REPORT 2023

NIPPON SIGNAL REPORT 2023

Nippon Signal’s Value Creation

Nippon Signal’s Value Creation
Nippon Signal’s Vision and Growth Strategy
Sustainability Initiatives

CON T EN T S
Sustainability Initiatives

Nippon Signal’s Main Business Domains …………… 03
History of Innovation …………………………………… 05
Value Creation Process ………………………………… 07

NIPPON SIGNAL’s SDGs Actions ………………… 27
E Environment
Response to TCFD (Task Force on Climate-related
Financial Disclosures) ………………………………… 31
FY2023 Quality, Environment & Safety’s Policies…… 41
S Society
Human Resource Investments ……………………… 45
CSR (Social Contribution) Activities ………………… 52
G Corporate GovernanceCorporate Governance ……………………………… 53
Corporate Executives ………………………………… 59

Nippon Signal’s Vision and Growth Strategy
To Our Stakeholders ………………………………… 09
Business Strategy ……………………………………… 15
Feature: Growth Strategy of the Company
Focus1 Automatic Operation ……………………… 19
Focus2 Global Network …………………………… 21
Research and Development ………………………… 25

Data Section
Financial and Non-Financial Highlights ……………… 61
Corporate Data ………………………………………… 63

01

NIPPON SIGNAL CO., LTD.

Editorial Policy
The Group publishes NIPPON SIGNAL REPORT for its customers, shareholders, investors, and other stakeholders, to provide comprehensive updates on
the Group’s management strategy, business activities, performance results,
and financial and non-financial information.
In preparing these reports, the International Integrated Reporting Frameworkof the International Integrated Reporting Council and the Guidance for Collaborative Value Creation released by the Japanese Ministry of Economy, Tradeand Industry were referenced, and we aim to ensure ease of understanding
with regard to our business model, value creation, and ESG (environmental,social and governance) initiatives that form their basis.
In the NIPPON SIGNAL REPORT 2023, we have created content focused on
the relationship between our business activities and the Sustainable Development Goals (SDGs) relevant to us, in order for more people to better
understand our enhancement of corporate value by means of social contribution through products and services that we promote.

Note on Forward-Looking
Statements
NIPPON SIGNAL REPORT contains statements on the futureplans, forecasts, and prospectsof the Group. They reflect thepredictions made by us and are
based on the information available at the time this report was
published. Please note that they
may differ from the actual results
due to the progress and circumstances surrounding future business activities.

NIPPON SIGNAL REPORT 2023

Data Section

Nippon Signal’s Value Creation

02

N i ppo n Sig nal ’s Val ue Creati o n

From railways and stations to the cities,
and Japan to the world.

ICT Solutions
Automatic Fare Collection (AFC) Systems

The Group strives to pursue outstanding technology for “safety and reliability,” while expanding ourbusiness locations.
As a company supplying a wide range of solutions to support safety and comfort, we contribute to theevolution of infrastructure.

Smart Mobility Systems

Cloud-based systems to collect, accumulate, and analyze information on railway facilities, areas along train lines,
and services using wayside IoT networks and onboard imaging systems.

Multiple handling vehicle*3

Humanoid robots for work at height
aimed at eliminating heavy-lifting workfrom railway maintenance operations
and improving its efficiency.

Bus Rapid Transit (BRT)*1

Platform screen doors

Automatic passenger gates

Automatic floor cleaning robots

Security gates

We provide systems to allow bus traffic
in both directions to share a single lanein East Japan Railway Company’s
self-driving BRT.

We ensure safety and security on platforms, with a wide range of Platform
screen doors to fit various types of stations and vehicles.

We participate in verification tests for
facial recognition passenger gates,
which is a step toward future applications of ticketless passenger gates.

These robots clean floors unattended,accurately detecting peripheral obstacles using lasers and ultrasound sensors.

We provide total security environmentsthat are people-friendly, from entry andexit systems for people and vehicles, tooffice security.

Automatic operation (conventional line trains)

Automatic operation (cars)

Traffic lights

Multilingual ticket vending machines

Parking lot management systems

Automatic X-ray baggage checking equipment

Ground penetrating radars

A device that links signals and point
machines in train station premises tosecure safe operation of trains.

We are developing an automatic train
detector that allows safe and stabletransportation on conventional lines,
with the aim of realizing GoA2.5*2 by
the end of fiscal year ending March 31,
2025.

A system that connects signal information with cars using 5G to assist smooth
preliminary decelerations and starting
preparations.

Controlling traffic lights using control
devices, to indicate red, green or yellow
signals to drivers and pedestrians.

We provide clear and user-friendly multilingual automatic ticket vending machines and information display systems
for stations.

We provide a range of devices andsolutions, including the PARK-LOC ®
system and network-linked payment
machines.

This checking equipment adopting
world’s first compact X-ray source, precisely and speedily detects the presence of dangerous items.

Detecting underground cavities andburied objects using undergroundsensing technology that applies radio
wave and communication technologies.

Communication Based Train Control (CBTC) systems

Water-resistant point machines

Slope failure prediction technologies

Pedestrian supporting applications

Works of Group Companies
Nursing care robots

Magnetic resonance imaging units

Computed Tomography

Solar power generation

Users can step on this equipment fromthe back, a novel riding style, to enjoy
free mobility.

Providing leading-edge medical devices
that use magnetic force to capture
cross-sectional images of a living bodyto support high-precision diagnoses.

Providing leading-edge medical devices
that detect microscopic lesions withhigh clarity using advanced digitaltechnology.

Contributing to accelerating the spreadof clean energy by installing solar power generation systems on building rooftops.

Sustainability Initiatives

Interlocking control panel

Nippon Signal’s Vision and Growth Strategy

Remote monitoring systems

Smart City Systems

A system to detect hazard on station
platforms using image processing devices attached to existing surveillancecameras.

Transportation Infrastructure
Railway Signal Systems

Platform safety monitoring systems via image analysis

Nippon Signal’s Value Creation

Nippon Signal’s Main Business Domains

Data Section

Train control systems using wirelesscommunication, to reduce system lifecycle cost.

We strengthened the water-resistantfunction of simplified water-resistantrailway point machine by improving thecover.

Systemization of “location” prediction
for slope failure, to protect transportation infrastructure from torrential rain.

We support people with visual impairment and senior citizens to cross roads
safely using a smartphone.

*1 BRT stands for Bus Rapid Transit System. *2 GoA2.5 is a grade of automated train operation in which an attendant, who is not a driver, is present in the cab of the first car.
*3 Developed jointly with West Japan Railway Company and Man-Machine Synergy Effectors, Inc.

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NIPPON SIGNAL CO., LTD.

NIPPON SIGNAL REPORT 2023

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N i ppo n Sig nal ’s Val ue Creati o n

Nippon Signal’s Value Creation

History of Innovation
Pursuit of New Pinnacles of Safety, Accuracy, Comfort, Speed and Volume
The history of Nippon Signal is also the history of a continuous pursuit of innovation, and the history of theevolution of Japan’s transportation infrastructure. Commitment to further innovation is the unchanging DNA
of the Group that has been passed down from our founding until today.
Value created by Nippon Signal

1990s-2010s

2011~

Foundation of Nippon Signal andModernization of Railway Signals

Evolution of Electronics Technologies andStart of New, Forward-Looking Businesses

Technological Progress and Network
Business Development

Acceleration of Global Expansion andStart of New Long-Term Management Plan

The Railway Nationalization Act, promulgated in 1906, nationalized major thoroughfares throughout Japan, and transportation demand saw a sharp spike thereafter. Nippon Signal Co.,
Ltd. was established in December 1928 via a merger of threecompanies, and was tasked with modernizing and realizing
domestic production of railway signals.

The opening of the Tokaido Shinkansen marked the beginning of a
new era, and the Company’s electronics technologies proceeded
to evolve in the Automatic Train Control (ATC) and Centralized Traffic Control (CTC) systems used for the Shinkansen. We contributed
to the development of Japan’s transportation infrastructure by creating various new products geared toward the needs projected toarise in the future as post-Shinkansen businesses are developed.

The transition from analog technologies to digital technologies andfrom hardware to software enable Nippon Signal to acquire technologies for realizing high-speed processing of massive quantities ofdata. With these technologies, we contribute to the dense, on-time
operation, and complex interoperable equipment of railways, to support the mobility of 40 million people living
and working in the Tokyo metropolitan area.

Leveraging the technological prowess it cultivated in Japan, Nippon
Signal accelerates global expansion efforts centered on Asian andother emerging countries. In these efforts, we focus on the development of systems compatible with the Mobility as a Service (MaaS)
revolution and new digital transformation.

1963

1998

Photograph: a mechanical interlocking system delivered to Kyoto Station in 1914. Reproduced from a Mimura Factory postcard (Railway Museum collection).

1929

1931

1958

A technical collaboration agreement with General Railway Signal Company of the UnitedStates is concluded with theaim of achieving domestic production of world-leading signal
equipment.
Made-in-Japan traffic signal
equipment is produced andinstalled at the Nihonbashi,
Gofukubashi, and Sakurabashi
intersections.
Production of parking meters
commences.

1964

1970
1972

1984

2003

2007
2009
2009

Production of the Eco Scan® microelectromechanical system
optical scanner commences.
The Visionary Business Center is
Eco Scan®,established to facilitate the cre- microelectromechanicalation of new products and new system optical scannerbusinesses.
Mutual use of common IC cards (Suica and PASMO)
commences, and Nippon Signal performs upgrades
to all automatic passenger gates.
The Overseas Division is established to boost competitiveness in overseas markets.
Order-taking and manufacturing of platform screen
doors commence on a full scale.

Opening of the section of the Tokyo Underground Railway between
Asakusa and Shimbashi Opening of the section of the Osaka Municipal Subway between Namba and Tennoji Establishment of the Teito Rapid Transit Authority (TRTA) Opening of the Kanmon submarine tunnel, the world’s first undersea tunnel Establishment of Japanese National Railways (JNR) (a railway
business transferred from the Ministry of Transport) Electrification of the Senzan Line is completed, and operation commences
05

NIPPON SIGNAL CO., LTD.

2017
2017
2018
2019
2020
2021
2022

Major events especially in the railway industry
1928-1950s

2011

1960s-1980s
Tokyo Monorail commences operation
The Tokaido Shinkansen Line commences operation
The Sanyo Shinkansen Line commences operation
Modernization of power is completed for JNR main lines (total abolition of steam locomotives)
The Tohoku Shinkansen and Joetsu Shinkansen Lines commence operation
Privatization and division of JNR into each JR company
Opening of the Seikan tunnel (Seikan ferry services are abolished,
and the Tsugaru-Kaikyo Line commences operation)

1990s-2010s
Birth of the Tokaido Shinkansen “Nozomi”
The Yamagata Shinkansen (a mini-shinkansen running on converted narrow-gauge railway lines) commences operation
Driverless trains commence operation on the Tokyo Waterfront New Transit Waterfront Line (Yurikamome)
The Nagano Shinkansen (from Takasaki to Nagano; later part of the Hokuriku Shinkansen) commences operation
Okinawa Urban Monorail, the first railway in Okinawa since the end of the Second World War, commences operation
The Kyushu Shinkansen (from Yatsushiro to Kagoshima Chuo Station) commences operation
Toyama Light Rail commences operation
Taiwan High Speed Rail commences operation

The SPARCS (Simple-structure and high-Performance ATCby Radio Communication System), the first wireless train
control system in the world, is developed and put into useon the Beijing Subway Line 15.
The ANSHIN* Center is established to provide IoT platformbase functions.
SPARCS is installed on the Delhi MetroLine 8 (Magenta Line).
The CLINABO® automatic floor cleaning
robot is developed.
Nippon Signal participates in verification tests
and projects related to the provision of signal
information to self-driving vehicles.
CLINABO®
Set a self-driving verification section on the automatic floor
Kashii Line, Kyushu Railway Company.
cleaning robot
Won the Award of Excellence of the
Public Construction Golden Quality Award.
Dhaka Mass Rapid Transit (MRT) Line 6 of Bangladesh
commenced operation.

Data Section

Production of Pasca 205 miniature commercial calculator commences.
ATC and CTC systems produced by Nippon Signal
are adopted for use on the segment of the Tokaido
Shinkansen Line connecting Tokyo Station andShin-Osaka Station.
Production of PARK-LOC® system commences.
Production of Japan’s firstcomprehensive automatedticket gate system commences and this system is installed
for use on the segment of the
Sapporo Municipal Subway
connecting Kita-Nijuyo-Jo Station and Makomanai Station.
An automatic boarding control system for aircraft isdeveloped.

Sustainability Initiatives

1960s-1980s

Nippon Signal’s Vision and Growth Strategy

1928-1950s

2011~ The Kyushu Shinkansen (Kagoshima route) commences operation on all sections Cruise Train “Seven Stars in Kyushu” commences operation 50th anniversary of the opening of the Tokaido Shinkansen The Hokuriku Shinkansen (Kanazawa extension) commences operation The Hokkaido Shinkansen commences operation Okinawa Urban Monorail extension commences operation Takanawa Gateway Station on JR Yamanote Line opens The Nishi Kyushu Shinkansen (from Nagasaki to Takeo-onsen) commences operation
NIPPON SIGNAL REPORT 2023

06

N i ppo n Sig nal ’s Val ue Creati o n

The Group is engaged in new value creation to contribute to “solving social issues” and “advancing infrastructure,” through value chains founded on “safety and reliability,” while keeping an eye on global environmental changes.

Nippon Signal’s Value Creation

Value Creation Process
We aim to achieve sustained growth by accelerating the process of development and real-world implementation of products that are suited to the market needs, carrying out business structure reforms, andstrengthening our business foundation.

Group Philosophy
Our Vision

Our Values

We help realize a more secure and comfortablesociety through superior technologies that provide
safety and reliability.

We strive to become a global company by pursuing world-leading technologies with ingenuity andpassion to inspire our customers’ Kando.*

1. Emphasize “safety and reliability” above all. .... Mono-zukuri (Manufacturing)
2. Strive to improve customer value by taking the customer’s perspective.
..............Koto-zukuri (Business)
3. Take on challenges for your own growth.............. Hito-zukuri (Education)* Kando is a Japanese word that describes the sense of awe andthe emotion you feel when experiencing something beautiful andamazing for the first time. It is the moment when your expectations
are exceeded – you feel Kando.

INPUT

4. Preserve the environment and contribute to the development of local communities.
................... Machi-zukuri (CSR)
5. Have dreams and share them.

Business Activities

OUTPUT
Business Domains

As of March 31, 2023

79.2
Interest-bearing debts 17.5
Shareholders’ equity

Development
and design

Marketingbillion JPY

billion JPY

2.8

billion JPY

Safetyand
Reliability

Railway Signal
Systems

Contribution to the SDGs

Manufacturing

Smart Mobility
Systems

Others

Maintenanceservices

Automatic Fare
Collection (AFC)
Systems(services, overseas)

Human capital

2,987
Human capital investments
79 million JPY(non-consolidated)

Number of employees

Nippon Signal operation coverage

30 countries and regions(Station Network Systems)

P27
Data Section

Social and relationship capital

NIPPON SIGNAL CO., LTD.

OUTCOME
Value provided to society

Sustainability Initiatives

2.6

Construction
work and management

Intellectual capital07

1. Working for Customers’ Kando
2. Fair Corporate Activities
3. Proper Information Disclosure and Communication with Society
4. Respect for Human Rights and Creation of a Good Working
Environment
5. Environmental Protection and Proactive Social Contribution
Activities
6. Proper Management of Company Assets and Information

billion JPY

Manufactured capital

R&D expenses

Our Code of Conduct: Six Commitments

Value chain

Financial capital

Capital investment.... Michi-zukuri (Creation of the future)

Our Code of Conduct

Nippon Signal’s Vision and Growth Strategy

Our Mission

Growth Strategy

Long-Term and Medium-Term Management Plans

P9

Smart City
Systems

Strengthening the Foundation Underpinning Sustained Growth

Sustainability Initiatives

P27

NIPPON SIGNAL REPORT 2023

08

N i ppo n Sig nal ’s Vi si on and G ro w t h S t rat eg y

— Changing Ourselves with DX, Making Change Happen with DX —President and Chief Executive Officer

Hidehiko Tsukamoto

With the downgrading of COVID-19 to a Class 5 infectious disease under the Japanese
Infectious Diseases Control Law after approximately three and a half years, we have now
entered a new phase of balancing measures to prevent the spread of infection with economic activities. As restrictions on movement have been eased this year, more events ofvarious kinds are returning from online to the real world, and demand for both domestic
and inbound tourism is on the rise. As people start to move around more, we can expect
a return of the energy of pre-pandemic times. On the other hand, in this increasingly
complex era, new challenges are emerging one after the other. Examples include changes in the environment surrounding the international economy and society, particularly the
prolonged situation in Ukraine, responses to soaring consumer prices caused by energy
shortages, and decarbonization efforts in response to climate change. In the era of newnormal, in which increasing complexity has become normalized, the Group will work torealize sustainable growth and development and the enhancement of corporate value.

Nippon Signal’s Vision and Growth Strategy

Next Stage
Accelerating Real-world Implementation

Nippon Signal’s Value Creation

To Our Stakeholders

FY2022 and the Status of the New Medium-Term Management Plan (Next Stage 24)

Sustainability Initiatives

In FY2022, the first year of the New Medium-Term Management Plan (Next Stage 24), we workedon the following four pillars of our management strategy:
Collaborative value creation with customers after COVID-19 pandemic
Expansion of international business and improvement of profitability
Enhanced design prowess and manufacturing prowess in the era of software firstPromotion of ESG (environmental, social and governance) Management for sustained
value creation
In the area of collaborative value creation with customers, we developed new products andservices that use digital technologies, such as automation, wireless, cashless, and robotics, andpursued the real-world implementation of new technologies in various parts of Japan. For the latter,
we received an order for a system for demonstration testing of SPARCS (wireless train control
system) that uses existing train information systems, we delivered a wireless system to allow bus
traffic in both directions to share a single lane as a technology to support self-driving BRT, and we
conducted demonstration trials of a fare service using credit card touch payments and QR codes.
In the area of robot development, we invested in Man-Machine Synergy Effectors, Inc., a startup
company that originated in Ritsumeikan University. We will continue to accelerate thecommercialization of our multiple handling vehicle, which aims to eliminate the social issue of heavylabor and dangerous work in railway maintenance.
In our international business, we won orders for several major overseas projects, including a signal
system for Delhi Metro Line 8 Extension Corridor in India, a signal system and Platform Screen
Door (PSD) System for Cairo Metro Line 4 of Egypt, and a signal system for Metro Manila Subway
Project in the Philippines. In addition, we established a new company in Dhaka, the capital city of
Bangladesh, as the Group’s fourth overseas subsidiary. We will strive to strengthen our locallybased efforts to win orders, including the establishment of maintenance businesses, and toenhance profitability.

Data Section

With our new employees in April 2023

09

NIPPON SIGNAL CO., LTD.

NIPPON SIGNAL REPORT 2023

10

N i ppo n Sig nal ’s Vi si on and G ro w t h S t rat eg y

ROE

6.3

%

5.3

%

64.7

%

85.4

billion JPY

6.0

%

4.6

%

61.2

%

95.0

billion JPY

6.3

Roll out maintenance businesses that have roots inlocal communities
Enhance profitability of line extension projects

3

%

5

2

Expansion of international
business and improvement of
profitability

Enhanced design prowess andmanufacturing prowess inthe era of software firstImprove cost ratios, curb inventory assets, and reduce
costs without reward
Reduce ST/LT* by improving drawing re-use rates% or more

Around60%

Promotion of ESG Management
for sustained value creation

Data Section

Equity ratio

billion JPY

 arket new products that solve customers’Mmanagement issues

Sustainability Initiatives

Operatingmargin85.0

Targets (FY2023)

Collaborative value creation
with customers after COVID-19
pandemic
Enhance capacity to propose eco and power solutions

Priority Strategies

Net sales

Results (FY2022)

1

Sustained Value Creation

Previous year (FY2021)

Next Stage Accelerating Real-world Implementation Efforts Toward FY2023

Nippon Signal’s Vision and Growth Strategy

In design and manufacture, the Group continues to feel the effects of the protraction of
procurement lead times of semiconductor chips and other components and the ongoing sharp
rises in material prices caused by global inflation. However, we are working to minimize the impactof these trends through design changes and the thorough pursuit of process management.
As a company involved in transport infrastructure, a business of a highly public nature, the Groupaims to contribute to society through the reduction of environmental impact and the building of safe
communities. To this end, we have joined the TCFD Consortium, planted the Forest of Nippon
Signal, and promoted ESG Management, including obtaining recognition as a Certified Health &Productivity Management Outstanding Organization and as a Digital Transformation Certified
Company.

Nippon Signal’s Value Creation

To Our Stakeholders

E: Development of energy-saving products and sales ofdecarbonization solutions
S: HR system reforms and promotion of health management
G: Strengthening risk management and global capabilities
Promotion of introduction of next-generation core systems
Re-organization of Group company functions
Strengthening human resources development*ST/LT: Standard time/Lead time11

NIPPON SIGNAL CO., LTD.

NIPPON SIGNAL REPORT 2023

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N i ppo n Sig nal ’s Vi si on and G ro w t h S t rat eg y

Nippon Signal’s Value Creation

To Our Stakeholders
Stages of the Group’s Value Chain Vision
Shift to One-Stop Services

Anniversary

Vision-2028 “Evolution 100”
2021

Previous Medium-Term Management Plan

2022

2023

2024

Next Stage 24

2025

2026

2027

2028

Next Medium-Term Management Plan

Sensing

Numerical
Targets

Priority
Strategies

2
3

Environmental
Goals

Greenhouse gas emissions:
50% reduction (2030)
Net zero (2050)

Collaborative value creation with customers after COVID-19 pandemic - Product transformation with DX
Expand solutions business and develop products to support customers’ structural reforms
Be thoroughly customer-oriented and strengthen marketing and proposal capabilities

Expansion of international business and improvement of profitability - Sustainable, long-term business development
Business development rooted in megacities, promotion of location strategies
Streamline and strengthen global capabilities

Enhanced design prowess and manufacturing prowess in the era of software first- Manufacturing reform to support business transformation
QCD optimization from design process, strengthening of Group capabilities and in-house production
Strengthening of development capabilities and establishment of design and production frameworks adapted to DX

13

E: Participation in TCFD, promotion of decarbonization
S: Promotion of diversity, health management, and sustainability
G: Sustainable reinforcement of corporate governance and compliance

NIPPON SIGNAL CO., LTD.

International Businesses Existing Businesses

Promotion of introduction of next-generation core systems
Re-organization of Group company functions
Strengthening human resources development

Services

Maintenance

Advantage in having

High robustness

infrastructure market presence

Subsystems
Assemblies
Value chain

Toward the 100th Anniversary
In 2022, Japan’s railways marked the 150th anniversary of the opening of the railway between
Shimbashi and Yokohama. The Group has a long history, providing railway and traffic signals for the
past 90 years and automatic passenger gates for 50 years. Our PARK-LOC® (flap-type parking lot
management system), the first to be developed in Japan, is also more than 50 years old. In thattime, the Group has responded to society’s and customers’ needs for safe and reliable “fail-safe
technologies” and engaged in collaborative value creation.
In our Long-Term Management Plan, which has 2028, the 100th anniversary of Nippon Signal’s
foundation, as its target, we believe that, for us to solve the continuously changing issues of society, in addition to firmly passing on our safety ideology and technologies, we must also take on thechallenge of making change happen with digital transformation (DX). Going forward, we will tackle
the reduction of fixed costs through compact, power-saving, and cableless technologies, flexible
software-based responses, and the expansion of new businesses such as automatic operation androbotics.
Further, last year, we announced that we had invested in &Capital Inc., an African impact fund*management company. As a company involved in social infrastructure, the Group has long contributed to solutions to social issues in Africa. Going forward, through our investment in &Capital, we
will continue to provide assistance to African nations in many areas, including agriculture, healthcare, infrastructure, and energy, while also striving to develop the Group’s international business.

Data Section

Promotion of ESG (environmental, social and governance) Management for sustained value creation
Sustained
Value Creation

upper-tier systems to maintenance

Sustainability Initiatives

1

Further overseas expansion

Terminal Equipment[Supporting the Next Stage of Infrastructure]
Real-world implementation of transport innovation through digitaltechnologies and acceleration of establishment of local operations overseas
FY2024
Net sales: 130.0 billion JPY
ROE 10%Turnkey contracting from

Accumulation of technology

Basic Policy and Priority Strategies of “Next Stage 24” Performance

Basic Policy

Data Analysis

Shift to higher value

Nippon Signal’s Vision and Growth Strategy

2020

Value added

100 thLong-Term Management Plan

2019

Digital Transformation*Impact fund: A fund that makes impact investments, that is, investments that have the dual intents of making a positive impact on the environment and social
issues and achieving economic returns.

Conclusion
Under the Group’s corporate philosophy, our mission is “to help realize a more secure and comfortable society through superior technologies that provide safety and reliability.” Taking on board thethoughts and wishes of our stakeholders, we will continue to grow in our challenge, without fear of
failure, to achieve a secure and comfortable society.
NIPPON SIGNAL REPORT 2023

14

N i ppo n Sig nal ’s Vi si on and G ro w t h S t rat eg yMedium-Term Management Plan “Next Stage 24”
Railway Signals
Vision/Target

FY2022 Transportation Infrastructure
Orders received
Net sales
contribution

55.0%

50,401

Providing solutions to support structural reforms
Net sales
51,189(¥ million)

48,83147,037

Segment profit

FY2020

FY2021

FY2022

FY2020

5,267

5,119

FY2021

FY2022

Smart Mobility
Systems

Main Areas of Business
Automatic Train Control (ATC) devices
Automatic Train Stop (ATS) devices
Centralized Traffic Control (CTC) devices
Electronic interlocking devices
Level crossing protection devices
Display devices
SPARCS (wireless train control system),
etc.

Main Areas of Business
Traffic control systems
Traffic lights control systems
Traffic lights
Mobile Virtual Network Operator (MVNO)
Pedestrian Information Communication
Systems (PICS), etc.

Developing the Eco & Power Solution Market
Developing new technologies/fields, such as labor-saving
solutions in the electricity substation area and vibration
power generation

Strategic products

AI maintenance

SPARCS(wireless train control system)

LRT*CBM: Condition Based Maintenance. An operation and maintenance approach in which use continues to the extent that safety is not affected, andrepair or replacement is undertaken at the appropriate time.

Smart Mobility

Sustainability Initiatives

For Smart Mobility Systems, particularly Road Traffic
Safety Systems, we received orders for and recorded sales of MVNO (network leasing services) thatare being rolled out across Japan and the renewalof traffic control systems.
In addition, to support people with traffic constraints
such as those who are visually impaired, in crossing
intersections, we have commercialized advanced
PICS, which provide signal information from pedestrian lights to smartphones through devices that are
installed at intersections. We will continue develop
solutions with a view to realizing barrier-free accessfor people with traffic constraints.
In terms of upcoming initiatives, we will work on
product development and commercialization aimed
at the real-world implementation of KURU LINK®,
where self-driving public transportation vehicles
connect departure points and transport hubs, suchas train stations, as well as transport hubs and destinations, and automated operation-related services
that are based on coordination between infrastructure, such as traffic lights, and self-driving vehicles.

Platform strategy
	Expansion of AI maintenance and CBM*	Real-world implementation of automatic operation
systems

Nippon Signal’s Vision and Growth Strategy

FY2022

Existing market strategy
	Streamlining of equipment such as SPARCS (wireless train
control system), creation of added value such as train
priority signal control on LRTs, more advanced functions/disaster response for point machines and crossing gates

7,114

44,018FY2021Main Strategies(¥ million)

Railway Signal
Systems

Vision/Target

High value adding through self-driving assistance, etc.
Main Strategies

Establishing business models in the self-driving market
	Standardization and business development of I2X (roadto-vehicle collaborative automatic operation system)	Real-world implementation of last one mile travelling
support service, KURU LINK®
Existing market strategy
	Conversion of local railway lines to Bus Rapid Transit (BRT)
Product improvement for energy saving
Platform strategy
	Creating added value through Mobile Virtual Network
Operator (MVNO), pedestrian assistance, etc.

Data Section

In Railway Signal Systems, in the Japanese market,
we received orders and recorded sales related tovarious signal safety devices, including Automatic
Train Control (ATC) systems and Centralized Traffic
Control (CTC) devices.
We are also accelerating our business activities toward the real-world implementation of Traio, a system to monitor the status of railway facilities, assolutions to support customers’ structural reforms
in the COVID-19 era.
In addition, we are receiving more and more inquiries for the Simple-structure and high-Performance
ATC by SPARCS (wireless train control system) that
contributes to efficient operation of trains, streamlining of facilities, and labor-saving. We have received
an order to design a system for a demonstration trial on the SEIBU RAILWAY Tamagawa Line.
In overseas markets, we received orders and recorded sales in the Philippines, India, and China.
We will contribute to the creation of comfortable
and safe communities through traffic infrastructure
by increasing sales of SPARCS and meeting infrastructure demand in Asian countries, based on our
installation track record in these markets.
In terms of future initiatives, with the aim of collaborative value creation with customers in the
COVID-19 era, we will work to develop productsthat address and take into account the social issuesof a declining workforce, natural disasters, and decarbonization. We will focus on fields such as
SPARCS, which contributes to reduce CO2 emissions, as well as remote monitoring/CBM and labor-saving that contribute to reduce fixed costs andoperational costs.
NIPPON SIGNAL CO., LTD.

(¥ million)

61,672

FY202015

Nippon Signal’s Value Creation

Business Strategy

Strategic products
Crossroads
networking

Automatic operation

MVNO

BRT

NIPPON SIGNAL REPORT 2023

16

N i ppo n Sig nal ’s Vi si on and G ro w t h S t rat eg yMedium-Term Management Plan “Next Stage 24”
Nippon Signal’s Value Creation

Business Strategy

AFC business
Vision/Target

FY2022 ICT Solutions

Solving customer management issues andrealizing MaaS
Orders received(¥ million)

Net sales

35,69137,391

41,565(¥ million)

Segment profit(¥ million)

Main Strategies
Net sales
contribution

34,78336,216 38,418

45.0%

3,320

FY2021

FY2022AFC business	Real-world implementation of flexible fare determination
	Providing a wide variety of payment methods and MaaS
(mobility support, reservations, payment services, etc.)

1,650

FY2020

FY2021

FY2022

FY2020

FY2021

FY2022

FY2020Automatic Fare
Collection (AFC)
Systems

Smart City
Systems

Main Areas of Business
Automatic passenger gates
Automatic ticket vending machines
Automatic fare adjustment machines
Platform screen doors
Gated parking lot management systems
Centralized payment PARK-LOC® parking
lot management systems, etc.

Main Areas of Business
Security gates
Automatic cleaning robots
3D Laser Ranging Image Sensor
Ground penetrating detection radars
OA devices (maintenance), etc.

In Smart City Systems, particularly Security System
Solutions, we received orders for and recorded
sales of various types of security products and robot products, mainly 3D laser ranging image sensors to be installed in platform screen doors, construction and agricultural equipment.
Furthermore, we have promoted sales of security
gates, which provide a one-stop solution for managing the entry and exit of people and vehicles,
mainly in amusement facilities and museums where
an indefinite large number of people go in and out.
In terms of upcoming initiatives, we aim to commercialize our multiple handling vehicle, which is a humanoid robot for railway work in high places, in
spring of 2024, with the aim of eliminating the social
issue of heavy labor and dangerous work on site.
We will enhance our line-up of security gates that
accommodate new technologies such as facial recognition and contactless technologies and work on
the development of various types of robots by leveraging the knowledge gained from cleaning robot
development.

Strategic products

Platform monitoring
Cashless payment system devices

Smart City business
Vision/Target

A new growth pillar
Main Strategies

Robotics
	Development and real-world implementation of heavymachinery and cleaning robots
	Developing markets for service robots such as security/
inspection robots
Sensing	Entry into the construction machinery market anddevelopment and deployment of omnidirectional sensors

NIPPON SIGNAL CO., LTD.

Data Section

Security	Deployment of facial recognition gates and developmentof high security market
Strategic products

Cleaning robots

17

Smart Parking
	Development of new fields through management support
for operators and gateless/flapless systems
	Promotion of low carbon emissions, such as developmentof products for electric vehicles

Sustainability Initiatives

In AFC, particularly Station Network Systems, in thedomestic market, we received orders for and recorded sales of various types of platform screen
doors, passenger gates, and ticket vending machines.
Various railroad operators are considering their platform door installation plans, utilizing the fare system
to promote barrier-free facilities at train stations led
by the Ministry of Land, Infrastructure, Transport
and Tourism. We are expanding our business activities by leveraging our strengths in areas such as
platform screen doors and platform monitoring
equipment, in which we offer a diverse lineup to
meet the needs of each installation location.
In addition, as initiatives for the future, we are working to develop new platform monitoring systems
that reduce costs for capital investment and makeuse of 3D laser ranging image sensors and low-cost
platform screen doors, among other things.
In overseas markets, we received orders for and recorded sales of AFC systems and others in Bangladesh and Egypt.
In terms of upcoming initiatives, the markets forcashless payment systems and image processing
are expected to expand in anticipation of full-scale
development of MaaS. To accommodate payment
systems in the new smart mobility society, we willbring new products onto the market and create
new businesses.

Safety on Platforms
	Development and deployment of lightweight platform
screen doors and platform monitoring devices
Improved serviceability with CBM

Nippon Signal’s Vision and Growth Strategy

3,300

3D Laser Ranging Image Sensor Baggage inspection

NIPPON SIGNAL REPORT 2023

18

N i ppo n Sig nal ’s Vi si on and G ro w t h S t rat eg y

Growth Strategy of the Company

Focus 1 Automatic Operation

Nippon Signal’s Value Creation

Feature:2 Remote monitoring system

Toward Next-generation Transit Services for the Last One MileKURU LINK®

* Last one mile: Refers to the last section from the closest public transport to the final destination (home, sightseeing spot, etc.). With the progression of theaging of society and depopulation, this last one mile is being seen as a challenge for future public transport services.

1 Operation management system

3 Infrastructure development to support safety (I2X* coordination) * I2X: Road-to-vehicle collaborative automatic operation system
With the development of infrastructure for sensing in zones where various different vehicles intersect, such as crosspoints and parking lots, safety support will be realized in line with the traffic situation, such as notifying self-driving vehicles of hazard information. As of March 31, 2023, Nippon Signal had participated in 45 verification tests on public roadsof road-to-vehicle collaborative systems. This is the most for any infrastructure manufacturer in Japan.
KURU LINK® service: Last one mile transit using self-driving vehicles centered on railway stations and other transport hubs.

User

The operation management system will be responsible for managing the condition of system operations and groundequipment. A web server system will be built in a control center, the main feature of which is vehicle service management,
in which the travel positions of self-driving vehicles will be plotted on a digital map in real time. Monitoring on the webbrowser will assist operation managers by giving them visual recognition of the various service conditions, while users will
be provided with information via digital signage at railway stations, smartphones, and other means. It will also be equippedwith the following systems to suit the needs of operation managers (public transport providers).

Control center (cloud)User smartphone (app)Web server

Operation management system

Timetable management system

System operational status management

Timetable generation
 anagement of operated timetableM
achievement

Ground equipment status management

Remote monitoring system

Vehicle operation management

Timetable management systemM onitoring of surrounding
environment during travel

Registration of user details
Book vehicle dispatch

Centralized control system

Information
Display of service operation

Sustainability Initiatives

On-time operation will be achieved by automatically instructing the self-driving vehicles to start driving in line with the scheduled timetable. Listing them alongside
the achieved timetable will give a full picture of service status.
Timetables are an intuitive user interface on which changes, increases in services,and other operations can be performed.

Urawamisono: Verification test

Nippon Signal’s Vision and Growth Strategy

KURU LINK® is a last one mile* transit service using self-driving vehicles that is centered on railway stations and othertransport hubs. Using a system that links users, self-driving vehicles, and ground equipment (infrastructure), with acontrol center at its core, it realizes one-stop solutions for dispatch or reservations of vehicles to come to one’s homeor for linking railway stations and residential areas with self-driving mobility vehicles.
Pilot operations and verification testing are currently being undertaken to resolve business-related and technologicalissues with the aim of early real-world implementation and contribution to the revitalization of regional areas. Thisfeature article presents the three mechanisms that underpin KURU LINK®.

Cameras and microphones installed on the self-driving vehicles will capture video andaudio of inside and outside the vehicle, allowing the situation inside and around the vehicle to be monitored in real time on a web browser at the (remote) control center. The
system will also receive speed and situational data from the self-driving vehicles to ascertain the condition of the vehicle, and by talking to passengers, it will be possible tomonitor the vehicle and its passengers comprehensively from a remote location.

Infrastructure management systemG round equipment
status management

 irect control ofD
self-driving vehicles

Urawamisono: Verification test

Railway link system

Use

The service can be linked to delays in railway timetables to automatically generate
self-driving vehicle timetables. Alternatively, the number of services can be increased automatically to maintain on-time operational service levels. Railway delay
information will be obtained from external systems via GTFS-RT*1.
*1 GTFS-RT: An information format that is included in the global standard bus information format “GTFS”
and provides dynamic data that can be used to predict delays and arrivals.

Control
User

Travel/operation instructions
Passenger information
Onboard monitoring

Self-driving vehicle

Management

Ground equipment

Crosspoints

Parking lots

Verification test of KURU LINK® service in Urawa-misono area

Kuki Plant compound: In-house verification

Shared single-lane traffic system
Right of way will be controlled on traffic sections in which a single lane is sharedby vehicles traveling in both directions, based on the respective location data ofself-driving vehicles and manually operated vehicles, and the information will be
provided as signal data on virtual traffic lights*2 and on-board tablets, to achieve
efficient use of mixed-use spaces and safe shared single-lane traffic.

Intersection withmunicipal road

19

NIPPON SIGNAL CO., LTD.

Timetable management system

Kesennuma Line BRT: Verification test

Automated Valet Parking (AVP)In parking lots, automatic parking and dispatch of vehicles can be achieved via asmartphone app operated by the user, thus increasing convenience for parking lot
users. The Automated Valet Parking system provides the best route to the parking
lot and parking/dispatch instructions to the self-driving vehicle through the use of asmartphone app, allowing for unattended automatic travel inside the parking lot. We
plan to expand the scenarios for use of this system to businesses such as automatic
dispatch/parking of self-driving car share vehicles and automated truck deliveries.

Data Section

 irtual traffic lights: Software-based traffic lights that control right of way without the installation of physical traffic lights.
*2 V

Saitama Stadium
2002

Electromagnetic
guide cable
Monitoring display
Operational
management display

GSI Map(Electronic National Land Web)

Shared single-lane
traffic section

Urawa-misono
StationOperation management system

Remote monitoring system

Keihanna: Verification test
NIPPON SIGNAL REPORT 2023

20

N i ppo n Sig nal ’s Vi si on and G ro w t h S t rat eg y

Growth Strategy of the Company
Dhaka Mass Rapid Transit (MRT) Line 6 in Bangladesh commenced operation (December 28, 2022)

Focus 2 Global Network

Main Themes of International Businesses

Nippon Signal delivered three systems, namely a signal
system, AFC, and platform screen door (PSD), to Bangladesh’s first metro in Dhaka, the capital city of Bangladesh.
For the signal system, our SPARCS (wireless train control
system), which uses wireless communications to control
and protect the trains, was adopted, and automatic operation has been achieved. This is our sixth delivery of
SPARCS.
In November 2022, we established Nippon Signal Bangladesh Private Limited. In addition to providing any maintenance and support services included in the contracts forthe above project, this new company will be our base forengaging in long-term business development in Bangladesh, where vigorous infrastructure investment is expected
to continue, in our efforts to further expand our business.

Initiatives

1. P romotion of megacities strategy leveraging overseas
subsidiaries
2. Receipt of definite orders and smooth implementation of
Phase 2 projects in cities where the Group already operates
3. E xpansion of maintenance businesses rooted in individual regions

Our international businesses began with the export of level crossing gates to the State Railway of Thailand in 1946, and we now provide Japanese transport infrastructure to 30 countries and regions. In addition to the Delhi Metro Line 8 (Magenta Line), for which SPARCS (wirelesstrain control system) was adopted and which began fully unattended operation in 2020, our signal systems and AFC systems have been adopted in major cities including Chennai, Jakarta, and Dhaka. With these products, we will continue to pursue the development of our global
network aggressively and contribute to the economic development of countries around the world.

30 countries and regions

Railway Signal
Systems

TurkeyCairo Metro Line 4
Signal and PSD systems

Bangladesh

Dhaka
MRT Line 6

Turkish Railways

Automatic Fare
Collection Systems

MyanmarThailand

China

MyanmarRailways
Traffic control
system in Yangon

State Railwayof Thailand
Bangkok
Red Line

Beijing Subway
Line 15
Beijing Subway
Airport Express Line

Signal systems

PSD systems

Nippon Signal’s Vision and Growth Strategy

We will strive to enhance profitability through various efforts, from the performance of projects to ongoing businessdevelopment through maintenance services, extension
projects on existing railways and market development, as
well as business development rooted in megacities.

Egypt

Nippon Signal’s Value Creation

Feature:AFC systems

Smart Mobility
Systems

PSD

Beijing Subway
Line 13China State Railway
Group Co., Ltd.

Smart City
Systems

Beijing Subway Line 15 SPARCS Beijing Subway Line 13(wireless train control system)
Automatic passenger gates

Liberia

Izmir suburban line

Izmir suburban line operation
management system

Dhaka MRT Line 6
SPARCS (wirelesstrain control system)

Dhaka MRT Line 6
Automatic
passenger gate

Sustainability Initiatives

Traffic signal
equipment in Monrovia

Korea
UK
Nippon Signal
Bangladesh
Private Limited

UgandaSpain

Traffic signal
equipment in Kampala

Busan
Metro
Gimpo
Goldline

United States

Iran
Iraq

Gwangju Metropolitan
Rapid Transit
Parking system
for Rep. of Korea Gimpo Goldline SPARCS(wireless train control system)

Pakistan
Beijing Nippon Signal Co., Ltd.
Taipei Office

Algeria
Saudi Arabia

UAE

Yangon Office

Dubai
Monorail

India

Tanzania

21

Chennai Metro
Automatic ticket
vending machines

NIPPON SIGNAL CO., LTD.

Delhi Metro Magenta
Line SPARCS (wirelesstrain control system)

TaiwanConventional Rail
Taiwan High
Speed Rail

Nippon Signal
India Pvt. Ltd.

Australia

South Africa

New ZealandIndonesia

Ahmedabad Metro
SPARCS (wirelesstrain control system)

PanamaNippon Signal Technology Taiwan Co., Ltd.

Railways inIndonesia
Jakarta Mass Rapid Jakarta Mass Rapid Transit(MRT) SPARCS (wireless
Jakarta Mass Rapid Transit
Transit (MRT)
train control system)(MRT) automatic passenger gate

VietnamPhilippines

Line 1 of the Ho Chi
Minh Urban Railway

Manila Subway
Line Signal system

Taiwan MRT
Circular Line
Parking system
for Taiwan

BrazilTaiwan High Speed Rail

Conventional Rail

Taipei Station CTC Center

AFC systems

Data Section

IndianDelhi Metro
Railways
Magenta Line
Chennai
Ahmedabad
Metro
Metro
Bengaluru Traffic
signal systems

TaiwanDhaka Office

Argentina

Argentine Railways(ADIF, SOFSE)
Roca Line

Roca Line Interlocking system

NIPPON SIGNAL REPORT 2023

22

N i ppo n Sig nal ’s Vi si on and G ro w t h S t rat eg y

Growth Strategy of the Company

Ethiopia

South Sudan

Focus 2 Global Network

Democratic Republicof the Congo

Nippon Signal’s Value Creation

Feature:Somalia

Republic of Uganda
Kenya

KampalaTraffic Lights Businesses Initiatives in Uganda
RwandaTanzania

Nippon Signal’s Vision and Growth Strategy

As a company involved in social infrastructure, Nippon Signal has
long been engaged in business activities with a strong awareness ofcontributing to solutions to social issues in Africa. In March 2023, wereceived an order for traffic signal systems terminal equipment for
the Project for Improvement of Traffic Control in Kampala City, Republic of Uganda. Leveraging the signal technology that we havebuilt up over the years, we are cooperating in the construction oftransport infrastructure that is critical for Uganda’s development.

Urban infrastructure in Kampala City, Uganda
Kampala City is the capital city of the Republic of Uganda (population:
approximately 1.6 million as of 2020), located in East Africa. The city’s
metropolitan area was almost completely destroyed in the civil war that
followed the collapse of the dictatorship in 1979. Since then, social infrastructure has recovered considerably as a result of reconstruction
assistance. On the other hand, a variety of issues have arisen as theresult of the rapid growth in the city’s population in recent years. In
particular, the fragility of the city’s transportation infrastructure, especially its roads, has become a serious problem. Chronic traffic congestion makes it difficult to travel comfortably, and poor road conditions
have worsened the living and natural environment along the roads.
Under these circumstances, Japan has been providing a range of assistance, including grants and yen loans, to Uganda to build transportation infrastructure that will support the nation’s future development.

One of the many roundabouts found throughout the city

An intersection where road maintenance has not been completed andsignal controllers have not been installed

Track record in Uganda
Traffic lights introduced to Uganda by Nippon Signal

In Kampala’s inner-city areas, some major roads have been developed, but most of the road network remains undeveloped. In addition, even on roads that have been paved, the surface quality is not good. Moreover, the city’s geographicaland climatic conditions, such as its location directly on the equator and its four to five months of heavy rainfall every year,
cause further deterioration of road surfaces and the surrounding environment.
Most intersections do not have traffic signals, with roundabouts used instead to diverge and merge traffic flow. Residents are unable to travel safely or comfortably by any mode of transport, whether it be by car, motorcycle taxi or bus.
Another issue is that when roadworks are conducted, major congestion occurs, further exposing the weaknesses of thetransportation infrastructure.

Sustainability Initiatives

State of development of roads and traffic lights

We delivered traffic light equipment for four intersections in 2018 under the pilot project (JICA grant Phases 1 and 2) and,in 2019, we delivered a central control system and the Moderato*1 system to Kampala City for KCCA*2. These achievements were well received, and in 2021, Nippon Signal delivered traffic signal equipment for nine intersections to Kampala
City through a local company (construction and maintenance company) under the KIIDP2*3 project funded by the WorldBank.
In this project, we plan to deliver traffic lights, traffic signal control equipment, traffic detection equipment, and otherproducts for 25 intersections in FY2024.
Infrastructure development in Uganda is expected to expand even further in the years ahead. We will continue to collaborate with the Japanese government, local governments, and local companies to improve the capacity of traffic flow
management and ease traffic congestion in Kampala City through highly reliable traffic signal products. In doing so, wewill contribute to the reduction of environmental impact and to the realization of safe and comfortable road traffic.
Track record in Uganda

Road conditions in Kampala City

Data Section

Explaining how to install equipment to local companies Instructing local companies’ workers on installation of the equipment Training for end users(2018@Kampala City)(2018@Kampala City)(2019@Kampala City)

Condition of relatively well-developed inner-city roads (locations where
Nippon Signal traffic lights have been installed)

23

NIPPON SIGNAL CO., LTD.

Undeveloped road surfaces*1 Moderato: Traffic control system in which the duration of the green light is controlled automatically based on calculations of traffic volume at the intersection*2 KCCA: KAMPALA CAPITAL CITY AUTHORITY*3 KIIDP2: The Second Kampala Institutional and Infrastructure Development Project

NIPPON SIGNAL REPORT 2023

24

N i ppo n Sig nal ’s Vi si on and G ro w t h S t rat eg y

We will focus on labor savings for transportation infrastructure through digital transformation (DX), as wellas on themes that lead to energy conservation and CO2 reduction to create a decarbonized, recycling-oriented society, and accelerate the development of new solutions and products.
Basic Policy

Sensing, wireless, and network technologies that interweave electromagnetic waves, and image analysis using AI, have been positioned as shared foundational technologies for the Company. We will use them to create various new products for achieving ongoing business growthand contributing to the resolution of social issues.

[Crew Support Systems]
In collaboration with the West Japan Railway Company, we have developed the Obstruction Warning Signal Device Detection Support System, whichuses analysis of camera images to detect red lights flashing on an obstruction warning signal device, sounding an alarm to the driver. We began
testing the system in West Japan Railway Company’s Okayama area in FY2019, and, having obtained favorable results from those tests, we will begin introducing it on West Japan Railway Company lines in FY2023.

Obstruction warning signal device (flashing light type)

Caution aheadThis system is a jointly developed product.

Light-emitting obstruction detection device

CameraProcessing
part

SPARCS (wirelesscommunications, distancemeasurement)

2D railway crossing
obstruction
detectors

Photos of actual onboard equipment
Belongings
checking
equipment
Sub-milli wave
Terahertz wave

InfraredCollect

Baggage checking
equipment (X-ray)

3D Laser Ranging
Image Sensor
Visible light

10GHz
30mm

100GHz
3mm

1THz
300μm

10THz
30μm

100THz3μm

To Traio analysis devices

Ultraviolet X-ray

1PHz
300nm

10PHz
30nm

B

DecideMonitoring Terminal

C

D

E

Extracted images

NormalDefective

Automatically make pass/fail decisions

AI pass/fail decision making systems

Traio cloud, facility management serverIntellectual Property Initiatives
Camera for image analysis

Example of hazard detection

Baggage checking
equipment[Acquisition of Intellectual Property]

Nippon Signal promotes the acquisition of intellectual property linked with its business strategy to cocreate value with customers in the new normal era, with the aim of creating new businesses.
Specifically, we are expanding our intellectual property, including patents, with a focus on such areas
as automation for railways, automation on the road, and mobility as a service (MaaS) and settlement.
We are also pressing ahead with the acquisition of intellectual property concerning the sharedfoundational technologies for our business (sensing, wireless, and network technologies and AI/image
analysis technologies).

[Rewards for Employee Inventions]

Belongings checking equipment

Nippon Signal has established a system to reward inventions made by employees, in accordance withthe provisions on employee inventions in the Patent Act. To increase the incentive toward employee
inventions, bonuses are paid at the time of invention, at the time of patent registration, and when theinvention contributes to profit.

FY2020

FY2021

FY2022
Number of applications

49

Data Section*The development of this system is partially supported by subsidies forrailway technology development given by the Railway Bureau of the
Ministry of Land, Infrastructure, Transport and Tourism of Japan.

[High Security Devices]
Against the backdrop of the growing threat of terrorism, we are developing high-security equipmentthat will not impede user convenience, based on the concepts of “high throughput,” “space-saving,”and “safe and secure.”
Automatic baggage detection devices will automatically determine hazardous items in baggage by
analyzing X-ray images. Belongings checking equipment (body scanner: under development) will automatically detect hazardous items (explosives, flammable liquids, etc.) concealed beneath clothing,
without stopping the flow of people.

NIPPON SIGNAL CO., LTD.

Extracted Extracted Extracted Extracted
image
image
image
image

Total Inspection Vehicle
Automatically extract facilities

We are engaged in developing products including Station Platform Safety Monitoring
Support Systems that utilize image analysis of video from cameras, automatic baggage
checking equipment that use X-ray images to automatically determine hazardous items
inside luggage, and crew support systems that detect signs from obstruction warning
signal devices of level crossing obstructions based on image analysis of images fromcameras positioned at the front of the train.

25

AI facility extraction systems

Lighting

Extract

AI / Image Analysis Technologies[Image Analysis Platform Monitoring Systems]
These systems support accident prevention and initial responses to accidents by detecting hazardous situations, such as passengers walking on the edge of the platformor falling from the platform, from camera images and notifying the tablet terminals installed in the station office of the detected images and information.

Suspension insulator
Concrete pole
Pull-off device for curve section
Hinged cantilever etc.

Store in large-capacity storage media total
inspection Vehicle

CameraFrequency 1GHz
Wavelength 300mm

Onboard imaging systems

Sustainability Initiatives

Milli-wave*1 Traio is a word coined by combining “train” and “IoT.” Nippon Signal developed part of the Traio system jointly with West Japan Railway Company.
*2 Wayside Facilities include suspension insulators, concrete poles, pull-off devices, hinged cantilevers, high-voltage cables, and watch towers.

[Onboard Systems for Total Inspection Vehicle]

Milli-wave railway
crossing obstruction
detectors

Microwave

Perceptibility of obstruction signal lights has been
improved, preventing serious incidents, such asaccidents caused by obstructions on level crossings.

Nippon Signal is making efforts to expand sales of Traio*1, a system that monitors the condition of wayside facilities*2 and achieves efficient andhigh-quality maintenance with less manpower and at lower cost.
We have developed new AI that is able to make pass-fail decisions on facilities using image data captured by cameras that can collect images evenat night. This AI supports the task of deciding on facility abnormalities, achieving labor savings in maintenance operations.
West Japan Railway Company has equipped its train cars for total inspection with these units.

Sensor part

GroundpenetratingradarsIf the obstruction warning signal device lit up due to an obstruction on a level crossing,etc., the driver would confirm
the obstruction by sight andoperate the brakes.

Achieving Inspections along the Railway with Image Processing: Traio Onboard Units

Sensing technologies

Remote monitoring
system Traio(Monitoring of facilities
along the train line)

From images taken by the camera
Light emitted from the warning device
is detected automaticallyDriver is prompted to exercise caution
by vocal warning

Nippon Signal’s Vision and Growth Strategy

Example of use

Wireless/Network technologies
Sensor part

After introduction of the system

Previous systems

Sensing, Wireless, and Network Technologies
We are developing a range of new products based on the shared foundation of sensing, wireless, and network technologies that interweave electromagnetic waves.

Nippon Signal’s Value Creation

Research and Development

15

35
12

14

10

27

3

14
20

13

10

Automation
for railways

Automationon the road

MaaS andsettlement

NIPPON SIGNAL REPORT 2023

26

S u st a in a b ili ty Ini ti ati ves

The Group will balance social and corporate values through five types of zukuri (aJapanese word for creation) or business activities to achieve the United Nation’s
17 Sustainable Development Goals (SDGs) to Transform Our World and the Group
Philosophy.
Social contributions and disaster relief
through products and services

Reduction of environmental
impacts to create a decarbonized,
recycling-oriented society

Basic Policy on CSR

Group
Philosophy

SDGs

We hope to realize a more secure and comfortable society for people around the world, and “Our Mission” in the Group
Philosophy sets out the idea.
Details:

Environmental Policy

We provide eco-friendly products and services, and also reduce the environmental impact throughout the product life
cycle, from product development to final disposal, to achieve a synergy between business activities and environmental
protection efforts.

2

Mono-zukuri(Manufacturing)1

P41

Nippon Signal’s Vision and Growth Strategy

Health Management

Transportation infrastructuredevelopment and disaster
relief support

P52

Group
Philosophy

SDGs

Details:

Promotion ofsocial welfare

Nippon Signal’s Value Creation

NIPPON SIGNAL’s SDGs Actions

Group
Philosophy

SDGs

Under the Health Declaration made on April 1, 2022, Nippon Signal has launched initiatives on health management
designed to fulfill our social responsibility based on our corporate philosophy of “safety and reliability,” and to continue toadvance as a company with sustainable growth.
Details:

Basic Policy on Information Security

P48

Group
Philosophy

SDGs

The Group is engaged in group-wide information security initiatives under this Basic Policy, with the aims of protecting theinformation assets of the Group from accidents, disasters, criminal acts, and other threats, and of responding to the trustof our customers and society.

Nippon Signal
Group Philosophy

Koto-zukuri(Business)

5

Details:

https://www.signal.co.jp/environment/information_security/

Basic Policy on Internal Control System

3

SDGs

Group
Philosophy

Regarding the establishment of systems to ensure that the execution of duties by Directors complies with laws andregulations and with the Articles of Incorporation and other systems necessary to ensure the appropriateness of business
operations, at a meeting of the Board of Directors on June 23, 2023, we amended the Basic Policy on Internal Control
System in light of our transition to a Company with an Audit and Supervisory Committee.
Details:

Active global
partnership

Machi-zukuri
(CSR)

4

Hito-zukuri(Education)

Policy for Determining Remuneration,etc. for Individual Directors
Construction of platforms in which diverse
employees are able to feel empowered in their work

SDGs

The remuneration of Directors (excluding Directors who are Audit and Supervisory Committee Members) is decided undera remuneration scheme to provide Directors with healthy incentive to pursue medium-to-long-term improvements incorporate value while also accomplishing short-term performance targets. Remuneration for each Director is set at an
appropriate level, based on their responsibilities.

Basic Approach on Eliminating Anti-social Forces
and Status of Establishment of Such Approach

SDGs

P56

Data Section

Environmental preservation

P57

Group
Philosophy

Details:

Support for high-quality education, culturalactivities, and women in the workplace

Sustainability Initiatives

Michi-zukuri(Creation of the future)Group
Philosophy

From the perspective of practicing social justice, the Group will have no relationship with anti-social forces whatsoever ineither direct or indirect ways. In the event that the Group is subjected to unreasonable demands from anti-social forces,
we will categorically reject such unreasonable demands, in coordination with relevant administrative organizations such as
the police and legal experts such as attorneys as necessary.

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contributions and disaster relief through1. Social
products and services

for high-quality education, cultural activities,
5. Support
and women in the workplace

Group
Philosophy

SDGs

In Japan, the issue of labor shortages due to a low birthrate and aging
population is one that threatens the basis of not only the railways but manyindustries as well. To prepare for the age of low birthrate and aging population, Nippon Signal has been collaborating with West Japan Railway Company and Man-Machine Synergy Effectors, Inc. to pursue the developmentof a multiple handling vehicle with the aim of reducing heavy labor and improving efficiency in railway maintenance work.

Group
Philosophy

Group
Philosophy

7. Active global partnership

Group
Philosophy

Group
Philosophy

SDGs

Sustainability Initiatives

SDGs

Nippon Signal is pursuing solutions that support transportation infrastructure that people can use with peace of mind and in comfort, even in a future where the aging population with a low birth rate and labor shortages
have progressed. We have collaborated with West Japan Railway Company to develop part of our “Traio” platform that uses IoT technology to provide remote monitoring, automation of inspections, and CBM. With thissystem, we realize next-generation operation and maintenance (O&M) thatenables work to be done without having to travel to the site. In addition, regarding disaster relief support, we contribute to the commercialization of
BRT using sections on the JR Kesennuma Line and the JR Ofunato Line,
which had been hit hard by the Great East Japan Earthquake.

Achieving SDGs requires global partnerships with countries, corporations,citizens, and academic institutions across the globe. Nippon Signal operates projects in 30 countries and regions, and we contribute to the creationof infrastructure in countries across the globe, mainly in Asia, by providing
train control systems, AFC (Automated Fare Collection system), platform
screen doors, and other products. We also actively network with people inemerging countries, such as those in Asia and Africa, and facilitate the creation of business partners and talent development, in an effort to support
the development of these countries.

SDGs

Group
Philosophy

8. Promotion of social welfare

SDGs

Group
Philosophy

Nippon Signal Group recognizes that, as a corporate group involved in transport infrastructure of a highly public nature, we should be a group that canhelp save lives in the event of an unexpected accident or a disaster. We arecontinuing our scheme to encourage officers and employees of Group companies in Japan to obtain lifesaving skill certifications issued by local fire authorities.
Nippon Signal continues to be a co-sponsor of the Gold Concert, a music
contest for people with disabilities, presenting the Nippon Signal Award to
grand prize winners.
We also collect donations around the date of the anniversary of our founding
each year under a matching gift* scheme. We have made donations to manyorganizations including the Japanese Foundation for Cancer Research,
Saitama Rehabilitation Center, and Saitama Adapted Sports Association.

Data Section

We provide human rights training on a regular basis with the aim of creating
an organization that does not violate human rights in our increasingly globalized corporate activities and supply chains. We are also working to enhance our staff dormitories as part of the creation of an environment inwhich our employees can work energetically. Signalio Nanasato and Signalio Utsunomiya are our studio dormitories for unmarried employees that
accommodate diverse individuals, where younger employees of diverse
gender and nationalities live. A corporate childcare facility, Signalio Kids, isattached to Signalio Utsunomiya to create an environment that will allow
employees to surmount changes in their life stages and continue to workwith peace of mind.

SDGs

Ever-increasing emissions of greenhouse gases (e.g., carbon dioxide, methane, chlorofluorocarbon) since the industrial revolution are having serious impacts on the global environment, such as extreme weather events and global
warming. Nippon Signal is also expected to conduct its business activities inan environmentally-friendly manner.
Nippon Signal is pushing forward activities that contribute to conservation of
the global environment, such as the use of renewable energy and forestry
conservation, and is conducting private power generation with solar panels installed in its dormitories for unmarried employees, Signalio Nanasato and Signalio Utsunomiya. In addition, we have continually engaged in forestry activities
with the Forest of Nippon Signal opened in Yaita City, Tochigi Prefecture.

Track length: 7.5 km
Number of carriages: 6 (total number of carriages)of platforms in which diverse employees
4. Construction
are able to feel empowered in their work

6. Environmental preservation

Nippon Signal’s Vision and Growth Strategy

SDGs

SPARCS (wireless train control system) can reduce CO2 emissions by approximately 70%* per annum compared with conventional train control systems. The adoption of SPARCS began with the realization of a completely
wireless train control system for Beijing Subway Line 15 in 2011, followedby expansion into other countries including India, Indonesia, South Korea,
and Egypt. We are also working hard to win bulk orders in Japan for systems with automatic operation functions.

infrastructure development and3. Transportation
disaster relief support

Group
Philosophy

Nippon Signal is a co-sponsor of the Pacific Music Festival (PMF), an international educational music festival for fostering young musicians foundedby Leonard Bernstein, a distinguished conductor and composer of the 20th
century.
We also co-sponsor Bolero: Plaza of Children’s Dream, a project organizedby world-renowned pianist, Michie Koyama, to support recovery efforts
from the Great East Japan Earthquake. Nippon Signal supports the “fromSaitama to the World” scholarships system (organizer: Saitama Center for
Go Global Students) and has implemented the NIPPON SIGNAL Global
Challenge Scholarships for aspiring young people challenging themselves
overseas.

of environmental impacts to realize a
2. Reduction
decarbonized, recycling-oriented society*Prerequisite
Line types: Conventional railway line, steel wheels, double track
Stations: 4 (1 machine room)
Intervals between transceivers: 300 m (number of track circuits: 50 tracks)

SDGs

Nippon Signal’s Value Creation

NIPPON SIGNAL’s SDGs Actions*Matching gift is a system where the Company adds a certain contribution to the amount of donations made by employees and donates the sum.

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Response to TCFD (Task Force on Climate-related Financial Disclosures)
The Group contributes to a sustainable society through environmentally friendly manufacturing, facilities that emit less greenhouse gases when in use, and popularization and maintenance of railways thatare the means of transportation with low environmental load.
As part of such initiatives, the Group declared its support of the Task Force on Climate-related Financial
Disclosures (TCFD) on December 23, 2021, recognizing that climate change affects sustained growth.
We will carry out the following initiatives in accordance with the TCFD recommendations.

Nippon Signal’s Value Creation

E Environment
Initiatives for Environment Beneficial Products, R&D

OfficeRailwayRoad traffic safety

Save labor, automation

Streamline equipment, save labor on maintenance work

Automate operation, reduce
environmental impact

Automatic cleaning robots
Robot control
Security

Automatic operation
	Reduce CO2 by accelerating and decelerating less frequently

CBTC (SPARCS, etc.)

	Reduce CO2 by eliminating power consumption of track circuits

sures. The Task Force recommends firms and other entities to grasp and disclose the risks and opportunities that climate change poses on their business.

Nippon Signal’s Vision and Growth Strategy

 pgrade the functions of on-site equipment (IoT, disasterU
prevention)
CBM, robotization of maintenance

Task Force on Climate-related Financial Disclosures (TCFD) was established by the Financial Stability Board (FSB) to discuss matters on climate-related disclo-

BRT, LRT
MVNO, PICS
I2V (vehicle-infrastructure
coordination)

	
Extend parts life (reduction of waste) by optimization of maintenanceIntegrate and streamline safety equipment

Participation in TCFD Consortium	
Facilitate the shift from private vehicles to public transportation (makepublic transportation convenient, and establish a system to maintainpublic transportation amid labor shortages)

We joined the TCFD Consortium to carry out effective TCFD-related activities in June 2022. We will align ourselves with
the Consortium and base our activities on cutting-edge knowledge.
The TCFD Consortium is a private sector framework, where a group of businesses and financial institutions that support
TCFD facilitate response to the Task Force by discussing effective information disclosure by businesses and initiatives touse disclosed information for appropriate investment decisions by financial institutions and other organizations. As of
March 2023, the Consortium has 753 member organizations.

Greenhouse Gas Emissions Reduction Plan

CO2 Reduction Plan
200,000

Emissions (Scope 1, 2)
Reductions (Scope 1, 2)

Emissions (Scope 3)
Reductions (Scope 3)

Parking

Shift towards full automation andcashless paymentsA utonomous parking, carallocation
	Reduce CO2 emitted when driving to look
for a parking space loud-based management ofC
vehicle license plate numbers

100,000

NS’s social responsibility
Consider decarbonization in view of the whole
product life cycle
Procurement (green procurement, fair trade, etc.)
Manufacturing (use of green energy)
After-sales (recycling)
Achievement of a circular economy	Reduce CO2 emissions at the time of
manufacturing and disposal by reducing
servers and terminal equipment throughthe introduction of clouds

0

StationSustainability Initiatives

The Group considers that taking environmental measures against global warming and creating a sustainable society will,
as stated in the Group’s philosophy, help realize a more secure and comfortable society through superior technologies
that provide safety and reliability. Throughout the product life cycle, we aim to reduce greenhouse gas emissions by 46%
by 2030 (from the 2013 level) and achieve carbon neutrality by 2050, in line with the government targets.

Save labor, shift to cashless
payments
Payment, recognition
Reduce paper use

Shift to thin client computing	Reduce CO2 emissions at the time of
manufacturing and disposal by reducing
terminal equipment

Platform monitoring, CBM emote monitoring, shift toRcashless payments-100,000(Abbreviations)
CBTC:	Communications-Based Train Control, a signal safety technology that controls train operation by using communications between trains andground facilities.

-200,000
FY2022

FY2024FY2030FY2050

CBM:	Condition Based Maintenance, a predictive maintenance approach in which maintenance is carried out only when deemed necessary.
BRT:	Bus Rapid Transit, a bus system that ensures shorter travel time and punctuality and increases transportation capacity by combining
articulated buses, public transportation priority systems, bus only roads, bus lanes, etc.

*Scopes 1, 2, and 3 are the classification by the SBT (Science Based Targets: an international initiative to help companies set and achieve GHG emissions
reduction targets towards the goal of holding the increase in global temperature to “below 1.5°C/2°C” above pre-industrial levels)

PICS:	Pedestrian Information and Communication Systems, systems that support safe transit by providing information about names of crossroads,
the status of traffic lights for pedestrians, etc., which is made possible through mutual exchange of information between communication
devices installed at crossroads and other locations and mobile devices owned by pedestrians.

Data Section

Scope 1: Direct GHG emissions of the company that occur from fuel combustion or industrial processes
Scope 2:	Indirect GHG emissions associated with the use of electricity, heat, or steam supplied by electric powercompanies and other external sources
Scope 3:	A ll indirect GHG emissions resulting from business activities that do not fall into Scope 1 or Scope 2.
Specifically, CO2 emissions from the supply chain.

LRT:	Light Rail Transit, a track-based transportation system that adopts low-floor vehicles as well as improved tracks and tram stops, resulting insuperior features in terms of easiness of getting on and off, punctuality, shorter travel time, and comfort.
MVNO:	Mobile Virtual Network Operator (service operator that provides lines).

I2V:	Infrastructure to Vehicle

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S u st a in a b ili ty Ini ti ati ves

Disclosure in Accordance with TCFD Recommendations

Nippon Signal’s Value Creation

E Environment
Selecting multiple temperature range scenarios to respond to an uncertain future
Projection of changes in global average surface air temperature (difference from 1986–2005 average)

Board of Directors
Approve

6

ReportCompany-wide Environmental Committee
Chair: Executive Officer responsible for TQM
Promoting Department
Instruct2*Matters of particular importanceExecutive Officer Responsible for TQM
Promoting Department
Approval(Environmental Management Representative)

Near term

-2
1950

2000

Long term

Mid term

2050

2100

4°C Scenario
The temperature will rise to 2.7–
5.4 degrees above pre-industrial
levels unless measures stricter
than now are taken against global
warming
1.5°C Scenario
The temperature will remain stable
at 1.5°C above pre-industrial levels if strict measures are taken
Scenario analysis in the TCFD recommendations suggests the selection ofmultiple temperature range scenarios

The difference between scenarios widens after 2030
It is important to draw an appropriate transition path for each selected timeline in the scenario analysis,
with an eye to achieving carbon neutrality by 2050

Risk Management[Process for managing climate-related risks]
The Group sorts out, evaluates, and manages climate-related risks listed below, deliberates their validity at the Company-wide Environmental Committee, and reports them to the Board of Directors.
a) Transition risks (policy and regulations, market, technology, users’ behavioral changes)b) Physical risks (natural disasters, infectious diseases, temperature rises)[Process for evaluating climate-related risk management]
As with other conventional risks, we multiply the probability of occurrence by the scale of damage to judge the severity ofnear-, mid-, and long-term risks in the 1.5°C and 4°C scenarios respectively. We judge the urgency of response in accordance with the severity.

Sustainability Initiatives

Board of Directors

Report40

Monitoring structure

Instruct

60[Climate-related monitoring]
The outcomes of climate-related monitoring are sent from divisions and departments to the Environmental Secretariat ofsites and affiliated companies and reported from the Environmental Secretariat of sites to the TQM Promoting Department.
The TQM Promoting Department reports them to the Executive Officer responsible for TQM Promoting Department, andmatters of particular importance are reported at the Board of Directors meetings. Monitoring instructions are given throughthe route opposite to reporting.

Report

51
11
30
33
26
32

2

Sites

[Company-wide Environmental Committee/Board of Directors]
The Company-wide Environmental Committee met four times in total during FY2022. Information disclosed in relation to
the TCFD and important matters deliberated by the Company-wide Environmental Committee were reported to the Boardof Directors four times in total.
Important matters reported to the Board of Directors were the results of the 6th Stage Environmental Action Plan,changes in countermeasures due to the revision to CO2 emissions, a plan to increase in stages the number of companies participating in the Company-wide Environmental Committee in accordance with the TCFD, changes in the TCFD
strategy (formulation of a more detailed strategy), and response to questions from the CDP (a UK-based NGO).

Instruct4

Historical
SSP1-1.9
SSP1-2.6
SSP2-4.5
SSP3-7.0
SSP5-8.5

Nippon Signal’s Vision and Growth Strategy

Governance
The Group regards the addressing of climate change as a significant sustainability challenge. Our Company-wide Environmental Committee, chaired by the
Executive Officer responsible for TQM Promoting Department and involving
heads of each site, manages the process in accordance with the targets andplans for each fiscal year. The Board of Directors provides supervision basedon the reports on matters and progress.
The Company-wide Environmental Committee and its chair are accountable forclimate-related matters.

[Decision-making process for mitigating, transferring, accepting, or controlling climate-related risks]
Instructions are given to our Group’s sites after decisions are made by the Company-wide Environmental Committee(Board of Directors if the matter is of particular importance).
The sites make specific decisions, led by their Environmental Committee Members. Coordination between sites and reporting on each site’s decisions take place at Environmental Secretariat meetings, to which the TQM Promoting Department serves as the secretariat.
Decisions made by each site are made known to divisions and departments by Environmental Committee Members.

TQM Promoting Department
Instruct

Kuki Site Environmental
Secretariat

Utsunomiya Site
Environmental
Secretariat

 pproval (Environmental Promotion
A
Representative/TCFD Representative)

ReportHead Office/Branch OfficeEnvironmental Secretariat

Instruct
MonitorInstruct
MonitorAffiliated Company(Consolidated)
Environmental
Secretariat

Upstream

Company

Scope3
Instruct
MonitorReportDivisions & Departments

Instruct
MonitorReportDivisions & Departments

ReportDivisions & Departments

ReportDivisions & Departments

Instruct
MonitorNIPPON SIGNAL CO., LTD.

Scope1

Scope2

Fuel combustion

Use of electricity

Scope3

ReportDivisions & Departments

Strategy (Scenarios Adopted)
In considering scenario analyses, we have consulted AR6 SSP1-1.9 and SSP5-8.5 of the Intergovernmental Panel on
Climate Change (IPCC) and set two scenarios, namely, (1) a world in which the average temperature rise in 2100 is below 1.5°C (1.5°C Scenario), and (2) a world in which the average temperature rise in 2100 is 4°C (4°C Scenario).

33

Downstream
Data Section

Ageo Site Environmental
Secretariat

Indicators and Targets (Life Cycle CO2 Emissions)
The Group will work on the reduction of greenhouse gases based on Scopes 1 to 3 set by the SBT Initiative. For Scope 3,
we will measure emissions for each category and make efforts to reduce GHG emissions, particularly those related to theuse and end-of-life treatment of our products, with activities starting in the early design stages.

Rawmaterials

Transportationand delivery

Employeecommuting

Other:
Capital goods, fuel and energy related
activities not included in Scope 1 or 2,
waste, business travel, leased assets

Use of products

End-of-life treatmentof products

Other:
Transportation and delivery,
processing of sold products, leased
assets, franchises, investments

NIPPON SIGNAL REPORT 2023

34

S u st a in a b ili ty Ini ti ati ves

Regional epidemic ofinfectious diseases

Opportunities

Risks

Implications for Nippon Signal

Responses of Nippon Signal

Mid term

 xpand decarbonization policy to Group companies
EShift to products with reduced hardware use
Present Green Procurement Guidelines including
those in line with the Framework Convention on
Climate Change and keep track of complianceLong termSustained high electricity costs

 ontinue to save energy and use renewableC
energy dditional costs arising from having to makeA
environment-related capital investments
ahead of schedule

Make capital investments while saving energyIncreased competition in environmental
performance (products with greater environmental impact will lose competitive power)
Failure to respond appropriately will lead tothe loss of trust in society and business
opportunities
Rise in costs for adapting to circular economy

Reduce environmental impact of our main products in accordance with SBT Scope 3*2
Develop products and services that will help reduce GHG emissions
Support TCFD and conduct scenario analyses, disclose information in accordance with the framework*1 Long-term targets for GHG emissions reduction (SBT Scope 3) will be presented in the 6th Stage Environmental Action Plan
*2 SBT, or Science Based Targets, are the GHG emissions reduction targets required under the Paris Agreement. Scope 3 covers indirect emissions.

4°C Scenario
Risks

Implications for Nippon Signal

Responses of Nippon Signal

35

NIPPON SIGNAL CO., LTD.

Near term
Mid termD ecline in new capital investments due tocustomers being hit by disasters
Decrease in new infrastructure developments due to increased costs for disaster
preparedness

Develop disaster-resistant products (waterproof,etc.)P ropose MaaS and other optimal means oftransit that take advantage of existing infrastructure facilitiesD ecline in operation rates of existing
infrastructure due to changes in areas thatare susceptible to disastersP ropose systems that can be maintained at low
costsD evelop products for use against infectious diseases (temperature check, traceability, etc.)

Expand sales of
products and solutions
that support
customers’
decarbonization efforts

Expand sales of
products and solutions
that support thestrengthening ofcustomers’
infrastructure

Expand sales ofsolutions that will help
counter infectious
diseases (new normal)

Create and expand
new businesses

Implications for Nippon Signal

Responses of Nippon Signal

Rise in orders for energy-saving products dopt energy-saving designs for existingA
products

 ise in orders to replace existing products forR
the purpose of decarbonization
Increased requests for proposals for
decarbonization solutions

 ecarbonization plan consisting of designD
improvement and change of products (including
discontinuing products)
O ffer solutions that will help reduce GHG
emissions ise in orders for products for securing
Rsubstitute power source in case of power
failure and products to prepare for flooding

 enerate solar power and develop productsGwith storage batteries
Develop waterproof products for outdoor use

 ise in orders to replace existing productsR
following customers’ works to strengthen
infrastructureIncreased requests for proposals for solutions
that enable speedy recovery from disasters

 evelop products that can stay functional during aDdisasterD evelop products that contribute to speedy
recovery from disasters

Increase in bookings and payments
made through channels other thancounters and ticket machines

 xpand sales of ticket gates that supportE
mobile bookings and payments

Increased requests for proposals for solutions
that enable capturing of congestion informationand equalizing of the flow of peopleIncreased requests for proposals for solutions
that enable full automation of site works

 evelop and propose solutions to capture the flowDof people and forecast congestion
D evelop and propose remote monitoring andoperation solutions

Increased requests for proposals for disasterdetection solutions

 evelopment plan for technologies to detect
Ddisaster occurrence to infrastructure

Results of Impact Review by Scenario Analysis[Products and services]To reduce greenhouse gases throughout the life cycle, we will drive forward the development of products with reduced
hardware use. This includes concentrating equipment, removing cables (going wireless), and supporting payments thatuse general-purpose devices.
We will drive forward the development of disaster-resistant products in response to increase in disasters due to abnormal weather. Such products include waterproof products and products that come with batteries or power generationequipment to cope with power outages.
[Supply chain/Value chain]
We will diversify suppliers and secure means of transportation to prepare for damage to parts manufacturing plants anddisruption to logistics caused by increased disasters due to abnormal weather. This includes design and development using parts that can be procured from multiple suppliers.
We will drive forward the development of products and systems that help maintain social infrastructure at the time of disasters and contribute to speedy recovery.

Data Section

Increased severity andsharp rise in the frequency of natural
disasters

 ind and flood damage to productionW
bases
Suspension of parts supply due to supply
chain disruption
Restriction on outdoor work due to extreme
heat, rise in air conditioning costsB usiness continuity planning: disaster preparedness at production bases, manufacture of same
product at multiple production bases, diversifying
suppliers, securing means of transportationS ecure in-house power generation and power storage capacityImprove outdoor work environments (roofs, spot air
conditioning, etc.)

Long term

Physical risksD ecline in new capital investments due toweaker dominance of public transportation

Sustainability Initiatives

Rapid change inprocurement andinvestment behaviors
aimed at a decarbonized society ise in business costs (carbon tax, emisRsions trading)Rise in purchasing prices led by thetransfer of costs of materials (iron), etc.
to the prices

Near term

Carbon tax on suppliers, introduction ofemissions trading
systemSubstantial increase in electricity costs

 he 6th Stage Environmental Action Plan:T
systematically secure green electricity toachieve a green energy procurement rate of
60% as the GroupDrive energy saving efforts and use of renewableenergy (introducing energy-efficient equipment
and power generation facilities) towards achieving
GHG emissions reduction targets*1 (6th Stage
Environmental Action Plan)

Mid term/Long term

Near term

Transition risks

Automate production processes, utilize IT for business talksS ecure parts and product inventory

Nippon Signal’s Vision and Growth Strategy

Near term : –FY2023, Mid term : –FY2030, Long term : FY2030–, Underlined : Risks that have large financial impacts, Red : Added items

1.5°C Scenario

 ecline in operation rates of production
Dplants including parts factories
R eduction of production due to disruption inparts supply

Opportunities
Mid term/Long term Mid term/Long term Near term Mid term/Long term Near term Mid term/Long term Near term

According to our analysis, the changes in society to keep the temperature rise below 1.5°C will bring about carbon taxation and other legislation, changes in market needs, and other changes, and will push up demand for the Group’s decarbonization solutions. If the temperature increases by 3-4°C, there will be a rise in physical risks associated with severe
disasters caused by climate change, and it may seriously affect the Group’s supply chain including our own offices andplants. Our analysis also suggests that there will be a rise in demand for disaster-resistant products.
In FY2023, we reviewed the scenario analysis published in FY2022. We classified the timing of impacts and our responses
thereto into near term, mid term, and long term, and made clear which risks would have large financial impacts. Some
items were added in accordance with changes in the environment.

Mid term/Long term Near term

Strategy Based on Scenario Analyses

Nippon Signal’s Value Creation

E Environment[Investment related to R&D]
A 14.0-billion-yen investment in R&D has been planned and being made based on the Group Three-years Medium-termManagement Plan (management plan for FY2022–FY2024).
Specifically, we focus on eco & power solutions that resolve issues in achieving a decarbonized society, as well as CBM,
automatic operation, payment and recognition, and robots. All of these contribute to greenhouse gas reduction by allocating limited human and physical resources efficiently.

NIPPON SIGNAL REPORT 2023

36

S u st a in a b ili ty Ini ti ati ves[Business operation]
We mainly engage in businesses that support infrastructure for railways, which are environmentally friendly means oftransportation.
Manufacturing and use of our products cause little direct greenhouse gas emissions. We use green electricity for manufacturing and strive to adopt energy-saving designs.
Shown below are our main manufacturing sites’ hazard maps for flood and inundation.
Kuki Plant

Utsunomiya Plant

Ageo Factory

Site hazard level[Capital allocation to (capital investment in) climate-related risks and opportunities]
Aiming to operate using 100% green electricity, the Group is shifting to green electricity procurement. By May 2023, thefollowing manufacturing sites have completed the shift to green electricity.
Nippon Signal
Start of green electricity procurement

Additional cost (unit price)

Electricity used from the start ofprocurement to March 2023 (MWh)Kuki Plant

October 2022

0.83 yen/kWh

1,502

Ageo Factory

October 2022

0.83 yen/kWh

365

Utsunomiya Plant

May 2023

0.83 yen/kWh

Start of green electricity procurement

Additional cost (unit price)

Electricity used from the start ofprocurement to March 2023 (MWh)

Nisshin Tokki Co., Ltd.

February 2022

0.7 yen/kWh204

Asahi Electronics Co., Ltd.

January 2023

0.83 yen/kWh

28

Yamagata NisshinElectronics Co., Ltd.

April 2023

1.1 yen/kWh

Nippon Signal’s Vision and Growth Strategy

Hazard map

Nippon Signal’s Value Creation

E Environment

Group companies

Inundation of 1.0–below 2.0 m
Inundation of 2.0–below 3.0 m
Classified as inundation risks of
1.0–below 2.0 m inundation forthe building area (hazard level 3)
and 2.0–below 3.0 m inundation
for the regulating reservoir (hazard level 4).

No inundation risks.

*Source: Hazard Map Portal Site

Kuki Plant: Relationship between the maximum
inundation level and building height
Kuki Plant building

Maximum inundation height (10.7 m)

0.2 m

Foundation
Building ground altitude (10.8 m)

Maximum inundation level (2.0 m)

The building will not beaffected by inundation
because the building groundaltitude is higher than the
maximum inundation height.

Lowest ground altitude (8.7 m)

Ageo Factory: Water stops higher than the maximum inundation level are in place[Transition risks, physical risks, and climate-related opportunities]
Transition risks
Soaring electricity prices have had the largest impact and are likely to have a significant impact in the future as well. If weare unable to sufficiently pass them on to product prices, there is a risk of downward pressure on the profit.
The Group will continue to strive for energy saving, and electricity procurement will be reviewed from time to time in lightof social circumstances and other factors.

If all manufacturing companies of the Group procure 100% green electricity, estimated additional costs will be as follows:
Additional cost(estimated unit price)

Electricity use (MWh)(Actual use in FY2022)

Nippon Signal (3 sites*1)

1 yen/kWh

6,168Group companies thatengage in manufacturing*2

1 yen/kWh

2,313

Total

1 yen/kWh8,482*1 Kuki Plant, Utsunomiya Plant, Ageo Factory*2 Yamagata Nisshin Electronics Co., Ltd., Nisshin Tokki Co., Ltd., Tochigi Nisshin Co., Ltd., Nisshin Industry Co., Ltd., Asahi Electronics Co., Ltd.
*3 Additional cost (unit price) may change depending on social circumstances.
Changes in additional costs due to the introduction of power generation facilities and other factors are not included.

Capital investments related to energy saving
In FY2022, we made the following capital investments related to energy saving.
Reduced workload at product inspection sites (automation)
Changed 324 fluorescent lights to LED lighting[Acquisition/Sale]
No large-scale business acquisitions or sales are scheduled, and no significant impact of acquisitions/sales on direct orindirect environmental data is expected.
[Access to capital]
We do not invest in businesses that directly emit greenhouse gases.

Data Section

Physical risks
Disasters on our manufacturing sites may temporarily cause risks of a significant impact, such as suspension of manufacturing and shipping. Our manufacturing lines, however, can flexibly produce a wide variety of products in small quantities
and are therefore expected to recover at a relatively early stage.
To prepare for the case where our suppliers and logistics networks are affected by a disaster, we promote the use of general-purpose products and diversification of suppliers.

Other manufacturing sites will gradually shift to 100% green electricity as well.

Sustainability Initiatives

Building foundation altitude (11 m)

Inundation below floor level(0.2–below 0.5 m)
Other inundation (0–below 0.2 m)[Flooded roads, etc.]
Classified as inundation risks of
0.2–below 0.5 m inundation for thebuilding area.

Opportunities
We are expanding sales of waterproof products, products with batteries, products with emergency power switching functions, and other products that respond to physical risks. The demand for such products is expected to grow further. For
example, we are expanding sales of waterproof point machines and traffic lights with batteries.
Products that respond to physical risks in a broad sense include cableless systems and remote monitoring systems, thedemand for which is also expected to grow further.

37

NIPPON SIGNAL CO., LTD.

NIPPON SIGNAL REPORT 2023

38

S u st a in a b ili ty Ini ti ati ves

Emissions from main Scope 3 categories and calculation method
We have estimated CO2 emissions from categories that are thought to account for a large portion of total emissions fromthe Group’s corporate activity. The estimates will be reviewed going forward.
(Unit: tons)

FY2022

FY2024 (target)

FY2030 (target)

Reduction measures

Scope1
Scope2

1,000
4,000

683
1,665

600 (-83)
800 (-865)

300 (-383)
0 (-1,665)

Scope3

238,800

188,499

170,530 (-17,969)

120,400 (-68,099)

Use of electric vehicles and fuel-efficient vehicles
Shift to green electricity
Reduction of CO2 emissions at the time of productuse, reduction of raw materials
Resource saving
Green procurement
Green procurement
Improvement of transportation efficiency
Introduction of fuel-efficient and eco-friendly cars
Recycling
Eco-driving, use of public transportation
CBTC, power and resource saving
Resource saving
Improvement of operational efficiency
Approximately 50% reduction from FY2013

Category 1

100,000

83,89478,000 (-5,894)

60,000 (-23,894)

Category 2

3,500

3,036

2,900 (-136)

2,500 (-536)

Category 4

2,000

1,715

1,600 (-115)

1,000 (-715)

Category 5
Category 7
Category 11
Category 12
Other
Total

500
800
80,00030,00022,000243,800

457
647
56,12925,621
17,000190,847430 (-27)
600 (-47)
48,000 (-8,129)
23,000 (-2,621)
16,000 (-1,000)
171,930 (-18,917)

400 (-57)
500 (-147)
24,000 (-32,129)
20,000 (-5,621)
12,000 (-5,000)
120,700 (-70,147)[Calculation methods for Scope 3]

Scope 3

Details

Raw materials

Category 2

Capital goods

Category 3

Fuel and energy related
activities not includedin Scope 1 or 2

Category 4

Upstream transportation and delivery

Category 5

Waste generated inoperations

Category 6

Business travel

Category 7

Employee commuting

Category 8

Upstream leased assets

Downstream transportation and delivery
Processing of soldCategory 10
products
Category 9

Category 11
Category 12
Category 13

End-of-life treatment ofsold products
Downstream leased
assetsFranchises
Investments: Calculated,: Not calculated)

Calculation method and grounds

Calculated by multiplying purchases for each internally set item group by the closest emission
coefficient in IDEA*1 v2Calculated by multiplying the value of actual capital investment by the emission coefficient that isdeemed closest in IDEA v2 (items that can be assessed based only on monetary value are used)
Expected to be small due to increased use of green energy
Estimated by calculating the emissions from Group companies’ transportation based on the fuelconsumption method and including emissions from other companies’ transportation based on
the ratio of transportation costs
Calculated by using the formula in IDEA v2 based on the volume of industrial waste and generalwaste (calculated by using the data for incineration services)
Emissions from business travel by company owned cars are included in Scope 1, and thosefrom business travel by other means are not calculated
Calculated only for car commuting based on the commuting distance and using the emission
coefficient for gasoline (commuting 24 days per month, fuel efficiency of 20 km/ℓ)
Emissions from leased vehicle fuel are included in Scope 1, and those from other leased assets
are not calculated (estimated to be small)
Estimated to be small because most are delivered to locations of use and little delivery is done
by customers
Estimated to be small because most are delivered as finished products and little processing isdone by customers
Calculated by multiplying lifetime electricity consumption, quantified based on each productgroup’s electricity consumption (when in standby mode and in operation), operation rate, andestimated life expectancy, by the emission coefficient (all products are powered by electricity)
Calculated by using the formula in IDEA v2 based on the weight of each product group (calculated by using the data for landfill services)
Not calculated (estimated to be small)No franchise systems in place
No large-scale investments in projects that emit greenhouse gases*1 IDEA is a database for calculating greenhouse gas emissions throughout the life cycle, offered by Sustainable Management Promotion Organization.
*2 Greenhouse gas (GHG) emissions are calculated for CO2 only. We will calculate methane (CH4) emissions when clearer data becomes available on leakage
at the time of fossil fuel mining and other emissions that indirectly affect us. (Our business does not have any direct links to emissions from livestock, etc.)

Waste Management
Waste reduction is included in the 6th Stage Environmental Action Plan, and waste volume is managed with targets in place.
We strive to reduce the volume of final disposal by reducing and reusing packaging materials and pallets, looking for collection
service operators capable of higher-level recycling (material recycling instead of thermal recycling), and taking other measures.
The Group will not only continue to strive for waste reduction in business operations but also take action to reduce our
products that are disposed of as waste. This also leads to the reduction of life-cycle greenhouse gas (GHG) emissions
that fall under SBT’s Scope 3, category 12 (end-of-life treatment of sold products).
39

NIPPON SIGNAL CO., LTD.

Our activity

ExtendedReduction due to fewer disposal opportunities
product life
Smaller andlighter products Reduction due to smaller waste volume per disposal
CablelessWaste reduction by doing away with mechanical parts, using generOther
al-purpose parts (use of existing terminals), and taking other measures

Proposal of appropriate overhaul, and reduction of
replacement frequency through CBM
Activities as evaluation indicators for eco-label
products
CBTC
Contactless IC card only automatic passenger
gates, card only fare adjustment machines, etc.

Trends in Life Cycle CO2 Emissions
Trends in Scope 1, 2 emissions (t)
(t)

5,000
4,000

4,015

3,947

3,739

3,700

3,851

4,051

3,917

3,714

3,546

3,000

2,656

1,000
0

FY2013

FY2014FY2015FY2016FY2017FY2018FY2019FY2020

FY2021

FY2022

Green Energy Procurement
The Group is gradually shifting to the use of green energy. In addition to using 100% green electricity, we will improve theefficiency of, as well as shift to electricity from, other types of energy and take other measures, thereby reining in greenhouse gas emissions.
Nippon Signal Kuki Plant
Ageo Factory

Timing of green electricity introduction

CO2 emissions reduced in FY2022*1 (t)Expected CO2 emissions reduction/year (t)October 2022

736

1,475

October 2022

179

370

May 202301,178

Nisshin Tokki Co., Ltd.

Utsunomiya Plant

February 2022

88

88

Asahi Electronics Co., Ltd.

January 2023

14

55

April 2023

0295

Yamagata Nisshin Electronics Co., Ltd.

*Calculated by multiplying the amount of electricity used after the introduction of green electricity by the emission coefficient for the plan before the introduction

Introduction of Environmental Management System (Software)
We have introduced Environmental Management System (software) to centrally manage the Group’s environmental information and outcomes of environmental activities. After the trial, the software will be introduced on a full-scale basis in July 2023.
The Environmental Management System (software) will manage the following matters.
CO2 Emissions (Scopes 1 to 3)
Energy use (electricity, gas, petroleum)
Water use (water intake, wastewater)
Waste volume
InputsInformation from other internal systems
Purchase of parts, shipping of products
Technical information (product electricity consumption, etc.)
Information on commuting, businesstravel, etc.
Logistics information
Waste management information, etc.

Environmental
Management System(software)

Data Section

Category 14
Category 15

Use of sold products

Expected effectSustainability Initiatives

Category 1

Waste reduction
initiative

2,000

The Group calculates its CO2 emissions using the methods shown below. (Whetheremissions arecalculated

Initiatives to reduce our products disposed of as waste

Nippon Signal’s Vision and Growth Strategy

FY2013(estimated)

Nippon Signal’s Value Creation

E Environment

Outputs
TCFD reports/IR
Act on Rational Useof Energy
Environmental
Committee materials

NIPPON SIGNAL REPORT 2023

40

S u st a in a b ili ty Ini ti ati ves

FY2023 Quality, Environment & Safety Policies
Quality, Environment & Safety Policies
Basic Policy
We strive to become a global company by pursuing world-leading technologies with ingenuity and passion to inspire ourcustomers’ Kando.

Environmental Management
Our environmental efforts represent the essence of our business activities.
Environmental Philosophy
Nippon Signal promotes initiatives to protect and improve the environment in an effort to create a better world for everyone and build a more comfortable society through safe and reliable technology.
Environmental Policy
We provide eco-friendly products and services, and also reduce the environmental impact throughout the product life cycle, from product development to final disposal, to achieve a synergy between business activities and environmental
protection efforts.

In order to promote the fusion of environmental conservation activities and environmental management, the Group has
been operating an Environmental Management System based on ISO 14001, through the Company-wide Environmental
Committee, comprised of representatives from five production facilities and chaired by the Executive Officer responsible
for TQM Promoting Department.
In the fiscal year ended March 31, 2023, three consolidated Group companies that engage in production joined the Company-wide Environmental Committee to accelerate decarbonization. In order to achieve the provision of eco-friendly
products and services, we aim to reduce environmental impact from the developmental stage onward, make continual improvements based on the PDCA cycle, and be a sustainable growth company.

Environmental Risk Management
After identifying environmental risks posed by the business operations at specific sites, emergency response training is
conducted regularly to help us avoid and mitigate risks.
41

NIPPON SIGNAL CO., LTD.

We engage in business activities based on our Group Philosophy: “We help realize a more secure and comfortable society
through superior technologies that provide safety and reliability.” We determine priority matters and quality targets for eachfiscal year, in accordance with our quality policy. We operate a quality management system based on ISO 9001, throughour Company-wide QA Committee, chaired by the Executive Officer responsible for TQM Promoting Department. Each division and department engages in quality enhancement by establishing a quality management plan based on the priority
matters and making efforts for continual improvement based on the PDCA cycle.

RQMS Management
RQMS (Railway Quality Management System; ISO/TS22163:2017) is a quality management system standard for the rail
industry. It includes the requirements appropriate for the railway market, in addition to the requirements of ISO 9001:2015.
Nippon Signal attained certification in the fiscal year ended March 31, 2020.
We passed the review in the fiscal year ended March 31, 2023 and the certification remains valid.

Green Procurement Guidelines
Based on its environmental policy of providing eco-friendly products and services, Nippon Signal enacted the Green Procurement Guidelines in 2005. When purchasing commercially available electric and electronic components or items withdesignated specifications from manufacturers or suppliers, we select and preferentially procure raw materials and components that are friendly toward the environment while also taking into account quality, price, and delivery date. The Green
Procurement Guidelines are updated regularly to comply with the latest versions of the Act on the Assessment of Releases of Specified Chemical Substances in the Environment and the Promotion of Management Improvement, the EU’s RoHS
Directive, the REACH regulation, and other rules.
In addition, we encourage suppliers to acquire certification for Environmental Management Systems, conduct green procurement, and manage and eliminate the use of regulated chemical substances from the perspective of supply chain
management.

Environment & Quality Education and Awareness Raising
Nippon Signal conducts regular training for internal environmental and quality auditors to ensure appropriate environmental activities and improve quality management.
Environmental and Climate Change Education
With the understanding that all employees should proactively address environmental issues (especially climate change),
we will implement level- and division/department-specific education programs. In the fiscal year ended March 31, 2023,
three education program sessions took place.
Topic

PurposeIntended target

July 19,2022

From a recycling-oriented
society to a circular
economyLearn how designs should be eco-friendly amid
calls for the TCFD and other disclosures

Design and manufacturing
divisions and departments

December
9, 2022

Environmental management education

Take advantage of the TCFD and other environmental trends, as well as environmental management
based on such trends, in conducting business

Sales and administration
divisions and departments

February
14, 2023

Green transformation
education

Introduce the still unfamiliar concept of green transformation (GX) with specific examples, deepen
understanding, and take advantage of the idea in
conducting business

Managerial employees,
employees who lead theactual work on the frontline

NIPPON SIGNAL REPORT 2023

Data Section

Environmental Audit
We regularly implement internal and external audits to verify compliance with, and the effectiveness of, the Environmental
Management Systems.
Internal audit: 	Regularly implemented audits based on audit guidelines
External audit:	Annual audits by ISO certification institutions; no cases of nonconformance were found in the audit conducted in the fiscal year ended March 31, 2023.

Quality Management

Sustainability Initiatives

 e consider the impact of our business activities on the environment, promoting efforts to conserve resources and enW
ergy, reduce waste, and recycle materials while curbing environmental pollution and improving our sustainable
environmental management system.
We comply with laws, regulations, ordinances, and other agreements related to the environment. We also adhere to
our own corporate control standards.
We strive to incorporate environmentally conscious technology from the design stage of new product development.
We establish specific goals and targets for protecting the environment within achievable technical and financial limits torealize the aims of this environmental policy, and conduct periodic reviews to ensure continued improvement.
We have created a document version of this environmental policy to ensure all employees are thoroughly aware of thepolicy for its implementation and maintenance and to share the policy with the public.

Environmental Compliance
Information on environmental laws and ordinances is managed and shared, and periodic checks are implemented to confirm compliance.
In the fiscal year ended March 31, 2023, there were no legal violations or accidents related to the environment.

Nippon Signal’s Vision and Growth Strategy

PolicyTo achieve the basic framework for FY2023, “Next Stage acceleration of real-world implementation,” the Group will provide safe and high-quality products and services through process optimization. We will also participate in the TCFD,
accelerate decarbonization, and aim to win reliability from people around the world.

Nippon Signal’s Value Creation

E Environment42

S u st a in a b ili ty Ini ti ati ves

Eco Test and QC Exam
We encourage our employees to take the Certification Test for Environment Specialists (Eco Test)*1 and acquire rank 3 orhigher certification in the Quality Control Examination (QC Exam)*2 with the aim of raising their awareness of, and helping
them acquire knowledge on, the environment and quality. Employees who have passed the Eco Test or acquired rank 3 orhigher certification in the QC Exam both exceed 70%.
*1 E
 co Test: A test scheme organized by the Tokyo Chamber of Commerce and Industry through which people aim to acquire knowledge on environmental issues*2 QC Exam: An examination scheme organized by the Japanese Standards Association through which knowledge on quality management is evaluatedSocial Contribution to the Environment

Cleaning a nearby park, planting flowers (Nisshin Tokki Co., Ltd., Kishiwada City)
Global environment protection activity

Reduction of the Environmental Impact from Our Products
Eco-Label Products
We rank products by our level of eco-friendliness. Products that meet our internal criteria have been approved as eco-label
products. Multiple eco-label products are approved every year, and the system has produced certain results, such as ripple effects of ideas on other products. While keeping the eco-label system, we have launched new initiatives to achieve a 50% reduction of greenhouse gases (SBT Scopes 1 to 3) throughout the product life cycle by 2030 and carbon neutrality by 2050.
We will calculate life cycle CO2 emissions for each product group and prioritize high-emission products in taking measures. Our activities will take the following directions, in addition to making products smaller and lighter and saving energy,
which we have been pursuing in developing eco-label products.
Details

Contribution to the reduction of greenhouse gas emissions

1

Hardwareless/Generalpurpose products

Reduce Categories 1 and 12 emissions, which account for a substantial proportion of SBT
Scope 3 emissions, to zero; and achieve a significant reduction of Category 11 emissions

2

Circular economy

Achieve reduction by converting SBT Scope 3 Category 12 emissions to Category 5 emissions,which we can control, and by replacing former products that have high environmental impacts

3Power generation andpower storage

Nippon Signal’s Vision and Growth Strategy

Global Environment Protection Activities
Each office (head office, branch offices, plants, affiliatedcompanies, etc.) of the Group carries out unique global
environment protection activities.

Nippon Signal’s Value Creation

E Environment

Contribute to a decarbonized society although not reducing SBT Scope 3 emissions

Site

Voluntary cleaning of areas around sites

Head office, branch offices, Kuki Plant,
Utsunomiya Plant, Ageo Factory, etc.

Biotope nature protection activities

Ageo Factory

Food drive*, where employees collect food items and donate them to children’s cafeteria and other organizations

Osaka Branch Office

Maintenance of roadside flower beds, participation in flower planting

Kyushu Branch Office, Nisshin Tokki Co., Ltd.

Energy Creation BusinessFukuoka Nisshin Electronics Co., Ltd., our Group company, engages in the FIT* power generation business to contributeto a decarbonized society through green electricity. Its engages in the “rental roof” power generation business by renting
building roofs, installing solar panels on the roofs using its own funds, and generating power.
*FIT: Feed-in Tariff system, where support is provided through guaranteed energy purchase prices set by law
Installed location

Power generated

Dazaifu Schools for Special Needs Education

97kW

Okawa Shofu High School, Fukuoka Prefecture

63kW

Fukuoka City Transportation Bureau (Kaizuka
Station and Meinohama Joint Office)128kW

Sustainability Initiatives*Food drive: An activity where the organizer collects unused leftover food items and donates them to food bank organizations, local welfare facilities andorganizations, etc.

Environmental Performance
Since the fiscal year ended March 31, 2006, the Group has continued to formulate environmental action plans, based on
which it has pursued reductions in environmental impacts. We have reviewed the 5th Stage Environmental Action Plan
(FY2019–FY2021) and are now promoting the 6th Stage Environmental Action Plan.
Environmental targets

1

3
4
43

Reduction in andSorting ofIndustrial Waste
Generated
Socialcontribution
related to theenvironment
Products

NIPPON SIGNAL CO., LTD.

FY2022 targets

FY2022 resultsE nergy use reduction rate

1% or more reduction fromthe previous fiscal year

5.3%

G
 reen energy procurement rate

20% or higher/year as the
Group

38.5%

C
 ontribution to the environment
by improving business operations

100% achievement rate

Achieved at six sitesR eduction in industrial waste
generated

0.5% or more reduction inemission units from theprevious fiscal year

18.7%

S
 orting of industrial waste

100% achievement rate

Achieved at five sitesP romotion of regional
environmental activities

Four times or more a year ateach site

Achieved at all sites(148 times in total)E nvironmental/SDGs education

Four times a year

Conducted four times

 O2 emissions from (Nippon
C
Signal) products and systems

Discussion on calculation
formulaCalculated emissions
for major categories
in SBT Scope 3

Data Section

2

Decarbonization

Environmental indicators*In addition to the above, systems that generate 1,141 kW in total have been installed at elementary and junior high school buildings, gyms, and other locations in Fukuoka Prefecture and Saga Prefecture.

NIPPON SIGNAL REPORT 2023

44

S u st a in a b ili ty Ini ti ati ves

Human Resource Investments

Basic Policy

Percentage of Female Workers in Managerial Positions, Percentage of Male Workers Taking Childcare
Leave, and Differences in Wages between Male and Female Workers

The source of the Group’s value creation lies in human resources. Our Values in the Group Philosophy include Hito-zukuri(education), and we are committed to develop human resources who take on challenges for their own growth.
Our priorities for the fiscal year ended March 31, 2023 were “diverse workstyles for a next-generation HR system reform,”“development of personnel for digital transformation (DX) through reskilling and development of young and mid-level employees to nurture next-generation leaders,” and “health management that invigorates the organization by promoting employee health and aims to improve corporate value by increasing productivity.”

Nippon Signal
Fiscal year under review
Percentage of male workers
taking childcare leave (%)
( 2)
*

3.7

80

Initiatives to Adopt Diverse Workstyles for a Next-Generation HR System Reform

Differences in wages between male and female workers (%)(*3)
All workers

Regular workers

Part-time and fixed-term
workers

71.2

75.8

73.7

*1 The percentage has been calculated based on the provisions of the Act on the Promotion of Women’s Active Engagement in Professional Life(Act No. 64 of 2015). Women account for 15.0% of all workers. Secondees to other companies are excluded, while secondees from othercompanies are included.
*2 The percentage of workers taking childcare leave, etc. or leave for the purpose of childcare under Article 71-4, Item 2 of the Ordinance for
Enforcement of the Act on Childcare Leave, Caregiver Leave, and Other Measures for the Welfare of Workers Caring for Children or Other
Family Members (Ordinance of the Ministry of Labor No. 25 of 1991) has been calculated based on the provisions of the Act on Childcare
Leave, Caregiver Leave, and Other Measures for the Welfare of Workers Caring for Children or Other Family Members (Act No. 76 of 1991).
Secondees to other companies are included, while secondees from other companies are excluded.
*3 The percentage has been calculated based on the provisions of the Act on the Promotion of Women’s Active Engagement in Professional Life(Act No. 64 of 2015). Equal wages are paid for equal work regardless of gender, and the pay gap derives from differences in male-to-female ratio
for the number of workers in each rank. Secondees to other companies are excluded, while secondees from other companies are included.

Consolidated Subsidiaries
Fiscal year under review
Name

2.8

71

Differences in wages between male and female workers (%)(*3)
All workers

Regular workers

Part-time andfixed-term workers

50.8

68.8

53.7

*1 The percentage has been calculated based on the provisions of the Act on the Promotion of Women’s Active Engagement in Professional Life(Act No. 64 of 2015). Women account for 6.9% of all workers. Secondees to other companies are excluded, while secondees from othercompanies are included.
*2 The percentage of workers taking childcare leave, etc. or leave for the purpose of childcare under Article 71-4, Item 2 of the Ordinance for
Enforcement of the Act on Childcare Leave, Caregiver Leave, and Other Measures for the Welfare of Workers Caring for Children or Other
Family Members (Ordinance of the Ministry of Labor No. 25 of 1991) has been calculated based on the provisions of the Act on Childcare
Leave, Caregiver Leave, and Other Measures for the Welfare of Workers Caring for Children or Other Family Members (Act No. 76 of 1991).
Secondees to other companies are included, while secondees from other companies are excluded.
*3 The percentage has been calculated based on the provisions of the Act on the Promotion of Women’s Active Engagement in Professional Life(Act No. 64 of 2015). Equal wages are paid for equal work regardless of gender, and the pay gap derives from differences in male-to-female ratio
for the number of workers in each rank. Secondees to other companies are excluded, while secondees from other companies are included.

Initiatives to Promote Workstyles Unbound by Time or Location
We have introduced flexible working hours, staggered working hours, and remote working to allow employees to flexibly
choose when and where to work in accordance with changes in the social environment and their life events. To promote suchdiverse workstyles and achieve organizational growth at the same time, we consider it important to maintain and improve individual and organizational productivity. To this end, we promote digitalization of business operations, web meetings, and otherinitiatives and work to establish a new workplace environment. In addition, we constantly monitor and control our systems,
provide education and training, and conduct accident drills as cybersecurity measures associated with digitalization.

Sustainability Initiatives

Nisshin Electronics
Service Co., Ltd.

Percentage of female workers Percentage of male workers
in managerial positions (%)
taking childcare leave (%)
( 1)
( 2)
*
*

Diversity & Inclusion Initiatives
We are taking action to promote women’s active engagement by setting KPIs in the general employer action plan for the percentage of women in managerial positions, number of women in engineer positions, and percentage of employees who usedthe childcare leave system. While engineers, many of whom have engineering backgrounds, account for a substantial proportion of our employees and the percentage of female employees is relatively small, we are working to improve their retention rate and support career advancement by creating an environment that facilitates women’s active engagement.
To promote active engagement of non-Japanese human resources, we actively recruit from Japanese universities thatdrive globalization and overseas universities where a relatively high proportion of graduates join Japanese companies.
Aiming to run an organization where diverse human resources play an active role, we offer training programs for managerial employees that focus on diversity management and harassment prevention.
To increase the diversity of our workforce, we recruit without setting quotas for arts and sciences backgrounds, and assign employees with arts backgrounds to engineering divisions and departments. Going forward, we will consider recruiting talented human resources through alumni contacts, introducing a system to rehire former employees, and introducing
a training program for Japanese employees to facilitate understanding of different cultures.

Nippon Signal’s Vision and Growth Strategy

Percentage of female workers
in managerial positions (%)( 1)*

Nippon Signal’s Value Creation

S Society

Data Section

Childcare Support Initiatives
By promoting flexible workstyles, we support balancing work and childcare and facilitate male employees’ participation inchildcare. Relevant systems were revised in July 2022 as described below.
• 
Expanded the scope of employees eligible to apply for restriction on overtime and holiday work and take leave totake care of the sick/injured• Expanded the scope of employees eligible for flexible working hours for childcare and flexible working hours before
childbirth• Removed core hours for employees who work by flexible working hours before childbirth or due to childcare, nursing care, or doctor’s visits
To support employees who try to balance work and childcare,we created “Guidebook to Support Balancing Work and Childcare” with input from parents in the company. The guidebook is
distributed to employees who became new parents. The contents include the flow from going through pregnancy to taking
childcare leave and returning to work, tips for sharing housework and choosing a day-care center, and recommendations
for books on childcare.
Initiatives for Human Resources Development and Reskilling to Increase Corporate Value
Initiatives to Establish Corporate Culture
Working in line with its philosophy of safety and reliability, the Group seeks to remain a corporate group upon whichsociety relies. To achieve this aim, the Group must build relationships of trust with stakeholders, backed by the proper behavior of each staff member. The Group added Our Code of Conduct to Nippon Signal Group Philosophy toprovide a foundation for these relationships of trust. Our Code of Conduct serves as a standard of behavior to befollowed by all officers and employees of the Group. The Group encourages all employees to respect laws, ordinances, and other rules. The Group is also working to build an organization with the capacity to quickly discover problems on its own and address them. As part of our initiatives, we regularly hold education programs for all employees,

45

NIPPON SIGNAL CO., LTD.

NIPPON SIGNAL REPORT 2023

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S u st a in a b ili ty Ini ti ati ves

featuring case studies that offer lessons. This equips participants with basic knowledge on safety and reliability necessary as Nippon Signal employees, as well as gives them opportunities to think proactively about the impact of our
products on society and bring back the findings to their work.
We set division- and department-specific targets based on company policies and share the targets at division anddepartment meetings held every six months, so that all employees can drive forward management strategies. To
achieve the division- and department-specific targets, each employee decides what they should do more of, basedon individual targets and competencies expected from each job function. In collaboration with managerial employees, they strive to materialize what they have decided. In addition, we give awards to employees with outstandingachievements and employees who have set examples for others. We also offer overseas training opportunities tohigh achievers in internal contests.

Initiatives to Educate Young Employees
To train young employees, we evolved the conventional OJT system into our original “Tetsuatsu Program” in 2019.
The Tetsuatsu Program was named after the proverb, “Strike while the iron is hot (Tetsu ha atsui uchini ute).” It is an education program for new employees, where they gain a variety of experiences by taking advantage of their ability to thinkflexibly and learn quickly. In organizations that welcome new employees, managers become leaders, and assistant managers and buddies (senior colleagues) play their roles in supporting the growth of new employees. The team thus join
forces for the task. Through this program, we aim to involve all the people around new employees in human resources
development and let themselves grow by being close to new employees.
Based on the idea described above, we roll out the Tetsuatsu Program with the following three objectives.

2.

3.

Accelerate the growth curve of new
employees by letting them gain avariety of experiences with the guidance and support from their team.

Create a culture where the entire
team supports and develops new
employees.

Improve the engagement of theteam, including new employees.

Promotion of Health Management
In April 2022, we formulated the Nippon Signal Group Health Declaration. We engaged in various activities in the fiscal year ended March 31,
2 0 2 3, the first year under the Declaration. Specific initiatives included
increases in the health checkup consultation and health guidance participation rates, as well as sports events and an exercising campaign incollaboration with the Health Insurance Society to encourage employees to exercise regularly. In March 2023, we were recognized as one of
the 2023 Certified Health & Productivity Management Outstanding Organizations (large enterprise category).

Nippon Signal Group Health Declaration
Nippon Signal Group’s philosophy is to help realize a more secure and comfortable society throughsuperior technologies that provide safety and reliability. Employees and their families, who support
the Group’s activities, are irreplaceable assets, and it is most important that they are healthy andempowered. The Company, employees, and the Health Insurance Society will join forces and takeactive measures to create an environment where each and every employee and their families are
physically and mentally healthy at work and live happy lives. Nippon Signal Group will press ahead
with the creation of an environment where employees can actively maintain and enhance theirhealth, and keep moving forward as a company that achieves sustainable growth.
Date of formulation: April 1, 2022
Hidehiko Tsukamoto,President and Chief Executive Officer,
Nippon Signal Co., Ltd.

In the fiscal year ending March 31, 2024, we look to evolve the program to include not only vertical interactions centeredaround managers but also horizontal perspectives, thereby increasing development and engagement opportunities acrossranks and departments.
Leadership Development
In the fiscal year ended March 31, 2023, we held meetings where the President himself communicated the top management’s vision to employees mainly in their third to fifth year at the Company. This created an opportunity for young
employees to increase motivation toward work, broaden their horizons, and seek to improve their skills. To develop
next-generation leaders, we also offered a training program for managerial employee candidates selected from eachdepartment. The program covered such themes as broad views and perspectives, clarification of one’s vision, and value-adding planning and proposal within the organization or to customers, business partners, and other stakeholders.

47

NIPPON SIGNAL CO., LTD.

Described below are our key initiatives.
(1) Physical healthW e will follow up after health checkups, increasing the specific health guidance participation rate and enhancing
health guidance offered by healthcare workers.
T o encourage employees to exercise regularly, we will continue to hold sports events and roll out exercising campaigns.
(2) Mental health	We will conduct stress checks, mental health seminars, etc. Measures will be taken for early detection and prevention of mental health issues, including follow-up on employees assessed as highly stressed.
(3) Future healthW e will strengthen measures against smoking.
	We will hold seminars to increase health literacy.
	We will promote the use of our Healthcare Leave system

Data Section

Reskilling and Relearning Initiatives
To facilitate employees’ self-development, we subsidize fees for correspondence courses and provide allowances to
employees who have obtained official qualifications recommended by the Company. In April 2023, we expanded thescope of employees eligible for monthly allowances and increased the amount of such allowances, thereby raising pay
for employees who actively engage in self-development. Details of specialized education needed for work are plannedin each division and department. Managerial employees learn the status of their subordinates’ self-development
through development interviews and give advice as necessary.
As learning opportunities outside the Company, we have the My Vision Leave System for employees who have reached
55 years of age and worked for the Company for 10 years or longer, allowing them to think about their future and takethe opportunity for self-improvement. We also have a system to send our employees to study at International Universityof Japan.

Sustainability Initiatives

1.

Health Management and Organizational Invigoration Initiatives

Nippon Signal’s Vision and Growth Strategy

Initiatives to Enhance Digital Literacy of All Employees
We have set “Strengthening of development capabilities and establishment of design and production frameworks adapted
to DX” as a priority in our medium-term management plan and have provided DX literacy education to all employees.
When recruiting, we put our efforts into securing human resources who have backgrounds mainly in software, as well as
AI, images, communications, and other fields that can contribute to DX.

Nippon Signal’s Value Creation

S Society

Initiatives to Increase Employee Engagement
Since 2021, we have conducted an employee awareness survey every year to improve employee engagement. The survey results are fed back to the management team and heads of divisions and departments, as well as used to identify
issues to be resolved. We thus take advantage of the survey to set the agenda for the creation of a rewarding workplace.
The agenda for the fiscal year ended March 3 1, 2 0 2 3 was strengthening communication across divisions and departments. We worked to increase employee engagement by supporting voluntary establishment of internal employee
networks and taking other measures.

NIPPON SIGNAL REPORT 2023

48

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Major Initiatives

Indicators and Targets (Non-Consolidated)
We have set the following KPIs to overcome personnel challenges to materialize our management strategy.
KPI

Percentage of employees taking
childcare leave

Nippon Signal’s Value Creation

S SocietyFY202156%

Male

FY202280%

Male

Target

Male


50%
or higher

Target FY

FY2025

Female 100%

Female 90%
or higher

Percentage of women in
managerial positions

3.6%

3.7%

5%

Number of women in engineer
positions

53

17% increase

20% increase

from FY2019(48)

from FY2019(50)

FY2025

Number of non-Japaneseemployees hired

1

1

2

Every year

Training investment per
employee

65,821 yen

64,228 yen

90,000 yen

FY2022

Percentage of employees
engaging in self-development(obtaining new official qualifications
or taking correspondence courses)

46.6%

43.5%

50%

FY2022DX literacy education
implementation rate

Not implemented

93.8%

100%

FY2022

FY2025

Nippon Signal employees KASAHARA Masaaki and INOUE Yasushi received the Sainokuni Excellent Craftsman (Saitama no
meiko) Award and SUZUKI Kohei and NAITO Kinya received the
Sainokuni Young Meister Award. They engaged in the production and quality assurance of railway signal safety devices, aswell as gave guidance to and developed younger engineers.
With the quality as the top priority, they also ensured workplacesafety, improved efficiency, shortened manufacturing times, andengaged in product inspections, repairs, renovations, and fieldtests. Their commitment to the above and other tasks with outstanding skills won recognition.

Nippon Signal’s Vision and Growth Strategy

Female 100%

 ippon Signal Employees Receive the Sainokuni
N
Excellent Craftsman (Saitama no meiko) Award andthe Sainokuni Young Meister Award Nippon Signal Employee Receives the Award forA
Contributors to Standardization Activities

Sustainability Initiatives

Nippon Signal employee MORISADA Akira received the Award forContributors to Standardization Activities from the Railway Technology
Standardization Investigation Committee (Secretariat: Ministry of Land,
Infrastructure, Transport and Tourism; Railway Technical Research Institute). He served as an international expert in many standard
deliberations at IEC/TC9* working groups and other meetings over theyears. His contribution to the deliberation and formulation of international standards for railway signal systems was recognized. He
participated in the Japanese working group for IEC/TC9 as a member
for over 20 years and contributed to the international standardizationof Japan’s railway technology, which also won recognition.
*IEC/TC9: An IEC (International Electrotechnical Commission: an international organization that works on standardization in the field of electric and electronic technology) technical committee that creates railway-related international standards

Japan Association of Corporate Executives Internship Program
We took part in the Japan Association of Corporate Executives Internship Program for the sixth time in 2022. The twoweek program from August 29 to September 9 took place in a hybrid format with online and in-person components forthe first time in three years.
The 2022 program offered the participating students an opportunity to learn about the basics of railway technology andconstancy (unwavering safety based on fail-safe technologies), from the perspective of manufacturing that supports transportation infrastructure. The participants interacted with our employees and deepened their understanding on our products during the on-site component of the program.

Data Section

49

NIPPON SIGNAL CO., LTD.

NIPPON SIGNAL REPORT 2023

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NS Skills Contest
As part of our activities aimed at enhancing our technological capabilities in manufacturing, and nurturing engineers andsupervisors who will be role models for others, we hold NS Skills Contests.
We use our own printed circuit boards and other parts for the competition, which also provides a development opportunity for staff in charge of planning and designing the tasks. To enhance manufacturing skills as the Group as a whole, wehave held the annual contest since 2013, setting new tasks every year.

Nippon Signal’s Value Creation

S Society

CSR (Social Contribution) Activities
As a company involved in the transportation infrastructure business, which is closely linked to the lives ofthe public, Nippon Signal Group is highly aware of the importance of coexisting with society and is thus
inspired to conduct social contribution activities on a Groupwide basis.
Basic Policy on CSR Activities

Nippon Signal’s Vision and Growth Strategy

We hope to realize a more secure and comfortable society for people around the world, and “Our Mission” in Nippon Signal Group Philosophy sets out the idea. Offering valuable products and services to society through superior technologies
that provide safety and reliability and solving societal issues will create business opportunities, which will, in turn, increase
corporate value.
Taking advantage of the characteristics of our transportation infrastructure business, we will strive to contribute to society
consistently while appreciating our ties with stakeholders to help realize safe and comfortable lives for people in Japanand around the world. The maximum amount of expenditure for such activities is approximately 1% of our ordinary income and will be reviewed in accordance with the expansion of the business.

Major Initiatives
Matching Gift

National Skills Competition

Sustainability Initiatives

By participating in the National Skills Competition, we intend to create
an organized and continuing educational base for “NS Meisters,” personnel able to compete on a global stage and take charge of manufacturing for the future.
We participated in the electrical equipment assembly trade category.
This category requires acquisition of broad knowledge and techniquesin areas including electronic circuit design, circuit board design, program design, repair and measurement, etc. along with advanced soldering skills. We have been participating in the national competition
each year since our first participation in 2016. The competition in eachcategory requires not only a wide range of knowledge and skills but
also mental strength, as well as the ability to make judgements and decisions. Through the National Skills Competition, we aim to develop human resources who can proactively think, act, and grow.

We have collected anniversary donations on the date of the anniversary of
our founding (February 16) since the fiscal year ended March 31, 1994, under a matching gift* scheme. In the fiscal year ending March 31, 2024, we
made a donation to the Turkish Embassy in Tokyo to support reconstruction after the February 2023 Turkey-Syria earthquake. We also make annual
donations to the Japanese Foundation for Cancer Research.
*Matching gift is a system where the Company adds a certain contribution to the amount of donations made by employees and donates the sum.

 o-sponsoring Bolero: Plaza of Children’s Dream and Our
CFirst Booth Exhibition
Bolero: Plaza of Children’s Dream is a music event organized by Michie
Koyama, a pianist from Sendai. The purpose of the event is to let children
who experienced the Great East Japan Earthquake have dreams and hope.
In the fiscal year ended March 3 1, 2 0 2 3, we not only co-sponsored theevent but also exhibited at a booth for the first time to further contribute tohito-zukuri (education) and machi-zukuri (CSR) for the future.

Data Section

Tree Growing Event at the Forest of Nippon Signal
In April 2023, we held a tree growing event at the Forest of Nippon Signal(established in Yaita City, Tochigi Prefecture in 2019). Approximately 200
employees, including Group company employees, and their families
participated in the event. On the day of the event, participants took walks
in nature and experienced forestry as well as craft making with scrap wood,in addition to engaging in tree growing activities. They spent a healthy andfruitful day enjoying nature and communication with other participants while
increasing awareness toward global warming.

51

NIPPON SIGNAL CO., LTD.

NIPPON SIGNAL REPORT 2023

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Corporate GovernanceNippon Signal Group (the Group) has been working to improve the transparency of its decision-making process
and construct a corporate governance system that properly incorporates supervisory and check functions.
Basic Policy on Corporate Governance

The Group’s basic policy in corporate governance is to conduct management that gives priority to all stakeholders andemphasizes making contributions to society.
To genuinely implement this basic policy, the Group will makeongoing management structural reforms that aim to strengthen corporate governance. The Group will also enhance themanagement structure so that it can respond flexibly andswiftly to changes in the environment surrounding management.

Nippon Signal (the Company) has transitioned to a Company
with an Audit and Supervisory Committee, of which the majority of members are Outside Directors, to strengthen the monitoring functionality of the Board of Directors. The Company
aims to enhance its corporate value by ensuring highly transparent management and further enhanced corporate governance by appointing Directors who are Audit and Supervisory
Committee Members with voting rights.
The Company currently has a total of eleven Directors, five, orabout half, of whom are Outside Directors that have also been
designated as Independent Officers as defined by Tokyo
Stock Exchange, Inc. Of the four Audit and Supervisory Committee Members, three, or a majority, are Outside Directors, as
required by laws and regulations.

Corporate Governance System at a Glance (As of June 23, 2023)
Company with an Audit andSupervisory Committee

Organizational format

Number of Directors (including Outside Directors)
11

Number of Audit and Supervisory Committee Members(including Outside Directors)
4

The Company has instituted an Executive Officer System toaccelerate and improve the efficiency of managerial decision-making and to enable the flexible execution of businessas well as the Group Business Planning Committee to enhance governance in the Group management.

3 Outside Directors

Term of Directors (excluding Directors who are
Audit and Supervisory Committee Members)

1 yearTerm of Directors who are Audit andSupervisory Committee Members

2 years

Has Executive Officer System

Accounting Auditor

53

NIPPON SIGNAL CO., LTD.

Nomination and Remuneration
Advisory Committee
Grant Thornton Taiyo LLC

These procedures are set out in the standards for reference
formulated by the Board of Directors. The Board of Directors
deliberates on matters requiring a resolution under laws, regulations or the Articles of Incorporation, and important mattersrelated to business operation, including the formulation ofshort- and medium-term management plans. It also decides
on matters stipulated under the Board of Directors regulations
and the standards for reference. In addition, the Group
Business Planning Committee carries out deliberation andreporting related to the execution of duties under short- andmedium-term management plans of the Group companies.
Executive Officers make up the Committee of Directors, a venue for discussions and reports on the execution of duties basedon short- and medium-term management plans. Executive Officers are also delegated authority for business execution.

Name

StatusCorporate
management

Finance andaccounting

Risk management/
Legal affairs

Globalexperience

Technology/R&D Manufacturing Sales/Marketing

TSUKAMOTO Hidehiko Representative Director
Director
FUJIWARA Takeshi
Director
KUBO Masahiro
Director
SAKAI Masayoshi
Director
HIRANO Kazuhiro
Director (Independent Outside)
INOUE Yuriko
MURATA Yoshiyuki Director (Independent Outside)and Supervisory
TOKUBUCHI Yoshitaka Audit
Committee Member
and Supervisory Committee
TOKUNAGA Takashi Audit
Member (Independent Outside)and Supervisory Committee
TAMAGAWA Masayuki Audit
Member (Independent Outside)SUZUKI Masako

Audit and Supervisory Committee
Member (Independent Outside)

Note: The skills matrix above shows the Directors’ expertise which the Company particularly expect them to exhibit.

(Reference) Criteria for Independence of Outside Officers

The Company prescribes the following criteria for the independence of Outside Officers to objectively determine the independence of Outside Officers. If an
Outside Officer falls under any of the following items, the Company determines that the Outside Officer is not sufficiently independent from the Company.
An Outside Officer designated as an Independent Officer as stipulated under Tokyo Stock Exchange, Inc. shall endeavor to maintain independence as prescribed in this Criteria until resignation. If the Outside Officer loses his/her independence, the Outside Officer shall notify the Company in advance (or assoon as possible after the event under unavoidable circumstances).
1. A person who is, or has been in the past 10 years, a business executor(*1) or Non-executive Director (if the person is an Outside Director) at
the Group (i.e. the Company or its subsidiaries).
2. Any person (party) who has fallen under any of the following items (1) to (8) in the past three years.
(1) A party for whom the Group is a major business partner(*2) or a business executor of such party(2) A major business partner of the Group(*3) or a business executor of such partner(3) A consultant, accounting professional, or legal professional who has received a significant amount of money(*4) or other property from the Group other thanofficer remunerations (if a party who receives such property is a corporation, association, or any other entity, a party who belongs to the relevant entity)(4) A current major shareholder(*5) of the Group or a business executor of such shareholder(5) A business executor of a corporation of which the Group is a current major shareholder(*5)(6) A person who belongs to the appointed audit firm for the statutory audit of the Group(7) A business executor of an entity whose Outside Officer is also a business executor of the Group(8) A person, an officer or other business executor of a corporation, association, or any other entity who receives a large amount of donation or grant(*6) from the Group
3. If a person who falls under 1. or 2. above is a key person(*7), close relatives (spouse, first or second degree relatives) of such person
4. A person who has assumed the office of Outside Officer for more than eight years in total(*1) A business executor refers to a person who executes the duties of a Director (excluding an Outside Director), Executive Officer, or employees, etc.
(*2) A party for whom the Group is a major business partner refers to a party who has business transactions with the Group, with total amount of sales inany of the fiscal year within the last three fiscal years exceeding 2% of the consolidated net sales of such business partner.
Such business partner shall include its parent company and important subsidiaries if such business partner is a corporation.
(*3) A major business partner of the Group refers to a party with whom the Group has business transactions, with total amount of sales in any of the fiscal
year within the last three fiscal years exceeding 2% of the consolidated net sales of the Group, or a party who has made a loan to the Group in theamount at 2% or more of the consolidated total assets of the Company at the end of the most recent fiscal year. Such business partner shall include
its parent company and important subsidiaries if such business partner is a corporation.
(*4) A significant amount of money refers to the yearly average money exceeding 10 million yen over the three most recent fiscal years.
(*5) A major shareholder refers to a shareholder who holds, directly or indirectly, 10% or more of the total voting rights. Such major shareholder shall include its parent company or important subsidiaries if such major shareholder is a corporation.
(*6) A large amount of donation or grant refers to a yearly average amount exceeding 10 million yen over the three most recent fiscal years.
(*7) A key person refers to a Director, Corporate Officer, Executive Officer, business executor who serves as a General Manager or in a higher rank, orbusiness executor who has authority equivalent to that of a General Manager or higher position.
NIPPON SIGNAL REPORT 2023

Data Section

Advisory body to theBoard of Directors

Yes

The decisions on significant matters regarding the Company
are based on two procedures: a request for decision and a
resolution by the Board of Directors.

Knowledge, Experience, and Capabilities the Company’s Directors Possess

Sustainability Initiatives

5 Outside Directors

In order to enhance debate regarding the nomination of officers and their remuneration, and raise the objectivity andtransparency of the decision-making process, the Nomination
and Remuneration Advisory Committee was established as anadvisory body to the Board of Directors. This committee ismade up of a majority of Outside Directors that are designated as independent directors.
The Company has also established the Advisory Board, which
is an advisory body for Representative Directors. This board
consists of outside experts with sophisticated and specialized
knowledge on business management.

The Group aims to remain to be a provider that supports infrastructure evolution with safe and trustworthy solutions. In order to leadsustainable business growth, the Company selects as Directors those who possess strong acumen and experience as a corporate
manager, deep insight into technological development surrounding the Company, capabilities to drive the expansion of business domains conducted on a global scale, and expert knowledge that contributes to corporate governance.
[Directors selected from within the Company]
The Company selects those who possess strong acumen for overall management, with knowledge of the business environment
surrounding the Company and the industries it belongs to, understanding of the Company’s strengths and issues through manufacturing, technological research and development, marketing, and sales activities, and experience in management administration suchas accounting, legal affairs, and risk management.
[Outside Directors]
The Company selects those who can provide advice on management strategies and perform an effective supervisory function on
management by drawing on advanced and specialized knowledge and experience in fields other than the Group’s business domains, while appropriately ensuring well-rounded diversity. In addition, to fully incorporate views from objective and independent
standpoints into corporate management, Outside Directors need to satisfy the requirements for independent directors/auditors as
stipulated by Tokyo Stock Exchange, Inc. Furthermore, they account for one-third or more of all Directors and at least one of themneed to have corporate management experience at another company.
Given the highly public nature of the Company’s business working on transportation infrastructure, a deep understanding of ourbusiness is essential in making managerial decisions. We therefore consider that the appropriate proportion of Independent Outside
Directors among members of the Board of Directors is around one-third.
The skills matrix of the Company’s Board of Directors is as follows.

Nippon Signal’s Vision and Growth Strategy

Basic Policy

Competence Required of Directors (Knowledge, Experience, and Capabilities)

Nippon Signal’s Value Creation

G Corporate Governance54

S u st a in a b ili ty Ini ti ati ves

Corporate Governance System
Audit and Supervisory Committee
Accounting Auditor

Board of Directors

Nomination and Remuneration Advisory Committee*1

President and CEO

Committee of Directors

Executive Officers
Internal Audit Dept.*4

Evaluation of the Board of Directors’ Effectiveness

General Meeting of Shareholders

Divisions & Departments

Group Business Planning Committee
Advisory Board*2
Risk Management Committee*3
Company-wide Environmental Committee*5

*1
*2
*3
*4
*5

Nomination and Remuneration Advisory Committee: Serves as an advisory body to the Board of Directors; consists primarily of Outside Directors, who raise thetransparency and objectivity of procedures regarding remuneration for officers or appointment of candidates for officers by participating in the decision process.
Advisory Board: Serves as an advisory body to the Representative Directors; consists of outside experts with sophisticated and specialized knowledge on
business management who provide advice and suggestions on business management from an elevated perspective.
Risk Management Committee: Controls compliance risks and all other types of risks under the direction of the Board of Directors; chaired by the President
and Chief Executive Officer.
Internal Audit Department: Provides assistance with internal management control activities by auditing the management and operation processes; monitors all managerial activities — such as purchasing, sales, and accounting — to provide information based on the monitoring results as well as advice andsuggestions on remediation and efficiency improvement.
Company-wide Environmental Committee: Promotes constant improvement of the company-wide environmental management system; chaired by the Executive Officer responsible for TQM Promoting Department. Issues important for management activities are reported to the Board of Directors.

Reason for nomination as Outside Director and an outline of expected roles
Audit and Supervisory Committee
Member• Professor, Business Law
Department, Graduate
School of Law, Hitotsubashi University (Chair ofDepartment)• Outside Director, Dai-ichi
Life Holdings, Inc.

13 out of 13
meetings held 100%

MURATA
Yoshiyuki

Mr. MURATA Yoshiyuki has ample experience, an impressive track record, and knowledge as a business manager.
The Company has appointed him to continue as an Outside Director so that these qualities will be applied within
its business administration, and an effective supervisory
function on management will be demonstrated.

• Representative Directorand Executive Vice
President, Daiwa House
Industry Co., Ltd.
• Outside Director, Fujita
Corporation

12 out of 13
meetings held 92%

TOKUNAGA
TakashiMr. TOKUNAGA Takashi possesses professional knowledge and abundant insight on risk management. The Company has decided that he will offer beneficial advice andopinions on the Company’s management. The Company
has appointed him as an Outside Director who is an Audit
and Supervisory Committee Member in expectation that hewill offer advice on its management supervisory function bymaking use of his capabilities in his specialized field.

TAMAGAWA
Masayuki

Mr. TAMAGAWA Masayuki, as an expert in advanced andwide-ranging international finance, etc., possesses longyears of work experience in the government and at international organizations and extensive knowledge and experience in finance and accounting. The Company has
appointed him as an Outside Director who is an Audit andSupervisory Committee Member in expectation that he willoffer advice on the Company’s management supervisory
function by making use of his wealth of experience,achievements, and knowledge on international financeand tax and finance affairs.

• Specially Appointed
Professor, Kogakuin
University

Ms. SUZUKI Masako possesses a wealth of experience,achievements, and knowledge in the management of human resources and health support service businesses.
The Company has appointed her as an Outside Director
who is an Audit and Supervisory Committee Member in
expectation that she will offer advice on the Company’s
management supervisory function based on her professional experience and knowledge in management developed through her career.

• Outside Director, JAPANPOST INSURANCE Co.,Ltd.
• External Director, Unite
and Grow Inc.

NIPPON SIGNAL CO., LTD.

Training for Officers
The Company utilizes training by external organizations andholds biannual officer training sessions to help new Executive
Officers acquire the necessary skills for exercising high levelsof leadership and taking part in management.
In addition, officers are encouraged to actively take advantage of oppor tunities for fur ther education, includinginter-industry exchange forums and other external seminars.

Officer Remuneration
Director remuneration comprises fixed compensation as well as
performance-linked compensation tied to both short-term performance and medium- to long-term performance. This scheme
is employed to provide Directors with healthy incentive to pursue medium- to long-term improvements in corporate value
while also accomplishing short-term performance targets. Performance-linked compensation is not paid to Outside Directors
or Audit and Supervisory Committee Members.
Fixed compensation is decided based on rank with consideration
paid to the duties of given Directors, the highest level of employee
remuneration, and the remuneration levels of other companies.

[Board of Directors
meetings]

13 out of 13
meetings held 100%
[Board of Corporate
Auditors meetings]

13 out of 13
meetings held 100%

Matters on Performance-Linked Compensation, etc.
Performance-linked compensation is tied to both short-term
performance and medium- to long-term performance, in order to provide Directors with healthy incentive to pursue
medium- to long-term improvements in corporate value while
also accomplishing short-term performance targets. A fixedamount is paid every month.
Compensation linked to medium- to long-term performanceis decided each year on an individual basis based on the rateof accomplishment of targets set for each Director. Compensation linked to short-term performance is calculated by
dividing the amount equivalent to 2.0%–2.5% of the ordinary
income of a given fiscal year among all Directors and Executive Officers. Ordinary income has been selected as theperformance indicator because the Group considers profitability as a medium- to long-term challenge and the Medium-Term
Management Plan includes an ordinary income target.

Matters on Delegation of Authority to Determine
Remuneration, etc. for Individual Directors (excluding
Directors who are Audit and Supervisory Committee Members)
In the fiscal year ended March 31, 2023, the Board of Directors decided at a meeting held on June 23, 2023, to delegate
the authority to determine the amount of remuneration for individual Directors (excluding Directors who are Audit andSupervisory Committee Members) to President and Chief
Executive Officer TSUKAMOTO Hidehiko. He has determined
the specifics. The authorities to determine the amount of
fixed compensation for each Director (excluding Directors
who are Audit and Supervisory Committee Members) and toevaluate the achievement level of managerial goals to be reflected to performance-linked compensation have beendelegated. These authorities have been delegated because
the Representative Director is the appropriate person to evaluate the achievement level concerning managerial goals
while overseeing the performance of the Company as awhole. To ensure appropriate exercise of authority by the
Representative Director, the Board of Directors consults with
the Nomination and Remuneration Advisory Committee
about the original proposal and receives a report from thecommittee.

NIPPON SIGNAL REPORT 2023

Data Section

INOUE
YurikoMs. INOUE Yuriko has high level of professional knowledge and experience as an expert on intellectual property
rights.The Company has appointed her to continue as
Outside Director in expectation that advice on its management and strategies including corporate law and data
governance will be provided and an effective supervisory
function on management will be demonstrated.

Policy for Determining Remuneration, etc. for Individual Directors(a) How the policy on determination of remuneration, etc.
for individual Directors was set
To provide healthy incentive to pursue medium- to longterm improvements in corporate value while also
accomplishing short-term performance targets, theCompany consulted with the Nomination and Remuneration Advisory Committee about the policy for determining
remuneration, etc. (hereinafter referred to as the “Policy”)
and respected the content of the report submitted by thecommittee. The Policy was adopted at the Board of Directors meeting held on June 23, 2023.
(b) Overview of the Policy
Director remuneration comprises fixed compensation
based on rank as well as performance-linked compensation tied to both short-term performance and medium- tolong-term performance. This scheme is employed to provide Directors with healthy incentive to pursue mediumto long-term improvements in corporate value while also
accomplishing short-term performance targets. Remuneration for each Director is set at an appropriate level,
based on their responsibilities. Remuneration for Outside
Directors and Directors who are Audit and Supervisory
Committee Members comprises fixed compensation
only, in light of their responsibilities.
(c) Reason for which the Board of Directors foundremuneration, etc. for individual Directors for the fiscal
year ended March 31, 2023, in line with the Policy
In making decisions on remuneration, etc. of individual
Directors, the Nomination and Remuneration Advisory
Committee deliberated on the original proposal frommultilateral perspectives, including alignment with the
Policy, and the Board of Directors respected the content
of the report submitted by the committee when making
its decision. The Board of Directors therefore found thedecision in line with the Policy.

Sustainability Initiatives

Concurrent Post(s)(as of June 23, 2023)

SUZUKI
Masako55

Number of Board of
Directors Meetings
Attended

Grounds for Election

NameWith an eye on links to shareholder value (share prices), Directors (excluding Outside Directors who are Audit andSupervisory Committee Members) and Executive Officers
spend fixed amounts from their monthly remuneration ontreasury share purchase. They thus purchase treasury shareson a constant basis. Specifically, treasury shares are purchased through the officers shareholding association to
avoid insider risks. The Group therefore does not have astock compensation scheme at the moment.

Nippon Signal’s Vision and Growth Strategy

Group Companies

The Company takes steps to periodically verify that theBoard of Directors is functioning effectively. Based on thefindings of those verifications, an evaluation of the effectiveness of the Board of Directors is performed to identify issues
and promote ongoing improvement activities.
In February 2023, a survey was administered to, and responses received from, all Directors and Audit & Supervisory
Board Members with regard to measures for enhancing thestructure, operating procedures, and meeting discussions of
the Board of Directors.
The secretariat of the Board of Directors gathered and processed responses and submitted the results to the Board of
Directors for thorough discussion and analysis.
Through this process, it was determined that the Board of Directors was highly effective overall. This decision was prefaced on
the assessment that the Board of Directors was sufficiently diverse and balanced, that it engaged in free and open discussion,and that it was appropriately exercising its supervisory function.
All questions in the survey were rated above “mostly appropriate.” However, the rating was the lowest on the “content (quality)and quantity of reference materials.” The Company will improve
the quality of reference materials and provide pre-meeting briefings as needed so as to enable the Board of Directors to havemore focused discussions and substantial deliberations. The
Company also aims to enhance the effectiveness of the Board’s
deliberations regarding medium- to long-term management issues by providing more opportunities for dialogue between the
Representative Director and Outside Officers.

Nippon Signal’s Value Creation

G Corporate Governance56

S u st a in a b ili ty Ini ti ati ves

Group Governance Structure
The Company dispatches Directors and Audit & Supervisory Board
Members to Group companies to help elect their Representative Directors, as well as offer guidance and supervision. The Company’s
corresponding departments receive daily reports on the financial
standing and how businesses are being run at individual subsidiaries.
The Group Business Planning Committee holds quarterly meetings,
where it receives reports on the management, financial results, andrisk management systems of the entire Group and offers the necessary guidance.

Major Initiatives

Internal Control System
In conjunction with its transition to a Company with an Audit andSupervisory Committee, the Company revised its Basic Policy on
Internal Control System, at a Board of Directors meeting held in
June 2023, to match the new organizational format while carrying
on the basic ideas of the original policy. The Company will constantly review the policy in its effort to create a more appropriate and effective internal control system.
The revised Basic Policy is as stated below.

NIPPON SIGNAL CO., LTD.

The Company avoids holding its General Meeting of Shareholders
on dates on which many companies hold their meetings to make iteasier for shareholders to take part in the General Meeting of Shareholders and to exercise their voting rights. Notices of convocation
are provided electronically well in advance on Tokyo Stock Exchange, Inc.’s website and the Company’s website along with disclosure of the English translation of proposals. In addition, theCompany facilitates the exercise of voting rights through the creation of an environment that enables the electronic exercise of voting rights through the use of a platform for said purpose, as well aslive streaming of the General Meeting of Shareholders.
The Company considers dialogue with shareholders and other investors to be one of the most important tasks for management. Accordingly, the Company has launched an investor relations section
on its website to disclose information in a timely and appropriatemanner. The Company organizes financial results briefings for institutional investors and posts the materials on its website, and creates other opportunities for constructive dialogue with investors inan effort to enhance its corporate value.

Cross-Shareholdings
The Company engages in cross-shareholdings when deemed necessary for purposes such as sustaining or enhancing business alliances or sales transactions, or maintaining financial transactions
and other collaborative business relationships.
The Company recognizes that it is desirable to keep cross-shareholdings at a minimum from the perspective of maintaining and improving corporate value. Based on this recognition, the Board of
Directors determines the rationality of individual holdings on an annual basis by evaluating the holding purpose, the associated gains
or losses, transaction volumes, counterparty performance, and future relationships. Those cross-shareholdings that are deemed tolack meaningfulness will be sold.
Voting rights attached to cross-shareholdings will be exercised by voting in favor of proposals judged to contribute to corporate value andagainst those judged to detract. Discussions with the counterparty will
be arranged as necessary to discuss proposals.
The Company currently does not have uniform standards for exercising
voting rights due to the need for comprehensive decisions that take
into account non-financial information pertaining to each company.
Should a company expresses its intent to sell shares of the Company’s stock possessed as a cross-shareholding, the Company will
respond appropriately and without implying that transactions will becurtailed or taking other steps to interfere with the sale.

Anti-Takeover Measures
To maintain and enhance both its corporate value and the common
value of shareholders, the Company established measures against
the acquisition of large quantities of its shares. These anti-takeovermeasures were approved by resolution at the Ordinary General
Meeting of Shareholders in June 2010 and put into place thereafter.
Following the expiration of these anti-takeover measures, resolutions to extend the period of the measures were approved at theOrdinary General Meetings of Shareholders held in June 2 0 1 3, inJune 2016, in June 2019, and in June 2022.

https://www.signal.co.jp/ir/shareholder/

Risk Management Structure
The greatest risk to the Group is failing to maintain safety and reliability. To ensure that safety and reliability is always maintained, the Company has established several regulations that clearly define theboundaries of authority and responsibility. Group divisions work in linewith these regulations as they take actions to control risks.
The Risk Management Committee, which is placed under the directcontrol of the President and Chief Executive Officer, is responsible forcountering actions that would impede sound corporate management
and addressing risks and compliance issues that threaten to damage
corporate value or those that a division cannot handle on its own.
The Risk Management Committee instructs all Company divisionsand Group companies to regularly identify, analyze, and evaluate
risks. In addition, the Compliance Subcommittee has been formed
to address serious risks that are expected to emerge in the medium
to long term, thereby contributing to the systematic implementationof countermeasures.

Compliance Promotion Structure
Compliance promotion activities are advanced under the guidanceof the Risk Management Committee, which is chaired by the President and Chief Executive Officer. In 2010, the Compliance Manualwas created, and the Company began holding regular compliancetraining to spread and entrench compliance awareness.
In addition, the Company has set up compliance hotlines as compliance helpdesks for whistleblowing. In 2015, the Company added
an outside lawyer as a contact point.

Business Continuity Planning
The Group works on transport infrastructure that is indispensable tosociety. In contributing to society, the Group understands that it has
a responsibility to try to swiftly restore operations in the wake of anatural disaster, an act of terror, or any other calamity so that products and services can be provided.
For these reasons, the Group has formulated a Business Continuity
Plan (BCP) to cope with disasters and accidents such as largescale earthquakes. It takes into account many different risks suchas securing supply for materials and the procurement of fuel whileworking to restore operations. The Group will continue reviewing issues and working to improve its BCP.
With the spread of COVID-19, the Group has developed its Regulations on Response to Natural Disasters and Novel Infection and set
out provisions regarding employee safety and business continuity,
based on the expansion of international businesses and new work
styles such as telework.

Creation of the Earthquake Initial Response Manual
As part of the BCP, the Group has created the Earthquake Initial
Response Manual. It specifies initial response actions to be taken in
the event of a large-scale earthquake. The Group conducts regulardrills at individual locations to help quickly form a local response
headquarters and a voluntary fire brigade.

Establishment of Nippon Signal Group
Philosophy and Our Code of Conduct
Principle 2.2 of Japan’s Corporate Governance Code, which wasformulated by Tokyo Stock Exchange, Inc., requires companies toformulate and put into practice a code of conduct that is to be followed by their staff members in Japan and other countries. The
Group’s corporate activities are supported by many different stakeholders, including customers, business partners, shareholders andinvestors, employees, and local communities. Working in line with
its philosophy of safety and reliability, the Group seeks to remain acorporate group upon which society relies. To achieve this aim, theGroup must build relationships of trust with stakeholders, backed
by the proper behavior of each staff member.
The Group added Our Code of Conduct to Nippon Signal Group
Philosophy in April 2016 to provide a foundation for these relationships of trust. Our Code of Conduct serves as a standard of behavior to be followed by all officers and employees of the Group.
The Group encourages all employees to respect laws, ordinances, andother rules. The Group is also working to build an organization with thecapacity to quickly discover problems on its own and address them.

NIPPON SIGNAL REPORT 2023

Data Section

57

Dialogue with Shareholders and Investors

For details about the anti-takeover measures, please see theCompany’s website (Japanese only).

Sustainability Initiatives

1.	System to ensure that the execution of duties by Directors
and employees complies with laws and regulations and the
Articles of Incorporation(1)	The Board of Directors shall make decisions for the company onmatters required by laws, regulations or the Articles of Incorporation, as well as on basic matters concerning execution of duties
as stipulated by the Board of Directors regulations, and supervise
the execution of duties by Directors and Executive Officers.
(2)	By having more than one Outside Director continually, the Company shall strive to maintain and strengthen its supervisory function over the execution of duties by the Directors.
(3)	The Company shall have a Committee of Directors, a body that
deliberates and reports on the state of execution of business inaccordance with short- and medium-term management plans,so as to build a structure that enables appropriate and efficientdecision-making.
(4)	Each member of the Audit and Supervisory Committee, under
the auditing structure in which they cooperate with Accounting
Auditors and internal audit divisions/departments, shall offer
opinions at Board of Directors meetings as needed and work
alongside Outside Directors to keep a check on the Company’s
decision-making.
(5)	The Full-time Audit and Supervisory Committee Members shallregularly hold liaison meetings with chiefs of administrative andoperational divisions/departments to conduct audits of the status of specific business operations.
(6)	Recognizing that compliance with laws and regulations is the“foundation of trust,” the Company shall provide strict ethicaltraining based on the Nippon Signal Group Philosophy to all internal officers and employees.
(7) The Company shall compile a Compliance Manual summarizing the
key points to be noted in compliance and distribute it to all employees, as well as regularly offer education/training sessions in order tomake knowledge take root among them and to cultivate awareness.
2. S ystem for the storage and management of information
concerning the execution of duties by Directors(1) To ensure appropriate and secure storing of records on the execution of duties by Directors, the Company shall employ a storage system that minimizes the risk of destruction, etc. to thegreatest extent possible.
(2) With regard to important documents related to the execution ofduties by Directors such as the minutes of Board of Directors
meetings, the Company shall manage their use history and limit
the persons who handle them so as to ensure higher security, in
addition to storing their duplicates at business locations other thanthe head office in its efforts for the preservation of information.
3. Rules and other systems for management of risks of loss(1) In order for the Group to minimize damage to its management resources and to maintain continuous growth, and aiming to correctly
identify, analyze, assess and appropriately manage risks, theGroup shall establish the Risk Management Regulations.

business operations by having them attend the Board of Directors
meetings and other important meetings or providing them with materials, as well as exchange opinions with them from time to time.
(2)	Directors ensure that persons who report something to the Audit
and Supervisory Committee do not suffer disadvantageous
treatment for having made such reports.
8.	Policy on processing of expenses arising from the executionof duties by the Audit and Supervisory Committee	Processing of expenses arising from the execution of duties by
the Audit and Supervisory Committee shall be carried out without delay by the division/department in charge upon confirming
the content of expenses claimed by the Audit and Supervisory
Committee Members.
9.	Other systems to ensure that audits by the Audit andSupervisory Committee are conducted effectively(1)	The Audit and Supervisory Committee Members shall attend
and give opinion as needed at statutory meetings and other important meetings including those of the Committee of Directors,
the Risk Management Committee, and the Group Business
Planning Committee.
(2)	The Audit and Supervisory Committee Members shall also attend meetings designed to cultivate awareness for business inno v a t i o n a nd c o rp o ra t e v a l ue i m p ro v e m e nt , suc h a spresentations on the quality improvement of business operationby employees, to enhance the effectiveness of audits.

Nippon Signal’s Vision and Growth Strategy•	Providing positive support, cultivating abilities and offering guidance for formulating strategies and improving management•	Understanding the financial standing and progress in management plans at the Group Business Planning Committee• Conducting extraordinary audits when necessary(2) The Group shall have in place a Risk Management Committee, abody that oversees risk management of the entire Group under
the direct control of the Board of Directors and chaired by the
Representative Director.
(3) The Risk Management Committee shall instruct all Group companies and Company divisions to regularly identify, analyze, andevaluate risks. In addition, the Compliance Subcommittee headed by an Manager shall be formed to address serious risks thatare expected to emerge in the medium to long term, thereby
contributing to the systematic implementation of countermeasures. The Committee shall also take budgetary measures asneeded.
4. System to ensure that the execution of duties by Directors is
conducted efficiently(1) The Group shall have an Executive Officer system, based on the
belief that separating management decision-making function andbusiness execution function leads to faster and efficient decision-making in management and enables flexible business execution. Executive Officers shall make up the Committee of
Directors, where they report on their own business execution as
well as learn about the progress of and check the appropriateness of business execution of other Executive Officers.
	Executive Officers with titles shall also attend the meetings of theBoard of Directors and present their opinions as needed or givereport on matters of importance to business execution.
(2) 	The Representative Director shall set up an Advisory Board, whichis the advisory body to the Representative Director consisting ofoutside experts with sophisticated and specialized knowledge on
business management, and seek its advice on the analysis of business activities and risk management from an objective viewpoint.
(3)	Various rules and regulations concerning approval authorities
and procedures for requesting decisions shall be established inorder to clearly define the roles and responsibilities of each division/department and individual employee. With regard to company-wide themes, however, committees and project teams
shall enter into proactive action and divisions/departments shallwork together across boundaries to consider the theme in orderto address the issues required by the management.
(4)	Planning functions of the administrative divisions/departments
shall be strengthened so as to facilitate the swift and efficient
execution of duties by Directors.
5.	System to ensure appropriateness of business operations of
the Group comprising the Company and its subsidiaries(1)	The Nippon Signal Group Philosophy shall be set up as a common philosophy of the Group aimed at enhancing corporate value and allowing the Group to contribute to international andlocal communities.
(2)	The Company shall take the initiative to set direction for theGroup and check the appropriateness of the entire Group in order to ensure the appropriateness of business as a corporategroup and to generate synergy.
(3)	Corresponding departments shall receive daily reports on the financial standing and how businesses are being run at individual
subsidiaries, while officers are placed at subsidiaries to checkthat the subsidiaries are properly managed.
(4)	The Group Business Planning Committee shall call on the representative directors of subsidiaries to attend its quarterly meetings, where it receives reports on the management, financial
results, and risk management systems of the entire Group andoffers necessary guidance.
(5)	The Company’s compliance helpdesks for whistleblowing (compliance hotlines) shall be set up with diversity promotion and diverse styles of working in mind, ensuring that whistleblowers do
not suffer disadvantages, and both inside and outside of thecompany so that users may contact whichever suits them.
(6)	An external lawyer who is independent of the Company’s management answers the calls to the internal compliance helpdesk
for whistleblowing, which is also available to subsidiaries. Thisway, the Company can detect violation of laws across the Groupat early stages and maintain sound workplace environments.
6.	Matters regarding employees in cases where Audit andSupervisory Committee requests the assignment of employees
to assist them in their duties and matters regarding theindependence of such employees from the Directors (excluding
Directors who are Audit and Supervisory Committee Members)	Assignment or transfer of employees who assist in the duties of
the Audit and Supervisory Committee shall be done with fullconsideration to its purpose and taking into account the opinionof the Audit and Supervisory Committee.
7.	System for Directors and employees to report to the Audit
and Supervisory Committee and other systems regarding
reports to the Audit and Supervisory Committee(1)	Directors and employees shall help the Audit and Supervisory
Committee with their execution of duties, give reports to them on

Nippon Signal’s Value Creation

G Corporate Governance58

S u st a in a b ili ty Ini ti ati ves

Nippon Signal’s Value Creation

G Corporate GovernanceCorporate Executives (as of June 23, 2023)
Directors

Directors who are Audit and Supervisory Committee Members
Apr. 1982
May 2005
Jun. 2006
Jun. 2010
Jun. 2014
Apr. 2015

Jun. 2020

TSUKAMOTO Hidehiko Apr. 2021
President and Chief
Executive Officer

Apr. 1983
Jul. 2006
Jul. 2009
Jun. 2014
Apr. 2016
Apr. 2018
Apr. 2019

KUBO Masahiro

Apr. 2020

Director
Jun. 2020

Jul. 2009
May 2011
Jun. 2014
Apr. 2019
Apr. 2020

HIRANO Kazuhiro

Apr. 2021

Director
Apr. 2022

Jun. 2022
Nov. 1993

Oct. 2010
Apr. 2018
Jun. 2018

INOUE Yuriko
Outside Director

Apr. 2020

Apr. 2019
Apr. 2020

FUJIWARA Takeshi
Deputy Chief Executive
Officer

Apr. 2022

Apr. 1985
Jul. 2006
Jul. 2010
Jun. 2014
Apr. 2016

SAKAI Masayoshi

Apr. 2020

Director

Joined NIPPON SIGNAL CO., LTD.
General Manager of Railway Signal
Division of Osaka Branch Office
General Manager of Transport information Systems of Transport Information Systems Division
Chief General Manager of Transport Information Systems Division
Executive Officer,
Chief General Manager of Railway
Signal Division of Business Division
Senior Executive Officer, Chief General
Manager of Railway Signal Division
Chief General Manager of Transport Systems Division
Managing Executive Officer (to present),
Responsible for Transport Systems,
Chief General Manager of Transport Systems Division, Responsible for Smart Mobility Systems Promotion Division
Chief General Manager, Osaka
Branch Office (to present),
Responsible for western Japan
area (to present)
Director (to present)
Full-time Lecturer of Graduate
Schools for Law and Politics, The
University of Tokyo
Professor, Graduate School of Law,
Kobe University
Professor, Graduate School of International Corporate Strategy, Hitotsubashi University
Professor, Business Law Department, Graduate School of Law, Hitotsubashi University
Outside Director, NIPPON SIGNAL
CO., LTD. (to present),
Outside Director, Dai-ichi Life Holdings, Inc. (to present)
Professor, Business Law Department, Graduate School of Law, Hitotsubashi University (Chair of Department) (to present)

Jun. 2020

Apr. 2021

Jun. 2021
Apr. 2023

NIPPON SIGNAL CO., LTD.

Jun. 2008
May 2011
Jun. 2011
Jun. 2014
Apr. 2018
Apr. 2019

TOKUBUCHI Yoshitaka
Director (Full-time Audit
and Supervisory
Committee Member)

Jun. 2021
Jun. 2023

Apr. 2009
Apr. 2011
Apr. 2013
Jun. 2013
Apr. 2015
Jun. 2020

MURATA Yoshiyuki

Jun. 2021

Outside Director
Apr. 2022

President and Representative Director, Taisei Housing Corporation
Executive Officer, Taisei Corporation
Managing Executive Officer, Taisei
Corporation
Member of the Board, Taisei Corporation
President and Chief Executive Officer, Representative Director, Taisei
Corporation
Vice Chairman, Representative Director, Taisei Corporation
Outside Director, NIPPON SIGNAL
CO., LTD. (to present),
Director and Executive Vice President, Daiwa House Industry Co.,Ltd.
Outside Director, Fujita Corporation(to present)
Representative Director and Executive Vice President, Daiwa House
Industry Co., Ltd. (to present)

Joined NIPPON SIGNAL CO., LTD.
General Manager of Production
Control Dept. of Kuki Plant
Executive Officer, General Manager
of Corporate Strategy Dept.
Managing Executive Officer
Director
Deputy Chief Executive Officer
Chief General Manager of Business
Administration Division
Director and Executive Vice President,
Executive Vice President and Executive Officer(Full-time) Audit & Supervisory
Board Member
Director (to present)

Chief Operating Officer TSUKAMOTO HidehikoDeputy Chief Executive FUJIWARA Takeshi
OfficerManaging Executive
Officers

Apr. 2008
Sep. 2013
Aug. 2016
Apr. 2019
Jan. 2020

TOKUNAGA Takashi Jun. 2023
Outside Director (Full-time
Audit and Supervisory
Committee Member)
Apr. 1981
Jun. 2000
Jul. 2007
Jul. 2008
Jul. 2011
Jul. 2012

TAMAGAWA Masayuki Oct. 2016
Outside Director (Audit
and Supervisory
Committee Member)

May 2017
Jun. 2019

Apr. 1972
Jul. 1983
Apr. 1999
Sep. 2004
Dec. 2007
Jun. 2010
Jan. 2016
Jun. 2016SUZUKI Masako
Outside Director (Audit
and Supervisory
Committee Member)Jul. 2019
Dec. 2019
Mar. 2023
Jun. 2023

SAKAI Masayoshi
GOTO Ryuichi

Joined National Police Agency
First Secretary of Embassy of Japan in the People’s Republic of
China
Professor of Graduate School of
Public Policy, The University of Tokyo
Chief of Aomori Prefectural Police
Headquarters
Deputy Director General of Commissioner General’s Secretariat,
National Police Agency
Councilor, Cabinet Secretariat
Secretary General of Japan Casino
Regulatory Commission
Outside Director, NIPPON SIGNAL
CO., LTD. (to present)

Joined Ministry of Finance
Deputy Director of Monetary and
Financial Systems Bureau, The International Monetary Fund (IMF)
Regional Commissioner of Sapporo
Regional Taxation Bureau
Director of Budget Development
Management System, Asian Development Bank
Deputy Head of Finance, Japan
Tobacco Inc.
Head of Asia External Representation Office, African Development
Bank (AfDB)Specially Appointed Professor of
Kogakuin University (to present)
Managing Executive Director,
Kogakuin University
Outside Audit & Supervisory Board
Member, NIPPON SIGNAL CO.,LTD.
Outside Director (to present)

KUBO Masahiro
HIRANO Kazuhiro

Executive Officers
Apr. 1986
Feb. 1998

Jun. 2023

Jun. 2022

59

Joined NIPPON SIGNAL CO., LTD.
General Manager of Safety Technology
Research Dept. of Research Center
Chief General Manager of Research& Development Center
Chief General Manager of Kuki
Plant of Mono-zukuri Division
Executive Officer, Chief General
Manager of Research & Development Center of Technical Development Head Office, Chief General
Manager of Visionary BusinessCenterSenior Executive Officer, In chargeof Research and Development,
Chief General Manager of R&D
Section, Chief General Manager of
ANSHIN Center, General Manager
of Safety Technology Research
Dept., General Manager of Advanced Railway System Development Section
Managing Executive Officer (to present),
Responsible for Kuki Plant (to present),
In charge of Technology, Researchand Development (to present),
Chief General Manager of R&D
Section, General Manager of IP
Management Dept., General Manager of Advanced Railway System
Development Section,
Responsible for TQM Promoting
Dept. (to present)
Director (to present)
Responsible for Railway System
Business (to present),
Responsible for Smart Mobility
Systems Division (to present)

Apr. 1982
Jul. 2006

RYUGO Kazuhiro
MIKUNI Hiroyuki
HORIE Toru
NAMIKI Yutaka
TAGAMI Hideaki
MACHIYAMA Shinichi
HIRAMOTO Masayuki
NAKAZAWA Mutsuo

Deputy Executive
Officers

MINAMI Junichi
FUJIMOTO Hiromasa
AOKI Yoshinori

Joined Nippon Yusen Kabushiki
KaishaJoined Temporary Center Inc.
Executive Officer of Pasona Inc.
Director, Senior Managing Executive Officer of Pasona Inc.
Director, Senior Managing Executive Officer of Pasona Group Inc.
Director, Vice President of Benefit
One Inc.
President of Benefit one Healthcare Inc.
Outside Director of JAPAN POST
INSURANCE Co., Ltd. (to present)
Executive Advisor of Pasona GroupInc.
President and Representative Director of Pasona Force Inc.
External Director of Unite and Grow
Inc.(to present)
Outside Director, NIPPON SIGNAL
CO., LTD. (to present)

Data Section

Apr. 2004

Jun. 2010
Apr. 2013
Jun. 2013
Apr. 2016

Joined NIPPON SIGNAL CO., LTD.
General Manager of Private Railways Sales
Dept. of Railway Signal Systems Division
Executive Officer
Managing Executive Officer
Director (to present)
Chief General Manager of Sales
and Marketing Head Office
Responsible for Domestic Businesses and Branch Offices
Deputy Chief Executive Officer (to present),
Responsible for Domestic and Overseas
Businesses and Branch Offices
Responsible for Smart Mobility
Systems Promotion Division
In charge of Business Management(to present)
Responsible for Transport Systems, Smart
Mobility Systems Promotion Division, andBranch Offices (to present)

Sustainability Initiatives

Apr. 1983
Jul. 2006

Joined NIPPON SIGNAL CO., LTD.
General Manager of Accounting Dept.
General Manager of Tohoku Branch Office
General Manager of General Affairs Dept.
of Business Administration Division
Executive Officer, General Manager
of Corporate Strategy Dept.
Chief General Manager of Kuki
Plant of Mono-zukuri Division
Senior Executive Officer,
General Manager of Corporate
Strategy Dept., Responsible for Finance Dept.
Managing Executive Officer (topresent),
In charge of Business Administration (to present)
Director (to present)

Apr. 1983
Jul. 2009

Nippon Signal’s Vision and Growth Strategy

Jun. 2016

Joined NIPPON SIGNAL CO., LTD
General Manager of AFC Systems
Sales Dept. of AFC Systems Division
Executive Officer
Director,
Managing Executive Officer
Deputy Chief Executive Officer
Representative Director,
Executive Vice President & Chief
Operating Officer
President and Chief Executive Officer (to present)
Chief Executive Officer
President and Chief Executive Officer and Chief Operating Officer (topresent)

Executive Officers and Deputy Executive Officers

NIPPON SIGNAL REPORT 2023

60

D a ta Se ct io n

Financial Data (¥ million)*2

2018*1

2014

2015

2016

2017

2019

2020

2021

2022

2023

Orders received*

105,783

99,713

83,25888,65999,581

113,347

118,604

85,18579,70999,063

Net sales*4

93,217

100,416

90,59382,134

83,77099,857

111,675

92,75585,04785,456

Operating income

5,943

8,377

7,162

4,269

2,061

7,000

8,912

5,713

5,390

5,112

Income before income taxes and minority interests

7,039

9,111

8,038

5,315

3,192

7,916

9,662

7,282

6,531

6,027

Net income attributable to owners of parent

3,667

5,413

4,994

3,500

2,051

5,306

6,584

4,916

4,503

4,075

R&D expenses

3,167

3,291

3,419

3,078

2,587

2,401

2,887

2,753

2,628

2,838

Capital investment

1,700

1,953

3,502

3,035

3,564

1,903

2,459

2,912

2,516

2,669

3

1,555

1,701

1,685

1,787

1,968

2,128

2,066

2,052

2,170

2,380

Total assets

113,140

120,573

121,434

124,298

127,322

137,643

137,971

141,356

134,086

146,019

Net assets

66,886

74,76479,801

79,252

79,401

82,13579,64884,69486,74089,351

Cash flows from operating activities

10,656

14,917

4,152

369

(305)

3,291

9,160

1,145

2,099

1,715

Cash flows from investing activities(1,745)(2,774)(5,963)(1,013)(4,153)(2,437)(4,600)(1,911)(2,344)(3,597)

Free cash flow

8,911

12,142(1,811)(644)(4,458)

854

4,560

(766)

(244)

(1,881)

Cash flows from financing activities(7,237)(6,502)(1,412)

(492)

3,111

426

(4,367)1,354(6,750)3,911

Nippon Signal’s Vision and Growth Strategy

Depreciation and amortization

Nippon Signal’s Value Creation

Financial and Non-Financial Highlights (Years ended March)(Yen)

Earnings per share (EPS)

58.32

79.37

73.24

51.59

31.42

81.29

103.34

78.82

72.21

65.34

Book value per share (BPS)

975.92

1,091.55

1,167.75

1,195.14

1,216.17

1,258.04

1,276.99

1,357.90

1,390.71

1,432.57

16*5

20

22

23

24

25*6

26

27

27

27

Return on equity (ROE)

5.9

7.7

6.5

4.4

2.6

6.6

8.1

6.0

5.3

4.6

Return on assets (ROA)

6.0

7.8

6.6

4.3

2.3

6.0

7.0

4.6

4.7

4.2

Equity ratio

58.8

61.8

65.6

63.8

62.4

59.7

57.7

59.9

64.7

61.2

Payout ratio

27.4

25.2

30

44.6

76.4

30.8

25.2

34.3

37.4

41.3

1,207

1,207

1,232

1,254

1,278

1,255

1,232

1,265

1,261

1,230

Average age of employees

41 yrs & 8 mos

41 yrs & 6 mos

41 yrs & 10 mos

41 yrs & 6 mos

41 yrs & 10 mos

42 yrs & 6 mos

42 yrs & 10 mos

42 yrs & 9 mos

42 yrs & 11 mos

42 yrs & 11 mos

Average length of service of employees

17 yrs & 11 mos

17 yrs & 9 mos

17 yrs & 11 mos

17 yrs & 2 mos

17 yrs & 1 mos

17 yrs & 4 mos

18 yrs & 3 mos

18 yrs & 2 mos

18 yrs & 3 mos

18 yrs & 10 mos

Dividend per share(%)

Sustainability Initiatives

Non-Financial Data*2
Personnel Data
Number of Employees*7

Environmental Data*

8

InputsElectricity (1,000 kWh)

8,413

8,282

7,867

7,613

7,850

8,456

7,986

7,645

7,361

7,021

3

Gas (km )

319

311

285

310

332

347

349

309

296

289

Fuel (petroleum) (kl)

28.7

28.6

29.5

30.9

31.9

31.6

32.9

25.4

27.3

29.1

57

73

54

51

54

51

50.2

54.6

54.9

58.0

Water (km3)
Outputs

4,015

3,947

3,739

3,700

3,851

4,051

3,917

3,714

3,546

2,656

Wastewater (km3)

57

73

54

51

54

51

50.2

54.6

54.9

58.0

Non-industrial waste (tons)

227

269

223

206

218

262

264

224

196

183

Industrial waste (tons)

437

447

412

292

394

324

364

253

248

149

Recycling rate (%)

98.9

98.8

99.0

99.4

99.5

99.6

99.4

99.3

99.2

98.8

*1 The Company has applied the Partial Amendments to Accounting Standard for Tax Effect Accounting (ASBJ Statement No. 28, February 16, 2018) from thestart of fiscal 2019. Management indicators and other important data related to fiscal 2018 have been retroactively revised to reflect this newly applied standard.
*2 Financial data is presented on a consolidated basis, while non-financial data is presented on a non-consolidated basis.
*3 Orders received are exclusive of consumption tax and other taxes.
*4 Net sales are exclusive of consumption tax and other taxes.
*5 The dividend per share for the fiscal year ended March 31, 2014, which amounted to 16 yen, included a commemorative dividend of 2 yen for the 85th anniversary of the foundation of Nippon Signal Co., Ltd.

61

NIPPON SIGNAL CO., LTD.

Data Section

CO2 (tons)*6 The dividend per share for the fiscal year ended March 31, 2019, which amounted to 25 yen, included a commemorative dividend of 1 yen for the 90th
anniversary of the foundation of Nippon Signal Co., Ltd.
*7 The number of employees includes staff on loan from other companies to Nippon Signal, and excludes Nippon Signal staff on loan to other companies
and temporary employees.
*8 The figures for the environmental data are those for the sites of Kuki Plant, Utsunomiya Plant, Ageo Factory, Yamagata Nisshin Electronics Co., Ltd. andNisshin Tokki Co., Ltd.

NIPPON SIGNAL REPORT 2023

62

D a ta Se ct io n

Nippon Signal’s Value Creation

Corporate Data
Corporate Overview (as of March 31, 2023)
Name of Company:

Nippon Signal Co., Ltd.

Non-Consolidated Subsidiaries

Domestic Offices and Plants

Date Established:

December 27, 1928

Nisshin Enterprise Co., Ltd.

Head OfficePaid-in Capital:¥10 billion

Nisshin Okabe Nikoh Co., Ltd.

Shin Marunouchi Building, 1-5-1 Marunouchi, Chiyoda-ku, Tokyo

President and CEO:TSUKAMOTO Hidehiko

Nisshin TECHNO Engineering Co., Ltd.

100-6513 Japan

Number of Employees:

2,987 (consolidated)

Nisshin Hutech Co., Ltd.

Accounting Auditor:

Grant Thornton Taiyo LLC

Saitama Union Service Co., Ltd.

Osaka Branch Office

Yokohama Techno Engineering Service Co., Ltd.

8F, Osaka Fukoku Seimei Building, 2-4 Komatsubara-cho,

Hokumei Electric Industry Co., Ltd.

Kita-ku, Osaka, Osaka 530-0018 Japan

Taipei Branch

Dhaka Office

Yangon Office

Phone: +81-6-6312-3851 Fax: +81-6-6312-8597

Beijing Nippon Signal Co., Ltd.

Consolidated Subsidiaries

Nippon Signal India Pvt. Ltd.

Kuki Plant

Nisshin Electronics Service Co., Ltd.

Nippon Signal Technology Taiwan Co., Ltd.

1836-1 Ooya, Aza, Ezura, Kuki, Saitama 346-8524 Japan

Nisshin IT Field Service Co., Ltd.

Nippon Signal Bangladesh Pvt. Ltd.

Phone: +81-480-28-3000 Fax: +81-480-28-3800

Sendai Nisshin Electronics Co., Ltd.

Hokkaido Branch Office

Utsunomiya Plant

Chubu Nisshin Electronics Co., Ltd.

11-2 Hiraide Kogyo Danchi, Utsunomiya, Tochigi 321-0905 Japan

Nisshin Industry Co., Ltd.

Phone: +81-28-660-3000 Fax: +81-28-660-3033

Tochigi Nisshin Co., Ltd.

Ageo Factory

Nisshin Tokki Co., Ltd.

Akita Office

Hokkaido Branch Office Tohoku Branch Office Chubu Branch Office Kyushu Branch OfficeNisshin Software Engineering Co., Ltd.
Nisshin Electric Construction Co., Ltd.

Morioka Office Akita Office Saitama Office Tochigi Office

Yamagata Nisshin Electronics Co., Ltd.

Kanazawa Office Yamanashi Office Shizuoka Office Mie Office

Sapporo Nisshin Electronics Co., Ltd.

Tohoku Branch Office

Kyoto Office Hiroshima Office Shikoku Office Okinawa Office

For further details, please refer to our website.
https://www.signal.co.jp/english/aboutus/branch.html

Asahi Electric Co., Ltd

Tochigi Office
Kanazawa Office

Stock Information (as of March 31, 2023)

Utsunomiya Plant
Yamanashi Office

Number of Shares of Common Stock Issued: 68,339,704

Kyoto Office

Major Shareholders

Number of Shareholders: 13,021

Shareholder

Number of
Shares Held Investment(thousand) Ratio (%)

Shareholder Registration Agent: Mizuho Trust & Banking Co., Ltd.

The Master Trust Bank of Japan, Ltd. (trust account)

6,693 10.73

Fukoku Mutual Life Insurance Company

4,793

7.68

Stock Exchange Listings: Tokyo Stock Exchange, Prime Market

Nippon Signal Group Employees Shareholding Association

4,027

6.46

Treasury stock
8.73%

The Nippon Signal Trading-Partner

3,285

5.27

Mizuho Bank, Ltd.

2,200

3.53

Overseas
investors
14.58%

Individuals andothers in Japan
28.14%

West Japan Railway Company

2,050

3.29

Custody Bank of Japan, Ltd. (trust account)

1,988

3.19

GOVERNMENT OF NORWAY

1,855

2.98

Other companies
in Japan
12.07%

Financial
institutions inJapan
35.70%MUFG Bank, Ltd.

1,372

2.20

Aioi Nissay Dowa Insurance Co., Ltd.

1,334

2.14

*1 Fukoku Mutual Life Insurance Company has placed 730,000 shares of
Nippon Signal stock in a retirement benefit trust separate from theaforementioned shares it holds. It reserves the right to give instructions
on how to exercise related voting rights.
*2 5,968,270 treasury shares have been deducted for the purpose of
calculating the investment ratio.

Chubu Branch Office

Saitama Office
Head Office

Hiroshima Office Osaka Branch Office
Mie Office
Kyushu Branch OfficeKuki Plant
Ageo Factory

Shizuoka Office

Shikoku Office

Data Section

Distribution of Shares by Shareholder Category
Securities companies
0.78%

NIPPON SIGNAL CO., LTD.

Morioka OfficeSustainability Initiatives

Fukuoka Nisshin Electronics Co., Ltd.

63

Nippon Signal’s Vision and Growth Strategy

Overseas Offices

Phone: +81-3-3217-7200 Fax: +81-3-3217-7300

Okinawa Office

NIPPON SIGNAL REPORT 2023

64

NIPPON SIGNAL
Shin Marunouchi Building, 1-5-1 Marunouchi, Chiyoda-ku, Tokyo 100-6513 Japan
Phone: +81-3-3217-7200 Fax: +81-3-3217-7300 E-mail:info@signal.co.jp