Nissha Sustainability Report 2020
EnglishTable of Contents
CEO Message

2

Nissha Group Sustainability

4

Promotion Framework for Sustainability / Materialities (Key Issues) and KPIs
Nissha Group Materiality / United Nations Global Compact
Nissha Philosophy
Nissha Group Stakeholders

13

Environment

19

Environmental Policy and Management Structures

20

Impact on the Environment out of our Business Operations

27

Environmental Objectives and Status of Achievement
Adaptation to Climate Change
Waste Management

Management of Chemical Substances and Environmental Risks

23
29
36
40
46

Social47

Human Rights
Labor Practices

Human Resources Development

52

Support for Diverse Work Styles

62

Respect for Diversity
Safety and Health

Fair Operating Practices

56
71

Initiatives Related to Information Security

79

Initiatives Related to Intellectual Property

86

Trade Management

Partnership with Our Suppliers

Initiatives Related to Conﬂict Minerals
Initiatives Related to Anti-corruption
Tax Policy

82
88
93
95
96

Quality Management

98

Along with Local Communities

104
108

Governance109

Corporate Governance

121

Corporate Ethics and Compliance

125

Editorial Policy

1

Nissha Sustainability Report 2020

CEO Message
Nissha Group views sustainability as an initiative toward
the achievement of sustainable growth and development
for both the company and society. Accordingly, we consider
social issues to be business opportunities. It is important
not only that we leverage our capabilities to provide
products and services that help resolve these on an
ongoingbasis,

management

but

also

foundation

that

we

underpinningstrengthen
our

our

business

activities. We must also build management systems thatallow us to fulfill of our social responsibility. In these ways and others, we pursue risk reduction.
Through these activities, we generate the economic and social value professed in the Nissha Mission,
which states that we realize the enrichment of people's lives.

Currently, the group is executing our Sixth Medium-Term Business Plan, a three-year program focusedon growth through reorganization and optimization of our business portfolio. This plan defines
mobility (automotive and transport equipment), medical devices, and sustainable packaging
materials, as priority markets in addition to our mainstay consumer electronics (IT) business. These
are markets in which we expect stable and sustainable growth and where clusters of social issuebased needs are present. The group views these needs as business opportunities, solvingsocial issues through businesses that make use of our strengths. At the same time, we strive
to identify and reduce environmental and social risks in our business activities, aiming to grow anddevelop with society.

In closing, I would like to extend my deepest condolences to the families of those who have lost theirlives to the novel coronavirus disease (COVID-19), and express my heartfelt respect for the medical
professionals at the frontline of treatment. We at the Nissha Group have undertaken manufacturing
and sales of medical face shields, and hope to continue mustering our strengths and contributing tosociety.

We look forward to your continued guidance and encouragement.
June 2020
Junya Suzuki
Chairman of the Board
President and CEO

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

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Nissha Sustainability Report 2020

3

Nissha Sustainability Report 2020

Nissha Group Sustainability
Promotion Framework for Sustainability
In January 2020, Nissha Group established the Sustainability Committee as an evolution of our former
CSR Committee. The Sustainability Committee is chaired by the president, with the director in chargeof sustainability serving as vice chair. In addition to reducing risks related to the environment andsociety, which were issues addressed by the CSR Committee, the Sustainability Committee reframessocial issues as business opportunities, seeking to resolve these issues through our businesses,
creating new opportunities. Through this dual-natured function, the committee seeks to realize theenrichment of people’s lives and achieve sustainable growth and development of society and the Nissha
Group.

Promotion Framework for Sustainability

The Sustainability Committee identifies materialities, or key issues, by prioritizing social issues thatmay present business opportunities for the group and risks that could impede business continuity.
Seven subcommittees established under the umbrella of the Sustainability Committee and businessorganizations use these materialities to set strategic policies, KPIs, and targets, engaging in PDCA
cycles.
Business divisions are responsible for creating business opportunities. We check the progress at eachMonthly Business Review (MBR) and Quarterly Business Review (QBR) meeting by evaluating KPIs. On

4Nissha Sustainability Report 2020

the topic of reducing risks, we strive to mitigate risks that could inhibit business continuity through theactivities of the seven aforementioned subcommittees. Each quarter, we hold a meeting to checkprogress. The committee reports the progress and results of these Sustainability Committee activities
to the board of directors once a year, addressing previous fiscal year's achievements and upcoming
activities.

Materialities (Key Issues) and KPIs
Nissha Group adopts a dual perspective of generating business opportunity and reducing risk in ouridentification of materialities (issues of particular importance), prioritizing each and engaging ininitiatives accordingly. We evaluate materialities along two axes: (1) importance to society andstakeholders and (2) importance to the company.
We identify materialities related to business opportunities in consideration of an issue's importance asa social issue (strength of needs) and Nissha superiority (scale of value we can provide) in our fourpriority markets as defined in the current Sixth Medium-Term Business Plan (FY2018/12-FY2020/12).
For materialities of risk reduction, we identify

risks related to the environment and society that may

impede business continuity along the axes of importance to stakeholders and importance to Nissha
Group. The degree of importance to stakeholders reflects the opinions of a range of stakeholders,
including our customers, shareholders, and investors.

Analysis Map

Materiality Identification Process
Step 1
Identify Related
Social Issues
Step 2
Prioritize

Identify social issues related to the Nissha Group and our supply chain,referencing the SDGs*1, GRI Standards*2, RBA*3, and guidance.
Analyze and prioritize the social issues identified in Step 1 based on the axesof importance to society and stakeholders (in consideration of SDGs, external
evaluations, etc.) and importance to Nissha.

Step 3
Verify Validity

Examine the validity of issues via interviews conducted with business

Step 4
Establish
Materialities and
KPIs

Use the materialities identified in steps 1 to 3 to create strategy items anddivisions, Sustainability Committee subcommittees, and other organizations.

KPIs by business unit and subcommittee. These are approved by the
Sustainability Committee.

5Nissha Sustainability Report 2020

*1. SDGs (Sustainable Development Goals): Adopted by the United Nations in September 2015
*2. GRI Standards (Global Reporting Initiative Standards): The world's most widely-adopted sustainability reporting
guidelines*3. RBA (Responsible Business Alliance): Issues an international code of conduct for labor, health and safety, theenvironment, ethics, etc.

Nissha Group Materiality
Nissha Group determines materialities as follows, using the above process in consideration of businessactivities and degree of achievement in the KPIs of the fiscal year within the group's four priority
markets, as defined in our Sixth Medium-Term Business Plan.

Materialities (Business Opportunities)

Materiality
Provide Free andComfortable Travel
Reduce Environmental
ImpactStrategy Items

KPI

Related
SDGs

Expand Business in the Mobility Market• Provide mobility products that contribute to
Mobility Segment Sales

comfortable travel• Provide products with low environmental
impactExpand Business in the Medical Devices

Solve Medical Issues
Through Products andServices

Market• Heart disease

Medical Technologies• Acute careBusiness Sales• Contribute to medical care throughconsumable medical products, etc.
Expand Business in the Sustainable
Packaging Materials Market

Promotion of Circular
Economy• Provide products/services that contributeto solving marine plastic pollution• Provide products/services that contribute

Sustainable Packaging
Materials Segment
Sales

to greater resource use efficiency
Resolve Social Issues

Generate Social Impact in Priority Markets

Sales in Priority Markets

Through Capabilities(Medical Devices, Mobility, Sustainable

Using Capabilities

Cultivated in IT Markets

Packaging Materials)

Cultivated in IT Markets

Develop New Products
That Contribute to
Resolving Social Issues

Create New Businesses, Products, And
Services Through Integrating Technologies

Sales of New Products

Promote Development That Contributes toThat Solve Social Issues

Resolving Social Issues

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Nissha Sustainability Report 2020

Materialities (Risks)Materiality

Strategy Items

KPI

Corporate
Ethics andCompliance
TradeManagement(1) Build an internalreporting system(2) Implement fair, legallycompliant operations
during import/export(1) Formulate systems overview for
US locations(2) Prevent illegal/unlawful
declarations, omission of importcharge factors
Illegal/unlawful declarations: 0(Annual)Omitted declarations of charge
factors: 0 (Annual)Business
Continuity
Management(1) Understand status of BCP
operation for key
locations(2) Formulate guidelines forhandling COVID-19(1) Check validity of BCP plan for
key overseas locations(2) Formulate guidelines for handling
COVID-19
Once guidelines are complete,
notify domestic locations, add
necessary equipment

Human
Rights in the
Workplace

Labor andHuman Rights(1) Identify and understand points(1) Understand and reducebrought up in customer audits
human rights risks at key
and measures for improvement,
overseas locations
share with related departments(2) Practice work-styleat Global Headquarters
reforms(2) Refine and evolve work hour
management

The
Environment(1) Understand and reduce
environmental impact
causing climate change
Environmental,
and other phenomena
Safety and(2) UnderstandHealthenvironmental impact of
newly acquiredcompanies(1) Confirm details of main
environmental impacts:
3 locations(2) Build environmental datacollection system for newly
acquired companies

Occupational
Health and
SafetyEnvironmental, (1) Understand health and
Safety, andsafety at newly acquired
Healthcompanies(1) Build health and safety datacollection system for newly
acquired companies

Information
AssetsCorporate
Ethics andCompliance
Information
Security(1) Modify trade secretmanagement to ensure
appropriateness(2) Modify and execute new,appropriate trade secretmanagement(1) Enforce and maintain rules for
trade secrets(2) Implement ISMS internal audit
To be implemented indepartments handling trade
secrets as information assets

Productivity
Reforms

Quality(1) Smart QC
Smart Factory(1) Productivity reform leveraging
IT technology: 3 target locations

Compliance

Product andServiceContinuity

Subcommittee

7

Related SDGs

Nissha Sustainability Report 2020

Materialities (Risks) and Boundaries

Materiality

Boundaries
Inside Nissha Group

Outside Nissha Group

Compliance●●

Product and Service Continuity●●

Human Rights in the Workplace●●

The Environment●●

Occupational Health and Safety●●

Information Assets●●

Productivity Reforms●

FY2019/12 Initiatives and Achievement Status (Risk)
In the fiscal year ended December 2019, we strived to reduce risks through activities concentrating on
medical devices and sustainable packaging materials, representing focus markets with its significanceincreasing, in step with the progress of the Sixth Medium-term Business Plan.
We built a structure for monitoring risk data at key bases and affiliated companies serving our focus
markets. In monitoring risks unique to business in the Medical Devices business, we referred to the
Sustainability Accounting Standards Board (SASB) disclosure standards for medical equipment andsupplies, targeting companies listed in North America, and confirmed that our management structureis operated effectively.
＊In the table below, an achievement status of “〇” indicates target achieved, and “△” target partly not achieved.

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Nissha Sustainability Report 2020

Material Issue

Subcommittee

Product
Responsibility

CSR
Committee
Secretariat

Complying
with Laws andRegulations

Corporate
Ethics andCompliance
Trade
Administration
and Control

Strategy Items
Understanding thestatus of responses
at the Medical
Technologies
business

Achievement
StatusKPI (target values)〇 Verified the
Nissha Medical
Technologies
risk management structure

Publishing information inaccordance with SASB
disclosure demands(1) Number of bases wheretraining is given on therevised personal(1) Response to
information protection
GDPR
regulations (14 domestic
bases)(2) Construction of(2) Number of bases in
the internal
Europe that havereporting systemcompleted preparations tofor overseas
construct the internalbasesreporting system (1overseas base)(3) Maintenance and (3) Maintenance andenhancement ofenhancement of
trademanagement levels for
management
persons responsible
through educational(4) Handling of
programs on trade
trade secrets
management(4) Formulation of regulations
and operational flow, andpenetration(1) 〇Implementati
on rate of
100%
(2) 〇
Implementati
on rate of100%(3) 〇 Conducted
Education in
April 2020(4) △ Completed
formulation ofregulations
andoperational
flow

Labor andHuman Rights

Understanding andreducing humanrights risks

Number of human rights risks
understood at key overseas
bases, mainly in North
America and Europe (10 risk
items)

Responsibility
for Productand Service
Continuation

Business
Continuity
Management

Understanding thestatus of BCP
operation at key
overseas bases andreducing risks

Understanding and reviewing
BCP operational status at key
overseas bases, mainly inNorth America and Europe (2companies)〇 Implementation rate of 100％

The
Environment• Understanding andreducing theEnvironmental, environmental
Safety andimpact of key
Healthoverseas bases• Responses toclimate change• Construction of anenvironmental dataacquisition system from key
overseas bases, mainly inNorth America and Europe• Maintain CDP score of B

〇 Completed
structure〇 Maintained
score of B

Occupational
Health and
SafetyUnderstanding theEnvironmental, status of safety and
Safety andhealth at key
Healthoverseas bases andreducing risk

Construction of a safety andhealth data acquisition
system from key overseas
bases, mainly in North
America and Europe〇 Completed
structure

Protection ofCustomer
Information

Information
Security

Ensuring operationof ISMS at overseas
companies

Number of new
implementations of ISMS atoverseas companies that
previous lacked it (3 cases)〇 Completed new
implementationfor 3 cases

Human Rights
in theWorkplace9

RelatedSDGs〇 Monitored 10
items

Nissha Sustainability Report 2020

United Nations Global Compact
Nissha Co., Ltd. support the United Nations Global Compact since April 2012.
The Global Compact is a voluntary initiative based on 10 principles in the areaof human rights, labor, the environment, and anti-corruption. Its purpose is tohave various companies show responsible and creative leadership, and thereby
act voluntarily as good citizens and participate in creating a global frameworkfor sustainable growth.
Signatory companies are required to express within and outside the company the commitment of top
management, establish a CSR framework, make continuous improvements aiming for higher levels ofmanagement and CSR, and submit annual reports on the status and results of activities in the format
of a Communication on Progress (COP).
At Nissha Group, we have in place various targets based on the 10 principles of the Global Compact
and work daily toward achieving them with an eye to meeting the needs of global society. We disclose
information about our activities in sustainability reports, published on the Nissha Group website.

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

Related information
United Nations Global Compact website: http://www.unglobalcompact.org

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Nissha Sustainability Report 2020

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

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

Brand Statement"Empowering Your Vision" expresses the relationship of Co-existence between Nissha and our
stakeholders. Both we and our customers, shareholders, employees, suppliers, and society have visions,and we mutually affect each other toward realizing it. We maximize our capabilities driven by ourTechnology, Passion, and Leadership, and with the energy infused in us by our stakeholders, together
create value for the future.

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Nissha Sustainability Report 2020

Shared Values
Customer is Our Priority
We are committed to maximizing customer value.
Diversity and Inclusion
We welcome diverse capabilities interacting as equals and enhancing ourorganizational performance.
Commitment to Results
We work with diligence and deliver results.
Done is Better than Perfect
We take actions first rather than sacrificing time value for perfection.
Act with Integrity
We act with integrity and maintain the trust placed in us.

12Nissha Sustainability Report 2020

Nissha Group Stakeholders
We identify our customers, shareholders, employees, suppliers, and society as the stakeholders that
support Nissha Group operations. Toward realizing our Mission, we incorporate the voice of our
stakeholders into business activities that contribute to a sustainable society. Both we and our
stakeholders have a clear vision, and we mutually affect each other toward realizing it. Our aim is towork together and create valuable future.

Nissha’s Circle of Trust

Customer
We at the Nissha Group serve customers across the globe.
We identify our focus markets as mobility (automotive),
medical devices, and sustainable packaging materials, inaddition to our mainstay of consumer electronics (IT).
We aim to create highly competitive and distinctive products
and services, develop them into customer value, and realize
the “enrichment of people’s lives.” From environmentconscious production systems to fair operating practices, we promote environmental and social
initiatives so that our customers can feel safe and entrusting us with work.
◆Communication
Sales activities in daily operations
Products and services information provided on the website
Activities to enhance customer satisfaction
Providing information for sustainability survey
Providing information about conflict minerals
Supplier responsibility (SR) audits by customers

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Nissha Sustainability Report 2020

Shareholder
We have a total of 50,855,638 outstanding shares and 11,194
shareholders. In a breakdown of shareholders by type, 36.0%
are Japanese financial institutions and securities firms, 23.0%
foreign institutions and individuals, 20.1% other Japanese
corporations, 19.9% Japanese individuals and others, and 1.0%
treasury stock (as of the end of December 2019).
In addition of active disclosure of information, we create opportunities to meet directly and exchange
dialogue with our shareholders and investors through IR events and one-on-one briefings. Feedback
and comments are reported directly to the management and shared regularly at Board of Directors
meetings.
◆Communication
Shareholders’ meetings
Management briefings following shareholders’ meetings
Financial results presentations and teleconferences for institutional investors
One-on-one briefings for institutional investors
Response to individual inquiries
IR information provided on the Nissha website
Materials published for shareholders and investors (integrated report, business report for shareholders,etc.)
Providing information to investigation institutions for ESG investment

Employee
The Nissha Group has 5,718 employees. The number of employees
in a breakdown by region, 40.2% in Japan, 12.6% in Asia, 27.6%
in North America, 9.1% in Europe, and 10.5% in Central and SouthAmerica (as of the end of December 2019).
We promote the creation of safe, comfortable workplaces and offer
support for diverse work styles, respecting our employees’ humanrights and diversity from a global perspective. We at Nissha Group
believe our employees are our most important management resources, and aim to achieve growth forboth the company and our employees.
◆Communication
Discussions between labor and management
Safety and health committees
Workplace improvement committee
Education and training
Personnel evaluation and interviews
Hotline (for reporting to outside the company)
Providing information via the company intranet and company newsletter
Employee awareness survey and interviews

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Nissha Sustainability Report 2020

SupplierNissha Group’s global operations revolve around procurement
activities and engagement with a large number of suppliers.
We strive to build partnerships of co-existence and co-prosperity
with our suppliers, and create corporate value founded on integrity.
We

seek

to

evaluate

oursuppliers

fairly,impartially,

andcomprehensively at all times, and promote sustainable procurement.
◆Communication
Procurement activities in daily operations
CSR procurement briefings
ESG check sheets
Sustainability survey and auditing
In-house exhibitions and seminars themed around supplier products and technologies

Society
The Nissha Group has 15 bases in Japan and 40 overseas (as of theend of March 2020), each of which carries out business activities
with respect for the local culture and climate.
We promote communication with local communities to fulfill ourbasic responsibilities as a corporation, and to be a company that isneeded by society. We strive to be aware of global social issues andplay a role in resolving them.
◆Communication
Support and promotion of arts and culture
Exchange events with community councils and community people
Factory and facility tours
Cleanup activities in factory areas
Future generation support activities
Social contribution activities in collaboration with NPOs
Employees’ participation in volunteer activities

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Nissha Sustainability Report 2020

Management Systems
In order to meet the demands of our customers and other stakeholders, we at the Nissha Group
introduce various management systems and follow a plan-do-check-act (PDCA) cycle.
Acquisition status of management systems certification is given below (Nissha Group, as of the end of
December 2019).

Standards
Subject Areas
ISO9001

ISO13485

IATF16949

ISO14001

Nissha Co., Ltd.
Global Headquarters

〇*1

〇*2

〇*3

〇*4

Nissha Co., Ltd.
Tokyo Division
Headquarters〇*1

Nissha Co., Ltd.
Kameoka Site〇

Nitec Industries, Inc.
Koka Factory〇

Nitec Industries, Inc.
Kameoka Factory*5

Nitec Precision andTechnologies, Inc.
Himeji Factory○

ISO50001OHSAS18001
ISO45001

ISO27001

Others

〇
〇

〇*3

〇
〇

〇
*6

Nitec Precision andTechnologies, Inc.
Kaga Factory

〇

〇

〇

〇

〇

〇

〇

〇

Nitec Precision andTechnologies, Inc.
Kyoto Factory○

Nissha FIS, Inc.

○

Nissha Printing
Communications, Inc.
Headquarters / Kyoto〇*1〇

Nissha Printing
Communications, Inc.
Osaka Division
Headquarters〇*1〇

Nissha Printing
Communications, Inc.
Headquarters /Kameoka Factory

〇*1

*6

Nissha F8, Inc.

〇*7〇

Nissha Business
Service, Inc.

〇*7〇

Zonnebodo
Pharmaceutical Co.,Ltd.

○

Eimo Technologies,
Inc.
Nissha GSI
Technologies, Inc.

○○〇

Nissha PMX
Technologies, S.A. de
C.V.
Graphic Controls
Acquisition Corp.

〇*8
EC93/42/
EEC

○

16

Nissha Sustainability Report 2020

Standards
Subject Areas
ISO9001

ISO13485

Lead-Lok, Inc.

〇

CEA Global
Dominicana, S.R.L.

〇

CEA Medical
Manufacturing, Inc.

〇

Sequel Special
Products, LLC〇

Nissha Medical
Technologies Ltd.

〇

Nissha Medical
Technologies GmbH &Co. KGIATF16949

ISO14001

ISO50001OHSAS18001
ISO45001

ISO27001

Others○EC93/42/
EEC○

Nissha Medical
Technologies SAS〇

Nissha Schuster
Kunststofftechnik○

Nissha Back Stickers○

AR Metallzing N.V. –Genk, Belgium○

AR Metallizing Srl. Casalgrasso, Italy○

AR Metallizing Ltd. Franklin, MA USA○

AR Metallizing
Produtos Metalizados
Ltda

○

〇

Eurofoil Paper Coating
GmbH

〇

〇

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

○○〇Guangzhou Nissha
High Precision Plastics
Co., Ltd.

○○〇

Nissha Precision
Technologies Malaysia
Sdn. Bhd.

○

○

〇

〇

〇
○

FSC COC〇〇FSC COCFSC COC〇〇FSC COC〇

EN15593*1. Administration divisions are excluded from the scope of certification.
*2. For departments related to Medical Technologies (Vermed products).
*3. For the support departments related to the touch sensor module for automotive displays.
*4. Only administration divisions and design and product development divisions have obtained certification.
*5. In the process of applying to change from Nissha Co., Ltd. Kameoka Site to Nitec Industries, Inc. Kameoka Factory.
*6. Certification is included in Nissha Co., Ltd. Kameoka Site.
*7. Only the Kyoto site has obtained certification.
*8. In the process of switching certification form ISO/TS16949 to IATF16949.

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Nissha Sustainability Report 2020

Distribution of Economic Value to Stakeholders
Our distribution of economic value to stakeholders in the fiscal year ended December 2019 is given in
the table below.
Amounts are based on the International Financial Reporting Standards (IFRS), which we have adopted
from the fiscal year ended December 2019.

Stakeholders

AmountDescription(Million yen)

Remarks

Legal welfare expenses andEmployees

32,811

welfare expenses pertaining to

Figures published in 101stsalaries, bonuses, andSecurities Report, p. 119, no. 28

retirement benefits
Money and in-kind donations,provision of facilities, andSociety52

employee volunteer services
converted into monetary value

In-house calculation(using methods established by
Keidanren)
Creditors (financial
institutions)
Government agencies(national, local)

Shareholders

1,173

1,044

1,499

Figures published in 101st

Interests

Securities Report, p. 122, no. 28

Current fiscal year and past

Figures published in 101st

fiscal year corporate income tax

Securities Report, p. 106

Amount paid in dividends

Figures published in 101st
Securities Report, p. 68

Related information
101st Securities Report (only in Japanese)

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Nissha Sustainability Report 2020

Environment

Nissha and its subsidiaries, as members of the global society, aim forbusiness development and the realization of a sustainable society throughenvironmentally conscious corporate activities.

Together with our stakeholders, we work for prevention of pollution,delivering safe and environmentally conscious products, and prevention of
global warming. We operate an environmental management system forcontinuous improvement.

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Nissha Sustainability Report 2020

Environmental Policy and Management Structures
The Nissha Group considers environmental initiatives to be our most important issue in order to achievesustainable growth and development for both companies and society.
The environmental policy of the Nissha Group calls for development of our business and the realizationof a sustainable society. Along with ensuring each Nissha Group employee is aware of this policy, eachfactory and organization sets targets and implements action plans for the achievement of the Nissha
Group environmental objectives. The environmental objectives are linked with the Key Performance
Indicators (KPI) for each business unit and are directly connected with our business activities.

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

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Nissha Sustainability Report 2020

The Environmental, Safety and Health Subcommittee of the Sustainability Committee practices
environmental management linked to business activities. Nissha is continuously working to improve by
operating our own environmental, safety and health management system within the Nissha Group in
Japan. This system includes complying with related laws and regulations as well as items our customers’
demands, on a base of the ISO14001 environmental management system and the ISO45001
occupational health and safety management system.

Nissha Group Environmental Management Structure

The Environmental, Safety and Health Subcommittee is composed of environment and safety managers
and subcommittee members who are appointed by related divisions and bases. And the Corporate
General Affairs is responsible for the operation as the secretariat under the supervision of the
management. To further strengthen the foundations that support our business, the Subcommittee is
responsible for the construction and maintenance of compliance systems such as the Responsible
Business Alliance (RBA*), an international code of conduct, in the areas such as laws and labor, healthand safety, the environment, and ethics.
*RBA: International code of conduct for labor health and safety, the environment, ethics, etc.

The energy management structure covering the Act on the Rational Use of Energy is as follows.

Energy Management Structure21

Nissha Sustainability Report 2020

In the fiscal year ended December 2019, we constructed a system to understand the status ofenvironmental impacts at key bases overseas. In the fiscal year ending December 2020, we intend tocollect accurate information from each base on a regular basis, in order to grasp and understand about
the major environmental risks and how they are being reduced.

Operating an Effective Environmental Management System (EMS)The Environmental Management System (EMS) for the Nissha Group in Japan covers all our bases—
not only major production bases but also small production bases and sales bases with little impact on
the environment. They are classified into ISO14001-certified bases and noncertified bases and set
priority management items respectively. We operate an effective EMS through confirmation of the
management items and taking corrective actions for improvement by internal audits, etc.
At our major production bases which have obtained ISO14001 certification, we assess specific risks
through environmental risk assessments, and prioritize and reflect them in specific activities. We carryout improvements and sustained management to mitigate negative risks that impact the environmentand business. In addition, we are also working on improving our environmental performance in sync
with KPI related to quality on our business activities.

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Nissha Sustainability Report 2020

Environmental Objectives and Status of Achievement
We set the Nissha Group Environmental Objectives for six years from the fiscal year ended December
2018, targeting bases in Japan that have obtained ISO14001 certification. In accordance with theseobjectives, each bases and divisions establish environmental targets, and we totalize and assess theresults each fiscal year in order to manage progress.

Environmental Objectives and Status of Achievementin the Fiscal Year Ended December 2019
＜Environmental Objectives＞
Period: FY2018～FY2023
Scope: Nissha Group in Japan ISO14001 certification sites (“certification sites”)
・Nissha Group environmental objectives, as a rule, cover a six-year period・Nissha Group environmental objectives are to be reviewed in line with changes in internal(e.g., medium-term business plan) and external circumstances
・Each site selects applicable items from Nissha Group environmental objectives
Assessment Definition
Satisfactory: Objective achieved
Unsatisfactory: Objective not achieved but good progress madePoor: Objective not achieved and poor progress made

1. Prevention of pollution
Target: (1) Maintain zero environmental accident (accidents that affect areas outside the factory)(2) For environmental risks classified as significant environmental aspects on the hazard
assessment list, implement measures and reduce the possibility of occurrence by one level
by December 31, 2023
* The Degree of severity may not change after measures are implemented* For items classified as “maintain,” follow the designated procedure and strive to prevent environmental accidents

Fiscal year

2018

2019

Assessment

Satisfactory

Satisfactory

Activities in FY2019
In the fiscal year ended December 2019, we carried out training for a chemical leak as a way to alleviate
risk. Also, in addition to continuing rainwater management as usual, we strengthened our initiatives
for alleviating environmental risk by carrying out training assuming environmental accidents at nightor rainy scenarios. As a result of these initiatives, we had zero environmental accident in the fiscal year
ended December 2019.

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Nissha Sustainability Report 2020

2. Attention to climate change
Target: (1) Reduce CO2 emissions rate (basic unit) by 6% or more by the fiscal year ending December
2023(2) Reduce CO2 emissions rate (basic unit) by 1% or more compared to the previous year
Reference value: Results in fiscal year ended December 2017

Fiscal year

2018

2019

Assessment

Poor

Poor

Activities in FY2019
In the fiscal year ended December 2019, we reduced the amount of energy input in conjunction withquality improvements at all target plants, but were unable to reach to our objectives. Improvements
in energy consumption for air conditioning was great at the Nitec Industries, Inc. (NII) Koka Factory.
On the other hand at the Nitec Precision and Technologies, Inc. (NPT) Himeji Factory and Kaga Factory,
lower product demand and lower operating rates resulted that the year-on-year objective for CO2
emission rates (basic units) was not achieved.

3. Reduction of waste
Target: (1) Reduce waste generation rate (basic unit) by 6% or more by the fiscal year ending
December 2023
(2) Reduce waste generation rate (basic unit) by 1% or more compared to the previous year
(3) Maintain zero emissions (recycling and resource reuse rate of 99.5% or more)(4) Reduce cost of waste treatment
Reference value: Results in fiscal year ended December 2017
Fiscal year

2018

2019

Assessment

Poor

Unsatisfactory

Activities in FY2019
To reduce the waste generation rate, we need to improve the yield rate through quality improvement
activities and reducing the amount of wasted materials by improving the production efficiency.
In the fiscal year ended December 2019, the influence by lower product demand and factory operation
rates in the Industrial Materials and the Devices businesses meant that the NII Koka Factory and NPT(other than the Kyoto Factory) failed to reach their objectives, and the company-wide reduction target
for waste generation was also not fulfilled. However, the zero emission of waste (recycling and resource
reuse rate at 99.5% or more) was achieved in terms of the entire Nissha Group in Japan, consecutively
from the previous year.
In reducing costs for waste, in addition to yield improvements, a reduction in the number of timescommercial disposal companies have needed to take away waste acids and alkalines from the NII Koka
Factory has also directly contributed to cost improvements.

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Nissha Sustainability Report 2020

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

Fiscal year

2018

2019

Assessment

Unsatisfactory

Satisfactory

Activities in FY2019
Production efficiency improvements and water saving efforts at NII Koka Factory contributed to lesswater consumption. NPT continues to save water for miscellaneous use.

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

Fiscal year

2018

2019

Assessment

Satisfactory

Satisfactory

Activities in FY2019
The NII Koka Factory achieved a 1% year-on-year reduction, its target figure, by promoting reductionof both PRTR-designated substances and organic solvents other than PRTR-designated substances.
NPT carried out satisfactory result through initiatives to reduce the amount of chemical used throughimprovements to yields.

6. Environment-conscious design
Target: (1) Introduce the viewpoint of energy saving, resource saving, durability, recycling, and so onin product design and development.
(2) Design environment-conscious processes and reduce the environmental impact of
Production.
Fiscal year

2018

2019

Assessment

Satisfactory

Satisfactory

Activities in FY2019
The design and development divisions of the Industrial Materials and the Devices businesses take
reduction of environmental burden as a factor for product design. In addition, they move ahead withthe development of products that contribute to reducing environmental burdens such as the use ofsustainable packaging materials.
Nissha FIS has carried out environmentally-friendly product design and development such as thehydrogen detectors in fuel cell vehicles.
In addition, NII and NPT are complying with established company standards regarding themanagement of chemical products, and also designing production processes that encourage the25

Nissha Sustainability Report 2020

alleviation of environment impact.

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

Fiscal year

2018

2019

Assessment

Satisfactory

Satisfactory

Activities in FY2019
With the help of our suppliers, we received responses to surveys along with our customers’ demands
in relation to environment. In addition, we executed on-site audit at our suppliers, examined on CO2emissions during production processes and checked the chemical materials used for product. Throughthese activities, we grasp the environmental impact in our supply chain to improve.

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Nissha Sustainability Report 2020

Impact on the Environment out of our Business
Operations
In order to grasp the impact on the environment out of our business operations, we conduct surveys
of usage of major materials and energy, and waste and other emissions.
The amount of major raw materials used at the Nissha Group in the fiscal year ended December 2019
was approximately 101,398 tons, a drop of approximately 15% from the previous fiscal year. Of thetotal amount of major materials used, approximately 81% was used at our overseas production bases,
and of that, approximately 85% was paper used in metallized paper, a product from the Industrial
Materials. The amount of paper used overseas was reduced in the fiscal year ended December 2019.
Domestically, the amount of major raw materials used by the Devices and Information andCommunication dropped.
The amount of waste generated in the Nissha Group during the fiscal year ended December 2019 wasapproximately 25,593 tons.
The amount of energy usage was 274,593 MWh of electricity, a drop of approximately 4% from theprevious fiscal year, and 11,741,000 m3 of gas, an increase of approximately 13% from the previous
year.

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Nissha Sustainability Report 2020

INPUTOUTPUT

Production bases in Japan
Industrial Materials

Devices

Production bases in Japan

PET/acryl film

1,123tSolvents

841t

Gravure Ink

751t

Others107t

Materials used in
product manufacturing
processes

10,702t

Metallic materials

4t

Resin materials

2t

Half-finished goods
Information andCommunication

Recyclable resources(items sold forrecycling)

Waste containing noble metals
Metal waste
Resin waste
Paper waste

Recyclable resources(industrial waste)

Waste plastic
Iron scrap, waste cans
Waste solvents, waste ink,
waste cloth
Waste acid, alkali
Sludge, others

1,621tPaper

4,348tInk

Waste for simple
incineration/landfill

47t

OthersGeneral business waste
Others (industrial waste)

23t

Total for production bases in Japan36t

16,437t

19,612t

Overseas production bases

Overseas production bases

Resin

1,636tFilm

2,028tMolds and molding
materials

Recyclable resources(items sold forrecycling)

85t

Touch sensors

Waste containing noble metals
Metal waste
Resin waste
Paper waste
Others7,272t0tPacking materials

101t

Paper

69,630t

Cardboards

1,391tAluminum

140t

Chemical substances

Recyclable resources(industrial waste)

Waste plastic
Waste solvents, waste ink,
waste cloth
Others666t

5,204tOthers

1,571tTotal for overseas production bases

81,786t

Non-recyclable waste

Total for overseas production bases

9,156tTotal for Nissha Group

101,398t

Total for Nissha Group

25,593t

Including production bases in Japan and overseas

Water

10,537t

31t

OthersTotal for production bases in Japan

Energy5,877tElectricity

11,583,000m3

Tap water

1,291,000m3

Industrial water

1,218tIncluding production bases in Japan and overseas

274,593MWh

Gas

Underground water

incineration/landfill

Emissions

CO2
VOC

Wastewater

103,000m3

179,002t*

808t
3,305,000m3*Detoxified by activated carbon adsorption, catalyst deodorization, etc.

1,943,000m3

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Nissha Sustainability Report 2020

Adaptation to Climate Change
The Nissha Group treats adaptation to climate change as a key issue, and we are creating business
opportunities that help solving social issues as well as managing related risks.
Nissha has established a Sustainability Committee chaired by the president. This Committee has
selected the environment as one of its material issues, and the Environmental, Safety and Health
Subcommittee under its jurisdiction promotes a range of activities aimed at understanding andmanaging the environmental impacts that cause climate change.
In the creation of business opportunities, initiatives towards the key markets laid out in the currently
active Sixth Medium-term Business Plan (FY2018.12-FY2020.12) are positioned as business activities
that will lead to solutions for social issues. Of these, adaptation to climate change uses strategy items
and KPIs set by the business units or divisions responsible for new product development.

Specific Examples of Adaption to Climate Change
１．Risk Management
Nissha carries out activities aimed at understanding the amount of CO2 emissions in our major
production bases, setting target figures for their reduction. The Environmental, Safety and Health
Subcommittee, one of the subcommittees of the Sustainability Committee, determines specific climatechange risks and works on adapting to them in order of the highest importance to our Group.
Along with these initiatives to understand and manage the environmental impacts that cause climatechange, we are also adapting to risks from climate change itself.
Major risks extracted in the fiscal year ended December 2019•

Risk of damage to factory operation at our business bases, and employees hampered from coming
to work through the effects of abnormal weather such as heavy snow caused by climate change.

•

Risk of increased amounts and costs of power consumed due to increased summer temperaturescaused by climate change.

2.

Creation of Business Opportunities

The Nissha Group creates business opportunities by providing our customers with the products andservices that will help solve social issues.
Examples of creating business opportunities carried out in the fiscal year ended
December 2019•

Metallized paper, one of the main products of our Industrial Materials, is highly regarded in thesustainable packaging materials market as a product that solves the major social issue of marine
plastic pollution. Using metallized paper in place of plastic for packaging not only solves the
problem of marine plastic, but allows us to contribute to reducing the amount of energy used
when producing plastic as well as the promotion of recycling. In the fiscal year ended December
2019, we acquired Eurofoil Paper Coating GmbH, a German metallized paper manufacturer. We
shall expand our market share in metallized paper in the European region as well as promote thedevelopment of new products using the processing technologies of Eurofoil.

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Nissha Sustainability Report 2020

Prevention of Further Global Warming
The Nissha Group is working to understand the CO2 emissions at its major production bases aroundthe world, and discloses any pertinent information. The information regarding CO2 emissions in thisreport has been verified by a third party, and been provided to the CDP.* Nissha was given a B grade
regarding climate change by the CDP for the fiscal year ended December 2019. This evaluation puts
us in the third rank from top using an eight-stage scale ranked from A to D-minus, and shows ourorganizational commitment to climate change issues.
Themarks in the text below signify data that has been verified by a third party.

*CDP: An international non-profit organization based in London, founded in 2000. It collects, analyzes, and evaluates
information related to environmental activities of major companies around the world and discloses the results toinvestors, etc.

Status of CO2 Emissions at Nissha GroupCO2 emissions and energy consumption, which are seen as key in adapting to climate change, areshown in the graphs below. The totals obtained by multiplying the individual consumption of fuels suchas electricity, gas, gasoline, diesel, and heavy oil with the specified factors are Nissha’s energy
consumption levels. The figures obtained by multiplying energy consumption by the CO2 emission
factors are the CO2 emissions of the Nissha Group.
The CO2 emissions for the Nissha Group in the fiscal year ended December 2019 were179,002t-CO2, a drop of approximately 3% compared to the previous year. However, the basic unitrose due to a decline in sales caused by a drop in demand.
Of these, the CO2 emissions at production bases in Japan were 121,565t-CO2, a drop of 8% from theprevious year. This drop was largely the result of drops in production volume in Nitec Precision andTechnologies, Inc. (NPT), which is responsible for production in our Devices, and Nitec Industries, Inc.
(NII) Koka Factory, which handles production for our Industrial Materials. On the other hand, the CO2
emissions at production bases overseas was 57,437t-CO2 in the fiscal year ended December 2019, an
increase of approximately 8% over the previous year. This was because increased production capacity
in some of our overseas production bases in our Industrial Materials as well as issues related to
production yield.
Nissha Group emits almost no energy-related greenhouse gases other than CO2, and its impact isminimal.
In the following trend graphs,*1. With the change in settlement month, the fiscal year ended December 2017 was only nine months,
from April to December, but the graphs show the figures from January to December 2017.
*2. The company names listed in the legend are as follows.
Nissha and others: Nissha Co., Ltd. and affiliated companies
NII: Nitec Industries, Inc.
NPT: Nitec Precision and Technologies, Inc.
NCI: Nissha Printing Communications, Inc. (In January 2019, NCI merged with NPC (Nitec Printing
Co., Ltd.) and they are shown together here.)

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Nissha Sustainability Report 2020

Trends in CO2 Emissions Volumes and Basic Unit

Trends in Energy Consumption and Basic Unit

31

Nissha Sustainability Report 2020

Trends in Electricity Consumption

Trends in Gas Consumption

Trends in Gasoline, Diesel, and Heavy Oil Consumption

32

Nissha Sustainability Report 2020

Basic Unit Management by Production Volume and Its Issues
In addition to grasping and managing the amount of energy consumption as obliged by the Act on the
Rational Use of Energy, the Nissha Group’s production bases in Japan voluntarily managed the basic
unit management of energy usage using production volumes from the fiscal year ended March 2014,
with the aim of improving energy use efficiency.
The basic unit performance for each production base in the fiscal year ended December 2018 was set
as 1.00 across the board, so the target for the fiscal year ended December 2019 was set at “0.99 orless” using this as a standard. The results are shown in the table below. NPT, which is responsible for
production in our Devices business, failed to achieve its target at the Himeji and Kaga factories due toa decline in product demand.

Basic Unit
(based on production volume etc.)
Sites

FY ended

FY ended

Dec. 2018

Dec. 2019

results

targetFY ended Dec.
2019

FY ended Dec.

evaluation

2019 results

Nissha (Global Headquarters

1.00

0.99 or less

0.59

Satisfactory

NII Koka

1.00

0.99 or less

1.10

Poor

NPT Himeji

1.00

0.99 or less

1.02

Poor

NPT Kaka

1.00

0.99 or less

1.16

Poor

NPT Kyoto

1.00

0.99 or less

0.82

Satisfactory

NCI (NPC)

1.00

0.99 or less

0.86

Satisfactory

Nissha Group’s production bases work with the Environmental, Safety and Health Subcommittee of the
Sustainability Committee to make energy consumption visible and analyze data, helping reduce ourenergy usage.

Initiative in Scope*1 3 Management
The Environmental, Safety and Health Subcommittee continues to lead efforts at Nissha to survey
Scope 3 emissions as part of the growing movement recently for companies to disclose their own Scope3, aiming to reduce the greenhouse gases over the entire value chain.
CO2 emissions during the period January – December 2019 amounted to 2,347t-CO2
employee (excluding some non-regular employees) commuting, 1,214t-CO2

from

from business travel.

In addition, emissions related to transport and shipping (downstream)*2 in Japan were 4,553t-CO2
while emissions related to purchased products and services were 48,682t-CO2. We shall continue towork with all our suppliers to publish Scope 3 figures.
*1. Scope: Scope of greenhouse gas (GHG) calculation. The following three are shown.
Scope 1: Direct GHG emissions from sources owned or controlled by the company.
Scope 2: Indirect GHG emissions through consumption of electricity, steam, or heat.
Scope 3: Indirect emissions other than those in Scope 2.
*2. Distribution of products sold by Nissha to the point of delivery to the customer.

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Nissha Sustainability Report 2020

Coverage and Calculation Method of CO 2 Emission
Calculation
Scope 1, 2

・Nissha Co., Ltd.
・Nitec Industries, Inc.
・Nitec Precision and Technologies, Inc.
・Nissha Printing Communications, Inc.
・Nissha FIS, Inc.
・Nissha Business Service, Inc.
・Eimo Technologies, Inc.
・Nissha PMX Technologies,S.A. de C.V.
・Graphic Controls Acquisition Corp.
・Lead-Lok, Inc.
・CEA Global Dominicana, S.R.L.
・CEA Medical Manufacturing, Inc.
Coverage・Nissha Medical Technologies Ltd.
・Crown Graphic N.V.
・DIA-Nielsen GmbH & Co. K.G.Zubehör für Meß- und Labortechnik・Tyrolmed GmbH・Nissha Schuster Kunststofftechnik
・Nissha Back Stickers
・Nissha Back Stickers International・AR Metallizing N.V.
・AR Metallizing S.r.l.
・AR Metallizing Ltd.
・AR Metallizing Produtos Metalizados Ltda・Nissha (Kunshan) Precision IMD Mold Co., Ltd.
・Guangzhou Nissha High Precision Plastics Co., Ltd.
・Nissha Precision Technologies Malaysia Sdn. Bhd.
Calculated based on Ministry of the Environment "Greenhouse Gas Emissions
Calculation Report Manual (Ver.4.3.2)”

Calculation method(CO2 emission factors)
CO2 emissions associated with the fuel use: Emission factor based on the Act on
Promotion of Global Warming Countermeasures
CO2 emissions associated with power purchase: 0.555t-CO2/MWh

Scope 3CO2 emissions associated with employee commuting and business trips
・Nissha Co., Ltd.
・Nitec Industries, Inc.
・Nitec Precision and Technologies, Inc.
Coverage・Nissha Printing Communications, Inc.
・Nissha F8, Inc.
・M crossing Co., Ltd.
・Nissha FIS, Inc.
・Nissha Business Service, Inc.

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Nissha Sustainability Report 2020

Calculated based on;
Ministry of the Environment/Ministry of Economy, Trade and Industry “Basic Guidelines
Calculation method

for Calculating Greenhouse Gas Emissions Through the Supply Chain（Ver.2.3)”
Ministry of the Environment "Calculation intensity database for calculating greenhousegas emissions of organizations through the supply chain（Ver.2.6)”

CO2 emissions from major logistics suppliers

Coverage

Major logistics suppliers（8 companies）

Calculation method

Calculated from fuel consumption x emission factor x sales ratio, sum up Ton-kilometer
method, total method (sales ratio)

CO2 emissions from major domestic material suppliers

Coverage

Major domestic material suppliers (9 companies)

Calculation method

Fuel consumption x sales ratio, sum up CO2 emissions per productThird Party Verification
In order to ensure the reliability of environmental performance data, Nissha Group has obtained athird-party verification from DNV GL Business Assurance Japan K.K. on the accuracy of the CO2
emissions data reported in the Nissha Sustainability Report 2020. The items verified in the report aremarked with.

35

Nissha Sustainability Report 2020

Waste Management
In the fiscal year ended December 2019, the Nissha Group generated a total of 25,593 tons of waste,
including waste reused as resources, waste sold for recycling and waste for simple incineration/landfill.

Of this, waste generated by production bases in Japan accounted for 16,437 tons, a drop of
approximately 25% from the 21,994 tons generated in the fiscal year ended December 2018. Emissions
from incineration and landfill waste accounted for 23 tons. This is about a 22% reduction from the 29
tons generated in the fiscal year ended December 2018.
The main reason for this drop in total waste generation was a decline in demand for products for
smartphones in the Devices business, reduced operation at domestic factories due to the effects oflower product demand in China in the Industrial Materials business, and a drop in production volume
due to the merger and abolition of production bases in the Information and Communication business.
Our recycling and resource reuse rate for the fiscal year ended December 2019 continued to be 99.9%,
allowing us to meet our target of zero emissions (recycling and resource reuse rates of 99.5% orabove).

Total amount of waste generated and recycling and resource reuse rate
(production bases in Japan)

To understand the amount of total waste generated at our overseas production bases, we previously
confined our scope to our Asian production bases, but as of the fiscal year ended December 2019, we
have expanded our scope to other major overseas production bases. The total amount of waste
generated overseas in the fiscal year ended December 2019 was 9,156 tons.

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Nissha Sustainability Report 2020

Risk Management Related to Waste and Waste Converted in Valuable
Resources
At Nissha Group in Japan, we recognize that waste and waste converted into valuable resources havethe following three main risks.
•

Accidents and disasters caused by waste and waste converted into valuable resources•(including at treatment contractors)•

Environmental pollution and violation of laws caused by inappropriate waste treatment•

Leakage of confidential information from waste and waste converted into valuable resources

To alleviate these risks, we are working on safety management of waste in accordance with the Nissha
Group Waste Management Regulations. In line with these regulations, each base has drawn up its own
Waste Management Manual and makes efforts toward thorough waste separation and management.
From the perspective of preventing accidents and disasters, whether a small amount of substance ora spray can, the properties of waste are checked meticulously and monitored so as to prevent spillage
during transportation and accidents at treatment facilities. The regulations also stipulate the criteria
for selecting waste treatment contractors and for regularly inspecting treatment facilities using achecklist original to Nissha. In addition, we have in place standards for managing waste and waste
converted into valuable resources that contain confidential information, and promote management inassociation with our information security management system (ISMS).

Responding to waste plastic import regulations
Import restrictions by China and Southeast Asian nations on waste plastic aimed at preventing marine
plastic pollution have been strengthened in recent years. This means not only that the disposal costs
for plastics in Japan have increased dramatically, but some disposal companies now refuse to takewaste plastic or buy items containing resins. This has forced us to sort our waste by type of plastic aswell as contract multiple disposal companies to ensure we have routes for recycling open to us.

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Nissha Sustainability Report 2020

Status of Waste Generation at Major Production Bases in Japan(December 2019 Results)
Nitec Industries, Inc. Koka Factory
Location: Koka City, Shiga Prefecture
Acquisition of ISO14001 Certification: June 2007
Production items: Transfer foils (Industrial Materials)
Recycling and resource reuse rate: 100.0％

Waste items

Ratio

Waste Plastic

43.9%

Waste Ink

33.8%

Aluminum, tin, waste cans, and copper scrap (valuable materials)

8.9%

Waste alkali and waste acid8.4%

Waste cloth and waste filters

2.6%

Sludge, crucible, and woodchips

1.2%

Recycled paper and cardboards

0.8%

Non-industrial waste

0.3%

Simple incineration and landfill

0.0%

Nitec Precision and Technologies, Inc. Himeji Factory
Location: Himeji City, Hyogo Prefecture
Acquisition of ISO14001 Certification: March 2014
Production items: Touch sensors (Devices)
Recycling and resource reuse rate: 99.9%

Waste items

Ratio

Waste acid, waste alkali and waste oil

36.9%

Waste plastic（valuable materials）

34.2%

Sludge16.9%

Waste plastic

9.5%

Recycled paper and cardboards（valuable materials）

2.2%

Wood chips and glass waste

0.2%

Metal-bearing waste（valuable materials）

0.1%

Waste oil（valuable materials）

0.0%

Simple incineration and landfill

0.1%

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Nissha Sustainability Report 2020

Nitec Precision and Technologies, Inc. Kaga Factory
Location: Kaga City, Ishikawa Prefecture
Acquisition of ISO14001 Certification: March 2014
Production items: Touch sensors (Devices)
Recycling and resource reuse rate: 99.8%

Waste items

Ratio

Waste acid and waste alkali

29.2%

Waste plastic（valuable materials）

27.6%

Waste plastic

9.4%

Recycled paper and cardboards（valuable materials）

5.3%

Metal-bearing waste（valuable materials）

0.1%

Sludge14.8%

Waste oil

13.4%

Simple incineration and landfill

0.1%

Nitec Precision and Technologies, Inc. Tsu Factory
Location: Tsu City, Mie Prefecture

Recycling and resource reuse rate: 100.0%

Waste items

Ratio

Waste acid and waste alkali

50.3%

Waste plastic（valuable materials）

10.6%

Waste plastic

13.7%

Sludge

22.4%

Recycled paper and cardboards（valuable materials）

2.6%

Wood chips and glass waste

0.2%

Metal (valuable materials)

0.2%

Waste oil（valuable materials）

0.0%

Simple incineration and landfill

0.0%

39

Nissha Sustainability Report 2020

Management of Chemical Substancesand Environmental Risks
The Nissha Group in Japan is working to minimize the risks its business activities pose to the local
community, as well as developing a system that will allow us to respond promptly in the unlikely eventof an accident. For our stakeholders to understand our environmental protection activities, we strive
to disclose information on the status of voluntary management of chemical substances andenvironmental risks.

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

Examples of initiatives for preventing pollution•

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

•Leak response training
We establish countermeasure procedures to prevent pollution from spreading in the event of a leakat sites for deliveries of substances or waste liquid collection, hold regular trainings, and revise theprocedures.

Drill on dealing with waste liquid leak from a drum
Nitec Precision and Technologies, Inc. Kaga Factory

Processing of industrial wastes is contracted to industrial waste collection and transportation companies
and industrial waste processing companies that have legal permission. Once a year, we send people toobserve the contractors and the final disposal locations to confirm that the waste are disposed ofproperly. In addition, we carry out surveys to understand risks such as soil pollution concomitant withchanges to soil character when constructing Nissha factories or other facilities.

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Nissha Sustainability Report 2020

Note that in the fiscal year ended December 2019, we had neither serious environmental accident nor
violation of environmental laws or regulations, and paid neither fine nor penalty.

Responses to complaints and communication with the community
In addition to minimizing environmental risks and prompt responses in case of any problem happened,
we believe that communication with local residents is very important.

In the fiscal year ended December 2019, we had no environment-related complaint from local residents
at our core factories in Japan. If we do receive a complaint, we work to deal with it appropriately
through prompt responses and set out a way to prevent it from happening again.
In addition, we encourage communication with the community to ensure locals understand that we are
actively engaged in protecting the environment. This communication includes cleaning up the areaaround our factories and holding classes on the environment in local elementary schools and otherplaces by our employees.

Management of chemical substances
The Nissha Group is working to ensure safety and to provide products with low global environmental
impacts aiming for sustainable social systems. In addition to laws, regulations, and standards such as
the RoHS Directive and the REACH Regulations, the Nissha Group in Japan sets our own voluntarystandards to satisfy the environmentally hazardous substance standards of our customers andmanages the environmentally hazardous substances we use in our products to provide ones that areenvironmentally-friendly. In order to ensure compatibility with our voluntary standards, we operate
the system outlined in the figure below covering all processes from design and development to shipping.
*RoHS Directive:

A directive from the EU regarding limitations on the use of specific hazardous substances in EEE(electrical and electronic equipment) and other products.

*REACH Regulations: A law from the EU regarding the registration, evaluation, authorization, and restriction ofchemicals aimed at maintaining and improving competitiveness in the chemical industry ofEurope and protecting human health and the environment.

41

Nissha Sustainability Report 2020

Management of Environmental Pollutants
The Nissha Group in Japan is constructing a system to understand and manage how environmental
pollutants are used at each business site. We use this system even for the calculation of emission andtransfer amounts which the Act on Confirmation, etc. of Release Amounts of Specific Chemical
Substances in the Environment and Promotion of Improvements to the Management Thereof (PRTR
Act) requires reporting on. In the fiscal year ended December 2019, substances which were transferredor emitted in excess of one tonne were ethylbenzene, xylene, 1,2,4-trimethylbenzene, toluene, nhexane and water-soluble copper salts (excluding complex salts).

We also take great care with management when handling chemical substances, such as establishing
our own voluntary standards. In addition to displaying GHS* labels on containers to warn people, we
carry out measures to prevent environmental pollution such as installing spillover containers to ensure
safety if the main container develops a leak, and ensure that all related personnel are familiar withthese measures.
＊GHS (Globally Harmonized System of Classification and Labelling of Chemicals): Provides internationally-standardized
rules to harmonize the contents of safety data sheets and standards of classification per hazard for chemical products.

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

Contests of standards

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

Usage-prohibited

Asbestos fibres

substance

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

Deliberate usage-

Substances subject to RoHS directive

prohibited substance

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

Regulated substance

Global Automotive Declarable Substance List
Conflict minerals
The Proposition 65
Children's Safe Product Act (RCW 70.240.030) The Reporting List of Chemicalsof High Concern to Children (CHCC)

Examples of regulated substances that apply to purchased products (Nissha product raw materials, chemicals used in the
production process for materials, etc.)

42

Nissha Sustainability Report 2020

1. Usage-prohibited substance: Use, either deliberately or not deliberately, is prohibited. Inclusion of impurities is also
prohibited.
2. Deliberate usage-prohibited substance: Deliberate use is prohibited. There are regulations on the inclusion of impurities.
3. Regulated substance: Substance which requires a content report. Substance which has regulations from industrial groups.
(Includes prohibited substances.)

Controlling atmospheric emissions
The Nissha Group in Japan carries out voluntary activities to control the emission of volatile organic
compounds (VOC), one of the causes of atmospheric pollution. Nitec Industries Inc. (NII) Koka Factory,
which emits VOCs, uses a catalytic deodorizer and a direct combustion deodorizer to scrub or reduce
VOCs. We also regularly measure smoke from our boilers.

Surveys of soil and groundwater contamination
We carry out regular surveys and monitoring of groundwater contamination at our production bases inJapan as well as the grounds of our Kyoto Global Headquarters. In particular, we survey contamination
status and check safety before construction for the site-development projects we are carrying out at
the Kyoto Global Headquarters.

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

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

Items
measured

Discharged water
pH
BOD
COD
SS
n-hexanederivedsubstances
PhenolCopperZinc
Soluble ironSolublemanganese
Chromium
NitrogenPhosphorus

Regulatory value(Water Pollution
Control Act)

Agreement
value (Law
Concerning
SpecialMeasuresforConservationof theEnvironmentof the Seto
Inland Sea)

Voluntarystandard

5,200
5.8~
8.6
120
120
150

5,000
5.8
8.6
10
10
5

5,000
6.5

Mineral oil: 5
Vegetable oil: 30

Unit

FY ended December
2017

FY ended December
2018

FY ended December
2019

Analysisvalue

Analysisvalue

Analysisvalue

Evaluation

Evaluation

Evaluation



4,976
6.8




4,934
6.9




4,655
6.9




8



7.6



7.6



9
9
4.5

mg/l
mg/l
mg/l

1.4
9.2
3





3.9
7.4
3.7





2.8
7.3
1.6





1

0.9

mg/l

0.6



0.6



<0.05



5
3
2
10

0.1
0.5
1.5
0.15

0.08
0.4
1.2
0.08

mg/l
mg/l
mg/l
mg/l

<0.005
0.03
<0.01
<0.01






<0.005
0.04
<0.01
<0.01






<0.005
0.04
<0.01
0.02






10
2
60
8

0.05
0.02
10
1

0.045

mg/l

0.05



0.05



0.04



0.02
9
0.45

mg/l
mg/l
mg/l

<0.02
7
0.19





0.02
9.4
0.29





<0.02
8.0
0.19





8

43

Nissha Sustainability Report 2020

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

Items
measured
pH
BOD
COD
SS

Regulatory
value(Prefecture)

FY ended December 2017

Voluntarystandard

FY ended December 2018

FY ended December 2019

Unit
Final effluent(Average)

Final effluent(Maximum)

Final effluent(Average)

Final effluent(Maximum)

Final effluent(Average)

Final effluent(Maximum)5.88.6
160 or less
160 or less
200 or less

7.5



7.6



7.4



7.7



7.5



7.5



40 or less80 or less20 or less

mg/l
mg/l
mg/l

31.5
35.4
15.6





47
63
26





32.6
55.3
28.2





56
93
63





21.9
34.0
9.1





34.0
47.0
18.0





30.0

15 or less

mg/l

0.5



0.5



0.5



0.5



0.6



0.8



n-hexanederivedsubstances

6.28.2

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

Items
measured

pH
BOD

Regulatory
Agreement
value
value of Tsu(WaterCity
Pollution
environmental
Controlconservation
Act)

Voluntarystandard

Unit

FY ended December 2017

FY ended December 2018

FY ended December 2019

June
8.0


June
7.9


June
8.2


December
7.8


December
8.3


December
7.9


5.8~8.6120

5.8~8.6
20

5.8~8.6
20

mg/

9.4



<5.0



<5.0



<5.0



<5.0



<5.0



120
150

20
70

20

mg/

6.1



3.6



0.8



5.1



1.4



1.5



70

mg/

<1



<2



<2



<2



<2



<2



5
5
3
2
10

5

5

mg/

<1



<2



<2



<2



<2



<2



3
2
10

5
3
2
10

mg/
mg/
mg/
mg/

<0.025
<0.01
<0.01
0.2






<0.5
<0.1
<0.1
0.3






<0.5
<0.1
<0.1
0.4






<0.5
<0.1
<0.1
<0.1






<0.5
<0.1
<0.1
<0.1






<0.5
<0.1
<0.1
0.1






10

10

mg/

<0.1



<0.1



<0.1



<0.1



<0.1



<0.1



2

2

mg/

<0.04



<0.1



<0.1



<0.1



<0.1



<0.1



3000 unit/ml

30



58



100



100



<100



<100



COD
SS
N-hexane

PhenolCopperZinc
Soluble ironSolublemanganese
Chromium
Coliform
bacteria
NitrogenPhosphorus
Fluorine
Cadmium
CyanideLead
Hexavalentchromium
Arsenic
Total
mercury

3000

3000

60

10
1



10
1
8
0.03
1
0.1

mg/
mg/
mg/
mg/
mg/
mg/

7.1
0.03
0.1
<0.005
<0.1
<0.02








1.0
<0.1












0.8
<0.1
<0.8
<0.001
<0.1
<0.01








1.2
0.2












0.8
<0.1
<0.8
<0.001
<0.1
<0.01








<0.5
<0.1












0.5

0.5

mg/

<0.04







<0.05







<0.05







0.1

0.1

mg/

<0.01







<0.01







<0.01







0.005

0.005

mg/

<0.0005

<0.0005

<0.0005







8
8
0.03
1
0.1

Management of Chemical Substances
For the fiscal year ended December 2018, we reported the use of nine PRTR-designated chemical
substances.
Nitec Industries, Inc. (NII) Koka Factory
Unit: kg
FY ended December 2017

PRTR
No.

Name ofchemical
substance

5380

Ethylbenzene
Xylene

88
296
300
392

Hexavalentchromiumcompounds
1,2,4Trimethylbenzend
TolueneN-hexane

Volumetransferred
Discharge
tovolume into
industrial
the
waste
atmosphereprocessing
companies

Reportingrequired /notrequiredFY ended December 2018
Volumetransferred
Discharge
tovolume into
industrial
the
waste
atmosphereprocessing
companies

Reportingrequired /notrequiredFY ended December 2019
Discharge
volume intotheatmosphere

Volumetransferredtoindustrial
waste
processing
companies

Reportingrequired /notrequired

2,109
16,261

530
4,219




1,444
9,904

587
4,026




1,211
9,937

463
4,075




0.1

0.0



0.1

0.0



0.1

0



2,258

1,114



299

107



265

95



66,3995,261

39,9703,227



83,927
8,371

36,8312,375




100,846
4,518

5,520
2,741




44

Nissha Sustainability Report 2020

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

Name ofchemical
substance

PRTR
No.

FY ended December 2017

FY ended December 2018

Discharge
volume intotheatmosphere

Volumetransferredtoindustrial
waste
processing
companies

Discharge
volume intotheatmosphere

Volumetransferredtoindustrial
waste
processing
companies

Reportingrequired /notrequiredFY ended December 2019

Reportingrequired /notrequired

Discharge
volume intotheatmosphere

Volumetransferredtoindustrial
waste
processing
companies

Reportingrequired /notrequired71

Ferric chloride

0.0

0.0



0.0

0.0

×

0.0

0.0

×

272

Water-soluble copper
salts (excluding
complex salt)

0.0

1,857.0

0.0

2,023.1



0.0

1,352.8

453

Molybdenum and its
compounds

0.0

0.0



0.0

0.0



0.0

0.0



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

PRTR
No.

Name ofchemical
substance

64

Silver and its compounds(water soluble)

71

Ferric chloride

272
453

FY ended December 2017

FY ended December 2018

Discharge
volume intotheatmosphere

Volumetransferredtoindustrial
waste
processing
companies

Discharge
volume intotheatmosphere

Volumetransferredtoindustrial
waste
processing
companies

-

-

-

-

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

Reportingrequired /notrequired

Reportingrequired /notrequiredFY ended December 2019
Discharge
volume intotheatmosphere

Volumetransferredtoindustrial
waste
processing
companies--

Reportingrequired /notrequired

0.0

0.0



0.0

0.0



0.0

0.0



0.0

0.0



0.0

0.0



0.0

0.0



-

-

-

-

-

-

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

FY ended Decenber 2017

FY ended Decenber 2018
Discharge
volume intotheatmosphere

Volumetransferred toindustrial
waste
processing
companies

0.0

0.0

PRTR
No.

Name ofchemical
substance

Discharge
volume intotheatmosphere

Volumetransferred toindustrial
waste
processing
companies

71

Ferric chloride

0.0

0.0

Reportingrequired /notrequired45

FY ended Decenber 2019

Reportingrequired /notrequiredDischarge
volume intotheatmosphere

Volumetransferred toindustrial
waste
processing
companies

0.0

0.0

Reportingrequired /notrequiredNissha Sustainability Report 2020

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

• We work with our customers across the globe to tackle social issues, undera structure in which our customers can feel safe to trust us with work.

• We respect the human rights and diversity of our employees, and create
workplace and systems in which they can maximize their abilities, withthe aim of achieving growth for both the company and our employees.

• We strive to build partnerships of co-existence and co-prosperity with our
suppliers, toward constructing sustainable production systems andsupply chains.

• We carry out social contribution activities, aiming to co-existence withlocal communities.

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Nissha Sustainability Report 2020

Human Rights
Basic Policy on Labor and Human Rights
We at Nissha Group have in place a basic policy on labor and human rights. In formulating the policy,
the 10 principles of the United Nations Global Compact, which we joined in April 2012, and theelectronics and automotive industries’ code of conduct provided by the Responsible Business Alliance(RBA) were used as reference. In addition to Japanese, this policy has been translated into English,
Chinese, Korean and Malay, Spanish and German, and widely distributed to all Nissha Group employees.

Basic Policy on Labor and Human Rights
The Nissha Group will observe the international norms, laws and ordinances related to human rights
and labor standards and will make efforts to continually improve human rights and labor standards.
1.

Child labor: We will prohibit child labor and also implement relief measures.

2.

Forced labor: We will eliminate all forms of forced labor, including bonded labor.

3.

Health and safety: We will secure the health and safety of our employees and provide a hygienic
workplace environment.

4.

Freedom of association and the right to collective bargaining: We will guarantee the right toorganize and the right to collective bargaining.

5.

Discrimination: We will not discriminate based on a person’s age, disability, ethnic group, gender,
marital status, nationality, political support, race, religion, sexual orientation, pregnancy ormembership in a union. We will also not be party to this.

6.

Punishment: We will not perform physical punishment or mental or physical coercion and wewill not engage in verbal abuse.

7.

Working hours: We will observe the laws, ordinances and labor agreements related to working
hours, rest breaks and holidays.

8.

Remuneration: We will observe the laws and ordinances related to the payment of appropriate
wages.
June 1, 2018
Junya Suzuki
Chairman of the Board
President and CEO
Nissha Co., Ltd

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Nissha Sustainability Report 2020

Initiatives Related to Labor and Human Rights
We adhere to international norms and laws on human rights and labor standards, and strive forcontinuous improvement in the content of our activities. Labor and Human Rights Subcommittee, oneof the constituent subcommittees of Sustainability Committee is introducing and operating amanagement system in line with the Responsible Business Alliance (RBA) code of conduct at major
production bases of the Nissha Group in Japan.
In the fiscal year ended December 2019, we conducted training to “respect the human rights of
employees” and “understand and reduce human rights risks”, in combination with efforts to assess
human rights risks at production bases in Japan employing foreign technical interns as well as atoverseas production bases. In addition, we implemented measures to encourage flexible work styles
and comfortable life in modern society, and provided in-house training on harassment prevention.
Moving forward, we plan to monitor human rights risks at affiliated companies new to the Nissha Groupand at overseas bases, and carry out the initiatives needed to reduce the risks.

Initiatives for Foreign Technical Interns
Workplaces in Nissha that accept technical interns from Vietnam make creative efforts in information
sharing and communication toward protecting the human rights of the interns and establishing aworker-friendly environment. Signs indicating evacuation routes and the location of the medical office,notices about harassment and other consultation desks, pay slips, and training materials, for example,
are prepared and provided in both the Japanese and Vietnamese languages.

Workshop

Training materials in Vietnamese

Harassment Prevention
We at the Nissha Group establish a set of Harassment Prevention Regulations, which prescribe
measures to prevent various forms of harassment in the workplace, with the aim of realizing soundworkplace environments in which all employees can live up to their full potential. As a structure forpromoting harassment prevention, we designate a chief promoter of harassment prevention and hotline
staff at each base. The chief promoters organize a liaison meeting twice a year, in May and November
as a rule, where they share information about cases of harassment that have occurred at one another’sbase, introduce their responses, and discuss practical harassment prevention, problem solving, andmeasures for improvement.
We have in place both internal and external hotlines that are accessible to all employees seeking

48

Nissha Sustainability Report 2020

consultation about harassment. Contact information is disseminated on our intranet, in a guidebook,and through e-learning. We ensure that employees can feel safe using the system by taking the utmost
care to protect the privacy of the consulter, and to protect the consulter or whistleblower from unfair
treatment or disadvantage. In the fiscal year ended December 2019, the internal hotline was used
seven times and the external hotline two times. All of the cases have been addressed and brought toa conclusion.
We use an e-learning system to provide harassment prevention training for all employees. In addition,
we conduct supervisor training for managers, training for hotline staff, and follow-up training targeting
divisions where cases of harassment had occurred with the aim of preventing recurrence. In the fiscal
year ended December 2019, group-wide training focused on preventing harassment and dealing withit, covering contents such as a harassment-free mindset, the viewpoint of the victim, and what to doin the event the participants become a victim. In the fiscal year ending December 2020, we plan towork on prevention centering on divisions with a high frequency of incidents.

Fair Evaluation and Treatment
The personnel system at Nissha Group is based on rewarding employees who have achieved results.
In Japan, we conduct a personnel evaluation every half year around the two axes; one is “responsibility
for results“, linked with the management strategies of the company and the goals of the individual’sorganization, and the other is “responsibility for conduct“, which look at the individual’s actions toward
producing results and the extent to which they epitomize the shared values of Nissha Group. The
outcomes are reflected in treatment in the form of bonuses, pay raises, and promotions. The
individual’s superior organizes interviews and provides feedback at the start of the period covered,
when goals are set, and at the end, when the outcomes are evaluated. By emphasizing dialogue formutual understanding, we strive for evaluation and treatment that is fair and convincing.
At present, we are preparing a new managerial personnel system that will come into effect in thesecond half of the fiscal year ending December 2020. The new system will attach weight to the scaleof the individual’s role and his or her ability to perform it regardless of age or career in the company.

Wage Management
We at the Nissha Group appropriately determine wages paid in exchange for labor in accordance withthe wage regulations of each subsidiary and with individual contracts based on the laws of the relevant
country. Neither our Basic Policy on Labor and Human Rights nor our wage regulations allow for
discrimination based on a person’s age or gender.
Once a year, we conduct internal audits of Nissha Group companies in Japan in the area of labor andhuman rights to check the status of adherence to laws and the codes of conduct provided by ourcustomers. Whether wages satisfy prefectural minimum requirements, and work times and overtime
hours are correctly reflected in wages—we continue to manage even findings like these for whichcorrective action has already been completed through past audits.

49

Nissha Sustainability Report 2020

Relationship with Labor Union
Our Basic Policy on Labor and Human Rights contains the provision, “4. Freedom of association andthe right to collective bargaining. In Japan, the labor contract concluded between company and labor
union confirms, “the Company and the Union shall respect each other’s position and maintain a peacefulrelationship between labor and management as well as strive for the maintenance and improvementof labor conditions and the growth of the Company.” In the fiscal year ended December 2019, there
were no significant violations of freedom of association.
The Nissha Group has three labor unions: the Nissha Labor Union (organized in March 1946, 739
members*), the Nitec Industries Labor Union (organized in March 2012, 433 members*), and the
Nissha Printing Communications Labor Union (organized in October 2015, 136 members*）(the numberof union members are as of the end of December 2019). In January 2016, these three unions formed
the Nissha Group Labor Union. While one union per company is our basic approach to promoting welldisciplined organization and building sound relationships between labor and management, werecognize that regular exchange of information and coordinated action between labor unions isnecessary to resolve common challenges within the Nissha Group. Based on this understanding, Nissha
Group have solid relationships and hold regular negotiations and discussions with our labor unions.
In the fiscal year ended December 2019, in response to legislation on work style reforms, we engaged
in collective bargaining with the labor union and introduced annual paid leave by the hour. In the fiscal
year ending December 2020, we will continue to review the agreement on overtime work and work ondays off, commonly called saburoku kyotei, or “Agreement 36,” for corresponding to Article 36 of theLabor Standards Act—establish and bring into effect telework regulations expanding on our existing
work at home system, and carry out other schemes to realize flexible work styles suitable for our
employees’ diverse lifestyles.
Nissha Co., Ltd. holds regular Management Council meetings with the Nissha Labor Union, joined by
employees excluding managerial staff, to negotiate and discuss employees’ labor conditions and share
information about the Nissha Group’s business operations. When changing important labor conditionsof Nissha Group in Japan, the company exchanges dialogue with the union on a daily basis with theaim of reaching an agreement satisfactory to both. Furthermore, labor and management offices areholding discussions to share information about work times and prevent large amounts of overtime
work.
Affiliated companies Nitec Industries, Inc. and Nissha Printing Communications, Inc. also holdnegotiations and discussions about employees’ labor conditions with their respective labor unions. The
Workplace Improvement Committee, established by both labor and management at Nitec Precision andTechnologies, Inc., works to promote improvements in the workplace environment and in welfare
benefits.
In fiscal year ended December 2019, the Nissha Group had no report either of a strike or lockout. We
will continue to respect the mutual positions of both company and union, and build a sound relationshipbetween labor and management.

50

Nissha Sustainability Report 2020

Voice of the Labor Unions
At the Nissha Group Labor Union, one union per company is
our

basic

approachtopromotingwell-disciplinedorganization and building sound relationships between laborand management. Each union offers suggestions, negotiates
between labor and management, and performs checks true
to the characteristics of the company. We emphasize
autonomy, such as providing guidance for Management
Council meetings between the union and management at
each company. In addition, the Nissha Group Labor Union
holds discussions between labor and management for issues
that are common to all, such as the various systems,
regulations, and so on.

Takashi Yoshioka
Labor Leader / Nissha Group Labor Union

Nissha is in the midst of dynamic changes right now. When carrying out union activities, we constantly
bear in mind that from a union-specific standpoint, we are supporting Nissha’s strength of achieving
growth through change. We are paving the way to growth and a sense of job fulfillment for employeesof the Nissha Group—this belief is at the base of our daily activities.

51

Nissha Sustainability Report 2020

Labor Practices

Human Resources Development
Nissha Group’s Mission is to realize the enrichment of people’s lives through the diverse capabilities
and passion. We believe our employees are our most important management resources and work todevelop human resources based on our Human Resources Development Policy.

Human Resources Development Policy
We implement a planned development of human resources needed for the company to grow andactively support our employees in the voluntary development of their skills with the aim of achieving
growth for both the company and our employees.

Approach to Human Resources Development
We at Nissha Group approach human resources development from the three areas of planned humanresource development, skill development, and career development. For each area, we aim to promotecomprehensive education incorporating the perspectives of training system, on-the-job training (OJT),
medium- to long-term career path development, and human resource systems to support these
programs.

52

Nissha Sustainability Report 2020

Human Resources Development Model

Planned human resource development
We implement planned development to foster and secure the human resources needed to achieve
the medium- and long-term vision.
Skill development
Individual employees voluntarily develop their skills and increase their market value.
→The company supports this and thereby enhances the quality of its human resources.
Career development
We support medium- to long-term career development and promote growth toward employees’ ideals.
(We provide opportunities to recognize the importance of and pursue career development.)

Training System (Major Programs by Area)
Area
Planned humanresource development

Training
Nissha Academy (selective training for next-generation management
candidates), rank-specific training, manager training, overseas appointee training,
etc.
Theme-specific training (leadership, logical thinking, presentation, etc.), foreign

Skill development

language training, accounting education, in-house TOEIC testing, correspondence
course, etc.

Career development

Education for young employees (first, second, and third years after joining Nissha
Group), career development training, etc.

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Nissha Sustainability Report 2020

Selective Human Resource Development
In 2013, we established Nissha Academy, an in-house institute for fostering human resources withmore advanced, specialized knowledge. While we continue to expand on our rank-specific and theme
or function-specific training, global human resource education, and career development, Nissha
Academy employs a selective system to provide training.
As part of Nissha Academy, we operate a Business School which provides knowledge and skills in the
proposal and execution of management strategies including accounting, finance, marketing, andhuman resources to foster leaders capable of company and business oversight. Graduates are actively
provided with opportunities to practice what they have learned through involvement in projects, thedrafting of medium-term business plans, and so on, which helps with their medium-term careerdevelopment as well.
As a gateway to Nissha Academy, in fiscal year ended March 2016, we launched business literacy
training, a short-term intensive selective program covering the basics of themes such as management,
accounting, and marketing. This program also goes beyond inputting knowledge to featuring practicalcontents, where participants apply what they have learned to analyze the current situation of theircompany and discuss its challenges through group work and the creation of individual reports.

Programs to Support Employees’ Will to Learn and Grow
The Nissha Group offers many open-call training courses which employees may sign up for in line with
their choice of personal development theme. Eligibility for the open-call training courses for generalemployees was expanded to managers in the fiscal year ended December 2018 in response to the willof managers to learn and grow. In addition, our correspondence courses and self-learning programs
via Skype support voluntary learning by covering half the price of subsequent courses for graduates.
In the fiscal year ended December 2019, we introduced a new career training course for employees in
the fifties. All permanent employees aged 50 through 59 attended the course designed to develop
understanding about the external environment and the company’s systems as well as facilitate
recognition of the participants’ own values and strengths. The e-learning system we introduced in thefiscal year ended December 2018 offers courses on essential knowledge and important themes for all
employees. Courses in the fiscal year ended December 2019 covered four themes including corporate
ethics and compliance; labor, human rights, and the prevention of harassment; and information

54

Nissha Sustainability Report 2020security. A video of the e-learning contents was used as teaching material for employees working at
plants, who have no access to a personal computer. In this way, we are working to upgrade andstandardize the knowledge of employees of the Nissha Group in Japan.
In addition, we have in place an overseas trainee system aimed at fostering young human resources
who will play a role in the global business environment. Employees who fulfill a certain set of criteria
and who have been recommended, passed the screening, and received approval are sent to overseas
subsidiaries, where they are provided with opportunities to experience global business, improve theirlanguage and cross-cultural communication skills, and gain understanding of local business practices.
In the fiscal year ended December 2019, five employees were dispatched to Europe, the United States,
and Southeast Asia, where they took their first steps toward becoming global human resources.

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

Annual training hours

Training hours per employee

Fiscal year

Fiscal year

ended

ended

ended

December 2017

December 2018

December 2019Male

14,204

Female

5,561

Total

19,765Male

7.4

Female

13.1

Total

8.4

Fiscal year

15,117

12,551(19,573)(17,768)

6,330

3,388

(7,277)(4,497)

21,446

15,939(26,850)(22,265)

7.9

6.8(10.2)

(9.6)

14.6

7.5

(16.8)(10.0)

9.1

7.0(11.4)(9.7)* Training hours per employee are calculated based on the number of full-time employees of the Nissha Group in Japan.
* Figures in parenthesis are the results including e-learning.
* With the change in fiscal year end date from March 31 to December 31, the fiscal year ended December 2017 covers anine-month period (from April to December).

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Nissha Sustainability Report 2020

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

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

Composition by region(Nissha Group, as of the end of December 2019)* Figures exclude temporary employees.

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Nissha Sustainability Report 2020

Composition by employment status(Nissha Group, as of the end of December 2019)*Figures exclude directors by a delegation agreement.

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

GenderDirectors ofCorporate

NisshaManagerial

the Board

officers

fellows

staff

Average
Employees

Average age

years ofemployment

FY ended

Male

6

15

1

153

610

41.1

13.7

Mar. 2016

Female

1

0

0

7

180

35.0

9.8

FY ended

Male

7

16

1

154

619

41.5

13.9

Mar. 2017

Female

1

0

0

7

183

35.4

10.2

FY ended

Male

7

15

1

165

603

41.8

14.1

Dec. 2017

Female

1

0

0

9

188

35.9

10.7

FY ended

Male

8

12

1

161

616

42.1

14.5

Dec. 2018

Female

1

0

0

11

203

36.5

10.7

FY ended

Male

8

12

1

162

609

42.9

15.3

Dec. 2019

Female

1

0

0

10

210

36.7

11.0

Note 1: Directors include Independent Outside Directors of the Board.
Note 2: Employees exclude temporary employees.

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Nissha Sustainability Report 2020

Composition by age (Nissha Co., Ltd., as of the end of December 2019)

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

Of all permanent employees who left Nissha Group companies in Japan in the fiscal year ended
December 2019, 2.26% left for personal reasons.

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Nissha Sustainability Report 2020

Percentage of Persons with Disabilities at Nissha Group in Japan
Business operators in Japan with over a certain number of employees are required to employ aprescribed percentage of persons with disabilities. Nissha Group in Japan with an applicable
workforce each strive to meet the statutory rate. At Nissha Co., Ltd. and affiliated companies subject
to the rule, Human Resources organizes regular interviews with employees with disabilities andstrives to maintain an environment where they can perform to their potential. The company also hasa system for appointing permanent employees taking into consideration their disabilities, andassigning job coaches to support the development of potential, toward long-term employment intune with the capabilities and circumstances of individual employees.
The percentage of persons with disabilities employed at major Nissha Group in Japan are given in thetable below. In the fiscal year ended December 2019, persons with disabilities accounted for 2.38％
of the workforce at Nissha Co., Ltd., for an increase compared to the previous fiscal year. Those
employed at Nissha Business Service, Inc. (NBS) decreased slightly, to 1.26%. By strengthening
collaboration with external organizations such as special-needs schools and introducing internships
inclusive of persons with disabilities, we plan to continue hiring and creating job opportunities for
persons with disabilities, and working to achieve and maintain the target statutory rate.

Percentage of Persons with Disabilities Employed (Nissha Group in Japan)

Nissha: Nissha Co., Ltd.
NII: Nitec Industries, Inc.
NPT: Nitec Precision and Technologies, Inc.
NCI: Nissha Printing Communications, Inc.
NBS: Nissha Business Service, Inc.

* With the change in fiscal year end date, the results are as of the end of March until 2016, and as of the end of December
after 2017.
* The statutory employment rate for persons with disabilities in private company is 2.2% since April 2018.

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Nissha Sustainability Report 2020

Employment of Foreign Nationals
In efforts to secure diverse human resources, Nissha Co., Ltd. has expanded new graduate hiring
activities to foreign international students. By participating in joint company briefing events
organized exclusively for international students in Japan, we sought to interview candidates from avariety of backgrounds. As a result, in the fiscal year ended December 2019, we hired fourinternational students, who are now working in sales, technology, and administration divisions. For
the divisions accepting foreign employees, we organize workshops to promote cross-cultural
understanding, ensuring that members respect one another’s diverse values and use that diversity toits best advantage in their work.
Nitec Precision and Technologies, Inc. has accepted technical interns from Vietnam since 2018. To
help the technical interns feel safe and secure at production sites, it ensures smooth workplacecommunication by posting signs such as evacuation routes in both the Japanese and Vietnamese
languages. We plan to continue efforts to secure and develop the diverse capabilities that will support
our changing business.

Initiatives to Promote Women’s Participation and Advancement in the Workplace
Nissha Group aims to be a corporate group where employees can live up to their potential regardlessof nationality, gender, or age, etc.

Practical Training for Women Employees
In order to promote women’s participation in the workplace, we believe it is crucial both for the
management to recognize the necessity of promoting women’s participation in the workplace andtaking advantage of diversity, and to raise the awareness of women employees themselves. At Nissha
Group in Japan, we conducted training for the management first, followed by career developmenttraining for women employees in general positions, and then training for women employees who are
candidates for managerial positions.
In the training for woman general employees, the content was designed so that participants could beaware of future career development, by looking back on their career so far and recognizing theircurrent strengths and making a future success plan. After the training, participants work with theirsuperiors to deepen communication and promote understanding of women employees so that more
effective results can be achieved.
In addition to the above training content, the career development training for women managerial
candidates is an opportunity to learn what is necessary to play an active role as a leader and to
exchange opinions among participants to deepen horizontal cooperation.
In fiscal year 2019, we held a seminar on "Healthcare for Working Women" as an educational activity
to help women continue to work healthily for a long time. Our industrial physician explained thehealth risks peculiar to women, the importance of health checkups, and points on healthmanagement.

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Nissha Sustainability Report 2020

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

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Nissha Sustainability Report 2020

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

Flexible Work Hours
We have in place flexible work hours as a system in which employees can voluntarily determine theirown start and finish time of the working day. With this system, we are able to respond flexibly to timedifferences with other countries, respond to customer requests and work styles according to the busy
period of work, while promoting work-life balance. Initially introduced in sales departments, the system
was expanded gradually to other divisions and today benefits employees also in development andadministration.

Work from Home / Telework System
We have had in place a work from home system for employees with child-rearing and family care
responsibilities since the fiscal year ended March 2015. In the fiscal year ended December 2019, 31
employees used the system (20 for child-rearing, 4 for family care, and 7 for other reasons). With theaim of improving work efficiency and further promoting work-life balance with flexible work styles, inthe fiscal year ending December 2020, we expanded eligibility for work at home to any employee who
can perform the same level of work at home as at the office. We also established a telework system,
covering work performed at locations other than the office using IT equipment, in efforts to promote
flexible, efficient work styles.

FY ended

FY ended

FY ended

FY ended

FY endedMar. 2016

Mar. 2017

Dec. 2017

Dec. 2018

Dec. 2019

Male

0

1

1

3

11

Female

5

6

7

12

20

Total

5

7

8

15

31

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Nissha Sustainability Report 2020

Diverse Work Styles for COVID-19
With the spread of the novel coronavirus disease (COVID-19) and the Japanese government expanding
its state of emergency declaration nationwide, in April 2020, Nissha Co., Ltd. and Nissha Group in
Japan switched sales divisions and back office divisions primarily to teleworking. In order to facilitate
work from home, we promoted digitization of paper-based documents such as internal application andapproval forms, and as a temporary measure until the situation subsides, simplified the approval
procedure for teleworking itself. For employees who needed to come to the office, we allowed the useof alternative public transportation routes that are relatively less congested.
During the pandemic, we allow employees to use special leave or saved expired leave for suspected
infection, and special paid leave for closure of a child’s kindergarten or school. For women employees whoare pregnant or within a year of childbirth, who may experience anxiety or stress about the possibility of
infection while commuting or owing to the nature of their work, we allow 100% teleworking if the job
permits it, or switching to a job that permits teleworking if the current job does not.
Moving forward, we plan to continue devising flexible work systems and support structures so that
employees can feel safe and secure while working and live up to their full potential.

Support for Reinstatement after Long-term Leave
For employees reinstated at work after long-term leave due to illness or injury, we set forth theconsideration to be taken by workplaces according to the condition of the employee’s health in an aim
to prevent recurrence of the illness or injury and achieve a smooth return to work. We arrange periodic
consultations with an industrial physician to confirm the considerations necessary in the workplace,and have a system in which reinstated employees may shorten their work time by up to two hours per
day for a period of six months. For employees to whom paid leave was not granted during long-term
leave, three days of paid leave are granted when the employee’s attendance at work is at least 95%
for a period of three months after reinstatement.

Child-rearing and Family Care Support
We are enhancing the support system for child-rearing and family care for the flexible working stylesof employees at various life stages. In order to make the systems easy to use, we have in place a
program in which employees may save up to 30 days of expired annual paid leave to be used in theevent of illness or injury, either of the employee or a family member, and for child-rearing, family care,school events, and closure of kindergarten or school.

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

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Nissha Sustainability Report 2020

Support system

Nissha Group in Japan

Shorter hours during

During pregnancy (up to maternity

pregnancy

leave before childbirth) Up to 3

Statutory coverage－

hours per day
Child-rearing leave

Up to 2 years old

As a rule, up to 1 year old (1 year 6months old when certain conditions
are met)Days off for spouse’s

5 days at the time of spouse’schildbirthchildbirth－(Special paid leave)
Shorter hours for child-

Up to completion of elementary

Up to 3 years old

rearingschoolBy effort: Start of elementary school

Up to 3 hours per day
Days off for child

1 child: 5 days

1 child: 5 days

nursing

2 or more children: 10 days

2 or more children: 10 days

Up to start of elementary school: paid

Either paid or unpaid

From the first to sixth grade: unpaid
Child-rearing support

Amount: 150,000 yen (for eachfundoccasion below)
Period• Birth• Start of elementary school－• Start of junior high school• Start of senior high school• Start of technical college
In addition to the above, we have introduced a system for supporting early reinstatement after childrearing leave by covering part of the expenses of a non-registered nursery. The system is designed for
employees who could not enroll their child in a publicly funded authorized nursery, and while the childis on the waiting list, temporarily opt to use the services of a more costly non-registered facility. To
date, two employees have been reinstated using the system.

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Nissha Sustainability Report 2020

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

Number of employees who used child-rearing leave

Number of employees who worked shorter hours for child-rearing

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Nissha Sustainability Report 2020

Number of employees who took days off for child nursing

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

Fiscal Year

Reinstatement
rate

Retention rate(one year)

FY ended

FY ended

FY ended

Dec. 2017

Dec. 2018

Dec. 2018

Male

100.0%

100.0%

100.0%

Female100.0%

100.0%

95.0%

Male

88.8%

83.3%

100.0%

Female96.4%

100.0%

90.0%* Reinstatement rate = Number of employees reinstated after child-rearing leave in the current fiscal year ÷ Number of
employees expected to be reinstated after child-rearing leave in the current fiscal year x 100* Retention rate = Number of employees remaining at the end of December in the current fiscal year after being reinstatedafter child-rearing leave in the previous fiscal year ÷ Number of employees reinstated after child-rearing leave in theprevious fiscal year x 100

Major family care support systems
In order to appropriately respond to inquiries and offer consultation about certification of needed longterm care and long-term care insurance, we have established a help desk that connects to an external
specialist.
Support system

Nissha Group in Japan

Statutory coverage

Family care leave

Total 240 working days

Total 93 days

Shorter hours for family

Three years from starting dateThree years from starting datecare

3 hours per day

Days off for family care

1 family member: 5 days

1 family member: 5 days

2 or more family members: 10 days

2 or more family members: 10 days

Paid

Either paid or unpaid

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Nissha Sustainability Report 2020

Number of employees who used family care leave
The table below shows the number of employees who used the support system for family care leave,
shorter hours for family care, and days off for family care. We are making efforts to raise employee
awareness of the system to support diverse work styles in an aging society by distributing the WorkLife Balance Support Guidebook containing information on both in-house and outside systems for familycare, and publishing the contents on the intranet.

FY ended

FY ended

FY ended

FY ended

FY endedMar. 2016

Mar. 2017

Dec. 2017

Dec. 2018

Dec. 2019

Male

0

0

0

1

3

Female

0

0

1

0

1

Shorter hours

Male

1

1

0

0

0

for family care

Female

0

0

1

1

1

Days off for

Male

4

7

9

8

12

family care

Female

4

5

7

8

5

Support system

GenderFamily careleave

Distribution of Work-Life Balance Support Guidebook
To support our employees in achieving work-life balance, we created a Work-Life Balance Support
Guidebook containing information on both in-house and outside systems for child-rearing and familycare and distributed to all employees. The guidebook is published on the Nissha Group intranet andswiftly revised in the event a system changes, enabling our employees to access up-to-date information
at all times.

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Nissha Sustainability Report 2020

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

Career Resumption Program
In January 2018, we introduced a career resumption program for re-hiring employees who have once
had to retire for specified reasons and wish to be reinstated at work. This is designed to support therebuilding of a career path for employees who wish to return to Nissha and use the experience andexpertise they gained before retirement. Eligibility was initially limited to marriage, childbirth, childrearing, spouse’s job transfer, and family care; however, illness or injury and infertility treatment wereadded in January 2020. After introduction of the program, 11 people have registered at the time ofretirement.
In January 2020, we also introduced a long-term leave system for employees accompanying theirspouse on an overseas appointment.

Promotion of the Use of Annual Paid Leave
To promote the use of annual paid leave, we have a program designed to encourage employees to plantaking four days a year, two days each in the first and second halves; and offer a further two days inwhich employees may request to take paid leave on their birthday or wedding anniversary, or that ofa family member. As a result of ongoing efforts, the fiscal year ended December 2019 saw annual paid
leave taken exceed 12 days on average, and an increase in the percentage of annual paid leave used.
In October 2019, we introduced annual paid leave by the hour as a system for facilitating more flexible
use of annual paid leave and supporting our employees’ efforts to balance child-rearing and family carewith work.

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Nissha Sustainability Report 2020

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

Outpatient Sick Leave System
In fiscal year ended March 2016, we introduced an outpatient sick leave system with the aim ofsupporting employees who require long-term outpatient treatment to continue working. The systemenables employees with specified disorders to take 12 days off per year for treatment. Three employees
used the system in fiscal year ended December 2019.

Fiscal YearFY ended

FY ended

FY ended

FY ended

FY endedMar. 2016

Mar. 2017

Dec. 2017

Dec. 2018

Dec. 2019

Male

0

1

2

1

1

Female

0

0

1

1

2

Total

0

1

3

2

3

Reduction of Overtime Work
Nissha Group companies in Japan promote the reduction of overtime work on an ongoing basis toward
improving productivity and helping our employees achieve work-life balance. Twice a month, we notify
all divisions of overtime hours recorded. Managers use this information to provide a reminder about
overtime work to employees in their division. Divisions that recorded a large amount of overtime work
are questioned as to the causes and the physical condition of employees in an effort to improveawareness about work time management. We also manage work hours by the week, where employees
set a weekly target, and if their work hours or overtime hours are too long, they and their manager
receive a midweek alert email.

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Nissha Sustainability Report 2020

Internal Job Posting System
The Nissha Group introduced an internal job posting system in fiscal year ended March 2012 with theaim of providing employees with the opportunity to choose their own career path as well as appoint
employees to positions that reflect their aptitude and thereby enhance our organizational strength.
The company posts specific job openings internally, employees who meet the criteria apply for the jobof their own will, and those who pass the screening are transferred to the relevant post. Employees
who have transferred through the system are playing an active role in their new division.

Implementation status

Fiscal YearFY ended

FY ended

FY ended

FY ended

FY endedMar. 2017

Dec. 2017

Dec. 2018

Dec. 2019

Mar. 2020

Number of

8

job posting
Successful
applicants(transferees)

Male

Female1

No offering
Male0

Female-No offering
Male-

Female
-

-

15
Male

Female
2

1

9
Male

Female4

１

Awarding system
Nissha Group has in place various awarding systems that aim to reward praiseworthy endeavors andcreate a setting in which the employees responsible for the endeavors influence and motivate thecompany and organizations as a whole.
In the fiscal year ended December 2019, four employees received the General Manager’s Award
recognizing significant contributions to the business unit’s financial performance, 21 employees the
Passion Award acknowledging challenges taken on toward the success of a project, and 111 employees
the Nissha People Award celebrating workplace stars who epitomize our Shared Values. The awards
are presented globally across the Nissha Group, with recipients including employees at overseas bases.

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Nissha Sustainability Report 2020

Safety and HealthOccupational Safety and Health Policy / Safety and Health Objectives
Nissha Group has in place a Occupational Safety and Health Policy declaring that we position the safety
and health of all involved in our business activities as a top management priority, and promote thoroughawareness of this policy. At Nissha Group in Japan, we established health and safety targets in linewith this policy. With a target period of three years (FY2018-FY2020) linked to the Sixth Medium-term
Business Plan, we are implementing various activities to prevent occupational accidents, aiming forzero occupational accidents.

Occupational Safety and Health Policy

Nissha Group recognizes that ensuring the safety and health of all people engaged in our businessactivities is a top management priority for the continuity and development of our operations, and to
this end, commits to the following practices.
1.

We promote the participation of all in creating comfortable workplace environments anddeveloping sound physical and mental health.

2.

We pursue Co-existence with society in compliance with relevant laws and regulations, and withthe requirements agreed upon by Nissha of local communities, public institutions, and ourcustomers.

3.

We strive for continuous improvement in occupational safety and health standards through theoperation of management system.

This policy will be distributed widely to all people in the Nissha Group as well as released to the generalpublic.
November 6, 2014
Junya Suzuki
Chairman of the Board
President and CEO
Nissha Co., Ltd.

Safety and Health Management System / Safety and Health
Subcommittee

The Sustainability Committee’s Environmental, Safety and Health Subcommittee is responsible for thesafety and health activities of the Nissha Group. As an activity linked with material issues (materiality),
it works to monitor initiatives and mitigate risks concerning safety and health at new M&A targets andkey overseas bases. The subcommittee built a structure for keeping track of information in the fiscal
year ended December 2019, and started collecting concrete information in the fiscal year ending

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Nissha Sustainability Report 2020

December 2020. Moving forward, it plans to analyze the information collected and undertake initiatives
to mitigate risks at each base.
The subcommittee oversees the Safety and Health Committees operated by each base toward
improving the level of safety and health activities throughout the Nissha Group in Japan. It manages
the progress of our safety and health objectives, the measures taken by each base on work-related
accidents, safety and health performance such as occurrence of accidents, and internal audits andcorrective measures based on the audits, and presents reports at quarterly group-wide meetings.
Finally, it conducts year-end reviews on whether our management system is functioning effectively,
and uses the results as a base for activities in the following fiscal year.
The Safety and Health Committees of each base consist of base representatives including a safety
manager and health manager, and employee representatives selected from the labor union and each
workplace. The members meet to report on work-related accidents and corrective measures, and to
exchange views and propose measures for improvement toward realizing a safe and comfortableworkplace. Any work-related accident that occurs at a base, together with its corrective measures, ispromptly reported to the subcommittee secretariat, the General Manager of the business unit
controlling the base, and the Vice President overseeing the base for sharing with other bases.

Safety and Health Management Structure

Occurrence of Work-related Accidents
The occurrence of work-related accidents at Nissha Group in Japan is given in the table below. Aftereach accident, we modify equipment, revise procedures, and otherwise strive to take corrective
measures. In the fiscal year ended December 2019, we organized various safety training programs to
improve employee awareness and knowledge about safety, and to boost safety levels overall, primarily
at production bases that recorded a larger number of work-related accidents than the previous fiscal
year. As a result, in the fiscal year ended December 2019, as in 2018, Nissha Group in Japan saw
decreases in both the number of work-related accidents and accidents that resulted in days of leave,
which translated into improved frequency and severity figures.

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Nissha Sustainability Report 2020

Occurrence of Work-related Accidents (Nissha Group in Japan)

Item

FY ended

FY ended

FY ended

FY ended

FY endedMar. 2016

Mar. 2017

Dec. 2017

Dec. 2018

Dec. 2019

Frequency of workrelated accidents*1
Severity of workrelated accidents*2
Fatal accidents

1.16

1.99

1.45

0.84

0.49

0.02

0.02

0.01

0.01

0.00

0

0

0

0

0

*1. Frequency of work-related accidents: Refers to the number of injuries and casualties resulting from work-related
accidents (four or more days of leave) per one million working hours.
*2. Severity of work-related accidents: Refers to the severity of work-related accidents in terms of the number of working
days lost per one thousand working hours.
Figures include accidents involving temporary employees.

Number of Work-related Accidents(Nissha Group in Japan and major overseas production bases)
The number of work-related accidents at the Nissha Group in Japan and major overseas production
bases in the fiscal year ended December 2019 are given in the table below. Overseas figures represent
accidents that resulted in days of leave.
RegionNumberJapan

13

North America

21

Central and South America

11

Europe

12

Asia

2

Reduction of Workplace Risks – Risk Assessment
We continue in our efforts to conduct point-based evaluations of the dangers and harms that production
equipment and chemical substances used in the workplace may have on workers, and to take measures
starting with the highest risks. Based on the results of risk assessment, we work to identify theremaining risks and reflect them in our control efforts. In selecting materials used in our products, wehave also incorporated a mechanism for evaluating the health hazards of chemical substances into thedesign review process toward assessing the risks to workers during mass production.

Safety Patrols
Members of the Safety and Health Committees of each base take the lead in conducting safety patrolsof workplaces. In addition to regular monthly patrols, the heads of each base carry out special safety
patrols during Japan’s national safety week in July toward enhancing workplace awareness about safety.

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Safety and Health Education and Training
We provide education and training required in workplaces based on our Safety and Health Educationand Management Regulations. Contents center on regular programs comprising training forenvironmental safety promoters, training foremen at our production bases in Japan, training inassessing risks, and lessons in life-saving and using an automated external defibrillator (AED) in
preparation for emergencies. At production bases, we focus particularly on safety education toward
reducing accidents involving injuries.

AED usage seminar

Training list

Category

Lesson/Session

Number of attendees in
FY ended Dec. 2019

General training

New employee training (safety and health)22

Safety training

Risk assessment training (safety and health,61

chemical substances)
Foreman education

45

Safety training (production base managers)

72

Safety training (small office)17

Health training (occupational health and healthy

135

obstacle by e-learning)
General life saving lesson

186

AED usage seminar

71

Firsthand Safety Seminar

47

Firsthand Safety Seminar
In October 2019, Nitec Industries, Inc. Koka Factory incorporated production equipment into aninteractive study program designed to provide the experience of near miss accidents. The program
titled Firsthand Safety Seminar was attended by 47 employees. With production sites switching toautomated, labor-saving equipment, safety has improved in the workplace environment on the one
hand. On the other, sources of danger are no longer obvious, and it has become difficult for employees
to identify hazardous objects and situations. The seminar aimed to provide the firsthand experience ofseeing, hearing, and feeling danger, and through it, to improve awareness of safety.

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The seminar reproduced an accident in which a dummy
suffers a fall while working on a stepladder, and usedequipment to give participants the experience of a very
weak electric shock and of being caught in a roller andchain. This gave participants the opportunity to think
about safety anew and learn how to use equipment
properly as well as what to do when an accident occurs.
Feedback from the participants said the seminar raised
their awareness of the sources of danger nearby in theworkplace, and offered them a lesson in the importance of studying about safety on a regular basis.

External Assessment
The Nissha Group production base Nitec Precision and Technologies, Inc. Tsu Factory received excellent
workplace awards for occupational health and for safety in 2019 from the Tsu Labor Standards
Association in recognition of its variety of occupational safety and health initiatives.

Awards ceremony

Nitec Precision and Technologies, Inc. Tsu Factory

Health Declaration
Nissha Group sees its mission as to realize the enrichment of people’s lives by creating technology anddeveloping it into economic and social value through the diverse capabilities, passion, and leadershipof the global Nissha Group. We believe that the physical and mental health of each and every employee
is the most important element in achieving this mission, which is why we have formulated our Health
Declaration in 2019.

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Health Declaration
The Nissha Group aims to create new values through the diverse capabilities and passion. We consider
the maintenance and improvement of our employees’ mental and physical health to be a vital part ofthat, and so are improving our workplace environments through promoting a range of measures related
to health.
September 3, 2018
Junya Suzuki
Chairman of the Board
President and CEO
Nissha Co., Ltd.

Health Maintenance and Enhancement Initiatives
We carry out various initiatives on a continuous basis toward preventing lifestyle diseases, andmaintaining and enhancing the health of our employees.
In the fiscal year ended December 2019, we organized interactive health seminars under the theme ofpromoting and boosting exercise habits. A total of 280 employees attended. The participants firstreflected on their own lifestyle habits and clarified their problems, and then went on to learn andpractice correct and effective squats. And at the lesson in Yogalates, the participants experienced a
combination of relaxing yoga with conditioning Pilates. The seminars proved to be popular with theparticipating employees, and we plan to provide similar opportunities in the future toward enhancing
our employees’ awareness and exercise habits.
In efforts to promote smoking cessation, we provided a correspondence program that attracted 22participants of which 40% succeeded in giving up smoking. We plan to continue the initiative in thefiscal year ending December 2020.
In a high-risk approach to maintaining and enhancing the health of our employees, we recommend
visiting a medical institution to employees whose health checkup results deemed they require detailed
examination or re-examination, and offer specific health guidance with support from an affiliatedmedical institution to those who are deemed to require it.

Yogalates lesson

Interactive health seminars

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Mental Health Support
As part of our mental health support offering, we organize mental health classes, covering selfcare andline care, by a clinical psychologist each year since the fiscal year ended March 2010, and introduced
stress check surveys in the fiscal year ended March 2013 ahead of a mandatory system coming into
effect in December 2015. The online system we introduced in 2019 has made the results accessible
immediately after administering the survey. By making it easier for employees to recognize their own
stress, this has enhanced the effects of self-care.
We also continue to promote the creation of employeefriendly workplaces. In fiscal year ended March 2015, we
provided line care education about supporting the processof improving workplace environments. Then, we soughtpilot workplaces for administering general checkups with theaim of creating pleasant workplaces from the bottom up.
The checkup teams first identified the good points of each
workplace, the points that require improvement, and thereasons for improvement, and then formulated a plan based

Stress check feedback training

on the members’ input, and set to work topic by topic. Ideas
for creating employee-friendly workplaces are posted on the intranet and shared internally to promote
its penetration. In the fiscal year ended December 2018, we started giving feedback to workplaceleaders on the workplace analysis results of the stress check survey. This provides an opportunity tolearn the correct way to read and use the analysis, and supports the creation of employee-friendly
workplaces based on the analysis.
As for support on a personal level, we have an outside web counseling service through which a
specialized counselor offers mental health advice online. Being accessible even to employees who havedifficulty juggling their work schedule with an appointment, and offering the benefit of privacy
protection, the service is used several times each year. For employees working long hours,
appointments are arranged with our healthcare staff and industrial physician. This helps us understandthe employees’ health condition as well as coordinate with their superior and the human resources
division in providing any required follow-up.
Also, for employees who require special attention in terms of mental health, we follow our Longterm
Leave Regulations and offer time to recover from their condition as well as consideration in theworkplace upon reinstatement, in an aim to prevent recurrence and achieve a smooth return to work.
We will carry on promoting collaboration between each division, the human resources division, and ourhealthcare staff in efforts to create comfortable workplaces.

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Mental health support structure

Certification as Health and Productivity Management Organization
Nissha Co., Ltd. was certified as a Health and Productivity Management Organization in the large
enterprise category for the fourth consecutive year in an announcement on March 2, 2020, by theJapanese Ministry of Economy, Trade and Industry, the Tokyo Stock Exchange, and Nippon Kenko Kaigi.
Certification was granted in recognition of our initiatives for promoting health-conscious activities. We
will continue to encourage the participation of all employees in creating safe, comfortable workplaceenvironments and promoting sound physical and mental health.

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Fair Operating Practices

Initiatives Related to Information Security
Information Security Policy
The spread of the Internet and the broad use of devices such as smartphones have ushered in aconvenient era in which anyone can connect with the online community and use various services easily
at all times. On the other hand, with computer virus infections and careless posting on social media,
the risks are increasing of everyone becoming either a victim or perpetrator of information leakage.
Information regarding our customers, suppliers, and employees is a vital information asset of the
Nissha Group. Any leaking of the details of new products and state-of-the-art technologies, personal
information, and other highly confidential information assets

outside the company or beyond parties

related to the company, cannot be tolerated under any circumstances. To ensure this does not happen,in 2005 we drew up an Information Security Policy with the aim of building a highly reliable and safe
information security management system (ISMS). We have since shared the policy with all employees
and continued to operate an ISMS.

Information Security Policy
Nissha and its subsidiaries committed to establish, maintain, and improve highly reliable and secure
an information security management system to protect our own business information and theinformation assets, which we acquire from customers, suppliers and employees, etc., through ourbusiness activities performed, from any kinds of threat. And we take internal and external information
security requirements into consideration and reduce all risks below the acceptable levels.
1.

We continually improve an Information security management system by establishing,implementing, and reviewing the information security objectives, so that the confidentiality,
integrity, and availability of information can be maintained and improved.

2.

We comply with legal and regulatory requirements for information security and with contractual
security obligation.

3.

We establish and improve the criteria for reasonably evaluating risks concerning information
security as well as the risk assessment methods, to mitigate risks and to maintain theinformation security levels which contributes to the corporate developments.

4.

We make Information Security Policy known to all employees working in the premises of Nissha
Group and its subsidiaries to raise their awareness of the issues related to information security.
July 1, 2013
Junya Suzuki
President and CEO
Chairman of the Board
Nissha Co., Ltd.

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Information Security Management Structure
The Information Security Subcommittee is established in the Sustainability Committee as a center forthe promotion of information security in the Nissha Group. Under monitoring and supervision by the
Chief Information Officer (CIO), the head of the subcommittee serves as ISMS management
representative, and the IT Department, which is responsible for the IT environment throughout the
Nissha Group, functions as secretariat. The subcommittee promotes initiatives linked with material
issues (materiality) of the Nissha Group, and works to maintain and improve our ISMS.
The scope of coverage of our ISMS is the entire Nissha Group including overseas locations. An
information security manager and promoters are selected at each affiliated company and department
to ensure thorough operation of the ISMS. The secretariat plays a central role in organizing ISMS
internal audits, ISO27001 inspections by an external organization, and management reviews towardmaking continuous improvements.

Management Structure

Risks to be Addressed
Rapid advances in information technology and the diversification and spread of IT devices requirecompanies to address not only conventional risks such as information leakage and tampering causedby virus infection and cyberattacks, but also the risks of social media posts and tweets, and unfounded
rumors and reviews harming their image and brand value, and jeopardizing their trust from society.
Moreover, with the swift global popularization of bring-your-own-device (BYOD), companies are
required to manage the risks caused by a broader range of information appliances beyond companyissued computers to personally owned devices used at work.
The Nissha Group addresses these risks swiftly and appropriately, recognizing that they pose asignificant challenge to the company’s survival.

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Overseas Expansion of Information Security
Since the fiscal year ended March 2016, we have been expanding our ISMS globally under a unified
standard toward enhancing the level of information security management at new overseas subsidiaries
that joined the Nissha Group through M&A. In the fiscal year ended December 2019, we introduced
the ISMS at two overseas bases as part of our activities linked to the material issue (materiality)“protection of customer information,” completing introduction of the ISMS at all subsidiaries of the
Nissha Group. At present, we are using the PDCA cycle, including annual ISMS internal audits, toward
establishing operation of the ISMS.

Information Security Education
Preventing the occurrence of information security incidents and accidents requires the formulation ofpolicies and regulations, and more importantly, that all employees take disciplined action with sufficientawareness of information security. We compile an Information Security Compliance Manual as teachingmaterial that reflects the information security policies and internal regulations of the Nissha Group,and provide training to all employees in an e-learning course. In the fiscal year ended December 2019,the course was taken by 98% of employees.

ISO27001 Certification
The Nissha Group has obtained ISO27001 certification, a global standard for
ISMS, and is working to expand its scope of application to new bases. In thefiscal year ended December 2018, all major bases in Japan obtained
ISO27001 certification. From the fiscal year ended December 2019 onward,
our focus is global expansion and establishing operation of the ISMS incompliance with ISO27001 requirements.

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Trade Management
We at the Nissha Group earned 85.2% of our sales outside Japan in the fiscal year ended December
2019. With the global development and expansion of Nissha Group operations, disciplined efforts intrade management are essential from the perspective of business continuity.

Net sales and percentage of overseas sales

81.5%
73.6%

73.9%

83.8%
207,404

174,035

159,518
119,222

115,802

FY endedMar. 2016

FY endedMar. 2017

85.2%

FY ended
Dec. 2017

FY ended
Dec. 2018

FY ended
Dec. 2019

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

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Trade Management Policy
Nissha and its subsidiaries comply with legal requirements and agreements in trade andstrive for continuous improvements in the trade management system for theachievement of our Mission.
1.

We comply with applicable trade control laws and regulations in each country and region, andwith international regimes.

2.

We designate a person responsible for trade management, and develop, maintain and improve
the trade management system.

3.

We pursue good trusting relationships with official agencies in each country and region andinternational logistics companies etc.

4.

We provide necessary education on trade to employees and other parties concerned.
Established on October 1, 2016
Revised on January 1, 2018
Junya Suzuki
Chairman of the Board
President and CEO
Nissha Co., Ltd.

Trade management at the Nissha Group in Japan started with the launch of the Trade Administration
and Control Committee in 2011. Currently, the Trade Administration and Control Subcommittee under
the Sustainability Committee is responsible for its operation.
The Trade Administration and Control Subcommittee, headed by the senior director responsible for theline organization Corporate Supply Chain Management (SCM), oversees trade management operations
for the entire Nissha Group. In Japan, daily operations are assigned to a management representativeand subcommittee members at each trading business division, business division, corporate division,and affiliated company. Outside Japan, where legal systems and business practices vary by country
and region, supervising is assigned to trade management representatives at each base.

Trade Management Structure

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Based on our Trade Management Policy, we establish the Basic Rules of Trade Management as well asother rules and regulations on trade-related operations required for an AEO. Individual Nissha divisions
draw on these to compile work standards and operating procedures, and carry out import and export
operations. At overseas affiliated companies, we are working to promote the Trade Management Policy
and the Basic Rules of Trade Management, and to create management documents.

Trade Management Documents System

Initiatives in the Fiscal Year Ended December 2019
In order to carry out appropriate and legal trade management operations, we provided trade
management education for 183 Trade Administration and Control Subcommittee members selectedfrom each division of the Nissha Group in Japan. All members completed training and enjoyed theopportunity to learn the laws and internal regulations covering international trade and recognize anew
the role each of them must fulfill.
At overseas bases, we conducted training for all employees with the aim of boosting our levels of trade
management. The course used material compiled by corporate divisions at our Global Headquarters in
Kyoto. As of the end of 2019, 789 employees at 18 companies completed training and deepened theirawareness that compliance with trade-related laws and internal regulations is essential for smoothbusiness activities in the Nissha Group.
We also worked on compiling internal regulations for overseas bases. Nine affiliated companies
formulated regulations corresponding to our Basic Rules of Trade Management and Regulations on
Legal Compliance in Trade Management Operations in accordance with their respective circumstancesand external environments. By this, what should be is clarified and expected to lead to the creation of
more appropriate systems and structures.
In the fiscal year ending December 2020, we plan to provide specialized education for employees intrade operations with the aim of engaging in ever more appropriate and legal trade management
operations.

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Training at Guangzhou Nissha High Precision Plastics Co., Ltd.

AEO Approval
Nissha Co., Ltd. obtained approval as an AEO Exporter in June 2014, and as an AEO Importer in June
2015. Their post-audits were conducted in October 2019, and we maintain all approvals. As of the endof 2019, 60 companies in Japan are approved 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.
Nissha Precision Technologies Malaysia Sdn. Bhd., based in Malaysia, obtained approval as both an AEO
Exporter and an AEO Importer in October 2014.

AEO Approval Form

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

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Initiatives Related to Intellectual Property
Approach to Intellectual Property
We at the Nissha Group cite the protection of intellectual property as a key item of our Corporate Ethics
and Compliance Guidelines. In line with our Basic Policy for Protection of Intellectual Property, we makeactive efforts to respect the intellectual property of third parties, and under the leadership ofIntellectual Property Management, obtain rights for and use that of our own.

Basic policy for protection of intellectual property
1.

We will acknowledge the importance of our technologies and brands as intellectual property andwill undertake their appropriate management.

2.

We will report any invention arising through our business operations in accordance with ourCompany regulations.

3.

We will strive to avoid the breach of third-party intellectual property rights.

Contents of Initiatives
Promotion of Patent Application
For every new technology developed in our development divisions, we consider obtaining rights byfiling for patent application. Promoting technology development and obtaining patent rights work todifferentiate Nissha products, made with our own proprietary technologies, from other companies’
products. In line with the globalization of our businesses, we file for patent application not only inJapan but also abroad. Because this puts a check on the inappropriate use of other companies’
technologies, it helps our customers reduce intellectual property-related risks in connection with Nissha
products.

Monitoring of Other Companies’ Patents
We periodically research and continuously monitor other companies’ patents so that Nissha Group
products do not infringe others’ patent rights. For monitoring, we input subjects as research criteria ina patent database and obtain results on a regular basis using a selective dissemination of information(SDI) system.

Intellectual Property Training Programs
We organize various training programs to ensure that our employees can deepen their understandingof intellectual property and learn to properly protect Nissha’s. In a mandatory program designed for
employees in engineering fields to improve their knowledge and skills in intellectual property, we invite
outside specialists to provide instruction on intellectual property systems, researching other companies’
patents, recognizing and brushing up inventions, and detecting infringement. In the fiscal year ended

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December

2019,

we

held

two

courses,

basic

and

intermediate, which were attended by 49 employees. For
employees other than engineers, members of Intellectual
Property Management serve as instructor to teach thebasics such as how to read a patent journal and file forpatent application. In the fiscal year ended December 2019,75 employees attended.

Intellectual property training program
Instructor: Mr. Tatsushi Gocho, Patent
Attorney, Associate Professor of Osaka
Institute of Technology
Commissioned organizer: CKS Corporation

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Partnership with Our Suppliers
Nissha Group procures the raw materials, components, equipment, and services necessary for making
our products from suppliers in various regions. We work with the suppliers that constitute this supply
chain to promote CSR procurement based on our Basic Purchasing Policy, sharing awareness of oursocial responsibility, and enhancing mutual corporate value.

Basic Purchasing Policy
For the achievement of our Mission, the Nissha Group build relationships of trust with our
suppliers through mutually fair procurement.
We evaluate our suppliers fairly, impartially, and comprehensively based on the following
criteria.
1.

Stable business foundation and reliable management principles

2.

Excellent technology development, stable supply, and quality servicing capabilities

3.

Adaptability to changes in the business environment

4.

Safety of products and services, consistency of quality, and competitiveness of5.

prices and lead times

6.

Effective business continuity management

We promote CSR procurement by working with our suppliers in the following areas.
1.

Labor and human rights

2.

Health and safety

3.

Environment

4.

Ethics5.

Information security
Established on April 2, 2009
Revised on January 1, 2018
Junya Suzuki
Chairman of the Board
President and CEO
Nissha Co., Ltd.

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Basic Approach to CSR Procurement

Expansion of Our Supply Chain
We at the Nissha Group collaborate with various suppliers through our business activities. Our supply
chain is expanding globally.

Main Entities of the Nissha Group Supply Chain

CSR Audit
We conduct CSR audits of particularly important suppliers and new suppliers. The audit cover fiveareas; labor, health and safety, the environment, ethics, and management system. They conform to
the Responsible Business Alliance (RBA), a code of conduct for the electronics and automotive
industries, and on our customers’ own code of conduct based on this RBA template. Prior to the CSR
audit, we explain the background, purpose, standards, and flow of the audit, and seek theunderstanding of each supplier. The audit process consists of an inspection of the supplier’s
employment regulations and work records, tours of the site premises including the clean room, andinterviews with employees. In the event the audit uncovers any instance of noncompliance, the supplieris required to make plans for corrective action (CA) and preventive action (PA) by themselves. About
three months later, auditors check that CA and PA have been taken and the noncompliance has been

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remedied, bringing the CSR audit to completion.
From the fiscal year ended March 2015 to date, we have conducted audits at a total of 19 companies.
The audits detected 187 instances of noncompliance (88 related to labor and human rights, 53 tosafety and health, 29 to the environment, 12 to ethics, and 5 to management system). Recently, witha focus on risks to the human rights of employees, we are conducting audits at suppliers such as
temporary employement agencies.
In the fiscal year ended December 2019, we carried out CSR surveys using the Self-Assessment
Questionnaire (SAQ) based on the RBA code of conduct. This was the first edition of regular annual
surveys. As a result of surveys targeting 11 sites at seven companies, no concern was confirmed in
the SAQ responses. In the fiscal year ending December 2020, we plan to continue the surveys on an
expanded scope. Should any concern is confirmed in the SAQ responses, our employees holding
corporate auditor qualification will visit the supplier and conduct an on-site audit. These activities areorganized according to a predefined manual.

Items of CSR Procurement Guideline
1. Labor and human rights
1) Freely chosen employment
2) Young workers
3) Working hours
4) Wages and benefits5) Humane treatment
6) Non-discrimination
7) Freedom of association
2．Health and safety
1) Occupational safety
2) Emergency preparedness3) Occupational injury and illness
4) Industrial hygiene5) Physically demanding work
6) Machine safeguarding7) Sanitation, food, and housing
8) Health and safety communication
3．The environment1) Environmental permits and reporting2) Pollution prevention and resource reduction3) Hazardous substances
4) Wastewater and solid waste
5) Air emissions
6) Materials restrictions
7) Storm water management8) Energy consumption and greenhouse gas emissions

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4．Ethics
1) Business integrity2) No improper advantage
3) Disclosure of information
4) Intellectual property5) Fair business, advertising and competition
6) Protection of identity and non-retaliation
7) Responsible sourcing of minerals
5．Information Security
1) Building of information management system
2) Prevention of leakage of confidential information about our customers and third parties
3) Defense against a computer and network threat, and management of electronic device andrecording medium
4) Prevention of leakage of personal information.

Fields of ESG check sheet
1.

Certification

2.

Labor and human rights

3.

Health and safety

4.

Environmental management

5.

Information security management

6.

Corporate ethics and compliance

7.

Management system

Development of Procurement Personnel
We provide education on a continuous basis for the development of procurement personnel in the
Nissha Group in Japan toward promoting transactions with our suppliers based on fairness, impartiality,
and integrity in line with our Basic Purchasing Policy.
We organize training for employees newly appointed to procurement divisions, and basic procurement
education for employees in divisions responsible for selecting materials and suppliers. These programs
are designed to provide the basic knowledge needed for participants to recognize the connection
between their own division and procurement, and engage in procurement operations, as well as
enhance awareness about compliance.
In the fiscal year ended December 2019, we expanded the basic procurement education program toengineering divisions and corporate supply chain management (SCM) divisions at affiliated companies,
and provided training using e-learning.

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Number of participants

Lecture/Training

FY ended Dec. 2018

FY ended Dec. 2019

Training for new procurement personnel

11

17

Basic procurement course (e-learning)

333

40

Basic procurement course for technical departments ofaffiliated companies (e-learning)
Procurement course for SCM divisions (e-learning)

92

―

133

―

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Initiatives Related to Conflict Minerals
We at Nissha express our approach to and stance on conflict minerals in our Underlying Philosophy
Concerning Corporate Responsibility for Minerals Procurement. Based on this policy, we make sincere
efforts toward achieving conflict free procurement.
The major conflict minerals used in Nissha Group products include tin used in some decoration films
and in ITO films*1 for touch panels, and gold used in FPC*2 plating. When checking whether we use anyof these minerals, we use a Safety Data Sheet (SDS) or other methods to check all materials used in
our products to identify those that contain conflict minerals. We also ask our suppliers, who procure
the materials for our products, not to use any conflict minerals produced by smelters not identified asconflict-free*3. We also investigate compliance using Conflict Minerals Reporting Templates (CMRT)
issued by the Responsible Minerals Initiative (RMI). Recently, we began receiving surveys from ourcustomers concerning minerals other than the 3TG (tin, tantalum, tungsten, and gold) such as cobalt.
We are responding to these surveys with integrity.

Underlying Philosophy Concerning Corporate Responsibility for
Minerals Procurement
The Nissha Group is deeply concerned that a portion of the conflict minerals extracted by the
Democratic Republic of the Congo and its neighboring countries are being used as a source of funding
for militia that through acts of looting, violence and forced labor are infringing on fundamental humanrights.
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 acornerstone of our Corporate Mission. Based upon our recognition of the importance of these principles
and aiming for co-existence with our stakeholders, we are committed to non-use of these conflictminerals, as raw materials in our products as they result in an infringement of basic human rights.
Accordingly where our company becomes aware of the use 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
wemaintain continuously.

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 CSR reports.

We will continue to make sincere efforts for the responsible procurement of related minerals in orderto fulfill our corporate social responsibilities.
Established on March 12, 2014
Revised on January 1, 2018
Junya Suzuki
Chairman of the Board
President and CEO
Nissha Co., Ltd.

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*1. ITO film: Film with a transparent conducting coating of indium tin oxide (ITO).
*2. FPC: Flexible printed circuits (FPC) that maintain their electrical properties when flexed.
*3. Conflict free: Not sourced from a conflict zone.

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Initiatives Related to Anti-corruption
The United Nations Global Compact, which Nissha Co., Ltd. is on the list of signatories, has set anticorruption as its 10th principle. And in recent years, global society has seen a tightening of thecrackdown on bribery and other corrupt practices pursuant to anti-corruption legislation including theUnited States’ Foreign Corrupt Practices Act and the United Kingdom’s Bribery Act. With the code of
conduct for global companies provided by the Responsible Business Alliance (RBA) also containing aprovision on “No Improper Advantage,” we have seen a rise in demand to comply with anti-corruption
standards.
The Nissha Group cites prohibition of corrupt practices as an important point of our Corporate Ethics
and Compliance Guidelines. We have in place a Nissha Group Anti-Corruption Guidelines, and are
disseminating information about its background and contents at bases in and outside Japan. At
overseas bases, particularly in Asia, we conducted interviews and training about initiatives in theprohibition of corrupt practices. The interviews turned up no significant issues; however, we willcontinue to keep an eye on certain regions in which bribery and corruption are rife.
We plan to continue keeping an eye on movements in the global community as well as the situation in
the Nissha Group, and will review the contents of our initiatives as the need arises.

Nissha Group Anti-Corruption Guidelines
The Nissha Group makes clear that all officers and employees are prohibited from presenting customers,
suppliers, and government officials, either directly or indirectly, with gifts or entertainment that may
constitute corrupt practice, and observes Japan’s Unfair Competition Prevention Act, the United States’
Foreign Corrupt Practices Act, the United Kingdom’s Bribery Act, and the regulations of other countries
and regions regarding anti-corruption.
1.

We neither present to nor accept from customers, suppliers, and government officials offers of
unfair advantage.

2.

We neither present to nor accept from customers, suppliers, and government officials offerswith gifts or entertainment that exceed the limit permitted by internal standards, laws, andregulations.

3.

We strive to understand the circumstances of the Nissha Group overall, and periodically review
our initiatives.

4.

We respond with sincerity to requests from our customers for cooperation in investigations, byproviding necessary information.
Established on April 1, 2017
Revised on January 1, 2018
Junya Suzuki
Chairman of the Board
President and CEO
Nissha Co., Ltd.

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

Nissha Group Tax Policy■ Basic policy
Nissha Group will strive to minimize tax risks, enhance our corporate value by complying with tax laws
and regulations in each country and each region.
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 while aspiring to
be a truly global company.
1. Nissha Group's approach to tax planning
Nissha Group will enter into transactions with a business purpose and a business activity and in case
we approach to tax planning, we will implement it properly and efficiently in compliance with tax laws
and regulations.
Our group will consider taxes as an essential factor in our business planning and make use of available
tax incentives within the scope of normal business activities. However, we will not engage intransactions for the primary purpose of tax avoidance and transactions without any actual businessactivities.
2. The level of risk to taxation that Nissha Group is prepared to accept
Nissha Group's tax policy is to minimize tax risks wherever possible when undertaking tax matters.
We will work to identify, evaluate, and manage tax risks in each country and region to reduce suchrisks, and where there is significant uncertainty or complexity in relation to tax risks, we will ask foradvice from third parties.
3. The approach of Nissha Group towards its dealings with Tax authorities in each country and region
Nissha Group believe that we can build and maintain good relationship with tax authorities in eachcountry and region corresponding with them and disclosing necessary information in a sincere andappropriate manner.
Therefore, We will strive to provide necessary information appropriately and cooperatively in responseto requests from tax authorities in each country and region while issuing tax returns properly andpaying appropriate amount of tax according to tax laws and regulations in each country and region.
If tax authorities inform us of tax adjustments, we will immediately take appropriate measures toprevent similar issues happen unless we file a petition of objection against their action or interpretation.
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 group’s tax strategy and policies, and the status is reported to Board of Directors
on an on-going basis through our group’s Chief Financial Officer.
Where there is significant uncertainty or complexity in relation to application or interpretation of tax
laws, we will take appropriate measures after seeking external advices.

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5. UK content
On September 2016, HMRC in the UK put a bill of "Large businesses: publish your tax strategy" into
force.
Nissha Group's tax policy also meets their requirement.

December 25, 201797

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Quality Management
Quality
We at Nissha Group strive daily to improve quality, based on our Quality Policy, so that we may provide
products and services that satisfy and meet the needs of our customers.

Quality Policy
Nissha and its subsidiaries are committed to contributing widely to society through customer’s trustand satisfaction of quality, cost, delivery, services and speed.
1.

We aim for quality that stands up to the customer’s expectations.

2.

We pursue Zero Defects in our products.

3.

We provide products which satisfy customer requirements and conform to relevant legislation
and regulations.

4.

We establish and maintain a quality management system, and continually improve its
effectiveness.
April 1, 2011
Junya Suzuki
Chairman of the Board
President and CEO
Nissha Co., Ltd.

Quality Management System (QMS)
Improving quality improves profits—based on this approach, the Nissha Group in Japan sets all key
performance indicators (KPI) as quality goals with the aim of integrating our quality management
systems with business administration. We promote improvements in quality by operating our Nissha
Group Total Quality Management (NTQM), based on a quality management system that meets therequirements of international standard ISO9001. In business targeting the mobility (automotive)
market, Nitec Precision and Technologies, Inc. (NPT) Kyoto Factory, which manufactures touch sensor
modules, and multiple other bases have obtained IATF16969 certification for quality management
systems in the automotive industry. From the fiscal year ending December 2020, we are aiming to
expand certification to other bases
In the Medical Technologies business, eight bases of the Nissha Group in North and Central America
and Europe have obtained ISO13485 certification, the international standard for quality management
systems in the medical devices industry. Our Global Headquarters in Kyoto obtained the same
certification in October 2019.
To meet the licensing requirements for the manufacturing and sales of medical devices in Japan, in
2017, Nissha Co., Ltd. obtained a Class 2 medical devices marketing and manufacturing license and amanufacturing license., and In addition, affiliated company Nissha FIS, Inc. became a registered

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medical devices manufacturer. In this way, we are making steady efforts to build a quality assurance
structure that fits our new business segments.

QMS Model

Nissha Group Total Quality Management (NTQM)
Our NTQM initiative seeks to build and improve a mechanism for keeping promises with our customers
as well as complying with lows and regulations. NTQM clarifies the procedures followed at each business
unit, such as design reviews (DR), reliability tests, and supplier management. We believe that
improving the accuracy of these procedures will enable us to provide products and services with evenhigher levels of quality and safety.

Five Musts for the Systematization of WorkWe set forth Five Musts for the Systemization of Work, a concept we are working to communicatecompanywide through training and our company magazine.

Five Musts for the Systematization of Work
1. Standardize work.
Standardization clarifies the required input, as well as the work you have to perform.
2. First of all, check the input.
Begin your work by checking for any fault in input.
3. Incorporate the customer viewpoint into the output.
Not only customers for the Company, but your immediate customers, internal and external. In yourwork, you must aim at an output that meets QCDS from all your customers.

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4. Reinforce the system using human factors.
Human factors should be used to cover those areas of work which cannot be covered by the system
alone. Your communication and teamwork will reinforce the system.
5. Make continuous efforts to improve the system.
The system must be established and implemented continuously. Continuous implementation results infurther improvement of the system, as well as that of the quality of our work and the Company.
*QCDS: Initial of Quality, Cost, Delivery, Service, the index for product evaluation.

Quality Slogan
Taking action with a strong awareness of the customer is essential to quality improvement. All Nissha
Group employees are required to perform their daily duties with a sense of responsibility, and create
quality in the eyes of the customer.
To this end, in April 2017, we established the quality slogan given here. The Japanese have a maximthat reads, “The next process is the customer.” The “me” in the slogan says each employee should takeon a leading role in delivering quality to the customer. And this “customer” may be external customersof the Nissha Group or internal workers in the production process following one’s own. The slogan iscommunicated thoroughly across Nissha Group companies both in and outside Japan, along with asense of “responsibility to all customers, internal or external.”

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

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

Training
1. General quality training (for new employees, promoted employees, new managerial
staff, managers, and overseas assignees)
2. Management system training (ISO9001, IATF16949, core tools, internal quality auditor)
3. Quality control training (QC Exam levels 3 and 4, QC Seven Tools, New QC Seven Tools, basic
statistics)
4. Quality methodology training (statistical methods, experimental design, Taguchi
methods, reliability engineering etc.)
5. Other training (electric/mechanical basic education, equipment maintenance, etc.)
Practical education
1. Support for small-group activities
2. Nissha Academy (Monozukuri School etc.)
Information sharing / reciprocal learning
Company-wide Presentation Meeting of Small-group Activities

Quality and Safety of Products
We at Nissha provide our customers with explicit information on product usage and safety in documents
such as delivery specifications. In the event a serious accident occurs as a result of flaws in our products
and services, which may violate laws or regulations, we will establish a CPL* committee and strive fora quick resolution. We are also prepared to report the incident to government agencies in accordancewith laws and to notify our customers as soon as possible. We communicate to our employees theimportance of ensuring the quality and safety of products through corporate ethics and compliancetraining.
Up to fiscal year ended December 2019, the number of instances in which we organized a CPL
committee or violated laws was zero, resulting in a fine of 0 yen. We will strive to maintain our zeroviolation record in the future.

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Management of Chemical Substances in Products
We at Nissha have in place two sets of criteria for managing chemical substances: the Nissha Control
Criteria for Chemical Substances, covering Nissha products and packaging materials, and the Nissha
Control Criteria for Chemical Substances in Purchased Products, covering procured items such as
primary and secondary raw materials. Both reflect the laws and regulations of relevant countries andregions, including the Restriction of Hazardous Substances (RoHS) directive and the Registration,
Evaluation, Authorization, and Restriction of Chemicals (REACH) regulation, as well as the substancerelated criteria of our customers. Whenever our customers’ criteria change, we identify the differencesfrom our criteria and work to conform to our customers’ request. Apart from this, we review our criteria
once a year, making revisions as necessary, and organize briefing sessions for related divisions andour suppliers.
When selecting new materials or changing materials in the design and development stages, we conduct
design reviews (DR) and assess compliance with the Nissha Control Criteria for Chemical Substancesin Purchased Products. Our factories are building a mechanism for accepting materials that meet ourcriteria, ensuring traceability, identifying and separating noncompliant substances, and responding toissues swiftly such as through reporting in efforts to prevent misuse and contamination.
The Environmental and Safety Management division functions as the secretariat and works with the
product development of each business unit, quality assurance and procurement divisions to promotemanagement of the chemical substances used in products. It also carries out internal environmental
audits on a regular basis to inspect the management status. This internal structure implements strict
control of chemical substances from the design stage to the final product, and responds to changes in
the needs of society and the demands of our customers.

Identifying Environmental and Social Risks
in the Medical Technologies Business
Through activities of the Sustainability Committee in the fiscal year ended December 2019, we sought
to identify environmental and social risks in the Medical Technologies business. The Medical
Technologies business serves the medical devices market, one of four focus markets defined in the
Sixth Medium-Term Business Plan.
In order to identify environmental and social risks, we used the Sustainability Disclosure Topics andAccounting Metrics indicated by the Sustainability Accounting Standards Board (SASB), Medical
Equipment and Supplies. We then checked the environmental and social response status required forbusiness continuity particularly at affiliated companies outside Japan.
As a result, we found that the quality department of each overseas affiliated company is building andoperating a system for identifying and managing products distributed on a global basis, with theirunderstanding the contents of each disclosure requests. In the fiscal year ended December 2019, norecall was issued in the Medical Technologies business. Moving forward, we keep monitoring thesituation and consider disclose our findings externally.

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Topics on SASB Medical Equipment & Suppliesü

Affordability & Pricing

üProduct Safetyü

Ethical MarketingüProduct Design & Lifecycle Management

üSupply Chain Management

üBusiness Ethics

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Along with Local Communities
Promoting Communication with Local Communities
The Nissha Group, conducting business around the world, value communication with local communities
as a means to win the trust of the people in each country and region. In Japan, we coordinate witheducational institutions and non-profit organizations to organize next generation support initiatives andsponsor nationwide art exhibitions in line with our Basic Social Contribution Policy.

Social contribution activities
We at the Nissha Group have in place a Basic Social Contribution Policy and carry out activities centeringon the four fields of environmental protection, next generation support, promotion and support of artsand culture, and human support.

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

Nissha Group in Japan organize various social contribution activities continuously, such as factory andfacility tours and exchange meeting with the people of local community, cleanup projects nearproduction sites, environmental workshops by our employees at local elementary schools, and future
generation support initiatives in collaboration with local education boards and non-profit organizations.

Initiatives for Future Generation Support
Presentation of Nissha Award at 14th Supreme Moving Toy Contest in Kyoto
Nissha Co., Ltd. is a sponsor of the Children’s Monodzukuri Project run by the Kyoto City Board of
Education. Promoting industry–academia–government–citizenry collaboration to create opportunities
for elementary and middle school pupils to learn about and experience Monodzukuri, ormanufacturing—in a show of support for the board’s objective, we host a corporate booth at the
Monodzukuri Hall of Fame in the Kyoto City Inquiry Learning Center for Career Education, and provide
teaching materials for programs held at the Hall of Fame for elementary school pupils.
As part of these activities, we support the annual Supreme Moving Toy Contest in Kyoto. The toycontest invites 3rd to 6th graders to make their own rubber-powered toy and join the competition. The
14th edition, held on January 19, 2020, at Kyoto Kogakuin Senior High School, attracted about 440
pupils from 100 elementary schools mainly in Kyoto City (the visitor count including guardians andteam leaders was about 1,050).

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By offering the opportunity to make a moving toy, the contest aims to cultivate creativity, independence,and social skills, and raise the children’s familiarity with and interest in Kyoto’s unique style ofMonodzukuri where tradition and innovation coexist. We supplied a racing car assembly kit for the
beginners’ category targeting 3rd and 4th graders, and presented a Nissha Award to the top racers.
Our corporate booth featured a quiz in which visitors answered questions about Nissha products andservices on a tablet computer. The corner attracted a crowd of elementary school pupils.

Toy Contest venue

Beginner course

Nissha exhibition booth“Let’s Make a Safari Park” Children’s Workshop
Nissha Co., Ltd. organizes workshops in collaboration with the NPO Kids Meet Artists (Director Haruka
Idegami). On December 15, 2019, we conducted a workshop titled “Let’s Make a Safari Park” at the
Kyoto Prefectural Center for Arts & Culture with cooperation from the Japan Environment and Children’s
Study (JECS) Kyoto Regional Center as part of its Kyoto-only event. The workshop attracted 18 groupsof 38 parents and children.
The workshop invited artist duo HANA★JOSS, based in Osaka Prefecture, to serve as instructors andintroduce the traditional Indonesian music form gamelan and shadow puppet theater wayang. The
participants handled the instruments and puppets for a chance to enjoy the sounds and textures, andthen tried their hand at making puppets around the theme of a safari park. Elephant, lion, and train—
the participants used their imagination to create unique characters. HANA★JOSS improvised a story
based on these characters, and performed a song to which the children presented a puppet show, fora fun moment of fusion between musical and performing arts.
As a material for making the puppets, we provided single-use electrocardiogram (ECG) electrodes
manufactured and sold for medical use, offering children the opportunity to explore a medical device
through the filter of their own worldview.
* Single-use: Designed for single use only; disposable

Introduction of Wayang

Traditional musicalWayang making

instrument, Gamelan

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Sponsorship of Museum Exhibitions and Art Events
As part of our efforts in “promotion and support of arts and culture” cited in our Basic Social
Contribution Policy, we cosponsor museum exhibitions and art events held throughout Japan. In thefiscal year ended December 2019, we sponsored the following 6 exhibitions.

Exhibition / event
Unrivaled Calligraphy:
Yan Zhenqing and His Legacy

Schedule

January 16 to February 24, 2019

Special Exhibition "National
Treasures of To-ji Temple:

March 26 to June 2, 2019

Kukai and the Sculpture Mandala"
MOOMIN
KYOTOGRAPHIE International
Photography Festival 2019

Matsukata Collection

Museum (Ueno Park)

Heiseikan, Tokyo National
Museum (Ueno Park)
Mori Arts Center Gallery

April 13 to May 12, 201911 venues in Kyoto city

October 11, 2019 to January 13,
2020

Special Exhibition "The Thirty-Six
Immortal Poets: Elegant Arts of the

Heiseikan, Tokyo National

April 9 to June 16

June 11 to September 23, 2019

Vincent van Gogh

Venue

October 12 to November 24, 2019

Classical Japanese Court"

The National Museum Art ofWestern Art

The Ueno Royal Museum

Kyoto National Museum, Heisei
Chishinkan Wing

Membership in Community Organizations
We participate in various activities of the local community.

Organization / host
Kyoto Chamber of Commerceand Industry
Kyoto Employers’ Association
Kyoto Association of Corporate
Executives
Kyoto Industrial Association
The Japan Kanji Aptitude Testing
Foundation

Kyoto Institute of Technology

Position / membership status

Company registered

Permanent member

Nissha Co., Ltd.

Councilor

Nissha Co., Ltd.

Special secretary

Nissha Co., Ltd.

Director

Nissha Co., Ltd.

Director

Nissha Co., Ltd.

Joint management council
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Kyoto University Graduate School of Business

Member of External Evaluation

Administration

Committee

Ritsumeikan University Business
SchoolNissha Foundation for Printing
Culture and Technology

Nissha Co., Ltd.

Advisory board member

Nissha Co., Ltd.

Representative Director

Nissha Co., Ltd.

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GovernanceNissha, since its foundation, has been executing strategies that promptly
address external challenges, under committed leadership. The Company

believes that strengthening corporate governance along with such leadershipwill promote agile and decisive decision making, as well as ensuring
management transparency and fairness, and we work to maintain andenhance them.

In order to remain a trust placed in us, all of our executives and employees
work to promote and thoroughly implement corporate ethics and compliance.

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Corporate Governance
Basic Approach to Corporate GovernanceNissha, since its foundation, has been executing strategies that promptly address external challenges,
under committed leadership. The Company believes that strengthening corporate governance alongwith such leadership will promote agile and decisive decision making, as well as ensuring managementtransparency and fairness. 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 sustainablecorporate growth and an increase in corporate value over the medium- to long-term. In an effort toclarify the Nissha Group’s basic approach to and policy for implementing corporate governance, in
October 2015 we established a Corporate Governance Policy.
* For further information, please follow the links below.
About＞Corporate GovernanceCorporate Governance Policy（PDF）

Overview of Corporate Governance
We have established a corporate governance structure as shown in the figure below.
*as of March 24, 2020

We make major business judgments and oversees the execution of the duties of the Directors of theBoard at meetings of the Board of Directors, and as a company with an Audit and Supervisory Board,
will strive to maintain and improve the oversight and checking functions by Audit and Supervisory

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Board Members and an Audit and Supervisory Board which are independent from the Board of Directors.
We adopt a corporate officer system in an effort to clarify the powers and authority in the speedy
decision making and the implementation of decisions, under which the Board of Directors will be incharge 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 onmatters relating to the direction of important managerial issues within the scope of the President’s
authority.

•

Monthly Business Review (MBR): Reviews the progress of business strategies based on key
performance indicators (KPI) and determines actions to take over the short term. The purpose of
the MBR is to monitor business execution by Corporate Officers and quickly respond to changes inthe business environment.

•

Investment Committee: Supports the Board of Directors’ decision-making process by verifying
particularly important investment matters from a groupwide standpoint, toward minimizing
investment risks and enhancing accountability, prior to submission to the Board of Directors.

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 ofIncorporation, and to manage risks.
•

Sustainability Committee: Chaired by the President and vice-chaired by the Senior Director of
Sustainability, the Sustainability Committee prioritizes social issues that represent business
opportunities and risks that jeopardize the business continuity of the Nissha Group, and determines
materiality (material issues). Business organizations and the Sustainability Committee’s sevensubcommittees then establish strategy items, key performance indicators (KPI), and target values
for each material issue and apply a plan-do-check-act (PDCA) cycle.

•

Disclosure Control Committee: Chaired by the President. Discusses the necessity of timely•Internal Audit Office: Under the direct control of the President, audits the internal control systems

disclosure of corporate information and the contents of disclosure.
of the Nissha Group, analyzes and evaluates their status of establishment and operation, and offers
suggestions for improvement.

Directors of the Board and the Board of Directors
Policy and Procedures for Appointment/Dismissal of Directors of the Board
Our Board of Directors comprises an appropriate number of 12 or fewer members, taking into accountdiversity and balance between the knowledge, experience, and skills of the individual to ensure thatthe Board fulfills its role of making important management decisions and overseeing the execution ofduties by Directors of the Board and Corporate Officers. Inside Directors of the Board are elected fortheir acquaintance with our operations and suitability for carrying out growth strategies and overseeing
business execution. Multiple Independent Outside Directors of the Board are elected who satisfy therequirements of not only the Companies Act but also the Standards for Independence of Independent
Officers, established by our Board of Directors.
In the event that a Director of the Board damages the trust or honor of the company, markedly
diminishes our corporate value, or gives rise to grounds that he or she is unfit to perform his or her
duties, the Board of Directors confirms the presence of a valid reason and makes the Director of theBoard 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.

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Having received reporting from the Nomination and Remuneration Committee, based on the policy
above, the Board of Directors makes decisions on proposals for the appointment/dismissal of a Directorof the Board to be deliberated at the general meeting of shareholders.
* For further information, please follow the links below.
About＞Corporate GovernanceStandards for Independence of Independent Officers（PDF）

Diversity of the Board of Directors (as of March 24, 2020)

As of March 24, 2020, our Board of Directors consists of nine members, of which four are Independent
Outside Directors of the Board with one being a woman of foreign nationality. The Board includes
individuals with experience abroad or at other companies, or holding a master’s degree in businessadministration. Each of our four Independent Outside Directors of the Board has experience into
general corporate management and business management in manufacturing industry, specialized
knowledge in corporate governance, business strategies, management strategies, legal affairs andcompliance, and broad insight into monetary economics.
We consider that the four Independent Directors satisfy standards for independence of outside officers
by the Tokyo Stock Exchange, hence they have sufficient independence and there is no risk of conflictof interest with general shareholders. Therefore, we have designated them as Independent Officers.

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

Initiatives to Enhance the Content of Discussions
Our Board of Directors meetings involve brisk, substantive discussions. Independent Outside Directorsof the Board draw on deep insight into their respective fields of specialty to provide accurate advice
and opinions, contributing to the enhancement of both management transparency and the Board’s
oversight functions.
Toward improving the quality of discussions, we distribute a meeting agenda and related materials in
advance, and explain particularly important matters to Independent Outside Directors of the Board
and Independent Audit and Supervisory Board Members beforehand. Toward thoroughness, important
issues such as the medium-term business plan and major M&A transactions are discussed once or
twice as matters to be reported prior to being listed as matters to be resolved. By setting and allotting
times for briefing and discussion in accordance with the degree of importance of the matter, we aimfor effective meeting operation.
In efforts to enhance the Board’s monitoring function, matters such as the status of post-merger
integration (PMI) and the financial results of major M&A transactions and newly established subsidiaries
and joint ventures are reported regularly in meetings.
To secure attendance by as many Directors of the Board and Audit and Supervisory Board Members as
possible, the secretariat of the Board of Directors creates an annual schedule of board meetings andnotifies members in advance.

Evaluation of Effectiveness of the Board of Directors
Once a year since April 2016, our Board of Directors has analyzed and evaluated board membershipand operation in the previous fiscal year toward continuous improvement of its effectiveness.
From January to February 2020, we analyzed and evaluated the results of a questionnaire covering all
board meetings held in the fiscal year ended December 2019 and disclosed an outline of the results in
a Corporate Governance Report submitted to the Tokyo Stock Exchange in March.

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Nomination and Remuneration Committee
PurposeWe establish a Nomination and Remuneration Committee as an advisory panel for the Board of
Directors in order to ensure the objectiveness and fairness of the appointment/dismissal of Directorsof the Board and the appointment of Audit & Supervisory Board Members, and incorporate theknowledge of Indipendent Outside Directors of the Board, as well as the remuneration of the Directorsof the Board. The chair and the majority of the members are selected from Independent Outside
Directors of the Board.

Role
With consultation from the Board of Directors, the Nomination and Remuneration Committee
deliberates on and provides a response regarding the following matters.
(1)

The appointment/dismissal standards for Directors of the Board and the appointment standards
for Audit & Supervisory Board Members(2)

Proposals for candidates for Directors of the Board and Audit and Supervisory Board Members,
and proposals for dismissal of Directors of the Board(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 remuneration of Directors of the Board(6)

Remuneration of Directors of the Board

Membership (as of March 24, 2020)(1)

Four independent members:
Kazuhito Osugi (Independent Outside Director of the Board and Committee Chair)
Makoto Ando (Independent Outside Director of the Board)
Asli M. Colpan (Independent Outside Director of the Board)
Kazumichi Matsuki (Independent Outside Director of the Board)(2)

Two inside members:
Junya Suzuki (Chairman of the Board, President and CEO)
Wataru Watanabe (Director of the Board and Executive Vice President)

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 attorneys and certified
public accountants with a focus on specialized knowledge in legal affairs, financial matters, andaccounting, who satisfy the requirements of not only the Companies Act but also the standards forindependence of independent officers, established by our Board of Directors.
Having received reporting from the Nomination and Remuneration Committee, and with prior approval

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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 deliberated at thegeneral 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 they meetthe standards of independence established by the stock exchange and are judged not to have a conflictof 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 ofduties by Directors, Members of the Board and Corporate Officers as stipulated by laws and regulations,
our Articles of Incorporation, and internal regulations, and make appropriate decisions from an
independent, objective standpoint on electing and dismissing accounting auditors and exercising theirauthority relating to audit fees, etc. Independent Audit and Supervisory Board Members draw on theirhighly specialized knowledge as attorneys and certified public accountants to contribute to themaintenance 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 Directors’
meetings and 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 theeffectiveness 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 Financeand Corporate Legal Affairs. In addition, full-time Audit and Supervisory Board Members hold regulargroup meetings with the auditors of Nissha Group companies in Japan in efforts to monitor the
management status of each company, and enhance and strengthen audits.

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

Remuneration System
Remuneration of Directors of the Board who are responsible for business execution, consist of baseremuneration, bonuses, and stock remuneration. Base remuneration is established as a base amountaccording to the individual’s position and the scale of his or her role. Bonuses are short-term
performance-related remuneration taking into account the financial results of each fiscal year andreflecting the achievement rate of goals. Stock remuneration is medium- to long-term performance-

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related remuneration reflecting the achievement rate of annual goals under the medium-term businessplan, and designed to promote awareness of the individual’s contribution to the medium- to long-term
improvement of financial results and sustainable growth of corporate value.
Remuneration of Independent Outside Directors of the Board is not linked to performance, since they
oversee management from a position independent from business execution, but consists of only baseremuneration determined according to criteria such as the individual’s career and duties.
Remuneration of Audit and Supervisory Board Members consists of only base remuneration, since their
duty is to perform audits of the Nissha Group overall from an independent position.

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

Results of FY ended December 2019
Remuneration by Category(Million yen)
Performance-related

Total
Title

Remuneration(Million yen)Compensation

Number of

Basic

Provision for

Remuneration

Management

Bonuses

Members

Board Benefit
Trust

Directors of theBoard (Excluding
Independent Outside

255

174

55

25

5

28

28

―

―

2

50

50

―

―

8

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

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

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Diversity of Corporate Officers（as of January 1, 2020）

At present, we have 16 Corporate Officers, of which two are foreign nationals.
These include individuals with work experience abroad or at other companies, and holding a Master ofBusiness Administration degree.

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

Risk Management in Business Operation
The Nissha Group establishes a Risk Management Policy to clarify our approach to risk management
efforts. The Business Continuity Management (BCM) Subcommittee of the Sustainability Committee
plays a central role in promoting risk management, including preparing for and responding toemergencies such as a natural disaster or pandemic.

Risk Management Policy
The Nissha Group strives to accurately identify the risks we face, avoid unexpected loss, andappropriately control risks, thereby ensuring business continuity and enhancing our corporate value
toward realizing the enrichment of people’s lives by creating technology and developing it into economic
and social value.
1.

We build and maintain a structure for responding to the various risks present in ourbusiness environment.

2.

We promote risk management at the managerial level toward conducting
organization-wide activities and preserving management resources.

3.

In the event of an emergency, such as a situation with critical managerial
consequences or a natural disaster, we work to minimize damage, resume businessactivities as quickly as possible, and prevent recurrence while prioritizing the safetyof human lives.

4.

We conduct in-house training to enhance awareness of and the ability to respond torisks, and ensure that each employ takes responsible, swift, and appropriate action.

5.

We periodically review our risk management structure, including this policy, andmake improvements on a continuous basis to ensure effective risk management at
all times.
Established on July 1, 2015
Revised on January 1, 2018
Junya Suzuki
Chairman of the Board
President and CEO
Nissha Co., Ltd

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We at Nissha have in place a set of Emergency Response Regulations that defines “emergency” andstipulates the action and structure required between initial response to a disaster and the early stagesof business recovery. In the event of a serious interruption of business due to emergency over a certain
level, such as a natural disaster or pandemic, we set up a response task force headed by the President
at our Global Headquarters in Kyoto. We also stockpile supplies at major bases in Japan, distribute“survival cards” listing information about what to do at earthquake strike, educate employees using ane-learning system, and conduct emergency training to promote thorough awareness about the generalrules for action and response in an emergency.
Our Basic Plan for Business Continuity Management (BCM) stipulates in detail the steps to be taken inorder to promote early recovery of key business locations. In efforts to verify the effectiveness of thesesteps, we organize business continuity planning (BCP) exercises on a regular basis for employees
including the management. We respond quickly to changes in management environment andreorganization, such as managing the latest editions of relevant documents.
In the fiscal year ended December 2019, we confirmed the status of BCP at major overseas affiliatedcompanies engaging in business in focus markets identified by the Nissha Group in the medium-termbusiness plan.

Response to COVID-19 Pandemic
The Japanese government declared a state of emergency against the novel coronavirus disease(COVID-19) on April 7, 2020. On the same day, Nissha Co., Ltd. set up a response task force headedby the President and strengthened measures throughout the Nissha Group. We disseminatedinformation about infection prevention and health management to employees, and made working fromhome the rule for all except those in production and logistics divisions.
In addition to continuing to supply products and services needed by our customers, we undertook
procurement and sales of medical face shields for use by medical professionals in efforts to resolve asocial issue that surfaced amid the crisis.

BCP Training for the Management
Once a year for the duration of the medium-term business plan, we conduct training for the
management themed around business continuity planning (BCP). The training is a simulation exercise
designed to confirm whether our BCP will function appropriately in the event of an emergency such as
an earthquake.
The session in the fiscal year ended in December 2019 replicated a situation in which the Global
Headquarters in Kyoto and the Kameoka Factory were struck by a massive local earthquake on the
Hanaore Fault in Kyoto City. Training focused on tracking the managers’ decision-making process. The
participants gave detailed instructions for dealing with damage to resources such as buildings andfacilities, information infrastructure, employees, and suppliers, for a true-to-life exercise.
Active involvement by the management in BCP/BCM construction and operation helps to enhance thecompany’s competitiveness and increase its corporate value. With customers citing BCP as a supplierrequirement in recent years, we believe it is necessary to continue these efforts.

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Simulated response task force

Task force at Kameoka FactoryManagement participating

Administration of Risk Survey
Each year, we conduct a risk survey at Nissha Group affiliated companies in Japan and overseas,
employing the knowledge of a risk consulting expert. Our survey in the fiscal year ended December
2019 was administered in May at Nissha Precision Technologies Malaysia Sdn. Bhd., our Malaysian
production base of the Industrial Materials business.
Because electric power facilities and outdoor equipment are often exposed to the blazing sun, we useda thermal camera to inspect heat sources that can potentially spark fires.
The results of the survey are incorporated into improvement activities at other bases as well.

Risk survey being administered at Nissha Precision Technologies Malaysia Sdn. Bhd.

Initiatives of Internal Audit OfficeInternal Audit Office maintains its impartiality and objectivity by serving as an organization
independent of business execution divisions. It draws up annual auditing plans, investigates whether
business activities are carried out appropriately and efficiently in the Nissha Group, offers advice andrecommendations to internal organizations, and conducts follow-up audits to confirm the status of
improvement of each finding that has surfaced through the audits. Based on the results of its audits,
the office compiles reports and provides suggestions to the President at monthly meetings, andpresents particularly important matters at Board of Directors meetings. In addition, to establish mutual
cooperation with the Audit and Supervisory Board, it holds meetings with full-time members every
three months.
In the fiscal year ended December 2019, audits were themed around the management of trade secrets
in the Nissha Group in Japan, Nissha’s uniquely Japanese ringi approval system and management of

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authority, and business administration in general at affiliated companies. Internal Audit Office alsoestablished a scope of evaluation and performed an independent assessment of financial reportingrelated internal controls in accordance with the Financial Instruments and Exchange Act.

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Corporate Ethics and ComplianceCorporate Ethics and Compliance Guidelines
The Nissha Group’s Corporate Ethics and Compliance Guidelines present a fundamental approach tocorporate ethics and compliance that each employee can practice to realize the Nissha Philosophy,
integrating our mission, standards of thought, and rules of conduct. The guidelines comprise 4Foundational Rules and 10 Important Points, which all executives and employees work to promote andthoroughly implement.

Foundational Rules
1.

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

2.

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

3.

We will comply with all laws and regulations, internal corporate regulations, and socially acceptedrules and norms.

4.

If we witness 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.

10 Important Points
1.

Free and Fair Competition

2.

Prevention of Corrupt Practices

3.

Product Quality and Safety

4.

Protection of Intellectual Property

5.

Appropriate Handling of Information and Resources

6.

Compliance with Import/Export Regulations

7.

Proper Disclosure of Information and Compliance with Insider Trading Regulations

8.

Environmental Protection and Conservation

9.

Creating a Comfortable Workplace, and Community and Social Contribution

10.

Respect for Human Rights

To ensure that all employees of the Nissha Group can understand the guidelines, we compile anddistribute a Corporate Ethics and Code of Conduct Manual in the Japanese, English, Chinese, andVietnabuchouha mese languages, and publish these editions on the Nissha Group intranet. In further
efforts to disseminate, we inform the guidelines to employees at the regular training sessions. Aftereach session, we collect signatures from the participating employees confirming that they understandand will base their conduct on the manual.

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Promotion Structure and Initiatives
All Nissha Group bases in Japan and overseas appoint managers and group leaders in charge ofpromoting corporate ethics and compliance. These managers and group leaders not only conduct
training in their respective divisions but also implement corporate ethics and compliance on a day-today basis through organizational management, serve as a liaison for referring specific cases to
Corporate Legal Affairs, and take on the role of consultant in their workplace. In order to increaseawareness of the managers and group leaders, we distribute quarterly issues of Corporate Ethics andCompliance News.
Designating every October and November as corporate ethics and compliance month, we organize groupwide training at all bases in Japan and overseas. In the fiscal year ended December 2019, we conductedan e-learning course for employees at bases in Japan, highlighting actual cases of information leakage
in the Nissha Group and raising awareness that compliance-related problems are relevant to us all.
While taking advantage of e-learning, we also organized group training sessions for employees in Japanworking at production sites, who do not use a personal computer. At overseas bases, training courses
are tailored to the circumstances of each region. The course in Europe focused on the General Data
Protection Regulation (GDPR), for instance, and that in the United States on social issues such as the#MeToo movement and the California Consumer Privacy Act (CCPA). These courses were planned by
Legal Affairs at our Global Headquarters in Kyoto with cooperation from outside attorneys, andadministered on site in group training sessions. At other overseas bases, we conduct training according
to each base’s operations, laws, and customs.
Through a questionnaire distributed to participants of the e-learning course, we collect a broad range
of information and views on workplace conduct that might constitute a breach of corporate ethics andcompliance, and that otherwise requires improvement. Cases based on the information in which efforts
are made toward improvement are reported together with the contents and outcomes of training to
the Corporate Ethics and Compliance Subcommittee of the Sustainability Committee.
Furthermore, we established pages on the Nissha Group intranet titled “OK or Not? Corporate Ethics
and Compliance Consultation Desk.” In the fiscal year ended December 2019, it featured actual cases
from bases in Japan and obverseas, which were presented in a way that employees could relate to ata personal level.

Corporate Ethics and Compliance Structure

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Hotline
The Nissha Group has in place an Internal Reporting Code and a hotline based on the Whistleblower
Protection Act for the purposes of quickly identifying the facts about illegal, unfair, or unethical conduct
by an organization or individual, minimizing the risk of a crisis, promoting ethical and legal compliance,
and ultimately enhancing our corporate value. Initially accessible from Nissha Group bases in Japanand some bases overseas, the hotline was expanded to some suppliers in Japan in the fiscal year ended
December 2019. In the interest of neutrality and fairness, the hotline reaches a third party served byan outside attorney.
Our Internal Reporting Code, covering operation of the hotline, protects whistleblowers from any
unfavorable treatment by either the company or other employees on account of their complaints, andobligates the acceptance of anonymous reporting. In the fiscal year ended December 2019, the hotline
was used nine times for complaints centering on workplace environment and interpersonal
relationships. All complaints received are relayed from the hotline (the outside attorney) to the
Corporate Ethics and Compliance Subcommittee secretariat, which, as a rule, coordinates with relevant
divisions in conducting an investigation and fact-checking while taking care to protecting thewhistleblower. When needed, the contents are reported to the Corporate Ethics and Compliance
Subcommittee for deliberation, and then measures are taken according to the results of theinvestigation and deliberation.
In order to make corporate ethics and compliance a familiar concept for all, we are working to create
an environment in which employees can feel comfortable about discussing even seemingly trivial
matters, and to disseminate information about the hotline through the Corporate Ethics and Code of
Conduct Manual distributed to all employees, the Labor and Human Rights Handbook, the Nissha Group
intranet, and in-house training.

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Hotline Organizational Chart* The hotline reaches an outside attorney.

Hotline for Technical Interns from Vietnam
The Nissha Group accepts technical interns from Vietnam, and to ensure that they can feel safe about
consulting the hotline in their native language, we introduced a Vietnamese interpreting service in July
2019. In the interest of neutrality and fairness, the Vietnamese hotline reaches a third party served byan outside attorney, as with the hotline for the Nissha Group in Japan.

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Editorial Policy
The Sustainability Report is published annually to serve as a communication tool between thestakeholders and the Nissha Group. Sustainability Report 2020 covers our initiatives and performancein the fiscal year ended December 2019 (January–December 2019), following the editorial policy given
below.

Guidelines Used as Reference
・The GRI Sustainability Reporting Standards
・ISO26000
・Environmental Reporting Guidelines 2012, issued by the Japanese Ministry of the Environment

Period Covered
From January 2019 to December 2019

Publication Dates
Current issue: June 2020 for Japanese, July 2020 for English
Last issue: May 2019 for Japanese, July 2019 for English
Next issue: June 2021 for Japanese, July 2021 for English (planned)

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

Major Affiliated Companies and Businesses

Companies

Major Businesses

Nitec Industries, Inc.

Industrial Materials

Nitec Precision and Technologies, Inc.

DevicesNissha FIS, Inc.

Devices

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Nissha SiMICS, Inc.

DevicesNissha Printing Communications, Inc.

Information and Communication

Zonnebodo Pharmaceutical Co., Ltd.

OthersNissha Business Service, Inc.

OthersNissha USA, Inc.

Industrial Materials

Eimo Technologies, Inc.

Industrial Materials

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

Industrial Materials

Graphic Controls Acquisition Corp.

Medical Technologies

Nissha Medical Technologies Ltd.

Medical Technologies

Nissha Europe GmbH

Industrial Materials

Nissha Schuster Kunststofftechnik

Industrial Materials

Nissha Back Stickers

Industrial Materials

AR Metallizing N.V.

Industrial Materials

AR Metallizing Ltd.

Industrial Materials

Nissha ARM Embalagens Trading Do Brasil Ltda.

Industrial Materials

Nissha Korea, Inc.

Industrial Materials

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

Industrial Materials

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

Industrial Materials, Devices

Guangzhou Nissha High Precision Plastics Co., Ltd.

Industrial Materials

Hong Kong Nissha Co., Ltd.

Industrial Materials

Taiwan Nissha Co., Ltd.

Industrial Materials, Devices

Nissha Vietnam Co., Ltd.

Devices

Note: AR Metallizing N.V., a consolidated subsidiary in the Industrial Materials Business Unit of Nissha Co., Ltd., has acquired
all shares of Eurofoil Paper Coating GmbH (company name changed to AR Metallizing GmbH on April 2020), a German
manufacturer of metallized paper, and fully completed the transaction on January 31, 2020.

Major Changes in Reporting Scope

Date

Contents

Impact on reporting scope

January 2019

Nissha Printing Communications, Inc. consolidated

The content of the Sustainability

our manufacturing subsidiary, Nitec Printing Co.,

Report 2020 has not beenLtd. In January 7, 2019 as part of the restructure

affected.

in our Information and Communication Business.
With this, Nissha Printing Communications
gathered its mass-production process after printing
into Kameoka Factory in Kameoka, Kyoto.

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July 2019

On July 1st, 2019, Nissha Industrial and Trading

The content of the Sustainability

Malaysia Sdn. Bhd. (Malaysia) transferred theReport 2020 has not beenshares of Nissha Flooring Industries Sdn. Bhd toaffected.

Scanwolf Plastic Industries Sdn. Bhd. Nissha
Flooring Industries Sdn, Bhd was a subsidiarycompany for production of Luxury Vinyl Tiles
operated in a joint venture with Scanwolf Plastic
Industries Sdn. Bhd.
NovemberNissha Co., Ltd. completed the share acquisition of

The content of the Sustainability

2019

Zonnebodo Pharmaceutical Co., Ltd. and made it aReport 2020 has not been

subsidiary as of November 25, 2019. Zonnebodo

affected.

Pharmaceutical Co., Ltd. engaged in manufacturingand marketing authorization holder of in-housedeveloped prescription pharmaceuticals (brandname drugs) and quasi drugs.

Publishing Division and Contact for Inquiries
Nissha Co., Ltd.
Investor Relations
TEL: +81 75 811 8111
FAX: +81 75 823 5344
Contact: https://www.nissha.com/english/inquiry.html

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