Environment
Contents /Editorial Policy

Nissha Group
Sustainability

Environment

Third Party
Verification

SocialHuman
RightsHuman
Resources

GovernanceFair Operating Practices/ Local Communities

Quality Management / Efficiency
and Productivity Improvement

GRI Standards Content
Index / ESG Data

Governance

25. Corporate Governance25-1 Basic Approach to Corporate Governance25-2 Overview of Corporate 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 and fairness.

We have established a corporate governance structure as shown in the figure below (as of January 1, 2024).
Shareholders' Meeting

Based on this recognition, the Company places corporate governance as one of the key management issues, strives to maintain and improve it, and seek out sustainable corporate growth and anincrease in corporate value over the medium- to long-term. In an effort to clarify the Nissha Groupʼsbasic approach to and policy for implementing corporate governance, we established a Corporate
Governance Policy.

Appointment / Dismissal
Cooperation
Monitoring* For further information, please follow the link below.
About ＞ Corporate GovernanceCorporate Governance Policy（PDF）

Audit and Supervisory Board:
4 Audit and Supervisory
Board Members

Audit(including 2 Independent Audit
and Supervisory Board Members)

Audit andSupervisory
Board Member's
OfficeAccounting Auditor

Cooperation

Appointment / Dismissal

Audit
Cooperation

Appointment / Dismissal

Board Of Directors:
9 Directors

Inquiry(including 4 Independent
Outside Directorsof the Board)

Chairman of the Board,
President and CEO

ReportNomination andCompensation
Committee

Management Meetings
Investment Committee

Internal Audit
Disclosure Control Committee
Sustainability Committee
ESG task force

Business Review

Risk Management and Compliance Committee
Accounting
Audit

Regional Collaboration Committee（RCC）

Corporate Officers

Business Unit / Corporate Administration/ Subsidiaries and others

Nissha Philosophy (Mission・Shared Values)

Nissha Sustainability Report 2024

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Environment
Contents /Editorial Policy

Nissha Group
Sustainability

Environment

Third Party
Verification

We make major business judgments and oversees the executionof the duties of the Directors of the Board at meetings of theBoard of Directors, and as a company with an Audit and Supervisory Board, will strive to maintain and improve the oversight andchecking functions by Audit and Supervisory Board Members andan Audit and Supervisory Board which are independent from theBoard of Directors. We adopt a corporate officer system in aneffort to clarify the powers and authority in the speedy decision
making and the implementation of decisions, under which theBoard 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 Presidentʼs authority.
Investment Committee
Ensures discipline in investment decisions by discussing thestrategic rationale for investments and the appropriateness ofinvestment recovery plans prior to submitting particularly important investment matters to the Board of Directors, and bymonitoring investments after they are made once every quarter.
Business Review
A committee for each business division made up of Internal
Directors and management from the business division (such as
Corporate Officers). It checks business strategies every monthor every quarter based on the KPIs and considers the actions totake in the short term. Along with monitoring work execution
by the Corporate Officers, it is designed to respond quickly tochanges in the business environment.

Nissha Sustainability Report 2024

SocialHuman
RightsHuman
Resources

Fair Operating Practices/ Local Communities

We also have in place the following organizations in order to enhance the management monitoring function, ensure that business execution complies with laws and regulations as well as our
Articles of Incorporation, and to manage risks.
Sustainability Committee
Chaired by the president and CEO and vice-chaired by the
Senior Executive Vice President (ESG promotion). The Sustainability Committee is made up of business organizations and responsible departments, as well as the ESG Task Force. Based on
the Sustainability Vision, it collaborates to work on the themesof creating business opportunities, risk reduction, strengthening
management foundation and corporate governance. The ESG
Task Force was established to address issues that are considered to be particularly important from an ESG perspective, andis promoting these respective activities.
Risk Management and Compliance Committee
This committee is chaired by the Director of the Board, Senior
Executive Vice President, Legal Affairs. The Risk Management
and Compliance Committee centrally manages risks that would
hamper business activity continuance (risks related to businessstrategies and business content, risks related to finance, and risks
that encompass the entire Group). It liaises with committees anddepartments that manage risks to prioritize them from a Groupwide, cross-cutting perspective and control them appropriately.
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.

Governance
Quality Management / Efficiency
and Productivity Improvement

25-3

Governance

GRI Standards Content
Index / ESG Data

Directors of the Board andthe Board of Directors■ Policy and Procedures for Appointment/

Dismissal of Directors of the Board
The Board of Directors of Nissha is comprised of an appropriate
number of Directors, up to twelve. The selection of Directors is donewith respect to the diversity and balance of skills that the Board
requires. In addition, Independent Outside Directors of the Board
comprise at least one third of the Board, and these Independent
Outside Directors are those who satisfy the "Standards for Independence of Independent Officers” set out by the Board of Directors.
In the event that a Director of the Board damages the trust or honorof 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 the presence of a valid reason andmakes the Director of the Board subject to a proposal for dismissal.
To ensure clarity in 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 Board of Directors makes decisions on proposals for the appointment/dismissalof 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)

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Environment
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Nissha Group
Sustainability

Environment

SocialThird Party
Verification

Human
RightsHuman
Resources■ The skill set necessary for the Board of Directors, and the values, experiences, andGovernanceFair Operating Practices/ Local Communities

Quality Management / Efficiency
and Productivity Improvement

Governance

GRI Standards Content
Index / ESG Data

Values, Experiences, and Skills (Shares Among Directors)

skills in common required for all Directors
We require all Directors to share certain values, experiences, and skills to make important management
decisions, exercise high levels of effectiveness in supervising the execution of the Companyʼs business, andcontribute to the enhancement of our corporate value. Moreover, we consider the optimal and balanced
distribution of skills (experience and knowledge) among the Board of Directors in those fields that are necessary based on our management strategy to be key for the Board. In addition, those fields will change as
the business environment changes.

GlobalDirectors must have experience in overseas management or other experience andknowledge to recognize management issues from a broad perspective to accelerate
global business development

Finance

Directors must have experience and knowledge in finance to improve the profitability
and capital efficiency of the business as well as to secure a stable financial base to increase corporate value over the medium to long term

Where we want to be by 2030 is presented in the form of our Sustainability Vision (long-term vision for2030). In addition, we have established a medium-term strategy reflecting our Sustainability Vision for2030, and formulated strategies to take us there in the form of three-year medium-term business plans.
To achieve these plans, the Company considers the skills (experience and knowledge) in the fields indicated on the right of particular importance for the Board of Directors.

Changes and Discontinuous Growth

Directors must be able to take appropriate risks and branch out into new areas without
being bound by preconceived notions to adaptively cope with changes in the businessenvironment and ensure the survival and development of the businessLong-Term Strategic
Orientation

Directors must have the ability to develop long-term visions and backcasts to formulate
strategies aimed at growth through the reorganization of our business portfolio

Communication Skills

Directors must have the ability to ensure mutual understanding and respect throughcommunication to build trust with stakeholders

The following skills matrix illustrates our approach to the values, experience, and skills required of all Directors,
as well as the distribution of skills (experience and knowledge) necessary for the Board of Directors as a whole.

Skills Matrix (Board of Directors)
Term

Age

Areas of particular specialty for each Director*Outside Directors

Career at other companies*Inside Directors

Corporate
management

Independence

Experience inpriority markets

Business development,
M&A

Marketing

〇

〇

〇

〇

Junya Suzuki

24 years 9 months

50s

―

〇

〇

〇

〇

Daisuke Inoue

6 years

50s

―

〇

〇

Wataru Watanabe

6 years

50s

―

〇

〇

Yutaka Nishimoto

3 years

50s

―

〇

〇

〇

〇

Production,
Technology, Quality〇

Legal,
Risk management〇〇

Hisashi Iso

3 years

50s―

Kazuhito Osugi

7 years 9months

70s

〇

―

〇

Kazumichi Matsuki

5 years

70s

〇

―

〇

Juichi Takeuchi

2 years

60s

〇

―

〇

〇

〇

Yukiko Hashitera

―

50s

〇

―

〇

〇

〇

〇

〇

〇

〇
〇
〇

*Term and age are at the conclusion of the ordinary general meeting of shareholders in March 22, 2024
*The above fields are those where Directors can particularly exercise their specialties based on the experiences, etc., of each member of the Board. It does not show all the experiences, knowledge, or skills possessed by each Director.

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Environment
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Nissha Group
Sustainability

Environment

Third Party
Verification

As of March 22, 2024, four of the Company's nine Directors of
the Board are Independent Outside Directors and one is a female.
In addition, all four Independent Outside Directors of the Board
have been designated as independent directors, based on the
judgment that they meet the criteria for independence stipulatedby the stock exchange and that there are no conflict of interest
risks between them and general shareholders.

■ Role of the Board of Directors
Our Board of Directors convenes for regular meetings once amonth and for extraordinary meetings as needed. The meetings
are chaired by the President.
The Board of Directors is responsible for formulating strategies
and supervising. Along with making decisions in accordance with
the Board of Directors Regulations regarding matters requiring adecision by the Board of Directors in accordance with the provisions of laws, regulations, and articles of incorporation, and on
key matters for business management, it also supervises the workof Directors and Corporate Officers.
In order to ensure flexibility and expertise in business judgements, we have in place a system in which matters to be resolved
at the general meeting of shareholders, such as distribution of
surpluses and acquisition of treasury stock, can be decided by the
Board of Directors.
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 ofthe transaction. In addition, we must obtain the approval of the

Nissha Sustainability Report 2024

SocialHuman
RightsHuman
Resources

Fair Operating Practices/ Local Communities

Governance
Quality Management / Efficiency
and Productivity Improvement

Governance

GRI Standards Content
Index / ESG Data

Board of Directors when engaging in conflict of interest transactions as prescribed by laws and regulations with the Directors of
the Board.

Supervisory Board Members, the secretariat of the Board of Directors creates an annual schedule of board meetings and notifies members in advance.

■ Initiatives to Enhance the Content of Discussions■ Evaluation of Effectiveness of the Board of Directors

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 bothmanagement transparency and the Boardʼs oversight functions.

Since April 2016, our Board of Directors has been working on
continuous improvements to enhance the effectiveness of corporate governance by conducting an annual analysis and evaluation of the composition and operation of the Board of Directors
in the previous year.

To improve the quality of discussions among the Board of Directors, and to enhance its roles of strategy formation and supervision, Nissha sends the minutes and related materials for
the Board of Directors meetings ahead of time, and in addition,holds preliminary briefings focused on key agenda items for Independent Outside Directors of the Board and Independent Outside
Audit and Supervisory Board Members. Also, in order to ensure
full discussion, key agenda items such as the Medium-term
Business Plan and corporate acquisitions above a certain size are
discussed multiple times as reporting items before being put on
the agenda for resolution. By allocating time for explanations
and deliberation of agenda items based on their importance andnature, meetings can be conducted more thoroughly and efficiently.

For the Board of Directors meetings held in the fiscal year ended
December 2023, we conducted a questionnaire on the evaluation of the effectiveness of the Board of Directors and third-party
interviews from December 2023 to January 2024, and the Boardof Directors analyzed and evaluated the results at its meetingin February 2024. An outline of the results was disclosed in the
Corporate Governance Report submitted to the Tokyo Stock Exchange at the end of March 2024.

Furthermore, in order to further improve the monitoring functionof the Board of Directors, the management status of acquired
corporations above a certain size is regularly reported directly at
the Board of Directors meetings by local managers. The Board of
Directors meeting confirms the details and makes any necessary
points regarding them.
To secure attendance by Directors of the Board and Audit and25-4

Environment
Contents /Editorial Policy

Nissha Group
Sustainability

Environment

Third Party
Verification

SocialHuman
RightsHuman
Resources

Fair Operating Practices/ Local Communities

Governance
Quality Management / Efficiency
and Productivity Improvement

Governance

GRI Standards Content
Index / ESG Data

Reasons for Appointment and Board of Directors Meeting Attendances in FY ended December 2023

Name

Junya
Suzuki

Daisuke
Inoue

WataruWatanabe

YutakaNishimotoHisashi Iso

Reason for appointment

Attendance atmeetings ofthe Board of
Directors

Mr. Junya Suzuki has duly performed his duties as Chairman of the Board, President and CEO, such asdecision-making on important managerial issues and the supervision of the execution of operations.
He has also committed to management from medium- to long-term perspectives and has shownstrong leadership and decisiveness toward the realization of the Nissha Groupʼs Mission since he assumed office as Chairman of the Board, President and CEO in 2007. We appointed him as a Directorof the Board because we believe that he is an appropriate talented person who will continue to carryout sound growth strategies for the Company and supervise the execution of operations.

100％(18/18
meetings)

Mr. Daisuke Inoue has duly performed his duties as a Director of the Board, such as decision-making
on important managerial issues and the supervision of the execution of operations. In addition, heassumes responsibility for business management as Senior Executive Vice President and General
Manager of Devices Business Unit, working to establish and implement marketing-based strategies
for winning new orders while showing strong leadership from the perspective of the Nissha Group asa whole as an executive responsible for 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 will continue tocarry out sound growth strategies for the Company and supervise the execution of operations.

100％(18/18
meetings)

Mr. Wataru Watanabe has duly performed his duties as a Director of the Board, such as decision-making on important managerial issues and the supervision of the execution of operations. As
well as drawing up and promoting medium-term business plans as Senior Executive Vice President
and Chief Strategy Officer, he shows strong leadership in accelerating the reorganization of the business portfolio of the Company and expanding business performance by creating new businesses as
Senior Director of New Business Development Office. We appointed him as a Director of the Board
because we believe that he is an appropriate talented person who will continue to carry out soundgrowth strategies for the Company and supervise the execution of operations.

100％(18/18
meetings)

Mr. Yutaka Nishimoto has duly performed his duties as a Director of the Board, such as decision-making on important managerial issues and the supervision of the execution of operations. As
Executive Vice President and Chief Quality and Production Officer, he is working to establish a comprehensive quality assurance system and to design and implement the optimum deployment of production capacity in accordance with our business strategy from the perspective of the Nissha Group
as a whole. At the same time, he shows strong leadership in putting in place an efficient and costadvantageous logistics system from a global point of view as an executive responsible for Corporate
Logistics. We appointed him as a Director of the Board because we believe that he is an appropriate
talented person who will continue to carry out sound growth strategies for the Company and supervise the execution of operations.
Mr. Hisashi Iso has duly performed his duties as a Director of the Board, such as decision-making
on important managerial issues and the supervision of the execution of operations. He assumes responsibility for business management as Executive Vice President and General Manager of Industrial
Materials Business Unit, working to establish and implement marketing-based strategies for winningnew orders while showing strong leadership in putting in place an efficient and cost advantageous
procurement system from a global point of view as an executive responsible for Corporate Supply
Chain. We appointed him as a Director of the Board because we believe that he is an appropriate talented person who will continue to carry out sound growth strategies for the Company and supervise
the execution of operations.

Nissha Sustainability Report 2024

Name

Reason for appointment

Attendance atmeetings of theBoard of Directors

Kazuhito
Osugi

Mr. Kazuhito Osugi has given valuable advice and opinions across the whole range of theCompanyʼs management, making the most of the deep insight in the field of finance hehas cultivated in the Bank of Japan over the years and broad experience fostered by participating in corporate management as an Independent Outside Director of the Boardfor the Company or other companies. Mr. Kazuhito Osugi 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 because we expect that he will continue to givehis valuable counsel and strive to enhance management supervisory functions from an
independent point of view across the whole range of the Companyʼs management.

100％(18/18
meetings)

Mr. Kazumichi Matsuki has given valuable advice and opinions across the whole rangeof the Companyʼs management, making the most of his hands-on experience in proactive and broad business development and deep insight concerning its governance as heassumed important posts regarding legal affairs and compliance at a company globally
Kazumichi developing business while participating in corporate management at manufacturers.
Mr. Kazumichi Matsuki has duly performed his duties, such as the supervision of the
Matsukiexecution of operations. We appointed him as an Independent Outside Director of theBoard because we expect that he will continue to give his valuable counsel and strive toenhance management supervisory functions from an independent point of view acrossthe whole range of the Companyʼs management.

100％(18/18
meetings)

JuichiTakeuchi

Mr. Juichi Takeuchi has given valuable advice and opinions across the whole range of
the Companyʼs management, making the most of his broad hands-on experience andextensive knowledge in the medical market, a priority market of the Company, as he has
been engaged in management strategies, alliances, sales and marketing in a medical
devices company, where he led its global strategies and assumed responsibility for its
overseas subsidiaries over the years. Mr. Juichi Takeuchi 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 because we expect that he will give his valuable
counsel and strive to enhance management supervisory functions from an independent
point of view across the whole range of the Companyʼs management.

100％(18/18
meetings)

YukikoHashitera

Ms. Yukiko Hashitera has experience in leading an IPO and corporate management as
Representative Director and President of a bio venture company after engaging in research and development in the pharmaceutical industry related to the medical market,
a priority market of the Company. Ms. Yukiko Hashitera also has broad hands-on experience and extensive knowledge in corporate management, innovations, and humanresources development gained by co-founding and serving as CEO of an incubator tocreate new businesses. We appointed her as an Independent Outside Director of theBoard because we expect that she will give her valuable counsel and strive to enhance
management supervisory functions from an independent point of view across the whole
range of the Company's management.

Appointed in
FY2024100％(18/18
meetings)

100％(18/18
meetings)

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Environment
Contents /Editorial Policy

Nissha Group
Sustainability

Third Party
Verification

Environment

SocialHuman
RightsHuman
Resources

Major Items Discussed in the Board of Directors meeting in FY ended December 2023
Theme

Agenda‒ Interim review of the 7th Medium-term Business Plan and formula -tion of the 8th Medium-term Business Plan
Management strategy‒ Personnel matters concerning Directors of the Board and Audit andSupervisory Board Members/Corporate Officers‒ Compensation of Directors of the Board

Corporate measures

Quality Management / Efficiency
and Productivity Improvement（1）The appointment/dismissal standards for Directors of the Board and the appointment stan-dards 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（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

Investment projects‒ Preliminary deliberations related to corporate acquisitions

and monitoring‒ PMI of major overseas subsidiaries, management briefings by CEO‒ General meeting of shareholders‒ Evaluation of the effectiveness of the Board of Directors‒ IR and SR reporting‒ Presentations by corporate officers (business reports)

25-4 Nomination and Compensation Committee

GRI Standards Content
Index / ESG Data

With consultation from the Board of Directors, the Nomination and Compensation Committee deliberates on and provides a response regarding the following matters.

‒ Financing (including issuing bonds, borrowing, etc.)‒ Verification of the reasonableness of cross-shareholdings

Governance■ Role‒ Consideration of shareholder return measures‒ Activity reports of Sustainability Committee, ESG Task ForceOthersFair Operating Practices/ Local Communities

Governance（6）Compensation of Directors of the Board■ Membership (as of March 22, 2024)（1）Four independent members:

Kazuhito Osugi (Independent Outside Director of the Board and Committee Chair)
Kazumichi Matsuki (Independent Outside Director of the Board)
Juichi Takeuchi (Independent Outside Director of the Board)
Yukiko Hashitera (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 Senior Executive Vice President)■ Nomination and Compensation Committee meetings held and attendance in FY■ Purpose

ended December 2023

We establish a Nomination and Compensation Committee as an advisory panel for the Board of Directors in order to ensure the objectiveness and fairness of the appointment/dismissal of Directors of
the Board and the appointment of Audit & Supervisory Board Members, and incorporate the knowledge of Independent 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 from Independent Outside Directors of the Board.

During the fiscal year ended December 2023, there were four meetings of the Committee, and the attendance status of each member is described below.

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Contents /Editorial Policy

Nissha Group
Sustainability

Name

Environment

AttendanceSocialThird Party
Verification

Name

Human
RightsHuman
Resources

Attendance

Kazuhito Osugi

100%

4/4meetings

Juichi Takeuchi

100%

4/4meetings

Asli M. Colpan *100%

4/4meetings

Junya Suzuki

100%

4/4meetings

Kazumichi Matsuki

100%

4/4meetings

Wataru Watanabe

100%

4/4meetings*As of March 22, 2024, Ms. Asli M. Colpan stepped down from the Nomination and Remuneration Committee, and Ms. Yukiko Hashitera wasnewly appointed to the same committee.

■ Major Items Discussed by the Nomination and Compensation Committee in FY

ended December 2023
‒ Composition and candidates for Directors of the Board and Audit and Supervisory Board Members‒ Chairman of the Board, Titled Directors, and the CEO‒ Remuneration for Directors towards the 8th Medium-term Business Plan
‒ Amount of compensation of Directors of the Board

25-5

Audit and Supervisory Board Members and the Audit and Supervisory Board■ 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 certified public accountants and attorneys with a focus on specialized knowledge in financial matters, accounting,and legal affairs, who satisfy the requirements of not only the Companies 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 and Supervisory 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 deliber-

Nissha Sustainability Report 2024

Fair Operating Practices/ Local Communities

Governance
Quality Management / Efficiency
and Productivity Improvement

Governance

GRI Standards Content
Index / ESG Data

ated 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 and two are Independent Audit and Supervisory Board Members. All two Independent Audit and Supervisory Board Members have been designated as independent officers, as theymeet the standards of independence established by the stock exchange and are judged not to have aconflict of interest with general shareholders.

■ Role of Audit and Supervisory Board Members and the Audit and Supervisory 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, ourArticles of Incorporation, and internal regulations, and make appropriate decisions from an independent,
objective standpoint on electing and dismissing accounting auditors and exercising their authority relating to audit fees, etc. Independent Audit and Supervisory Board Members draw on their highly specialized
knowledge as certified public accountants and attorneys 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, theaudit structure, and the audit standards that describe the evaluation basis for audits and the action
guidelines. In accordance with these, 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 Directorsʼ meetingsand other important meetings, review approval documents and other important documents, perform
visiting audits at major offices and affiliated companies, and regularly exchange views with the President
and CEO, Directors of the Board, and General Managers. In order to increase the effectiveness of audits,
Audit and Supervisory Board Members hold regular meetings and coordinate closely with the Accounting
Auditor, Internal Audit, and corporate divisions such as Corporate Finance and Corporate Legal Affairs.
Full-time Audit and Supervisory Board Members regularly hold the Group board of auditorsʼ meetings
with the Audit and Supervisory Board Members of the Nissha Group companies in Japan, at which theyshare information and exchange opinions, as well as work to strengthen and enhance auditing in theGroup companies, such as by jointly conducting visiting audits.

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Environment
Contents /Editorial Policy

Nissha Group
Sustainability

Environment

SocialThird Party
Verification

Human
RightsHuman
Resources

Fair Operating Practices/ Local Communities

Reasons for Appointment and Board of Directors/Audit and Supervisory Board Meeting

Name

TetsuyaTaniguchi

Kenji Imai

Reason for appointment

Mr. Tetsuya Taniguchi engaged in operations of corporate
communications, investor relations and corporate social
responsibility, after having been in charge of operations in
the general affairs, and strived for transparency and clarity indisclose for shareholders and investors. Also, he has extensive knowledge of the Nissha Groupʼs business as a whole.
Since he assumed the position in March 2020, Mr. Tetsuya
Taniguchi has duly performed supervisory functions as a
Full-time Audit and Supervisory Board Member of the Company, making the most of the broad experience and insighthe has gained. We appointed him as an Audit and Supervisory Board Member since we believe that he will continue to
execute his duties appropriately.

100％(18/18
meetings)

Mr. Kenji Imai is well-versed in the Groupʼs businesses andhas broad experience and deep insight cultivated throughhis long career of engaging in sales and business strategies
in the Industrial Materials and Devices businesses of theCompany by leading the formulation and implementation of
performance and investment plans. Since he assumed theposition in March 2022, Mr. Kenji Imai has duly performed
supervisory functions as a Full-time Audit and Supervisory
Board Member of the Company, making the most of thebroad experience and insight he has gained. We appointed
him as an Audit and Supervisory Board Member since we believe that he will continue to execute his duties appropriately.

100％(18/18
meetings)

Nissha Sustainability Report 2024

Quality Management / Efficiency
and Productivity Improvement

Governance

GRI Standards Content
Index / ESG Data

YusukeNakanoMr. Yusuke Nakano has deep knowledge of finance, ac counting and management administration as a certified
public accountant and profound wisdom in governing corporate management, and has been auditing the Company
from his professional perspective. He also participates incorporate management as an independent outside directorof the board of another company, an Independent Audit
and Supervisory Board Member of the Company and an
independent audit and supervisory board member of othercompanies. We appointed him as an Audit and Supervisory
Board Member since we believe that he will continue toreflect his experience and deep insight in the audit of theCompany from an independent point of view.

100％(18/18
meetings)

100％(13/13
meetings)

YusakuKurahashi

Mr. Yusaku Kurahashi has extensive insight in corporate
governance, risk management, and corporate legal affairs
cultivated through his hands-on experience as a lawyer, as
well as a global perspective gained though his experienceabroad. He has also participated in corporate management
as an Independent Outside Director of the Board (Audit andSupervisory Committee Member) and an Independent Audit
and Supervisory Board Member of other companies. In lightof such broad experience and deep insight, we appointed
him as an Audit and Supervisory Board Member since wejudge that he can appropriately execute his duties as an
Independent Audit and Supervisory Board Member from an
independent point of view.

Appointed in
FY2024

Appointed in
FY2024

Attendances in FY ended December 2023
Attendance atAttendance atmeetings ofmeetings of
the Audit andthe Board ofSupervisory
Directors
Board

Governance100％(13/13
meetings)

100％(13/13
meetings)

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SocialHuman
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Resources25-6 Compensation of Directors of the Board and Audit
and Supervisory Board Members■ Basic Policy on Compensation of Directors of the Board and Audit andSupervisory Board Members
We establish a compensation system for Directors of the Board and Audit and Supervisory Board
Members based on the individual ʼs role in business execution and management oversight, and sothat the role may be fulfilled appropriately, toward linking the compensation with the sustainablegrowth of the Nissha Group and the enhancement of our corporate value over the medium to longterm. In particular, our policy on compensation of Directors of the Board who are responsible forbusiness execution, is to ensure that the system promotes value sharing with our shareholders andcontributes to the improvement of our financial results and corporate value.

■ Policy for determining the details of individual compensation for Directors of
the Board (hereinafter, the “determination policy”)
Method of determining the determination policy
The Company resolved the determination policy at the meeting of the Board of Directors held on February 19, 2021. The Company consulted the Nomination and Compensation Committee in advanceregarding the details of the resolution made at the meeting of the Board of Directors and received its
report.
Outline of the details of the determination policy
The Companyʼs compensation plan for Directors of the Board was designed to lead to the sustainablegrowth of the Nissha Group and the improvement of corporate value over the medium to long term
and to ensure that their respective duties are duly performed.
The basic policy on compensation for Directors of the Board who are responsible for business execution is to promote the sharing of value with shareholders and contribute to the improvement ofcorporate performance and corporate value. The compensation consists of a base salary (monetarycompensation), which is fixed compensation, bonus (monetary compensation), which is short-

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Index / ESG Dataterm performance-linked compensation, and stock compensation, etc., which is medium- to longterm performance-linked compensation. The base salary (monetary compensation) is fixed monthly
compensation and determined based on the importance of duties each Director of the Board is
responsible for and their positions. The bonus (monetary compensation), which is short-term performance-linked compensation, is based on periodic profit or loss, such as consolidated net sales andconsolidated operating profit, as indicators to function as an incentive to achieve performance targets for each fiscal year and to encourage appropriate management. The Company determines theamount of the bonus by evaluating the level of achievement of the performance targets and pays it ata fixed time each year. Stock compensation, etc., which is medium- to long-term performance-linked
compensation (non-monetary compensation, etc.), was designed to function as an incentive to promote a sense of contribution to the sustainable growth of the Nissha Group and the improvementof corporate value over the medium to long term. Specifically, a Board Benefit Trust (BBT) is used.
Under this system, the Company awards points to Directors of the Board, etc. according to their titles
and the attainment levels of consolidated performance targets as well as medium-term performancetargets for each fiscal year during a three-year period covered by the medium-term business plan.
On a fixed date in every final fiscal year of the medium-term business plan, the Company grants or
pays shares in the Company and cash equivalents of such shares at their market value (hereinafter
together, “Company Shares”) through the trust according to the number of points awarded. As for indicators for awarding points, consolidated net sales and operating profit are used for the consolidated
performance targets for each fiscal year, while the level of achievement of ROE, one of our key business management indicators set forth in a medium-term business plan, is used for the medium-term
performance target.
The ratios of compensation by type are determined based on the compensation level of companies ofa similar scale to the Company and those in related industries and general trends.
Compensation for Independent Outside Directors of the Board does not include performance-linked
compensation as they supervise management from a standpoint independent from business execution. It consists solely of a basic salary, which is fixed compensation, and is determined by considering
the career and responsibilities of the relevant Independent Outside Director of the Board.
The Company has established a Nomination and Compensation Committee as an advisory panel for
the Board of Directors of the Company. The Nomination and Compensation Committee is chaired by
an Independent Outside Director of the Board and the majority of its members are Independent Out-

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side Directors of the Board. The Chairman of the Board, President
and CEO prepares proposed compensation amounts for Directors of the Board in accordance with predetermined calculation
methods within the range of compensation limits determined at
general meetings of shareholders. Upon consultation by the Boardof Directors, the Nomination and Compensation Committee deliberates the details of the proposed compensation amounts andsubmits a report to the Board of Directors. The Board of Directors
then determines the compensation amounts based on the report.

■ Results of FY ended December 2023

Reasons for the Board of Directorsʼ determination that thedetails of compensation for Directors of the Board for the
fiscal year ended December 2023 are in line with the determination policy

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

257

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

The Nomination and Compensation Committee deliberated on
the individual compensation for Directors of the Board for the fiscal year ended December 2023 from various viewpoints and confirmed that the details of compensation for Directors of the Boardand the determination process are in line with the determination
policy. With respect for the report from the Nomination and Compensation Committee, the Board of Directors determined that thedetails of compensation are in line with the determination policy.

■ Matters regarding compensation for Audit andSupervisory Board Members
Compensation for Audit and Supervisory Board Members isdetermined through discussions among Audit and Supervisory
Board Members within the range of compensation limit determined at a general meeting of shareholders. It consists solely ofa fixed basic salary as Audit and Supervisory Board Members are
responsible for auditing the entire Nissha Group from an independent standpoint.

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Compensation by category (Million yen)

Title

Fixed
Total
compensationcompensation(Million yen)
Base salary

Performance-relatedcompensation

Number ofmembers

Bonuses

Stock compensation, etc.
(Non-monetarycompensation, etc.)

171

45

40

5

33

33

―

―

2

54

54

―

―

6

* The performance-linked stock compensation, etc. is stated at the amount of provision for management board benefit trust recorded for the current fiscal year. The Company Shares weredelivered on a fixed date after the end of the period covered by the 7th Medium-term Business Plan (from January 1, 2021 through December 31, 2023).

25-7 Corporate Officers
To respond flexibly to changes in the business environment,
Nissha considers it important that the experiences, knowledge,
abilities, ages, and so on of Corporate Officers be both the bestand distributed without bias. The term of Corporate Officers is
one year.

foreign nationals and one is female.
Corporate Officers include persons with experience of working
overseas or at other companies, as well as those with expertisesuch as those with master's or doctoral degrees.

■ Diversity of Corporate Officers (as of January 1, 2024)
At present, we have 18 Corporate Officers, of which two are

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Initiatives of Internal Audit Office26-1 Systems

26-2 Audit Content

In order to maintain independence and objectivity, the Internal Audit
Office is independent of operating departments and is under the directcontrol of the Chairman of the Board.

Audits by Internal Audit Office are broadly classified into "internal control audits" and "theme audits" based on the Financial Instruments
and Exchange Act. Internal control audits are conducted jointly withaccounting auditors by selecting the scope of evaluation from theperspectives of company-wide controls, financial reporting, businessprocesses, and IT controls. This auditing is aimed at guaranteeing thereliability of financial reporting as a result of assessing the effectivenessand efficiency of the Nissha Group ʼ s business activities. The Internal
Audit Office also audits the legal compliance status of business activitiesof the Nissha Group and the Risk Management and Compliance Committee activites. In this context, the assessments concerning importantrisks selected by the Risk Management and Compliance Committee
include business ethics matters such as the prohibition of corruption.
These assessments are audited to ensure they are being properly andeffectively conducted in accordance with risk management and compliance regulations. Theme audits, on the other hand, use a risk-based
approach to select themes at the beginning of each fiscal year to audit
risks that cannot be covered by internal control audits.

Our Internal Audit Regulations outline fundamental matters concerning internal audits. They set forth a system for drafting or revising our
medium-term audit plans and fiscal year audit plans that adjust to our
medium-term business plans and changes in law and the social andeconomic environment, and then acquiring the approval of the Chairman of the Board, President and CEO. The audits are implemented for
all Nissha Group business operations in a method that covers all major
sites over the three years medium-term business plan, and conductedin accordance with the annual plan.
After the audit, advice and recommendations are given to the departments subject to the audit, and after a certain period of time, follow-up
audits are conducted to check the status of improvements in the areas
identified. Audit results are reported and advice given at monthly meetings with the Chairman of the Board, President and CEO.
Additionally, the Internal Audit Office hold one meeting per quarterwith the Full-time Audit and Supervisory Board members in which theyreport on their activity status, exchange opinions, and ensure mutual
collaboration with the Audit and Supervisory Board. Moreover, once perquarter, the three entities of the in-house Directors, Full-time Audit
and Supervisory Board members, and Internal Audit hold a meeting(Triangle QBR). Therein, the Internal Audit reports on information andissue awareness it gained during the processes of auditing. This content
is reported, together with the annual audit plan, once per half-year at
the Board of Directors meeting. It contributes to the strengthening ofNisshaʼs audit and supervisory functionality.

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27.

Governance

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Internal Control
SystemNissha has established an Internal Control Policy by a decision of
the Board of Directors to provide a system to ensure the appropriateness of work as stipulated by the Companies Act. Nissha isworking to improve our corporate value by constructing and operating an Internal Control System to guarantee that the work ineach of the companyʼs organizations is being done legally, appropriately, and efficiently. To ensure reliability of financial reporting,
we submit the assessment results of our internal control systemin the form of internal control reports to the Prime Minister of Japan and disclose the contents to our shareholders and investors.

26-3 Initiatives for FY2023
In the fiscal year ended December 2023, in addition to an internal
control audit, a theme audit was carried out on the status of support
for laws and regulations in relation to the Act Against Delay in Payment
of Subcontract Proceeds, etc. to Subcontractors and the Electronic
Books Maintenance Act, as well as one on the status of managementof poisonous or hazardous item storage facilities. An audit was also carried out related to the overall business management of domestic andoverseas affiliated companies selected through risk analysis.

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28. Risk Management and Compliance
Through our Risk Management and Compliance Committee, and based on our Risk Management
Policy, the Nissha Group conducts centralized management over risks that hinder business operations. Once a year, based on the business models for each company and the business organizations,
we prioritize and appropriately control risks that could hinder the continuity of business activities for
all companies, in cooperation with the departments and subcommittees that have primary responsibility for risk.

28-1 Policy

Risk Management Policy
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 the enrichment of peopleʼs 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, we work to minimize damage, resume business activities as quickly as possible, and prevent recurrence.
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 acontinuous basis to ensure effective risk management at all times.

Junya Suzuki
Chairman of the Board, President and CEO
Nissha Co., Ltd.
Established on July 1, 2015 / Revised on January 1, 2022

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28-2 Guidelines

28-3 Structure

The Group has sets “Act with Integrity” (we act with integrity and maintain the trust placed) as oneof the Shared Values that are principle of employee behavior. And we declared that each officer andemployee should act in good faith and continue to be a trusted company. We established the Corporate Ethics and Compliance Guidelines, which sets out the basic ideas concerning corporate ethics
and compliance that each officer and employee is expected to follow.

Nissha has established a Risk Management and Compliance Committee chaired by Director of theBoard, Senior Executive Vice President (in charge of legal affairs) and composed of all in-house Directors of the Board. The Risk Management and Compliance Committee holds a general meeting
once a year and progress confirmation meetings every quarter, and reports to the Board of Directors
each year on the status of activities. The Board of Directors oversees the activities of the Risk Management and Compliance Committee, discusses reports from the Committee, and gives improvement instructions as necessary.

In addition, the Nissha Group has prepared the Corporate Ethics and Code of Conduct Manuals as away to more clearly embody the Corporate Ethics and Compliance Guidelines and make it more understandable to our employees. Along with distributing this to all employees, it has also been postedon the Nissha intranet. This Manual was prepared in Japanese, English, Chinese, and Vietnamese,and having the entire company study it at the same time is designed to ensure awareness, alongwith the Corporate Ethics and Compliance Guidelines.

Corporate Ethics and Compliance Guidelines
Nissha Group acts according to the “Principles” in order to realize the enrichment of peopleʼs lives by always
creating technology and developing it into economic and social value.

Principles
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
and norms, also act according to “Corporate Ethics and Code of Conduct”.
4. If we witness any actions contrary to the “Corporate Ethics and Code of Conduct" or are suspicious ofcertain behaviors or decisions, we should immediately report to and consult with our supervisors.
Junya Suzuki
Chairman of the Board, President and CEO
Nissha Co., Ltd.
Established on April 1, 2012 / Revised on January 1, 2022

Nissha Sustainability Report 2024

The Risk Management and Compliance Committee centrally manages the cross-company risks,business risks, and financial risks of the Nissha Group on a global basis. Of these, for the cross-company risks, the Committee selects key risks in line with the results of the risk assessment at the annual general meeting. The selected key risks are set as key performance indicators for the lead departments or subcommittees, and minimized through their activities. In addition, the status of these
activities is reported in the progress meetings, and the Committee confirms whether the set KPIs
are progressing as planned, and rotates the PDCA cycle (the Sustainability Committee manages the
progress of materiality risk items).
The Business Review for each businessdivision and the Investment Committee
for the corporate finace department
manage business risks and financial risks.
Progress is reported at the annual general meeting, and the Committee checks
the contents.
In addition, if a serious risk incident arises(including a serious report to the hotline),
the Risk Management and Compliance
Committee convenes on an emergency
basis.

Board of Directors
ReportSupervise

Risk Management and Compliance Committee
Committee Chair(Director of the Board, Senior Executive Vice President,
Legal Affairs)

Secretariat(Corporate Legal Affairs
and Global Integration Planning Departments)

Business divisions, lead departments,and subcommittees that manage risks

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28-4 Risk Assessments
The Risk Management and Compliance Committee carries out
risk assessments on the 16 items to the right under its purview.
The lead departments or subcommittees that manage the key
risks selected through this risk assessment set Key Performance
Indicators and action items, and work to mitigate these risks
through their activities.
We aim to conduct risk reduction that is even more in line withbusiness activities. In addition to the Headquarters Corporate
Division risk assessment, risk priority levels will be considered inbusiness units and affiliated companies as well. General Managers will select key risks, taking into account the process ofconfirming appropriateness from a business management perspective. Furthermore, Group companies overseas study within
their business departments the priorities and appropriateness ofhigh-priority risks selected by each company and select key risks.

■ Risk Assessments and Risk Management Methods(1) Evaluation targets• All Group companies in Japan• 55 Group companies oversea (Including when major
overseas subsidiaries and their own subsidiaries have been
evaluated.)(2) Target risks• Cross-group risks (including compliance risks)(3) Selection process for key risks
The following process is used by the Risk Management andCompliance Committee to select key risks.

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Fair Operating Practices/ Local Communities(i) For the above cross-group risks, the high-value risks calculated using the "probability of occurrence" and "impact
when it occurs" horizons are considered the "inherent risks".
(ii) In addition, the "effectiveness of control activities" is evaluated, and risks with low "effectiveness of control activities"
with respect to "inherent risks" are selected as key risks.
(3) Management method

Key risks
Low "effectiveness of control
activities" withrespect to "inherent risks"

The lead department or subcommittee
sets the Key Performance Indicators andaction items to mitigate risks. The progressof these activities is monitored by the Risk
Management and Compliance Committee.
(Business risks are spearheaded by thebusiness organization, which checks via
business reviews, etc.)

High "effectiveness of control
activities" withrespect to "inherent risks"

Subject to monitoring, and the Risk Man agement and Compliance Committee
confirms the status of maintenance andoperation by the lead department or subcommittee.

Cross-grouprisks other than"inherent risks"Managed by the business organizationand lead department, and reported at theMonthly Business Review (MBR)

The following items are also positioned as content for corporate
ethics and compliance that officers and employees of the Nissha
Group should follow.

Governance
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and Productivity Improvement

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1. Fair business practices (violation of antitrust laws, violation of unfair competition laws, threats and coercion
against anti-social forces and companies, bribery andcollusion with business partners, insider trading, circular transactions, etc.)
2. Labor and human rights (harassment (e.g. sexual
harassment, power harassment), health and mental
health management, health and safety, etc.)
3. Enhancement of human capital (ensuring management human resources and global human resources,
mismatch between business portfolio and human resources portfolio, etc.)
4. Ensuring quality and safety of products/services (useof banned substances, quality falsification, recalls andserious complaints, etc.)
5. Ensuring quality and safety of medical products/services (use of banned substances, violation of the Pharmaceuticals and Medical Devices Act)
6. Intellectual property rights (patent infringement, information contamination, etc.)
7. Supply chain management (supplier management (labor and human rights, health and safety, environment,
information security, compliance), child labor andforced labor, etc.)
8. Environmental protection (climate change response,
waste management, chemical substances management, water pollution, etc.)
9. Trade management (trade management (e.g. violationof foreign exchange and customs laws))
10. Information systems (theft and leakage of confidential

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In the fiscal year ended December 2024, as a result of the risk
assessment, the Nissha Group in Japan has chosen as key risks fairbusiness practices, labor and human rights, product and service
quality and safety, medical product and service quality and safety,
supply chain management, information systems, and business
continuity. The Nissha Group overseas has selected labor andhuman rights, financial affairs, information systems and business
continuity.

and personal information, information leaks via SNS,
malware infection, etc.)
11. Asset management (misappropriation of company
property (money), theft or loss of company assets)
12. Business continuance (natural disasters (earthquakes,
typhoons, floods, etc.), fire and accidents)
13. Business strategies (changes in competitive/market
environments)
14. Business development (development delays, interruption in technology)28-5 Promotion of Corporate Ethics
and Compliance

15. Production activities (design defects, release of defective products)
16. Finance (failure of capital planning, exchange rate
fluctuations)

The Risk Management and Compliance Committee promotes
corporate ethics and compliance activities throughout the entire Nissha Group. All Nissha Group bases in Japan and overseas
appoint managers and group leaders in charge of promoting
corporate ethics and compliance. Concerning compliance with
the Pharmaceutical and Medical Device Act, in order to achieve*Items in parenthesis are examples of risks.

Governance

GRI Standards Content
Index / ESG Datafurther promotion of the priority markets, we have maintained a
Medical Healthcare Consultation Desk since the fiscal year ended
December 2021 in addition to providing the above training efforts, etc.

■ Promotion Structure
The managers and group leaders in charge of promoting corporate
ethics and compliance not only implement initiatives to improve
the awareness of corporate ethics and compliance in their respective divisions but also implement corporate ethics and complianceon a day-to-day basis through organizational management, serveas handy consultants for their workplace, and, should an incident
arise, work with Corporate Legal Affairs to deal with it.

■ Awareness-raising activities
Corporate Legal Affairs also holds training sessions, etc., as a way
to further boost awareness among these promotion managers,
leaders, and other employees. During the fiscal year ended December 2023, training was conducted as appropriate for each

Corporate Ethics
and Compliance Structure

Board of Directors

Risk Management
and Compliance Committee
Committee Chair:Director in charge of legal affairs

Audit

Re

Audit and Supervisory Board(Audit and Supervisory Board Members)portReportReportSecretariat: Legal Affairs

ReportConsult /ReportManager

All Employees
SupportReport /Consult

Group Leader

Report / Consult

Appointed Employee(if required)(Full-time employees,
contracted employees,
temporary employees etc.)

ReportHotline (External)
Report / Consult

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department or affiliated company with themes such as the Antimonopoly Act or insider trading restrictions. Carrying out trainingthat is relevant to the work of trainees has further improved onsite employee awareness of compliance.
And overseas, our Europe, China, and North American bases are
identifying and reducing risks according to regional characteristics. During the fiscal year ended December 2023, training washeld at EU bases on money laundering and personal data, at Chinese bases on the RBA Action Guidelines, and at North Americanbases on internal whistleblowing systems.

■ Company-wide Simultaneous Training, etc.
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 isprovided not just for full-time, contract, and temporary employees, but for managers of subcontractors and even part-timers.
In the fiscal year ended December 2023, at domestic bases,
we selected training themes from the significant risks identified
through risk assessment, focusing on fair business practices, labor and human rights, and appropriate handling of information.
In our Western and Asian bases as well, we introduce examples
on themes the Nissha Group deems important and hold training
corresponding to the laws and customs related to each differingbusiness operation content at all domestic and overseas bases.
The ratio of those taking training during the fiscal year ended December 2023 at domestic bases was 100% (2,911 people).
Questionnaires are sent out after each company-wide simultaneous training session to collect a wide range of information andopinions from all employees about concerns and actions thatneed to be improved in the workplace from the perspective ofcorporate ethics and compliance. Examples and results of improvements based on this information are reported to the Risk

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Management and Compliance Committee, along with reports on
training implementation.

■ Officer Training, etc.
At the Nissha Group, in addition to company-wide simultaneoustraining, we also hold compliance training designed for officers.
In April 2024, we invited an external instructor (a lawyer) to
provide training on global compliance and global internal whistleblowing systems.

28-6 Hotline
The Nissha Group in Japan 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, andultimately enhancing our corporate value.
We are working to disseminate information about the hotline
through the Corporate Ethics and Code of Conduct distributed
to all employees, the Labor and Human Rights Handbook, theNissha Group intranet, in-house training, and awareness posters.
All employees working for the Group in Japan and overseas canuse this service, and in the fiscal year ended December 2019, we
expanded the scope of users by establishing a contact point forsome 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 disadvanta-

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geous 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 Legal Affairs. The Corporate Legal
Affairs liaises with the relevant departments after consultingwith the outside attorney about the best way to investigate andconfirm the issue. Said investigation and confirmation are thencarried out with consideration for the protection of the whistleblower. The content is reported to the Risk Management andCompliance Committee, 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 2023 are shown below.
• Hotline Consultations (for employees): 8 cases (Including 2
from overseas bases)
The contents mainly dealt with human relations in theworkplace and harassment. In all cases, warnings and guidance were given and the workplace environment improved,correcting the issues. An overview summary was disseminated via the Nissha intranet, awareness was raised foreveryone instead of just for the perpetrators, and measures
were taken to prevent recurrence.
• Supplier hotline: 0 cases
For overseas locations as well, in addition to already operating
report acceptance services for some group companies in China
and the Southeast Asian region, we commenced the operationof report acceptance services in some North American and European bases starting in the fiscal year ended December 2023.

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Hotline Organizational Chart (Nissha Group in Japan)

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28-7 Dealing with Antisocial Forces

Whistle-blower (consulter)
ReportingComplaint

Hotline (outside attorney)
Complaint

Corporate Legal Affairs
Investigationcooperation
requestInvestigationcooperation
request* When the likelihood ofinternal whistleblowing is low* In case of possible
internal
whistleblowing

Complaint* When the subjectof the complaintis officers

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 advancethrough the prescribed procedures that our existing and new
business partners are not members of antisocial forces. This has
cut off all possibilities of involvement in money laundering by antisocial forces.

Audit and Supervisory
Board Members
Investigationcooperation request

Suitable division

Relevant division
関係部門

Reporting

Reporting

法務部

orCorporate Legal Affairs or Audit and Supervisory Board Members

監査役

Reporting* Consideration for theprotection of whistle-blower

Risk Management and Compliance Committee
Request for recurrence prevention measures

Suitable division

Request for discipline

Corporate Human Resources
and Employee Benefits
Disciplinary action
through a separate
procedure

Violator

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29. Information Security
29-1 Policy and Principles

29-2 Management Structure

The Nissha Group has created, and continues to operate, an Information Security Management System(ISMS) based in the ISO27001 that is applied to all group companies, and that reflects our Information
Security Policy and our principles outlining specific conduct and regulations known as the Information
Security Principles. We prevent threats to the leak of important information received from our customers
and suppliers and important information managed under tight control within the company, particularly
highly confidential information assets such as new product information, advanced technologicalinformation, and personal information.

As an organization to promote information security within the Nissha Group, the Information Security
Subcommittee was established under the Risk Management and Compliance Committee, and works on
maintaining and improving the ISMS*.

Information Security Policy
Nissha Group constructs a reliable and safe information security management system (ISMS) based on an understanding of the importance of information security in business activities and continually improve this in order tocontinue to be a company that provides economic and social value to our stakeholders.
Junya Suzuki
Chairman of the Board, President and CEO
Nissha Co., Ltd.

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 entire Nissha Group, including overseas
affiliates. For each affiliated company and department, an information security manager and an information
security promoter are appointed, and ensures the system operates in each workplace. In addition, the ISMS
secretariat plays a central role in conducting reviews for top management, internal audits of the ISMS, andregular ISO27001 audits by external examiners to provide opportunities for improvement.
* ISMS=Information security management system

Management Structure
Risk Management andCompliance Committee

Information Security Principles
1. We shall continually improve our information security management system by establishing, implementing, andreviewing the information security objectives so that the confidentiality, integrity, and availability of information
assets can be maintained and improved.

ISMS Management
Representative(Head of Information
Security Subcommittee)

2. We shall comply with laws, regulations, and contract stipulations related to information security.
3. We shall establish criteria for rationally evaluating risks related to information security and methods for risk assessment, and work to maintain and improve information security.

ISMS Internal Audit Team

4. We shall work to prevent the occurrence of incidents or accidents related to information security, and, if an accident does occur, shall respond promptly and work to both minimize damage and prevent recurrence.
5. Nissha People shall understand the Information Security Policy and Basic Principles, and always act with anawareness of information security.
Shinichiro Kobayashi
Vice President, Chief Information Officer
Nissha Co., Ltd.

Information Security
Managers

Information Security
Managers

Information Security
Managers

Information Security
Managers

Information Security
Promoters

Information Security
Promoters

Information Security
Promoters

Information Security
Promoters

Established on July 1, 2013 / Revised on May 1, 2022

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Domestic

Overseas282
employees

52
employees

Nissha Group
Sustainability

Environment

SocialThird Party
Verification

Information Security Managers

89 employees

Information Security Promoters

193 employees

Information Security Managers

16 employees

Information Security Promoters

36 employees

29-3 Deployment of the Management
SystemThe Nissha Group operates the ISMS across all its corporations,both in Japan and overseas.
In Japan, we have obt ained ISO27001 cer tification, theinternational standard for ISMS. Overseas, we have been rollingout 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
through the PDCA cycle.

Human
RightsHuman
Resources

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29-4 Efforts for Risk Reduction

29-5 Training

The Nissha Group maintains an Information System (confidential
information, per sonal information, information securit y)as one risk area managed under the Risk Management andCompliance Committee. In the fiscal year ended December
2020, we worked on appropriate management of trade secrets
and operation. In the fiscal year ended December 2021, wepermeated this operation, performed internal auditing of theimplementation status, and promoted expansion abroad. In thefiscal year ended December 2022, we launched an initiative toappoint internal auditors from among locally hired employees tostrengthen the effectiveness of internal audits overseas and to
improve education and awareness. We brought in Multi-Factor
Authentication (MFA) to deal with recent security threats in thefiscal year ended December 2023.

Cyber attacks are becoming increasingly sophisticated day byday, so merely strengthening systems will not prevent all of them.
To prevent damage, it is essential for each and every employee tobe fully aware of information security and act with discipline sothat they can learn about threats and methods, and recognize
issues as soon as possible.

Information assets are important information that differentiates
us from our competitors and increases our competitiveness,so it is essential to reduce risks such as information leaks.
Through ISMS internal audits, we advance the permeation ofcontrol methods corresponding to the level of importance, andparticularly implement thorough and strict control concerning
trade secrets.

The Group holds training sessions for all employees, using
e-Learning, based on training materials that reflect our internal
information security policies determined in-company. The fiscal
year ended December 2023 training attendance rate was 100%.
We intend to carry out initiatives to increase awareness andliteracy among employees regarding information security. The
Nissha Group aims to improve information security through both
system enhancements and a high level of awareness and literacyof information security among each and every employee.

In addition, with the rapid progress of IT and the diversificationand spread of devices, we are working on measures to reduce
the risk of our corporate image and brand being af fected
or information leaks through social media postings. We arealso working on information security measures for personal
information devices as used for BYOD (Bring Your Own Device),in addition to company-supplied computers and terminals.

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30. Trade Management30-1 Policy and Principles

30-2 Structure

The Nissha Groupʼs ratio of overseas sales is 86.6% in the fiscal year ended December 2023. As theGroupʼs businesses expand globally, disciplined trade management is an essential issue from theperspective of business continuity.

Nissha Group trade management is now consolidated in the Trade Management Subcommittee under
the Risk Management and Compliance Committee. Across the entire Nissha Group, including overseas
affiliates, we select trade management supervisors and engage in trade management based on theTrade Management Policy, Trade Management Principles, and Trade Management Basic Regulations.

Targeting all group companies, we maintain "Trade Management Policy" and "Trade Management
Principles” outlining specific conduct, compulsory conduct, and regulations. As an Authorized
Economic Operator (AEO), we also establish necessary rules and regulations, and maintain astructure toward continuous improvement of trade management in order to respond to various
internal and external changes in the environment.

At Nissha Group in Japan, we place Trade Management Subcommittee members (responsible persons,directors, and members) in business divisions, corporate management departments, and affiliatedcompanies to create a management system. At the same time, since overseas Nissha Group companies
have different laws, regulations, and business practices in each country or region, we assign a tradecontrol manager to each base to manage.

Trade Management Policy
Nissha Group fulfills its responsibilities as a company to its stakeholders by developing a trade management system and complying with laws and regulations related to trade management, such as security
export control.

Junya Suzuki
Chairman of the Board, President and CEO
Nissha Co., Ltd.

Risk Management andCompliance Committee
Trade Administration andControl Subcommittee

Head of Trade Administration andControl Subcommittee

Trade Administration andControl Subcommittee
Secretariat

Trade Management Principles
1. We comply with laws and regulations related to trade management in each country and region.
2. We shall appoint a person responsible for trade management in our bases, and in addition to developing the trade management system, this system shall be maintained and improved.
3. We shall cooperate with public agencies and logistics partners in each country to establish a soundtrade management system.
4. Nissha People will undergo any training required for trade management, and each person shall carryout their work appropriately.
Hisashi Iso
Director of the Board, Executive Vice President, Corporate Supply Chain
Nissha Co., Ltd.
Established on October 1, 2016 / Revised on January 1, 2024

Nissha Sustainability Report 2024

Business divisionCorporate division

Affiliated companies

Overseas bases

responsible persons,directors, members

responsible persons,directors, members

trade control managers

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 Groupbases overseas, we are working on permeation of the Trade Management Policy, Trade Management
Principles, and Trade Management Basic Regulations as well as preparing management documents.

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Authorized Economic Operator (AEO) Program

Nissha Precision Technologies Malaysia Sdn. Bhd., based in
Malaysia, obtained approval as both an AEO Exporter and an AEO
Importer in October 2014. Their post-audits were conducted in
May 2022, and we maintain both approvals.

The AEO program is designed to secure and facilitate global trade
and to strengthen a country ʼ s international competitiveness byproviding benefits such as reduced or simplified customs controls

Governance

GRI Standards Content
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• Aim 2: Zero omitted declaration of charge factors: By regularly
operating that the internal post-checking system establishedto prevent occurrence is working correctly in cooperation withrelated departments, no incidents occurred in the fiscal year
ended December 2023, as in the previous fiscal year.

to operators with cargo security management and compliancestructures. The September 11, 2001, terrorist attacks on the
United States raised awareness of the necessity of an international

30-5 Training

framework for reinforcing anti-terrorism measures by ensuring
both security and efficiency in the international movement ofgoods. In 2006, the World Customs Organization (WCO) adopted
a set of AEO guidelines as a global standard and the basis onwhich countries enact laws and operate their respective AEO
programs. Japan launched its AEO program in 2006, starting with

AEO Approval Form

Quality Management / Efficiency
and Productivity Improvement

employment histories with Nissha.

30-3 AEO Approval
Nissha Co., Ltd. obtained approval as an AEO Exporter in June
2014, and as an AEO Importer in June 2015. Their second
postaudits were conducted in October 2019, and we maintain all
approvals. As of December 14, 2023, 60 companies in Japan areapproved as both AEO Importer and AEO Exporter. Being one ofthese companies with dual approval, we have in place a system
for safe and smooth international logistics.

Governanceexporters and expanding gradually into the current form.

Starting in the fiscal year ended December 2020, we provide
theme-based education oriented towards employees involved in
actual importing and exporting. In the fiscal year ended December
2023, we carried out training for 235 employees actually involvedin trade operations in Japan, regardless of their department.

■ Themes• Security trade controls• Determining relevance and screening transactions

30-4 Initiatives for FY2023• Incoterms and HS codes• Internal import/export steps

In the fiscal year ended December 2023, following on from theprevious fiscal year, we engaged in the following two items aiming to implement proper and lawful operations during importingand exporting.
• Aim 1: Zero incidents of illegal/unlawful declarations: During
the fiscal year ended December 2023, there were no casesin the shipping divisions, where one had arisen the previous
fiscal year, but there were 12 new cases in the administrative divisions. We are working to build a system to prevent
recurrences of human error by employees who have short

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31. Anti-corruption
31-1 Guidelines

31-2 Efforts to Ensure Awareness and Internal Audits

The Nissha Group regards corrupt practices, such as bribery, collusion with business partners, violations of the Competition Law and the Unfair Competition Prevention Act to be one of the major risks
managed by the Risk Management and Compliance Committee. We have established the Nissha
Group Anti-Corruption Guidelines and made them known to our bases both in Japan and overseas.

In addition to these Guidelines, the Nissha Group has set out specific standards for domestic andoverseas bases, and used the Nissha intranet to spread awareness. Also, training is provided for all
operations of the Group to ensure compliance with the relevant laws, regulations, and customs.

Nissha Group Anti-Corruption Guidelines

In the fiscal year ended December 2023, one of the case studies in the company-wide simultaneous training on corporate ethics and compliance was bribery at an overseas base. Because bribery is
an entrenched practice in some countries and regions, we conduct internal audits on a regular basis.
The Group has not identified any cases of corruption in the fiscal year ended December 2023.

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 Japanʼs Unfair Competition Prevention Act, the United Statesʼ Foreign
Corrupt Practices Act, the United Kingdomʼs 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 ourinitiatives.
4. We respond with sincerity to requests from our customers for cooperation in investigations, by providing
necessary information.
Junya Suzuki
Chairman of the Board, President and CEO
Nissha Co., Ltd.
Established on April 1, 2017 / Revised on January 1, 2018

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32. Business Continuity
32-1 Policy and Principles

32-2 Structure

We at the Nissha Group establish the Business Continuity Plans Policy, which the Business Continuity Management (BCM) Subcommittee under the Risk Management and Compliance Committee plays a central
role in promoting in preparing for and responding to emergencies such as a natural disaster or pandemic.

The BCM Subcommittee has been set up under the Risk Management and Compliance Committee
as a system for operating BCM in the Nissha Group. The President and CEO serves as the person responsible for BCM activities, and BCM Promoters have been appointed at the Nissha Co., Ltd. Head
Office and each Group company. The secretarial office holds BCM Subcommittee meetings on aregular basis. These are used to confirm initiatives and the status of improvement of BCM measures
for the Nissha Group overall, training persons in charge, and planning and carrying out BCM drills.

Business Continuity Plans Policy
Nissha Group formulates business continuity plans to minimize damage and work towards prompt businessrecovery, while ensuring the safety of human life first, in the event of a major natural disaster, fire, power cut,
epidemic, or other major event that interrupts business. In addition, we carry out regular revisions and drills toensure the effectiveness of these plans, and promote business continuance management.
Junya Suzuki
Chairman of the Board, President and CEO
Nissha Co., Ltd.

Risk Management and Compliance Committee
Business Continuity Management (BCM)
Subcommittee
BCM Activities Representative

Business Continuity Plans Principles
1. In the event of a major interruption of our business, we shall ensure the safety of human life as our top priority
while preventing secondary disasters.
2. We shall define buildings, equipment, information systems, human resources, and suppliers as key management resources/ stakeholders, and formulate business continuity plans. In addition, we shall consider changes in the business environment and regularly revise these plans.
3. We shall clarify which businesses are to be prioritized for continuance/ recovery, and achieve this recovery
within the target timeframe.
4. We shall regularly conduct training and drills related to business continuance, and work to improve our organizational capacity to respond to risks.
5. We shall contribute to society through working with local communities to support recovery and rebuilding.
6. We shall comply with laws, policies in Japan and overseas, and other norms with regards to business continuance.
Daisuke Inoue
Director of the Board, Senior Executive Vice President, General Affairs
Nissha Co., Ltd.

Nissha /BCM Promoters

Secretariat(General Affairs
Department)

Departments

Affiliated Companies /BCM Promoters

Affiliated Companies /BCM Promoters

Secretariat

Secretariat(Corporate
Administration
Department)(Corporate
Administration
Department)

Factories / Departments

Factories / Departments

Established on September 28, 2006 / Revised on May 1, 2022

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32-3 Initiatives
Nissha Group in Japan haves in place a set of Emergency Response Regulations that defines “emergency” and stipulates theaction and structure required between initial response to a disaster and business recovery. In the event of a serious interruption ofbusiness due to emergency over a certain level, such as a natural
disaster or pandemic, we set up a response task force headedby the President. In addition to habitually stockpiling supplies atmajor bases in Japan in preparation for emergencies, we also distribute “survival cards” listing information about what to do when
an earthquake strikes, educate employees using an e-Learning,and conduct emergency training to promote thorough awarenessabout the general rules for action and response in an emergency.
Our Basic Plan for 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 tochanges in management environment and reorganization, suchas managing the latest editions of relevant documents.

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Operation of a safety confirmation system

Implementation of management BCP training

We have introduced a system under which employees register

We hold BCP drills annually in accordance with the BCM

their safety information so that we can smoothly and quickly

Subcommittee Action Plan. These drills are simulations to checkconfirm their safety status in the event of a major natural disasterthat BCP functions adequately in the event of an incident such as

such as an earthquake or typhoon, a pandemic or other emer-

an earthquake.

gency. As part of our safety confirmation drill during our biannual

During the fiscal year ended December 2023, targeted at thedisaster drills, we send an e-mail to all employees simultaneously,

Devices Business Unit, Nissha Precision and Technologies, Inc.

and managers confirm the safety of the members of the compa-

Himeji Factory and Kaga Factory, Nissha FIS, Inc., and the Nissha

ny based on employeesʼ responses to the e-mail.

Head Office were linked online, and carried out drills simulating

In 2023, the other Group companies in Japan also brought in thesame system. This system allowed us to smoothly confirm employee safety after the 2024 Noto Peninsula Earthquake.

an earthquake in Hyogo Prefecture. This drill started with setting
up a base headquarters, then participants rapidly responded
within their own scope of responsibility, working to ensure
employee safety and minimize business risk.
We consider the construction and operation of BCP/BCM
important for improving the companyʼs competitiveness and also
leading to improved corporate value, and we continue to conduct
a diverse range of situation-based drills each year.

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Risk Surveys

Responses to the Noto Peninsula Earthquake

The Nissha Group carries out annual risk surveys at affiliatedIn the Noto Peninsula Earthquake that struck at 16:10 oncompanies in Japan and overseas. These surveys draw on theJanuary 1, 2024, Nissha Precision and Technologies, Inc.

expertise of specialists in risk consulting. For the fiscal year ended

Kaga Factory (Kaga City, Ishikawa Prefecture) experienced an

December 2023, the surveys covered Nissha FIS, Inc. The risk

earthquake registering an upper 5 on the Japanese seismicof fire or explosion was assessed in terms of fire management,

intensity scale. Nissha immediately moved to confirm relatedbuilding and motive power, use and processes, fire-fighting

people ʼ s safety and the situation at the factory, and at 18:00

equipment, and fire hazards, while for natural hazards, disasterwe set up the Noto Earthquake Measures Headquarter andprevention measures for lightning, earthquakes, flooding and sobegan activities. This allowed us to quickly confirm that none

on were also confirmed. Overall, the evaluation was positive, but

of our employees, including dispatch employees and contract

we will continue to implement the PDCA cycle to make further

workers, had been harmed. Although there was some damage at

improvements.

the factory to production equipment and the roof, there was no

Governance
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and Productivity Improvement

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major damage.
Later, while checking the effects on the production system
including the supply chain, we worked on recovery, and were able
to get up and running again quickly.

Kameoka Factory

Nissha FIS, Inc.

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33. Tax Principle
Nissha Group will compliance with tax laws and regulations in each country and each region based on Tax Principle, in order to fulfill our corporate social responsibilities (CSR).

Tax Principle

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

Basic Principle

amount of tax according to tax laws and regulations in each country and region.

Nissha Group will strive to minimize tax risks, enhance our corporate value by complying with tax laws and reg-

If tax authorities inform us of tax adjustments, we will immediately take appropriate measures to prevent simi-

ulations in each country and each region.

lar issues happen unless we file a petition of objection against their action or interpretation.

Nissha Group will pay close attention to the trends in the international tax framework such as Base Erosion
Profit Shifting (BEPS) project and make properly responses to such changes as a 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 approach

4. The approach of Nissha Group to risk management and governance arrangements in relation totaxation in each country and region
Nissha Group's tax policy is reviewed and controlled by our group's Chief Financial Officer who is responsible
for our groupʼs tax strategy and policies, and the status is reported to Board of Directors on an on-going basis

to tax planning, we will implement it properly and efficiently in compliance with tax laws and regulations.

through our groupʼs Chief Financial Officer.

Our group will consider taxes as an essential factor in our business planning and make use of available tax

Where there is significant uncertainty or complexity in relation to application or interpretation of tax laws, we

incentives within the scope of normal business activities. However, we will not engage in transactions for thewill take appropriate measures after seeking external advices.

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 Principle 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.

Hitoshi Koya
Executive Vice President, Chief Financial Officer
Nissha Co., Ltd.
Established on December 25, 2017
Revised on May 1, 2022

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.

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34. Responsible Mineral Procurement34-1 Policy

34-2 Initiatives

Nisshaʼs policy on conflict minerals is outlined in our Basic Approach to Responsible Mineral Procurement. We clearly state our belief that Nissha Group products do not use materials made from conflictminerals, which are used to finance armed groups involved in human rights abuses such as looting,assault, and forced labor, and we follow the OECD's conflict minerals due diligence guidance.

34-2-1 3TG Usage Status
The 3TG (tin, tantalum, tungsten, and gold) used in Nissha Group's products are shown in the tablebelow.
Segment

Basic Approach to Responsible Mineral Procurement
The Nissha Group is deeply concerned that a portion of the conflict minerals extracted by the Democratic

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 we maintaincontinuously.

3TG in use

Industrial Materials

Only a small portion of Decoration (Mobility) and
Decoration (Home appliances and others)

Tin

Devices

For Tablet devices, Smartphones, Portable gameplayers, Industrial equipment (logistics related),
Mobility, Gas sensors and others

Tin, tantalum,
tungsten, and gold

Medical Technologies

Only a small portion of Medical devices (CDMO)

Tin, tungsten, and gold

Republic of the Congo and its neighboring countries are being used as a source of funding for militia thatthrough acts of looting, violence and forced labor are infringing on fundamental human rights.

Applicable product group* The names of the segments and product lineups are in line with "25. Net sales (2) Disaggregation of revenue” in our Annual Securities Reportfrom January 1, 2023 to December 31, 2023. The proportion of net sales of products using 3TG accounted for approximately 30% in thefiscal year ended December 2023.

34-2-2 Survey Requests to Suppliers

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 tofulfill our corporate social responsibilities.
Junya Suzuki
Chairman of the Board, President and CEO
Nissha Co., Ltd.
Established on March 12, 2014 / Revised on January 1, 2018

Nissha Sustainability Report 2024

The Nissha Group, mainly through its related business units, requests suppliers to conduct a surveyof 3TG used mainly in materials for mass-produced products using the latest CMRT (Conflict Minerals Reporting Template), generally once a year. Then, based on the CMRTs submitted by suppliers,
we prepare our CMRTs and submit them to our customers.
We review the content of CMRTs submitted by suppliers, and if a refinery, etc. is no longer in business or has changed its name, we ask suppliers to resurvey.
Concerning the survey for the fiscal year ended December 2023, in addition to handling refineries

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that were removed from the Responsible Minerals Assurance Process (RMAP) compliance list due
to the impact of sanctions imposed by the U.S. government and others on Russia and refineries ourcustomers requested not to be used, we encouraged our suppliers to procure their 3TG from Conformant Smelters & Refiners. We intend to continue these kinds of efforts in the future.

34-2-3 Developing and Implementing Strategies to Address Identified Risks
In some cases, we may ask suppliers to utilize the RMAP audit program if non-certified refineries areincluded in the refinery information they have submitted in the CMRT. Additionally, concerning 3TG,
if it becomes clear that a relationship exists with a refinery upstream in the supply chain that is involved in armed forces or human rights abuses, we will consider taking strict measures in line with ourcustomerʼs requests. However, there were no such cases in the fiscal year ended December 2023.

34-2-4 3TG Survey Results
The CMRT provided by the Responsible Minerals Initiative (RMI) is designed so that the scope ofdeclaration during responding can be selected from (1) company level, (2) product level, and (3) user-defined level. However, we ask suppliers to respond at the product level in order to ensure that thesmelters of minerals used in the parts and materials for Nissha Group products can be definitively
identified. We believe that this type of surveying will enable us to identify targets for risk reduction,such as non-certified smelters and refineries, and will lead to effective due diligence.
In our 3TG survey for the fiscal year ended December 2023, we received responses from 100% of
our suppliers for almost all product lineups. As a result of analyzing the responses from suppliers, incases that included smelters that were not accredited by RMI, we took steps to reduce risk by changing suppliers and asking suppliers to utilize the RMAP audit program.
Recently, we are receiving surveys with Extended Mineral Reporting Template (EMRT) from our customers concerning minerals other than the 3TG such as cobalt.
In light of this situation, we are considering incorporating environmental perspectives in addition tohuman rights violations in our current policies, Basic Approach to Responsible Mineral Procurement.

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35. Management System and Other Certification Acquisitions
The Nissha Group's management system and other certification
status are as follows. (as of March 2024)■ Quality■ Quality
Subject Areas

ISO9001

Subject Areas

Quality

ISO13485
Medical devices

Nissha Co., Ltd.

〇 *1

Nissha Co., Ltd.

〇 *4

Nissha Precision and Technologies, Inc.

〇

Nissha Precision and Technologies, Inc.

〇 *5

Nissha Industries, Inc.

〇

Graphic Controls Acquisition Corp.

〇

Nissha Printing Communications, Inc.

〇

Lead-Lok, Inc.

〇

Nissha F8, Inc.

〇 *3

CEA Medical Manufacturing, Inc.

〇

Nissha Business Service, Inc.

〇

Sequel Special Products, LLC〇

Nissha FIS, Inc.

〇

Nissha Medical Technologies (Ohio), Inc.

〇

Nissha Metallizing Solutions N.V.

〇

Nissha Medical Technologies SAS〇

Nissha Metallizing Solutions S.r.l.

〇

Nissha Medical Technologies Ltd.

〇

Nissha Metallizing Solutions GmbH〇CEA Global Dominicana, S.R.L.

〇

Nissha Metallizing Solutions Ltd.

〇

Isometric by Nissha Medical Technologies〇

Nissha Metallizing Solutions Produtos Metalizados Ltda〇

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

〇

Nissha Advanced Technologies Europe GmbH〇

Guangzhou Nissha High Precision Plastics Co., Ltd.

〇

Nissha Back Stickers International〇

Nissha Precision Technologies Malaysia Sdn. Bhd.

〇

Nissha SB Poland Sp.zo.o.

〇*4. For departments related to BS Probe Holder EX in Global Headquarters.

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

〇

*5. For departments related to BS Probe Holder EX products at Kyoto (production base).

Guangzhou Nissha High Precision Plastics Co., Ltd.

〇

Nissha Precision Technologies Malaysia Sdn. Bhd.

〇

*2

■ Quality*1. Only obtained at sales, purchasing, design and development, production and logistics
departments of Industrial Materials Business Unit, Devices Business Unit and RB

Subject Areas

Business and Product Development in Global Headquarters, Tokyo Division Headquarters
and Kameoka Factory.
*2. Obtained at the Himeji Factory and Kyoto (production base).
*3. Obtained at the Kyoto studio.

Nissha Co., Ltd.

ISO22716
Cosmetics〇 *6*6. Obtained for the production of microneedle patch for cosmetics in the PCBU Production
department of the New Business Development Office at the Global Headquarters.

Nissha Sustainability Report 2024

35-1

Environment
Contents /Editorial Policy

Nissha Group
Sustainability

SocialThird Party
Verification

Environment■ Quality

Human
RightsHuman
Resources

GovernanceFair Operating Practices/ Local Communities■ Environment
Subject Areas

IATF16949〇 *7

Nissha Precision and Technologies, Inc.

〇 *8

Nissha Eimo Technologies〇

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

〇

Nissha Advanced Technologies Europe GmbH〇

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

〇Guangzhou Nissha High Precision Plastics Co., Ltd.

〇

Nissha Precision Technologies Malaysia Sdn. Bhd.

〇

*7. For the support departments related to the touch sensor module for automotive in
Global Headquarters and Kameoka Factory.
*8. Obtained at the Himeji Factory and Kyoto (production base).

Governance

GRI Standards Content
Index / ESG Data

■ Energy
Subject Areas

Automotive

Nissha Co., Ltd.

Quality Management / Efficiency
and Productivity Improvement

ISO14001
Environment

Nissha Co., Ltd.
Global Headquarters〇

Nissha Industries, Inc.
Headquarters / Koka Factory〇

Nissha Precision and Technologies, Inc.
Headquarters / Himeji Factory〇

Kaga Factory〇

Tsu (production base)〇Kyoto (production base)〇*9

Subject Areas

ISO50001
EnergyNissha Metallizing Solutions S.r.l.

〇

Nissha Metallizing Solutions GmbH〇

Nissha Advanced Technologies Europe GmbH〇■ Occupational health and safety
ISO45001
Subject Areas

Occupational
health and safety

Nissha FIS, Inc.

〇

Nissha Business Service, Inc.

〇

Nissha Metallizing Solutions S.r.l.

〇

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

〇

Nissha Metallizing Solutions Produtos Metalizados Ltda〇

Nissha Metallizing Solutions S.r.l.

〇

Nissha Metallizing Solutions GmbH〇

Nissha Metallizing Solutions Produtos Metalizados Ltda〇

Nissha Medical Technologies SAS〇

Nissha Advanced Technologies Europe GmbH〇

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

〇Guangzhou Nissha High Precision Plastics Co., Ltd.

〇

Nissha Precision Technologies Malaysia Sdn. Bhd.

〇

*9. Obtained at administration departments and design and product development departments.

Nissha Sustainability Report 2024

35-2

Environment
Contents /Editorial Policy

Nissha Group
Sustainability

SocialThird Party
Verification

Environment■ Information security

Human
RightsHuman
Resources

Nissha Co., Ltd.
Global Headquarters

Information
security〇

Tokyo Division Headquarters〇

Nagoya Sales Office〇

Kameoka Factory〇

Nissha Industries, Inc.
Headquarters / Koka Factory
Kameoka Factory
Nissha Precision and Technologies, Inc.
Headquarters / Himeji Factory

Quality Management / Efficiency
and Productivity Improvement

GRI Standards Content
Index / ESG Data

Governance■ Others
ISO27001

Subject Areas

Fair Operating Practices/ Local Communities

Governance

〇
〇 *10
〇

Subject Areas

FSC COC

Nissha Co., Ltd.

〇

Nissha Printing Communications, Inc.
Headquarters〇

Osaka Sales Offie〇

Tokyo Sales Office〇

Kameoka Factory

〇

PEFC

EN15593

EC93/42/EEC*11

Nissha Metallizing Solutions N.V.

〇

Nissha Metallizing Solutions S.r.l.

〇〇

Nissha Metallizing Solutions GmbH〇〇

Nissha Metallizing Solutions Ltd.

〇

Nissha Metallizing Solutions Produtos Metalizados Ltda

〇

〇

〇

Graphic Controls Acquisition Corp.

〇

Tsu (production base)〇Nissha Medical Technologies Ltd.

〇

Kyoto (production base)〇*11. For paper purchasing departments in Nissha Co., Ltd.

Kaga Factory

Nissha FIS, Inc.

〇

Nissha Printing Communications, Inc.
Headquarters〇

Osaka Sales Offie〇

Tokyo Sales Office〇

Kameoka Factory〇 *10

Nissha F8, Inc.
Tokyo Studio〇Kyoto Studio〇Nissha Business Service, Inc.

〇

*10. Certification is included in the Kameoka Factory of Nissha Co., Ltd.

Nissha Sustainability Report 202435-3