Second Opinion
NIPRO CORPORATION

September 9, 2021

ESG Division
Chief Analyst: Takeshi Usami

Social Finance Framework

Rating and Investment Information, Inc. (R&I) has confirmed the alignment of the Social Finance
Framework of NIPRO CORPORATION (hereinafter referred to as Nipro) dated September 9, 2021 with theSocial Bond Principles 2021 (SBP2021) . The framework for which this opinion is provided was formulated
based on the Social Bond Framework dated August 7, 2020, by adding convertible bonds and loans asfinancing instruments and making necessary changes. There are no major changes other than changing thereporting to the appropriate indicators. With respect to convertible bonds, common shares issued upon theexercise of conversion rights before maturity are out of the scope of this opinion. This opinion is based on thefollowing views.

■ Overview of the Opinion(1) Use of Proceeds
Proceeds will be allocated to capital investment and research and development (R&D) spending in
Nipro’s four business segments -- the domestic business, the global business, the pharmaceuticalbusiness and the pharmapackaging business. All of these businesses aim to solve medical issues andachieve the company’s own growth at the same time in various regions including Japan, as well as in awide array of fields, by sincerely listening to the voices of end users of medical services. Eligible projects
will have direct outcomes, such as achieving a stable supply of safe and secure pharmaceuticals andmedical devices and helping patients stay alive and enhance their quality of life (QoL). Indirect outcomes
include reducing medical accidents and improving the working environment at medical institutions.
Negative impacts of project implementation are addressed by, for example, institutional systems and thecompany’s environmental conservation initiatives. R&I has evaluated that eligible projects will provide
positive outcomes for society as a whole. Eligible projects correspond to the project category of “Accessto essential services” illustrated in SBP2021, which targets the “General public,” particularly “Aging
populations” and “People with disabilities.”(2) Process for Project Evaluation and Selection
A medium-term management plan is formulated based on Nipro’s corporate philosophy, code of conduct
and key challenge, and projects for proceeds allocation are selected according to the plan. Eligible
projects are properly incorporated in its corporate philosophy of becoming a truly global comprehensive
healthcare company. With eligible projects selected through appropriate processes, both third-party
characteristics and expertise are ensured.
(3) Management of Proceeds
Proceeds will be properly managed by the accounting department of the corporate planning
headquarters. Allocated and unallocated amounts will be tracked in a reliable manner using internal
accounting codes that are set on payments for the implementation of eligible projects. Until allocated,
proceeds will be invested only in highly liquid and safe financial assets under internal rules. The
allocation of proceeds will be confirmed by a finance officer annually. Financing through convertible
bonds will be handled in the same way as financing through straight bonds, regardless of whether
conversion is exercised. Consequently, R&I considers management of proceeds to be appropriate.
(4) Reporting
Nipro will disclose to investors the allocation of proceeds and materials that explain social outcomes. The
allocation of proceeds will be made public on its website annually. The company plans to disclose theRating and Investment Information, Inc.

Copyright (C) 2021 Rating and Investment Information, Inc. All rights reserved.

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Second Opinions are R&I's opinions on the alignment of a framework, formulated by companies etc. to raise funds for the purpose of environmental conservation and social
contribution, with the principles etc. compiled by public organizations or private organizations related to the relevant financing as of the date of assessment and are notstatements of fact. Further, R&I does not state its opinions about any matters other than the alignment, certify outcomes, give advice regarding investment decisions or
financial matters, or endorse the merits of any investment subject to the financing. R&I does not undertake any independent verification of the accuracy or other aspects of
the related information when issuing a Second Opinion and makes no related representations or warranties. R&I is not liable in any way for any damage arising in relation
to Second Opinions. As a general rule, R&I issues a Second Opinion for a fee paid by the issuer. For details, please refer to the end of this document.

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output indicators and outcome indicators it has determined. R&I has confirmed that necessary reporting
will be made. Regardless of whether convertible bonds are converted, reporting will be made until the
allocation of proceeds is completed.

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Outline of the Issuer
Since its founding in 1954, Nipro has been pursuing technological innovation to contribute to society
through its business activities. Currently, it is a comprehensive healthcare company with the “trinity” ofthe medical device, pharmaceutical, and pharmapackaging businesses. For these three businesses,
offices and factories are deployed in and outside Japan.



Its management philosophy is as follows: In looking toward our future as a truly global comprehensive
medical manufacturer, we believe our current and future responsibility to society is to develop innovative,
value-added products and technologies that improve patient outcomes and healthcare worldwide.

Its code of conduct is as follows:

Based on the viewpoints of patients and users, three company divisions – medical equipment,
pharmaceuticals, and pharmaceutical containers – work together as one in order to meet the needs
at every medical site with world-leading innovative, safe and defect-free products, technologies, andbusinesses.

Promote corporate strategies based on the “Sanpo-yoshi” concept, which seeks to benefit threeparties: the company, users, and society.

Focus on global expansion while building a production and sales network based on the concept of“local production for local consumption” and on supporting the health of people around the world in
addition to ensuring a stable supply chain.

Its key challenge is to push forward with the development of more advanced products in the light of the
major trends in front-line medical settings, related to treatment, prevention and health enhancement. At
the same time, Nipro aims to grow as a truly global comprehensive healthcare company that can satisfy
every need of diverse people from different cultures, customs, lifestyles, age groups, etc. To these ends,
the company believes it is important that all its employees work in concert with suppliers and otherbusiness partners to consider how they can better contribute to medical services on a global scale and to
put these ideas into practice.

The group corporate logo represents the first letter of its company name “N,” as well as the symbol for
infinity “∞”. This logo is designed to express its aspiration for sustained growth while creating sharedvalues with society through its business activities by supplying valuable products and technologies.
Nipro’s corporate logo



Nipro is fully aware that acting responsibly, while being conscious of its social responsibility, is thefundamental corporate philosophy it should abide by so as to fulfill its corporate missions in society. The
company naturally complies with all laws and regulations and seriously works on environmental
problems and various other social issues.



Nipro recognizes the importance of environmental preservation and considers active involvement inenvironmental issues to be an essential part of corporate activity. It keeps an eye on its potential impact
on the global environment not in the manufacturing process alone, but in all aspects of its businessactivities. In its efforts to preserve and improve the environment, the company pursues efficient use ofresources and energy, reduction of waste and emissions, assessment and mitigation of the impact of its
products and production process on the environment, and development and use of environmental
technologies. It takes swift and appropriate action to alleviate any adverse impact or potential impact on
the environment and to improve the environment. Specifically, Nipro obtained ISO14001 certification for
its Odate Factory in Akita Prefecture. Among other initiatives are recycling of resources, reduction ofwaste and emissions, introduction of renewable energy, promotion of energy savings, biodiversity
conservation, prevention of water pollution, and conservation of water resources.

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1. Use of Proceeds(1) Eligible Projects
Eligible projects
Eligible projects are businesses in four segments -- the domestic business, the global business, thepharmaceutical business and the pharmapackaging business. Proceeds will be allocated to finance orrefinance capital investment or R&D spending in each segment. R&I has confirmed that a proceeds
allocation plan is properly in place. The main use of proceeds is shown in the table below.

Eligible projects

Main use of proceeds

Examples① Domestic business

Capital investment primarily in

Install additional dialyzer production

medical device manufacturinglines and renew cell culture equipment

factories and regenerativeat regenerative medicine productmedicine-related facilities and R&D

manufacturing facilities

activities for pharmaceuticals, etc.
② Global business

Capital investment primarily in

Install additional dialyzer production

medical device manufacturinglines

factories③ Pharmaceutical

Capital investment primarily in

Install additional syringe formulation

business

pharmaceutical contract

manufacturing equipment (tomanufacturing factories

manufacture syringe formulations forthe government’s vaccine stockpiles,
etc.)④ Pharmapackaging

Capital investment primarily in

Install new glass tubing manufacturingbusinessmanufacturing factories forequipment (to manufacture vials forpharmaceutical packaging

vaccine developers, etc.)

products and R&D activities forpharmaceutical packaging
products, etc.

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Objectives of eligible projects
Eligible projects are all of Nipro’s current businesses. These businesses will ultimately help solve thesignificant social issue of people’s healthy living. This will be achieved through the company’s efforts tocontribute to medical services as a truly global comprehensive healthcare company that can satisfy
every need of diverse people and create shared values with society, as shown in its management
philosophy, code of conduct and key challenge.



As stated in its framework and medium-term management plan (April 2020 to March 2025), specificsocial issues that Nipro intends to solve through eligible projects are as follows:a.

Stable supply of medical devices that are indispensable for patients to stay alive and enhance their
QoLb.

Reducing healthcare expenses and social costsc.

Providing treatment to patients in remote areas with limited accessd.

Preventing medical accidents at medical institutionse.

Providing safe and secure medicines for allf.

Dealing with new infectionsg.

Stable supply of antimicrobial agents that are in short supplyh.

Providing a medical environment for patients who are remote or difficult to accessi.

Enhancing the labor productivity of healthcare professionals

The relationships between eligible projects and issues recognized by Nipro are as follows:①

Domestic business: medical devices, pharmaceuticals, information and communication technology(ICT), regenerative medicine
Main issues addressed: a, b, d, e, f, g, h, iManufacturing and supply of medical devices for the treatment of various diseases,
manufacturing and supply of pharmaceuticals, development and provision of medical systems,
manufacturing and development of infection prevention products, therapeutic drugs and testingproducts, etc., and manufacturing and development of regenerative medicine products for thetreatment of spinal cord injuries, etc. in Japan
Nipro’s core medical device product is dialyzers, or artificial kidneys, used for dialysis. Dialyzers
are directly linked to maintaining and enhancing QoL as a medical device that is indispensable forpeople who need dialysis to stay alive, become healthier and enhance their QoL. The company also
manufactures and supplies medical devices with safety measures. They include winged needles
that prevent needlestick accidents, colored syringes that prevent mix-ups, and pre-filled syringes
and kit preparations that reduce the risk of foreign matter contamination, bacterial contaminationand needlestick accidents. Safety products prevent medical accidents and at the same time mitigate
the burden on healthcare professionals. These address the issues of a, d and i.
The company supplies Nipro-brand generic drugs. Its universal design products include orally
disintegrating tablets and films that can be taken without water and packages that enable those withvisual difficulties to identify tablets or allow patients to write down medication instructions andmedication dates. This contributes not only to a healthier life of people who need drugs, but to lower

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healthcare expenses. Furthermore, the company continues to manufacture antimicrobials, which
are unprofitable and whose supply is a cause for concern. As a precaution against the future supplyof active pharmaceutical ingredients (APIs), it is developing some of them in-house. These address
the issues of b, e and g.
In the field of ICT, Nipro provides telemedicine systems such as Heart LineTM. This systemenables patients in remote locations to receive medical care and also plays a part in preventing the
spread of COVID-19 or future infectious diseases and ensuring healthcare professionals’ safety. In
addition, the company helps enhance the productivity of healthcare professionals by offering
operational management systems. These address the issues of h and i.
In regenerative medicine, Nipro jointly develops autologous bone marrow-derived mesenchymal
stem cells for the treatment of spinal cord injuries (SCIs) with Sapporo Medical University andobtained approval for Stemirac Injection, the world's first regenerative medicine product for SCIs.
SCI patients are mainly treated with rehabilitation, but in many cases, such treatment does not leadto satisfactory improvement in neurological functions. Progress in this field is expected to improve
patients’ neurological symptoms and functional disorders and thereby help patients achieve ahealthier life and a higher QoL. Patients’ reintegration into society will likely reduce healthcare
expenses and social costs. These address the issue of b.
Nipro manufactures and develops infection prevention products, therapeutic drugs and testingproducts, etc. For example, it engages in the development of portable extracorporeal membrane
oxygenation systems, which are used for the treatment of COVID-19 and other purposes, andhypochlorous acid water without salt content (that enables sterilization of humidifiers at precision
machinery factories, etc.). Such activities contribute to the testing and treatment of COVID-19 andfuture infectious diseases and the prevention of the spread thereof. These address the issue of f.
②

Global business: supply of dialyzers and other activities outside Japan
Main issues addressed: a, c, f
Manufacturing and supply of medical devices outside Japan, construction and operation of
Nipro’s own dialysis clinics and training centers in developing and emerging countries, andmanufacturing and supply of infection prevention products, therapeutic drugs and testing products,
etc. outside JapanThe number of kidney disease patients is on the rise worldwide against the backdrop of
population growth and better living standards in emerging countries. The International Society ofNephrology estimates that over 850 million people worldwide have some form of kidney disease1,
which is roughly double the number of people who live with diabetes (422 million) and 20 times morethan the prevalence of cancer worldwide (42 million) or people living with AIDS/HIV (37 million). For
kidney disease patients, dialysis, which they need about three times a week, can be considered asocial infrastructure.
As of March 2020, Nipro engaged in the construction and operation of its own dialysis clinics in 8
countries and training centers in 16 countries, mainly in developing and emerging markets. It
contributes to maintaining and improving people’s access to medical care in the regions. These
address the issues of a and c.
In addition, the company manufactures and supplies infection prevention products, therapeutic
drugs and testing products, etc. in overseas markets. As in Japan, such activities contribute to thetesting and treatment of COVID-19 and future infectious diseases and the prevention of the spreadthereof. These address the issue of f.

1 International Society of Nephrology: June 2018 news article

https://www.theisn.org/news/item/3317-the-under-recognized-epidemic-worldwide-over-850-million-people-suffer-from-ki
dney-diseases

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Pharmaceutical business: contract manufacturing
Main issues addressed: b, e, f
Nipro provides pharmaceutical contract manufacturing services in Japan. It meets demand for avariety of dosage forms and a wide range of production scales to achieve a stable supply ofpharmaceuticals to people in need. The company also helps reduce social costs by undertaking
manufacturing processes of all customer companies, as manufacturing by individual companies
tends to be more costly. Furthermore, pharmaceuticals produced in its contract manufacturingservices include therapeutic drugs for infectious diseases, which suggests that it helps prevent the
spread of infectious diseases such as COVID-19. These address the issues of b, e and f.

④

Pharmapackaging business
Main issues addressed: d, i
Nipro manufactures and supplies pharmaceutical packaging products and kit preparations,
including glass products for the storage and formulation of pharmaceuticals and drug administration
systems. These products are indispensable for medical care, and their stable supply is essential.
The company helps mitigate the burden on medical professionals by continuously gathering needs
at medical sites and reflecting them in its future improvement and development activities. In addition,
it combines medical devices and pharmaceuticals for each therapeutic area into kits and also
manufactures medical devices that prevent medical accidents, such as mix-ups and foreign matter
contamination. These address the issues of d and i.

Recognition of social issues


To determine whether the issues recognized by Nipro are social issues, it is necessary to specify thescope of society for each issue. Medical care is an issue recognized by society in light of Goal 3 of the
Sustainable Development Goals (SDGs) advocated by the United Nations, “Ensure healthy lives andpromote well-being for all at all ages.” Even so, details must be examined according to the scope ofsociety. R&I has therefore clarified respective target societies and confirmed the recognition of issues asfollows:
a. Stable supply of medical devices that are indispensable for patients to stay alive and enhance their
QoL
This issue relates to both Japan and foreign countries, but R&I defines the scope of society as Japan.
While all medical devices are deemed to be indispensable, the recognition of issues R&I confirms isabout dialysis-related medical devices, the main products in eligible projects. Dialysis is essential for
people who undergo dialysis therapy due to severe renal dysfunction. Currently, there are about 13
million chronic kidney disease patients in Japan. Thanks to various measures, growth in the number ofpatients requiring dialysis is slowing down, but more than 300,000 people are still on dialysis. The
Ministry of Health, Labour and Welfare (MHLW) recognizes issues regarding chronic kidney disease2.
Patients who require dialysis need to receive it once every three days. Dialysis can be considered asocial infrastructure for patients, as suggested by the ministry’s move to ensure dialysis care indisasters3. Given that dialysis patients will most likely keep increasing, a stable supply of relevant
medical devices is an issue recognized by society. Dialysis is just one example. In other diseases as well,a stable supply of medical devices that are directly linked to life support is recognized as a social issue.
Globally, more than 850 million people are estimated to have some form of kidney disease, and thenumber of patients requiring dialysis is on the rise. As in Japan, a stable supply of medical devices isrecognized as an issue, along with access to medical care in c.

2

MHLW: July 2018 report by the study panel on measures against renal diseases
https://www.mhlw.go.jp/content/10901000/000332759.pdf
3 MHLW: Ensuring dialysis care in disasters, August 2007https://www.mhlw.go.jp/file/06-Seisakujouhou-10900000-Kenkoukyoku/0000096276.pdf

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b. Reducing healthcare expenses and social costs
The society targeted by this issue is Japan. In Japan, reforms relating to medical fees andpharmaceuticals are called for in order to realize a sustainable social security system4. Healthcare
expense and social cost savings that can contribute to this end are recognized as a social issue. In
particular, wider use of generic drugs is promoted to help mitigate the burden on patients and improvemedical insurance finances5.
c. Providing treatment to patients in remote areas with limited accessThis issue targets a global society including developing and emerging countries. The global recognitionof the social issue can be most typically found in the SDGs. Goal 3 of the SDGs is to “Ensure healthy
lives and promote well-being for all at all ages.” Of this, Target 3.8 states “Achieve universal healthcoverage, including financial risk protection, access to quality essential healthcare services and accessto safe, effective, quality and affordable essential medicines and vaccines for all.” Kidney diseases are
increasing in the world, and Nipro’s offering of its own dialysis clinics, a social infrastructure, addresses
this social issue. Furthermore, the construction and operation of training centers are aligned with Target
3.c of the SDGs, “Substantially increase health financing and the recruitment, development, training andretention of the health workforce in developing countries, especially in least developed countries andsmall island developing States.”d. Preventing medical accidents at medical institutions
In Japan, social interest in medical accidents has increased in the wake of a patient mix-up in surgery
that occurred in January 1999. As long as medical care is provided, medical accidents are recognized asa social issue. Efforts to ensure medical safety have been continuously underway to date6.
e. Providing safe and secure medicines for all
As with the issue of d mentioned above, as long as medical care is provided, offering safe and secure
pharmaceuticals is a social issue. The issue is critical for patients who use pharmaceuticals, not tomention pharmaceutical providers, as can be seen in the study on safe use of pharmaceuticals andmedical devices, etc. 7 It also encompasses barrier-free access, especially in Japan, where thepopulation is aging.
f. Dealing with new infections
Today, countermeasures against COVID-19, a new infectious disease, are recognized as a global
social issue. Because people are in a highly fluid society, infectious diseases, including but not limited to
COVID-19, are likely to spread widely, and preventing this is a social issue. In Japan, the recognition of
the social issue can be found in the 1998 enactment of the Act on the Prevention of Infectious Diseases
and Medical Care for Patients with Infectious Diseases and the notification of the basic guidelines forpromoting the prevention of infectious diseases in an integrated manner8.
g. Stable supply of antimicrobial agents that are in short supply
This is a structural problem with the procurement of APIs in Japan. In 2019, four academic societies
closely involved with infectious diseases9 issued recommendations on a stable supply of antimicrobials10.
4“Basic Policy on Economic and Fiscal Management and Reform 2019” approved by the cabinet in June 2019
MHLW: Promotion of wider use of generic drugs
https://www.mhlw.go.jp/stf/seisakunitsuite/bunya/kenkou_iryou/iryou/kouhatu-iyaku/index.html
6 MHLW: Medical safety measures
https://www.mhlw.go.jp/stf/seisakunitsuite/bunya/kenkou_iryou/iryou/i-anzen/index.html
7 MHLW: Study on safe use of pharmaceuticals and medical devices, etc.
https://www.mhlw.go.jp/stf/seisakunitsuite/bunya/0000057965.html
8 https://www.mhlw.go.jp/file/06-Seisakujouhou-10900000-Kenkoukyoku/0000186708.pdf
9 Japanese Society of Chemotherapy, The Japanese Association for Infectious Diseases, The Japanese Society for5

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The MHLW holds stakeholder meetings for a stable supply of ethical drugs. These suggest that the issue
is recognized as a social issue.
h. Providing a medical environment for patients who are remote or difficult to access
Telemedicine is recognized as a social issue that can be solved with advancements in IT equipment11.
From the viewpoint of enhancing local medical care, efforts to promote telemedicine are underway,
including improving the quality of medical care, increasing patients’ convenience and filling the regional
gap in medical care, especially for remote islands and sparsely populated areas. It is also expected tohelp prevent the spread of COVID-19.
i. Enhancing the labor productivity of healthcare professionals
In Japan, securing healthcare professionals at medical institutions is recognized as a social issue due
mainly to the declining population, changes in young people’s awareness of occupations, diversifying
medical needs and the uneven distribution of doctors12. A better working environment is essential forsolving the issue. Enhancing the labor productivity of healthcare professionals has a direct impact on theway they work and take holidays.
Consequently, the direct objectives of eligible projects are to address the nine issues that society
recognizes as social issues.

(2) Goals of Eligible Projects Are Positive Social OutcomesThe benefits and impacts of eligible projects are summarized below.
Benefits and impacts of eligible projects
Direct 13
benefits

 Safe and secure pharmaceuticals and medical devices will be supplied in a stablemanner A stable supply of essential pharmaceuticals and medical devices will help patientsstay alive and enhance their QoL.
 Better access to medical care will be achieved.

Indirect benefits

 Medical accidents will decrease at medical institutions.
 The working environment for healthcare professionals will improve.
 The spread of infectious diseases will be mitigated.

Indirect impacts
and responses

 Social costs may increase due, for example, to a rise in healthcare expenses
caused by less profitable pharmaceutical manufacturing⇒ Nipro is working to reduce costs on the back of its extensive experience inpharmaceutical manufacturing. Moreover, measures are taken by society as a

Clinical Microbiology, and Japanese Society for Infection Prevention and Control
10 http://www.chemotherapy.or.jp/guideline/4gakkai2019_1.pdf
11 MHLW: IT promotion in medical carehttps://www.mhlw.go.jp/stf/seisakunitsuite/bunya/kenkou_iryou/iryou/johoka/index.html
12 https://www.mhlw.go.jp/stf/seisakunitsuite/bunya/kenkou_iryou/iryou/quality/
13 “Direct” relates to the users of eligible projects, “indirect” relates to the society in which eligible projects are conducted,
and “extensive” relates to the society that extends beyond the society in which eligible projects are conducted. For details,
see “R&I Social Bond Opinion Assessment Methodology” at https://www.r-i.co.jp/rating/products/esg/so_social_jpn.pdf.

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whole, as exemplified by the MHLW’s projects that support a stable supply ofpharmaceuticals.
 Inappropriate medical care may be provided through telemedicine and other new
ways of medical care.
⇒ Measures are taken by society as a whole, as exemplified by the MHLW’s
formulation of the guidelines for appropriate online medical care.
Extensive Project implementation may impose environmental burdens.

impacts and⇒ Nipro is taking various measures across its business activities, recognizing

responses

active environmental efforts as a prerequisite for corporate activities in light of theimportance of environmental conservation.

Social outcomes are positiveEligible projects will have direct outcomes, such as achieving a stable supply of safe and secure
pharmaceuticals and medical devices and helping patients stay alive and enhance their QoL. Indirect
outcomes include reducing medical accidents and improving the working environment at medical
institutions. While the medical arena faces society’s demands for actions against indirect impacts,
institutional measures are primarily in place. Extensive impacts are addressed by Nipro’s environmental
initiatives.



Implementing eligible projects is considered to help solve social issues. R&I has therefore evaluated thateligible projects will provide positive outcomes for society as a whole.

Sustainable Development Goals (SDGs) Relating to Eligible Projects


R&I has confirmed eligible projects’ contribution to SDGs by referencing the International Capital Market
Association’s mapping table for project categories and SDGs. The relationship between eligible projects
and SDGs is as follows:
Eligible projects

SDGs

Efforts

Domestic■Manufactures and sells dialyzer, which is an indispensable medical device

business

for life support, health improvement, and quality of life improvement ofpatients who require dialysis.
■The company sells products that are in high demand worldwide when new
infectious diseases, such as COVID-19, become rampant■Surgical masks, medical rubber gloves, tubes and other consumables,
blood collection tubes, and disinfectants are stocked.
■ Manufactures and sells own-brand generic drugs that contribute to
reducing social medical costs.
■We continue to manufacture and market antimicrobials, although they are
unprofitable and there are concerns about the supply of APIs.
■The company promotes products that can be used without difficulty,
regardless of age or disability.
■A range of products are offered that enable those with visual difficulties to
identify tablets, to write down medication instructions and medication dates,
and to prepare PTP sheets for patients with reduced dexterity.

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Second Opinion■As a precaution against the future supply of APIs, we are developing someof them in-house.
■The company sells a cloud-based monitoring system (Nipro Heart Line™)
that uses ICT to provide real-time information on patients, even in remotelocations.
■The company sells the HN LINE™, which solves business problems bylinking medical device information with electronic medical records.
■The company hopes to support the reduction of labor, efficiency of nursing
operations in hospitals, and work-style reforms of healthcare professionals

Global business■Manufactures and sells dialyzer, which is an indispensable medical device
for life support, health improvement, and quality of life improvement ofpatients who require dialysis.
■ In

emerging

clinicshavetreatment

countries,

been

to

set

up

such
in

as

in

Latin

suburbanareas

America,dialysisprovidedialysistopatients living in remote areas, where it is more convenient

for them to receive dialysis treatment.
■In Southeast Asia and Africa, dialysis clinics have been set up in urban
areas to provide patients with high-quality treatment■The company sells products that are in high demand worldwide when new
infectious diseases, such as COVID-19, become rampant■Surgical masks, medical rubber gloves, tubes and other consumables,
blood collection tubes, and disinfectants are stocked.

Pharmaceutical■Manufactures contract manufacturing drugs that contribute to reducing

businesssocial costs by reducing risks and improving efficiency while promoting

Pharmapackagin■The company sells safety products to prevent medical accidents whileg businessusing medical equipment.

horizontal division of labor from drug research and development to supply.

■They include winged needles that prevent needlestick accidents, coloredsyringes that can be distinguished by color to prevent mix-ups, andpre-fillableofforeignsyringesmatterandkit

preparations

contamination,

thatbacterial

reducetheriskcontamination,andneedlestick accidents.

Checks against project categories illustrated in SBP2021


Eligible projects relate to medical care and correspond to the project category of “Access to essential
services” illustrated in SBP2021, which targets the “General public” including “Aging populations,”“People with disabilities,” “Excluded and/or marginalised populations and/or communities” and“Underserved, owing to a lack of quality access to essential goods and services.”

Proceeds will be allocated to capital investment and R&D spending in Nipro’s four business segments -- thedomestic business, the global business, the pharmaceutical business and the pharmapackaging business. Allof these businesses aim to solve medical issues and achieve the company’s own growth at the same time invarious regions including Japan, as well as in a wide array of fields, by sincerely listening to the voices of end

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users of medical services. Eligible projects will have direct outcomes, such as achieving a stable supply ofsafe and secure pharmaceuticals and medical devices and helping patients stay alive and enhance their QoL.
Indirect outcomes include reducing medical accidents and improving the working environment at medical
institutions. Negative impacts of project implementation are addressed by, for example, institutional systems
and the company’s environmental conservation initiatives. R&I has evaluated that eligible projects will provide
positive outcomes for society as a whole. Eligible projects correspond to the project category of “Access toessential services” illustrated in SBP2021, which targets the “General public,” particularly “Aging populations”
and “People with disabilities.”

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2. Process for Project Evaluation and Selection(1) Incorporation into Comprehensive Objectives, Strategies and so on
Eligible projects are all of Nipro’s businesses and therefore incorporated in its medium-term
management plan based on its management philosophy and code of conduct, among others. Nipro
believes that such projects will help it create values for three parties -- the company, users and society -and achieve sustainable growth as a truly global comprehensive healthcare company.



Nipro's businesses are carried out under its management philosophy of social contribution. They aredesigned to help solve social issues, and the company is committed to continuing these businesses as
called for in its medium-term management plan.

(2) Criteria for Project Evaluation and Selection

Because eligible projects are all of Nipro’s businesses, project evaluation and selection have been
completed with the formulation of the medium-term management plan.



The medium-term management plan was formulated based mainly on the company’s management
philosophy and code of conduct, which served as the criteria for the evaluation and selection of eligible
projects.



Nipro’s key challenge is to push forward with the development of more advanced products in the light ofthe major trends in front-line medical settings, related to treatment, prevention and health enhancement.
At the same time, it aims to grow as a truly global comprehensive healthcare company that can satisfy
every need of diverse people from different cultures, customs, lifestyles, age groups, etc. Because
projects aligned with this key challenge are selected, no eliminating criteria have been set.

(3) Process for Project Evaluation and Selection

The corporate planning department of the corporate planning headquarters collaborates with various
departments within the company to create a draft of a medium-term management plan that incorporates
eligible projects. The plan is approved by the board of directors. Medical expertise is ensured throughcoordination with various departments, and the checking function is secured by a resolution of the boardof directors, which is separated from the drafting department. When selecting projects for proceeds
allocation, the corporate planning department evaluates and selects projects that correspond to capital
investment or R&D spending, and a finance officer approves them. Selected projects are reported at theboard of directors.

A medium-term management plan is formulated based on Nipro’s corporate philosophy, code of conduct andkey challenge, and projects for proceeds allocation are selected according to the plan. Eligible projects areproperly incorporated in its corporate philosophy of becoming a truly global comprehensive healthcarecompany. With eligible projects selected through appropriate processes, both third-party characteristics andexpertise are ensured.

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Second Opinion

3. Management of Proceeds
Proceeds will be credited to a checking account in the name of Nipro and managed by the accounting
department of the corporate planning headquarters.



Payments for eligible project implementation will be managed by the accounting department based on
the verification and request by a department that receives invoices or other evidence documents. Dataon expenditures for eligible projects will be extracted using internal accounting codes, and allocated andunallocated amounts will be tracked in a reliable manner. The allocation of proceeds will be confirmed bya finance officer annually. Furthermore, an independent auditor audits the accounting situation.



Unallocated proceeds will be invested only in highly liquid and safe financial assets under internal rules.

Proceeds from convertible bonds will be handled as explained above, regardless of whether they areconverted into shares.

Proceeds will be properly managed by the accounting department of the corporate planning headquarters.
Allocated and unallocated amounts will be tracked in a reliable manner using internal accounting codes thatare set on payments for the implementation of eligible projects. Until allocated, proceeds will be invested onlyin highly liquid and safe financial assets under internal rules. The allocation of proceeds will be confirmed by afinance officer annually. Financing through convertible bonds will be handled in the same way as financing
through straight bonds, regardless of whether conversion is exercised. Consequently, R&I considers
management of proceeds to be appropriate.

4. Reporting(1) Overview of DisclosureReporting will be made as follows:
Items
Allocation ofproceeds
Regular reporting

Timing

MethodAs regards the allocation of proceeds,
the proportion of proceeds allocatedto financing or refinancing will be
disclosed annually.

Annually disclosed until
the allocation of proceeds
is completed

WebsiteThose relating to financial conditions
Securities reports and financialsummaries

Annually disclosed until
the allocation of proceeds
is completed

WebsiteThose relating to business strategies
and performance
Annual reports
Medium-term management plan
Impact reporting

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Second Opinion(2) Impact Reporting

For impact reporting of eligible projects, Nipro will continuously disclose the output indicators andoutcome indicators shown below to the extent possible.



The change from the framework dated on August 7, 2020 is to disclose the number of products
manufactured and the number of products sold at the rate of increase. Since the number of Nipro
products is diverse and unit of each production number is different, it is not suitable for measuring social
effects even if the number of products manufactured and sold is disclosed as it is, and for competitive
reasons, the rate of increase has been changed to be used as an index. By using the manufacturing
number and the number of sales were weighted average by Price, it has become the index consideredmore products and products with low supply amount. In addition, by using the rate of increase, it ispossible to clearly show the investment effect for each year.

Domestic
business

Output indicators

Outcome indicators

・The increasing rate of medical

・The increasing rate of medical

devices manufactured

devices sold・The increasing rate of Nipro-brandgeneric drugs manufactured

Global business・The increasing rate of Nipro-brandgeneric drugs sold・Cell drug manufacturing capacity

・The number of cell drugs sold・The increasing rate of medical

・The increasing rate of medical

devices manufactured

devices sold・The increasing rate of dialysis
clinics

・The increasing rate of patientstreated at dialysis clinics

・The number of training centers

・The number of training center
users

Pharmaceuticalbusiness

・The increasing rate of drugs
manufactured under contract

・The increasing rate of drugs
manufactured and shipped undercontract

Pharmapackaging
business

・The increasing rate of products
manufactured

・The increasing rate of products
soldNipro will disclose to investors the allocation of proceeds and materials that explain social outcomes. The
allocation of proceeds will be made public on its website annually. The company plans to disclose the output
indicators and outcome indicators it has determined. R&I has confirmed that necessary reporting will be made.
Regardless of whether convertible bonds are converted, reporting will be made until the allocation ofproceeds is completed.

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Second Opinion[Disclaimer]
Second Opinion is not the Credit Rating Business, but one of the Ancillary Businesses (businesses excluding Credit Rating
Service but are ancillary to Credit Rating Activities) as set forth in Article 299, paragraph (1), item (xxviii) of the Cabinet Office
Ordinance on Financial Instruments Business, etc. With respect to such business, relevant laws and regulations requiremeasures to be implemented so that activities pertaining to such business would not unreasonably affect the Credit Rating
Activities, as well as measures to prevent such business from being misperceived as the Credit Rating Business.
Second Opinions are R&I's opinions on the alignment of a framework, formulated by companies etc. to raise funds for the
purpose of environmental conservation and social contribution, with the principles etc. compiled by public organizations or
private organizations related to the relevant financing as of the date of assessment. Second Opinions do not address any
matters other than the alignment (including but not limited to the alignment of a bond issue with the framework and theimplementation status of the project subject to financing). Second Opinions do not certify the outcomes and other qualities ofthe projects subject to the financing. Hence, R&I will not be held responsible for the effectiveness of the projects, including theiroutcomes. Second Opinions are not, in any sense, statements of current, future, or historical fact and should not beinterpreted as such, and Second Opinions are not a recommendation to purchase, sell, or hold any particular securities and do
not constitute any form of advice regarding investment decisions or financial matters. Second Opinions do not address thesuitability of an investment for any particular investor. R&I issues Second Opinions based on the assumption that each
investor will investigate and evaluate the securities which they plan to purchase, sell, or hold for themselves. All investment
decisions shall be made at the responsibility of the individual investor.
The information used when R&I issues Second Opinions is information that R&I has determined, at its own discretion, to bereliable. However, R&I does not undertake any independent verification of the accuracy or other aspects of that information.
R&I makes no representation or warranty, express or implied, as to the accuracy, timeliness, adequacy, completeness,merchantability, fitness for any particular purpose, or any other matter with respect to any such information.
R&I is not responsible or liable in any way to any party, for all or any damage, loss, or expenses arising out of or in relation toerrors, omissions, inappropriateness of, or insufficiencies in the information used when issuing Second Opinions, or opinions inSecond Opinions, or arising out of or in relation to the use of such information or Second Opinions (regardless of the nature of
the damage, including direct, indirect, ordinary, special, consequential, compensatory, or incidental damage, lost profits,
non-monetary damage, and any other damage, and including expenses for attorneys and other specialists), whether in contract,
tort, for unreasonable profit or otherwise, irrespective of negligence or fault of R&I.
All rights and interests (including patent rights, copyrights, other intellectual property rights, and know-how) regarding
Second Opinions belong to R&I. Use of Second Opinions, in whole or in part, for purposes beyond personal use (including
reproducing, amending, sending, distributing, transferring, lending, translating, or adapting the information), and storing
Second Opinions for subsequent use, is prohibited without R&I's prior written permission.
As a general rule, R&I issues a Second Opinion for a fee paid by the issuer.
Japanese is the official language of this material and if there are any inconsistencies or discrepancies between theinformation written in Japanese and the information written in languages other than Japanese the information written in
Japanese will take precedence.
[Expertise and Third-Party Characteristics]
R&I has launched the R&I Green Bond Assessment business in 2016, and since then, R&I has accumulated knowledge
through numerous evaluations. Since 2017, R&I has been participating as an observer in the Green Bond Principles and Social
Bond Principles, which have their own secretariat at the International Capital Market Association (ICMA). It also has beenregistered since 2018 as an Issuance Supporter (external review entity) of the Financial Support Programme for Green Bond
Issuance, a project by the Ministry of the Environment.
The R&I assessment method and results can be found on the R&I website (https://www.r-i.co.jp/en/rating/esg/index.html).
There is no capital or personal relationship between R&I and the fundraiser that could create a conflict of interest.

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Social Bond / Social Bond Programme
External Review Form

Section 1.

Basic Information

Issuer name: NIPRO CORPORATION
Social Bond ISIN or Issuer Social Bond Framework Name, if applicable: Social Finance Framework
Independent External Review provider’s name: Rating and Investment Information, Inc.
Completion date of this form: September 9, 2021
Publication date of review publication: September 9, 2021 [where appropriate, specify if it is an update and add
reference to earlier relevant review]

Section 2.

Review overview

SCOPE OF REVIEWThe following may be used or adapted, where appropriate, to summarise the scope of the review.

The review assessed the following elements and confirmed their alignment with the SBPs:☒☒

Use of Proceeds
Management of Proceeds☒☒

Process for Project Evaluation and Selection
Reporting

ROLE(S) OF INDEPENDENT REVIEW PROVIDER☒

Second Party Opinion☐

Certification☐

Verification☐

Scoring/Rating☐

Other (please specify):

Note: In case of multiple reviews / different providers, please provide separate forms for each review.

EXECUTIVE SUMMARY OF REVIEW and/or LINK TO FULL REVIEW (if applicable)<Second Party Opinion: Second Opinion>
R&I has provided a second opinion that the framework is aligned with the Social Bond Principles 2021.
For details, please refer to the report above.

Latest update: June 2020

Section 3.

Detailed review

Reviewers are encouraged to provide the information below to the extent possible and use the comment section to explain
the scope of their review.

1. USE OF PROCEEDS
Overall comment on section (if applicable):
For details, please refer to “1. Use of Proceeds” in the report above.

Use of proceeds categories as per SBP:☐

Affordable basic infrastructure☒

Access to essential services☐

Affordable housing☐

Employment generation / programs
designed to prevent and/or alleviate
unemployment stemming fromsocioeconomic crises☐

Food security and sustainable food systems☐

Socioeconomic advancement andempowerment☐

Unknown at issuance but currently expected
to conform with SBP categories, or othereligible areas not yet stated in SBPs☐

Other (please specify):

If applicable please specify the social taxonomy, if other than SBPs:

Target populations:☐ Living below the poverty line

☐ Excluded and/or marginalised populations and/or communities☐ People with disabilities☐ Migrants and /or displaced persons☐ Undereducated☐ Underserved, owing to a lack of quality accessto essential goods and services☐ Unemployed☐ Women and/or sexual and gender minorities☐ Aging populations and vulnerable youth☐ Other vulnerable groups, including as a resultof natural disasters☒ Other (please specify): “General public,” particularly “Aging populations” and “People with disabilities.”

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2. PROCESS FOR PROJECT EVALUATION AND SELECTION
Overall comment on section (if applicable):
For details, please refer to “2. Process for Project Evaluation and Selection” in the report above.

Evaluation and selection☒☒☐

Credentials on the issuer’s social
objectives
Defined and transparent criteria for
projects eligible for Social Bond proceeds
Summary criteria for project evaluationand selection publicly available☐☐☐

Documented process to determine thatprojects fit within defined categories
Documented process to identify and manage
potential ESG risks associated with the project
Other (please specify):

Information on Responsibilities and Accountability☐☐

Evaluation / Selection criteria subject toexternal advice or verification
Other (please specify):☒

In‐house assessment

3. MANAGEMENT OF PROCEEDS
Overall comment on section (if applicable):
For details, please refer to “3. Management of Proceeds” in the report above.

Tracking of proceeds:☒

Social Bond proceeds segregated or tracked by the issuer in an appropriate manner☒Disclosure of intended types of temporary investment instruments for unallocated proceeds☐

Other (please specify):

Additional disclosure:☐

Allocations to future investments only☒☐

Allocation to individual disbursements☐

Allocations to both existing and future
investments
Allocation to a portfolio of disbursements☐

Disclosure of portfolio balance of
unallocated proceeds☐

Other (please specify):

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4. REPORTING
Overall comment on section (if applicable):
For details, please refer to “4. Reporting” in the report above.

Use of proceeds reporting:☒

Project‐by‐project☐

On a project portfolio basis☐

Linkage to individual bond(s)☐Other (please specify):☐

Social Bond financed share of total investment☐

Semi‐annual

Information reported:☒ Allocated amounts☐ Other (please specify):

Frequency:☒ Annual☐ Other (please specify):

Impact reporting:☒

Project‐by‐project☐

On a project portfolio basis☐

Linkage to individual bond(s)☐Other (please specify):☐

Semi‐annual

Frequency:☒ Annual☐ Other (please specify):

Information reported (expected or ex‐post):☐ Number of beneficiaries☐

Target populations☐

Information published in sustainability report☒ Other ESG indicators (please specify): For
details, please refer to “4. Reporting” in thereport above

Means of Disclosure☐

Information published in financial report☐

Information published in ad hoc☒ Other (please specify): Issuer’s Website
documents
Reporting reviewed (if yes, please specify which parts of the reporting are subject to external review):☐

Where appropriate, please specify name and date of publication in the useful links section.

Page 4 of 6

USEFUL LINKS (e.g. to review provider methodology or credentials, to issuer’s documentation, etc.)
1. The evaluation methodology and services
https://www.r‐i.co.jp/en/rating/products/esg/index.html
2. Evaluation performance(1) Green Financehttps://www.r‐i.co.jp/en/rating/esg/greenfinance/index.html(2) Sustainability Financehttps://www.r‐i.co.jp/en/rating/esg/sustainabilityfinance/index.html(3) Social Financehttps://www.r‐i.co.jp/en/rating/esg/socialfinance/index.html

SPECIFY OTHER EXTERNAL REVIEWS AVAILABLE, IF APPROPRIATE
Type(s) of Review provided:☐

Second Party Opinion☐

Certification☐

Verification☐

Scoring/Rating☐

Other (please specify):

Review provider(s):Date of publication:

Page 5 of 6

ABOUT ROLE(S) OF REVIEW PROVIDERS AS DEFINED BY THE SBP

1. Second Party Opinion: An institution with social expertise, that is independent from the issuer may issue
a Second Party Opinion. The institution should be independent from the issuer’s adviser for its Social
Bond framework, or appropriate procedures, such as information barriers, will have been implemented
within the institution to ensure the independence of the Second Party Opinion. It normally entails anassessment of the alignment with the Social Bond Principles. In particular, it can include an assessmentof the issuer’s overarching objectives, strategy, policy and/or processes relating to social sustainability,
and an evaluation of the social features of the type of projects intended for the Use of Proceeds.
2. Verification: An issuer can obtain independent verification against a designated set of criteria, typicallypertaining to business processes and/or social criteria. Verification may focus on alignment with internalor external standards or claims made by the issuer. Also, evaluation of the socially sustainable featuresof underlying assets may be termed verification and may reference external criteria. Assurance or
attestation regarding an issuer’s internal tracking method for use of proceeds, allocation of funds fromSocial Bond proceeds, statement of social impact or alignment of reporting with the SBP, may also be
termed verification.
3. Certification: An issuer can have its Social Bond or associated Social Bond framework or Use of Proceeds
certified against a recognised external social standard or label. A standard or label defines specific criteria,
and alignment with such criteria is normally tested by qualified, accredited third parties, which may verify
consistency with the certification criteria.
4. Social Bond Scoring/Rating: An issuer can have its Social Bond, associated Social Bond framework or a
key feature such as Use of Proceeds evaluated or assessed by qualified third parties, such as specialised
research providers or rating agencies, according to an established scoring/rating methodology. The
output may include a focus on social performance data, process relative to the SBP, or anotherbenchmark. Such scoring/rating is distinct from credit ratings, which may nonetheless reflect materialsocial risks.

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