(Translation)
Nikkiso Co., Ltd.
Internal Control Basic Policy(Revised on May 15, 2024)

Nikkiso Co., Ltd. (hereinafter referred to as “Nikkiso”) shall provide for its Internal Control Basic
Policy as follows based on the Companies Act and the Ordinance for Enforcement of the Companies
Act. Nikkiso shall uphold the management philosophy of ensuring that the Nikkiso Group holds soundsocial ethics and values as a member of society, complies with laws, regulations and social norms, andbuilds up good relationships with stakeholders, while contributing creatively to fields that form the
bedrock of our lives in an effort to realize people’s good quality of life.
With the aim of achieving the Nikkiso Group’s sustainable growth and increased corporate value overthe mid- to long-term under this management philosophy, Nikkiso shall put in place the Sustainability
Committee composed of the general managers of business divisions and general managers ofadministration divisions, ensure that reports are made to the Board of Directors in a timely andappropriate manner, and thereby establish the internal control system of the Nikkiso Group.
1. Intra-Group Control(1) The system to ensure that execution of duties by directors and employees of Nikkiso and its
subsidiaries conform to laws, regulations and the Articles of Incorporation(Article 362, Paragraph 4, Item 6 of the Companies Act, Article 100, Paragraph 1, Items 4 and 5 of
the Ordinance for Enforcement of the Companies Act)
1) Establishment of Code of Conduct
Nikkiso shall establish, as compliance guidelines of the Nikkiso Group, the “Nikkiso Group
Global Code of Conduct” that provides for fundamental matters that the Nikkiso Group’s officers
and employees should observe for acting in compliance with laws, regulations and social norms
in their business activities and making a contribution to society in accordance with theirconscience as a person in the business community.
2) Compliance System for Ensuring Compliance with Laws, Regulations and Articles ofIncorporation
To promote the Group’s compliance, Nikkiso shall assign the executive (director or executive
officer) taking in charge of compliance and establish the department responsible for compliance
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in an administration division, and the “Risk Management and Compliance Committee” under thesupervision of “Sustainability Committee” and thereby put in place the system for reporting on
the status of its compliance to the Board of Directors and the Audit & Supervisory Board in atimely and appropriate manner.
3) Development of the whistle-blowing system
The Nikkiso Group shall, with the aim of conducting transparent and fair group management, put
in place both in Japan and abroad a “whistle-blowing system” in which the department in chargeof compliance serves as the contact point for employees of the Nikkiso Group detecting a fact(s)violating laws and/or regulations within the Nikkiso Group, and such employees can reportit/them directly, anonymously or not to specialists including outside attorneys.
4) Establishment of Internal Control Department
Nikkiso shall establish Internal Control Department that puts in place, runs and evaluates thesystem ensuring the reliability of financial reporting based on the Financial Instruments andExchange Act and the rules and regulations prescribed by Nikkiso covering not only Nikkiso but
also its subsidiaries, and reports on the status of its internal control to the Board of Directors andthe Audit & Supervisory Board in a timely and appropriate manner.
5) Establishment of Internal Audit Department
Nikkiso shall establish Internal Audit Department in charge of supervising internal audit under
the direct control of the President & CEO, prepare the basic policy of internal audits, andformulate annual audit plans and conduct internal audits, etc. based on the Internal Audit
Regulations, covering not only Nikkiso but also its subsidiaries.
6) Supervision and Audit by Outside Directors and Outside Audit & Supervisory Board Members
Nikkiso shall reinforce the system that supervises and audits decision-making of management
and business execution by outside directors and outside Audit & Supervisory Board Members
who have no conflict of interests with general shareholders and are independent of Nikkiso’s
business execution from objective and expert standpoint.
7) Check on Executing Persons and Ensuring of Appropriateness
Nikkiso shall provide for the matters that must get approval from the Board of Directors underthe Board of Directors Regulations, the Authority Regulations, etc. to maintain the system where
each executing person cannot make a decision and execute business at his/her own discretion.
Further, the President & CEO shall make business execution reports to the Board of Directors ona regular basis, including matters concerning the compliance structure. In addition, Nikkiso shallselect an accounting auditor who can demonstrate its expertise also for accounting treatment ofoverseas subsidiaries to maintain the system where proper accounting treatment can be conductedbased on close exchange of information.
8) Response to Antisocial Forces
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The Nikkiso Group shall break off the relationship with antisocial forces, reject an unreasonable
request(s) in a resolute attitude and work towards elimination of antisocial forces in an organizedmanner.
(2) The system regarding storage and management of information on execution of duty by
Nikkiso’s directors(Article 100, Paragraph 1, Items 1 and 3 of the Ordinance for Enforcement of the Companies Act)
1) Information Security and Information Management
The Information Systems Committee shall be put in place under the supervision of the
Sustainability Committee and measures for maintaining and improving information security shallbe implemented on an ongoing basis in accordance with Basic Rules on Information Security.
Furthermore, the system for managing and storing business documents pursuant to items 2) and3) below shall be put in place.
2) Management and Storage of Business Documents in Accordance with Laws and Regulations
Minutes of General Shareholder Meeting, Board of Director Meeting and Management
Conference (including respective electromagnetic records) shall be prepared and stored in an
appropriate manner based on the laws, regulations and the internal related regulations.
3) Management and Storage of Business Documents Based on Authority Regulations Including
President & CEO’s Approval
Requests for approval from the President & CEO where the President & CEO is the final approvershall be stored for a prescribed period of time from the date of the approval or report by meansof the original copy or electromagnetic records at the department requested the approval from the
President & CEO based on the Authority Regulations and the Detailed Regulations for the
President & CEO’s Approval.
(3) The system regarding Regulations for management of risk of loss at Nikkiso and its
subsidiaries and other matters(Article 100, Paragraph 1, Items 2 and 5 of the Ordinance for Enforcement of the Companies Act)
1) Risk Management
Nikkiso shall manage risks that should be managed by dividing them broadly into businessrelated risks and operational risks. The “Risk Management and Compliance Committee,” chairedby a general manager of an administration division and composed of specialized units of businessdivisions and administration divisions shall be put in place under the supervision of the
Sustainability Committee and assume the responsibility of managing business portfolio risks and3 / 7

risks related to business operations in Japan and overseas, country risks, risks related totechnology development, intellectual property, product quality, product defects and the like(hereinafter, ”Business Risks”) and safety, environmental and disaster risks, financial andeconomic risks such as currency fluctuations and interest rate fluctuations, information
technology and security risks, risks related to export trade control and antitrust laws and the like(hereinafter, ”Operational Risks”).
2) Risk Assessment and Monitoring by Committees
The Risk Management and Compliance Committee shall assess and monitor the respective status
of Business Risks and Operational Risks, and put in place the risk management system forensuring that reporting is made in a timely and appropriate manner via the Sustainability
Committee to the Board of Directors and the Audit & Supervisory Board of the Nikkiso Group.
3) Development of Crisis Management System
In the event of the occurrence of unforeseeable circumstances, Nikkiso shall establish the
response headquarters whose head is the President & CEO or executive officer in charge, makeprompt responses with the help of outside experts including its attorneys, etc. where appropriate,
and maintain the system to minimize expansion of damages. In addition, as to the matters that
require disclosure, Nikkiso shall maintain the system that can make disclosure in a timely andaccurate manner. Nikkiso shall maintain the Company-wide emergency contact network just incase of emergency.
(4) The system to ensure that duties by Nikkiso’s and its subsidiaries’ directors are executed inan efficient manner(Article 100, Paragraph 1, Items 3 and 5 of the Ordinance for Enforcement of the Companies Act)
1) Board of Directors and Corporate Management System
Nikkiso shall hold the Board of Directors Meeting basically once a month to deliberate on thematters provided for by laws and regulations and other important business execution, and further
hold it from time to time where appropriate. Nikkiso shall conduct decision-making regarding
management functionally, and shall maintain the divisional organization system to execute it. In
addition, Nikkiso shall maintain the system that appoints a general manager who is responsible
for executing that duty in each division.
2) Business Plans
Nikkiso shall maintain the system where in business plans prepared in each fiscal year at eachdivision based on the Nikkiso Group’s medium-term business plan, respective business operation
challenges, goals and indices are clarified. Further, Nikkiso shall develop activities under thepolicy management at each division and flesh out the business plans toward achieving the goals.
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The Nikkiso Group’s subsidiary shall, when it executes business, prepare its own business plansreflecting business plans prepared by the division to which it belongs and manage the degree ofattainment of goals. As to each business plan, Nikkiso shall maintain the system where thedeliberation council composed by the President & CEO, executive officer, etc. verifies the
progression with each division on a quarterly basis.
3) Decision of Important Matters and Management Conference
Nikkiso shall maintain the system where the decision of important matters regarding management
policy and business strategies is made through deliberations at the Board of Directors Meeting aswell as, in advance based on the Authority Regulations of Nikkiso, through deliberations at theManagement Conference composed of the President & CEO, the executive officers and thegeneral managers of a division, etc.
4) Promotion of Efficiency through Delegation of Authority
Nikkiso shall ensure disciplined, efficient and prompt decision-making and business execution
by clearly demarcating the matters where the President & CEO is the final approver from thosewhere the authority is delegated to the general manager of the related division as well as thematters on which Nikkiso should make the final decision from those where the authority isdelegated to Nikkiso’s subsidiary. As regards execution of the matters where the authority wasdelegated from Nikkiso’s President & CEO, the general manager of a division and the President& CEO of Nikkiso’s subsidiary shall accelerate the efficiency and promptness in decision-making
and business execution.
5) Accuracy and Promptness of Business Management Information
Nikkiso shall maintain and further reinforce the system that enables Nikkiso’s President & CEO,executive officers and general managers of divisions to grasp the current situation by promptly
digitalizing main financial information through the system utilizing IT.
(5) Other system to ensure proper business in the Nikkiso Group composed of Nikkiso and its
group subsidiaries(Article 100, Paragraph 1, Item 5 of the Ordinance for Enforcement of the Companies Act)
1) Development of Regulations on Oversight of Subsidiaries’ Management
Matters that require Nikkiso’s final approval and matters to be reported to Nikkiso with regard toa subsidiary’s management as well as the final approver and a person to whom a report is finallymade shall be made clear in the Board of Directors Regulations and the Authority Regulations of
Nikkiso.
2) Development of Audit System for Subsidiaries
Nikkiso shall also conduct audits of business of Nikkiso’s subsidiaries in a systematic manner by
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Audit & Supervisory Board Members, Internal Audit Department and the accounting auditor of
Nikkiso.
2. The system that supports audits by Audit & Supervisory Board Members(Article 100, Paragraph 3 of the Ordinance for Enforcement of the Companies Act)
Nikkiso shall, as a Company with Audit & Supervisory Board, put in place the system that supports
audits by Audit & Supervisory Board Members to ensure the effectiveness of audits conducted byAudit & Supervisory Board Members.
(1) Matters regarding employees who should support the duty of Audit & Supervisory Board
Members1) Nikkiso shall establish Office of Audit & Supervisory Board Members to support the duty of
Audit & Supervisory Board Members at the request of Audit & Supervisory Board Members.
2) Some employees (hereinafter, the “Employees”) who belongs to Office of Audit & Supervisory
Board Members and support the duty of Audit & Supervisory Board Members shall be free fromthe dictates of people other than Audit & Supervisory Board Members with respect to the work
instructed by Audit & Supervisory Board Members.
3) Personnel change, personnel assessment, etc. of the Employees shall require agreement from
Audit & Supervisory Board Members.
4) The Employees shall be a person who has a certain level of knowledge regarding Nikkiso’s
businesses, finance, accounting, compliance, etc. from a viewpoint of ensuring the effectivenessof audits conducted by Audit & Supervisory Board Members.
(2) The system concerning reporting to Audit & Supervisory Board Members
1) As to business reports (including matters related to the status of business execution, risk
management and compliance) made by the general manager of a division or the President & CEOof Nikkiso’s subsidiary on a regular basis to the President & CEO of Nikkiso, Nikkiso shallmaintain the system where they are also always distributed to the standing Audit & Supervisory
Board Member. Also, Nikkiso shall maintain the system where Audit & Supervisory Board
Members can, at any time, request submission of reports from Nikkiso’s directors and employees.
2) Nikkiso shall maintain the system where the status, etc. of businesses and compliance of
Nikkiso’s subsidiaries are reported on a regular basis at the “Auditors Liaison Meeting” which
Audit & Supervisory Board Members, corporate auditors of Nikkiso’s subsidiaries, etc. are toattend.
3) Nikkiso shall maintain the system where Audit & Supervisory Board Members have consultations
with the accounting auditor and Internal Audit Department from time to time to promote sharing
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of information on audit information of Nikkiso’s subsidiaries.
4) Nikkiso shall prohibit the Nikkiso Group’s officers and employees and other people who reported
misconduct to Audit & Supervisory Board Members from being treated unfavorably for thereason that he/she/they made such report, and make the Nikkiso Group fully aware of it.
(3) Matters concerning the policy with regard to the procedure for advance payment or
reimbursement of expenses incurred in connection with execution of Audit & Supervising
Board Members’ duty or treatment of other expenses or debts in connection with executionof the said duty
When an Audit & Supervisory Board Member requests Nikkiso to pay advance, etc. of expenses
based on Article 388 of the Companies Act, Nikkiso shall have deliberations on the matter at the
Department in charge and thereafter, accede to that request in a swift manner except for a casewhere the expenses or debts with regard to the said request are deemed unnecessary for executionof the said Audit & Supervisory Board Member’s duty.
(4) Other system to ensure that audits by Audit & Supervisory Board Members are conductedin an effective manner
Nikkiso shall maintain the system where Audit & Supervisory Board Members may attend any
Committees/meetings including principal meetings (such as Management Conference) voluntarily
so as to be able to obtain management information enough for fulfilling auditing functions in an
effective manner.

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