a measure to prevent recurrence.
In addition to responding after an incident occurs, we are also striving to defend in advance, and we are trying to improve the leveland maturity.
In fiscal 2021, in response to the increase in damage caused by cyber attacks around the world, we conducted a comprehensive
inspection of the servers used by our company and group companies. The servers with security concerns were extracted andcountermeasures were taken.
In addition, CSIRT publishes "CSIRT communication" every month to inform employees of the latest information on information
security and to alert them.
When it becomes necessary to call attention with a high degree of urgency, we are working to prevent incidents by issuing abulletin version that describes specific precautions.

Confidentiality Management
The working group on confidentiality management annually inspects the company-wide status of confidentiality management basedon the confidentiality management rules set by the company.
Regarding the self-inspection results by each department, the secretariat of the confidentiality management subcommittee
confirms its validity for the enhancement of the checking function.
The inspection includes self-inspection by each department and mutual inspection between departments. The inspection items arereviewed according to the broader progress of informatization in society for the enhancement of the checking function.
Furthermore, in addition to the rules on the in-house handling of confidential information, we have also established rules on the useof confidential information outside the company in order to prevent the leaking of such information, including rules on the use of
portable computers and cloud services, and we monitor compliance with the rules.

Information Security Promotion System

Protection of Personal Information

For confidentiality management, we have a working group on confidentiality management that reports to the Risk Management
Committee. The working group is tasked with identifying and reducing the risks related to the management of confidential
information and protection of personal information.

As exemplified by the General Data Protection Regulation (GDPR) enforced in Europe, measures to protect personal information
have been enhanced globally. In response, the Niterra Group has set a range of internal rules to appropriately protect, manage andhandle the personal information of its customers and employees.
In addition, as a response to the revised Personal Information Protection Law that came into effect in April 2022, we pre-assess
risks based on the type and the number of personal information and take measures to reduce the risks.
See the policy regarding the handling of personal information (Privacy Policy) below.

CSR and Sustainability Promotion System

Information Security Management System
In order to continuously respond to information security risks that threaten companies and organizations, we have set information
security as a priority issue (materiality) and are building an information security management system.
As one of them, We are in the process of establishing an information security management system. In 2020, we obtained TISAX(Trusted Information Security Assessment Exchange) certification, an information security assessment standard for the German
automotive industry supply chain.
In FY2021, group companies in the United States and China also completed the acquisition of TISAX certification.
Priority Issues (Materiality)

Privacy Policy

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Compliance Promotion System
In order to enhance compliance, we established the Compliance Committee chaired by the Representative Director. This committee
conducts activities to prevent noncompliance issues under the supervision of the CSR and Sustainability Committee. It will also give
instructions about the measures to be taken in the event of a noncompliance incident and monitor the implementation of themeasures.
The Compliance Committee draws up action plans based on the results of compliance awareness surveys of employees, etc., andpromotes compliance in cooperation with special committees and group companies.
In addition, we are promoting initiatives to prevent workplace harassment, and labor and management are working together to ensure
thorough compliance.
Moreover, it provides compliance education and conducts awareness-raising activities targeting both executives and employees while
also providing related information and raising employees’ compliance awareness through designated compliance facilitators at eachdepartment.

Compliance Policy
With recognition that our company is a member of society, we enhance corporate ethics and understand the spirit andmeaning of laws, company regulations, international rules, and social norms in order to appropriately meet social demand andbecome a company trusted by the international community.

Action Guidelines
・We not only comply with laws and regulations, but also act in good faith with common sense and responsibility as a memberof society.
・We regularly educate and raise the awareness of all our employees to impart a high level of ethics and correct knowledge,
with which they can act voluntarily to prevent a violation.
・Should a violation occur, we will promptly investigate the causes and take remedial actions. We will strive to take appropriate
countermeasures to prevent recurrence and fulfill our accountability.

Compliance Promotion System

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Corporate Ethics Helpline

Compliance Education and Awareness Raising

We have established the Corporate Ethics Helpline as an internal reporting system available to employees and suppliers seeking
consultation and making reports regarding compliance.
In addition to setting up the Compliance Committee Secretariat as an internal point of contact, we have also set up external private
contractors.
We are striving to improve convenience by, for example, allowing consultations and reporting outside working hours and on holidays.
Anonymous consultations and reports are also accepted, and whistleblowers are thoroughly protected so that whistleblowers are not
identified and are not disadvantaged as a result of reporting.
The hotline accepts consultations and reports when any violation of compliance, including harassment, or an act that may result insuch violation is known. We investigate the facts of consultations and reports we receive, and if any problems are identified, we
promptly deal with them.
In FY2022, there were 97 consultations and reports, including those from employees of Group companies and those related to laboraffairs and internal regulations, and we promptly took corrective actions for the identified problems.
We are continuously working to make the helpline service widely known by measures such as introducing it in training, putting up
related posters and distributing carrying cards describing the service.
Also, we have established channels for consultation and making reports at each of our overseas group companies.
With the revised Amendment of the Whistleblower Protection Act enacted in June 2022, we reviewed related regulations and reinformed employees about the corporate ethics helpline.

To raise employees’ awareness and knowledge regarding compliance, we are continuing to educate them by using the Compliance
Guidebook, which summarizes the rules concerning companies and society, the Compliance Newsletter, which provides specificexamples of compliance issues that could arise in our daily operations, and the Compliance Promotion Rules (for Managers/Mid-Level
Employees), which explains expected roles and behavior, in addition to holding level-specific and theme-specific training.
Moreover, in order to check employees’ level of understanding about the corporate rules and systems and to examine the corporate
culture and identify compliance risks, we conduct a compliance awareness survey targeting employees. In FY2022, we fed back thesurvey results to each department and identified those departments with issues to be addressed and interviewed.

Compliance Guidebook
The Compliance Guidebook provides explanations of the laws and rules that ourcompany and society must comply with, as well as specific prohibited items.
＜Example of Publication Content＞
・Respect for human rights
・Compliance with trade-related laws ・・Prohibition of harassment
Protection of personal information
・Compliance with Anti-Monopoly Act
・Maintenance of company secrets
・Prohibition of bribery and inappropriate ・Prohibition of conflicts of interest
entertainment
・environment conservation
・Prohibition of bribery of foreign public
・Regulation of donations and political
officials etc. when developing overseas
donationbusiness
・Exclusion of Exclusion of anti-social
・Prohibition of insider trading
forces,etc.

Compliance Promotion Book for Managers / Mid-career Employee
The Compliance Promotion Book isavailable in two versions: Managers
version and Mid-career Employee
version. They serve as guidelines for
managers and mid-level leaders topromote compliance in their workplaces.
The book contains the necessary
behavior, knowledge, and examples foreach position.
＜Example of Publication Content＞
・Expected roles and behavior
・Compliance management・Response before problems occur
・Response after a problem occurs,etc.

Flow after report is received via the Helpline

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Initiatives to Prevent Corruption

Initiatives Concerning Competition Laws

We are striving to prevent corruption in line with the statement made in our Corporate Code of Conduct: “We shall promote fair,transparent, free competition and sound trade. We shall also ensure that our relationships and contacts with government agencies
and political bodies are of a sound and proper nature.”
We issued the Compliance Guidebook in 2012, in which we set the rules concerning the prevention of corruption, including theprohibition of involvement in political contributions or bribery, and made employees aware of these rules.
Subsequently, in 2013, we issued the Conduct Guidelines Concerning the Giving and Receiving of Gifts and Entertainment to raise
employees’ awareness of the issues and prevent them from becoming involved in misconduct. Further, we signed the UN Global
Compact in 2016 and formulated an Anti-Corruption Policy for our employees in 2018, openly reaffirming our commitment topreventing corruption.
We are thus working to prevent corruption in line with the guidelines and others. We respond to any violations of the anti-corruption
rules mainly through the Compliance Committee. Our overseas Group companies are also taking action to prevent corruption,
especially to prohibit and prevent bribery of civil servants and facilitation payment, including providing employees with related
education and conducting surveys on local laws. We also request that suppliers refrain from acts of bribery through our CSR
Procurement Guidelines. In FY2022, there were no violations of related laws and regulations across the Group.

Taking seriously our violation of the Anti-Monopoly Act of Japan, as uncovered in FY2014, we have established a system to promotecompliance with competition laws and to ensure legal compliance both within and outside the country.
In Japan, we formulated the Anti-Monopoly Act Compliance Manual and distributed copies to employees while holding a range ofrelated seminars internally for both executives and employees. Moreover, we have introduced an in-house e-mail inspection system tomonitor and prevent recurring violations of the competition law.
Our overseas Group companies are required to report the activity status regarding compliance with competition laws to Niterra on aregular basis. In addition, the company’s teams in charge of affairs concerning competition laws and compliance visit the Group
companies, where they audit the companies’ compliance systems and implementation status and check whether local employees are
sufficiently aware of the related rules. Seminars featuring guest speakers are also held.
We will continue our education and auditing activities to ensure compliance with competition laws both in Japan and abroad.

Export Control
We comply with domestic laws and regulations based on the Foreign Exchange and Foreign Trade Act in accordance with themultilateral export control regime (MECR) established for international peace and safety. In addition, we have established related
internal rules and an in-house export control organization.
We also conduct awareness-raising and inspection activities targeting departments engaged in export control, thereby ensuring andenhancing our export control in compliance with the related laws and regulations. We are working to prevent the destabilization ofinternational affairs by focusing on preventing the outflow of sensitive technology as well as cargo that can be diverted to militaryuse.
In addition, we have established a system to understand and respond to the international situation related to export control andrevision trends of related laws and regulations.
In accordance with revisions to export control-related laws and regulations that came into force in May 2022, we have reviewed
related regulations and made them known to relevant departments.

Participation in "United Nations Global Compact"

Initiatives to Eliminate Anti-Social Forces
We will take a firm stance against anti-social activities and forces/organizations. We will not engage in any act that facilitates suchactivities, including purchasing something, providing benefits and participating in money laundering, including from suppliers
associated with them.

Initiatives to Prevent Insider Trading
We have established internal regulations to prevent insider trading, which obstructs fair trading in the stock market.
Our internal regulations set standards of conduct regarding the management of our internal information and the buying and selling ofstocks, etc. of our company or other companies. Compliance with these rules will prevent insider trading by our officers, employees,
and ourselves.

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Tax Policy
By understanding the spirit and purpose of taxation laws and regulations, we respond appropriately to the demands ofsociety and aim to become a company trusted by the international community.

Action Guidelines
・We fulfill our social responsibilities by observing laws on corporate taxation and other tax laws in every country, as well asinternational taxation standards including the OECD Transfer Pricing Guidelines, the Action Plan on Base Erosion andProfit Shifting, and the arm’s length principle of transfer pricing.
・In order to ensure compliance with taxation laws and regulations, we work toward improving our knowledge and gaining aproper understanding of taxation and adopt an attitude of sincerity toward tax authorities to enhance our reliability andtransparency.
・We properly manage taxation risks by working toward appropriate declaration and payment of taxes in each country,
thereby enhancing shareholder value.
・We never engage in profit shifting to tax havens and other low-tax countries or implement other measures for the
purpose of tax avoidance.

73

Data

Environment

Index

Society

Governance

Sustainability Data
（Non-Financial Information）＜Quantity of environmental conservation benefits＞
Effect measured in thebusiness area

Environmental Management Environmental Accounting Environment Data
Compliance with Environmental Laws and Regulations
Providing Environmentally Friendly Products Global Human Resource Management
Human Resource Development Diversity Work-life Balance
Occupational Safety and Health Product Quality Social Contribution Activities
Communication with Stakeholders Corporate Governance Compliance
R&D




Effect measured withrespect to resource
input into operations

Types of effect
Energyconsumption











Water
consumption















Effect measured withrespect to environmentalload and waste frombusiness activities

Environmental Management
Acquisition rate of ISO14001

Unit

Scope oftabulation％

Niterra Group

2018
ー

2019

2020

2021

93

93

93

2022

＜Economic benefits associated with environmental conservation activities＞
Revenue

Revenue generated from the recycling of waste
generated in operations or used products

CostsavingEnergy cost saving achieved from energy
conservation efforts
Reduction of water expenses through water saving
Waste disposal cost saving achieved by resource
conservation and recycling efforts

Total

million yen

Scope oftabulation

2021

2022

Difference
from theprevious
fiscal year

GWh

34,95933,351-1,608Gas

million ㎥

1,157

1,115

-42

LGP

tons

6,593

5,929

-664

Tap water㎥

821,362

796,098-25,264

Well water㎥

358,895

370,205

11,310

704

856

152

194,207

155,197-39,010

Niterra Co., Ltd.
and Groups inJapan (withintegrated
certification)

Amount of PRTR substances
treatedtons

CO2 emission from energy
consumption

tons

Waste

Effectively
used

tons

11,727

10,851-876

Not
effectively
used

tons

66

47

-19

tons

92

221

129

[Calculation method] Energy consumption. CO2 emission from energy consumption : Excluding the amount used for and CO2 emitted
from the transportation activities

Environmental Accounting
Unit

Unit

Purchased
electricity

Amount of PRTR substances
released into air and water96[Calculation method] Percentage of employees working at ISO14001-certified sites

Area of recognized effect

Data

Scope of tabulation

Niterra Co., Ltd. andGroups in Japan (withintegrated certification)

2021

2022

724.2

769.8

111.9

134.2

0.3

3.4

3.0

40.3

839.4

947.7

74

Environment

Index

Society

Governance

Environment DataManagementof WaterManagementof WasteManagementof Chemical
Substances

Data

Unit

Scope oftabulation

2018

2019

2020

2021

2022

Total energy
consumption

MWh

Niterra Group

830,834

799,541

780,112825,807739,043

Total
nonrenewableenergyconsumption

MWh

Niterra Group

830,258

799,263

779,822823,783

674,410

MWh

Niterra Group

367,018

339,823

326,302338,530

275,900

MWh

Niterra Group463,241

459,440

453,520

485,252

398,510

MWh

Niterra Group

576

278

290

2,024

64,633

Unit

Scope oftabulation

2018

2019

2020

2021

2022

Total water
consumption

10,000㎥

Niterra Group

154

166

153

165

161

Basic Unit

10,000㎥/Millionyen

Niterra Group

5.40

5.68

5.13

4.92

4.40

Total water
discharge

10,000㎥

Niterra Group

154

166

153

165

161

Total waste
generated

tons

Niterra Group

21,45022,031

20,237

22,68621,188

Basic Unit

Tons/Million
yen

Niterra Group

0.075

0.075

0.068

0.068

0.058

Purchased
electricity

MWh

Niterra Group

0

0

0

0

62,144

Effectively used

tons

Niterra Group

19,49019,212

18,223

20,712

19,344

MWh

Niterra Group

576

278

290

2,024

2,489

Not effectively
usedGenerated
electricity

tons

Niterra Group

1,960

2,662

2,014

1,974

1,843

Effective
utilization rate

7.01

6.47

6.21

6.44

5.11

Niterra Group

90.9

87.3

90.0

91.3

91.3

10,000tons-CO2

Niterra Group％

Total direct GHG
emissions[Scope 1]
Total indirect
GHG emissions[Scope 2]

10,000tons-CO2

Niterra Group

22.1

21.1

19.5

20.1

16.0

Scope 1+2

10,000tons-CO2

Niterra Group

29.1

27.6

25.7

26.5

21.1

Basic Unit

tonsCO2/Million
yen

Niterra Group

1.02

0.94

0.86

0.79

0.58

On-siteinspection atwaste disposal
company
facilities

cases

Niterra Co., Ltd.
and Groups in
Japan

84

82

57

39

21

Amount of PRTR
substances
treatedtons

Niterra Co., Ltd.
and Groups in
Japan

920.0

763.8

640.4

755.0

865.0

Amount of PRTR
substances
released

tons

Niterra Co., Ltd.
and Groups in
Japan

132.3

88.1

94.5

139.1

222.5

tons

Niterra Co., Ltd.
and Groups in
Japan

120.9

77.1

83.6

129.3

214.8

tons

Niterra Co., Ltd.
and Groups in
Japan

2.9

1.6

1.1

1.0

1.1

tons

Niterra Co., Ltd.
and Groups in
Japan

8.6

9.4

9.8

8.8

6.7

(Toluene)(Xylene)(Other)（Fuels）
Energyconsumption （Electricity）
Total renewableenergygeneration

Greenhousegasemissions(Scope 1,2)

[Calculation method]
Scope 1 : Calculated by using the global warming potential as provided for in the Act on Promotion of Global WarmingCountermeasures.
Scope 2 : Calculated by using the emission factor as provided by each electric power company in Japan, while in other countries
calculated by using the emission factor of each country by the IEA.

75

Environment

Index

Society

Governance[Calculation method]
1：Calculated by multiplying the figures shown in the material balance sheet by the relevant values retrieved from the database ofemissions unit values built for the calculation of organizations’ greenhouse gas emissions across their supply chains
2：Calculated by multiplying the cost of acquiring tangible fixed assets (shown in the financial statements) by the relevant value
retrieved from the database of emissions unit values built for the calculation of organizations’ greenhouse gas emissions across their
supply chains
3：For power consumption, calculated by multiplying the amount used by the relevant value retrieved from the database of emissions
unit values built for the calculation of organizations’ greenhouse gas emissions across their supply chains. For gases, etc., calculated
by multiplying the amount used with the relevant value retrieved from the IDEA LCA database.
4：Extracted from the data notified (for products) by shippers specified under the Act on Rationalizing Energy Use
5：Calculated by totaling CO2 emissions from the transportation of the company’s waste (extracted from the data notified (for waste)by shippers specified under the Act on Rationalizing Energy Use and CO2 emissions from the treatment of waste (calculated bymultiplying the cost of waste treatment (for fiscal years up to fiscal 2018) or the amount of waste treated (for after fiscal 2019) by
the relevant value retrieved from the IDEA LCA database)
6：Calculated by multiplying the number of employees by the relevant value retrieved from the database of emissions unit values built
for the calculation of organizations’ greenhouse gas emissions across their supply chains
7：Calculated by multiplying the result of multiplying the number of employees by the number of their working days by the relevant
value retrieved from the database of emissions unit values built for the calculation of organizations’ greenhouse gas emissions acrosstheir supply chains
11：Calculated by multiplying the amount of CO2 emissions per one ton of products calculated by using the Japan Auto Parts
Industries Association’s LCA tool by the weight of shipped products
12：Calculated by multiplying the weight of shipped products by the relevant value retrieved from the IDEA LCA database
15：Calculated by multiplying the amount of CO2 emitted by the five companies that are ranked in the top five in terms of themonetary value of the stocks owned by Niterra by the stockholding ratio* "0" is indicated for non-applicable items, and "-" is indicated for difficult-to-calculate items.

＜Greenhouse gas emissions (Scope 3)＞
Unit

Scope oftabulation

2018

2019

2020

2021

2022

１．Purchased goods andservices

119.16ー

122.01169.03

197.48

２．Capital goods

20.23

ー

11.08

11.49

7.86

３．Fuel- and energy-related
emissions not included in scope
1 or scope 2

4.42

ー

4.29

4.60

4.34

４．Upstream transportation anddistribution

17.15

ー

12.86

15.03

8.75

５．Waste generated inoperations

0.57

ー

0.71

0.77

0.78

６．Business travel

0.21

ー

0.21

0.21

0.21

2.06

ー

2.10

1.47

1.46

７．Employee commuting
８．Upstream leased assets

10,000tons-CO2

Niterra Group0

９．Downstream transportationand distribution

ー

ー

ー

ー

ー

10．Processing of sold products

ー

ー

ー

ー

ー

11．Use of sold products

970.32ー

878.07939.95909.1012．End-of-life treatment of soldproducts

0.06

ー

0.05

0.06

0.06

13．Downstream leased assets

014．Franchises

015．Investments

0

Total

1,134

ー

1,031

＜Proportion by region in FY2022＞
Unit
Consumption
Water
Emissions

1,143

Data

1,130

76

Waste

EmissionsGreenhousegas

Emissions

Japan

Asia

North
AmericaSouth
America

EuropeAfrica10,000 ㎥

121

23.3

1.9

13.8

0.7

0.3

%

75.2

14.5

1.2

8.6

0.4

0.2

10,000 ㎥

121

23.3

1.9

13.8

0.7

0.3

%

75.2

14.5

1.2

8.6

0.4

0.2

t

11,916

3,496

2,074

2,889

740

73

%

56.2

16.5

9.8

13.6

3.5

0.3

10,000tons-CO2

16.7

2.6

0.9

0.7

0.1

0.1

%

79.2

12.1

4.4

3.2

0.5

0.4

Environment

Index

Society

Governance

Providing Environmentally Friendly Products＜Waste plastic emissions from domestic group companies＞
Unit

Waste plastic emissionst

Scope of tabulation

2022

Niterra Co., Ltd.

51.3

SparkTec WKS CO., LTD.

50.1

NICHIWA KIKI CO., LTD.

2.5

KAMIOKA CERAMIC CO., LTD.

2.1

NTK CERAMIC CO., LTD.

237.1

CERAMIC SENSOR CO., LTD.

101.5

NITTOKU ALPHA SERVICE CO.,
LTD.

0.9

NANSEI CERAMIC CO., LTD.

16.4

NTK CERATEC CO., LTD.

31.6

MORIMURA SOFCTECHNOLOGY CO., LTD.

1.7

NTK CUTTING TOOLS CO., LTD.

3.4

NTK Medical CO., LTD.

2.8

CECYLLS

6.9

NITTOKU DENSHI CO., LTD.

2.7

NITTOKU SMILE CO., LTD.

0.2

Environment-related noncompliancecases

Niterra Group

0

3

2

2

1

Environment-related fineyen

Niterra Group

0

0

0

0

0

cases

Niterra Co., Ltd.
and Groups in
Japan

3

1

2

4

1

Environment-related complaints

2021

2018

2019

2020

2021

Sales ratio of precious metal
plugs*％

Niterra Group

39

39

41

40

43

Sales ratio of wide range
oxygen sensor*％

Niterra Group

27

34

37

37

39

2022

Global Human Resource Management
Unit

Scope oftabulation

2018

2019

peopleNiterra Group

15,994* Adopted
IFRS forfiscal* Adopted
IFRS forfiscal* Adopted
IFRS forfiscal* Adopted
IFRS forfiscalpeopleNiterra Co., Ltd.

5,863

5,883

5,891

3,617

3,554

Number of temporary workers

peopleNiterra Co., Ltd.

505

649

473

108

121

Average
age

Men

aged

Niterra Co., Ltd.

39.0

39.7

41.5

41.5

41.4

Women

aged

Niterra Co., Ltd.

36.9

37.6

38.7

39.6

39.5

Total

aged

Niterra Co., Ltd.

38.6

39.3

41.0

41.0

41.1

Men

aged

Niterra Co., Ltd.

16.8

17.1

17.8

16.7

19.8

Women

aged

Niterra Co., Ltd.

16.1

16.4

17.2

16.9

17.3

Total

aged

Niterra Co., Ltd.

16.7

16.9

17.7

16.7

19.3

Average annual salaryyen

Niterra Co., Ltd.

6,912,014

6,759,462

6,362,393

6,725,908

6,896,899

Turnoverrate

Total employee
turnover rate％

Niterra Co., Ltd.

2.62

3.12

3.59

4.71

6.27

Voluntary
employeeturnover rate％

Niterra Co., Ltd.

1.53

1.90

2.12

3.51

3.29

Number of workers* Number of employees as of March 31* Number of employees as of March 31

No. ofyears ofserviceScope oftabulation

2020

Scope oftabulation* Number of
employees asof March 31

Unit

2019

Unit

* “Precious metal plug” and “wide range oxygen sensor” are types of environmentally friendly products and are selected as priority
issues.
We aim to increase each of the “sales ratio of precious metal plugs” and the “sales ratio of wide range oxygen sensor” to not lessthan 50%

Compliance with Environmental Laws and Regulations
2018

Data

2022

* Number of
employees asof March 31

77

16,4302020
16,391

2021
16,0942022
16,247

Environment

Index

New
graduatehiringCareerhiringRate ofemployeeswith highwork
satisfaction

Unit

Scope oftabulationMenpeopleWomen

Society

GovernanceDiversity

2018

2019

2020

2021

2022

Niterra Co., Ltd.

116

101

84

40

21

peopleNiterra Co., Ltd.

27

27

26

21

13

Total

peopleNiterra Co., Ltd.

143

128

110

61

34

Foreignnationality

peopleNiterra Co., Ltd.

4

5

5

6

2

Men

peopleNiterra Co., Ltd.

40

30

26

30

34

Women

peopleNiterra Co., Ltd.

4

8

9

3

6

Total

peopleNiterra Co., Ltd.

44

38

35

33

40

Foreignnationality

peopleNiterra Co., Ltd.

0

1

0

0

0

Hired as amanagerpeopleNiterra Co., Ltd.

ー

7

6

8

13

％

Niterra Co., Ltd.
and Groups in
Japan

88.1

90.9

88.0

87.6

92.6

* As of April 1

pointsNiterra Co., Ltd.
and Groups in
Japan

ー

3.37

3.34

3.30

3.33

Response rate
Overallsatisfaction(maximum 5
points)

Unit

Scope oftabulation

2018

2019

2020

2021

2022

Men

peopleNiterra Co., Ltd.

4,730

4,784

4,734

3,017

2,947

Women

peopleNiterra Co., Ltd.

1,037

1,045

1,057

600

607

Percentageof women％

Niterra Co., Ltd.

18.0

17.9

18.3

16.6

17.1

Men

peopleNiterra Co., Ltd.

966

963

978

780

672

Women

peopleNiterra Co., Ltd.

15

18

26

26

35

Percentageof women％

Niterra Co., Ltd.

1.53

1.83

2.60

3.23

4.95

Ratio of women, foreign nationals
and career recruits in managerial
positions*％

Niterra Co., Ltd.

12.5

13.6

14.5

17.0

19.9

SupervisorsMenpeopleNiterra Co., Ltd.

1,112

1,221

1,264

1,024

968

Women

peopleNiterra Co., Ltd.

26

37

39

47

48

Percentageof women％

Niterra Co., Ltd.

2.28

2.94

2.99

4.39

4.96

Men

peopleNiterra Co., Ltd.

3,427

3,305

3,202

1,383

1,209

Women

peopleNiterra Co., Ltd.

597

601

612

255

217

Percentageof women％

Niterra Co., Ltd.

14.8

15.4

16.0

15.6

15.2

％

Niterra Co., Ltd.
and Groups in
Japan

2.21

2.25

2.46

2.36

2.59

Under 30
years old％

Niterra Co., Ltd.

24

22

17

17

16

30 to 50
years old％

Niterra Co., Ltd.

59

60

62

61

59

50 yearsand over％

Niterra Co., Ltd.

17

18

21

22

25

peopleNiterra Co., Ltd.

204

190

208

132

120

Regular employees* As of March 31

Managers* As of April 1

Generalists(Classified,
Considered)* As of April 1[Calculation method] Average age/No. of years of service : Calculated based on the number of regular employees as of March 31
Average annual salary Including bonuses and extra wages
Total employee turnover rate : Calculated based on the number of employees who retired / quit the company
Voluntary employee turnover rate : Calculated based on the number of employees who quit the company for personal reasons

Percentage of disabled employees* As of March 31

Human Resource Development
Average hours of training
Average amount spent on
training

Employee age group

Unit

Scope oftabulation

hours

Niterra Co., Ltd.
and Groups in
Japan

8

9

3

4

29

yen

Niterra Co., Ltd.
and Groups inJapan

23,31018,321

8,324

10,80939,955

2018

2019

2020

2021

Data

2022

[Calculation method] Calculated for the training (level-specific, global, etc.) provided by the Strategic Human Resources Department

Reemployed* As of March 31

78

Environment

Index

Society

Governance

Data＜Gender wage gap at domestic group companies＞[Calculation method]
Regular employees : Excluding employees temporarily transferred to Group companies
Manager,Supervisor,Generalist : including employees temporarily transferred to Group companies
Percentage of Disabled Employees : Including employees temporarily transferred to Group companies and the special subsidiary in
Japan
Reemployed : Including employees temporarily transferred to Group companies
Employee age group: Including employees temporarily transferred to Group companies* We aim to increase the “ratio of women, foreign nationals and career recruits in managerial positions” to 25% in fiscal 2030.

Unit＜Percentage of women by level＞

Gender wage gap%

Gender wage gap ofregular workers

Gender wage gap of
non-regular workers

Gender wage gap of all
workers

Niterra Co., Ltd.

66.1

119.2

67.5

SparkTec WKSCO., LTD.

74.7

100.8

76

CERAMICSENSOR CO.,
LTD.

68.5

69

68.6

NTK CERATEC
CO., LTD.

69.4

58.2

64.3

Unit

Scope of tabulation* As of April 1

Directors％

Niterra Co., Ltd.

36.0

65.7

89.3

61.6

Excutive officers andCorporate officers

NTK CERAMIC
CO., LTD.

％

Niterra Co., Ltd.

0

74.5

96.6

75.7

All Managers* As of April 1％

Niterra Co., Ltd.

4.95

NANSEICERAMIC CO.,LTD.

Senior Managers* As of April 1％

Niterra Co., Ltd.

3.26

Supervisors％

Niterra Co., Ltd.

4.96

* As of April 1* As of April 1

2022

Scope oftabulation

As of March 31, 2023

*1：Wages include all payments made by employers to their employees as remuneration for labor. Retirement allowance andcommuting allowance are excluded.
*2：With respect to regular workers, secondees are included in the companies from which they are seconded and are paid.
*3：With respect to non-regular workers, those re-employed after mandatory retirement, part-time workers, and contract workers areincluded, whereas dispatched workers are excluded. There is no consistency in the numbers, as companies have different employment
forms and the percentages vary. For instance, the Company employs medical professionals who are included in contract workers andthe pay gap is 119.2%. Except for contract workers, the gap would be 85.8%.
*4：Of the Company and its domestic consolidated companies, presented above are those that are disclosed under the Act on
Promotion of Women’s Participation and Advancement in the Workplace.

79Environment

Index

Society

GovernanceWork-life BalanceMaternity/
Child care

Unit

Scope oftabulation

Employees who
took maternity
leavepeopleEmployees who
took child careleave（Men）

peopleEmployees who
took child careleave（Women）

peoplePaid
holidays

Unit

Scope oftabulation

Paid holidays
granted to
employees

day(s)

2018

2019

Niterra Co., Ltd.

19.6

19.5

2020

2021

2022

ー

19.6

19.5

2018

2019

2020

2021

2022

Niterra Co., Ltd.

61

47

47

30

23

Paid holidays
taken by
employees

day(s)

Niterra Co., Ltd.

16.6

16.7

ー

14.0

15.0

Niterra Co., Ltd.

4

5

13

24

55

Rate of usage％

Niterra Co., Ltd.

84.4

85.6

ー

71.2

75.6

％

Niterra Co., Ltd.,
SparkTec WKSCO., LTD.,
NANSEICERAMIC CO.,LTD., NTKCERATEC CO.,LTD. (Komaki),
NTK Medical CO.,LTD. NTKCUTTING TOOLSCO., LTD

92

92

92

94

98

Niterra Co., Ltd.

46

53

36

35

Niterra Group labor unionparticipation rate

* Number of employees as of March 31

25

Percentage of
employees who
returned to work
after taking childcare leave％

Niterra Co., Ltd.

100

96

94

94

98

Users of theshort working
hour system forchild carepeopleNiterra Co., Ltd.

42

30

41

23

26

Employees who
took nursing
care leavepeopleNiterra Co., Ltd.

2

3

1

2

2

Users of theshort working
hour system fornursing carepeopleNiterra Co., Ltd.

0

1

1

1

1

Users of the short working
hour system for other reasons(not childcare/nursing care)peopleNiterra Co., Ltd.

0

0

2

4

4

Workinghours

Prescribedworking hours

hours/year
and person

Niterra Co., Ltd.

1,899

1,899

1,899

1,899

1,899

Actual working
hours

hours/year
and person

Niterra Co., Ltd.

2,008

1,982

1,884

1,955

1,834

Averageovertime working
hours

hours/month

Niterra Co., Ltd.

22

19

8

11

15

Long-term
nursingcare leave

Data[Calculation method]
Working hours：Excluding managers, employees temporarily transferred to Group companies and those on leave
Paid holidays：Calculated for a fiscal year from October to next September (example : fiscal 2019 was started in October 2019 andended in September 2020), excluding managers, employees temporarily transferred to Group companies and those on leave
Employees who took child care leave : Number of employees whose child care leave started in the fiscal year
Percentage of employees who returned to work after taking child care leave : Percentage of employees who returned to work among
those whose child care leave period expired in the fiscal year
Users of the short working hour system for child care : Number of employees who became users of the system in the fiscal year
Employees who took nursing care leave : Number of employees whose nursing care leave started in the fiscal year
Users of the short working hour system for nursing care : Number of employees who became users of the system in the fiscal year

80

Environment

Index

Society

GovernanceOccupational Safety and Health＜Percentage of male employees taking childcare leave at Group companies in Japan＞
Unit
Percentage of male employees taking
childcare leave%

Scope of tabulation (*2)

Data

2022

Niterra Co., Ltd.

52

SparkTec WKS CO., LTD.

34

CERAMIC SENSOR CO., LTD.

65

NTK CERATEC CO., LTD.

47

NTK CERAMIC CO., LTD.

25

NANSEI CERAMIC CO., LTD.

ー (*1)

Unit*1：Not listed as there is no man whose spouse gave birth.
*2：Among domestic group companies, the company is disclosed in the provisions of the Act on the Promotion of Women's Active
Engagement in Professional Life
[Calculation method]
Percentage of male employees taking childcare leave（％）=（Number of men who took childcare leave）÷（Number of men whose spousegave birth）×100

Scope of tabulation

2018

2019

2020

2021

2022

Total accident frequency
rate

Niterra Co., Ltd.
(Including temporary
employees)

1.08

0.77

0.93

0.90

0.42

Frequency
rate ofaccidents
requiring
leave
from
work

Niterra Co., Ltd.

0.08

0.00

0.34

0.13

0.00

Niterra Co., Ltd.

0.08

0.00

0.27

0.13

0.00

Niterra Co., Ltd.

0.00

0.00

1.13

0.00

0.00

Niterra Co., Ltd.
(Including temporary
employees)

0.00

0.00

0.00

0.00

0.00

Total
Employees-

Temporaryemployees

Frequency rate ofoccupational diseases[Calculation method]
Total accident frequency rate : Total number of victims per 1million working hours
Total accident frequency rate=Number of victims of all occupational accidents÷Total working hours×1million hours
Frequency rate of accidents requiring leave from work : Number of victims who took leave per 1million working hours
Frequency rate of accidents requiring leave from work=Number of victims of accidents requiring leave from work÷Total working
hours×1million hours
Frequency rate of occupational diseases : Number of employees who took leave due to occupational diseases per 1million working
hours
Frequency rate of occupational diseases=Number of employees who took leave due to occupational diseases*÷Total working
hours×1million hours* Occupational disease refers to heatstroke, backache, chemical poisoning, and other occupational diseases defined by the Ministry of
Health, Labor and Welfare.
＜Number of work-related fatalities＞
Unit
Number of fatalities

81

Employees

peopleContractors

peopleScope of tabulation
Niterra Group

2018

2019

2020

2021

2022

0

0

0

0

0

0

0

0

0

0

Environment

Index

Society

GovernanceSocial Contribution Activities＜Number of participants in Health and safety related education＞
Unit
Stratified training participant

2022

Health and safety training for third-year
employees

295

Health and safety training for tenth-year
employees

240

Health and safety training for chiefs

110

Niterra Co., Ltd. and Groups inJapan

peopleType of contribution

2020

2021

2022

Cash contributions

248.5

394.6

496.1

464.8

476.7

Time: employee volunteering
during paid working hours

13.4

7.6

8.4

10.6

38.1

1.7

51.3

1.3

11.3

65.6

35.2

29.7

0.03

0.01

7.11

73

Chemical education for managers

86

Management overheads

Total

874

Product Quality
Unit

Scope oftabulation

2018

2019

2020

2021

2022

Number of vehicles recalled

vehicles

0

0

0

0

0

Expenses incurred due torecalls issued in thecorresponding fiscal year

yen

0

0

0

0

0

Number of vehicles recalled thatwere Mandated

vehicles

0

0

0

0

0

Cost of recalls as a percentage
of annual revenues

％

0

0

0

0

0

Niterra Group82

Scope oftabulation

2019

Chemical education for workers

70

Unit

2018

In-kind giving: product orservices donations, projects /partnerships or similar

Health and safety training for new managers
Specialized training
participant

Scope of tabulationData

million yen

Niterra GroupEnvironment

Index

Society

GovernanceCommunication with Stakeholders
Stakeholder

Shareholders
andinvestors

Customers

Communication

We disclose
information incompliance with thelaw and also
disclose information
promptly via themedia and at our
website.

We offer
information
meaningful tocustomers at our
website andthrough exhibitions
so that they canpurchase and use
our products andservices with peaceof mind.

Major activities

2020

2021

Suppliers

We are working tobuild relationshipsof trust with
suppliers as theirsound partners andachieve growth
together. To thisend we conduct
activities across the
supply chain, suchas holding briefing
sessions on our
corporate policies.

2022

June

●Dialogue with institutional investors andsecurities analysts

197 times

258 times

235 times*●Financial results briefing for institutional
investors and securities analysts

2 times

2 times

2 times●Conference call for institutional investors
and securities analysts

4 times(A total of 242
people)4 times(A total of 288
people)4 times(A total of 310
people)●Organization of briefings on our
technologies for institutional investors andsecurities analysts

Canceled dueto the spreadof the COVID19

1 timeJune

June

1 times(A total of 724
people)●Dispatch of company information andfinancial information through SNS for
personal investorsーー

6 time●Publication of the newsletters forshareholders

1 time1 time1 time●Publication of an annual integrated report

Oct.

Oct.

Sep.

From time to time

●Explanation about products andtechnologies at exhibitions

From time to time

●Organization of briefings on thecorporate principles●Organization of seminars on practicalissuesFrom time to time

June

June

May

24 seminars

7 seminars

7 seminars●Local cleanup activity

2 times(A total of
1,720 people)●Provision of information via the website(on products, events, etc.)●Communication through daily
procurement activities

2022

From time to time

2 times(A total of 411
people)From time to time

2021

●Participation in local events such as
festivals●Organization of online briefings on thecompany for personal investors●Communication through sales activities

2020

2 times
1 timeFrom time to time

Frequency & no. of articipants per year

From time to timeー

●Provision of information via the website

Major activities●Communication through social meetingsand eventsー●Communication at venues of events, suchas racing events

Communication

Frequency & no. of articipants per year

●Organization of the ordinary general
meeting of shareholders●Organization of ESG briefings

Stakeholder

Data

Local
communities

We respect the local ●Environment-related plant tours
culture and customs
at each of ourbases locatedacross the world
and work for●Environmental meetingssmoothcommunication withlocal communities.
We also participate ●Communication through cultural andin various social
sport events
contribution
activities to help
create a・2020 NGK SPARK PLUG Suzuka 2&4 Race
comfortable society
as a corporate
citizen.
・NGK SPARK PLUG FC Gifu football classfor children
・Musical for families held in the NTK Hall

From time to time・Marathon Festival Nagoya Aichi
83●Provision of information via the website(environmental information, etc.)

From time to
time(A total of 464
people)From time to
time(A total of 558
people)From time to
time(A total of 459
people)From time to
time(A total of 71
people)From time to
time(A total of 324
people)From time to
time(A total of 188
people)From time to
time(A total of 4
people)From time to
time(A total of 7
people)From time to
time(A total of 5
people)ーーーCanceled due tothe spread of the
COVID-19

Apr.

Apr.

Canceled due tothe spread of the
COVID-19

Oct.

Sep.

Dec.
(Scale down due
to the spread of
the COVID-19)

Dec.

Dec.

Mar.

Mar.

Mar.

From time to timeEnvironment

Index

Stakeholder

Communication

Society

2020

Employees●Publication of an in-house magazine

2021

2022

＜Board of Directors and Board of Auditors＞

From time to time
Booklet：4
times
Website： fromtime to time

●Organization of various labormanagement meetings

Booklet：2
times
Website： fromtime to time

Unit
Booklet：2
times
Website： fromtime to time

Directors

From time to time

Scope oftabulation

2022

2023

Men

people

7

7

Women

people44Percentage of women

％

36

36

Outside directors (independent officers)

people77Percentage of outside directors*

％

64

64

45

45

5.4

5.5

●Utilization of the corporate ethics helpline(for employees)

63 calls
received

32 calls
received

97 calls
received●Organization of various training sessions

From time totime

From time totime

From time totime

Percentage of female and non-Japanese
directors*％●Employee satisfaction survey

All employees,
from Oct. to
Nov.

All employees,
from Oct. to
Nov.

All employees,
from Oct. to
Nov.

Average tenure

years

Men

people

2

2

Women

people22Percentage of women

％

50

50

Outside directors (independent officers)

people33Frequency

times

12

ー

Average attendance rate

％

99

ー

Audit Committee
members* Details of individual interviews with institutional investors and securities analysts in FY2022【Each dialogue partner】
Dialogue partner

Data

Corporate GovernanceFrequency & no. of articipants per year

Major activities●Communication through daily operations
and at workplaces

To maintain safe
and sound
workplaces andhelp employees
work with vigor, themanagement teamproactively visits
work sites to havedialogues with onsite employees.

Governance【Each responder】
Number of times

Responder

Number of times

Securities analysts

57 times

President

23 times

Domestic institutional investors

85 times

Board member

4 times

Foreign institutional investors

93 times

Sustainability division

2 times

Total

235 times

IR division

206 times

Total

235 times

Board of directors

Niterra Co., Ltd.

* We aim to increase the rate of outside directors and the percentage of female and non-Japanese directors to at least one-third and
30% of the total number of directors, respectively, by fiscal 2030.

84IndexEnvironment

Society

GovernanceCompliance＜Remuneration and bonus paid to directors and auditors in fiscal 2022＞

Total remuneration by type(million yen)
Number
Totalof
Performance- recipients
remuneration
Fixedlinked,stock(million yen)(persons)
remuneration Bonus
based
remuneration

Directors(excluding Directors who are Audit and Supervisory Committee Members)（Outside directors）
Directors who are Audit and Supervisory Committee Members（Outside directors）
Outside directors(Outside auditors)

494

328

111

55

12

（61）
70
（35）
17
（10）

（61）
70
（35）
17
（10）

（-）

（-）

-

-

-

-

（5）
4
（3）
4
（3）

Data

＜In-house Reporting System＞

Consultation requests/ reports
made internally

Unit

Scope oftabulation

cases

Niterra Co., Ltd.
and Groups in
Japan

2018

2019

2020

2021

2022

73

80

63

32

97

[Calculation method] Number of cases of consultation requests/reports received through the Corporate Ethics Helpline＜Anti-corruption＞

Violations of laws related toanti-corruption*1 The following limits are set on the remuneration paid to directors (excluding Directors who are Audit and Supervisory Committee
Members) according to the resolution made at the 122th general meeting of shareholders held on June 24, 2012.
Total amount of remuneration
60 million yen or below per month(excluding bonus):(Of which, the monthly amount for outside directors is 13 million yen or below)
Total amount of bonus:
180 million yen or below per year
According to the resolution made at the 122th general meeting of shareholders, a performance-linked stock remuneration system is
to be implemented for four fiscal years from FY2020, targeting the company’s directors and corporate officers, with the upper limiton the total payment amount set at 1,000 million yen.

Unit

Scope oftabulation

cases

Niterra Group

Unit

Scope oftabulation

2018

2019
0

2020
0

2021
0

2022
0

0

＜Political Donation＞

Political organizations*2 The following limits are set on remuneration paid to Directors who are Audit and Supervisory Committee members according to theresolution made at the 122th general meeting of shareholders held on June 24, 2022.
Total amount of remuneration
10 million yen or below per month(excluding bonus):
Total amount of bonus:
10 million yen or below per year
The following limits are set on remuneration paid to Audit and Supervisory Board members according to the resolution made at the106th general meeting of shareholders held on June 29, 2006.
Total amount of remuneration
10 million yen or below per month(excluding bonus):
Total amount of bonus:
10 million yen or below per year
*3 “Bonus” corresponds to “performance-linked remuneration, etc.”, and “performance-linked, stock-based remuneration, etc.”
corresponds to “performance-linked remuneration, etc.” and “non-monetary remuneration, etc.” The total amount of “bonuses” and“performance-linked, stock-based remuneration” shown in the table was recorded as an expense for FY2022.

Lobbyists or lobbyingorganizations
Trade associations

2018

2019

2020

2021

2022

cases

0

0

0

0

0

yen

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

cases

0

0

0

0

0

yen

0

0

0

0

0

cases
yen

Niterra Co., Ltd.

R&D
Unit
R&D expenses

millions ofyen

Ratio of R&D％

Scope oftabulation
Niterra Group

2018

2019

2020

2021

2022

28,071

28,315

26,11523,68527,887

6.60

6.64

6.11

4.82

4.96

[Calculation method] Including expenses for improving existing products and for applied research as well as the development cost
recognized as the cost of an intangible asset
85

Environment

Index

Society

GovernanceInitiatives

Data

CDP
CDP is an international non-governmental organization (NGO) launched in 2000 to collect, analyze, andevaluate information on the environmental activities of the world's leading companies and share these resultswith institutional investors. We answered questions on climate change and water security.

Niterra is actively participating in sustainability initiatives.

CDP
The United Nations Global Compact (UNGC)

Science Based Targets initiative（SBTi）

The UN Global Compact was proposed by the UN Secretary-General Kofi Annan in 1999 to address a variety
of issues such as global warming, environmental problems, and social inequality that have been ongoing on a
global scale. It is an initiative formally launched at UN headquarters in July 2000 and is a voluntary corporate
principle of action.
We participated in the United Nations Global Compact in November 2016.
We support the 10 principles of the United Nations Global Compact in the four fields of "human rights," "labor,""environment," and "anti-corruption," and promote various activities as a "good member of society."

The SBTi is a collaboration between CDP, the United Nations Global Compact, World Resources Institute (WRI)
and the World Wide Fund for Nature (WWF). The SBTi defines and promotes best practice in science-basedtarget setting and independently assesses companies’ targets.
In June 2022, our group's greenhouse gas reduction targets were approved by SBTi as meeting the level "wellbelow 2°C" of the Paris Agreement.
JAPAN CLIMATE INITIATIVE (JCI)

United Nations Global Compact Participation

The JCI is a network of various non-state actors such as companies, local governments, organizations andNGOs actively engaged in climate action.
We participated in April 2021 with the aim of realizing a decarbonized society.

Sustainable Development Goals (SDGs)
The SDGs consist of 17 goals and 169 targets for achieving a sustainable society by 2030, adopted at theUnited Nations Summit in 2015. They aim to solve global problems and challenges such as poverty, inequality
and climate change, and to "leave no one behind".
As a signatory to the United Nations Global Compact, we are committed to doing what we can to contributetowards the achievement of the SDGs.

JAPAN CLIMATE INITIATIVE
GX League
The GX League (GX: green transformation) is a forum for cooperation between a group of companies and thegovernment, universities, and academic institutions in order to meet greenhouse gas reduction targets andincrease industrial competitiveness by using Japan’s goal of carbon neutrality by 2050 as an opportunity foreconomic growth.
We endorsed the "GX League Basic Concept" in 2022 and participated in the "GX League" in 2023.

Our Commitments to SDGs
Women's Empowerment Principles (WEPs)
WEPs are principles for businesses to work voluntarily on promoting the advancement of women. They
provide a holistic framework for companies to promote gender equality and women’s empowerment in theworkplace, marketplace and community and drive positive outcomes for society and business. The UN Global
Compact and UN Women collaborated to develop and established WEPs in 2010 through multi-stakeholderinternational consultations.
We signed this Code of Conduct in October 2020 and expressed our strong intention to create a working andsocial environment in which women can exert their strengths socially.

GX League

Task Force on Climate-related Financial Disclosures (TCFD)
The TCFD is a task force established by the Financial Stability Board (FSB), an international organization ofcentral banks and financial regulators from major countries, to provide a framework for disclosing information
on climate change. In June 2017, the TCFD released a report recommending disclosure of information aboutrisks and opportunities related to climate change. Governments, financial institutions, and companies aroundthe world have endorsed the TCFD's recommendations.
We have announced its endorsement of the recommendations of TCFD in July 2020. Based on the TCFD
recommendations, we will assess and proactively disclose the financial impacts of climate-related risks andopportunities.
Support for the TCFD Recommendations

86

Environment

Index

Society

Governance

External Evaluations

Data

MSCI JAPAN ESG SELECT LEADERS INDEXCorporate evaluation of ESG investment

We are selected as a member company of the MSCI JAPAN ESG SELECT LEADERS INDEX since
2017.
The index for Japanese equities is created by MSCI (U.S.A.) and composed of companies withhigh ESG ratings from each industry.

ESG investment refers to investment that selects investment targets not only in terms of finance but also in consideration of ESG(environment, society, governance) factors that are non-financial information. Numerous ESG investment evaluations have been
conducted at home and abroad.
The Company continues to be selected as a constituent of all ESG indices for Japanese Equities adopted by the Government
Pension Investment Fund (GPIF).

MSCI JAPAN ESG SELECT LEADERS INDEXMSCI JAPAN EMPOWERING WOMEN INDEX＜Status of Inclusion in the ESG Index＞
FTSE4Good Index Series

We are selected as a member company of the MSCI JAPAN EMPOWERING WOMEN INDEX. The
index for Japanese equities is created by MSCI (U.S.A.) and designed by companies withexcellent gender diversity in each industry.

We are selected as a member company of the FTSE4Good Index Series since 2003.
FTSE4Good Index is created by FTSE Russell (UK), a leading global index provider, andorganized by companies that meet global standards concerning the environment, society, andgovernance based.

MSCI JAPAN EMPOWERING WOMEN INDEX
S&P/JPX Carbon Efficient Index
We have been selected as a member company of the S&P/JPX Carbon Efficient Index since
2018. An ESG index jointly developed by S & P Dow Jones Indices and Japan Exchange Group(JPX). For the constituent stocks of Tokyo Stock Price Index (TOPIX), the inclusion ratio in theindex will be determined in consideration of the disclosure status of environmental informationand carbon efficiency (carbon emissions per unit of revenue).

About FTSE4Good Index
FTSE Blossom Japan Index
We are selected as a member company of the FTSE Blossom Japan Index since 2017.
The index for Japanese equities is created by FTSE Russell (UK) and organized by companies
that meet diverse standards concerning the environment, society, and governance based on
ESG evaluation.

S&P/JPX Carbon Efficient Index
SOMPO Sustainability Index

FTSE Blossom Japan Index Series

We are selected as a member company of the SOMPO Sustainability Index.
The index for Japanese equities is created by SOMPO Asset Management Co., Ltd. andcomposed of companies with outstanding ESG-related initiatives. We have been adopted for the
fourth consecutive year since 2020.

FTSE Blossom Japan Sector Relative Index
We are selected as a member company of the FTSE Blossom Japan Sector Relative Index since2022.
The index for Japanese equities created by FTSE Russell (UK), is designed to measure theperformance of Japanese companies that demonstrate strong ESG practices. The index isconstructed so that sector weights align with the Japanese equity market.
FTSE Blossom Japan Index Series
87Environment

Index

Society

Governance＜Evaluation of Major External Surveys＞

Data

NIKKEI Smart Work Management Survey

CDP

The survey has been sponsored by Nikkei Inc. since 2017. It targets listed companies and leading
unlisted companies nationwide, and evaluated by adding a management base such as corporate
governance to “Smart Work Management” that is defined from the three elements of "Realization ofdiverse and flexible working styles," "System to create new businesses," and "Ability to develop
markets" for maximize the performance of the organization.

CDP is an evaluation for the environmental activities of the world’s leading companies and these results
are disclosed to institutional investors. We had responded to climate change and water security fields
and received the following ratings;
2020

2021

2022

Climate Change

A-

B

B

Water Security

B

B

B

2020

2021

2022

Toyo Keizai CSR Survey
The survey has been sponsored by Toyo Keizai Inc. since 2005, and it evaluates companies from thefour perspectives of "human resources utilization," "environment," "corporate governance + sociality,"and "finance" related to CSR.
In 2022, it was implemented for 1,631 companies, it was implemented for 1,631 companies, and ourcompany was ranked 133rd.

CDP
MSCI ESG Ratings
MSCI ESG Rating is provided by MSCI (USA). It’s designed to measure a company’s resilience to longterm industry material ESG risks. How well ESG risk is managed compared to other companies in thesame industry is evaluated on a 7-point scale (leader: AAA, AA, average: A, BBB, BB, laggard: B, CCC).
We received an AAA rating in 2023.
2021

2022

2023

A

AA

AAA

The survey has been sponsored by Nikkei Inc. since 2019. It targets listed companies and leading
unlisted companies nationwide, and evaluates the company's "SDGs management" on a five-star scalefrom the four pillars of "SDGs strategy / economic value," "social value," "environmental value," and "governance."
We have been received 4 stars for the third consecutive years since 2020.
2021

2021

2022

150th

146th

133rd

*THE USE BY Niterra CO., LTD. OFANY MSCI ESG RESEARCH LLC OR ITS AFFILIATES (“MSCI”) DATA, AND THE USE OF MSCILOGOS, TRADEMARKS, SERVICE MARKS OR INDEX NAMES HEREIN, DO NOT CONSTITUTE A SPONSORSHIP, ENDORSEMENT,RECOMMENDATION, OR PROMOTION OF Niterra Co., Ltd. BY MSCI. MSCI SERVICES AND DATA ARE THE PROPERTY OF MSCI OR
ITS INFORMATION PROVIDERS, AND ARE PROVIDED ‘AS-IS’ AND WITHOUT WARRANTY. MSCI NAMES AND LOGOS ARE
TRADEMARKS OR SERVICE MARKS OF MSCI.

NIKKEI SDGs Management Survey

2020

2020

Major Award and Certification
The following are the main awards and certification received by our Group for our CSR-related initiatives.

2022

In Fiscal 2023
Recipient

88

Award

Organizer

Niterra Co., Ltd.

Selected as “Climate Leaders Asia-Pacific 2023”

Financial Times、Statista

NGK SPARK PLUGS (INDIA)
PVT. LTD.

Received ”DivHERsity Awards 2023”

HerKeyEnvironment

Index

Society

Governance

In Fiscal 2022

Data

In Fiscal 2021

Recipient

Organizer

Recipient

Certified as Health & Productivity Management Outstanding
Organizations Recognition Program for 2023 (White500)

the Ministry of Economy,
Trade and Industry (METI)
and Nippon Kenko Kaigi(Japan Health Conference)

NGK SPARK PLUG CO., LTD.

Selected to the ”Dow Jones Sustainability Asia Pacific Index”

S&P Dow Jones Indices

NGK SPARK PLUG CO., LTD.

Received Bronze Class in overall category and in glass and ceramics
products of the “SUSTAINA ESG AWARDS 2021”

SUSTAINANGK SPARK PLUG CO., LTD.

Received the Excellence award of “NIKKEI Integrated Report Award
2022”

Nikkei Inc.

NGK SPARK PLUG CO., LTD.

Certified as “SPORTS YELL COMPANY” for 2023

JAPAN SPORTS AGENCYNGK SPARK PLUG CO., LTD.

Certified as a Silver Rating, of “PRIDE Index 2021”

work with PrideNGK SPARK PLUG CO., LTD.

Received the Excellence award, of the “22th Telework Promotion
Awards”

Japan Telework
Association

NGK SPARK PLUGS (INDIA)
PVT. LTD.

Selected as one of the Top 25 Safest Workplaces in India at the KelpHR
Posh Awards® 2021
*Posh: Prevention of Sexual Harassment at Workplace

KelpHRNGK SPARK PLUG CO., LTD.

Certified as “Nagoya City Childcare Support Company Certification” andreceived the Excellence award

Nagoya CityNGK SPARK PLUG CO., LTD.

Certified as “SPORTS YELL COMPANY” for 2022

JAPAN SPORTS AGENCYNGK SPARK PLUG CO., LTD.

AwardNGK SPARK PLUG CO., LTD.

Selected as an AA Website in Sector Ranking and All Markets Rankingof "All Japanese Listed Companies' Website Ranking 2022"

Nikko Investor Relations
Co., Ltd.

NGK SPARK PLUG CO., LTD.

Received Bronze Class in the Sustainability Site Awards 2023

Association for
Sustainability
Communication

NITTOKU SMILE CO., LTD.

Certified as “Monisu”.

Ministry of Health, Labourand Welfare

NGK SPARK PLUG CO., LTD. Ise
Plant

Certified as “Japanese Red Cross Society Golden Order of Merit”

Japanese Red Cross
Society

NGK SPARK PLUGS (INDIA)
PVT. LTD.

Received ”DivHERsity Awards 2022”

HerKey89

AwardOrganizer

Environment

Index

RecipientAward

Society

Governance

Organizer

NGK SPARK PLUG CO., LTD.

Received the “Aichi Family Friendly Company Award”

Aichi Prefecture

NGK SPARK PLUG CO., LTD.

Selected as “2022 the Health & Productivity Stock Selection”

Ministry of Economy, Tradeand Industry (METI) andthe Tokyo Stock Exchange

NGK SPARK PLUG CO., LTD.

Certified as Health & Productivity Management Outstanding
Organizations Recognition Program for 2022 (White500)

Ministry of Economy, Tradeand Industry (METI) andNippon Kenko Kaigi (Japan
Health Conference)

NGK SPARK PLUG CO., LTD.

Selected as one of the Nadeshiko Brands

Ministry of Economy, Tradeand Industry (METI) andthe Tokyo Stock Exchange

Data

RecipientAward

Organizer

NGK SPARK PLUG CO., LTD.

Received Silver class in glass and ceramics products industries of the“SUSTAINA ESG AWARDS 2020”

SUSTAINANGK SPARK PLUG CO., LTD.

Certified as “Work-Life Balance Promotion Company”

Nagoya CityNGK SPARK PLUG CO., LTD.

Received ”IkuMen/IkuBoss Enterprize Award, Aichi Prefecture Family
Friendly Company Award” of the 2nd year of Reiwa

Aichi Prefecture

NGK SPARK PLUG CO., LTD.

Certified as Health & Productivity Management Outstanding
Organizations Recognition Program for 2021

Nippon Kenko Kaigi (Japan
Health Conference) andthe Ministry of Economy,
Trade and Industry (METI)NGK SPARK PLUG CO., LTD.

Certified as “SPORTS YELL COMPANY” for 2021

JAPAN SPORTS AGENCYIn Fiscal 2020
RecipientAward

Organizer

NGK SPARK PLUG CO., LTD.

Selected to the ”Dow Jones Sustainability Asia Pacific Index”

S&P Dow Jones Indices

NGK SPARK PLUG CO., LTD.

Certified as “Kurumin”

Ministry of Health, Labourand Welfare

NGK SPARK PLUG CO., LTD.

Certified as “Zero-Emission challenging company”

Ministry of Economy, Tradeand Industry (METI)

90

Environment

Index

Society

Governance

In Fiscal 2019
Recipient

Data

In Fiscal 2018
Award

Organizer

RecipientAward

Organizer

NGK SPARK PLUG CO., LTD.

Selected to the ”Dow Jones Sustainability Asia Pacific Index”

S&P Dow Jones Indices

NGK SPARK PLUG CO., LTD.

Selected to the ”Dow Jones Sustainability Asia Pacific Index”

S&P Dow Jones Indices

NGK SPARK PLUG CO., LTD.

Received “Minister of Health, Labour and Welfare commendation”, the55th National Blood Donation Promotion Campaign

Ministry of Health, Labourand Welfare

NGK SPARK PLUG CO., LTD.

Selected as one of the Nadeshiko Brands

METI and the Tokyo Stock
Exchange

NGK SPARK PLUG CO., LTD.

Received Bronze Class in overall category and Silver Class in glass andceramics products industries of the “SUSTAINA ESG AWARD 2019”SUSTAINANGK SPARK PLUG CO., LTD.

Certified as Health & Productivity Management Outstanding
Organizations Recognition Program for 2019 (White500)

Nippon Kenko Kaigi (Japan
Health Conference) andthe Ministry of Economy,
Trade and Industry (METI)NGK SPARK PLUG CO., LTD.

Certified as “Aichi Health Management Promotion Company”

Aichi Prefecture

NGK SPARK PLUG CO., LTD.

Received the Excellence Award of “Internet IR Award”

Daiwa Investor Relations
Co. Ltd.

NGK SPARK PLUG CO., LTD.

Received Bronze Class in overall category and Silver Class in glass andceramics products industries of the “SUSTAINA ESG AWARD 2018”

SUSTAINANGK SPARK PLUG CO., LTD.

Achieved the highest Rank of DBJ's Health Management Rating System

Development Bank ofJapan Inc.

NGK SPARK PLUG CO., LTD.

NGK SPARK PLUG CO., LTD.

Certified as Health & Productivity Management Outstanding
Organizations Recognition Program for 2020 (White500)

Certified as “SPORTS YELL COMPANY” for 2020

Nippon Kenko Kaigi (Japan
Health Conference) andthe Ministry of Economy,
Trade and Industry (METI)JAPAN SPORTS AGENCY91

Environment

Index

Society

Governance

In Fiscal 2017

Recipient

RecipientAward

Organizer

NGK SPARK PLUG CO., LTD.

Selected to the ”Dow Jones Sustainability Asia Pacific Index”

S&P Dow Jones Indices

NGK SPARK PLUG CO., LTD.

Received Blue-chip company of "Aichi women shine Company"

Aichi Prefecture

NGK SPARK PLUG CO., LTD.

NGK SPARK PLUG CO., LTD.

Certified as Health & Productivity Management Outstanding
Organizations Recognition Program for 2018 (White500)

Selected as Bronze Class company, RobecoSAM Sustainability Award
2017

Data

Award

Organizer

NGK SPARK PLUG CO., LTD.

Certified as Health & Productivity Management Outstanding
Organizations Recognition Program for 2017 (White500)

Nippon Kenko Kaigi (Japan
Health Conference) andthe Ministry of Economy,
Trade and Industry (METI)NGK SPARK PLUG CO., LTD.

Selected as New Diversity Management Selection 100

METI

NGK SPARK PLUG CO., LTD.

Selected as Semi-Nadeshiko Brands

METI and the Tokyo Stock
Exchange

In Fiscal 2015

Nippon Kenko Kaigi (Japan
Health Conference) andthe Ministry of Economy,
Trade and Industry (METI)

RobecoSAM

RecipientAward

Organizer

NGK SPARK PLUG CO., LTD.

Received Incentive Award, Empowerment Grand Prix for Activities by
Women

Japan Productivity Center
Working Women's
Empowerment ForumNGK SPARK PLUGS (U.S.A.),
INC. (WEST VIRGINIA
FACTORY)

Received Five-Diamond Employer AwardWest Virginia Chamber ofCommerce

In Fiscal 2014
Recipient

In Fiscal 2016
RecipientAward

Organizer

NGK SPARK PLUG CO., LTD.

Certified as “Eruboshi”

Ministry of Economy, Tradeand Industry (METI)NGK SPARK PLUG CO., LTD.

Received the Corporate Environmental Achievement Award (CEAA)
2016

The American CeramicSociety(AcerS)NGK SPARK PLUG CO., LTD.

Received 2017 Aichi Environmental Award

Aichi Prefecture

92

Award

Organizer

NGK SPARK PLUG CO., LTD.

Selected as one of the Top 100 Global Innovators

Thomson Reuters

NGK SPARK PLUG CO., LTD.

Received FY2014 Excellence Award, Nagoya City Accreditation andCommendation System for Companies that Promote Increased Roles
for Women

Nagoya CityNGK SPARK PLUG CO., LTD.
Miyanojo Plant

Received Minister of Economy, Trade and Industry Award, 33rd
National Convention for the Promotion of Factory Greening

Japan Greenery Researchand Development Center

Environment

Index

Society

Governance

In Fiscal 2013
Recipient
NGK SPARK PLUG CO., LTD.

Award
Selected as one of the Top 100 Global Innovators

Organizer
Thomson Reuters

In Fiscal 2010
RecipientAward

Organizer

NGK SPARK PLUG CO., LTD.

Received the Incentive Prize at the 14th Environmental Communication
Awards

Ministry of theEnvironment, etc.

NGK SPARK PLUG CO., LTD.

Selected as one of the Top 100 Companies in JapanThe Nippon Foundation

93

Data

Environment

Index

Society

Governance

GRI Standards Comparison Table

Disclosures

GRI 2,3References

GRI 2: General Disclosures 2021
1. The organization and its reporting practices
2-1

Organizational details- Overview

2-2

Entities included in the organization’s sustainability
reporting- Scope of reporting

2-3

Reporting period, frequency and contact point- Scope of reporting

2-4

Restatements of information

2-5

External assurance－- Social and Environmental Information Verification Report

2.Activities and workers
2‑6

Activities, value chain and other business relationships- Corporate Profile > Overview- Business Fields- Company > Global Networks- Proper Procurement > Supply Chain Management- "Integrated Report 2023",CSR and Sustainability Procurem
ent 

2‑7

Employees- Sustainability Data（Non-Financial Information）> Global Hu
man Resource Management- Sustainability Data（Non-Financial Information）> Diversity

2-8

Workers who are not employees- Sustainability Data（Non-Financial Information）> Global Hu
man Resource Management

References

3.Governance

GRI 2,3 200 series (Economic) 300 series (Environmental) 400 series (Social)

Disclosures

Data

2-9

Governance structure and composition- Corporate Governance > Corporate Governance System

2-10

Nomination and selection of the highest governance body

- Governance > Corporate Governance

2-11

Chair of the highest governance body

- Governance > Corporate Governance

2-12

Role of the highest governance body in overseeing themanagement of impacts- Priority Issues (Materiality)

2-13

Delegation of responsibility for managing impacts- Sustainability Management

2-14

Role of the highest governance body in sustainability
reporting- Priority Issues (Materiality)

2-15

Conflicts of interest- Corporate Governance > Roles and Independence of Outside Directors

2-16

Communication of critical concerns- Sustainability Management > CSR and Sustainability Promotion System- Risk Management > Promotion System

2-17Collective knowledge of the highest governance body- Sustainability Management > CSR and Sustainability Promotion System- Corporate Governance > Training for officers

2-18

Evaluation of the performance of the highest governancebody- Corporate Governance>Evaluation of the effectiveness of t
he Board of Directors

2-19

Remuneration policies- Corporate Governance>Remuneration for Director

2-20

Process to determine remuneration- Corporate Governance>Remuneration for Director

4．Strategy, policies and practices

94

2-21

Annual total compensation ratio

2-22

Statement on sustainable development strategy- Sustainability > Top Message

2-23

Policy commitments- Respect for Human Rights

2-24

Embedding policy commitments- Respect for Human Rights- Proper Procurement

2-25

Processes to remediate negative impacts- Respect for Human Rights

Environment

Index

Disclosures

Society

Governance

200 series (Economic)

References

2-26

Mechanisms for seeking advice and raising concerns- Respect for Human Rights- Compliance

2-27Compliance with laws and regulations- Sustainability Data（Non-Financial Information）> Compliance

2-28

Membership associations- Sustainability > Initiatives

Disclosures

Approach to stakeholder engagement- Sustainability Data（Non-Financial Information）>Communica
tion with Stakeholders- Communication to Stakeholders

2-30Collective bargaining agreements- Work-Life Balance > Labor-Management Relations- Sustainability Data（Non-Financial Information）>Work-life B
alanceProcess to determine material topics- Priority Issues (Materiality)

3-2

List of material topics- Priority Issues (Materiality)

3-3Management of material topics- Priority Issues (Materiality)

201-1

Direct economic value generated and distributed- Annual Securities Report The 123rd Fiscal Year (From April
1, 2022 to March 31, 2023) 

201-2

Financial implications and other risks and opportunities due
to climate change- Sustainability＞Priority Issues (Materiality)- Governance＞Risk Management

201-3

Defined benefit plan obligations and other retirement plans- Annual Securities Report The 123rd Fiscal Year (From April
1, 2022 to March 31, 2023) 

201-4

Financial assistance received from government－

GRI 202: Market Presence 2016

GRI 3: Material Topics 2021
3-1

References

GRI 201: Economic Performance 2016

5．Stakeholder engagement
2-29

Data

202-1

Ratios of standard entry level wage by gender compared to
local minimum wage

－

202-2

Proportion of senior management hired from the local
community－

GRI 203: Indirect Economic Impacts 2016
203-1

Infrastructure investments and services supported

203-2

Significant indirect economic impacts- Social Contribution－

GRI 204: Procurement Practices 2016
204-1

Proportion of spending on local suppliers－

GRI 205: Anti-corruption 2016

95

205-1

Operations assessed for risks related to corruption- Compliance > Initiatives to Prevent Corruption

205-2

Communication and training about anti-corruption policies
and procedures- Compliance > Initiatives to Prevent Corruption

205-3

Confirmed incidents of corruption and actions taken- Compliance > Initiatives to Prevent Corruption

Environment

Index

Disclosures

Society

Governance

300 series (Environmental)

References

GRI 206: Anti-competitive Behavior 2016
206-1

Legal actions for anti-competitive behavior, anti-trust, andmonopoly practices

Data

Disclosures-Compliance>InitiativesConcerningCompetitionLaws

References

GRI 301: Materials 2016

GRI 207: Tax 2019
- Appropriate Tax Payment

301-1

Materials used by weight or volume301-2

Recycled input materials used－

Reclaimed products and their packaging materials

－

207-1

Approach to tax

207-2

Tax governance, control, and risk management

－

301-3

207-3

Stakeholder engagement and management of concerns
related to tax－

GRI 302: Energy 2016

207-4

Country-by-country reporting－- Environmental Burdens from Business Activities

302-1

Energy consumption within the organization- Environmental Burdens from Business Activities- Sustainability Data（Non-Financial Information）>Environment Data302-2

Energy consumption outside of the organization

－

302-3

Energy intensity

－

302-4

Reduction of energy consumption

－

302-5

Reductions in energy requirements of products andservices－

GRI 303: Water and Effluents 2018
303-1

Interactions with water as a shared resource- Conservation of Water Resources

303-2

Management of water discharge-related impacts- Environmental Management > Compliance with Environmen
tal Laws and Regulations

303-3

Water withdrawal- Conservation of Water Resources > Trends in Volume of W
ater Usage

303-4

Water discharge- Environmental Burdens from Business Activities

303-5

Water consumption- Conservation of Water Resources

GRI 304: Biodiversity 2016

96

304-1

Operational sites owned, leased, managed in, or adjacent to,protected areas and areas of high biodiversity value outside
protected areas- Conservation of Biodiversity

304-2

Significant impacts of activities, products, and services on
biodiversity- Conservation of Biodiversity

Environment

Index

Disclosures
304-3

Habitats protected or restored

304-4

IUCN Red List species and national conservation list species
with habitats in areas affected by operations

Society

Governance

References

Disclosures- Conservation of Biodiversity

GRI 305: Emissions 2016
Direct (Scope 1) GHG emissions- Sustainability Data（Non-Financial Information）>Environment Data305-2

Energy indirect (Scope 2) GHG emissions- Sustainability Data（Non-Financial Information）>Environment Data305-3

Other indirect (Scope 3) GHG emissions- Sustainability Data（Non-Financial Information）>Environment Data305-4

GHG emissions intensity- Sustainability Data（Non-Financial Information）>Environment Data305-5

Reduction of GHG emissions- Sustainability Data（Non-Financial Information）>Environment Data305-6

Emissions of ozone-depleting substances (ODS)

305-7

Nitrogen oxides (NOX), sulfur oxides (SOX), and othersignificant air emissions－- Environmental Burdens from Business Activities

GRI 306: Effluents and Waste 2016306-1

Water discharge by quality and destination- Environmental Burdens from Business Activities

306-2

Waste by type and disposal method- Environmental Burdens from Business Activities

306-3

Significant spills- Environmental Management > Compliance with Environmen
tal Laws and Regulations- Sustainability Data（Non-Financial Information）>Compliancewith Environmental Laws and Regulations

306-4

Transport of hazardous waste

－

306-5

Water bodies affected by water discharges and/or runoff－

GRI 307: Environmental Compliance 2016
307-1

Non-compliance with environmental laws and regulations

References

GRI 308: Supplier Environmental Assessment 2016

－

305-1

Data

- Environmental Management > Compliance with Environmen
tal Laws and Regulations- Sustainability Data（Non-Financial Information）>Compliancewith Environmental Laws and Regulations
97

308-1

New suppliers that were screened using environmental
criteria－

308-2

Negative environmental impacts in the supply chain andactions taken- Proper Procurement > Promoting Responsible ProcurementEnvironment

Index

Society

Governance

400 series (Social)

Disclosures

Disclosures

References

401-1

New employee hires and employee turnover- Sustainability Data（Non-Financial Information）>Global Human Resource Management

401-2

Benefits provided to full-time employees that are notprovided to temporary or part-time employees

401-3

Parental leave

403-10

GRI 401: Employment 2016

- Health Promotion Activities- Sustainability Data（Non-Financial Information）>Occupation
al Safety and Health404-1

Average hours of training per year per employee- Human Resource Development- Sustainability Data（Non-Financial Information）>Human Res
ource Development

404-2

Programs for upgrading employee skills and transition
assistance programs- Human Resource Development- Diversity & Inclusion > Providing Workplaces Where Employees Can Continue to Exert Their Abilities

404-3

Percentage of employees receiving regular performanceand career development reviews－－- Work-Life Balance > Initiatives that Consider Work-Life Balance- Sustainability Data（Non-Financial Information）>Work-life B
alanceMinimum notice periods regarding operational changes

References

GRI 404: Training and Education 2016

GRI 402: Labor/Management Relations 2016
402-1

Work-related ill health

Data

GRI 405: Diversity and Equal Opportunity 2016－

GRI 403: Occupational Health and Safety 2018

405-1

Diversity of governance bodies and employees- Global Human Resource Management- Sustainability Data（Non-Financial Information）>Global Human Resource Management- Sustainability Data（Non-Financial Information）>Diversity

405-2

Ratio of basic salary and remuneration of women to men- Annual Securities Report The 123rd Fiscal Year (From April
1, 2022 to March 31, 2023) 

403-1

Occupational health and safety management system- Occupational Health and Safety > Promotion System403-2

Hazard identification, risk assessment, and incident
investigation- Occupational Health and Safety > Promotion System- Diversity > Providing Workplaces Where Employees Can Co
ntinue to Exert Their Abilities

GRI 406: Non-discrimination 2016403-3

Occupational health services- Health Promotion Activities

406-1

403-4

Worker participation, consultation, and communication on
occupational health and safety- Occupational Health and Safety > Promotion System

GRI 407: Freedom of Association and Collective Bargaining 2016403-5

Worker training on occupational health and safety- Health and Safety Activities > Enhancement of Education,
Training and Enlightenment

407-1

403-6

Promotion of worker health- Health Promotion Activities

GRI 408: Child Labor 2016403-7

Prevention and mitigation of occupational health and safety
impacts directly linked by business relationships- Occupational Health and Safety > Promotion System- Health and Safety Activities > Risk Assessment (RA) Initiati
ves

408-1

403-8

Workers covered by an occupational health and safety
management system- Occupational Health and Safety > Promotion System

403-9Work-related injuries- Health and Safety Activities > Status and Reporting Proced
ure of occupational Accidents- Sustainability Data（Non-Financial Information）>Occupation
al Safety and Health

Incidents of discrimination and corrective actions taken

Operations and suppliers in which the right to freedom of
association and collective bargaining may be at risk

Operations and suppliers at significant risk for incidents ofchild labor－- Work-Life Balance > Labor -Management Relations- Respect for Human Rights

GRI 409: Forced or Compulsory Labor 2016
409-1

98

Operations and suppliers at significant risk for incidents offorced or compulsory labor- Respect for Human Rights

Environment

Index

Disclosures

Society

Governance

References

Disclosures

GRI 410: Security Practices 2016
410-1

Security personnel trained in human rights policies orprocedures－

Incidents of violations involving rights of indigenous peoples－

GRI 412: Human Rights Assessment 2016
412-1

Operations that have been subject to human rights reviews
or impact assessments- Respect for Human Rights

412-2

Employee training on human rights policies or procedures- Respect for Human Rights

412-3

Significant investment agreements and contracts that
include human rights clauses or that underwent humanrights screening

Requirements for product and service information andlabeling

417-2

Incidents of non-compliance concerning product and service
information and labeling

－

417-3

Incidents of non-compliance concerning marketing
communications

－

418-1

419-1

Operations with local community engagement, impact
assessments, and development programs- Social Contribution- Communication to Stakeholders

413-2

Operations with significant actual and potential negative
impacts on local communities－

GRI 414: Supplier Social Assessment 2016414-1

New suppliers that were screened using social criteria- Proper Procurement

414-2

Negative social impacts in the supply chain and actions
taken- Proper Procurement- Environmentally-friendly Products > Environmental Friendli
ness in the Product Lifecycle

GRI 415: Public Policy 2016
- Compliance > Initiatives to Prevent Corruption- Sustainability Data（Non-Financial Information）>Compliance

GRI 416: Customer Health and Safety 2016
416-1

Assessment of the health and safety impacts of productand service categories

－

416-2

Incidents of non-compliance concerning the health andsafety impacts of products and services－

Substantiated complaints concerning breaches of customer
privacy and losses of customer data－

GRI 419: Socioeconomic Compliance 2016

－

413-1

Political contributions

417-1

GRI 418: Customer Privacy 2016

GRI 413: Local Communities 2016415-1

References

GRI 417: Marketing and Labeling 2016

GRI 411: Rights of Indigenous Peoples 2016
411-1

Data

99

Non-compliance with laws and regulations in the social andeconomic area－

Environment

Index

Society

Governance

SASB Standards Comparison Table*Information is disclosed in units different from those required by SASB.
Topic
Energy Management

Waste Management

Accounting Metric(1) Total energy
consumed

SASB Code
TR-AP-130a.1

Unit ofMeasureReferences

MWh*

Sustainability Data (Non-Financial Infor
mation) > Environment Data
Environment > Environmental Burdens f
rom Business Activities(2) percentage gridelectricity

MWh*(3) percentage
renewable

MWh*(1) Total amount ofwaste frommanufacturing

TR-AP-150a.1

ton(2) percentage
hazardous

Not disclosed(3) percentage recycled％*

Sustainability Data (Non-Financial Infor
mation) > Environment Data

Product Safety

Number of recalls
issued, total units
recalled

TR-AP-250a.1

NumberSustainability Data (Non-Financial Infor
mation) > Product Quality

Design for Fuel
Efficiency

Revenue from products
designed to increase
fuel efficiency and/or
reduce emissions

TR-AP-410a.1％*

Priority Issues (Materiality)
Sustainability Data (Non-Financial Infor
mation) > Providing Environmentally Frie
ndly Products
Environment > Response to Climate Cha
nge

Materials Sourcing

Description of the
management of risks
associated with the useof critical materials

TR-AP-440a.1

Discussion
andAnalysis

Society > Proper Procurement > Promoti
ng Responsible Procurement
Environment > Eco Vision > Eco Vision 2030
Environment > Management of Chemical
Substances > Handling within the Group

100

SASB Code

Unit ofMeasureTopic

Accounting Metric

Materials Efficiency

Percentage of products
sold that are recyclable

TR-AP-440b.1

Not disclosed

Percentage of input
materials from recycled
or remanufactured
content

TR-AP-440b.2

Not disclosed

Total amount ofmonetary losses as aresult of legal
proceedings associatedwith anticompetitive
behavior regulations

TR-AP-520a.1

Not disclosed

Number of parts produced

TR-AP-000.A

Not disclosed

Weight of parts produced

TR-AP-000.B

Not disclosed

Area of manufacturing plants

TR-AP-000.C

Competitive Behavior

Sustainability Data (Non-Financial Infor
mation) > Environment Data
Environment > Environmental Burdens f
rom Business Activities
Environment > Management of Waste

Data

thousandsof m2

References

Annual Securities Report (The 123nd Fi
scal Year) > P.34, 3. Equipment and Facil
ities About Us > Global Networks

Niterra Co., Ltd.
URBANNET NAGOYA NEXTA Bldg. 1-1-1 Higashisakura, Higashi-ku, Nagoya 461-0005

https://www.ngkntk.co.jp/english/
Sustainability Strategy Dept.