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Nissha Group
Sustainability

Environment

SocialThird Party
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Human
RightsHuman
Resources

Fair Operating Practices/ Local Communities

Governance
Quality Management / Efficiency
and Productivity Improvement

Governance

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13. Human Rights
This policy has been translated into Japanese, English, Chinese, Korean, Malay, Spanish and German,
and widely distributed to all Nissha Group employees. In addition, we ask all our suppliers to understand our policy and work with us on initiatives directed at labor and human rights.

13-1 Basic Policy
We at Nissha Group have in place a basic policy on labor and human rights. In formulating the policy, the10 principles of the United Nations Global Compact, which we joined in April 2012, and the Responsible
Business Alliance (RBA) code of conduct were used as reference. The RBA code of conduct is a global codeof conduct for the IT devices and mobility industries, which Nissha sees as the priority markets. It referencesinternational norms and standards including the International Bill of Human Rights and the ILO Declaration
on Fundamental Principles and Rights at Work.

Basic Policy on Labor and Human Rights
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 to organize
and the right to collective bargaining.
5. Discrimination: We will not discriminate based on a personʼs age, disability, ethnic group, gender, marital status, nationality, political support, race, religion, sexual orientation, pregnancy or membership in aunion. We will also not be party to this.
6. Punishment: We will not perform physical punishment or mental or physical coercion and we will not
engage in verbal abuse.
7. Working hours: We will observe the laws, ordinances and labor agreements related to working hours,
rest breaks and holidays.
8. Remuneration: We will observe the laws and ordinances related to the payment of appropriate wages.

13-2 Structure
The Nissha Group recognizes that human resources are the driving force for improving corporate
value, and has identified “respect for human rights” as one of our materiality. A task force has been
established under the Sustainability Committee to deal with the themes of "enhancing human capital and respect for human rights" and is working to address respect for human rights at the Group's
suppliers. For other important human rights risks, a Labor and Human Rights Subcommittee has
been established under the Risk Management and Compliance Committee, which is working to reduce these risks throughout the Group.

Board of Directors

Sustainability Committee

ESG Task Force(Enhancing Human Capital,
Respect for Human Rights)

Risk Management and Compliance Committee

Labor and Human Rights Subcommittee

Junya Suzuki
Chairman of the Board, President and CEO
Nissha Co., Ltd.
Established on June 1, 2018

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13-3 Initiatives Related to Laborand Human Rights
Our initiatives related to labor and human rights can be broadlyclassified into initiatives by the ESG Task Force (enhancing humancapital and respect for human rights) to address material issues
throughout the Group and initiatives by the Labor and Human
Rights Subcommittee to address risks related to compliance withinternational norms and laws in the area of labor and humanrights that apply to the Group.
The ESG Task Force has as its strategy “reduction of labor and human rights risks” for the “respect for human rights” materiality. In
the fiscal year ended December 2021, we used a questionnairetargeted at all group companies to confirm that there were nocases of child labor or forced labor. In the fiscal years ended December 2022 and 2023, we worked to achieve zero child laborand forced labor at the Groupʼs primary suppliers.

Human
RightsHuman
Resources

Fair Operating Practices/ Local Communities

laws and regulations and the RBAʼs code of conduct, etc. Specifically, in addition to checking whether the salaries paid irrespectiveof employment categories such as full-time, contract, or temporary
employees, etc. meet the minimum wages set by the prefectural
governments, and whether working hours and overtime are correctly reflected in wages in compliance with laws and regulations
and the RBA, we also check whether items which have been pointed out and corrected in previous audits continue to be compliedwith and so on. Internal audit findings are reported through the report line, and the Labor and Human Rights Subcommittee provides
support to production bases, as necessary, so that corrective action
can be taken. The results of the internal audit conducted during
the fiscal year ended December 2023 were favorable with no major findings.

Initiatives for Foreign Technical Interns

Refer to 21-4 CSR Audit and Labor and Human Rights Risk Survey
In the fiscal year ended December 2023, we highlighted childlabor, forced labor and discrimination, carrying out compliancetraining aimed at all Group companies both in Japan and overseas.
In Japan, 2,911 people were targeted for this training, and we
confirmed that 100% of these people took said training.
The Labor and Human Rights Subcommittee operates a management system, and its key performance indicators/action items
include items related to materiality issues, risk assessments conducted at the Company-wide level, and risk assessments specificto affiliated companies.
Furthermore, we conduct internal audits once a year at major
Nissha Group production bases in Japan to check compliance with

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Index / ESG Dataof the interns and establishing a worker-friendly environment. For example, when employees first join the company, they are given opportunities to experience Japaneseculture and we organize recreational activities so they canlearn about local culture.
Furthermore, we are preparing and providing signs showing evacuation routes and the location of the medical
office, notices about harassment and other consultation
desks, pay slips, and training materials, etc. in both Japanese and Vietnamese so that both all employees andtechnical interns can understand them easily. In terms ofcommunication, senior trainees and employees work withinterpreters to provide detailed explanations and to create
an environment where trainees can always ask for help ifthey have any questions.
Fifteen technical interns completed their training in thefiscal year ended December 2023 and returned to theirhome countries. We hope that many young people will
acquire skills and grow as world-class human resources
while experiencing different cultures, and we will continue
to support them in this endeavor.

Workplaces in Nissha Group that accept technical interns
from Vietnam make creative efforts in information sharing
and communication toward protecting the human rights

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13-4 Harassment Prevention

13-5 Relationship with Labor Union

We at the Nissha Group establish a set of Harassment Prevention
Regulations, which prescribe measures to prevent various formsof 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 for promoting harassment prevention, we designate chief promoters of harassment prevention
at each base and we have established an external hotline consultation service (Refer to 28-6 Hotline Consultation Service).
The contact information is provided through the Nissha Group
intranet and e-learning, and we are working to ensure that employees understand that the system is set up so they can discuss
issues with confidence by assuring them that their privacy will
be fully respected and that they will not be treated unfairly or bedisadvantaged for making use of these services. In the fiscal year
ended December 2023, there was one case related to harassment filed at hotline consultation service, but it has already beenhandled.

Our Basic Policy on Labor and Human Rights contains the provision, “Freedom of association and the right to collective bargaining.” In Japan, the labor contract concluded between company
and labor union confirms, “the Company and the Union shall respect each otherʼs position and maintain a peaceful relationshipbetween labor and management as well as strive for the maintenance and improvement of labor conditions and the growth of
the Company.” In the fiscal year ended December 2023, there
were no significant violations of freedom of association.

We also provide annual e-Learning training to all employees toprevent harassment, in addition to providing training for chief
promoters of harassment prevention to solve problems and prevent harassment, and discuss and implement measures for further improvement.

We have the Nissha Crew Alliance as the only labor union in the
Nissha Group in Japan. This is based around employees in thethree companies of Nissha Co., Ltd. plus the domestic Group
companies Nissha Industries, Inc., and Nissha Printing Communications, Inc. As of April 2023, employees at Nissha Precision
and Technologies, Inc. are also eligible to join. (Total union membership as of January 2024 was 1,253 members.) The vision of
the Nissha Crew Alliance is “ realizing new happiness ” through“new ways of working (workplace sphere) ”, “new lifestyles (social
sphere)”, and “new union activities (individual sphere)”. It aims to
support all employees of the Nissha Group in Japan. The Nissha
Crew Alliance engages in regular negotiations and discussions
based on this concept to build stable labor-management relations
while resolving common issues in the Nissha Group in Japan.
The Management Council, whose members are mainly directors
and corporate officers of Nissha Co., Ltd., holds regular meetings
with the Nissha Crew Alliance. In addition to negotiating anddiscussing employee working conditions, the Council shares information on the management of the Nissha Group. During the
fiscal year ended December 2023, the Management Council met

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eight times, including regular bi-monthly meetings and ad-hoc
meetings. In addition, the labor and management offices strive
to prevent labor problems by sharing employeesʼ opinions on theworking environment and the working hours situation once amonth. Furthermore, when changing important labor conditionsof the Nissha Group in Japan, the company engages in communication with the union in addition to regular consultations, with theaim of reaching an agreement satisfactory to both parties. In thefiscal year ended December 2023, an agreement was reached ona severance pay system based on the new human resources system. Previously, severance pay systems varied by companies, but
now they have been unified and as of January 2024, a new joint
severance pay system has been adopted at all major companies
in the Nissha Group in Japan. In addition, opinions were voiced on
both sides regarding improving the existing systems and formulating new measures, so we have been working together on theissue. With prices continuing to rise and growing pressure for wage
increases, labor and management reached an agreement on increasing starting salary for new graduates and raising overall salarylevels in January 2024, following on from 2023.
Nissha Industries, Inc. and Nissha Printing Communications, Inc.
have also established labor management liaison meetings at thecompany and office level to provide forums for labor and management to exchange opinions. Moreover, Nissha Precision andTechnologies, Inc. has established the Workplace Improvement
Committee, with members from both labor and management, towork on promoting improvements in the workplace environment
and in welfare benefits.
In fiscal year ended December 2023, the Nissha Group in Japan
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 relationship between labor and management.

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14. Human Resources Policy and System
14-1 Policy

14-2 Human Resources System (Scope: Nissha Group in Japan)

The Human Resources Policy upon which the Nissha Group base our human resources strategy istaken directly from our Mission, which reflects growth both for the company and employees throughdiverse capabilities and passion. The Nissha Group continues to grow by seeing changes in the market
environment as business opportunities and by improving our value proposition to customers, driven
by the diversification of our human resource capabilities and core technologies. Since growth throughsuch change is at the core of our management strategy, our Human Resources Policy states clearly thatmanagement strategy and human resource strategy should be in lock-step.

Based on the idea that company growth leads to employee growth, and employee growth tocompany growth, the Group operates a human resources system focused on roles and abilities.

Human Resources Policy
Nissha Group aims for growth both for the company and employees through diverse capabilities
and passion, seeing changes in the business environment as opportunities for growth.
1. We shall develop employees who embody Nissha Philosophy and contribute to society
through our business activities.
2. We shall respect diversity of employees and utilize their individuality and strengths.
3. We shall emphasize global teamwork to achieve results.

In this system, the required skills are clearly stated, and employees demonstrating the skills requiredby the company will be given a fair chance to be promoted, regardless of age or length of service. In
the human resources system for general employees, we not only take extra care of those employees
who have key posts, but use a multiple-track personnel promotion system based on expectedroles. The actions expected of the managers who direct these employees have been clarified as
managerial competencies consisting of the ability to change (leadership) and the ability to execute(management). In addition, we expanded the treatment for people with advanced specialist skills
previously offered to only select managerial staff, and as of the fiscal year ending December 2024,
started a new allowances payment for employees, regardless of whether they are managerial staff
or ordinary employees, who contribute to their company or business using advanced specialist skills.
Each employee carries out their duties with an awareness of the abilities required based on
their position, and receives feedback from their supervisor on the gaps with the abilities actuallydemonstrated in the semi-annual performance review. This encourages the growth of each
employee, which in turn leads to further growth for the company.

4. We shall encourage proactive actions and unconventional innovation.
5. We shall provide rich training programs and challenging growth opportunities.
6. We shall create a workplace full of energy where employees feel safe to work.
Junya Suzuki
Chairman of the Board
President and CEO
Nissha Co., Ltd.
Established on January 1, 2021 Revised on May 1, 2022

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① Diversity

14-3 ESG Task Force Initiatives
The Nissha Group has set “enhancing human capital” and “respect for human rights”, as social (S)material issues to realize our Sustainability Vision. In order to accelerate our efforts in these areas,
we have established task forces under the Sustainability Committee to address three themes, (1)diversity, (2) human resources development, and (3) labor and human rights. For each theme, wehave set key performance indicators on a global basis for where we see ourselves in 2030 (Long-term
Vision or Sustainability Vision) and where we want to be in three years (Medium-term Vision), andbackcasting from these, we set annual activities targets and work to carry them out.
Key Performance Indicators andAction Items for 2026

Fair Operating Practices/ Local Communities

Governance

Key Performance Indicators andAction Items for 2030

1. Diversity

Female manager ratio
Global consolidated: 23%
Nissha non-consolidated: 12%

Female manager ratio
Global consolidated: 25%
Nissha non-consolidated: 17%

2. Human
resourcesdevelopment

Selection rate of leadership candidates
Nissha non-consolidated: 45%

Selection rate of leadership candidates
Nissha non-consolidated: 50%

3. Labor andhuman rights

0 incidents of child labor or forced laborat primary suppliers in regions with highrisks of labor and human rights (Central
and South America, Southeast Asia andGreater China).

Identify audit targets based on annual
purchasing results and continue toperform audits
Zero child labor and forced labor

Although the definition of managerial staff varies between countries, we have adopted a new
standardized definition of managerial staff on a global basis, and we monitor the situation regularly.
At the end of the fiscal year ended December 2023, the ratio of male to female employees in theGroup was approximately 6 (male) to 4 (female), but the ratio of male to female managerial staff
was approximately 8 (male) to 2 (female), which indicates a discrepancy. In order to get the ratioof female managerial staff, a key performance indicator, closer to the ratio of female employees
by 2030, we are working on a project to promote the advancement of women with a special focus
on Japan, where the disparity between men and women in management positions in particular is
considerable.

② Human resources development
As indicated in our Human Resources Policy, the Group is aiming to maximize employee capabilities
and achieve sustainable corporate growth by providing full training programs and challenging
growth opportunities. In particular, in order to increase our pool of management and strategic
personnel who will lead the management of the entire company and its businesses, we have set,
as a key performance indicator, the attendance rate of employees at the Nissha Academy Business
School (beginner and intermediate levels) as the "selection rate of leadership candidates”. We haveset a goal of increasing the selection rate of leadership candidates to 50% (Nissha non-consolidated
basis) by 2030, and are working on systematic training.

③ Labor and human rights
We are working to "understand and reduce human rights risks" at Nissha Group domestic andoverseas bases and their primary suppliers. In the fiscal year ended December 2023, we conducteda CSR survey of 131 of our primary suppliers in regions* with high labor and human rights risks, andconfirmed that there was no use of child labor or forced labor.
Refer to 13-3 Initiatives Related to Labor and Human Rights* Areas identified by the ILO (International Labour Organization) as having high labor and human rights risks: Central and South America,
Southeast Asia and Greater China

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14-4 Talent Management System
We have introduced a talent management system to grasp
the abilities of each employee and make the most of theirindividuality and strengths. The talent management system
records employee backgrounds, evaluations, and results ofengagement surveys and self-assessment. This data is then used
to develop and implement various measures.
This has become a useful tool for management. For example,
by using the same system as for implementing personnel
evaluations, we can not only grasp the status of progress in realtime but the past personnel evaluations for those who havebeen transferred can be referenced by their superiors at their
new place of work. From the fiscal year ended December 2023,
we have been implementing employee skill surveys by registering
the abilities, experiences, and knowledge of each employee,
and moving ahead with collecting and making visible suchinformation. We will continue these sorts of initiatives to moveahead with data-based talent management in the future.

14-5 Fair Evaluation and Treatment(Scope: Nissha Group in Japan)

Human
RightsHuman
Resources

GovernanceFair Operating Practices/ Local Communities

done. In addition to these two, some general employees working
on production lines or in routine work are evaluated based on
the held skills evaluations, which assess whether they have thenecessary skills and knowledge for their job.
Bonuses and salary increases for general employees are basedon all three of performance evaluations, demonstrated skills
evaluations, and held skills evaluations, while promotions
are based on demonstrated skills evaluations and held skills
evaluations. Bonuses and salary increases for managerial staff,
from whom greater commitment to outcomes is required, arebased on performance evaluations only, while promotions are
based on demonstrated skills evaluations.

14-6 Wage Management
Wages and other compensation for labor are appropriately
stipulated in the wage rules of each affiliated company and inindividual contracts in accordance with the laws and regulationsof each country. The Nissha Group makes no distinctions basedon age, gender, or other factors. The wage gap between maleand female in the fiscal year ended December 2023 is shown
below. The figures show a comparison of female with a malewage set at 100.

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The human resources system used for full-time workers at
Nissha applies equally to male and female, and they are both
treated the same. Differences between male and female arise
from differences in rank or age composition. There is a smaller
ratio of female in managerial positions or higher ranks, whichhave relatively higher salaries, and this affects the differences
over all positions. Looking at managerial staff alone, female are
100.2 compared to the maleʼs 100, so there is no difference.
We are considering further promotion of initiatives for theadvancement of women which should lead to improvements inthe overall difference.
In addition, non-regular workers include employees who aretreated differently, such as contract employees who are rehired
af ter mandator y retirement and employees working underindividual labor contracts. The main reason for the difference
between male and female is that employees rehired on an
ongoing basis as non-regular workers in managerial positions
following mandated retirement are, as noted above, mostly
male, which affects the overall difference.

(Nissha Co., Ltd.)The Nissha Group considers rewarding employees for theirachievements to be the foundation of our human resourcess y s tem. Per s o nnel e v aluatio ns are b a s e d o n the t ar ge t
management system, and focus on the two axes of performance
evaluations, which assess KPIs tied to the mission of theorganization an employee belongs to and the management
strategy of the company, and demonstrated skills evaluations,which assess whether actions appropriate to the role have been

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Male

All workers

Female100

75.9

Full-time workers

100

78.1

Non-regular workers

100

60.0

* Calculated based on the regulations in the Act on Promotion of Women's Participation
and Advancement in the Workplace (Act No. 64 of 2015).

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15. Respect for Diversity■ Employee Composition (Nissha Co., Ltd.)

15-1 Nissha Group Employee Composition
The diversity of the Nissha Group shows in our employee composition, and a variety of employees ofdifferent nationalities, genders, and ages are active. With the expansion of our activities across theglobe, about 60% of permanent employees work at Nissha Group companies outside Japan. Nissha
Group overseas bases are continuing to hire local employees and locally hired employees have been
appointed to upper management positions, such as CEO, at eight of the 17 major overseas groupcompanies.

Area

Japan

Unit: Number of employees

North America

Central andSouth America

Asia

Europe

Male

1,489

750

191

281

501

Female

433

617

415

301

243

Total

1,922

1,367

606

582

744

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

GenderDirectors of
the Board*1

Corporate
officers

Nisshafellows

Managerial
staff*2

Total employees*3

Averageage*4

Averageyears ofemployment*4

End of
FY2019

Male

8

12

1

162

609

42.9

15.3

Female

1

0

0

10

210

36.7

11.0

End of
FY2020

Male

8

11

2

145

531

43.0

15.4

Female

1

0

0

8

189

37.3

11.5

Male

8

12

2

157

534

43.8

15.6

Female

1

0

0

9

197

37.8

10.8

Male

8

12

1

153

513

44.7

17.2

Female

1

0

0

10

197

38.2

11.8

Male

8

11

1

152

514

44.8

17.2

Female

1

0

0

12

206

38.1

11.6

End of
FY2021■ Composition by region (Nissha Group, as of the end of December 2023)

Number of employees by region and genderFiscalYear

End of
FY2022End of
FY2023*1. Directors include Independent Outside Directors of the Board.
*2. Managerial staff exclude corporate officers.
*3. Employees exclude temporary employees.
*4. Average age and average years of employment indicate the average number of employees included in total employees.

■ Composition by employment status (Nissha Group, as of the end of December 2023)

Composition by employment status and gender
Permanent
NumberTemporary

Composition (%)

NumberComposition (%)

Male

3,212

61.5

894

65.4

Female

2,009

38.5

474

34.6

Total

5,221

―

1,368

―

* Figures exclude directors by a delegation agreement.

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Human
RightsHuman
Resources■ Composition by age (Nissha Co., Ltd., as of the end of December 2023)
Unit: Number of employees
Age

18-19

20-29

30-39

40-49

50-59

60-69

Male

0

36

106

213

152

7

Female

4

45

66

63

27

1

■ Number of employees (Nissha Group)

Unit: Number of employees

End of FY2019

End of FY2020

End of FY2021

End of FY2022

End of FY2023

Male

3,692

3,432

3,470

3,362

3,212

Female

2,026

1,958

1,939

1,963

2,009

Total

5,718

5,390

5,409

5,325

5,221

Fair Operating Practices/ Local Communities■ Composition of managerial staff (Nissha Group in Japan)

End of
FY2022End of
FY2023Governance

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15-2 Employment of Persons with Disabilities
The Nissha Group is working to achieve a percentage that is above the statutory rate of persons
with disabilities employed at domestic Group companies which are targeted by government ʼsemployment ratio system for persons with disabilities. To ensure that employees with disabilities
can work with peace of mind, we provide support from outside specialists, help them develop
their skills, and hold regular interviews with Human Resources. In the fiscal year ended December
2023, we invited a counselor from the Kyoto Vocational Center for Persons with Disabilities andcreated a space for dialogue between the counselor and department heads of where the employeeswith disabilities worked. The following shows the changes in the employment rate of persons withdisabilities in our company. Three people were hired in the fiscal year ended December 2023,
meaning our percentage of persons with disabilities employed exceeded the statutory rate.

Unit: %Of all permanent employees who left Nissha Group companies in Japan in the fiscal year ended
December 2023, 2.52% left for personal reasons.

End of
FY2021

Quality Management / Efficiency
and Productivity Improvement■ Legal employment rate and Nisshaʻs employment rate

* Figures exclude temporary employees.

FiscalYear

Governance

Male

FemaleOf which mid-carrier employees

Total

Of which foreign
employees

Number

281

14

295

94

2

Composition
ratio (%)

95.3

4.7

―

31.9

0.7

Number

269

15

284

91

1

Composition
ratio (%)

94.7

5.3

―

32.0

0.4

Number

261

17

278

89

1

Composition
ratio (%)

93.9

6.1

―

32.0

0.4

End of FY2019

End of FY2020

End of FY2021

End of FY2022

End of FY2023

Employment rate ofNissha

2.38

2.11

2.12

2.07

2.67

Statutory
employment rate

2.2

2.2

2.3

2.3

2.3

We shall continue to strengthen links with external organizations such as Hello Work, create places
that are easy to work in, and promote understanding of workplaces for the disabled. Through theseactions, we aim to both create opportunities to hire and employ persons with disabilities and at thesame time, achieve “Diversity and Inclusion” (We welcome diverse capabilities interacting as equals
and enhancing our organizational performance) part of our Shared Values.

* Managerial staff exclude temporary employees.

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15-3 Foreign Employees in Active Roles

15-4 Promotion of Women's
Advancement

next-generation female managerial staff, who are in leadershiproles just below the managerial level.

The Nissha Group conducts recruitment activities regardless ofnationality. In our Group, where a diverse range of people plays
active roles, non-Japanese nationals account for more than
60% of all employees. The number of foreign nationals working
for the Nissha Group in Japan is increasing. In our Kyoto Global
Headquarters, we have set up a worship room available for those
who wish to use it, as well as a small purification facility to purify
the body before worship.

The Nissha Group aims to be a company where all employees,
regardless of nationality, gender, age, and more, can exercise
their abilities to the full.

■ Action Plan for the Japanese Act on Promotion of
Womenʼs Participation and Advancement in the

The total number of new graduates and mid-career hires and thenumber of newly hired foreign employees at Nissha Co., Ltd. isshown below.
Unit: Number of employees
Total
numberof hires

New graduates
Foreignnationals

Total
numberForeignnationals

Country

FY2020

19

12

0

7

0

-

FY2021

34

11

0

23

0

-

FY2022

27

12

1

15

0

Republicof Korea

FY2023

51

12

0

39

2

Republicof Korea,
Brazil* Figures for mid-career hires from the end of FY2020 to the end of FY2022 have been revised
due to a review of the aggregation method in accordance with the disclosure of the midcareer hiring ratio based on the Comprehensive Promotion of Labor Policies Act.
* The number of mid-career hires includes employees who were promoted from non-regular to

Nissha Sustainability Report 2024

Refer to 14-3 ESG Task Force Initiatives

The Japanese Act on Promotion of Womenʼs Participation andAdvancement in the Workplace requires companies with 101 or
more employees to draft an action plan for promoting womenʼsparticipation in business. In the Nissha Group, five companies,
Nissha Co., Ltd., Nissha Industries, Inc., Nissha Precision andTechnologies, Inc., Nissha Printing Communications, Inc. andNissha Business Service, Inc. have formulated action plans thatspecify quantitative targets and the details of their initiatives.
In line with the action plans based on the Womenʼs Participation
Act, moving forward, we will continue to upgrade our initiatives sothat all female employees can live up to their full potential.

Mid-career

Total
numberregular employment.

The Nissha Group has set the ratio of female managerial staff,
one of the symbols of diversity, as a KPI. We are working on
promoting the advancement of women, setting targets of 23%
globally consolidated and 12% for Nissha non-consolidated by
2026. In the fiscal year ending December 2024, several women
will be appointed as managerial staff, and Nissha expects
the percentage to increase to more than 8.5% on a nonconsolidated basis.

WorkplaceFemale managers ratio
End of
FY2020End of
FY2021

End of
FY2022End of
FY2023

Forecast at theend of FY2024

Nissha
Group
(%)

19.4

20.0

21.5

22.7

23.0 〜 24.0

NISSHA
(%)

5.0

5.4

5.9

7.1

8.5 〜 9.5

The Nissha Group in Japan opened a career counseling office in
2021, where women can get support for career planning that
accommodates their life events. In addition, we are providing
challenging growth opportunities for female employees byenhancing selective training and company-wide common
training items for each grade, and systematically developing
next-generation managerial staff through personnel rotation.
Through these initiatives, we shall steadily increase the ratio of

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Governance

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16. Human Resources Development
16-1 Basic Concept
The Nissha Group in Japan offers a wide range of training
programs to realize our medium- to long-term growth strategy
and to suppor t employees' medium- to long-term careerdevelopment and promote their growth. These programs havebeen organized into an in-house university, Nissha Academy.
Specifically, we have established selective training programs todevelop management and strategic human resources, rankspecific training programs that match the employeeʼs stage,function-ba sed training programs to provide specialized
knowledge according to job type and duties, and career design
training programs tailored to employeesʼ life stage. The Nissha
Group overseas is also developing various training programs
under the Nissha Academy flag, based on the actual situationin each country and region. Through such human resources
development initiatives, the Group aims to see the company andour employees grow together.

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16-2 Training Systems

graduated from schools of management with lectures based onpractical case studies by in-house instructors.

■ Selective training

Executive MBA program and a graduate school program
for working professionals

We carry out selective training with the object of systematicallytraining the human resources necessary to achieve our mediumto long-term growth strategy, including training candidates
for the next generation of management/strategy personnel orglobal personnel.

As a higher level training program of the Business School, we alsooffer opportunities to attend an external executive MBA course,
or graduate schools in the fields of business management or data
science as an adult student. These programs are mainly used toacquire new skill sets in anticipation of a change in position thatinvolves a major change in perspective or viewpoint.

Business School
This training program is designed to systematically develop
human resources to lead the management of the entire company
and its businesses.
It covers the knowledge and skills involved in developing andimplementing business strategies. Participants who complete thetraining program will be actively provided with opportunities to
put what they have learned into practice, including participating
in projects and formulating medium-term management plans.
The Business School offers three courses: a beginner course
for those aiming to gain the skills and knowledge needed to
become assistants to managerial staff, an intermediate course
for those aiming to gain the skills and knowledge required ofentry-level managerial staff, and an advanced course for thoseaiming to gain the skills and knowledge required for upper-level
managerial staff. The beginner course is taught by in-houseofficers and managerial staff who have completed programs at
the Business School, and covers basic business literacy and the
Nissha Group's corporate philosophy system (Nissha Philosophy).
The intermediate and advanced courses are original programs
that combine MBA-based lectures by outside professors from
graduate schools of management or Nissha staff who haveNissha Sustainability Report 2024

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Quality Management / Efficiency
and Productivity Improvement

Governance

GRI Standards Content
Index / ESG Data

tic Group companies. For about a month, regardless of hiring
company or academic history, they will learn the outline of the
Nissha Group as a whole as well as its businesses and products
through lectures and field trips to factories. After that, students
undergo business unit training or factory training as appropriate
for their positions. After being assigned positions, they expand
their experiences broadly while utilizing rotations across job
types and departments, in consideration of development froma long-term perspective, supporting new employees to grow instages.

Overseas trainee system
We have an overseas trainee system for developing young humanresources (from both liberal arts and science backgrounds)
who can flourish in global business settings regardless of their
job type. Employees who have been with the company for atleast three years can apply, and, following an internal selection
process, will be dispatched as trainees for about a year. By
working at overseas subsidiaries in Europe, America, or Asia,
they can improve their specialized skills, language abilities,
and intercultural adaptability with the goal of becoming global
leaders, including candidates for overseas postings, in the future.

■ Rank-specific training
Rank-specific training is provided at milestones such as whenentering the company, promoted, and appointed to certain
positions.

New employee training
At the Nissha Group, the first three years after new graduatesenter the company are positioned as the initial training period. At
the start of this period, group training is conducted at all domes-

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Training is provided to employees to allow them to acquire theknowledge and skills required for their job type and duties, suchas engineering, production, purchasing, etc.

Priority market skills training
In accordance with our portfolio strategy, Nissha is working on
shifting from the IT devices market to non-IT device markets,
such as medical and mobility. Priority market skills training backs
up our portfolio strategy from the education and training aspects. It is our unique training program for improving the qualityof our value proposals to customers in non-IT device markets.
Priority market skills training consists of three layers: (1) Basiceducation for engineers, (2) Practical design skills for engineers,and (3) Practical education by target markets for non-engineers
as well. This composition reflects the demand for advanced design skills by corporations in position to provide parts and modules in the medical market such as Nissha, and the demands ofcompliance with quality management systems and regulations
specific to each industry.
In 2023, multiple subjects were offered in each level from (1) to(3), with a focus on the medical and mobility markets, and a total of 819 people took these trainings.

Common training for engineers
The technical knowledge required tomeet the needs of global customers
is taught from the dual aspects of
the “core technologies” that are ourstrengths, and the science-based“common engineering” knowledge(quality, statistics, intellectual prop-

Nissha Sustainability Report 2024

SocialHuman
RightsHuman
Resources

Fair Operating Practices/ Local Communities

erty, etc.) that all engineers, regardless of where they work, should
be aware of. Employees are taught all this, from introductory toapplied fields, in line with their individual experience and knowledge
levels.
In order for us to continue to grow while changing our target markets and products, we train engineers who can create products thatcome with “Nisshaʼs unique strengths” beyond the boundaries ofbusiness units.

16-3 Support for Employees' Voluntary
Desires to Learn and Grow

We support self-study for the purpose of encouraging employees
to voluntarily seek opportunities for study, and to enhance theireducation or gain knowledge about the Company's business, byproviding information on programs that encourage study andby providing a system that subsidizes half of the cost for those
employees who complete self-study.

16-4 Career Planning Support
Since the fiscal year ended December 2019, we have been
providing career design training annually for full-time employees
in their 50s. All full-time employees aged 50-59 have completed
this training (as of December 31, 2023), which is designed tohelp them understand changes in the external environment,
company systems, and their own values and strengths, andchoose their own careers.

Governance
Quality Management / Efficiency
and Productivity Improvement

Governance

GRI Standards Content
Index / ESG Data

16-5 Training Records
The table on the right shows the total training hours per year of
employees (full-time and contract) who participated in major
training programs offered by the Nissha Group in Japan andthe training hours per employee, obtained by dividing the total
number of hours by the number of employees.
Some training sessions are held every two years, and others
every three years. While the number of programs and students
have both fluctuated from year to year, we carry out training
based on careful study of the targets and required times so thatthe necessary education can be given to the necessary people.
In addition, we are also working on increasing efficiency thoughways such as compressing time for group training by combining
pre- and post-study to meet the needs of diverse working styles
and reduced work hours.
GenderTotal training
hours per year

Training hours
per employee

FY2021

FY2022
23,252

FY2023Male

28,92820,042

Female13,498

7,361

8,697

Total

42,42630,61328,739

Male

16.4

14.2

12.2

Female

24.0

15.3

17.7

Total

18.2

14.4

13.4

* Training hours per employee are calculated based on the number of full-time employees andcontract employees of the Nissha Group in Japan.

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16-6 In-House Training Programs
The Nissha Group values an organizational culture in which
senior employees train junior employees and encourages inhouse training programs. Instructors are primarily managerial
staff who share their experience and knowledge with other
employees. In addition to expanding personal connections
among employees, through this initiative more employees are
rediscovering Nisshaʼs strengths and attractiveness, and ourorganizational strength and sense of unity are improving. We
previously had employees take part in external training programsin areas in which we have not accumulated knowledge in-house,
as we accumulate knowledge in these areas we are graduallycreating training programs in-house. This ratio varies from year
to year, but we are aiming to achieve a 50% in-house training
ratio.

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and Productivity Improvement

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17. Employee Engagement
The Nissha Group has established Diversity and Inclusion as oneof the Shared Values, which is the principle of employee behavior,and is working to create a workplace where human resources
with diverse values and diverse backgrounds can maximize theirabilities. At Nissha Group in Japan, we are implementing work
style reforms with the aim of improving productivity, along withenhancing various support systems and promoting the creationof a workplace that supports diverse and flexible work styles.
These are some of the ways we provide support to help our
employees achieve a work-life balance.

17-1 Engagement Survey
For employees to work passionately and for the company andemployees to grow together, we believe it is important for thecompany to improve employee engagement by putting in placea system that encourages this and fostering an organizational
culture that is easy to work in. As one of these efforts, we started
engagement surveys in 2022. In the first half of the fiscal year
ended December 2023, these were expanded to contract
employees in addition to all full-time employees in Japan,
and these targeted around 3,100 employees, excluding thoseworking at overseas Nissha Group factories, etc. in the second
half of the fiscal year ended December 2023. The purpose ofthis survey was to identify issues that will improve the diverse
capabilities and passions of Nissha, the source of our growth,and to improve it to the way we are, and will be conductedannually in the future.
Compared to the previous fiscal year, there were, overall,
improvements in the key indices, showing that actions in the

Nissha Sustainability Report 2024

workplaces over this period were bearing fruit. In addition,
increa s e d intere s t amo ng emp l oye e s l ead to a sizeab l e
improvement in the response rate. These results will be analyzed
at the company, business, and workplace levels to create specificactions with the aim of further improvements. By continuingthese efforts into the future, we shall foster a corporate culture
where all employees can work with passion.

■ Engagement survey results
KPI

TargetResponse rate
Global consolidated

More than80%

Positive response rate
Global consolidated

Will to contribute to the organization

ResultFY2022

FY2023

83.0%

94.2%

FY2022

FY2023

95.6%

95.5%

87.8%

89.0%

82.3%

83.4%

78.8%

80.6%

I want to contribute to Nissha

Organizational Commitment
I am proud to work for Nissha

Rewarding
I find my work rewarding

17-2 Flexible Work Hours
We have introduced a flextime system to promote work-lifebalance, as well as to accommodate the time difference between
Japan and overseas, enabling flexible working styles that meetboth the needs of our customers and variations in businessdemands. Employees manage their time in a planned andautonomous manner, without setting a core time. A wide rangeof employees, from the sales departments to the development,
engineering, and management departments take advantage ofthis system.

17-3 Telework System
A telework system has been introduced to promote effective
and flexible working styles for employees, as well as helping
them balance their home and work lives. In the fiscal year ended
December 2020, by expanding its scope from employees withchild-rearing and family care responsibilities to any employee
who can perform the same level of work at home as at theoffice, the system is now also an indispensable part in the eventof transportation disruptions or disasters.

Feeling of contributing to society
I feel I contribute to society through my
work

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17-4 Child-Rearing and Family Care
SupportWe are enhancing the support system for child-rearing andfamily care for the flexible working styles of employees at various
life stages.

■ 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 childrearing support exceed statutory guidelines.
Support system

Nissha Group in Japan

Shorter hours
during pregnancy

During pregnancy (up to maternity
leave before childbirth)
Up to 3 hours per day―

Days off for
spouseʼs childbirth

3 days at the time of spouseʼschildbirth(Special paid leave)―

Shorter hours forchild-rearing

Up to completion of elementary
schoolUp to 3 hours per day

Up to 3 years old
By effort: Start of elementary
schoolDays off for childnursing

1 child: 5 days
2 or more children: 10 days
Up to start of elementary school:
paid
From the first to sixth grade: unpaid

1 child: 5 days
2 or more children: 10 days
Either paid or unpaid
Up to start of elementary
schoolChild-rearing
support fundAmount: 150,000 yen (for eachoccasion below)
Period:• Birth• Start of elementary school• Start of junior high school• Start of senior high school• Start of technical college

Nissha Sustainability Report 2024

Statutory coverageSocialHuman
RightsGovernanceFair Operating Practices/ Local Communities

Human
Resources

Quality Management / Efficiency
and Productivity Improvement

In addition to the above, in order to support female employees
who wish to return to work early after childcare leave, we haveintroduced a system to provide financial support to employees
who return to work by the end of the month in which their childturns six months old and who meet certain requirements, and asystem to cover part of the expenses of private day care.

■ Number of employees who used child-rearing

Support (Nissha Group in Japan)
The number of employees who used child-rearing leave, worked
shorter hours for child-rearing, and took days off for child nursing
are as the table below. In order to help employees make effective
use of our support systems, we notify both the employee andhis or her manager of the various systems immediately after
birth registration is filed. Thanks to improved recognition of thesystems available, the number of male employees using childrearing systems is increasing year after year.
SupportsystemChild-rearing
leave

Shorterhours forchild-rearing―

Days off forchild nursing

Gender

FY2019FY2020

FY2021

FY2022

FY2023

Male

18

19

21

25

38

Female

43

50

46

48

43

Total

61

69

67

73

81

Male

7

2

2

3

6

Female

90

93

87

92

82

Total

97

95

89

95

88

Male

79

56

49

50

60

Female

78

64

59

65

62

Total

157

120

108

115

122

Reinstatement Rate*1(%)

Retention
rate*2(one year)(%)

Governance

GRI Standards Content
Index / ESG Data

Gender

FY2019FY2020

FY2021

FY2022

FY2023

Male

100.0

100.0

100.0

100.0

100.0

Female

95.0

100.0

95.6

95.8

100.0

Average

96.8

100.0

97.1

97.6

100.0

Male

100.0

92.0

83.3

87.5

95.0

Female

90.0

88.6

91.3

100.0

88.6

Average

93.5

90.0

88.5

94.7

90.6

*1. Number of employees reinstated after child-rearing leave in the current fiscal year ÷ Numberof employees expected to be reinstated after child-rearing leave in the current fiscal year x 100*2. Number of employees remaining at the end of December in the current fiscal year after
being reinstated after child-rearing leave in the previous fiscal year ÷ Number of employees
reinstated after child-rearing leave in the previous fiscal year x 100■ Major family care support systems
Support system

Nissha Group in Japan

Statutory coverage

Family careleave

Total 240 working days

Total 93 days

Shorter hours
for family care

Until the reason for homecare has passed
3 hours per day

At least 3 years from startof useDays off forfamily care

1 family member: 5 days
2 or more family members:
10 daysPaid

1 family member: 5 days
2 or more family members:
10 daysEither paid or unpaid

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

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

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Environment■ Number of employees who used family care leave

Family careleave
Shorterhours forfamily careDays off forfamily care

Gender

FY2019FY2020

FY2021

Human
RightsHuman
Resources

Fair Operating Practices/ Local Communities■ Communication with employees(Nissha Group in Japan)
SupportsystemSocialFY2022

FY2023

Male

3

1

0

0

0

Female

1

0

0

0

0

Male

0

0

0

0

0

Female

1

0

0

0

1

Male

12

8

5

6

8

Female

5

7

1

6

7

Governance
Quality Management / Efficiency
and Productivity Improvement

Governance

GRI Standards Content
Index / ESG Data

■ Kurumin Certification

A dedicated "Thinking about Careers" website is available on
intranet to introduce various systems and personal experiences
to help employees think independently about the career options
available when life events such as marriage, childbirth, childcare,nursing care, treatment for illness, and retirement occur.
In addition, we established a system that is easy for employees
to under stand by consolidating contact to the Per sonnel
Consultation Desk and referring employees to the appropriate
person in charge according to the content when they havequestions or concerns about life and career plans in general, notjust in relation to childcare or nursing care.

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 cer tif y companies that have already obtained Kurumincer tification in recognition of their mea sures to suppor t
employees with children and are carrying out initiatives at aneven higher level. This certification was in recognition of ourintroduction of systems to support a balance between work andchildrearing for both men and women, our initiatives to reduce
overtime work, our ongoing seminars on topics related to thepromotion of women in the workplace, and so on.
Within the Nissha Group, Nissha Business Ser vice Co., Ltd.
received Kurumin cer tification in 2015, followed by Nitec
Precision and Technologies, Inc. (currently, Nissha Precision andTechnologies, Inc.) in 2016.
We shall continue aiming to create a workplace where each
employee can work energetically, enjoying a rich life where workand child-rearing are balanced.

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Environment17-5 Promotion of the Use of Annual
Paid Leave

We are continuing efforts such as disseminating informationinternally via the intranet, registering annual paid leave plans forthe year in advance in the attendance management system, anddistributing the results of leave taken to department managers.
Five days a year have become standard as required leave, so
we changed our target to eight days as of 2023, and many
employees were able to achieve. As a result, the average takeup rate in FY2023 was 72.0%, a further improvement over lastyearʼs rate. Currently, the target has been raised to ten days per
year, and we will continue to promote the use of annual paid
leave.
In October 2019, we introduced annual paid leave by the hour asa system for facilitating more flexible use of annual paid leave.
This system is widely used by employees.

■ Average days and percentage of annual paid leaveused (Nissha Group in Japan)
Fiscal Year

FY2019FY2020

FY2021

FY2022

FY2023

Average
days

12.2

11.4

11.5

12.9

14.1

Percentage of
use

65.9

61.4

60.3

66.1

72.0

Nissha Sustainability Report 2024

SocialHuman
RightsHuman
Resources

Fair Operating Practices/ Local Communities

17-6 Saved Expired Leave System
T he Nis sha Group in Japan ha s intro duced a paid leaveaccumulation system that allows employees to save up to 30
days of expired annual paid leave to be used in unforeseen
circumstances or to facilitate the performance of social roles.
This system is used in the event of illness either of the employee
or a family member, childcare and family care, school events andholidays, and volunteer activities including registering as a donor
with the bone marrow bank.

17-7 Volunteer Leave System (Nissha
Group in Japan)

T he paid leave accumulation sy s tem can b e us ed w hen
participating in volunteer activities such as registering as adonor with the bone marrow bank, assisting at welfare facilities
managed by local government s, and activities related toreconstruction assistance following natural disasters. In thefiscal year ended December 2023, four people used the system
for a total of eight days.

Governance
Quality Management / Efficiency
and Productivity Improvement

Governance

GRI Standards Content
Index / ESG Data

17-8 Outpatient Sick Leave System(Nissha Group in Japan)

In fiscal year ended March 2016, we introduced an outpatient
sick leave system with the aim of supporting employees who
require long-term outpatient treatment to continue working. The
system enables employees with specified disorders to take 12days off per year for treatment. In addition, when further support
is required due to currently undergoing treatment, up to 24 days
can be taken. Nine employees used the system in the fiscal year
ended December 2023.
Fiscal Year

FY2019FY2020

FY2021

FY2022

FY2023

Male

1

2

3

5

5

Female

2

2

3

4

4

Total

3

4

6

9

9

17-9 Support for Reinstatement After
Long-Term Leave

For employees reinstated at work after long-term leave due
to illness or injury, we have introduced rehabilitation work toprevent recurrence and support a smooth return to work. After
returning to work, we ask employees to submit periodic reports
to check on their status, and they also have interviews with ourindustrial physicians to check on anything that requires special
allowances in employment. For employees to whom paid leave
was not granted during long-term leave, three days of paid leave
are granted when the employeeʼs attendance at work is at least
95% for a period of three months after reinstatement.

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17-10 Management of Working Time

17-11 Internal Job Posting System

17-12 Awarding System (Nissha Group)

Nissha Group in Japan promote the reduction of overtime work
to realize employee health and work-life balance. In addition
to improving productivity, Group companies have been steadilydecreasing overtime hours over the years through ongoing
activities including employee training aimed at optimizing
working hours and sending out individual aler t e-mails to
employees who are likely to work long hours. As a result, there
was an 11% reduction from the previous fiscal year in 2023.
At the same time, Group companies are working to equalize
working hours among departments by reviewing the division ofduties.

The Nissha Group introduced an internal job posting systemwith the aim of providing employees with the opportunity tochoose their own career path as well as appointing employees
to positions that reflect their aptitude and thereby enhancing
our organizational strength. Under this system, we first recruit
the human resources needed for divisions and operations that
we focus on, such as priority markets and new businesses withhigh commercialization potential, from the perspective ofmanagement strategies such as medium-term business plans.
Employees who meet the requirements apply on their own
initiative and those that pass the selection are transferred to
the relevant division. Employees transferred through internal
recruitment are playing active roles in their divisions.

Nis sha Group e s t ablished var ious awarding s y s tems for
employees. These systems aim to praise the recipients of theawards and motivate the company and organizations as a whole
by clarifying the requirements that the company should praiseand by widely disseminating facts that correspond to suchrequirements through the company and organizations.
The results of the four main group-wide awards in the fiscal
year ended December 2023, namely the CEO's Award, the BU
Headʼs Award, the Synergy Award, and the New Hope Award, areas follows. These award winners include employees at overseas
bases. As part of the companyʼs efforts to create synergy, we
encourage movement across business units and divisions,so many employees who have contributed to cross-sectional
projects have been selected.

■ Implementation status of internal Job posting

system (Nissha Group in Japan)
Fiscal Year

FY2019FY2020

FY2021

FY2022

FY2023

Number of job
posting9Nooffering

15

31

14

Male

4

-

6

2

0

Female

1

-

1

0

1

Successful
applicants(transferees)

Nissha Sustainability Report 2024

Number of
winners

Type

Content

CEO's Award(Company-wide)

For employees who have made significant
contributions to the consolidated performancen/aCEO's Award(Group Companies)

For employees whose sales and operating
profit greatly exceed the previous year's
level and plan, or who have contributed
to the bold and dynamic execution ofbusiness strategies

11

BU Headʼs
Award

For employees who have made significant
contributions to business performance or
strategy

41

Synergy Award

For employees who have created synergies across regions and businesses

57

New HopeAward

For domestic employees who act proactively without fear of failure or change asworkplace heroes

15

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In addition to the group-wide awards
mentione d ab ove, the Group als oop erate s an award sy s tem for Group
companies, including the Group
Company Representative Award,
which recognizes employees who havep er formed out st andingly well. The
Group has established the global tagline' P e r f o r m a n c e C h a m p i o n', w h i c h i smeant to recognize employees who haveachieved results, and all of these awards
are operated under a unified concept andvisual.

17-13 Career Resumption ProgramThis program supports former employees who resigned due tolife events such as childbirth, childcare, or nursing care, or for
personal reasons such as job change, by giving them the option
to return to work for the Nissha Group. This program enables us
to draw on the range of experiences, knowledge and skills thatformer employees who are already familiar with our corporate
culture and business have acquired outside the company, suchas at other companies. It allows them to play active roles again
as human resources with diverse values and careers. In 2023,
there were two cases of this program being utilized within the
Nissha Group in Japan.

Human
RightsHuman
Resources

GovernanceFair Operating Practices/ Local Communities

17-14 Employee Stock Ownership Plan /J-ESOPAs part of our efforts to provide employees with incentives
to increase the corporate value of the Group and to support
medium- to long-term asset formation, we operate an employee
stock ownership plan for full-time and contract employees of the
Nissha Group in Japan.
In addition, we introduced a Stock Benefit Trust (Employee
Shareholding Purchase-type) in November 2019 as a systemthat allows all employees and contract employees who join theemployee stock ownership plan to receive the benefits of the risein the stock price of the Company's shares for three years. This
program ended in January 2023 and was reintroduced in March
2023.

Quality Management / Efficiency
and Productivity Improvement

Governance

GRI Standards Content
Index / ESG Data

17-15 Retirement Pay System
Nissha has updated to a retirement pay system based aroundrole and ability as of the fiscal year ending December 2024 inorder to unify it with its human resources system. In addition,
expanding the defined benefit pension plan, in which pension
assets can be carried, from the existing system allows both
dealing with employment flexibility and supporting employee
asset growth.

As of the end of December 2023, 28.5% of the employees havejoined, and together hold 0.9% of the Company's shares.

■ Subscription Status of Employee Stock Ownership

Plan
Year

2019

2020

2021

2022

2023

Number of
eligible
subscribers

2,353

2,089

2,081

2,011

2,033

Number ofsubscribers

625

543

573

553

579

Subscription
rate

26.6

26.0

27.5

27.5

28.5

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

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Sustainability

Environment

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SocialHuman
RightsHuman
Resources

Fair Operating Practices/ Local Communities

Governance
Quality Management / Efficiency
and Productivity Improvement

Governance

GRI Standards Content
Index / ESG Data

18. Safety and Health18-1 Policy and Principles

18-2 Safety and Health Management System

The Nissha Group has established a Basic Policy for Occupational Health and Safety and Basic
Principles for Occupational Health and Safety which outlines specific actions and disciplines, andhas informed all employees of their content, aiming to ensure the health and safety of all people
involved in our business activities.

Under the Risk Management and Compliance Committee, the Nissha Group in Japan operates anenvironmental occupational health and safety management system that includes compliance withitems required by customers and by laws and regulations, based on the ISO14001 Environmental
Management System and the ISO45001 Occupational Health and Safety Management System. We
formulated an action plan to achieve our targets, and in addition to repeating the PDCA cycle with aneye to sustained improvements, we are striving to implement assessments through regular internal
audits and management reviews. The Safety and Health Committees established at each base areformed from representatives from the bases, such as the safety manager and the health manager,
along with employee representative members selected from the Nissha Crew Alliance (labor union) andworkplaces. The Committee is responsible for responding to occupational accidents and implementing
corrective measures, as well as bringing about safe and comfortable workplaces.

Occupational Safety and Health Policy
Nissha Group places safety first in its business activities and continues to actively work on areas such as improving the working environments and health of Nissha People, remaining a company where Nissha People
can remain healthy in both physical and mental.
Junya Suzuki
Chairman of the Board, President and CEO
Nissha Co., Ltd.

Safety and Health Management Structure

Occupational Safety and Health Principles
1. We shall strive to eliminate and reduce risks through increasing risk sensitivity and responding to changes forachieving “zero accidents”.
2. We shall promote measures related to health and promote the maintenance and improvement of both
physical and mental health.
3. We shall introduce appropriate management resources to ensure the safety and promote the health of Nissha People, and work to improve their effectiveness.
4. We shall ensure the safety of Nissha People by having them mutually interact and act with discipline.
5. We shall construct a management system and promote continuous improvements to suit changes in thebusiness environment.
6. We shall comply with relevant laws and regulations, act with integrity, and create a safe culture.
Daisuke Inoue
Director of the Board, Senior Executive Vice President, General Affairs
Nissha Co., Ltd.
Established on April 1, 2007 / Revised on May 1, 2022

Nissha Sustainability Report 2024

The Nissha Group in Japan manages the progress of safety and health objectives, conducts safety
and health risk assessments at workplaces, takes measures to prevent the recurrence of occupational
accidents, monitors the number of accidents and the results of working environment measurements,
and conducts internal audits and takes corrective action. The progress of these activities is reported

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at management review report meetings that all bases participate
in. At the end of the fiscal year, a review is held on whether the
management system is functioning effectively and to link it toactivities for the next fiscal year as part of the PDCA cycle.

18-3 Initiatives for FY2023

Human
RightsHuman
Resources

GovernanceFair Operating Practices/ Local Communities

Quality Management / Efficiency
and Productivity Improvement

Safety Patrols* Figures include accidents involving temporary employees.

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

*1. Refers to the number of injuries and casualties resulting from occupational accidents(one or more days of leave) per one million working hours.

The Nissha Group in Japan has set safety and health targets
in line with our Occupational Safety and Health Policy andOccupational Safety and Health Principles, and are developinga range of occupational accident prevention activities with thegoal of zero occupational accidents over the three-year period
linked with the Medium-term Business Plan.

We honor workplaces that have worked diligently on these safety
and health activities and have not experienced any accidents
during the year. We also present an annual safety and healthaward, the Annual Zero Accident Award, in an effort to foster aculture of safety.

Workplace Risk Reduction - Risk Assessment

18-4 Occurrence of Occupational Accidents

We conduct risk assessments to reduce occupational safety andhealth risks in the workplace in accordance with our internal
regulations. Risk assessments are conducted regularly on aworkplace basis to continuously identify sources of hazards,
conduct risk assessments, and determine and implement risk
reduction measures based on the risk assessments. When an
injury accident occurs, we conduct a risk assessment for thatwork, and take risk reduction measures. Chemical substancerisk assessments are conducted at workplaces that use chemical
substances, such as technical development departments andproduction facilities. A major revision to the laws concerningchemical substance management in 2023 meant a substantial
shift from the existing legal compliance focus to autonomous
management. In the Nissha Group in Japan, we aim for zero
health effects from chemical substances, and are moving ahead
with the responses needed for autonomous management.

*2. Refers to the severity of occupational accidents in terms of the number of working days
lost per one thousand working hours.

Occurrence of Occupational Accidents by Region (Nissha
Group major overseas production bases)
The numbers of occupational accidents at the Nissha Groupmajor overseas production bases in the fiscal year ended
December 2023 are given in the table below.
RegionNumber

North
America

14

Central andSouth America

2Europe

13

Asia

1

* Work-related accidents requiring absence from work. The count for the number of accidents isbased on the standard in each region.

The following table shows the occurrence of occupational
accidents in the Nissha Group in Japan. There were two more
accidents in the fiscal year ended December 2023 than theprevious year, with a total of nine occupational accidents.
However, our goal is zero, and we are continuing to push ahead
with initiatives for this.

Occurrence of Occupational Accidents (Nissha Group in
Japan)Item

FY2021

FY2022

FY2023

15

7

9

7

0

5

Occupational accident
frequency*1 (%)

1.48

0.35

0.91

Occupational accident
severity*2 (%)

0.05

0.00

0.04

0

0

0

Number of occupational
accidents
4 or more days of leave

Fatal accidents

Nissha Sustainability Report 2024

GRI Standards Content
Index / ESG Data

Governance

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18-5 Safety and Health Education andTraining

Generaltraining

In accordance with our Safety and Health Education and Management
Regulations, we are focusing on education and training to raise safety
awareness and foster a culture of safety, using remote educationand e-Learning. We also share information and develop educational
programs at our major overseas production bases.

Human
RightsHuman
Resources

GovernanceFair Operating Practices/ Local Communities

Quality Management / Efficiency
and Productivity Improvement

Individual safety education

120

General lifesaving training

72

AED lessons/First aid team training

133

Traffic safety education

1,574

18-6 Safety Slogan
We created a safety slogan to raise awareness of safety with theaim of eradicating occupational accidents. This slogan is displayed
at all of our production bases in Japan and overseas.

General lifesaving training

Individual safety education

Governance

GRI Standards Content
Index / ESG Data

18-7 External Evaluation
The Nissha Group in Japan received the following awards related
to health and safety in the fiscal year ended December 2023.
Award target

Award nameAwarding bodyNissha Industries, Inc.

Excellent Safe Driving
Management Office

Koka Konan Safe
Driving Management
Association

Nissha Precision andTechnologies, Inc.

“Challenge 100”
accident-free, violationfree movement

Automobile Safe Driving
CenterNissha Precision andTechnologies, Inc.
Tsu (production base)

Chairmanʼs Award of
Mie Prefecture Labor
Standards Association
Federation
Superior WorkplaceAward

Mie Labor Bureau
Mie Prefecture Labor
Standards Association
Federation
Labor standards
associations around thecountry etc.

Training Participation
Category

Lesson/Session

Training on intake

Generaltraining

Number of attendees
in FY2023

62

Safety training at the time of assignment

5Training when installing new equipment

77

Health and safety training (healtheducation)

141

Health training (prevention of heatstroke)

70

Risk assessment training (safety andhealth/chemical substances)151

Foreman education

15

Chemicals training (risk assessment ofchemicals/chemical emergencies)

125

Safety training (chemical substances)724

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RightsHuman
Resources

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Governance
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and Productivity Improvement

Governance

GRI Standards Content
Index / ESG Data

19. Health and Productivity Management
19-1 Policy

19-2 Structure

Nissha Group sees its Mission, ''We realize the enrichment of peopleʼs lives by creating technology
and developing it into economic and social value through the diverse capabilities, passion,and leadership of the global Nissha Group.'' To achieve this, we have formulated a Health andProductivity Management Policy based on the belief that it is important for the realization of ourMission that each and every employee to be healthy in mind and body and to be highly motivated intheir work, as this will lead to improvements in company performance.

We have appointed Senior Vice President, Chief Human Resources Officer in charge of health andproductivity management as part of our health and productivity management promotion structure.
Under the Risk Management and Compliance Committee, the Health and Productivity Management
Subcommittee, led by the director of the committee, staff plan and promote health measures for
the Group.

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

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Human
RightsFair Operating Practices/ Local Communities

Human
Resources

FY
2022*Measurement started
from the fiscal year ending
December 2024

1

Improve literacy of individuals
and managers regarding
women's health
Systematic training related
to mental health

2

FY
2023

3

FY
2024

• Average lost work time rate per employee in the survey, Wfun
(A questionnaire developed by the University of Occupational
and Environmental Health to measure the degree of work
impairment due to health problems)

―

―

12.9%

• Number of respondents

―

―

2,151

• Response rate

―

―

100%

4

0.72%

0.81%

―

• Positive response rate for the question “I find my work
rewarding” in the engagement survey

―

62.1%

62.4％

• Number of respondents―

2,005名2,039名• Response rate

―

97.0%

99.2%

Final Metrics for
Health-Related Targets

Management Issues
Addressed via
Health Management

Participation rate in seminars on women's health
Percentage of participants inmental health-related training(self-care, line care)

Exercise opportunities
for employees

Percentage of employees exercisingat least two days per week(questionnaire)

Healthy menu offerings

Number of Wellness menu
items consumed

Percentage of highly
stressed persons(stress check)

Social Value

1

Improved
Presenteeism

Percentage of obese
employees(BMI of 25 or higher)

Percentage of employees who eat breakfast (questionnaire)

Disease Prevention and Early Detection
Subsidies for full medical exams

Percentage of employees receiving a full medical exam

No smoking on-site

Percentage of smokers (questionnaire)2

Improved
Absenteeism

3

Increased
Engagement

Improved Work Styles and Work Environments

System for minimal
intervals between shifts

Independent career choice

Absenteeis

Metrics for Changes in
Employee Awareness and Behavior

Improved Lifestyles

Balance of work hours• Number of people on leave + number of long-term absences /total number of employees

Metrics for Health Investment
Policy Initiative Progress

Improved Health Literacy

Breakfasts at company café
convenience store

Final health-related target indices (Scope: Nissha Group in Japan)

Presenteeis

Health Investment

GRI Standards Content
Index / ESG Data

GovernanceDifference between max and min hours worked by division

Worktime Interval
compliance rate

Percentage of employees
who sleep sufficiently(questionnaire)

A Diverse Workforce Demonstrating Passion and High Performance

In the Group, we include “ Diverse people flying high in their roles with passion” as one of the
management issues we want to solve through health and productivity management, and have set
three KPIs (presenteeism, absenteeism, and engagement). We are moving ahead with concrete
actions in four categories to make these improvements.

Quality Management / Efficiency
and Productivity Improvement

Health Investment Outcomes

19-3 Health and Productivity Management Strategy Map
The Health and Productivity Management Strategy Map is a visualization by corporations engaged inhealth and productivity management of the problems they face and their initiatives to solve them.

GovernanceWe realize the enrichment ofpeopleʼs lives by creating newvalue through the diverse
capabilities and passion of the
global Nissha Group

Corporate Value
We improve the value
propositions offered tocustomers through a diverse
workforce that is healthy andhighly motivatedNo. of career plan programs in use*Figures as of the end of December each year

Engagement*Measurement started
from the fiscal year ended
December 2023

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19-4 Various Measures

Results in
FY2023We provide low-salt platedmenus with balanced
nutrition in the company
cafeteria.

Consumption
rate: 11.2%

In progress

Boost the rate ofdetailed medical
checkups

Those employees whose
health check results showedthat they needed further
detailed examinations will be
eligible to have the company
will pay costs for detailed
examinations (up to a
maximum of 10,000 yen per
examination) and their time
will be counted as working
hours if their examination isduring working hours (onceper examination).

Screening rate:
67%

Screening rate:
more than 70%

To support employees inquitting smoking, we offer
our correspondence course
in quitting smoking, the Stop
Smoking Challenge, and
the Graduate from Smoking
health guidance fromcompany health staff. We
also provide a subsidy (up to
10,000 yen) for participants
to purchase aids for stoppingsmoking.

Ratio of smokers:
25.7%

−

Industrial health staff provide
support for reviewing thelifestyle habits of employees
who are at high risk ofdeveloping lifestyle diseases
and who are likely to benefit
by modifying their lifestyle.

Ratio taking:94%
Ratio continuing:
98%−

Specific healthguidance

Nissha Sustainability Report 2024

Human
Resources

We hold seminars on
women's health that areopen to both men andwomen (simultaneously
available online, withrecordings available later).

GovernanceFair Operating Practices/ Local Communities

Participation rate:
6%

Quality Management / Efficiency
and Productivity Improvement

Governance

GRI Standards Content
Index / ESG Data

In progress

19-5 Certified Health and Productivity
Management Outstanding
Organizations

Targets in
FY2026

Improvements
to number ofWellness Plates
consumed

Reduction inratio of smokers

Human
RightsParticipation rate
in seminars on
women's health

The Health and Productivity Management Subcommittee,
which includes occupational health staff, plays a central rolein promoting health management through various measures
based on the Strategy Map.
Initiatives

SocialWe have been recognized as a "Certified Health & Productivity
Management Outstanding Organizations (Large Enterprise
Category)" by the Ministry of Economy, Trade and Industry forthe third year in a row. The certification is given to companies
with especially excellent health management practices.

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RightsHuman
Resources

Fair Operating Practices/ Local Communities

Governance
Quality Management / Efficiency
and Productivity Improvement

Governance

GRI Standards Content
Index / ESG Data

20. Intellectual Property
20-1 Basic Concept20-2 Initiatives■ Training

The use of intellectual property is essential for the Nissha Group
to appropriately protect and provide customers with products
obtained as a result of our R&D and business activities. In order
to contribute to our business performance and conduct effective
and safety R&D and business activities, the Group emphasizes"building an intellectual property portfolio" and "avoiding intellectual property risks" under the leadership of the Intellectual
Property Management Department.

■ Building an intellectual property portfolio

The Nissha Group is enhancing its various training programs so thateach and every employee works with an understanding of intellectual
property right acquisition and usage and the risk associated withintellectual property.

We use the intellectual property system to properly safeguard
the results of our research and development. Right acquisition
is not limited to patents, but covers a wide range of other rights,
including designs, trademarks, and copyrights. In addition,
as the Groupʼs products are sold globally, we are working toobtain rights in other countries as well as Japan. The Intellectual
Property Management Department coherently manages, fromapplication to rights expiration, and intellectual property rights
we have obtained are utilized strategically throughout the entire
Nissha Group.

■ Avoiding intellectual property risks
To prevent inadver tent use of the intellectual proper ty ofother companies or the unauthorized use of our intellectual
property by third parties, we have established a SDI (Selective
D i s s emi nat i o n of Inf o r mat i o n) s y s t em t hat co n s t a nt l ymonitors whether these intellectual properties are being usedappropriately.

We offer a wide range of training for all employees taught byIntellectual Property department staff, from fundamental curriculum
such as explanations on how to read patent publications and theprocess of patent acquisition to on-the-job curriculum such astechniques for surveying patents from other companies. In the fiscal
year ended December 2023, a total of 165 employees attended.
In mandatory training for employees in engineering fields, we invitedan outside specialist instructor to teach about ways to find inventions
and techniques for searching for development themes, and so on.
This training was designed to continuously improve employeesʼ skills
and knowledge regarding intellectual property. In the fiscal year
ended December 2023, a total of 65 employees attended.

To prevent problems related to intellectual proper t y, theIntellectual Proper ty Management Depar tment examines
contracts related to intellectual property, such as joint researchand joint development.

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Sustainability

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SocialHuman
RightsHuman
Resources

Fair Operating Practices/ Local Communities

Governance
Quality Management / Efficiency
and Productivity Improvement

Governance

GRI Standards Content
Index / ESG Data

21. Partnership with Our Suppliers
21-1 Basic Policy
The Nissha Group procures the materials, equipment, and services necessary for production and awide range of business activities from suppliers in various regions. We work fairly and equally withall suppliers to promote sustainable procurement based on our Purchasing Principles in order toshare awareness of our social responsibility and enhance mutual enterprise value.
Our Purchasing Principles apply to all business operations throughout the Nissha Group. Basedon these principles and the Purchasing Management Regulations as a management frameworkoutline, we operate a system for each business.

Purchasing Principles
Nissha Group achieves sustainable procurement by building relationships of trust with our suppliers
through mutually fair purchasing.
Nissha Group evaluates our suppliers in terms of fairness, impartiality, and comprehensively based on thefollowing criteria.
1. Stable business foundation and reliable management principles
2. Excellent technology development and the abilities to propose products or services that consider environmental impacts
3. Provision of stable, high-quality products or services
4. Price competitiveness5. Stable production capacity and lead times
6. Effective business continuity management plans
Nissha Group achieves sustainable procurement by working with our suppliers in the following areas.
1. Labor and human rights
2. Health and safety
3. Environment
4. Ethics
5. Information security

Hisashi Iso
Director of the Board, Executive Vice President, Corporate Supply Chain
Nissha Co., Ltd.

We request all of our suppliers to comply with the Purchasing Principles and the CSR Procurement
Guidelines. These Guidelines are based on the Responsible Business Alliance (RBA), a code of
conduct mainly for the electronics and automotive industries, and on other codes of conduct that
our customers request we follow. The items are listed below.

■ Items of CSR Procurement Guidelines and SAQ (Self Assessment Questionnaire）
1. Labor and human rights

2．Health and safety

3．The environment(1) Elimination of Involuntary Labor(1) Occupational safety and health(1) Environmental permits and re-(2) Prohibition of child labor, pro-(2) Emergency preparedness

tection of young workers and(3) Prevention of occupational injury

porting(2) Pollution prevention and re-and illness

source reduction(3) Working hours(4) Industrial hygiene(3) Hazardous substances(4) Wages and benefits(5) Physically demanding work(4) Solid waste(5) Humane treatment(6) Machine safeguarding(5) Air emissions(6) Non-discrimination(7) Sanitation, food, and housing(6) Materials restrictions(7) Freedom of association(8) Health and safety communica-(7) Water management

student workerstion(8) Energy consumption and greenhouse gas emissions

4．Ethics

5．Information Security(1) Business integrity(1) Building of information management system(2) No improper advantage(2) Defense against threats on computers and networks(3) Disclosure of information(3) Management and protection of personal information(4) Intellectual property

and confidential information(5) Fair business, advertising and competition(6) Protection of identity and non-retaliation(7) Responsible sourcing of minerals

Established on April 2, 2009 / Revised on January 1, 2024

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21-2 Maintaining Purchasing Related
Rules

After the sweeping revision of our Purchasing Management
Regulations in 2021, we are currently working on formulating a
range of regulations that will form the subordinate documents,
with the aim of further unifying rules and improving control overpurchasing operations at each Group company. In particular, inorder to ensure compliance with laws and regulations such as
the Act against Delay in Payment of Subcontract Proceeds, etc.
to Subcontractors (hereinafter referred to as the “ Subcontractors
Act ”), and others that have become stricter in recent years, weformulated the Subcontractors Act, etc. Compliance Regulations,and are working to create internal rules and spread awareness ofcontent that we expect to see required by the law soon ahead oftime.
In addition, to ensure the content of these new regulations andrules are understood and put into practice, the Nissha Group asa whole will hold briefings that include comprehension testing,
and will check operational status using internal audits.
In Septemb er 2020, we est ablished and announced our
Declaration of Partnership Building as promoted by government
agencies such as the Cabinet Office, and are promoting activities
designed to build trust relationships with all of our suppliers andenhance mutual enterprise value.

Human
RightsHuman
Resources

Fair Operating Practices/ Local Communities

21-3 Nissha Group Supply Chain
We at the Nissha Group collaborate with various suppliers
through our business activities, and our supply chain is expanding
globally. The global supply chain has been severely affected
recently by the pandemic, regional conflict, the sharp rise in
raw material and fuel prices due to dramatic foreign exchange
shifts, supply shortages and price hikes due to labor shortages,
as well as natural disasters. However, thanks to the cooperationof our suppliers, the Nissha Group is continuing sound businessactivities.

Main Entities of the Nissha Group Supply Chain

Governance
Quality Management / Efficiency
and Productivity Improvement

Governance

GRI Standards Content
Index / ESG Data

21-4 CSR Audit and Labor and Human
Rights Risk Survey■ CSR Audit
At the same time as accepting CSR audits from customers, theNissha Group carries out annual inspections using our own
unique Self Assessment Questionnaire (SAQ) so that we canascertain the status of suppliers as we build a safe, reliable supply
chain. The CSR auditing and Self Assessed Questionnaires (SAQ)
are based in our CSR Procurement Guidelines (21-1).
Carrying on from the previous year, in the fiscal year ended
December 2023 the Industrial Materials Business Unit andthe Devices Business Unit carried out surveys of 95 companies(73 existing suppliers, 22 new suppliers) in Europe and Asia,
including China, in addition to Japan. The results showed nopoints of concern.
We will continue to conduct these surveys, and if any concerns
are identified in the SAQ responses, Nissha employees qualified
as internal auditors will act in accordance with the procedures
such as visiting suppliers and conducting on-site audits.

■ Labor and Human Rights Risk Survey
In the fiscal year ended December 2023, the ESG Task Force*
took the lead in conducting a survey on labor and human rights.
The sur vey targeted suppliers that meet the following two
criteria.
(1) Located in areas of high labor and human rights risk (ILO
Standard: China, Southeast Asia, etc.).
(2) Top 80% of purchase value per base or there is no alternative
procurement source.

The survey found no points of concern at any of the targeted

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suppliers (131 companies). Additionally, we conducted onsite audits for nine of these companies. We followed up on theissues identified during the on-site audits and confirmed thecompletion of corrective actions. The specific countries andnumber of targeted companies of our suppliers are as follows.
• China, 4 companies• Malaysia, 2 companies• Mexico, 2 companies• Brazil, 1 company

In the fiscal year ending December 2024, we will continue thissurvey and conduct on-site audits of suppliers that we deem
particularly necessary in order to reduce risk in our transactions.
* The ESG task force is set up under the umbrella of the Sustainability Committee onthemes considered particularly important from an ESG perspective, and responsible foraccelerating the respective activities.

Human
RightsHuman
Resources

Fair Operating Practices/ Local Communities

21-5 Development of Procurement
Personnel

Governance
Quality Management / Efficiency
and Productivity Improvement

Governance

GRI Standards Content
Index / ESG Datatraining system (mechanism) in a plan to improve the level ofeach and every employee.

Focusing its efforts on training procurement personnel, theNissha Group in Japan has continued to provide the basic
procurement education and procurement training by external
instructors since the fiscal year ended March 2009. To date,more than 1,000 employees have taken these courses.
In the fiscal year ended December 2023, we carried out
e-Learning on basic matters of the Subcontractors Act andrevisions to operating standards related to beating down prices.
These targeted not only the procurement and sourcing division
but also departments related to procurement, such as technicaland development departments. All 329 targeted personnel
completed the training.
In addition, 448 people took the basic procurement education
course, which incorporates laws, regulations, and contract items
related to procurement and internal rules such as our Purchasing
Principles and Purchasing Management Regulations. Follow-ups
were also done after testing comprehension of the training, suchas re-training and re-testing of those who were deemed in needof re-training.
Training was also held for overseas Group companies, and in thefiscal year ended December 2023, basic procurement education
was given to a total of 84 people in 6 overseas Group companies
in Europe and North America, and 5 overseas Group companies
in Asia outside China. This training will be expanded to otherGroup companies in future, and standardized between sites.
We are currently moving ahead with a plan to implement training
globally to help reinforce procurement departments and improve
procurement skills. We are studying the use of skill maps topromote visualization of work skills and the construction of a

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22. Along with Local Communities
22-1 Policy

22-2 Initiatives

Along with aiming to “realize the enrichment of peopleʼs lives” our Mission calls for through our business activities, the Nissha Group engages in social contribution by clarifying key activity areas.

The Nissha Group are expanding our business globally. We promote activities that meet the needs ofour stakeholders through communication with them in each region.
As a company with its headquarters in Kyoto, Nissha Co., Ltd., engaged in the following activities in
the fiscal year ended December 2023.

Social Contribution Policy

Environment / support for future generation

Nissha and Nissha People contribute widely to society to realize the enrichment of peopleʼs lives professedin our Mission by resolving social issues through our businesses and supporting the fields listed below.
Main fields of our support:

Environment
Arts and Culture
Medical and wellness
Junya Suzuki
Chairman of the Board
President and CEO
Nissha Co., Ltd.
Established on March 6, 2009 / Revised on June 1, 2022

・Participated in the activities for environmental workshops at ele-mentary schools organized by the Kyoto Chamber of Commerce
Employees visited elementary schools in Kyoto City to carryout environmental workshops. The workshops gave children
the opportunity to think about environmental issues such as
global warming and plastic waste, introduced our initiatives
for reducing environmental impact and sustainable materials,
and explained how the company is taking on social issues.
Workshop at: Kyoto Municipal Yousei Elementary School on September 6, 2023
Kyoto Municipal Kotoku Elementary School on September 26, 2023
Support for future generation
・Introduced our business as part of social studies courses

Our Kyoto Global Headquarters received requests from local
elementary schools, and dispatched staff to talk about ourbusiness and a factory as part of the schools ʼ social studies
courses. The classrooms and factory were linked online on theday, so the children and the factory workers could interact.

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・Participated in Childrenʼs Monodzukuri Project run by the Kyoto City Board of Education

Exhibited a corporate booth at the Kyoto Monodzukuri Hall of Fame, Kyoto City Inquiry Learning Center for Career Education (Kamigyo-ku, Kyoto) held by the BOE. In addition, we provided
teaching materials for about 1,100 people to use in the Workshop Class hands-on study program for manufacturing that the Hall runs for elementary school children.
Promotion and support of arts and culture
・Sponsorship of arts and crafts exhibitions

Fair Operating Practices/ Local Communities

Governance
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and Productivity Improvement

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・Support for the areas and people affected by the 2024 Noto Peninsula Earthquake

In January 2024, we donated 10 million yen (5 million yen each from Nissha Co., Ltd. and Nissha
Precision and Technologies, Inc.) to support the victims of the Noto Peninsula Earthquake and tohelp with reconstruction in the affected areas.
Donation made through: Japan Platform*, a non-profit organization* Emergency humanitarian assistance framework established in 2000 as an intermediary support organization to support theactivities of NGOs. Japan Platforms works to deliver aid from Japan quickly and effectively to victims of natural disasters inJapan and abroad, refugees and internally displaced persons due to conflicts.

We sponsor exhibitions and art displays in Japan.
Special Exhibition: Visionaries: Making Another Perspective (Kyoto City KYOCERA Museum ofArt)

22-3 Membership in Community Organizations (Nissha)

Henri Mattise: The Path to Color (Tokyo Metropolitan Art Museum)Nissha participate in various activities in the region.

Special Exhibition: Ancient Mexico: Maya, Aztec, and Teotihuacan (Tokyo National Museum,
Kyushu National Museum, National Museum of Art, Osaka)Special Exhibition: Numinous Minamiyamashiro Treasures from the Mountains between Naraand Kyoto (Nara National Museum)
Claude Monet: Journey to Series Paintings (Ueno Royal Museum, Nakanoshima Museum of Art,
Osaka)KYOTO GRAPHIE international photography festival 2023 (The Museum of Kyoto and othervenues in Kyoto City)・Participation as a museum partner

Kyoto National Museum (Higashiyama-ku, Kyoto)
Humanitarian Assistance・Support for the areas and people affected by the 2023 Turkey-Syria Earthquake

In February 2023, we donated 3 million yen to support the victims of the 2023 Turkey-Syria
Earthquake and to help with reconstruction in the affected areas.

Organization / host

Position / membership status

Company
registered

Kyoto Association of Corporate Executives

Special secretary

NisshaKyoto Chamber of Commerce and Industry

Permanent member

NisshaKyoto Employersʼ Association

Councilor

NisshaKyoto Industrial Association

Director

NisshaKyoto Institute of Technology

Joint management council member

NisshaKyoto City University of Arts

Management advisory board member

NisshaRitsumeikan University Business School

Education Curriculum Council Member

NisshaKyoto Institute of Invention and Innovation

President

NisshaNISSHA FOUNDATION

Representative Director

NisshaDonation made through: Japan Platform*, a non-profit organization

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23. Quality Management
We need to expand the provision of products and services aimed at the medical and mobility markets, priority markets for us, to achieve our sustainability vision. The quality of these products andservices has a high likelihood of influencing the life and health of people, so require sophisticatedquality management. To achieve this, it is essential that we not only operate systems that can beapplied globally in line with the various target markets, but develop human resources with the mindsets, knowledge, and skills that can adapt to these.

Quality Policy
Nissha Groupʼs products and services enhance value for customers and society through the establishment
and operation of quality management system that is designed to ensure quality, cost, robust supply chains,and compliance with relevant laws and regulations.
Junya Suzuki
Chairman of the Board
President and CEO
Nissha Co., Ltd.

The Nissha Group has identified the “responsible provision of products and services” as a materiality
and address the issue by setting KPIs and action items.

Strategy Items• Maintain and expand quality management system in accordance with business strategy• Building quality with an emphasis on product safety and feasibility at the design stage,
operation of per-product design reviews and increasing their level• Fostering and improving the quality mindset (Implementation of function-based training)

KPIs and Action
Items (FY2024)

Nissha Quality Way
1. CUSTOMER FOCUS

Number ofserious quality
incidents: 0

We continuously achieve customer-defined quality.
2. LEADERSHIP
We are all committed to upholding and executing our Quality Policy – each and every one of us is a leader.
3. PROCESS APPROACH
We work based on systematic approach and continue to improve.

23-1 Policy / Nissha Quality Way

4. QUALITY BY DESIGN
We build quality into design, focusing on product safety and feasibility.
5. VALIDATED DECISION MAKINGIn April 2022, along with a revision of our Quality Policy, we established the Nissha Quality Way as acode and standard of conduct necessary to actualize the Quality Policy. These are our fundamental
philosophies for quality in the Nissha Group and the upper level policies for all the quality policies
currently featured in the Quality Management System (QMS).
The Chief Quality and Production Officer (CQPO) carries out plant assessments for all our production
bases in Japan and major overseas production bases. Additionally, he uses an array of opportunities
to spread and percolate our Quality Policy and the Nissha Quality Way, including training at foreign
bases, training targeting new employees and promoted employees, and inclusion in internal company publications (published in Japanese, English, and Chinese).

Nissha Sustainability Report 2024

We are established in evidence-based and scientific approach.
6. QUALITY BY CONNECTED SUPPLY CHAIN
Quality is at the core of our trusting relationship within our supply chain.
7. BAD NEWS FIRSTWe quickly address challenges through rapid response and escalation process.
Yutaka Nishimoto
Director of the Board, Executive Vice President, Chief Quality and Production Officer
Nissha Co., Ltd.
Established on April 1, 2011 / Revised on April 1, 2022

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and Productivity Improvement23-2 Quality Slogan

23-3 Quality Management System (QMS)

For the quality improvement, it is essential to take actions witha strong awareness of customers. Across the entire the Nissha
Group, every single employee is required to be responsible for
their daily work and to constantly improve quality. To actualize
that, it is necessary for each employee to work with “passion” andto consolidate the “wisdom” and ingenuity” of all employees.

Out of our belief that the systematization of work is important,
the Nissha Group constructs our quality management systems
to align with their target markets. We also create quality targets
that conform with quality policies as well as planning to meetthose targets. This is employed in the process of cycling through
PDCA and in our quest to actualize target performance.

Following our Quality Policy revision and the establishment of the
Nissha Quality Way, we revised our quality slogan in April 2022.
The slogan shows that the protagonist who creates quality is"me", that is, all employees working in our group. Just as in our
Quality Policy and the Nissha Quality Way, we are spreading andpermeating this slogan throughout all Nissha Group companies
both in and outside Japan.

In addition to creating, implementing, and continually improving quality control systems based in the international ISO9001(2015 version), we are steadily constructing quality assurance
systems individually aligned with medical, mobility, and sustainable materials designated as the priority markets in our Sustainability Vision (long-term vision) for where we want to be in 2030.

“Quality”

Quality by Everyone, Everyday,with Passion
私は品質に責任を持つ
一人ひとりが情熱を持ち、全員参加で、品質を継続的に改善しよう！

In businesses oriented towards the medical market, we have acquired a first-class marketing license for medical devices, an operating permit required to manufacture and sell medical devices
within Japan. Affiliated companies Nissha FIS, Inc. and Nissha
Precision and Technologies, Inc. have also both registered asbusinesses manufacturing medical devices. Moreover, fourteen
Nissha Group bases have obtained ISO13485, the international
standard for quality management systems in the medical devices
industry (as of March 2024).
In businesses targeting the mobility market, eight Nissha Groupfactories and support sites, including Nissha Precision and Technologies, Inc. Himeji Factory (including the Kyoto site), which
manufactures touch sensor modules, have obtained IATF16949
certification for quality management systems in the automotive
industry (as of March 2024).

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Governancemanagement, confirmation of compliance in internal audits(promises to customers, standards and regulations, and company
rules), and confirmation of QMS status in management reviews
and instructions for improvement. Through these operations, weare continuously improving the structure and performance of ourquality management systems.

Customerrequirements for QMS
Additional requirements
for medical devices

Common requirements
specific to the automobile industry

P

ISO9001

ISO9001

Quality management
system for automotive(IATF16949)

Quality management
system for medical devices(ISO13485)

Context of the organization(four clauses)
Leadership (five clauses)

D
Operation(eight clauses)

Plan (three clauses)

A

Improvement(three clauses)

C

Performance evaluation(three clauses)

Support (seven clauses)

Quality management system (ISO9001)

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23-4 Two Strategies in the 8th Medium-term Business Plan

■ Quality and Added Value Creation at the Design and Development Stages

In the quality and production strategy, part of the 8th Medium-term Business Plan (2024-2026),
we are working on maximizing profit margins throughout the entire value chain through quality andadded value creation at the design and development stages, and the pursuit of lean operation at themass production stage.

This shows how it is important to build in quality at the design stage rather than at the prototyping
and production stages.

(Nissha Quality Way)High

Marketing (Customer Oriented)
Customer
Needs

DesignEngineering

Operation

Products
andServices

Design change freedom

80% certainty

Capabilities

Value Added

Efficiency

MarginQuality and Added Value Creation

Pursuit of Lean Operation

Nissha Quality Way

Nissha Operational Excellence

Low
Planning/Inquiry

Upstream

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Difficult to change design
once 80% certainty is reached

Quality/Cost certainty

Development/
Product design

Production process
designMass production

Downstream

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SocialHuman
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Resources■ The Pursuit of Lean Operation at the Mass Production Stage(Nissha Operational Excellence)
Nissha Operational Excellence is a principle to maximize profit margin. It expresses our commitment
to evolve globally by raising our capability / quality and will to maximize profit margin to a higher level, learning from sharing best practices among bases in addition to sustained continuous improvements at each base. Nissha Operational Excellence is universal to all our bases, departments, andfunctions regardless of location, and all teams within whole Nissha to embrace and practice it. The
idea is never about pushing the Global Headquarters or Japanese way of operations to other bases.
We use all bases that yield excellent results as role models.

Safety5S

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23-5 Overall Optimization and Continuous Improvement
The Nissha Group sees linkages between departments and between company functions as process
linkages. As such, we promote the accurate identification of "input" and "output". We are aiming
for overall optimization by being aware of process connections and thoroughly implementing theimportance of division of roles within the company, and by having all employees stand from thecustomer's perspective. We believe that basic concepts like this and the sorting out of functions willbuild the foundation as a manufacturing company.
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 Groupʼs “small-group activities” and “improvement proposal system”. We believe this is extremely important as a manufacturing
company, and we are deepening this approach across the entire Nissha Group. Moreover, based on
the idea that employees are our most important management 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 based on data (facts), and (3) using the PDCA
(Plan, Do, Check, Act) Cycle to continuously improve, so that we can further improve our customers ʼsatisfaction. As specified in the “VALIDATED DECISION MAKING” in the Nissha Quality Way, we areconstantly pursuing improvement from a fact based, scientific approach.
Training

Practical education

There's a shield that symbolizes our strong focus on Safety. Nissha Group saying, "Not because I haveto, but because I want to," reflects our dedication to safety and keeping our employees healthy.

① General quality training (for new employees, promoted① Support for small-group activities

The logo features five gears that represent, which stand for sort, straighten, shine, standardize andsustain. Each gear signifies one of these principles, showing how they all work together to make thewhole system run smoothly.

②

TARGETSThe logo stands for our main targets: Quality, Cost, and Delivery.

KAIZENThe logo represents KAIZEN, the concept of continuous improvement. We used moving arrows toshow our dedication to always making processes better.

*The Corporate Marketing and Communications team of Nissha Medical Technologies proposed Nissha Operational Excellence in order topresent the Plant Management Overview in an easy-to-understand way and to spread awareness of this.

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③
④
⑤

⑥

employees, new managerial staff, managers, and overseas assignees)
Priority markets skill training
Management system training (ISO9001, IATF16949,
core tools, internal quality auditor)
Quality control training (QC Exam levels 3 and 4, QC
Seven Tools, New QC Seven Tools, basic statistics)
Quality methodology training (statistical methods,
experimental design, Taguchi methods, reliability engineering, etc.)
Digital Transformation training (AI, statistical processing,
Python, etc.）② Support for Digital Transformation activities

Information sharing① Company-wide Presentation Meeting of Small-group Activities② Presentation Meeting of Digital Transformation ac-

tivities③ Utilize the company intranet to inform all Nissha

Group employees on improvement content including small-group activity, improvement proposals,
Digital Transformation activity, and automatization
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23-6 Quality and Safety of Products
Information on product handling and safety is clearly stated in thedelivery specifications, etc. to customers. In the unlikely event thatan incident involving a defect in our products or services leads toa violation of laws and regulations or a serious accident related toquality assurance, we will respond in accordance with our Regulations for Responding to Serious Quality Incidents and work to resolve the situation as soon as possible. In addition to providing appropriate reports to government agencies in accordance with thelaw, we have a system in place to inform customers of any necessary information as quickly as possible. Employees are made awareof the importance of ensuring product quality and safety throughcorporate ethics and compliance training and other programs. As
stated in "BAD NEWS FIRST" in the Nissha Quality Way, we thinkthat when a problem occurs, prompt escalation and early response
is an opportunity to strengthen trust from all of our stakeholders,
including customers.
The evaluation of our product quality is determined by our customers. The Nissha Group indexes and manages quality performance with factors including quality defects and delivery
disappointments communicated by customers as a "customer
satisfaction level" index.
In the fiscal year ended December 2023, there were no serious
quality incidents or violations (no fines), as defined in the Regulations for Responding to Serious Quality Incidents. We will continue
striving to maintain the number of serious quality incidents andviolations at zero.

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24. Efficiency and Productivity Improvement24-1 Approach

Contents

The Nissha Group includes efficiency and productivity improvement as a materiality. By enhancing
these through the use of digital technologies, we can not only strengthen our own competitiveness,but provide value to our customers and contribute to solving social issues. Initiatives to improve efficiency and productivity are a vital part of our Mission: “creating technology and developing it into
economic and social value ” The Nissha Group aims to create sustained growth and social value
through the use of digital technologies.
Strategy Items

STEP2
STEP3

Cost (input)
reduction

Increase productivity through the digitization of internal business processes.
Resources secured through this to be reinvested into high-value-added
operations.

Added value

Extend digitization to the entire organization to increase the added value we(output) increaseprovide to our customers by leveraging accumulated data.

New added value

Contribute to the creation of new added value and the resolution of social(output) creation

issues by utilizing accumulated data and know-how and digital technology.

KPIs and Action Items (FY2026)• Expand data-based decision-making mechanisms

Improve efficiency and

STEP1

Examples of initiatives• Reduce working hours through the introduction of productivity

productivity by digitalization

enhancement tools at overseas subsidiaries: 20,000 hours / yearof value creation processes(compared to 2023)*

Currently, society is experiencing unprecedented and rapid changes thanks to digital technology. DX
is not just digitalization; it requires transforming internal processes as well. We are reforming not justproduction but all internal processes through going digital. To move ahead with these changes andreforms, we consider human resources are the most important thing, so are focusing efforts on employee training.

• Reduce working hours for non-routine tasks by using generative AI* Working hours before introducing automatization and efficiency tools (A) - Working hours after introducing tools (B) = Hours reduction per task (C)(C) × Annual work frequency = Annual hours reduction

24-2 Initiatives Through FY2023

We are gradually moving ahead with DX in the following three steps, and working to develop the environment and human resources to support it. In particular, Step 1, Cost reduction, and Step 2, Added value
increase, are linked with improving efficiency and productivity.

The Nissha Group is both moving ahead with the digitalization of its production bases as well as the digitization of the departments responsible for indirect operations.
In the fiscal year ended December 2023, the following results were achieved in the digitalization of indirect
operations.
• Image-based stamps using images or diagrams were completely abolished, all approval processes weresystematized, and governance strengthened.
• Storage of documents related to product design was systematized, strengthening Nisshaʼs asset safety.
Projects to promote DX (DX projects) also had notable results.
• A system was developed to use AI to assess the content and output simple estimates from past

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design information when designing a new product.
• Visual control was brought in for the operational status ofequipment in Nissha Group production bases around theworld.
• Performance forecast and planning was systematized (simulations of planned values, calculations of optimal values).
• System log data was analyzed to optimize all work processes.
Additionally, as a method of productivity improvement in desk
work arenas, we introduced features including RPA (Robotic Process Automation), an electronic approval system, and AI-powered chatbot functionality. We also saw results from automating
and streamlining work through enlarging the scope of systemapplication by interweaving multiple systems so as to transcend
the discrete effects gained by using each individual system alone.
RPA in particular has seen impressive results: since its full scale
implementation in 2019 to the end of 2023, an approximate
84,000 hours of work time per year was automatized andstreamlined.
In addition, employee training included content related to data
science such as statistics or the creation of AI/machine learningmodels using Python. Training also focused on the business process of creating workflow diagrams, as well as on thinking abilities such as logic. Awareness of the convenience and usefulnessof training that uses online platforms has gradually penetrated,
and a corporate environment has evolved where even employees
themselves will actively learn.

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Quality Management / Efficiency
and Productivity Improvement24-3 Initiatives for FY2024 and beyond
In the fiscal year ending December 2024 we are creating systems
for sustained growth such as pushing ahead with Group-wide
digitalization, promoting customer satisfaction, and boosting ourcompetitiveness as ways to improve efficiency and productivity.
Digitalization means we can expect improvements in the quality ofthe products and services we provide to our customers. It will also
lead to improvements in customer satisfaction through prompt
and accurate provision thanks to automated processes.
- Digitalization and automatization of processes

Governance

GRI Standards Content
Index / ESG Datamize work processes, increasing productivity.
In a labor market that is getting tougher on a daily basis, it isgetting harder to secure human resources with advanced digitaltechnology skills in particular. Nissha aims to develop 100 “humanresources who can promote DX through their own abilities ” over
the three-year period from 2024 to 2026 in order to ensure sustained growth. We are carrying out the following human resources
development strategies in order to achieve this goal.
- Enriching training programs
We are improving our training contents through the provision ofteaching materials and analysis of questionnaire results based on
a comprehensive partnership agreement with Shiga University.
We dispatch employees to Shiga Universityʼs Graduate School ofData Science, promoting the training of human resources who
can create value from data.

We will analyze existing work processes and move ahead withdigitalization and automatization. We will utilize technologies
such as workflow management systems and RPA (Robotic Process Automation) to try to improve work efficiency. For example,
automating billing processing or report creation will increase theamount of work that can be done without direct employee engagement, allowing for increased productivity. In the fiscal year
ending December 2024, we plan to focus on expanding them toour overseas subsidiaries.

- Spreading DX literacy- Strengthen data utilization and improve analysis processes- Providing opportunities for practice

We will move further ahead with the utilization of our accumulated data, and strengthen systems such as visualization andanalysis that lead to better productivity and product quality. We
will use big data and AI to strengthen our collection and analysis of work-related data and to encourage data-driven decision-making, we will bring in technologies such as visualization
tools like management dashboards and digital twins that allow
simulations in virtual space. Through visualization of information
and rapid analysis, we can propose effective measures and opti-

We hold workshops that focus on particular issues as a way toprovide opportunities to put learned knowledge and skills into
practice, working to revitalize our DX projects.

We spread DX literacy among all Group employees throughevents themed around IT and DX. We also use in-house training
and online education platforms, establishing a curriculum to promote the development of human resources who will promote DX.

It is vital to ensure and foster the right people for digital transformation. To grow sustainably while responding to labor market
changes, there are three key pillars: enrich solid training programs,
spread DX literacy, and provide opportunities for practice. Nissha
will strive to achieve our targets through these initiatives.

24-2