Nissha Sustainability Report 2021
EnglishTable of Contents
1. CEO Message

2

2. Nissha Group Sustainability

4

Nissha Philosophy / Sustainability Vision (long-term vision for 2030)
The 7th Medium-term Business Plan / Nissha’ s Value Creation Process
Promotion Framework for Sustainability / Materialities (Key Issues) and KPIs
Initiatives in which Nissha participate and external evaluation
Nissha Group Stakeholders
16

Environment
3. Responses to Climate Change

17

4. Impact on the Environment out of our Business Operations

19

5. Environmental Policy and Management Structures

21

6. Environmental Objectives and Status of Achievement23

7. CO2 Emissions and Reduction Efforts

26

8. Waste Management32

9. Management of Chemical Substances and Environmenta l Risks

34

Social41
10. Human Rights

42

11. Human Resources System46

12. Human Resources Development

47

13. Respect for Diversity

51

14. Support for Diverse Work Styles

55

15. Safety and Health of Employees

62

16. Initiatives Related to Information Security

69

17. Trade Management72

18. Initiatives Related to Intellectual Property

75

19. Partnership with Our Suppliers

76

20. Quality Management・Improving Productivity

79

21. Along with Local Communities

85

Governance87

22. Corporate Governance88

23. Internal Control System98

24. Initiatives of Internal Audit Office98

25. Corporate Ethics and Compliance99

26. Initiatives Related to Anti-corruption

103

27. Tax Policy

104

28. Initiatives Related to Conflict Minerals

105

29. Risk Management107

30. Initiatives Related to Business Continuity

109

31. Management System and other Certification Acquisitions

111

32. Editorial Policy

113

1

1. CEO Message
Nissha Group is a forward thinking global company. Our Mission is to realize theenrichment of people’s lives by creating technology and developing it into economic
and social value through the diverse capabilities, passion, and leadership of the
global Nissha Group. Nissha Group is developing the 3 businesses of “Industrial
Materials”, “Devices”, “Medical Technologies”, and also developing various businesses
such as “Information and Communication”, “Pharmaceutical and Cosmetics”.
The Group views sustainability as an initiative for sustainablegrowth anddevelopment of both the company and society. To achieve this, we must approachsocial issues as business opportunities, and leverage our strengths to offer products
and services that provide solutions to these issues. At the same time, we believe in
the importance of strengthening our management foundation, reducing risks that
could impede the sustainability of our company, and engaging in governance toensure that we carry out them in an appropriate manner, in order to support our business activities. Through these
activities, we generate the economic and social values professed in the Nissha Mission, which states that we realize theenrichment of people's lives.
In January 2021, we set out our Sustainability Vision(long-term vision) for where we want to be in 2030. At thesame time, we have formulated the 7th Medium-term
Business Plan as a strategy to achieve our medium-term
vision and goals over the next three years from 2021,
backcasting from where we want to be in 2030.
In the 7th Medium-term Business Plan, we aim to establish
a foundation for growth by making the most of thebusiness foundations we have built to date and maximizing
global synergies. In addition, the Group aims to achieve
growthbyexpanding

products

andsolutionsthat

contribute to solving social issues. For this, we will focus
on markets that we have positioned as priority markets,
such as medical devices, mobility (automotive andtransport equipment), and sustainable materials.
These are markets in which we expect stable andsustainable growth and where clusters of social issuebased needs are present. The group views these needs as
business opportunities, solving social issues throughbusinesses that make use of our strengths. Through this,
we aim to grow and develop with society.
In closing, I would like to extend my deepest condolences to the families of those who have lost their lives to the novel
coronavirus disease (COVID-19), and express my heartfelt respect for the medical professionals at the frontline oftreatment.
The Group will continue to place the highest priority on the safety and security of our stakeholders and employees. We
will continue to conduct business while implementing measures to prevent infections from starting or spreading, striving

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Nissha Sustainability Report 2021

to solve social issues by mobilizing all our resources.
We look forward to your continued guidance and encouragement.
June 2021
Junya Suzuki
Chairman of the Board
President and CEO

Nissha Co., Ltd. support the United Nations Global Compact sinceApril 2012. We have in place various targets and work actively
based on the 10 principles of the Global Compact in the area of
human rights, labor, the environment, and anti-corruption.

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Nissha Sustainability Report 2021

2. Nissha Group Sustainability
2-1 Nissha Philosophy
Nissha has integrated its standards of thought, rules of conduct, and Mission—ideals held in high regard —into Nissha
Philosophy that is greatly valued.

MissionWe realize the enrichment of people’s lives by creating technology and developing it into economic and social value
through the diverse capabilities, passion, and leadership of the global Nissha Group.

2-2 Sustainability Vision (long-term vision for 2030)
Nissha Group has defined Sustainability Vision (long-term vision) that communicates where we want to be as acorporate group by the year 2030. Guided by this vision, we aim for annual net sales of JPY300 billion and an ROE of
15% or more. We will accomplish these goals through products and solutions that contribute to solving social issues
and creating social value in the priority markets of medical, mobility (automotive/transport equipment), andsustainable materials. We are also striving to reduce our total CO2 emissions by 30% (versus 2020), with a view to
becoming carbon-neutral by 2050. In so doing, we aspire to fulfill the spirit of our Mission to realize the enrichmentof people’s lives.
Note that in July 2021, the Group revised its 2030 CO2 emissions reduction target upwards from a 20% reduction toa 30% reduction (both compared to 2020).
*For details, please refer to “3. Response to Climate Change” and “7. CO2 Emission Status and Reduction Efforts”.

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Nissha Sustainability Report 2021

2-3 The 7th Medium-term Business Plan
We made a start of the 7th Medium-term
Business Plan in January 2021. It sets our
medium-term strategy for the 3 years from 2021,
reflecting backwards the Sustainability Vision for2030. Under the 7th Medium-term Business Plan,
we aim to construct a foundation for growth by
fully utilizing the global business bases we haveacquired and built so far and maximizing theirsynergies.
In the markets of Medical Devices, Mobility, andSustainable Materials, our goal is to achieve
growth by expanding product lineups that will solve social issues. In the IT devices market, we will enhance profitability
and efficiency against the downturn trend in the product demand.

2-4 Nissha's Value Creation Process
We will continue to provide products and services that help solve social issues in priority markets such as medical
devices, mobility (automotive/transport equipment), and sustainable materials, where stable and sustainable growthis expected. We shall achieve this by utilizing our management resources, including the six core technologies anddiverse human resources that we have cultivated through our business activities, and through our competency thatcreate value.
In addition, in order to sustain these business activities over the long term, we are working to strengthen ourmanagement base to support the activities of our diverse human resources and increase productivity, and to reducerisks to continue our business by fulfilling our social responsibilities as a company.
Through these activities, we generate the economic and social values professed in the Nissha Mission, which statesthat we realize the enrichment of people's lives.

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Nissha Sustainability Report 2021

2-5 Promotion Framework for Sustainability
We established the Sustainability Committee, chaired by the president and vice-chaired by the officer in charge ofsustainability. The Sustainability Committee works in collaboration with our business organizations, subcommittees,
and business divisions on a number of topics. These topics include creating business opportunities, risk reduction,
strengthening management foundation, and corporate governance.
The ESG task force has been established to address the themes of "Improving human resources capabilities, andutilizing diverse human resources", "Respect for human rights", "Response to a decarbonized society", and"Pharmaceutical affairs”. These are considered to be particularly important from an ESG perspective, and the task force
is responsible for accelerating activities for each of these at Nissha.
The Sustainability Committee holds a general meeting once a year, at which it approves the KPIs for each organization.
These KPIs are set based on thematerialities resolved on by the
Board of Directors. In addition,monthlybusiness

reviews

quarterly

progress

confirmation

meetings

are

to

held

and

confirm

whether or not the set KPIs areprogressingasplanned.

Eachorganization is responsible for the
management of strategic items,
KPIs, and action programs.
In the fiscal year ended December
2020, we held one Sustainability
Committee

meeting

and

three

progress confirmation meetings.

lPromoting organizations• Creating business opportunities: Checks progress based on the KPIs promoted by the business organizations atbusiness reviews held monthly or quarterly.
• Risk reduction: The following eight subcommittees reduce the risk that inhibits business continuity through theiractivities. Progress is checked based on KPIs at quarterly progress confirmation meetings.
Corporate Ethics and Compliance Subcommittee
Labor and Human Rights Subcommittee
Health and Productivity Management Subcommittee
Environmental, Safety and Health Subcommittee
Quality Subcommittee
Business Continuity Management Subcommittee
Information Security Subcommittee
Trade Administration and Control Subcommittee• Strengthen management foundation: Promoted by the departments involved in the materiality. Progress ischecked based on KPIs at quarterly progress confirmation meetings.
Digital Transformation Promotion Office
Corporate Information Technology and Management

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Nissha Sustainability Report 2021

• Corporate governance: Annually analyzes and evaluates the role, composition, and operation of the Board of
Directors, and makes continual improvements to enhance its effectiveness.
Corporate Strategy Planning

2-6 Materialities (Key Issues) and KPIs
2-6-1 Materiality Identification
Nissha Group identifies items of particular importance asmaterialities in order to realize our Sustainability Vision
and achieve the goals of the current 7th Medium-term
Business Plan.
Materialities are evaluated from the perspectives ofcreating

business

opportunities,

reducing

risks,

strengthening management foundations, and promoting
governance using the two axes of “importance to society
and stakeholders”, and “importance to Nissha”. In
addition, “importance to society and stakeholders"incorporates opinions obtained through dialogues withstakeholders including customers, shareholders andinvestors. The identified issues and their positioning within the Group are discussed by the Sustainability Committee,
and materialities are identified through deliberations and resolutions by the Board of Directors.

lMateriality Identification Process

Step 1

Identify social issues related to the Nissha Group and its supply chain based on

Identify related social issues

the business environment, referencing the SDGs*1, GRI Standards*2, RBA*3, etc.

Step 2
Prioritize

Analyze and prioritize the social issues identified in Step 1 based on the axes ofimportance to society and stakeholders (in consideration of SDGs, external
evaluations, etc.) and importance to Nissha.

Step 3

Examine the validity of issues via interviews conducted with business divisions,

Verify validity

Sustainability Committee subcommittees, ESG task force and other organizations.
Based on Steps 1 to 3, materialities are identified through deliberations andStep 4

resolutions by the Board of Directors. In addition, business organizations,

Establish materialities and KPIs

subcommittees, and the ESG task force incorporate strategic items and KPIs,
which are then approved by the Sustainability Committee.

*1 SDGs (Sustainable Development Goals): Adopted by the United Nations in September 2015
*2 GRI Standards (Global Reporting Initiative Standards)：Global guidelines for sustainability reporting*3 RBA (Responsible Business Alliance)：International code of conduct for labor, health and safety, environment, ethics, etc. for theelectronics and other industries

2-6-2 Initiatives for FY2021.12 and beyond
Nissha Group has reviewed its materialities in line with the establishment of the Sustainability Vision (long-term vision)and the start of the 7th Medium-term Business Plan (2021-2023). While taking into account the status of KPI
achievement up to the previous year, we have identified the following through the process of identification described
as below.

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Nissha Sustainability Report 2021

lCreating Business Opportunities (Resolution of social issues through business)

Identify important social issues (needs) in the priority markets stipulated in Sustainability Vision and the 7th MediumTerm Business Plan currently in operation
Materiality

Strategy Items

Creating Business Opportunities•

Net sales of Medical Technologies
business

Solving medical problems

Expansion of business for Medical Devices /Healthcare market• Contribution to medical care centered onminimally invasive (heart disease) and acutecare fields

Contribute to the safety andcomfort of transportation andlogistics, and the reduction ofenvironmental impact

Expansion of business for Mobility market• Providing mobility products that contribute tosafety, comfort, and reduction of environmental
impact•Net sales of Mobility segment•

Promotion of Circular Economy

Expansion of business for the sustainable materials
market• Promotion of Circular Economy• Solving marine plastic pollution issues• Contribution to improving resource utilization
efficiency

Net sales of Sustainable Materials
segment in Industrial Materials
business•

Net sales of New Business
Development Office

Solving social issues byapplying and integrating
technologiesl

KPI (2023)

Creation of new products that lead to the solutionof social issues

Risk reduction (Reducing environmental and social risks that impede business
continuity)

Evaluate and identify environmental and social risks that impede business continuity in aiming to achieve Sustainability
Vision and the 7th Medium-term Business Plan
Materiality

Promotion ofcompliance

Respect for humanrightsStrategy Items

・ Enhancement of the internal reporting
system・ Responding to domestic and foreign
legal risks

Risk Reduction

Occupational healthand safety

・ Set up an optimal contact point for the entire
company and establish an operational flow
・ Understanding the risks of individual laws andregulations; education and retention.

Reduction of labor and human rights
risks• Number of child labor and forced labor cases ofprimary suppliers in areas with high laborand human rights risks (Latin America,
Southeast Asia, China): 0•

Creating a workplace where employees
are physically and mentally healthy,
highly motivated, and able to work
lively (improvement of employee
engagement)

・ Raising health awareness: Hold a wellness day for
employees once a month・ Early detection and treatment of illness:
Improvement of the rate of detailed healthexaminations (examination rate of 50% or more)・ Workplace support in stress checks: 100%
attendance and participation of
subcommittee members in workplace careinterviews•

Reduce our total CO2 emissions by
30% (versus 2020), with a view to
becoming carbon-neutral by 2050.

•

Develop a plan to reduce total CO2 emissions towardthe 2030 target, and reduce the prescribed
CO2 emissions by 2023.

• Reduction of occupational accidents• Understand and reduce the health andsafety burden of newly acquiredcompanies through M&A••

Number of occupational accidents 7 or lessExpand scope•

Promotion of healthand productivity
management

Response to a
decarbonized society

KPI・Target (2023)

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Nissha Sustainability Report 2021

Materiality

Strategy Items•

Reduction of quality cost ratio•

Improvement of quality assurance
system that gains customers

Advancement ofquality control

KPI・Target (2023)

reliance•

Support for strengthening quality

Quality cost ratio target: 3.0%
Continuation and expansion of QMS certification•

Pointing out and support through internal audit•

Implementation (as planned) of quality education•

Improvement support for business divisions such as small
group activities

system in strategic priority areas

Support for strengthening quality system in•(Medical, Mobility)•••

strategic priority areas

Strengthening the legal compliance•system by thoroughly
Providing
Risk Reduction

responsible medical
products andservices••

Continuous implementation of education for management
and all employees

disseminating medical-related laws•

Maintenance and expansion of ISO13485 certification

and regulations•

Compliance with laws and regulations related toEnsuring the quality and safety of

information disclosure (Pharmaceutical Machinery Law

products and services

Enforcement Regulations, Appropriate Advertising

Appropriate disclosure ofStandards for Pharmaceuticals, etc.)

information about products andservices

Continuity of•business activities•

Response to infectious diseases•

Implementation of management BCP training and BCP•

Understanding the BCP operation andExecute business continuity basic

training at major domestic bases

plan in case of emergency

management status of important bases

Protection andutilization of
information assetsl• Strengthening security in responseto new work styles• Strengthening and establishing
ISMS•

Attendance rate of information security education for all•

Number of information security incidents•

Expansion of ISMS application range to overseas

employees

undeveloped departments

Strengthen Management Foundation (initiatives to support the creation of business
opportunities and the reduction of risks) / Corporate Governance

Identify important management foundation elements for accelerating business activities toward the achievement of
Sustainability Vision and the 7th Medium-term Business Plan
Materiality

Foundation

Strengthen Management

Improving human

Strategy Items

KPI・Target (2023)• Enhancement of trainings forresource capabilities,

management / strategic humanand utilizing diverse

resources, and rotation

human resources

Selection rate of leader candidates•

Nissha: 36%
Female manager ratio•

Global consolidated: 21%• Promote activities for women

Nissha 8%•

Productivity
improvement

Reduction of working hours by automation andefficiency tools such as RPA (compared to 2020)•

Digitization of value creation processby 100,000 hours / year•

Company-wide development ofdigitization of value creation process

Corporate

GovernanceCorporate governance•Improving the effectiveness of theBoard of Directors•

Improving the effectiveness evaluation results of
the Board of Directors

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Nissha Sustainability Report 2021

lBoundaries of Materialities (risk reduction, strengthen management foundation,
corporate governance)
Boundaries
Materiality

Inside Nissha

Outside Nissha

Group

Group

Promotion of compliance●●

Respect for human rights●●

Promotion of health and productivity management●

Response to a decarbonized society●●

Occupational health and safety●●

Advancement of quality control●●

Providing responsible medical products and services●●

Continuity of business activities●●

Protection and utilization of information assets●●

Improving human resource capabilities, and utilizing diverse
human resources●

Productivity improvement●

Corporate governance●

2-6-3 FY2020.12 Initiatives and Achievement Status (Creating Business
Opportunities / Risk Reduction)lCreating Business Opportunities

Regarding the materiality of business opportunities, the overall trend was a recovery in H2, but the unachieved factor
was that demand was sluggish in H2 due to the impact of COVID-19.

Materiality

Strategy Items

Provide Free andExpand Business in the Mobility Market

Comfortable Travel• Provide mobility products that contribute to comfortable

Reduce Environmental
ImpacttravelKPI

Achievement
Status*

Net sales of Mobility
segment

89.6%• Provide products with low environmental impact
Expand Business in the Medical Devices Market

Solve Medical Issues• Heart disease

Through Products and• Acute care

Services• Contribute to medical care through consumable medical

Net sales of Medical
Technologies

products, etc.

business (excluding

85.1%

business media)

Expand Business in the Sustainable Packaging Materials Market
Promotion of Circular
Economy• Provide products/services that contribute to solving marine
plastic pollution

Net sales of Sustainable
Packaging• Provide products/services that contribute to greater resource

89.2%

Materials segment

use efficiency
Resolve Social Issues
Through Capabilities
Cultivated in IT Markets

Develop New Products
That Contribute to
Resolving Social Issues

Net sales in Priority
Generate Social Impact in Priority Markets (Medical Devices,

Markets

Mobility, Sustainable Materials)

Using Capabilities

65.8%

Cultivated in IT Markets
Create New Businesses, Products, And Services ThroughIntegrating Technologies
Promote Development That Contributes to Resolving Social
Issues

Net sales of New
Products that Solve

79.4%

Social Issues* The results in FY2020.12 against the sales plan.

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Nissha Sustainability Report 2021

l

Risk Reduction

Materiality

Subcommittee

Strategy Items

Achievement

KPI

Status*1

1. Formulate systems overview
Corporate
Ethics andCompliance

Compliance
TradeManagementfor US locations
1. Build an internal reporting

1. △: Delayed due to COVID-

2. Prevent illegal/unlawful

19

declarations, omission ofsystem2. △: Illegal/unlawful

import charge factors

2. Implement fair, legallycompliant operations

Illegal/unlawful declarations:

during import/export

0 (Annual)
Omitted declarations of charge

declarations: 7*2〇: Omitted declarations ofcharge factors: 0

factors: 0 (Annual)
1. Check validity of BCP plan for
Product andBusiness

ServiceContinuity

Continuity

Management

1. Understand status of BCP
operation for key locations

key overseas locations

1. 〇: Review of key overseas

2. Formulate guidelines forlocations completed

handling COVID-19

2. Formulate guidelines forOnce guidelines are complete,handling COVID-19

notify domestic locations, add

2. 〇: Formulated and updated
guidelines

necessary equipment
1. Identify and understand points
brought up in customer audits
Human
Rights in the
Workplaceand measures for

1. Understand and reduceanalyzed the risks of key

Labor andhuman rights risks at key

improvement, share with

Human Rights

overseas locations

related departments at Global

overseas locations

Headquarters

2. Practice work-style reforms

1. 〇: Investigated and2. 〇: Refined attendancesystem and revised work

2. Refine and evolve work hour

hour management rules

management
1. Understand and reduce
environmental impact
Environment

Environmental,

causing climate change

Safety andand other phenomena

Health

2. Understand environmental

1. Confirm details of main

1. 〇: Identified environmental

environmental impacts:

impact of three key overseas

3 locations

bases
2. 〇: Established system for

2. Build environmental data

impact of newly acquiredcompanies

collection system for newly

collecting environmental

acquired companies

data at target sites

Occupational

Environmental, 1. Understand health and

1. Build health and safety data

1. 〇: Established system for

Health and

Safety, andsafety at newly acquired

collection system for newly

collecting environmental

SafetyHealthcompanies

acquired companies

data at target sites

Corporate
Information

1. Modify trade secret

Ethics andmanagement to ensure

Complianceappropriateness

Assets

1. Enforce and maintain rules for
trade secrets
2. Implement ISMS internal audit

2. Modify and execute new,

To be implemented in

1. 〇: Revised information
security-related regulations
and completed deployment
to relevant departments
2. △: ISMS internal audits toInformation

appropriate trade secretdepartments handling trade

Security

management

secrets as information assets

be carried over to March2021
1. 〇: Implemented labor-

Productivity
Reforms

Quality

1. Smart QC
2. Smart Factory

1. Productivity reform leveraging

saving and unmanned

IT technology: 3 target

operations by introducing AI

locationssystems, etc. at three majordomestic factories.

*1. 〇 means objective achieved. △ means objective partially achieved.
*2. The number of incidents decreased compared to FY2019.12, but the goal was not met. The cause was identified, andcountermeasures taken using RPA and other IT tools. In addition, the automation of checks, improvements to the management
system, and training for new employees will be implemented to further improve the issue.

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Nissha Sustainability Report 2021

2-7 Initiatives in which Nissha participate and external evaluationl

United Nations Global Compact

Nissha Co., Ltd. support the United Nations Global Compact since April 2012.
The Global Compact is a voluntary initiative based on 10 principles in the area of humanrights, labor, the environment, and anti-corruption. Its purpose is to have various companies
show responsible and creative leadership, and thereby
act voluntarily as good citizens and participate in creating a global framework for sustainablegrowth. Signatory companies are required to express within and outside the company thecommitment

of

top

management,

establisha

CSR

framework,makecontinuous

improvements aiming for higher levels of management and CSR, and submit annual reports on the status and resultsof activities in the format of a Communication on Progress (COP).
At Nissha Group, we have in place various targets based on the 10 principles of the Global Compact and work daily
toward achieving them with an eye to meeting the needs of global society. We disclose information about our activities
in sustainability reports, published on the Nissha Group website.

The Ten Principles of the UN Global Compact
Human Rights
Principle 1: Businesses should support and respect the protection of internationally proclaimed humanrights; andPrinciple 2: make sure that they are not complicit in human rights abuses.
LabourPrinciple 3: Businesses should uphold the freedom of association and the effective recognition of theright to collective bargaining;
Principle 4: the elimination of all forms of forced and compulsory labour;
Principle 5: the effective abolition of child labour; andPrinciple 6: the elimination of discrimination in respect of employment and occupation.
Environment
Principle 7: Businesses should support a precautionary approach to environmental challenges;
Principle 8: undertake initiatives to promote greater environmental responsibility; andPrinciple 9: encourage the development and diffusion of environmentally friendly technologies.
Anti-Corruption
Principle 10: Businesses should work against corruption in all its forms, including extortionand bribery.

United Nations Global Compactl

CDP

In January 2021, we received an "A-" rating in the Climate Change Report 2020
published by the CDP, an international non-profit environmental organization. This is
the second highest level of their eight-point scale, indicating we are at a leadershiplevel in addressing climate change.

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Nissha Sustainability Report 2021

l

FTSE Blossom Japan Index

We have been selected as a constituent stock of the FTSE Blossom Japan Index (as ofDecember 2020). The FTSE Blossom Japan Index is an index developed by FTSE Russellthat reflects the performance of Japanese companies with superior environmental, socialand governance (ESG) performance. The index has become one of the leading indicesfor ESG investment, with the Government Pension Investment Fund (GPIF) using it as
their ESG index, for example.

l

SOMPO Sustainability Index

This index is composed of around 300 Japanese companies with excellent ESG
performance. Since 2012, we have been selected as one of the constituent stocks of the
Bunanomori Environmental Survey conducted by Sompo Risk Management Inc. forenvironmental evaluation, and the IntegreX Survey conducted by IntegreX Inc.

l

Kurumin certification

With three consecutive terms of Kurumin certification since the fiscal year ended March
2010, we were certified with Platinum Kurumin in March 2019.

2-8 Nissha Group Stakeholders
We

identify

thestakeholders

as

our

customers,

shareholders,

employees, suppliers, and society. Toward realizing our Mission, we aim
to realize our respective visions while valuing a relationship with thestakeholders in which we affect each other.

lCustomerIndustrial Materials, Devices, and Medical Technologies—we at the
Nissha Group operate three businesses on a global basis, using our coretechnologies to provide various products and services that satisfy
market needs. While seeking to resolve social issues through ourbusinesses operations, we also promote fair operating practices, efforts
in labor and human rights, and the building of environment-conscious
production systems so that our customers can feel safe about
entrusting us with work.

Nissha’s Circle of Trust

Communication- Sales activities in daily operations- Products and services information provided on the website- Providing information for sustainability survey- Providing information about conflict minerals- Supplier responsibility (SR) audits by customers

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Nissha Sustainability Report 2021

lShareholder

We have in place an Investor Relations (IR) division and a Shareholder Relations (SR) division to serve as contact
points for our shareholders and investors, and to establish a system for promoting deeper communication with ourshareholders and comprehensively providing financial and non-financial information. We also create opportunities tomeet directly and exchange dialogue with our shareholders and investors through IR events and one-on-one briefings.
Feedback and comments are reported regularly at Board of Directors meetings and to the management, and used forthe enhancement of our corporate value.

Communication- Shareholders’ meetings and management briefings following shareholders’ meetings- Financial results presentations for institutional investors- One-on-one briefings for institutional investors- Response to individual inquiries- IR information and sustainability information provided on the Nissha website- Materials published for shareholders and investors (integrated report, business report, sustainability report, etc.)- Providing information to investigation institutions for ESG investmentl

Employee

We at the Nissha Group respect our employees’ human rights and diversity from a global perspective. To this end, we
promote the creation of safe, comfortable workplace environments and offer support for diverse work styles so that
our employees can live up to their full potential. We believe our employees are our most important management
resources, and aim to achieve growth for both the company and our employees.

Communication- Dialogue between labor and management- Education and training- Personnel evaluation and interviews- Hotline- Providing information via the company intranet and company newsletter- Employee awareness survey and interviewslSupplier

The Nissha Group’s global operations revolve around procurement activities and engagement with a large number ofsuppliers. We strive to build partnerships of co-existence and co-prosperity with our suppliers, and aim to enhance one
another’s corporate value through procurement integrity. We also seek to evaluate our suppliers fairly, impartially, andcomprehensively at all times, and to promote sustainable procurement.

Communication- Procurement activities in daily operations- CSR procurement briefings- CSR survey and audit- Self Assessment Questionnaire (SAQ)- In-house exhibitions and seminars themed around supplier products and technologies

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Nissha Sustainability Report 2021

lSociety

The Nissha Group comprises a network that spans across the globe, and in each region, we carry out business activities
with respect for the local culture and climate.
While promoting communication with local communities to fulfill our basic responsibilities as a corporation and to be acompany that is needed by society, we also strive to be aware of global social issues and play a role in resolving them.

Communication- Support and promotion of arts and culture- Exchange events with community people- Factory and facility tours- Cleanup activities in factory areas- Future generation support activities- Employees’ participation in volunteer activities

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Nissha Sustainability Report 2021

Environment
In our "Sustainability Vision" that communicates where we want to be by
the year 2030, Nissha Group has set a 30% reduction in our total CO2
emissions (compared to 2020) with a view to carbon-neutral by 2050. To
achieve this, we are promoting initiatives through backcasting such as
reducing power consumption and introducing renewable energy.
In fields other than decarbonization, we are working to provide safe andenvironmentally friendly products and prevent environmental pollution
with the aim of developing our businesses and realizing a sustainable
society, while listening to the voices of our stakeholders. We also operate
an environmental management system to make continuous improvements.

16

3. Responses to Climate Change
3-1 Establishing the Sustainability Vision― Reduce total CO2 emissions 30% by 2030 (compared to 2020), and to zero by 2050
In recent years, with the frequent occurrence of abnormal weather conditions such as torrential rains believed to becaused by global warming, efforts to prevent global warming have become an important issue for the international
community. The Paris Agreement, adopted at COP21 in 2015, set a goal of reducing greenhouse gas emissions to zeroin the second half of this century and limiting the average global temperature rise to less than 2°C above pre-industrial
levels. In Japan, the government declared in October 2020 that it would aim to achieve a carbon-neutral, decarbonizedsociety by 2050, and in April 2021, it announced that it would aim to reduce greenhouse gas emissions by 46%(compared to 2013) by 2030.
In light of these trends, in July 2021 the Nissha Group revised upward the CO2 emission reduction target in the
Sustainability Vision, which describes what the Group wants to be in 2030, from a 20% reduction to a 30% reduction(both compared to 2020) in order to achieve carbon neutrality by 2050.
In future, we intend to refer to the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD)
in our efforts to address climate change, and will actively promote the disclosure of information.
The status of our response to the TCFD framework items is as follows.
Item

Nissha’s initiative

Progress

Detailed information

Governance

The Sustainability Committee,
headed by the president, manages
responses to climate change at the
management level.
Progress and results are reported
to the Board of Directors once a
year for discussion.

Formed ESG Task Force in FY2021.12
to promote ESG items of particularimportance. A team consisting ofseveral internal organizations as wellas the environmental division has
been established to manage companywide targets and promote actions
under the theme of "Adaptation to a
decarbonized society.”

2-5 Sustainability
Promotion System

Strategies

Established a Sustainability Visionthat aims to reduce total CO2
emissions by 30% in 2030
(compared to 2020), with the aimof becoming carbon neutral by
2050.

“Adaptation to a decarbonized society"and "Contributing to the safety andcomfort of transportation and logistics,
and reducing environmental impact"
set as materialities of the 7th Mediumterm Business Plan (3 years), whichstarted in 2021.

2-2 Sustainability Vision
2-6 Materiality (material
issues) and KPIs

Risk Management

The Sustainability Committee
assesses and identifies climaterelated risks, and theEnvironmental, Safety and Health
Subcommittee under it manages
climate change risks.

Confirmed at the Sustainability
Committee's quarterly progressconfirmation meetings.

2-5 Sustainability
Promotion System

Indicators andTargets

Set materialities based on the
Sustainability Vision (long-term).

Set KPIs for the "Adaptation to a
decarbonized society” materiality of
the 7th Medium-term Business Plan (3years), which started in 2021.

2-2 Sustainability Vision
2-6 Materiality (material
issues) and KPIs

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Nissha Sustainability Report 2021

lInitiatives to create business opportunities

The Group views its efforts to achieve a decarbonized society in terms of both creating business opportunities andreducing risks. In other words, we intend to contribute to the realization of a decarbonized society through our businessactivities, by providing products and solutions that contribute to the reduction of CO2 emissions throughout society,and by minimizing the amount of CO2 emissions generated by the Group's own business activities.
As an example of creating business opportunities, we have the metallized paper produced and sold by our Industrial
Materials business as the main products for sustainable materials, one of the Group's key markets. It is used for labelsand packaging of beverages, food, and daily necessities, and has a 40% market share. Metallized paper is gaining
interest as a packaging material with superior design potential, and at the same time, it is highly regarded for its ability
to contribute to solving environmental problems. Its increasing use as a substitute for plastic in beverage and foodproduct packaging not only solves the major social problem of marine plastic pollution, but also contributes to reducing
energy use and promoting recycling from the perspective of Life Cycle Assessment (LCA), leading to a reduction in CO2emissions.
In the fiscal year ended December 2019, Nissha acquired Eurofoil Paper Coating GmbH (now AR Metallizing GmbH), a
German manufacturer of metallized paper. This means we will be able to expand our European region market share in
the metallized paper market, and use AR Metallizing’s processing technology to promote the development of newenvironmentally-friendly products such as molded products using wood chips, bamboo, or other plant-based materials.
Moreover, in the mobility (automotive and transport equipment) market, one of the Group's priority markets, IMD and
IML, which allow beautifully decorated plastic surfaces, are widely used for interior parts in particular. As IMD and IML
can be applied at the same time as molding, they reduce the materials and energy used in the production processcompearing to the painting, thereby helping reduce CO2 emissions in customer processes. The use of IMD also
eliminates having to transport unpainted molded products to be coated, thereby reducing CO2 emissions from thistransportation.
Our group will expand its business for the mobility market, including IMD and IML, against the backdrop of trends suchas climate change response and CASE.

l

Risk management initiatives

Examples of climate-related risks we are assessing

Migration
risks

Nissha is categorized as a specified business operator under the Act on the Rational Use of Energy,
and we will be fined if we fail to submit an energy usage report, medium- to long-term plan, or
periodic report as required by the Act, or if we submit false reports. In addition, if our energy
efficiency and conservation efforts are rated as poor, an on-site investigation will be conducted by anagency commissioned by the Agency for Natural Resources and Energy. We risk increased costs due
Regulatory to fines and mandatory installation of energy efficiency and conservation equipment if therisks
improvements ordered as a result of the investigation are not implemented.
We are constantly monitoring to ensure the intellectual property of other companies is not used
inadvertently, nor is the Group's intellectual property used without authorization by third parties. We
pay particular attention to trends amongst our competitors in business fields that will undergo
significant change and growth in the future.
In an increasing number of cases, customers make the details of our environmental initiatives a
Reputation
condition for orders. This means that we risk fewer customer orders if our climate change initiatives
risks
are deemed insufficient.

Physicalrisks

Urgentphysicalrisks

Our factory sites are expected to be flooded due to sudden heavy rainfall caused by climate change.
This flooding brings the risk of damages to both buildings and structures, and to machinery,equipment, and vehicles at these factories.

Chronic
physicalrisks

The Group’s key production bases manufacture products in clean rooms, so there is the risk ofincreased costs due to the significant impact of rising outside temperatures on the amount ofelectricity used for air conditioning in these clean rooms.

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Nissha Sustainability Report 2021

4. Impact on the Environment out of our Business Operations
In order to manage the impact on the environment out of our business operations, we grasp the input of major materials,
the amount of waste, the amount of energy and water used, and the amount of exhaust and emissions.
The amount of major raw materials used at the Nissha Group in the fiscal year ended December 2020 was
approximately 114,036t, an increase of approximately 12% from the previous fiscal year. Of the total amount of major
raw materials used, approximately 82% was used at our overseas production bases. Of this amount, AR Metallizing’s
metallized paper products accounted for approximately 84%. At domestic production bases, the amount used by theDevices business increased. At the same time, the amounts used by the Industrial Materials business and theInformation and Communication business dropped.
The amount of waste generated increased both in Japan and overseas.
The amount of energy used by the Nissha Group was 257,464MWh of electricity, a drop of approximately 6% from theprevious fiscal year, and 9,085,000m3 of gas, a drop of approximately 21% from the previous year. From the fiscal year
ended December 2020, CO2 emissions are calculated using the market-based method for bases in Japan and thelocation-based method for overseas bases.

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Nissha Sustainability Report 2021

INPUTOUTPUT

Production bases in Japan
Industrial Materials

Devices

Production bases in Japan

PET/acryl film

978t

Solvents

686t

Gravure Ink

671t

Others107t

Materials used in
product manufacturing
processes

Waste plastic
Iron scrap, waste cans

2t
3t

Waste solvents, waste ink,
waste cloth

49t

Waste acid, alkali

Others1,849tPaper

3,958tInk

6,406tPaper waste
Recyclable resources(industrial waste)

Resin materials

12,105t

Sludge, others
Waste for simple
incineration/landfill

42t

OthersGeneral business waste

27t

Others (industrial waste)

Total for production bases in Japan

33t

18,538t

20,482t

Overseas production bases

Overseas production bases

Resin1,290tFilm

1,674tMolds and molding
materials

Recyclable resources(items sold forrecycling)

Metal waste
8,433tPaper waste
Others0t

Packing materials

Waste containing noble metals

Resin waste

90t

Touch sensors

172t
Recyclable resources(industrial waste)Paper

78,391t

Cardboards

1,752tAluminum

2,594tChemical substances

6,560tOthers

1,031tTotal for overseas production bases

93,553t

Total for overseas production bases

11,397t

Total for Nissha Group

104,036t

Total for Nissha Group29,935t

257,464MWh

Gas

9,079,000m3

Tap water

1,287,000m3

Industrial water

Waste solvents, waste ink,
waste cloth

1,369tincineration/landfill

1,595tIncluding production bases in Japan and overseas

Electricity

Underground water

Waste plastic

Others
Non-recyclable waste

Including production bases in Japan and overseas

Water

Metal waste

Metallic materials

Total for production bases in Japan

EnergyWaste containing noble metals

Resin waste

12,103t

Half-finished goods
Information andCommunication

Recyclable resources(items sold forrecycling)

Emissions

CO2
VOC

Wastewater

40,000m3

124,204t*

700t
3,033,000m3*Detoxified by activated carbon adsorption, catalyst deodorization, etc.

1,725,000m3

20Nissha Sustainability Report 2021

5. Environmental Policy and Management Structures
The Nissha Group considers environmental initiatives to be our most important issue in order to achieve sustainablegrowth and development for both companies and society.

5-1 Environmental Policy
The environmental policy of the Nissha Group calls for development of our business and the realization of a sustainable
society. Along with ensuring every Nissha Group employee is aware of this policy, we have established the Nissha Group
Environmental Objectives. Each factory and organization sets targets and implements action plans to achieve them.
The environmental objectives are linked with the Key Performance Indicators (KPI) for each business unit and are
directly connected with our business activities.

Environmental Policy
Nissha and its subsidiaries, as members of the global society, aim for business development and the realizationof a sustainable society through environmentally conscious corporate activities.
1. Prevention of Pollution
We comply with legal requirements and agreements with society, and strive to prevent environmental pollution
in all aspects of our corporate activities such as product development, design, materials, production, sales, andfacilities.
2. Product Safety
We fulfill promises with our customers and deliver safe and environmentally conscious products.
3. Prevention of Global Warming
We make a contribution to prevention of the global warming by efficient using of resources and energy.
4. Continuous Improvement
We strive for continuous improvement by establishing an environmental management system and reviewing it
in response to changes in the business environment.
5. Co-existence with Society
We promote open dialogue with our customers, shareholders, suppliers, employees, and society through ourefforts to preserve the global environment.
April 1, 2012
Junya Suzuki
Chairman of the Board
President and CEO
Nissha Co., Ltd.

5-2 Management Structures
The Environmental, Safety and Health Subcommittee under the Sustainability Committee promotes environmental
initiatives. It consists of an environmental safety manager and members appointed from each related division and base.

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Nissha Sustainability Report 2021

Corporate General Affairs serves as the secretariat under the overall supervision of management. To further strengthen
the foundations that support our business, the Subcommittee is responsible for the construction and maintenance ofcompliance systems for the Responsible Business Alliance (RBA)* with respect to its environmental aspects.
* RBA: International code of conduct for labor, health and safety, the environment, ethics, etc.

Environmental Management Structure

5-3 Environmental Management System (EMS)The Nissha Group in Japan operates its own environmental, health and safety management system based on the
ISO14001 environmental management system and the ISO45001 occupational health and safety management system.
This system includes compliance with relevant laws and regulations as well as items requested by customers, andstrives for continuous improvement.
The Environmental Management System for the Nissha Group in Japan covers all our bases—not only major production
bases, but also small production bases and sales bases with little impact on the environment. They are classified into
ISO14001-certified bases and noncertified bases and set their priority management items as appropriate. The
effectiveness of our EMS is ensured through checking, correcting, and improving issues noted by internal audits andso on.
At our major production bases which have obtained ISO14001 certification, we assess risks identified throughenvironmental risk assessments, and prioritize and reflect them in specific activities. We carry out improvements andmaintenance to mitigate negative risks that impact the environment and our business. On the other hand, we arecontinuing to work on positive environmental initiatives and improvements to environmental performance that is linked
to quality KPIs and other factors in our business activities.
In the fiscal year ended December 2020, we established a system to regularly and accurately collect information on
the environmental impact of our key overseas bases. The information collected from these key bases will be used topromote risk reduction activities.

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Nissha Sustainability Report 2021

6. Environmental Objectives and Status of Achievement
The Nissha Group in Japan has set the Nissha Group Environmental Objectives for a period of six years from the fiscal
year ended December 2018 for those bases that have obtained ISO14001 certification. In accordance with these
Objectives, each base and division establishes environmental targets, and we aggregate and assess the results eachfiscal year in order to manage progress.
The targets will be revised based on the results of the fiscal year ended December 2020, and we intend to set
environmental targets that take decarbonization into account from the fiscal year ending December 2021.

Environmental Objectives
Period: FY2018 (ended December 2018) - FY2023 (ending December 2023)
Scope: Nissha Group in Japan ISO14001 certification sites (“certification sites”)

Assessment Definitions〇 Satisfactory: Objective achieved△ Unsatisfactory: Objective not achieved but good progress made✕ Poor: Objective not achieved and poor progress made*Company names and abbreviations
NII: Nitec Industries, Inc.
NPT: Nitec Precision and Technologies, Inc.
FIS: Nissha FIS, Inc.

6-1 Environmental Objectives, Evaluations, and Initiatives
1. Prevention of pollution
Target(1) Maintain zero environmental accident (accidents that affect areas outside
the factory)

FY2018FY2019FY2020

〇

〇

〇

〇

〇

〇

(2) For environmental risks classified as significant environmental aspects on
the hazard assessment list, implement measures and reduce thepossibility of occurrence by one level by December 31, 2023

(1)

There were no cases of environmental accidents in the fiscal year ended December 2020.

(2)

As risk reduction measures, we have strengthened our efforts to reduce environmental risks by conducting drills
to deal with chemical leaks, as well as drills that assume night and rainy conditions. In addition to these drills, weare also continuing rainwater management. As a result of these efforts, the factory's environmental risk “potential”(the value in the environmental risk assessment) has been reduced by more than one level.

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Nissha Sustainability Report 2021

2. Mitigation of climate change
Target

FY2018FY2019FY2020(1) Reduce CO2 emissions rate (basic unit) by 6% or more* by the fiscal
year ending December 2023

×

×

〇

(2) Reduce CO2 emissions rate (basic unit) by 1% or more compared to theprevious year

△

△

〇

*Reference value: Results in fiscal year ended December 2017
(1) By the fiscal year ended December 2020, we have managed a drop of more than 3% of the target to be achievedby the fiscal year ending December 2023. This means we are still on the planned track.
(2) In order to reduce the CO2 emission rate (basic unit) by at least 1% over the previous fiscal year, we set targets
for each factory and reduced energy input in conjunction with quality improvements. All bases were able toachieve at least 1% reduction over the previous fiscal year.

3. Reduction of waste
Target

FY2018FY2019FY2020(1) Reduce waste generation rate (basic unit) by 6% or more by the fiscal
year ending December 2023

×

×

△

(2) Reduce waste generation rate (basic unit) by 1% or more compared tothe previous year

△

△

△

(3) Maintain zero emissions (recycling and resource reuse rate of 99.5% or
more)

〇

〇

〇

(4) Reduce cost of waste treatment

〇

〇

〇

*Reference value: Results in fiscal year ended December 2017
(1)

Each factory is working to improve its yield rate and efficiency through quality improvement activities andreducing the amount of wasted materials by improving production efficiency. In the fiscal year ended December
2020, of the target factories, NPT Himeji Factory and Kaga Factory were unable to achieve their targets, so thecompany-wide evaluation was set at “Unsatisfactory”.

(2) Targets are set according to the characteristics of each factory. In the fiscal year ended December 2020, the NII
Koka Factory and NPT Kaga Factory achieved their targets, but the NPT Himeji Factory failed to do so.
(3) The Nissha Group in Japan as a whole achieved a recycling rate of 99.9%, and has maintained zero emission ofwaste (a recycling and resource reuse rate of 99.5% or more) as in the previous fiscal year.
(4) In addition to yield improvements, a reduction in the number of times commercial disposal companies haveneeded to take away waste acids and alkalines from the NII Koka Factory has also directly contributed to cost
improvements.

4. Reduce use of water
TargetReduce use of water by improving production efficiency and saving water

FY2018FY2019FY2020△〇〇

Improved production efficiency and water conservation efforts at the NII Koka Factory and the NPT Himeji Factory
resulted in reduced water consumption. We continue to reduce water consumption and save water for miscellaneous
use by improving production efficiency at our factories.

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Nissha Sustainability Report 2021

5. Reduce use of chemical substances
TargetCertification sites reduce usage rate of chemical substances (Certification sites
set individual targets)

FY2018FY2019FY2020〇〇〇In addition to PRTR-designated substances used in the printing process, the NII Koka Factory also reduced the use oforganic solvents, which do not contain designated substances, to achieve its target of a 1% reduction from the previous
year.
At the NPT Himeji Factory, efforts to reduce chemicals used in boilers meant that the target was greatly exceeded, andat the NPT Kaga Factory, the chemicals used in wastewater treatment were reduced by 24% per unit of wastewater.

6. Environment-conscious design
Target(1) Introduce the viewpoint of energy saving, resource saving, durability,
recycling, and so on in product design and development.
(2) Design environment-conscious processes and reduce the environmental
impact of production.

(1)

FY2018FY2019FY2020

〇

〇

〇

〇

〇

〇

As a positive risk assessment (a positive environmental aspect), the design and development divisions of theIndustrial Materials and the Devices businesses incorporate the reduction of environmental impact in productdesign. In addition, they are moving ahead with the development and mass production of products that
contribute to reducing environmental impact, such as the use of sustainable packaging materials.
FIS also designs and develops parts that contribute to environmentally-friendly customer products, such ashydrogen detectors and coolant sensors used in fuel cell vehicles.

(2)

NII and NPT are complying with established company standards regarding the management of chemical products,
and also designing production processes that promote reduced environmental impact.

7. Enhance environmental performance in supply chain
TargetEnhance environmental performance based on customer requirements and the
RBA code of conduct

FY2018FY2019FY2020〇〇〇With the help of our suppliers, we responded to questionnaires and conducted on-site inspections which reflected ourcustomers’ demands in relation to the environment. In addition, we examined CO2 emissions during production
processes and checked chemical materials used in products. These activities showed us the environmental impacts ofour supply chain, which will help improve the environment.

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Nissha Sustainability Report 2021

7. CO2 Emissions and Reduction Efforts
The Nissha Group has set its Sustainability Vision (long-term vision) as our ideal for 2030. In this Vision, we aim toachieve a 30% reduction in total CO2 emissions (compared to 2020), with the goal of becoming carbon neutral by 2050.

7-1 Upwards Revision of 2030 CO2 Emissions Reduction Target
In July 2021, the Group revised its CO2 emissions reduction target for 2030 up from a 20% reduction to a 30%
reduction* (both compared to 2020), and is working to achieve this goal.

*The 30% reduction is a level of 48% reduction compared to 2018, when the Group's CO2 emissions peaked (in the case of converted by
CO2 emission factor under the same conditions) .

In future, we intend to refer to the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD)
in our efforts to address climate change, and will actively promote the disclosure of information.

l

Revisions to the 2030 CO2 emission reduction target

2050 Target

At establishment (February 2021)

At revised (July 2021)

Carbon-neutral

No change*1

30% reduction in CO2 emissions*1

2030 Target

20% reduction in CO2 emissions

Emission factors*2

Calculation using fixed factors

GHG Protocol Scope 2 GuidanceReference year

2020

No change*1. CO2 emissions of Scope 1 and 2*2. Fixed values were used at establishment. The GHG Protocol Scope 2 Guidance was used when revised.
Calculated using the market-based method for domestic bases and the location-based method for overseas bases.
・Market-based method: A method for calculating Scope 2 (indirect) emissions based on the emission factor of electricity
purchased under contract. The choice of low-carbon electricity is reflected as an emission reduction.
・Location-based method: A method for calculating Scope 2 emissions based on average emission factors within a specific area,such as a region or country. Energy-saving efforts are reflected as emission reductions, but reductions due to the selection of
low-carbon electricity are not.

7-2 Summary of Emissions in FY2020.12
The Nissha Group’s emissions in the fiscal year ended December 2020 was 124,204t-CO2.

7-3 Trends in CO2 Emissions and Energy Consumption
The Nissha Group’s CO2 emissions and energy consumption, which are seen as key in adapting to climate change, areshown below. The totals obtained by multiplying the individual consumption of fuels such as electricity, gas, gasoline,
diesel, and heavy oil with the specified factors are Nissha’s energy consumption levels. The figures obtained bymultiplying energy consumption by the CO2 emission factors are the CO2 emissions of the Group.
Nissha Group emits almost no energy-related greenhouse gases other than CO2, and its impact is minimal.

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Nissha Sustainability Report 2021

About the following tables
1.

The CO2 emission factors for electricity in the fiscal year ended December 2020 are calculated based ondata calculated using the market-based method for Japan and the location-based method for overseas.

2.

The company names listed in the tables are as follows.
Nissha and others: Nissha Co., Ltd. and affiliated companies
NII: Nitec Industries, Inc.
NPT: Nitec Precision and Technologies, Inc.
NCI (NPC): Nissha Printing Communications, Inc. (In January 2019, NCI merged with NPC (Nitec Printing
Co., Ltd.) and they are shown together here.)

CO2 Emissions Volumes and Basic Unit
(unit: t-CO2, excluding basic unit)
FY endedCompany

FY ended Dec. 2018

FY ended Dec. 2019

FY ended Dec. 2020

*1

Dec. 2020
by Conventional
calculation method*2

Nissha and Others

5,413

5,967

3,721

5,629

NII

17,40916,455

11,507

15,404

NPT

106,698

97,82969,572

88,860

2,133

1,314

770

1,280

bases

52,91757,437

38,63452,573

Total

184,570

179,002124,204

163,746

0.89

1.03

0.69

0.91

NCI (NPC)
Overseas production

Basic Unit*3*1. Calculated using GHG Protocol Scope 2 Guidance*2. Calculated by the conventional calculation method to compare 2018 and 2019 with the same standard*3. CO2 emissions volume (t-CO2) / Net sales (Million Yen)
In fiscal 2020, the Nissha Group changed our method of calculating CO2 emissions, using the market-based method
for Nissha Group in Japan and the location-based method for Nissha Group companies overseas to calculate theelectricity emissions. Using the conventional calculation method, the Group’s CO2 emissions were 163,746t-CO2, adecrease of approximately 8.5% from the previous fiscal year. Although net sales increased year on year, the main
reasons for the reduction are the temporary suspension of production at some of our production bases due to theimpact of COVID-19, and a decrease in energy consumption at our sales sites, including the Kyoto Global Headquarters,
as a result of the promotion of telework.

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Nissha Sustainability Report 2021

Energy Consumption and Basic Unit

Electricity Consumption(Unit: 1,000GJ, excluding basic unit)
Company(Unit: MWh)FY ended

FY ended

FY ended

Dec. 2018

Dec. 2019

Dec. 2020

98

108

102

Others

8,272

9,561

9,002

19,446

18,214

17,633

182,023

166,887

154,259

3,840

2,368

2,306

Company

Nissha andFY ended

FY ended

Dec. 2019

Dec. 2020

Nissha andOthers
NII

316

309

271

NII

NPT

1,920

1,768

1,603

NPT

38

24

23

NCI (NPC)

NCI (NPC)
Overseas

Overseas

production

production
956

1,058

967

bases

76,51477,56374,264

3,328

3,266

2,966

Total

290,095

274,593

257,4640.01600.01890.0165bases
Total
Basic Unit

FY ended
Dec. 2018*1*1. Energy consumption (1,000GJ) / Net sales (Million Yen)

Gas Consumption

Gasoline, Diesel, and Heavy Oil Consumption(Unit: 1,000m3)

Company(Unit: kl)
FY ended

FY ended

FY ended

Dec. 2018

Dec. 2019

Dec. 2020

Others

72

77

54

2,506

NII

8

7

6

1,441

NPT

17

13

12

NCI (NPC)10

0

FY ended

FY ended

FY ended

Dec. 2018

Dec. 2019

Dec. 2020

293

208

220

NII

2,953

2,833

NPT

2,523

2,317

Company
Nissha andNissha andOthersNCI (NPC)

000Overseas

Overseas

production

production

bases

4,641

6,226

4,919

bases

56

150

133

Total

10,410

11,585

9,085

Total

154

246

205

7-4 Emissions Reduction Efforts
To curb electricity consumption, the Nissha Group in Japan is reviewing the number of printing machines we use,
improving plant infrastructure, and cleaning waste heat and cooling systems. In addition, among overseas Nissha Group
companies, Nissha (Kunshan) Precision IMD Mold Co., Ltd. (China) started using solar power generation in 2018, and
AR Metallizing (Europe) is introducing a wind power generation system.

7-5 Initiative in Scope*1 3 Management
The Environmental, Safety and Health Subcommittee continues to lead efforts at Nissha to survey Scope 3 emissions
as part of the growing movement recently for companies to disclose their own Scope 3, aiming to reduce the greenhousegases over the entire value chain. The results of fiscal year ended December 2020 are as below.

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Nissha Sustainability Report 2021

Survey target

FY ended Dec. 2020（t-CO2）

Employee (excluding some non-regular employees) commuting

2,244

Business travel
Transport and shipping (downstream)293*2

in Japan

19,720Purchased products and services

45,646*1. Scope: Scope of greenhouse gas (GHG) calculation. The following three are shown.
・Scope 1: Direct GHG emissions from sources owned or controlled by the company.
・Scope 2: Indirect GHG emissions through consumption of electricity, steam, or heat.
・Scope 3: Indirect emissions other than those in Scope 2.
*2. Distribution of products sold by Nissha to the point of delivery to the customer.

7-6 Coverage and Calculation Method of CO2 Emission Calculationl

Scope 1, 2
・Nissha Co., Ltd.
・Nitec Industries, Inc.
・Nitec Precision and Technologies, Inc.
・Nissha Printing Communications, Inc.
・Nissha FIS, Inc.
・Nissha Business Service, Inc.
・Zonnebodo Pharmaceutical Co., Ltd.
・Eimo Technologies, Inc.
・Nissha PMX Technologies,S.A. de C.V.
・Graphic Controls Acquisition Corp.
・Lead-Lok, Inc.
・CEA Global Dominicana, S.R.L.
・CEA Medical Manufacturing, Inc.
Coverage・Nissha Medical Technologies Ltd.
・Nissha Medical Technologies SAS
・Tyrolmed GmbH・Nissha Schuster Kunststofftechnik
・Nissha Back Stickers
・Nissha Back Stickers International・AR Metallizing N.V.
・AR Metallizing S.r.l.
・AR Metallizing Ltd.
・AR Metallizing Produtos Metalizados Ltda
・AR Metallizing GmbH・Nissha (Kunshan) Precision IMD Mold Co., Ltd.
・Guangzhou Nissha High Precision Plastics Co., Ltd.
・Nissha Precision Technologies Malaysia Sdn. Bhd.
Calculated based on Ministry of the Environment "Greenhouse Gas Emissions Calculation
Report Manual (Ver.4.7)” (CO2 emission factors)
CO2 emissions associated with the fuel use: Emission factor based on the Act on Promotion of

Calculation method

Global Warming Countermeasures
CO2 emissions associated with power purchase: Emission factor based on the market-based
method for domestic bases and the location-based method for overseas bases (conventionalemission factor: 0.555t-CO2/MWh)

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Nissha Sustainability Report 2021

lScope 3CO2 emissions associated with employee commuting and business trips
・Nissha Co., Ltd.
・Nitec Industries, Inc.
・Nitec Precision and Technologies, Inc.
・Nissha Printing Communications, Inc.
Coverage・Nissha F8, Inc.
・M crossing Co., Ltd.
・Nissha FIS, Inc.
・Nissha Business Service, Inc.
・Zonnebodo Pharmaceutical Co., Ltd.
Calculated based on;
Ministry of the Environment/Ministry of Economy, Trade and Industry “Basic Guidelines for

Calculation method

Calculating Greenhouse Gas Emissions Through the Supply Chain（Ver.2.3)”
Ministry of the Environment "Calculation intensity database for calculating greenhouse gas
emissions of organizations through the supply chain（Ver.3.0)”

CO2 emissions from logistics suppliers

Coverage

Logistics suppliers（38 companies）
Domestic transportation: based on the Fuel Economy Law

Calculation method

Overseas transportation: sum up CO2 emissions from conventional / improved Ton-kilometer
methodCO2 emissions from major domestic material suppliers

Coverage
Calculation method

Major domestic material suppliers (12 companies)
Fuel consumption x sales ratio, sum up CO2 emissions per product*Calculations of CO2 emissions are subject to inherent uncertainty due to, for example, incomplete scientificknowledge used to determine emission factors and numerical data.

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Nissha Sustainability Report 2021

7-7 Verification Opinion
The Nissha Group has received a verification opinion from SGS Japan Inc. on the accuracy of the CO2 emissions datacontained in this report in order to improve the reliability of our environmental performance data.

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Nissha Sustainability Report 2021

8. Waste Management
8-1 Total amount of waste generated by Nissha GroupIn the fiscal year ended December 2020, the Nissha Group generated a total of 29,935t of waste, including waste
reused as resources, waste sold for recycling and waste for simple incineration/landfill. Of this, waste generated byproduction bases in Japan accounted for 18,538t, a rise of approximately 13% from the 16,437t generated in the fiscal
year ended December 2019. Emissions from incineration and landfill waste accounted for 27t, a rise of approximately
17% from the 23t generated in the fiscal year ended December 2019.
The main reason for this increase in waste
generated in Japan was the increase inproduction

at

Nitec

Precision

Total amount of waste generated and recycling and resource reuse rate
(Nissha Group in Japan)

andTechnologies, Inc. (NPT), production basesof Devices business. The amount of waste
generated by NPT accounts for about 87%

Total amout

FY ended

FY ended

FY ended

Dec. 2018

Dec. 2019

Dec. 2020

21,994t

16,437t

18,538tof the waste generated by domestic bases.

Waste sold for recycling

8,735t

5,877t

6,406t13,230t

10,537t

12,105t

29t

23t

27t

99.9%

99.9%

99.9%

On the other hand, the amount of waste

Waste reused as resources

generated by sales bases including the

Waste for simple

Kyoto Global Headquarters have shown aincineration / landfill

significant downward trend due to the

Recycling and resource reusespread of telework.

rate

Our recycling and resource reuse rate for the Nissha Group in Japan in the fiscal year ended December 2020 was thesame 99.9% as last year, allowing us to meet our target of zero emissions (a recycling and resource reuse rates of
99.5% or above).
To understand the amount of total waste generated at our overseas production bases, we previously confined our scope
to our Asian production bases, but as of the fiscal year ended December 2019, we have expanded our scope to othermajor overseas production bases. The total amount of waste generated by the Nissha Group overseas in the fiscal year
ended December 2020 was 11,397t, an increase of approximately 24% over the 9,156t from the fiscal year ended
December 2019. The main reason for this increase was the new addition of Eurofoil Paper Coating GmbH (now AR
Metallizing GmbH), a German manufacturer of metallized paper, to the Group.
The recycling and resource recovery rate for major overseas Nissha Group bases was 86%. We will continue to monitor
the amount of waste generated by our overseas production bases.

8-2 Risk Management Related to Waste and Waste Converted in Valuable
Resources
At Nissha Group in Japan, we recognize that waste and waste converted into valuable resources have the following
three main risks.
• Accidents and disasters caused by waste and waste converted into valuable resources (including at treatment
contractors)• Environmental pollution and violation of laws caused by inappropriate waste treatment• Leakage of confidential information from waste and waste converted into valuable resources
To alleviate these risks, we are working on safety management of waste in accordance with the Nissha Group Waste
Management Regulations. In line with these regulations, each base has drawn up its own Waste Management Manual

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Nissha Sustainability Report 2021

and makes efforts toward thorough waste separation and management. From the perspective of preventing accidents
and disasters, whether a small amount of substance or a spray can, the properties of waste are checked meticulously
and monitored so as to prevent spillage during transportation and accidents at treatment facilities.
The regulations also stipulate the criteria for selecting waste treatment contractors and for regularly inspecting
treatment facilities using a checklist original to Nissha. In addition, we have in place standards for managing waste andwaste converted into valuable resources that contain confidential information, and promote management in association
with our information security management system (ISMS).

8-3 Responding to waste plastic import restrictions
Import restrictions by China and Southeast Asian nations on waste plastic aimed at reventing marine plastic pollution
have been strengthened in recent years. This means not only that the disposal costs for plastics in Japan have increased
dramatically, but some disposal companies now refuse to take waste plastic or buy items containing resins. This has
forced us to sort our waste by type of plastic as well as contract multiple disposal companies to ensure we have routes
for recycling open to us.
In addition, to comply with the Basel Convention, we do not dispose of the separated film as it is, but instead rewind
it to use as roll film at the factory. Thus, we are working on ways to turn waste into resources in consideration of
resource recycling.

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Nissha Sustainability Report 2021

9. Management of Chemical Substances and Environmental Risks
9-1 Establishment and Operation of the Nissha Control Criteria for Chemical
Substances in Purchased Products
Many of the parts and materials used in Nissha Group products are requested or specified by customers, and so thematerials and the suppliers differ for each product.
Management of the chemical substances used in our products and their production processes is governed by the Nissha
Control Criteria for Chemical Substances in Purchased Products, which reflect the laws and regulations of relevant
countries or regions and the standards of each of our customers, to serve as a set of voluntary standards.

9-2 Management of Chemical Substances Used in Products
9-2-1 Operation of the Nissha Control Criteria for Chemical Substances in
Purchased Products
We use our Nissha Control Criteria for Chemical Substances in Purchased Products as our standards for purchased
goods such as raw materials and sub-materials used for the products of our group. These standards reflect the laws
and regulations of relevant countries and regions, including the RoHS Directive and the REACH Regulation, as well as
the substance-related criteria of our customers. Whenever the relevant laws or regulations are amended, or ourcustomers’ criteria change, we identify the differences from our criteria in order to adapt to these changes.
The Nissha Control Criteria for Chemical Substances in Purchased Products are revised on an annual basis, taking thesedifferences into account. If there is a major revision, we organize briefing sessions for related divisions and our suppliers
to inform them of the changes.
When selecting new materials or changing materials in the design and development stages, we conduct design reviews(DR) and assess compliance with the Nissha Control Criteria for Chemical Substances in Purchased Products whileconsidering the impact on human health and the environment. When used in our factories, we select raw materials
that have passed the DR and which meet the criteria, ensuring traceability for each process.
We are also building a mechanism for identifying and separating noncompliant substances to prevent misuse orcontamination, and for responding swiftly including reporting to customers.
The environmental and safety management division functions as the secretariat and works with the productdevelopment, quality assurance and procurement divisions of each business unit to promote management of thechemical substances used in our products. It also carries out internal environmental audits on a regular basis to checkthe management status of these chemical substances. This system ensures strict control of chemical substances, fromthe design stage to the final product, responding to changes in the needs of society and the demands of our customers.
In the fiscal year ended December 2020, there were no cases in which chemical substances used in our products wererecalled from the market or reshipped with changing in materials.

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Nissha Sustainability Report 2021

Contents of our voluntary standards and list of target substances (extract)

Contests of standards

Groups of substances in the Nissha Control List for Chemical Substances in
Purchased Products

Usage-prohibited

Asbestos fibres

substance*1

Dioxins
Ozone depleting substances
Fluorinated greenhouse gases
Bisphenol-A (with usage conditions)
Substances prohibited from being manufactured (Manufacture-prohibited substance)
Specific amine (with regulations on impurity content)
Azo-dyes which do not form specific amine (with regulations on impurity content
concentration)
Arsenic and its compounds (with usage conditions)

Deliberate usage-

Substances subject to RoHS directive

prohibited substance*2

REACH SVHC (Substances of Very High Concern) and Candidate List SubstanceNickel and its compounds (with usage conditions)
Polychlorinated biphenyls (PCBs)
Specific phthalates
Specific benzotriazol
Dimethylfumarate (DMF)
Perfluorooctane sulfonates (PFOS)
Perfluorooctanoate (PFOA)Natural rubber
Class 1 Specific Chemical Substances of Law Concerning the Examination andRegulation of Manufacture, etc. of Chemical Substances

Regulated substance*3

Global Automotive Declarable Substance List
Conflict minerals
The Proposition 65
Children's Safe Product Act (RCW 70.240.030) The Reporting List of Chemicalsof High Concern to Children (CHCC)* Examples of regulated substances that apply to purchased products (Nissha product raw materials, chemicals usedin the production process for materials, etc.)*1. Use, either deliberately or not deliberately, is prohibited. Inclusion of impurities is also prohibited.
*2. Deliberate use is prohibited. There are regulations on the inclusion of impurities.
*3. Substance which requires a content report from suppliers to Nissha.

9-2-2 Compliance with the RoHS DirectivelEfforts to comply with the RoHS Directive

Nissha complies with environmental regulations in Europe mainly through the Nissha Control Criteria for Chemical
Substances in Purchased Products, our voluntary regulations on chemical substances. Our products comply with the
RoHS Directive*, which regulates the use of certain substances in electrical and electronic equipment.
* This refers to the European “Directive on the Restriction of the Use of Certain Hazardous Substances in Electricaland Electronic Equipment (2011/65/EU)” and its amendments. The Directive prohibits the inclusion in products oflead, mercury, cadmium, hexavalent chromium, PBB, PBDE, bis(2-ethylhexyl) phthalate, butyl benzyl phthalate,
dibutyl phthalate, and diisobutyl phthalate in excess of the maximum permissible amount, except for exempted
applications.
Text of the Directive

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Nissha Sustainability Report 2021

System for promoting compliance with the RoHS DirectivelNissha has been working on either not using or using fewer hazardous chemical substances used in our products since
the first edition of the Nissha Control Criteria for Environmentally Controlled Substances was established in 2007,
leading up to the current Nissha Control Criteria for Chemical Substances in Purchased Products.
Substances regulated by the RoHS Directive (formerly Directive 2002/95/EC) have been subject to control as
environmentally controlled substances since the first edition by complying with customer requests in accordance withthe directive.
• Conformity with the previous directive (2002/95/EC)
There is no intentional use of mercury, cadmium, specific bromine flame retardants, or hexavalent chromium in our
products. Although we used to use lead in solder for quality reasons and with the approval of our customers, wehave been working towards total abolition with the establishment of the Nissha Control Criteria for Environmentally
Controlled Substances, and currently prohibit the use of lead in new products.
• Conformity with the new directive (2011/65/EU)
Although Annex III (exemption list) was amended by European Commission Decision 2010/571/EU (effective January2013), none of the relevant chemical substances were used in our products.
• Addition of specific phthalate esters to restricted substances
The European Commission Delegated Directive (EU) 2015/863 (effective July 2019) amended Annex II (List of
Restricted Substances), designating specific phthalate esters* as a new restricted substance. As a result, themarketing of electrical and electronic equipment (EEE) containing specified phthalate esters in the European
Economic Area (EEA) has been banned. To date, we have not used any of the relevant chemical substances in our
products.
* Bis (2-ethylhexyl) phthalate [DEHP], Benzyl butyl phthalate [BBP], Dibutyl phthalate [DBP], Diisobutyl phthalate[DIBP]

Warranty system for RoHS specificationsl

The points required for RoHS compliance are listed below. We are putting measures into place at each stage of theprocess, building a comprehensive countermeasures system.
•

Example of a warranty system based on cooperation with material suppliers
Management system for RoHS Directive based on cooperation with material suppliers
Annual submission of certificates of conformity, reports on the inclusion of prohibited substances, reports on the
inclusion of chemical substances in products, content information, ICP data, and written pledges from suppliersof materials for mass production•

Example of countermeasures in the production process
Enforcement of rules when accepting materials
Distinguishing between storage locations and labeling of input materials
Ensuring and maintaining traceability
Identifying and separating noncompliant substances•

Example of information provided to customers in connection with sales
Provision of information on chemical substances used in products
Registration in the customer’s management system and issuance of SDS

36

Nissha Sustainability Report 2021

Our main products do not use any chemical substances that fall under the RoHS Directive or other directives, so we do
not currently have a plan to reduce them.

9-2-3 Compliance with REACH Regulation
The REACH Regulation (EC 1907/2006) are a European law on the registration, evaluation, authorization and restrictionof chemical substances. REACH came into force in 2007 with the aim of protecting human health and the environment.
REACH Regulation require registration with the European Chemicals Agency (ECHA) in order to sell more than 1
tonne/year of chemicals in the EU, whether an existing or new chemical substances. In addition, articles specified by
the REACH Regulation must be registered if there is an intentional release, and must be notified or announced if they
contain substances of very high concern (SVHC).

l

About our products

Many of the products listed on our website fall under the category of “articles” as defined by the REACH Regulation.
Also, there are no chemical substances registered under this regulation.
We have a system in place to comply with the REACH Regulation through the management of chemical substancesused in our products. Currently, based on the information and data we have obtained from our material suppliers andour own knowledge, we do not use any SVHC as per the list updated on January 19, 2021 for our main products(articles). This is also stated in the SDS and other documents that we provide in response to customer requests.
Reference Materials:
Supervisory Authority: European Chemicals Agency (ECHA)
Latest SVHC list from the ECHA
Text of the REACH Regulation

9-2-4 Response to California Proposition 65
Proposition 65, known as the Safe Drinking Water and Toxic Enforcement Act of 1986, is a California law enacted byreferendum in November 1986 to protect the state’s citizens and drinking water resources from chemicals that cancause cancer and birth defects.
The state’s Environmental Protection Agency Office of Environmental Health Hazard Assessment (OEHHA) requires
employers to display a warning statement for products containing chemicals specified in Proposition 65. Also, a productis required to display a warning statement designated by the state if it is sold or distributed in the state, even if it is
not produced there.
Our voluntary standards, Nissha Control Criteria for Chemical Substances in Purchased Products, also include
information on California Proposition 65. We are working to comply with this law by, for example, having our material
suppliers submit a certificate of compliance on a regular basis every year. Note that this applies to none of theCompany’s products.

9-3 Chemical Substances used in Production Processes
9-3-1 Operation of the Nissha Control Criteria for Chemical Substances in
Purchased Products
In addition to the chemical substances used in our products, we also regulate the chemical substances used in our
production processes in accordance with the Nissha Control Criteria for Chemical Substances in Purchased Products.
These include the substances prohibited for manufacturing under the Enforcement Order of the Industrial Safety and
Health Law and the substances regulated by the Poisonous and Deleterious Substances Control Act, and the Act on

37

Nissha Sustainability Report 2021

Confirmation, etc. of Release Amounts of Specific Chemical Substances in the Environment and Promotion of
Improvements to the Management Thereof (PRTR Act).

9-3-2 Reduction of Chemical Substances in Use
Our environmental goal is to reduce the rate of use ofchemical substances at ISO14001-certified business sites. In
the fiscal year ended December 2020, the Nitec Industries,
Inc. (NII) Koka Factory, production base of Industrial

FY

FY ended

FY ended

FY ended

Dec. 2018

Dec. 2019

Dec. 2020〇〇〇

Assessment

Materials business, achieved its target of a 1% reduction year-over-year of PRTR substances and organic solvents otherthan PRTR substances.
Nitec Precision and Technologies, Inc. (NPT), production base of Devices business, achieved results in its efforts to
reduce the use of chemicals by improving yields.
(Please refer to 6. Environmental Objectives and Status of Achievement)

9-4 Management of Environmental Pollutants
The Nissha Group in Japan is constructing a system to understand and manage how environmental pollutants are used
at each business site. We use this system even for the calculation of emission and transfer amounts which the Act on
Confirmation, etc. of Release Amounts of Specific Chemical Substances in the Environment and Promotion of
Improvements to the Management Thereof (PRTR Act) requires reporting on.
In the fiscal year ended December 2020, substances which were transferred or emitted in excess of one tonne were
ethylbenzene, xylene, Hexavalent chromium, toluene, nhexane and water-soluble copper salts (excluding complex
salts).
We also take great care with management when handling chemical substances, such as establishing our own voluntarystandards. In addition to displaying GHS* labels on containers to warn people, we carry out measures to prevent
environmental pollution such as installing spillover containers to ensure safety if the main container develops a leak,and ensure that all related personnel are familiar with these measures.
*GHS (Globally Harmonized System of Classification and Labelling of Chemicals): Provides internationally-standardized rules toharmonize the contents of safety data sheets and standards of classification per hazard for chemical products.

9-5 Response to environmental risks (preventing environmental accidents or
pollution)
The Nissha Group in Japan realizes that pollution from chemical substances is a serious environmental risk, and works
to manage it. To prevent environmental accidents from happening during storage or transportation of chemical
substances within a work site, we lay out management procedures that consider the scale and frequency of accidents.
In addition, we have set emergency response procedures and carry out training on an ongoing basis to minimize theinfluences in event of a leak, and revise and improve our methods as required.
l

Examples of initiatives for preventing pollution
Sites for deliveries of liquid chemicals via tanker truck or waste liquid collection are equipped with emergency
cutoff devices to prevent any substances from leaking outside the site if an accident occurs.

lLeak response training
We establish countermeasure procedures to prevent pollution from spreading in the event of a leak at sites fordeliveries of substances or waste liquid collection, hold regular trainings, and revise the procedures.

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Nissha Sustainability Report 2021

9-6 Prevention of Water Pollution
We have set our own strict standards and regularly conduct voluntary surveys of waste water quality to prevent waterpollution.
The figures for core production bases are as follows.

Nitec Precision and Technologies, Inc. (NPT) Himeji Factory
Measurements of Wastewater Quality
Agreement
value (Law
Concerning
SpecialMeasuresforConservationof theEnvironmentof the Seto
Inland Sea)

Regulatory value(Water Pollution
Control Act)

Items
measured

Voluntarystandard

Unit

FY ended December
2019

FY ended December
2020

Analysisvalue

Analysisvalue

Analysisvalue

Evaluation

Evaluation

Evaluation

Discharged water

5,200

5,000

5,000

4,934



4,655



4,156



pH

5.8~

5.8

6.5

6.9



6.9



6.8



8.6

8.6

8

7.6



7.6



7.5



BOD

120

10

9

mg/l

3.9



2.8



4.0



COD

120

10

9

mg/l

7.4



7.3



5.2



SS

150

5

4.5

mg/l

3.7



1.6



1.9



Mineral oil: 5
Vegetable oil: 30

1

0.9

mg/l

0.6



<0.05



<0.5



Phenol

5

0.1

0.08

mg/l

<0.005

<0.005

<0.005



Copper

3

0.5

0.4

mg/l

0.04



0.04



0.05



Zinc

2

1.5

1.2

mg/l

<0.01



<0.01



<0.01



Soluble iron

10

0.15

0.08

mg/l

<0.01



0.02



0.03



Solublemanganese

10

0.05

0.045

mg/l

0.05



0.04



0.04



Chromium

2

0.02

0.02

mg/l

0.02



<0.02



<0.02



Nitrogen

60

10

9

mg/l

9.4



8.0



4.2



8

1

0.45

mg/l

0.29



0.19



0.02



n-hexanederivedsubstances

Phosphorus



FY ended December
2018

Nitec Precision and Technologies, Inc. (NPT) Kaga Factory
Measurements of Wastewater Quality

Items
measured

Regulatory
value(Prefecture)

Voluntarystandard

FY ended December 2018

FY ended December 2019

FY ended December 2020

Unit
Final effluent(Average)

Final effluent(Maximum)

Final effluent(Average)

Final effluent(Maximum)

Final effluent(Average)

Final effluent(Maximum)pH

5.88.6

6.28.2

7.4



7.7



7.5



7.5



7.5



7.7



BOD

160 or less40 or less

mg/l

32.6



56



21.9



34.0



23.4



40.0



COD

160 or less80 or less

mg/l

55.3



93



34.0



47.0



33.5



47.0



SS

200 or less20 or less

mg/l

28.2



63



9.1



18.0



6.3



23.0



30.0

15 or less

mg/l

0.5



0.5



0.6



0.8



0.6



0.9



n-hexanederivedsubstances

39

Nissha Sustainability Report 2021

9-7 List of PRTR-designated chemical substances
Nitec Industries, Inc. (NII) Koka Factory
Unit: kg
FY ended December 2018

PRTR
No.

Name ofchemical
substance

5380

Ethylbenzene
XyleneVolumetransferred
Discharge
tovolume into
industrial
the
waste
atmosphereprocessing
companies

Hexavalentchromiumcompounds
1,2,4Trimethylbenzend
TolueneN-hexane

88
296
300
392

FY ended December 2019

Reportingrequired /notrequiredVolumetransferred
Discharge
tovolume into
industrial
the
waste
atmosphereprocessing
companies

FY ended December 2020

Reportingrequired /notrequired

Discharge
volume intotheatmosphere

Volumetransferredtoindustrial
waste
processing
companies

Reportingrequired /notrequired

1,444
9,904

587
4,026




1,211
9,937

463
4,075




710
15,745

286
6,431




0.1

0.0



0.1

0



0.1

0



299

107



265

95



25

10



83,927
8,371

36,8312,375




100,846
4,518

5,520
2,741




61,535
601

25,134245



Nitec Precision and Technologies, Inc. (NPT) Himeji Factory
Unit: kg

Name ofchemical
substance

PRTR
No.

FY ended December 2018

FY ended December 2019

Discharge
volume intotheatmosphere

Volumetransferredtoindustrial
waste
processing
companies

Discharge
volume intotheatmosphere

Volumetransferredtoindustrial
waste
processing
companies

Reportingrequired /notrequiredFY ended December 2020

Reportingrequired /notrequired

Discharge
volume intotheatmosphere

Volumetransferredtoindustrial
waste
processing
companies

Reportingrequired /notrequired71

Ferric chloride

0.0

0.0

×

0.0

0.0

×

0.0

0.0

×

272

Water-soluble copper
salts (excluding
complex salt)

0.0

2,023.1



0.0

1,352.8



0.0

1,820.2

453

Molybdenum and its
compounds

0.0

0.0



0.0

0.0



0.0

0.0



Nitec Precision and Technologies, Inc. (NPT) Kaga Factory
Unit: kg

PRTR
No.

Name ofchemical
substance

64

Silver and its compounds(water soluble)

71

Ferric chloride

272
453

Water-soluble copper salts(excluding complex salt)
Molybdenum and its
compounds

FY ended December 2018

FY ended December 2019

Discharge
volume intotheatmosphere

Volumetransferredtoindustrial
waste
processing
companies

Discharge
volume intotheatmosphere

Volumetransferredtoindustrial
waste
processing
companies

-

-

-

-

-

Reportingrequired /notrequiredFY ended December 2020

Reportingrequired /notrequired

Discharge
volume intotheatmosphere

Volumetransferredtoindustrial
waste
processing
companies--

Reportingrequired /notrequired

0.0

0.0



0.0

0.0



0.0

0.0



0.0

0.0



0.0

0.0



0.0

0.0



-

-

40

-

-

-

Nissha Sustainability Report 2021

SocialIn order for the Nissha Group to grow and develop, and realize theenrichment of people’ s lives on a continuous basis, it is importantthat we recognize and live up to society’ s demands and expectations.
We are carrying out various activities that support our businesses,
while valuing communication with our stakeholders.

• We work with our customers across the globe to tackle social
issues, under a structure in which our customers can feel safe totrust us with work.
• We respect the human rights and diversity of our employees, andcreate workplace and systems in which they can maximize theirabilities, with the aim of achieving growth for both the company andour employees.
• We strive to build partnerships of co-existence and co-prosperity
with our suppliers, toward constructing sustainable production
systems and supply chains.
• We carry out social contribution activities, aiming to co-existencewith local communities.

41

10. Human Rights
10-1 Basic Policy on Labor and Human Rights
We at Nissha Group have in place a basic policy on labor and human rights. In formulating the policy, the 10 principlesof the United Nations Global Compact, which we joined in April 2012, and the Responsible Business Alliance (RBA) codeof conduct, mainly for the electronics and automotive industry, were used as reference. In addition to Japanese, thispolicy has been translated into English, Chinese, Korean and Malay, Spanish and German, and widely distributed to all
Nissha Group employees.

Basic Policy on Labor and Human Rights
The Nissha Group will observe the international norms, laws and ordinances related to human rights and labor
standards and will make efforts to continually improve human rights and labor standards.
1. Child labor: We will prohibit child labor and also implement relief measures.
2. Forced labor: We will eliminate all forms of forced labor, including bonded labor.
3. Health and safety: We will secure the health and safety of our employees and provide a hygienic workplaceenvironment.
4. Freedom of association and the right to collective bargaining: We will guarantee the right to organize andthe right to collective bargaining.
5. Discrimination: We will not discriminate based on a person’s age, disability, ethnic group, gender, marital
status, nationality, political support, race, religion, sexual orientation, pregnancy or membership in a union.
We will also not be party to this.
6. Punishment: We will not perform physical punishment or mental or physical coercion and we will not engage
in verbal abuse.
7. Working hours: We will observe the laws, ordinances and labor agreements related to working hours, rest
breaks and holidays.
8. Remuneration: We will observe the laws and ordinances related to the payment of appropriate wages.
June 1, 2018
Junya Suzuki
Chairman of the Board
President and CEO
Nissha Co., Ltd

10-2 Initiatives Related to Labor and Human Rights
At Nissha, the Labor and Human Rights Subcommittee, one of the constituent subcommittees of the Sustainability
Committee, works to comply with international norms and laws regarding labor and human rights, as well as
continuously improve its initiatives. We have set “Respect for human right” as one our materialities (material issues),
and hold internal audits once a year at major production bases of the Nissha Group in Japan where we check the statusof compliance with laws and regulations and with the code of conduct of the Responsible Business Alliance (RBA).
Specifically, in addition to ensuring that the salaries paid to regular and temporary employees meet the minimum
wages set by the prefectural governments, and that working hours and overtime are correctly reflected in wages incompliance with laws and regulations and the RBA, we also check whether items which have been noted as correctedin previous audits continue to be complied with.

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Nissha Sustainability Report 2021

In the fiscal year ended December 2020, the Labor and Human Rights Subcommittee engaged in understanding andreducing human rights risks and in implementing working style reforms.
• In terms of understanding and reducing human rights risks, we conducted risk assessments for human rights at
major overseas locations related to our key markets of medical devices, mobility (automobiles and transportationequipment), and sustainable materials.
We will continue to identify and reduce human rights risks at newly-added affiliated companies and overseas basesof the Group. We will also work to identify and prevent or reduce labor and human rights risks in our supply chain,with a KPI of preventing child labor or forced labor at our primary suppliers in regions where the Group operates
that have high labor and human rights risks (Latin America, Southeast Asia, Greater China).
• In terms of implementing working style reforms, we have established internal regulations for teleworking and otherworking styles, including for affiliated companies that have newly joined the Group, and are working to develop
flexible work systems and support systems so that employees can work safely and with peace of mind and live up
to their full potential.

Initiatives for Foreign Technical Interns
Workplaces in Nissha that accept technical interns from Vietnam make creative efforts in information sharing andcommunication toward protecting the human rights of the interns and establishing a worker-friendly environment.
For example, when trainees first join the company, they are given recreational activities to learn about local cultureso that they can become familiar with Japanese culture as soon as possible. After they start working, signs showing
evacuation routes and the location of the medical office, notices about harassment and other consultation desks,
pay slips, and training materials, for example, are prepared and provided in both Japanese and Vietnamese sothat both employees and technical interns can understand them. Our employees work with interpreters to ensurethat the technical interns from Vietnam understand what we are doing, and we try to explain things in ways thatare understandable in Vietnamese culture. Even during the COVID-19 pandemic in the fiscal year ended December
2020, we accepted six technical interns, and in addition to the above initiatives, we are also providing mental
support.

Training materials in VietnameseWorkshop43

Nissha Sustainability Report 2021

10-3 Harassment Prevention
We at the Nissha Group establish a set of Harassment Prevention Regulations, which prescribe measures to prevent
various forms of harassment in the workplace, with the aim of realizing sound workplace environments in which all
employees can live up to their full potential. As a structure for promoting harassment prevention, we designate a chief
promoter of harassment prevention and hotline staff at each base. The chief promoters organize a liaison meeting twicea year, in May and November as a rule, where they share information about cases of harassment that have occurred
at one another’s base, introduce their responses, and discuss practical harassment prevention, problem solving, andmeasures for improvement.
We have also established an internal harassment consultation service available to all employees, and an external hotline
consultation service for any and all types of consultation. The contact information for each service is provided throughthe Nissha Group intranet, guidebooks, and e-learning, and employees are assured that their privacy will be fully
respected and that they will not be treated unfairly or be disadvantaged for making use of these services. We arecommitted to ensuring that our employees can discuss issues with confidence. There were 8 consultations with theinternal harassment consultation service during the fiscal year ended December 2020. The external hotline received
12 inquiries regarding things like workplace environments or human relations, but all of these have been addressed.
(Please refer to 25-4 Hotline Consultation for details.)
We use an e-learning system to provide annual harassment prevention training for all employees. In addition, we
conduct supervisor training for managerial staff and training for hotline staff. During the fiscal year ended December
2020, in addition to conducting e-learning training for all employees based on specific examples of harassment, we
took a top-down approach to preventing harassment which included posting a message from the director in charge ofhuman resources on the Nissha intranet regarding the eradication of harassment in accordance with the enforcementof the Law on Measures to Prevent Power Harassment.

10-4 Fair Evaluation and Treatment
The Nissha Group considers rewarding employees for their achievements to be the foundation of our human resources
system. In the semi-annual personnel evaluation, and based on the target management system, employees areevaluated on the two axes of “performance evaluation,” which evaluates KPIs related to the company’s management
strategy and the mission of the organization to which they belong, and “behavior evaluation,” which evaluates theactions and abilities expected by the company to create results. The results are reflected in bonuses, salary increases,
promotions, and other benefits. Employees meet with their supervisors to receive feedback when setting goals at the
beginning of the term and when conducting evaluations at the end of the term. We place emphasis on dialogue formutual understanding, and devise ways to ensure fair and convincing evaluations and treatment.

10-5 Wage Management
Wages and other compensation for labor are appropriately stipulated in the wage rules of each affiliated company andin individual contracts in accordance with the laws and regulations of each country. The Nissha Group makes no
distinctions based on age, gender, or other factors.

10-6 Relationship with Labor Unionl

Basic Concept

Our Basic Policy on Labor and Human Rights contains the provision, “4. Freedom of association and the right to collective
bargaining. In Japan, the labor contract concluded between company and labor union confirms, “the Company and theUnion shall respect each other’s position and maintain a peaceful relationship between labor and management as well
as strive for the maintenance and improvement of labor conditions and the growth of the Company.” In the fiscal year

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Nissha Sustainability Report 2021

ended December 2020, there were no significant violations of freedom of association.
The Nissha Group used to have three labor unions: the Nissha Labor Union, the Nitec Industries Labor Union, and the
Nissha Printing Communications Labor Union. In January 2021, these three unions merged to form the Nissha Crew
Alliance, a single labor union for the Nissha Group in Japan, to which all employees, excluding managerial staff, belong.
(As of January 2021, there were 1,114 members, with a membership ratio of approximately 65%). The vision of the
Nissha Crew Alliance is “realizing new happiness” through “new ways of working (workplace sphere),” “new lifestyles(social sphere),” and “new union activities (individual sphere).” It aims to support all employees of the Nissha Group in
Japan by expanding the old one-company-one-union system.

lLabor-Management Relations

Both labor and management engage in regular negotiations and discussions based on the above concept to build stable
labor-management relations as a way to resolve common issues in the Nissha Group in Japan.
To revise the personnel system for general employees, in the fiscal year ended December 2020 Nissha held a series of
discussions with the labor union from the conceptual stage, working together to create a new system. Also, labor andmanagement worked together to change commuting allowances and introduce telework allowances in response to thechanges in working styles brought about by the spread of COVID-19. During the fiscal year ending December 2021,
we are continuing to cooperate and promote initiatives related to new ways of working and diversity.
Nissha Co., Ltd. holds regular Management Council meetings with the Nissha Crew Alliance. In addition to negotiating
and discussing employee working conditions, the Council shares information on the management of the Nissha Group.
When changing important labor conditions of the Nissha Group in Japan, the company carries out dialogues with theunion with the aim of reaching an agreement satisfactory to both. Furthermore, the labor and management offices
strive to prevent labor problems by regularly sharing employees’ opinions on the working environment and the working
hours situation.
Affiliated companies Nitec Industries, Inc. and Nissha Printing Communications, Inc. have also established labormanagement liaison meetings at the company and office level to provide forums for labor and management to exchange
opinions. Moreover, Nitec Precision and Technologies, Inc. has established the Workplace Improvement Committee,
with members from both labor and management, to work on promoting improvements in the workplace environment
and in welfare benefits.
In fiscal year ended December 2020, the Nissha Group had no report either of a strike or lockout. We will continue torespect the mutual positions of both company and union, and build a sound relationship between labor and management.

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Nissha Sustainability Report 2021

11. Human Resources System
11-1 Basic Human Resources Policy
We at Nissha Group recognize that our employees are our most important management resources.
With the start of the 7th Medium-term Business Plan, we have formulated and started to roll out a new Basic Human
Resources Policy. The policy outlines our fundamental approach to human resources measures, and our humanresources-related systems and development are implemented based on this policy.

Basic Human Resources Policy• We respect diversity and utilize the individuality and strengths of our employees.
• We appropriately respond to employees who grow with the company and are highly motivated to contribute.
• We encourage proactive action and unconventional changes when adapting.
• We emphasize global teamwork to achieve results.
• We provide a full training system and challenging growth opportunities.
• We develop human resources who can contribute to society through our business activities.

11-2 New Human Resources System
Based on the idea that company growth leads to employee growth, and employee growth to company growth, theGroup has overhauled its human resources system, which still had elements of seniority-based hierarchy, and started
operating a new system focused on roles and abilities in line with the 7th Medium-term Business Plan.
In this new system, the required skills are clearly stated, and employees demonstrating the skills required by thecompany will be given a fair chance to be promoted, regardless of age or length of service. In the human resources
system for general employees, we have greatly improved the treatment of employees who hold key positions andintroduced a multi-track human resources system based on expected roles. In addition, the actions expected of the
managers who direct these employees have been clarified as managerial competencies consisting of the ability tochange (leadership) and the ability to execute (management).
Each employee carries out their duties with an awareness of the abilities required based on their position, and receives
feedback from their supervisor on the gaps with the abilities actually demonstrated in the semi-annual performance
review. This encourages the growth of each employee, which in turn leads to further growth for the company.

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12. Human Resources Development
The Nissha Group regards the source of the company's strengths as "employees", and are working to systematicallydevelop our human resources.

12-1 Initiatives
The Nissha Group has identified the improvement of human resource capabilities and the activities carried out by adiverse talent pool as materialities. We are working to develop human resources by setting the enhancement androtation of management and strategic human resource training as strategic items, making the selection rate ofcandidate leaders* a KPI, and setting the target for 2023 as 36% for Nissha on a non-consolidated basis.
To achieve our medium- to long-term growth strategy, the Nissha Group in Japan has established a training system
based on the following pillars: selective training to develop the next generation of management, rank-specific trainingthat matches the employee's stage, and function-based training to provide specialized knowledge according to job type.
Overall, this training is called the Nissha Academy.
Moreover, we will introduce reskilling training as a strategy to reconfigure the skills of employees who can play anactive role in the growth areas of the 7th Medium-term Management Plan, namely medical devices, mobility(automotive and transportation equipment), and sustainable materials.
For human resources training at overseas bases, the Human Resources department plans to expand successful
examples of educational programs to overseas bases, and to allow overseas bases to take the initiative in training local
management. Through these human resource development programs, the Group aims to see the company and our
employees grow together.
* Number of participants in the Business School (beginner and intermediate) shown below / Number of general employees

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Nissha Sustainability Report 2021

12-2 Training Systems
12-2-1 Rank-specific training
Human Resources takes the lead in providing rank-specific training according to qualification grade, age, position, andexperience.

l

New employee training

At Nissha, the first three years after new graduates enter the company are positioned
as the initial training period. After joining the company, new graduates undergo asix-month training program before being assigned to a business division. Three years
after joining the company, new employees are rotated across job categories anddivisions to gain a wide range of experience, helping them to grow step by step.
After joining the company in April, employees take group training (about one month),business unit training (about two months), and factory training (about threemonths).
Employees learn how to act as members of society, business manners, and the basic skills
Group training

for carrying out their work. In addition, through lectures and group work, employees learn
the Nissha Philosophy, strategies, businesses, technologies, basic manufacturing concepts,
and company rules that they should understand as employees of the Nissha Group.
Employees learn how to build up core technologies and corporate values tied to business.

Business unit training

Through lectures and group work, employees deepen their understanding of the roles andwork of the divisions (functions) that make up a business unit.
Employees visit actual factory production sites to train in manufacturing under the guidanceof senior employees.

Factory training

Through hands-on work, employees learn to understand technology and production
processes, as well as quality, safety, and other important aspects of a manufacturing
company.

12-2-2 Function-based training
Training is provided to employees to allow them to acquire the knowledge and skills required for their job type (function),such as engineering, production, purchasing, etc.

lCommon training for young engineers

The technical knowledge required to meet the needs of global customers istaught from the dual aspects of the “core technologies” that are our strengths,
and the science-based “common engineering” knowledge (quality, statistics,
intellectual property, etc.) that all engineers, regardless of where they work,
should be aware of. Employees are taught all this, from introductory to appliedfields, in line with their individual experience and knowledge levels.
In order for us to continue to grow while changing our target markets andproducts, we train engineers who can create products that come with “Nissha’s
unique strengths” beyond the boundaries of business units.

12-2-3 Global human resource development
Nissha is also carrying out a range of measures to ensure more global human resources can play active roles in ourcompany.

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Nissha Sustainability Report 2021

lOverseas trainee system

We have an overseas trainee system for developing young human resources (from both liberal arts and sciencebackgrounds) who can flourish in global business settings regardless of their job type. Employees are selected internallyfrom their third year on and spend about one year in a local subsidiary. By working at overseas subsidiaries in Europe,
America, or Asia, they can improve their specialized skills, language abilities, and intercultural adaptability with thegoal of becoming global leaders, including candidates for overseas postings, in the future.

12-2-4 Selective training
We carry out selective training with the object of systematically training the human resources necessary to achieve our
medium- to long-term growth strategy, including training candidates for the next generation of management executives.

lBusiness School

Nissha operates a Business School to systematically train human resources who will lead the management of the entire
company and its businesses. This program covers the knowledge and skills involved in developing and implementing
business strategies. After graduating from the School, employees will be actively provided with opportunities to put
what they have learned into practice, including participating in projects and formulating medium-term management
plans.

12-2-5 Training for temporary employees
When dispatch staff, contract staff, and other temporary employees are accepted, they are given the same training as
full-time employees to ensure that they have a thorough knowledge of our business, as well as the rules and regulations
for working at the company and for daily operations.
Training content• Company profile• Labor and human rights, employment regulations, working hours management, safety and health• Corporate ethics and compliance, protecting corporate secrets, trade management• Environmental initiatives, waste separation

12-2-6 Post-training surveys (employee engagement surveys)
Questionnaires are administered at times such as training for promotion by grade for general employees, training for
those promoted to managerial staff positions, training for upper managerial staff positions (general managers andabove), and career training. Surveys are conducted on participants' motivation and satisfaction, and their work
satisfaction and acceptance. These surveys encourage employees to self-start their work with a strong sense ofcontributing to the company.

12-2-7 Company-wide e-learning
Our in-house e-learning system (introduced in FY2018.12) covers the knowledge and key topics that all employees of
our Group should know. In the fiscal year ended December 2020, e-learning covered four themes, including corporate
ethics and compliance; labor and human rights, and harassment prevention; and information security. For employees
who work in factories and do not have access to their own computers, we provide training using video materials of thesame content in an effort to raise and equalize the knowledge of all domestic employees of the Group.

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Nissha Sustainability Report 2021

12-2-8 Support for employees' voluntary desires to learn and grow
The Group has established a system to support self-study for the purpose of encouraging employees to voluntarily seek
opportunities for study, and to enhance their education or gain knowledge about the Company's business. Employees
are free to choose from a variety of distance learning and e-learning programs that match what they want to learn.
Moreover, this voluntary self-study is supported through subsidies of half the fees for those who complete their courses.

12-2-9 Career planning support
As of the fiscal year ended December 2019, we have been providing career design training for employees aged 50. By
learning about changes in the external environment, the company's systems, and their own values and strengths, they
have the opportunity to consider their future career plans. In the fiscal year ended December 2020, 116 eligible
employees took this course.

12-3 Training Records
The total number of hours dedicated to major training programs in the Nissha Group in Japan and training hours per
employee (by gender) are given in the table below.

Annual training hours

Training hours per employee

FY ended

FY ended

FY ended

Dec. 2018

Dec. 2019

Dec. 2020

Male

19,573

17,76816,740Female

7,277

4,497

5,565

Total

26,85022,26522,305

Male

10.2

9.6

10.6

Female

16.8

10.0

13.8

Average

11.4

9.7

11.2

* Training hours per employee are calculated based on the number of full-time employees of the Nissha Group in Japan.
* There was an emphasis on training to encourage the advancement of women in the fiscal year ended December 2018, so moretraining time was allotted for women.

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Nissha Sustainability Report 2021

13. Respect for Diversity
The Nissha Group has a set of Shared Values that serve as the principle of employee behavior seeking to realize our
mission. One of those values, Diversity and Inclusion, declares, “We welcome diverse capabilities interacting as equals
and enhancing our organizational performance.” To grow as a global company, we respect diverse work styles by diverse
human resources, and aim to create workplaces in which all employees can perform to their full potential.

13-1 Nissha Group Employee Composition
The diversity of the Nissha Group shows in our employee composition in terms of gender, age, and employment status.
With the expansion of our activities across the globe, about 60% of permanent employees work at Nissha Group
companies outside Japan. We hire a diverse range of people on a global basis. Locally hired employees are appointed
to upper management positions such as CEO at eight of Nissha Group’s overseas bases, where they are deeply involvedin management.

Composition by region (Nissha Group, as of the end of December 2020)
Male
Japan

Female

Total

1,587

401

1,988

North America

841

668

1,509

Central and South America

216

323

539

Asia

310

364

674

Europe

478

202

680

* Figures exclude temporary employees and directors by a delegation agreement.

Composition by employment status (Nissha Group, as of the end of December 2019)
Male
Permanent

TemporaryFemaleTotal

Number

3,432

1,958

5,390

Composition

63.7%

36.3%

―

Number

1,429

583

Composition

71.0%

29.0%

2,012
―

* Figures exclude directors by a delegation agreement.

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Nissha Sustainability Report 2021

Employee Composition (Nissha Co., Ltd.)Fiscal Year

GenderDirectors ofCorporate

NisshaManagerial

the Board*1

officers

fellows

staff

FY endedMale

7Mar. 201718

1

FemaleFY ended

Male

1

0

7

15

Dec. 2017

Female1

Employees*2

Averageage

Averageyears ofemployment

154

619

41.5

13.9

0

7

183

35.4

10.2

1

165

603

41.8

14.1

0

0

9

188

35.9

10.7

FY ended

Male

8

12

1

161

616

42.1

14.5

Dec. 2018

Female

1

0

0

11

203

36.5

10.7

12

1

162

609

42.9

15.3

FY endedMale

8

Dec. 2019

Female

1

0

0

10

210

36.7

11.0

FY ended

Male

8

11

2

145

531

43.0

15.4

Dec. 2020

Female

1

0

0

8

189

37.3

11.5

*1. Directors include Independent Outside Directors of the Board.
*2. Employees exclude temporary employees.
Composition by age (Nissha Co., Ltd., as of the end of December 2020)
10-19

20-29

30-39

40-49

50-59

60-69

Male

0

54

133

214

129

1

Female

0

40

84

48

16

1

* Figures exclude temporary employees.
Number of employees (Nissha Group)
Male

FemaleTotal

FY ended Mar. 2017

3,449

1,684

5,133

FY ended Dec. 2017

3,597

1,725

5,322

FY ended Dec. 2018

3,832

2,012

5,844

FY ended Dec. 2019

3,692

2,026

5,718

FY ended Dec. 2020

3,432

1,958

5,390

* Figures exclude temporary employees.
Of all permanent employees who left Nissha Group companies in Japan in the fiscal year ended December 2019, 3.57%
left for personal reasons.

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Nissha Sustainability Report 2021

13-2 Persons with Disabilities Employed at Nissha
The Nissha Group is working to achieve
the employment rate for people withdisabilities

atcompanies

with

the

number of employees that are subject tothe employment rate system for people
with disabilities set by the government.
To

ensurethat

employees

withdisabilities can work with peace of mind,
we

providesupportfromoutsidespecialists such as job coaches, help
them develop their skills, and holdregularinterviews

with

Human

Resources at least once a year.
The figure on the right shows changes inthepercentageofpersonswith

disabilities employed at Nissha. Although the percentage of persons with disabilities employed was low in 2020 due inpart to retirements, we will continue to work systematically to achieve and maintain our target for percentage of
persons with disabilities employed and thus achieve diverse working styles with diverse human resources by creating
opportunities to hire and employ persons with disabilities through strengthening cooperation with special-needs schools
and other external organizations, introducing internships that include persons with disabilities, and creating a
comfortable work environment.

13-3 Foreign Employees in Active Roles
We hire people regardless of nationality in accordance with the “Diversity and Inclusion” part of our Shared Values. In
our Group, where a diverse range of people play active roles, foreign nationals account for 63.1% company-wide.
Hiring of new graduates and mid-career employees at Nissha is shown below.

Total numberof hires

New graduates

Mid-career

Total

Foreign

Total

Foreignnumbernationals

numbernationals

Country

FY2018.12

45

24

1

21

1 Uzbekistan, Malaysia

FY2019.12

21

18

4

3

0 Malaysia, Indonesia, Vietnam, IranFY2020.12

20

12

0

8

0

ー

We have set up a worship room in our Kyoto Head Office that can be used by people of any religion or sect. There isalso a small purification facility to purify the body before worship, which is used regularly every day.

13-4 Promotion of Women's Advancement
The Nissha Group aims to be a company where all employees, regardless of nationality, gender, age, and more, canexercise their abilities to the full.
Starting in the fiscal year ending December 2021, our Group has identified the improvement of human resource
capabilities and finding active roles for a diverse range of people as a materiality. To that end, we have made promoting
female advancement a strategic item and the ratio of female managerial staff a KPI, for which we have set targets of
21% for global consolidated companies and 8% for Nissha on a non-consolidated basis by 2023.

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Nissha Sustainability Report 2021

We opened a career counseling office in 2021, where women can get support for career planning that accommodates
their life events.
Over the 7th Medium-term Business Plan (3 years; FY2021.12 to FY2023.12), we will provide challenging growth
opportunities for female employees by enhancing selective training and company-wide common training items for each
grade, and systematically develop candidates for upcoming managerial staff positions through personnel rotation.

lAction Plan for the Japanese Act on Promotion of Women’s Participation andAdvancement in the Workplace

The Japanese Act on Promotion of Women’s Participation and Advancement in the Workplace requires companies with
301 or more employees to draft an action plan for promoting women’s participation in business. In the Nissha Group,
three companies fall under this category: Nissha Co., Ltd., Nitec Industries, Inc., and Nitec Precision and Technologies,
Inc. One more company, Nissha Printing Communications, Inc., has voluntarily formulated an action plan.
In line with the action plans based on the Women’s Participation Act, moving forward, we will continue to upgrade ourinitiatives so that all employees can live up to their full potential.

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Nissha Sustainability Report 2021

14. Support for Diverse Work Styles
The Nissha Group has established Diversity and Inclusion as one of the Shared Values, which is theprinciple ofemployee behavior, and is working to create a workplace where human resources with diverse values and diverse
backgrounds can maximize their abilities. At Nissha Group in Japan, we are implementing work style reforms with theaim of improving productivity, along with enhancing various suport systems and promoting the creation of a workplacethat supports diverse and flexible work styles. These are some of the ways we provide support to help our employees
achieve a work-life balance.

14-1 Flexible Work Hours
We have introduced a flextime system to promote work-life balance, as well as to flexibly accommodate the timedifference between Japan and overseas, enabling working styles that meet both the needs of our customers andvariations in business demands. Many employees, not only in sales divisions, but also in the engineering, development,
and administration divisions, make use of this system.

14-2 Telework System
A telework system was introduced in the fiscal year ended March 2015 to promote effective and flexible working styles
for employees. In the fiscal year ended December 2020, its scope was expanded from employees with child-rearing
and family care responsibilities to any employee who can perform the same level of work at home as at the office.
During April and May 2020, when the State of Emergency Declaration for the spread of COVID-19 was issued, the sales
and back office divisions at Nissha and its Group companies in Japan transitioned to working from home in principle.
About 60% of employees were working from home during this period. In the fiscal year ending December 2021, we
began providing telework allowances to employees who worked from home for the entire day.

Responses to the novel coronavirus disease (COVID-19)
With the spread of the novel coronavirus disease (COVID-19) and the Japanese government expanding its stateof emergency declaration nationwide, in April 2020, Nissha and its Group companies in Japan switched sales
divisions and back office divisions primarily to teleworking. In order to facilitate working from home, we promoted
the digitization of paper-based documents such as approval forms and other internal approval processes, andsimplified the approval procedure for teleworking. For employees who need to come to the office, we allow theuse of alternative public transportation routes that are relatively less congested.
We continue to devise flexible work systems and support structures so that employees can feel safe and secure
while working, and live up to their full potential. We allow employees to use special leave or saved expired leavefor suspected infections, and special paid leave when their child’s kindergarten or school is closed.
For female employees who are pregnant or have given birth less than a year previously, we allow increased
amounts of telework or changes to jobs that can be worked from home in light of the anxiety or stress they may
feel about the possibility of infection.

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Nissha Sustainability Report 2021

14-3 Child-rearing and Family Care Support
We are enhancing the support system for child-rearing and family care for the flexible working styles of employees atvarious life stages.

14-3-1 Major child-rearing support system
By drafting an action plan and executing a range of measures based on the Act on Advancement of Measures to Support
Raising Next-generation Children, many of our efforts in child-rearing support exceed statutory guidelines.

Support system

Nissha Group in Japan

Statutory coverage

During pregnancy (up to maternity leave before
Shorter hours during pregnancy

childbirth)－

Up to 3 hours per day
As a rule, up to 1 year oldChild-rearing leave(2 years old when certain

Up to 2 years old

conditions are met)
Days off for spouse’s childbirth

Shorter hours for child-rearing

5 days at the time of spouse’s childbirth

Up to completion of elementary school
Up to 3 hours per day

Up to 3 years old
By effort: Start of elementary
school1 child: 5 days

1 child: 5 days
Days off for child nursing－(Special paid leave)

2 or more children: 10 days
Up to start of elementary school: paid
From the first to sixth grade: unpaid

2 or more children: 10 days
Either paid or unpaid
Up to start of elementary
schoolAmount: 150,000 yen (for each occasion below)
Period:• BirthChild-rearing support fund

• Start of elementary school－• Start of junior high school• Start of senior high school• Start of technical college
In addition to the above, we have introduced a system for supporting early reinstatement after childrearing leave bycovering part of the expenses of a non-registered nursery. The system is designed to subsidize employees who could
not enroll their child in a publicly funded authorized nursery, and while the child is on the waiting list, temporarily opt
to use the services of a more costly non-registered facility. To date, two employees have been reinstated using thesystem.
We also have in place a program in which employees may save up to 30 days of expired annual paid leave to be usedin the event of illness or injury, either of the employee or a family member, and for child-rearing, family care, school
events, and closure of kindergarten or school.

14-3-2 Number of employees who used child-rearing Support
The number of employees who used child-rearing leave, worked shorter hours for child-rearing, and took days off forchild nursing are as the table below. In order to help employees make effective use of our support systems, we notify
both the employee and his or her manager of the various systems immediately after birth registration is filed. Thanks
to improved recognition of the systems available, the number of male employees using child-rearing systems isincreasing year after year.

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Nissha Sustainability Report 2021

Support system

FY ended

FY ended

FY ended

FY ended

FY endedMar. 2017

Dec. 2017

Dec. 2018

Dec. 2019

Dec. 2020

Male

12

7

14

18

19

Female

45

40

45

43

50

Total

57

47

59

61

69

Male

9

9

8

7

2

Female

69

75

81

90

93

Total

78

84

89

97

95

Male

60

62

67

79

56

Female

63

67

78

78

64

Total

123

129

145

157

120

GenderChild-rearing leave

Shorter hours for child-rearing

Days off for child nursing

The reinstatement rate and retention rate (1 year) after child-rearing leave are given below. Many employees arereinstated after taking leave and continue to work in the Nissha Group.
Fiscal Year
Reinstatement Rate*1

Retention rate*2 (one year)

FY ended

FY ended

FY ended

Dec. 2018

Dec. 2019

Dec. 2020

Male

100.0%

100.0%

100.0％

Female100.0%

95.0%

100.0％

Male

83.3%

100.0%

92.0％

Female100.0%

90.0%

88.6％

*1. Number of employees reinstated after child-rearing leave in the current fiscal year ÷ Number of employees expected to bereinstated after child-rearing leave in the current fiscal year x 100*2. Number of employees remaining at the end of December in the current fiscal year after being reinstated after child-rearing leavein the previous fiscal year ÷ Number of employees reinstated after child-rearing leave in the previous fiscal year x 100

14-3-3 Major family care support systems
Support system

Nissha Group in Japan

Statutory coverage

Family care leave

Total 240 working days

Total 93 days

Shorter hours for family care

Until the reason for home care has passed

At least 3 years from start of use

3 hours per day
Days off for family care

1 family member: 5 days

1 family member: 5 days

2 or more family members: 10 days

2 or more family members: 10 days

Paid

Either paid or unpaid

In order to appropriately respond to inquiries and offer consultation about certification of needed long-term care andlong-term care insurance, we have established a help desk that connects to an external specialist.

14-3-4 Number of employees who used family care leave
The table below shows the number of employees who used the support system for family care leave, shorter hours forfamily care, and days off for family care.

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Nissha Sustainability Report 2021

Support system

FY ended

FY ended

FY ended

FY ended

FY endedMar. 2017

Dec. 2017

Dec. 2018

Dec. 2019

Dec. 2020

Male

0

0

1

3

1

Female

0

1

0

1

0

Male

1

0

0

0

0

Female

0

1

1

1

0

Male

7

9

8

12

8

Female

5

7

8

5

7

GenderFamily care leave

Shorter hours for family careDays off for family care

14-3-5 Distribution of Work-life Balance Support Guidebook
To

support our employees

inachievingwork-life

balance, we created a Work-life Balance Support
Guidebook containing information on both in-house andoutside systems for child-rearing and family care anddistributed to all employees. The guidebook is publishedon the Nissha Group intranet and swiftly revised in theevent a system changes, enabling our employees toaccess up-to-date information at all times.

14-3-6 Kurumin Certification
Nissha has received “Kurumin” certification for three consecutive terms since the fiscal year
ended March 2010, for a total of 11 years, and in March 2019 we were certified with Platinum
Kurumin.
Based on the Act on Advancement of Measures to Support Raising Nextgeneration Children,“Platinum Kurumin” is a system to certify companies that have already obtained Kurumin
certification in recognition of their measures to support employees with children and arecarrying out initiatives at an even higher level. This certification was in recognition of our introduction of systems to
support a balance between work and childrearing for both men and women, our initiatives to reduce overtime work,
our ongoing seminars on topics related to the promotion of women in the workplace, and so on.
Within the Nissha Group, Nissha Business Service Co., Ltd. received Kurumin certification in 2015, followed by Nitec
Precision and Technologies, Inc. in 2016.
We shall continue aiming to create a workplace where each employee can work energetically, enjoying a rich life where
work and child-rearing are balanced.

14-4 Promotion of the Use of Annual Paid Leave
We have a program designed to encourage employees to plan taking four days of paid leave a year, two days each in
the first and second halves; and offer a further two days in which employees may request to take paid leave on theirbirthday or wedding anniversary, or that of a family member. The average number of days of annual paid leave takenin the fiscal year ended December 2020 exceeded 11 days, thanks to ongoing efforts to promote its use, including
spreading the word via the Nissha intranet.
In October 2019, we introduced annual paid leave by the hour as a system for facilitating more flexible use of annual
paid leave and supporting our employees’ efforts to balance child-rearing and family care with work.

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Average days and percentage of annual paid leave used (Nissha Group in Japan)
Fiscal YearFY ended

FY ended

FY ended

FY ended

FY endedMar. 2017

Dec. 2017

Dec. 2018

Dec. 2019

Dec. 2020

11.3

10.2

11.0

12.2

11.4

61.3％

55.9％

60.4％

65.9％

61.4％

Average days
Percentage of use

14-5 Outpatient Sick Leave System
In fiscal year ended March 2016, we introduced an outpatient sick leave system with the aim of supporting employees
who require long-term outpatient treatment to continue working. The system enables employees with specified
disorders to take 12 days off per year for treatment. Four employees used the system in fiscal year ended December
2020.

Fiscal YearFY ended

FY ended

FY ended

FY ended

FY endedMar. 2017

Dec. 2017

Dec. 2018

Dec. 2019

Dec. 2020

Male

1

2

1

1

2

Female

0

1

1

2

2

Total

1

3

2

3

4

14-6 Support for Reinstatement after Long-term Leave
For employees reinstated at work after long-term leave due to illness or injury, we have introduced rehabilitation work
to prevent recurrence and support a smooth return to work. After returning to work, we ask employees to submit
periodic reports to check on their status, and they also have interviews with our industrial physicians to check onanything that requires special allowances in employment. For employees to whom paid leave was not granted duringlong-term leave, three days of paid leave are granted when the employee’s attendance at work is at least 95% for aperiod of three months after reinstatement.

14-7 Managing Overtime Work
Nissha Group companies in Japan promote the reduction of overtime work as a way to improve productivity and help
our employees achieve a work-life balance. In the middle of each month, we notify all division heads of overtime hours
recorded. Divisions that recorded a large amount of overtime work are questioned as to the causes and the physicalcondition of employees, and we send out e-mail alerts from the attendance system when overtime hours in a day ormonth exceed a given amount. In this way, we are continuing our efforts to reduce overtime.

14-8 Internal Job Posting System
The Nissha Group introduced an internal job posting system in fiscal year ended March 2012 with the aim of providing
employees with the opportunity to choose their own career path as well as appointing employees to positions thatreflect their aptitude and thereby enhancing our organizational strength. Under this system, we first recruit the humanresources needed for specific divisions and operations from the perspective of management strategies such as mediumterm business plans, and then employees who meet the requirements apply on their own initiative. Those that pass
the selection are transferred to the relevant division. Employees transferred through internal recruitment are playing
active roles in their new divisions.

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Fiscal Year
Number of job posting

FY ended

FY ended

FY ended

FY ended

FY endedMar. 2017

Dec. 2017

Dec. 2018

Dec. 2019

Dec. 2020

No offering

No offering

Successful applicants

Male

FemaleMale

Female(transferees)

－

－

－

－

15
Male

Female
2

1

9
Male

No offering

FemaleMale

Female1－－414-9 Awarding system
Nissha Group has in place various awarding systems that aim to reward praiseworthy endeavors and create a settingin which the employees responsible for the endeavors influence and motivate the company and organizations as awhole.
Awards won in the fiscal year ended December 2020 are as follows.
• President's Award (not awarded): For employees who have made a significant contribution to management by
embodying the corporate philosophy.
• General Manager's Award, CFO Award (34 recipients): For employees who have made significant contributions tothe business unit’s financial performance.
• Passion Award (61 recipients): For employees who boldly take on challenges with enthusiasm towards the successof a project.
• Nissha People Award (111 recipients): Celebrating workplace stars who epitomize our Shared Values.
This system is used throughout the entire Nissha Group, with recipients including employees at overseas bases. As
part of the company’s efforts to create synergy, we encourage movement across business units and divisions, so many
employees who have contributed to cross-sectional projects have been selected.

14-10 Career Resumption Program
In January 2018, we introduced a career resumption program for re-hiring employees who have once had to quit for
specified reasons, such as marriage, childbirth, childcare, or spousal transfer, and wish to be reinstated at work. As ofJanuary 2021, this has been expanded to include all employees who quit for their own reasons.
This program enables us to draw on the range of experiences, knowledge and skills that they acquired outside, suchas at other companies. It allows them to play active roles again as human resources with diverse values and careers,
as well as to have people hit the ground running as they are already familiar with our corporate culture and business.

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Nissha Sustainability Report 2021

14-11 Employee Stock Ownership Plan & J-ESOP
As part of our efforts to provide employees with incentives to increase the corporate value of the Group and to support
medium- to long-term asset formation, we operate an employee stock ownership plan for full-time and contract
employees of the Nissha Group in Japan.
In addition, we introduced a Stock Benefit Trust (Employee Shareholding Purchase-type) in the fiscal year ended
December 2020. This will enable us to return the benefits of increases in the share price of our stock over a three-year
period to all full-time and contract employees in the stock ownership plan.
As of the end of December 2020, 26.0% of the employees have joined, and together hold 0.8% of the Company's
shares.

Year

Number of eligible

Number ofsubscribers

subscribers

Subscription rate

2016

2,530

584

23.1%

2017

2,387

585

24.5%

2018

2,413

598

24.8%

2019

2,353

625

26.6%

2020

2,089

543

26.0%

In addition, in the fiscal year ended December 2020, we introduced a Stock Benefit Trust (J-ESOP) for employees of
the Company and some of its subsidiaries.

14-12 Retirement Pay System
To help employees build their assets, we have introduced a defined contribution pension plan in addition to a defined
benefit pension plan to support our employees' life money planning. In addition to the Company's contributions,employees can voluntarily add their own contributions, which are then invested by the employees themselves.
Employees can also choose the age when they start to receive benefits (between 60 and 70 years old) and the methodof receipt (lump-sum payment or a pension from a financial institution).

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15. Safety and Health of Employees
15-1 Safety and Health15-1-1 Occupational Safety and Health Policy
The Nissha Group has established an Occupational Safety and Health Policy and informed all employees of its contents
in order to ensure the safety and health of all people involved in our business activities.

Occupational Safety and Health Policy
Nissha Group recognizes that ensuring the safety and health of all people engaged in our business activities is a
top management priority for the continuity and development of our operations, and to this end, commits to thefollowing practices.
1. We promote the participation of all in creating comfortable workplace environments and developing soundphysical and mental health.
2. We pursue Co-existence with society in compliance with relevant laws and regulations, and with therequirements agreed upon by Nissha of local communities, public institutions, and our customers.
3. We strive for continuous improvement in occupational safety and health standards through the operation ofmanagement system.
This policy will be distributed widely to all people in the Nissha Group as well as released to the general public.
November 6, 2014
Junya Suzuki
Chairman of the Board
President and CEO
Nissha Co., Ltd.

15-1-2 Safety and Health Management System
Safety and health activities of the Nissha Group in Japan are overseen by the Environmental, Safety and Health
Subcommittee of the Sustainability Committee, which works to continuously improve the level of health and safety.
The Safety and Health Committees established at each base are formed from representatives from the base, such as
the safety manager and the health manager, along with employee representative members selected from the Nissha
Crew Alliance (labor union) and workplaces. The Committee is responsible for responding to occupational accidents
and implementing corrective measures, as well as bringing about safe and comfortable workplaces.
The Nissha Group in Japan manages the progress of health and safety targets, conducts health and safety risk
assessments at workplaces, takes measures to prevent the recurrence of occupational accidents, monitors the numberof accidents and the results of working environment measurements, and conducts internal audits and takes corrective
actions. The progress of these activities is reported at the quarterly meetings of the Environmental, Safety and Health
Subcommittee. At the end of the fiscal year, a review is held on whether the management system is functioning
effectively and to link it to activities for the next fiscal year as part of the PDCA cycle.

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Safety and Health Management Structure

15-1-3 Initiatives for FY2020.12
The Nissha Group in Japan has set health and safety targets in line with our Occupational Safety and Health Policy, andhas developed a range of occupational accident prevention activities with the goal of zero occupational accidents over
the three-year period (FY2018.12 to FY2020.12) linked with the 6th Medium-term Business Plan.
In addition, we have set “occupational safety and health” as one of our materialities (material issues). In the fiscal year
ended December 2020, we collected data on specific safety and health statuses for key overseas bases and affiliatedcompanies that were newly added to the Group through M&A. Starting in the fiscal year ending December 2021, we
will analyze this information and promote initiatives to understand and reduce the safety and health burden on theGroup as a whole.

lWorkplace risk reduction - Risk assessment

The Nissha Group in Japan conducts risk assessments on an ongoing basis to evaluate on a scale the risk of hazards
and harm to workers posed by chemical substances handled in production facilities and workplaces, and takes
countermeasures on a priority basis, starting with those with the highest risk. In addition, residual risks based on thisrisk assessment are reflected in the operation of the management system. When selecting materials to be used in our
products, we evaluate the health hazards of chemical substances based on the Nissha Control Criteria for Chemical
Substances in Purchased Products at the design review stage to ensure the health of workers during mass production.
(Please refer to 9. Management of Chemical Substances and Environmental Risks.)l

Safety Patrols

A team led by the safety manager, health manager, industrial physician, and Nissha Crew Alliance (union) members
conducts safety patrols of workplaces. In addition to checking for potential hazards and unsafe work practices in theworkplace, and whether chemical substances are being managed appropriately, the patrols also try to raise workplacesafety awareness by incorporating the perspective of customer requirements.

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15-1-4 Occurrence of Occupational Accidents
The following table shows the occurrence of occupational accidents in the Nissha Group in Japan. The number ofoccupational accidents in the fiscal year ended December 2020 increased by two from the previous year, and both thefrequency and severity worsened. To follow up, we are working on correcting the issues that became apparent fromthese accidents by renovating equipment and reviewing work procedures.
Occurrence of Occupational Accidents (Nissha Group in Japan)
Item
Occupational accident frequency*1
Occupational accident severity*
Fatal accidents

2

FY ended

FY ended

FY ended

FY ended

FY endedMar. 2017

Dec. 2017

Dec. 2018

Dec. 2019

Dec. 2020

1.99

1.45

0.84

0.49

0.98

0.02

0.01

0.01

0.00

0.01

0

0

0

0

0

* Figures include accidents involving temporary employees.
*1. Refers to the number of injuries and casualties resulting from occupational accidents (one or more days of leave)
per one million working hours.
*2. Refers to the severity of occupational accidents in terms of the number of working days lost per one thousandworking hours.

lNumber of Occupational Accidents by Region (Nissha Group in Japan and major overseas
production bases)

The number of occupational accidents at the Nissha Group in Japan andmajor overseas production bases in the fiscal year ended December 2020are given in the table below. Overseas figures represent accidents that
resulted in days of leave.
* The count for the number of accidents is based on the standard of each region.

RegionNumberJapan

15

North America

10Central and South America

2Europe

19

Asia

2

15-1-5 Safety and Health Education and Training
We provide education and training required in workplaces based on our
Safety and Health Education and Management Regulations. While somecurriculums had to be postponed in the fiscal year ended December 2020
due to the novel coronavirus disease (COVID-19), we are working to
reduce the number of injuries and accidents by maintaining andimproving safety awareness through remote education and e-learning.

General lifesaving training

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Nissha Sustainability Report 2021

Training participation

Category

Number of attendees

Lesson/Session

General training

Safety training

in FY2020

New employee training (safety and health)15

Special training for handling low-voltage electricity

11

Health training (occupational health and health hazards)

106

Health training (prevention of heatstroke)

359

Risk assessment training (safety and health)335

Foreman education3

Chemicals training (risk assessment of chemicals)

80

Safety training (using utility knives safely)

30

General lifesaving training

30

15-1-6 Safety Slogan
In 2009, we created a safety slogan to raise awarenessof safety with the aim of eradicating occupational
accidents. This slogan is displayed at all of our production
bases in Japan and overseas.

15-1-7 External Assessment
The Nissha Group in Japan received the following awards in the fiscal year ended December 2020.

Award target
Nissha Co., Ltd.

Award name
Excellent Voluntary FireAwarding body
Director, Kyoto City Fire Department

Prevention Office
Safe Driving Supervisor, Kaga Factory,

Excellent Safe Driving Manager

Nitec Precision and Technologies Inc.

Ishikawa Prefecture Association of
Safe Driving Managers

15-2 Health and Productivity Management
15-2-1 Health Declaration
Nissha Group sees its mission as to realize the enrichment of people’s lives by creating technology and developing it
into economic and social value through the diverse capabilities, passion, and leadership of the global Nissha Group. To
achieve this, we believe that it is important for each and every employee to be healthy in mind and body and to behighly motivated in their work, as this will help the company's performance. This is why we formulated our Health
Declaration.

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Nissha Sustainability Report 2021

Health Declaration
The Nissha Group aims to create new values through our diverse capabilities and passion. We consider the
maintenance and improvement of mental and physical health to allow employees to fully exercise their abilities
to be an important management issue, and promote a range of measures to that end.
Established on September 3, 2018
Revised on July 1, 2021
Junya Suzuki
Chairman of the Board
President and CEO
Nissha Co., Ltd.

15-2-2 Promotion of Health and Productivity Management
Since our establishment, the Nissha Group has grown by changing our target markets and products from a foundationof advanced technological capabilities. We will continue to keep pace with changes around the world, providing the
products and services required by growth markets.
To that end, we are focused on the development of human resources based on the idea that the growth of the company
is the growth of its employees, and the growth of employees is the growth of the company. In addition, we believe that
how we maintain and improve the physical and mental health of our employees, and how we keep them motivated towork, will become key management issues. That is why Nissha considers these to be materialities within ourmanagement, and is carrying out the following measures.
1. The monthly Wellness Day is held to raise health awareness among employees
Everything we do is built on the physical and mental health of each and every employee. Also, with the COVID19 pandemic still going on since last year, there have been changes in lifestyles such as the promotion of
teleworking and refraining from going out. This has brought physical and mental issues into the spotlight. To
reduce the health risks of employees and their families, we will educate them on improving their lifestyles,
including exercise, diet, sleep, smoking, and drinking.
2. Boost the rate of detailed testing in medical checkups to catch and treat diseases at an early stage
We will also work to improve the rate of detailed testing after medical check-ups to prevent, detect and treat
lifestyle diseases at an early stage
3. Work on improvements based on the results of the workplace stress check analysis
Based on the results of the Stress x Motivation workplace analysis, we aim to create an even more comfortableworkplace by increasing the involvement of workplace leaders in addition to existing activities by insurance staff.
A director in charge of health and productivity management has been appointed as a system to promote this healthand productivity management. We have established a Health and Productivity Management Subcommittee under the
Sustainability Committee, which reports directly to the President, to plan and promote health measures for the entire
Group under the leadership of the director in charge.

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Nissha Sustainability Report 2021

Health and Productivity Management Promotion SystemlLifestyle Improvements

Our plan was to hold monthly on-site yoga group lessons and "Health Up Seminars for Mind and Body" as a continuationof the promoting and boosting exercise habits program implemented in the fiscal year ended December 2019. However,this had to be put on hold in the fiscal year ended December 2020 due to the novel coronavirus disease (COVID-19).
We shall make use of webcasts to provide more opportunities for employees to get into the habit of exercising.
We are going to set up a monthly Wellness Day company-wide. On each Wellness Day, the entire company will promotea non-smoking policy, as well as carry out initiatives such as promoting walking or other exercise, and provide
information on diet and sleep to improve lifestyle habits. The goal is to encourage changes in employee awareness andbehavior.

l

Promoting Non-Smoking and Prevention of Passive Smoking

To stop smoking, we provide smokers with distance-learning stop-smoking programs, and in the fiscal year ended
December 2020, 47% of the 15 participants successfully quit smoking. These will be continued in the fiscal year ended
December 2021, and the company plans to offer subsidies for them.
We closed all smoking areas at all domestic locations on World No Tobacco Day in May as a way to raise awareness ofquitting smoking. We shall continue to set up a non-smoking day once a month to continue as a way to raise healthawareness among our employees and their families.

lCreating a Lively and Comfortable Workplace (Improving Employee Engagement)

Nissha has been carrying out stress checks since the fiscal year ended March 2013, ahead of the mandatory requirement,in order to create a comfortable workplace. Starting in the fiscal year ended December 2019, we introduced a webbased system which allows people to check their results immediately after a survey. This has led to people being moreaware of their own stress and being able to take better care of themselves. In addition, the results of the workplacestress checks are passed on to the workplace leaders in each organization, providing opportunities to learn the correct
way of interpreting the results and how to apply them.
We are also working on a program called Workplace Environment Improvement: Workplace Doc, which aims to create
a comfortable workplace through a bottom-up approach by providing line care education to learn how to support theprocess of workplace environment improvement and soliciting pilot workplaces. Furthermore, the Health andProductivity Management Subcommittee will support the use of stress checks from a more management-focused
perspective to strengthen measures in the workplace. Through activities such as this, we shall continue to promote
more comfortable workplaces.
To support individuals, we have set up an external 24-hour health consultation service, where mental health counseling

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Nissha Sustainability Report 2021

by professional counselors is readily available. There are a given number of people who use it each year because
privacy is assured and it offers the convenience of being accessible via phone or the internet, even when it is hard tofind time due to work.
Other mental health support includes yearly mental health education (self-care, line care, etc.) by clinical psychologists.
In 2020, in response to the COVID-19 pandemic, we held a self-care web seminar, “Mental Health Management in the
COVID-19 Pandemic,” which was seen by 124 employees. We have also started regular activities by a clinicalpsychologist, and have enhanced individual interviews and consultations regarding different policies.
Mental health support structure

15-2-3 Other Efforts to Maintain and Improve Health
We continue to implement a variety of health promotion initiatives, including preventing the onset of lifestyle diseases.
We will continue to work to maintain and improve the health of our employees, while always keeping the necessity ofliving in a pandemic in mind.

l

Cancer Measures

We held a web-based seminar, “Curing Cancer While Working,” viewed by 255 employees, as a way to improve thecancer screening uptake rate as well as the rate of employees who get more detailed examinations after their healthcheck-ups.

lSpecific Health Guidance

We are switching our specific health guidance carried out as part of our high-risk approach to remote interviews as a
response to the COVID-19 pandemic.

lSupport for Balancing Work and Treatment

As of the fiscal year ended March 2010, we have formulated and implemented regulations regarding support for
returning to work, and in the fiscal year ended December 2020, we revised the Leave of Absence Regulations to
introduce rehabilitative work. We will support our employees so as to ensure their health and allow them to balancetreatment and work without aggravating their illness.

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Nissha Sustainability Report 2021

16. Initiatives Related to Information Security
16-1 Basic Policy
The Nissha Group has established an Information Security Policy. All employees are required to comply and implement
on a constant basis. We are constructing and maintaining an information security management system (ISMS) toprotect highly confidential information assets from threats. The information assets include key information provided bycustomers and suppliers, or strictly managed within the company, particularly information about new products oradvanced technologies, and personal information.

Information Security Policy
Nissha and its subsidiaries committed to establish, maintain, and improve highly reliable and secure an information
security management system to protect our own business information and the information assets, which we
acquire from customers, suppliers and employees, etc., through our business activities performed, from any kindsof threat. And we take internal and external information security requirements into consideration and reduce allrisks below the acceptable levels.
1. We continually improve an Information security management system by establishing, implementing, andreviewing the information security objectives, so that the confidentiality, integrity, and availability of
information can be maintained and improved.
2. We comply with legal and regulatory requirements for information security and with contractual security
obligation.
3. We establish and improve the criteria for reasonably evaluating risks concerning information security as wellas the risk assessment methods, to mitigate risks and to maintain the information security levels which
contributes to the corporate developments.
4. We make Information Security Policy known to all employees working in the premises of Nissha Group and its
subsidiaries to raise their awareness of the issues related to information security.
July 1, 2013
Junya Suzuki
President and CEO
Chairman of the Board
Nissha Co., Ltd.

16-2 Management Structure
As an organization to promote information security within the Group, the Information Security Subcommittee wasestablished under the Sustainability Committee, and works on maintaining and improving the ISMS.
Under the CIO (Chief Information Officer), the head of the Information Security Subcommittee is the ISMS management
representative, and the ISMS secretariat has been established in the IT Department to oversee all IT environments in
the Group. The ISMS covers all bases within the Group, including those overseas. For each affiliated company anddepartment, an information security manager and an information security promoter is appointed, and ensures thesystem operates in each workplace. In addition, the ISMS secretariat plays a central role in conducting reviews for top
management, internal audits of the ISMS, and regular ISO27001 audits by external examiners to provide opportunities
for improvement.

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Nissha Sustainability Report 2021

Management Structure

Domestic

251 employees

Overseas

39 employees

Information Security Managers

86 employees

Information Security Promoters

165 employees

Information Security Managers

15 employees

Information Security Promoters

24 employees

16-3 Deployment of the Management System
The Nissha Group operates the ISMS at all its bases, both in Japan and overseas.
In Japan, we have obtained ISO27001 certification, the international standard for ISMS.
Overseas, we have been rolling out ISMS as a unified standard globally, including for corporations that have newly
joined our Group as a result of M&A and so on. This rollout was completed in the fiscal year ended December 2019. At
present, in addition to an annual ISMS internal audit, we are working to maintain and improve ISMS operations throughthe PDCA cycle.

16-4 Efforts for Risk Reduction“Protection and utilization of information assets” is included in our Group’s materiality. In the fiscal year ended
December 2020, we worked on appropriate management of trade secrets and operation. Information assets areimportant information that differentiates us from our competitors and increases our competitiveness, so it is essential
to reduce risks such as information leaks. We ensure management is done in accordance with importance, and carryout ISMS internal audits for departments that handle trade secrets.
In addition, with the rapid progress of IT and the diversification and spread of devices, we are working on measures toreduce the risk of our corporate image and brand being affected or information leaks through social media postings.
We are also working on information security measures for personal information devices as used for BYOD (Bring YourOwn Device), in addition to company-supplied computers and terminals.

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Nissha Sustainability Report 2021

Responses to the novel coronavirus disease (COVID-19)
The Nissha Group has introduced IT services to support the diverse working styles of our employees. These
services automate or streamline operations, or make them paperless. We also completed conversion of our IT
infrastructure to the cloud in 2019. In response to the risk of information leaks, we are constructing a systemthat allows almost all IT services provided by our companies to be safely accessed from outside. By creating anenvironment where employees can work anytime, anywhere, we were able to smoothly transition to telework toprevent the spread of COVID-19, achieving seamless business continuity.

16-5 Training
Cyber attacks are becoming increasingly sophisticated day by day, so merely strengthening systems will not prevent
all of them. To prevent damage, we consider it essential for each and every employee to be fully aware of information
security and act with discipline so that they can learn about threats and methods, and recognize issues as soon as
possible.
The Group holds training sessions for all employees, using e-learning, based on training materials that reflect ourinternal information security policies. We have been striving to ensure a thorough understanding of information security
among employees, such as by reaching 100% attendance for the fiscal year ended December 2020 as well.

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17. Trade Management
The Nissha Group’s ratio of overseas sales is 85.8% in the fiscal year ended December 2020. As the Group’s businesses
expand globally, disciplined trade management is becoming an essential issue from the perspective of business
continuity.

17-1 Basic Policy
We have in place a Trade Management Policy covering the entire Nissha Group. As an Authorized Economic Operator(AEO), we also establish rules and regulations, and maintain a structure toward continuous improvement of trade
management.

Trade Management Policy
Nissha and its subsidiaries comply with legal requirements and agreements in trade and strive for continuous
improvements in the trade management system for the achievement of our Mission.
1. We comply with applicable trade control laws and regulations in each country and region, and with international
regimes.
2. We designate a person responsible for trade management, and develop, maintain and improve the trade
management system.
3. We pursue good trusting relationships with official agencies in each country and region and international
logistics companies etc.
4. We provide necessary education on trade to employees and other parties concerned.
Established on October 1, 2016
Revised on January 1, 2018
Junya Suzuki
Chairman of the Board
President and CEO
Nissha Co., Ltd.

17-2 Management Structure
The Group’s trade management is overseen by the Trade Management Subcommittee under the Sustainability
Committee. At Nissha Group in Japan, a trade management supervisor is appointed in accordance with the Trade
Management Policy and the Basic Rules of Trade Management. Trade Management Subcommittee members (responsible
persons, directors, members) are appointed in business divisions, corporate management departments, and affiliatedcompanies to create a management system. At the same time, at Nissha Group bases overseas, the varying laws,
regulations, and business practices of each country or region mean that we assign a trade control manager to each
base.

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At Nissha Group in Japan, a range of operational regulations and rules for trade-related operations required of AEO
businesses have been established, while each department is preparing work standards and manuals to ensure export
and import operations are carried out appropriately. At Nissha Group bases overseas, we are working on disseminating
the Trade Management Policy and Basic Rules of Trade Management as well as preparing management documents.

17-3 AEO Approval
Nissha Co., Ltd. obtained approval as an AEO Exporter in June 2014, and as an AEO Importer in June 2015. Theirsecond post-audits were conducted in October 2019, and we maintain all approvals. As of December 10, 2020, 60
companies in Japan are approved as both AEO Importer and AEO Exporter. Being one of these companies with dual
approval, we have in place a system for safe and smooth international logistics.
Nissha Precision Technologies Malaysia Sdn. Bhd., based in Malaysia, obtained approval as both an AEO Exporter andan AEO Importer in October 2014, and maintains both approvals.

AEO Approval Form

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Authorized Economic Operator (AEO) Program
The AEO program is designed to secure and facilitate global trade and to strengthen a country’s international
competitiveness by providing benefits such as reduced or simplified customs controls to operators with cargo
security management and compliance structures. The September 11, 2001, terrorist attacks on the United Statesraised awareness of the necessity of an international framework for reinforcing anti-terrorism measures by
ensuring both security and efficiency in the international movement of goods. In 2006, the World Customs
Organization (WCO) adopted a set of AEO guidelines as a global standard and the basis on which countries enact
laws and operate their respective AEO programs. Japan launched its AEO program in 2006, starting with exporters
and expanding gradually into the current form.

17-4 Initiatives for FY2020.12
In the fiscal year ended December 2020, we identified compliance as a materiality, setting proper and lawful operations
during importing and exporting as one of its strategic items, and with the following two items as KPIs.
• “Zero incidents of illegal/unlawful declarations”: There were 8 incidents in the fiscal year ended December 2019,but 7 in the fiscal year ended December 2020. We are working on increasing awareness about recurrence: startingin the fiscal year ending December 2021, steps are being taken to reconfirm on site whether preventive measures
are functioning effectively within 6 months of an incident occurring as a way of checking that these preventive
measures are effective in the workplace at fault.
• “Zero omitted declarations of charge factors”: Thanks to reinforcing management by creating a system of followup checking within the company, there was no incident occurred.

17-5 Training
We have prepared new theme-based educational materials for training import/export workers, and carried out training
for about 550 people actually involved in trade operations in Japan, regardless of their department.
ThemesSecurity trade controls

Determining relevance andIncoterms and HS codes

screening transactions

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18. Initiatives Related to Intellectual Property
18-1 Views on Intellectual Property
The use of intellectual property is essential for the Nissha Group to appropriately protect and provide customers withproducts obtained as a result of our R&D and business activities. In order to contribute to our business performanceand to securing a competitive edge for new businesses, the Nissha Group emphasizes the three areas of “rights
acquisition,” “risk management,” and “training,” under the leadership of the Intellectual Property Management.

18-2 Major Initiatives
l Rights acquisition
We use the intellectual property system to properly safeguard the results of our research and development. Rights
acquisition is not limited to patents, but covers a wide range of other rights, including designs, trademarks, andcopyrights. In addition, as the Group’s products are sold globally, we are working to obtain rights in other countries aswell as Japan. The Intellectual Property Management comprehensively manages from application to rights expiration,and intellectual property rights we have obtained are utilized strategically throughout the Group.

l Risk management
To prevent inadvertent use of the intellectual property of other companies or the unauthorized use of our intellectual
property by third parties, we have established a SDI (Selective Dissemination of Information) system that constantly
monitors whether these intellectual properties are being used appropriately.
In addition, to prevent problems related to intellectual property, we also check contracts for things like joint researchand joint development that are related to intellectual property.

l Training
Training employees is important for promoting intellectual property initiatives. To that end, the Group is enhancing its
various training programs so that each and every employee can understand and implement intellectual property rightacquisition and usage.
The Intellectual Property Management provides instructors for basic training such as how to read patent gazettes andthe procedures for obtaining a patent. In the fiscal year ended December 2020, 27 employees took this training course.
In mandatory training for employees in engineering fields, we invited an outside specialist instructor to teach about
intellectual property systems, how to search for other companies’ patents, how to understand and brush up on
inventions, steps in determining infringements, and so on. These trainings were designed to continuously improve
employees’ skills and knowledge regarding intellectual property. In the fiscal year ended December 2020, a total of 26
employees took the basic and advanced courses.

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19. Partnership with Our Suppliers
19-1 Basic Policy
The Nissha Group procures the raw materials, components, equipment, and services necessary for making our products
from suppliers in various regions. We work fairly and equally with all suppliers to promote CSR procurement based on
our Basic Purchasing Policy in order to share awareness of our social responsibility and enhance mutual corporate value.

Basic Purchasing Policy
For the achievement of our Mission, the Nissha Group build relationships of trust with our suppliers throughmutually fair procurement.
We evaluate our suppliers fairly, impartially, and comprehensively based on the following criteria.
1. Stable business foundation and reliable management principles
2. Excellent technology development, stable supply, and quality servicing capabilities
3. Adaptability to changes in the business environment
4. Safety of products and services, consistency of quality, and competitiveness of prices and lead times
5. Effective business continuity management
We promote CSR procurement by working with our suppliers in the following areas.
1. Labor and human rights
2. Health and safety
3. Environment
4. Ethics
5. Information security
Established on April 2, 2009
Revised on January 1, 2018
Junya Suzuki
Chairman of the Board
President and CEO
Nissha Co., Ltd.

19-2 Nissha Group Supply Chain
We at the Nissha Group collaborate with various

Main Entities of the Nissha Group Supply Chain

suppliers through our business activities. Our
supply chain is expanding globally.

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19-3 CSR Audit and SAQ
In order to build a safe and secure supply chain, we have been conducting CSR audits of particularly important suppliers
and new suppliers since the fiscal year ended March 2015. We have conducted audits at a total of 19 companies. The
audits detected 187 instances of noncompliance (88 related to labor and human rights, 53 to safety and health, 29 to
the environment, 12 to ethics, and 5 to management systems). Recently, with a focus on risks to the human rights of
employees at production bases, we are conducting audits at suppliers such as temporary employment agencies. In
addition to on-site audits, we continue to conduct regular annual surveys using our own Self Assessment Questionnaire(SAQ).
At the request of our customers, in the fiscal year ended December 2020 we conducted a SAQ survey of 41 companies(from materials suppliers to assembly contractors) in Europe and Asia, including China, in addition to Japan. Nitec
Precision and Technologies (NPT), the Group's main production base, also conducted a survey of existing suppliers,
mainly temporary staffing agencies, as well as new suppliers. There were no particular points of concern found in the
responses to the 2020 SAQs. We will continue to conduct these surveys, and if any concerns are identified in the
responses, Nissha employees qualified as internal auditors will visit suppliers and conduct on-site audits in accordancewith the procedures.
Note that the CSR audits and SAQs are based on our CSR Procurement Guidelines, which we request our suppliers tocomply with. These Guidelines are based on the Responsible Business Alliance (RBA), a code of conduct for theelectronics and automotive industries, and on other codes of conduct that our customers request we follow. The items
are listed below.
Items of CSR Procurement Guideline and SAQ (Self Assessment Questionnaire）
1. Labor and human rights

2．Health and safety

3．The environment(1) Environmental permits and(1) Freely chosen employment(1) Occupational safety(2) Young workers(2) Emergency preparedness

reporting(3) Working hours(3) Occupational injury and illness(4) Wages and benefits(4) Industrial hygiene(2) Pollution prevention and resource(5) Humane treatment(5) Physically demanding work(3) Hazardous substances(6) Non-discrimination(6) Machine safeguarding(4) Wastewater and solid waste(7) Freedom of association(7) Sanitation, food, and housing(5) Air emissions(8) Health and safety communication(6) Materials restrictions

reduction(7) Storm water management(8) Energy consumption andgreenhouse gas emissions

4．Ethics

5．Information Security(1) Business integrity(1) Building of information management system(2) No improper advantage(2) Prevention of leakage of confidential information(3) Disclosure of information

about our customers and third parties(4) Intellectual property(3) Defense against a computer and network threat, and(5) Fair business, advertising and competition

management of electronic device and recording(6) Protection of identity and non-retaliation

medium(7) Responsible sourcing of minerals(4) Prevention of leakage of personal information.

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19-4 Development of Procurement Personnel
Since 2008, the Nissha Group in Japan has been continuously providing training to develop procurement personnel(basic procurement education, training for technical and development departments, procurement training by external
instructors, etc.). To date, a total of more than 800 people have taken this training.
In the fiscal year ended December 2020, we provided basic and intermediate procurement education to 47 participants.
We organize basic procurement education for employees newly engaged in procurement work, such as in procurement
divisions. It is designed to teach them the basic knowledge about procurement required for their work as well as toenhance their awareness of compliance. In addition, intermediate procurement education is provided to employees
who took the basic procurement education in the previous year, with the aim of helping them acquire more specialized
procurement knowledge.
In future, we plan to expand the scope of this education to include mid-level employees and managerial staff, as a way
to provide systematic procurement education.

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20. Quality Management・ Improving Productivity
20-1 Quality Management
20-1-1 Quality Policy
The Nissha Group is constantly striving to improve quality under our Quality Policy in order to satisfy our customers
and contribute to society by providing high-quality, safe, reliable products and services.

Quality Policy
Nissha and its subsidiaries are committed to contributing widely to society through customer’s trust andsatisfaction of quality, cost, delivery, services and speed.
1. We aim for quality that stands up to the customer’s expectations.
2. We pursue Zero Defects in our products.
3. We provide products which satisfy customer requirements and conform to relevant legislation and regulations.
4. We establish and maintain a quality management system, and continually improve its effectiveness.
April 1, 2011
Junya Suzuki
Chairman of the Board
President and CEO
Nissha Co., Ltd.

20-1-2 Quality Management System (QMS)

QMS Model

Our Group believes that improvements to quality leads toimprovements to profits, which is why we have set all KPIs as
quality targets and aim to integrate the quality management
system with management. The Group's quality management
system is designed to prevent problems from occurring bystandardizing operations. We determine quality targets in linewith our Quality Policy, formulate plans to achieve thesetargets, and manage the achievement with PDCA cycle. Our
quality management system is based on the international
standard ISO9001 (2015 version), and we are constantly
working for the improvement.
Also, we are steadily building a quality assurance system
tailoredtothepriority(automotiveandtransport

marketsofequipment),

medical,andmobilitysustainable

materials. These markets are are positioned as priority
markets in our Sustainability Vision (long-term vision), which
describes where we want to be in 2030.
To meet the licensing requirements for the manufacturing and sales of medical devices in Japan, in 2017, Nissha Co.,
Ltd. obtained a Class 2 medical devices marketing and manufacturing license and a manufacturing license, and our

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affiliated company Nissha FIS, Inc. became a registered medical devices manufacturer. Moreover, some bases of the
Nissha Group in North/Central America and Europe have obtained ISO13485 certification, the international standard
for quality management systems in the medical devices industry. Our Global Headquarters in Kyoto obtained the same
certification in October 2019.
In businesses targeting the mobility market, Nitec Precision and Technologies, Inc. (NPT) Kyoto Factory, which
manufactures touch sensor modules, and multiple other bases have obtained IATF16949 certification for quality
management systems in the automotive industry. The NPT Himeji Factory is also planning to obtain certification during
the fiscal year ending December 2021, and we are aiming to obtain certification for even more sites this year.
The fields of healthcare (ISO13485) and mobility (IATF16949) require even stricter quality management systems thanISO9001, so we will further improve our management systems to meet these requirements.

20-1-3 Nissha Group Total Quality Management (NTQM)
The Nissha Group promotes quality improvements through NTQM
(Nissha Group Total Quality Management), our unique approach to total
quality assurance built on a quality management system based on
ISO9001 (2015 version).
In order for our customers to use our products with peace of mind, theymust not only meet with our customers' requirements, but they mustalso comply with applicable laws and regulations, as well as be safe.
NTQM is a system that establishes and operates the necessary
frameworks, from customer inquiries to design and mass production, and helps prevent serious problems such asclaims and lawsuits related to contractual liability (CL) and product liability (PL).

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20-1-4 Five Musts for the Systematization of WorkWe set forth Five Musts for the Systemization of Work, a concept we are working to communicate companywide throughtraining and our company magazine.

Five Musts for the Systematization of Work
1. Standardize work.
Standardization clarifies the required input, as well as the work you have to perform.
2. First of all, check the input.
Begin your work by checking for any fault in input.
3. Incorporate the customer viewpoint into the output.
Not only customers for the Company, but your immediate customers, internal and external. In your work,
you must aim at an output that meets QCDS from all your customers.
4. Reinforce the system using human factors.
Human factors should be used to cover those areas of work which cannot be covered by the system alone.
Your communication and teamwork will reinforce the system.
5. Make continuous efforts to improve the system.
The system must be established and implemented continuously. Continuous implementation results infurther improvement of the system, as well as that of the quality of our work and the Company.
*QCDS: Initial of Quality, Cost, Delivery, Service, the index for product evaluation.

20-1-5 Quality Slogan
For the quality improvement, it is essential to take actions
with a strong awareness of customers, including the next
process. All Nissha Group employees are required toperform their daily duties with a sense of responsibility, andcreate quality in the eyes of the customer.
To this end, in April 2017, we established the quality slogan
given here. The Japanese have a maxim that reads, “Thenext process is the customer.” The “me” in the slogan says
each employee should take on a leading role in delivering
quality to the customer. And this “customer” may be
external customers of the Nissha Group or internal workers
in the production process following one’s own. The slogan is communicated thoroughly across Nissha Group companies
both in and outside Japan, along with a sense of “responsibility to all customers, internal or external.

20-1-6 Company-wide Optimization and Continuous Improvement
We define the ties between one’s own department and others, and even ties between work processes across the Nissha
Group, as “input” and “output.” Hence we stress the importance of recognizing links between internal processes andthe orderly division of roles. By having all employees stand in the customer’s shoes, we aim to break free of departmentbased optimization and strive for company-wide optimization. We believe that basic concepts like this and the sortingout of functions will build Nissha Group’s foundation as a manufacturing company.。

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The accumulation of bits of insight and ingenuity from all employees is the source of great improvements in work
processes. This approach forms the foundation of Nissha Group’s “small-group activities” and “improvement proposal
system”. We recognize these as important mechanisms to work on and develop across the Nissha Group. Moreover,based on the idea that the quality of people plus the quality of work equals the quality of the company, and employees
are our most important management resource, we are actively engaging in the development of human resources, suchas through the continuous planning and implementation of a range of education. Through these activities, we are
implanting the concepts of (1) always interweaving ingenuity into your work, (2) judging based on data (facts), and(3) using the PDCA (Plan, Do, Check, Act) Cycle to continuously improve, so that we can further improve our customers’satisfaction.

Training•

General quality training (for new employees, promoted employees, new managerial staff, managers, andoverseas assignees)•

Management system training (ISO9001, IATF16949, core tools, internal quality auditor)•

Quality control training (QC Exam levels 3 and 4, QC Seven Tools, New QC Seven Tools, basic statistics)•

Quality methodology training (statistical methods, experimental design, Taguchi methods, reliability
engineering, etc.)•

Other training (electric/mechanical basic education, equipment maintenance, etc.)

Practical education•

Support for small-group activities

Information sharing / reciprocal learning•

Company-wide Presentation Meeting of Small-group Activities•

AI activity results report meetings•

Improvement proposals, AI activities, automation examples, small group content, and so on are shared among
all employees through our improvements database

20-1-7 Quality and Safety of Products
Information on product handling and safety is clearly stated in the delivery specifications, etc. to customers. In theunlikely event that an incident involving a defect in our products or services leads to a violation of laws and regulations
or a serious accident related to quality assurance, we will establish a CPL* Committee to quickly resolve the situation.
In addition to providing the appropriate reports to government agencies in accordance with the law, we have a system
in place to inform our customers of any necessary information as soon as possible. Employees are made aware of theimportance of ensuring product quality and safety through corporate ethics and compliance training and other programs.
In the fiscal year ended December 2020, there were no CPL Committee meetings, no violations, and no CPL incidents(no fines). We will continue striving to maintain the number of violations and CPL cases at zero.
* Combination of contractual liability (CL) with product liability (PL)82

Nissha Sustainability Report 2021

20-2 Improving Productivity
The Nissha Group believes that digital technology will not only improve our own productivity, but also enhance theadded value we provide to our customers and help solve social issues. To that end, we are working to promote DX. We
have also set productivity improvement as a materiality, and are moving ahead with the use of automation andefficiency tools such as RPA and the digitization of value creation processes.
We are gradually moving ahead with DX in the following three steps, as well as working to develop the environmentand human resources needed to support it.

Contents
STEP 1

Examples of initiatives

Improve productivity of internal operations by•

Effective use of data through DB construction

creating and digitizing databases (DB) for•

Automation of production, design, and indirect

specific departments and operations.

operations through the use of AI and RPA

Resources secured by this will be reallocated•to high value-added businesses.

Sales Force Automation (SFA) and marketing
tools to improve the efficiency of sales
activities

STEP 2

Extend digitization to the entire value chain to• Using AI in the quotation processincrease the added value we provide to our• Creating customer value (QCDS) through the use ofcustomers.

AI in business operations• Building digital platforms

STEP 3Create new business models that help solve• External sales of in-house systems and expertisesocial issues through digitization.

• Establishment of a data business and businesscollaboration (ecosystem) using accumulated data

20-2-1 Initiatives through FY2020.12
The Nissha Group is also working to improve productivity in manufacturing. This involves making IoT and AI integral
parts of production bases, and is mainly being done through "Smart QC," a project that aims to improve quality andproductivity through IT, and "Smart Factory" activities that promote robotization and labor-saving in production
processes. We are establishing quality control methods that use IT such as IoT and AI.
In the fiscal year ended December 2020, we worked on productivity reforms using IoT and AI technologies at three ofour major production bases: the Himeji Factory and Kaga Factory of Nitec Precision and Technologies, Inc. (NPT) andthe Kameoka Factory of Nitec Industries, Inc. (NII)In terms of quality, we have launched a system for film touch sensor production that automatically analyzes trends indata obtained from automatic visual inspection equipment and feeds it back to upstream processes. We have also
introduced AI into the visual inspection process to save manpower. In terms of production, increasing robotization ofoperations, which we call Smart Factory, has saved manpower.
Furthermore, productivity improvements have not been limited to manufacturing sites, but have also made significant
inroads in a range of deskwork areas. A prime example is the automation of business operations through Robotic
Process Automation (RPA), an initiative that began rolling out full-scale in 2019. RPA has automated many tasks thatused to be done manually, such as data input and output, aggregation, and report generation. In addition to RPA, wehave also introduced electronic approval systems and AI-based chatbots, and expanded the combined results and scopeof application of these systems. As of the end of 2020, the work that used to be done manually has been reduced byapproximately 70,000 hours per annum.

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20-2-2 Initiatives for FY2021.12 and beyond
From the fiscal year ending December 2021 onwards, from the perspective of improving the productivity of internal
operations (STEP 1), we are aiming to improve the efficiency of design operations and build quality at the upstream
stage through the digitalization of design. This is in addition to the existing digitalization of production in production
divisions, such as Smart QC and Smart Factory, and signifies our move into the full-scale use of AI.
Also, we will expand the number of departments globally using services such as RPA that have already been introduced.
We will also introduce new services, such as AI-OCR, in order to expand and upgrade tasks that can be applied
automation, creating further benefits.
In parallel with the above, STEP 2 aims to create new added value for existing businesses, and will promote efforts todigitize and upgrade the entire process of business operations, including marketing, sales operations, R&D, and logistics.
In addition, in order to create new value through the use of AI, we are also promoting the development of AI humanresources through both classroom-based and practical training.

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21. Along with Local Communities
21-1 Basic Policy
The Nissha Group, which operates globally, promotes activities that meet the needs of society through communicationin each region. In Japan, these initiatives are carried out in accordance with our Basic Social Contribution Policy.

Basic Social Contribution Policy
Nissha and Nissha People contribute to society under the spirit of global citizenship by using their management
resources effectively toward the achievement of our Mission.
Main fields of contribution: "Environmental Protection", "Support for Future Generation", "Promotion and Supportof Arts and Culture", and "Humanitarian Support".

21-2 Initiatives in FY2020
The following initiatives were carried out in the fiscal year ended December 2020.
1. Environmental protection / support for future generation•

Participated in the activities for company’s environmental workshops at elementary schools organized by the
Kyoto Chamber of Commerce and Industry's envoronmental measures special committee² Carried out the workshop at Kyoto Municipal Suzaku Dairoku Elementary School

2. Support for future generation•

Participated in Children’s Monodzukuri Project run by the Kyoto City Board of Education² Exhibited a corporate booth at the Kyoto Monodzukuri Hall of Fame, Kyoto City Inquiry Learning Centerfor Career Education² Provided materials for learning programs for elementary school students² Supported the "Making Supreme Moving Toys” Toy Contest Grand Prix in Kyoto•

Collaborated with NPO Kids Meet Artists²

Carried out the Machikusa Mikke workshop at Kyoto Municipal Suzaku Daishichi Elementary School

3. Promotion and support of arts and culture•

Sponsorship of arts and crafts exhibitions² Special Exhibition "Horyuji Kondo Mural and Baekje Kannon" (Tokyo National Museum)² “Oshii Ukiyo-e: The Roots of Japanese Cuisine” exhibition (Mori Arts Center Gallery)² NHK Taiga Drama Special Exhibition “Kirin ga Kuru” (Gifu City Museum of History)² KYOTOGRAPHIE International Photography Festival² KYOTO STEAM - International Arts × Science Festival•

Became museum partner²

Kyoto National Museum

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21-3 Membership in Community Organizations
Nissha participate in various activities in the region.

Organization / host

Position / membership status

Company registered

Kyoto Chamber of Commerce and Industry

Permanent member

Nissha Co., Ltd.

Kyoto Employers’ Association

Councilor

Nissha Co., Ltd.

Kyoto Association of Corporate Executives

Special secretary

Nissha Co., Ltd.

Kyoto Industrial Association

Director

Nissha Co., Ltd.

The Japan Kanji Aptitude Testing Foundation

Director

Nissha Co., Ltd.

Kyoto Institute of Technology

Joint management council member

Nissha Co., Ltd.

Kyoto University Graduate School of Business

Member of External Evaluation Committee

Nissha Co., Ltd.

Ritsumeikan University Business School

Advisory board member

Nissha Co., Ltd.

Nissha Foundation for Printing Culture and Technology

Representative Director

Nissha Co., Ltd.

Administration

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GovernanceNissha, since its foundation, has been executing strategies that
promptly address external challenges, under committed leadership.
The Company believes that strengthening corporate governancealong with such leadership will promote agile and decisive decision
making, as well as ensuring management transparency andfairness, and we work to maintain and enhance them.
In order to remain a trust placed in us, all of our executives andemployees work to promote and thoroughly implement corporate
ethics and compliance.

8722. Corporate Governance22-1 Basic Approach to Corporate GovernanceNissha, since its foundation, has been executing strategies that promptly address external challenges, under committed
leadership. The Company believes that strengthening corporate governance along with such leadership will promote
agile and decisive decision making, as well as ensuring management transparency and fairness.
Based on this recognition, the Company places corporate governance as one of the key management issues, strives tomaintain and improve it, and seek out sustainable corporate growth and an increase in corporate value over the
medium- to long-term. In an effort to clarify the Nissha Group’s basic approach to and policy for implementing corporate
governance, in October 2015 we established a Corporate Governance Policy.
* For further information, please follow the link below.
About＞Corporate GovernanceCorporate Governance Policy（PDF）

22-2 Overview of Corporate Governance
We have established a corporate governance structure as shown in the figure below (as of April 1, 2021).

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We make major business judgments and oversees the execution of the duties of the Directors of the Board at meetingsof the Board of Directors, and as a company with an Audit and Supervisory Board, will strive to maintain and improve
the oversight and checking functions by Audit and Supervisory Board Members and an Audit and Supervisory Board
which are independent from the Board of Directors. We adopt a corporate officer system in an effort to clarify thepowers and authority in the speedy decision making and the implementation of decisions, under which the Board of
Directors will be in charge of the formulation of strategies and business oversight, and the Corporate Officers will be incharge of the execution of business.
The President chairs the following meetings toward appropriate and efficient business execution.
• Management Meeting: Comprises Inside Directors of the Board as core members. Deliberates on matters relating
to the direction of important managerial issues within the scope of the President’s authority.
• Investment Committee: Ensures discipline in investment decisions by discussing the strategic rationale forinvestments and the appropriateness of investment recovery plans prior to submitting particularly importantinvestment matters to the Board of Directors, and by monitoring investments after they are made.
• Business Review: Monthly and quarterly meetings to review the progress of business strategies based on key
performance indicators (KPI) and determines actions to take over the short term. The purpose of the MBR is tomonitor business execution by Corporate Officers and quickly respond to changes in the business environment.
We also have in place the following organizations in order to enhance the management monitoring function, ensurethat business execution complies with laws and regulations as well as our Articles of Incorporation, and to manage
risks.
• Sustainability Committee: Chaired by Chairman of the Board and vice-chaired by the Senior Director of
Sustainability. The Sustainability Committee identifies materialities (material issues) by prioritizing social issues
that represent business opportunities for the Group, activities that form the basis of management, and risks thatjeopardize corporate sustainability. Based on this, business organizations and the Sustainability Committee’s
subcommittees then establish strategy items, KPIs, and target values for each material issue and apply the PDCA
cycle.
• Disclosure Control Committee: Chaired by the President. Discusses the necessity of timely disclosure of corporate
information and the contents of disclosure.
• Internal Audit Office: Under the direct control of the President, audits the internal control systems of the Nissha
Group, analyzes and evaluates their status of establishment and operation, and offers suggestions for
improvement.

22-3 Directors of the Board and the Board of Directors
22-3-1 Policy and Procedures for Appointment/Dismissal of Directors of the
Board
Our Board of Directors comprises an appropriate number of 12 or fewer members, taking into account diversity andbalance between the knowledge, experience, and skills of the individual to ensure that the Board fulfills its role ofmaking important management decisions and overseeing the execution of duties by Directors of the Board andCorporate Officers. Inside Directors of the Board are elected for their acquaintance with our operations and suitability
for carrying out growth strategies and overseeing business execution. Multiple Independent Outside Directors of theBoard are elected who satisfy the requirements of not only the Companies Act but also the Standards for Independenceof Independent Officers, established by our Board of Directors.
In the event that a Director of the Board damages the trust or honor of the company, markedly diminishes our corporate
value, or gives rise to grounds that he or she is unfit to perform his or her duties, the Board of Directors confirms thepresence of a valid reason and makes the Director of the Board subject to a proposal for dismissal. To ensure clarity in

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management responsibilities for each fiscal year, the term of office of Directors of the Board is set at one year.
Having received reporting from the Nomination and Compensation Committee, based on the policy above, the Boardof Directors makes decisions on proposals for the appointment/dismissal of a Director of the Board to be deliberated
at the general meeting of shareholders.
* For further information, please follow the link below.
About＞Corporate GovernanceStandards for Independence of Independent Officers（PDF）

22-3-2 Diversity of the Board of Directors
As of April 1, 2021, our Board of Directors consists of nine members, of which four are Independent Outside Directorsof the Board with one being a woman of foreign nationality. The Board includes individuals with experience abroad orat other companies, or holding a master’s degree in business administration. Each of our four Independent Outside
Directors of the Board has experience into corporate and business management in the manufacturing industry,
specialized knowledge in corporate governance, business strategies, management strategies, legal affairs andcompliance, and broad insight into monetary economics.
We consider that the four Independent Directors satisfy standards for independence of outside officers by the Tokyo
Stock Exchange, hence they have sufficient independence and there is no risk of conflict of interest with generalshareholders. Therefore, we have designated them as Independent Officers.

22-3-3 Role of the Board of Directors
Our Board of Directors convenes for regular meetings once a month and for extraordinary meetings as needed. The
meetings are chaired by the President.
In order to ensure flexibility and expertise in business judgements, we have in place a system in which matters to beresolved at the general meeting of shareholders, such as distribution of surpluses and acquisition of treasury stock,can be decided by the Board of Directors.
The Board of Directors makes decisions on matters that require resolution by the Board as stipulated by laws andregulations and our Articles of Incorporation as well as on important managerial matters as stipulated by theRegulations of the Board of Directors, and oversees business execution by Directors of the Board and Corporate Officers.
We confirm an investigation into the existence of any transactions between the Company and related parties such as
the Directors of the Board and Audit & Supervisory Board Members, Corporate Officers, and their relatives, and if any
material facts exist, they will be resolved by the Board of Directors, which will make a decision after duly deliberating
the reasonableness of the transaction. In addition, we must obtain the approval of the Board of Directors when engaging
in conflict of interest transactions as prescribed by laws and regulations with the Directors of the Board.

22-3-4 Initiatives to Enhance the Content of Discussions
Our Board of Directors meetings involve brisk, substantive discussions. Independent Outside Directors of the Board
draw on deep insight into their respective fields of specialty to provide accurate advice and opinions, contributing to
the enhancement of both management transparency and the Board’s oversight functions.
Toward improving the quality of discussions, we distribute a meeting agenda and related materials in advance, andexplain particularly important matters to Independent Outside Directors of the Board and Independent Audit and90

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Supervisory Board Members beforehand. In addition, in order to ensure full discussion, key agenda items such as themedium-term business plan and corporate acquisitions above a certain size are discussed as reporting items before
being put on the agenda for resolution. On the other hand, it aims to operate at a suitably balanced pace by allocatingtime for explanation and deliberation based on the importance of each agenda item.
Also, in order to further improve the monitoring function of the Board of Directors, the status of corporate acquisitions
above a certain size and the establishment of subsidiaries and joint ventures are regularly reported to and confirmedby the Board of Directors.
To secure attendance by Directors of the Board and Audit and Supervisory Board Members, the secretariat of the Boardof Directors creates an annual schedule of board meetings and notifies members in advance.

22-3-5 Evaluation of Effectiveness of the Board of Directors
Since April 2016, our Board of Directors has been working on continuous improvements to enhance the effectivenessof corporate governance by conducting an annual analysis and evaluation of the composition and operation of the Boardof Directors in the previous year.
For the Board of Directors meetings held in the fiscal year ended December 2020, we conducted a questionnaire fromJanuary to February 2021 to evaluate the effectiveness of the Board of Directors. The results were analyzed andevaluated, and an outline of the results was disclosed in a Corporate Governance Report submitted to the Tokyo Stock
Exchange in April 2021.

22-3-6 Reasons for Appointment and Board of Directors Meeting Attendances in
FY ended December 2020
Name

Reason for appointment

Attendance atmeetings of theBoard ofDirectors

Junya Suzuki

Mr. Junya Suzuki has duly performed his duties as Chairman of the Board,

100%

President and CEO, such as decision-making on important managerial(18/18

issues and the supervision of the execution of operations. He has also

meetings)

committed to management from medium- to long-term perspectives andhas shown strong leadership and decisiveness toward the realization of the
Nissha Group’s Mission since he assumed office as Chairman of the Board,
President and CEO in 2007. We appointed him as a Director of the Board
because we believe that he is an appropriate talented person who willcontinue to carry out sound growth strategies for the Company andsupervise the execution of operations.
Daisuke Inoue

Mr. Daisuke Inoue has duly performed his duties as a Director of the Board,

100%such as decision-making on important managerial issues and the(18/18supervision of the execution of operations. In addition, he assumes

meetings)

responsibility for business management as Senior Executive Vice President
and General Manager of Devices Business Unit, working to create companywide synergies while showing strong leadership from the perspective of the
Nissha Group as a whole as Senior Director of Human Resources, General
Affairs and Legal Affairs. We appointed him as a Director of the Board
because we believe that he is an appropriate talented person who willcontinue to carry out sound growth strategies for the Company andsupervise the execution of operations.

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Name

Reason for appointment

Attendance atmeetings of theBoard ofDirectors

Wataru Watanabe

Mr. Wataru Watanabe has duly performed his duties as a Director of the100%

Board, such as decision-making on important managerial issues and the(18/18supervision of the execution of operations. As well as promoting medium-

meetings)

term business plans as Executive Vice President, Chief Strategy Officer andDirector of Corporate Strategy Planning, he shows strong leadership in
executing reorganization of the business portfolio of the Company bycreating new businesses as Senior Director of New Business Development
Office. In addition, he is working to build a management framework thatwill contribute to the sustainability of the Company and society as an officer
in charge of sustainability. We appointed him as a Director of the Board
because we believe that he is an appropriate talented person who willcontinue to carry out sound growth strategies for the Company andsupervise the execution of operations.
Yutaka Nishimoto

Mr. Yutaka Nishimoto has been in charge of development, design, quality
control, production technology and production in the Company’s corebusinesses of industrial materials and devices. He has been involved in the

Appointed in FY
endingDecember 2021

management of domestic and overseas subsidiaries, and has contributed tothe startup of factories and the improvement of production in important
projects implemented by production subsidiaries in the Devices Business
Unit. Currently, he assumes responsibility as Executive Vice President, Chief
Quality and Production Officer and is showing strong leadership in theestablishment of a comprehensive quality assurance system and in thedesign and implementation of the optimum deployment of production
capacity in accordance with our business strategy from the perspective of
the Nissha Group as a whole. In light of such broad experience and deep
insight, we appointed him as a Director of the Board because we believethat he is an appropriate talented person who will carry out sound growthstrategies for the Company, engage in decision-making on importantmanagerial issues and supervise the execution of operations.
Hisashi Iso

Mr. Hisashi Iso has for many years been in charge of sales in the Company’s

Appointed in FY

core businesses of industrial materials and devices. He has been in charge

endingof the supply chain in areas such as procurement in the Devices Business

December 2021

Unit and led the diversification strategy of the Company’s business model,
and has also been involved in the management of overseas subsidiaries.
Currently, he serves as Senior Vice President and General Manager ofIndustrial Materials Business Unit, and is showing strong leadership inbusiness management in the global consolidation of the Industrial Materials
Business Unit. Taking his experience and deep insight into consideration, we
appointed him as a Director of the Board because we believe that he is anappropriate talented person who will carry out sound growth strategies for
the Company, engage in decision-making on important managerial issues
and supervise the execution of operations.
Kazuhito Osugi

Mr. Kazuhito Osugi has given valuable advice and opinions across the whole

100%

range of the Company’s management, making the most of the deep insight(18/18in the field of finance he has cultivated in the Bank of Japan over the years

meetings)

and broad experience fostered by participating in corporate management as
an Independent Outside Director of the Board for the Company, as an
outside director for another company or as an advisor of an operational
division for another company. He has duly performed his duties, such as thesupervision of the execution of operations. We appointed him as an
Independent Outside Director of the Board since we believe that he willcontinue to give his valuable counsel from an independent point of view
across the whole range of the Company’s management.

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Name

Reason for appointment

Attendance atmeetings of theBoard ofDirectors

Makoto AndoMr. Makoto Ando has given valuable advice and opinions across the whole

100%

range of the Company’s management, making the most of a broad(18/18perspective cultivated through his long career of prominent positions

meetings)

regarding technology and business management at an electronics
manufacturer, experience as a corporate manager, and deep insight asdemonstrated by his suggestions as an expert member of conferences heldby government ministries and agencies. He has duly performed his duties,
such as the supervision of the execution of operations. We appointed him as
an Independent Outside Director of the Board since we believe that he willcontinue to give his valuable counsel from an independent point of view
across the whole range of the Company’s management.
Asli M. Colpan

Ms. Asli M. Colpan has given valuable advice and opinions across the whole

100%

range of the Company’s management, making the most of her global(18/18perspective and excellent expertise practiced in her research on

meetings)

management strategies and corporate governance and broad experienceand insight cultivated by participating in corporate management as anindependent outside director of the board or an independent auditor ofother companies. She has duly performed her duties, such as thesupervision of the execution of operations. We appointed her as an
Independent Outside Director of the Board since we believe that she willcontinue to give her valuable counsel from an independent point of view
across the whole range of the Company’s management.
Kazumichi

Mr. Kazumichi Matsuki has given valuable advice and opinions across the100%

Matsukiwhole range of the Company’s management, making the most of his(18/18experience in proactive and broad business development and deep insightmeetings)

concerning its governance as he assumed important posts regarding legal
affairs and compliance at a company globally developing business while
participating in corporate management at manufacturers. He has duly
performed his duties, such as the supervision of the execution ofoperations. We appointed him as an Independent Outside Director of theBoard since we believe that he will continue to give his valuable counsel
from an independent point of view across the whole range of the Company’s
management.

22-4 Nomination and Compensation Committee
22-4-1 Purpose
We establish a Nomination and Compensation Committee as an advisory panel for the Board of Directors in order toensure the objectiveness and fairness of the appointment/dismissal of Directors of the Board and the appointment ofAudit & Supervisory Board Members, and incorporate the knowledge of Indipendent Outside Directors of the Board, as
well as the compensation of the Directors of the Board. The chair and the majority of the members are selected fromIndependent Outside Directors of the Board.

22-4-2 RoleWith consultation from the Board of Directors, the Nomination and Compensation Committee deliberates on andprovides a response regarding the following matters.
(1) The appointment/dismissal standards for Directors of the Board and the appointment standards for Audit &Supervisory Board Members(2) Proposals for candidates for Directors of the Board and Audit and Supervisory Board Members, and proposals for
dismissal of Directors of the Board

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(3) Proposals for the appointment/dismissal of the Chairman of the Board, titled directors, and the CEO(4) Matters related to the succession plan for the President(5) Policy on compensation of Directors of the Board(6) Compensation of Directors of the Board

22-4-3 Membership (as of April 1, 2021)(1) Four independent members:
Kazuhito Osugi (Independent Outside Director of the Board and Committee Chair)
Makoto Ando (Independent Outside Director of the Board)
Asli M. Colpan (Independent Outside Director of the Board)
Kazumichi Matsuki (Independent Outside Director of the Board)(2) Two inside members:
Junya Suzuki (Chairman of the Board, President and CEO)
Wataru Watanabe (Director of the Board and Executive Vice President)

22-5 Audit and Supervisory Board Members and the Audit and SupervisoryBoard
22-5-1 Policy and Procedure for Electing Auditors
Our Audit and Supervisory Board comprises an appropriate number of four or fewer members.
Inside Audit and Supervisory Board Members are elected for the wealth of experience required in auditing. Independent
Audit and Supervisory Board Members are elected from attorneys and certified public accountants with a focus on
specialized knowledge in legal affairs, financial matters, and accounting, who satisfy the requirements of not only theCompanies Act but also the standards for independence of independent officers, established by our Board of Directors.
Having received reporting from the Nomination and Compensation Committee, and with prior approval of the Audit andSupervisory Board, based on the policy above, the Board of Directors makes decisions on proposals for the appointment
of Audit and Supervisory Board Members to be deliberated at the general meeting of shareholders.
At present, our Board consists of four members, of which two are Full-time Audit and Supervisory Board Members andtwo are Independent Audit and Supervisory Board Members. All two Independent Audit and Supervisory Board Members
have been designated as independent officers, as they meet the standards of independence established by the stock
exchange and are judged not to have a conflict of interest with general shareholders.

22-5-2 Role of Audit and Supervisory Board Members and the Audit andSupervisory Board
Our Audit and Supervisory Board Members and Audit and Supervisory Board audit the execution of duties by Directors,
Members of the Board and Corporate Officers as stipulated by laws and regulations, our Articles of Incorporation, andinternal regulations, and make appropriate decisions from an independent, objective standpoint on electing anddismissing accounting auditors and exercising their authority relating to audit fees, etc. Independent Audit andSupervisory Board Members draw on their highly specialized knowledge as attorneys and certified public accountants
to contribute to the maintenance and improvement of our corporate governance structure.
Our Audit and Supervisory Board determines the duties of Audit and Supervisory Board Members, the audit structure,and the audit standards that describe the evaluation basis for audits and the action guidelines. In accordance withthese, the Board develops auditing policies and Nissha Group's Corporate Governance auditing plans.
In compliance with the above, Audit and Supervisory Board Members attend Board of Directors’ meetings and otherimportant meetings, review approval documents and other important documents, perform visiting audits at major

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offices and affiliated companies, and regularly exchange views with the President and CEO, Directors of the Board, andGeneral Managers. In order to increase the effectiveness of audits, Audit and Supervisory Board Members hold regularmeetings and coordinate closely with the Accounting Auditor, Internal Audit, and corporate divisions such as Corporate
Finance and Corporate Legal Affairs. In addition, full-time Audit and Supervisory Board Members hold regular groupmeetings with the auditors of Nissha Group companies in Japan in efforts to monitor the management status of eachcompany, and enhance and strengthen audits.

22-5-3 Reasons for Appointment and Board of Directors/Audit and Supervisory
Board Meeting Attendances in FY ended December 2020
Attendance at
Name

Reason for appointment

meetings of theBoard ofDirectors

Attendance atmeetings of the
Audit andSupervisory
Board

Mr. Yasuro Nonaka has abundant experience and insightas he has long been engaged in operations of thegeneral affairs division and has successively held
various posts, including Vice President, Senior Directorof Human Resources, General Affairs and Legal Affairs,
Yasuro Nonaka

having been involved in compliance and risk

100%

100%

management. In light of the above experience and(18/18(14/14

meetings)

meetings)

insight as well as his performance of duties as an Audit
and Supervisory Board Member, we appointed him as an
Audit and Supervisory Board Member, since we believethat he is an appropriate talented person who will audit
the execution of operations by Directors of theCompany.
Mr. Tetsuya Taniguchi engaged in operations ofcorporate communications, investor relations and

Tetsuya Taniguchi

corporate social responsibility, after having been in100%

charge of operations in the general affairs, and strived(13/13for transparency and clarity in disclose for shareholders

meetings)

and investors. Also, he has extensive knowledge of the*After appointed

Nissha Group’s business as a whole. In light of suchas an Audit andbroad experience and deep insight, we appointed him as

Supervisory

an Audit and Supervisory Board Member since weBoard Member

100%(9/9 meetings)*After appointed
as an Audit andSupervisory
Board Member

believe that he is an appropriate talented person who
will audit business execution of the Company.
Mr. Shigeaki Momo-o is not only well acquainted withcorporate legal affairs as a lawyer but also has broad
experience in global business and acquisition ofoverseas corporations as a pioneering international
attorney in Japan as well as deep insight in the medical
devices market, one of the focus markets of the
Shigeaki Momo-oCompany. He has been auditing the Company from his

100%

100%

professional perspective. He has also participated in(18/18(14/14

corporate management as an Independent Audit andmeetings)

meetings)

Supervisory Board Member of the Company and of othercompanies. We appointed him as an Audit andSupervisory Board Member since we believe that he willcontinue to reflect his experience and deep insight in
the audit of the Company from an independent point of
view.

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Attendance at
Name

Reason for appointment

meetings of theBoard ofDirectors

Attendance atmeetings of the
Audit andSupervisory
Board

Mr. Yusuke Nakano has deep knowledge of finance,accounting and management administration as acertified public accountant and profound wisdom ingoverning corporate management, and has been
auditing the Company from his professional perspective.
He also participates in corporate management as an
Yusuke Nakano

independent outside director of the board of anothercompany, an Independent Audit and Supervisory Board
Member of the Company and an independent audit and

100%

100%

(18/18(14/14

meetings)

meetings)

supervisory board member of other companies. We
appointed him as an Audit and Supervisory Board
Member since we believe that he will continue to reflect
his experience and deep insight in the audit of theCompany from an independent point of view.

22-6 Policy on Determining Compensation of Directors of the Board and Audit
and Supervisory Board Members
We establish a compensation system for Directors of the Board and Audit and Supervisory Board Members based on
the individual’s role in business execution and management oversight, and so that the role may be fulfilled appropriately,
toward linking the compensation with the sustainable growth of the Nissha Group and the enhancement of our corporate
value over the medium to long term. In particular, our policy on compensation of Directors of the Board who areresponsible for business execution, is to ensure that the system promotes value sharing with our shareholders andcontributes to the improvement of our financial results and corporate value.

22-6-1 Compensation System
Compensation for Directors of the Board who are responsible for business execution consists of base compensation,bonuses, and stock compensation. Base compensation is established as a monthly base amount according to theindividual’s position and the scale of his or her role. Bonuses are short-term performance-related compensation, andthe amount is determined by evaluating the degree to which targets for each fiscal year have been achieved, using theperiod profit and loss as an indicator to function as an incentive to encourage achievement of performance targets andappropriate management. Stock compensation is medium- to long-term performance-related compensation, and isdesigned to function as an incentive to encourage a sense of contribution to the sustainable growth and the mediumto long-term enhancement of corporate value of the Group, specifically through the use of a Stock Benefit Trust (Board
Benefit Trust, or BBT). Under this system, the Company assigns points based on position and the degree to which
consolidated performance targets and medium-term performance targets for each fiscal year during the three-year
period of the medium-term business plan have been achieved. On a given date in the final year of the medium-termbusiness plan, the Trust grants or transfers shares of the Company and cash equivalent to the amount of the Company's
shares converted to market value in accordance with the points gained. In addition, the performance targets for eachfiscal year and medium-term performance targets based on the medium-term business plan are used as indicators for
granting points.
Compensation of Independent Outside Directors of the Board is not linked to performance, since they oversee
management from a position independent from business execution, but consists of only base compensation determinedaccording to criteria such as the individual’s career and duties.
Compensation of Audit and Supervisory Board Members consists of only base compensation, since their duty is toperform audits of the Nissha Group overall from an independent position.

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22-6-2 Procedure for Determining Compensation
The policy on compensation of Directors of the Board, compensation system, and framework for linking compensation
with performance are deliberated by the Nomination and Compensation Committee and then reported to the Board of
Directors. The Board of Directors receives reporting and makes a decision.
Compensation of Directors of the Board is drafted by the President within a limit defined at the general meeting ofshareholders in accordance with a predetermined calculation method, deliberated by the Nomination and Compensation
Committee, and then reported to the Board of Directors. The Board of Directors receives reporting and makes a decision.
Compensation of Audit and Supervisory Board Members is determined within a limit defined at the general meeting ofshareholders through consultation among the Audit and Supervisory Board Members.

22-6-3 Results of FY ended December 2020
Compensation by Category(Million yen)
Performance-related

Total
Title

(Million yen)

Number ofCompensation

Compensation

Fixed

Provision forCompensation

Members

Management

Bonuses

Board Benefit
Trust

Directors of the Board(Excluding Independent Outside
Directors of the Board)

226

151

52

22

5

26

26

―

―

3

46

46

―

―

6

Audit and Supervisory Board
Members (Excluding
Independent Audit andSupervisory Board Members)
Independent Outside Directors
and Independent Audit andSupervisory Board Members

22-7 Corporate Officers
In order to adapt flexibly to changes in the business environment, we appoint Corporate Officers also taking into
account diversity and balance between the knowledge, experience, skills, and age of the individual. The term of officeof Corporate Officers is set at one year.

l

Diversity of Corporate Officers (as of April 1, 2021)

At present, we have 16 Corporate Officers, of which two are foreign nationals.
Corporate Officers include persons with experience of working overseas or at other companies, as well as those withexpertise such as those with master's or doctoral degrees.

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23. Internal Control System
Nissha builds and operates an internal control system in accordance with a policy for internal control formulated by the
Board of Directors. The system is designed to ensure that the duties of each internal organization are carried out legally,
appropriately, and efficiently toward enhancing our corporate value. To ensure reliability of financial reporting, we
submit the assessment results of our internal control system in the form of internal control reports to the Prime Ministerof Japan and disclose the contents to our shareholders and investors.

24. Initiatives of Internal Audit Office24-1 Systems
In order to maintain independence and objectivity, the Internal Audit Office is independent of operating departments
and is under the direct control of the Chairman of the Board. It conducts regular annual audits of all Nissha Group
operations in accordance with the annual plan. After the audit, the departments concerned are given advice andrecommendations, and follow-up audits are conducted to check the status of the improvements. Audit results arereported and advice given at monthly meetings with the Chairman of the Board, and particularly important matters arereported to the Board of Directors. Also, meetings are held with full-time Audit and Supervisory Board Members every
three months to ensure mutual cooperation with the Audit and Supervisory Board.

24-2 Audit Content
Audits by Internal Audit are broadly classified into "internal control audits" and "theme audits" based on the Financial
Instruments and Exchange Act. Internal control audits are conducted jointly with accounting auditors by selecting thescope of evaluation from the perspectives of company-wide controls, financial reporting, business processes, and IT
controls. Audits look at whether the business activities of the Group are in compliance with laws and regulations, andwhether the Group's Corporate Ethics and Compliance Guidelines, especially the 10 Important Points such as thePrevention of Corrupt Practices, are being carried out appropriately and effectively in accordance with internal
regulations. Theme audits, on the other hand, are conducted at the beginning of each fiscal year to identify risks thatcannot be covered by the former.

24-3 Initiatives for FY ended December 2020
In the fiscal year ended December 2020, as a theme audit, we conducted an audit on information management of trade
secrets and management of duties and authorities, which is the Nissha Group in Japan's approach to information
security, as well as a follow-up audit on the overall business management of affiliated companies. In the future, weplan to systematically conduct audits of affiliated companies, including those that have newly joined our Group through
M&A.

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25. Corporate Ethics and Compliance25-1 Corporate Ethics and Compliance Guidelines
The Nissha Group has established its Corporate Ethics and Compliance Guidelines to serve as guidelines to be observedby all officers and employees. In line with the Nissha Philosophy, which is the fundamental principle underlying ourGroup’s mission, purpose of existence, and ideas, the Corporate Ethics and Compliance Guidelines present the basic
ideas of compliance and corporate ethics that each and every one of us should practice in the form of 4 Foundational
Rules and 10 Important Points.

Foundational Rules
1.

We value and hold on to high ethical standards, integrity in our actions, and act with good common sense
through our responsible behavior.

2.

We pursue the co-existence with the stakeholders including our customers, shareholders, suppliers, local
communities and our employees.

3.

We will comply with all laws and regulations, internal corporate regulations, and socially accepted rules andnorms.

4.

If we witness actions contrary to the "Corporate Ethics and Code of Conduct" or are suspicious of certain
behaviors or decisions, we should immediately report to and consult with our supervisors.

Ten Important Points
1.

Free and Fair Competition

2.

Prevention of Corrupt Practices

3.

Product Quality and Safety

4.

Protection of Intellectual Property

5.

Appropriate Handling of Information and Resources

6.

Compliance with Import/Export Regulations

7.

Proper Disclosure of Information and Compliance with Insider Trading Regulations

8.

Environmental Protection and Conservation

9.

Creating a Comfortable Workplace, and Community and Social Contribution

10. Respect for Human Rights

To ensure that all employees of the Nissha Group can understand these Guidelines, we compile Corporate Ethics andCode of Conduct Manuals in Japanese, English, Chinese, and Vietnamese, and publish them on the Nissha Group
intranet. Employees are also made thoroughly aware of these Guidelines at regular training sessions.

25-2 Promotion Structure
The Corporate Ethics and Compliance Subcommittee, under the Sustainability Committee, oversees the entire Groupand promotes relevant activities. This Subcommittee is formed of the President and Chairman of the Board, directors
responsible for Human Resources, General Affairs, and Corporate Legal Affairs, and directors responsible formanagement strategies, while Corporate Legal Affairs runs the Secretariat. In addition, all Nissha Group bases in Japanand overseas appoint managers and group leaders in charge of promoting corporate ethics and compliance.

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Corporate Ethics and Compliance Structure25-3 Initiatives
The managers and group leaders in charge of promoting corporate ethics and compliance not only conduct training intheir respective divisions but also implement corporate ethics and compliance on a day-to-day basis throughorganizational management, serve as handy consultants for their workplace, and, should an incident arise, work with
Corporate Legal Affairs to deal with it.
Corporate Legal Affairs also publishes quarterly issues of Corporate Ethics and Compliance News as a way to further
boost awareness among these managers and group leaders. Furthermore, the “OK or Not? Corporate Ethics andCompliance Consultation Desk” section on the Nissha Group intranet features points about areas of particular concern.
In the fiscal year ended December 2020, this section covered issues such as how to deal with suspected violations oflaws and regulations such as bribery and cartels, as well as harassment issues that arise in working from home.
The Group designates every October and November as Corporate Ethics and Compliance Months, and provides groupwide training at all bases in Japan and overseas. This simultaneous training is provided not just for full-time, contract,
and temporary employees, but for managers of subcontractors and even part-timers.
In the fiscal year ended December 2020, in light of the drastic changes to the corporate environment due to novel
coronavirus disease (COVID-19), the training theme for domestic bases focused on introducing examples of corporate
ethics and compliance violations that are likely to occur under these circumstances, discussing the causes of misconductand countermeasures. As COVID-19 precluded face-to-face training at bases in Europe and the United States, thetraining was videotaped so that each participant could view it. In all areas where the Group operates, training is tailoredto the laws, regulations, and customs related to business operations. For example, at Asian region bases, training isprovided by personnel in charge of administrative divisions.
Questionnaires are sent out after each company-wide simultaneous training session to collect a wide range of
information and opinions from all employees about concerns and actions that need to be improved in the workplacefrom the perspective of corporate ethics and compliance. Examples and results of improvements based on thisinformation are reported to the Corporate Ethics and Compliance Subcommittee, along with reports on training
implementation.

25-4 Hotline
The Nissha Group has in place an Internal Reporting Code and a hotline based on the Whistleblower Protection Act forthe purposes of quickly identifying the facts about illegal, unfair, or unethical conduct by an organization or individual,
minimizing the risk of a crisis, promoting ethical and legal compliance, and ultimately enhancing our corporate value.
We are working to disseminate information about the hotline through the Corporate Ethics and Code of Conduct Manual
distributed to all employees, the Labor and Human Rights Handbook, the Nissha Group intranet, and in-house training.
All employees working for the Group in Japan and overseas can use this service, and in the fiscal year ended December

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2019, we expanded the scope of users by establishing a contact point for some of our domestic suppliers. This contact
point is an outside attorney, an independent and impartial third party.
The Internal Reporting Code contains the following.
- The whistleblower shall not be subjected to any disadvantageous treatment by the Company or other employees dueto their report.
- Anonymous reporting is also possible.
All complaints received are relayed from the hotline (an outside attorney) to the Corporate Ethics and Compliance
Subcommittee Secretariat. The Secretariat liaises with the relevant departments after consulting with the outside
attorney about the best way to investigate and confirm the issue. Said investigation and confirmation are then carriedout with consideration for the protection of the whistleblower. The content is reported to management at the Corporate
Ethics and Compliance Subcommittee meeting, where it is discussed as necessary, after which, measures are taken
according to the results of the investigation and discussion.
The number and main content of consultations received during the fiscal year ended December 2020 are shown below.
- Hotline (for employees): 12 cases (mainly related to workplace environments and human relations)- Supplier hotline: 0 cases

Hotline Organizational Chart

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25-5 Dealing with Antisocial Forces
In accordance with our basic policy for dealing with antisocial forces and our regulations for dealing with antisocial
forces, etc., Nissha has established that it will have no dealings whatsoever with antisocial forces. In principle, we
confirm in advance through the prescribed procedures that our existing and new business partners are not membersof antisocial forces. This has cut off all possibilities of involvement in money laundering by antisocial forces.

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26. Initiatives Related to Anti-corruption
26-1 Anti-Corruption Guidelines
The Nissha Group cites Prevention of Corrupt Practices as an important point of our Corporate Ethics and Compliance
Guidelines. We have also formulated the Nissha Group Anti-Corruption Guidelines, and ensure bases in Japan andoverseas are aware of its contents.

Nissha Group Anti-Corruption Guidelines
The Nissha Group makes clear that all officers and employees are prohibited from presenting customers, suppliers,and government officials, either directly or indirectly, with gifts or entertainment that may constitute corrupt
practice, and observes Japan’s Unfair Competition Prevention Act, the United States’ Foreign Corrupt Practices
Act, the United Kingdom’s Bribery Act, and the regulations of other countries and regions regarding anti-corruption.
1. We neither present to nor accept from customers, suppliers, and government officials offers of unfair
advantage.
2. We neither present to nor accept from customers, suppliers, and government officials offers with gifts orentertainment that exceed the limit permitted by internal standards, laws, and regulations.
3. We strive to understand the circumstances of the Nissha Group overall, and periodically review our initiatives.
4. We respond with sincerity to requests from our customers for cooperation in investigations, by providing
necessary information.
Established on April 1, 2017
Revised on January 1, 2018
Junya Suzuki
Chairman of the Board
President and CEO
Nissha Co., Ltd.

26-2 Efforts to Ensure Awareness and Internal Audits
Training is provided for all operations of the Group to ensure compliance with the relevant laws, regulations, andcustoms. As face-to-face training could not be held in the fiscal year ended December 2020 due to the COVID-19
pandemic, we created videos of the training to prevent corruption to make employees aware of it. We also posted
information on the Nissha Group intranet about what to do if bribery, cartels, or other violations of the law are suspected.
However, as bribery is a deeply-rooted practice in some countries and regions, internal audits on anti-corruption are
conducted on a regular basis. In the fiscal year ended December 2020, we reviewed our audit plan for the next fiscal
year and beyond in order to continue with more substantial audits. In the future, we plan to conduct operational andthematic audits, including prohibition of corruption, of affiliated companies that have recently joined our group throughM&A or other means.
The Nissha Group has not identified any cases of corruption in the fiscal year ended December 2020.

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27. Tax Policy
Nissha Group will compliance with tax laws and regulations in each country and each region with our group tax policy,
in order to fulfill our corporate social responsibilities.

Nissha Group Tax Policy
Basic policy
Nissha Group will strive to minimize tax risks, enhance our corporate value by complying with tax laws andregulations in each country and each region.
Nissha Group will pay close attention to the trends in the international tax framework such as Base Erosion andProfit Shifting (BEPS) project and make properly responses to such changes while aspiring to be a truly global
company.
1. Nissha Group's approach to tax planning
Nissha Group will enter into transactions with a business purpose and a business activity and in case we approachto tax planning, we will implement it properly and efficiently in compliance with tax laws and regulations.
Our group will consider taxes as an essential factor in our business planning and make use of available tax
incentives within the scope of normal business activities. However, we will not engage in transactions for the
primary purpose of tax avoidance and transactions without any actual business activities.
2. The level of risk to taxation that Nissha Group is prepared to accept
Nissha Group's tax policy is to minimize tax risks wherever possible when undertaking tax matters.
We will work to identify, evaluate, and manage tax risks in each country and region to reduce such risks, andwhere there is significant uncertainty or complexity in relation to tax risks, we will ask for advice from third
parties.
3. The approach of Nissha Group towards its dealings with Tax authorities in each country and region
Nissha Group believe that we can build and maintain good relationship with tax authorities in each country andregion corresponding with them and disclosing necessary information in a sincere and appropriate manner.
Therefore, We will strive to provide necessary information appropriately and cooperatively in response to requests
from tax authorities in each country and region while issuing tax returns properly and paying appropriate amountof tax according to tax laws and regulations in each country and region.
If tax authorities inform us of tax adjustments, we will immediately take appropriate measures to prevent similar
issues happen unless we file a petition of objection against their action or interpretation.
4. The approach to risk management and governance systems in relation to tax affairs
Nissha Group's tax policy is reviewed and controlled by our group's Chief Financial Officer who is responsible forour group’s tax strategy and policies, and the status is reported to Board of Directors on an on-going basis
through our group’s Chief Financial Officer.
Where there is significant uncertainty or complexity in relation to application or interpretation of tax laws, we willtake appropriate measures after seeking external advices.
Established on December 25, 2017

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28. Initiatives Related to Conflict Minerals
28-1 Policy
Nissha’s policy on conflict minerals is outlined in our Basic Approach to Responsible Mineral Procurement. In line withthis policy, we are working to ensure that our products do not use materials made from conflict minerals, which are asource of funds for armed groups involved in human rights abuses such as looting, violence and forced labor.

Basic Approach to Responsible Mineral Procurement
The Nissha Group is deeply concerned that a portion of the conflict minerals extracted by the Democratic Republicof the Congo and its neighboring countries are being used as a source of funding for militia that through acts oflooting, violence and forced labor are infringing on fundamental human rights.
In April 2012, Nissha became a signatory to the “Global Compact” as advocated by the United Nations. We at
Nissha Group have fully embraced the Ten Principles stated in the Global Compact as a cornerstone of our
Corporate Mission. Based upon our recognition of the importance of these principles and aiming for co-existencewith our stakeholders, we are committed to non-use of these conflict minerals, as raw materials in our products
as they result in an infringement of basic human rights. Accordingly where our company becomes aware of theuse of any conflict minerals, we will immediately implement all measures required regarding that use.
1. Nissha Group is presently implementing ongoing control systems for conflict minerals which wemaintaincontinuously.
2. Nissha Group will promptly provide to its customers conflict minerals information including its smelters, etc.
3. Nissha Group in respect of this issue will publish the relevant information in its sustainability reports.
We will continue to make sincere efforts for the responsible procurement of related minerals in order to fulfill our
corporate social responsibilities.
Established on March 12, 2014
Revised on January 1, 2018
Junya Suzuki
Chairman of the Board
President and CEO
Nissha Co., Ltd.

28-2 Initiatives
The only conflict minerals used in the products of our group are the tin used for vacuum metallized foil, one of thetransfer foils produced by the Industrial Materials business, the tin used for ITO films for touch sensors and the gold
used for FPC plating produced by the Devices business. We do not use any tin or cobalt in molding resin.
The Nissha Group is required by our customers to report using the latest version of the Conflict Minerals Reporting
Template (CMRT) issued by the Responsible Minerals Initiative (RMI). Recently, we began receiving surveys from ourcustomers concerning minerals other than the 3TG (tin, tantalum, tungsten, and gold) such as cobalt.
This is why we use a Safety Data Sheet (SDS) or other methods to check all materials used in our products to identify

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those that contain conflict minerals. We also ask our suppliers, who procure materials for our products, not to use any
conflict minerals connected with violations of human rights, and that they report using the latest version of the CMRT
to allow us to confirm the contents. If there is an inquiry about the region where the conflict minerals are produced
after the CMRT is submitted to our customer, we go back through the records to check multiple suppliers. If thesechecks find any concerns about the use of conflict minerals that may lead to infringement of human rights, we willsuspend the use of such minerals and take immediate corrective measures.
Thanks to these checks, we found no cases of the use of conflict minerals related to human rights violations in our
products in the fiscal year ended December 2020. Our gold is largely sourced in line with the guidance of the London
Bullion Market Association (LBMA), and we have confirmed that other conflict minerals do not involve human rights
violations.

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29. Risk Management29-1 Basic Policy
We at the Nissha Group have in place a Risk Management Policy to clarify our group-wide approach to risk management.
We strive to counter risks that may have an impact on business continuity by setting up and making continuous
improvements to an internal structure designed to ensure business continuity of the group overall and enhance ourcorporate value.

Risk Management Policy
The Nissha Group strives to accurately identify the risks we face, avoid unexpected loss, and appropriately
control risks, thereby ensuring business continuity and enhancing our corporate value toward realizing theenrichment of people’s lives by creating technology and developing it into economic and social value.

1. We build and maintain a structure for responding to the various risks present in our business environment.
2. We promote risk management at the managerial level toward conducting organization-wide activities andpreserving management resources.
3. In the event of an emergency, such as a situation with critical managerial consequences or a natural
disaster, we work to minimize damage, resume business activities as quickly as possible, and prevent
recurrence while prioritizing the safety of human lives.
4. We conduct in-house training to enhance awareness of and the ability to respond to risks, and ensure thateach employ takes responsible, swift, and appropriate action.
5. We periodically review our risk management structure, including this policy, and make improvements on
a continuous basis to ensure effective risk management at all times.
Established on July 1, 2015
Revised on January 1, 2018
Junya Suzuki
President and CEO
Chairman of the Board
Nissha Co., Ltd.

29-2 Management Structure
We establish a Sustainability Committee, chaired by the President, which works to ensure the long-term continuationof the Nissha Group by prioritizing nonfinancial risks that impede business continuity, and by promoting efforts tominimize those risks through the activities of its subcommittees.
The eight subcommittees under the umbrella of the Sustainability Committee—Corporate Ethics and Compliance; Laborand Human Rights; Health and Productivity Management; Environmental, Safety and Health; Quality; BusinessContinuity Management; Information Security; and Trade Management—set KPIs and numerical targets for risk factors,
implement plan-do-check-act (PDCA) cycles, and submit quarterly reports on their progress to the Sustainability
Committee. The Sustainability Committee submits yearly reports on the contents of those activities at Board of
Directors meetings.

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29-3 Major Business Risks
The major risks we have identified that may have a significant impact on the Nissha Group’s financial condition,
operating results, and cash flow status are given below.
1. Novel coronavirus disease (COVID-19)
2. Business operation risks-Progress in growth strategies-Fluctuating demand in specific segments or for specific customers
3. Financial risks-Losses on goodwill impairment-Fluctuations in foreign exchange rates-Other financial risks (e.g., decreasing market value of securities, bad debt on trade receivables, obsolescence of
inventory)
4. ESG-related risks-Response to a decarbonized society-Improving human resource capabilities, and utilizing diverse human resources-Respect for human rights-Occurrence of quality issues-Improvement in effectiveness of the Board of Directors-Other ESG-related risks (e.g., other improvements in productivity, promotion of compliance, continuity ofbusiness activities, protection and utilization of information assets, risks related to workplace safety and health)*For more details on these risks, please refer to our Annual Securities Report.

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30. Initiatives Related to Business Continuity
30-1 Basic Policy for Business Continuity Plan
We at the Nissha Group establish a Basic Policy for Business Continuity Plan, which the Business Continuity Management(BCM) Subcommittee of the Sustainability Committee plays a central role in promoting in preparing for and responding
to emergencies such as a natural disaster or pandemic.

Basic Policy for Business Continuity Plan
We will establish the Business Continuity Plan (emergency response measures and business recovery plans) inorder to primarily ensure the safety of life, minimize the damage and earlier recover our business in case of aserious business interruption due to a major natural disaster, fire, blackout, infection disease, etc. The purposeand essential points of the plan are described as follows.
1. Purpose of establishing and operating the Business Continuity Plan
(1) For customers
We will make our best effort to fulfill our responsibility to supply Nissha group’s products and services incase of emergency.
(2) For shareholders
We will control risks properly to minimize the damage of corporate value during peacetime.
In case of a serious business interruption, we will make our best effort to recover the corporate value.
(3) For employees
We will ensure the security of our employees including their families as well as try to ensure job security.
(4) For suppliers
In mutual maximum cooperation with suppliers, we will maintain appropriate business relationship with
suppliers during peacetime , and we will make our best effort to recover earlier our business activity incase of emergency.
(5) For the local community
We will contribute to the recovery of the local community and society as a member of the society.
2. Continuous improvement of the Business Continuity Plan
We will respond to changes in our business situation and external environment according to continuous
improvement of the Business Continuity Plan.
Established on September 28, 2006
Revised on October 1, 2015
Junya Suzuki
Chairman of the Board
President and CEO
Nissha Co., Ltd.

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30-2 Initiatives
30-2-1 Emergency response and business recovery response
We have in place a set of Emergency Response Regulations that defines “emergency” and stipulates the action andstructure required between initial response to a disaster and the early stages of business recovery. In the event of aserious interruption of business due to emergency over a certain level, such as a natural disaster or pandemic, we set
up a response task force headed by the President.
Our Basic Plan for Business Continuity Management (BCM) stipulates in detail the steps to be taken in order to promote
early recovery of key business locations. In efforts to verify the effectiveness of these steps, we organize business
continuity planning (BCP) exercises on a regular basis for employees including the management. We respond quickly
to changes in management environment and reorganization, such as managing the latest editions of relevant
documents.
We also stockpile supplies at major bases in Japan, distribute “survival cards” listing information about what to do when
an earthquake strikes, educate employees using an e-learning system, and conduct emergency training to promotethorough awareness about the general rules for action and response in an emergency.
In the fiscal year ended December 2020, we verified the contents of BCP documents and confirmed the effectivenessof their use at major overseas affiliated companies engaging in business in focus markets identified by the Nissha
Group in the medium-term business plan.

30-2-2 Training at Major Bases
Once a year, we conduct business continuity planning (BCP) training to confirm that our BCP will function appropriately
in the event of an emergency such as an earthquake. The session in the fiscal year ended December 2020 simulated asituation in which the Nitec Precision and Technologies, Inc. Kaga Factory was devastated by an earthquake.

30-2-3 Containment of the COVID-19 Pandemic
On the same day that the Japanese government declared a state of emergency in April 2020, we set up a responsetask force headed by the President and strengthened measures throughout the Nissha Group. We made use of workfrom-home and videoconferencing to minimize travel and avoid the 3C’s—close contact in crowded, confined spaces—and disseminated information about infection prevention and health management to employees.
We also prepared an initial response manual and carried out desktop exercises simulating suspected infection within
the company. Thanks to these efforts, we responded appropriately to cases of confirmed infection and experienced no
disruptions to factory or business operations.

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31. Management System and other Certification Acquisitions
The Nissha Group's management system and other certification status is as follows.
(as of April 2021)
Standards
ISO9001

ISO13485

ISO22716

IATF16949

ISO14001

ISO50001OHSAS18001
ISO45001

ISO27001

EnergyOccupational
health andsafetyInformation
security

Subject Areas
Quality

Medicaldevices

Cosmetics

Automotive

Environment

Nissha Co., Ltd.
Global Headquarters

○*1

○*2

○*3

○*4

○*5

Nissha Co., Ltd.
Tokyo Division Headquarters○*1

Nissha Co., Ltd. Kameoka Site

○

○
○

○*4

○

Nissha Co., Ltd.
Nagoya Sales Office○

Nitec Industries, Inc.
Koka Factory○

Nitec Industries, Inc.
Kameoka Factory○

Nitec Precision and Technologies,
Inc. Himeji Factory

○

○

○
○*6

○

○

Nitec Precision and Technologies,
Inc. Kaga Factory○○

Nitec Precision and Technologies,
Inc. Tsu Factory

○

○

○

○

Nitec Precision and Technologies,
Inc. Kyoto Site○○

Nissha FIS, Inc.

○

Nissha Printing Communications,
Inc. Headquarters / Kyoto○*1○

Nissha Printing Communications,
Inc. Osaka Division Headquarters○*1○

Nissha Printing Communications,
Inc. Tokyo Sales Office○*1○

Nissha Printing Communications,
Inc. Headquarters / Kameoka
Factory○*1○*6

Nissha F8, Inc.

○*7

Nissha Business Service, Inc.

○*8

○

○*7

○

○

○

Graphic Controls Acquisition
Corp.

○

Lead-Lok, Inc.

○

CEA Global Dominicana, S.R.L.

○

CEA Medical Manufacturing, Inc.

○

Sequel Special Products, LLC

○

○

○

○

Nissha Schuster
Kunststofftechnik○

Nissha Back Stickers○

Nissha Back Stickers
International
AR Metallzing N.V. – Genk,
Belgium
AR Metallizing Srl. - Casalgrasso,
Italy
AR Metallizing Ltd. - Franklin, MA
USA
AR Metallizing Produtos
Metalizados Ltda

EC93/42/EEC○○

Nissha Medical Technologies
GmbH & Co. KG
Nissha Medical Technologies SAS○○

Nissha PMX Technologies, S.A.
de C.V.

Nissha Medical Technologies Ltd.

○○

Eimo Technologies, Inc.
Nissha GSI Technologies, Inc.

OthersEC93/42/EEC
○

○

○

○

○

○

○
○

FSC COC

○

○

○

○

FSC COCFSC COC○○AR Metallizing GmbH○

Nissha (Kunshan) Precision IMD
Mold Co., Ltd.

○

○

○

Guangzhou Nissha High Precision
Plastics Co., Ltd.

○

○

○

Nissha Precision Technologies
Malaysia Sdn. Bhd.

○

○

○

○

111

○
○

FSC COC
EN15593
FSC COC

Nissha Sustainability Report 2021

*1. Administration divisions are excluded from the scope of certification.
*2. For departments related to Medical Technologies (Vermed products).
*3. Obtained at the Kyoto Factory in the manufacture of microneedle patch for cosmetics.
*4. For the support departments related to the touch sensor module for automotive.
*5. Only administration divisions and design and product development divisions have obtained certification.
*6. Certification is included in the Kameoka Site of Nissha Co., Ltd.
*7. Only Nissha photo studio (Kyoto) has been certified for ISO9001, while NF8 photo studio (Tokyo) and Nissha
photo studio (Kyoto) have been certified for ISO 27001.
*8. The Hot Stamping Production is excluded from the scope of certification.

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32. Editorial Policy
The Sustainability Report is published annually to serve as a communication tool between the stakeholders and the
Nissha Group. Sustainability Report 2021 covers our initiatives and performance in the fiscal year ended December
2020 (January–December 2020), following the editorial policy given below.

32-1 Guidelines Used as Reference
・The GRI Sustainability Reporting Standards
・ISO26000
・Environmental Reporting Guidelines 2018, issued by the Japanese Ministry of the Environment32-2 Period Covered
From January 2020 to December 2020

32-3 Publication Dates
Current issue: June 2021 for Japanese, August 2021 for English
Last issue: May 2020 for Japanese, July 2020 for English
Next issue: June 2022 for Japanese, August 2022 for English (planned)

32-4 Scope of Reporting
The information and data contained in this report focus mainly on activities conducted by the Nissha Group. Where
information for the entire group is not available, the scope of reporting is indicated separately. “Nissha” refers to “Nissha
Co., Ltd.” alone. “Nissha Group” refer to Nissha Co., Ltd. and its group companies. “Global Headquarters” refers to theglobal headquarters and associated companies located within the global headquarters premises. The major affiliatedcompanies of each Nissha Group business are given below. Significant activities conducted by companies in our supply
chain are also included in this report.

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32-5 Major Affiliated Companies and Businesses
Companies

Major Businesses

Nitec Industries, Inc.

Industrial Materials

Nitec Precision and Technologies, Inc.

DevicesNissha FIS, Inc.

DevicesNissha Printing Communications, Inc.

OthersZonnebodo Pharmaceutical Co., Ltd.

OthersNissha Business Service, Inc.

OthersNissha USA, Inc.

Industrial Materials

Eimo Technologies, Inc.

Industrial Materials

Nissha PMX Technologies,S.A. de C.V.

Industrial Materials

Nissha Medical Technologies

Medical Technologies

Nissha Europe GmbH

Industrial Materials

Nissha Schuster Kunststofftechnik

Industrial Materials

Nissha Back Stickers

Industrial Materials

AR Metallizing N.V.

Industrial Materials

Nissha Korea, Inc.

Industrial Materials

Nissha Industrial and Trading (Shenzhen) Co., Ltd.

Industrial Materials

Nissha (Kunshan) Precision IMD Mold Co., Ltd.

Industrial Materials, Devices

Guangzhou Nissha High Precision Plastics Co., Ltd.

Industrial Materials

Taiwan Nissha Co., Ltd.

Industrial Materials, Devices

Nissha Industrial and Trading Malaysia Sdn. Bhd.

Industrial Materials

Nissha Precision Technologies Malaysia Sdn. Bhd.

Industrial Materials

Nissha Vietnam Co., Ltd.

Devices32-6 Major Changes in Reporting Scope
Date
January 2020

Contents

Impact on reporting scope

The molding division of Nissha Co., Ltd.'s Industrial Materials

The content of thebusiness is transferred to Nitec Industries, Inc. (NII), and NII

Sustainability Report 2021 has

is reorganized into two factories: the Koka Factory (Koka City,

not been affected.

Shiga Prefecture) and the Kameoka Factory (Kameoka City,
Kyoto Prefecture).
January 2020

AR Metallizing N.V. (Belgium), a consolidated subsidiary of

The content of the

Nissha Co., Ltd.'s Industrial Materials business, acquired

Sustainability Report 2021 has

Eurofoil Paper Coating GmbH (Germany) (currently AR

not been affected.

Metallizing GmbH).
November 2020

Nissha Medical Technologies (USA), a consolidated subsidiary

The content of theof Nissha Co., Ltd.'s Medical Technologies business, acquired

Sustainability Report 2021 has

Olympus Group’s Norwalk, Ohio Medical Manufacturing

not been affected.

Operation, that manufactures medical devices.

32-7 Publishing Division and Contact for Inquiries
Nissha Co., Ltd.
Shareholder Relations
Contact: https://www.nissha.com/english/inquiry.html
TEL: +81 75 811 8111

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