▍ Initiatives to Enhance Medium- to Long-Term Corporate

Value and ESG Initiatives to Support Sustainable Growth

September 10, 2024
Yasuchika Iwasa
President
NIPPO LTD.
1▍ Corporate Philosophy and Business Identity
NIPPO LTD. will continue to provide “unique value” as a “technical innovator”
supporting our customers‘ manufacturing in our endeavor to enhance mid- tolong-term corporate value and develop a sustainable society.
Since the company's founding in 1952, NIPPO LTD. has supported our customers’
manufacturing both as a trading company specializing in the field of high-performance
production components and as a manufacturer of precision-molded plastic components.
"Technical innovator" describes the business style of our company—”thinking of,
selecting, and creating unique value” supported by our technical capabilities andstrategic thinking, with the employees who embody this style being one of ourcompany's greatest strengths.
We constantly strive to enhance our medium- to long-term corporate value andbring about a sustainable society, continuously helping sustain convenient andprosperous lifestyles by “creating unique value” through new challenges in thedevelopment of our customer's manufacturing and technology.

More Than the Sum
As our corporate statement, this expresses the aim to support and contribute to ourcustomers' manufacturing goals by creating added value ("1+1=3 More Than the Sum")—that is, by providing "unique value"— based not simply on addition, but on our uniquecompetitive advantage based on our "thinking of, selecting, and creating unique value"
approach to develop products and services.

Management Philosophy
We are committed to promoting both prosperity for ourcompany and happiness for our staff and associates bycreating new value, so as to repay society for its blessings.

Management Policy
As a company creating unique value, we will continue tosupport the world-leading manufacturing of our customers
and view our employees as a source of strength for ourcompany, and will make it our goal to be a global company
with roots in each of our local communities.

Code of Conduct
We strive to ground actions in the six core concepts that are
required in providing unique value: "Customer Creed"; "Basic
行動規範
Consciousness"; "Fairness";"Taking on Challenges"; "Speed";and "Communication."2▍ Business Segment
Trading

Manufacturing

Mobility
Power Train Components
Electronic Control System Components
・ Molded Resin Products,
Insert Components
・ Coil Parts and Assembly
・ Processing Metal Components
Customized Manufacturing Equipment(Automated Machinery, Inspection Machines, etc.)

Medical and Precision Devices
Disposable Medical Device Products
Medical Robots Components
Printer Parts
Digital Imaging Components

Electronics【Electronic Components】
Functional Materials
・ Thin Film Materials
・ Packaging Materials
Wiring Board Materials
High Performance Epoxy Adhesives
Wafer grinding carriers
Functional Processed Components, Jigs
and Tools, Equipment【Housing Fixtures and Equipment】
Residential Piping Materials
Water Heater and Piping Materials
Materials for Household Fuel Cells

3▍ Global Network
Working as our customers' business partner in developing a global business rooted in Japanese and overseas regions● NIPPO LTD. Group Sales Office

Fortech Plastic (Suzhou, Anhui)

NIPPO LTD. Group Production Site
◆ FORTECH PLASTIC CO., LTD. Group Production Site

Fortech Plastic (Shanghai)
Shanghai Branch

Fortech Plastic (Kingtech, Dong Guan)
Fortech Plastic (Taiwan)

Fortech Plastic (Beihai)

Shenzhen Branch
Hong Kong Branch

Hokuriku Sales Office

Korat Factory
Vietnam Factory

NIPPO MECHATRONICS HIROSHIMA CO., LTD.
●

Tohoku Sales Office

Philippines Factory
Bangkok Factory

Akashi Office
Tokyo Branch●●●

Kyushu Sales Office●●●

NIPPO Metaltech Co., Ltd.
Yokohama Sales Office
NIPPO MECHTRONICS LTD
Head Office and Factory●

Inazawa OfficeKansai Branch
NIPPO METALTECH CO., LTD.

• 8 sales offices and 5 production sites

Head Office and Nagoya Branch

Mexico BranchInternational
Headquarters
Malaysia Factory

Fortech Plastic (Malaysia))
Jakarta Factory※FORTECH PLASTIC: Business Partner• 7 sales offices and 6 production sites in ASEAN, Greater
China, and Mexico *Fuyu Giken (business partner): 8 sites
4

SECTION 1: Initiatives to Enhance Medium- to Long-Term Corporate Value

5

Electronics▍ History of Value Creation

Changing Business Trends

The NIPPO Group was established in 1952 based on theSales Division of Toho Carbon Manufacturing, an authorized
dealer for Hitachi, Ltd. manufacturing and sellingcarbon blocks. Since then, we have supported
our customers’ manufacturing as a "unique,value-creating company" fulfillingthe dual functions of trading andMagnet Parts
manufacturing.
Varnish Material

Semiconductor andelectronic component material
Wiring board materials

Mobility

Material for housing
fixtures and equipment
Electronic systemcomponents
Gears, rotors
Exhaust gas recirculation parts

Power train
components

Medical and Precision Devices

Printer parts
Wristwatch parts

Audio Visual (AV) equipment

Camera parts（M￥）

40,000

History and Sales Trends

30,00010,000

Medical device components

1991
Resister with the Japan
Securities Dealers Association as
an OTC stock

50,00020,000Winding wires
Solenoid parts

Insulators
Hybrid vehicle parts
Timing chain tensioner
Engine parts

Carbon Parts

Fuel cell materials

1952
NIPPO LTD. established,business as a distributor forchemical products from
Hitachi, Ltd. starts

1968
Ichinomiya Factory (Aichi
Prefecture) opens, precisionengineering plastic molding
business starts

1987
Global production starts
with Bangkok factory(Thailand)0

1987- Expansion
1960- Development
1952- Founding• 1987 Start of global production• 1968 Start of precision engineering plastic molding
・NIPPO LTD. established• 1987 Started of manufacturing and sales
business(Osaka City, Osaka Prefecture)of our original products “Hys Torque• 1982 Start of development, manufacturing and sales ofRoller” and “One Way Clutch Unit".
plastic magnets• 1982 Start of manufacturing and sales of self-designed, • 1991 Resister with the Japan Securities
Dealers Association as an OTC stock.
FRP-made product "Fuel Economy Plates" for trucks.
NOTE：The company has adopted the Revenue Recognition Accounting Standards since FY2021

2006
Inazawa Office (Aichi Prefecture) opens,specializing as site for production anddevelopment of automotive components

2018
Head office relocated to
Nagoya, Aichi Prefecture

2016- Change
2001- Renewal• 2016 Formulation of Management Strategy based on• 2002 Introduction of corporate headquarters system as one
long-term vision and medium-term management planmeasure to strengthen marketing system• 2018 Headquarters relocated to Nagoya City, Aichi Prefecture• 2004 Listed on the JASDAQ Securities Exchange (currently the• 2020 Multiple listings on Nagoya Stock ExchangeTokyo Stock Exchange)• 2022 Shift to new market categories of Tokyo Stock Exchange• 2006 Opening of Inazawa Office in Inazawa City, Aichi Prefecture"Standard Market" and Nagoya Stock Exchange• 2011 Start of medical equipment manufacturing in Korat (Thailand)
6"Main Market".

▍ Establishment Phase of Medium-Term Management Plan 2022-2028
Our Purpose

Our Goal

To provide unique value to our customers, who are leading the world in
manufacturing, and continue to support their manufacturing efforts.

To become a unique company that continues to grow and view its employees as asource of strength.

■Phases of Medium-Term Management Plan
Medium-Term
Management Plan
2022

Medium-Term
Management Plan
2025

Medium-Term
Management Plan
2028

Sustainably grow by cumulative medium-term segments, not by year.

Phase

Period for facing thechallenge of building new
business models, whilestabilizing our financial base

A period for actively
promoting sales of new
products and materials
developed through the “creating
the new business models” phase

A period for realizing evenhigher growth in terms of bothbusiness scale and earnings byfurther expanding business areas

Strengthen businessfoundation

Prepare for stepping up

Step up7

▍ Value Creation Process
The NIPPO Group conducts business in three core business segments: Electronics; Mobility; and Medical and Precision Devices. As a "technical innovator" supporting our customers'
manufacturing efforts, we apply six types of capital and two functions (trading and manufacturing), and through our approach of "thinking, selecting, and creating," we continue toprovide "unique value"—something more than the sum of its parts—and contribute to enhance medium- to long-term corporate value and in achieving a sustainable society.
Principal Capital (as of end of FY 2022)
Financial

Total assets
Equity ratio

Manufacturing

Fixed assets
13,002 million yen
Capital investment expenses
1,279 million yen

30,755 million yen
48.1 %

Business Activities

Corporate Philosophy

Our Strengths

We are committed to promoting both prosperity for our company andhappiness for our staff and associates by creating new value, so as to repay
society for its blessings.

As a "technical innovator," we utilize a business style that combines trading
and manufacturing functions, with employees who embody this style.

Business Vision

Intellectual

Patents held
R&D expenses

22
64 million yen（Business Segment）

Electronics
Medical and Precision
Devices

Mobility

Medium-Term Management Plan
2025 - Quantitative Targets

Human

Medium-Term Management Plan 2025 (FY2023-FY2025)

Number of employees(non-consolidated) 319
Number of employees(consolidated) 2,830

A period for actively promoting sales of new products and materials developed throughthe “creating the new business models”

SocialDomestic group companies
Overseas group companies
Business partners

Natural3
106Electricity usage
42,324,963 kWh
Water consumption
110,040 m³■Electronics：Develop as a materials and parts trading company with
manufacturing functions■Mobility：Evolve from Tier 2 to Tier 1.5 manufacturer■Medical & Precision Devices ：Grow as medical device component
OEM manufacturer（Initiatives to Address Materiality）
Protecting the Global
Environment

・Reducing CO2 emissions

・Developing environmentally friendly
products

3-year Cumulative Total of
Consolidated Operating
Income： 5.73bJPY

3-year average ROE ≧ 10.0%
Observance of ComplianceSeg. Sales/Income in FY2025

・Continuing, auditing, and supervision■Electronics：
18.10bJPY/1.30bJPY■Mobility：
16.50bJPY/1.54bJPY■Medical and Precision
Devices ：7.50bJPY/0.20bJPY

of compliance awareness activities

Harmonizing with andContributing to Society（Ref）

Sustainability targes■Reduction rate in CO2emissions： by 2050, achievingcarbon neutrality (effectively
zero CO2 emissions), in 2030, atleast 25% in comparison withFY2021 ※targeting SCOPE ½■Employee Satisfaction rate
： FY2025 ≧ 65%■Percentage of woman
employees among employees
at assistant manager level（including general staffs)： FY2025 40%• Efforts to strengthen human capital
Medium-term Management Plan 2025（https://www.nip.co.jp/english/ir/.assets/cyukei2025_en.pdf）• Diversity initiatives
ESG data （ https://www.nip.co.jp/english/esg/#esgdata）

▍ Business Portfolio■Basic Policy Regarding Our Business Portfolio
１. With our focus on the three business segments of Electronics, Mobility, and Medical and Precision Devices, we take on the challenge of creating a competitive advantage in these domains
while aiming to expand our business with the creation of a new, fourth segment including niche domains.
2. In each business segment, we will strategically invest management resources to businesses exhibiting high potential for growth and profitability and promote the shift of resources tothese domains. Simultaneously, we plan to downsize or withdraw from businesses in each segment that does not contribute directly or indirectly to the growth of operating income (amount)or that is deemed unlikely to make a commensurate contribution over time.
3. To identify management indicators considering the cost of capital and to ensure the linkage between these management indicators and our business activities (operations), we set operating
income (amount) growth targets for each business segment, with the Board of Directors supervising efforts to achieve medium- to long-term improvement in corporate value
and regular reviews of our business portfolio.

New Businesses

Electronics
Semiconductormaterials

Mobility

Medical &Precision
Devices

Electronic
control parts

Disposable parts for
medical equipment

Wiring board
materials

Coil parts

Hydrogen energy
components

Sensor relatedparts

Parts for medical
robotsPower device
components

Strengthening Functions
Strengthening manufacturer functions• Film slit processing• High performance adhesives• Wafer polishing carriers• In-house planned products

Enhancing cost competitiveness• Promoting automation in mass production
and inspections process
Automation

Enhancing cost competitiveness• Promoting automation in mass production
and inspections process

Downsize or withdraw from businesses in each business segment that do not contribute directly or indirectly to the growth ofoperating income (amount) and that cannot be expected to contribute as time passes.

＋

Create new business segments

Main Businesses

9▍ Measures to Create New Business Segments
Product developmentwith environmental contribution as a keyword

Novelty product development＜Manufacturing＞

Add new
technology＜Trading＞
Utilize
external
resources■Market Developmentin the Field of Hydrogen Energy

Product
matching＋■Collaboration with Universities【Joint researchwith Nagoya Institute of Technology】
Developed the world's first "defogger"
pattern-molded plastic product that
automatically transports liquids
with fine patterns.
（image）

Expand the product lineup by combining in-house
resources and that of partners, targeting the key
materials necessary to generate "hydrogen energy,“
which is attracting attention
as a carbon free nextgeneration energy source.
■Development ofEnvironment-friendly Products【In-house project】（Green Development Project）
Young employees take the lead in creating new businessmodels and developing products based on the keywordof "carbon neutral."Create a new business that contributes to "enhance mid- to long-term corporate value and develop
a sustainable society"!

10▍ Business Strategy and Business Model （Electronics）• Problem-solving technical business style conducted in
Sources ofCompetitive
Advantage

Riskscollaboration with partner companies• Superior quality assurance system equivalent to that of amanufacturer, despite being a trading company• Offering high value-added products that combine trading
company and manufacturer functions

Opportunities

Value Chain
Wafer Polishing Carriers Okinawa Factory• Increasing need for functional materials due to the evolution of next-generation communications
technologies• Greater demand for polishing carriers due to the increasing precision of semiconductor wafers• Increased demand for hydrogen energy-related components due to the progress of carbon
neutrality• Return of domestic production activity due to fluctuations in exchange rates and developing
geopolitical risks

Efforts to Create a Sustainable Competitive Advantage
Category

Increase in Added Value

Housing Fixtures andSales Contract

Equipment Manufacturers, others

Manufacturing
Outsourcing Contract

Procurement Department

Numerical andCritical Analyses

Development Department

Contracted Design

Procurement Department

Approx.
5０％

Partners

Equipment/
Equipment Components

NIPPO Sales Department

Molds/Jigs

Vietnam Factory/Korat Factory

DuPontRaw Materials

Slit Processing

RESONAC

Approx.
40％

Functional
Materials,
othersSubstrate Manufacturers

Distributor/Sales
Agent Contract

Electronic Component/Semiconductor/

Functional Adhesives

Development Department

Approx.
10％

In-House
Products• Changes in supply chains due to reorganization of suppliers/customers' business• Increased procurement costs due to sharp increases in material prices• Accelerating cost competition for general-purpose materials

Shift to High
Value-added
Products

Strengthening
Manufacturer
Functions

Measures

Electronics and semiconductormaterials

Match products that can solve customer issues

Wiring Board Materials

Shift to high-end wiring board products with high added value

Hydrogen Energy Products

Increase for unit product orders through partner collaboration

Wafer Polishing Carriers

Increase profitability by improving productivity and expanding
sales channels through cooperation with partners

Film Slit Processing Products

Expand business by expanding the clean room floor space atthe Vietnam factory and constructing a new clean room at theKorat factory

Functional Adhesives

Boost development of original high-performance adhesives

Business vision
Develop as a materials and components trading company with manufacturing functions

11

▍ Business Strategy and Business Model (Mobility)
Sources ofCompetitive
Advantage• Mass production technology for coil (wound wire)parts• Quality control technology for critical safety parts• Equipment technology supporting high-quality andefficient mass production activities

Value Chain

Opportunities• Increased demand for electronic control system parts (ECUs, PCUs, motors, etc.)• Progress in electrification leading to increased demand for new materials satisfying requirements
for electrical properties and reduced weight• Advances in automated driving resulting in increased demand for new materials used to ensure
safetyCustomized Equipment

Precision-Molded Plastic

Production Equipment

Stamped Metal Products
Conductive Metal Wire

Magnets

Technology Licensing

Procured Products/Partners

Plastic Materials

Category

Tier 1 Auto Parts Manufacturer

Molds and

持続的な競争優位を創出するための取組み

Efforts to Create a Sustainable Competitive Advantage
Critical Safety Parts (Powertrain and

Products and Assemblies

Electronic Control Systems, Mechanical Components)

In-House Product

Risks• Shift to electric (EVs) (surpassing expected speeds)• Disruption of supply chains due to disasters and countries' risks• Reduced production by automobile and auto parts manufacturers due to prolonged semiconductor
shortages• Compensation for recalls due to defective parts• Sharp increases in transportation and personnel expenses

Strengthening DifferentiatedTechnologies

Measures
Coil Parts, Thin-Wall Molding• Unitization of products combining thin-wall molding technologies, winding technologies,
independently procured products, etc.
• Acquire techniques for evaluating electrical characteristics and reliability• Shift to molded insert products, Teflon coatings, and other high value-added products• Acquire techniques for evaluating bonding of plastics with dissimilar materials

Incorporate New Products• New product development combining technologies possessed by NIPPO and partners
Target: Autonomous driving-related parts, units, etc.

Enhance Cost Competitiveness•Promote automation by incorporating equipment independently manufactured by NIPPO(produced in-house) and sales of equipment produced in-house

Reinforce Responses for BCP•Promote production in optimal locations, optimize locations for logistics sites and warehouses

Plaster Casting
Metal Cutting

Plastic Processing

Prototypes
andother components

Business vision
Evolve from Tier 2 to Tier 1.5 manufacturer

12▍ Business Strategy and Business Model (Medical and Precision Devices)
Sources ofCompetitive
Advantage•Environment, technology, and licensing for speciallycontrolled medical devices• ISO 13485-conformant quality control technology

Opportunities

Value Chain

Medical Device Manufacturers
Precision Device Manufacturers

Sterilization and Disposal

Application

Medical Components,
Special Silicone Tubes,
etc.

Printer/Printer-Related Parts

Metal Parts
Electronic Components

Teflon Coating Printing

Procured Items/Partners

Paint Materials

Disposable Products for

Precision Plastic
Molded Products
and Assemblies

Plastic Materials

Medical Devices

In-House Products

Customized Equipment

Molds
Production Equipment

Risks• (Common to Both) Change in supply chain due to partners restructuring their businesses• (Precision Devices) Decrease in printer demand due to increasingly paperless work
• (Medical Devices) Recall payouts due to defective components and other factors• Increased demand for medical robots due to labor shortages at medical institutions• Increased demand for telemedicine, including online medical examinations and remote device
operation due to labor shortages at medical institutions, prevention of nosocomial infections, andother developments• Increased demand for high-quality, high-precision components due to an increase in medical
lawsuits

Efforts to Create a Sustainable Competitive Advantage
Category
Strengthening DifferentiatedTechnologies

Measures• Enhance assembly, adhesion technology, surface treatment technology,
and validation skills•Acquire knowledge on specialized material processing for medical device components

Enhance cost competitiveness•Promote automation with in-house equipment and create production lines capableof handling integrated production, from component units to finished products

Expand subcontracted
manufacturingof medical device components• Scale up contract manufacturing by building a production system for medical
device components in Japan• Scale up contract manufacturing by strengthening overseas (ASEAN) production system

Reinforce the Equipment Business• Lateral development (sales) of devices produced in-house utilizing equipment technology
developed with automotive parts

Business vision
Develop as an OEM manufacturer of medical equipment components

13

SECTION 2: ESG Initiatives Supporting Sustainable Growth14▍ Sustainability Policy
The NIPPO Group's management philosophy expresses our mission to promote both prosperity for our company and happiness for our staff and associates by creating new value
so as to repay society for its blessings.
We have established the following policies as sustainability policies based on our “Compliance Declaration and Code of Conduct,” which we are bound to follow as a good
corporate citizen, and commit ourselves through our business activities to enhancing our medium- to long-term corporate value and bringing about a sustainable society inaccordance with the SDGs.

Social Policies••

We understand and respect the basic human rights guaranteed by Japan's Constitution and the laws and regulations of each individual country, as well as the basic
human rights stipulated in international guidelines.
We respect every country's and region's culture and customs, and we strive to harmonize with and contribute to our local communities in cooperation with ourdiverse stakeholders.

Environmental Policies••

We promote business activities that help protect the global environment and continuously work to improve such activities.
We are proactive in dealing with the risks of climate change and strive to reduce CO2 emissions in the process of manufacturing and selling our products and materials

Stakeholder Policies
Customers

With our new challenge of “creating and providing unique value,” we support our customers‘ manufacturing businesses, and contribute to technologicaldevelopment and fuller, more convenient lifestyles around the world.

Suppliers

We strive to build relationships as a trusted business partner based on the spirit of fairness and the philosophy of mutual prosperity through free and equitablebusiness dealings.

Employees

We adhere to the principle of mutual respect for one another's values and thinking, regardless of nationality, race, gender, age, religion, and other differences.
We are committed to creating a workplace environment where employees can work with peace of mind as they take on challenges together, supporting our
employees in their aim to build more enriching lives.

Shareholders/
Investors

We disclose information to our shareholders and investors in a timely and appropriate manner and emphasize constructive dialogue aimed at enhancing mediumto long-term corporate value.

Local Community

As a good corporate citizen with roots in the community, we actively engage in programs that contribute to society.

15▍ Sustainability System
Based on our Sustainability Policy, the NIPPO Group has established the Sustainability Committee, which is chaired by the president, as a framework for promoting initiatives toimprove medium- to long-term corporate value and create a sustainable society. To promote sustainability, we plan to identify and review materiality as well as review efforts toaddress identified materiality. Subcommittees will promote specific initiatives to maintain and improve each identified materiality, with the results of the activities being reported to
the Sustainability Committee every six months. In addition, the Board of Directors will supervise the activities of this committee and subcommittees via the annual management
review.

■ Sustainability System Chart■Roles of Each Institution (Organization)
Roles

Board of Directors
Board of Directors

Supervision

Report/Proposal

President
Sustainability Committee

President• Chief executive responsible for dealing with sustainability-related management
issues• Report and provide recommendations to the Board of Directors regarding
sustainability-related management issues• Develop Sustainability Committee activities with advice from the Board of
Directors

Sustainability
Committee• Identify and review materiality• Review subcommittee's initiatives for each identified materiality• Resolve other sustainability-related problems and issues(President, Director in charge of Corporate,

Chief of Headquarters,
Audit and Supervisory Committee Chairman)

Chief Executive
Responsible for
Implementation

Chief of Corporate
Headquarters

Subcommittees

Relevant Sections

Climate Change Subcommittee

Corporate HQ Operation Support
Department, Corporate Planning
Division, HQs

Human Capital andDiversity Subcommittee

Corporate HQ
Personnel Department

Compliance Subcommittee

Corporate Planning DivisionCorporate HQ• Determine basic policies for sustainability-related initiatives• Supervise sustainability-related management issues• Promote specific initiatives to maintain and improve identified materiality• Report to the Sustainability Committee on the results of activities
Subcommittees*In order to link the sustainability promotion system and the Group's risk
management system, Chief Executive Responsible for Implementation of thesubcommittees and Chief of Risk Management Headquarters are appointed
concurrently.

16▍ Materiality Identification and Review Process and Risk Management System
The Sustainability Committee is tasked with providing the NIPPO Group with an understanding of the company‘s social and environmental problems and other sustainability-related
issues, identifying materiality following a primary evaluation of the impacts these issues have on NIPPO’s stakeholders, on society, and on the company‘s management and business.
A secondary evaluation of materiality that have been identified involves elucidating the risks and opportunities for each one and determining the specific efforts necessary tomaintain and improve them. The aim is to create an efficient and effective management system by integrating each process for identifying, reviewing, maintaining and improving
materiality with the Risk Management System, based on the Basic Risk Management Regulations separately established by the Group.

Integration with Risk Management System

Materiality Identification and Review Processes●Processes for distinguishing, identifying, and evaluate materiality andtheir risks and opportunities

Understandour social,environmental,
and othersustainabilityrelated issues

Identify
materiality
throughprimary
evaluationof various
issuesRisk Management Processes Stipulated
in the "Basic Risk Management Regulations"

Risk Category(1) List anticipated risks and opportunities, collect and analyze
information• Risks related to climate change• Risks related to labor issues(human capital, diversity, etc.)• Risks related to compliance• Risks related to disasters andaccidents• Risks related to information
security• Risks related of trade, other risks(2) Run future simulations for each emergent risk/opportunity andidentify risks/opportunities requiring action (secondary evaluation)(3) Formulate measures to prevent risk and create opportunities(4) Formulate plans for action when risks occur(5) Investigate the causes of risk occurrence(6) Disclose necessary information after risk occurs(7) Establish measures to prevent recurrence of risk
(8) Formulate and implement other necessary actions●Processes for Managing Materiality and Their Risks and Opportunities
Formulate measures to
identify and prevent risks
and create opportunities

Risk Management System Stipulated in the "Basic
Risk Management Rules"

Resolve problems/issues
arising in each subcommittee(as appropriate)

Manage progress andadvise onsubcommittee/committee
activities

Disclose required
information,internally andexternally

Formulate measures
to identify andprevent risks andcreate opportunities

Be constantly aware of link between the "long-term vision" and "medium-term management
plan," proceed through the PDCA cycle• Risks related to technology andpatents• Risks related to sales transactions• Risks related to purchasingtransactions• Risks related to distribution• Other risks related to transactions

Chief of Risk
Management
Headquarters

Chief of Corporate
Headquarters

Chief of Business
Headquarters

Sustainability System

Subcommittee• Climate Change
Subcommittee• Human Capital and Diversity
Subcommittee• Compliance Subcommitteeー

Chief Executive
Responsible for
Implementation

Chief of Corporate
Headquartersー* The aim is to create an efficient and effective management system by integrating the framework formateriality initiatives carried out by subcommittees under the Sustainability Committee with the risk
management system stipulated in the Basic Risk Management Regulations.

* Please refer to "Risk Management System" under "Basic Risk Management Regulations" on Page 28.

17▍ Evaluation and Identification of Materiality
The NIPPO Group recognizes that compliance is the most important undertaking for a company seen as a public institution. In addressing this, we identify the social andenvironmental problems and other sustainability-related issues (materiality) that affect the company and incorporate this materiality in our business strategy so as to enhance
our medium- to long-term corporate value and successfully achieve a sustainable society through the creation of unique value.

■ Materiality Identified by the Company and Subcommittees Responding
E: Environmental Issues S: Social Issues G: Governance Issues

Extremely High

Observance ofComplianceImpact on Our Stakeholders and Society

E: Protecting the Global Environment(Climate Change Subcommittee)

Developing environmentallyfriendly products

Reducing wastewaterand solid waste

Job creation

Reducing CO2 emissions

Developing human resources
who can create unique value

S: Harmonizing with and Contributing to Society(Human Capital and Diversity Subcommittee)
Occupational health andsafety initiatives

Diversity and equal
opportunity initiatives

Coexistence with local
communities

Providing training andeducational opportunities

High

G：Observance of Compliance (Compliance Subcommittee)

Impact on Our Management and Business

Extremely High18

▍ Specific Initiatives to Identify Materiality
The NIPPO Group identifies risks and opportunities related to the identified materiality and promotes initiatives in line with the countermeasures formulated for each, and we strive toimproving medium- to long-term corporate value and achieving a sustainable society.
Materiality
E
Environment

S
SocialG
GovernanceRisk and Opportunity

NIPPO Initiatives

Protecting the Global
Environment• Reducing CO2 emissions• Developing environmentallyfriendly products• Reducing wastewater andsolid waste

Risks• Increased costs following stricter reporting
requirements for CO2 emissions, the introductionof carbon pricing, and the additional excesses forcorrective measures and emissions control• Decreased sales due to delayed responses tomarket changes, such as lower demand for printers
resulting from the shift to paperless operations andthe electrification of automobile engines• Increase demand from the business partners to
reduce CO2 emissions and impact of that oncompany’s evaluation•Damage to our own factories due to increases inabnormal weather and natural disasters

Opportunities• Increasing need forenvironmentally friendly productsthat help reduce environmental
impact and lower CO2 emissions• Increasing need for products
related to CO2 separation, capture,and utilization, with "carbon
neutral" being the operating key
phrase•Increasing need for components
related to hydrogen energy, which
is attracting attention as a nextgeneration, non-CO2-emittingenergy source

E-1 Reducing CO2 emissions

Harmonizing with andContributing to Society• Developing human resources
who can create unique value• Job creation• Diversity and equal
opportunity initiatives• Providing training andeducational opportunities• Occupational health andsafety initiatives• Coexistence with local
communities

Risks• Results of decline in the working population:
Existing employees• Increased workload• Lower productivity and work engagement• Increased wages
Employee attrition•Work environments not meeting world's needs:• Lower productivity and morale• Employee attrition• Reduced innovation

Opportunities• We will contribute to sustainablecorporate growth and a sustainableof society by ensuring this is acompany where all employees—
who are the source of ourstrength—respect each other's
individuality and can continue intheir work with peace of mind.

S-1 Initiatives to Strengthen Human

Risks
Observance of Compliance• Decline in social trust/credibility due to non-compliance

Related SDGs

E-2 Developing environmentallyfriendly products

Capital-1 Initiatives to Strengthen Human
CapitalS-2 Creating a Workplace

Environment Where Diverse
Employees Can Play an Active Role
-1 Creating a Workplace Environment
Where Employees Can Work Safely andSecurely-2 Creating a Workplace Environment
Where Everyone Can Play an Active RoleG Continuing Compliance
Awareness Programs with Auditing
and Oversight19▍ E-1 Reducing CO2 emissions
The NIPPO Group has identified the global issue of “protection of the global environment” as one of its material issues, and recognizes that it is acompany‘s responsibility to address this issue. Among these, we believe that concrete efforts to address climate change are urgently needed. In
December 2022, we announced our support for the TCFD recommendations, and the Climate Change Subcommittee discussed the risks andopportunities, and responses that climate change could affect our business. We are also disclosing information in accordance with theserecommendations.
※ For risks and opportunities identified by our company and specific initiatives, please refer to"Information Disclosure Based on TCFD Recommendations" (https://www.nip.co.jp/english/esg/.assets/tcfd_en.pdf).

● Metrics and Targets

Reduction rate in CO2 emissions（in comparison with FY2021）

FY2023Results

FY2025
Target

FY2050 Target＋2%

Reduce≧25%

carbon neutrality(effectively zero CO2 emissions)

Installation of self-consumption solar power generation system
With an aim of reducing CO2 emissions and power costs byswitching some of the electricity used in our factories to clean
energy, we installed solar power generation systems at our
production sites. In FY2023, we installed and started operationof self-consumption solar power generation systems at each of
the Inazawa and Malaysia plants.

・ We have set a target for reducing CO2 emissions, the greenhouse gas with the greatest impact on global warming.“
・ Results for each fiscal year：https://www.nip.co.jp/english/esg/.assets/esg_environment_en.pdf
・ We will make an announcement about the range of “SCOPE 3” that can be managed in practice once we havedetermined that information and are prepared to disclose it.

● Roadmap to Carbon Neutrality

Present
Reducing emissions
from NIPPO's
production activities

・ ・ ・

・

FY2030・・・・FY2050・ Extensive energy conservation in production activities and factory equipment, incorporating new energy-saving equipment
and replacing existing facilities
CO2 emissions reducedby more than 25%

・ Using innovative technologies to achieve greater energy savings and higher efficiency

compared to FY2021

Reduction throughexternally procuredenergy・ Installation of solar power systems

Contribution throughbusiness activities

・ Material and product development activities using "environmental contribution" as a key concept

・ Procurement of renewable forms of energy

Carbonneutrality
achieved20▍

E-2 Developing environmental contribution products

The NIPPO Group, in order to create new business segments, help protect the global environment by promoting
the material and product development activities using "environmental contribution" as a key concept,.
Hydrogen energy-related
business development
Targeting key materials necessary to generatehydrogen energy, which is a carbon free andnext-generation energy source, we areaccelerating efforts to commercialize it bycombining the resources of our company,
partner companies, and universities.
① Expansion of product lineup by utilizing
the resources of partner companies
・ Sales of fuel cell components
・ Development of water electrolysis cells②Joint research and development with
Nagoya Institute of Technology
・Development of a "New Type of FuelCell" that does not require Hydrogen
Gas Supply

Start preparations for contract
production of "LIMEX Pellet*"

TBM

NIPPO

environmentallyfriendly material"LIMEX"

Precision
Plastic Molding
Technology

In Mar. 2024, weestablished a capital andbusiness alliance withTBM Co., Ltd. and ourVietnam plant is now
preparing for contract
production of LIMEX
Pellet. In the future, wewill also work on joint
development of new
LIMEX materials.
* LIMEX Pellet contains more than 50% inorganic
substances such as calcium carbonate, which is
expected to reduce the amount of petroleum-derived
plastics used and greenhouse gas emissions,
including CO2.

Green Development ProjectAs an in-house project, a Green
Development Project was launched in 2022
and are working on the development ofenvironmental contribution products.
Centered on industry-academia-government
collaboration, the project is promoting
activities with the goal of "creating a new
business model and developing productsthat will lead the era 30 years from now" inlight of the "14 fields to grow" indicated by
the Japan government.
In addition, as 8 out of the 12 members of
this project are in their twenties, we arealso striving to develop human resources by
providing opportunities to younger
generation so that they will play a central
role in our company in 20 or 30 years.
Ongoing Themes
Direct capture of CO2 from the atmosphereusing wave energy, chemical reactions, etc.
Development of products using plants thatabsorb a lot of CO2.
(Fiber, powder, activated carbon, etc.)21▍ S Initiatives to Strengthen Human Capital and Increase Diversity
The NIPPO Group's employees—who we consider to be our technical innovators—are the source of our competitive advantage, and we may say that their existence is ourstrength. We enable "unique value creation" through the active participation and diverse perspectives of each employee as well as their mutual coexistence and cooperation.
In order to continue this practice, the NIPPO Group is placing even greater focus on efforts to strengthen human capital and increase diversity.

■Three Initiatives for "Unique Value Creation"
S-1. Initiatives to Strengthen Human Capital● Developing human resources who can create unique value

Continuously maintaining our practice of unique value creation requires employees to continue honing their expertise, to respect eachother's values and ways of thinking, and to support derivation of the ideas and challenges of "more than the sum." Thus, we strive tocreate a workplace environment in which employees have a high degree of work engagement and are actively involved.

"Unique Value Creation"

S-2. Creating a Workplace Environment Where Diverse Employees Can Play an Active Role
● Creating a workplace environment where employees can work safely and securely

We consider an environment in which employees can work in safety and with peace of mind to be a basic condition incontinuing to create unique value. We will introduce and review various personnel systems as we strive to create acomfortable working environment based on work style reform/innovation.

・Creating a workplace environment where everyone can play an active role
We consider an environment in which diverse perspectives—that is, an environment enabling discussions between thosewith diverse characteristics, including gender and internationality, regardless of position, career, or age—to be a basic
condition in continuing to create unique value. We will introduce and review various personnel systems for the diversificationof human resources as we strive to create opportunities for everyone to play an active role.

Environment where everyone
can play active role

Environment oflearning and mutual
elevation
Safe andsecureenvironment22

▍ S-1 Initiatives to Strengthen Human Capital● Human Resource Development
System in FY2024■Developing Human Resources Who Can Create Unique Value● Metrics and Targets
FY2023 Results

FY2025 Target

Participation rate of level-specific training

95%

100%

Participation rate of training for managers

100%

100%

・ Results for each fiscal year：https://www.nip.co.jp/english/esg/.assets/esg_society_en.pdf(1) Stratified Human Resource Development System
To develop technical innovators with technology and strategic thinking from a medium- to long-term
perspective, we have been phasing in a mutual learning form of training based on the concept of"teaching, learning, and growing together." In concrete terms, based on work requirements set foreach level, we provide opportunities to carefully consider what employees want to be in the futureand steps in achieving that.

(2) Developing Candidates for Management
For the purpose of improving the organization's ability to achieve goals, we conduct training in line withthe training system aimed at strengthening management capabilities for managers and candidates for
management positions. For example, at the "Basic Management Training" program for management
candidates, they learn basic knowledge about management, such as how to lead the organization toachieve its goals and producing results through subordinates, and then they analyze issues in their own
departments and integrate the results and action plans with their department heads in an aim toprovide them with an opportunities to acquire practical basis knowledge and experience.

(3) Enhancement Through Job-Specific Training
We conduct training specific to each business division, allowing trainees to acquire the knowledge
and skills required in their specialized fields, as we strive to create a system that enables our
personnel to grow through their work.

Basic skills improvement program “NIPPO Skill License System“
As one of our efforts to strengthen human capital, which is our materiality, we
have introduced the “NIPPO Skills License System” that is an in-house basic
skills improvement program aimed at “developing human resources who cancreate unique value."
As an example, in the field of plastic injection molding
technology, after a predetermined education andevaluation, more than 50 people have been certified as
instructors at five plants in Japan, Thailand (Bangkok
Korat), Vietnam, and Indonesia.
23▍ S-2 Creating a Workplace Environment Where Diverse Employees Can
Play an Active Role

■ Creating a Workplace Environment Where Employees Can Work Safely and Securely(1) Periodic Examinations with a “Management and Labor Assessment" by a Certified
Labor and Social Security Attorney
As we aim to be a company that values each and every employe, wewere certified as a company that has passed the management and laborassessment, following a certified social insurance and labor consultant's
assessment of our compliance with labor and social insurance laws andregulations and of our initiatives to reform the workplace environment.

(3) Initiatives to Improve Mental Health and Employee Satisfaction
Recognizing that our employees' mental health is a basic condition in leading a happy life
for them and their families as well as in maintaining a lively workplace, we have beenworking to improve mental health, not only in terms of mental illness, but also withmeasures to revitalize communication in the workplace.
FY2023 Results

FY2025 Target

99

94

Stress Check Index *1(2) Increasing the Childcare Leave Rate

Employee Satisfaction *2

55.1%

≧ 65%

We have focused on creating a system and workplace environment that allows
employees to take leaves of absence for a childbirth, childcare, or other reasons
without worrying, while also enabling them to return to work without difficulty.

High Stress Percentage*3

21.2%

＜ 10%

Turnover Rate *4

6.9%

＜ 5%

FY2023 Results

FY2025 Target

Male Employees

50%

≧ 15%

Women Employees

100%

100%

* 1 Stress Check Index: An indicator of "comprehensive health risk" established by the Ministry of Health, Laborand Welfare. The national average is set at 100. The higher index (above 100) indicates the higher risk that theworking environment is having a negative impact on workers' health.
*2 Employee Satisfaction: Index of job satisfaction based on stress checks (percentage of employees who are“satisfied” or “somewhat satisfied” with their jobs)*3 High Stress Percentage: Percentage of “employees deemed to be highly stressed” according to stress checks*4 Turnover Rate: Turnover rate of regular employees (excluding mandatory retirement)

・ Results for each fiscal year：https://www.nip.co.jp/english/esg/.assets/esg_society_en.pdf

Initiatives to ensure that employees can continue to work safely and securely while giving birth and parenting
We believe that providing the necessary support at each stage of pregnancy, childbirth,and parenting will lead to "the creation of a workplace culture in which both men andwomen can balance parenting and work" and "the creation of a work environment inwhich taking childcare leave does not stop career development." We have also revised
HR system and held individual briefing sessions for employees before and after childcare
leave.

New HR systems
Maternity checkup leave
Paid leave for childcare
Partial salary payment during childcare leave24▍ S-2 Creating a Workplace Environment Where Diverse Employees
Can Play an Active Role
■ Creating a Workplace Environment Where Everyone Can Play an Active Role
(1) Ensuring Diversity in Core Human Resources
As we believe a multifaceted perspective enhances an organization’s
growth, one aim is to increase the percentage of woman employees
in career-track and professional positions as well as employees at
assistant manager level.

FY2022 Results

FY2025 Target

Percentage of woman employees in career-track andprofessional positions （not including managers）

9.8%

15%

Percentage of woman employees among employees
at assistant manager level （including general staffs)

30.5%

40%

・ Results for each fiscal year：https://www.nip.co.jp/english/esg/.assets/esg_society_en.pdf(2) Company-wide Project Initiatives
We continue to create a system thatallows any interested individual to takeon the challenge of new initiatives andgain successful experience without thelimits imposed by occupationalclassifications or specializations, thereby
providing opportunities to encounter"more than the sum," an experience that
results from discussions featuringmultiple perspectives.

Systems that reward employees who take on challenges and enhance their engagement
As part of our efforts to create a workplace environment where diverse employees can play an active role, we haveestablished a new system to support employees who take on challenges and enhance their engagement from FY2024.
■Special Promotion System
In FY2024, we introduced a system that allows employees who have taken on challenges and achieved higher results tobe promoted at an earlier stage.
■In-house multi-job and in-house internship system
In fiscal 2024, we introduced a system that allows employees with high aspirations to gain diverse work experience
while staying at our company. This system also aims to develop human resources with multiple skills based on diverse
personal network and multiple experience, and to create new value that is not bound by existing frameworks.
【In-house multi-job system】
A system in which departments that need support
from other departments set recruitment guidelines andrecruit employees who want to take on the challengeof their work.

【In-house internship system】
A system that allows employees who are interested
in the work of other departments
to apply for the work and gain work experience there
so that they can use it for future career development.

25

▍ G Continuing Compliance Awareness Programswith Auditing and Oversight
The NIPPO Group has identified "observance of compliance" as the company's most important materiality. We have incorporated the "ComplianceDeclaration and Code of Conduct" into our “Compliance Guidebook” as a fundamental set of directives to be observed in the execution of our daily
duties. We always take the ethical path and proceed with good social sense so that we may be deemed a good corporate citizen.

■Compliance Training System
Basic Issues Requiring Compliance in the Execution of Regular Operations
as Stipulated in the "Compliance Guidebook"
Follow-up
for managers

Follow-up
for all employees

For New
employees• Training for managers
Labor management, harassment, etc.

• Compliance training for all employees• Thematic compliance training (optional)
Subcontracting law,environmental laws andregulations, harassment, etc.

• Pre-assignment training for new hires• Mid-career employee training
Importance of compliance,internal management systems, etc.

• Respect for Human Rights• Appropriate Information Disclosure• Prohibiting Discrimination• Ensuring Accuracy of Financial Reporting• Prohibiting Harassment• Prohibiting Insider Trading• Ensuring Health and Safety• Fair Manufacturing• Prohibiting Transactions Constituting
Competition with Company Business or
Conflicts of Interest• Tackling Environmental Challenges• Prohibiting Corruption• Compliance with Chemical Substance
Regulations• Eliminating All Connections to Anti-Social Forces• Proactive Communication• Prohibiting Private or Unauthorized Use ofCompany Property• Fair Procurement Practices• Protecting Classified Company Information• Free and Fair Competition• Protecting Personal Information• Compliance with Import/Export
Regulations• Protecting Intellectual Property26

▍ G Corporate Governance System
Shareholders Meeting
Appointment/Dismissal
ReportingAccounting Auditors

Audit &
Supervisory Committee

AuditsInstructions

Chief of Corporatee
Headquarters

Board of Directors

Cooperation

Proposals
Reporting
Cooperation

Cooperation

Internal Audit
Division

Nomination &Compensation
Committee
ReportingInstructions
Reporting

Audits by Audit& Supervisory
Committee

Internal
AuditsInternal
ReportingCommittees and Conferences
Appointment/Dismissal/
Supervision

President
Instructions

Internal Control Promotion Headquarters
Budget Verification Committee
Invention Investigation Committee
Sustainability Committee

ReportingManagement Strategy Conference
Business Strategy Conference

ReportingManaging Directors
Executive Officers
Instructions

AuditsExternal
ReportingConsulting Lawyer・HP

Management Policy Explanation Meeting

Reporting

Notification

Each Division and Affiliated Companies*1. For details on the status of the Corporate Governance Code initiatives, please refer to https://www.nip.co.jp/esg/.assets/CorporateGovernanceCode.pdf. (Japanese)*2. To secure and enhance the company's corporate value and our shareholders' shared interests, the Company, upon approval of the 73rd Ordinary General Meeting of Shareholders, implemented the"Countermeasures to Large-scale Purchases of Company Shares (Takeover Defense Measures)" plan. For details, please refer to https://www.nip.co.jp/english/ir/shareholder/ir_baishu_boei.html.

27

▍ G Risk Management System
Board of Directors

ReportingPresident※Major risks
Appointment

Reporting

Chief of Risk Management Headquarters
Risk Management Processes Stipulated inthe "Basic Risk Management Regulations"(1) List anticipated risks and opportunities, collect and analyze information(2) Run future simulations for each emergent risk/opportunity andidentify risks/opportunities requiring action (secondary evaluation)(3) Formulate measures to prevent risk and create opportunities(4) Formulate plans for action when risks occur(5) Investigate the causes of risk occurrence(6) Disclose necessary information after risk occurs(7) Establish measures to prevent recurrence of risk
(8) Formulate and implement other necessary actions

ReportingInstructions

Department in Charge※ The diagram for auditing and supervision is the same as the corporate governance system.

Appointment categories for
Chief of Risk Management Headquarters

Risk contents• Risks related to climate change• Risks related to labor issues(human capital, diversity, etc.)• Risks related to compliance• Risks related to disasters and accidents• Risks related to information security• Risks related of trade, other risks
⚫
⚫
⚫
⚫
⚫

Risks related to technologies and patents
Risks related to sales transactions
Risks related to purchasing transactions
Risks related to logistics
Risk related to other transactions

Chief of Risk
Management
Headquarters

Chief of Corporate
Headquarters

Chief of Business
Headquarters28

▍ Disclosure of ESG Information
Non-financial information on the environment, society, and governance is disclosed on our website as "ESG data."* Respective data subject to disclosure may change based on the progress of this initiative at our company.

Information Disclosed

Environmental Issues• CO2 emissions• Waste emissions (non-consolidated)• Electricity usage• Water usage• Sales of energy-saving and environmentally friendly products

Social Issues• Number of employees• New graduate and mid-career hires (number)• Managers (number of people)• Percentage of woman employees in career-track and profess
ional positions （not including managers）• Percentage of woman employees among employees at
assistant manager level（including general staffs)• Employment rate for persons with disabilities• Turnover• Length of service• Average annual income (by job category)• Occupational accidents (number of days)• Occupational accidents (frequency)• Average days of paid leave taken• Number of employees taking childcare leave• Number of employees taking nursing care leave• Stress Check Index• Employee Satisfaction Index• Percentage of high-stress employees• Regular health check-up rate
• Participation rate of rank-based training• Participation rate of managerial training• Number of training sessions related to technology and skills• Number of participants in training related to technology and skills• Number of newly qualified employees

Governance Issues• Board of Director effectiveness(ratio of independent directors/ratio of women directors/ ratio of foreign directors /number of board meetings/ skill set)
• Number of participants in compliance training• Number of legal violations• Number of internal reports• Number of external reports

29